Michigan Unemployment

First appeared on Associated Press

Michigan officials say the state's unemployment rate fell sharply again in the latest month to 9.3 percent, the lowest level in more than three years.

The state said Wednesday that December's seasonally adjusted unemployment rate was down 0.5 percentage points from November's 9.8 percent and down 1.3 points from October.

The national unemployment rate was 8.5 percent in December.

The Bureau of Labor Market Information and Strategic Initiatives says the number of Michigan residents working rose for the fourth straight month in December. Meanwhile, the size of the civilian labor force continued a drop that saw 100,000 fewer people working or looking for work last month than one year earlier.

The last time the Michigan unemployment rate was lower was September 2008, when it stood at 8.9 percent.

Unemployment Benefit Changes

First appeared in Associated Press (Lansing)

The Republican-led Michigan Legislature on Wednesday approved legislation aimed at stabilizing the state’s unemployment benefits fund, including a bill that could make it tougher for some to get and keep jobless benefits.

The bill that could affect jobless benefits eligibility passed the Senate by a 26-12 vote after clearing the House 61-47. Both votes were largely along party lines, sending the measure to Republican Gov. Rick Snyder.

Republicans say the bill will deter fraud, prevent overpayments and encourage the unemployed to seek jobs before their benefits run out.

Democrats say it could weaken benefits for some at time they need the help most. Michigan’s unemployment rate has been falling but remains above the national average. That’s the major reason that the state’s unemployment fund has had to borrow from the federal government to make ends meet.

Two other, less controversial bills approved by the Legislature would help Michigan pay back loans from the federal government related to unemployment benefits. The debt, currently about $3 billion, would be paid off by allowing the state to issue bonds to cover the obligation.

“Michigan’s unemployment insurance system must address this growing debt to get back on stable footing,” said Rep. Wayne Schmidt, a Republican from Traverse City.

Snyder is likely to approve the legislative package pending final review, spokeswoman Sara Wurfel said.

The bill would further limit the ability of a person who was fired for cause or who may have left a job voluntarily to collect jobless benefits. An employee could be considered to have left work voluntarily if he or she missed several consecutive workdays without contacting the employer.

After a certain period of time, available work could no longer be considered “unsuitable” if it was outside the unemployed worker’s previous experience or if it paid lower wages in some cases. That clause could kick in after 10 weeks of receiving state benefits, which Democrats say would force Michigan families into a cycle of underemployment.

Republicans argue that the requirements simply would prompt unemployed workers to accept new jobs when they’re available.

The new requirements would come on top of an earlier law that will cut the length of time that jobless workers can get state unemployment benefits from the current 26 weeks to 20 weeks, starting with new filers in 2012.

Republicans say the overall package is designed to eliminate debt in the unemployment benefits system and ease the burden on employers who pay into the system. The legislation would require some employers to pay unemployment taxes on a larger portion of their employees’ wages. Other changes, however, would save money for employers paying into the state’s unemployment insurance program.

The bonding plan could allow Michigan employers to avoid higher payments that otherwise would be needed to repay the rising debt connected to the federal loans.

Web Tools for Michigan's Unemployed

Story first appeared in The Detroit News.

Gov. Rick Snyder sees a disconnect between what Michigan's employers need and what's available to them in the state's work force. And his plan to fix it drew positive early reviews after its unveiling Thursday.

To improve Michigan's work force development efforts, Snyder outlined a plan that includes everything from a new one-stop website for prospective employers and employees, to proposed changes for unemployment benefits, to calls for change on immigration caps and new goals for the state's welfare to work efforts.

Snyder said times have been tough in Michigan. He added that we have failed to think strategically about the relationship between economic development and talent. Job creators are finding it challenging to grow and develop without the right talent, and job seekers are struggling to connect with the right opportunities that leverage their skills.

He added that today, too few workers have the skills needed to meet the demands of employers in the new economy. Despite an unemployment rate of 10.6 percent, thousands of jobs remain unfilled in Michigan.

At the heart of Snyder's plan is the Internet site Pure Michigan Talent Connect, which he described as a "Web-based talent marketplace."

For those seeking work, it will provide information on education opportunities, areas of job growth and openings. For businesses searching for help, it will connect them with possible hires.

To further help businesses hold on to valued workers, Snyder will push for changes to the unemployment system. He proposed allowing work sharing, where companies can scale back worker hours and then the employees would get partial unemployment benefits.

This allows the employers to retain their talent and ensures that a business can begin growing again immediately once demand returns to normal levels.

It benefits employees because they retain employment and fringe benefits.
Lawmakers' OK needed

The change to unemployment would have to be approved by the state Legislature.

He also wants to eliminate caps on the immigrants with master's degrees or higher levels of education. It's a move that would require action in Congress and Snyder encouraged those in attendance Thursday to contact their elected officials on the subject.


Two state programs drew particular scrutiny from Snyder. Michigan's Jobs, Education and Training program is designed to help low-income families. Those receiving federal and state unemployment assistance will be encouraged to use work-participation programs.

In Michigan, Snyder said, the participation level is unacceptable.

He promoted a new effort between several state agencies to boost those levels above standards set by the federal government.

Lindsay Chalmers, vice president of Goodwill Industries, attended the governor's speech and agreed with much of what he heard concerning improvements to the two programs. Goodwill provides training and services aimed at putting people back into the workforce.


Michigan Works!, the state's doorway program to job training and employment opportunities, must be changed as well, Snyder said.

The program will shift to a "demand-driven strategy," and the program's executive director welcomed the challenge.


