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February 17, 1995 - Image 3

Resource type:
The Michigan Daily, 1995-02-17

Disclaimer: Computer generated plain text may have errors. Read more about this.

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The Michigan Daily - Friday, February 17, 1995 - 3

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'U,' high-tech industry,
give A2 an economy
unique in Michigan

Ann Arbor, a city of more than 100,000
year-round residents, is deeply af
fected by the University, which
brings tens of thousands of students here
every year.
The economic indicator that makes Ann
Arbor truly unique is the unemployment rate,
which is one of Michigan's lowest.
The University draws high-tech compa-
nies to the area -- firms that tend to keep
wages high and unemployment low. But low
unemployment is not necessarily beneficial
for local restaurants and stores.
The areas around campus are also a chari-
table environment for Ann Arbor's homeless
In Ann Arbor, the number of people either
working or looking for work - technically,
the labor force - is more than 65,000. Of
those, 1,225 are currently unemployed.
At 1.8 percent, Ann Arbor's unem-
ploymnent rate is half the state's average,
which is 4.1 percent. The national average is
even higher at 5.1 percent.
The city's unemployed fall into two groups.
Those in the first group are between jobs and
can be expected to find work rapidly. Those in
the second group have not been employed for
longer periods of time, and are not expected to
find jobs as quickly.
According to Curt Gottleib of the Michi-
gan Employment Security Commission, most
of Ann Arbor's unemployed belong to the
first group. He adds that very few people in
Ann Arbor are "chronically unemployed."
This means for people looking for work,
the chances of getting a job are fairly good. On
the other hand, businesses looking for em-
ployees are forced to compete among them-
selves. In general, businesses cannot find as
many employees as they would like.
To some employers, the low unemploy-
ment is a crippling force preventing them
from hiring employees at what they feel are
reasonable wages.
The problems of
low unemployment
Holly Downey, a West Quad Dining Ser-
vices supervisor, said the low unemployment
rates really are a "plague."
"We have only about 85 percent of posi-
tions filled right now," she said, "and we'd
like to fill more." Though the University pays
food service employees $5.60 to start, well
above the minimum wage of $4.25, she sim-

ply cannot keep fully staffed.
"When we hire someone new, we always
ask if they have any friends looking for work.
They usually don't," Downey said. West Quad
also posts signs throughout the dining hall
encouraging students to come to work.
West Quad isn't the only employer notic-
ing the lack of students to employ. Corey
Lefere, the assistant manager of Wendy's in
the Michigan Union, cannot keep his roster
full either. "We can use about 12 people per
shift and often we have only eight," Lefere
said. Wendy's recently raised its starting wage
from $6.00 to $6.25, but only attracted four
additional people, and is still understaffed.
Lefere and Downey both said understaffing
can compromise service.
"It can result in long lines," Lefere said.
"We don't serve people as well as we
could if we had the people," Downey said.
On South University Avenue, Elaine
Pearlman is having similar problems manag-
ing the Burger King in the Galleria. She
estimates only 86 percent of the positions
there are filled.
She does, however, have a solution. "It's
called Bucks for Books," she said. The pro-
gram reimburses students employed at Burger
King for up to $150 in textbooks.
The offer, which is used by University
students, local high school students and stu-
dents at Washtenaw Community College, is
designed to make Burger King a more attrac-
tive place to work.
Despite the offer, which has been in place
for some time, and the starting pay of $5.50,
Burger King is unable to maintain a full
complement of workers.
Since local businesses cannot attract em-
ployees with benefits and pay well above the
minimum wage, President Clinton's recent
proposal to increase the minimum wage would
have little effect in Ann Arbor.
Vickie Crupper, a senior financial aid of-
ficer at the University, called the minimum
wage in Ann Arbor "a moot point."
University and work/study
The University work/study program is a
financial-aid program designed to help stu-
dents pay high tuition costs by employing
them in various places around campus, from
chemistry labs to the admissions office.
The availability of other jobs may be harm-
ing University employers who hire through
work/study, as the program is not immune to
the economic factors influencing business in
Ann Arbor.
Crupper estimated that 30 percent of the
program's positions go unfilled. "Anyone who
qualifies for work/study and wants to work
will find a job."
Work/study jobs function differently than
other jobs on campus. Crupper said, the de-
partment that hires the student only pays a
fraction of the student's wages. The federal
government pays the rest.
"Departments don't always expect to find
people to fill the jobs they post," Crupper
A cure for the plague
George Mecham, an economist at the De-
troit MESC office, said Ann Arbor's unem-
ployment situation should send people three
messages. "First, it's a signal to get into the
labor force to people who aren't there already.
Second, it's a signal for people from outside
- .yAnn Arbor to find a
way to commute or
work there. Third, it's
a signal to employers
to look into automa-
< # 4 tion- ,

