In epidemic of layoffs, no one is immune

One in an occasional series.

On a single day last month, two Philadelphia institutions announced they were closing, thrusting more than 1,400 people into professional and personal uncertainty.

This would have been a jolt under any circumstance, but these workers were lawyers and legal support staff, and doctors, nurses, and technicians - professions that don't come to mind quickly as vulnerable to economic ebbs and flows.

The workplaces were the storied law firm Wolf, Block, Schorr & Solis-Cohen L.L.P., and the nearly century-old Northeastern Hospital in Port Richmond.

They were just the latest enterprises to add to the ranks of the jobless. But they prove that this recession, approaching 18 months in duration, practices equal opportunity as it curtails careers and ruins lives.

The Philadelphia region has joined the rest of the nation in the iron grip of an unemployment crisis, with 210,100 unemployed in the eight-county area, costing $2.7 billion in lost monthly production and about $252.1 million in lost spending.

The joblessness is perverse: It is the direct result of the battered economy and the major reason economic recovery will be slow and painful - with most analysts foreseeing little in the way of even a modest turnaround until midway through next year.

Meanwhile, consumer spending and the housing market - to name two key economic drivers - are certain to suffer prolonged damage by the high level of unemployment.

Every geographic pocket of the Philadelphia metropolitan area is affected, with equally tough times in Philadelphia and in New Jersey's rural Salem County on the edge of the metro market. One in five of the region's jobs are in Camden, Gloucester and Burlington Counties, but in one year, those same counties have lost a disproportionate share of the work - nearly 31 percent.

No sector of employment is spared, with construction, manufacturing, retailing and trade, and business and professional services taking the biggest hits on a percentage basis.

By any measure, the crisis is remarkable. Here's just one: 13.2 million Americans are now unemployed.

"These numbers are pretty dark," said chief economist Mark Zandi at Moody's Economy.com in West Chester. "The economy is in a very severe downturn, and it's very broad-based, in every part of the country."

The U.S. Labor Department released its much-watched monthly report Friday, and it was as dire as forecast - 663,000 jobs lost in a month and unemployment up to 8.5 percent, the highest rate since November 1983. Add in the nine million workers forced to work part-time as well as those too discouraged to look for work, and the rate reaches as high as 15.6 percent.

It is going to get worse, Zandi says. He expects the national unemployment rate to be as high as 9.8 percent by this time next year, with this region's rate not far behind.

Labor economist Mark Price at the Keystone Research Center in Harrisburg agrees. So far, the region has fared slightly better than the nation as a whole. The evidence? In the eight counties, unemployment was 8 percent in February, while the nation's was 8.1 percent.

But, he said, "our turn is coming. We may just be lagging behind."

The region's situation is historically significant but not the worst in recent decades, at least at the moment. In New Jersey, the unemployment rate in January 1977 was 10.6 percent, higher than February 2009's 8.2 percent. In March 1983, Pennsylvania's statewide unemployment climbed to 12.9 percent, significantly higher than the 7.5 percent in February 2009.

"I don't think we're going to get to 13.9 percent," Price said.

Nor is it likely that unemployment will reach Depression levels when, in 1933, one in four were without work nationwide.

But there's plenty of suffering still to come.

Seventy-two truck drivers and warehouse workers at the USF Holland truck terminal in the city's Tacony section are losing their jobs. The terminal closed Friday.

In Blue Bell, a Montgomery County suburb where homes cost upwards of $800,000, three out of 10 neighbors in adjoining culs-de-sac are laid off.

In West Philadelphia's 5700 block of Spruce Street, in one of the city's zip codes hardest hit by unemployment, the block captain worries about prospects for the young men on his street - bleak, when unemployment among African American male teenagers stands at nearly 40 percent.

"I can't offer nothing to these kids," said Thommie Hampton. "You can't get a job."

In Cheltenham Township, a business-process manager laid off in January for the second time in two years struggles to reinvent himself - again - as his middle-class lifestyle slips away.

In Mount Ephraim, a young woman who graduated from Rutgers University in Camden last year is still looking for a librarian or government-research job this year. "It's pretty disheartening to apply for so many positions and get rejected," said Stephanie Kurek, 26. Older workers, willing to take pay cuts to stay employed, are competing with her for entry-level positions, she said.

If there is anything that these tales tell us, it is that misery is everywhere in the Delaware Valley. It crosses all geographic lines, all economic lines, all gender lines, all race lines, all age lines.

All these people, the unemployed executives in Blue Bell, the unemployed teenagers in West Philadelphia, the lawyers, the doctors, the truck drivers, and the managers have their own difficult and individual stories.

But collectively, their loss is our loss.

