Economists are using the expression “free fall” in discussing the labor market; almost 600,000 jobs nationwide were lost in the month of January alone. Altogether, an estimated 3.6 million people have been laid off since December 2007, considered the beginning of the recession. What’s scary is that most of the job loss has happened in the last three months.
From housing market slump to mortgage crisis to construction industry flat-line, the recession is now impacting all aspects of the economy as companies such as Panasonic and Boeing lay off thousands of workers. In turn, consumer spending slows down, causing another spiral of decline.
The national unemployment rate is 7.6 percent, California’s is 9.3 percent, and in Santa Barbara County it’s 7.2 percent, with the bulk of the jobless in North County. While the greater Santa Barbara area doesn’t have mega employers like Microsoft laying off workers, local people are still losing their jobs.
“It’s a tough situation,” said Steve Cushman, president of the Santa Barbara Chamber of Commerce. The economic engines of large employers such as UC Santa Barbara and the County of Santa Barbara are idling. “The government is not hiring. Small businesses aren’t hiring either, because of uncertainty over the economy.”
Cushman said he’s hearing from business owners that they are planning month-to-month. Depending on revenues, an owner may have to sublet part of a building, or delay paying creditors, or cut employees’ hours, or ask the landlord to negotiate a lower rent. “The last thing you want to do is let people go,” he said, “but if you have to, you do.”
Even the closing of a relatively small establishment, such as Fatburger on State Street, has a multiplier effect, Cushman explained. The hamburger restaurant closed in December 2008, putting 13 people out of work. Each employee is paid a salary, which is then spent locally. That money is circulated three or four times in the South Coast economy. What follows are some up-close looks at what this means for Santa Barbara and its residents.
Martha on the Street: Martha Lannan was laid off from the Goleta Valley Voice in December 2008. She’s not sure if the newspaper went bust because of the economic downturn, or the tough time newspapers are having in general, or if the parent company, Ampersand Publishing, just didn’t have respect for the product.
On top of her personal loss, Lannan is sad about the Voice vanishing from the community. She and her coworkers were not able to produce a “farewell” issue. “It would have been nice to have even one paragraph in the paper, saying how much it meant to us to serve our readers,” she said.
Lannan’s husband, a dentist, continues to bring in sufficient income, but they are putting their youngest child through graduate school at USC. So her income is important to the family. The challenge for Lannan is finding a job in her profession. She wants to write for a living, preferably for a newspaper, preferably on community issues.
Even if she ends up finding a job in special education or the health industry (areas in which she has prior experience), Lannan hopes she can incorporate writing into the work. For now, she’s catching a few freelance writing assignments and trying to keep herself busy.
“Some days are very long,” she said. “It’s an empty kind of a thing because you don’t have to be anywhere, you don’t have a schedule.”
Down but Not Out: Daniel is not his real name, but as his former employer is offering severance pay, this unemployed banking industry worker wants to be anonymous. Daniel has been on a rollercoaster of emotions since he was laid off last month. The day before he got the bad news, someone tipped him off that layoffs were coming. So he cleaned out his desk the night before because he “didn’t want to be that person walking out with a box of stuff.”
It didn’t matter that he knew what was coming when called into his manager’s office. “It was heartbreaking,” he said. “And it was surreal because we had been told over and over how strong our department was.” Daniel was angry and confused, and sad that he wasn’t allowed to speak to his clients anymore. His supervisor cried when breaking the news.
Daniel feels anger when he thinks of the federal bailout money that got swallowed up by the big banks, including his, but didn’t trickle down to him or the others who got axed that day. “People were using the word ‘bloodbath,'” he said, referring to simultaneous layoffs in Santa Barbara, Ventura, and San Luis Obispo counties.
It took about two weeks for Daniel to recover his confidence and send out a few resumes. Knowing that competition for jobs is fierce, he was somewhat surprised to land an interview. “This could be too good to be true.”
The Ortega Street Shuffle: By most accounts, the clerks are helpful at the Employment Development Department on Ortega Street in downtown Santa Barbara. The “unemployment office” helps people file a claim for benefits, but also offers job seekers telephones with free long-distance service, fax machines, and computers with Internet access. There are also classes on resume-writing and dressing for a job interview.
The stories from the unemployment line are fascinating. One woman said she’s sent out 74 resumes, and has had in response three rejection letters-none of her applications has led to an interview. She is looking for work in office management, accounts payable, or purchasing, as she’s done those kinds of jobs in the past. Her husband is about to lose his job.
Another man said he was laid off from Commerce Planet, a company similar to Bargain Network. He estimates there were more than 60 employees at one time, but several waves of layoffs have resulted in only a handful still working at the Goleta firm. (Calls to Commerce Planet were not returned; not surprising as the company has recently sold most of its major assets.) In his forties, the man considers himself lucky because he is not married and has no children or mortgage. “I don’t need much,” he said, adding of the job market, “but there’s nothing out there.”
Back to School: Enrollment is up at Santa Barbara City College for many reasons-most of them having to do with the economic slowdown. In terms of the unemployed, college President Andreea Serban believes they may be responsible for an increase in online enrollment. “That makes sense. Individuals impacted by unemployment need retraining, and the online environment is more flexible for people with families,” she said.
Indeed, SBCC’s parent organization, the California Community Colleges System Office, is fighting Governor Arnold Schwarzenegger’s budget cuts as displaced workers seek to upgrade job skills through affordable community college programs. Statewide, campuses are experiencing a 10-percent increase in enrollments.
Jobless Californians are also expected to apply in greater numbers to graduate schools as unemployment rates continue to climb. Antioch University officials are anticipating an upswing in applications. There will be a delay from the time someone loses a job to when they make the decision to get a higher degree, according to Kathy Kramer, Antioch’s communications director.
“People are trying to figure out what to do. It’s a big decision that affects their family and finances,” said Kramer, adding that federal financial aid is available.
Other good news out of the federal arena: President Barack Obama’s stimulus package contains provisions for expanded unemployment insurance benefits. Economists believe the jobless rate will max out at 11 percent. By comparison, the Great Depression of the 1930s saw a 30-percent unemployment rate.