Workers in Their 40s Feel Trapped in Wake of Dot-Coms Flops

San Jose Mercury News, Calif.

Joelle Tessler

February 09, 2003

     Feb. 9--While tech workers in their 30s may speak of the downturn as an opportunity to rethink priorities and re-examine their options, Jody Davis is just trying to get by in a world of diminishing choices.

     Davis, like so many in their 40s who have had their lives derailed by the tech implosion, is not striving for some idealized post-dot-com existence. She is simply fighting to keep what she has from slipping away. For Davis, 42, staying in Silicon Valley has meant taking a ""survival job."

     Two years ago, Davis was making $85 an hour as a tech recruiter. "There were so many jobs that it was a question of getting the engineer to take your job instead of another one," Davis said. "I was pushing perks like sign-on bonuses and extravagant salaries. The engineers were in control."

     When those engineering jobs dried up, however, Davis' livelihood went with them. For the past year and a half she has been tending bar -- and even that line of work is looking shaky these days. Davis is down to one night a week at Linda's Light Rail Lounge in San Jose since many of the business travelers who once filled the place have disappeared.

     Now, Davis is coming to grips with downward mobility. After moving from a $1,700 two-bedroom apartment in Santa Clara to a one-bedroom for $1,200, Davis moved again last July into a 38-by-8-foot trailer near Summit Road in the Santa Cruz Mountains. The rent is $850 a month and the setting is bucolic. Davis thinks about starting an equestrian apparel business.

     Still, downsizing has been painful. Davis has sold her dining room set, her diamond ring, even her horse, Josie.

     "I really can't afford her," she said. "If she needed an expensive operation, I would be in trouble and so would she."

     As the downturn enters its third year, Davis often feels overwhelmed by just paying the bills and putting food on the table. "You spend a lot of energy just surviving," she said. "My whole life has changed, and some days it hits me really hard."

     While younger workers still have the time and flexibility to change direction and rediscover themselves after a layoff, those in their 40s are too far along in their careers and too established in their lives to start over without serious consequences. Their overwhelming fear: a career that is sliding backward.

     "People are no longer looking to their jobs to feel good about themselves," said Molly Clogg, senior technical recruiter with Responsive Technology, a engineering recruiting firm. "It's not so much about people's sense of identity or their self esteem. It's about survival."

     Jim Johnston, 43, started out as a truck driver for PepsiCo in San Diego at age 20 and spent 17 years working his way into management. Then he left it all behind for tech.

     After a stint at a remanufacturer of mainframe systems, Johnston joined Kozmo.com in the spring of 2000. Kozmo, which delivered CDs, candy and other goods ordered online, hired Johnston as its San Diego operations manager.

     But with the dot-com shakeout spreading, the company would soon shut the San Diego facility and make Johnston general manager of its San Francisco operations. In April 2001, Kozmo folded. Through it all, Johnston's marriage was falling apart. In the span of five months, he'd moved to the Bay Area, lost his job and gotten a divorce.

     Today, as branch manager at Kinko's in San Mateo, Johnston makes half of what he did at Kozmo. His 401(k) is worth less than half of what it was in 2000. And even after selling his four-bedroom home in San Diego for $370,000, Johnston cannot afford a house in the Bay Area.

     "Two and a half years ago, I was married and owned a home," Johnston said. "Now what I am earning is what I was earning when I left PepsiCo in 1997. I feel like I have gone back five years."

     Johnston has a sense of urgency about rebuilding what he has lost. He once planned to retire at 55, but has pushed that back 10 years.

     "How am I going to make up this huge loss?" he said. "The way I look at it, I've got 20 more years in the workforce and I'm starting over."

     Many in their 40s say that for the first time in their careers, they can no longer call the shots in a job market that prizes youth.

     "One of the rudest awakenings for people in the 40-plus age group who are highly educated and highly skilled is finding that 40 is over the hill," said Kitty Wilson, director of ProMatch, a Sunnyvale career center. "It's a shock to realize you're not the hot candidate anymore."

