More than 60 people stand in line on a typical day at the Central Square state unemployment office, waiting to receive their bi-monthly checks. Recipients in Massachusetts normally receive 30 weeks of unemployment benefits before their funding is cut off, unless the state feels the jobless rate in a particular area is especially severe. At 7.6 percent, unemployment in Cambridge is high, but not high enough for emergency attention. Many people received the unexpected news that no extension would be granted; and for some, it was their last check.

Not more than 10 blocks away, Russell C. Lindquist, chief economic planner for the city's Community Development Department studies a package of development projects worth over $1.2 billion. Some work, including the rehabilitation of abandoned buildings and warehouses and the construction of new facilities on previously undeveloped property, has already been completed. Most of the 47 projects are in the planning or early development stages.

"We're at the threshold of a massive amount of new development," Lindquist says, adding that his plans could create thousands of new jobs in the city.

These two scenes illustrate the dichotomy which now dominates the Cambridge unemployment picture. A stifling recession and the weakening of traditionally important industries, combined with federal budget cuts in job training programs have cut down on employment opportunities in the city and surrounding areas. Many companies have laid off workers and few are hiring. In contrast, growing interest of certain business to relocate in the inner city has encouraged private developers to begin projects which could bring new employment to the area. City officials also hope that a production industry will settle on one of the development sites, restoring some of the manufacturing jobs lost in the city over the past 20 years.

Many long-time residents and political leaders predict that these projects could provide needed jobs, especially blue collar and unskilled employment needed to preserve Cambridge's diversely populated neighborhoods. The losses of blue collar jobs have levelled off, says Lindquist, but few positions have been replaced. Instead, most of the new opportunities have been in almost exclusively white collar fields such as research and industrial consulting. This development has allowed the city's economy to grow at a slow but steady pace during generally rough economic times, but it has also brought a higher-income group to the city, driven up housing prices and provoked fear among long-time residents over a perceived threat to their neighborhoods.

Even if new commercial activity expands the job market, some experts argue that the city will be caught unprepared to take advantage of the opportunity. Cambridge currently has no policy to recruit job-intensive industries and also lacks a municipal program for training under-employed and unskilled residents. The city office which had been at least nominally in charge of manpower and training closed last year because of budget cuts.

The ongoing national recession, which officials say has stalled developers' attempts to recruit tenants for their property, may give the city enough time to establish employment programs, but the impact on the job market has been anything but positive. Businesses ranging from large corporations to small local firms have suffered in this region. Polaroid, a major employer in the city, has in recent months laid off 350 workers and granted 1100 others early retirement. A typical small firm, Cybermation Inc., is struggling to survive after declaring bankruptcy. Even the unemployment office recently laid off four employees. Says City Councilor Walter Sullivan, "I've got people calling me every day looking for jobs, but there just aren't any around."

Federal cuts for job training and direct job financing only compound the problems. According to a report released by Cambridge Community Services Inc., the city lost $1.2 million in training and public service employment subsidies in the fiscal year ending June 30. Six Middlesex County towns, including Cambridge have lost $5.9 million in Comprehensive Employment and Training Act (CETA) funding during the same period. Six thousand fewer people received federal services as a result. In addition, the local CETA administration reports that it has experienced a drop of almost 20 percent in the number of people it places in jobs after completion of training programs because of general caution in the business community.

The problem becomes more vivid on a personal level. "I sometimes get disgusted," says one man who asked not to be identified by name, waiting in line in the Cambridge unemployment office. "You know, when you don't have enough money to buy things for your kids--it's rough." A plasterer, the man has been out of work since September.

It is the inability of existing businesses to meet the employment needs of the area, even without recession, that underscores the need for new business, city officials say. "We can't assume that businesses already in the city will continue to grow," Lindquist says. "Developers will have to encourage new firms to come into the city," he adds.

Plans for development in the inner cities are not a new concern. Beginning with the national Urban Renewal Program of the 1960s, and continuing with the Urban Development Action Grants (UDAG) in the late 1970s, the federal government has offered money to cities able to attract capital investment from businessmen. But until recently, that interest hadn't existed in Cambridge.

In the past two years businesses have begun returning to cities such as Cambridge, backed principally by private developers, but also aided by federal and state grants. Plans now exist to revitalize four sections of the city which were once thriving manufacturing areas. A project called the Cambridge Center slated for Kendall Square calls for the development of office space, a retail center and a hotel.

A $6.8 million UDAG grant will fund the redesign of the Lechmere canal in East Cambridge, and a massive development project is designed to bring office and retail space to the Riverfront area. In the Alewife region, where three office complexes have been completed recently, additional office and industrial development is planned. Successful completion of the MBTA Redline extension is crucial for success in Alewife. In Cambridgeport, the major revitalization plans--under the supervision of MIT--have been stalled pending further negotiations with neighborhood residents. Plans for the other areas have already received local approval.

Harvard has outlined two projects for the Harvard Square area and construction has begun on the University Place and Parcel lb office and housing complex--worth a combined total of $100 million.

Business leaders in the community generally predict that the economy will rebound in the near future, allowing businesses to occupy these revitalization sites. "The city is bursting at the seams," says Barbara Sullivan of the Cambridge Chamber of Commerce. "You can only hold back development for so long," she adds John Conally, executive director of the Private Industry Council, which works with CETA officials to locate private sector jobs, says. "I believe the upturn will happen shortly. If the government program [to improve the economy] doesn't do it, business will take the bull by the horns."