Impact of joblessness begins to hit auto workers: unemployment benefits run low
Tens of thousands of jobless auto workers, assured by President Carter that help is on the way, wonder glumly whether it will come soon enough and be sufficient to keep them off welfare roles next winter.
Auto workers up to now have been cushioned against financial crises and layoffs by union contract provisions, federal protections, and state unemployment compensation.
In Michigan, typically, an assembly-line worker with four dependents has been receiving $265 a week, compared with regular pay of $292, or else is under Federal Trade Readjustment Assistance, at $270 per week. For many, layoffs have so far been more trauma than financial hardship.
But the cushions are in jeopardy now. Supplemental Unemployment Benefits (SUB) reserves, intended to guarantee auto workers up to 95 percent of regular takehome pay in layoffs, are running low. Other benefits also will be exhausted by late summer for most of 250,000 auto workers currently laid off in Ford, Chrysler, American Motors, and General Motors plants with no callback dates for jobs.
Similar problems are looming for another 50,000 auto workers on temporary layoffs, a number that will rise sharply in coming weeks as plants shut down normally for model changes.
The United Automobile Workers union estimates that still another 200,000 under its contract are idle after layoffs in parts-supplier plants.
Altogether, the jobless level in the auto industry has risen beyond 500,000, the number idled at the worst of the 1974-75 recession. No improvement is in sight.
Such heavy layoffs weigh hard on fastdiminishing SUB funds: Only a trickle of money is being put into the funds on a basis of hours worked, while the weekly payout is draining off reserves.
Ford announced a week ago that payments were about to be suspended for workers with fewer than 10 years seniority. The company has been making SUB payments to 64,300 workers, at a cost of about $7 million a week. Only $6.9 million remained in SUB reserves after last week, out of $150 million on hand last Jan. 1.
The Chrysler and GM funds are in better shape, with a few months of reserves left.
Federal trade assistance funds, for those who have lost jobs because of imports, have been drained over the past year, and payments will have to be suspended unless Congress acts soon on a new $1.4 billion appropriation.
Compounding these problems, state unemployment compensation is paid for only 26 weeks in most states, with the federal government paying similar benefits for an additional 13 weeks during high unemployment periods. About one-third of jobless auto workers have already exhausted these benefits for 1980.
