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Study says many construction workers and their families rely on public assistance to make ends meet

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A recent report from the University of California, Berkeley, Labor Center found more than one in three construction workers in Michigan relies on some kind of public assistance.

The report blames employers willing to exploit workers in order to win bids, as well as payroll fraud.

The Labor Center's report said 35% of families of construction workers rely on one or more public assistance programs to make ends meet, including Medicaid, cash payments, food stamps, or earned income tax credits.

The report noted that in the past, the construction industry offered good-paying jobs for people without college degrees, but the ultracompetitive market in Michigan and nationally has employers squeezing labor costs to win bids.

Many do not offer benefits such as health insurance, and contractors sometimes illegally misclassify workers as independent contractors or pay them under the table, the report's authors found.

The low wages and exploitative practices in the construction industry, both in Michigan and nationally, cause profound hardship for workers and their families. 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 Public Cost of Low-Wage Jobs in the Michigan Construction Industry - UC Berkley Labor Center

In total, almost half a billion dollars — $469 million — is spent on safety net program utilization annually by construction-working families in Michigan, according to the report's analysis.

The report said the state should crack down more on fraud, including making general contractors liable for fraud committed by their subcontractors. 

The Michigan Department of Labor and Economic Opportunity, and the Construction Association of Michigan did not answer Michigan Radio's request for a response to the report. 

Tracy Samilton covers energy and transportation, including the auto industry and the business response to climate change for Michigan Radio. She began her career at Michigan Radio as an intern, where she was promptly “bitten by the radio bug,” and never recovered.
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