Where job drain is biggest (it's not Ohio)

Here along Highway 495, a crescent of asphalt arching around Boston's suburbs, the effects of large-scale layoffs the past four years are visible from local restaurants to defunct car washes. When Lucent Technologies laid off close to 3,000 workers here between 2001 and 2002, half a mile away the lunch crowd at the Loft Restaurant and Bar thinned to a tiny gaggle. Business at the local car wash nose-dived.

Development of a nearby strip mall stopped. "Lucent's employees were the heart of a lot of business here," says Loft owner Jane Cassidy, gazing at the restaurant's mahogany bar. Lost jobs, especially in high-tech manufacturing, have become as familiar here as bad driving and Red Sox boosterism.

The job-drain problem runs nationwide, of course, with some 2.3 million more jobs lost than gained since 2001. But some states have been hit harder than others, and by one measure Massachusetts tops the list. It has lost a higher percentage of jobs the past three years - 6 percent - than any other state, according to data released this month by the Labor Department.

The reasons here and in other hardest-hit states are varied, and suggest why the job issue is both at the centerpiece of the presidential campaign and difficult for politicians to solve. Outsourcing, enemy No. 1 in current discussions of the job dearth, is part of the problem. Lucent's jobs, for example, went to China and Canada. Meanwhile, if manufacturers aren't moving work offshore, they are learning to produce more efficiently at home, shedding workers in the process.

But there are other factors at work. Corporate scandals. The 9/11 attacks. Even drought. And as happened in North Andover, cutbacks at one large employer ripple outward in local economies, affecting small business and consumer buying.

"This isn't just about outsourcing overseas as many people are saying," says Doug Woodward, an economics professor at the University of South Carolina. "This is a complex issue that varies state to state."

Consider a few of the states that have lost jobs: Massachusetts, Colorado, Ohio, Illinois, and South Carolina.

In Massachusetts, job losses are rooted in the woes of the very industries that made the state an engine of the new economy during the '90s.

The decline of high-tech, prompted largely by a bursting stock market bubble in 2001, hit the state's information-based economy with inordinant force.

"The customers we serve got very conservative about how much they were willing to spend for our equipment," says Mary Wark, a Lucent spokesperson.

In addition to outsourcing some work overseas, the company also began working with contractors who paid their employees part-time wages of $9 compared to the minimum of $16 to $25 they received from Lucent, says Gary Nilsson, who heads the local Communication Workers of America union here.

Ohio has also seen a big loss of jobs, but it exemplifies another side of the nationwide trend in manufacturing. The state is known for manufacturing heavy durable goods like appliances and automobiles. Jobs have leaked from these industries for several decades, largely because of pressure overseas.

But the 3.8 percent job decline in Ohio since 2001 was based primarily on factories' investments in better technology during the late 1990s. When the recession came, factories were able to increase productivity while still laying off thousands.

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