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Pandemic unemployment benefits are ending, but that doesn’t equal more workers

Employers desperate for workers are turning to signing bonuses and other hiring incentives, even for positions that pay a low hourly wage.
Mario Tama
/
Getty Images
Employers desperate for workers are turning to signing bonuses and other hiring incentives, even for positions that pay a low hourly wage.

Starting Sep. 4, thousands of Michigan residents will be without pandemic unemployment benefits.

Programs being cut include Pandemic Unemployment Compensation, which added an extra $300 to standard federal and state benefits.

Now, employers are wondering whether people will be pushed back into the workforce, solving the ongoing hiring crisis.

In Petoskey, the labor shortage is driven by more than just benefits, or lack thereof. Petoskey Chamber of Commerce President, Nikki Devitt said it's more of a housing issue.

"How do they work if they can't live here?" she said. "I mean, the biggest crisis to the workforce hands down is housing.”

Along with housing, Devitt said the pandemic pushed older populations into retiring early, diminishing the workforce. To bring in a younger workforce would require more housing and hire wage availability, both of which Petoskey is struggling with.

"If you're looking at it from the aspect of somebody who starts off at a particular wage and wants to move up, but also has need for new housing," she said. "They are in a position where they're going to have a difficult time being able to find it at all."

Bringing in a newer, and younger, workforce isn't just an issue in Petoskey, it's becoming a necessity in several counties, according to the Northern Lakes Economic Alliance (NLEA). They recently put out a study titled "Quantifying the Local Labor Shortage," which examined the declining workforce availability in Antrim, Charlevoix, Cheboygan and Emmet counties.

In it they found that the workforce population has been in a steady decline for about 15 years. However, the pandemic added insult to injury. NLEA graduate intern, Sam Bailey, reported that in July 2019, the unemployment population was at about 2,500, but in June of 2020, it was sitting at 6,300.

What came after that change is a mass exiting of the workforce from older populations.

"So we've got an aging population, and a graying of our population, which also is a graying of our workforce," NLEA President, David Emmel, said. "And so, you know, people in that 65 plus range that were still engaged in the workforce, a pandemic represents a high risk for those individuals, and so we saw a number of people exit the workforce."

As that older populations exits, there's also a struggle to bring in younger workers to replace them.

“So we have a graying of the population and the workforce, and people exiting the workforce. In addition to that, we have consistently declining school enrollments, so when we talk about, you know, our next generation of workforce in northern Michigan, that population is rapidly declining," Emmel said. "We have less younger people coming into the workforce, and we have more older people leaving the workforce.” 

The main contributing factors here are housing, workforce exit and education availability. Cessation of benefits of low on the list. So, how can the labor shortage be solved?

Emmel isn't sure. He said it's a complicated, multifaceted issue.

"That is the million dollar question," he said. "And I don't think anyone really knows the answer to that, because there are so many market forces, right?"

Both the Petoskey Chamber of Commerce and the NLEA said they're continuing to observe the forces at hand and navigate this issue along with the rest of the state.