Attorney Lee Nelson is an expert on Minnesota and federal unemployment insurance laws. So, we turned to him to find out how the state shutdown and federal debt crisis could affect the unemployment programs that pay laid-off Minnesotans about $31 million a week in state and federal benefits. (That sum jumped to $38 million a week during the shutdown).
Q We just experienced a three-week shutdown of state government. How did that impact Minnesota unemployment?
A In the weeks leading up to it, we had been averaging 5,000 new unemployment insurance applications per week. And then we saw a sudden increase of 17,000... that is attributable to the state worker [layoffs] from the shutdown.
Q How does the state shutdown affect Minnesota's outlook for the rest of the year?
A There is one impact that this has and it is one of those great anomalies -- the shutdown actually has a positive impact.
The shutdown is very likely to mean that we will see an increase in the unemployment rate -- obviously. The law says that if the state has a three-month rolling unemployment average of less than 6.5 percent, then we stop [paying] the last 13 weeks of extended [unemployment] benefits [to laid-off workers]. That program would end.
But now it's very unlikely it will end this year because you are always taking the three-month average. So even if unemployment goes down to 6.3 or 6.4 percent in August or September, you will still have July creating a three-month average above 6.5 percent. Had the shutdown not occurred, we could have ended the program earlier.
Q Minnesota's jobless rate rose in June to 6.7 percent. Economists say it could grow to 7.5 percent for July. If so, you are saying that more Minnesotans will get to keep that final 13-week tier of unemployment benefits?