New fears arise in Mich., where hard times began years ago

Few cars were parked in a lot near a closed factory Friday in Detroit. As sales have plummeted across the country, large inventories are building at dealerships and factories. Meanwhile, the three big US automakers failed to get federal aid requested. (Spencer Platt/Getty Images)

FENNVILLE, Mich. - The bad news keeps coming to Michigan, a state long stuck in recession and at ground zero in the national economic downturn. But unlike in months and years past, there are no exceptions to the despair, not even here among the bucolic resort communities along Lake Michigan.

The flailing auto industry is important here, but so is furniture-building, tourism, the retail trade, and construction - pieces of the economy long buffered from the downturn in Detroit. Now waves of layoffs are sweeping towns around here in wine country and elsewhere across the state, swelling the ranks of the unemployed just as tens of thousands of those already of out of work fear running out of unemployment benefits.

"You just sit and you worry," said Pat Weber, a construction administrator in Fennville who was laid off more than a year ago. "In the last year, I've put in for more than 100 jobs. I stopped counting after 110. It's just so defeating."

All around Fennville and its neighbors here in southwest Michigan, front lawns are peppered with for-sale signs and merchants complain about slow days. But while this remains a beautiful place with none of the obvious blight of Detroit on the other side of the state, residents say the hardship beneath the surface is very real.

It is the same story in other parts of Michigan, as the state's already entrenched recession - in at least its fifth year, according to economic specialists - digs deeper as a result of the recent global financial crisis.

New data show the state's unemployment rate crept up to 9.3 percent, almost three times what it was in 2000, and, along with Rhode Island's, the highest in the country. Just last week, Herman Miller Inc., an office-furniture company based in Zeeland, Mich., announced that it would eliminate or lay off 400 to 650 workers, many of them in western Michigan. SKD Automotive, an auto parts manufacturer in Jonesville, Mich., where it is the largest employer, indicated it would eliminate 300 jobs.

As a result of the steady job losses that began in the summer of 2000, 1.82 million Michigan residents, or close to 20 percent of the population, are now on some form of public assistance, including food stamps and home heating credits, a record for the state.

"It is really hard not knowing if you aren't going to be working the next day," said Wendy Einhardt, 47, who spent 16 years making plastic car parts before being laid off in August in Sebewaing, on Saginaw Bay of Lake Huron. "You worry a lot about what is coming."

Around the state, home foreclosures are commonplace, the trust fund that pays unemployment benefits is millions of dollars in debt, food banks are struggling, and health agencies are reporting an uptick in people with symptoms like anxiety and depression. Suicides were up in recent years, although officials caution against drawing any direct links between deaths and the economy.

In one sign of distress, in the first nine months of this year, some 130,000 Michigan residents who had lost their jobs remained out of work so long that they ran out of regular unemployment benefits. By the middle of this month, 63,000 people (who had already run out of their ordinary maximum benefit - as many as 26 weeks, at as much as $362 a week) also ran out of an extension authorized by Congress. Without a second extension of benefits, signed by President Bush on Friday, tens of thousands of others had been expected to run out each month.

Interviews in several towns with residents, elected officials and economic specialists show that Michigan is straining under the weight of the prolonged hard times. And it is anxious about a future that could look even worse, particularly if any of the Big Three automakers should collapse.

"There's this feeling that we've been in the trough long before anyone got there," said Jane Zehnder-Merrell of the Michigan League for Human Services. "It's been a long spiral downward since 2000, really. We've never experienced any economic recovery."

Weber, 58, tried to sell the two-bedroom home she designed on 6 acres abutting a forest in the early 1990s so she could move away from Fennville to find work, but the house languished on a weak market for months and, finally, dejected, she gave up.

She is not sure how much longer she will be able to pay her mortgage.

"The worst that will happen is that I will lose my home," Weber said gazing around her living room, her golden retriever at her feet.

For Weber, who is far from destitute, there is no more going out for dinner and very little driving. Her grocery list is shorn of extras. She is not sure that her car, which needs pricey repairs, will get her to Chicago for Thanksgiving dinner with friends. Life looks different now.

"This is so debilitating, so humiliating," she said. "I feel kicked to the curb. It's been one defeat after another, seems like forever. I feel reduced to nothing."

Michigan's governor, Jennifer M. Granholm, a Democrat, says that her administration has made efforts to remake basic elements of state policy - tax structure, statewide school requirements, the economy itself - anything to turn things around. But she acknowledges the progress has been slow.

"These are all long-term strategies, I know," Granholm said. "But we didn't get here overnight, so we've got to do a lot of things to get out of it."