Making Ends Meet in Greater Lansing: How families and workers managed the pandemic through the informal economy
By Dr. Louise Jezierski and Dr. Sejuti Das Gupta, James Madison College, Michigan State University
When the Covid-19 pandemic hit hard in Michigan in March 2020, schools and businesses shut down, and participation in the labor force contracted sharply. In the Lansing-East Lansing Metropolitan economy, the Bureau of Labor Statistics estimated that there were 23,700 fewer jobs between July 2019 and June 2020, a bit more than 10 percent of total non-farm jobs. Every sector experienced job loss, but the biggest losses were felt in Leisure and Hospitality, Manufacturing, and Government sectors. As some area workers stayed employed remotely, through online work, others were affected by closures, furloughs, and layoffs. Two of the biggest impacts on the local economy were school closures, especially public schools and daycare centers, as the problem of kids staying home created serious challenges for families. Another problem was the closing of Michigan State University, as students left for home, limiting the contributions they make in local consumption, but also in their role as workers.
We received a small grant from the Center for Community and Economic Development at MSU to study the impacts of the pandemic on the work – life balance on families in the greater Lansing area. We conducted about 30 in-depth interviews, about an hour each, through zoom. Our respondents are helping us understand the shape or map of the local ecology of support systems in connection with the local economy. We are examining places and strategies that help people link up to needed household services, as families themselves take on expanded (unpaid) care work roles, and community organizations help link people with jobs and services. We talked to people who are daycare and eldercare providers, housecleaners, haircare specialists, teachers and tutors, food preparers, and service providers, all who engage in both the formal as well as the informal economy. We listened as our respondents conveyed how they were challenged by remote work arrangements, school closures, business losses, and income loss. We knew that families and workers would need to connect to find household services as well as employment in more informal, personal ways, and we wanted to find out how they managed to make these connections.
We learned that families and small businesses experienced tremendous economic and personal losses as they tried to adapt to the limited employment and institutional support systems caused by the pandemic. We heard personal narratives of resilience too, as families took on the challenges of eldercare and childcare and/or started small enterprises, relying on friendships, personal networks, and family to make ends meet. For instance, families found that they appreciated the chance to focus on family needs, to truly see how their children worked remotely in school, or for children to see their parents at work, in the home. Respondents told us that their family ties deepened. For others, losing jobs with people they worked for and felt close to, deepened their isolation. As vaccinations have been introduced and workplaces and schools have reopened, the economy is rebuilding from the dark days of March through June of 2020. However, our main take-away is that a lot of people have lost income that will never be recovered, people have moved away, students have lost learning capacity, many have experienced isolation and disorder. The safety-net supply chain has been disrupted. Our respondents’ own words and situations show the deep troubles they have faced over the last year.
“So, when the pandemic hit, I only cleaned two houses and that was every other week, so I only cleaned four times a month. So that was at for about four months. And now I only have just like 9 clients. And instead of going let’s say every week or every two weeks now I just go once a month. So economically, it did hit very, very hard.”
So, my mother passed in September and, you know, my role sector at work was important so I kept upon zoom. My mom ended up being in hospice at home. So not only was I a caretaker, she then was hospitalized for a while. So, I'm going back and forth trying to visit her at Sparrow. Again, the boys are at home. I'm working from home. I'm trying to visit her. Then when she got out, she was in a rehab facility for just like a couple of days and we realized how bad was it was, and you couldn't visit anyone in a rehab facility at that time. So that was a very difficult thing to put anyone in there, but I didn't have that kind of care home that she couldn't go to the bathroom, do things on our own. So, we ended up bringing her home for hospice and not only a week before she passed.”
For one small businessperson, the Cares Act, was “a lifesaver” since he was self-employed, specifically because his landlord was “not helpful at all.” Personal unemployment assistance money was used to “keep the shop closed even though I’m working.” He was forced to “bow out” of his long-time commercial space due to lack of support from his landlord. He was “not entitled to the grant money,” to census data indicating the three-block radius where his new shop is (in Lansing) is not a low-income area. He also attempted to use the PPP program, which he did not qualify for due to lack of having employees. He lost a total of $37,000 in 2020.
“I stopped apologizing [for needing to take care of my children]. I still don’t apologize for that…. I’m not one thing. Yeah, I’m a working mom. I’ve got three kids. They’re at home. I’m not going mince words or hide that.”
“So, we found her on Care.com. It worked out really well. Our son ended up absolutely loving her and was sad -- she was an MSU student, so when her semester ended, she went home for the summer. Very devastating for him, very devastating for all of us. She does plan to come back in the fall and as we need her when she gets back to school. But budget-wise, not something our family ever anticipated. So that was a huge hit for us. It became a struggle. I mean, childcare, whether it be a center or in-home is not cheap.”
