Missing the Boom-Time Bandwagon

After 25 mostly happy years as a salesman and manager in the packaging and food industries, Denis A. Leonhardt suffered a bad jolt in 1996 when he was laid off from a $65,000-a-year job.

Last month, he finally went back to work--as a $13.50-an-hour computer technician.

Leonhardt, 56, who shares a Dana Point apartment with his wife, Diana, said the comedown to a job paying less than half of what he once earned “is hard. Our lifestyle has obviously changed. Someday, I’d like to get back to where we were, but practically speaking, I just don’t see it.”

His story is an example of a phenomenon that economists have identified in studies cutting across industry lines: When workers--particularly employees with long tenure at a single company--are pushed out of their jobs, they usually fall permanently into a lower professional orbit.

The downward mobility is especially poignant for middle-aged “downsizees” now in their 40s and 50s who prospered before losing jobs during the recession of the early 1990s or in the continuing wave of corporate cutbacks. Many built high career expectations during the go-go ‘80s. Now, they are being bombarded with news accounts of how well the economy is doing again, with unemployment down to around the lows of the early 1970s.

But for many of them, the good old days haven’t come back--and, economists say, probably never will.

Leonhardt, an outgoing man with a hearty laugh, sometimes loses his good humor when newscasters talk about the booming economy. “I don’t think much thought has been given to those of us who’ve been downsized, re-engineered or flattened out in the organization,” he said. “Are you supposed to just take another job making half of what you used to make and be happy?”

The downward mobility among middle-aged veterans of downsizings appears to be spreading, experts say, largely because corporate America no longer rewards longevity the way it once did. Employers, instead, are taking a “What have you done for me lately?” approach to pay, promotions and retention decisions, and the result is that some middle-aged workers are losing out.

In coming years, many experts say, employers increasingly will woo older workers to help offset a labor force shortage in the post-baby-boom generation. But for now, “there’s a general prejudice for young blood in this society. There’s a feeling that at some point after 50, you’re less flexible, that you’ll have fewer years of service you can give to employers,” said Neil Smelser, a Stanford University sociologist.

Obsolete Skills

Evidence suggests that the downsizing-related economic losses have been greater for men, who traditionally have been far more likely than women to remain with a single employer for years. One reason victims of downsizing fall behind permanently is that, in some cases, they simply are worth less to their new employers than they were to their previous bosses. They may have had skills or knowledge of the inner workings of their old company that were helpful before but don’t have any value to other organizations.

So, when they go to new employers, “they have to take a loss and start rebuilding skills,” said Yale labor economist Ann Huff Stevens.

In a study published last year, Stevens found that American workers who lost jobs earned 9% less--even six to 10 years after being laid off--than equivalent employees who escaped downsizings.

Displaced workers also often miss out on on-the-job opportunities to develop the latest skills. “You’re not getting the experience of being able to work on projects that have state-of-the-art tools, state-of-the-art computer systems, things like that,” said Jeff Petersen of Santa Clarita, a 46-year-old electrical engineer who was laid off three months ago for the second time in four years.

To be sure, not all of the displaced workers in their 40s and up are suffering. Given the chance to reevaluate their lives and career goals, some laid-off middle-aged workers are happy to take lower-paying jobs that they find more rewarding or less stressful.

Steviann Curtin of North Hollywood found work as a career counselor after losing her position as a bank branch manager in May 1996. The pay for the new job, in the mid-$30,000 level, is more than a third less than she used to earn. Curtin, now 50, said, “I could go out and make more money, but that’s one of the changes [that occurs] as you reach midlife. Earlier, I would have taken the job that paid the most, but now that’s not my priority, and I see that with a lot of people.”

What’s more, in many ways the baby boomer generation is adaptable and well-suited to dealing with job loss. Layoffs are so commonplace that the stigma attached to losing a job has faded. On top of that, baby boomers tend to be less deeply rooted in their communities than their parents were, so “it’s OK to pack up and move to another city” to find work, said Fernando Torres-Gil, who directs UCLA’s Center for Policy Research on Aging. “This is a flexible, hang-loose, ‘We’ll figure it out somehow’ group.”

