A trio of economic woes is hindering Michigan’s recovery from the downturn created during the CCP virus pandemic.
According to Pure Michigan Talent Connect, a job placement portal run by the state, there are currently 88,000 job openings in the Great Lakes State.
“There are help wanted signs in front of almost every store, factory, or business. It is an extremely tight labor market,” Carl Osentoski, executive director of economic development for six counties in Michigan’s Thumb region, told The Epoch Times.
To fill the thousands of available jobs, Osentoski said businesses in the region are raising wages, offering signing bonuses, and getting creative in wooing new employees.
Firms around the state are offering flexible work schedules, child care, post-hire training in lieu of experience, and free seasonal housing in some of Michigan’s prime resort communities to attract workers.
Companies are also using temporary seasonal workers who have entered the U.S. on special visas and will return to their home countries after a specified amount of time.
The labor shortage in Michigan is worsening despite the state posting a 5 percent unemployment rate in June.
Last month, Michigan’s Democrat Gov. Gretchen Whitmer vetoed a bill passed by the Republican-controlled state legislature to eliminate enhanced unemployment benefits that pay some workers as much as $300 per week on top of their regular benefit.
“It’s hard to get people to go to work if you are paying them so well to sit home,” said Doug Gielow, founder of Gielow Pickles Inc., a food processing firm with plants in Michigan, Florida, and Washington state.
The 86-year-old Gielow, who still goes to his office every day, told The Epoch Times, “We had to temporarily close our Washington state plant last week because not enough people came to work to operate it. At one of our Michigan plants, only half of the scheduled crew showed up last Saturday. Every supplier we have is experiencing similar issues.”
Luke Forrest, executive director of the Community Economic Development Association of Michigan, pointed out that the state’s labor shortage may be exacerbated by an extreme shortage of housing.
“Small businesses say potential employees are often priced out of the market when it comes to rents or reasonable mortgages,” Forrest told The Epoch Times.
Diona McLaughlin, communications manager for a regional job training and placement program called GST Michigan Works, told The Epoch Times that, even for some people with a strong work ethic, the housing shortage is dire.
“We’ve seen employees living in their cars and bathing in the factory restrooms. In a survey at one of our resource fairs, 80 percent of the 143 participants said they needed help with housing. We have got to resolve not only the housing crisis, but the shortage of child care before we will see more people back to work.”
McLaughlin said the child care industry in Michigan was decimated when sites were forced to close during the lockdowns and mandatory school shutdowns.
“As a result, 136,000 Michigan women were forced to leave the workforce, adding to the labor shortage,” she said.
New home construction in Michigan never recovered from the Great Recession. In the pre-recession year of 2005, more than 45,000 building permits were issued for single-family homes. The figure plummeted to 5,000 in 2009. Fifteen thousand permits were issued in 2019 and 2020. For 2021, the Michigan Association of Homebuilders is forecasting around 16,000 permits.
With higher prices for building materials and owners of existing homes getting top dollar for their properties, Michigan builders have turned to the construction of high-end houses in order to remain profitable. This trend has forced many moderate-income Michiganders seeking to upgrade to a nicer home out of the market. The situation is forcing them to stay in their homes, creating a shortage of listings that bids up home prices. This in turn keeps renters seeking to buy a starter home renting longer, thereby creating a shortage of affordable apartments and rising rents.
On July 27, Whitmer proposed using $100 million of pandemic relief money to produce 2,000 new rental units, many of which would be constructed in the city of Detroit, where the need for affordable housing is particularly high.
The labor shortage meanwhile, has affected the supply chain.
“We can’t get vinegar at our Florida plant because the vinegar company has no truck drivers, so the product we need is just sitting on their loading dock. Other supplies we used to get in a week now take seven to 10 weeks to be delivered,” Gielow said. “Production costs are going up, which will be reflected in higher consumer prices.”
Other food producers around the U.S. are struggling to find enough workers. The Colorado-based meat producer Pilgrim’s Pride has increasingly automated its factories to compensate for the labor shortage, and Arkansas-based Tyson Foods is running at reduced capacity.
In Michigan, supermarkets have curtailed their advertising spending for newspaper circulars. One grocer told The Epoch Times, “We are hesitant to promote items which we may not be able to reliably purchase in quantity or get them at all.”
This ripple effect has proved devastating to smalltown newspapers across the state that rely on supermarket advertising for as much as 25 percent of their ad revenue.
The interplay of the labor shortage, the housing shortage, the disintegration of much of the child care industry, and the disruptions caused by an unreliable supply chain have combined to create feelings of economic insecurity among many Michigan residents.
Though the state of Michigan put in place its own extension of the federal eviction moratorium that expired July 31, lengthening it to Sept. 30, nearly 81,000 Michigan residents say they fear being evicted in the next two months. Where they will go remains unclear. A temporary solution for them may lie in the pool of $500 million of pandemic emergency rental assistance dollars that hasn’t yet been distributed.