Bleak lesson: For most jobless, loss of earning power permanent

September 07, 2009|By Jane M. Von Bergen, Inquirer Staff Writer
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  • Eyes rimmed red, laid-off equity analyst Bob Niemeyer and his wife, Patricia. He once made $130,000 a year. He now earns a bit above minimum wage at Macys. (Ed Hille / Staff Photographer)
  • Eyes rimmed red, laid-off equity analyst Bob Niemeyer and his wife, Patricia. He once made $130,000 a year. He now earns a bit above minimum wage at Macys. (Ed Hille / Staff Photographer)
  • Dennis Tosto with daughter, Elizabeth, 10. Laid off in 2002 and in Dec., he goes to GetWorks, a church-based support group.

One in an occasional series

Every morning about 5 o'clock, former equity analyst Bob Niemeyer backs out of his driveway, turns the corner past the country club, and begins his morning commute.

Working hours before the store opens, Niemeyer hangs sale signs in the menswear department at Macy's in Exton. Finally, last week, Macy's promoted him to a full-time job. He earns $8.50 an hour.

Only three years ago, Niemeyer was bringing home roughly $100,000 a year from his job as an analyst at Glenmede Trust Co.

Then, in June 2006, he was laid off - for the second time in nine years. Since then, the most he earned was $21 an hour at a temporary job.

These days, as economists bleat hopefully about the bottoming-out of the recession, Niemeyer's story provides a tough lesson.

If history is any guide, the 15 million people who are now unemployed will not recover along with the economy. Their loss of earning power is permanent, according to studies that have examined work histories over decades.

Twenty years out, they will be earning 15 percent to 20 percent less than what they would have earned had they stayed in the same job, advancing along with their colleagues.

"They never get back to the earnings level they would have had," said Ann Huff Stevens, an economics professor at the University of California at Davis. She is among a handful of economists around the nation who have examined this trend.

Her research is based on a University of Michigan data set of 5,000 families tracked since the 1960s.

Cheryl Spaulding has her own data set - more than 3,000 unemployed people, including Niemeyer, who have joined Joseph's People.

Joseph's People, a support group for the unemployed, began in 1995. The group Spaulding helped start at St. Joseph Church in Downingtown has spawned a network of related groups in suburban churches.

"Nobody is going to work anywhere for 30 years and get a gold watch," she said.

"The person who loses a high-level job will [eventually] get a job in their field, but it will be at a lower level, and they'll be paid one-third less," she said. "It's the rare individual that makes it back to where they were."

In 2002, as employment stalled in another economic downturn, John Hamilton of Downingtown joined Joseph's People. So did Lisa Compton of Exton. Darryl Knaub drove in from Springfield, Delaware County, when he was laid off that same year.

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