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Laid off and in a lurch

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Fresh out of business school in 1998, Arye Dworken started his career at an ad agency in New York, and then, like many of his generation, moved online, working for the Web site of the Oxygen television network. When the dot-com bubble burst in 2000, Oxygen closed its online division and Dworken found himself out of a job. Today, more than a year after Oxygen let him go, 28-year-old Dworken is working temporarily as a magazine intern at what he calls less than minimum wage. And he will be looking for work again soon.

“This is not what I had in mind — are you kidding?” said Dworken. After several bad experiences, Dworken has given up on the advertising experience and hopes to reinvent himself as a music journalist. Although he realizes that covering the music industry could be a tough way to make a living, he says he feels passionately about the work.

“It’s something I have more interest in doing, and something I have more confidence doing,” Dworken said. “And it seems to offer a lot of flexibility.”

Like millions of unemployed Americans, Dworken hopes the gradual improvement in the nation’s economy projected for the second half of this year will help him find steady work. But experts warn that the current economic slowdown may be unique in at least one respect: recovery of the job market, and particularly a revival of the type of high-paying, information technology jobs created during the Internet bubble, may be a long time coming.

On Thursday, the Labor Department reported that the nation’s jobless rate shot up to 6.4 percent in June. The last time the rate was higher was in April 1994. The government also said that businesses cut 30,000 jobs last month, with many of those cuts concentrated on factory workers.

The economy generally needs to add about 150,000 jobs to exceed to natural growth of the work force, so the unemployment rate is expected to fall only gradually over the next year as businesses add jobs cautiously in the early phases of an expansion.

Although the recession of 2001 has been over for more than a year, according to most economists, the economy has continued to shed jobs.

“We aren’t exactly in a recession, but we are in a recovery period which is positive but very slow,” said Alice Rivlin, an economist at the Brookings Institution in Washington.

Last week Federal Reserve policy-makers elected to cut short-term interest rates for a 13th time since early 2001, saying that they see improving financial conditions, including a “stabilizing” job market, but that the overall economy “has yet to exhibit sustainable growth.”

The continued loss of jobs this year makes America’s current economic woes different than those suffered in past downturns. In the early 1990s, for instance, the economy recovered slowly from recession until the sudden appearance of a new, dynamic industry typified by high-tech companies based in California’s Silicon Valley and elsewhere, whose hiring soon began to soak up excess labor.

“The rehiring in the early ’90s came from startups who were growing gangbusters such as Cisco, Oracle, Wind River Systems, Micron, etc., etc.,” says Patti Wilson, a career counselor in the Silicon Valley. “These are now established companies today. .. There has been no place for the laid-off to run to unless it is out of the industry altogether, as nobody has been hiring until recently.”

Financial strain
You don’t need to tell Greg Dunn. At 54 he isn’t exactly unemployed. A former development manager with Phoenix Solutions in Pleasanton, Calif., quit his job in March 2000 — at the height of the dot-com boom — to start his own consulting firm. As the stock market tanked and the economy took a nosedive, consulting opportunities soon dried up.

Dunn now spends time developing Web sites for free and serves as the unpaid East Bay regional director for Bay.NET, a professional group for software developers in the San Francisco area. He also teaches computer programming and math part-time for what he calls “slave wages” at the University of Phoenix Online.

While consulting work has been in short supply over the past three years, Dunn said recently he has been getting “all kinds of nibbles” about potential contracts, and he is encouraged by the strong performance of high-tech stocks in the second quarter. “I guess there is a little sense that things are looking up,” he said.

And Dunn said that having “a lot of downtime” over the past several months has allowed him to pursue personal projects he otherwise never would have gotten around to, including learning new technologies and building a gazebo for his yard.

“The past two years have been financially terrible but spiritually rewarding,” he said. “It’s been great to be able to try new things. If the plane comes out of the nosedive before it crashes, you’re going to say that on balance it was a good experience.”

Esteem killers
Paula Mints was always confident in her job as a published author at Strategies Unlimited, a research division of PennWell Publishing, part of Texas-based PennEnergy. As a senior analyst she survived the first two rounds of layoffs, but not the last one in December 2002.

Mints was pretty sure she could find another job soon, given her experience. But she was in for a rude awakening.

“I have been trying all kinds of methods, from constantly monitoring job sites to hitting up on friends again and again.” In spite of sending several resumes out and networking with career counselors, Mints has not been able to convert her 10 years of experience into a full-time job.

She knew she hit bottom when a resume writing service rejected her for a position of a writer even with her strong writing background.

“My self-esteem is dead right now,” Mints said. “I have been rejected as an analyst and a writer, and when this happens, it pretty much kills your confidence, and the only way I can identify myself is as a writer.

Retirement accounts drained
Apart from killing their self-esteem, it’s also tearing down their retirement plans. Most of these laid-off workers have been living off unemployment benefits, hoping they would find a job within six months, after which benefits generally run out. But with the economy failing to accelerate, a lot of their savings are getting used up — including money set aside for retirement in some cases.

“I have been digging into my retirement savings,” says Lorrie Gasewind, 55, of San Jose, Calif., who has been jobless since September 2002. Gasewind has been unable to find even a clerical job or temporary position as a receptionist since she was laid off from her job as training manager for a Silicon Valley maker of medical diagnostics, where she had worked for seven years.

“I’m a member of a network of human resource professionals who are in the same boat, and everyone’s talking about how tough it is,” she said. “Sometimes the interviews are just awful. ... You recognize that you’re not a real candidate, and you really want to throttle somebody.”

Congress’ recent decision to extend unemployment benefits provided a financial boost to Gasewind, but she said she wonders how the current “jobless recovery” can be considered a recovery at all.

Traditionally the job market opens up after a few months of economic recovery, but it can take much longer.

“The bubble really burst because of the dot-coms,” said Cynthia Knoll, regional economist at the University of California’s Haas Business School in Berkeley. She said the high-tech industry created too many jobs, and workers should not expect a recovery in the sector’s labor market any time soon.’s Martin Wolk contributed to this report.