Businesses bailed out; unemployed left in cold
Attacks puncture already soft job market
By Jeff Plungis, and Gary Heinlein / The Detroit News
Daniel Mears / The Detroit News
WASHINGTON -- Donald Hawley was laid off a few months ago after seven years on the
job from an auto supplier that makes injection dies. He expected to be called back to
work in six to eight weeks, but sluggish auto sales have kept him on the unemployment
line.
The unemployment checks recently stopped coming and Hawley is experiencing how
tough it is to find work in a down economy. He's looking for a job in the $9- to
$10-an-hour range. He was earning $15.80 an hour when he was laid off.
"It's real slow," Hawley, 52, of Lansing said. "I've had opportunities to work
relatively low-paying temporary jobs with no benefits, but that doesn't work for me.
I'm spending $500 a month for health insurance for me and my wife. That's more than my
house payments. I have to have a job with benefits."
Hawley said the Sept. 11 terrorist attacks have hurt the economy and the job
market. But it was bad before that. "The attacks made a bad situation worse," he said.
Lawmakers in Lansing and in Washington are trying to find ways to respond to recent
job losses. They are trying to keep the economy as strong as possible first while
other kinds of temporary help to workers are being considered.
In the weeks since the Sept. 11 terrorist attacks, more than 100,000 workers in the
airline industry alone are out of work. As these cutbacks ripple through the economy,
there will be more.
All of this comes after more than a year of other job cuts in a slowing economy,
from the auto industry to short-lived dot-coms. It all adds up to more than a million
jobs lost.
Aiding the 100,000-plus displaced airline workers has become a high priority for
organized labor and Democrats in Congress. An effort to include extended unemployment
and health benefits and worker retraining in a $15-billion airline rescue package
passed Sept. 21, but failed to attract Republican support.
Rep. David Bonior, D-Mt. Clemens, voted against the airline rescue package after
attempts to add worker protections failed.
"As we consider giving billions of dollars to the airline industry, we must
remember the human face of this economy -- the machinists, the flight attendants, the
pilots, the mechanics," Bonior said.
House Speaker J. Dennis Hastert, R-Ill., pledged to House Minority Leader Richard
A. Gephardt, D-Mo., that the House would consider worker benefits later. But other
senior House Republicans, including Majority Whip Tom Delay, R-Texas, said last week
that no such legislation would reach the House floor. It could become part of an
economic stimulus plan being drawn up this week.
Worker aid package
The proposals for airline workers range in cost from $1.5 billion to $3.8 billion.
Ed Wytkind of the Transportation Trades Department of the AFL-CIO, which represents
60,000 airline workers, said his union was pressing lawmakers for 12 to 18 months of
health-care benefits for laid-off airline workers. Airlines resisted adding the
requirement to the aid package.
"We're being told this is an extraordinary time. It's extraordinary enough to do a
$15-billion bailout for the airlines. But it's business as usual for employees?"
Wytkind said.
Pleas for government help could come quickly and often in the coming weeks. As they
deal with multibillion dollar aid packages for various industries, lawmakers may have
more than airline workers to consider.
Hotels in Las Vegas are laying off service workers because occupancy rates are down
33 percent and approximately 200 conventions scheduled for October, November and
December have been canceled. Ancillary businesses at airports, from suppliers to
restaurants, are also vulnerable.
Airline industry layoffs already have hit Detroit Metropolitan Airport, where
Northwest Airlines is furloughing nearly 750 customer service agents, cargo handlers,
reservation agents and clerks. Roughly half of them are full-time workers and half are
part-time employees, according to figures supplied by the International Association of
Machinists and Aerospace Workers.
"We've had very low unemployment for years, and now all of this is happening,"
union Secretary-Treasurer John Massetti said. "Our people wonder why me, how long is
it going to last and am I going to be able to survive?"
Northwest so far has said it will cover the costs of laid-off workers'
company-sponsored medical, dental and life insurance through the end of this year. The
company also has decided to give each worker a lump sum severance check that will be
based on years of service.
Unfortunately, many will have to look for other work to make ends meet while they
are waiting to be recalled to their jobs. Past experience suggests that the industry
recovers slowly from business slumps.
Retraining workers
Job retraining will also be important for laid-off workers eager to change
industries.
Appleone, a company with two Metro Detroit locations to place people in information
technology jobs, has seen a steady increase in applications.