Snyder also focused on the role of the state's universities and community colleges in promoting a focus on computers, engineering and mathematics skills — areas that have seen a decline in student interest in recent decades.

But simply pushing colleges in that direction won't be enough, said an economics professor at Michigan State University.

Jobless Rates Decrease In Michigan

Story first appeared in the Traverse City Record-Eagle.

The state of Michigan says seasonally unadjusted unemployment rates have decreased in all of Michigan’s 17 major labor markets.

The figures for August were released Thursday by the Department of Technology, management and Budget, and they reflect seasonal reductions in the work force.

Fewer unemployed workers actively sought employment in August than in July. Summer hiring receded from a July peak.
Statewide, the unadjusted jobless rate in August was 11 percent compared with 11.9 percent in July.

Rates ranged from a low of 7.2 percent in the Ann Arbor region to a high of 12.9 percent in the Detroit region.

Seasonally unadjusted payroll jobs in Michigan increased by 0.3 percent in August.

Jobs were added in manufacturing, construction and professional and business services. The state lost government jobs.

States get set to Resume Unemployment Benefits

USA Today

State unemployment agencies are gearing up to resume sending unemployment payments to millions of people as Congress moves to ship President Obama a measure to restore lapsed benefits.

After months of increasingly bitter stalemate, the Senate passed the measure Wednesday by a 59-39 vote. Obama is poised to sign the measure into law after a final House vote scheduled for today.

It's a welcome relief to 2½ million people who have been out of work for six months or more and have seen their benefits lapse.

Under best-case scenarios, unemployed people who have been denied jobless benefits because of a partisan Senate standoff over renewing them can expect retroactive payments as early as next week in some states.

In other states, it will take longer, possibly as long as six weeks.

State unemployment and labor agencies have been preparing for weeks for Congress to restore jobless payments averaging $309 a week for almost 5 million people whose 26 weeks of state benefits have run out. Those people are enrolled in a federally financed program providing up to 73 additional weeks of unemployment benefits.

About half of those eligible have had their benefits cut off since funding expired June 2. They are eligible for lump-sum retroactive payments that are typically delivered directly to their bank accounts or credited to state-issued debit cards.

The Senate continued debating the measure a full day after a GOP filibuster was defeated by a 60-40 vote. Senate rules required 30 hours of debate.

Democrats tout the economy-boosting effect of unemployment checks because most beneficiaries spend them immediately, and they say that paying for them with cuts to other programs dilutes the stimulative effect.

"Extending unemployment insurance isn't just the right thing to do. It's also the smart thing to do for our economy," said Sen. Sherrod Brown, D-Ohio.

Economists say the measure will likely have a modest beneficial effect on the economy. It represents less than one-quarter of 1% of the size of the $14.6 trillion economy and is far smaller than last year's $862 billion stimulus legislation.

Republicans have blocked Democratic add-ons, such as aid to state governments, that could have meant a greater economic boost.

House Fails to Pass Jobs Bill, Unemployment Extension

Reuters

 

Republicans in the House of Representatives on Tuesday blocked a Democratic effort to extend unemployment benefits for the long-term unemployed.

Democrats brought up the measure under special rules that require a two-thirds majority for passage. But they failed to win sufficient support from Republicans, who expressed concern about the measure's $33 billion cost to the federal treasury.

The bill would help as many as 1.7 million people whose unemployment insurance benefits have run out. It would extend an emergency unemployment compensation program through November 30.

Democrats said the spending was justified to help the unemployed pay their bills and to boost the economy.

"When you provide unemployment insurance to people, they spend it," House Ways and Means Committee Chairman Sander Levin said. "If Republicans are worried about growth and consumer demand, they should work to put money in the pockets of people who are desperate, who are out of work, who are looking for work."

The U.S. unemployment rate, currently 9.7 percent, has remained stubbornly high even as the economy has begun to recover from deep recession sparked by the financial crisis.

The government is due on Friday to report the jobless rate for June. Analysts are expecting a slight increase due to temporary U.S. government census workers being laid off.

But Republicans said the $33 billion price tag was too much to add to an already bloated federal deficit.

"Look around the world. Countries are sinking in debt," said Representative Dave Camp, the top Republican on the Ways and Means Committee, adding that "this reckless spending cannot go on forever."

The $1.4 trillion deficit and $13 trillion debt are becoming issues in the run-up to the November U.S. congressional elections in which Republicans hope to make substantial gains against the Democrats, who control Congress.

The extension of jobless aid for the long-term unemployed has run into solid Republican opposition in the Senate as well. A measure was attached to a bill that would extend popular business tax breaks, which stalled last week over Republican concerns about deficit spending.

Unemployment Rate for May: Down in 37 States, Up in 6

USA Today

 

 

A majority of states saw their unemployment rates drop in May. But the widespread declines were mainly because people gave up looking for work and were no longer counted.

The unemployment rate fell in 37 states and the District of Columbia, the Labor Department said Friday. Six states had increases and seven experienced no change.

Forty-one states and the District of Columbia saw a net increase in jobs. But that reflected national data showing a huge gain because of government hiring of temporary census workers.

Nevada now has the highest jobless rate in the country, marking the first time in more than four years that Michigan did not hold that distinction. Nevada's rate climbed to 14%. Michigan's fell to 13.6%.

Nationally, the unemployment rate dipped to 9.7% in May from 9.9% in April. But the drop was largely because hundreds of thousands of jobless people stopped searching for work.

A total of 431,000 new jobs were added across the country in May, the biggest gain in a decade. Still, the surge came from 411,000 temporary census jobs. Private-sector job growth slowed significantly.

