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Disasters wipe out jobs along with lives

This year's wave of storms, tornadoes and flooding has idled thousands of workers in the South and Midwest, potentially pushing up the nation's jobless rate and taxing strapped states.
Image: Heavily damaged Home Depot in Joplin
A Home Depot was one of hundreds of businesses damaged or destroyed by a tornado that swept through Joplin, Mo., May 22.Charlie Riedel / AP file

The plant where Joe Wermuth worked in Joplin, Mo., took a direct hit and was wiped out by the massive tornado that hit the town May 22. But he considers himself lucky.

“I’m very blessed not to have lost my home (or) anyone in my family,” he said.

Also, he still has a job. The welding supply company that employs him transferred him to a location in another town not far from his home in Neosho, Mo.

Sadly not all workers have been so lucky. Their homes or places of business have been destroyed in this year's wave of storms, tornadoes and flooding. That means thousands of workers in the South and Midwest could be out of work for some time, potentially pushing up the nation's jobless rate and further taxing financially strapped state unemployment funds.

The hardest-hit states already are seeing claims pour in for unemployment benefits. Since a deadly wave of tornadoes swept through Tuscaloosa, Ala., and other Southeast towns in late April, more than 6,000 people have applied for disaster-related jobless benefits, said Tom Surtees, director of the Alabama Department of Industrial Relations. Typically about 24,000 people file for jobless benefits each month in the state, where the jobless rate is 9.3 percent, a bit above the national average.

“We’re not concerned about the rate at this time," said Surtees. "We’re concerned about individuals that need jobs and housing.”

Missouri, hit by massive flooding even before the nation's deadliest tornado in 60 years, also is seeing an uptick in storm-related claims.

About 200 workers have applied for federal Disaster Unemployment Assistance in the state, mainly due to flood damage, said Larry Rebman, director of the Missouri Department of Labor. Even before the tornado hit, the Department of Labor put up a poll on its website asking residents if they were filing for unemployment because of the storms, and more than 500  answered yes in the first 24 hours.

Exactly how many more employees will end up on the unemployment rolls because of last week’s tornado is unclear, Rebman said.

“People are still recovering in that area and haven’t begun to focus on jobs,” he said last week. “They’re still for looking for loved ones.”

The impact of the storms could begin to show up in monthly unemployment figures for May, due out June 3. Figures from April, showing that unemployment edged up to 9 percent, did not reflect the worst of the storms and flooding because they were based on surveys conducted in mid-April. Similarly the impact of late May tornadoes and flooding would not show up until monthly figures due out July 8.

“It is possible we would see an increase in the unemployment rate, but we can’t speculate,” said Stacey Standish, a spokeswoman for the Bureau of Labor Statistics.

Affected towns are bracing for potential widespread unemployment.

Nearly 400 businesses were damaged or destroyed by the massive F5 tornado that swept through Joplin, said Kirstie Smith, spokeswomen for the area's chamber of commerce. The town's biggest employer, the local hospital system, suffered a direct hit on its main facility. Other big employers including a Home Depot and a Walmart were severely damaged.

Home Depot, which employed 90 workers at its Joplin store and lost one employee during the tornado, is “committed” to reopening the store, said Stephen Holmes, a spokesman for the home improvement giant. For now, all employees are being paid even though the store is not operating.

Holmes would not say how long the retailer would continue paying workers but said, “We are looking at their options,” including the possibility of having employees work at stores in the nearby towns of Springfield, Mo. and Pittsburg, Kan.

Employees at the Walmart store “have been offered the opportunity to work at other company facilities in the area,” said spokesman Dan Fogleman.

And the local hospital system has set up a fully operational mobile unit and has sent many patients to other facilities in the surrounding area.

In most cases, employers aren’t required to provide temporary transfers or continue paying idled workers, especially if they’re not covered by a union contract, according to legal experts.

“Every employer makes its own decision as to economically what it can afford under the circumstances,” said Howard Shapiro, an employment attorney and head of law firm Proskauer’s New Orleans office, who lived through Hurricane Katrina in 2005. “Generally if you are unable to open you do not have an obligation to pay people who are not working.”

Natural disasters can boost local and state unemployment rolls, as it did in Louisiana and Mississippi after Katrina. In the two months following Hurricane Katrina, nonfarm employment in Louisiana fell by 241,000, a decline of 12 percent, and the New Orleans area saw a drop of 35 percent. In Mississippi, the hard-hit Gulfport-Biloxi metro area saw a loss of 18,000 jobs, or 15 percent.

Any increase right in unemployment filings could be bad news for states that face shortfalls in their jobless benefit funds.

“Our trust fund is insolvent. We’ve borrowed $670 million,” said Rebman, Missouri’s Labor Department director. “We’re going to be paying claims for unemployment because of the disasters, but we don’t have a projection on how much more we’re going to pay.”

Despite the funding problems, Rebman stressed that employees who lose their jobs as a result of any natural disaster should apply for unemployment benefits as soon as possible. The waiting period for checks is typically 14 to 21 days but funds related to a disaster can be expedited in 10 days or even less.

Fedearl Disaster Unemployment Assistance is available if the president has declared a major disaster. Unlike regular unemployment, self-employed individuals could be eligible for DUA. The assistance may be available if residents lived, worked or were scheduled to work in the disaster area at the time of the event occurred and meet one of the following criteria:

  • no longer has a job or a place to work
  • cannot reach the place of work
  • cannot work due to damage to the place of work
  • cannot work because of an injury caused by the disaster.

"An individual who becomes the head of household and is seeking work because the former head of household died as a result of the disaster may also qualify for DUA benefits,” according to the Department of Labor.

Keith O’Neal, who is coordinating the relief effort at Joplin Family Worship Center, said he’s worried about people who may end up without work even for a few days because many residents don’t have cash reserves and have to depend on family and friends. But for now, he added, few are thinking about jobs or money.

“People are in survival and preservation mode,” he said. “They aren’t worried about tomorrow.”