<p>Thirty months into recovery, Americans are realizing that the
great American job is gone. In its place: a new world of work.
</p>
<p>By George J. Church--Reported by Massimo Calabresi and Jane Van Tassel/New York,
Michael Riley/Atlanta and Joseph R. Szczesny/Detroit, with other
bureaus
</p>
<p> Philip Maidel is still angry. After his job as a supervisor
in the transportation department of the Long Beach, California,
naval shipyards disappeared in 1989, he bypassed a chance for
a secure civil service post because he trusted promises of higher
pay and equal job stability from McDonnell Douglas. The aircraft
builder's recruiters "wined us, they dined us, they had a big
film presentation," Maidel fumes. "They really put on the dog
that you were part of the company for no less than 10 years.
Three years later, I'm standing on the sidewalk."
</p>
<p> It may not be any consolation, but Mary Kimberlin shares his
lot--even though, she says, "I helped to produce that program"
that lured Maidel. They are, in fact, members of the same networking
group at a Douglas-financed "outplacement center" in the Los
Angeles suburb of Lakewood. After 22 years at McDonnell Douglas,
during which she worked up to senior programming analyst, Kimberlin
received a reduction-in-force notice in 1990. She tried going
back to school, studying for a degree in business administration,
but has held only one short-lived job in the past three years.
Meanwhile her marriage has broken up under the emotional stress
of prolonged unemployment--not only for herself but also for
her former husband, who was laid off by Hughes Aircraft the
same year Kimberlin got riffed at Douglas. Says Kimberlin mildly:
"I didn't expect this to go on so long."
</p>
<p> The really ironic thing about this story is that it is no longer
so unusual for recruiter and recruited, wife and husband, to
wind up together among the long-term unemployed. After 31 months
of renewed growth in national production, all sorts of people
who never thought they would be on the jobless lines--professional
and managerial types, highly skilled technicians and long-seniority
office workers--are joining laid-off factory hands in looking
for jobs and not finding them.
</p>
<p> The recent perceptible quickening of the recovery from the 1990-91
recession has done little to calm their anxiety. "I suspect
that it may be a long time before we see improvement in the
employment picture," says Stephen Roach, chief economist for
the investment banking firm Morgan Stanley. In his opinion,
and that of many other authorities, "the labor market is in
the midst of a profound structural transition where we are really
moving away from traditional sources of hiring." Into what?
A not-very-brave new world in which, even after the recession
is a faded memory, no one can be quite sure where the big surge
of new jobs will come from.
</p>
<p> It is the anxiety about jobs that has made this week's House
of Representatives vote on the North American Free Trade Agreement
a nail-chewing Washington version of the Perils of Pauline.
In itself, the pact that would allow free movement of goods
and investments among Canada, the U.S. and Mexico would, it
is thought, have only moderate immediate effects. Some U.S.
jobs would be lost to low-wage Mexican competition, and some
jobs would be created in American industries that would have
an easier time selling their products in Mexico. But the numbers
would be relatively small on both sides, and it is anyone's
guess where the balance would be struck. Most reasonably impartial
economists believe that the result would be a modest net increase
in U.S. jobs.
</p>
<p> In a climate of extreme worry about employment prospects, however,
NAFTA has picked up an enormous load of symbolic freight. Opponents--most prominently labor unions and Ross Perot's movement--see, not entirely wrongly, the U.S. economy being hurt by growing
foreign competition, and view NAFTA, less logically, as the
latest in a succession of what Perot calls "dumb trade agreements"
that have taken a grievous toll of American jobs. Proponents
regard the pact as an unavoidable necessity if the U.S. is going
to compete with the trade blocs forming in Europe and Asia.
Rejection, they argue, would be a futile and dangerous attempt
to wall off the U.S. from a global economy that no longer shows
much respect for national borders.
</p>
<p> At week's end the vote still looked too close to call. The Administration
was picking up a few more votes, but not as many as might have
been expected after Vice President Al Gore emerged as the consensus
winner in his TV showdown with Perot. The latest predictions
from nose counters: NAFTA might win by two or three votes. But
if it appears to be falling short, it will lose by 60 to 70,
because many pro-NAFTA Representatives will not dare to provoke
union and Perotista fury in a losing cause.
</p>
<p> NAFTA or no NAFTA, however, the squeeze on jobs continues. This
is one subject on which expert and public opinion are in rare
accord. In the latest TIME-CNN poll by Yankelovich Partners
Inc., 54% of those questioned thought it will be harder to find
a job during the next year than it has been over the past 12
months, vs. 29% who thought the search would be easier. Two-thirds
believed that job security has deteriorated over the past two
years, although those years have seen continuous economic growth.
When those giving this response were asked whether the insecurity
was likely to be just a short-term problem for the next few
years or a long-term trouble lasting many years, only 37% said
short; 53% expected long-lasting difficulty.
</p>
<p> Part of the problem, of course, is that production growth has
been far more sluggish than usual for the first 31 months of
recovery; and this has been reflected in an equally slow reduction
in unemployment--down from 7.8% in June 1992 to 6.8% last
month, but still far higher than normal for this stage of an
expansion. But the unemployment rate is a grossly inadequate
measure of hardship. Secretary of Labor Robert Reich estimates
that in addition to the 8.8 million people officially counted
as jobless, 1.2 million are so discouraged that they have quit
looking for work and thus are no longer counted. The Bureau
of Labor Statistics figures that as many as 6.2 million more
would like to work full time but have taken part-time jobs because
that is all they can get. Grand total: as many as 16.2 million.
