News Story

Number of People Collecting Unemployment in Michigan Plummets Nearly 90 Percent

There are 314,000 fewer people taking unemployment benefits than in 2009

There are 314,000 fewer people in Michigan collecting unemployment benefits than six years ago, a nearly 90 percent decline. Some see this as another indicator of the state’s economic rebound.

There were 363,212 people collecting unemployment as of Jan. 24, 2009. That number dropped to 49,060 as of June 20, 2015, according to the U.S. Department of Labor.

“Michigan’s growing economy is putting people back to work,” said James Hohman, the assistant director of fiscal policy at the Mackinac Center for Public Policy. “Fewer people on unemployment insurance is one of the added benefits.”

From 2006 to 2010, Michigan led the nation with the highest unemployment rate for 49 consecutive months.

In coming out of that era, the state experienced one of the steepest drops in unemployment rates in its history. The state's unemployment rate went from 14.9 percent in June 2009 to 5.4 percent in April 2015. The unemployment rate was 5.5 percent in May.

Charles Owens, the state director of the National Federation of Independent Business, said part of the reduction in the number of people receiving unemployment benefits can be attributed to an improving economy. But Owens said some people may have had their unemployment benefits exhausted and no longer are receiving them.

“It’s probably a blend of the two,” Owens said. “As Michigan has turned around, people have been able to find jobs.”

Rick McHugh, staff attorney at the National Employment Law Project in Ann Arbor, said there was probaly a higher percent of benefit exhaustions today because benefits only last 20 weeks now.

"The major factor is simply the lower overall unemployment rate as the economy has improved," McHugh said in an email. "The rate in 2009 was in double digits. Non-experts are often surprised by how much the unemployment numbers can impact UI programs. If the unemployment rate is 4 percent and increases to 6 percent that may not seem like a big increase, only 2 percentage points. However, it can produce a significant increase in claims numbers—a 33 percent increase in this example. And, in Michigan the unemployment rate more than doubled and we got slammed as a result. Claims numbers rapidly climbed here."

Editor's note: This story has been altered to include the comments of Rick McHugh of the National Employment Law Project.

See also:
Michigan's Drop in Unemployment is Historic

How Long is Too Long for Unemployment Benefits?

2014 Was a Great Year for Adding Jobs in Michigan

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.