Michigan Companies Can't Find Seasonal Help
Michigan had the highest unemployment rate in the nation at 14.1 percent in March, and the ranks of the state’s unemployed total more than 682,000. The last time the March jobless rate in Michigan was that high was 27 years ago in 1983, when it reached 16.1 percent.
So you would think it would be easy to hire seasonal workers in Michigan for industries like landscaping, right? Well, you would be wrong this year, because unemployed Michiganders are getting unemployment benefits for up to 99 weeks due to all of the federal jobless benefits extensions, and those benefits are creating disincentives for some of the unemployed to go back to work. Here’s the way the math works:
Landscape workers can earn about $12 per hour in Michigan and would make $480 per week before taxes working full-time, or about $350 per week after taxes. In addition, full-time landscape workers would face transportation costs and other work-related expenses. But collecting unemployment benefits and working zero hours per week, many of those unemployed workers can receive $255 per week tax-free for almost two years, which is only $95 less per week than if they worked full-time. For some workers who are getting the maximum of $387 per week in jobless benefits, they can receive even more from collecting benefits than they would get paid going back to work full-time.
So in the state with the highest jobless rate in the country, landscaping companies in Michigan are actually finding it difficult to hire seasonal workers this year, partly because of “the most generous safety net we’ve ever offered nationally,” according to Michigan economist David Littmann. Read more about it here in today’s Detroit News.
Cross-posted at the Enterprise Blog.
41 Comments:
Likewise, a friend of mine is seeking apprentice built-up roofers and cannot find enough that can pass his requirements:
1) Pass a drug test.
2) Pass a physical.
3) Have a driver's license.
4) No felony convictions, and can legally leave the state of Michigan because some work is in neighboring states.
5) Must have their own car (the common excuse "I will get a ride to work from a friend" only lasts a week or so).
6) Have a high school diploma.
These jobs start out about $20-per-hour and go up to near $30-per-hour for journeyman status. It is very hard, dangerous, and dirty work, but you would think he could find many takers at that pay. Wouldn't you?
Turning the safety net into a hammock is how Obama is "transforming the economy from the bottom up."
Excellent work!
A simple market solution is to pay hire wages.
You want more of something, raise the price.
I'm shocked that for landscaping they're not paying most folks off-book. i.e. collect unemployment and a paycheck too.
Jeez, roofers in Los Angeles get $10 an hour cash, no bennies, no paycheck.
Walt G: Has your friend ever run a business before? Why all the requirements?
Perhaps the seasonal part is off-putting. While it may be work, there is a defined end to it. Perhaps if it did lead to something non-seasonal, they would take it up.
Another reason? Perhaps it pays more to be unemployed when businesses can easily (and affordably) screw with people.
Honesty and civility just are not profitable anymore.
Likewise, a friend of mine is seeking apprentice built-up roofers and cannot find enough that can pass his requirements:
Outside of the transportation requirement, I am a bit surprised. Michigan of all places, too.
I suspect that it may be customer and/or insurance requirements. The physical sounds like insurance, and given that hot tar is involved the drug tests sound like it also. Further the fact that travel is involved requires the car since they work in multiple states. As to a diploma versus a GED that is not clear. In general it sounds like a lot of insurance requirements, (things like workmans comp and the like) Note that in the residential business quite often the little details about workmans comp and unemployment taxes are often ignored as part of being off the books, but in the commercial space, the customer wants to be sure so it does not get bad publicity.
I don't think you fix Michigans problems on the back of seasonal landscapers.
I can easily see why you would have a problem getting roofers to pass those tests and do hot dirty dangersous work for $20 an hour to start.
If they are not physically capable they can't do the work, and if they can't pass a drug test, or have a record your insurance won't cover the liability on someone else's property.
If all I have is a pick-up truck, and a smooth togue, I can hire day workers in front of Home Depot with little risk to me.
But if I actually have a business, with investements and livliehoods to support, the risk is a lot different.
If I get busted for operating an unlicensed business, the fine is $2000, but if I have a licensed business and get caught with illegal hiring the fine is up to $50,000.
Spencer is right though, pay more to get legals and learn Spanish anyway.
A short story: If Michigan landscapers were paid $100 per hour.
They left unemployment and took the landscaper positions. They took the jobs in droves. All was good in the land and the people prospered.
The meaty, beefy, big and bouncy $100 per hour landscape job attracted the attention of Jennifer Granholm’s. The public sector coffers were bear. Oh what to do, what to do!
Then came the tax. Yes the stormy tax woman cometh and taketh away! All landscapers will be taxed at 90.5%! Yes, that’s the ticket! The public coffers runeth over and all was good with entitlements, bureaucracy expansion, and public sector pay/benefits marched on.
