Unemployed taking lower-paying jobs

WORKING FOR LESS MONEY

July 06, 1993|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau

WASHINGTON -- Economic recovery may be firmly in place, but all it has brought Eloise Covington is a new job that pays less than half the wage of her old one.

For Mark Blacker, it has produced two employment offers, but at tens of thousands of dollars below what he used to earn.

And Ed Scheve, who made $18,000 a year with full benefits as an Army sergeant before he became one of the Pentagon's defense cuts after 10 years' service, now finds himself employed in the civilian sector, earning only $6.62 an hour as a general office clerk with no benefits.

All three lost their jobs in recent months. And while the economy's inability to create new jobs during the recovery has been well documented, they are facing the equally unpleasant truth that today's job openings frequently involve less pay.

The downward economic mobility of U.S. workers is not a new phenomenon. Real average earnings for the 80 percent of the work force who are not in supervisory or management positions have been declining steadily since 1980.

Recessions have periodically accelerated this downward trend. And that appears to be the case during the recent downturn as well. According to a preliminary analysis of earnings for all workers by economist Jared Bernstein, of the Economic Policy Institute, the wage decline again accelerated during the 1990-91 recession, before resuming its slower long-term downward trend afterward.

A recent workplace survey by the Bureau of Labor Statistics found that of 2.7 million displaced workers who were in new, full-time jobs in January 1992, 43 percent were paid less than they previously earned. And for nearly one in four, the pay cut was big -- more than 20 percent, not adjusted for inflation. The nation's 17.9 million manufacturing workers -- down from 19.1 million in 1990 -- have seen their average hourly wage drop from $8.28 an hour in 1990, when the recession began, to $8.02 last month in inflation-adjusted 1982 dollars.

In the service sector, where jobs have actually been added since the recession, the income decline has been less marked, dropping from an average hourly rate of $7.39 in 1990 to $7.38 last month in inflation-adjusted dollars.

"There is no question that overall there are many people who are losing their foothold, who are definitely experiencing a substantial decline in earnings over time," said David Stevens, executive director of the Jacob France Center, a research unit at the University of Baltimore's Merrick School of Business. "Many people have shifted from more stable to less stable employment. Skills that were rewarded in previous labor markets are obsolete, and they are suffering from that."

Making ends meet

Eloise Covington, 56, of Baltimore, worked for 22 years at the A&P Bakery until it closed six months ago, throwing more than 200 employees out of work. She was earning $12.85 an hour as a machine operator when the bakery closed.

"I couldn't find another job making that kind of money," Ms. Covington said. "There is no job out there making anything near that."

After a period on unemployment she is now retrained as a nursing assistant through Project Baltimore Works, which is funded by the city's Office of Employment Development. She earns $6.05 an hour.

"That is the only thing I could find out there," she said. "A lot of those who worked at A&P still don't even have jobs. Of all of them who have jobs, no one has gotten a job that I heard of that is making the money they made there. The highest I heard of is making $7 an hour."

To make ends meet, she works a part-time shift at St. Joseph's Manor, Lake Avenue, as well as her full-time job at Manor Care nursing home in Ruxton.

Until he was laid off in February, Mark Blacker, 42, earned $60,000-plus as a marketing manager for a heating, ventilation and air conditioning company, enjoying full benefits. "My job was eliminated by a telephone call from the president of the company, saying 'We just don't need you or the division any more. The business has gone.' "

He has since had four or five interviews and been offered two jobs in the same industry -- one at $39,000 without benefits and one at $33,000 with limited benefits.

"I see the same type of positions I held now paying 20 or 25 percent less. I rejected it because of the level, what was expected, and no benefits. I simply couldn't survive on that," said Mr. Blacker, adding that previously he was accustomed to having four or five job offers in hand.

"There is a tremendous amount of under-the-surface age discrimination," said Mr. Blacker, who has found unemployment a difficult adjustment. "Our culture, our whole civilization and society here in this country, bases value on the work ethic, not on really who we are individually . . . but basically whether we work. We have been taught that since we were kids. It (losing a job) takes away a lot of one's self-esteem."

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