These Trying Times : The Stormy Economy Shatters Lives and Scatters Dreams

Judy Cejka takes her place in line at the Long Beach unemployment office at 10:40 a.m. It will be noon before she gets to the front. There is a cockroach climbing the wall behind her and a single job brochure posted on the bulletin board: cook foreman at a federal prison, $28,000 a year.

Most economists say the recession is bottoming out and the nation will begin to recover by Christmas. But from where Cejka is standing this Monday morning--a 40-year-old executive secretary out of work for the first time since she was 17--the road to prosperity looks long and depressing.

“I don’t belong here,” Cejka groaned. She had accused her boss of sexual harassment and left her job three months ago. “I’ve subscribed to three newspapers for the want ads. I’ve sent out 20 resumes and I haven’t had a single interview. I didn’t think it would be this hard.”

The recession that swept the nation last summer has cut a tornado’s path in Long Beach and the county’s Southeast cities, destroying some lives but barely touching others.

It has wracked the aerospace industry with more than 5,000 employee layoffs in Long Beach and Huntington Beach since last May. It has shut down 10 auto dealerships, a pillar in the Southeast economy, and it has sent unemployment soaring to an average 7.6% in Southeast-area cities--the highest first quarter in five years. Welfare lines are longer, new housing starts during a recent three-month period were down a staggering 76% and sales have been slumping from the neighborhood hardware store to the regional mall.

Small businesses have gone bankrupt. Factories that employ largely unskilled workers in some of the county’s poorest towns have shut down. Virtually every business has tightened its belt, whether out of need or fear.

Thousands of laid-off workers have been dumped into the tightest labor market in a decade. Cities already struggling from a lack of funds are facing even tougher times, eyeing everything from public restroom maintenance to library books for places to cut. Public health clinics stretch to accommodate jobless patients who have no health insurance, and some school districts are considering mass layoffs for the first time ever.

Even those whose jobs are secure have felt the ripple--the business traveler whose expense account is restricted, the corporation now charging for office coffee that used to be free, the family that wants to buy a bigger house but can’t sell the one they own.

“It’s a terrible way to survive,” laments Carmen Koosa, an automobile dealer who was forced to lay off 14 people at his Downey dealership, and to cut salaries and take over management of his Santa Fe Springs location. His dealership in Bellflower was shut down entirely early this year, putting 63 people out of work.

The Victims

They are a sad parade of the recession’s victims, filing in to take a seat in the beige chair next to the beige desk occupied by Susan Knox, placement interviewer at the Long Beach unemployment office.

It is a cavernous, colorless room where people go for help. What they find is minimal. The maximum unemployment insurance is $210 a week; the minimum is $40. The benefits are scarcely enough to support the most frugal lifestyle, and they run out after 26 weeks anyway. The few jobs available are typically truck driver, pipe fitter, clerical worker, maintenance staff.

Chris Ortega, dressed in a pink shirt and beige tie, his hair combed neatly to one side, takes a seat. Fifteen months ago, he was a marketing clerk at Long Beach Transit earning $1,500 a month and living in an apartment blocks from the beach. Then a job for which he had been groomed was eliminated. With no place to move up, he resigned and took a vacation in Europe. He came home to an economy in recession.

In more prosperous times, Ortega’s resolve to leave for something better might be called spunk. But months of fruitless job hunting has a way of breaking young ambition. At 28, he is living with his parents again. To get by, he has sold off pieces of his vintage comic book collection. His temper is short, his self-esteem in ruins.

“It was reckless and foolhardy in retrospect,” Ortega says, lowering his eyes. “I am humbled, majorly humbled. If they were to ask me back to my old job this afternoon, I would go at half the wages.”

The number of jobless people in the Long Beach/Southeast area is even worse than the 7.6% unemployment rate reflects. That figure does not include thousands of people whose 26 weeks of benefits ran out before they found work. Nor does it count the homeless.

The hunt for work is a scramble. When a $20,000-a-year clerical job attracts a flood of applicants, employers can afford to be choosy. Firms that used to train new employees are content to wait weeks for the perfect applicant to come along. Laid-off aerospace workers are taking jobs at half their former pay and prestige, competing with recent college graduates for even entry-level positions, employment experts report.

