Friday, April 16, 2021

Off-Site Construction Workers Can't Afford to Go Back to Work

New unemployment numbers are released every week and every week employers stare at their computer screens screaming "I have jobs that need filled!"

Here's the simple math. The Off-Site construction industry is willing to pay $18+ an hour plus benefits for production line workers. That's more than $36,000 a year. Good pay before COVID-19 killed our economy and the government stepped in to help those that lost their jobs due to the pandemic.

Right now, through state and federal unemployment relief people are able to make more than that a year simply for not working.

Take, for example, a married household with two young children living in Georgia with a single earner who made $60,000 in 2019. 

Imagine the single earner lost her job on April 1, 2020 due to the coronavirus pandemic. Prior to the pandemic, the family would have been eligible for $365 per week from the state of Georgia in unemployment benefits up to 26 weeks and $4,000 in Child Tax Credit, for a total of $13,490.

During the pandemic, that family will have received $50,840 in federal and state unemployment benefits from April 1, 2020 to September 6, 2021, plus $11,400 in stimulus payments, plus $7,200 in Child Tax Credit, totaling $69,440 in combined COVID-19 relief benefits.

Human Nature

When bad things happen to someone, like losing their job, they turn to friends and family and soon they begin to learn the secrets to maximizing unemployment benefits that everyone else has used with success. 

Then there are the individuals who claim those unemployment benefits and with no job to report to, begin doing handyman jobs, babysitting or a myriad of other small jobs that could bring more than $10,000 cash in unreported payments.

In my neighborhood, there are three families with nobody working. One is a plumber that worked for a commercial builder who simply stated to the unemployment office he was afraid to go back to work. Today he is getting all his state and Federal benefits and working full time for his neighbors fixing leaks and helping with remodeling. All for cash. Best guess: He'll making well over $100,000 a year right now. 

When his benefits begin to dry up, he'll simply shop around for an employer willing to pay the most for his skill. And you can bet it won't be much less than he's making now.  

Many workers that were laid off before the state and Federal governments began paying COVID-19 relief payments were only making $365 a week. Today, some of those same unemployed people are making almost three times that amount a week.

There is absolutely no incentive for any worker taking full advantage of all that is being offered to go back to work in your factory for the same amount of money they are making for not working. Add in any "cash under the table" they get for side jobs and all of a sudden they can't afford to work for you.

The unemployment boost came as a way to help people through the pandemic if they were laid off from their jobs or if they were afraid to return to work.

Related Article: Modular Housing Factories Face More Problems Than Just a Skilled Labor Shortage

The unintended consequence is that those that don’t need that money are taking advantage of that money, they’re not working, they’re not in the workplace and that’s holding back the economic recovery.

Somehow, the off-site industry needs to get the word out that COVID-19 benefits will not last much longer but our factories will continue to pay fair wages for many years to come.

Gary Fleisher is the Managing Director and contributor to the Modcoach Network and its affiliated blogs. 

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