Big states led all others in job growth. Texas saw a net gain of 43,600 jobs, California was up 28,300 and New York rose by 21,000.

Nevada's jobless rate rose from 13.7% in April. That state has been hurt by the collapse in housing and a downturn in tourism.

"Tourism is always one of the areas hardest hit during a recession," said David Wyss, chief economist at Standard & Poor's in New York.

Unemployment in Michigan, a state hurt by the troubles in the auto industry, fell from 14% in April. Michigan had had the highest monthly unemployment rate in the country since April 2006.

Wyss said the new report did not show any major changes overall in state trends.

"In general, the band of states between the Mississippi River and the Rocky Mountains are doing relatively well while the worst hit states remain the housing bubble states and manufacturing states around the Great Lakes," he said.

North Dakota continued to have the lowest unemployment rate in the country at 3.6%. It was followed by South Dakota (4.6 percent) and Nebraska (4.9 percent).

By region, the West reported the highest regional jobless rate at 10.9%, unchanged from April. The Northeast had the lowest rate at 8.9%, also the same as the previous month.

Unemployment in the South stood at 9.4% in May, down from 9.6% in April. The jobless rate in the Midwest was 9.7%, an improvement from 10% in April.

Extended Unemployment Benefits by End of May

mLive

Michigan Rep. Sander Levin says long-term federal unemployment benefit bill should be passed by Memorial Day

The House Ways and Means Committee, chaired by Michigan Rep. Sander Levin (D-12th District), released an updated statement regarding the unemployment extension bill, H.R. 4213, American Workers, State, and Business Relief Act of 2010.

The bill would extend eligibility to file for extended unemployment benefits until the end of this year. A short-term extension of extended federal unemployment benefits is scheduled to expire in early June.

Both the Senate and the House have passed versions of the bill but have yet to finalize how it will be paid for. No firm dates have been set regarding final action on the bill, although according to this statement from Levin, the House is shooting for action by Memorial Day.

    According to the House Ways and Means Committee release, “Chairman Levin has stated that he will continue working with the Senate to complete work on H.R. 4213 by Memorial Day to ensure the benefits included are available to families and businesses, particularly those benefits directed to workers who have lost their jobs through no fault of their own. We are committed to, and working toward, passing a longer-term extension of unemployment benefits as included in H.R. 4213.”

During the summer months, Congress has two recesses, so hopes for passage of the bill rest in what can get done in May and early June.

Is A Recovery Without Jobs Really A Recovery?

Business Week

Attendees at a job fair in Livonia, Mich., try to get their 

résumés into the right hands Paul Sancya/AP Photo

Could it take as long as five years for the economy to replace all of the 8 million jobs lost since the Great Recession began? The most bearish economists think so.

Job creation is proving to be painfully slow, and Washington is starting to panic. With unemployment at a 26-year high of 10.2% and climbing, the Democrats are scrambling to rev up the economy before the midterm elections next November. The latest effort is a "Jobs Summit" set for Dec. 3 at the White House. The idea, said President Barack Obama after a Nov. 23 cabinet meeting, is that the gathering of business leaders, nonprofits, academics, and labor will "explore how we can jump-start the hiring that typically lags behind economic growth."

That may well prove an impossible goal since the White House is battling an ominous economic trend that has been gathering in strength and severity for decades. The U.S. economy, once the greatest job-creation machine in the world, has taken longer and longer to replace the jobs lost in recent recessions—never mind creating the additional jobs needed to absorb new workers into the market. Back in the '70s and '80s, it took as little as a year after a recession ended to add back the jobs that had disappeared. Yet after the eight-month downturn that ended in March 1991, it took 23 months. And following the 2001 dot-com bust, 39 months passed before the U.S. returned to square one on the jobs front.

This time, things could be even worse. U.S. payrolls peaked at 138 million in December 2007; today they stand at roughly 130 million. Stuart G. Hoffman, the chief economist of the PNC Financial Services Group thinks it could easily take another four years to regenerate all those jobs, assuming, as many economists do, that the recession ended in June of this year. David Rosenberg, the former top North American economist for Merrill Lynch, now with the Canadian investment firm Gluskin Sheff + Associates, is even more pessimistic. Convinced that the U.S. has now entered "the mother of all jobless recoveries," he believes it will take at least five years to recover all those jobs. "And that's a conservative estimate," he adds.

What accounts for the growing lag times? The speed and extent to which GDP bounces back after a downturn is one crucial factor. Martin A. Regalia, chief economist for the U.S. Chamber of Commerce, points out that as the U.S. recovered from earlier recessions, GDP often grew for several quarters at around 7%—roughly four points above the economy's long-term potential. Such spurts, fueled by strong pent-up demand among consumers and businesses, helped many unemployed Americans find jobs. Not this time: With both households and businesses stepping back from spending levels that were artificially pumped up by debt, demand is weak. Most economists project GDP growth to stay at or below 3% for the next to years. "If you don't have growth well above your long-term potential, you can't reabsorb people, so it takes a lot longer to get back to where you were," says Regalia.

It's not just a matter of regaining lost ground: There are also all those young people just entering the labor force to put to work. Simply to keep the jobless rate from rising, the U.S. needs to add a net 150,000 jobs a month. While the slashing of U.S payrolls appears to be slowing, no one expects the economy to generate anywhere near the growth needed to generate that many new jobs anytime soon. That's why Harvard University economist Kenneth Rogoff believes the unemployment rate could peak at over 11%. "The U.S. would need to add a good 11 million jobs to bring the unemployment rate back to where it was at the start of the crisis, and over 9 million jobs just to get unemployment back to 6%," he says. As for the unemployment rates of 5% or lower that the U.S. boasted between 2005 and 2007? "We might not see that for a decade," says Rogoff.

