Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.bonus,americast.usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Fri, Aug 21 1992 Date: Fri, 21 Aug 92 04:08:23 EDT Message-ID: 08-21 0000 BONUS: Unemployment looks here to stay USA TODAY Update Aug. 21-23, 1992 Source: USA TODAY:Gannett National Information Network For two years, workers have watched with alarm as the unemployment rate has climbed steadily, from 5.2% in summer 1990 to 7.7% this summer. Yet many economists and politicians look at today's jobless level and scoff. What's the big deal? It's nothing like a decade ago, when unemployment hit 10.8%. WILL THE WORKFORCE BOUNCE BACK LIKE BEFORE? Today's level hides the fact that the nation's workforce has fundamentally and irrevocably changed the past two years. Recessions usually crush the ranks of blue-collar workers. Then the economy rebounds and the unemployed return to work. Not this time. Thousands upon thousands of white-collar jobs - many of them high-paid and managerial - have been lost, probably forever. And that has left people with decades of experience, some who had earned $50,000 salaries and worked hard for Ph.Ds, taking lower-paying jobs or standing in an unfamiliar place - the unemployment line. SHOULD WORKERS BE ESPECIALLY ALARMED? "This is one of the most powerful developments of the early '90s," says Audrey Freedman, president of Manpower Plus consultants in New York. "People are seeing there just aren't that many good jobs available anymore." Jobs of all kinds are disappearing at an alarming rate. In the past two years, non-farm employment has plummeted from 110.4 million to 108.6 million. That's equivalent to losing the combined employment of General Motors, Ford, Chrysler and IBM in one fell swoop. WHO WILL BE HARDEST HIT? Blue-collar and non-supervisory workers, as always, have been hit the hardest. But their bosses are getting pink slips, too: Of the 176,000 jobs lost in the transportation industry, 85,000, or 49%, were supervisors. In the electronic-equipment industry, 55,000, or 9%, of the industry's supervisors or managers joined the unemployed. Nearly all of those midmanagement jobs are gone forever. HAVE COMPANIES DOWNSCALED TO GET BY IN TOUGH TIMES? Companies have found that they can get by without hundreds of managers involved in planning, administration and fiscal work. Those jobs were added in the boom years, when companies in the USA weren't faced with vicious foreign competition. Now they're expendable. Plus, companies have found that they can push decision making down to eliminate several layers of management. "We're all learning how to do things differently, how to make our people more flexible," says Wanda Lee, a corporate vice president at FHP, a Fountain Valley, Calif.-based health-maintenance organization. "We have to to survive." ARE HIGH-PAYING JOBS DISAPPEARING? Dig beneath the broad numbers, and it's clear that jobs that have traditionally commanded high wages - many of them unionized - are disappearing rapidly. Carmakers and others in the transportation industry have cut 176,000 positions. Autoworkers average $65,000 a year in pay and benefits, and they're unlikely to ever again find jobs that will reward them that handsomely. Manufacturers of electronic equipment, hit hard by defense-spending cuts, have eliminated 132,000 highly paid positions. HAVE CONSTRUCTION WORKERS SUFFERED? There are 575,000 fewer construction jobs than in July 1990. Employment has plunged along with the collapse of commercial construction, which has been crippled since the 1986 tax-law changes took away many incentives to invest in real estate. The nation's office-vacancy rate is about 20%, and tops 30% in cities such as Dallas and Tampa. Experts say it could be five years or longer before construction workers are called back. Also crunching construction: the aging of the baby-boom generation, which in the 1980s bought houses and started families . That group is not building houses now. That phenomenon could slow hiring for years. HOW HAVE RETAIL JOBS FARED? Retailers - from auto dealerships to department stores - have slashed employment by 535,000. Many had grown fat in the 1980s, when consumer spending was booming and it was easy to add workers. In the slow-growth 1990s, they've found that they can get by with fewer sales people or with temporary workers. Sears alone dropped 33,000 from its payroll last year. That's likely to continue, thanks to financial pressure on retailers and their growing reliance on technology. Tasks that once required human effort can now be done faster - and cheaper - by computers. ARE ANY AREAS UNAFFECTED? The heavy losses in those industries haven't been offset by the sizeable job gains a few industries have enjoyed. The economy's strongest job machine, health services, has boosted employment by 640,000 since July 1990. The USA's nearly insatiable appetite for health care, driven in part by an aging population, has led to high demand for nurses, technicians and other health-care specialists. But few of those jobs are high-paying, high-glamour positions. Most are relatively low-paying spots for nurses, aides and clerks. HOW HAVE CUTS HURT THE WORKER? How much has the loss of high-paying jobs and the growth in lower-paying slots affected workers in the USA? Enormously. Average weekly earnings for non-supervisory workers - adjusted to exclude inflation and show the real change - fell from $261 a week in July 1990 to $255 a week last month. That may not sound like much, but workers expect to make more money each year, not less. When they don't, they feel poor and they buy less. HAVE THE UNEMPLOYED GIVEN UP HOPE? Beyond those counted as officially unemployed, there are an estimated 1.1 million discouraged workers - people who would like to work but aren't looking for jobs because they don't think there are any openings. The ranks of the discouraged has soared 33% since summer 1990. Thousands of people are opting to live at home with parents, collect welfare or otherwise scrape by instead of search for work. IS THERE HOPE FOR STRONG EMPLOYMENT GROWTH? "No one's going to feel the way they did in 1984," when job growth averaged 350,000 a month, says David Blitzer, chief economist at Standard & Poor's. "That sort of really robust growth just isn't in the cards right now. Even where business is picking up, people are anxious, and that is hurting employment." Says Larry Klemz, owner of Home Mountain Publishing in Valparaiso, Ind., "I've been debating moving to a bigger place and adding eight to 12 people over the next couple years. But I'm nervous. The spending (by customers) has to come first." WHICH COMES FIRST? Klemz has perfectly described a major problem: Businesses don't want to hire until they see a strong surge in consumer spending. Consumers don't want to spend until they see businesses hiring. Both wait for the other to move. And the plight of those who've lost their jobs grows worse. More than 3.6 million people - 37% of all those unemployed - have been without work for 15 weeks or longer. That's nearly four months without a job. WILL THIS BE A TERMINAL STANDOFF? Blitzer says there is a chance that "we can get enough small improvement in employment to get small gains in consumer confidence and spending." And over a year or so, the economy could pick up. Small gains and isolated growth in some types of jobs - software designers, for example - won't change the overall picture, however. In the next year or so, there will still be thousands of college graduates waiting tables and working as unpaid interns. The problems could remain for far longer as well. Says Freedman: "I think we're in for a decade of almost no growth in our standard of living, and that means no great growth in good jobs." Bonus Editor: Martin Baucom. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM