Small biz owners: Unemployment systems not working

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Janet South took a deep breath before she spoke.

The owner of DECO Group, a commercial painting company in Indianapolis, said she didn’t want to sound heartless.

But she told members of the Indiana General Assembly’s Small Business Caucus that she and other business leaders have a problem: They can’t compete with public assistance programs.

The benefits “are so deep and so wide that, truthfully, people don’t need to work for what we can pay them,” South said. She said some workers would rather accept government assistance and stay home to be with their children than come to work, even to a job with benefits.

People around South nodded emphatically as she continued. “And the unemployment system, it’s broken,” she said. “The benefits have become an entitlement program.”

The lawmakers – four of them, from both parties and both legislative chambers – listened intently. Some took notes. They asked South and other business leaders to stay after the meeting and give them more information. They gathered business cards.

“Legislators too often get insulated in the Statehouse and going out and meeting small business owners on their own turf, on their own time I think opens up the dialogue and you learn so much more,” said Rep. Terri Austin, D-Austin, a co-chair of the Small Business Caucus.

The meeting was part of a series of town hall meetings the caucus is hosting across the state. This one took place at Quality Environmental Professionals Inc., a firm in Indianapolis that bids on state work.

The company’s owner, Deb Peters, told lawmakers that she struggles to hire qualified employees – geologists, engineers and other highly educated professionals – because so many of them leave Indiana. She said the “brain drain” is making it tougher for her company to succeed.

And she complained the state has moved away from contracting with smaller businesses for work. Instead, Peters said, small firms like hers must become subcontractors of larger companies – often from out of state – who get the bids for projects.

John Guynn, the sales manager at DKC Inc., a disposable health care products company, told the caucus a similar story. He said bidding preferences meant to help Indiana-based firms win contracts aren’t working.

Guynn said that in 2008, the Family and Social Services Administration went with a Michigan company to provide incontinence products to its clients. Now, he said, the agency has issued another request for bids. But he held up the stack of rules to show lawmakers and said, “You almost have to get an attorney to go through all this garbage.”

The proposal calls for quality vendors. But Guynn said “bidders know it’s all going to come down to pricing, and the big companies come in and low bid the small companies.’

About a dozen business owners spoke at the meeting about taxes, regulations and training programs. But one topic – the state’s unemployment insurance system – kept coming up.

Barbara Quandt, director of the National Federation of Independent Business in Indiana, said that’s been the case at all of the town hall meetings so far. It’s a reflection, she said, of a growing frustration among business owners that the unemployment system is difficult to deal with and tipped too far in favor of the workers.

“Each meeting has had unemployment issues,” whether they involve compliance problems or benefits levels or taxes, she said.

On Tuesday, business owners told stories about employees collecting benefits despite quitting after little time on the job. They said some Hoosiers apply for jobs only to fulfill a requirement of receiving benefits but then aren’t interested in coming in for interviews. And they said the Department of Workforce Development isn’t providing unemployed Hoosiers with the skills and training they need to be good workers.

Ray Cox, owner of the Elite Beverage liquor stores in Indianapolis, told lawmakers that it’s obvious the unemployment system is being abused.

“It was once a safety net,” Cox said. “Today it’s another form of entitlement and it’s at the employers’ expense.”

Sen. Jean Breaux, an Indianapolis Democrat who attended the town hall Tuesday, said she was surprised to hear about the unemployment problems. Lawmakers recently overhauled the insurance system to try to dig it out of debt. The changes included a cut in benefits, an increase in employer taxes, and new rules aimed at stopping fraud.

But Breaux said additional changes may be in order.

“That seems to be a real big burden on businesses,” Breaux said. “I thought we had figured out a balance to that but it seems like we may need to work on it some more.”


