The Ripple Effect: What One Layoff Means For A Whole Town

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.

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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.

With folks forgoing vacations, Hyco Lake, 10 miles north of Roxboro, was a busier place this summer. It's a man-made lake that actually serves a business purpose. The south end of Hyco Lake feeds cooling water to a massive power plant owned by Progress Energy. The plant employs 268 people and generates up to 2,425 MW of electricity. In January, just after he was laid off, Whitfield called human resources at Progress to see about a job. The Roxboro power plant employs six supply-chain analysts, says Harry Sideris, the plant manager, but he doesn't need any more. Even if he did, Sideris says, Progress has a soft hiring freeze in effect and is filling only essential positions.

Progress also has a plan to sell synthetic gypsum, a by-product of its newly installed pollution-reducing stack scrubbers, to a plant that was scheduled to be built this year by wallboard maker CertainTeed. Gypsum is a critical component of wallboard, which is a critical component of housing construction. You know where that story goes. Because construction has collapsed, CertainTeed has postponed the wallboard plant until 2011.

That's too bad, because according to John Donaldson, president of CertainTeed Gypsum, the plant would have needed a supply-chain analyst. Someone like Brian Whitfield.

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