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Shipyard Workers Worry About Sequestration Furloughs

As the Defense Department prepares to furlough its civilian workforce in three days – pending a deficit reduction agreement in Congress –communities surrounding the country’s military facilities are also bracing themselves for an economic hit. At lunchtime at the Portsmouth Naval Shipyard on the Maine New Hampshire border, this so-called ‘budget sequestration’ is on many peoples’ minds.  

There are two times a day when Town Pizza in Kittery, Maine starts to bustle.  11:30, when the Portsmouth Naval Shipyard’s forty-seven-hundred civilian employees get off for lunch, and in the afternoon, when they come off the yard for the day. Civilian Navy engineer Mike Hamby has been eating the same spaghetti meatball dish here for the last thirty years.  He says rumors are flying about furloughs that could cost him and his colleagues up to 20 percent of their pay.

Everybody’s wondering what’s going to happen next, then we get our emails explaining how it’s going to work, one day a week, no pay, no nothing.’

Hamby says it’s the young people with babies and mortgages who are really anxious.  Older guys like him have seen this kind of thing happen over and over. And seriously, Hamby says -- a four day work week?--

It's kind of a blessing, if you look at it the right way.

Hamby’s friend Kelly Koulalis  works at a sandwich shop at the shipyard. She says nerves about the budget sequester are already affecting people’s behavior:

We've noticed the lunches aren't as busy, I think people are worried about it, people are making decisions to spend less money on food.

The Navy has frozen hiring at the yard, and halted maintenance on some ships and buildings, due to Congress’s stopgap budget agreement known as the continuing resolution. But if the budget sequester actually happens, most of the 4700 civilian employees here will also be furloughed one day a week for 22 weeks or more.  The Navy would also halt repairs to the USS Miami, a submarine that was damaged in a fire last May.  The Navy needs to cut $8.6 billion in spending in 2013 alone.

Pretty much everyone in Kittery agrees that Shipyard workers are the scapegoats of political scare tactics. But not everyone thinks Defense cuts are necessarily a bad idea. Bill Miller is trying on boots at a Pawn Shop just down the road from Town Pizza. His sister and brother in law work at the naval shipyard. He says they all agree: America needs to cut its spending, even at the shipyard.

So the cuts are needed. Or else we’re in for big trouble, the country’s in for big trouble.

But on the other side of the shipyard in Portsmouth New Hampshire, City Manager John Bohenko says effects from payroll cuts could be significant, even off the facility: 

Because when you have a reduction in payroll, that means people have less to spend in the economy and the local economy.

The furloughs would take more than $90 million in employee income out of nearby towns.

Back in Kittery at Carl’s meat market – which is actually owned by a guy named Jim Spencer – people are lining up for lunch. Jim gets a third of his lunch business from workers at the Portsmouth Naval Shipyard. And customer Kevin Quinn, who owns a car repair shop up the street, says he worries he’ll lose business because of the furloughs, too. 

We do a lot of business with shipyard workers too, so, we definitely don't want any layoffs or cutbacks whatsoever.

Quinn says if his business slows down, going out to lunch here at this market – that’d be the first thing to go. 

It all trickles down, he says.