The Ripple Effect

How a single layoff reverberates around one community's economy--and why the impact could last for years

By Massimo Calabresi/Roxboro Monday, Sept. 21, 2009
    • Bryan Regan / Wonderful Machine

    When Brian Whitfield, center, lost his job, it affected not just wife Debbie and son Logan but also some fellow citizens.

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    The imposed frugality in Roxboro goes directly to Brad Rogers' bottom line. He and his wife Betty opened a popular Golden Corral franchise just south of unemployment services on Durham Road in 1999. Everyone from the town's low-skilled workers to the city elders goes there, drawn by the $9.99 all-you-can-eat buffet and the slogan HELP YOURSELF TO HAPPINESS. This year the Whitfields, the Waldrons and many others aren't: sales are down 2.5% this year, and it would be worse, says Rogers, if he hadn't launched a big coupon push. But that's eaten into profits, which dropped 63% over the past two years and are on track to do the same this year.

    To stay in the black, the Rogerses cut all worker hours 10% at the beginning of August, which saved jobs but lowered the wage dollars available to the community. Rogers isn't even the worst off--his cheap buffet can still fit into many tight budgets. O'Neil says other restaurant owners in town tell her they're down 25% in 2009. Big Al's diner closed in February.

    In the bigger picture, though, consider a GM dealership that was run by three brothers and closed down in November 2008, taking with it 26 jobs. One brother, John Boyette, moved out of town in search of work, while another, Norman, is selling used cars for a dealer in Cary, 50 miles away. "We're getting along the best we can now," says Norman. It's axiomatic that if the local dealership can't sell cars, then GM doesn't need as many parts from Eaton, which then doesn't need as many Brian Whitfields.

    The Scramble to Cut Back

    Compared to other parts of the country, Person County's 39,000 residents are actually fortunate. Forty miles south of Roxboro is Research Triangle Park, near Durham, where growth has been led by innovation and the unemployment rate is a mere 6%; 51% of Person County's workforce travels to Durham County for jobs, and that helped soften Person's economic woes in the past.

    But the previous downturns were not as severe as this one. Decreased spending at places like Golden Corral has gone straight to the county budget's bottom line. This year's sales-tax revenues are projected to drop 10% from last year. Overall revenue is expected to fall 9%, or $5,528,022. Capital projects have been hit. The county had planned to renovate the courthouse, an elegant 1930 brick building that sits in a square off Main Street and has a workmanlike modern extension off the back. At a meeting in May, the county council decided to delay the project.

    In that, the county joined a troubling national trend: the collapse of construction spending. Job losses in construction have been a key amplifier of the ripple effect in this recession. In 2007 there were 175 new private residential building permits issued in Person County; as of late last month, the number was 50.

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