Acton Institute Powerblog

The Downside of Michigan Jobless Pay

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I have close friends here in Michigan who are out of work–talented, principled, hard-working people who are either unemployed or seriously underemployed. My heart breaks for them and for everyone eager to work who has been blindsided by the current recession. Unfortunately, government policies to help sometimes make the situation worse. A recent Detroit News story offers fresh evidence, evidence suggesting that Michigan’s bloated nanny state is creating perverse incentives in the labor market, incentives that are both economically and morally degrading:

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.

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.

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.

The solution isn’t to walk away from charity. The solution is to return the lion’s share of charity work to families, churches and local communities. This is charity with a human face, charity that can make important distinctions informed by local knowledge, charity that promotes human flourishing rather than dependency and dysfunction. It’s a change that will require governments to stop crowding into the sphere of private charity, and for families, churches and community organizations to prayerfully crowd back into charitable work they may have turned over to the government in decades past.

No system of charity is perfect, private or otherwise. And government-directed help has its place, such as in the case of some natural disasters. However, the evidence continues to mount that long-term, state directed charity leads to moral and economic disaster. It’s time to change.

Jonathan Witt


  • Jules

    You know it is nice to point out the ones who refuse work for economic reasons, but there are those of us who have not been able to find work in months if not years at this point. I have applied at many companies and have yet to find more than about a $9 an hour job for a few hours a week, or one that lasts only a few weeks. A person needs to be able to live in this state, and $9 an hour for less than full time work is not going to get us there. I happen to have worked a majority of the time I was collecting unemployment and earned a degree. So please do not assume everyone is like the person you note in your article.

  • Patrick Powers

    Jules, There is a difference between the outlook of an employee and an entrepreneur.
    Employees do their jobs as defined in a job description or other instructions. At the end of the day, employees leave the business both physically and mentally. I have a small business, where we pay $9 – $10 per hour for 32 hours/week. This is one of the jobs you would not want if you only did the tasks outlined in the formal job description. And I’d be happy not to have you.

    What I am looking for is an entrepreneur, someone who will love the business and grow it along with me. The reason for having an employee is to do those things that I, as the manager or owner, cannot do for lack to time or some other limitation. If I could find an entrepreneurial employee, I’d rejoice. Within my little business, such a person could easily increase their pay by $4.00 per hour or more, and increase their hours to about the same as mine (60 hours/week). We don’t even have to buy any new equipment, just use the equipment we have fully, and use our out-source suppliers when needed.

    I suggest you get a copy of Acton’s DVD on entreprenuers and watch it until you decide to become an entreprenuer on your own or within an existing business.

    As an aside, a number of years back I was involved with 40 Plus, an employment self help program for professionals over the age of 40 who were between jobs. We did a survey of successful job seekers, i.e., those who found jobs. One of the things we documented was that people who found jobs in entrepreneurially (that is, created a new position and product within an existing business). Simultaneously, these people earned a higher income and had better working conditions because in defining the job they defined the salary and job description.

  • CJL


    I have a question and it is not meant to demean or provoke, but just as a matter of curiosity. How were you drawing unemployment while working? I can understand being underemployed, but that was a matter of choice, being in school and all. But wasn’t that illegal and unethical? Just curious.