Addressing unemployment and poverty: A Labor Day message from Upjohn Institute President Michael Horrigan

Michael Horrigan portrait, horizontal, white background

By Michael Horrigan

Labor Day—the traditional celebration of the dignity of work and the contributions of hard-working Americans—is an even more significant holiday this year as we face the greatest economic-and-health challenge in our country’s history. Between the middle of March through August, as the pandemic has gripped our nation, over 59 million workers have filed for traditional Unemployment Insurance (UI). An additional 17 million, including the self-employed and others who are not eligible for traditional UI, have filed under emergency Pandemic UI programs. And the latest data show that across all UI programs, over 29 million continue to collect UI benefits.

Another perspective comes from the monthly jobs report. Between February and April, the economy saw payrolls decline by 22.2 million. As of August, only 10.6 million of these jobs had been recovered. The unemployment rate shot up from 3.5 percent in February to 14.7 percent in April and has since come down to 8.4 percent.

In the initial phase of layoffs, many laid-off workers expected to be recalled by their employers. In April, over 78 percent of the unemployed were on temporary layoff, expecting recall. Even in these early months, however, large numbers of those laid off knew their jobs were not coming back. Faced with massive state-ordered shutdowns of industries and directives for its citizenry to self-quarantine, many laid-off workers not expecting recall, but eligible for UI, did not and could not search for work. These jobless workers were reported as being out of the labor force, a group whose ranks increased by 8.3 million between February and April, causing the labor force participation rate to fall from 63.4 percent to 60.2 percent. Since that time, as the economy has gradually reopened in fits and starts, the dust is slowly clearing to reveal increasing shares of the unemployed on permanent layoff, even as more individuals re-enter the labor force to look for work. Both trends imply the need to find new jobs for many workers.

Throughout this period, I have been in awe of the bravery and dedication of the front-line workers who care for those infected with the deadly COVID-19 virus, maintain our food supplies, teach our children, maintain our infrastructure, and perform many other critical functions that have continued nearly without pause since the pandemic began. I salute Michigan Governor Whitmer’s Futures for Frontliners initiative to extend educational benefits to the brave front-line workers in our state. Every step counts. As industries have gradually reopened, most employers have adopted careful measures to create safe work environments by staggering work schedules, enforcing social distancing, issuing protective equipment, limiting capacity, and, of course, encouraging the use of telework whenever possible. Again, every step counts.

At the Upjohn Institute, we are dedicated to researching the causes of unemployment, exploring effective approaches to alleviating the impacts of unemployment, and providing assistance to unemployed job seekers. In recent months, we have joined the chorus of researchers seeking to understand and offer solutions to this crisis. Whether it be advocating for the use of short-time compensation, unemployment insurance reform, access to free community college to improve worker skills, or increased aid to state and local governments faced with massive shortfalls in operating revenue, Upjohn researchers have provided data-driven guidance to offer potential solutions to the problems faced by both working and out-of-work Americans.

Following upon the tradition of our founder, W.E. Upjohn, who, prior to the creation of the UI system, turned over farmland during the Great Depression to out-of-work Michiganders, we join the countless other dedicated groups who provide direct assistance to those in need. The service centers we operate in our four-county region provide one-stop services to job seekers, UI applicants, and welfare recipients. Our business services unit partners with hundreds of local employers to sponsor job fairs; match job candidates to employer needs; work with local employers to apply for local, state, and federal funding grants; and respond in real time with services to mitigate the effects of mass layoffs.

We recognize that job assistance can mean providing a helping hand to overcome personal obstacles just as much as matching available jobs to worker skills. We have set up offices in trusted neighborhood centers, in high-poverty areas, to provide wrap-around services to individuals to address the barriers that prevent finding meaningful and rewarding work, such as systemic racism and access to educational opportunities, transportation, child-care, and shelter.  We work closely with community leaders to address child-care issues on a system-wide basis.  In partnership with employers, we have placed success coaches at worksites to provide one-on-one assistance for workers who are but ‘one car repair’ away from being unable to work (among numerous problems that workers often face in silence).  Employers report significant improvements in retention and worker satisfaction.

Every step we take—be it through large-scale federal programs responding to a once-in-a- century health and economic crisis, or the efforts of state and local leaders and our own workforce development programs to address the problems of unemployment and poverty in our communities—demonstrates how we show real respect for American workers. Dr. Upjohn knew that converting farmland for out-of-work families would not cure the problems of the Great Depression, but he too had great faith that every step taken by caring individuals and institutions, working together, could help achieve the goal of getting America back to work with the dignity that every American worker deserves on this and every Labor Day.


Research Topics: Unemployment Insurance