Slower growth only partly explains the shift toward jobless recoveries. Goldman Sachs (GS) senior economist Ed McKelvey argues that over the last decade globalization and deregulation have forced companies to focus far more on controlling costs to remain competitive in world markets. Sharply higher productivity is allowing companies to get far more out of the workers they have, while factory automation is wiping out assembly line work and information technology is making many white- and pink-collar jobs extraneous. Meanwhile, companies are moving other operations abroad to take advantage of cheap labor in places like China and India. Such pressures from globalization are only increasing. "With most of the motivations and mechanisms for the jobless recovery still in place, we see no reason why most firms would behave differently this time around," McKelvey wrote in a recent note to clients.

In theory, American workers should be able to shift gears and perform higher-value-added work at home, and some have. But many Americans aren't equipped for the jobs of the future. A telling sign of the mismatch between workers' skills and employers' needs is that according to the U.S. Bureau of Labor Statistics, there were almost 2.5 million job openings in September that employers were actively trying to fill. While that was down from a peak of 4.8 million in 2007, it was still a stunningly high number considering that there were over 15 million people unemployed that month. Julian L. Alssid, executive director of the Workforce Strategy Center, says that schools, including many community colleges, still aren't producing graduates with the kinds of skills that employers demand.

The weak labor market has left many workers far more idle than they'd like. That means companies have plenty of room to boost hours for part-timers before they need to add more people to the payroll. In a Nov. 16 speech, Federal Reserve Chairman Ben S. Bernanke pointed out that the number of part-time workers who want a full-time job but cannot get one has more than doubled since the recession began. The average workweek for production and nonsupervisory employees has fallen to 33 hours, the lowest level of the postwar period. "The best thing we can say about the labor market right now is that it may be getting worse more slowly," Bernanke added.

Which leads to another key reason why unemployment is likely to rise even as layoffs fade from the picture: New hiring will probably remain sluggish. That may seem an obvious point, but Michael Feroli, an economist with JPMorgan Chase, (JPM) points out that the recent jobless recoveries didn't occur because layoffs continued longer than during a traditional recession. A far more critical factor was that businesses waited longer to start hiring again than had historically been the case.

It all adds up to an enormous economic and political challenge for President Obama and his advisers—and one for which they have only limited ammunition. Count on the President to keep reminding everyone how much worse things would have been without the stimulus and the bailout of the banks. While there's talk of boosting infrastructure spending and offering tax credits to employers who create new jobs, the soaring deficit is likely to prevent ambitious new programs from being adopted. "There aren't a lot of easy options," warns Gregory Valliere, chief policy strategist for institutional broker Soleil Securities. "Those that make the most sense will cost a lot of money, which voters have adamantly rejected. So it's hard to see what they can get done." The real question may be whether the summit gives the Administration and its congressional allies some political breathing room.

Obama Signs Extended Unemployment Benefits Into Law

Detroit Free Press

As expected, President Barack Obama this morning signed into law a bill extending benefits for out-of-work Americans who have exhausted their unemployment checks or will do so by year’s end.

In Michigan, more than 100,000 people may eventually be helped by the extension, which provides up to 14 weeks of additional benefits for anyone whose unemployment has already run out or will be exhausted by Dec. 31, 2009.

the national unemployment rate had topped 10% in October, the highest since March 1983.

It doesn’t help people who will run out of benefits in 2010 – though Congress is expected to come back and pass legislation this year that extends that eligibility window into next year.

Obama’s signature makes today the effective date of the bill. The additional benefits are not retroactive, meaning that once recipients who have run out of benefits begin getting checks in mid-December, they will reach back to only Nov. 6.

The House voted Thursday to pass the legislation after waiting weeks for the Senate to move on the bill. Michigan had the highest jobless rate in the nation in September at 15.3%. Today, it was reported that the national unemployment rate had topped 10% in October, the highest since March 1983.

The state Unemployment Insurance Agency projects that as many as 80,000 people will be eligible for the new extension by the time checks begin going out in mid-December. It will take that long for the federal Labor Department and state agencies to identify who is eligible and start sending out extension checks.

The legislation also authorizes an additional six weeks of benefits on top of the 14 weeks for out-of-work residents in the hardest-hit states, including Michigan, but it remains unclear how many people will actually qualify for those extra six weeks under the legislation signed into law by Obama today.

The reason is that a person has to exhaust the new benefit of up to 14 weeks to qualify for those six weeks – even though there are only eight weeks left in the year.

That means it may be available at first to only people who because of their work histories qualify for no more than eight weeks under the extension. Otherwise, it will take another act of Congress to lift the eligibility window past the end of the year to make those extra six weeks widely available.

U.S. Senate Approves Unemployment, Homebuyer's Credit Extension

from Detroit Free Press

The U.S. Senate voted unanimously tonight to extend unemployment benefits by as much as 14 weeks to out-of-work Americans, including about 100,000 Michiganders who have exhausted their jobless benefits or would do so by year’s end.

The legislation -- which had been hanging fire in the Senate for weeks -- still required a supermajority vote to close off debate as Republicans held it up, despite the unanimous vote in the end. It now returns to the House, where quick passage could come as early as Thursday.

It would then go to President Barack Obama, who is expected to sign it. It could be weeks, however, before states can start getting the extension checks out to people who have already exhausted their unemployment benefits.

Nowhere is the need being felt as greatly as in Michigan, which at 15.3% had the highest unemployment rate in the country in September.

