Monday's Detroit News posted a story entitled "Landscapers Find Workers Choosing Jobless Pay." The article explains that Michigan has the nation's highest unemployment rate, and some of its residents are rejecting job offers in order to continue collecting unemployment. The landscaping industry is finding that some workers are choosing to stay home and collect unemployment rather than working (and paying the expenses involved in working--travel, gas, meals, etc.).
The average landscaper earns about $ 12 per hour. That is a $ 480 paycheck per week. Unemployment pays $ 255, a difference of $ 225. After federal and state taxes are deducted, the landscaper earns $ 350 a week--$ 95 less than the unemployment check.
Statistics show that an unemployed person in Michigan collects unemployment for an average of 19.4 weeks. Last year that average was 15 weeks. Unemployment benefits last for up to 26 weeks. When state unemployment benefits run out, an unemployed person can apply for extended federal benefits that increase the total time unemployment can be collected to a maximum of 99 weeks. That's almost two years!
Another part of this picture is the fact that 15 percent of Michigan's economy is underground. No one knows how many of the people collecting unemployment are working 'under the table.'
If the goal of paying unemployment is to help people financially while encouraging them to find jobs, it may be that extending unemployment benefits is counterproductive.
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