More states could cut down jobless benefits

Job-seekers wait in line for assistance at a government-run employment center, in Las Vegas, Nevada.

Jeremy Hobson: Well now to an item that's weighing down state budgets. The cost of unemployment benefits.

As Marketplace's Janet Babin Reports, this week the governor of Michigan is considering cutting those benefits.


Janet Babin: Michigan recently passed a law that would slice jobless benefits from 26 weeks down to 20 weeks. Republican lawmakers say the bill would save businesses hundreds of millions in unemployment taxes.

But the governor still has to sign the law, and Democratic Congressman Sandy Levin is hoping he doesn't.

Sandy Levin: This is such a serious backward step that we shouldn't give up.

The new law would make Michigan the only state to offer less than 26 weeks of unemployment benefits. But other states hit hard by the last recession -- Arkansas, Arizona, Florida and Indiana -- are also looking for ways to limit jobless claims, and might adopt cuts of their own.

Andrew Stettner with the National Employment Law Project says many states were unprepared for such high jobless claims.

Andrew Stettner: There was kind of a belief that we wouldn't have severe recessions again, so states really stopped saving, in terms of their unemployment insurance premiums.

Stettner says slashing benefits now could stall the fragile recovery.

I'm Janet Babin for Marketplace.

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