America's Blue-Collar Blues: Is More Job Training the Answer?

MERLE KEEFER works as an engine repairman at the Mack Truck plant in Hagerstown, Md. A 33-year veteran of the company, Mr. Keefer has had little more than basic lessons on how to read a blueprint or a wiring diagram, skills that would make him a more valuable employee. The company has refused to take on the added expense of training, he says.

Keefer is one of millions of working-class Americans who have suffered an erosion of wages or, worse, have been squeezed out of an economy that is increasingly oriented toward education and skills.

At the Mack Truck plant, so few of the floor's 900 employees have been trained well enough to keep pace with the constantly updated machinery that when the knowledgeable workers are absent, it's a problem.

''Forget it,'' Keefer says, ''the assembly line could stop.''

During these weeks of White House-congressional angling over the 1995-96 budget, President Clinton is pushing measures designed to boost skills and job opportunities for this burgeoning portion of the nation's labor force. But Mr. Clinton is up against budget-cutting lawmakers who say White House plans are ''big government'' and too costly.

Republicans seek savings with cuts in federal scholarship programs and the imposition of market-rate interest on student loans. They call Mr. Clinton's plan to afford vocational or college education to more youths a subsidy the government can no longer afford. To many in the GOP, the president's proposed private-sector training programs invite Uncle Sam's interference in the marketplace.

Labor Secretary Robert Reich, often called the Clinton Cabinet's ''social conscience,'' says Washington is mired in tireless political debate. ''I'm not suggesting ... increasing job training and affording student loans is a magic bullet,'' Mr. Reich told reporters at a recent Monitor breakfast. But the measures are an essential start, he says.

How can the White House expect to finance these investments in training and education without raising taxes? Reich has a ready response: With Washington's help, business and individuals can take on the task. He says extending worker-training tax credits to businesses will ''help prepare their employees for the technologically driven economy.'' And Clinton has fashioned a tax cut targeted at working families ''that doubles as an incentive for education.''

Keefer, who meets with management twice a month as one of the Mack Truck plant's skilled-trade representatives, says government incentives may lure his superiors into programs they have long resisted. ''We've been fighting for years for more training, and they've always had excuses.''

He charges that his management's only sign of upgrading the skills of its work force was to hire a consulting firm at $2.6 million for 40 weeks ''to tell them how to run things more efficiently.''

''We're like all the other companies that are downsizing -- we're cut to the bone for manpower, so the company can't afford to have six or eight guys in school for production,'' Keefer says. But while his company ''tries to do more with less,'' it could easily boost productivity with training. ''Knowing what we're doing, we might take half an hour to fix something instead of a couple of days.''

Decline in wages

The most recent Labor Department statistics show a continuation of the 20-year decline in wage earners' living standards. During the past year, consumer prices climbed 2.8 percent, while the median income for wage and salaried employees rose a meager 1.9 percent. Those with limited education and skills have been the hardest hit.

''Workers like those at the Mack Truck plant need to be trained in areas around the production line -- not just for the widget,'' says Harold Raveche, president of Stevens Institute of Technology in Hoboken, N.J.

Referring to the Clinton program for tax incentives and federally funded programs, Mr. Raveche contends that ''the problem with Clinton and Reich is that they think government has to be everywhere.'' Ultimately, markets have to determine their own needs and meet them: ''Government should be a catalyst, not a social engineer,'' he says.

Mack Truck is a part of United States industry that is lagging behind, says Phyliss Eisen, senior policy director for the National Association of Manufacturers. Increasingly, she says, industry ''believes their work force is their competitive edge,'' pointing to the $50 billion-a-year American business already spends on training. In 1990, 5 percent of manufacturing companies offered training, today that number is upward of 25 percent.

Despite those strides, 90 percent of Americans work in small businesses, where the training needs are greatest and the resources are the thinnest. Ms. Eisen argues that Clinton's efforts to ''help companies leverage their dollars to increase their amount of training'' is vital to the future competitiveness of US workers.

Indeed, the skills and education gap has made US income inequality a bigger problem than in any other industrialized country, says Edward Wolff, an economics professor at New York University.

The past two decades' technological advancements ''are favoring more skilled and more educated workers while the least-trained workers are losing out to global competitors,'' Mr. Wolff says, a problem ''compounded by growing international trade, where workers abroad can do the same work that the lower tier of our work force does, only cheaper.'' The pressure ''pulls down wages'' in the US.

This is most stark in California, home to some of the country's worst urban blight, the largest pool of low-cost immigrant labor, the biggest base of high-technology firms, and a persistent unemployment problem.

''There is little doubt that we are heading toward a two-tiered society,'' says Tapan Munroe, chief economist of San Francisco-based Pacific Gas & Electric and a leading voice in his state's economic-development community. At the bottom of the nation's income distribution, the number of Americans living in poverty hit a 30-year high of 39.3 million in 1993 -- 40 percent of whom were children. ''Most troubling is that trends show that the next generation will slip further,'' he says.

The best preventative measure is to improve the transition from high school to work, Wolff says. ''Today, the top quarter of students who continue their education are on a promising track, while the bottom three-fourths who may or may not finish the 12th grade are in real jeopardy. We don't prepare the [high school graduate] technical, semiskilled workers -- people below the professional and managerial level.''

Low- and middle-income families are squeezed by post-high-school education costs. According to recent tabulations by T. Rowe Price, the Baltimore-based money management firm, a parent of an infant today who plans to give that child a chance to go to a private college will have to sock away the equivalent of $450 in high-yield investments every month for the next 18 years.

Clinton's intention to allow students to borrow funds for school, while US taxpayers pay for the interest on the loans and are often left holding the bag for unpaid student debts, is an unacceptable alternative to Rep. Bill Gooding (R) of Pennsylvania, chairman of the House Economic and Educational Opportunities Committee and Rep. Howard McKeon (R) of California, chairman of the subcommittee on post-secondary education.

By basing eligibility for loans not only on the family's capacity to pay but also the price of the schools students choose, they say the plan is rigged to allow ''students with relatively high incomes to qualify for government-subsidized loans by choosing expensive colleges and universities.'' The Clinton approach, they say, is regressive because it asks ''high school graduates to pay taxes to subsidize future high-income earners.''

Political stakes high

Some observers say Clinton has as much at stake politically as workers do economically.

Populist commentator Kevin Phillips says Clinton has lost the traditional lower-middle-class, blue-collar constituency of the Democrats. ''It's a pretty disillusioned group,'' contends Mr. Phillips, that has watched a president preside over an economy in which corporations have depressed wage scales ''to make themselves more competitive as their stock prices have soared'' and to ''allow low-cost labor abroad to flood the US with cheap goods.''

Clinton's contention that he wants to redress the working person's economic plight doesn't jibe with his actions. ''You can't tell these people that you care about them all that much while simultaneously worrying about the bond market, and passing trade agreements that threaten the livelihoods of average wage earners.... The Democrats have to find something they can deliver on,'' Phillips says.

Reich, too, warns of negative election-year repercussions if Clinton fails to improve the economic outlook of those hurting the most. ''Never underestimate the power of a declining paycheck. There's a lot of anxiety out there ... 1996 will be a contest for the soul of the anxious class.''