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“Throughout this period, the trade unions transitioned from their alliance with the Democratic Party on the basis of ferocious anti-communism into outright instruments of the corporations and the state. They have and continue to collaborate in the “orderly shutdown” of factories and mines, after pushing through wage and benefit cuts on the bogus pretext of “saving jobs.”
defraud workers of jobless benefits
By Shannon Jones
20 December 2016
Between October 2013 and October 2015 the state
of Michigan falsely accused more than 20,000 people of filing fraudulent
unemployment claims, forcing struggling residents to repay millions they did
not owe, according to the results of a state review released this week.
A newly installed computerized system wrongly
flagged unemployment claims as fraudulent 93 percent of the time during the
period examined. The subsequent interest and penalties collected by the state
resulted in a huge surplus in the state’s unemployment insurance fund. This
week the Republican-controlled state legislature passed a bill transferring $10
million of that money to help plug a hole in the state budget caused by tax
giveaways to business.
The review belatedly and reluctantly conducted
by Michigan authorities found that of 22,427 cases flagged for fraud by a
computer, 20,965 of those cases did not in fact involve fraud. As a result of
the surge in false fraud determinations the unemployment insurance agencies’
penalty and interest account ballooned from $3.1 million in 2011 to around $155
million as of October 2016.
A Royal Oak, Michigan attorney is now conducting
a class action lawsuit against the state of Michigan on behalf of those
unjustly forced to repay benefits. Attorneys are demanding that the surplus
unemployment insurance agency funds be put in a trust until all those owed
reimbursement by the state are fully repaid. To this date a mere $5.4 million
has been refunded to 2,571 claimants. Audited state records show that more than
$15 million was gouged from claimants in 2015 alone.
The false fraud charges caused enormous hardship
for those wrongly accused. In some cases repayments and penalties exceeded
$100,000 per claimant. Bankruptcy filings in the state increased during the time
period when the false accusations of fraud were taking place.
Daniel Di Gregorio, a
crane operator contacted by the Detroit Free Press, said his
wife had taken the initiative in fighting a $33,000 assessment by the state of
Michigan. His attorney said the notices did not meet basic due process
requirements and assumed fraud on the part of claimants. He said the false
accusations had a “huge chilling effect” on those who experienced it and
frightened many others from even filing for benefits.
The director of the
University of Michigan law school unemployment insurance clinic told the
British Guardian newspaper he often found people facing
significant emotional stress. In response he said the clinic added a suicide
hotline to a referral resource page on its website.
The Guardian said
it had encountered claimants who were charged with fraud despite never
collecting a dollar in benefits. Many were not even aware they had the right to
Renee, a public
university lecturer in Michigan, told the World SocialistWeb
Site she has been ordered by the state to repay $4,000 in unemployment
benefits she was paid over the course of the summer months when she was not
teaching. She said she was fighting the determination, but did not have much
hope of prevailing.
“They were denying a whole bunch of us who had
filed similar claims in previous years and been approved.
“There is a robotic system and third party
contractors, who don’t even know the rules, who will flag your unemployment
benefits. It is very difficult to deal with the paperwork the state gives you
and the state reporting website is very difficult to navigate. It is set up so
you miss deadlines all the time. If you miss the deadline, it doesn’t matter if
you are correct.
“For people who don’t realize they can have a
lawyer, it is a frightening and stress inducing process.”
Renee said she had turned in all the required
paperwork showing the state was in error, but the state claimed she had missed
a deadline, a deadline she wasn’t even aware of. “My lawyer says I can’t really
do anything about it now, even if their determination was fraudulent.
“The money I owe the state is racking up
interest because I can’t afford to pay it back. I don’t have room in my budget
She said the experience was traumatizing. “It is
disgusting. It makes you feel like you have no say in your life. The system is
set up to keep you from receiving money you are legally owed.”
Reports of the state of Michigan gouging
unemployed workers comes as changes in the Supplemental Nutrition Assistance
Program (SNAP), commonly known as food stamps, are set to take effect this
spring. The cuts will further impact already struggling families and
individuals. New rule requirements mean adults designated as able-bodied, age
18-49, who do not work and do not have dependents, could lose their benefits.
Since 2002, Michigan had been exempt from
federal requirements, so designated able-bodied adults were exempt from
requirements that they work in order to receive food stamps. The waiver had
been initially granted because the state’s unemployment rate was above the
national average. But now that the official unemployment rate in the state has
fallen to 4.7 percent, below the national average of 4.9 percent, the waiver
has not been renewed for 2017. Like the rest of the US, the state’s official
jobless rate distorts the real situation and is largely due to a drop in the
number of workers in the labor force.
The rule change will be phased in starting next
month and will be fully effective by October 2018. It will immediately affect
some 14,000 adults in four counties, including Oakland and Washtenaw counties
in suburban Detroit, where the unemployment rate is the lowest. It means adults
without dependents will only get benefits for three months out of a 36-month
period unless they are enrolled in a job-training program, work at least 20
hours per week, or participate in community service.
There are some 220,000 people in Michigan
designated as able-bodied adults and who have no dependents that could potentially
be impacted by the rule changes. Some 1.4 million Michigan residents are now
receiving SNAP benefits, or about 1 in 7 people in the state. Some 29 percent
of households receiving food stamps had at least one member who was 60 or
The amount of benefits paid to food stamp
recipients is absurdly small, amounting to an average of $124 a month, or about
$1.38 per meal. That is roughly equivalent to the cost of a can of soup. The
income limit for a two-member household is $20,709 annually.
Up to 1 million people nationwide could be
impacted by the reinstatement of work requirements in relation to SNAP
benefits. In the states where work requirements have already been reinstated,
the majority of people impacted have lost their benefits.
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