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The Recession Goes to School

For decades, teaching has been a secure profession—combining service with a steady living in good times and bad.

Not in this recession. The gloomy federal jobs report issued by the Labor Dept. on Oct. 2 showed a record decline in education jobs in September from the same time last year.

The drop in public and private employment for elementary, secondary, and technical schools, as well as higher education, was 0.9%, or 121,000 positions. That's the biggest slip since such record-keeping began in the 1950s. And for the first time, the decline comes as enrollments are rising. "You haven't had state and local governments this stressed since the Great Depression," said Dean Baker, co-director of the Center for Economic & Policy Research, a Washington think tank.

The penetration of layoffs into one of the most recession-resistant kernels of the economy shows how pernicious the downturn remains. Take a look at history: Just three previous Septembers—in 1978, 1981, and 1982—had year-over-year education job drops.

Each of those dips was smaller than the current decline and came as school enrollment shrank. (While enrollment numbers for the current year aren't yet available, the latest report from the Education Dept. projects the number of students—those in elementary school through college—will rise this year.)

In budget-strapped Los Angeles Unified School District, 2,100 teachers, counselors, and others were let go this school year as average class size rose to 24 students from 21. "It's only going to get worse next year," predicts Gregg Solkovits, vice-president for secondary education for the United Teachers of Los Angeles.

The Moxie to Take on Mattel—Again

A year after a court gave Mattel (MAT) the rights to MGA Entertainment's Bratz dolls in a dispute over the line's origins, MGA has launched two new dolls, both aimed at Mattel's business. Fashion-focused Moxie Girlz are targeting Barbie. Best Friends Club is a line of larger dolls—each with a backstory and a journal—meant to take on the historically themed American Girl. "Mattel thought it would kill MGA and have a doll monopoly," says MGA CEO Isaac Larian, who is appealing last year's jury verdict. "MGA came back with not one, but two." Both are designed with the weak economy in mind, Larian says. Whereas Bratz dolls went to pretend discos in $69.99 plastic limos, Moxie Girlz ($17.99) ride in a $29 hybrid. Best Friends Club dolls sell for $39, compared with $95 for Mattel's American Girl. To promote the dolls, Larian plans to run ads in magazines such as Parenting that declare: "Your daughter's best friend shouldn't cost a fortune." Oh, and he seems to have picked up a thing or two from the intellectual property skirmish with his rival. Visitors to MGA's offices are now asked to sign an agreement saying they'll consult with MGA before discussing any trade secrets they may come across. "I borrowed a couple of paragraphs from Mattel," Larian says with a grin.

Britain Goes Greyhound

Greyhound is crossing the Atlantic. On Sept. 14, Greyhound UK began offering service between London and two coastal cities, Portsmouth and Southampton. To capitalize on the company's American roots, buses have been named after women from classic U.S. songs—there's a Proud Mary and a Barbara Ann. "Even in Britain, everyone recognizes the brand," says Alex Warner, Greyhound UK's managing director.

With cash-strapped British passengers trading down from rail travel and local bus rivals taking longer to cover the same routes, Greyhound is competing by offering nonstop service and amenities—Wi-Fi, power outlets, and complimentary newspapers.

The 11-bus fleet is modeled on Boltbus, Greyhound's successful discount service on the East Coast of the U.S. One-way prices start at a pound ($1.60) for the two-hour journeys Greyhound now offers.

Warner says the British adventure is set to break even by 2010. Routes to five other British destinations are planned for next year, mostly to cities no more than three hours from London with large student populations or tourist attractions.


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