Economic slump strikes area built on manufacturing

Hickory, N.C., region sees unemployment rate take largest leap in U.S.

September 16, 2001|By David Firestone | David Firestone,NEW YORK TIMES NEWS SERVICE

HICKORY, N.C. - In spring 2000, Century Furniture Co. ran a help-wanted advertisement for upholsterers in six area newspapers. The company was offering a good-paying job in a region with thousands of experienced furniture workers, but not one applicant responded.

At the time, the unemployment rate in this manufacturing area of North Carolina was an extraordinarily low 2.2 percent.

Anyone who wanted to work was doing so, and companies were raiding each other for experienced workers. New industries refused to move in, fearing that they could not fill jobs.

But in just 12 months, Hickory's economy reversed.

The region's main industries have slumped. Its unemployment rate has jumped more than any other in the country, rising 5 percentage points to 7.2 percent.

Century Furniture is no longer running help-wanted advertisements; workers are knocking on its doors.

`The driver's seat'

The relationship between the area's employers and its employees has been transformed.

"Instead of employees being in the driver's seat, now we're in the driver's seat," said Bill McBrayer, the operations manager for the upholstery division of Lexington Home Brands, another furniture maker in Hickory.

"It's a whole different feeling. Now, if you want to do something like clamp down on smoking in the plant, you can. Last year, people would just have quit," he said.

Managers say that productivity is up and that workers are more motivated because they fear layoffs.

Employees ruefully acknowledge the changes and say they are stunned by how quickly the environment shifted.

"They cut us back from 60 hours to 36 last month," said Henry Stallard, who works at a large fiber-optic cable factory and was looking for a second job at the county unemployment office this week to supplement his reduced income. "They would never have done that last year.

"Now everybody's got to cross their T's and make sure they don't make any mistakes. Everything's totally flip-flopped."

`More at stake'

While Hickory has been hit unusually hard, many production workers across the South and in other manufacturing states will see tougher and more demanding environments than they have for the better part of a decade.

As layoffs rise, employers will be asking more of the workers.

"When a worker has more at stake by losing his job, he's always willing to work much more efficiently," said Walter Wessels, a labor economist at North Carolina State University in Raleigh.

"What's different this time is that the change is happening much more quickly than in the past. Employers are monitoring the market much more carefully now, and they know that if they don't get their employees to work harder in times like these, their competitors will."

This is not necessarily true of the entire economy.

Ronald E. Bird, chief economist for the business-oriented Employment Policy Foundation in Washington, said that jobs continue to be created in the services and information sectors, and that the current national unemployment rate of 4.5 percent is low by the standards of the last half-century.

But workers in manufacturing states are in many cases bearing the brunt of economic change.

837,000 jobs cut

The country has lost 837,000 manufacturing jobs since July 2000, by far the largest loss in any sector, and states that were recently thriving have been among the hardest hit.

North Carolina lost more manufacturing jobs than any other state - a striking contrast to its enormous growth in the last 20 years. It is here that the effects of such rapid change are most visible. (Other states that have lost thousands of manufacturing jobs include California, Illinois, Michigan and Pennsylvania.)

North Carolina's jobless rate is at its highest since 1993, rising to 5.3 percent last month from 3 percent in July 1999.

The Hickory metropolitan area, which has about 350,000 residents, does not have the highest unemployment rate in the state - 10 counties have double-digit unemployment rates, and two counties have rates higher than 12 percent - but the rise in Hickory's unemployment has been greater than anywhere else in the country.

The federal Bureau of Labor Statistics shows that joblessness in the four-county Hickory area grew by 4.5 percentage points in the last 12 months; the next highest was San Jose, Calif., the heart of the dot-com industry, where the rate grew by 2.5 percentage points.

Full cycle

The Hickory region has long been a capital of furniture and textile manufacturing, industries known for their unforgiving business cycles. But when the three largest manufacturers of fiber-optic cable began building factories in Hickory in the 1980s, the region's economic base seemed fully diversified.

By last year, the country's furniture capital was also producing 40 percent of the world's supply of fiber optics.

Beginning last summer, however, all three industries hit a sharp decline almost simultaneously, beset by foreign competition, slowing demand for the older industries and an oversupply of fiber-optic cable.

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