Michigan Braces for a Surge in Welfare Applications

By SARA MURRAY from Wall St Journal June 26, 2009

(See Corrections & Amplifications item at bottom.)

Michigan's generous jobless benefits and strict eligibility rules
have kept the welfare rolls down despite the state's 14.1% unemployment
rate, the highest in the country. But a surge in jobless workers
reaching the time limit for unemployment benefits in coming months
could change that.

Zuma Press

More
than 5,000 unemployed residents of southeast Michigan looked for work
at a job fair sponsored by the city of Detroit in March. Some filled
out job applications on computers, while others waited to speak to
recruiters.

A
major test for the state's welfare system could come by January, when
nearly one in seven unemployed workers will have exhausted their
jobless benefits, unless the laws change, said Norm Isotalo, a
spokesman for Michigan's unemployment-insurance agency. Many of the
more than 680,000 unemployed workers in the state are collecting
jobless benefits, which last for as long as 79 weeks.

Other states with high unemployment, such as Florida and Oregon, have already seen significant increases in welfare caseloads.

"We're expecting a huge influx of applications in the next few
months," said Barbara Anders, the director of adult and family services
at the Michigan Department of Human Services. About 100,000 people's
jobless benefits will expire by January. Officials hope for funding to
add staff to handle the influx, and the state Senate appropriations
committee has approved hiring 200 more staffers.

"We
believe that the safety net remains strong in Michigan," said Liz Boyd,
a spokeswoman for Democratic Gov. Jennifer Granholm. She added that the
state's food-assistance and Medicaid programs have expanded.

In contrast to most other big states, welfare caseloads in Michigan
are 4.8% below year-ago levels, though the total number of cases has
stopped falling in the past four months. In April, the state reported
about 70,000 families were receiving welfare under the federal-state
Temporary Assistance for Needy Families program, or TANF. But nearly
one in seven residents, or 1.4 million in all, are receiving food
stamps -- a clear symptom of Michigan's economic distress.

The state has some of the strictest welfare rules in the nation,
dating back to its pioneering welfare-overhaul efforts in the 1990s.
Michigan is one of four states that closes a family's case the first
time it fails to comply with a requirement -- such as spending a set
amount of time searching for a job -- according to the Urban Institute,
a Washington think tank.

Michigan is the only one of those four states that also suspends a
family's benefits for three months when it doesn't comply; the other
three suspend them for one month. Families that are suspended for
breaking the rules must reapply for benefits.

Local
advocates for low-income people cite Michigan's rules limiting the
income or assets of would-be welfare recipients. A family of three that
earns more than $814 a month is ineligible for welfare in Michigan, a
threshold that hasn't changed in more than two decades, said Sharon
Parks, president of the Michigan League for Human Services, an advocacy
group for low-income people.

"The fact that it's stayed the same means that you have to be poorer and poorer to qualify for cash assistance," Ms. Parks said.

In the 1990s, under Republican Gov. John Engler, Michigan developed
one of the nation's first programs to push welfare recipients to work,
an approach adopted nationally in 1996. The rules tightened further
under Ms. Granholm in 2006. The rules allow families to receive
benefits for a maximum of two years, and toughened penalties for not
following work requirements.

Before Michigan's welfare office will open a case, an applicant must
first visit a Michigan Works office to register for a job-search
program, and report frequently thereafter, which some advocates say has
discouraged applications in a state where jobs are scarce.

"It's just perceived to be this roadblock to getting assistance,"
said Kristin S. Seefeldt, assistant director of the National Poverty
Center at the University of Michigan, who has followed 45 low-income
women for the past four years.

For those who already have jobs, the job-search program doesn't bend
around work schedules. For others, the job-search program primarily
consists of spending hours looking at want ads. "They could do that on
their own, and the amount of money they'd get from TANF isn't worth it"
for some people, Ms. Seefeldt said. The monthly welfare check for a
family of three in Michigan is $492, or $5,904 a year.

Write to Sara Murray at sara.murray@wsj.com

Corrections & Amplifications

Families in Michigan can receive welfare benefits for a maximum of
four years. This article incorrectly said the maximum was two years.

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