Whitmer’s exit plan is the key to Michigan’s economic recovery

23 May 2020

 

Should all things go as planned without any extensions, Gov. Gretchen Whitmer’s COVID-19 stay-at-home orders are set to end at 11:59 pm on May 28. 

 

After this date, Michiganders will be free to resume life outside the home (although many will still wear personal protective equipment (PPE) like face masks in public) and return to the status quo before the pandemic exploded in early March. 

 

While the COVID-19 quarantine has been lauded as an effective way to enforce social distancing after the state reopens, many of Michigan’s workers will have to face the harsh economic realities that being away from the workforce has inflicted upon them. 

 

While Whitmer’s most recent orders allow for manufacturing workers to go back to work despite the quarantine extensions, more needs to be done so jobholders in all fields have some degree of security. 

 

To make sure that Michigan’s economy does not tank in a manner consistent with the sustained high unemployment and homelessness of the Great Depression and the Great Recession, the state government should boost spending significantly, thus helping businesses to keep the workers they already employ and making sure tenants can pay rent without fear of eviction.

 

For many Americans in Michigan and elsewhere, working from home is simply not an option. Be they public school teachers or salespeople at non-essential businesses like malls and department stores, many people are losing their jobs because they’re not allowed to report to work due to stay-at-home orders across the country. 

 

This may also be because they chose to leave. After all, they don’t want to contract or pass on COVID-19 or because they work in businesses that have to let them go because revenues are plummeting due to those same stay-at-home orders. Naturally, this causes unemployment to rise dramatically. 

 

While there are reports of hundreds or even thousands of firms hiring workers right now, these numbers are quite deceptive as these businesses are in specific fields, like healthcare, which do not cover all of the newly unemployed. 

 

With regards to Michigan specifically, the state’s unemployment numbers recently exceeded one million workers filing for unemployment benefits, which is around 21 per cent of the state’s workforce. 

 

This is up from 180,000 people filing for benefits before the coronavirus, a rate of about 3.6 per cent. This is a level not seen since the Great Depression and makes Michigan the state with the third-highest unemployment rate in the country. 

 

While many of these jobs may return once the economy reopens and businesses will once again have in-person consumers, many establishments have gone out of business due to the aforementioned lack of revenue. 

 

In Michigan’s restaurant industry alone, approximately 10 per cent of all restaurants in the state may have closed permanently (precise hard data is hard to come by given the pandemic) in April. 

 

Michigan legislators like United States Rep. Haley Stevens (MI-11) have supported and co-sponsored legislation such as the Essential Worker Protection Act, which calls for a federal interagency task force overseen by Cabinet members and other high-level officials to supervise federal support of newly unemployed manufacturing workers in Michigan. 

 

This task force would also supervise the allocation of federal funds to businesses to make sure they, and the jobs they provide, stay afloat during this crisis. 

 

Although Whitmer doesn’t have the individual power to authorize this level of spending, working with the state legislature to pass appropriations boosting the funding already being considered at the federal level would be an ideal pathway to build a financial safety net not just for manufacturers, but for all industries who need the money to keep their workers employed. 

 

This will help ensure an improved level of employment growth and stability that can be sustained after Michigan is reopened.

 

Even though Michigan’s government temporarily halted evictions for failing to pay rent with a March executive order from Whitmer, those who owe rent will be hit with those bills once the state reopens, even if they don’t have a job. 

 

Currently, the best solutions to this problem seem to be coming from private organizations. The tenant advocacy group Detroit Renter City (DRC) has been pushing for, among other things, a halt on evictions until at least 60 days after the state of emergency (set to end on May 28). 

 

While 60 days may be too long to prevent landlords from collecting their income, the idea of making sure that tenants have ample time to either get new jobs or secure unemployment benefits (which have been delayed due to high-traffic website crashes in the last month) will stabilise the housing situation of many Michiganders. 

 

The Michigan government should certainly consider implementing this sort of temporary rent moratorium, while also again allocating funds that could be used to compensate landlords for their lost income or serve as a form of financial aid to renters who are unable to afford other rent-related costs, such as utilities.

 

It may not look like it due to the isolation of quarantine, but Michigan’s economy may struggle quite a bit once the state reopens. Unemployment is already spiking, and homelessness may also reach new highs if high rent and business closures are not addressed soon. 

 

The state government has a responsibility to Michigan residents to protect our financial interests as much as possible and that goal can only be accomplished by increased attentiveness to the necessary costs of keeping the labour force employed and housed.

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