This is like a bad blues song. We're down so low that even the friggin state unemployment funds are going broke.
Michigan's unemployment fund has run out of money to pay claims, as the automotive economy sheds tens of thousands of jobs every month. The state has borrowed money from the federal government for each of the past three years to cover its costs. It's always paid back the loans, but this year that may not happen. The fund has run out of the money it banked during the flush years.
"Michigan has had high unemployment for many years now, among the highest in the country," Gheske says, "and that has posed a tremendous strain on the trust fund."
If Michigan can't pay the loans, some of the state's employers — the ones who have been laying off a lot of workers without paying much into the trust fund — will soon have to pay more in their payroll taxes to help cover the interest. And if the state can't pay back the principal sometime next year, all of Michigan's employers will have to pay more......
Michigan Isn't Alone
Indiana is a month away from having to borrow. Funds in California, Missouri, New York, Ohio, South Carolina and Wisconsin are also close to insolvency.