Layoffs and Unemployment and Downsizing and Education & Workforce Development and Workplace Issues

Displaced older workers abandon hopes of landing similar work

September 3, 2007

Indianapolis resident Don Lathan spent 21 years as a computer programmer for a major insurance company before corporate consolidation changed his life. Now he has a part-time gig playing traditional Irish music with his wife, Alberta.

Andy Corman managed large construction projects for two decades before being laid off in 2002. It took him five years to find steady employment--making less money. He's not complaining, though, since his wife lost her job this summer.

"That's the carousel [we're] on," he told IBJ.

They are far from alone. In fact, a growing percentage of men and women nationwide are reaching a career crossroads at a time when most would hope to have it made.

Almost a quarter of the 3.8 million Americans displaced from their jobs from 2003-2005 were 55 or older, according to the U.S. Bureau of Labor Statistics, up from 21 percent in the prior three years.

And about a third of those older workers have dropped out of the labor force altogether rather than face starting over--a phenomenon that skews unemployment figures and accelerates the brain drain expected as baby boomers retire.

"The prospect of getting another job where experience counts is so low that many are weighing the whole issue of whether to even work at all," said Patrick M. Barkey, who was director of Ball State University's Bureau of Business Research before leaving this summer for a similar post at the University of Montana. "They're off the grid."

The BLS does not release state-specific statistics on displaced workers, and Indiana's Department of Workforce Development doesn't conduct comparable research, but Barkey said the Midwest has been hit particularly hard as long-tenured manufacturing jobs disappear.

Indeed, more than a quarter of the 1.1 million manufacturing employees displaced from 2003-2005 lived in the region that includes Illinois, Indiana, Michigan, Ohio and Wisconsin--and 20 percent of the former factory workers weren't looking for new jobs in January 2006.

Blue collar or white, displaced workers who aren't seeking new jobs are not factored into unemployment statistics. As a result, Indiana's 4.6-percent jobless rate might not be quite as rosy as it seems, Barkey said.

"The unemployment rate is no longer that one single number that can tell us how the economy is doing," he said.

Accurately calculating the number of so-called missing workers is difficult, since none of DWD's reporting tools even attempt to track them, said spokesman Joe DiLaura.

Still, given that the department already is tuned into the potential impact of the impending retirement boom, he said "that might be a good subject for us to look at next."

Disappearing workers

Local employment specialists and career counselors see a lot of older workers looking for help, but it's clear to them that not everyone will be successful.

"I do walk away from some people and think, 'They'll never recover,'" said Renee Mickler, president of Mickler and Associates in Carmel.

Patrice Weidner of the Work One office in Fishers agreed.

"There's always a segment that just disappears," she said.

There are plenty of reasons older workers are getting hit hard, said Jerry Conover, director of the Indiana Business Research Center at Indiana University.

Mergers and acquisitions take their toll as companies consolidate and look to reduce expenses. High salaries--often earned by long-tenured employees--are an easy target. Likewise, outsourcing is an increasingly common cost-cutting move. And manufacturing losses are particularly painful, especially in union shops.

Replacement jobs tend to come with lower salaries and benefits, Conover said.

"Not only are you not going to get that job back, but in manufacturing--where everything is based on seniority--if you change industries, you're going to have to go back to a starting wage," Barkey concurred. "That's a big shock."

In fact, of those white- and blue-collar workers displaced in 2003-2005 who found new full-time jobs, almost half make less than they did in their old positions, according to the BLS.

Factory workers and middle managers alike find it hard to accept their new situations, Mickler said. They want to find the same kind of jobs with the same kind of salaries.

"But the world did change," she noted. "You either get with it or you don't."

Still, most don't throw in the towel, the employment professionals said. They're out there, plugging away like Corman.

Rest and 'retool'

The 51-year-old construction manager grew up in Massachusetts and got a degree in civil engineering, which led to a career overseeing large projects for various construction firms.

In 1995, he moved to central Indiana to manage a $24 million addition to the Veterans Administration hospital in Indianapolis.

Noticing that it was getting harder for large firms to keep full staffs on board between big jobs, Corman joined a small company and concentrated on projects in the $2 million to $3 million range.

That went fine for five years, but in 2002 the economy caught up with him.

"I spent 8-1/2 months out of work," he said. "I couldn't even buy an interview." Fortunately, his wife was working.

