Bad Times get Worse
sfgate.com.
BAD TIMES GET WORSE
JOBS: Layoffs last longer than unemployment pay
Waiting to work
Sam Zuckerman, Chronicle Economics Writer Sunday, July 14, 2002
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It's been 18 months since Mary McGuire lost her job as a business development specialist at a Palo Alto software company -- the first real spell of unemployment in her adult life.
Most of the time, the 41-year-old Noe Valley resident shows the same kind of positive, upbeat face to the world that helped make her a success in business, rising early to search the Internet for jobs. By nature, she is confident and optimistic. But there are bad days too.
"There have been times when I cried the whole day, when I burst into tears and say, 'What is going to happen to me?' " McGuire confided.
Two years after the Internet bubble burst, plunging the nation into recession, there are tens of thousands of people like McGuire in the Bay Area - - talented, conscientious individuals, both professional and blue collar, who have been unable to find work for six months or more.
In California, 171,000 people were out of work for more than 26 weeks in June, a jump of 9,000 in one month and up from 109,000 in June 2001. Yet, because of a quirk in federal law, Californians are no longer eligible for a second 13-week extension of unemployment benefits provided for in an emergency economic stimulus package enacted in March.
Separate statistics aren't available for the Bay Area, but labor market experts say the collapse of the region's technology, tourism and travel sectors has devastated employment and made this region one of the nation's centers of long-term joblessness.
Nationwide, the number of workers out of work for more than 26 weeks rose to 1.67 million in June, more than twice as many as the 728,000 people who had been jobless that long in June 2001, according to the Labor Department. The numbers don't include people who want to work but have given up looking.
"It's a very severe problem," said Maurice Emsellem, public policy director of the National Employment Law Project, a group that lobbies for liberalized unemployment benefits. "There are many more long-term unemployed and the number is growing fast."
SILICON VALLEY WORST OFF
Nowhere has been hit harder than Silicon Valley, which rode the tech wave up only to see it crash back down to earth.
"I would call this a tech depression. There are no jobs," said Los Gatos career counselor Patti Wilson.
Blame the persistence of long-term unemployment on a sluggish recovery. After contracting late in 2001, the economy started growing again around the beginning of the year, thanks to steady purchases of homes, cars and electronic gear by ordinary Americans.
But, after a burst of speed in the first quarter, the pace of economic growth has slowed as consumers falter and businesses keep the lid on spending. In such a climate, employers aren't hiring new workers. Forecasters expect unemployment to keep rising this year before gradually falling in 2003.
"Businesses are going to be cautious," said Mary Daly, senior economist at the San Francisco Federal Reserve Bank. "They are still very challenged on earnings."
In the tech sector, Wilson thinks the job downturn could stretch for years to come. "I don't think we're going to see anything positive until 2005," she warned.
CALIFORNIA'S LOST BENEFITS
To help the long-term jobless, Congress earlier this year approved an extra 13 weeks of unemployment insurance benefits -- beyond the standard 26-week eligibility period. For states with high unemployment rates, lawmakers authorized a second 13-week extension, providing for as much as a full year of coverage.
California, where the official unemployment rate is 6.4 percent, has been one of a handful of states that qualified for the second extension. An obscure indicator known as the insured unemployment rate -- the number of people collecting unemployment insurance as a percentage of all people covered by the program -- is used to determine whether a state is eligible for the second extension.
But California's insured unemployment rate just dipped below the 4 percent threshold that triggers the second extension. (Only Oregon and Washington state still qualify for this second 13-week period of extra benefits.) That means that any Californian whose first extension ran out after July 6 will not be eligible for a second extension.
San Francisco resident Amy McKay, 39, is one of those who could be affected by the cutoff. McKay recently began collecting her first extension of unemployment insurance. Right now, she's hopeful she will be called back to the United Airlines cabin cleaning job she lost last October. But if she doesn't find work before her benefits run out in a few months, she may have to abandon the Bay Area.
"I have friends and relatives," said McKay. "If push comes to shove, I could possibly go home to St. Louis."
Critics of the current system say the weak job market makes it urgent to keep a full 26 weeks of extended benefits.
"We're trying to get policymakers to understand that the extended benefits program is broken and needs to be fixed," said Emsellem of the National Employment Law Project.
But employers who have to pay part of the cost of unemployment insurance object.
"Unemployment insurance is for temporary, short-term unemployment. Its purpose is not to be a catchall form of income support," said Eric Oxfeld, president of UWC-Strategic Services on Unemployment and Workers' Compensation, an employer group. "Nine months is about the limit of what should be considered temporary unemployment."
DEALING WITH STRESS
With or without benefits, being without a job for a lengthy period is one of the most traumatic things that can happen.
"I've never seen this much depression," said Wilson, the job counselor. "Families are breaking up, people have lost their 401(k)s, they've lost their homes."
Most people manage to muddle through, perhaps with help from friends and family, and almost always with a great deal of hardship.
"I have the outlook of an engineer. I see it as a problem I need to work on, " said Bandit Gangwere, a 45-year-old systems engineer from Felton whose last significant contract assignment ran out more than a year ago.
Gangwere doesn't feel sorry for himself despite burning though savings, investments and his retirement account. "My self-worth has never been wrapped up in the job," he explained, a perspective he said he gets from his religious faith.
What he worries about, though, is his wife and 10-year-old son.
"I have responsibilities as a husband and a father. Not being able to find a job to fulfill those responsibilities has been a frustrating thing."
E-mail Sam Zuckerman at szuckerman@sfchronicle.com. |
