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Fewer people are drawing unemployment in Elkhart County as labor pool tightens

While some employers say workers would rather collect government benefits than work, data shows a surprising contradiction to that notion.

Posted on July 13, 2014 at 5:00 a.m.

Some employers in Elkhart County say they’re hurting for good workers but all they can seem to find are lazy 20-somethings who would rather lie around and draw benefits from the government. 

But workers argue that though manufacturing jobs seem to be plentiful, they barely pay enough to earn a living.

The numbers side with the workers’ notion of more jobs with less pay. Indeed, less money is being paid out in unemployment benefits in Elkhart County than at any point in the past decade — that’s both in actual dollars and, even moreso, in the purchasing power of those dollars.

On top of that, federal extensions for state unemployment benefits expired at the end of 2013 and less money in state unemployment benefits is being paid out.

But it’s harder to quantify an attitude that employers insist they see on a regular basis. That, and there’s actually a smaller labor pool for employers to choose from than before the Great Recession.

A CULTURAL SHIFT

In mid-April, Forest River CEO Doug Gaeddert, one of the area’s largest employers, said a higher jobless rate doesn’t translate into a higher demand for work.

“Plain and simple. It’s part federal government, part cultural shift,” Gaeddert said. “But if you want to ask me, 'do I think we’re lazier than we were seven or eight years ago?’ Absolutely.”

A month later, Bob Moore Jr., co-owner of fast-growing MOR/ryde Inc., made similar remarks.

“We’ll offer a young person with no experience $10-an-hour, plus a chance for a bonus,” Moore said. “They’ll do the math and come back and say, 'I can sit on my sofa and drink cheap beer and live off the government. I’m going to wait until that runs out and then I’ll come back.’”

Moore said a decade or two ago, people couldn’t do that.

“The guys in Washington say, ‘Have a heart. It’s hard for people to find jobs.’ But the reality is you have to want to work,” he said. “I live in fear of not providing for my family. It’s a God-given thing. It’s a very frustrating thing when you feel like you’re competing with the government, and then you have to pay all these taxes to just foster that.”

But data provided by the Indiana Department of Workforce Development doesn’t support that sentiment.

About $17 million in state and federal unemployment benefits were paid out in 2005, when the county’s jobless rate was 4.5 percent. That same amount was doled out last year, when the jobless rate was nearly double.

And that’s not even adjusting for inflation. That $17 million from 2005 would equal about $20 million in 2013. In practical terms, a grocery cart of food costing $100 in 2005 would have cost about $118 in 2013.

(Read about why one struggling Elkhart County worker turned down a $9-an-hour job)

In Elkhart County, there were far fewer jobs to be had in 2009 when the economy was at its worst, but they still paid more than they do today. Data from the U.S. Bureau of Labor Statistics shows an average Elkhart County manufacturing worker in 2013 made about $29,630 a year — down from $34,040 in 2009.

The cost of living was cheaper then, too. Since 2009, according to the BLS:

  • The combined price of all goods rose 20 percent in Midwestern cities of comparable size to Elkhart.
  • Going to the doctor cost 34 percent more.
  • Grocery bills jumped 25 percent.
  • Filling up your gas tank cost 20 percent more.

Tony Flora, president of the North-Central Indiana AFL-CIO Council, said rather than blaming unemployment, Elkhart manufacturers need to start paying entry-level workers more if they want to grow their profits.

"These employees are cycling through several employers,” Flora said. “You’re probably going to do better if you pay a little bit more to hang on to those people. It’s not the unemployment benefits they’re competing with, they’re competing against their fellow employers who are in lock-step with each other.”

Flora said employers attribute their difficulty in finding workers to unemployment benefits because it’s easy, and it delivers an emotional impact. But, Flora said, the notion doesn’t hold up under free-market economics. The vast majority of people would rather work for $10-an-hour than collect unemployment, which can pay considerably lower than that, Flora said.

"People have accepted a lower standard of living,“ Flora said. ”People are very resigned to their circumstances.“

The continuing decline in manufacturing wages is one reason Flora has been campaigning over the past year to raise the federal minimum wage from $7.25 to $10.10 an hour. Doing so ultimately would force factory wages up as well, he said. Factories in Elkhart County, Flora said, are now paying what should be the minimum wage, for jobs that produce high-quality products under physical strain.

"A $10-an-hour wage will not keep a family alive,” he said. “That $10-an-hour wage is being subsidized by a variety of ways, such as food stamps, Medicaid, the Children’s Health Insurance Program and free lunches in public schools.”




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