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Boom gone bust, recession shakes workers, reshapes outlooks

Posted: Friday, December 28, 2001

NEW YORK (AP) -- Anthony Samawova slumped out of the state unemployment office, stared down at the pavement and reminisced about the good old days when the economy was sweet.

''I wish I'd graduated last year,'' groaned Samawova, who has netted more than 100 rejection letters from potential employers, but not a single job offer since earning a degree from Syracuse University in May.

''Last year, I found a summer job and it was easy. I just went in and I got the job,'' said Samawova, who is 22 and trained as a studio technician. ''I went back and they said now they don't have any openings.''

Samawova joins scores of Americans -- including the newest entrants to the job market as well as the most experienced veterans -- confronting a harsh new reality. As the curtain comes down on 2001, they've been written out of the script for an economic drama that suddenly has more actors than parts.

The country has seen much worse before, and to listen to economists, this recession may not last long or cut that deep. But following a record decade-long expansion and punctuated by the Sept. 11 terrorist attacks, this downturn is a shock, not least for people in their 20s who have never experienced anything else but good times.

Even for those who have weathered previous economic storms, the contrast is stark because the 1990s brand of prosperity was so euphoric, the downturn's scope has been so wide and the collapse has accelerated so quickly.

''Making $15 an hour, I was able to pay for my daughter's wedding, send my son to college, we could buy a new car every six or seven years. We led a very comfortable existence,'' said Mark Kulick of West Scranton, Pa.

He lost his job as a maintenance mechanic when the television factory where he worked the past 25 years was shuttered this summer. Now, at 44, he has enrolled at a community college for retraining as an electrical engineer.

''I was looking forward to retirement, looking forward to all sorts of things. Now we got thrown kind of a monkey wrench,'' said Kulick.

The manufacturing sector that employed Kulick took the hardest hit this year, but nobody was really spared.

''One of the defining characteristics of the current downturn is that it is so broad-based, nearly every part of the country is suffering and almost every industry is experiencing problems,'' said Mark Zandi of Economy.com, a West Chester, Pa. forecasting firm.

The slowdown was under way before 2001 began. But through last year, much of the damage was limited to investors, punished by a rapidly declining stock market, and to workers at dot-com ventures that folded.

Federal Reserve policymakers sought to minimize the damage, aiming to guide the economy to a vaunted ''soft landing.'' The terrorist attacks eliminated any chance of that happening, at least for hundreds of thousands of workers.

''That's one of the real problems with the soft landing is that it's very hard to get it right and even if you get it right, because the economy has slowed so much, you're very vulnerable to some sort of unforeseen shock,'' said Mark Vitner, senior economist with Wachovia Securities in Charlotte, N.C.

The result is evident in government jobless figures. It was just last October that the nation's unemployment rate hit a 30-year low of 3.9 percent. It rose gradually during the first part of the year, as many companies, particularly those in manufacturing and telecommunications, shed workers.

After Sept. 11, bad got much worse, particularly for workers in the airlines and tourism business. The cutbacks were felt immediately in places like Orlando, Fla. and Las Vegas, that depend on visitors.

Marla Lara was cut from her job at a Sheraton Hotel in greater Orlando in October, and she waited four hours for a chance at an interview at the Gaylord Palms Resort in Kissimmee. The problem is that thousands of others also turned up to prospect for work, creating a two-mile traffic jam.

One of those was Karen Chungu, who was laid off from her job as a front desk clerk at a timeshare development in Orlando over the summer.

''No one is hiring,'' she said.

The new cuts sent unemployment up to 5.7 percent in November. The job loss total for that and the previous month hit 800,000, the worst performance in more than two decades. Economists say the rate will continue to surge through the first part of next year and could hit 6.5 percent by next summer.

In historic terms, the rate is still low. The recession of the early 1990s took unemployment to 7.8 percent in the summer of 1992.

But after several years during which there always seemed to be more than enough jobs, the slump has badly shaken some workers.

Michael Stanchina, for one.

In early November, his employer, Hoskins Manufacturing Co., sent its 24 hourly and six salaried employees home, explaining that the Mio, Mich. company had cash flow problems. Managers assured all the workers they'd be brought back by Nov. 19, as soon as those problems were solved.

On Nov. 13, though, the company ''just locked the doors,'' said Stanchina, who worked for 27 years in the shipping and receiving department.

Stanchina is posting his resume on the Internet and says he'd be willing to drive up to 50 miles for another job. In northern Michigan, he knows there are plenty of others just as willing.

''The worst part of it is (until) about three months ago Cooper Tires had five plants around here, but they closed and everyone got laid off,'' he said.

There's a similar sense of despair in Houston among the immigrant day laborers who come to the Casa Juan Diego seeking temporary housing and work. These days, there's not much work to offer, said Mark Zwick, who runs the organization.

A flood in Houston in June created plenty of home repair jobs for the workers. But those jobs dried up as the city returned to normal, and the jarring effect of the downturn has eliminated much of what was left, he said. Just months ago, Zwick was dispatching workers on 40 to 50 jobs a day. Now, it's down to a handful.

''We were riding high and then all of a sudden on Sept. 11, everything changed,'' he said. ''We thought we were going to have a new world order and a new economy. But the great new world was limited to very few people.''

Even for workers with jobs, the downturn has whittled away at their ability to make ends meet.

The average worker logged 34 hours per week in October, down from a peak of 34.7 hours in 1998, as employers cut back on overtime and shut down factories. That seems like a small change. But the last time the figure was so low was in January 1996, when a massive East Coast blizzard the federal government shut down kept thousands of workers home altogether.

Employers are taking notice of the new reality. After several years of struggling to fill jobs -- with warnings from demographers that there is likely to a be a shortage of younger workers for years to come -- many are surprised by a bumper crop of applications for the few openings that are being posted.

''A year ago it was very, very competitive. This year, we have a hundred applications for the same job. We're overwhelmed,'' said Mary Black, a personnel executive at CKE Restaurants Inc., a Santa Barbara, Calif., firm that operates the Carl's Jr. and Hardees fast food chains.

There is limited good news for some workers. In sectors like mortgage banking, government, and pharmaceuticals, employers are bolstering payrolls.

In the past few months, Novartis Pharmaceuticals Corp. has added 2,600 new workers at its offices in East Hanover and Summit, N.J. and in Suffern, N.Y. The new hires include Laurie Wooding, who oversees an employee newsletter, magazine and Web site, and enthuses over the raise she received to move into a thriving industry.

''I know I made the right decision,'' she said.

But Wooding's sense of satisfaction is tempered by knowing that two close friends recently lost their jobs and can't find work.

One of them, a company vice president, has halted remodeling work on his home and looking for other ways to make his savings last.

''He used to drive an (Audi) TT and now he drives a 16-year-old Volvo,'' Wooding said.

Others whose fortunes have waned try to find an upside to the decline.

Their number include Chris Baty of Oakland, Calif., who still marvels at the money he made during the dot-com frenzy, first as an employee at a commercial Web site and then as a free-lancer writing the copy businesses used to create their own Internet destinations. At the high point, that work earned Baty $85 an hour.

That work has all but disappeared since February. But Baty, who is 28, said while his income has dropped, he's happier because he's focusing on what he wants to do, rather than chasing dollars. Now he makes most of his money writing music reviews and a column for a weekly newspaper.

Still, he's wistful about what used to be.

''That was a truly glorious time,'' he said. ''And I think all of us were young and naive enough to think that things had changed, that the rules had changed and this could go on forever.''



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