From NYTimes
December 13, 2001
Northwest Goes From High-Tech to High Joblessness
By SAM HOWE VERHOVEK
RESHAM, Ore., Dec. 12 — Steve Haggard was in quality control at the Fujitsu semiconductor plant here. Lisa Pagel was an account manager at a grocery warehouse in nearby Milwaukie. Eric Spengler was a mechanic at a commercial cleaning business.
These three Oregonians all lost their jobs in recent weeks, in a part of the country where, by many measures, the national recession first hit and continues to hit the hardest.
On a percentage basis, Oregon has lost more jobs than any other state in the past year, according to the federal Bureau of Labor Statistics, and its unemployment rate, at 6.5 percent, is now the second highest in the nation — surpassed only by its next- door neighbor, Washington State, at 6.6 percent.
The number of Oregonians receiving food stamps jumped 32 percent in September, compared with the same month a year ago, the biggest year- to-year increase since 1974.
When a wave of layoffs hit the the Northwest's high-tech industry, which has replaced the traditional resource industries, like logging and fishing, as an economic linchpin, the ripple effects were severe. Portland's "Silicon Forest" area has nearly one of every 10 semiconductor jobs in the nation.
Fujitsu announced recently that it would close the semiconductor plant here, which makes "flash memory chips" used in cellphones, hand-held organizers and other devices. That has thrown 670 people out of work and set off a budget crisis for officials in this Portland suburb, where the $2 million a year that Fujitsu paid in taxes represented about 10 percent of all property-tax revenue.
Problems have also hit heavy manufacturing and the service sector, leaving many workers with their first experience of being laid off.
"It's a weird feeling to have someone just say, `Poof!, your job's gone," said Mr. Spengler, 38. Like many people filling out unemployment forms at a state office here, he said he had almost taken for granted that he could move from one better- paying job to another.
Ms. Pagel, 36, who started as a deli manager and worked her way up to account manager for a wholesale grocer, said she was stunned when her employer laid her off a week ago.
"I didn't think it would happen to me — it's the first time ever that I've been laid off, and I've been in the work force for 14 years," she said as she visited the State Employment Department office here with her husband, a tow truck driver, to check listings for other jobs.
"I don't think it's really hit me yet, that I'm unemployed," she said.
While Fujitsu is pulling an entire plant out of Oregon, other high-tech companies, including Intel, TriQuint Semiconductor and Mitsubishi Silicon America, have all announced cutbacks at plants here.
Heavy manufacturers like Boeing, with plants in both the Seattle and Portland areas, are laying off thousands. Freightliner, a big truck manufacturer in Portland, has laid off about 700 workers this year. Many smaller businesses are contracting as well, officials say.
Last Friday, state economists said the state was facing a $720 million shortfall in its two-year, $11.4 billion budget. State lawmakers convened hearings this week on cuts and possible tax increases to make up the difference.
Gov. John Kitzhaber, a Democrat, recently formed a 17-member Economic Strategy Advisory Group to come up with ideas for stimulating the state's economy. The state is also starting an advertising campaign to attract more tourists and even to "encourage Oregonians to visit Oregon," as Governor Kitzhaber put it.
While the economy was struggling before Sept. 11, the terrorist attacks have had an impact, as seen in the downturn in tourist visits and the layoffs at Boeing, which has scaled back production of commercial airliners.
Officials are hopeful that the state will bounce back in the coming months. While unemployment has jumped, they note, the rate is still barely half what it was during the recession of the early 1980's in Oregon, when the state depended more on logging and fishing.
Even as it became a high-tech state, Oregon never lost its manufacturing base, and in some ways it is paying a price for its reliance on an industry prone to swings in demand.
In Oregon, manufacturing accounts for about 28 percent of the gross state product, compared with a national average of 17 percent, said John Mitchell, an economist with U.S. Bank in Portland.
"I don't think this is a structural problem," Mr. Mitchell said. "I think it's cyclical. When there was a downturn in the forest-products sector, I would have said, hey, that's not coming back. But a lot of this will."
Many of the laid-off workers, as well as local and state economic development officials, said they expected the economy to bounce back soon.
"This could be a fundamental shift, but I don't think it is," said Mr. Haggard, who is now involved in mothballing the Fujitsu plant.
For now, though, most of the news is bad. Fujitsu's announcement, for instance, came just after SEH America, which produces silicon wafers in Vancouver, Wash., just across the Columbia River from Portland, announced that it was moving some of its operations to Malaysia, and cutting about 350 employees, or a quarter of its Vancouver work force.
Many laid-off workers said they had had problems finding new jobs, while others said they had found work in more traditional fields. Mr. Haggard, for instance, is returning to his old line of work, as a loan officer at a mortgage company.
Here in Gresham, Max Talbot, the director of community and economic development, said officials were hoping that some other company would emerge to buy the Fujitsu factory.
"Hopefully, a year from now things will have turned around and somebody else will be at that site," Mr. Talbot said. "We're hoping that we can look back on this time and say, well, that was bad, but it wasn't as bad as we feared."
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