</p>
<p> Even those calculations do not complete the picture. Some of
those who are unemployed may be loath to admit it. Thomas Mooney,
president of the Chamber of Commerce in Rochester, New York,
is puzzled over why the area's stated jobless rate is below
5% despite brutal payroll slashing by Eastman Kodak, the region's
biggest employer. His conclusion: many Kodak workers were not
laid off outright but were coaxed or pushed into early retirement,
and "an awful lot of those people become consultants. Whether
or not they have any clients, I don't know. But if they get
a call asking if they are working, they may say they're consultants,
and then they're listed as employed"--though they really are
not.
</p>
<p> More important, the jobs being wiped out at giants like Kodak,
McDonnell Douglas, IBM and General Motors are far better paid
than the jobs opening up at companies still growing rapidly.
Wal-Mart, the discount-store chain, created more jobs in the
first 30 months of the recovery than any other company in the
country, but they generally pay only about $5 to $9 an hour.
PepsiCo is still expanding, but most of the new jobs are for
those who feed the ovens at the company's Pizza Hut, Taco Bell
and KFC fast-food restaurants. Result: many people who survive
layoffs and find new jobs nonetheless suffer a deep slash in
income. One study found that of 2,000-odd workers let go by
RJR Nabisco, 72% found jobs--but at wages that averaged only
47% of their previous pay.
</p>
<p> By now, these trends have created an "industrial reserve army"--to borrow a term from Karl Marx--so large that a quite
extraordinary and prolonged surge in output would be required
to put all its members to full-time, well-paid work. Two indications
of the yawning chasm between job supply and demand, in Detroit
alone: in October, the Detroit Post Office handed out 20,000
applications for such jobs as clerk, sorter and letter carrier,
even though it announced it would have at most a few hundred
openings and that some of them would not be filled for three
to five years. Last week Detroit was again the scene of a sort
of job panic: thousands of unemployed workers began lining up
at 7 a.m. to apply for jobs that might never exist in a gambling
casino that Mayor-elect Dennis Archer wants to keep from being
built.
</p>
<p> And where will a surge of job-creating growth come from? In
the short run, at least, the dominant employment trend is going
in the opposite direction. The nation's corporate goliaths are
continuing, and even intensifying, the downsizing mania. Even
companies that are still profitable: Procter & Gamble and General
Electric. And even companies that have already been through
one or two spasms of shrinkage. The latest survey by the American
Management Association of 8,000 of its members showed that 47%
reduced their staffs during the 12 months ended last June, a
trifle more than in 1991-92, and the cuts went deeper: an average
10.4% of staff was cut, vs. 9.3% the previous 12 months.
</p>
<p> Eric Greenberg, director of management studies for A.M.A., thinks
that the trend is going beyond reason. "A great many companies
are asking the wrong question," says he. "They are asking, What
is the irreducible core that we need to turn on the lights in
the morning and lock up the doors at night and still continue
to do business? The right question is, How can we change the
way we do business so that the people we have are better able
to contribute to organizational success?" Worse, he complains,
"what companies have been doing is firing their customers and
undercutting any hope of a consumer-driven recovery. People
who lose their jobs are not spending their money and not driving
the industrial machine." But even if he is right, it will take
some time for this logic to sink in: Greenberg readily admits
that A.M.A. surveys point to almost as much downsizing as ever
in the 12 months ending next June.
</p>
<p> The situation is not entirely dark for job seekers. Some types
of jobs are still expanding, though occasionally types that
many people are unaware of. A fair number of former Detroit-area
autoworkers, for example, have been successfully retrained to
become prison guards.
</p>
<p> More important, despite the persistence of unemployment and
underemployment, the U.S. is still creating about 2 million
jobs a year, net. And that puts it well ahead of some of the
foreign competitors that in popular and Perotista mythology
are beating Uncle Sam's brains out. The official 6.8% U.S. unemployment
rate compares with 11.1% in Canada, 10.7% in Britain and around
11% in the 12 nations of the European Community as a whole.
Today new technology, in such forms as robot welders on auto
assembly lines, is wiping out jobs. But economic historians
point out that new technology in the long run has always created
more jobs than it has destroyed, and should do so again.
</p>
<p> But what kind of jobs and in what industries? Experts can identify
only very general trends. Blue-collar jobs will continue overall
to be lost to low-wage offshore competition. In the textile
area, fashion design will stay in the U.S., but cloth weaving
will go; in steel, American mills will turn out specialized
alloys, but the heavy, crude stuff will increasingly be bought
from abroad. And there are a few consensus forecasts: nobody
would leave biotechnology off a list of industries bound to
grow. Nonetheless, there are sharp disagreements. Most experts
believe that agriculture will continue its centuries-long decline,
but a few regard it as having become a high-tech field while
nobody was looking and think it may be harboring prospects for
job growth. Contrariwise, though many analysts regard health
care as the high-tech field bound to generate more and better-paying
