Facing hard times

TENSTRIKE, MINN.

Justin Juelson recently sold his '97 GMC truck to pay his August mortgage and buy school supplies for his two children. Two weeks ago, the laid-off electrician labored over a neighbor's rusted Chevy S10, bloodying his knuckles to replace a stubborn steering column for $75 cash.

Selling their possessions and snatching up odd jobs are two of many actions the Juelsons have resorted to since Justin lost his $60,000-a-year job in December. His wife, Joy, lost her job at the same plant in Bemidji three years ago; her unemployment benefits ran out a year ago. Today, they owe one nervous banker, several credit card companies and their own 401(k)s large sums as they struggle to survive the deepest recession in 70 years.

The Juelsons are among the 14.9 million Americans without steady jobs as of last month. More than 103,000 Minnesotans have lost their jobs since the recession began two years ago, nearly doubling the unemployment rate in the state's most populous metro-area counties.

But the sting of this recession has been especially sharp outside the metro area, where employment options are more limited and the impact of lost jobs is felt quickly at the restaurants and shops along the tidy, rural Main Streets in Beltrami, Clearwater, Itasca, Red Lake and other northern counties. While there are indications that the worst of the recession may be easing, few analysts expect the jobs picture to improve much in the coming year. In some parts of Minnesota, economic recovery could be years away.

"You can't deny that the situation in northern Minnesota is really difficult," state economist Tom Stinson said. "Part of it is that lumber and [the] wood product industry and construction [and taconite] are important there and suffering badly."

Laying off your relatives

At the height of the housing boom, Bagley Hardwood Products was running three shifts a day, with a workforce of 33. In August, the 5-acre lumberyard 25 miles west of Bemidji sat empty except for two stacks of elm boards waiting to dry, be mated, glued, cut, planed and shipped to England, where they would become tables and dressers. Orders are down so much that there won't be enough sawdust to heat the plant through the winter -- if they make it through winter, said Dan Fultz, who oversees the plant.

Fultz and his wife, Peggy, have run the business for the owner for 21 years. But this year they've each taken a 30 percent pay cut and had to lay off 21 employees -- including a brother, three children and their entire office staff. Peggy now strains to keep up as bookkeeper, accounts receivable clerk, inventory tracker, spec checker and machine operator.

"It's tough to lay off your own children," Dan Fultz said. "They worked here for years. I'd lie awake at night and think, 'How am I going to word this?' I tried to prepare them, but it still came as a surprise."

Even in the best of times, life can be hard in Clearwater County, frequently among the poorest in Minnesota. But the collapse of the nation's housing and economic sectors, and the fallout across the rest of the economy, has ruptured the good life that many residents had started to build.

As recently as March, one in five county residents was out of work. That dipped to 11 percent as of July, but nobody's going on a spending spree.

Jobs paying $10 to $15 an hour plus benefits have vanished, said Peggy Fultz of Bagley.

"In this small town, people are either looking for minimum-wage jobs or else they are applying for unemployment or welfare. It's really scary."

Diane Fjerstad, 58, knows the feeling. She thought she'd found her very last job when she walked into Team Industries in Bagley three years ago to begin machining parts for all-terrain vehicles manufactured by Polaris, Arctic Cat, Yamaha and Honda.

But at 6 a.m. Jan. 27, she reported to work to find several human-resources managers on the shop floor. "That is never a good sign," she said. "Two hours later, they came up, pointed and said, 'You and you and you and you, come upstairs.' They had our final paychecks ready. The whole room sat there, dumbfounded."

In the end, 68 people were ushered to the door from the Bagley plant. Employment at the company's six Minnesota plants plunged from 1,319 to about 800 workers.

"Sales are easily down 30 percent from the last year and a half," said Tony Passanante, Team's senior director of marketing and strategic planning. "If the economy ever pops back, a workforce will probably be waiting in the wings," Passanante said. But he's not expecting miracles: "It's safe to say the jobs won't come back as fast as they disappeared."

Recently, only 30 night-shift workers were on duty in Bagley, drilling holes into die-cast housings, checking transmission parts and bolting components into place.

"At this time of year, before the downturn, this place would have been humming," said product development director Micah Ricke. He said Team Industries is doing more proprietary engineering and design work to help boost sales.

Locked gates at the factory

For miles around Tenstrike -- population 195 -- the stress of joblessness is subtle but strong. The unemployment rate in Bemidji, 18 miles southwest, hit 17.4 percent in January before improving to a still painful 13.2 percent in July.

