Thousands of professional, clerical and highly skilled blue-collar workers pushed out on the streets by federal job cutbacks, the ailing housing industry, the closing of The Washington Star and other such events have produced an unprecedented employment slump for the Washington area that threatens its reputation as a recession-proof town.
In an area fabled for economic stability regardless of the trends elsewhere, jobs have been swept away to a degree that alarms some local business leaders and economists. Once-secure workers, who built financial obligations around that security, now scramble for the remaining jobs.
In the District of Columbia, for example, where most workers file for unemployment because of higher benefits, the August unemployment rate was 10 percent -- a 35-percent jump from the 7.4-percent rate a year before.
By the end of the year more than 4,000 federal jobs here will have disappeared through reductions in force. Another 1,400 jobs disappeared when The Star folded in August. And at least 370 striking air traffic controllers in the area have lost their jobs and other workers have been caught in airline layoffs resulting from the strike.
Major consulting firms and other companies are not getting the government contracts they once relied on, and the struggling housing market has had a serious impact on construction workers, real estate brokers and building material suppliers, according to area employment offices. These problems, coupled with a record number of business bankruptcies, have accounted in part for the growing ranks of the jobless.
And, nearly a year after the national election, some Carter administration officials and congressional staffers who lost their jobs when the Republicans won control of the Senate are still out of work.
"Yes, we are concerned," said John Tydings, executive vice president of the Greater Washington Board of Trade. "There's a convergence of a number of factors, many of which to date we haven't had to deal with."
The area's new jobless workers -- so different from the poor, unskilled and uneducated unemployed who generally make up the area's out-of-work labor force -- find themselves competing against large numbers of other applicants for the fewer jobs available.
The numbers are just beginning to emerge and tend to lag behind events by a few months. The District is showing significant unemployment as of August, according to the most recent statistics available, while the Virginia and Maryland suburbs report less of an immediate employment impact. In the metropolitan area unemployment has climbed from 4.2 percent a year ago August to 5.1 percent this August.
In the District, the unemployment trend is clearly up, said Matthew Shannon, the D.C. Employment Service's deputy director of program operation. In the first full week in October, roughly 500 claims were taken, compared with 200 the week before. Earlier, at three federal agencies undergoing layoffs, D.C. Employment Services people took an additional 700 claims.
Unemployment in Northern Virginia has been about 2 to 3 percent in the last several years but was 3.6 percent in August -- about 20,800 workers and down slightly from 3.8 percent in July.
David Moates, manager of the Virginia Employment Commission office in Falls Church, said he will not be all that concerned about the economic impact in the region unless the unemployment rate in Northern Virginia climbs above 4.5 percent.
But he notes "a definite change in pattern" for federal contracting, with fewer consulting jobs available for private firms that once thrived in such businesses.
"We've had more than our normal seasonal surge in this group," said Moates, who also said 30 mortgage-loan investment counselors applied for unemployment benefits at his office earlier this month as a result of the stalled housing market.
In Montgomery County, the Maryland Employment Services office in Wheaton reports a 20- to 30-percent increase in unemployment in the last two to three months, although the unemployment rate for Montgomery, Prince George's and Charles counties combined was about normal, 3.7 percent, in August.
Overall, Washington-area unemployment rose from 75,700 in July of 1980 to 89,900 last July, according to the D.C. Labor Department, and the total number of people working fell from 1,590,900 to 1,582,200 in that same span, the department reported.
What the figures cannot show is the outlook for those who have been thrown out of work. Most analysts are generally confident about the area's long-run economic stability and expect the area will produce a number of new jobs in the years to come.
"It's easy to get kind of a doom and gloom picture because we're seeing some things we've never seen in recent history," Tydings said. "Heretofore there was just the federal government and now there are other elements," he said. But he added that business people "still have, collectively, optimism, touched with a degree of caution."
"Things are slower, no question about that, but the people haven't packed up and walked away," Tydings said.
Ivanhoe Donaldson, director of D.C. Employment Services, is more pessimistic about the area's employment future. He expects that "5,000 to 6,000 federal employes will be out of work by the time Christmas gets here, and that has a ripple effect and impacts on employment in the private sector."
"In the long run, if there is any area in the country that will rebound it will be this area," said John Touchstone, director of the Metropolitan Washington Council of Governments' Department of Community and Economic Resources. The long-run data suggest that the economy should be able to absorb the jobless workers. But Touchstone offered a caution.
"There is a problem in matching those jobs and the people out of work," he said. "We're going to have people out of work with jobs coming on line that don't match their skills." An economist formerly with the government may not be just the person for a job in a hotel or a data-processing job.
"That's a totally different thing. That's what makes the problem so hard to get a handle on," Touchstone said.
COG recently advertised for one day for an entry-level planner. The agency was besieged by calls and received approximately 100 resumes, Touchstone said. "We had people with PhDs offer to work at an entry-level job and other people with no experience in the area saying, 'Let me try it.' "
Ed Smith, a 40-year-old former congressional staffer with a doctorate in political science, has been out of work since late February. He had worked on the House Administration Committee until that panel's chairman, Rep. Frank Thompson (D-N.J.), was defeated.
"They always say 40 is the turning point in your life," Smith said. "It was on my birthday that I got laid off."
"I've really been looking," said Smith, who has applied for more than 200 jobs and has had at least 130 interviews -- without finding a permanent job.
"With so many people out there, they've probably seen any number since they've seen you," he said. "It's easy to be out of sight and out of mind."
Once it was easy to float out of a congressional staff job or out of an government position into some type of foundation-funded enterprise or "public interest" position. But that part of the economy has been buffeted by some of the same forces that have produced layoffs in other sectors.
"Foundations have been shrinking as a source of all grants because of a decline in the stock market and their shrinking portfolios," said Brian O'Connell of Independent Sector, a coalition of volunteer, nonprofit and business organizations.
Not everyone who has been cast out of work is still unemployed. Charles McAleer, a newsroom veteran of 44 years at The Washington Star who retired when the paper folded, said he believes that about two-thirds of the 300 or so workers in the news department found work. But many of The Star's former craft employes or older editorial workers are still looking, particularly if they want to stay in Washington.
The current employment squeeze has also meant a tougher job market for the people coming out of school, according to Touchstone. "Metropolitan Washington has always been a place where you could get a job if you had a good education. That's frightening."
Also dismaying is the size of the cutbacks in jobs. "With the Community Services Administration you had a whole agency -- that many people at one time wiped out. That's scary," said Touchstone.
Craig Hathaway, 39, spent 13 years working with the government's antipoverty programs and was among the 1,000 CSA workers who lost their jobs when the agency was abolished on Sept. 30. One of Hathaway's two sons, 12-year-old David, has also lost his job -- a Washington Star delivery route.
Hathaway is trained as a specialist in economic development and does not hold much hope of finding similar work.
"I'm not really thinking about trying to remain in the government," the GS 13 said when CSA workers held a "wake" outside the agency's headquarters on their last day.
"All the programs I'd go to are being shut down," he said, "and most of the job possibilities with private groups will be closed to me because they're all being cut themselves . . . . It's crummy."