“One week we ran two ads for employment and got 50 phone calls,” said Jill Wertz, branch manager of Adia Personnel in Santa Fe Springs. “I have places for five people, not 50.”

Jack Voss, a Westchester building engineer, sent out nearly 800 resumes and contacted 25 headhunters without finding work. Xavier Rodriguez, a Lakewood financial planner in his mid-40s, broke down and cried when recounting how he applied to firms without success. He even dyed the gray in his hair to make a better impression at interviews.

“I’m 43 years old and I have all this experience,” Rodriguez said, glumly watching a swarm of applicants at a Lakewood job fair. “I get laid off and they hire new kids right off the street.”

In frustration, highly trained computer programmers and aircraft engineers are settling for less. A handful of layoff casualties at Douglas Aircraft, a McDonnell Douglas division in Long Beach, applied at the nearby McDonald’s restaurant for counter jobs. (Each withdrew when told the job pays about $5.50 an hour, a manager there said.)

So stiff is the competition for even menial jobs that some employers seem callous, interviewing scores of applicants and never bothering to call most of them back.

Alan Dybas, a 39-year-old computer programmer, spent 15 months looking for work in his field after he was laid off from a Signal Hill propane gas company. He finally applied for a job at a local mortuary picking up bodies. It paid a fraction of the $40,000-plus salary to which he was accustomed.

They turned him down.

“They said they needed someone with experience. What is there to picking up dead bodies?” Dybas scoffed. “It’s an employer’s market. It used to be that they would let you know--you got the job or you didn’t. Now they don’t even call. They don’t send a letter. It makes me disgusted.”

The fallout is worse than financial. People who have lost their jobs and those afraid they might describe a kind of stress that is changing their very personalities. Lethargy takes over. Depression sets in. Marriages strain from arguments about money.

Over and over, people out of work describe a feeling of worthlessness, of going to sleep on Sunday night with no reason to get out of bed Monday morning.

“I’m cranky. I have zero patience,” Judy Cejka said, inching toward the front of the unemployment line. “Sometimes I’m afraid to go back out there.”

Few seem to escape it. Even those secure in their jobs report they are changing their spending habits, postponing vacations, eating at less-expensive restaurants.

“We see the person down the street who lost his job or we hear reports on the news and we say, ‘Gee, that could happen to me,’ ” said David Stewart, a consumer psychologist and marketing professor at USC. “We think: ‘Maybe I ought to prepare for that. Maybe the car I’ve got will last another year.’ ”

There are jobs, employment experts say, but most of them go to the applicant willing to change careers and take a substantial pay cut.

Chris Ortega, the Long Beach Transit worker who has been job hunting for more than a year, discovered at his recent unemployment interview that the city parks department is hiring for the summer. The jobs range from $4.35 to $11 an hour. He left for home with a pink flyer, full of hope.

The Numbers

Hard times spread like a virus when the country is in recession. The factory lays off 1,000 workers; the workers stop dry-cleaning their uniforms; the dry-cleaner cuts back on solvents; the solvents plant cancels plans to expand; the contractor puts off buying a fleet of new trucks; the truck dealer lays off 50 more people. . . .

As a result, businesses nationwide are failing at an alarming rate. Bankruptcies shot up 54% in the first quarter of this year over last, according to Dun & Bradstreet Corp. in New York.

In the Southeast cities, 13 companies shut down, moved or laid off more than 100 people between July and December of the past year, according to the Southeast Los Angeles County Private Industry Council.

That translates to a graveyard of shuttered industries--a cosmetics manufacturer, a bullet factory, a meatpacker, a foundry, a factory that made kitchen oven mitts. Their demise has left hundreds of already poor people unemployed, typically Latin immigrants with at least two children and little or no command of English.

“Instead of $5 an hour, the laborer will get $4.25 an hour, then $3.25 an hour and there will be nothing he can do about it,” said Manuel Pastor, professor of economics at Occidental College in Los Angeles. “These people are all living at the margin anyway, so what they will be cutting will be severe--food and clothing.”

Companies expect to hire 10% fewer college graduates in 1991, reports the Collegiate Employment Research Institute in Michigan. Several firms that regularly recruit from Whittier College say they have no plans to hire, an official there said.

