Print Friendly and PDF

Employers say they can’t find workers. Here’s who’s leaving Michigan’s labor force and why


Detroit Free Press

By Adrienne Roberts

An executive of a workforce agency can’t find enough workers to meet employer demands. Meanwhile, the founder of a nonprofit has a surplus of professional clothing and a lack of job seekers to donate them to.

These are just two examples that highlight what economists say is a mismatch in Michigan’s job market. Employers, both in Michigan and across the country, say they can’t find workers to fill open positions.

It’s no wonder. The labor force in Michigan — a measure of people who are working or actively looking for work — is declining.

Michigan’s labor force was down 4.4%, or 215,000 workers, in March compared with the same month last year, according to the most recent data available from the Michigan Department of Technology, Management and Budget. That’s compared with a 1.3% drop nationally in that same time period.

“We’re struggling to meet employers’ needs, there’s no question about it,” said Greg Pitoniak, CEO of SEMCA Michigan Works!, a nonprofit that provides job seekers in Wayne and Monroe counties with training and support.

Where have all the workers gone?

Michigan’s labor force participation rate going into the COVID-19 pandemic was low compared with the labor force participation rate of other states, said Pat Cooney, the assistant director of economic mobility at Poverty Solutions at the University of Michigan.

Before the pandemic, in January 2020, the state’s labor force participation rate was 61.7%, lower by at least a few percentage points compared with other Midwestern states.

That is in part because of the loss of goods-producing jobs during the Great Recession, many of which were in the automotive industry. And some of those jobs still have not come back, he said.

The automotive industry is a huge employer in Michigan — it directly and indirectly supported nearly 684,000 jobs in 2019, according to a recent report from the Detroit Regional Chamber’s MICHauto group — but economists say there are thousands of jobs in that sector that have permanently vanished.

The manufacturing sector was down 43,000 jobs, or 7%, in March compared with March 2020, according to state records. That’s likely impacting Michigan’s labor force participation rate, said Cooney, given the industry’s importance in the state.

But he and other economists say this economic recovery will be led by the return of jobs in another industry: leisure and hospitality. In Michigan, jobs in that industry are down 17%, or 72,000, in that same time period.

“Our best economic tool right now is public health,” Cooney said. “Once we get to a point where there’s enough folks vaccinated and some of the fear about being in public abates, I do think that there will be this kind of resurgence in the service economy.”

Until then, some workers are sitting on the sidelines. Others are getting jobs in other industries.

Finding a new career

Luci Dorsette worked in the leisure and hospitality prior to the pandemic, as a server at a restaurant in Center Line. She was let go soon after the restaurant closed for dine-in service early on in the pandemic under the state’s stay home order.

“I didn’t know what I was going to do,” Dorsette said. The 35-year-old Detroit resident is formerly incarcerated, and said she needed to work in order to get custody of three of her five children.

She filed for unemployment benefits but wasn’t receiving them long before getting a temporary job at Walgreens.

“This (pandemic) could be over at any time,” Dorsette said. “They can cut those (unemployment) benefits. And then what do you have?”

After her temp job ended, she got a job in May at the fast food restaurant Checkers but quickly learned that she wouldn’t be able to move up there and become a manager because she had been incarcerated. She started looking for other jobs again.

In November, she was hired as a graphic designer at Bags to Butterflies, a transitional employment program in Detroit where formerly incarcerated women design handbags for sale and are offered mentorship.

Now, she’s enjoying her more-typical 9-5 schedule and is enrolled in online graphic design classes at Independence University.

But many workers weren’t able to find work so quickly in another industry.

Obstacles for would-be employees remain

“There are so many barriers,” said Alison Vaughn, founder of the Detroit nonprofit Jackets for Jobs, which offers career skills training, employment etiquette and professional clothing to job seekers.

Vaughn said there are some long-standing issues — such as a lack of transportation and professional clothing — that have made gaining employment difficult. Those issues, coupled with more generous unemployment benefits and a lack of child care options, have resulted in more people not working.

“The reality is that I can get paid more money sitting at home watching TV, and being with my kids, instead of hustling out there taking two or three buses to try to interview for a job that’s only going to pay less,” she said. “So why go through all that work (to get a job)?”

Those defined as being out of the labor force could be collecting unemployment benefits because claimants haven’t been required to report their work search efforts to the state’s Unemployment Insurance Agency, a labor department spokesperson said.

That requirement was waived at the beginning of the pandemic through an executive order by Gov. Gretchen Whitmer when businesses across the state shut down.

That requirement will be reinstated later this month, the spokesperson said.

Still, Vaughn said she’s not sure whether people will rejoin the workforce when that happens. She hears of concerns about potential exposures to COVID-19 that come with public-facing jobs, especially in the Black community, where Black workers are more likely to be hesitant about getting the vaccine. Nearly a third of white Michigan residents have received both doses of the vaccines, compared with a fifth of Black residents, according to the state’s COVID-19 vaccine dashboard.

She said job seekers are having to pivot to find a job in a new industry, which can be scary.

“The last job that they have is no longer, so now they’re having to think about a new career,” Vaughn said.

Pitoniak said he’s seeing some mismatch in skill sets. For example, he said demand is very high right now for welders, industrial mechanics and truck drivers.

‘The people that maybe are unemployed aren’t necessarily a good match for those positions,” he said.

Pitoniak said one potential reason people are out of the labor force is that they’re taking classes or training in order to prepare for a career switch. Receiving unemployment benefits is allowing them to do that.

He’s hoping that a positive that can come out of this pandemic is that more employers will offer work-based learning — paid training on the job for candidates who may have a good work ethic and attitude but don’t have a specific credential or skill set.

“There are many people who can’t take time off to get a credential because they can’t afford not to work,” he said.

Pitoniak also said he’s hearing of employers reviewing their qualification requirements to make sure they’re not overstating what they need.

“Employers are looking at work-based learning to get them the credentials they want, and they’re looking at making sure that their job postings reflect the actual credentials that are needed,” he said.

That’s crucial because being out of the labor force for too long can hurt both the worker and the economy.

“It’s almost like starting from scratch,” Cooney said of a job seeker who has been out of work for a significant amount of time. “The long-term impacts (of being out of work) are really terrible. Folks who are out of work for too long, that can kind of become a barrier to reemployment itself.”

View original article here