Recession-hit Dubuque seeks new footing; Hard times draw city residents, leaders together

Nancy and Peter Eisbach were used to good steady salaries when they first bought a home here. Now they are in their 30s, unemployed for the first time, and struggling to keep at least a portion of their bills paid.

''We were getting to an age where we thought we were pretty secure, but now we're suddenly back to base one,'' says Nancy. She points out that all family frills, including the usual $18 spent for Brownie day camp for the youngest of their three daughters, have long since been pared.

The Eisbachs are an example of what economists now refer to as ''the newly poor.''

Hundreds of other families in this friendly blue-collar city nestled at the foot of the bluffs along the western bank of the Mississippi River fit the same description.

Dubuque, a city of 62,000 which only a few years ago had one of highest employment rates and strongest wage-scale averages in the United States, has been particularly hard hit by the current recession.

But the city's residents are pulling together to extract Dubuque from the economic quagmire in which it seems mired.

Statistically, according to the US Department of Labor, Dubuque led the nation in unemployment in January with a high of 23 percent. While much of that was due to a month-long shutdown by Deere & Co., and civic leaders put the current unemployment figure at closer to 11 to 12 percent, many families here are still feeling the pinch.

Both major manufacturers in town have cut back. Deere & Co. has, over many months as orders have fallen off, dismissed almost half the work force at its local construction machinery plant. Wages have been essentially frozen. And the Dubuque Packing Company has transferred some of its local operations such as hog slaughtering (the area where Mr. Eisbach worked before his layoff last fall) to its other plants around the US. The firm's 1,200 remaining employees have been asked to take wage and benefit cuts. So far the union is holding firm, but officials of ''the Pack,'' as it is called here, have warned that they may have no choice but to shut down local operations entirely in mid-October.

Many of Dubuque's smaller businesses have been no more immune from the hard times. Several have closed.

''I think the unemployment situation is just as bad or worse than it was earlier this year - none of our shops has picked up one bit since January,'' says Robert Runde, business representative for the International Association of Machinists and Aerospace Workers. He is constantly on the telephone these days trying to answer queries from both union members and creditors about how soon workers may be called back.

Lines at the Job Service office here are long - both for those filing unemployment claims and for those applying for the few job openings there are.

''I'm sure there are people whose unemployment benefits have run out who have pretty much given up,'' admits acting job-placement manager Martha Burger. ''Any job of any kind these days gets a lot of applicants . . . and we'll be getting a big influx of students very shortly.''

Mike Rellihan, who just finished his freshman year at Iowa State University, came home to try for a third summer of steady work with a local motel where he'd been a bartender and bellhop. This time motel officials told him he could have only 6 to 18 hours of work a week. Mike, picking up papers off the lawn, concedes: ''I'm taking what they give me.''

And many people here here talk about the recent ad for someone with a BA degree to drive a potato chip truck. It drew more than 400 applicants.

Still, so much talke about unemployment here can sometimes make the problem seem worse than it is.

''It's a depressed economy - no question about it - but the rumors have blown it out of all proportion,'' says free-lance photographer Jim Shaffer, a longtime Dubuque resident whose children all happen to have summer jobs. ''What we've got is the jitters just because no one knows what's actually going to happen.''

One local business last year issued T-shirts with the caption: ''Will the last one leaving Dubuque please turn out the lights?''

But, as often happens when times get rough, there is also a noticeable pulling together of residents and leaders in this city in pursuit of a common goal: Dubuque's survival and return to economic stability.

When officials of the local packing company, for instance, announced in April that they planned to shut down in the fall, a task force of top local business, labor, and government leaders was promptly organized in response. The immediate goal of this Economic Action Coalition was to stave off the plant closing. But the long-range aim is a more general economic recovery.

''The committee has met many times,'' observes coalition coordinator and former Dubuque Mayor D. Michael King. ''We have every hope that it will be effective. But we're just beginning and we're working very quietly.''

Publishers of the Herald Telegraph, the local newspaper, decided to help by offering job searchers free want-ad space. And the local United Way assigned one staff member to spend all his time helping those who have been laid off get fuel assistance and other temporary economic boosts. The local Jaycees now offer a monthly improvement award - a light bulb set in plastic - for those who have done the most to help the city move forward. And, aware that there is comfort in company, the Eisbachs and several other unemployed families have banded together in an informal monthly support group. The most recent subject for discussion: how best to hang onto one's house when the mortgage money isn't there.

''I think there's definitely a feeling that we're all in this together,'' says Harvey Schmitt, vice-president of the Dubuque Chamber of Commerce. ''The offers of support and the willingness to pitch in are certainly there. The main difficulty is finding a way to marshall this energy to solve the problem . . . which is really nationwide. There are a lot of people who want to roll up their sleeves, take a brickbat to the enemy, and be a part of the solution.''

Also, amid all the downturns and talk of them, there are a few noticeable bright spots on Dubuque's business horizon.

Both the A. Y. McDonald Manufacturing Company, which makes plumbing fixtures, and Frommelt Industries' Safety Division are relocating and expanding in the new industrial park on the city's west side. Some new jobs may be involved.

And there are a few businesses in Dubuque which have either felt little impact from the current recession or are noticing signs of a turnaround.

''As far as we're concerned, the recovery is already here - business has picked up,'' says Greg Toland, assistant manager of the local Sears store. ''I don't think the situation is as dire as everyone says. This town is just so used to a strong employment picture.''

Similarly the local Bishops Buffet, a cafeteria in Dubuque's busy outlying Kennedy Mall, has been largely holding its own throughout the tough times, according to manager Jim Derwin. ''Some places cut corners, but that's the easiest way to go under,'' he says.

''Conditions have not improved dramatically over the last few months,'' says the chamber's Mr. Schmitt. ''But from talking with manufacturers here I get the sense that we are at or near the bottoming-out point. . . . The difficulty that Dubuque will continue to face is that Deere, its major employer, is tied so closely to the housing and construction industry. If we were more diversified, conditions wouldn't be as severe. But there's no way to change the economic mix overnight.''

A few like Nancy Eisbach say they doubt that Dubuque will ever make it economically as a city again. But most residents here appear reasonably sure that their city will get back on its economic feet eventually. What worries them is the timing and the cost.

''I think Dubuque will make it,'' insists labor's Bob Runde, a member of the Economic Action Coalition. ''The question is how far down it will go before the turnaround comes and how long it takes to come back.''