US to spur retraining; SOS for the displaced worker
By most measures, the United States economy is rebounding from recession, although at a more leisurely pace than in the past. But one stubborn statistic - unemployment - is only inching down and remains at an uncomfortably high 10.2 percent. And the jobless rate could begin climbing again this summer as better economic news brings idle workers back into the job market.
''The rate could climb as much as half a point'' before declining later in the year, says Edward Guay, chief economist at the CIGNA Corporation.
Even more worrisome is the likelihood that several years of economic recovery will trim the unemployment rate but still leave large numbers of workers without jobs, displaced by a variety of things including new technology, improved operating methods, and increased competition from imports.
So the nation's business and government leaders are facing the question of identifying these workers, helping them find new jobs, and giving them the training for those jobs, if necessary.
Under the Job Partnership and Training Act, which takes effect Oct. 1, states will be required to develop a plan for retraining or relocating displaced workers. The Reagan administration wants to spend $240 million for these activities in the budget year beginning the same date, enough to help 96,000 workers.
In an ever-changing economy, of course, some workers are always being displaced. But ''the displaced (worker) portion of unemployment has increased quite a bit'' in the current recession, says Steven Sheingold, the author of a Congressional Budget Office study on the subject.
Experts disagree on how many workers have been displaced. But they do agree that many displaced individuals could land one of the large number of factory jobs expected to be created over the next decade. The challenge is that many of the new positions will require skills displaced workers do not have or will offer wages below what former auto or steel workers have come to expect.
''The jobs that are going to be available will not be as high paying as the ones they have been laid off from,'' says Jane Kulik, project director at Abt Associates Inc., a Cambridge, Mass., consulting firm that has been studying worker retraining programs for the US Labor Department.
Mr. Sheingold says, ''There will be a significant degree of adjustment. There will be lower wages and less benefits. I do not know of any way around it.''
Retraining is the major avenue for solving the displaced-worker problem, experts say. The most cost-effective approach appears to be teaching laid off employees how to look for new jobs. Other situations involve teaching the worker new job skills. And some agencies are looking at the idea of teaching displaced workers how to start their own businesses.
''We don't think auto and steel will come back to their old (employment) levels,'' says Ronald E. Kutscher, assistant commissioner of labor statistics. ''The skills required in those industries are not the same as in the growing industries. So you do have skill-mix problems.''
Auto workers are perhaps the largest category of displaced employees. As the result of increased imports and increased factory mechanization, many of the 236 ,700 laid-off members of the United Automobile Workers are not expected to be called back.
The phenomenon also affects less-publicized workers. For example, Union Pacific Corporation has 13.6 percent of its 44,000 workers on layoff. ''Will they all come back?'' chairman James H. Evans asks. ''The answer is probably not ,'' as the result of more automation at the transportation company.
Some experts say the problem is not as grim as it would first appear. ''The recession makes it look like you have got millions of workers who are laid off permanently from industries presumed to be in long-term decline. In fact, many of the workers will go back to the same industries as interest rates fall,'' asserts Marc Bendick Jr., an economist at the Urban Institute, a Washington, D.C.-based think tank. He says roughly 100,000 people have been laid off from declining industries and appear to be in long-term difficulty.
The AFL-CIO's director of economic research, Rudy Oswald, contends that ''60 to 80 percent'' of the workers who lost jobs during the recession will regain them. But that would still leave between 500,000 and 1 million among the displaced. Mr. Sheingold puts the number of such workers higher, at 1.4 milion.
There will be a large number of new jobs available in the US in the next 12 years for which displaced workers can compete. According to an unpublished US Labor Department study excerpted in the newsletter Economics Today, factory employment will hit 22.7 million workers in 1995, up from 19.2 million last year. During the same period the number of service jobs will rise from 22.6 million to 32 million.
Job-hunting prospects for displaced workers will also brighten, because employers will have a smaller supply of young replacement workers in coming years. The number of 16- to 24-year-olds in the labor force is expected to decline 13 percent between 1979 and 1995, according to Labor Department statistics.
Robots and other advanced types of automation will continue to trim employers' needs for workers, although the process will be gradual, many experts think. ''We are not going to wake up tomorrow with robots putting everyone out of work,'' says Roger D. Semerad, executive vice-president of the Brookings Institution and chairman of 70001 Ltd., a pre-employment training program that teaches job-hunting approaches, among other things.
Teaching displaced workers basic job-hunting skills is one of the most cost-effective ways of helping them, experts say. Many of the displaced ''have never written a resume, never thought about how their skills may be transferred to other jobs,'' says Mr. Bendick at the Urban Institute.
Training in job-search skills is one service provided by 70001 Ltd. in 51 cities. Supported by corporate contributions and federal grants, the organization places four of five graduates within two weeks in entry-level jobs at a cost per placement of $1,907. The 70001 service began by serving only disadvantaged teen-agers, but last year it started to offer pre-employment training to jobless men and women in Prince Georges County, Md.
While some workers can find new jobs without acquiring different skills, others cannot. ''Take the person who worked in an auto plant. Auto assembly is not skilled work. . . . So when he goes back on the labor market he goes back as if he were 18 or 19 and unskilled,'' says Audrey Freeman, a labor expert at the Conference Board, a business research group.
One of the more successful retraining programs is the Downriver Community Conference Economic Readjustment Program, run by a community service agency in the Detroit area. Staff members work closely with local employers in seeking openings for which unemployed workers can be trained. The companies also help design the training. Preliminary data indicate 70 percent of the participants have gained jobs.
Relocating displaced workers is a less appealing solution, experts say. One reason is that at this stage in the economic recovery there are relatively few areas where there is a surplus of jobs. ''You don't want to move people to places that have unemployment,'' economist Freeman says.
And workers with financial roots in an area generally will not respond to a modest relocation payment. ''If you are talking about a 45-year-old with a membership in the bowling league, he is not going to move for $1,000,'' Mr. Bendick says. ''A large part of the factors that lock these people into a location are financial, and they are big financial items. If you own a house in Detroit, you'd lose your shirt selling it.''