Don’t tell Sheila that the Lawrence area is invulnerable to the economic downturn.

Experts say the area is weathering the national recession pretty well, but Sheila, who asked that her real name not be used, disagreed.

Lawrence is feeling the effects of a slowed U.S. economy. Farmers Cooperative Assn., the state's biggest co-op, has been sold off in pieces and reorganized. The Farmland fertilizer plant is idle. Honeywell Inc. is shedding employees. And Sprint PCS is closing its call center. But experts say the city's economic foundation is strong and poised for a turnaround.

When a government contract expired last year, Sheila lost her job of 26 years.

Months later she was still looking for new employment.

“A lot of companies around here have downsized and put into effect hiring freezes,” she said.

She’s had a handful of promising opportunities only to have the door closed at the last minute because the company decided to put off making a new hire.

The Lawrence Work Force Center is seeing more folks like Sheila, according to Cheryl White, who counsels job-seekers at the center, 2540 Iowa.

“We have noticed a decline in the number of job openings,” White said. “I believe there are opportunities out there, but the competition is stiffer.”

And, she said, the downturn in Lawrence is not limited to big companies like Farmland Industries and Honeywell, and the headline-grabbing bankruptcies, such as Oread Inc. and Kmart.

“We hear a lot about the big ones, but it’s the little businesses who let go of one or two people that are adding up,” White said.

There have been plenty of headlines about the big ones: Farmers Cooperative Assn., the state’s biggest, has been sold off in pieces and reorganized. The Farmland fertilizer plant is idle. Honeywell Inc. is shedding employees. Oread Inc. shut down, laying off hundreds. And earlier this year, Sprint PCS turned another 500 workers loose on the job market when it shut down its Lawrence service center.

Experts applaud Lawrence

But the experts say Lawrence is doing fine relative to the national economy and the Sept. 11 terrorist attacks that have hurt certain sectors, such as aircraft manufacturers in Wichita.

“Lawrence is a bright spot in the state of Kansas,” said Bill Layes, chief of labor market information for the Kansas Department of Human Resources.

Douglas County unemployment in 2001 was 4 percent, right around the state’s average of 3.6 percent and less than the national average of 5.6 percent, Layes said.

Other economic experts said Lawrence has a strong foundation based on the presence of Kansas University and its approximately 5,300 jobs and the city’s link to the Kansas City metropolitan area.

Lawrence’s population is among the state’s fastest growing nearly 3 percent per year and that fuels economic growth.

“Lawrence, by most standards, is a prosperous town,” said Luke Middleton, a research economist with KU’s Policy Research Institute. “It’s a great place to live.”

And as more people arrive, the demand for construction, supplies, restaurants and a multitude of other service jobs increases.

In a quarterly report on economic trends, Middleton noted that annual employment in Douglas County increased 24 percent during the 1990s more than twice the statewide growth rate.

The number of businesses increased 38 percent, nearly three times the state rate.

Dark clouds

If there is an Achilles’ heel in the Lawrence economic scene, it is that thousands of Lawrence residents commute to the Kansas City area or Topeka for better-paying jobs.

Debi Moore, who recently left her position as vice president for economic development at the Lawrence Chamber of Commerce, said about one in five workers living in Lawrence leaves town every day to go to work.

“We are exporting white-collar workers to other towns,” Moore said.

That trend shows up in the relatively low wages in Douglas County.

According to Middleton’s report, the average wage per job in Douglas County was $22,876, which was nearly $6,000 less than the statewide average and almost $12,000 less than the national average.

State officials attribute the low wages to the high number of college students working for low pay. But Douglas County wages also lag behind other college communities, including Columbia, Mo., Iowa City, Iowa, and Fort Collins, Colo., according to Middleton’s report.

Lawrence not protected

Moore said layoffs, closings and bankruptcies in the past two years have shown that decisions made elsewhere can have a lasting effect on the local economy.

“There are some people in the community who believe Douglas County has been somewhat insulated from the economic problems because of Kansas University,” she said. “But we are not insulated from what happens nationally and globally.”

To offset this, she said more needs to be done to help existing businesses in Lawrence and to create businesses from KU spin-offs.

“We educate KU students and a lot of them are Kansans who say they would like to stay in Lawrence, but we don’t provide the jobs,” Moore said.

She thinks a prime opportunity for growth is creating businesses in Lawrence connected to biomedical research at KU and other area institutions.