Michigan unemployment claims dart up amid automaker shortages

Alex Harring
The Detroit News

Production slowdowns in the auto industry helped fuel an eye-popping surge in Michigan's weekly unemployment claims, the state Department of Labor and Economic Opportunity said Thursday. 

The number of residents claiming unemployment in Michigan spiked from 7,465 to 20,548 between the second and third weeks of July, according to data from the U.S. Department of Labor. That 175% statewide increase is one of the highest in the nation. 

Nearly 13,000 of those claims, or 63%, were in the automotive industry, said Erica Quealy, a spokesperson for the state labor department. And "almost all of those were specifically related to auto manufacturing and auto wholesale trade," she added.

Hiring in California slowed down in June 2021 as employers in the nation's most populous state tried to coax reluctant workers back into their pre pandemic jobs before the nation's expanded unemployment benefits expire in September.

The department typically sees this trend when automakers slow down in summer months — a seasonal trend that typically has a notable effect on the state that houses significant operations of three of the world's largest automakers.

"Michigan historically sees a large increase in claims filed each summer as auto manufacturers and their suppliers temporarily shut down their plants and facilities," Quealy said.

On top of typical summer slowdowns, automakers have also taken hits due to a semiconductor shortage. General Motors Co. announced Wednesday that it plans to cancel production at one Indiana assembly plant and roll back schedules at the Flint Assembly plant next week due to the shortage.

U.S. Rep. Haley Stevens, D-Rochester Hills, wrote Thursday to House Speaker Nancy Pelosi, D-Calif., urging passage of $52 billion in Senate-approved funding for domestic semiconductor research, design and manufacturing.

“Used car prices are at historic highs, dealerships are running extremely low on new vehicle inventory and nearly 13,000 Michigan automotive workers filed unemployment claims last week alone,” Stevens said in a statement. “These shocking figures are due to the semiconductor chip shortage and supply chain issues that have been plaguing American automakers for months."

The jump in Michigan's jobless claims comes amid an uptick nationally. Total U.S. claims rose to 419,000 — the highest in two months — from 368,000 a week earlier.

Thursday's numbers come as the fight over enhanced unemployment benefits continues to play out in Lansing and Washington, D.C. Gov. Gretchen Whitmer vetoed a Republican proposal Tuesday that aimed for the state to relinquish the federal $300 unemployment bump.

Republican lawmakers claim the federal bump is keeping people from working, fueling a national worker shortage, while Democrats have argued that the added money is a needed support for people whose livelihoods have been impacted by the pandemic.

The federal unemployment bump is set to expire in September.


Twitter: @alex_harring

Staff Writer Melissa Nann Burke contributed.