Michigan jobless claims surge to 108,000 in a week, labor director asks for patience

Laid off from her job at a shoe store, Susan Brochu-Hoshield attempted to file for unemployment last Monday, but the Labor Department system, she said, was so overwhelmed it wouldn't let her complete her application until Friday.

"It was a total, total mess," the frustrated Petoskey resident said, adding that she has even had experience filing for unemployment. "I feel sorry for people who have never used the system before because they're going to be in really big trouble."

By Sunday, the director of the Michigan Department of Labor and Economic Opportunity, Jeff Donofrio, was offering interviews to reassure the public and ask them to be patient under unprecedented circumstances.

The state, he said, is in good shape to pay claims and is aggressively trying to fix problems and even planned to hire more staff.

Last week, Michiganders filed 108,710 unemployment claims, a 2,100% surge from the 5,000 claims that the department normally anticipates, and far more than any period in recent history.

Donofrio would not speculate on how much worse unemployment might get but noted that the governor has expanded benefits. He said the state is more prepared now with a trust fund of $4.6 billion than during the recession when it had less than $40 million.

"Two weeks ago, we probably would not have believed we were going to be in this situation," he told the Free Press. "But, as we start making decisions, I think we weigh the calculations what the impacts are going to be and have appropriately understood what they will result in."

Donofrio said the department is expecting a high number of claims to continue to come in and has reallocated staff and is expecting to hire but did not say how many would be needed.

"This is changing on an hourly basis both on a national level and a state level," he said. "We don't want to make any comment on volume at this point, but we're prepared for this to continue for a few weeks — at least."

On Thursday, the U.S. Labor Department reported a 30% increase in unemployment claims the week before. The surge of 281,000 new claims shows just how quickly the public health crisis is turning into a financial one, with far more claims expected in the upcoming weeks — and possibly even months — ahead.

According to a Goldman Sachs analysis of anecdotal reports from 30 states on the number of applications filed the first few days of the week, initial claims for unemployment benefits nationwide could rise to a record 2.4 million.

Goldman economist David Choi said in a research note that a disproportionate share of claims may have been filed early in the week or that his sample was biased toward states with unusually large increases in claims.

But, he said, claims would still total more than 1 million, by far the highest on record.

The situation, Donofrio said, is a "public health crisis that is associated with an economic crisis." He asked Michiganders to "bear with us and be patient" as the state tries to address the surge in claims.

The department, he added, has upgraded the information technology systems, adding servers, that allows the state to process the applications faster. There also is a new call system.

"This health crisis that you have right now is resulting in a lot of economic hardship for people and businesses," Donofrio said. "So, while the first priority is to flatten that curve, to slow the spread of this disease to give our health care officials and staff the time and resources to deal with this crisis, the governor has worked hard to make sure there is emergency relief in place through unemployment insurance and through other programs to at least get emergency funds into people's hands now."

Moreover, despite the federal labor department's guidance to state officials to only provide general information on claims, such as very high or large increase, he said the state aims to keep the public informed.

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Ken Hreha, 62, of Dryden, said he hopes the labor department is able to begin hiring again to address all the new claims. He worked for the department for nearly four years starting in 2009 — and he'd work there again.

"That was the best job I've ever had," he said. "My niece told me she got laid off and she tried for hours and hours to get through, but no luck."

Brochu-Hoshield said that despite her frustrations, at 67 she's more concerned about getting the coronavirus because she is older and has asthma. She worries that if she did catch the virus, she'd end up on a ventilator.

But the increasingly dire financial picture concerns her, too.

Brochu-Hoshield said she works because her retirement income barely covers her living expenses and, in addition to her own concerns, she worries that her adult children are starting to feel the pinch of the economic tightening, too.

"We're trying to self isolate," she said, adding people need income. "It's very hard."

Contact Frank Witsil: 313-222-5022 or fwitsil@freepress.com. USA TODAY contributed.