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Blue Collar Depression:  Unemployment Averages Don’t Tell The Whole Story

Thursday, March 4, 2010 at 6:06 PM

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More than two years into the so-called Great Recession, we’re starting to get used to hearing about unemployment hovering around double digit levels. That’s the national average but averages can be deceiving. In some sectors of the economy unemployment is double the national average. Here's the latest installment of our ongoing coverage of unemployment, Help Wanted. For blue collar workers, the Great Recession is more like the Great Depression. Here’s ideastream®’s Dan Bobkoff.

Photo Gallery

Tom Fisher stands by his truck. Electrician Tony Skettle (right) works in the basement of a suburban home.

Unemployment among white collar professionals more than doubled during the recession. But at just over 4 and a half percent, it’s still less than half the national average. Compare that to unemployment among production workers which stood at 14 percent at the end of last year…or construction where unemployment is 20 percent.  Professor Andrew Sum calls the disparities shocking. 

SUM: I’ve never seen, Dan, in any postwar recession such a one-sided, lopsided view of who has been affected.

Sum heads the Center for Labor Market Studies at Boston’s Northeastern University.  He’s one of the few economists to focus on huge differences within the overall unemployment picture.  He says the brunt of the recession has disproportionately affected blue collar workers in manufacturing, transportation and especially construction and that the results have been devastating here in Ohio and across the nation.

SUM: The rate of decline among these men was equivalent to the rate of decline in the great depression of 1929-33.

The hardest-hit blue collar jobs have unemployment rates three to five times as high as white collar professionals.

Tom Fisher knows the blue collar struggles first hand.

He’s a truck driver from Olmsted Township.

On the day I met him, he was pulling into a warehouse parking lot after an overnight trip to upstate NY.

We climbed into the cab of the Truck Fisher drives for a company that makes insulation for commercial buildings.

Commercial real estate ---like residential real estate--- has taken a dive.  With less building and rehabbing going on there’s less need for insulation and less need for Fisher.

FISHER: Three years ago, I was working 50-55 hours a week at this one company. And everything over 40 was time and a half, which is good money, very good money for me.

Now he’s lucky to work a couple days a week, working maybe 20 hours. No overtime. He took a second job late at night at the Plain Dealer, helping prepare stacks of papers for delivery. It’s tough work, for not a lot of money. His income fell by $12,000 last year. 

FISHER: I live from paycheck to paycheck and when you’re $12,000 less, I’m not paying certain bills. Creditors are not happy. I’m having troubles at the banks trying to get money in on time to pay the bill. And it’s just a vicious circle. I just don’t feel I’m getting anywhere. 

And, Fisher knows he’s one of the lucky ones. Like many blue collar workers, he’s underemployed, meaning he works part time but desires full time work. But having some work is better than many of his peers.  He knows a lot of independent truck drivers who just went broke.

FISHER: Well, I know two guys personally that just left their trucks right at the truck stop and walked away. Called their wives. The wives came and got them, and just left them and let the banks come get them. Freight on them and everything. They just could not do it anymore.

Unemployment in the transportation sector doubled during the recession. But that’s still not as bad as another sector.

FISHER: A lot of places I go to is construction sites. And some of the big construction companies around here are down from 400 men crews to 8,10, 12 men crews.

That might be an exaggeration but the data does show that unemployment in construction is more than double the national average, triple what it was at the start of the recession.  It’s also been especially rough on small firms.

While Tony Skettle does a small job checking wiring at a recently sold home, his wife Kathy manages their company’s finances. They’ve owned Skettle Electric in suburban Cleveland for 25 years, and until now, never really had to cut any staff.

KATHY SKETTLE: A few years ago, we had eight and we’re down to five—actually like 4 and a half. Four full time and one part time. In the history of our company, we’ve only ever laid off one person and that was years ago.

Kathy Skettle is doing what she can to keep some business coming in.

KATHY SKETTLE: I find myself making more offers to customers. Going back and making cold calls. Whereas before, they had to do very little advertising to get customers.

Labor Economist Andrew Sum says there are more than 30 out of work construction workers for every open job.

Since many of these blue collar trades are dominated by men, that’s contributing to the far higher unemployment among men than women during the current downturn,

At the same time, the duration of unemployment is at an all time high—lasting more than 7 months

Meanwhile, white collar professions aren’t doing too badly…relatively speaking. The financial sector’s unemployment rate despite a spike the past two years is under 6%, about half the national average. Again, Andrew Sum.

SUM: The architects of the disaster have not been strongly adversely affected. At the same time, the number of these banks and financial investment firms have been providing hundreds of billions of dollars to individuals, while, at the same time, there’s been hundreds of billions of dollars of losses of wages on the blue collar side.

Sum says Washington lawmakers need to more than just extend the length of unemployment benefits. He says it’s time for a targeted jobs program specifically for the Blue Collar workers.

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