Long-term unemployment ripples through one town

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The Wall Street Journal
By: Sara Murray and Cameron McWhirter
January 18, 2012

Long-term unemployment ripples through one town

The waiting list for subsidized housing here, just 40 families long a year ago, is up to 500. The number of children eligible for free or reduced lunch is up 50%. A little more than a year ago, the Methodist church began seminars for marriages strained by job losses.

Roswell is a pre-Civil War cotton mill town that grew into a wealthy bedroom community of Atlanta as the metro area prospered. More than half the city's 88,000 residents have four-year college degrees. But Roswell sits in a region with an unusually severe case of long-term unemployment: About 40% of the unemployed in the Atlanta metro area in 2010, the most recent local data available, were out of work for a year or more versus the national average of 29%.

One of them is Marcy Bronner, 57 years old. When she lost her job at Pennzoil back in 2000, it took her seven months to find a new one at Quintiles, a bio- and pharmaceutical-services company. She eventually became senior director of human resources at a salary in the low six figures.

In November 2010, she was laid off again. More than a year later, she is still looking for work. "It's harder now," she says, compared to the 2000s. "There's a lot more people out there."

While the job market is improving--the national unemployment rate fell to 8.5% in December--long-term unemployment continues to be particularly pronounced, and there is little indication that it is falling quickly. The government said that in December 3.9 million nationwide had been out of work for at least a year and were still looking. Federal Reserve Chairman Ben Bernanke has called this "a national crisis."

Some will eventually find jobs, though long spells of unemployment are likely to scar them for years. Workers who were jobless for six months or more in the late 1990s and early 2000s in Connecticut and eventually found work earned 60% less than those who were unemployed for three months or less, economists Kenneth Couch of the University of Connecticut and Dana Placzek of the state labor department found.

Some will never find jobs again. Their ties to the job market will wither. The splotches of unemployment on their applications will make them unattractive to potential employers. Workers who had been unemployed for less than five weeks in 2010 had a 34% chance of finding a job the following month, according to Labor Department data. Those out more than six months had only a 10% chance.

When their unemployment benefits run out, some will find other ways to get by--relying on families, drawing on retirement savings or, if they can qualify, going on government disability programs.

"This is what people saw in Europe: You had large groups of people who hadn't worked in a long amount of time," says Betsey Stevenson, former chief Labor Department economist and now a visiting professor at Princeton University. "I am really quite fearful that 10 years from now we're going to look back and go, 'Why didn't we fight this harder?"

The longer people are out of work, the more likely their skills are to become obsolete--particularly at a time of rapidly evolving technology. "You are in your 40s, 50s or 60s, and you are suddenly out of work," said Jonathan Warner, director of community and economic development at Chattahoochee Technical College, which has its main campus in Marietta, Ga., the next town over from Roswell. "What are you going to do? Who is going to hire you? The smart ones come to us to get retooled."

Ms. Bronner, the former human-resources director who lives in Marietta, has been told by job-placement experts that she has too much experience for some openings. She gets that. "I would be saying the same thing if I was sitting in my old chair," she says.

Moving is an unattractive option: Her husband's home inspection business relies on local referrals.

Nationally, the rise in the number of two-earner couples and the decline in home prices has made moving harder when one spouse loses a job. Only 11.6% of Americans moved in 2011, a smaller percentage than in any year since the Census Bureau began keeping track in 1948.

So Ms. Bronner, who has a bachelor's degree in business technology from the University of Houston, has gone back to school, earning certifications in business quality improvement methods at Chattahoochee Tech. Ms. Bronner has joined a support group for the jobless at Roswell United Methodist Church and has posted her resume on the LinkedIn website, and she checks job websites daily. "There is no resting on your laurels, not anymore," she says.

Lately, she has started thinking of looking outside of human resources. A neighbor was unemployed as an electrician for a year, and went back to school to become a pharmacy technician. She is considering more training in project management to qualify for work in other fields, though the prospect of "completely switching gears" in middle age is daunting, she says.

It can also be depressing. While helping with the wedding of one of her three daughters last year, she found herself crying uncontrollably at random moments. For about four months, she says, she was in "a pretty big funk." At one point, her husband told her: "Your daughter is so afraid you're going to lose it. You've got to get your act together." A counselor helped her pull through, and the wedding became a turning point, helping her renew her as-yet-unsuccessful job hunt.

Unemployment is, at first, a personal struggle. But as it persists, the ripples spread throughout a community.

Local governments in the arc of wealthy suburbs north of Atlanta don't have the infrastructure to deal with thousands of middle-class residents who have been out of work for six months or more. They never had the need before.

"I haven't experienced this kind of impact in my lifetime," says Jere Wood, a 63-year-old lifelong resident of Roswell who has been its mayor since 1997. "This isn't the first time a lawyer's lost his job, but it's the first time a lot of them have lost their jobs." Unemployment in the Atlanta metropolitan area in which Roswell sits was 9.8% at last tally, well above the national average.

