Chips of wrath 

Unemployment rising before the crisis

click to enlarge Jeri Hough, a laid-off pharmacy tech, searches for jobs at the Idaho Department of Labor's Boise office. - NATHANIEL HOFFMAN
  • Nathaniel Hoffman
  • Jeri Hough, a laid-off pharmacy tech, searches for jobs at the Idaho Department of Labor's Boise office.

Six out of seven analysts agree: So many people are out of work right now because of the low business cycle stifled by the failure of the banks in the wake of the sub-prime mortgage crisis.

BW started with Boise State and worked west to Berkeley, then across the plains to the nation's capital and up the eastern seaboard in search of an economist willing to take the long view on unemployment.

But the vast majority of American economic thinkers agree more or less with Boise State's Don Holley.

"It all comes down to there's just not enough business to justify the employment," said Holley, chairman of Boise State's economics department.

In Idaho, like most places across the nation, workers are losing their jobs every single day:

• Idaho jobless claims spiked 20 percent the week of Nov. 17 compared to the week prior, with 3,212 more people collecting unemployment checks.

• More than 40,000 Idahoans made the October unemployment rolls, the highest number out of work in more than 25 years.

• And while Idaho's October unemployment rate, at 5.4 percent, is lower than the national rate, it is the most rapidly deteriorating unemployment rate in the nation, according to the Idaho Department of Labor.

The state's largest employer, Micron Technology Inc., echoed Holley's spending-equals-jobs equation in initiating some 1,500 to 1,800 layoffs at its Boise headquarters.

"When you have a situation where consumers aren't purchasing our customers' products, that certainly causes all of us pain in the food chain," Micron spokesman Dan Francisco told BW.

Francisco acknowledges that global competition in the microchip market is also to blame for layoffs in Boise.

But what about companies that either have a bad business model and fail their employees or companies that have a business model that requires them to abandon their American employees and seek cheap labor elsewhere in the world? Might their decisions on workers happen to coincide with a generally acknowledged economic crisis?

Even at the progressive Economic Policy Institute, where analysts are calling for billions of dollars of government spending in the auto industry and on public sector work projects, the data demands a strict macroeconomic analysis: 3.3 million additional unemployed workers in the last three months ... "Nobody thinks that what's going on now is anything natural," said EPI economist Heidi Shierholz.

But then BW found the economics department at the University of Massachusetts-Amherst, where the unabashed journal Rethinking Marxism is published, and found a different take on rampant American joblessness.

"I expect that the American working class have seen the peak of their standard of living—we're in for a long period of declining standard of living of the American working people, and they're not psychologically ready," said Richard Wolff, a U Mass economist who had just returned from lecturing in Germany. "They are going to be very angry."

For Wolff, the bulge in the unemployment numbers is a symptom of a long-changing global economy and a harbinger of more structural changes to come in the U.S. labor market.

But BW did not have to go all the way to Amherst to get such a critical analysis of the jobs economy. A few blocks from the BW offices, in an old brick building, an Idaho Department of Labor unemployment office has been filled in recent weeks with dozens of people searching for jobs and applying for unemployment benefits.

One man, who identified himself only as Carlos, exhibited some of the psychological symptoms of a declining standard of living, illustrating two sides of the anger Wolff speaks of.

"I'm pretty concerned about myself," said Carlos, a 61-year-old Hispanic draftsman who was nearing the end of his unemployment insurance payments after six months of looking for work. "At my age, you feel like it's over. What am I going to do next?"

Carlos was angry about the scant job prospects and work culture in Idaho, but he also felt his last job fell victim to an opposing anger: a scapegoating of minority workers when resources tighten.

"They don't like people who come from somewhere else and make more than them," Carlos said. "Especially Hispanics or minorities."

Other job seekers at the Boise unemployment office diligently plugged away on the computers, printing up dozens of job offers, knowing they would be among dozens or hundreds of applicants. Some prayed. Most remained optimistic.

Jeri Hough, who works in the health-care industry, one sector that has retained high job numbers, also found herself at a state computer terminal looking far and wide for a pharmacy tech job.

"There's not enough volume of work," Hough said.

She, like many others, is relying on family to help out with her young son and may have to look outside of Idaho for work.

While thousands of Idaho job seekers hold out hope for that lucky classified ad, Wolff, who warned BW that his suggestions for solving American working class woes often make for awkward press interviews, sees the national unemployment figures as a mere blip.

He said that changing world markets, the rise of China, India, Russia and Brazil and the steady export of jobs have made American work more precarious over the years, workers less organized, and decent pay and benefits a luxury.

"All of those factors predate and will postdate this current economic blip," Wolff said. "They have been contributing to structural levels of unemployment."

Micron is a good example of these structural changes, something that is very well understood within the company's sprawling campus just east of Boise.

"When I was working on their NAND flash, I was working on their cutting-edge technology," said Tony Brennan, a kayaker, a father of two and a man who lost his job at Micron last month after 21 years—his entire career—with the company.

"I was very surprised that the layoffs would reach me. They bring you in and you're done that day," Brennan said.

Brennan once worked at the old Sunset Sports Center in Boise with Micron CEO Steve Appleton, who strung tennis racquets in his college days. Both went to work at the fledgling microchip manufacturer.

Brennan started at Micron as an entry-level operator and worked his way up to area engineering supervisor in research and development. He said he likes Appleton and thinks he's tried to hold on to the talent at Micron, but wonders what a standard performance review on top executives might reveal.

"I'm held accountable to certain standards ... Why does management continue to fail when it holds its employees to a higher standard?" Brennan asks.

Brennan is now networking with hundreds of other out-of-work Boise tech workers with varying degrees of engineering know-how, looking for the next big idea: something green, something that uses microchips, some helpful technology.

"Boise's got a wealth of engineering talent in this town, but if this state doesn't move fast ... all this talent is going to leave," Brennan said.

And the Sunset Sports—now out of business—where both Brennan and Appleton learned about bringing home a paycheck? It was in the little downtown brick building that now houses the Boise unemployment office.

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