Michigan job paradox: 238,000 unemployed but businesses can't find anyone to hire

Small businesses continue fight to stay alive during pandemic

Former Lt. Gov. Brian Calley with the Small Business Association of Michigan talks about the second Paycheck Protection Program deadline coming as well as how we can help support the community stores that need us.

A job paradox is forming in Michigan's small business market as the number of available positions continues to grow, even as the state's unemployment rate remains historically high.

Some businesses have even offered a signing bonus to anyone who wants a job, but to no luck.

After a wave of restrictions depressed demand for commerce among the state's small business community, there are now ample positions ready to be filled. But if those positions don't get filled, it could mean more challenges on the way for restaurants, retailers, and other industries.

According to the U.S. Bureau of Labor Statistics, the unemployment rate in Michigan is 5.1% - about 238,000 people in the state. That's a far cry from the more than a million out-of-work citizens at the onset of the pandemic. Almost a quarter of Michigan's labor force was out of work last April

And yet, there's no shortage of businesses struggling to find employees to fill available positions. Almost 45% of all small businesses had an unfilled job opening by March 21, according to the National Federation of Independent Business.

Darren Lee, the owner of Hopscotch and Bourbon in Roseville, says he has searched two months for available workers, but with no luck. "...they're content with their unemployment they're content with the money they're being paid to stay home and not work."

Bolstered unemployment insurance might be one of the reasons why hiring has been difficult. But there are other reasons that could be causing the divergence in the local labor market.

Generous unemployment benefits

Jobless benefits from the state along with a $300 weekly supplement from the new federal aid package approved earlier this year means that many people are making more money as an unemployed citizen than a working employee.

That might be nice for residents but it can be a tough sell for small businesses that can't offer a competitive wage. Even Lee, who offered a $400 bonus to new hires can't fault people for staying home.

"...they're content with an easier life and I can't say I blame them, but I'm not built that way," he said.

This might be the case for some people, however, research on job searches and postings found that employers did not experience a greater difficulty finding applicants for vacancies.

A study last updated in August of 2020 from the University of Pennsylvania found that even as the number of job vacancies decreased during the pandemic, the number of job applications decreased at a smaller rate.

Owner of new restaurant can’t find people who want to work

Darren Lee is owner of Hopscotch and Bourbon in Roseville. He assembled just enough people to open and even tried to sweeten the deal, knowing he just doesn't have enough employees.

However, the economy's state in 2020 was unique. Things may be returning to a more normal process this year which means the conclusions of jobless benefit research may not be as relevant in 2021.

Concerns about getting sick

Many people out of work may be less interested in returning to a job over concerns about getting infected.

While vaccines have now become readily available for almost anyone in Michigan with the means of driving to one, the pandemic is still a major health threat that may outweigh the concerns of those without a job.

While many have found ways of working at home in a remote fashion, service sector jobs in restaurants or in retail require onsite work. Working around other people increases the likelihood of getting infected by COVID-19.

A survey from the U.S. Census Bureau found that about 4 million adults weren't working for fear of getting or spreading COVID-19. Other research has found that as more people get vaccinated, more people will start working again.

A new career

Pastry Chef Cherelle Mason out of Southfield didn't need to recoil from the economy as the pandemic ballooned last year. Instead, as sales rose following the first stimulus check, she made plans to open an official bakery location.

Relle's Deli and Sweets opened earlier this year, selling cheesecake to a growing fanbase that was once a small and loyal following.

Mason was one of the thousands of people in the state that followed their hobby into a business last year. New business filings in Michigan rose to an average of 4,000 per week in the summer of 2020, about double of a normal week in pre-pandemic seasons.

"The relative risk of starting a new business has gone down," Brian Calley, the state's former lieutenant governor and head of the Small Business Association told FOX 2 this year.

The risk of starting one's own business compared to entering the workforce as someone else's employee may not feel as scary considering the state the economy was left in after the pandemic first hit.

Help wanted at home

And then there are the adults previously part of the workforce that couldn't return because of the needs at home.

Alternative forms of schooling have meant parents were needed at home more because of children not going into the classroom.

Virtual back-to-school brings change for entire family

We go inside one home in Oakland County to see what one family's 'virtual classroom' looks like - crowded and stressful.

And in-person learning, while an option in some districts, isn't fully back. After Michigan encouraged districts to reopen learning centers, cases spiked around the state. The governor then asked for districts to shut down in-person learning as a measure against more spread.

Until schools fully return to in-person learning, the needs of parents at home may continue to outweigh the benefits of returning to work.

Jack Nissen is a reporter at FOX 2 News Detroit. You can contact him at (947) 517-2294 or at Jack.Nissen@fox.com.