Michigan’s unemployment benefits would be extended by six weeks and gradually increased to $614 per week under proposed legislation that passed the Senate last week.

The legislation would allow unemployed claimants to receive up to 26 weeks of unemployment benefits in an eligible year. People who receive unemployment currently run out after 20 weeks.

In a statement, the Michigan Manufacturers Association called the legislation a “dramatic increase.”

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“Increasing the weekly maximum benefit with an undefined cost to Michigan job providers is irresponsible and will threaten the state’s competitiveness compared to neighboring states,” said David Worthams, MMA Director of Employment Policy, in a press release. “Michigan manufacturers will be facing a powerful disadvantage.”

Other business groups and Republican lawmakers have also criticized the legislation, saying it’s an added burden for employers. The changes include a gradual increase in the weekly benefit amount – currently capped at $362. The maximum benefit, based on a claimant’s wages, would rise to $614 over three years and then be tied to inflation.

If approved, the new law would permanently reverse a 2011 law signed by then-Republican Gov. Rick Snyder that cut unemployment insurance eligibility, according to Bridge Michigan .

The proposal will threaten the solvency of Michigan’s Unemployment Insurance Trust Fund, which will trigger even higher tax increases placed upon the backs of employers, Worthams said.

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Proponents contend it’s been decades since Michigan has increased benefits, and it’s time to bring the weekly benefits in line with current wages. The $362 maximum benefit is below the federal poverty line and could be a big hit for someone making $1,000 a week.

“We are extremely low,” said state Sen. John Cherry, D-Flint, told WKAR.org. “So, that’s a tough situation for people to be at. If they lose their job for two months before they get a new one, being able to make sure they’re providing food for their kids and all that.”

Supporters cite the stagnant rate as a possible factor in some of the state’s economic woes and say unemployment benefits are a needed safety net for people who find themselves out of work.

Michigan’s unemployment hit 4.7% in October, up for a seventh consecutive month, along with persisting inflation and declining disposable income for workers, according to this Detroit Free Press article.

Michigan would join the majority of states that offer at least 26 weeks of unemployment benefits. Only 13 states, including Michigan, currently offer fewer weeks.

Other bills in the package aim to reform the UIA reforms by establishing additional rules around who can access the benefits, attempt to limit fraud, and ensure people who receive unemployment are actively trying to get a new job.

The UIA came under fire after the COVID-19 pandemic, when Democratic Gov. Gretchen Whitmer approved a temporary expansion for workers who were told to either stay home or suddenly found themselves out of work.

The agency failed to stop a deluge of fraudulent claims, as well as faced court cases from people who were falsely accused of fraud. The expansion included self-employed and part-time workers who are usually ineligible for unemployment.

Supporters said the legislation is designed to improve the unemployment filing experience and add protections for people wrongly accused of fraud.

Republicans want more oversight of Michigan’s UIA  following its pandemic missteps. A third-party audit estimated that from March 2020 through September 2021 cumulative UIA errors cost the state an estimated $8.5 billion, according to Bridge.

In a floor speech, Sen. Thomas Albert, R-Lowell, said unemployment benefits “do not magically appear at no cost — it is not free money.”

In June, the House approved similar legislation to increase unemployment eligibility, though that proposal didn’t include a hike in maximum weekly benefits. In related news, Michigan’s third UIA director since 2020 has announced her resignation for a private sector role in January.

To become law, the Senate bills would need approval from the House and the governor’s signature. The clock is ticking to get it passed during lame-duck session. The effort would likely hit a roadblock next year when Republicans assume majority control.