As corporations tighten their belts, so do consumers. Spending at Los Cerritos Center in the first three months dropped 10% below a year ago. Half the cities in the Southeast posted declines in precious sales tax revenue in the fourth quarter last year, and others recorded gains that failed to match the inflation rate of 6.1%.

Many firms declared hiring freezes, and turnover came to a halt. People with jobs tended to stay put. The local housing market sat virtually paralyzed--the sale of homes and condominiums during the first three months of this year were the lowest in three years. (In Artesia, Bellflower and Cerritos, 112 condominiums sold in the first quarter of 1990. A year later, sales totaled 69.)

The slump drove some agents out of the business. Two brokers closed their offices in Long Beach as the market hit bottom. Memberships at realtor boards in Long Beach and the Cerritos area dipped about 10%, although officials report that agents are coming back to the fold as home sales begin to pick back up.

Although few businesses have escaped the recession’s clutches, some appeared to succeed in spite of it.

In Whittier, 25 new stores and restaurants opened within the past year. Some, like the 1950s-style diner Rocky Cola, have lines out the door, their success likely the result of pent-up demand ever since the October, 1987, earthquake left much of the town’s commercial district in rubble.

In Montebello, homes priced under $200,000 sold briskly while bigger ones in fancier areas stagnated.

But successes like those seemed rare. In most cases, big businesses are trimming the fat while the small ones cut to the lean.

In the plush hotels of downtown Long Beach, room occupancies are down 4 percentage points--virtually the entire profit margin--as companies restrict business travel. Hotel sales managers are competing fiercely for business, offering ultra-cheap rates and generous packages. “They have quotas to hit. If they can’t bring in X number of room nights, they are history,” said an industry expert who declined to be identified. “There are people worried about getting canned tomorrow.”

And in Compton, Fred Cressel has owned Cressel’s Stationers since 1966, but his business is down 35% over last year. Orders from the city of Compton and the school district, both financially strapped, have virtually dried up.

Every time a business goes belly up, or two offices consolidate to save money, Cressel’s sells fewer pens, file folders, staplers and desks. He has cut his store hours and laid off one of only two non-family employees.

“It made me feel bad. She had to go on unemployment,” Cressel said of the woman he let go. “She had a family.”

The Public Sector

The recession is clearly not the only cause of all of these woes. It is more like the bully who kicks a guy when he is down.

The Southeast cities were some of the poorest in the county well before the economy went bad. The people of Cudahy, for example, were already earning an average of less than $7,000 a year, making that city one of the poorest in the state.

And other local municipal budgets are stretched near breaking from declining sales tax revenues. Tens of thousands of residents are living on the edge, working two or three jobs to make ends meet, if they work at all.

For the hobbling public sector, the recession has not made things any better.

The city of Long Beach is looking at a $21-million deficit this year, and is threatening to cut the police force for the first time in memory. As many as 12 police officers and 20 firefighters could be laid off, with more lost through attrition.

Long Beach already has scaled back public library services, public restroom maintenance, after-school sports programs and senior citizen activities. Many city buildings are in disrepair, street and tree maintenance will suffer, cultural programs will be slashed and the quality of life in general will deteriorate dramatically without new revenues, some officials warn. The City Council now faces the thorny choice of sacrificing vital services or imposing what could be unpopular new taxes.

So strapped for funds is Compton that city leaders are thinking of abolishing the local Fire Department. The residents of Bell were forced to start paying for trash pickup when the city decided it could no longer afford it.

As layoffs mount and businesses fold, the newly unemployed line up for public assistance. At the Bell Gardens Human Services Assn., which gives government-subsidized food to the needy, 377 people came in January to get a free bag of groceries. In March, 698 came.

The demand for service at the county’s 48 public health centers is up 5% over last year--100,000 more visits a year in a system already stretched beyond its limits. Patients wait up to four weeks for an appointment; the wait to see a doctor or to fill a prescription is typically two hours long, health officials say.

The Montebello Unified School District faces possible bankruptcy, although not all of its problems are recession-related. Just to meet its June payroll, the district must rely on the sale of $7.5 million in bonds. In addition, the school board last month approved $19 million in budget cuts for next year and expects to lay off about 200 employees.

