Recession's Ripple Effect Strikes Missoula, Mont.

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Montana has been mostly insulated from the national recession. Local economists say the state is typically the last to enter a recession, and the last to emerge from it. In Missoula, the largest industrial plant shut its doors last month — sending 417 people to unemployment lines. In addition, Macy's announced it is closing the downtown Missoula store.

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Economic trouble is creeping closer to a place that was sheltered until recently: Montana. The state government has money. The housing market is relatively stable. But in Missoula, a big employer is shutting down. Montana Public Radios Emily Ritter has the story.

EMILY RITTER: Kim Lyles was born and raised in Montana. He and his wife, Susan, have four children and five grandkids, and have lived in Missoula most of their lives.

Mr. KIM LYLES: I had intended to retire at about 62, which is five years from now, and this kind of changes everything. And I really wasnt prepared, necessarily, for this outcome.

RITTER: On December 14th, the paper mill Lyles has worked at for 30 years announced it was shutting down. Smurfit-Stone laid off 417 people, the biggest blow to the states economy since the recession started. So Lyles is trying to figure out what will be next. He says hes too young to retire, too old to go back to school.

Mr. LYLES: Ill be 60 years old when I get out of the two-year program that they offer. And in all fairness, whos going to hire a 60-year-old guy, you know?

RITTER: Its a challenge a lot of the laid-off workers at the mill are having to grapple with. The average salary at Smurfit-Stone was $70,000 a year. Compare that with the average salary in Missoula - just over $40,000. Lyles says hell never find something else that pays that kind of money, in the state.

Mr. LYLES: I really don't want to leave. We don't have a fancy house, but its our house, you know? And I love Harleys. I told my wife that if I have to, Ill go work at the Harley shop. And she just shakes her head and says, you know, youre selling yourself short. And I keep telling her: I am short.

RITTER: About 70,000 people live in the Missoula Valley. Its nestled between the Sapphire, Bitterroot and Mission Mountain ranges. This western half of the state relied on the timber industry for the better part of a century. But production has slowed drastically in the last 30 years.

President of the United Steelworkers Local 885, Bob Johnson, says 26 mills have shut down since 1990. Six have closed their doors in just the last three years.

Mr. BOB JOHNSON (President, United Steelworkers Local 885): The types of industry that has left Montana isnt returning, and I don't see it returning anytime in the near future. At this point, I think Montanas just going to start seeing what this economy is actually - impacting us. It could be very frightening for the state.

RITTER: Businesses in downtown Missoula are also dealing with some big changes all of a sudden. Macys announced this month that they would close their Missoula store, one of the downtowns anchor retailers.

Ms. JULIE HILLY (Owner, Boutique): To have this happen does, you know, impart a little bit of fear.

RITTER: Julie Hilly(ph) opened her boutique in 2008, just months before the economy tanked. She has really relied on Macys customers who walk by her store.

Ms. HILLY: When people were not able to find things over at Macys, the employees at Macys were always so good about referring those customers down the street. And I think thats that's the key.

RITTER: At Smurfit-Stone, the fence around the mill is dotted with hardhats left by workers leaving their shifts for the last time.

Kim Lyles says hes not just losing a job, but feels like hes losing part of his extended family.

Mr. LYLES: Like I always try to tell people, don't feel bad for Sue and I; we'll get by. I just - it breaks my heart to see whats happening to these young kids that are just starting out in life, you know? I would like to see them have the same opportunities that we had. And I don't see that happening.

RITTER: Economists say the Missoula-area recession may have been slow to arrive -but isnt likely to go away until last next year.

For NPR News, Im Emily Ritter.

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