  • Can't find employees either......
    Those of you disagreeing there is a HUGE problem, have absolutely no clue how bad the system is being abused. I have had $18-21/hr jobs, 3-6 positions, constantly open for the past 3 years. I can't fill them. These are no experience required, full training offered, with a GED, and a clean and valid DL as the ONLY requirements. Every time we put the help wanted ad up it is the same story - 200 applicants, of which 100 have no DL or an OWI, 50 won't answer their phone, email, or respond to a message, of the other 50, 40 will set up and interview, at best 5 will show up. When they find out its actually work - maybe 1 signs up for a shadow day to see what the job involves in person. I have been able to find the total of 3 people in the last 8 months - all of which have since quit, and are currently, and again, unemployed. I have had at least 100 people in the last year, come right out and say if they can't be paid cash, so they can keep getting their unemployment checks, they were not interested. I moderate a national forum - 5000 small business owners in my industry - all with the same problem I have, all a long term ongoing problem. They can not find people to accept their $15-21/hr positions. I am actually considering downsizing, keeping 2-3 of my best technicians, and moving the business into my home and giving up on expansion - solely - due to lack of labor. This is the grip of EVERY small business owner I know. They simply can not staff. The unemployment system needs some big sharp teeth to rid it of those seeing it as a way to work 6 months, then take a year off - in a never ending cycle.
  • disgruntled
    What kind of jobs do you have are they posted anywhere? I am looking
  • $9.50 plus OT
    Also they give increases, promotions and offer full benefits after 90 days of employment. For an entry level job this is well above McDonalds.
  • Smiley: Misclassification is ILLEGAL
    Smiley broke the law by hiring an employee but pretending she was a contractor so he could skip out on payroll taxes and is then mad that the state of New York wouldn't go along with his charade! But what he did was ILLEGAL: Pretending an employee isn't an employee to dodge taxes is tax-evasion. You're lucky all she did was file for unemployment: She could have filed a complaint with the US D.O.L. over the misclassification and caused infinitely larger headaches for you, including the possibility of criminal indictment.
  • No Data
    Does anyone else find it strange that this article has no numerical data to back up the claims by the employers? I think everyone would get it if some data were offered on what people on unemployment get vs. what these employers are offering as an hourly wage. Instead we get the assertion that unemployed people would rather stay home. We are left to draw our own conclusions. Just to give one man’s example, I was on unemployment once for well over a year back in 2001-2002. Then I was a 50-year old engineer trying to cope with the tech bust recession. I got by through a combination of self-employment and unemployment. However, I always felt the incentive to work. My unemployment checks alone would not cover my rent and were only temporary. So I accepted every consulting, teaching and tutoring job I was offered and reported every dime I made, even when I was paid in cash. It wasn’t easy an easy time, but the system seemed to work the way it should for me. I was able to start my own business which still exists today. I am grateful for the help I received while I was on unemployment, but I always knew that I needed to build my own future and that unemployment is helpful, but only on a temporary basis.
  • Unemployment is a Headache
    I was just thinking about unemployment myself. I hired a worker in NY as a contractor, but NY law said that she was an employee-- although there was a contract, I paid her "firm", she used her own equipment and materials, and she worked her own hours. This young lady files for unemployment and gets it. Now, I'm getting all of these bills from the state of New York. C'mon!!! Talk about taking advantage of the system.
    • You should apologize
      You have no idea WHAT any of us know about ANYTHING. One thing I can tell you: The claim they "can't find people to take the work" and then begin whining that the "solution" is to pull the rug out from under people without work so that they will accept whatever pittance these swine are willing to pay. Here's a thought: Raise prices. Lower your profit margin. Those are your options, because employees aren't infinitely fungible towards a salary of $0. Below a certain amount they can't support themselves, and are simply making an intelligent economic decision not to accept the job because it doesn't meet their needs. In the HR universe we call this "not a fit." Your problem is that you want to make people who don't really fit your organization fit by making them more desperate. That's despicable and disgusting, and these mewling business-people should be called out as the leeches they are. If you can't afford your staff you have two choices: Raise the salaries or shut down. Period. Because rent is what it is, and food is what it is: People who can't cover those expenses on your pay won't be taking the job. It's common sense: They're making a wise business decision for themselves.
    • Listen and learn
