Loss of Job in Orange County Often Devastating

Times Staff Writer

Just back from vacation in October, Gil Banfill played the messages on his telephone answering machine. A woman from his employer’s personnel office asked what he wanted to do about his pension fund.

Banfill, 53, returned her call and learned that the Irvine computer memory disk plant where he worked had been closed the previous week. After 5 years with Xidex Corp., his job was gone.

Three months after the plant closing, Banfill is still making the rounds of prospective employers. So far, he has received only one offer, a late-night factory job paying $6 an hour. Banfill, who made nearly $11 an hour at Xidex, turned it down.

“When I’m out looking, I see others too,” Banfill said recently. “When I put in an application yesterday, the place was full.”


Like many other laid-off workers in Orange County, Banfill is caught in an economic squeeze: unable to qualify for jobs that pay as much as he had been earning and unable to afford to take the lower-paying jobs for which he qualifies.

With its thriving economy and 2.9% unemployment rate--so low it is considered “full employment” by economists--Orange County has jobs to spare. But many are unskilled assembly or service positions paying about $5 an hour.

The difficulties faced by the Orange County residents classified as unemployed and actively looking for work is compounded by the area’s escalating housing expenses and high cost of living.

According to economists and employment experts, Orange County’s unemployed typically hunt for 2 or more months in an often unsuccessful effort to find comparable jobs.

And in the end, many find themselves sliding down the economic ladder into lower-paying, less-skilled positions.

Assistance Program

The plight of the unemployed “is a side of Orange County that you won’t see in tourist brochures,” said Bill Fogarty, who runs a displaced worker assistance program for the Orange County Central Labor Council.

Higher-paid manufacturing jobs account for a shrinking percentage of overall employment in Orange County, while lower-paid service jobs are proliferating in such sectors as retail, hotels and restaurants.

What’s left of the manufacturing base is shifting from traditional “low-tech” assembly jobs to high-tech assembly lines requiring different skills than those possessed by many unemployed workers.

“There is a big expansion of jobs in Orange County at both the top and the bottom of the pay scales,” said Allen J. Scott, a UCLA professor who has studied the effects of a changing industrial base in Southern California.

Many casualties of plant closings are unskilled or semiskilled workers whose former jobs paid from $7 to $12 per hour, Scott said. While other jobs may now be available, the pay often is too low to allow them to earn a comparable living.

During the 12 months ended in June, 1987, the 90,854 jobs posted at EDD offices in Orange County offered wages averaging $5.36 an hour. That amounts to $11,149 a year, or less than the official poverty level of $11,650 for a family of four in California.

According to the Orange County Social Services Agency, in order for a typical welfare family in the county to become self-sufficient, the breadwinner must earn at least $7.90 an hour, or $16,432 a year.

The crunch is compounded by Orange County’s sky-high housing prices, which have increased at a far faster rate than prevailing wages. According to the Apartment Assn. of Orange County, average rent for one-bedroom apartments in newer complexes is $806 a month, or $9,672 a year.

“We have a special problem in Orange County,” said Harriet Fox, assistant manager of the EDD office in Santa Ana. “While the price of housing is exceptionally high, the growth of service industries such as retail and restaurants is creating a lot of low-paying jobs.”

Wages paid for many production and assembly positions have been held down in part by a huge influx of immigrant labor into Orange County.

“Anyone coming into the market from a job at $8 an hour is going to have to compete with immigrant labor, which often is able to make do with lower wages by pooling family incomes and living quarters,” Scott said.

And in an area where the high cost of living makes two-worker households a necessity and savings a luxury, the loss of a job can lead to financial disaster more quickly than in other parts of the country.

Workers who are obliged to depend on unemployment insurance, which in California provides a maximum of $166 a week for up to 26 weeks, often have to dip deeply into savings to make ends meet while hunting for a new job.

“Because so many in Orange County are living over their heads, if they lose their job they soon will face the bill collector and (then) the loss of their homes, cars and families,” said Fogarty, the labor council program administrator. “It has a domino effect.”

The emotional toll of a job loss can be devastating, said Fogarty, who recalled that a year ago he recognized a gaunt middle-aged man among the homeless people waiting in line for a night’s shelter at the Santa Ana Armory.

The man had held a $25,000-a-year job at the Voit rubber plant in Santa Ana before the plant closed in 1983, Fogarty said. But in the intervening years, he had been unable to find work, lost his house and family and suffered a mental collapse.

To some extent, the experiences of the unemployed in Orange County reflect economic changes affecting the entire nation.

Despite the longest peacetime economic expansion in the country’s history, nearly 10 million Americans were victims of plant closings and layoffs from 1983 to 1988, according to a recent study by the Bureau of Labor Statistics.

Of 4.7 million people who had worked at least 3 years for their former employer, 70% had found new employment by January of last year, the study said. But only half managed to match their previous incomes, and one in three took pay cuts of 20% or more.

More Changes Expected

The trend is expected to continue as corporate America restructures itself to become more competitive in the world marketplace.

“I do believe the average American laborer is in for a lot of pain,” said Ray Catalano, a professor of social ecology and management at UC Irvine. “I think the age of the job with good benefits and some security is pretty much gone.”

Some unemployed workers participate in retraining programs in order to update their job skills or prepare for a new occupation.

But many can’t take advantage of free vocational instruction provided by government-subsidized programs because they can’t afford to keep paying household bills during the months of training.

After 2 months or so of searching, employment officials said, unemployed workers usually start feeling pressured by financial obligations. When their unemployment benefits are exhausted, they begin accepting jobs that pay considerably less than they previously earned.

Those who had put in many years with their previous employers tend to take the biggest cuts, employment experts said, because the company-specific knowledge they acquired is not valued by new employers. Many must start over at entry-level positions.

The outlook for casualties of future plant closings in Orange County is not rosy, UCLA’s Scott said.

Jobs are available, he said, so long-term unemployment is not the problem here that it is in other areas of the country.

But many of the county’s unemployed eventually find themselves joining an economic underclass of low-paid workers.

Jan Newman, business manager for the International Brotherhood of Electrical Workers local in Santa Ana, said most of the electrical assemblers laid off since last April from a Collins Defense Communications facility in Santa Ana have found it nearly impossible to find jobs with comparable pay and fringe benefits.

Newman said she has received numerous calls from assemblers who are still searching.

“Maybe they are being too particular,” she said. “They want something that isn’t there. And they aren’t willing to settle for less. But they will have to.”

Times staff writer John O’Dell contributed to this report.