Community copes with 2,000 Hanford layoffs

By Annette Cary, Tri-City HeraldOctober 16, 2011 

Editor's note: Hanford started this year with 12,000 workers and nine months later about 2,000 positions have been cut. Herald reporters and photographers take a closer look at what this means to Tri-Citians and our economy with a daily series of stories that begins today.

The day after the last of almost 2,000 workers were told they were losing their jobs at Hanford, Twigs Bistro and Martini Bar opened at the Columbia Center mall in Kennewick.

Business has been excellent, said general manager Will Willingham. Customers have been filling its 267 seats, with waits of up to 30 minutes on some nights.

Bob's Burgers and Brew has drawn so many diners since opening in Kennewick less than a year ago, that it's preparing to open a second restaurant in Richland.

And Tim Bush Motor Co. recently bought a Yakima BMW franchise and started selling the cars in Richland.

Despite almost 2,000 layoffs so far and up to another 1,060 possible by fall at Hanford, plenty of money continues to be spent in the Tri-Cities.

Businesses are showing confidence that as painful as the layoffs are for the affected workers, the community will rebound from any economic dip.

It has been the story of the Tri-Cities since World War II, when 50,000 workers arrived at the newly created Hanford nuclear reservation to produce the plutonium that helped defeat Japan and end the war.

Since then Hanford has been a roller coaster of employment, with the number of jobs rising and falling through the decades.

Most recently, a $1.96 billion infusion of American Recovery and Reinvestment Act money for Hanford environmental cleanup swelled employment at the nuclear reservation during two and a half years.

With Recovery Act spending near its peak at the start of 2011, about 12,000 workers were employed at Hanford, which doesn't count for about 4,500 workers who work for the Department of Energy's Pacific Northwest National Laboratory in Richland.

Layoffs include new and experienced workers

Since this past spring, almost 2,000 Hanford workers have lost their jobs, most of those within the past month, as work paid for with economic stimulus money is finished. Although the end of Recovery Act spending drove the layoffs, it wasn't just the new hires who lost their jobs.

For union workers, it was last in, first out.

But for nonunion workers, contractors looked at the positions they needed next and used a rating and rankings process if necessary to help determine which workers to keep.

At CH2M Hill Plateau Remediation Co., which received $1.3 billion of the stimulus money, 22 percent of workers under 40 were laid off and 16 percent of those over 40 were laid off.

That reflects an average worker age of 51 at CH2M Hill, which corresponds to the age of environmental cleanup workers across the nuclear reservation.

About 15 percent of the layoffs sitewide were voluntary -- likely including many workers who eased into retirement with the bonus of up to 20 weeks of severance pay.

But for those workers looking for a job, it's a given that not all will be able to find work in the Tri-Cities and that some who do will be disappointed with their pay, said Candice Bluechel, WorkSource Columbia Basin business services manager.

"In our community, Hanford has traditionally been a top employer," she said.

Depending on a worker's skills, the worker may have to find another job with a federal contractor to earn the same wages again.

Recovery Act workers with a minimum of a high school or general equivalency diploma were hired for decontamination and demolition work starting at a wage of $17 an hour.

Those hired and given 26 weeks of paid training to become health physics technicians started at about $20 an hour. Many bolstered their paychecks with overtime.

Some new workers interviewed by the Herald when hiring began, including retail workers, said they never before had medical, dental and vision insurance for their families.

Even those with educational backgrounds in higher demand elsewhere in the nation could take a pay hit.

The mean wage for environmental scientists and specialists in the Tri-Cities is $88,827 a year compared with $70,245 a year in the Seattle area, according to a 2011 Tri-Cities Index of Innovation and Technology prepared by PNNL.

It's too soon to know how many of the laid-off workers will relocate to jobs outside the Mid-Columbia, Bluechel said.

About 80 percent of stimulus hiring was within the state of Washington, according to the Tri-City Development Council. But for those with ties to the community and determined to stay here, the outlook is best for those with certain skills.

There are openings for engineers and software programmers. Some high-tech companies are looking for technicians.

Those with health and safety and quality assurance experience may find their skills transferable to other local jobs, she said. In addition, laid-off workers with four-year college degrees could find work as project managers. Health care workers also continue to be in demand.

Some may want to look into retraining programs available at WorkSource and Columbia Basin College, she said.

For those willing to leave the area, there are some DOE complex programs hiring for specific projects in Oak Ridge, Tenn., and Savannah River, S.C., according to TRIDEC.