Eventually, Corman took a short-term assignment at an area hospital.

"When it ended after a year, I was back home," he said. Then came a six-month project. And then another.

Corman finally got a break in June, when he was hired as a project superintendent at MacDougall Pierce Construction Co. in Fishers. The Noblesville resident now supervises day-to-day activities at a construction site. As a project manager, he'd been involved in all aspects, including finances, planning and design.

"It's a change of career," he said.

And the money isn't as good.

"My salary today probably is close to what I was making seven or eight years ago," he said.

Corman estimates that he has worked about 60 percent of the time since 2002. As a result, cutting back has become second nature for his family. Most belt-tightening has been minor, like renting DVDs instead of going to the movies, but he was forced to make some big changes, too. For example, he bought short-term catastrophic health insurance to supplement the coverage his family received through his wife's job.

"I prayed nothing went wrong," he said.

Even with the new job, the Cormans will be pinching pennies.

"Two weeks before I got my new job, my wife got laid off," he said.

Judy Corman had been working as an assistant manager at a Carmel medical office. Before that, she was a teacher's aide. Despite being laid off, she's not ready to throw in the towel--Judy is looking for work, going through the same process her husband did.

"She's not discouraged," Andy Corman said.

Neither is he. Corman said the last five years were a chance to "retool" himself. To that end, he took advantage of training programs at the Work One center in Fishers to polish his interviewing and networking skills.

He also learned to appreciate the value of friendships and relationships. And above all, he didn't give up.

Salary concessions

Neither did Indianapolis resident Sam Nugent, who was laid off in 2003 after a long career as a regional sales representative for several custom binder manufacturers.

Although he's still a little angry over what he felt was a brusque brush-off, he now knows it was for the best. After all, in a business dominated by computers, the three-ring office binder is pretty much a dinosaur.

"It got me out of a dying business," said Nugent, 49.

And he was lucky to have a fall-back position. Several years earlier, he had worked part-time as a telemarketer for The Indianapolis Star. His first call after his termination was to the newspaper, and "I got my job back in a week," he said.

Nugent worked 32 hours a week as a telemarketer until January, when he took a full-time job at College Network, a company that markets educational programs to universities.

"I'm in a much better position [now]," he said.

Still, getting to this point was a slog. When he lost his sales job, his annual salary was about $50,000. As a telemarketer, he made less than $22,000. He had to refinance the mortgage for his home, going from a 15-year note to a 30-year note.

"Christmas and Hanukkah didn't exist," he said.

Nugent's new salary is still about $10,000 less than what he had been making as a binder salesman. However, he also can earn a commission on top of his base salary.

Tune in, drop out

Lathan, the computer-programmer-turned-musician, wasn't as eager to get back into the rat race. The 54-year-old faced a career crisis in 2002, when Safeco Insurance decided to close its data center in Indianapolis.

Local employees--including Lathan--were offered a chance to move to the Seattle area, but he decided against it. He and his wife would have to start over, leaving family behind to make their way in a more expensive part of the country.

So he accepted a severance package and decided to take some time to find a new programming job.

Just about the time Lathan cleaned out his desk, though, a longtime friend asked him to take care of his farm outside Indianapolis while he went on an extended vacation with his family. Pitching hay and watering livestock for a month was an eye-opener.

"It was kind of amazing after 21 years of sitting at a desk," Lathan said.

The experience didn't make him want to become a farmer, but it did make him consider other options. His wife had been playing traditional Irish music as a sideline for several years, and working as a duo would increase the opportunities for gigs.

So for the last four years, Lathan has been a part-time musician, something he's found enjoyable, if not entirely dependable.

"It's real iffy," he said.

The couple can be swamped with work--one month, they performed 12 shows at the Indiana State Museum--then go for weeks waiting for a phone call. They netted $15,000 in their busiest year.

While that's considerably less than what he was making at Safeco, Lathan said he hasn't had to cut back. He and his wife have no children, are determined savers and have never led an expensive lifestyle.

Lathan said he occasionally still thinks about returning to a regular day job. But the idea of starting over again isn't appealing since he would have to relearn his programming skills.

"It would be a continuous lifestyle of re-educating myself about new technology every year," he said.

And for now, at least, that's just not worth the effort.

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