"It's been consistent since late-spring, early-summer," said jobs representative
Sharon Thomas at the firm's Novi office. "They're from all walks -- every kind of
industry. They all want the same jobs -- technical work."
Gwen Windler, who recently moved to Waterford from Arizona, needs a job, and she
hopes the Appleone agency can help her. She has applied for jobs in several area
businesses including Daimler-Chrysler, but knows that in today's tight economy, it
could take weeks to land a better-paying job where she can uses her education and
experience.
Windler, 29, has a bachelor's degree in criminal justice and history from Indiana
University. She worked five years as a credit card fraud representative with a
financial firm in Arizona before taking a chance on landing a job in Michigan.
"I put my resume in here hoping to find something quick," she said. "Hopefully I
can land something in a couple of weeks. I'm better off than a lot of people who got
laid off and don't have college degrees."
State Rep. Hansen Clarke, D-Detroit, introduced legislation last week that would
supplement unemployment payments to airline industry workers laid off in Michigan.
Clarke said he wanted to boost the weekly amount the workers can receive, allow them
to collect unemployment money beyond Michigan's 26-week maximum or both.
An effort to include the package on a supplemental spending bill was rebuffed in
the GOP-controlled state House of Representatives last week.
Laid-off airline workers are better off than some for short-term unemployment
benefits. Restaurant workers would be ineligible for benefits if they admit they are
looking for part-time work, which many restaurant jobs are. Workers who have had their
jobs for fewer than nine months are also generally ineligible.
Unemployment benefits
Michigan's laid-off auto workers are among those most affected by the economy's
slowdown this year, but they get higher unemployment benefits than most others. Under
United Auto Workers contracts, carmakers are required to supplement state unemployment
payments so that their laid-off employees receive 90 percent of their regular weekly
pay.
Across the country, weekly payments would vary greatly by state. A Michigan worker
who had earned $1,000 per week would be eligible for $300 per week in unemployment.
The same worker earning the same salary would earn $477 in Massachusetts and $441 in
Washington state, but only $230 in California.
Michigan has the leeway to extend the benefits in times of high unemployment. But
so far, layoffs have averaged just over 12 weeks, lower than the national average. The
U.S. Bureau of Labor Statistics said the average length of unemployment for U.S.
workers has increased to 13.3 weeks.
Calls from people seeking work have shot up in the past two months at Dorothy Day
Personnel Inc. in downtown Detroit. The callers are hard-pressed, and disappointed to
learn the agency only places workers in clerical and office support jobs, job
specialist Nicole Smith said.
"What makes me sad is that we don't have anything for so many of them," she said.
"They'll take factory, industrial, housekeeping, but we don't specialize in that."
A male caller told Smith he was willing to do whatever kind of work Dorothy Day
Personnel could find. "He said he'd work as an operator, secretarial, clerical,
anything," Smith said. "He was just desperate."
Michigan's unemployment rate rose to 5.1 percent in August, up slightly from the
previous month and the highest level since March 1996. It also is above the national
rate of 4.9 percent in August.
The jobless rate has fluctuated around 4.5 percent for most of the year, according
to the Michigan Department of Career Development.
"It's a continuation of a slow increase in the unemployment rate that we began
seeing in January," said Joe Billig, an economist with the Department of Career
Development. "That especially reflects the slowdown in the manufacturing sector that
started late last year."
Jack Wheatley, director of the Michigan Unemployment Agency, said claims have risen
by 50 percent to 100 percent each month of the year, but the state still has a healthy
$2.7 billion in its unemployment trust fund. August, when the fund dipped by $300,000,
has been the only month in which the fund hasn't increased, Wheatley said.
"Things would have to get an awfully lot worse before we would have any trouble
paying claims," Wheatley said.
Health care help
Health care is another urgent priority. Employers are required to allow workers to
continue their health coverage under federal law, but laid-off employees have to pick
up the cost of premiums, usually $5,000 or $6,000 a year. That is beyond the reach of
many families. Only about 20 percent of those eligible pay the premiums to continue
health coverage, said Edwin Park, health policy analyst for the Center on Budget and
Policy Priorities, a non-partisan Washington think tank.
One option is for the federal government to provide subsidies to employers or
insurers to continue coverage. But cost could quickly become a factor. Park estimates
it would cost more than $5 billion to cover the laid-off airline workers for a year.
