Aerospace Layoffs Lead to Chronic Joblessness

In a new study that confirms the worst fears about the human cost of California’s defense slump, UCLA researchers have found that half of the aerospace workers laid off in 1989 were jobless two years later or had left the state.

An additional analysis shows that workers laid off more recently are not faring any better. Just 16% of California aerospace workers laid off over a one-year period in 1991 and 1992 found new jobs quickly, and a third were jobless more than seven months.

The study, the first to track what has happened to aerospace workers who have lost jobs in the unprecedented downturn, found a pattern of chronic joblessness, falling incomes and downward mobility for tens of thousands of workers. A copy of the study, which will be released today, was made available to The Times.

“It is clear that aerospace workers are not going back to new employment,” said UCLA Prof. Paul Ong, who authored the report along with graduate student Janette R. Lawrence. “The state’s economy is in poor shape, so new jobs are not being created and there is not a demand for skills held by displaced aerospace workers.”

Ong studied two groups of workers, one group laid off in 1989 and the other between April, 1991, and June, 1992. He found that 84% of the workers in the later group were unemployed for periods from a few weeks up to a year.

Laid-off aerospace workers in Los Angeles County had the hardest time finding new jobs, but workers in relatively affluent Orange County also had a tough time.

Older workers and engineers seemed to fare the worst. Forty-two percent of workers older than 55 and 41% of engineers faced long-term joblessness, defined as 27 weeks of unemployment.

The study examined unemployment data, tracking individuals to determine how long they remained on unemployment insurance and whether they later found jobs at other California companies. Thus, the study is based on hard data, rather than statistical estimates.

The workers laid off in 1989 were caught in a state economy undergoing wrenching changes. “California is encountering the process of high-wage, high-skill jobs being replaced by low-wage, low-skill jobs,” the study said.

By region, the core of Los Angeles County fared the worst, with 60% of the 1989 group of workers failing to find new jobs or leaving the state. In Orange County, 56% of workers did not reappear on the job rolls.

About a third of the workers laid off in 1989 found new jobs, but their earnings dropped 33%, to an annual average of about $22,000. For the Orange County workers, about 29% of them found lower wage jobs of less than $18,000 a year.

“They ended up at low-wage firms, in the retailing sector and the service sector, where they often did not have health insurance,” Ong said.

Only 17% of the Los Angeles County workers laid off in 1989 were able to find new aerospace jobs at close to their original wages. In Orange County, 21% of the workers found work in aerospace.

It appears likely that even fewer of today’s laid-off workers will find new aerospace jobs in the state’s biggest manufacturing industry.

California’s aerospace industry lost more than 130,000 direct aerospace jobs through February, 1993, off from a peak of 376,200 jobs in 1988, the study found.

An additional 40,200 jobs in related industries were lost. As a result, the state lost $5 billion in direct wages and $4 billion in indirect wages.

Ong found that Los Angeles County bore 66% of the total losses in California, or 80,200 jobs. The impact varied widely within the county. Van Nuys/Burbank fared the worst, with 41% of the workers laid off starting in 1991 on extended jobless benefits. In Orange County, 28% of the unemployed were on extended benefits.

African-Americans and Latinos suffered above-average layoff rates, the UCLA study found. Latinos represent 14% of the state’s aerospace work force, but accounted for 17% of the 1992 layoffs. African-Americans represent 8% of the work force, but 10% of those laid off.

Ong said the study points to the need for stronger statewide policy to address the problems of the unemployed.

“We think we need to focus on what is happening to workers as much as what is happening to the industry,” Ong said. “We do not have a coherent policy. We seem to lack a certain amount of cohesion among our public officials.”

The state is assuming that a conversion of the defense industry will create new employment opportunities for displaced aerospace workers.

“We want to challenge the assumption that you have to just address the demand side of the problem, which will automatically pull workers into jobs,” Ong said. “It is not automatic.”

Other recent studies have also raised troubling questions about how much defense conversion can help the state.

The California Commission on State Finance recently estimated that the state will recoup just 160,000 jobs by the end of the decade, based on the benefits of the peace dividend. That leaves a net loss of 80,000 jobs because of the defense downturn.

Times staff writer Dean Takahashi contributed to this report.