Fewer Jobs Likely to Be Lost in Quake Than From Riots

Although thousands of Angelenos remained at least temporarily out of work Thursday, some labor experts predicted that Monday’s devastating earthquake would ultimately cost fewer jobs than the 30,000 lost after the 1992 Los Angeles riots.

Still, state officials said they are preparing for a surge in unemployment insurance claims from workers displaced by the magnitude 6.6 temblor. Since Monday, insurance claims at some state Employment Development Department offices in the San Fernando, Santa Clarita and Antelope valleys have been running up to 30% higher than usual.

One of those in line at the Canoga Park unemployment office Thursday was Julianna Stevenson, 56, who said she didn’t know if she could return to her $8-an-hour sales job at the Vogue Fashion store in Granada Hills, which has been closed for repairs since the quake.

“We can’t reopen, so I’m on my own now,” the North Hills resident said.

However, some larger Southland employers were keeping workers on the payroll, even if their office or factory had been temporarily closed. Other companies were reassigning workers to undamaged facilities in the region or using them to staff emergency centers and cleanup crews.

For example, Great Western Bank said that although it has recalled only 300 of its 3,600 employees assigned to its Northridge office center, it is keeping the remaining 3,300 workers on the payroll. “If they can’t come to work because they have no job site, we’ll continue to pay them normally,” a company spokesman said.

A representative of Carter Hawley Hale, owner of Broadway department stores, said it will keep employees from its six closed stores on the payroll for at least 30 days or until they can be reassigned to other stores. The company said it will also offer its workers merchandise for their quake-damaged homes at wholesale prices to help them get back on their feet.

“A lot of our employees were affected and we’re trying to work with them,” spokeswoman Pat Turner said.

Experts cautioned that it is still too early to make firm predictions about long-term job loss, noting the often erroneous estimates made immediately after the Los Angeles riots. Then, as now, a key issue will be the ability of small- and medium-sized businesses, most of which are not covered by earthquake insurance, to rebuild their damaged offices and storefronts and recall the thousands of employees now out of work.

According to Jack Kyser, economist for the Economic Development Corp. of Los Angeles County, the San Fernando Valley alone is home to 38,000 businesses, nearly 75% of which have fewer than 10 employees. Other communities hit hard by the quake, including Santa Monica and Hollywood, also have a large proportion of small businesses.

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“These smaller businesses are going to be the ones most vulnerable to disruption,” Kyser said, adding that it still is impossible to make a thorough survey of which will be severely affected.

“Vons can tell you how many stores are closed and Unocal can say how many gas stations are out, but when you get into small business, it gets to be terra incognita,” Kyser said.

Some labor analysts argue that many more small businesses affected by Monday’s quake will rebuild in their current locations than did businesses damaged in the riots.

The riots, which stemmed from deep social and economic problems, not only wiped out entire neighborhoods but the spirit to rebuild many businesses. In contrast, a greater number of business victims of the quake are located in economically vibrant areas and are likely to have a greater incentive to rebuild, these analysts say.

Further, because earthquakes can strike anywhere at anytime in Southern California, they do not stigmatize a community in the way that social unrest and violence can.

“Despite the devastation, we aren’t likely to see a full-scale abandonment of Los Angeles as a town,” said Larry Kimbell, director of the UCLA Business Forecasting Project. “This is not a ghost town story. This is not a Chernobyl.”

In fact, Kimbell and other economists are predicting that the job impact of the disaster will be partially offset by a temporary boost in jobs among freeway and other construction workers, just as happened in Florida following Hurricane Andrew in 1992.

But this was no consolation to many workers who have been losing wages all week.

In the Canoga Park unemployment office, Laszlo Koncz, a 51-year-old inspector at the Rocketdyne rocket engine plant, joined dozens of workers filing for unemployment relief.

Koncz said Rocketdyne’s unionized workers, like himself, weren’t being paid until the Rockwell International Corp. unit can get the plant operating again. The plant employs about 6,000 overall.

“I’m here because I can’t make any payments,” said Koncz, his right eye blackened and swollen from a quake-related injury. Koncz, who has worked at Rocketdyne for 12 years, said he has talked to several co-workers in the same predicament, and “they’re still in shock. They have no idea what to do.”

Another Rocketdyne worker, a quality assurance official who asked not to be identified, said he had been making $20 an hour. But after the quake, he said, “We were essentially told, ‘Don’t call us, we’ll call you.’ ”

A Rocketdyne spokesman said salaried workers still are being paid and the company is calling back additional hourly workers every day as it gears up production.

For many workers, unemployment insurance provides only minimal relief from mounting financial woes. The program pays $40 to $230 per week for 26 weeks to employees who are willing and able to work, but are out of a job through no fault of their own. Self-employed workers are eligible for similar benefits through the federal disaster unemployment program, which is also administered by the state EDD.

Another company, defense contractor Whittaker Corp., said it has laid off until March about 150 of the 500 workers once assigned to a heavily damaged Simi Valley factory. The remainder were redirected to the company’s other plants in the region.

Whittaker Controller Ronald Wittman said the company expects the laid off workers to draw on their accumulated sick and vacation leave and then apply for unemployment insurance. “We have one plant that must be substantially rebuilt before employees can return and we can’t afford to keep all the employees on the payroll until then,” he said.

Yet, there also were stories of employees triumphant.

At 20th Century Insurance, whose Woodland Hills headquarters building remains closed, employees fashioned a makeshift office in the company parking lot from a canvas tent and a few tables and began taking earthquake insurance claims from policyholders.

“Our employees have been generous and imaginative,” Senior Vice President Rick Dinon said. “And many of them are victims as much as our customers.”

At the Chatsworth headquarters of retailer Lamps Plus, several hundred workers labored furiously to get the heavily damaged facility repaired and to clear away hundreds of thousands of dollars worth of lamps that instantly became junk when the quake hit, owner Dennis Swanson said. “They’re hauling it away by the truckload,” he said.

Swanson, 47, wearing a T-shirt, tennis shoes and baseball cap, marveled at his workers’ dedication amid the nearly overwhelming emotional upheaval of the past few days. At one point while describing their efforts, he suddenly stopped talking, put his head in his hands and briefly wept. “This is the first time I’ve really had a chance to talk about it,” he said.

Times staff writer Thomas S. Mulligan contributed to this story.