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The unemployment rate is one metric to gauge the health of the labor force, but it’s not the only one. At times it can even be deceptive. The Michigan Department of Technology, Management, and Budget made this point in a recent release. The January unemployment rate statewide made impressive gains, from 8.2% to 5.7% in one month. Most of the improvement was driven by people who gave up looking for work. The DTMB described trends in the Detroit region. “The jobless rate reduction was not primarily due to more employed residents, as employment moved up by only 14,000. The metro area workforce fell by 100,000 in January.”
Director of Workforce Services for UP Michigan Works Debb Brunell says the situation is similar locally. Her staff shared some startling statistics when talking to the Keweenaw Economic Development Alliance virtual breakfast last week.
It is unclear when that will change. Michigan Works used to be a requirement to receive unemployment benefits. If you didn’t enroll with the “reemployment” agency and show you were actively looking for new opportunities, you forfeit your right to assistance from the state. That was modified last year due to the effects of economic lockdowns meant to mitigate the spread of COVID-19.
The federal government has guaranteed additional benefits on top of what is offered through the state program. An extension of the emergency unemployment help, several hundred dollars per week, was part of the recently passed stimulus bill. Republican critics say that if the benefits are too lavish and go for too long it will keep people from returning to the labor force.
