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As Jobs Vanish, Fears Grow

Economy In Crisis

ERIC GERSHON and LYNN DOAN

December 06, 2008

On Friday, hours after a report showed that the recession claimed 533,000 U.S. jobs in November, Connecticut politicians convened with frightened employers and workers around the state to talk about saving jobs at their companies.

It's a scene unfolding around the country: private-sector groups angling for government help in a deepening crisis that many experts say requires far broader action.

At Meriden City Hall, Rep. Chris Murphy, D-5th District, met with auto industry executives whose businesses, mostly new-car dealerships, have cut nearly 1,000 workers so far this year in Connecticut.

In Hamden, Attorney General Richard Blumenthal joined union leaders to protest AT&T's plan to eliminate 460 local jobs.

And in Hartford, lawmakers huddled at the Capitol to brainstorm ways to save 100 newspaper jobs in Bristol and New Britain.

Job losses are accelerating at a terrifying pace, with more than 1.25 million lost in the U.S. in the last three months, according to a U.S. Department of Labor report Friday. Unemployment jumped to 6.7 percent, the highest since 1993. Almost two million jobs have vanished since last December, with daily warnings of dire conditions ahead that could make this the worst recession since World War II. November's job losses are the most in any month since 1974.

Connecticut lost 3,600 jobs in October — the largest drop since December 2003 — and unemployment rose to 6.5 percent that month, the most recent for which statistics were available.

Auto executives, AT&T workers and threatened newspaper veterans are but three of many groups hoping for state or federal protection. But economists say a piecemeal approach — one company, one industry at a time — has little chance of reversing larger economic forces driving the big losses.

"You say, 'What about auto jobs?' Well, what about steelworkers? What about newspaper jobs? What about the economists? Everybody wants a bailout. Everybody's job is essential," said Nicholas S. Perna, economic adviser for Webster Bank. "It is impossible for our government to pick up every conceivable piece that falls on the floor."

Rather, he and many others say, public policy leaders must devise a sweeping set of economic stimulus policies that address the shrinking job market in the broadest way, not industry by industry.

"The problem started on a macro level," Perna said. "The solution is a macro one."

Battle Lines

A big-picture answer would include massive public works projects, said Perna, other economists and politicians from Sen. Christopher Dodd, D-Conn., to the person whose opinion counts most, President-elect Barack Obama.

But this would take time, and specific industries, specific companies, specific households are feeling the pain now — motivating elected officials to reach out.

"This is about thousands and thousands of jobs right here in the 5th District of Connecticut," Murphy told about a dozen local auto industry executives in a meeting to solicit their views on the plight of the teetering U.S. automakers.

In the group was Connecticut Automotive Retailers Association President James Fleming, who testified before Congress Thursday. By Friday he was back home trying to confirm that four more dealers had closed locations while he was away — evidence to him that Congress should allow big loans to the U.S. auto industry.

"I think the strongest argument is that 1 in 10 people are employed either directly or indirectly in that industry," Fleming said. "If one in 10 people are unemployed, the economic implications are catastrophic, because people stop spending."

Terri Petito, who has been working in AT&T call centers for 22 years, had a harrowing week. On Wednesday, she was told by management that her workload was being increased by as much as 25 percent.

On Thursday, she was pulled into another meeting and told that her position was being eliminated — although it remains unclear whether she'll be laid off.

"I said, 'You've got to be kidding me.' Even our manager was shocked," Petito said. "My grandfather retired from this telephone company. My father did. I was hoping to retire here, too. My head's kind of spinning."

Blumenthal, in an attempt to shield Connecticut from AT&T's plans to cut 4 percent of its national workforce, has formally asked state utility regulators to suspend 400 planned job cuts and 60 planned transfers to Michigan. The moves would unacceptably hurt customer service, he said, and the state has the legal authority to interfere with actions that would do so.

It would be the first time the state Department of Public Utility Control attempted to stop job cuts.

"You're talking about very well-defined customer service standards and a profitable company who just wants to make bigger profits," he said.

AT&T officials say the job cuts are related to the company's shrinking land-line business, and that some of the planned changes would improve customer service, not hurt it.

Changing The View

At this point, even advocates of government assistance for struggling industries question the value of picking fights about small numbers of jobs.

"The fact that we're in a deep recession now changes the way we have to view a lot of different things, including business decisions about laying off workers," said Heidi Shierholz, an economist with the Economic Policy Institute, a labor-backed think tank in Washington, D.C.

EPI supports federal loans for U.S. automakers, arguing that the disappearance of General Motors, Chrysler and Ford would lead to failures all along the supply chain and the loss of more than 3 million jobs.

Murphy, who had not decided by Friday how he might vote on a potential taxpayer-funded loan to the automakers, said in an interview that the companies' survival would not alone restore America's prosperity or fully address withered consumer confidence.

Restructuring plans that the companies presented to Congress this week envision closing thousands of car dealerships and laying off thousands more workers, even with big loans.

"You have to have an economic stimulus strategy to get people buying cars and consumer goods," Murphy said.

Friday's report, which revised September and October job loss figures sharply upward, showed erosion across the economy — in manufacturing, construction and many service industries.

Any solution will likely come too late to save Petito's job and thousands of others vanishing across the nation and the state. None of the AT&T employees being laid off have received official notice; union leaders expect to be notified next week.

Petito described herself Friday as "lucky" because, unlike several of her co-workers who are raising families, she only supports herself and her dog.

"I know a lot of people who have young children," she said. "Who knows what the future's going to bring for them?"