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  • Outside the Beltway: Takin' What They're Givin' But Not Workin' for a Livin'

    With 14.9% unemployment and a massive 800,000 jobs lost in the last decade, times are tough in Michigan. But despite the desperate conditions, some Michiganders have decided to keep collecting government unemployment checks instead of accepting job offers and heading back to work, according to a Detroit News report:

    In a state with the nation’s highest jobless rate, landscaping companies are finding some job applicants are rejecting work offers so they can continue collecting unemployment benefits.

    It is unclear whether this trend is affecting other seasonal industries. But the fact that some seasonal landscaping workers choose to stay home and collect a check from the state, rather than work outside for a full week and spend money for gas, taxes and other expenses, raises questions about whether extended unemployment benefits give the jobless an incentive to avoid work.

    The Detroit News breaks down the numbers to reveal what that perverse incentive is all about: an unemployment check amounts to $255 per week, and though a full-time landscaping employee in Michigan would bank $480 per week from working, after taxes they would only be making $95 more than if they just stayed home and collected unemployment.

    Those benefits had been extended to June 2, 2010, but as The Heritage Foundation’s James Sherk writes, “workers in high unemployment states can collect unemployment insurance for 99 weeks – almost two years of benefits,” which is substantially more than the typical six months of benefits. Sherk also points out the unintended consequences of those extensions:

    [E]conomic studies consistently show that when workers collect longer UI benefits they also stay unemployed longer.

    This does not happen because unemployed workers are lazy, or want welfare handouts. It happens because unemployment insurance changes the jobs the unemployed look for.

    Most job losers would like to find work near where they currently live, and in their same industry or occupation. Who wants to move away from friends or family, or take a pay cut in a field in which you have less skills?

    So what’s the motivation of those turning down those landscaping jobs in Michigan? It could be that folks are holding out for better jobs, or it could be that some are gaming the system. From the Detroit News report:

    Chris Pompeo, vice president of operations for Landscape America in Warren, said he has had about a dozen offers declined. One applicant, who had eight weeks to go until his state unemployment benefits ran out, asked for a deferred start date.

    “It’s like, you’ve got to be kidding me,” Pompeo said. “It’s frustrating. It’s honestly something I’ve never seen before. They say, ‘Oh, OK,’ like I surprised them by offering them a job.”

    Some job applicants are asking to be paid in cash so they can collect unemployment illegally, said Gayle Younglove, vice president at Outdoor Experts Inc. in Romulus.

    “Unfortunately, we feel the economy is promoting more and more people and companies to play the system and get paid or collect cash money so they don’t have to pay taxes,” Younglove said.

    These anecdotes aside, high unemployment remains a serious problem in Michigan and throughout the United States. Though 99 weeks of unemployment insurance have provided assistance to those in need, it is cold comfort to those who won’t have jobs when the benefits expire. And that is why Congress must take action to create an environment where jobs can grow, and not through more government spending.

    Posted in Economics [slideshow_deploy]

    8 Responses to Outside the Beltway: Takin' What They're Givin' But Not Workin' for a Livin'

    1. Gerrit, Your Mom says:

      Um, Mike Brownfield is allowed to post Huey Lewis music videos? Who's running this shop?

    2. Rhonda Sciortino, So says:

      Although I'm stunned that anyone would turn down an offer for honest work to get a free paycheck, I shouldn't be. I know two people who have done the same thing stating that the work was beneath them and that they earned the right to stay home because they'd paid into the system. What's shocking is that the two people I mentioned are people of good character, are good parents, and have a long track record of being good employees!

      Their actions, and similar actions of so many others, are indicative of a slow and insidious cancer in our culture that is rooted in selfishness and self-centeredness. "I need to look out for me–get what's coming to me–take care of ME." When we should all be looking at how we can use our skills, talents, and abilities to help others. Because where there are needs and wants, there is commerce.

      Anyone who will use their abilities to meet the needs of others can EARN a decent living for themselves because despite the economy, Americans are still spending money on what they want. Doubt me? Check the parking lots of the malls–they're packed. Restaurants are crowded on Friday and Saturday nights. Concerts and sports events fill stadiums. People WILL spend money on your goods and services. So, what can YOU DO to help others and in so doing, help yourself?

      http://www.rhondasciortino.com

    3. Pingback: » Financial News Update – 05/11/10 NoisyRoom.net: The Progressive Hunter

    4. Sheila Calhoun, Jack says:

      While there are plenty of people who will milk the system, I don't think the situation is as cut and dry as this article makes it sound. Who wouldn't want a job that nets them $95 more a week than they get sitting at home? How about the parent who has to spend $100+ a week in child care? Or the person who's unemployment income qualifies them for state medical coverage but getting that job will make them lose that, and the new company has no medical benefits and/or very high benefits? Or perhaps it simply costs them more than that $95 a week to get back and forth to that job? Sometimes the situation isn't so simple, and, like it or not, many of the unemployed have families to support. I am one of these people, caught in the middle. My 'income' has already been cut by over 70% and I am barely making ends meet. I'll be damned if I am going to take a job that ultimately puts my family in an even worse position than we are now, strips my kids of their medical coverage, and puts me at risk with my health because I can no longer get the medications I need, just so someone can consider me a productive member of society. The sentiment of everyone working at any job they can get is a noble, lofty goal, but it's unrealistic in many cases. Should I be a better role model, and take any job that will hire me, just to set a wonderful example of a hard working American? Yeah, probably, but right now it's every man for himself and if I can provide more stability for my kids by being picky about which jobs I apply for/accept, then so be it.

      And, just for clarification, most of those lower paying positions won't even look at my resume because I am overqualified. And anyone who says I should be out flipping burgers or working at a convenience store should talk to my doctor about the degenerative arthritic condition which prevents me from standing on my feet for long periods of time, so an office position is the only thing I can do. And, my unemployment has run out and I am looking for jobs like I have been for the past almost 2 years, and in that time I have not been sitting on my ass. Instead, I went back to college and earned a degree. The point is, it's just not all black and white.

    5. Billie says:

      I love Huey Lewis!

      I have a friend who loves her extended unemployment benefits.

      Unless the government stops it's overreaching of the free market, private business industries, inconveniencing and setting unnecessary standards, rules and regulations, hindering the term "private" business, the government's conflict of interest will remain, job growth in the private sector.

    6. Micki-Tamarac, FL says:

      Unemployment is at about 12% in Florida and yet everywhere i go i see signs saying Help Wanted. i just can't believe if someone wants to work they can't find a JOB. Of course they don't start out as president of the company. We have to WORK our way up.

    7. Anonymous (Detroit, says:

      I've seen this type of behavior in my own family. My brother (unemployed) lives a block from an Oil change station. The station for the longest time has had a help wanted sign. So I mentioned to him about the help wanted sign. My point was some money is better than no money. He kind of shrugged it off.
      I couldn't believe it, here he was with no job and no longer was available for unemployment benefits refusing a job because is more or less below him.

      Think of it, a block away. I would be so fortunate to live that close to work.

      People need to wake up!

    8. anonymous(Detroit, M says:

      I misspelled anonymous in my recent posts Name location text box.

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