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Labor hoping to return to work safely as coronavirus takes toll on industry, unions, and labor market
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LABOR DAY 2020

Labor hoping to return to work safely as coronavirus takes toll on industry, unions, and labor market

The coronavirus pandemic has taken a major toll on the Region's industrial labor unions, and overall labor market this year.

COVID-19 has resulted in thousands of temporary layoffs at steel mills and factories across the heavily industrialized Calumet Region. Unions fought for protective measures like face shields, physical spacing on the assembly line, and thermometers at their workplaces, while dues dried up as members were out of work.

The sudden, abrupt job losses were the worst they've been in a lifetime, easily eclipsing the Great Recession induced by the financial crisis of 2007 and 2008.

U.S. Steel warned the state it could temporarily lay off as many as 3,765 steelworkers at Gary Works and the Midwest Plant in Portage. ArcelorMittal told the Indiana Department of Workforce Development it temporarily laid off 1,648 workers in Northwest Indiana and permanently terminated 103 professional salaried employees.

The cuts extended to union workers in other sectors, such as gaming. Hammond Horseshoe Casino, Ameristar East Chicago, and Blue Chip Casino in Michigan City collectively laid off more than 2,500 employees, in some cases for an indefinite duration. The Chicago Assembly Plant in Hegewisch, Chicago Stamping Plant in Chicago Heights and Lear Corp. seat-making factory in Hammond together furloughed most of their 8,000 employees in the Calumet Region while they were idled for weeks at the onset of the pandemic.

NIPSCO is now offering buyouts as it looks to reduce headcounts, and BP is in talks with United Steelworkers Local 7-1 at the Whiting Refinery about eliminating some of the 1,700 jobs there.

"It's unlike anything we've seen before," Northwest Indiana Building & Construction Trades Council Business Manager Randy Palmateer said. "We're seeing unemployment, layoffs, furloughs, workers still not employed."

As stay-at-home restrictions were lifted, factories have reopened, blast furnaces have been restarted and furloughed workers have been recalled. 

But unemployment in the Gary metro area, which encompasses most of Northwest Indiana, still stood at 10.6% in July, the lowest it's been in months, according to the Indiana Department of Workforce Development.

"Superficially, the labor market seems to be improving," Indiana University Northwest Assistant Professor of Economics Micah Pollak said. "However, these improvements mask serious underlying concerns and we shouldn’t expect the labor market to return to the relative strength and stability that we had early this year for some time."

Workplace safety

More and more workers have been called back to the mills, but concerns about workplace safety loom large, United Steelworkers District 7 Director Mike Millsap said.

"The different things you hear from leadership in the government and employers has caused a lot of confusion, frustration and uncertainty among working men and women," he said. "They should stay on one consistent message."

Steel mills and other factories were deemed essential at the onset of the pandemic, but not enough guidance was given on how to keep workers safe, Millsap said.

"The companies are essential, but they forgot to make the employees essential," he said. "Beyond masks, hand sanitizer and being 6 feet apart, what do you do to ensure workplace safety? Workers have been concerned about bringing the virus home to their families."

Employers also initially would not let high-risk employees, such as older workers or the immuno-compromised, stay home to avoid getting sick. Those that chose to were deemed absentee.

"There were no guidelines, no laws, no requirements for what to do," Millsap said. "We had to bargain these issues. Some employers are better than others. Some employers have relaxed absenteeism rules for those who are high-risk who are older or with underlying conditions. Others tell them they have to come to work or be fired. Or if they take time off they get no compensation. It's another case of putting the workers in a very bad position where they have to choose between their health and their job. They don't think about the average working man and woman. And there are workplaces with no representation at all, where nothing is being done to protect the workers or stop the spread of the virus."

The union remains in talks with the Region's big industrial employers about safeguards as business rebounds and more furloughed workers come back, he said.

'Everything's pushed back'

The downturn in the Calumet Region's industrial sector during the COVID-19 pandemic has meant less work for the trades on the industrial lakefront, where the steel mills and refineries normally spend tens of millions of dollars every year on major maintenance and capital projects.

"It's really affecting us," Palmateer said. "Most of the projects on the books have been pushed back until next year."

The state deemed construction workers to be essential, but work dried up at the steel mills, oil refineries and Cline Avenue Bridge project. Union trade workers have still been buoyed by some big projects, including the Hard Rock Casino in Gary, the $200 million-plus Franciscan Hospital in Crown Point, and new hotels in Crown Point and Hammond, Palmateer said.

"We've still had INDOT projects and commercial projects that have kept man-hours coming in and kept employment from being completely decimated," Palmateer said. "Some trades have been hit harder than others. Mechanical, HVAC, boilermarkers and ironmakers have had to find other means because their bread and butter is the lakefront. They've been trying to get these smaller projects, the light industrial that's coming up, and working with developers."

Contractors and the unions have put many new safety precautions into place, including requiring masks at job sites, requiring social distancing and doing temperature checks.

"The building trades work well with our contractors," Palmateer said. "We look at them as our partners and not our adversaries, especially in dealing with safety. Our contractors follow all the Centers for Disease Control guidelines. We tell our members to use common sense and if they don't feel safe, don't do it. They eat lunch alone in their cars instead of in trailers. We work together with our contractors and end users on making sure our job sites are safe places."

The slowdown has had a major impact on skilled union training halls, which have stopped accepting new apprentices after work has widely dried up. But Palmateer is optimistic business will pick up next year, especially as major industrial sites need to catch up on deferred maintenance projects after they tried to hoard cash to get through the pandemic.

"Hopefully by this time next year, we'll be past the downturn," he said. "In our world, it's often feast or famine, and our guys know that. We just want everybody to go back to work."

High unemployment to linger

In addition to its impact on local unions, the COVID-19 pandemic has hit the overall labor market in Northwest Indiana, which only recently fell back below Great Recession levels, Pollak said.

"It’s likely to continue to fall but not return to pre-pandemic levels for some time," he said. "I would expect a continued slow decline over the next few months until the 6% to 7% range, where it will likely stabilize for the rest of the year and into the spring."

In Northwest Indiana, continued unemployment insurance claims are rising to record levels. But the initial jobless insurance claims for those filing for unemployment for the first time are declining after "soaring so fantastically in April and May," Pollak said.

But underlying concerns remain about the Northwest Indiana labor market, he said.

"While the falling unemployment rate may sound promising, it conceals a more serious problem in the labor market," Pollak said. "Between December 2019 and July 2020, the number of discouraged workers in the United States, people who would like to work but are not longer looking for work, has more than doubled from 277,000 to 701,000 and it’s likely to continue to rise. These discouraged workers are not counted as unemployed in unemployment rate calculations. In addition, due to a tightening labor market many workers have been forced to take jobs well below their education and skill level, such as multiple part-time jobs, working for the gig economy or entry-level jobs. While technically employed, and thus not counted as unemployed, they are far from being in a good employment position."

See an afternoon and evening through the eyes of Crown Point Police Patrolman Daniel Lee. Interview by Mary Freda. Video by Kale Wilk. Produced by Nat Cardona.

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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.

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