JUs ,DIksAdyKIyNs/sdiyy
Unlike many cities its size, Ann Arbor has maintained low unemployment and a vital downtown, which bustls along Main Street.

economy is the climate it provides for high-
tech businesses, said Curt Gottleib of the
Ypsilanti MESC office.
The University attracts the technology-
oriented companies that Gottleib says pro-
vide "good steady jobs." Firms like Ann Ar-
bor Software and Arbor Technologies take
their name from the town and flourish in the
areas surrounding the University, benefiting
from University facilities and a steady stream
of graduates to hire.
According to the MESC's December fig-
ures, Ann Arbor's unemployment rate dis-
torts the figure for Washtenaw County, which
is pulled down to 2.1 percent.
Gottleib said Ypsilanti is the other major
influence on the Washtenaw Community, and
has a different sort of economy. "It's more
blue collar," he said.
Gottleib said a blue-collar economy is
more prone to unemployment than the "high-
tech" economy created by the technology-
oriented firms the University attracts.
In addition, the University itself employs
more than 32,000 people, making it the larg-
est employer in Washtenaw County.
The happily unemployed
The University also creates an odd set of
economic conditions for people outside the
labor force. To be outside the labor force, one
needs simply stop looking for a job, as some of
the homeless people of Ann Arbor have done.
"Why work?" asked one man who fre-
quents the University campus. "Students and
teachers here are some of the most generous
people around. They keep me fed, they keep
me warm, and they're my friends."
One student with many good "friends"
among the Ann Arbor homeless described his
relationship with them. "Well, they have to eat,
so I'll buy them some food, or smuggle stuff
out of the dining hall. One night it got really
cold, so I let (my friend) sleep in my room."
"The (recreation building) is a good place
to get a shower, or use a sauna, or whatever
you want, if you can pass for a student. Once
you get in, you can use all that stuff as much
as you want," said one homeless man.
Department of Public Safety Officer Bob
Pifer said the department deals with non-
students in University buildings on a regular
basis. "We from time to time get calls to
remove (non-students) and we have leave to
do so," he said. According to Pifer, some of
the University's major concerns include the
possibility these individuals would "commit
larceny, start fires or damage property."
According to DPS incident logs, the po-
lice average one or two calls per day about
non-affiliates in University buildings. The
standard procedure is to check for outstand-
ing warrants, and then escort the individual
from the building.
Students also claimed several of the Ann
Arbor homeless are good sources of drugs
like marijuana and LSD. One homeless man
said, "I ain't getting rich off it. I help them get
high, they help me get by."
And Ann Arbor is apparently a good place

Unemployment Stays Low
The University, combined with the pharmaceutical and engineering industries, keep
Ann Arbor's unemployment rate well below state and national averages.

mmOm Ann Arbor mCm Washtenaw County

mum Michigan




4 1
_ _ _ _ _ _ _ _ _ _21%


s k z s - £ 3 ,

Jan. 93

May 93

Sept. 93V

Jan. 94

May 94


can benefit from
low unemployment
and has a good
chance of finding a
job that pays $6 per
With a monthly
income of more than
$1,000, fitting the
cost of housing into
the one-third of in-
come traditionally
viewed as an accept-
able fraction would
not be difficult in
many parts of the
But Ann Arbor
is not many parts of
the country. Ac-
cording to the Ann
Arbor Tenants
Union, rent prices in
Ann Arbor are ex-
tremely high when
compared to rates in
similar areas.
The University
Off-Campus Hous-
ing Office places the
average monthly
rent for a local one-
room efficiency at
$489, an 8-percent
increase over the
1993 rate. This is

Earning Money
Ann Arborites also earn more than the state and county averages.

Median Family Income

Ann Arbor


Per Capita Income

Ann Arbor
Washtenaw Cour

M '
: "b

Here is a breakdown of how people in the Ann Arbor region, which
includes all of Washtenaw, Livingston and Lenawee counties,
Local Construction
Government: and Mining:
21 6600
v ,
Govemmentl {uacs
Private Sector Service:

Source: University Housing Division

He speculated
that eventually labor
from Ypsilanti,
where unemploy-
ment figures are
higher, will find its
way into the Ann Ar-
bor market. If it does
not, Ann Arbor em-
ployers will need to


nearly one-half of that

$1,000 income. A one-bedroom apartment
costs on average $559, well over half of the
Adding roommates lowers the price, but
for multiple-occupancy units, the per-person
rent is on average above $350.

Ann Arbor's is almost as low as unemploy-
ment can get. As a result, local business is
starved for labor, and must compete to em-
ploy workers who in other cities would make
minimum wage. Minimum wage, a matter of
debate throughout the rest of the country, is
not an issue in Ann Arbor.


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