The ABC Unified School District is targeting school nurses and librarians for possible layoffs.

“I’ve never seen this before,” said Carol Smetzer, regional coordinator for Catholic Charities in Long Beach, which had to lay off a case worker last month. “Most clients who come in are newly laid off--a lot of professional people. So many people who are able to work but can’t because there are not enough jobs or the jobs that are there pay minimum wage.”

The Future

The average national recession lasts 11 months, experts say, and this one is in month No. 10. Everyone wonders when it will finally end, but the signals are annoyingly mixed.

Officials report that the unemployment rate has dropped slightly, but claims for unemployment insurance are up. Real estate agents say prospective buyers are house hunting again, but sellers are turning down rock-bottom offers.

Economists believe the decline is slowing and recovery will come within several months. But the healing will be halting and measured, nothing like the rebound of 1982.

When the end comes, it will be none too soon for Xavier Rodriguez, the financial planner who was laid off 10 months ago and has since applied with 239 companies.

“People have told me you have to think positive and everything will work out,” he said, nervously clutching his appointment card for an interview at the county coroner’s office, his worn copy of “The Knock ‘Em Dead Book--Answers to the Toughest Interview Questions” at the ready.

In the meantime, he has taken a job working for commission, recruiting members for the Santa Ana Chamber of Commerce. It is beneath his skills and it does not pay enough. But when he wakes up in the morning, he has someplace to go.

Community correspondent Susan Paterno contributed to this story.

Next Sunday

RECESSION DEPRESSION--The pocketbook is not the only place where people feel the pinch of a recession. For many, losing a job or the threat of losing a job causes a great deal of anxiety and stress. Fear, anger and frustration manifest themselves during an economic slump as surely as longer welfare lines and sluggish retail sales.

AEROSPACE BLUES--No one is having a more difficult time finding work these days than aerospace workers. Engineers, technicians and others are scrambling for jobs and many are finding that it is difficult to break into other fields because aerospace workers are often viewed as overpaid and overspecialized.

RECESSION IN LONG BEACH: A SPECIAL REPORT

The nation’s recession has dealt cities in Southeast Los Angeles County a solid blow. Aerospace layoffs number in the thousands, assembly lines in manufacturing plants are grinding to a halt and auto dealerships are shutting down for lack of sales. Even those workers whose jobs are secure appear to be economizing, afraid the recession’s virus might infect them next. As the indicators below show, retail sales are sluggish, welfare lines are longer, unemployment has risen in every city and home sales have dropped. Today we begin an occasional series about the recession’s impact in the Southeast.

Spending

Consumer spending was off. Gross retail sales in the area were down almost 1% in the fourth quarter of 1990 compared to 1989. That presages sales tax woes for local governments. Oct.-Dec. ‘89: $3,604,776,000 Oct.-Dec. ‘90: $3,571,223,000 % change: .9 Source: Hinderliter, de Llamas & Associates

Employment

The unemployment rate in the Southeast and Long Beach areas surpassed the countywide rate of 7.4% in February, and had climbed 3 percentage points compared to February of 1989. Unemployment Rate: ‘89: 4.6 ‘91: 7.6 Employed: ‘89: 668,854 ‘91: 696,722 Unemployed: ‘89: 32,435 ‘91: 58,103 Source: California Employment Development Department, Employment Data and Research Division

Public Assistance

As unemployment increased, so did the number of people seeking government help to make ends meet. The Southeast and Long Beach areas saw increases in the number of people receiving Aid to Families with Dependent Children, General Relief and Food Stamps. The figures compare September 1989 and December 1990. AFDC: ‘89: 129,133 ‘90: 140,760 General Relief: ‘89: 7,938 ‘90: 8,559 Food Stamps: ‘89: 17,411 ‘90: 19,830 Source: L.A. County Department of Public Social Services

Home Sales

Nervousness about the economy stalled home sales, with the number of single-family homes sold dipping in the last year. The median price, however, remained fairly stable.. 1st Qtr Median Price: ‘90: $156,280 ‘91: $154,130 1st Qtr Sold: ‘90: 4,044 ‘91: 2,913 Source: Dataquick Information Systems

Employment

Some of the hardest-hit industries are based in the Long Beach/Southeast area and unemployment has skyrocketed. In February, joblessness in more than half of the Southeast cities surpassed the county’s rate of 7.4%. In six of those cities, unemployment rates zoomed into double digits.