      Small business owners are the backbone of our economy and deserve more respect than what they're being given on this comment board. It's shameful that people who have no idea what it takes to run a small business (nor the inclination or work ethic to do so) call them greedy liars. Small business owners created their own jobs instead of sitting around complaining on comment boards. Look at them as leaders instead of enemies. They aren't fat cat CEOs of international corporations- they are our neighbors working hard to keep their business going. Listen to them and learn something.
      • Message To Phillip
        I believe you Phillip. I am guessing that one of several issues are delaying your return to the work force, and it would be interesting to review the hiring methods used by companies you have applied to, and the ways in which they cull through thousands of online applications. If the IBJ is open to reviewing the algorithms currently used to cull through online applications it might help to explain what actually happened to the Human Resource Departments that once met face-to-face with prospective employees. Perhaps the State Unemployment Services Department should provide in-depth computer training or assistance that helps people looking for work learn the methods for defeating computer-based application culling and allow people who want a job to actually sit across the desk from a prospective employer. Good people are out there looking for work and they cannot get a face-to-face opportunity to present themselves. If I am wrong, then let the IBJ and State of Indiana fill the Convention Center with tables and chairs and create weekly "Free Jobs Fairs". I am not buying into the fact that companies have thousands of jobs they cannot fill. I think those companies are missing opportunities to hire good people because those companies hired a Computer Placement Services Company that dehumanized the hiring practices of hundreds of good companies.
      • Post These Jobs at IBJ
        If there are so many small companies that have jobs they claim no one wants, I recommend that the IBJ provide "Free Front Page Postings" for a period of six months and let's see how many companies step forward and actually post these jobs they claim to have available with no one willing to work. I am not buying it. Currently, a person receiving State Unemployment Benefits is required to apply for work, and prove they are applying for work each week. When a person applying for a job that is posted on the Internet receives no feedback from prospective employers, how does the State Unemployment Services Department verify if a job posted on the Internet and applied for by an unemployment payment recipient was actually filled by the prospective employer? If a small business is looking to hire people at a wage that is less than the two or three hundred dollars they receive each week from the state, I can imagine that people are electing to stay home rather than take a cut in the basic income they are receiving from the state. Why not create a joint-payment plan whereby the person on unemployment receives a percentage of the unemployment compensation they have earned, that when coupled with the pay from the new job, brings their earned income closer, or perhaps equal to what they were making before their layoff. Please post these jobs that you cannot find workers to fill, and lets start to review what is actually happening in the jobs market.
      • Not So Fast!!!
        The reason people are collecting benefits is because they have lost a job. There are definitely some that could find a job but why work when you have earned and get more unemployment benefits? You don't have to pay for expensive child care and transportation costs let alone other expenses just to go to work!
      • to much taxes to make it.
        Small business wages are stagnant because business are paying too much in sales tax. lower the sales tax especially on restaurants who are paying more than their fair share. Find another way to fund the stadiums and pro sports teams . refund some of the money already collected and freeze all new taxes on small businesses.
      • I want a good job
        I would love to have a good job. I have a family and I've searched for 7 years for a decent paying job. 317-892-9288
        • If you only knew the $ wasted by DWD
          There are a lot of comments so far which show a lack of basic understanding about the unemployment insurance (UI) system (nothing unusual in a comments section). However, the State of Indiana's Department of Workforce Development (DWD) deserves any and all intense investigation for the money they have squandered since 2005 under then-Governor Daniels to the current administration. Since 2006, DWD has overpaid unemployed claimants well over $2 billion (the debt to the federal government for the UI Trust Fund's being bankrupt has been over $2 billion as well, not coincidentally). DWD's modernized computer system (also not coincidentally first went online in 2006), originally to cost $23.9 million, now costs over $52 million and is 5 1/2 years past due for completion. The system has been such a failure that combined with the loss of institutional knowledge, poor training, a revolving door, and utterly incompetent leadership, DWD most definitely HAS turned the UI system into a welfare system. DWD has for years ignored the state law that claimants are to be registered for work and actively seeking work. Even worse, when employers have reported "new hires", DWD (who has been backlogged for years) just cancels the issues holding