New England, once in job rut, now a hive
As if building a huge and complex nest of steel and concrete, two giant cranes sit like exotic birds atop 120-foot-high pedastals, effortlessly swinging down girders to men like David Nichols. A ship welder by trade, Mr. Nichols is one of scores of workers building the new Hynes Convention Center here in Boston's Back Bay. Just a few months ago the General Dynamics shipyard in Quincy, Mass., where Nichols used to work, closed for good.
But with foresight that rivals that of almost any economist, Nichols says he quit the shipyard five years ago because ``I knew [shipbuilding] was slowing down.''
It was indeed. The tough part was that Nichols's father and brother, who did not quit, were laid off when the yard shut down. About 5,300 other workers were thrown out of jobs, too.
On the surface it sounds like a familiar, albeit sad, story. Many people still picture the struggling New England of the '70s, when unemployment rates in the 8 and 9 percent range made the region an easy target for nightly news-feature stories on ``the plight of the jobless.'' Meanwhile, even as other regions of the United States -- most notably the Sunbelt states -- were enjoying good economies, population increases, and generally better times.
In fact, the ``sad'' story of Nichols's father and brother losing their jobs isn't sad at all. He says his father hadn't been laid off more than a few weeks before finding work as a carpenter. His brother took a vacation before finding a job with a heating and air conditioning company, without a great loss in wages.
``They knew it [the shutdown] was coming,'' Nichols says. ``They were looking for other jobs, but they weren't concerned, because they knew they could get a job somewhere.''
A proud General Dynamics official touts the company's ``very successful'' reemployment program, which has placed 1,600 of the laid off shipbuilders. Many others found jobs on their own. But perhaps the biggest reason those ``displaced'' workers have found jobs so quickly is the profusion of job openings.
``Near full employment'' is the unfamiliar term economists are using these days to describe the New England job market.
And, although one might not feel it in the cool ocean air blowing through the auditorium construction site at the corner of Boylston and Dalton Streets, there is still a tangible sense of job confidence that Nichols and other workers possess in this six-state region.
It is assurance born of the fact that even if they get laid off, there are still many jobs out there. For example, despite the vagaries of the construction business, Nichols is confident that when he finishes this job in frigid January or February, he'll simply ``move on to the next job.''
While manufacturing and old-line industries in oil, glass, steel, and mining in much of the nation are reeling from tough overseas competition, the oil glut, and a weak economy -- the New England states continue bulling along with the lowest unemployment rates in the country.
There is an explanation. Economists say the '73 recession hit New England hardest, toughening its economy and forcing many traditional New England industries like shipbuilding, metalworking, textiles, leather, and shoemaking out -- or at least toward -- the door.
In their place, insurance, health care, banking, business services, real estate, finance, retail, hotels, construction, and high-tech manufacturing have picked up steam. These industries, gathering momentum in the late '70s, were slowed a bit in the recession of '82-83, but bucked most of it and simply took off.
Today, that culture of service, retail, and high-tech manufacturing has combined with educational institutions here to a complex job machine. Instead of unemployment rates more than two percentage points above the national average, New England has brought a slew of new jobs home to roost -- and a labor shortage.
``If I've got to point to one great phenomenon in New England, it's the very rapid rates of job growth,''says Paul Harrington, an economist at Northeastern University in Boston.
``In Massachusetts alone, we generated 435,000 jobs between 1977 and 1984. That's an amazing volume of jobs within a single state's economy,'' he gushes. ``You've got to recognize that that was during a period of time when we had the worst recession since the Great Depression. And yet our economy grew at about 2 percent annual average pace.''
Professor Harrington admits that job growth is uneven and that most of the new jobs are blooming in a ``growth strip'' running roughly from Stamford, Conn., in the south to Portland, Maine, in the north. That has meant that western Massachusetts and much of Maine and Vermont have not always prospered quite much as, for example, eastern Massachusetts, New Hampshire, and Connecticut.
But although New England boasts low unemployment, that doesn't mean it has been immune to job losses in the same old line industries that have been suffering across the country. It just means the service and retail trade industries have more than filled their place.
Though thousands of Massachusetts jobs were lost in durable and nondurable manufacturing industries like textiles and metal cutting, the state's economy has proved resilient.
From June 1985 through June 1986, Massachusetts produced a total of 37,700 new jobs, Harrington says. And though the rate of new job creation has slowed somewhat, from a net of more than 150,000 new jobs in the same '83-84 period, the rate of job expansion is still easily outpacing the increase in the labor market.
Job growth is proceeding at a 2.7 percent pace, while the labor force growth rate is only 1.3 percent, he says.
Employers say that since much of the region is virtually at full employment, and personnel managers acknowledge that they've been put to ingenious shifts to be ``more creative'' in their hiring practices.
In the fast-growing New England service industries, many firms have reached beyond traditional labor pools to employ younger workers, minorities, and handicapped people. Many of these are ``hard core'' unemployed who might never have worked in other regions. They have a shot at earning wages more than $2 an hour above the $3.55 federal minimum wage.
Boston retailers have learned they must attend more job fairs than ever, and some of them even bused in part-time help during the Christmas shopping season last year.
Somerville Lumber Company is a Massachusetts retail lumber and home imporvement outlet that has expanded from one outlet in 1982 to its fifth outlet, which opened this year. Susan Fedo was hired to find employees for the fast- growing company, and it's been a challenge, since each store requires at least 125 people on the payroll. Job fairs have become a regional staple for employers, and Ms. Fedo regularly attends many of them.
``We've got to be very active recruiting and very active in letting people know about us,'' she says. The lumber company also puts on its own job fairs and pays well above minimum wage to attract workers.
Kenneth Stuart, vice-president in charge of personnel at State Street Bank (one of the region's largest), says the bank is scrambling to find workers.
One of the bank's fastest-growing jobs is the ``account controller'' slot, which involves handling mutual funds and master trust funds. Traditionally this post has gone to college accounting majors. Not anymore.
``We're growing faster than we can hire people and train them,'' he says. ``The more technically trained people are the better. But we will take them -- we're requiring less accounting now.''
The bank has more than 1,000 account controllers and has grown more than 25 percent every year for the last three years, Mr. Stuart says. To get enough new employees the bank is:
Going to more junior colleges seeking out those with two-year degrees in accounting.
Running in-house training programs that offer English as a second language to try to draw in those with accounting backgrounds, but who speak different languages.
Keeping the bank open week nights so people can apply for jobs as well as participating in a referral program that searches for computer systems people, programmers, secretaries, and entry-level clerks.
James Darr at the Boston Private Industry Council sees some possibility that what has happened in New England could also be happening more broadly in other parts of the US.
``Lots of heavier manufacturing disappeared from this region in the '50s and '60s,'' Mr. Darr says. ``So we experienced then what the Midwest and the South are now.''
``I think the other parts of the country will experience a decline in birthrate, their relative manufacturing wage will go down, their less competitive industries will close, and eventually I think they'll benefit from it.''