Economist: Michigan’s work search requirement doesn’t help much with extra jobless benefits

End of $300 weekly federal benefit expected to flood the job market with workers again
Updated: Jun. 10, 2021 at 7:10 PM EDT
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SHIAWASSEE COUNTY, Mich. (WJRT) - Ten days after Michigan reinstated requirements for workers drawing unemployment benefits to search for work, employers say the problem of no-shows isn’t going away.

A Mid-Michigan economic expert said the number of open jobs in Shiawassee County actually increased by 50% over the past two months despite the work search requirement. Employers trying to fill those jobs are reporting a rising number of people skipping scheduled job interviews or not showing up after they’ve been hired.

Employers are frustrated because of it, leaving them no choice but to reduce hours or pay overtime to current workers.

”The no show issue is huge right now,” said Justin Horvath, who leads the Shiawassee Economic Development Partnership. “I’m having conversations with employers every day who are telling me they’re calling people for interviews -- they’re even hiring people -- and they’re just not showing up.”

People drawing unemployment benefits in Michigan were not required to search for a new job for over a year during the coronavirus pandemic. The Michigan Unemployment Insurance Agency reinstated those requirements on May 30, so workers have to prove they took action to find a job or they cannot collect benefits.

Workers must complete at least one of five options each week before they certify their weekly claim for benefits. The system is designed as a good faith effort that someone is trying to get a job.

Horvath said the work search requirement is not the solution to Mid-Michigan’s labor shortage, however.

“Our companies are telling us they appreciate the return to work requirements. It’s a step in the right direction. But in reality, what they’re really asking for is the elimination of the $300 per week federal stimulus,” he said.

So are people actually out looking for jobs? Michigan Works Bay Region is seeing a lot more work search activity. They hope job seekers follow through with the entire process from application to interview to being employed.

A couple of months ago, Shiawassee County had around 1,000 job openings across all sectors. As of June 10, that number has increased to 1,500. That number should be going down -- not up.

Horvath said state unemployment benefits with the $300 weekly additional federal benefit and combined with not having to pay for child care and transportation means companies have to increase their wages.

Depending on the company and position, that could cost employers up to $10 dollars more per hour. That wage increase could potentially mean higher costs for products.

The $300 federal unemployment benefits are not scheduled to end until September.

“When that occurs, I think we’re going to see a flood of people back into the job market -- not only in Shiawassee County, but the state as a whole,” Horvath said.

Gov. Gretchen Whitmer’s administration does not plan to stop paying the additional $300 weekly federal unemployment benefit like some other states, which are coping with similar labor shortages.

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