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.
'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
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
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
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
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
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
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
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
Employment Center to train as a truck and bus driver. Regarding his
new profession, he said, "Obviously the pay will never be there
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
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
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
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
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
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
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
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
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
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.