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Employers fret over generous unemployment benefits

News Photo by Julie Riddle An employee cares for a customer at the Family Dollar store in Rogers City Friday.

ALPENA — Go to work, work hard, potentially expose yourself to a deadly virus, and earn minimum wage.

Or stay at home and earn $24 an hour, thanks to generous unemployment benefits approved by Congress to soften the economic blow of coronavirus-related shutdowns that sent many employees home two months ago.

When an employee can bring in more money by not working, Northeast Michigan employers may well worry whether they’ll have the help they need to keep their businesses alive as the state moves toward loosening restrictions and getting the economy back on its feet.

Since mid-March, unemployment filings in Alpena County have increased by about 500%, according to the U.S. Department of Labor. Nearly 4,000 new and continued claims by Northeast Michigan workers were reported during the week ending May 5.

A total of 112 Northeast Michigan residents have been confirmed infected with the virus, including 90 Alpena County residents, 11 Presque Isle County residents, six Alcona County residents, and five Montmorency County residents. As of Friday, 10 Northeast Michigan residents have died while infected with the virus, including nine Alpena County residents and one Alcona County resident.

News Photo by Julie Riddle Employee Kathy Schalk tends the register at a Rogers City gas station. Shalk was offered the chance to stop working when the coronavirus hit the region, but didn’t want to leave her company and co-workers in the lurch, she said.

At Michigan Works!, which matches hiring employers with people looking for jobs, people who have recently filed for unemployment sometimes say they’ll wait until their employer opens back up instead of looking for a new job, Collin Hoffmeyer, business solutions manager for Michigan Works! said.

Others say they’re doing fine as they are and aren’t interested in one of the job openings at essential businesses allowed to stay open.

Some essential businesses — including some in Alpena — hoping to retain workers have implemented an extra per-hour supplemental income that Hoffmeyer calls “hero pay.”

But not all businesses have the ability to do so, he added. Stores, restaurants, and other industries in more rural areas, or those businesses taking a financial hit and having to tighten their belts already, can’t offer their employees more money to stay on the job.

INCENTIVE TO STAY HOME

News Photo by Julie Riddle A customer picks up an order from an essential worker at a restaurant Friday.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress in March, gave workers an additional $600 each week in federally funded unemployment benefits. That comes on top of the maximum of $362 per week in state benefits possible in Michigan.

Added to what the federal government is providing, that comes to about $24 an hour, based on a typical 40-hour workweek.

In Alpena, Alcona, and Presque Isle counties, the average wage is about $19 per hour, according to data released by the Bureau of Labor Statistics in July. Only six counties in the state — including nearby Oscoda and Cheboygan counties — have a lower average wage than Montmorency County’s $17.70 per hour.

If a worker can make more by staying at home, not going to work is a financially tempting choice.

At the outset of the stay-at-home order, that was a good thing. The extra income encouraged people to stay away from their workplaces, where they might spread the virus.

As the state moves toward reopening some businesses, though, employees will once again be needed.

With the lure of an extra $600 a week through the end of July — and the possibility that the benefits provided through the CARES Act will be extended through January 2021 if legislators pass a proposed $3 trillion HEROES (Health and Economic Recovery Omnibus Emergency Solutions) Act currently before Congress — those drawing unemployment benefits may decide staying at home is irresistibly profitable, putting employers in a bind.

Still, Hoffmeyer said, many local employees want to work as soon as they can.

Phone calls to Northeast Michigan businesses reveal that, while some employers have met with resistance from employees who are unable or unwilling to work, many have the help they need — for now, at least.

Many businesses, from gas stations to grocery stores to restaurants to auto parts stores and road commissions, reported they have enough workers, and some have even added to their staff in recent weeks.

Other businesses in both Alpena and smaller communities are being told by laid-off employees that they can’t come back to work.

Some cite health-related concerns. Others admit frankly that they want to keep receiving unemployment benefits.

Still other active employees have asked to be laid off, knowing they can make more by not working, some businesses say.

Click through the interactive timeline below to see how the virus spread in Northeast Michigan. Story continues below timeline.

YOU REFUSE, SO DOES STATE

If a laid-off employee refuses to go back to work when called, they can lose their unemployment benefits, according to Department of Labor regulations.

However, exemptions allow some people to stay home for coronavirus-related reasons, including caring for a child because Michigan schools were closed to prevent the spread of the coronavirus.

A gas station in Harrisville lost three employees who chose to not work because of health concerns, two because they have elderly parents in the high-risk category for contracting COVID-19.

Applications from people wanting to work at the station have come to a standstill, an employee said. Some of the store’s shifts are covered by people who were laid off from other jobs and are filling in temporarily. When other industries open up again, those people will be gone and there may not be enough help to get the work done, the employee worried.

Employees had to be laid off at Pompeyo’s Mexican Grill in Alpena, which has been exhausting for those who still work at the restaurant and now have to work all the time, manager Christ Christou said.

“No doubt, there will be second thoughts” among employees about coming back to work once the dining room reopens, Christou mused.

In Michigan, minimum wage is $9.45 per hour. If wait staff don’t earn enough tips to supplement their starting pay of $3.50 per hour, the restaurant has to make up for the missing income, up to minimum wage — another financial hit for struggling businesses.

When restaurant dining rooms were first closed, tips on takeout orders were generous, Christou reported.

“Now, they’re not so generous,” he said. “It’s 50/50.”

OTHER CONCERNS

Having enough workers is a worry, but, in his company’s case, it’s not the fault of the coronavirus, said Bruce Goodrich, of Everett Goodrich Trucking in Alpena.

Seasonal workers, laid off every winter when roads can’t be asphalted, are back to work with no complaints, he reported, but the business has had trouble finding enough crew members in recent years.

Years ago, he’d have a pile of applications each spring from young people looking for summer work. Recently, only a handful of people apply for open positions running machinery or laying asphalt.

On the other hand, Goodrich said, businesses such as his may be protected from people wanting to gather excess unemployment benefits through July.

There are only six months of good working weather, he said. If seasonal workers, who know they will file for unemployment in winter, don’t put in enough work time when it’s warm, they won’t be eligible to collect unemployment when snow flies.

The employees are all laid off at Cedar Log and Lumber of Millersburg, a supplier of cedar and pine building materials.

Owner Tyler Tollini, worried about the future of his and many other businesses hit by coronavirus-related closures, remembers his dad talking about the Great Depression.

“It was bad, but he never talked like what happened now,” Tollini said.

Like many other business owners, he is confident his employees are loyal and willing to come back when the business can resume normal operations.

Still, he’s not going to hurry them back to work.

“You’ve got to work, but you’ve got to do it smart,” the business owner said. “I’m not killing anybody over a buck.”

News staff writer Crystal Nelson contributed to this report. Julie Riddle can be reached at 989-358-5693, jriddle@thealpenanews.com or on Twitter @jriddleX.

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