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.