payment -- allowing claimants to get paid who are now employed. Although many of the employees there are dedicated public servants, the "leadership team" of DWD has done very little to fix the problems. The current commissioner has been there since 2006 and yet the agency has never improved. Small businesses (and large businesses, too) should be outraged; yet when the time comes to gripe (say within the last two years), their highest business representatives at the Indiana Chamber and Indiana Manufacturer's Association (both of whom have complained about DWD) kept their mouths shut because they didn't want to cross Governor Daniels during the "right to work" movement. If those two groups had the guts back then, they could have done something about DWD. Here we are 7 years later, and the same people who have costs businesses (and taxpayers) billions of dollars continue to lead DWD into a rather large hole.
        • You try it...
          I'm 44 years old. I've worked, paying taxes, since I was 13 years old. Do you think, for some reason, that I'm proud to live on the dole? I've had a sporadic employment history in the last few years (thanks to various 'too big to fail companies getting life support from the federal government over terrible investments and then firing 10's of thousands of employees), and I'm damned grateful that 'safety net' exists. I apply for jobs every day. I work in IT. Don't tell me that I need a Bachelor's Degree to do $12/hour desktop support when I have 13 years hands- on experience with industry certification. Maybe small business owner's should lower their standards and re-think their business strategies before blaming all of this on government. Last time I checked, Republicans had the governor's seat as well as control of the state legislature.
        • worker
          Jim F. also your wrong about taxes US is the highest in the free world and most of us that work pay almost 50% total affective tax. You guys thin we need to give you a job and a living wage but we live in the real world where we have to sell our products at the lowest price.. If your getting 8-9hr work 3 jobs and get some skills your to dumb to know about economics and understand its a big world and your way of life is over your jobs left with epa and other free market kills someone has the job now for 1-2 hr and love it oh and buy the way if not the company went bankrupt because of paying you a living wage to say how bad the company is.. You get what you deserve government cheese
        • Truth
          Truth..... try operating a small business. The government sets you up for failure. Fact. In the last 5 years, my unemployment tax has risen 5 times. It is now more than my mortgage. Revolting? I find it revolting that I pay more for non-workers than I do my own house. People on un-employment should have to work for the money they receive for free. That would put an end to un-employment.
          • Help wanted
          • Where Are the Facts?
            Small business owners seem to find fault with a lot of things these days--too much tax, restricted competition, not enough skilled labor, and now "unemployment benefits in Indiana are too high." I find these arguments void of facts. Taxes are at an all time low (federal, state, and local), job applications far outnumber available jobs and Indiana's unemployment benefits are low relative to other states. Please, small business owners, don't blame the people who now receive unemployment benefits for your problems. The real problem is that businesses don't want to pay a decent wage even without benefits. And...just what do these small businesses that believe in limited government want the legislature to do? I find the situation revolting!
            • RE:Amen
              Lots of people would be happy to work for a good wage -- me included. As a person who has been looking for a decent job for more than a year and fills out applications daily, it's frustrating when I hear nothing back from prospective employers. It also makes me skeptical of these employers in the comments sections who complain about being unable to find anyone who wants to work when every job I apply for gets hundreds of competing applicants. I wish some of these employers in the comments section and those complaining to the legislature would post links to the jobs they're unable to fill. (Spoken as a well-qualified college graduate who has never taken a day of unemployment benefits in his life).
            • idea, realy?
              Try looking for a job Brent.Spend an hour applying on a company website only to get an email with 2 minutes saying you are not qualified for the job you just wasted an hour on creating user name, password, profile, taking a test, uploading a resume only to get rejected. The "good wages" they say they offer are in the $8-9 per hour wage. Can you live on that? My wife is an IU grad, worked for her company 16 years that went out of business, next company she worked for 4 years and they went under. She applies for jobs all day, every day, so how are you supposed to find a job if you're picking up trash or mulching? The discrimination against older workers is disgusting and the hiring practices of most of these companies is a joke.We dont get free rent,free food,free phone,nothing. Her unemployment before it ran out was $190 per week and thats before taxes. Benefits are not "deep and wide" Janet South!
            • "We just have to accept it"
