NEWSDAY: Unemployment and Collapse of Real Wage Gains

This story features NYUP member Charlene Ruiz and makes the connection between high unemployment and the collapse in wages that occurs across the economy for middle and low-income workers.

http://www.newsday.com/business/ny-bzcov1215,0,4907993.story

'Wage Collapse': With a poor post-9/11 economy, laid-off workers with higher salaries are taking lower-skilled jobs to survive
By Patricia Kitchen
Staff Writer

Newsday, December 15, 2002

Charlene Dukes Ruiz was just boarding the PATH train at the World Trade Center when she felt the vibrations of the plane hitting Tower One. Along with thousands of other soot-covered workers who never made it to their offices that September morning, she ended up trudging home across the Brooklyn Bridge.

Now, 15 months later, she's still experiencing vibrations from that day. As horrible as it was, this mother of a 15-year-old son said, "the aftereffects are even worse.”

Two months after the attacks, she was let go from her $35-an-hour consulting job with U.S. Trust Co. in New Jersey. In her search for work since then, she said, "I've e-mailed resumes, I've faxed resumes, I've hand-delivered resumes,” but no job. None except the one she took three months ago when her unemployment insurance benefits ran out -- as a cashier in a Manhattan cafe earning $7.25 an hour.

"If I continue to make this wage, I'll never get out of the debt I'm in,” she said, noting that she owes more than $20,000 to credit-card companies and $4,000 to the Internal Revenue Service.

What's more, the job is taking an emotional toll. "When you're working at a low-paying job, people treat you like you're brainless. It's humiliating and demeaning.”

Thousands of people in the region share those feelings after downscaling their careers or accepting lower-level, lower-paying survival jobs to tide themselves over. The formerly well-heeled find themselves filling salt shakers at diners, selling sweaters or cell phones, making telemarketing calls, inputting medical billing information -- even passing out fliers on street corners. Some have given up on their old professions and are climbing new career ladders, often starting several rungs lower in pay and status.

Although there are no good estimates on how many people lost good jobs and are now underemployed, some experts say the number is rising, as people run out of unemployment checks and have to take some sort of work. Another 66,000 statewide may join their ranks Dec. 28, when the extension of unemployment benefits is scheduled to expire.

Since June, 182,000 New Yorkers have exhausted their 26 weeks of state and 13 weeks of federal extension benefit checks, said Jonathan Rosen, executive director for the New York Unemployment Project, a membership-based organization of unemployed New Yorkers. The result, he said: "Wage collapse,” especially for lower- and middle-income people who had made some earnings headway during the boom years. "I wish I could say Charlene Ruiz is uncommon,” he said. "She isn't.”

The U.S. Bureau of Labor Statistics tracks the number of part-timers who would work full-time if they could find the jobs or whose employers have cut back their hours. Last month, those employees comprised 18.3 percent of all part-time workers -- up from 14.3 percent in October 2000, when the unemployment rate was at its lowest in recent years. That's a rise from 3.1 million to 4.2 million people.

For many, "survival jobs don't guarantee your survival,” said Lenore Neier, communications director of the Community Service Society of New York, an antipoverty think tank and direct services organization.

"People are taking low-level jobs with no benefits and are unable to make ends meet,” she said. "They are calling us in desperation to find out if they are entitled to food stamps or public assistance. Most are not.”

Though it's difficult to quantify, the reduction of wages has a cumulative effect on the region's economy, as people stop taking cabs or eating out, postpone purchases of cars, clothing and appliances. More people buy at thrift shops. Some can't give to charities. Others skip doctor appointments or mortgage payments.

Rae Rosen, senior regional economist with the Federal Reserve Bank of New York, worries about the region's rising foreclosure rate and late payments. "It crosses all income levels, all skills and classes,” she said. "Foreclosures are rising because people are unemployed or underemployed for long periods.”

"I'm seeing a whole new class of people shopping at dollar stores,” said Claire Bush, director of Futures in Information Technology, a program of the Metropolitan Council on Jewish Poverty. That's an umbrella group of Jewish community service councils that provides job training and placement and crisis intervention. What's more, she said, as higher-level people take lower-level jobs, less skilled workers "get pushed out at the bottom.”

