The ripple effect of layoffs
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KAI RYSSDAL: Earnings reports are tricky to parse even in the best of times — forget about when everybody’s feeling stressed.
Google is today’s case in point. The search engine that would rule the world reported better than expected profits today. But expectations were pretty low. In fact, today’s the first time Google’s profits actually fell from a year earlier. Still made money. Just not as much.
Today the Commerce Department reported the number of people filing for first-time unemployment benefits has risen to a 26-year high. That’s 589,000 new people signing up for state assistance, either online or in-person, in just a single week.
Layoffs don’t affect just those who lose their jobs, though. From Portland, Ore., Sadie Babits has this story about the ripple effects of so many people being out of work.
SADIE BABITS: David Bunker has had a string of bad luck lately. Last October, he lost his job as a sales manager at a title insurance company in Portland. This week on his way to a job fair, he got rear-ended. His car was totaled.
DAVID BUNKER: Being unemployed, it’s opened up a whole, I guess, set of challenges that I haven’t faced before.
Finding fulltime work has become a fulltime job. And Bunker is competing with some 174,000 other unemployed Oregonians.
BUNKER: I mean, I’ve been through quite a few recessions, and I’ve never experienced this many professional people out of work.
At 44, David Bunker is tightening his belt. He and he wife have cut the extras out of the household budget. Gym membership? Gone. . . . Vacations? Postponed. . . . Cell phone service? Reduced.
BUNKER: Really keeping an eye on the gas I’m spending driving around. Renegotiating terms on credit cards and/or loans that I have.
And he’s nixed one of his favorite things — going out for sushi.
BUNKER: Definitely sushi is out of the question now because it’s an expensive item.
Restaurants are feeling the ripple effect of the David Bunkers of the world who are now eating at home.
SOUND OF MIO SUSHI RESTAURANT: Hello! Two?
This is Mio Sushi in Portland’s Hollywood district. Jay Park is a waiter here. He says regulars aren’t coming in.
JAY PARK: Customers that usually come twice a week, they started coming once a week. Sometimes they don’t come at all.
Mio Sushi hasn’t laid anyone off yet, but according to Oregon’s state economist, when someone like David Bunker loses his job, there’s usually at least one other person who also gets laid off. We find those people in a visit to a regional employment office.
The place is packed just minutes after the doors open. Amy Vander Vliet is the regional economist here. She says the latest state unemployment rate — 9 percent for December — is the highest rate since the mid-1980s.
AMY VANDER VLIET: And the unemployment rate tends to be a lagging indicator. So we’re in for higher unemployment in the months to come because I don’t think we’ve hit bottom yet.
In fact, computer-chip maker Intel announced this week it’s closing a plant in suburban Portland. Another 1,000 people will be looking for work.
For Marketplace, I’m Sadie Babits in Portland.
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