Said Sen. Debbie Stabenow, Michigan Democrat, “Families throughout the state and across the country are struggling to put food on the table as many cope with finding new jobs. … This extension of unemployment insurance not only provides support when it is needed most, it is one of the fastest, most effective ways to stimulate our economy.”

Michigan’s Unemployment Insurance Agency projected earlier this year that 99,000 recipients would exhaust their benefits -- including up to 26 weeks of regular benefits, 33 weeks of Congress’ first emergency extension and 20 weeks of the state’s extended benefits program -- between May and the end of the year.

Sen. Carl Levin, a Michigan Democrat, said that during the debate, about 7,000 unemployed Americans lost their benefits each day and that by mid-October, 44,000 Michiganders had exhausted their benefits. UIA estimated another 18,000 would lose benefits between mid-October and mid-November.

“I wish it had come sooner,” said Levin.

Last year, Congress authorized up to 33 additional weeks of emergency unemployment compensation for people in hard-hit states who exhausted their regular benefits -- which are typically based on work history and wages and often last up to 26 weeks. Originally set to expire in March 2009, the federal stimulus bill extended the window for people to qualify for the additional benefits to the end of December.

That December 2009 deadline is still in place. But with the national unemployment rate still rising (from 7.6% in January to 9.8% in September) and the initial emergency unemployment extension having already run out for many people, legislators were intent on providing an additional round of help.

The House -- which is expected to accept the Senate version -- had earlier approved legislation some weeks ago authorizing up to 13 weeks of additional benefits for people living in states with unemployment rates of 8.5% or higher.

The Senate legislation went further, authorizing up to 14 additional weeks for out-of-work residents in every state in the nation, provided they’ve already exhausted the earlier authorized benefits or will do so by the end of the year.

Under the bill as crafted by Senate Finance Chairman Max Baucus of Montana and Senate Majority Leader Harry Reid of Nevada, an additional 6 weeks of benefits -- on top of the added 14 weeks -- would be available in states with unemployment higher than 8.5%. Twenty-six states and Washington, D.C., have rates of 8.5% or higher.

However, under the legislation as written, it is unclear how many people in those high unemployment states could ever collect that additional 6 weeks of benefits.

To get them, a person in one of the affected states would have to exhaust the newly authorized benefits of up to 14 weeks first, and do so by the end of the year. But there are only eight weeks left in 2009.

Some people, who would get eight weeks or less of new benefits under the law, would be the ones who would likely qualify for the extra six weeks under the legislation as written. But expect Congress to attempt before the end of the year to further extend the eligibility window -- albeit in another piece of legislation -- to give people in hard-hit states like Michigan more of a chance to collect those six weeks.

Senate Poised To Aid Jobless, Homebuyers

Reuters

Unemployed workers would get more jobless benefits and homebuyers and businesses would get additional tax breaks under a bill that the U.S. Senate is likely to pass on Wednesday or Thursday.

Democratic leaders in the House of Representatives have promised quick action on the bill.

Here is a description of each of the bill's provisions:

UNEMPLOYMENT INSURANCE

* Jobless workers who have exhausted their unemployment benefits would get an additional 14 weeks of aid.

* Workers living in states where the unemployment rate is above 8.5 percent would get an additional six weeks of benefits, for a total of 20 extra weeks of benefits.

As of September, 27 states, the District of Columbia and Puerto Rico had unemployment rates above 8.5 percent. Nationwide, unemployment stands at 9.8 percent, the highest since 1983, and analysts expect it to climb to 9.9 percent when figures for October are released on Friday.

About 3.4 million people now are receiving unemployment aid, according to the Labor Department.

* Roughly 600,000 workers may have already exhausted their benefits, according to the National Employment Law Project, and 1.3 million could do so by the end of the year.

* Some workers would now be eligible for up to 79 weeks of unemployment insurance, three times the 26-week limit that was in place before the current recession.

* The additional benefits would be paid for by extending a tax on employers through June 30, 2011.

States that would qualify for the extensions would have to have unemployment rates hitting 8.5 percent or higher under a Senate bill co-sponsored by Carl Levin, D-Detroit, and Debbie Stabenow, D-Lansing, or 9 percent or higher under the House bill. Michigan’s unemployment rate is 15 percent, the highest in the nation.

HOMEBUYER CREDIT

* Extends an existing $8,000 tax credit for first-time homebuyers until April 30, 2010.

* That credit, which was due to expire on Nov. 30, has helped the housing industry recover from the worst recession since the Great Depression of the 1930s.

* Homebuyers who already own a home and have lived there for at least five years would be eligible for a $6,500 tax credit.

* More affluent buyers would be eligible for the credit, as it would be phased out for individuals who earn more than $125,000 or families that earn more than $225,000. The current credit is phased out for individuals who earn more than $75,000 and families that earn more than $150,00. 

 * Home purchases under contract as of April 30, 2010, would have to close within 60 days to be eligible for the credit.

* The credit only applies to the purchase of principal residences that cost $800,000 or less.

* Would cost $10.8 billion over 10 years.

BUSINESS TAX CREDIT

* Would allow all businesses to apply losses sustained in 2008 or 2009 to the five prior years, enabling them to recover taxes paid at a time when the economy was booming.

* Businesses would be able to apply losses from either 2008 or 2009 but not both years.

* The losses would apply to full-year taxable income for the prior four years and 50 percent of income in the fifth year.

* A similar tax credit already on the books only applies to small businesses that earn less than $15 million per year.

* Would cost $10.4 billion over 10 years.

OTHER PROVISIONS

* Would delay implementation of another tax rule that governs how companies can allocate interest expenses between the United States and foreign sources.