City Employed Unemployed Rate 89/91 89/91 89/91 Artesia 7,227/7,529 231/413 3.1/5.2 Bell 11,234/11,703 626/1,120 5.3/8.7 Bellflower 29,823/31,068 1,318/2,357 4.2/7.1 Bell Gardens 11,910/12,407 932/1,666 7.3/11.8 Cerritos 30,158/31,417 657/1,175 2.1/3.6 Commerce 4,500/4,688 255/456 5.4/8.9 Compton 30,944/32,236 3,143/5,622 9.2/14.9 Cudahy 6,355/6,621 561/1,004 8.1/13.2 Downey 47,427/49,407 1,772/3,170 3.6/6.0 Hawaiian Gardens N/A N/A N/A Huntington Park 20,476/21,331 1,470/2,630 6.7/11.0 Lakewood 42,688/44,470 1,578/2,822 3.6/6.0 La Mirada 23,471/24,451 918/1,643 3.8/6.3 Long Beach 186,782/194,578 8,312/14,866 4.3/7.1 Lynwood 20,565/21,423 1,381/2,469 6.3/10.3 Maywood 8,915/9,287 592/1,058 6.2/10.2 Montebello 27,799/28,959 1,116/1,995 3.9/6.4 Norwalk 41,735/43,477 1,963/3,511 4.5/7.5 Paramount 15,627/16,279 1,000/1,789 6.0/9.9 Pico Rivera 25,257/26,311 1,358/2,429 5.1/8.5 Santa Fe Springs 7,222/7,523 372/666 4.9/8.1 Signal Hill N/A N/A N/A South Gate 30,152/31,410 1,581/2,828 5.0/8.3 Whittier 38,587/40,197 1,299/2,323 3.3/5.5 SOUTHEAST 668,854/696,722 32,435/58,103 4.6/7.6 COUNTY 3,982,770/4,149,000 183,949/329,000 4.4/7.4

Source: California Employment Development Department, Employment Data and Research Division

Public Assistance

Three principal welfare programs administered by Los Angeles County are Aid to Families with Dependent Children (AFDC), General Relief and Food Stamps. AFDC is paid to parents of minor children. General Relief is a $312 monthly payment that goes to single adults who do not qualify for other forms of government aid. Food stamps are usually issued in conjunction with the other welfare programs. During the last four months of 1990 more Southeast and Long Beach-area families were on welfare than a year ago, although the increase was not as great as it was in the county as a whole.

AFDC General Relief Food Stamps City ’89 ’90 ’89 ’90 ’89 ’90 Artesia 548 627 10 13 69 77 Bell 2,965 3,527 153 200 456 585 Bellflower 2,932 3,248 91 203 359 387 Bell Gardens 4,983 5,427 188 205 908 1,153 Cerritos 487 599 23 51 51 66 Commerce 961 1,048 67 104 227 272 Compton 17,691 19,280 1,086 1,774 1,820 2,284 Cudahy 3,065 2,737 84 90 546 558 Downey 2,812 3,418 136 132 390 462 Hawaiian Gard. 1,012 1,151 18 32 199 329 Huntington Park 4,900 5,160 361 403 936 1,071 La Habra Hts. 10 19 0 0 0 0 Lakewood 2,114 2,006 89 68 292 294 La Mirada 717 784 9 24 55 68 Long Beach 45,505 50,112 3,854 3,139 4,776 5,108 Lynwood 6,436 7,214 549 514 1,063 1,199 Maywood 2,440 2,605 135 132 558 567 Montebello 4,690 5,106 337 432 755 944 Norwalk 4,653 5,591 124 207 658 844 Paramount 4,389 4,502 102 160 777 973 Pico Rivera 4,553 4,485 148 203 620 586 S.F. Springs 1,141 1,202 15 17 109 65 Signal Hill 906 882 25 28 88 122 South Gate 6,516 6,961 270 318 1,310 1,424 Whittier 2,707 3,069 64 110 389 392 SOUTHEAST 129,133 140,760 7,938 8,559 17,411 19,830 COUNTY 555,341 638,987 48,898 56,378 78,707 91,520

Figures are estimates from September, 1989, December, 1990

Source: Los Angeles County Department of Public Social Services.

