Business Community Disappointed in Lame Duck Legislature’s Unemployment Tax Increase on Job Providers 

LANSING, Mich. – The state’s six largest business organizations, the Michigan Manufacturers Association, Michigan Chamber of Commerce, Detroit Regional Chamber, Grand Rapids Chamber, Small Business Association of Michigan and Business Leaders For Michigan, released the following statement expressing disappointment to the Michigan Legislature’s passage of legislation (Senate Bill 40) yesterday to drastically increase UI benefits – and costs to employers, who fund 100% of the cost of the UI system.  

“This week, the lame duck legislature passed a 70% increase in unemployment insurance (UI) benefits, which will drastically increase the cost of our state’s 100% employer-financed UI system. It will be nearly impossible to enact a benefit payout of this size without increasing UI taxes on employers and will cause businesses to be less able to afford to hire people. 

“The higher burden on Michigan’s job providers hands a new advantage to  competitor states in the South, such as Tennessee, South Carolina, North Carolina, and Alabama. These states continue to grow jobs and recruit companies to leave Michigan for friendlier business environments. As Michigan continues to struggle to maintain its population and looks for ways to attract new and keep existing companies, increasing the cost of employing people leads the state in the wrong direction. 

“The Michigan Unemployment Trust Fund, supported solely by taxes on job employers, lost billions during the COVID-19 pandemic. Even with increased taxes since then on employers to make up for these losses, the Trust Fund has only partly recovered. These higher benefits will reverse the progress that has been made and drive the Trust Fund balance down, triggering tax increases on job providers.” 

“With a long list of policy threats still pending in the lame duck legislature, the Michigan business community calls on lawmakers to stop and consider the state’s competitiveness. We need to move our state forward, not backward. Job creation for Michiganders and communities depends on an attractive business climate.” 

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Statement courtesy of 6 Largest Business Organizations on Unemployment Expansion.

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