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Part 4: "A recovery? Ha ha"
September 14, 2004
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| Karsten Smelser made a big switch about a year ago, when he left the technology sector to be the second man in a two-man machining operation. Smelser says the move was out of necessity: "I don't think there's a recovery for Average Joe worker." (MPR Photo/Jeff Horwich) |
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Shakopee, Minn. — Smelser is a life-long computer programmer. Today he sits between two power lathes, churning out metal parts you might find on the hydraulics of a snow-plow. About a year ago, a technology company he had started -- and where he was the director of technology -- laid him off. He made a call that same day to Steve McCloud, whose one-man operation had provided parts for the struggling company. Soon thereafter, Smelser found himself in a whole new line of work.
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|  Karsten Smelser demonstrates his latest technology | | |
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"I used to make six figures, now I'm lucky to bring home a few hundred a month. No insurance, no nothing. It's a risk. But we're trying to grow the shop and get into new markets," Smelser says.
If the tech economy had remained strong, he has no doubt he would still be there today. "I wouldn't have had to even think about moving to another industry. It's been my whole life since I was a kid," Smelser says. "I didn't really have a choice, got to keep a roof over my head, got to keep some food in the refrigerator."
Karsten says he is still getting used to having his wife, an accountant, be the main breadwinner for the two of them.
Since 2000, Minnesota has lost almost 38,000 technology jobs. The tech losses have leveled off, and state officials now predict more than 30-percent annual growth in the years ahead. But at the moment, that's not much consolation to those displaced by the bursting of the tech bubble.
"A recovery?" Smelser asks. "Ha ha. No, I don't think there's a recovery going on."
"Sleepless nights"
"We definitely have spent more sleepless nights in the past three years than we ever anticipated we would have," says Paul Mandell. Mandell works for the state, one of four staff on the Capitol Area Architectural and Planning Board. The board oversees maintenance and development of the Capitol grounds and surrounding area.
Tight budgets have hit state and local government straight through the period of economic recovery, including Mandell's office.
"We had two rounds of budget cuts. We went to a 32-hour workweek, basically, on a voluntary basis, all four of us. Our healthcare went up, we haven't had a cost-of-living increase in two years. In fact, it costs us more to work for the state than it did two years ago," Mandell says.
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| Paul Mandell | | |
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"Gertens is out in our neighborhood; it's a huge greenhouse. I work part-time in tree sales there. I go home from work, change clothes, grab a little bit to eat, and then go outside for the evening. I work three evenings a week, and Saturdays all day."
Aside from his two jobs, Mandell is active in his community of Inver Grove Heights, running right now for City Council. He has three children, and his wife owns a sewing and fabric store. "The business went down dramatically (after September 11), and then plateaued, fortunately. She just celebrated her third year of owning the store. One of these years we'll celebrate making a profit."
Mandell says economic circumstances have forced his family to live a more frugal lifestyle than he would have hoped at this point in his life.
"We're very careful wherever we shop. Clothing has been cut back dramatically, and we're fortunate that my wife can make so much. All three of my kids, Jenny, Kristy and Bobby -- Bobby has made a few scarfs, but Jenny and Christy have made formals in the past few years, their formals for their proms.
"The food budget, of course, food goes up, gas goes up. As far as vacations go, we vacation in the state, pure and simple.
"My oldest daughter goes away to college for the first time this year. When you're talking $18,000 in costs per year for a state school -- between room, board, and all the expenses -- that's a lot of money.
"We put away a certain amount every paycheck, and that's the only way we can protect that money, because otherwise we're still borrowing, paying off credit cards. We're not living paycheck to paycheck, but at times you wonder with the next mortgage, (how) are we going to pay this?"
"It's nice to have those clients on the books"
With her long hair and tie-dyed dress, you might not at first peg Koren Walsh as a keen observer of the economy. But she watches from more angles than most of us. In one job, Walsh processes bounced checks. She continues to watch the upsurge in memo lines showing purchases of groceries and children's clothing. The company also helps gas stations deal with drive-aways, which she says are on the rise.
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| Hands-on economics | | |
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In job number two -- as a massage therapist in Wayzata -- Walsh can feel the tension that financial problems put in her clients' shoulders. And she feels the economy's ebb and flow herself by the number of shoulders she has to care for:
"Things got hard after September 11, Walsh says. "Clients who normally came in once a week suddenly got laid off. We were a luxury, so we were one of the first things to go.
"I just started working at a new (wellness) center, after the first center I was at closed completely, and I think that was partially due to the crash of the economy. The first thing that we saw decline was the amount of our tips, and then the amount of our clients. Now I'm noticing that tips are a little better. I've actually picked up a few standing clients now, that I can rely on to come in every week. When you're guessing what your income will be for the future, it's nice to have those clients on the books.
"I cancelled the health club membership, my son isn't doing as many extracurricular activities as he used to. I was investing a hundred dollars a month for my son's college and my retirement, and I put that on-hold. I had some car problems a few weeks ago, and lucky enough the mechanic who's working on my car was willing to barter for some of his shop time. So for me, that's wonderful. And for him, he needed to get my car in his shop because he got laid off from a major dealership, and he lost his medical benefits and he's got a back injury, so we're helping each other out."
Part 5: "I just pick myself up and get out there"
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