Tuesday, May 11, 2010

Landscapers find workers choosing jobless pay - Gaming the System

Many years ago, the company I worked for moved their offices from NYC to Charlotte, NC. At the time, I had shared custody for my three children and was not able to move with the job. This was during a downturn in the economy and jobs were not plentiful so, after a time, I was forced to go on unemployment. I was grateful it was available but soon found some consulting work that enabled me to "get off the dole".

Businesses pay taxes specifically to fund these unemployment benefits, but when government extends benefits beyond what was intended, the taxpayer pays and, as this article suggests, the incentive to work is diminished. As in the welfare system, the unemployment largess can reward the uninspired worker.

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."

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.
Read full article here.

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