(The Center Square) – A Michigan bill that would extend unemployment benefits from 20 to 26 weeks has drawn sharp criticism from numerous small business groups.
House Bill 5827 would extend unemployment benefits by six weeks and be fully funded by state businesses. Unemployment insurance is funded by employers through federal and state unemployment taxes.
For small businesses with limited assets, this could be a death sentence, business groups say.
The National Federation of Independent Business, a Nashville-based small business group, said 86% of its members oppose increasing unemployment insurance.
“This legislation is an insult at a time when small business owners are struggling to find workers and survive a tough economic climate,” said NFIB Michigan State Director Amanda Fisher. “Currently, there are approximately 400,000 unfilled positions in Michigan. According to the NFIB Research Center, a top concern for small businesses is finding workers who are qualified and willing to work. In fact, in a May survey, 42% (seasonally adjusted) of small business owners reported they have job openings they cannot fill.”
House Republicans were particularly critical, with some saying the new term would discourage hiring.
“We're not talking about hard-working people who get laid off, take a few days off, and then start sending out resumes; they usually get back to work within a few weeks,” said Rep. Cam Cavitt, a Republican from Cheboygan. “This bill would allow those who refuse to actively look for work to put off their job search even longer while enjoying a taxpayer-funded sabbatical.”
Currently, Michigan ranks 39th in labor force participation rate. As of January, the state had 261,000 job openings and fewer than 200,000 people actively looking for work.
“Unemployment benefits are funded by businesses, not taxpayers,” said Republican Rep. William Brook of Erie. “This is a tax increase on small businesses that are already struggling. 26 weeks is six months. 20 weeks is four and a half months. That may not seem like much of a difference to some, but it makes a big difference to those who pay into this fund.”
Meanwhile, House Democrats say the bill would “modernize” state unemployment insurance policies. As of June, 39 other states were offering 26 weeks of unemployment benefits.
“This legislation will help workers who live in areas where jobs aren't as plentiful, especially rural areas, seasonal tourist destinations and areas with high poverty rates,” said Monique Stanton, CEO of the Michigan Federation for Public Policy. “When benefits end after just 20 weeks, workers are often forced to take any job available, even if it's one with low benefits and low pay, which can have long-term negative effects on their finances, housing and food security. These additional six weeks will allow workers to thoroughly search and find the best job available.”
The bill passed the House 56-54 and is currently before the Senate Labor Committee.