Unemployment insurance could be leading to worker shortage

Unemployment benefits boosted by federal funding might be making it harder for employers to find workers as the state begins to reopen.

As stores and restaurants reopen in Michigan, consumer spending is rebounding. But as spending rebounds, some employers are having difficulty finding workers.

A possible culprit? Temporary unemployment benefits funded by the federal government.

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The CARES Act provides an extra $600 per week on top of state unemployment benefits for up to 26 weeks for those who are unable to work due to the coronavirus pandemic.

That equals as much $962 per week for many people – more than most low-skilled positions pay.

“You can earn up to $24 an hour and earn more in unemployment than in your prior job,” said Michael Horrigan, president of the Upjohn Institute for Employment Research in Kalamazoo, in an article in Bridge Magazine.

Employers have an alternative, according to research by the Upjohn Institute. It’s called Short-Time Compensation (STC).

STC allows employers to bring back workers part-time and allows workers to continue to draw down federal unemployment dollars.

You can read the full story here.

You can read the full research highlight here.

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