Yet another reason state needs to issue apologies

January 18, 2009
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Gov. Jennifer Granholm and the newly elected class of state legislators sworn in “ceremonially” last week should spend this week writing letters of apology to those who still operate businesses in Michigan and employ its residents. Added to the significant strains put upon business by the Michigan Business Tax was the added insult of a state system “unprepared” to handle laid-off workers filing for unemployment benefits.

In 2008, 200,000 business owners “contributed” to the state unemployment insurance fund through the unemployment tax. There were 224,000 “contributors” just one year earlier. Business owners pay an average of $441 per year per employee in unemployment insurance taxes. No business owner wants to lay off employees; businesses are created and developed to employ growing numbers of people.

The defeat and frustration of being laid off was exacerbated by the fact that employees were not able to file for benefits, as the state “system” melted down under the weight of unemployment claims. Former employees could not register by phone because of heavy call volumes or online because of jammed servers.

But businesses paid the taxes, paid for the failed “system.” It is no wonder the business community becomes so disenfranchised by government.

The behavior of state Unemployment Insurance Agency employees became typical bureaubrat disregard and should be immediately addressed. (We might suggest state officials look to Secretary of State Terri Lynn Land for personnel improvement processes.)

When the Business Journal inquired as to the causes for the meltdown, the UIA deputy director commented that those Michigan workers were “lucky” because, in some other states, systems crashed completely while “ours is still working.” And then, of course, defensiveness presents itself by way of blaming the unemployed, not the state, because those laid-off workers tried to file their claims in a manner the state employees did not prefer. Those same state employees have been paid by the residents they insulted.

The debacle is made more infuriating because it should never have happened. Specific types of companies are required to publicly announce forecasted job cuts. The state had early warnings. Statewide business surveys such as those conducted by Manpower presented forecasts from business owners regarding anticipated cuts and anticipated hiring. It doesn’t take a genius to see that the state offices would need to be ready to handle new volumes.

There is more bad news for business owners: For the first time in many years, about 20 percent of employers contributing unemployment tax will be assessed an additional solvency tax of up to $67.50 per employee, pushing the top end of the percentage scale to almost $995 per year per employee (see story on page 1).

Business owners have a credo (excepting the Big Three in current circumstance): The customer is king. Especially in this economic environment. Apologies are necessary to the employers who remain in this state and to those who were greeted with such great disregard by the UIA.

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