by Maurie Backman | June 23, 2021
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So far, 26 states have ended boosted unemployment. Will Michigan join their ranks?
The American Rescue Plan was signed into law in mid-March, and at the time, it was clear that the public was desperate for relief. In addition to the $1,400 stimulus checks that hit Americans' bank accounts, the massive $1.9 trillion bill called for a $300 weekly federal boost to unemployment benefits.
That boost was initially set to remain in place through early September. But 26 states have already pulled the plug on that boost. Now it looks like Michigan could be next to end those boosted payments ahead of schedule.
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Right now, Michigan residents can receive a maximum unemployment benefit of $662 a week. But $300 of that comes from the federal boost that has kept many jobless people afloat during the pandemic.
Now, Republican lawmakers in the state want to end those boosted benefits early. The argument is that since Michigan reopened in full on June 22, at this point, jobless people should have ample opportunity to seek work. And that extra $300 a week in unemployment income may disincentivize some jobless people from trying to get hired. Many states are experiencing labor shortages, and believe all of that extra money in unemployment income is the reason why.
There may be some truth to that sentiment. Right now, jobless workers in Michigan can earn up to the equivalent of $16.55 an hour on unemployment. Meanwhile, the federal minimum wage sits at $7.25 an hour. With that $300 boost in play, anyone working 40 hours a week at the current minimum wage would lose income by taking a job and giving up unemployment.
Of course, boosted unemployment benefits may not be the only thing keeping people out of the labor force. Many workers are dealing with childcare issues, and won't have access to full-time care during the day until schools reopen full-time in the fall.
Other workers, meanwhile, may be dealing with health issues that keep them out of the workforce. Now that mask mandates have been lifted, it's less safe for non-vaccinated people to work in a public setting. Some people may not be eligible to receive a coronavirus vaccine or may not receive sufficient protection from it, including those with certain health conditions or those who recently fell ill with the virus.
So while pulling the plug on boosted unemployment benefits early could drive more people to look for a job, it may not be the grand solution lawmakers are hoping it'll be.
At this point, there are only about two months of boosted unemployment left -- that $300 weekly enhancement is unlikely to get extended beyond the current Labor Day deadline. Keeping it in place could help a lot of jobless people stay afloat while they map out their return to the workforce. But whether Michigan goes that route is yet to be determined.
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