* That rule had been scheduled to take effect in 2011 but now would be pushed back until 2018, which would save the government $20.1 billion over 10 years.

* Would also boost penalties for certain types of companies that do not file tax returns, which would raise $1.2 billion over 10 years.

Michigan: The State Of Joblessness

from the Wall Street Journal

State lawmakers will soon face large budget deficits again, perhaps as much as $100 billion across the U.S. Here's some free budget-balancing advice: Steer clear of the Michigan model. The Wolverine state is once again set to run out of money, and it is once again poised to raise taxes even as jobs and businesses disappear.

In 2007 Governor Jennifer Granholm signed the biggest tax increase in Michigan history, with most of the $1.4 billion coming from business. The personal income tax—which hits nonincorporated small businesses—was raised to 4.2% from 3.95%, and the Michigan business tax levied a surcharge of 22%. The tax money was dedicated to the likes of education, public works, job retraining and corporate subsidies. Ms. Granholm and her union allies called these "investments," and the exercise was widely applauded as a prototype of "progressive" budgeting.

Government is the largest employer in the state, but the number of taxpayers to support these government workers is shrinking.

Some prototype. Every state has seen a big jump in joblessness since 2007, but with a 15.2% unemployment rate Michigan's jobs picture is by far the worst. Some 750,000 private-sector payroll jobs have vanished since the start of the decade. For every family that has moved into Michigan since 2007, two have sold their homes and left.

Meanwhile, the new business taxes didn't balance the budget. Instead, thanks to business closures and relocations, tax receipts are running nearly $1 billion below projections and the deficit has climbed back to $2.8 billion. As the Detroit News put it, Michigan businesses are continually asked "to pay more in taxes to erase a budget deficit that, despite their contributions, never goes away." And this is despite the flood of federal stimulus and auto bailout cash over the last year.

Following her 2007 misadventure, Ms. Granholm promised: "I'm not ever going to raise taxes again." That pledge lasted about 18 months. Now she wants $600 million more. Among the ideas under consideration: an income tax increase with a higher top rate, a sales tax on services, a freeze on the personal income tax exemption (which would be a stealth inflation tax on all Michigan families), a 3% surtax on doctors, and fees on bottled water and cigarettes. To their credit, Republicans who control the Michigan Senate are holding out for a repeal of the 22% business tax surcharge.

As for Ms. Granholm, she and House speaker Andy Dillon continue to bow to public-sector unions. There are now 637,000 public employees in Michigan compared to fewer than 500,000 workers left in manufacturing. Government is the largest employer in the state, but the number of taxpayers to support these government workers is shrinking. The budget deadline is November 1, and Ms. Granholm is holding out for tax increases rather than paring back state government.

The decline in auto sales has hurt Michigan more than other states, but the state's economy would have been better equipped to cope without Ms. Granholm's policy mix of higher taxes in order to spend more money on favored political and corporate interests. If any larger good can come of the experience, it is that Michigan is teaching other states how not to govern.

From Project Manager To Bathroom Attendant

White-collar jobs go trailing after a sliding economy

Story from the Wall Street Journal

ROCHESTER HILLS, Mich. -- Dave Duncanson still isn't used to being on his feet all day.

The head custodian at Stoney Creek High School starts his day at 4 p.m. by logging onto a computer, reading a series of building reports and assigning cleaning tasks to his subordinates. Then he must march through dimly lit hallways to clean his designated area: the principal's offices, the counselor's wing and the media center. For hours each weeknight, he can be found pulling trash from bins, vacuuming carpets, putting desks and chairs back in place.

The job pays $15.05 an hour and comes with a pension and benefits. In that sense, Mr. Duncanson, 49 years old, feels fortunate. But the story of how he got here offers a window into the deteriorating economy of Michigan, once a bastion of middle-class prosperity, and the plight of tens of thousands of white-collar workers who have been displaced by the near-collapse of the domestic auto industry.

Less than a year ago, Mr. Duncanson was working a few miles away in Auburn Hills, at a desk on the fourth floor of Chrysler's tech center. There, he was a product-development manager making $109,000 a year in salary. At his current job, he'll make less than a third of that.

"At first, I just wanted to do something to bring in money," says Mr. Duncanson, who had spent eight and a half years at Chrysler and took a buyout last November as the company slid toward bankruptcy. "I figured things would bounce back."

They haven't. Michigan's unemployment rate has galloped to 15.2% in August from 9.6% in November, running roughly one and a half times the national rate and leading all states for at least 26 of the last 28 months. In metro Detroit -- home to all three big U.S. auto companies -- the jobless rate is 17.7%, the highest of any large urban area in the country, according to the Department of Labor.

"I sweep floors. I mop bathrooms. I clean up puke."

For Mr. Duncanson and former colleagues who left Chrysler in a swirl of white-collar job cuts last fall, the result has been a year of frustration, financial insecurity, swallowed pride and, inevitably, sacrifices.

Mr. Duncanson got his first auto-industry job in 1984, armed with just a teaching degree from Northern Michigan University. He joined Chrysler in 2000, working his way up through a series of managerial jobs in product development.

Though he wasn't an engineer, he oversaw large teams of Chrysler engineers during pivotal powertrain launches for vehicles such as the Dodge Ram pickup and Jeep Liberty SUV. His specialty was streamlining processes, which put him in a layer of management that Chrysler was eager to eliminate when it ran out of cash and slashed its product-development budget late last year. He left with a buyout package of $50,000 in cash, an amount based on his eight-plus years of service.

