With mills gone, jobless benefits don't help much

Unemployment insurance is running out in southern Virginia

March 25, 2002|By Peter T. Kilborn | Peter T. Kilborn,NEW YORK TIMES NEWS SERVICE

SOUTH BOSTON, Va. - For 13 years, Amy Altman worked at the JPS Apparel Fabrics plant here, and wound up earning $9.50 an hour. With production grinding toward a halt early last year, she began working one week on and one off, and on the off weeks she collected a $224 unemployment check. When the plant closed on Aug. 1, letting 346 workers go, the checks continued.

But in October, they stopped. Her eligibility, limited to six months, had expired. Creditors phoned. "When would I pay?" she recalls them asking. "I had nothing to pay with."

Altman, 42, a divorced mother of two grown children, filed for bankruptcy. The judge let her keep her mobile home and her 1992 Chevrolet Cavalier, its blue paint rubbing off. Since moving in with her fiance, a 27-year veteran of JPS who has found work driving trucks, she has put the mobile home and its half-acre of land up for sale. She is asking $39,000.

The unemployment insurance program that ran out for Altman, just as it has run out for hundreds of thousands of other Americans since the onset of the recession that hit in early 2001.

Unemployment insurance has been around for 67 years, as long as welfare. It was conceived as a lifeline to pull laid-off workers through recessions, granting them cash until their jobs came back or they found new ones, for a maximum of 26 weeks. In the last five recessions before this one, Congress routinely extended benefits, to 39 weeks.

But even after Congress approved an extension recently, a larger question about the program remains: whether for many beneficiaries, including hundreds here in this industrial string of towns in far southern Virginia, it still works as intended.

No jobs to return to

Previously, factories in this part of the country weathered recessions by reducing the work force and then bringing employees back when the economy revived. This time, however, the plants are shutting down, for good, leaving no jobs to bring workers back to.

Even as the national economy shows signs of rebounding, jobs here are leaving faster than they are coming, bloating welfare rolls as the tally of unemployed workers who have exhausted their benefits grows. Unemployment in this area exceeds 10 percent, the level of a deep recession and almost twice the national rate. In Martinsville, it is 20 percent. In Danville, the area's biggest town, the number of laid-off workers jumped to 5,160 in December from 1,680 the December before.

What new jobs there are, in fields like warehousing and telemarketing, pay less than the old ones: $6 to $10 an hour (as against $9 to $15), or about what people laid off from the old jobs collect in unemployment benefits.

Small furniture companies have closed in all these towns. In Clarksville, the Russell Stover candy plant has also shut down this winter, eliminating 700 jobs. But it is the closing of textile and apparel factories that has done the most damage. In January, Burlington Industries said it would permanently shut four American plants, including one in Clarksville and another in nearby Halifax. Just over two years ago, the Tultex Corp., then the biggest employer in Martinsville, filed for bankruptcy, shutting plants there and in South Boston, with the loss of 2,400 jobs. This year Vanity Fair Imagewear, which employs 2,300 people near Martinsville, is closing.

`More imports'

In most cases, the reason is competition from foreign goods. With adoption of the North American Free Trade Agreement nine years ago acting as a spur, more and more shirts, dresses and cloth are being imported rather being churned out here.

"More imports have meant more exhaustion of unemployment benefits," said Joyce Snead, manager of the Virginia Employment Commission's office in Martinsville. "It's a bad situation. It truly is. It is getting worse and more frightening." Helping qualified workers apply for benefits and look for jobs is taxing Snead's office. She said she had asked the state to add five more counselors to her 32.

"Unless the economic development people can turn things around, it's going to become even more difficult than it is now," she said. "We have gone from having 350 jobs posted on a weekly basis six months ago to less than 100."

To get any of those 100, candidates must often lower their standard of living.

At the State Employment Commission office in South Boston, Linda Miles, 24, separated mother of three children, said she lost her Burlington job in January. It paid $9.35 an hour. She searched the office's computer for new jobs, and made a list of three: phlebotomist, $6 an hour; general warehouse worker, $6.90; cashier, $6.

Miles' estranged husband pays her rent, but she has no unemployment benefits to fall back on: she had not worked long enough and earned enough to qualify. She is unwilling to leave the area, and without a job here, her last resort is welfare.

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