For every person out of work, $13,000 in monthly production is gone - that's $13,000 worth of unmade machinery, unwritten legal briefs, unchanged hotel linens, undelivered packages, unanswered phones, said economist Zandi.

He calculated that statistic by looking at individual monthly shares of the gross domestic product.

In the broad Philadelphia region, with nearly 210,100 unemployed, that's a stunning $2.7 billion in monthly production gone from the economy.

And for each person out of work each month, roughly $1,200 goes unspent, based on labor expert Price's back-of-the-napkin calculation of average monthly wages, minus average unemployment benefits.

That's making do with last year's Easter dress, dropping piano lessons, putting off dental work, driving on worn tires, and skipping Friday night at the neighborhood diner.

In this area, the unemployed are not spending $252.1 million a month - a figure that increases to $378.2 million as money trickles through the economy. It's what happens when, for example, the local car mechanic doesn't order new tires from his supplier and the restaurateur needs fewer steaks from his purveyor.

"It's the disappearance of the middle class," said Jeffrey Daman, an associate lawyer who lost his job at Dechert L.L.P. in Philadelphia on Feb. 27. His former firm announced 120 more layoffs last month.

What started out as a meltdown in the mortgage industry, with loan processors and mortgage brokers losing their work as early as 2007, has now spread to the so-called safe sectors of "eds and meds" - education and health.

There have been layoff announcements by Fox Chase Cancer Center, Frankford Hospital, and Children's Hospital of Philadelphia, along with Northeastern Hospital, all in the city. Crozer-Keystone Health System began laying off 400 from its suburban hospitals in January, and South Jersey Hospital in Vineland filed a state notice to lay off 123 staffers, effective last Tuesday.

The decline in the housing market has hurt construction in the region - on a percentage basis, no other sector has lost more workers. There are 10 percent fewer people working in construction than there were a year ago, according to the U.S. Labor Department.

In the city and Pennsylvania suburbs, 9,800 carpenters, electricians, and plumbers lost their jobs, along with people like Sharon Smith of Philadelphia, a construction-office manager laid off in December.

"You put your resume out there and you get nothing," she said.

In the region, manufacturing has lost 9,400 jobs in one year, including 2,400 within city limits.

Laid-off lawyers like Daman don't need federal statistics to understand the gravity of 15,300 area jobs lost, year over year, in business and professional services, with nearly 5,000 gone in the city.

Unemployment cascades. It washed away 14,600 local positions in retailing, transportation, and trade, as people are too scared to shop. Stores close, deliveries slow, and a trucking depot, such as the one in Tacony, shuts down.

More people in retail and trade lost jobs in Pennsylvania, but on a percentage basis, Camden, Gloucester and Burlington Counties together had the biggest decline.

"I loved my job," said Maria Robb of South Philadelphia. She worked for Boscov's - now recently emerged from bankruptcy - and was laid off in January along with all store-level public-relations people.

"It's just sad," she said.

The official start of the current recession, most experts agree, was December 2007 - a recession that began as the housing market collapsed and real estate values tumbled. Then Wall Street banks and the entire global economy were rocked as complicated financial bundles, many built on the presumption that real estate always appreciates, lost value.

On Nov. 22, 2007, Keith Bradford of Cheltenham lost his job in the mortgage industry at a company in New Jersey. He was one of the early casualties.

"I cried when I lost that job," he said.

Bradford had been working at the company for 10 years, earning as much as $81,000 a year, enough to buy a house in Cheltenham Township and to send his daughter to Catholic school. Even as the economy was slowing, Bradford snagged a job at Prudential Insurance Co. in Horsham.

But it paid less than two-thirds of his previous salary. He took a part-time retail job so his wife, Kim, could stay home with their two young children.

The insurance company laid him off in January 2008.

Now he's trying to figure out how to make a monthly mortgage payment of $1,931 on the $2,000 a month he brings in on unemployment benefits. His part-time retail job has to pay for all the rest.

"It's an end to how you used to live your life," said Bradford.

On March 16, in an effort to give back and stay sharp, the Bradfords ran a modest resource fair for unemployed people at the LaMott Community Center in Cheltenham, a few blocks from the Philadelphia border.

In Philadelphia, unemployment has reached 9.4 percent - an unsurprising statistic given some of the city's distressed neighborhoods. Yet in terms of employment, Philadelphia remains the engine pulling the region, with one in four people in the eight-county area working here.

More than half of the people who are employed in the city - not necessarily who live in the city - work in economic sectors that are fairly stable. These include government, hospitality, education, and health.

That's why Paul Levy, head of the Center City District, which cleans and markets downtown Philadelphia, remains optimistic.

"The job loss in the city is not as bad as the region, and the region isn't as bad as the country," Levy said.

He tracks the health of Center City through weekly conversations with commercial real estate brokers, and so far, he said, there haven't been too many vacancies.

