LANSING, MI—In another devastating blow to the state's already fragile economy, the Unemployment Insurance Agency of the state of Michigan permanently shuttered its nine branch offices Monday, leaving more than 8,500 unemployment employees unemployed.

Newly unemployed workers stream out of the UIA headquarters.

Announcing the closings at a press conference, Michigan Gov. Jennifer Granholm called them "a tragic coda" to a once-vibrant industry that until this week defined the Michigan economy and served almost one-fifth of the state's employable population.

"This is a sad day for the people of Michigan," Granholm said to a crowd of part-time reporters and former assembly-line workers Tuesday. "Our state has a long, hallowed history of unemployment, and with these closings, we have lost a vital part of our economic and social fabric."

Since its inception in 1937, Michigan's unemployment benefits system has been among the nation's most productive, outlasting the state's automotive and other industrial and manufacturing sectors to become Michigan's most enduring job-provider.

For many, the closing of UIA marks an end of an era. Flint resident Martha Ayers recalled the "glory days" of the 1980s when the line of workers waiting to get inside each morning stretched around the block.

"Helping people move on with their lives after they'd been suddenly fired is all I've ever known. What am I going to do with myself now?"<BR><b>Former UIA employee Paul Huegli</b>

"People from all over the state used to come just to visit our unemployment office," Ayers, 52, said. "Just like Detroit, Ypsilanti, Novi, and most other Michigan cities, Flint's an unemployment town. Has been as long as I can remember."

The sudden collapse of the very institution that formed the backbone of the state economy has left its former employees in total shock. Many newly laid-off UIA workers have expressed dismay at how the closures were handled. While most front-line workers were given no advance notice, department heads were presented with pink slips a week before the announcement and privately urged to return to the office while it was still possible to collect benefits.

Fifty-one-year-old Paul Huegli worked for the unemployment office for 25 years, and now finds himself in the odd position of competing for work against the very individuals he once served.

"Helping people move on with their lives after they'd been suddenly fired is all I've ever been good at, all I've ever known," Huegli said. "What am I going to do with myself now?"

Some of Huegli's colleagues are taking action. Former outreach associate Aaron Corcoran, 41, said he plans to join his brother-in-law and move to Kentucky. "We heard there was a lot of unemployment down there," Corcoran said. "I bet they can use someone who learned his trade in the heart of the unemployment industry. We were the best in the world."

Although the UIA closures appeared to come from out of the blue, some had predicted the agency's downfall, calling its spending-based business model unsustainable.

"They were pouring every penny of profit back into the product, and with all this money going out and none coming in, it was bound to catch up with them," said systems analyst Mark Sturdevant, who had spent the past three months observing the UIA offices firsthand since being fired from an untenured teaching position in the economics department of Michigan State University. "No one, not even Michigan's state unemployment office, can elude market forces."

Despite seemingly grim prospects for the Michigan unemployment industry in the near future, Gov. Granholm expressed solidarity with the laid-off UIA workers, saying that she was "confident" the state will once again have a thriving unemployment industry. "In fact, within a few years, I expect to be right out there with you guys," Granholm said.