Unemployment system struggling under weight of millions

More than a third of working-age adults in Michigan have applied for unemployment since the coronavirus first reared its head in March.

That’s more than 1.7 million people. And most of them are already receiving payments, placing a strain on the state’s unemployment insurance system, according to a report in Bridge Magazine.

Steve Gray, director of the state’s Unemployment Insurance Agency (UIA), testified Wednesday to the Michigan Joint Select Committee on the COVID-19 Pandemic. He said unemployment claims hit hard when restaurants were forced to close on March 16.

“It hit us like lightning,” he said.

The unemployment application system buckled under the strain of those applicants and experienced problems including website malfunctions.

The department has added staff and tweaked its website to deal with the influx of applicants. Since March 15, it has paid out $5.62 billion to unemployed workers. That includes people who previously would not have qualified for unemployment, such as part-time workers and contractors.

The unemployment trust fund could run out of money this summer, forcing the UIA to borrow from the US government to make payments.

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