The stormy tax woman was spotted ordering a super sized government and a side of super sized government scope from the Keynesian happy meal menu. That strawberry entitlement milkshake was a must! All was good in the land of unfunded empty promises.
Alas, the once sought after golden job of landscaper now only yielded $380 of take home pay for a 40 hour week. The landscapers wearily went back onto the unemployment rolls and the public coffers were empty once more.
Ah, the evil of it all!
The End
>"Perhaps the seasonal part is off-putting. While it may be work, there is a defined end to it."
sethstorm, So, it's your belief that an unemployed person would rather continue to be unemployed than take a job they know will end at some time in the future? How does that make them better off?
>"Perhaps if it did lead to something non-seasonal, they would take it up."
I guess there isn't any way to know for sure unless they take the job as it is now. It certainly won't lead to permanent work if they don't apply.
I would call your hypothetical unemployed person awfully picky, considering the circumstances, but I think you've hit on the real reason below.
>"Another reason? Perhaps it pays more to be unemployed..."
As the example in the post shows, a person may be better off staying unemployed, considering the seemingly never ending extensions of unemployment benefits.
>"...the Keynesian happy meal menu."
That's great! I love it! So many items to chose from.
Wasn't there a Nobel Prize winning economist who said that US unemployment benefits were not generous enough for this to happen? I'll be waiting for his column puzzling over this.
Walt G.,
Your friend may be trying to select for employees most likely to be reliable, honest, hard working, self sufficient, and who need a minimum of direct supervision. Perhaps those who meet his requirements have already found jobs.
Many landscapers around the state use illegals in order to evade wage-and-hour, payroll taxes, workers comp and OSHA.
Also many of them dump workers quickly when spring work slows down.
Has there been an ICE warning to landscapers and contractors?
" . . . many of those unemployed workers can receive $255 per week tax-free for almost two years . . "
that doesn't sound right. the first $2400 of UC is tax free, otherwise UC is taxable.
Anon @ 5:27
>"Wasn't there a Nobel Prize winning economist who said that US unemployment benefits were not generous enough for this to happen? I'll be waiting for his column puzzling over this."
Is this the same Nobel Prize winning economist who pointed out, after the collapse of the World Trade Center buildings on 9/11/2001, that there was a silver lining? After all, a lot of work lay ahead for construction companies.
Also many of them dump workers quickly when spring work slows down.
At least they are consistent. They dump their commercial mowing machines the same way.
So, it's your belief that an unemployed person would rather continue to be unemployed than take a job they know will end at some time in the future? How does that make them better off?
Well, whenever Iam unemployed I go out in my woodshop and make stuff.
Then when I'm employed again my wife takes used furniture to sell in the market.
Ron, you need a little imagination.
>"Ron, you need a little imagination."
Well, I guess so! It never occurred to me that a good living could be made selling used furniture.
I think you all a missing a big point. If they take the temp job, they can't go back on unemployment.
You have to balance the guaranteed 99 weeks to a job that might last less than 6 months.
>"I think you all a missing a big point. If they take the temp job, they can't go back on unemployment.
You have to balance the guaranteed 99 weeks to a job that might last less than 6 months."
You're absolutely right. I had forgotten about that. It makes more sense now, thanks.
Michael said...
I think you all a missing a big point. If they take the temp job, they can't go back on unemployment.
You have to balance the guaranteed 99 weeks to a job that might last less than 6 months.
This is the reason Paul Krugman is wrong. He claimed that extending unemployment coverage reduces unemployment. But the decision went from less than a year of benefits versus available opportunities, to nearly 2 years of benefits versus available opportunities.
How many jobs, particularly hourly jobs, have anything close to 2 years of job security? With lots of those jobs, you can't even be sure of 40 hours a week a couple months down the line even if the company is doing well now. A lower amount, but for a known period ends up looking pretty good.
The other thing that came to mind is that the government is picking up CORBA payments. That's around 18 months of medical insurance you don't have to pay for.
My sister got let go from Deloitte. It took her 10 months to find another job, but financially, she had no worries for those 10 months and she's not a saver or investor.
Same thing in our community -- a friend of ours owns a mailing business and had to layoff half their staff in September 2009.
They now have enough business to rehire, but calls to six of the laid off workers resulted in exactly the same message: "I can't afford to come back to work..."
Unemployment, coupled with food stamps, telephone credits for unemployed, under-the-table compensation, etc. actually pays more than what they can afford to pay at the legitimate business level.
Really sad state of affairs. Getting the feeling that your a chump for working and/or trying to run a small business these days.
It used to be (and still is in much of the world) that the poor had to work really really hard just to stay alive. Men worked dusk to dawn, put their kids to work, put their wives to work at home or in a factory, and sacrificed much just to keep going.
Now, in the west at least, the poor don't need to work to survive and live (relatively) like kings! Poverty used to be its own disincentive.
