Downturn hits blue collar workers hard

Marketplace Staff Mar 23, 2010

Downturn hits blue collar workers hard

Marketplace Staff Mar 23, 2010


Kai Ryssdal: The unemployment rate in this country has been within a few decimal points of 10 percent for a while now — 9.7 percent as of the latest reading earlier this month. But that number comes with a fairly significant caveat. The 9.7 percent is across the entire economy. Some industries really haven’t been hit all that hard by the Great Recession. For others, though, like a big chunk of the blue collar economy, it’s more like a real depression.

From WCPN in Cleveland, Dan Bobkoff has more.

DAN BOBKOFF: Labor economist Andrew Sum says white collar workers haven’t done too badly the past couple of years.

ANDREW SUM: I’ve never seen any postwar recession such a one-sided, lopsided view of who’s been affected.

Consider this: Yes, unemployment among white collar professionals more than doubled since the recession began at the end of 2007. But at just over 4.5 percent, it’s still about half the national average.

For blue collar workers, though, job losses have been devastating. Production workers have a 14 percent unemployment rate. Construction is over 20 percent. Sum, who heads the Center for Labor Market Studies at Boston’s Northeastern University, says for these workers, it’s more than just a recession.

SUM: The rate of decline among these men was equivalent to what we lost in the Great Depression of 1929-33.

Truck driver Tom Fisher knows that first hand.

On the day I met him, he was pulling into a warehouse parking lot after an overnight trip to upstate New York.

He works for a company on the west side of Cleveland that makes insulation for commercial buildings.

TOM FISHER: Three years ago, I was working 50-55 hours a week here at just this one company. And anything over 40 was time-and-a-half, which is good money, very good money for me.

Now he’s lucky to work a couple days a week, working maybe 20 hours. As both residential and commercial real estate collapsed, so did construction jobs, and so did the jobs, like Fisher’s, that support the industry.

Fisher took a job at the Plain Dealer newspaper’s distribution center late at night to make some extra cash. But even with the second job, he earned $12,000 less last year than the year before.

FISHER: I live from paycheck to paycheck, and when you’re $12,000 less, I’m not paying certain bills. Creditors are not happy. I’m having trouble at the banks.

But having some work makes Fisher one of the lucky ones. He knows a lot of independent truck drivers who went broke.

FISHER: Well, I know two guys personally that just left their trucks right at the truck stop and walked away, called their wives. The wives came and got them, and they just left them and let the banks go get them. Freight on them and everything. They just could not do it anymore. And that’s sad.

On the other side of Cleveland, Tony Skettle is checking wiring at a recently sold house.

Not many people are buying houses these days so he’s not getting a lot of work. His wife Kathy manages the money. They’ve owned Skettle Electric for 25 years, and, until now, never really had to cut any staff.

KATHY SKETTLE: A few years ago, we had eight, and we’re down to five — actually like four-and-a-half. Four full time and one part time. In the history of our company, we’ve only laid off one person before and that was years ago.

Now, Skettle says she has to make cold calls and special offers to try to keep some business coming in. Unemployment in the construction industry has tripled. Meanwhile, the jobless rate in the financial sector is just 6 percent. Labor economist Andrew Sum notes the irony.

SUM: The architects of the disaster have not been strongly adversely affected.

Sum is hoping lawmakers will create a stimulus specifically for construction and other hard-hit industries.

In Cleveland, I’m Dan Bobkoff for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.