Study Shows 1 in 3 Michigan Construction Workers on Public Assistance

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A report from the University of Berkley Labor Center, researching Michigan's construction industry, found that one in three workers receives public assistance, including Medicaid, cash payments, food stamps, or earned income tax credits.

The report places blame on exploitative bidding practices and payroll fraud. Historically, the Michigan construction industry offers high-paying jobs for people without college degrees, but the ultracompetitive market tends to squeeze labor costs to win bids.

Many construction companies in the study don't offer health benefits. Researchers also discovered a tendency to misclassify work to pay less. Construction companies also paid many contractors under the table.

"The low wages and exploitative practices in the construction industry, both in Michigan and nationally, cause profound hardship for workers and their families," the study says. "It also costs the public. When employers misclassify their workers or pay them under the table, they are defunding and defrauding government programs, including workers' compensation, Social Security, and Medicare."

The study estimates that Michigan spends approximately $469 million on social safety net programs for families of construction workers.

Berkley researchers pose an answer to the problem; crack down on fraud and make general contractors liable for fraud committed by their contractors.

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