High-tech jobless lowering the bar
By Jon Swartz
USA Today
SAN FRANCISCO — Harry Strout never imagined he would end up behind a counter at a consumer-electronics store.
Not after more than 20 years as a telecom engineer at Merrill Lynch, Kaiser Permanente and Pacific Bell. Not with a bachelor's degree in chemistry and a master's in business administration. And not after several years as a consultant.
But after a year of unemployment — during which he sent more than 1,500 resumes without luck — he took a job this month at RadioShack for $6.75 an hour.
"I had to make a living," Strout, 61, says. "I don't think of this as an ignoble experience."
Nor does Anna O'Neil, 28, a fresh-faced public-relations specialist. She impulsively moved to Silicon Valley from Atlanta in 2000 to join dot-com startup Bigstep. She's managed a San Francisco restaurant for 10 months, having been laid off by Bigstep in 2001. "I'm used to a paycheck, and my insurance ran out," O'Neil says.
Strout and O'Neil are the lucky ones. They have jobs.
Nationwide, the number of people who have been jobless for long periods has risen to its highest level since 1994. Almost 1.5 million have been out of work for more than six months, up 80 percent from a year ago, the Department of Labor says. Especially hard hit: workers in telecom and tech, two fast-growth industries of the 1990s that have since suffered downturns.
The long layoffs are having a big impact — on individuals and the economy. Some wages in Silicon Valley are declining for the first time in a decade. Silicon Valley bankruptcies are rising. More tech and telecom workers are shifting industries, as did workers before them in the auto, oil and aerospace industries. That could deplete the talent pool when tech and telecom rebound.
At the same time, many of the cash-strapped unemployed have been forced to borrow money and dip into their retirement savings.
The elimination of nearly 320,000 jobs this year in computers, telecom and e-commerce, the aging of the work force and the globalization of industries have combined to make long-term unemployment more likely for more people, says UCLA economics professor Tom Lieser.
In Santa Clara County — the epicenter of Silicon Valley — the jobless rate was 7.6 percent last month, down from a record 7.8 percent in July and up from 1.7 percent less than two years ago. Close behind: telecom-heavy Dallas, with a 7.2 percent jobless rate in July.
The jobless cover all demographics: software engineers who in previous downturns were still highly sought after, youngsters who dived into the exploding dot-com market and older workers who did the same.
"It's extremely difficult out there," says Rene Manzo, 45, a network engineer laid off by Global Crossing in July 2001. "There are too many people competing for jobs, and employers are looking for incredibly specialized applicants."
For younger workers, this might be their first run at unemployment. For those in their 40s, 50s and 60s, the job hunt is complicated because they may be too experienced for many jobs and scare employers, who fear they would just jump when the economy picks up.
For all, the market is dismal. Hires in high tech plunged 27 percent to 834,727 this year, says the Technology Association of America. Most tech analysts don't expect a rebound until next year or 2004. Some companies are going through three or four rounds of layoffs. Bankruptcy filings in telecom have claimed dozens of firms.
