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Unemployment benefits end, but effects remain unpredictable

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Brett Dahlberg
/
WCMU News
Employers in Michigan say they're having trouble finding workers.

Unemployment benefits ran out for more than 400,000 Michiganders this weekend, according to the state unemployment insurance agency.

Those benefits are designed to give people time after they lose a job to find a new one that’s a good fit, said Jason Taylor, a professor of economics at Central Michigan University.

Taylor said payments to unemployed people support them so they don’t have to grab the first job opening they see, even if it’s not a good match for their skills.

But those benefits can’t last perpetually, he said. “If we gave this to them forever, it might disincentivize them from taking another job, so these benefits do expire at some point.”

Michigan’s unemployment rate has been hovering around 5% for months. Taylor said employers are having trouble filling jobs, and they’re blaming that difficulty at least partially on the existence of unemployment benefits.

“Businesses have been long clamoring, saying that a major reason why they can’t hire workers is because of this unemployment insurance policy,” he said. “It will be interesting to see whether or not they’re right. They’ve been predicting that once this expires, we’ll see lots of people returning to the workforce.”

Taylor said historically, ending unemployment benefits has only had small effects on the job market. He said it might take higher wages or a clear end to the pandemic to push more people into the workforce.