Shaefer weighs in on state's faulty unemployment insurance fraud claims

January 27, 2017

A January 18 Detroit MetroTimes piece by Jack Lessenberry, "Politics & Prejudices: Screwing the poor, and ourselves," features quotes from Luke Shaefer.

Lessenberry's opinion piece profiles the issue of a faulty fraud detection system implemented by the Michigan state government as a cost-saving measure--the system led to over 20,000 Michiganders being wrongly accused of committing unemployment insurance fraud. 

For those who were wrongly accused of fraud, which the state found was true for 93 percent of cases, Shaefer explained, "So, let's say they found you improperly got $3,000. Not only would you have to pay that back, but you would owe a penalty four times the amount of what you 'fraudulently' got — with interest."

Despite the state quickly realizing that rates of uninsurance fraud 'detection' had sky-rocketed, the system was utilized for two years. "They've had evidence that this was a major problem for a long time. I don't understand why it took so long [to stop]," Shaefer said.

Lessenberry goes on to describe Shaefer's research, including his book $2.00 a Day: Living on Almost Nothing in America (co-authored with Kathryn Edin of Johns Hopkins), and suggests that the false fraud claims are indicative of how the poor are treated in politics.

H. Luke Shaefer is an associate professor of social work and public policy and director of Poverty Solutions at the University of Michigan. His research focuses on the effectiveness of the United States social safety net in serving low-wage workers and economically disadvantaged families.