Unemployment is the new welfare/dole!
I read somewhere that the average pay of illegal immigrants is 20/hour. A vast majority of illegals use false SSNs and pay taxes. Lots of myths out there about illegals.
1. I always thought most "seasonal" workers were college kids. At least that's what I did when I was off for the summer.
2. The statement "benefits are creating disincentives for some of the unemployed to go back to work" is vague... How much is "some?" If it's a high percent I might care, if it's not very high it's a silly point to make. Is it that hard to do the leg work before writing an article? Do you have an agenda you're trying to bend this to? Are you sure you're a journalist?
3. Most seasonal jobs aren't long term, so I would think most folks that are unemployed would be looking for a permanent job, not a temp one.
In all honesty, it comes across that you have an agenda against the welfare state. That's fine, you can choose your opinions. However, you can't choose the facts. You're assuming that the number abusing the system is large. Prove it. Is it that hard to survey these people?
Well, yes. You have some 40 million households that couldn't bother to send a census form back. Besides, answering a surrey is work.
A vast majority of illegals use false SSNs and pay taxes. Lots of myths out there about illegals.
I tell anyone worried about illegals to just go and give their SSN to a dozen of them. All their earnings will show up in your account. Social security worries over.
Except for them, of course.
The other thing that came to mind is that the government is picking up CORBA payments. That's around 18 months of medical insurance you don't have to pay for.
Good thing too. I was on COBRA for a while and it was costing me over $900/month. that's a heavy hit with $230 a week in unemployment coming in. fortuenately, i had other money, but most people don't.
And by the time it was over I had wiped about a big chunk of funds for insurance that, as it turned out, I did not need.
Most people just couldn't do it for cash flow reasons.
"A simple market solution is to pay hire wages.
You want more of something, raise the price."...
Hmmm, economics not you're strong suit, eh angry bear?
"Many landscapers around the state use illegals in order to evade wage-and-hour, payroll taxes, workers comp and OSHA"...
Proving yet again the federal government interfering in the private sector kills jobs...
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>"1. I always thought most "seasonal" workers were college kids."
No, Ryan, most seasonal jobs are in agriculture, or in this case landscaping, where work doesn't exist year round. What you and other college students had are called summer jobs.
>"2. The statement "benefits are creating disincentives for some of the unemployed to go back to work" is vague..."
Yes it is, and necessarily so. We can't know exactly how many for reasons I will explain in a moment.
>"How much is "some?" If it's a high percent I might care, if it's not very high it's a silly point to make."
It appears to be high enough to notice, as finding seasonal workers wasn't an issue in previous years. There is certainly a correlation between extended unemployment benefits and a scarcity of seasonal workers. Causation, of course, can't be proven.
>"Is it that hard to do the leg work before writing an article?"
What leg work? Going door to door interviewing unemployed people?
>"Do you have an agenda you're trying to bend this to?"
I can't speak for him, but I believe Professor Perry's "agenda" is to throw out interesting posts like this one, and watch the various discussions, from different viewpoints, unfold as they have in this thread.
>"Are you sure you're a journalist?"
No, Professor Perry isn't a journalist. Why would you think that? Check "about me" on the front page where you first saw this post.
>"3. Most seasonal jobs aren't long term, so I would think most folks that are unemployed would be looking for a permanent job, not a temp one."
Correct: but since there are few permanent jobs available, you might expect some unemployed people to take temporary jobs if they are truly needy, but that doesn't seem to be happening. Could the reason be the availability of extended UC benefits?
>"You're assuming that the number abusing the system is large."
Earlier you said that "some" is vague. Could be high, could be low. Now the use of the word means high?
>"Prove it. Is it that hard to survey these people?"
Actually, it is. Thank goodness that what are left of our constitutional rights in this country ensures that no one is obliged to answer questions like yours. I think that most people, if asked by a surveyor why they were still unemployed, would answer "F*** you!" and slam the door. I know I would.
Bottom line, Ryan, instead of attacking the messenger and the message, build an argument based on the subject of the post.
Read more carefully and understand better what you are talking about before commenting so you don't sound like an idiot.
Ryan said...
In all honesty, it comes across that you have an agenda against the welfare state. That's fine, you can choose your opinions. However, you can't choose the facts. You're assuming that the number abusing the system is large. Prove it. Is it that hard to survey these people?
In all honesty Ryan, it comes across that you have an agenda in favor of the welfare state. That's fine, you can choose your opinions. However, you can't choose the facts.
And you haven't presented any facts, just your opinions.
What percentage of people "abusing the system" is ok with you? Do you really think that the Detroit Free Press happened upon that tiny fraction of cases it occurred and that the 2 other posters here relayed the 2 other instances where jobs have gone looking?
Use your common sense. There was even large amounts of fraud for the home buyer tax credit, which is extremely verifiable. People aren't dumb.