The roster of Roswell residents collecting Social Security disability benefits, often the last refuge of those who can't find work, is up nearly 16% since 2007, mirroring the national increase. Local charities are serving residents who once earned six-figure salaries. Unemployed parents scramble for fee waivers to keep children in after-school sports.

As job losses became more prevalent, the 6,700-member Roswell United Methodist Church reacted, offering a support group for the unemployed. The twice-a-month events drew nearly 350 last year, up from fewer than 100 in better times. In late November, Ms. Bronner went for the first time--and was amazed by the number of others who were there.

In November 2010, the church launched the seminar for couples dealing with the tension that unemployment can cause--particularly as it continues for long periods. The church considered doing so earlier but there wasn't interest.

Geoff Wiggins, 58, who runs the seminar with his wife, usually opens sessions like this: "How many times have you had this discussion? The working spouse comes in at the end of the day and says 'How was your day?' And the unemployed person says, 'I'm out of work, how do you think my day went?'" The goal is to help couples communicate better as they struggle with income insecurity and battered self-worth. "What breaks my heart," Mr. Wiggins says, "is how many people aren't getting help."

The recession hit the church budget hard. Donations fell. "The jobs just aren't out there," says Mike Long, senior minister. "Because of that they simply couldn't give to the church like they were."

In 2009 the church cut spending by 10% and trimmed staff salaries by 5%. In 2010, it cut its program ministries by 15%. When paid employees were laid off, volunteers took over lawn maintenance and custodial work. Last year's $4.5 million budget is 13.5% below 2008 levels.

One of the other participants in the church support group, Edward "Ted" Boone, a 49-year-old college graduate, lost his job in August 2010. He had been earning in the low six figures in a business information job, a field in which he had planned to work until retirement.

He, too, rejected an out-of-state move. His wife is employed as a pastor nearby. Instead, he concentrated on aggressive networking.

In November 2011, after 15 months of unemployment, one of his contacts helped him land a data manager's job at a Decatur, Ga., nonprofit. He begins work this month. One drawback: The new job will pay half what the old one did. "I'm not going to find what I was making years ago," Mr. Boone says. "It's less, but that's fine."

When the recession took hold, job losses stung all parts of the Atlanta economy--Roswell included. Employers with jobs to offer are flooded with applicants. Applications and placements at staffing firm Hire Dynamics LLC, which has six Georgia locations including one near Roswell, were up 40% last year, says chief executive Dan Campbell. But it takes longer to winnow candidates because there are so many. A recent ad drew 400 resumes.

For some openings, the unemployed need not apply. Amy Grimmer, for instance, is searching for a sales representative in the Atlanta area for a client in the payroll outsourcing services business.

"We're not looking at the unemployment pool," says Ms. Grimmer, president of Centripetal Consulting Group, based in Dallas. "They feel like the sales people [who] are talented enough would have found positions." Most clients, she adds, aren't so explicit.

In the worst of the early 1980s downturn, the typical or median unemployed American had been out of work for 12.3 weeks. In December 2011, the typical unemployed person had been jobless for 21 weeks.

In response, Congress has extended unemployment benefits--which normally last no more than 26 weeks--for as long as 99 weeks.

For Jennifer Barbee, 34 years old, it doesn't matter what Congress does. A mother of three who once made $40,000 a year, she lost her human-resources job three years ago and has exhausted her $330 a week in jobless benefits. Now she relies on $600 a month in child support, Medicaid for her children's medical care, food stamps and aid from a local food bank, North Fulton Community Charities.

Demand at the food bank is running 30% ahead of 2007, and organizers are still playing catch-up. "People don't realize we're seeing middle-class families that have been unemployed 18 months or longer," says Vonda Malbrough, the development director.

Ms. Barbee has widened her job search to waitressing and other hourly jobs. Her plans to earn a college degree online are on hold so she can put any cash toward her children. She does what she can to keep her skills fresh, teaching herself to use Adobe Dreamweaver to help a friend with website work. Her laptop has the 2007 version of Microsoft Office so she has been looking online for subsequent changes to stay up to date.

It is harder to keep tabs with constantly changing regulations that human-resources professionals are supposed to know, such as recent changes governing health insurance. "I kind of try to pay attention when I hear about them," she says. "But I really don't know what's out there right now."

Meanwhile, she writes to the local parks and recreation department requesting fee waivers so her children can participate in football, basketball and gymnastics. The department has seen a spike in such requests, which allow parents to pay $5 or $10 instead of $100 or more.

Roswell is changing. More than 9,200 children, 19% of those enrolled in schools in and around Roswell, received free and reduced-price school lunches last year. Before the recession, 13.2% qualified.

The free-lunch line has been tough to explain to Ms. Barbee's 10-year-old daughter, who goes through it every day. Most of her friends don't. "She has said, 'Mommy why do we get free lunch and other people don't?'" the mother says. "It's something that they notice."

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This page contains a single entry by CFED published on January 18, 2012 4:01 PM.

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