Not even half of 34 job hunters placed in positions in October and November through a federally funded initiative ended up taking work at the same or higher salary, according to a report provided by Ernest Pennino. He is assistant deputy commissioner at the George A. Mason One-Stop Employment Center at the Suffolk County Department of Labor in Hauppauge.

Pennino sees some people making the switch from white-collar to blue-collar jobs, often steering into truck-driving because of the seemingly steady demand for drivers. Yet, they'll earn only $32,000 to $35,000 their first year, including overtime.

They are simply telling themselves, Pennino said, "the job market is soft now and eventually I'll get back to wearing a shirt and tie again, but right now I've got to feed my family.” When their pay is half of what it was, they often take added part-time jobs or rely more heavily on a spouse's income, he said.

That's the case with Raymond Alexander, 56, of Nesconset, who spent more than 30 years doing data processing work. When his department was outsourced about a year ago, he was earning an income in the six figures. Fortunately, he said, his and his wife's four children are grown, she has a steady job with the state, and he received a year's severance from his former employer, Avis Rent-A-Car.

Still, his vision of retirement has been thrown for a loop. Seeing himself now as semi-retired, he applied for his pension six years early -- and took an 18 percent penalty hit. Because he'll still be working, he also decided to take advantage of a $3,800 grant he learned about at the One-Stop Employment Center to train as a truck and bus driver. Regarding his new profession, he said, "Obviously the pay will never be there again.”

Plus, he's finding the transition from white to blue collar to be a hard one. His age is against him, he said, on jobs that involve heavy lifting or being outdoors in the cold. One recent lead was for an 18-hour-a-day bus-driving job to Atlantic City -- paying only about $9 an hour. Another was for a delivery job to New York City that would involve leaving Eastport at 3:30 a.m. "I'm not going to do that either,” Alexander said. "That's almost a night job.”

Ruiz also said she's experienced a 180-degree shift in her lifestyle. Her 15-year marriage to her high-school sweetheart is formally ending in divorce. They had been separated and tried to reconcile, and then came the financial pressures. When she applied for disaster assistance, she was told she fell into "a gray area,” working in New Jersey for a New York City-based firm, but with the help of the New York Unemployment Project she did get rent assistance to the tune of $820 a month. It ends in three months.

Ruiz applied for financial aid from the private school her son attends, but was told the aid was denied because his grades dropped this year. Just two weeks ago, Con Edison was threatening to turn off her electricity -- she's four months behind in paying the bill. And last month her landlord sent her a letter saying she'll have to move because her apartment building is for sale.

"I feel like I'm that little piece of something else in a whole big mess of beans. We all look alike. ... You get overlooked,” said Ruiz, who is working 37 hours a week at the cafe, which is in a bookstore.

This from a woman who grew up in the projects of Crown Heights, started her banking career 23 years ago as a clerk-typist and climbed to the position of senior securities analyst.

On her lunch break the other day, she talked about her career aspirations. Her face lit up as she spoke of her ambition to go into nursing. A first step would be to find administrative work for a hospital that also would provide nurse training, but her priorities at the moment are to find affordable housing and any job that would pay a living wage -- at least $30,000 a year.

"People who have jobs had better be glad they have jobs,” she said.

Indeed, plenty of employed workers are more than aware of what might await those who lose their jobs. More than eight in 10 of 1,000 polled said it would be difficult for people laid off to find similar-paying jobs, according to the quarterly confidence index conducted for Right Management Consultants, a career transition and consulting firm in Philadelphia.

Mahzuzul A. Bazlee of Ridgewood is facing this challenge soon. He'll be out of work in mid-January because the Times Square HMV store where he has worked for five years as a music buyer is closing.

To get a jump-start on his job search, this 36-year-old native of Bangladesh has been visiting the Queens Workforce 1 Career Center in Jamaica, which provides counseling, retraining and job leads. But "this is a slow time of year for job hunting.” He said he hopes his several years' worth of experience as a food and beverage manager will give him more options.