Here's my anecdote from decades ago in California. I was on unemployment due to seasonal unemployment that was going to last about 3 months. Since looking for a job is a requirement, I called my friend to go out looking. He said don't do that, just look in the paper for large employers, put down the company, contact name, and the phone number on the unemployment form and send it in. He said they never check if you actually did apply there. Well, he was right. We'd just hang out, go to movies and do whatever for those 3 months.
Proving yet again the federal government interfering in the private sector kills jobs...
...or the more likely thing is that the private sector is getting away with fraud due to lack of enforcement.
If I see what appears to be illegals, I have no problem documenting it and saying something to get them sent away. If I have the documentation as to who contracted them, bonus.
You have no problem with illegals since they provide a way to get around laws you don't like, Juandos. Whether it is fraud overwhelming the government for H1-b's or Mexicans for whom undercut legal US citizens(including naturalized people for whom are legally allowed to work), you want the same thing.
You don't want to abide by the market forces of US citizens. While it may be undesirable, but that does not give you the automatic right to absolutely disregard the law with work. Either learn to tolerate US citizens or leave to the jurisdiction for which you wish to send work towards. Don't go at it half-assed by claiming US citizenship but undermining citizens for whom are looking for work but are legitimately frustrated in their search(by someone's use of illegals or other non-citizens under fraudulent/deceptive means).
Otherwise, don't complain about how many people are out of work and should be in work.
>"This is the reason Paul Krugman is wrong. He claimed that extending unemployment coverage reduces unemployment."
He just MUST know this is wrong. he IS an economist after all, even if he has become a political hack.
There are certain economic laws that even Krugman must acknowledge. If you want less of something, tax it. If you want more of something, subsidize it. Subsidizing unemployment by paying benefits will cause more unemployment.
If you want less of something, tax it
Then start with offshoring, outsourcing and etc. Make the tax inescapable, and the incentive to report irresistible(by a low threshold).
If you want more of something, subsidize it.
Then explain employment, and the parts where it would be inconsistent.
>"Then explain employment, and the parts where it would be inconsistent."
sethstorm, What does this mean? can you reword it?
My comment about subsidizing unemployment means that if you pay unemployment benefits, you will get more person-days of unemployment than you would get without the subsidy.
sethstorm says: "...or the more likely thing is that the private sector is getting away with fraud due to lack of enforcement"...
What is this supposed fraud sethstorm?
"You have no problem with illegals since they provide a way to get around laws you don't like, Juandos"...
You mean I do have a problem with the constitutionally questionable interference in the private sector by the federal government, right sethstorm?
Apparently sethstorm you don't see yourself has having priced yourself and your skillsets out of the market...
"You don't want to abide by the market forces of US citizens. While it may be undesirable, but that does not give you the automatic right to absolutely disregard the law with work"...
Again what is this alledged law you are alluding to sethstorm?
The laws that were already on the books but Congress failed to act on so now pass more laws to cover up their collective incompetence?
It shouldn't be up to the private citizen as an employer to do the work that Congress is mandated by the Constitution to do...
"Either learn to tolerate US citizens or leave to the jurisdiction for which you wish to send work towards"...
Either quit whining about how you priced yourself out of the market or start up your own place of employment so you can deal with inane paperwork and asinine laws passed by the Congress you probably voted for...
sethstorm always willing to spend someone else's money for his own inability to earn it...
Again what is this alledged law you are alluding to sethstorm?
These are the existing laws already on the books as to enforcing laws against use of illegals in the United States. However, the lack of sufficient penalties exist for business entities who use this illegal labor to undercut legitimate citizens.
What Arizona is doing is a step in the right direction. Other states would do well to adopt said legislation to enforce the law, even if it is unpleasant for people who depend on the non-enforcement of a law.
I did not price myself out of a market. You merely decided to have contempt for legal citizens and legal immigrants. The paperwork is a part of the business. If I do not choose to start a business, it does not make my standing any lesser for not starting one. You just want an excuse to bypass legitimate citizens and that I called you on it.
Extending unemployment is giving the unemployed a way to withhold their labor in an equally powerful way as a business tries to circumvent upward market forces in the US. Perhaps those business entities should make a good-faith effort to hire citizens(and reject illegals).
>"Extending unemployment is giving the unemployed a way to withhold their labor in an equally powerful way..."
What!?!? Is this something like a strike?
Your extended unemployment benefits are being paid by ME! You had better not be withholding your labor if you could be working! I'm losing sympathy for you, sethstorm. Get a job.
Your extended unemployment benefits are being paid by ME! You had better not be withholding your labor if you could be working!
Well, desperation and duress certainly make for a very bad negotiation position. Long-term even moreso.
Although it's quite difficult to withhold from(reasonable) opportunties that simply do not exist.
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