     Joanne Carey, 42, has been living paycheck to paycheck since she arrived in the valley in 1985. But until the downturn hit, that never scared her. She could always find a job to cover the bills, and has done everything from filing and administrative work to corporate purchasing for tech-industry giants.

     Now, she has come perilously close to exhausting all of her savings for the second time in two years. After roughly five months out of work, Carey is at last starting a temporary assignment as a consultant for the Santa Clara County procurement department. "Sixty days is better than nothing," she said.

     Still, spending five to eight hours a day scouring the Web for job leads has taught Carey some tough lessons about how age is perceived in the valley. Many employers, she explained, believe that older workers cost more and are less dedicated.

     "This has woken me up to the fact that I am no longer a kid," Carey said. "I feel young. I feel active. I feel like I have a lot to give. But if your resume lists more than five to seven years of work experience, they don't want you."

     Carey has been scraping by, splitting her rent in Santa Clara with a roommate and working nights and weekends at Barnes & Noble for $9 an hour.

     "It's hard to downsize yourself to $9 an hour," she said. "You need to make $25 to $35 an hour to survive in Silicon Valley. I was making $50 to $60 an hour, and the pay cut is killing me."

     She is nevertheless grateful for the Barnes & Noble job because it has been "someplace to go."

     According to Libby Pannwitt, a career-management consultant and life-planning coach in San Carlos, unemployment can be devastating, since work can give structure and purpose to life. "There is a rhythm to working," Pannwitt said. "There is a sense of purpose to getting up in the morning and going to work. When that gets taken away, there is a real disequilibrium."

     Carey, who has been working since she was 13, considers herself a survivor. Still, it has been a scary two years.

     "I have another 25 to 30 years before I'll qualify for retirement, and yet all indicators are that I'm now too old to have a challenging, well-paid future," she said. "My worst nightmare has come true: no safety net, over 40, with shrinking opportunities."

     One striking characteristic of this recession, Clogg noted, is that it has touched people across the economic spectrum. Many in upper-income brackets who took security for granted have had their confidence deeply shaken.

     "The attitude was that if you have a good education and work hard enough, things will work out," said Charles Darrah, a cultural anthropologist at San Jose State University. "But now there are a lot of highly skilled, highly competent people who can't get jobs, so this is a real blow to their self esteem."

     Margarete Ralston, 48, started out in the telecom industry 27 years ago designing TV and radio antennas. She has held titles ranging from vice president to product director at small start-ups and industry giants such as US West. She has a master's in electrical engineering and an MBA and was even a professor of electrical engineering.

     With all her experience, Ralston figured she would have no trouble finding work when NewTone Communications, a telecom software and services provider, shut its U.S. operations in July of 2001. Ralston was laid off the day before her 47th birthday.

     A year and a half later, Ralston has sent out more than 3,500 resumes and still doesn't have regular work. She has been turned down for an engineering instructor position at Ohlone College and a $9-an-hour retail job at Crate & Barrel.

     "I tell myself: "It's the economy, stupid. It's not about you' " she said. "Still, it's depressing. Before this, I had never been laid off or fired. I can't get my bearings back."

     Ralston would take a lesser position than the one she had at NewTone, where she made $150,000 a year as senior vice president of marketing and business development. But she is competing with a flood of unemployed telecom workers -- many also coming out of senior-level positions at a time when companies are looking for lower-level employees.

     To pay the bills, she has been substitute teaching, teaching a graduate-level wireless course at Santa Clara University and working as a mortgage loan officer. She even briefly tried selling cars at a Chrysler and Chevrolet dealer in Cupertino.

     Now, after selling her Campbell home, Ralston is preparing to move to Denver, where her mother lives in a nursing home.

     "I'm trying to think about life after telecom," Ralston said. "Some days I think my future is at Home Depot. I'm going after scraps of income and it doesn't feel very good after all these degrees and all this work experience. But telecom isn't going to be my future. Telecom is my past. It's time to get over it and do something else."

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(c) 2003, San Jose Mercury News, Calif. Distributed by Knight Ridder/Tribune Business News.