“I definitely have given out about six times the divorce resources than I did in my previous two years. I've given out about three times child abuse or domestic violence resources than I have before. Talking about an academic specialist, PhD person who is living with her abusive ex and can't move because of COVID and her children and the care [they need]. So, if things were bad at home, things were worse because it's now magnified, and you can't avoid it. If you are alone, a lot of issues with isolation, not being able to see people, seeing your parents or other relatives. So, I think the biggest thing it's affected is people's sense of self, sense of accomplishment, feelings of failure, stress levels, worry about being laid off or furloughed. And it really depends on the supervisor.”
We came away with some key findings about the pandemic. Self-employed workers lost clients in the formal economy, and their lost wages would not be made up with any federal CARES Act funding or even state unemployment benefits because they didn’t fit the priorities for small businesses with employees, or they were working in the informal economy, or they were undocumented workers. Households required a new division of labor to cover child-care. Often, salaried workers maintained their income, while their wage-working partners cut back to help out at home. One couple lost 25% of their monthly income due to cutbacks in hours worked, plus increased costs to hire a part-time, in-home childcare worker. We found that more than half the workers in our sample suffered severe loss of work and income in sectors such as house-cleaning, cosmetology, and eldercare. In our sample, many who lost wages in 2020-21 will probably not be able to make up this gap. Others used this opportunity to branch out as entrepreneurs, working on their own, but facing steep start-up costs.
Our institutional support system is also at risk. The care economy that includes public schools, pre-school, and eldercare all have weaknesses and low capacity for care provision. The Lansing Public School District was closed the entire year for in-person learning and was conducted all by remote learning. This created an uneven impact on pre-school enrollment. While East Lansing parents continued to enroll their children in daycare, this full enrollment capacity contributed to high demand that resulted in a two-year wait list. Compounding this was a teacher shortage as interns in early childhood development enrolled at Michigan State University or Lansing Community College, were not available due to university closings between March of 2020 until August of 2021. In comparison, the Lansing subsidized daycare was under-enrolled. Even if the cost of daycare for eligible families were fully funded by the federal government, demand for their services declined. The daycare director explained that many families found it difficult to have some of their K-12 children at home and to take their pre-K children to daycare, while finding it easier to keep all their children home together. This resulted in declining enrollment and declining revenues, as their budget is determined by per capita enrollment. Teachers were furloughed, but their salaries continued as PPP loans covered them. Some teachers left for other positions that paid more. The very low salaries for those in eldercare and daycare ($11-$13 dollars an hour, for some skilled workers with associates or bachelor's degrees) prompted workers in these sectors to leave their jobs for greater pay either at another facility, or leaving this sector altogether, as some retail establishments offered higher wages, thus, leading to less capacity in the care economy.
The Century Foundation recently completed a comprehensive report that assesses each state’s progress toward the goal of enacting the ideal care policies that support children, families, and communities. The five policy areas are: 1) child care and early learning; 2) home and community-based services/long-term care; 3) paid family and medical leave; 4) paid sick and safe days; and 5) fair working conditions for care workers. The State of Michigan’s composite score was a D. (Century Foundation Report 2021).
In 2020, AARP noted that “Michigan has an estimated 1,280,000 family caregivers who provide 1.2 billion hours of care to loved ones each year. On average, family caregivers’ annual out-of-pocket expenses total nearly $7,000, while costs for Hispanic and Latino/a caregivers require 44 percent of their average income (equivalent to about $9,000 annually), African American families spend 34 percent, and whites spend 14 percent on caregiving expenses for their loved ones.” (AARP 2020:5)
The Michigan League for Public Policy has recently reviewed our state’s capacity for day care. In Ingham County, there are over 19,000 children aged 0-5, but only 11,526 daycare spots, leaving a deficit capacity, or a ratio of 1.7 students per daycare spot. As younger children need a higher level of trained care, new policy initiatives that will move four-year-old children to public school daycare centers may disrupt the current business model that makes daycare centers solvent, as their student/teacher ratios will be adjusted downward, and pay goes up, while centers get paid per pupil.
The promise of investment coming from both the federal and state governments for subsidized childcare, care economy infrastructure, and extended child tax credits may go a long way in solving some of these long-standing problems that were revealed so starkly during the months of pandemic. But the pandemic had some explicit independent effects that have made care economy capacity deficits worse, such as the interruption of training elder care and day care teachers, and as public-school teachers have retired or walked away from this profession. The share of senior-aged Michiganders and shrinking population of working age adults is a long-term structural challenge. Support for people to train for these jobs and to make sure they have a living wage to keep them there, will require careful crafting of social policy initiatives. The care economy infrastructure of families, small businesses, and schools, provide the foundation for our regional (and state) economic growth. The strains and cracks in this system must be addressed to avoid serious consequences for the quality of life and opportunity in the greater Lansing economy.