              No, we do not. We should withdraw from these suicidal "Free trade" agreements which are nothing more than an enormous subsidy to business, allowing them to produce goods for sale in the U.S. without paying U.S. wage scale. Worse, this subsidy is double-edged--it drastically reduces tax revenues (because of all the new unemployed people paying far, far less) and simultaneously dumps many thousands of unemployed people into the safety net, straining it even more than the revenue shortfalls.
            • Simple Repair
              It's simple. So simple that they most likely won't fix it this way...... Start deducting the Unemployment "Insurance" from employees. Let them fill their own accounts and draw from them. When they're out of money, that's it. Unless you sort recycling or report to some other type of job where you would be paid for your service. Paying people money from employers to do nothing creates a lot of free loaders. Would you like to end Unemployment? Stop paying people to do nothing. Make them work for it. It's not rocket science.
            • Zero Sympathy
              If you "can't afford" to compete with unemployment I have zero sympathy for you. UI is peanuts-- <$350/week for highly-paid professionals, less than half that for the slave-wages these swine are offering. Our employment market it already heavily distorted by "free trade" agreements that create never-ending pressure to cut salaries in the U.S. What these people want is yet-another-subsidy--for themselves--in the form of a squeeze on the unemployed. "They won't accept our paltry wages!!!" goes the whine. Okay, Mr. Capitalist, that's the market telling you that you don't pay enough. What UI does is prevents these swine from hiring people who won't be able to work for them. They might have "benefits" (whatever that means) but unless one of them is complementary child care they have to (absolutely have to) pay at least the amount of UI + the cost of child care. And that doesn't make UI into an "Entitlement"--it is a fire-break against unscrupulous employers who want to first strip the unemployed of UI altogether, and then keep on lowering wages until we're all slaves.
            • Typical
              My parents own a small business and have to compete with unemployment benefits all of the time. They are not able to pay great wages, but they do provide benefits. There is hardly any margin for many small business owners right now. If it had not been for a few smart investments and a farm subsidizing business losses during the recession, the business and nearly 40 jobs directly connected to it would have disappeared years ago. People need to realize that many small business owners aren't in it for fat cash, they are just trying to make an honest living and those "low wages" are all that the market values that type of work to be. Unfortunately, the global market has put a lot of downward pressure on U.S. wages, but we just have to accept it and move on. Hard work is what once made the U.S. great. Unfortunately, it seems that we have forgotten.
              • @Disgruntled
                Disgruntled - what is the "good" wage you are referring to? Since this is forum allows anonymous posts you should not worry about anyone finding out who you are. PLEASE tell us what wage you are speaking of.
                • RE:Amen
                  Don't forget free cell phone and healthcare!!
                • Idea
                  Why don't the people receiving benefits also be required to work for the state? picking up trash on the side of the road, help spread multch around trees in Indiana, etc. why not make them give a little of their time since they are receiving benefits. If they don't show up they don't get paid that week.
                  • Wage definition
                    Just curious. What is your definition of a good wage? I also agree that some people definitely would rather stay on government hand outs, but honestly I see why people with kids would stay at home. The cost of child care is off the charts, and most employers pitch a bi#*h, if you miss an hour every once awhile if your kid is sick. Not everyone has access to relatives to watch their young kids. Realistically, I see both sides of the argument. Most employers are pricks these days.
                  • Amen
                    I have 16 jobs to fill for a good wage and can't find anyone that wants to work! Government benefits have gotten out of control. Free rent, free food, free school, free electricity, free ebt cards. Whats the motivation to work anymore??

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                    1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

                    2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

                    3. I was just watching an AOW race from cleveland in 1997...in addition to the 65K for the race, there were more people in boats watching that race from the lake than were IndyCar fans watching the 2014 IndyCar season finale in the Fontana grandstands. Just sayin...That's some resurgence modern IndyCar has going. Almost profitable, nobody in the grandstands and TV ratings dropping 61% at some tracks in the series. Business model..."CRAZY" as said by a NASCAR track general manager. Yup, this thing is purring like a cat! Sponsors...send them your cash, pronto!!! LOL, not a chance.

                    4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

                    5. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............