Tri-City economy less dependent on Hanford

The good news is this year's layoffs haven't cut as deeply as some past downturns at Hanford and in related industries.

About 10,000 construction jobs were lost when the Washington Public Power Supply System abandoned work on one nuclear power reactor and mothballed another one.

In the mid '90s, a push to reduce the cost of environmental cleanup at Hanford led to the loss of more than 5,000 jobs by the end of the decade from a peak of 14,462 jobs in 1994.

Getting through that time without the economy crashing increased community confidence, said Gary Ballew, Richland's economic development manager.

The Tri-City economy also is better prepared to absorb the loss of jobs now than in earlier decades.

The population of the Tri-City metropolitan area has grown from about 192,000 to 258,000 since 2000, increasing much faster than the rate of Hanford employment, said Carl Adrian, TRIDEC president.

Historically, Hanford has been the most important single entity in the Tri-City area economy, according to a 2009 report prepared by PNNL for DOE.

From 1971-94, total area employment levels, population and the real estate market generally mirrored Hanford contractor employment, except in the late '70s and early '80s when the WPPS construction was a factor, it said.

But after 1994, area employment, total income, population and residential real estate sales and building permits increased significantly despite very few changes in Hanford employment levels, it said.

"The data indicate that recently the Tri-Cities economy has become increasingly independent of Hanford," it said.

Even as Hanford downsized in the late '90s, personal income continued to rise in the Tri-City area, it said.

TRIDEC estimates that 10 percent of the employment in Benton and Franklin counties is at Hanford, not counting PNNL.

However, because of the good wages paid at the nuclear reservation the Hanford payroll accounts for about 16 percent of all forms of wage and other income coming into the Tri-Cities, said Dean Schau, assistant professor of economics at Columbia Basin College.

In the short term, businesses that catered to the influx of Hanford workers during the past two years may feel a pinch, said Gary Petersen, TRIDEC vice president of Hanford workers.

RV parks that expanded and were filled to capacity are starting to have vacancies, as do some apartment complexes.

Just in the past couple of weeks, Petersen has noticed fewer cars jamming the bypass highway past Richland during the morning and evening Hanford commutes, which will translate to lower sales at some gasoline and convenience stores.

Layoffs were expected, but more are possible

The community knew that Recovery Act money would come and go, leaving layoffs in its wake, Petersen said.

"But long-term Hanford is not going away," he said. DOE's projections based on anticipated federal budgets show Hanford and PNNL employing about 13,000 people in 2025.

Budgets may fluctuate by 5 percent or even 10 percent, which will be felt, but Hanford spending should provide "a consistent base for the community for a very long time," he said.

PNNL will help stabilize and grow the Tri-City area economy, Petersen said. Hanford contract requirements to subcontract substantial percentages of work to small businesses, with many of the subcontracts being awarded to Mid-Columbia companies, also is helping stabilize the economy, he said.

There still are concerns about employment in the next two years at Hanford, however.

With Congress not yet passing the budget for the fiscal year that began this month, DOE is allowing Hanford cleanup contractors to lay off up to 1,100 workers in light of uncertain budgets.

So far, only Washington River Protection Solutions has taken advantage of that and the 244 workers it laid off are included in the total of almost 2,000 layoffs since spring, leaving about 850 more possible, if contractors choose.

In addition, as cleanup along the Columbia River advances and work there is ramped down, Washington Closure Hanford plans to lay off 210 workers this year. That brings the worst-case scenario yet to come in the next 12 months to about 1,060 more layoffs.

Hanford watchers also have their eye on the Hanford budget for fiscal 2013. The Obama administration is saying it wants a 5 percent cut in proposed budgets being prepared for that year.

It's not clear if that cut would apply to Hanford, which has legal obligations to meet for environmental cleanup.

"The worst thing that can happen is people start thinking negatively and we bring (a poor economy) down on ourselves," Petersen said.

If businesses are concerned, they don't do the additional hiring they need, creating a ripple effect through the economy, Adrian said.

But TRIDEC is not seeing that negativity now. In addition to new restaurants and other businesses, new office and medical buildings are going up. Cadwell Laboratories broke ground for an expansion last week, and the week before ground was broken on Badger Mountain South, a planned development of nearly 2,000 acres in Richland.

"I think the future looks brighter than people think," Petersen said.

* More Hanford news at hanfordnews.com.

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