Study: Michigan Avoided Slow Job Growth By Extending COVID Unemployment Benefits

Michigan Advance

September 25, 2021

In July, Gov. Gretchen Whitmer vetoed a GOP bill that would have ended emergency COVID-19 unemployment benefits two months before they were set to expire.

That decision likely prevented Michigan from being one of many states that saw substantially less job growth by axing those benefits early, according to a new study released Friday by the Bureau of Labor Statistics.

Extra unemployment payments of $300 per week ended nationally in early September. Without those extra federal dollars, Michigan workers normally receive $362 per week in regular aid; other states like Minnesota offer more. But many mostly Republican-led states chose this summer to end those additional unemployment payments early, like Texas and Florida, in an effort to boost job growth by incentivizing employment.

The Bureau’s new study shows that those efforts largely backfired.

Among the states that chose to axe benefits early: Alaska, Iowa, Missouri, Mississippi, Alabama, Idaho, Nebraska, New Hampshire, Indiana, North Dakota, West Virginia, Wyoming, Arkansas, Florida, Georgia, Ohio, South Carolina, South Dakota, Texas, Utah, Montana, Oklahoma, Tennessee, and Arizona.

In Michigan, the number of unemployed persons from June to August 2021 decreased from just over 227,700 down to around 223,800 — a decrease of nearly 11,000 unemployed residents.

In contrast, Iowa (one of the states which ended benefits early) started with 66,639 unemployed and actually increased to 67,868; Mississippi did not increase in unemployment numbers, but rather saw a small decrease with 2,244 less unemployed residents after ending federal benefits.

The new study and other research have shown similar trends related to unemployment benefits and job growth, although many Republicans still claim that unemployment payments hamper the workforce by discouraging employment.

Michigan’s unemployment rate is below the national average, with 4.7% compared to the national 5.2% as of August. It has declined continuously over the last eight months.

Republican lawmakers and members of Congress, including U.S. Rep. Peter Meijer (R-Grand Rapids), had rallied for an end to the emergency aid before Whitmer vetoed the effort.

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