Justin Juelson had been an electrician at Ainsworth Lumber in Bemidji, a plant that once had digested truckloads of timber daily for the country's ravenous home builders and buyers. Today, behind locked gates and NO TRESPASSING signs, the factory is silent. Juelson is one of 260 workers who lost their jobs. He's antsy for work but said that nobody is hiring.

"I've had three buddies from Ainsworth [Lumber] who went to Iraq or Afghanistan just to get work after being laid off because they could get $30 an hour there as a contractor," Juelson said.

The $1,600 unemployment check Juelson gets each month leaves just $300 after paying his mortgages. The lender on the Juelsons' home sent a "security agent" around last month to make sure they hadn't abandoned the property. The reason: the family was 10 days late on the mortgage payment, he said.

To make ends meet, Juelson bales hay, mows lawns and fixes cars in his garage. Others who lost jobs raise goats, tend subsistence crops and barter goods. One Clearwater man, laid off from Ainsworth last year, hunts for leeches in nearby lakes that he sells for hundreds of dollars to bait shops.

The cash economy runs through Clearwater, Beltrami, Itasca, Red Lake and Hubbard Counties like the scrubby brush along the highways. Seasonal relocations to the Twin Cities for work also help keep many displaced workers and their families afloat.

"Still, you are not living well," said Stinson, the state economist.

Federal and state safety nets help. Many laid-off workers enroll in the state's Dislocated Workers Program, which lets them collect benefits while they get up to two years of job retraining, complete with tuition and books.

Joy Juelson joined the program after losing her job at Ainsworth Lumber three years ago, and now has five classes left to complete her paralegal degree. She just hopes that a job awaits at the end of her ordeal.

Her husband will head to school this fall to learn a new trade. But he's nervous. He's already a welder, an electrician and has a boiler operators license, and he still can't find steady work.

Justin's job counselor, Al Pederson, understands. Pederson was laid off from Ainsworth in 2006. The Dislocated Workers Program helped him earn a business degree from Bemidji State University while receiving unemployment and working part time at the Bemidji airport. In February, Pederson got hired by the Rural Minnesota Concentrated Employment Program, which provides job counseling services for the state.

The house is safe - for now

"I'm tickled pink to have a job [paying] $15 an hour. But I have two kids going to school and it's been very difficult," Pederson said. "I haven't lost my house yet, but it's been close. I think about bankruptcy every now and then. The credit card bills I had killed me, and they are still killing me."

Pederson now helps 100 of the 260 former Ainsworth workers who once traveled to the plant from surrounding counties. It's not uncommon for people in this area to drive a hundred miles for a good-paying job, he said. For many, Ainsworth was it. Now they travel to the Minnesota Workforce Center in Bemidji to file for social services, drop kids off at Head Start classes and visit job counselors like him.

No one in this region is immune from the economic fallout. Andy Wells won the Minnesota Small Business Person of the Year award for this year, yet even his company -- Wells Technology, a $4 million a year precision metal manufacturer in Bemidji -- has sent some of its employees to the workforce center.

"Manufacturing all over has fallen off," said founder Andy Wells, while showing visitors his aerospace, medical and meat-processing equipment.

Wells, who grew up in a house the size of a garage on the Red Lake Reservation, earned a master's degree from Bemidji State and taught industrial technology there before starting the company. Revenue and accolades grew. But manufacturing revenue plummeted by a third in 14 months.

Wells cut seven of his 32 workers, slashed hours and nearly killed the Native American Industrial Apprenticeship Academy he had founded. "This year, we could only afford to have four apprentices," he said.

Apprentice John Fairbanks graduates this month. Wells would like to hire him, but can't. "He's very good," Wells said. "But right now we have several people on layoff already, so we can't create any new jobs."

Mark Ostlund of Leech Lake, a new apprentice, knows that Fairbanks may face a tough job hunt. Before joining Wells Technology, Ostlund said, he searched for a year but couldn't find work despite having a fresh industrial technology degree from Bemidji State.

"I have a good friend of mine who can't get a job anywhere," Ostlund said. "He's an automotive technician and he's having a hell of a time getting work. He's going to apply at McDonald's and Subway."

Dee DePass • 612-673-7725

FACES OF HARD TIMES TOP PHOTOS

"Manufacturing all over has fallen off." Andy Wells, Bemidji businessman

"It's safe to say the jobs won't come back as fast as they disappeared." Tony Passanante, Team Industries executive in Bagley

"'You and you and you and you, come upstairs.' They had our final paychecks ready. The whole room sat there, dumbfounded." Diane Fjerstad, on her last day at Team Industries