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.
Members of the Michigan Nursery and Landscape Association "have told me that they have a lot of people applying but that when they actually talk to them, it turns out that they're on unemployment and not looking for work," said Amy Frankmann, the group's executive director. "It is starting to make things difficult."
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.
$12-per-hour jobs
A person becomes ineligible for benefits if he or she fails to accept suitable work, said Stephen Geskey, director of Michigan's Unemployment Insurance Agency.
The average landscape worker earns about $12 per hour, according to the Michigan Department of Labor and Economic Growth. A full-time landscaping employee would make $225 more a week working than from an unemployment check of $255.
But after federal and state taxes are deducted, a full-time landscaper would earn $350 a week, or $95 more than a jobless check. The gap could narrow further for those who worked at other higher-paying seasonal jobs, such as construction or roofing, which would result in a larger benefits check.
The maximum weekly benefit an unemployed Michigan worker can receive is $387.
The jobless in Michigan are collecting for a longer time -- an average of 19.4 weeks last year, up from 15 weeks in 2008. State benefits last for up to 26 weeks.
The unemployed can then apply for extended federal benefits that increase the total time on the public dole up to a maximum of 99 weeks.
The federal jobless benefits extension "is the most generous safety net we've ever offered nationally," said David Littmann, senior economist of the Mackinac Center for Public Policy, a free-market-oriented research group in Midland. The extra protection reduces the incentive to find work, he said.
It's impossible to know exactly how many workers are illegally declining employment, but 15 percent of Michigan's economy is underground, where people trade services, barter or exchange cash without reporting it to the government, Littmann said.
Working pays off
One former landscaper, who has been on unemployment for a year, said he will search for work when the benefits expire, but he estimates he earns about $50 to $60 less a week than he would if he were working.
"It's crazy," he said. "They keep doing all of these extensions."
But another analyst said working pays off for most seasonal laborers.
"That's a tough call for a family that's trying to pay its bills," said Sharon Parks, president and CEO of the Michigan League for Human Services, a Lansing-based nonprofit that helps low and moderate-income families toward economic self-sufficiency.
"But I think that by and large, people want to work because they need a paycheck," she said.
That is what other Metro Detroit landscaping companies are finding. They say business is up this season, and they have a steady stream of applicants eager to fill the orders.
"They can earn more money working for us than they can from getting unemployment," said Tony Konja, president of Artistic Outdoor Services in Farmington Hills.
"Finding talented people is, and always will be, a challenge," said Sam LaGrasso, president of United Lawnscape Inc. in Washington Township. "But if a company is focused on being good to its people and providing advancement opportunities, the talent will find you."
But B&L Landscaping in Oak Park finds the labor pool is noticeably weaker and less motivated, director Richard Angell said, even though the company still gets 80 to 100 applicants per week.
"We're just getting people coming in, filling out paperwork, hoping they won't get hired," Angell said. "... We're having a hard time finding quality applicants."
Gaming the system is "not surprising, but the question is how prevalent it is," the Unemployment Insurance Agency's Geskey said. "My gut tells me it may happen, but under the law, that person's benefits need to end."
http://detnews.com/article/20100510/BIZ/5100335/