He had been out of work for three months when he approached his local school district, Rochester Community Schools, which serves this wealthy suburban community north of Detroit. He figured he could land a teaching job, only to find out that his teaching certificate had long expired. Eager to pass the time, he took the one district job that was available to him: substitute janitor, at $10 an hour.

His wife, a part-time teachers' aide in the same district, was supportive. His two teenage daughters were initially horrified at the thought of their friends seeing him pushing a broom or cleaning a bathroom after school. But the older one, 16-year-old Heather, says few students are comfortable talking about their parents' jobs lately.

"Some of my best friends, their parents could be out of a job and I wouldn't know," she says.

By July, unable to find other work, Mr. Duncanson seized an opportunity to take a custodian's job full-time. He was assigned to Stoney Creek, a crosstown rival of the school his daughters attend. With the promotion came a raise, though it was diminished that same week when the custodians' union accepted a 25% pay cut to avert outsourcing.

Mr. Duncanson proudly notes how has been able to transfer his experience in streamlining processes to his current job as head custodian. Still, he says, "How would you like to be the guy who runs into his old co-workers and says, 'Hey, I clean toilets'?"

As Stoney Creek opened last week for Mr. Duncanson's first school year as a custodian, he considered himself one of the lucky ones. A year after the exodus began at Chrysler, many of his former co-workers are still out of work and have no steady income, health-care coverage or retirement benefits. He has all three. Even the mortgage is taken care of: He used his $50,000 buyout package to pay it off. And he's hoping to gain a builders license to supplement his income.

The evenings at the school are long -- the shift ends at midnight, after his wife and daughters have gone to bed -- and the new job is tough on his feet. The family is watching spending carefully; dinners out and big family vacations are no longer an option.

But there are upsides. The heavy-set Mr. Duncanson has lost 25 pounds since giving up his desk job, and his cholesterol is down enough that he's off medication. The former efficiency expert has already gotten a promotion, in part for streamlining the school's daily cleanings.

More importantly, he says, his daughters have learned the value of a hard day's work, no matter what kind. Living in an affluent suburb where classmates routinely get new cars for their 16th birthdays, he says, that hasn't been easy.

"Well, yeah, it hurt," he says, of accepting a lower-paying job. "But every dollar counts."

Michigan Singing White-Collar Blues

Story from the Wall Street Journal

Tony Barr is waiting for his big break -- or any break at all.

Last fall, just as Chrysler Corp. was sliding toward bankruptcy, he and two other colleagues in product development left the company to start their own consulting business, marketing their efficiency expertise to other firms in Michigan.

So far, they have lured just one paying customer. "Even if you tell people you'll work for free," says Mr. Barr, many companies "don't even want to talk to you."

Mr. Barr, 46 years old, was the type of well-educated, white-collar "knowledge" worker that Michigan hoped would help offset a decline in auto-assembly jobs. But Detroit's Big Three car makers have aggressively thinned these ranks in the past two years, perhaps permanently, casting tens of thousands of midcareer, white-collar workers into an extended limbo.

Many displaced veteran workers who once earned high salaries in engineering, information technology, research and design jobs aren't now destitute, thanks to generous severance packages. But they find themselves stuck, unable to find comparable work in Michigan, but also unable or unwilling to uproot their families and try their luck out of state.

For them, the choices come down to taking whatever job they can get, or waiting for something to come along.

From the end of 2006 through June, the Big Three eliminated nearly 30,000 North American white-collar jobs, virtually all in Michigan. Chrysler's white-collar work force is less than half what it was at the end of 2006.

As a result, Michigan's unemployment rate galloped to 15.2% in August from 9.6% in November, when the exodus from Chrysler began, and has led all states for at least 26 of the past 28 months. Metro Detroit's 17.7% jobless rate is the highest of any large urban area in the country.

Michigan also leads the nation in labor underutilization -- a broader measurement of job-market limbo that includes the unemployed, people who quit looking for work, those who have been cut to part-time status and those who are working part-time while they seek full-time employment. Over the four quarters ended June 30, around one in five Michigan workers fell into this category, according to the U.S. Department of Labor.

Labor-market economists say skilled workers in Michigan with years of experience, particularly from the auto sector, must compete against a flood of younger, better-educated candidates for a shrinking pool of jobs. Their specialized expertise, highly valued in their former posts, is a tough sell anywhere else.

"To find a new job they'll probably end up making less, probably substantially less," says Don Grimes, a senior researcher at the University of Michigan's Institute for Research on Labor, Employment and the Economy. "It's going to be painful."

Compounding the problem, Metro Detroit's housing market remains in profound decline, even as other areas stabilize. As of July, home prices in the region are down 45% from their peak in early 2006, as measured by the Case-Schiller home-price index, and are down to 1995 levels, destroying millions of dollars in household wealth and stranding thousands of middle-class families in homes they can't afford to sell.

"We haven't seen the huge out migration, not yet," says Jim Rhein, an economic analyst for the Michigan Department of Energy, Labor and Economic Growth. Part of the reason: "It's not looking rosy anywhere else," he says.

Michigan has scrambled to shift its economy toward other industries that can attract high-wage jobs, such as defense, alternative energy, health care and even movies. Those jobs are only trickling in.

Tom Boileau, 55, has seen how difficult the transition has been. After 35 years in product development at Chrysler, Mr. Boileau was earning roughly $110,000 a year when he took an early-retirement deal last fall that pays him a pension of nearly $4,000 a month. He was later hired by Michigan Works, a state agency that helps displaced workers retrain and find jobs.

Each day, Mr. Boileau says, 90 to 100 unemployed people sat at his desk at a state office in Detroit, where he handled primarily suburban white-collar engineers' cases. "They kept coming back and coming back and coming back, and working on their résumés," says Mr. Boileau. "I didn't see anyone get anything."

