Michigan saw a 2000% jump in unemployment claims

Posted at 5:42 PM, Mar 23, 2020
and last updated 2020-03-23 21:52:43-04

(WXYZ) — A $2 trillion COVID-19 stimulus package remains in limbo after Senate Democrats blocked a critical vote, citing a lack of worker protections as well as flimsy restrictions for bailed out businesses. The gridlock unfolded Monday afternoon, hours after Gov. Gretchen Whitmer joined a growing list of state leaders who've issued emergency "stay-at-home" orders, shuttering thousands of "non-essential" businesses.

While the stalled package is supposed to soften the impact of a virus-created-recession, democrats have expressed wariness of the current language. In addition to allowing $500 billion in bailout funds to go to companies selected personally by the Trump administration, the current plan does not prohibit the chosen corporations from laying off workers.

"We have an obligation to get the details right, get them done quickly," Senate Minority Leader Chuck Schumer told the Washington Post. "That doesn’t mean blindly accepting a Republican-only bill."

In Michigan, where the the effects of COVID-19, expected to accelerate now that that a "stay-at-home" order has been put in place, the balancing act of urgency and long-term-protections come to the forefront.

"Markets and health are always intertwined, and what markets don’t like is uncertainty," said Peter Hammer the director of Wayne State University's Damon Keith Center for Civil Rights. "It affects how people view their own health and life and family, as well as work and ultimately their income and their purchasing decisions."

While Hammer, notes that bailouts are not inherently wrong, he says the "devil is in the details" and pushes for restrictions are important.

"You can structure a program addressing the hospitality industry and think about workers first and not stockholders, you could structure policy in thinking about the airlines, saying that we’re making sure there are not huge layoffs and we’re going to use funds to make sure people stay on payroll, which is actually going to make it easier to come back faster when the public health crisis is over," he said, adding that an emphasis should be placed on: who benefits, who decides and who is burdened.

In addition to an industry-specific-bailout, the stalled package proposes sending a one-time paycheck of $1,200 to every American making under $75,000.

Hammer says while such actions are helpful it's also important to keep perspective: any stimulus package will track the same inequities that currently exist in the economy.

While economists talk about "multipliers" — a dollar put into the market can generate three to four more — if a community, such as Detroit, lacks certain markets the multipliers won't show up.

"If you're living in a part of the city that’s abandoned, that’s isolated from supermarkets and employment opportunities, if there is a multiplier effect, it’s not going to multiply in those neighborhoods. It’s going to multiply in the neighborhood, across 8 Mile, when you go out to go shopping," Hammer said, emphasizing that safety-nets needs to be considered in vulnerable high-impact regions that lack traditional markets.

"I think the most important thing to do at this time is first adopt economic policies that are actually complimentary to the public health needs and second, making sure that the vulnerable populations and the safety net policies are given just as much of a priority as the economic bailouts," he continued.

Over 100,000 unemployment claims were filed last week in Michigan —  a 2,000 percent increase compared to the weekly average of 5,000 claims, according to Bridge Magazine.

The increase, however, comes with its own equity issues, as the application process is online.

"I’m concerned about poor people who might not have reliable access to technology, there are a lot of people who don’t have a laptop," said Michigan attorney Jennifer Lord.

In 2015 Lord filed a civil suit against the state’s Unemployment Insurance Agency alleging that the agency’s computer software mislabeled numerous unemployment claims as fraudulent. While the agency, according to Lord, says it has fixed some of the bugs that caused the problem, she is concerned about oversight under a newly overwhelmed, and solely-digital system.

"The system is going to become more reliant on technology and that was exactly the problem that we had going back to 2013 when oversight was withdrawn," she said. "If these workers can’t go to these agency offices to monitor the technology, we’re going to have automated decision making that could cause some problems, we’re definitely going to need to be careful going forward."

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