Md.'s jobless residents feel pain of financial crisis

October 04, 2008|By Jamie Smith Hopkins and Lorraine Mirabella | Jamie Smith Hopkins and Lorraine Mirabella,jamie.smith.hopkins@baltsun.com and lorraine.mirabella@baltsun.com

Beware, job hunters: The pain felt first by the real estate industry and more recently by Wall Street is starting to hit you in a big way.

U.S. employers cut 159,000 jobs last month, twice as many as they did in August, the Labor Department said yesterday. Economists warn that layoffs will likely increase as the impacts of emergency mergers, government takeovers and credit problems more fully filter into the economy.

Even in Maryland, which has held up better than the country overall, unemployment is on the rise. The number of residents looking for work but not finding it surpassed 135,000 in August, the most recent estimate from the Labor Department. The unemployment rate, a low 3.5 percent in January, has rapidly ratcheted up to 4.5 percent.

Goodwill Industries of the Chesapeake, which helps Marylanders find and train for work, is seeing 50 percent more people coming to its downtown Baltimore office for assistance than it did last year. But businesses are more hesitant to hire.

"I think [employers] are pretty seized up now," said Phil Holmes, vice president of public policy and development at Goodwill. "Can they expand their business? Is their line of credit going to be called? ... It is unprecedented, what we're coping with."

U.S. job cuts last month hit employees in a variety of industries, including manufacturing, construction, retail and finance. Unemployment remained steady at 6.1 percent, but tens of thousands of Americans dropped out of the labor force. When the economy worsens, it's not unusual for people to stop actively searching for work because they've had no luck.

The nation's unemployment rate is up from 4.9 percent at the beginning of the year.

The number of Americans working part time even though they want full-time jobs, meanwhile, has risen by 1.2 million during the past year.

Maryland, which benefits from an outsized share of federal spending and a strong health care sector, has added jobs even as employers nationally have cut a total of 760,000 since January. But the state's growth hasn't been enough to keep unemployment from growing, too.

About 4,700 Marylanders filed new claims for unemployment benefits last week, up 40 percent from a year ago. The Maryland Department of Labor, Licensing and Regulation began seeing the numbers rise in December and has noticed acceleration more recently. "You don't have as many jobs to place these people with," said Thomas Wendel, the state's assistant secretary for unemployment insurance.

Some employers are begging for workers, but the skills they need don't necessarily match the skills of people looking for jobs, he added.

Raquel Huezo, an economist with RESI, Towson University's consulting arm, expects to see "very slow" job growth for the rest of the year in Maryland. He also predicts cuts in at least the first half of next year. Blame the credit crunch, which started with subprime mortgages but is now narrowing options for companies that have nothing to do with housing.

"Maryland is so reliant on small businesses," Huezo said. "A drying of the credit market definitely impacts them, impacts their payrolls, their ability to function."

Job hunters should plan on fewer opportunities as a result, said John A. Challenger, chief executive of Chicago outplacement firm Challenger, Gray & Christmas. He compared this market to the recessionary year of 2001.

"Be open to changing industries," he advised. "Be open to relocation if you can. ... There's just more people competing and bumping into each other for a smaller number of jobs."

More than two dozen job seekers were huddled around tables filling out applications at Goodwill's career center in downtown Baltimore by midmorning yesterday. The number of people coming in on Fridays for weekly intake services has been growing all year. Yesterday it reached a new high of 150 applicants even before the 11 a.m. cutoff time, said Ursula Villar, marketing and development director for Goodwill.

The program, which assigns applicants to case workers who channel them into training programs, tries to find people entry-level jobs in health, hospitality, janitorial and other fields.

Shannon Price, 21, a single mother of two, has been looking for a clerical job since June, when she left a security guard position because of child care conflicts. Price said she has applied to many companies - between 30 and 40 - but was called in for just one interview.

"I'm hoping to find full-time employment to provide a better future for my kids," Price said. "It seems if you don't know people, you can't get a job."

Antonio Atkinson Jr., 23, a 2003 high school graduate who has trained as a carpenter, spent the summer working as a youth team crew leader for the Parks & People Foundation, first as a volunteer, then in a paid job. But he's been out of work since that seasonal job ended, unable to find a replacement.

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