(The Center Square) – A Michigan bill extending unemployment benefits from 20 to 26 weeks has received extensive criticism from numerous small business organizations.
House Bill 5827 would extend unemployment payouts by six weeks and be entirely funded by the state’s businesses. Unemployment insurance is funded by employers through federal and state unemployment taxes.
For small companies with limited assets, this can be a death sentence, according to business groups.
The National Federation of Independent Business, an association of small businesses based in Nashville, said 86% of their members opposed an increase in unemployment insurance.
“When small business owners continue to struggle to find workers and survive a difficult economic climate, this legislation is a slap in the face,” said Amanda Fisher, NFIB Michigan State Director. “Currently, there are around 400,000 open positions in Michigan. And according to the NFIB Research Center, small business’ top concern is finding workers who are qualified and willing to work. In fact, in the May survey, 42% (seasonally adjusted) of small business owners reported job openings they could not fill.”
House Republicans were particularly critical, with some saying the new time period disincentives employment.
“We’re not talking about the hard-working people who are laid off, take a few days, and then start sending resumes out. Those people are normally back to work in a matter of weeks,” Rep. Cam Cavitt, R-Cheboygan said. “This bill ensures that the people who refused to proactively look for a job can put off the search for even longer as they enjoy an extended taxpayer-funded vacation.”
Currently, Michigan ranks 39th in labor force participation. As of January, the state had 261,000 open job positions, with fewer than 200,000 people actively looking for work.
“Unemployment is not taxpayer funded, it’s business funded,” Rep. William Bruck, R-Erie said. “This is a tax increase for small businesses that are already struggling. 26 weeks is six months. 20 weeks is four and a half months. It might not sound like a big difference to some of you, but it’s a huge difference when you’re the one who is paying into this fund.”
House Democrats, on the other hand, say the bill “modernizes” the state’s unemployment policy. As of June, 39 other states offer 26 weeks of unemployment benefits.
“What this legislation does is help workers who live in communities where jobs aren’t as plentiful – especially rural areas, areas with seasonal tourism and communities with higher levels of poverty,” Michigan League for Public Policy CEO Monique Stanton said. “When benefits run out at just 20 weeks, workers are often forced to take whatever job is available, even if it’s a lower-paying job with fewer benefits, which can have a long-term negative impact on family budgets, housing and food security, and more. This additional six weeks will allow workers to do a really thorough search and find the best position available.”
The bill passed in the House on a 56-54. It currently sits in the Senate Committee on Labor.