Mr. Boileau himself hasn't fared much better. Since his contract with the state expired in April, he has been without a full-time job. He fills his time working as a part-time hockey coach, which pays $500 a week during the season. While he'd like to work full-time, he acknowledges that at age 55 and without a bachelor's degree, he'd be lucky to get a third of what he used to make at Chrysler.

Dave Duncanson considers himself one of the lucky ones. Less than a year ago, he was earning $109,000 a year as a Chrysler product-development manager, overseeing large teams of engineers during pivotal powertrain launches. He left in November with a $50,000 cash buyout.

This summer, he started a full-time job as head custodian at Stoney Creek High School in Rochester Hills, Mich., the upscale suburb where his family lives. For hours each weeknight, he can be found pulling trash from bins, vacuuming carpets and putting desks back in place. The job pays $15.05 an hour, or about $31,000 a year after a recent 25% pay cut, and offers a pension and health benefits.

Mr. Duncanson, 49, says he was baffled at first that he couldn't find work to match his qualifications. But he's come to appreciate the stability of full-time work. "A little upgrade from where I'm at, and I'd be happy with that," he says, "just to avoid the auto industry."

Mr. Duncanson, who spent 26 years in the auto industry, proudly notes how he has been able to transfer his experience in streamlining processes to his new job. Still, he says, "How would you like to be the guy who runs into his old co-workers and says, 'Hey, I clean toilets?'"

Mr. Duncanson can think of just one person in his old department at Chrysler, a younger engineer named Melissa Nemeth, who successfully landed a comparable job. She and her husband, Phil, a General Motors engineer, sold their home in suburban Sterling Heights, Mich., for a $40,000 loss, but managed to cover the mortgage balance. They moved to Oregon. "It couldn't have gone any better, but it was a scary ride," says Ms. Nemeth.

As more-junior workers earning lower salaries, the Nemeths, both 30, were able to pack up and find new jobs out of state, adapting their skills to new industries. But many veteran workers won't or can't. Some remain convinced that given their specialized skills, their best prospects for comparable work are in Michigan. Many can't absorb a pay cut or the loss on their house. Others, like Messrs. Duncanson and Barr, have strong family ties to Michigan.

At home, Mr. Barr is struggling with his new role. When he left Chrysler with a $75,000 cash buyout, his wife, who also worked there as an engineer, bumped up to full-time. Mr. Barr is now the parent who drops his three kids at the movies or picks them up from practice. Here in his hometown, one of Detroit's most affluent suburbs, he has noticed more dads walking their dogs in the middle of weekdays, just like him.

His efficiency business is predictably lean. He and his partners run it out of his home office, occasionally venturing out to local restaurants to pitch prospective clients. "We've taken people out to lunch and it's like, 'I'll get a salad,'" says Mr. Barr.

After one such lunch in June, Mr. Barr recalls, the prospect, from a large local accounting firm, left the bill on the table and said, "When you guys get an office, why don't you call us?"

While he waits for business to catch on, Mr. Barr has found an outlet for his technical skills. For five hours a week he teaches a neighbor how to use her computer. It pays $30 an hour.

Says Mr. Barr: "I didn't want to grow up to do this, you know?"

U.S. Jobless Rates Continued To Soar In January

As Originally Posted at The Wall Street Journal

Unemployment rates rose in nearly every state in January, illustrating that no region has been immune to the recession that has grown broader as it has deepened.

Jobs remain hardest to find in the areas that were first hit by the economic slowdown: The highest unemployment rates were in manufacturing-heavy states in the Midwest, and in states that suffered the most from the housing bust, including California, Nevada and Florida. States in the Northeast and South that had been less affected by the housing bust continue to be generally better off.

Between December and January, nearly half of states saw unemployment rates rise a full percentage point, a remarkable jump. Georgia, where unemployment rose to 8.6%, and Rhode Island, at 10.3%, have the highest unemployment rates since at least 1976, when the government data begin.

"It really puts the exclamation point on how this recession, which is rooted in large part in financial markets, touches all sectors and touches them quickly," said Luke Tilley, a senior economist at forecasting firm IHS Global Insight.

The lowest unemployment rate was in Wyoming, with 3.7%, followed by North Dakota, Nebraska and South Dakota.

The steep rise in state unemployment rates is the latest indicator showing how consumers and businesses essentially froze at the end of 2008, and have yet to resume meaningful spending. In the last three months of 2008, gross domestic product fell at a 6.2% annual rate, the fastest since the depths of the 1982 recession, and much faster than the government had previously estimated.

Likewise, state employment data show job losses were much worse than originally thought. In California, for instance, the government previously estimated that the state's economy had shed 257,000 jobs in 2008. Wednesday's revision showed the state actually lost 443,000 jobs.

A number of export-heavy states, where until recently overseas demand had offset U.S. weakness, have seen their unemployment rates skyrocket as the recession spread overseas.

South Carolina, host to many international companies and other exporters, saw its unemployment rate rise 4.7 percentage points in the year ended January, tied for second fastest in the nation. (Unemployment in North Carolina, which has a large banking and manufacturing presence, also rose 4.7 percentage points over the year.)

Several economists believe the unemployment rate will hit 10% by the time a recovery is under way, but four states have already eclipsed that level. California, Rhode Island and South Carolina had unemployment rates between 10.1% and 10.4% in January. In Michigan, where the economy was teetering even before two of the Big Three auto makers sought emergency loans from the government, the unemployment rate jumped to 11.6%.