Since March 15, Michigan Unemployment Insurance Agency has provided nearly $22 billion in unemployment benefits to more than 2.1 million workers, according to a Sept. 2 press release.
The release reported that spending by Michigan residents has been three times higher than economists forecasted as a result of the state’s efficiency and speed in paying out unemployment benefits. Approximately 98% of eligible claimants received benefits, out of the 2.6 million claims made since March 15.
“Our unemployment system was designed to be a safety net for both our workers and economy,” UIA Director Steve Gray said in the release. “As we have throughout the pandemic, the UIA will continue to work, day and night, to provide this emergency financial assistance quickly so that claimants have the resources to provide for their families.
The federal Work Share program was also credited for this recovery in spending. The program aims to provide relief to businesses by allowing laid-off workers to be hired back part-time, providing unemployment pay to make up for lost wages. Out of the 25 states utilizing the Work Share program, Michigan leads in the total employees certified at 75,820.
The press release referenced the Harvard-based nonprofit Opportunity Insights, a research institute that has collected data on consumer spending throughout the pandemic. Their research indicates that for Michigan, consumer spending is up 4% from January 2020. Spending was previously down 36.5% on April 1st after public schools were ordered closed via executive order. Consumer spending also spiked after stimulus checks were paid out on April 15th.
The city of East Lansing participated in this program through June and July this year.
“The program allowed us to reduce staffing for a period, but the employees could supplement their pay with unemployment insurance,” East Lansing City Manager George Lahanas said. “What it allowed us to do was essentially lower our service levels when a lot of things were closed and be able to reduce our payroll expenses."
According to Lahanas, about 100 employees participated, saving the city over $300,000. The majority of selected businesses were chosen because they were already on reduced schedules — businesses that would not be hurt by having a part time staff.
“For instance, parks and recreation and library operations that were more or less closed, so those employees were employees that were able to have a reduction in hours without significantly impacting services,” Lahanas said.
Lahanas said that East Lansing city officials are proceeding with care in regard to its next steps.
“It's more of a cautious wait-and-see approach at this point,” he said.
While unemployment benefits and the Work Share program may have provided a favorable future for the East Lansing economy, city officials expressed concern for certain businesses, specifically downtown retailers.
In a virtual meeting of the East Lansing Downtown Management Board that took place Tuesday, Sept. 1, Chair Chanelle Crouch asked board members how retail businesses would fare as MSU prepares for a semester with limited numbers of students on campus.
“Retail, right now it’s hit or miss. ... It’s so easy for (students) to order things online, and get them, and not have to worry about parking and venturing out of where they’re living,” Ray Walsh, a member of the board and the owner of Curious Book Shop in East Lansing, said. Walsh said that his own book store was currently receiving business, but that he can’t be sure how long this foot traffic will last.
Board member Mike Krueger also expressed concern for retail businesses that sell Spartan-themed apparel. He speculated that stores like the Student Book Store would suffer a drop in sales as first-year students stay home. Freshmen seem to be the most popular demographic for these kinds of stores, looking to purchase lanyards, sweaters and other items carrying the Sparty logo. There are five of these businesses on downtown Grand River Avenue alone and more throughout East Lansing.
“I’m not quite sure what the city can do to support them ... but those are the retail places that are definitely going to be hurting the worst,” Krueger said.
Board member Justin Hewson also said that while he does see students active downtown, he’s not sure how many of them are shopping at these retail locations.
“I’ve seen students in large groups ... eating at restaurants, walking down Grand River ... whether they venture into shops that’s going to be unknown,” he said.
However, East Lansing still retains a large student population in rental housing. Hewson is cautiously optimistic that these students will continue to shop downtown.
“There (is) still a good number of people living downtown right now, that are going to hopefully venture out and shop,” he said.
The Student Book Store has adapted in some capacity by offering a wide variety of MSU-themed face coverings, which are listed on its website as bestselling items.
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