Detroit — Krystle Morton was taught not to count on money until she has it. And not having it is suddenly creating a lot of uncertainty.
Morton and thousands of other workers in Michigan, already uneasy about the spreading coronavirus, are having to deal with another uncertainty: unemployment.
“It’s getting tight around here,” said the 35-year-old Detroiter who was laid off from Lear Corp.’s Flint plant. “I’m sure everyone is going through it right now … the fear of the unknown, worrying about our livelihoods once this is over with. I’m not trying to be overwhelmed. I just pray about it and try to get through the day.”
A record 311,000 Michigan workers filed for unemployment last week, more than double that of the week before and the fourth highest total in the nation behind California, New York and Pennsylvania, significantly more populous states. Across the nation, a record 6.6 million people filed jobless claims last week, according to the Labor Department, double that of the record set the previous week.
Michigan’s increase is a direct cause of business shutdowns either by the state’s stay-at-home order or as a result of lack of business that forced manufacturers to shut their doors. It’s Michigan’s manufacturing might that’s likely to blame for having more claims than other more-populous states.
“Michigan is the home to a lot of very large manufacturing companies with significant payroll,” said Robert Dye, senior vice president and chief economist at Comerica Bank. “Unfortunately, it’s the mix of industries in Michigan … these industries are responding to very challenging times.”
Michigan was hit hard at the turn of the century because of its industrial base. A state that slid into recession in 2001 remained in a one-state slide that lasted until the end of the Great Recession.
At its peak then, Michigan’s jobless rate hit 14%, higher than the national average of 10%, Michigan State University economics professor Charles Ballard said.
“This is a common thing, unfortunately, that Michigan does tend to have bigger downs when the economy goes sour than much of the rest of the country,” Ballard said.
Ford Motor Co., Fiat Chrysler Automobiles and General Motors Co. have all halted production across North America, causing their suppliers — many in Michigan — to do the same.
Paycheck to paycheck
With the state’s unemployment office overloaded, it took Morton days to get her claim filed. Although she was laid off March 20, it was April 1 before she was able to successfully file.
The single mother of three lives paycheck to paycheck on an income of about $29,000 per year. Her children are ages 6, 9, and 18, the oldest a senior in high school. She’s worried about paying rent, her car loan and other expenses until her unemployment and federal stimulus checks come.
Morton’s unemployment check will total about $700 every two weeks, close to $400 short of what she would typically earn making seats for GM trucks at Lear.
Lear’s plant in Flint was billed as rebirth of manufacturing for the city when it opened in 2018 on the site of the former Buick City auto plant administration building. When it held a job fair for 200 new employees, 2,500 hopefuls signed up.
Before the impact of the coronavirus, it was running Saturday overtime shifts.
Gov. Gretchen Whitmer has signed an agreement with the U.S. Department of Labor to implement Pandemic Unemployment Assistance and Compensation programs that increase weekly benefits for all unemployed workers by $600 a week for up to four months, and extend benefit payments from 26 to 39 weeks.
“I’m hoping for that really,” Morton said. “It will put me ahead a couple of months.”
The agreement also grants unemployment benefits to workers who do not already qualify, including the self-employed, independent contractors, gig workers and low-wage workers who can no longer earn money because of the pandemic.
Hair stylist Amanda Page of Hamtramck didn’t think she could file for unemployment. She tried filing Wednesday night.
“It just asked for my Social Security number and my employer’s ID number, which I do not have. I was told the site does not have a proper setup for the self-employed yet,” she said.
She rents a chair at Fern and Dales Hair Salon on Woodward north of Nine Mile and gets paid per service. She uses that revenue to pay for her chair rent and supplies. Client tips also are a part of her income. She’s not sure how much she’ll get in unemployment, or if it will be enough to cover her living expenses.
“Unemployment will help cover some things, but I am one of the lucky few who had some money in savings … it was money I was saving for a house, but now it will help keep me afloat until I can work again.”
Arjun Verma, a bartender at popular Detroit restaurant Republic, signed up for unemployment on March 16, the day after a night of zero reservations and only two walk-ins, rare for the chef-driven, hospitality-forward restaurant.
During a good season, like fall of 2019, Verma could make about $3,000 a month, mostly from tips. He got approved for $220 a week in unemployment benefits.
That means an income drop of nearly $2,000 per month, or two thirds less than he made in a good month.
“I reported my hourly as being $5-$7,” he said. “They asked … give us your weekly hourly, so there was a small confusion in that they ask you for your weekly hourly and they asked you what you made biweekly.”
The $220 a week will cover rent and utilities, but little else. Verma expects the money to be deposited Monday. He applied for food stamps to help supplement the remainder.
“These are programs that are readily available,” he said. “There’s been times in my life that I should have applied for them but I thought, there’s someone who needs it a little more. Now I’m the someone who needs it a little more.”
Nothing but a dial tone
Melissa Kay Swift of Detroit has been frustrated with the system to file for unemployment. After being laid off from her factory job at E.C. Moore, an abrasives producer in Dearborn, Swift has tried to reach the unemployment office by phone for two weeks.
“I tried to do it online through the website, but that was very difficult,” she said. “I had to keep setting a new username, a new password. The glitches through the website kept messing up, where they ended up locking me out all the way. So now the only way I can get through is on the phone, and I have been calling nonstop on my assigned days. And I get nothing but a dial tone or being hung up on or a recording telling me to go online and do it on the website because that way is easier and faster. But right now nothing seems easy or faster.”
Swift has had her job for a little more than a year and said she’s accustomed to getting paid every Friday. Now she’s concerned about not being able to pay rent and other bills.
“I just don’t understand how they expect people to go weeks without money coming in,” she said. “Most of us live paycheck to paycheck.”
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