Saturday, October 21, 2000
Job market 'churning'
Demand high despite cuts
By John J. Byczkowski
The Cincinnati Enquirer
From his desk as director of the state's employment services offices in Northern Kentucky, Jim Clay can tick off a list of big layoffs he's seen recently.
At Clarion Manufacturing in Walton, 200 jobs were lost as production moved to Mexico. In Hebron, 100 jobs were lost at a Nine West factory. In Newport, 425 were lost from Starkist. In Covington, 500 were lost from Gibson Greetings.
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LAYOFFS
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American Greetings Inc. is closing a former Gibson Greetings distribution operation in Covington, putting 200 out of work. It's also cutting 300 jobs at a former Gibson office in Covington.
Hasbro Inc., which acquired Kenner Products in 1991, will shut what remains of the toymaker here and eliminate 325 full-time jobs later this year.
International Paper, which acquired Champion International in June, is shutting an office complex in Hamilton, eliminating 350 jobs.
Nine West Group is shutting a distribution center in Madisonville later this year, eliminating 144 jobs.
Harte-Hanks Inc., the Oakley direct marketing firm, began laying off 82 employees at its Cincinnati plant this month.
Alliance Laundry Systems will eliminate 130 jobs in Norwood and consolidate them into an existing plant in Florida, completing the cuts early next year.
Phoenix International Life Sciences, which received job-creation tax incentives to occupy the former Emerson A. North hospital in College Hill, is closing, eliminating 172 jobs.
Trinity Industries, a maker of truck trailers in Mount Orab, cut 310.
Heinz Products' Starkist division moved out of Newport, taking 425 jobs with it.
Clarion Manufacturing Corp. of America closed its Walton plant this year, cutting 83 jobs.
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INFOGRAPHIC
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In the past 12-14 months, downsizings have cost us somewhere between 2,400 and 3,000 jobs in Northern Kentucky, he said.
But in the next breath he ticks off the list of Northern Kentucky employers who have been hiring: Fidelity Investments, Interactive Marketing, The Gap, Levi Strauss, Arvin-Meritor.
Things are moving fast over here, and we're trying to get these people re-employed as fast as we can, he said. We're not experiencing a lot of trouble getting people back into the work force.
The pace of layoffs is rising in Greater Cincinnati, even as the local economy overall continues to add jobs. New unemployment claims rose at a double-digit pace through summer, with August's claims up 23 percent compared to a year earlier.
How long will it last? Global factors rising energy prices, a weak euro and overstocked warehouses are hurting many industries. Locally, many job reductions have been the result of mergers, and those in construction describe a lull between big projects.
The American economy destroys jobs in one place and creates them in another. Nationally, the unemployment rate fell to 3.9 percent in September from 4.1 percent in August, and the work force grew by 252,000.
Still, workers nationally are getting pink slips:
Through August, there have been 9,554 layoff events involving 50 or more workers, affecting 1.1 million jobs, according to the Bureau of Labor Statistics. That represents fewer events than during the same period last year but more workers involved, with durable-goods manufacturing responsible for the increase.
Layoffs in 2000 tracked by the international outplacement firm Challenger Gray & Christmas will fall short of last year's total of 675,132. But they've accelerated in the July-September quarter, up 2.5 percent over the same period a year ago.
Initial unemployment claims bottomed out at 258,000 the week of April 14, but have been rising since, and are now steadily above 300,000 a week.
Locally, Greater Cincinnati added 13,600 jobs in September, but job growth is slowing. Unemployment claims are up, and Cincinnati's help-wanted advertising index plummeted to 75 in August from 109 in July.
Regardless, the numbers don't add up to trouble for the economy, said Gail Fosler, economist at the Conference Board in New York. There's a tremendous amount of churning that goes on in the labor force, she said. Though new jobless claims total 300,000 a week, that's still very low. The best week in the 1980s expansion was 295,000 new claims, she said.
What we have seen in the earlier part of the year is the lowest point in unemployment insurance claims in the last 20 years. The fact it went below 300,000 is significant, she said. The fact it's back above 300,000 doesn't ring any alarm bells.
Manufacturers, however, have cut 149,000 jobs from July to September. Gordon Richards, chief economist at the National Association of Manufacturers in Washington, cited three factors:
A falling euro, which makes American exports more expensive in Europe.
Built-up inventories.
Rising energy prices.
When oil prices rise, manufacturers are faced with higher costs, typical response is to cut costs in other areas, he said.
Donna Georgyi, who heads the Hamilton office for Ohio Employment Services, said she's seeing a lot of temporary layoffs due to higher fuel prices, particularly in transportation. She said she believes with many companies' profits falling, they're cutting back workers to make profits look better at the end of their fiscal years.
And, construction claims seem to be up a little right now, partly as activity slows toward winter, but also as big projects are ending, she said.
Joe Zimmer, executive secretary of the Greater Cincinnati Building Trades Council, agreed there's a lull in construction right now. That's a function of the stadium (Paul Brown Stadium) having gotten done, he said.
But next year work ramps up on Great American Ball Park and some $700 million in work at Cinergy Corp. power plants, so there's just a tremendous amount of work in the area generally, he said.
Mr. Clay, in Covington, said job demand remains high despite the layoffs. Where workers once spent 18 to 20 weeks between jobs, today it's half that. In addition, a lot are able to find work at 80 percent of what they were making, and will get back to what they were making before, he said.
A lot of companies are looking for administrative assistants, secretaries, accountants, technological backgrounds, marketing people, he said. There's always a market for those folks in this area. And there is training money available for certain of these folks who need to be retrained to get back into the market.
One downside: His office's funding is tied to the unemployment rate, which has been dropping. That means he has fewer resources to deal with the uptick in layoffs.
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