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Eateries surviving despite rising jobless rates

By Johnny Jackson

jjackson@henryherald.com

Restaurateur George Shepherd was not surprised to learn that the state's latest jobless claims had increased nearly 95 percent over the past year.

The Georgia Department of Labor announced this week that 88,756 laid-off workers filed first-time claims for state unemployment insurance benefits in June, an increase of 94.8 percent from June of 2008.

Shepherd said he opened Chevy's Diner in April 2008 with partners Erica and Neil Daniell and R. Kirby Godsey. "We couldn't have picked a worst time, or more adverse time, to start a business," he said.

He said the restaurant has managed to do steady business in downtown McDonough and keep its 17 full-and-part-time workers employed, even in this difficult economy. Recent jobless claims, however, indicate that many residents and other businesses have not been as fortunate.

The State Labor Department reported that the total number of jobless workers (not just those making first-time claims) receiving unemployment benefits rose 97.1 percent over the year, from 81,321 in June 2008, to 160,249 in June 2009.

Most initial claims were filed by laid-off workers in manufacturing, wholesale and retail trade, as well as in construction and administrative/support services, according to State Labor Commissioner Michael Thurmond.

"Rising unemployment continues to plague local economies throughout North Georgia," Thurmond said. "Fortunately, lay-offs in the hard-hit Dalton area appear to be moderating, although the recession-resistant Athens labor market experienced an unusually sharp increase in first-time jobless claims."

Jobless claims in Henry and Clayton counties increased from May to June of this year, by 36.4 percent in Henry, and 33.5 percent in Clayton, according to the state labor department. There were 1,408 initial claims filed by Henry residents in June, up from the 1,032 filed in May. In Clayton, there were 2,665 claims in June, compared to 1,996 in May.

The labor department reported that, over the past year, the two Southern Crescent counties experienced sharp-but not staggering increases in the number of claims filed - 69.6 percent for Clayton, and 96.4 percent for Henry. Some other counties experienced increases well above 100 percent, with Hall County, for example, suffering a 176.5 percent increase in jobless claims.

For local businesses, new and established, the news about increased jobless claims is a sobering indicator of the current economic recession. "It's going to take a long time to get all those jobs back," said Paul Gaffney, the owner and chef of PJ's Cafe in downtown McDonough.

Gaffney said he has become more cost-conscious in recent months than in all the years he has been in business. He said he opened his restaurant in February 2004, under better economic conditions, and has had to adjust to the changing times. "We have a very loyal following, and we're always creating ways to earn more clientele," he said. "Business is up from previous years, because we put out a fine product."

He said part of his job is to help maintain job security for his staff of 15. "Even though business is doing well, you've got to be very cost-conscious," he said. "I mean, you can't raise prices on your guests. So, you have to watch every dollar you spend."

George Shepherd acknowledged that cost-efficiencies were a part of the initial business model for Chevy's Diner. "We recognized that we needed to have a value-priced menu," he said. "Really, it comes down to maximizing the resources you have, and increasing your efficiencies."

He said the restaurant's most efficient resource exists in its staff, which is able to interact with both regular and potential customers. "The foundation of any successful business is its associates," he added. "To be born in adversity will teach you quickly to be even more efficient. Those lessons eventually return to better prosperity."