Insurance Day, 5/4/10 | Read the original article |
By Mike Allen
San Diego’s economy seems to be doing fairly well these days, enjoying an unemployment rate below both state and national averages.
But that’s little solace to Will Grigg.
A computer technician with some 15 years’ experience, Grigg has been unemployed for more than a year and is nearing the end of his extended unemployment benefits.
“My unemployment runs out in the beginning of June. When that happens, I’ll probably have to take any type of job just out of practicality,” said Grigg, who was laid off in April 2001.
His former employer, a computer outsourcing support firm, resumed hiring for his skill set, but Grigg wasn’t willing to take an entry level salary, less than what he was paid when he joined the company in 1998. He said the firm and other high-tech firms seem to be very particular in their hiring, generally offering jobs to younger, less-experienced workers and paying them a lot less.
“Yes, you can get a job, but if you’re 47 years old, you have to be willing to take a $9,000 cut from what I was earning a year ago,” Grigg said.
Grigg’s situation isn’t that unusual, say some human resource experts, who note while the local economy is adding new jobs, the positions are mostly in the low-skilled, lower paying service industries, not in manufacturing or high-tech, which generally paying higher wages.
Cecile Cowan, director for the Metro Career Center, a federally funded job search resource in Kearny Mesa, said she’s seen unemployed workers from high-tech and other professions forced to settle for lower salaried jobs because they cannot find work commensurate with their skills.
“People are taking lower-paying jobs because they have to meet their obligations,” Cowan said.
Not long ago, a new hotel opened near the career center and held an open house to obtain its staff, she said.
“They got about 1,000 people over the three days of interviewing, and they got some very well-educated people,” Cowan said.
Cross-Section Of Industries
While the tech wreck of recent years has certainly caused a spurt in the numbers of unemployed among technical skilled workers, Cowan says many of the unemployed at the center come from other industries, including finance, insurance, accounting, purchasing and management.
At least 40 percent of those registered at the Metro Career Center are college graduates and are having difficulty finding similar-paying positions. One former dot-com worker who was earning in excess of $45,000 is finding few prospects of matching that salary even with two years’ experience.
Many of the skilled jobs that are available are paying an average salary of $15 an hour, or about $31,000 annually.
“That may sound OK but it’s really not, even if you’re just supporting one person,” Cowan said.
Those who keep close tabs on the subject say San Diego’s economy is faring better than most other areas of the state and nation, based on its lower unemployment rate over the past two years.
Last month, San Diego’s unemployment rate was 3.8 percent, down 1/10th of a point from March and tied with Napa for fourth-lowest in the state. Meanwhile, California’s unemployment for the same period was 6.3 percent, and the national rate was 5.7 percent.
Except for January, when the county’s rate hit 4.1 percent, San Diego’s unemployment has been below 4 percent for all of the past 12 months, and actually hovered around 3 percent for much of 2001, according to the state Employment Development Department.
However, the majority of the new jobs being added generally pay lower salaries, state reports show. Of the 24,500 jobs added to the region since April 2001, about half were in the service industries, and 6,400 of those were in retail trade.
On the other hand, manufacturing jobs, which generally pay higher wages, declined by 2,400 jobs over the year.
“When you take out jobs in the high-tech and manufacturing sectors and replace them with hospitality positions, it doesn’t take a rocket scientist to figure out that we’re losing money,” Cowan said.
Some are far more critical of the trend.
Donald Cohen, executive director of the Center on Policy Initiatives, a nonprofit research organization promoting livable wages, said the region is building a “low wage economy that is fundamentally weak.”
“An economy that allows 700,000 workers to work without health insurance is not a healthy economy, and where 12 to 15 percent are earning under the federal poverty level is not a healthy economy, and where people cannot afford to buy houses is not a healthy economy,” Cohen said.
Some unemployed workers hear the positive news reports on unemployment and cringe.
The implication is that they’re not trying hard enough or are being too picky about their next job, they say.
“You get frustrated, and think that there must be something wrong with you,” said Jose-Luis Arvizu, who has been searching for a sales and marketing position for about a year.
Despite his using resources such as executive search firms, the career center, updating his skills, sending out hundreds of resumes each month, and networking, Arvizu, 47, has had only a few interviews.
He said many companies appear to be reticent about expanding their staffs, uncertain of where the economy is heading. Those firms that are hiring tend to offer jobs to younger, less-experienced workers and are paying them much less.
“The thing is, I know tons of people like me, people with experience and technical skills. These are software developers, systems administrators. There is an oversupply of technical people,” he said.
Although it’s often been more difficult for older, unemployed workers to find a job, local companies are slowly expanding their payrolls, said Phil Blair, co-owner of Manpower Temporary Services in San Diego.
In last month and a half, the staffing company has received job orders ranging from five to 70 positions, rather than one to just a few positions, he said.
“Companies are starting to resume production levels, and some of them are bringing back their third production line.”
Manpower’s most recent quarterly survey of local employers found 26 percent plan to increase their staffing during the third quarter. Yet 60 percent said they intend to maintain their current level of employment. Only 7 percent said they planned to reduce their staff.
The remaining 7 percent were uncertain.
Blair said a positive trend he’s noticed is companies are retaining their best skilled employees despite the slowdown. They realize it will be harder to replace these workers if they do leave, he said.
Alan Gin, the USD economist who compiles an economic index for the region, recently said the state reported 21,843 in new unemployment claims filed, the largest increase in the past five years.
“At this rate, the area’s unemployment should rise to 4 percent in May,” Gin said.
While Gin expects the rate to decline to about 3 percent later this year, he says the area faces “some rough months ahead.”