Former Clinton administration Labor Secretary Robert B. Reich said the recession of the early 1990s “shook up the middle class because it was the first time in the postwar era that white-collar workers took a beating, losing their jobs permanently.” Still, despite the long-term setbacks suffered by many workers, “those with the right educations, skills and connections ultimately got back on track,” said Reich, now a professor of social and economic policy at Brandeis University.

Among the success stories is Peter Rothenberg of Northridge, who two years ago launched a firm that produces videos, illustrations and graphics used by expert witnesses in courtroom presentations.

Rothenberg, 53, spent about 10 years in a variety of production jobs in the cable television field. After being laid off in 1992, he concluded that he was too old to look for another job in the youth-driven entertainment industry. Rothenberg never earned more than $45,000 a year in cable television, and figured he couldn’t compete against younger producers willing to work for less.

So, Rothenberg took a job with a litigation services firm where he could use his production skills again to help expert witnesses and lawyers. Later, he established his own business and now earns more than twice what he did in cable television. What’s more, he is happy to find a field where his age is no longer a hindrance.

“Experience counts,” he said. “Attorneys joke about how they want enough gray hair in the room. They look for people who can hit the ground running.”

Lost in Space

But many others who were displaced in the 1990s have suffered. Rand Corp. researchers who tracked California aerospace workers from 1989 to 1995 found that among the thousands who lost their jobs and then found new work, average wages declined 20%.

That comes as little surprise to Petersen, who never fully recovered professionally after his first layoff four years ago. Back then, he got caught up in a cutback at the Navy contractor in the San Fernando Valley where he worked as a senior design engineer. That interrupted, and perhaps ended, his 18-year career in the defense industry.

After six months of unemployment, Petersen ran out of money, swallowed his pride and took a job as a technician for $42,000 a year with a company that makes high-tech welding equipment. Eventually, he was promoted to a product safety engineering position and his pay climbed to $57,000, just under the peak of $58,000 he earned in the defense industry.

But then, three months ago, a business downturn cost Petersen his job again. This time around, Petersen figures he is savvier about job-hunting and blessed with a better job market. Still, with no solid prospects in hand, he is beginning to get frustrated. “I thought for sure by now I would have something,” he said.

Petersen, who is married and has a 10-year-old daughter, also worries that his age could start working against him now that he’s within a few years of 50. To project a youthful appearance, he has begun dying his prematurely gray hair and is working out regularly to try to trim some flab.

His wife of 17 years, Judy, keeps the family afloat financially with her earnings as a physical education teacher at a church school. Petersen also receives $460 every two weeks in unemployment insurance, a benefit he can receive for up to six months.

Petersen said former colleagues who survived the massive cutbacks in Southern California’s defense industry earlier in the 1990s “have moved up into staff positions or are project managers, and I’m out there quasi-begging, ‘Just give me an engineering job.’ ”

Yet when Petersen compares his lot to that of the worst-off victims of Southern California’s defense industry downsizing, he considers himself fortunate. Some of them, he said, have been out of work for years and haven’t adjusted to the realities of the job market.

“I try to tell them, ‘Hey, wake up. Those jobs may not come back in your lifetime. You have to find something different,’ ” Petersen said.

Leonhardt, for his part, largely lost hope of ever again landing a well-paying sales or management job after his two years of unemployment. Instead, he is focusing on building a new career as a computer technician.

He is optimistic that his income may climb to somewhere approaching his old level once he gets a few years of experience. Still, it’s a far cry from the upward mobility and corporate comforts that once seemed to flow from his hard work.

After completing a stint in the Army in 1962, Leonhardt took a 40-hour-a-week job, a full college course load and helped raise a family of five children.

When he received his bachelor’s degree in business at age 29 and began a career in sales in his native Ohio, Leonhardt recalled fondly, plenty of opportunities came his way. “It was the best time of my life, business-wise, because I had so many job offers,” he said.

These days, the layoff-seasoned Leonhardt no longer has the luxury of a company car or an expense account. In his new job, he sits at a desk all day, taking calls from computer users in need of some quick technical help over the phone.

Although happy to be working again, Leonhardt feels out of place among people just starting their first careers. His co-workers are “kids wearing shorts and with their hats on backward,” Leonhardt said. “This is not my kind of deal.”