Strike’s costs spread out to community

Zack Bazzi is not seeing workers from a nearby General Motors plant swing through the gas station where he works on Detroit’s east side since they went on strike nearly a month ago.

Business is “slow,” Bazzi said from behind the counter of the empty Marathon station within a short walk of the massive DetroitHamtramck assembly plant. “They come in usually in the morning and lunchtime. Now they’re all on strike.”

“You’re losing customers,” he added, saying the striking workers are holding onto what money they have “to pay their bills.”

As the United Auto Workers strike against the automaker churns through a fourth week , experts say lost wages means less spending. The strike already has cost the state millions of dollars in tax revenue.

Nationally, 49,000 UAW members have walked off their jobs at GM. With nearly 18,000 of those in Michigan, Democratic Gov. Gretchen Whitmer this week raised concerns about the state’s economy as the strike impact spreads to the automobile supply chain.

With all GM employees in Michigan on strike, state withholding taxes are anticipated to be down by $1.5 million to $2 million each week, Michigan Treasury Department spokesman Ron Leix said.

“If the strike lasts more than a couple weeks and employees are not compensated, the total withholding decline — direct, indirect and induced impacts — would be estimated to increase to $3.5$4.6 million per week,” Leix wrote in an email.

“The hit to the broader Michigan economy could dampen sales tax, but historically these strikes have not caused a noticeable impact in tax collections,” Leix said.

Michigan’s monthly target statewide total for withholding in October is about $800 million.

The state’s economy is not nearly as dependent on the auto industry as it once was, but it’s still a significant sector. Last year, manufacturing jobs accounted for about 14 percent of Michigan’s employment behind 15.4 percent in education and health services, and 15 percent in professional and business services sectors, according to the Bureau of Labor statistics.

Anderson Economic Group, an East

Lansing, Michiganbased consulting firm that works with auto dealers and manufacturers, says GM had lost an estimated $660 million in profits through Oct. 6, while employees lost more than $412 million in direct lost wages.

“As long as the strike continues, it will diminish the purchasing power of the striking and laidoff workers in Michigan by millions of dollars per day,” said Charles Ballard, an economics professor at Michigan State University. “That’s the most direct effect, but the indirect effects may ultimately be just as important. With diminished incomes, the affected workers will spend less. That means less money coming into local businesses.”

“The damage to the Michigan economy will continue to grow every day that the strike continues,” Ballard said.

Dan and Vi’s pizza deli, one of the few eateries near the DetroitHamtramck plant, says sales have been down, though Wednesday’s noontime crowd snaked around the small shop nearly to the door.

“We’re definitely noticing a difference in sales, but we’re gonna be OK,” said manager Tina Wheeler. “We’ve been in the neighborhood 56 years. We’re not going anywhere.”

Associated Press Eric Scharrer, 32, of Davison, Mich., holds his fist in the air in solidarity while waving an American flag alongside his friend Dell Williston, 32, of Grand Blanc, Mich., and hundreds of others during the 11th day of the nationwide United Auto Workers strike against General Motors after stalled contract negotiations outside of the Flint Assembly Plant on Sept. 26 in Flint, Mich.

Associated Press Tina Wheeler, manager of Dan and Vi’s pizza, which is one of the few eateries near the DetroitHamtramck General Motors plant, says sales have been down.