That could change.

Law firms around the city have been shedding employees - 1,400 layoffs announced in the last six months - though some of those employees work in other cities. Statistics show that the biggest job losses in Philadelphia are in professional and business services.

In December 2007, 88,000 people were employed as lawyers, architects, paralegals, staffing recruiters, and accountants in Philadelphia. That was the highest employment in that sector since at least 1999. By February 2009, 6,900 of those jobs, nearly 8 percent, were gone.

Over the same time period, though, 4,500 teachers, nurses, doctors, orderlies, and therapists found work in the health and education sectors - the city's strongest job generators despite the recent cuts.

Outside the city, it's a different story.

Chester City, for example, has the highest unemployment in the Philadelphia area at 10.8 percent.

Like other old industrial communities such as Bristol Township or Norristown, Chester has had trouble for years as its manufacturing base eroded.

The area's bedroom communities are also suffering.

Consider Chester County.

Once rural, Chester County is now one of the fastest growing and wealthiest suburbs in the region, and has been ranked, just recently, the 21st highest among 3,100 counties in the nation by adjusted gross income - $96,578 in 2007, according to the Transactional Records Access Clearinghouse at Syracuse University.

The county's unemployment rate of 5.8 percent in February was the lowest in the metropolitan area - and second lowest in Pennsylvania.

Still, upheaval in the job market has hit Chester County hard, striking at its primarily white-collar, educated workforce. As of February, 17,322 county residents were receiving unemployment benefits. Continuing claims for unemployment benefits were up 114 percent from two years ago - the biggest increase by county in the region.

In November, television retailer QVC said it would begin to lay off 900 employees, most from various facilities in West Chester. Five hundred were targeted at its West Chester distribution center. On March 27, QVC closed its call center, putting 250 people out of work. About 200 QVC jobs will move to the company's Florence, S.C., operations.

Reynolds Packaging Group is mothballing its plant in Downingtown; most of the 150 crew members came in late last month to turn in their badges. The facility prints consumer-product and pharmaceutical packaging.

Siemens Medical Solutions USA Inc. laid off 450 marketing, software, sales, and service workers from its U.S. headquarters in Malvern in September - part of a broader group of layoffs at the German-owned company.

Among those who lost their jobs there last year were three Chester County residents. They reconnected at a recent support and networking "career transition" meeting in King of Prussia.

"It's incredibly stressful," said Colleen Horan, an instructional designer and developer of e-learning courses who worked at Siemens for 19 years during two stints.

Now she hopes that her unemployment benefits and a part-time job delivering newspapers will be enough to keep her in her house in Phoenixville until she can find a full-time job.

The situation in Chester County isn't uncommon, said economist Michael Lahr, of Rutgers University in New Brunswick, N.J.

The areas that expand the fastest, he said, tend to fall first and furthest. He suspects that one would find similar increases in the fastest-growing areas in New Jersey.

"Mount Laurel - that was a hot-growing area - and Moorestown. Those are the areas where it is going to hurt the most," he said.

In sheer numbers, Camden, Gloucester and Burlington Counties have been hit hard by the decline in consumer spending. In February 2008, 120,300 people worked in the sector that includes stores and trucking companies. A year later, that number dropped by 6,700.

"Within New Jersey, South Jersey was outperforming northern New Jersey," said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University in New Brunswick.

"That was really driven by housing costs and a much stronger housing product in South Jersey. People would have a long commute - they could go up 295 or the turnpike to Trenton, or the Route 1 corridor.

"Housing was so much more affordable, much cheaper than the expensive suburbs to the west of Philadelphia. South Jersey accounted for the population growth. When you have housing growth," he said, "you have the retailing that follows, and the doctors' offices and the accountants' offices.

"South Jersey had the housing boom, so it got hit hard by the housing bust," he said. "Starting in 2007, it started to falter and fell behind the state as a whole."

These days, Bruce M. Weissberg, 55, of Haddon Township, a laid-off information-technologies project manager, wonders how it will play out.

Weissberg is among 32,424 people in Burlington, Camden and Gloucester Counties receiving unemployment benefits, up 52 percent from two years ago.

"Everybody's downsizing," he said, passing out his resume at a job fair at Rutgers University-Camden last week. "Last year, I got 20 calls a week from people who wanted to hire me. This year, I'm happy to get one call.

"I'm scared to death, to tell you the truth."

It's a tough world. Maybe we can help - help navigate the troubled waters of unemployment and the recession, help vent about the insanity of it all or at least help find a laugh. Maybe we can provide some hope as we all try to reinvent ourselves.

For job-hunting tips, useful links, workplace news, and a new blog - "Jobbing" - by Inquirer writer Jane M. Von Bergen, visit go.philly.com/jobbing

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