With his wife, Lutfun, also looking for work, Bazlee said, "I have no time to stay without a job. I hope with my heart and soul” to find something comparable, but "I'll have to pick up anything if I don't get my desired job.” That might mean a stint in catering or perhaps taking on a second job. "I think there's not a lot of opportunity like before.”

When seeking opportunities, more than a few of the area's unemployed and underemployed check out the part-time opportunities on Craig's List -- www.craigslist.org. That's an online community that allows employers to place free help-wanted ads.

Several weeks ago, Paul Dunn, a bartender/manager at the Taverna Restaurant in Roslyn, put an ad on Craig's List looking for backup bartenders so he could cut back his 12- to 14-hour workdays. He got 30 to 40 responses, about one-third from former technology workers, a couple from as far away as New Jersey. Some said, "I need a job. I'll do anything,” Dunn said.

This did not surprise him since about a year ago he was an information technology worker bringing in six figures. Laid off a week after the terrorist attacks, , he said, "I figured I would have no problem getting a job” and proceeded to put in eight-hour days "posting to every board I could find.” He got only consulting gigs, enough to keep him going. And about four months ago, he signed on at his friend's restaurant.

For many people, though, even survival jobs are not easy to come by.

Robin Gustafsson, service director for the Gotham Bar and Grill in Greenwich Village, said she sees about 10 people a week -- mostly laid off from Wall Street jobs -- looking for wait-staff work. The latest trend, she said, is for people to leave two resumes -- one on their financial services skills, the other on their college restaurant experience. Yet, even with impressive credentials there are few opportunities. The Gotham has low staff turnover, she said, plus, as a three-star restaurant, it tends to hire people with more extensive food and wine expertise.

With so many doors closed, it's little wonder skilled, confident people start to doubt themselves. For some, taking a survival job is a good news-bad news scenario. On the one hand, it does provide some income, plus it keeps people in the flow where they are more likely to hear about better-paying jobs.

On the other hand, a lower-level job can be demoralizing. Plus, said Allison Hemming, president and founder of Hired Guns, a Manhattan staffing firm for marketing and creative professionals, those who take such jobs need to guard against being complacent. "People hate job hunting so much, they might get stuck there longer than they want.”

Of course, sometimes taking a job like that can motivate you more, said Hemming, also author of "Work It! How to Get Ahead, Save Your Ass and Land a Job in Any Economy” (Fireside, $13), due out next month.

Tatiana Lysynecky is one who is unlikely to become complacent. Laid off from her programming/software design job with a midtown financial services firm in October 2001, she is bringing in just about one-third of her previous income working two jobs six days a week.

"I was at that company 13 years,” she said, "and I did a great job.”

While many in her field were wooed to other employers by big salary increases and sign-on bonuses, she decided to stay put.

"I was at the office until midnight just three weeks before the layoff,” she said. "I always did the right things. I lived by the rules. I never took sick days. Now I'm in financial trouble.”

With no job at her old salary level in sight, she's taken on a temporary project at the Metropolitan Council on Jewish Poverty, which also is helping her find work more suitable to her level. In addition, she works Saturdays as a banquet waitress at a hotel in New Jersey.

"Up until a month ago I was unemployed, and I still feel like I am. I'm not meeting my bills, and that scares me. ... I've been working hard, paying my taxes and doing all the right things. Now the government just doesn't care. There's been no support. No extension on unemployment.”

Just this week she received disaster assistance for the mortgage on her apartment, which is five blocks north of Canal Street. A few days earlier she had gotten a "foreclosure pending” letter in the mail. Up until now her credit rating has been "excellent,” said Lysynecky, who also has no health insurance.

"You start thinking of being homeless,” she said. "You get a different perspective on how people end up that way.” Thoughts can shift to, "If I'm not going to get a job to meet my bills, I will end up on a park bench on the corner. It can happen.”

Copyright © 2002, Newsday, Inc.