No one wants to work?!
By Jason Verlinde May 17, 2024
A question we frequently get is ‘why doesn’t anyone want to work anymore?’. While we ask that question because we aren’t getting as many job applications as we might have a few years back, the answer isn’t as simple as ‘people are lazy’.
There are several factors. A big one is the cost of daycare. We have a 4-year-old and have experienced that cost first hand. In our area, the going rate for daycare is just over $400 a week for one child. If there are two children, the daycare expense almost doubles. It’s not hard to justify dropping out of the workforce when that much of a paycheck is going for childcare.
Missed days of work for illnesses are also concerns. Kids in daycare get sick (a LOT), then parents get sick. The leads to absenteeism at work, and the subsequent stress. Partly because of this we have seen a large decline in workforce participation. I don’t believe most of those parents wanted to give up their jobs or put their career on hold when they decided to have children. It’s simple family economics.
In addition to that, we have a population that has seen steady declines here in Michigan. Between July 2020 and July 2023 (census releases numbers in July) Michigan’s population declined by 40k people. Last year when July 2023 numbers were released, Michigan saw a net gain of only 4k people over July 2022. That was cause for some excitement, as maybe we have turned the corner and we will see the population start growing again. For the fact checkers here’s the link to the population information.
In preparation for this email, I stumbled upon something that really struck a nerve with me. According to the Michigan Department of Technology, Management and Budget between March 2023 and March 2024 “the state’s government (+23,000) and private education and health services (+17,000) sectors recorded the most pronounced numerical job additions” (the link to the press release and data is here). Here are 3 employment categories that should grow at a fraction of the rate of population growth. Instead, they grew at a rate of 10 new employees per one net gain in population. State government units themselves hired 5.75 new employees for each net gain in population!
So, let’s recap this a little bit, over a three year period we lost 40k people. In one year, 40k new jobs were created and hired for in three institutional business categories. That’s up to 80k people that are no longer working for one of our small businesses. If you think I’m exaggerating, check out the May BLS report. In Metro Detroit from March 2023 to March 2024, government, education and health services grew by almost the exact number as other fields shrunk, with a 0% overall net gain in employment.
So, here we are…why don’t people want to work? Well, I think they do, it’s just that we are competing with factors that are out of our control. People are still changing jobs. People who aren’t working are always coming back into the workforce. It just takes more time, more effort and more know-how to find and attract them to our businesses today than it did 10 or 15 years ago.
There is some good news, businesses are still looking for new employees. That’s a great sign. There are over 200,000 job openings in Michigan across all sectors and fields. The companies employing people in the fields mentioned above that lost employees, don’t appear to be from downsizing, it would seem they lost to the employing competition, and are trying to replace those employees and still trying to grow. It’s time to put on our business helmets! We are at war with the public sector for employees! Don’t let a lack of employees kill your business!
This is part one of a series we are going to compile explaining the difficulties we are having in Michigan when looking for employee. We will send them out in our enewsletter and post them on our website. If you would like to join our email list please use the button below.