Consumer Spending

The following figures show the taxes collected from retail sales in each city and paid to the state in the last three months of the year. Because they directly depend on overall retail sales, sales taxes serve as a good gauge of consumer spending patterns, Inflation, as measured by the consumer price index, was 6.1% in 1990, so any year-to-year increase of less than that reflects a decline, in real terms, of consumer spending. The State Board of Equalization returns 1% of the sales tax revenue collected in each city to that city’s government.

Oct.-Dec. Oct.-Dec. % change City 1989 1990* Artesia $32,746 $36,962 12.9 Bell 28,787 43,675 51.7 Bell Gardens 32,753 33,994 3.8 Belllflower 97,556 97,891 0.3 Cerritos 363,278 381,065 4.9 Commerce 302,317 286,978 -5.1 Compton 103,893 98,699 -5.0 Cudahy 19,940 21,738 9.0 Downey 226,797 214,149 -5.6 Hawaiian Gardens 15, 976 16,670 4.3 Huntington Park 81,365 71,231 -12.5 La Mirada 86,168 81,941 -4.9 La Habra Heights 1,600 1,957 22.3 Lakewood 194,851 187,583 -3.7 Long Beach 635,933 680,763 7.0 Lynwood 41,503 47,060 13.4 Maywood 17,919 16,845 -6.0 Montebello 154,544 182,934 18.4 Norwalk 168,882 181,254 7.3 Paramount 108,131 96,138 -11.1 Pico Rivera 112,352 100,236 -10.8 Santa Fe Springs 405,297 340,374 -16.0 Signal Hill 121,020 124,404 2.8 South Gate 119,441 108,707 -9.0 Whittier 160,514 161,650 0.7 Totals 3,604,776 3,571,223 -0.9

* - Preliminary

Source: Hinderliter, de Llamas & Associates

Home Sales

Sales figures show a jittery real estate market with a 27% drop in the number of single-family residences sold in the first quarter of 1991 and a 48% drop in condominiums sold. Home prices in Cudahy and Maywood rose, but in neighboring Bell Gardens, Long Beach, and other cities that line the 710 Freeway, prices dropped. Though some area realtors say homes under $200,000 are selling briskly, the figures show that the sales of homes and condos slowed in general.

Zone 1: Maywood, South-Central Los Angeles

Zone 2: Commerce, East Los Angeles, Montebello, Vernon

Zone 3: Bell, Compton, Cudahy, Huntington Park, Lynwood, South Gate

Zone 4: La Habra Heights, Pico Rivera, Santa Fe Springs, Whittier

Zone 5: Artesia, Bellflower, Bell Gardens, Cerritos, Downey, La Mirada, Norwalk, Paramount

Zone 6: Hawaiian Gardens, Lakewood, Long Beach, Signal Hill.

Single-Family Homes

1Qtr 89 1Qtr 89 1Qtr 90 1Qtr 90 1Qtr 91 1Qtr 91 Zone $ Median Sold $ Median Sold $ Median Sold 1 $105,000 682 $124,000 767 $127,000 588 2 $144,000 212 $161,000 166 $156,000 130 3 $115,000 870 $126,000 977 $127,000 665 4 $146,000 562 $168,000 488 $172,000 357 5 $167,000 936 $190,000 783 $183,000 548 6 $190,000 952 $206,000 863 $188,000 625

Condos

1Qtr 89 1Qtr 89 1Qtr 90 1Qtr 90 1Qtr 91 1Qtr 91 Zone $ Median Sold $ Median Sold $ Median Sold 1 $105,000 20 $125,000 23 $143,000 12 2 $78,000 24 $93,000 31 $116,000 11 2 $101,000 18 $130,000 27 $113,000 9 4 $105,000 29 $125,000 43 $134,000 28 5 $100,000 99 $130,000 112 $129,000 69 6 $115,000 146 $123,000 197 $124,000 118

Source: Dataquick Information Services