A Great Economy, Except for the Workers

May 05, 1994|By ROBERT RENO

Major American corporations are laying off workers at the rate of better than 3,000 a month.

This butchery of the corporate work force is unprecedented in recent history, unheard of in a period of unmistakable economic recovery and steeply rising profits, and is proceeding at a faster pace than it was a year ago when the recovery was still a far more uncertain thing.

Other than this anomaly, which represents financial disaster for thousands of American households and stressful anxiety for thousands of others still awaiting the ax, everything is fine.

Consumer confidence rose last month. Payroll employment grew 456,000 in March. The Commerce Department's forward-looking index of leading indicators for March, reported Tuesday, surged handsomely to its highest level since it was created in 1948.

The closely watched survey of purchasing managers conducted the National Association of Purchasing Management,

which was reported Monday, showed a spurt in optimism with respondents expecting revenues to rise 7 percent this year while capital expenditures grow 10.9 percent.

The Wall Street Journal survey of 623 The continuing butchery of the corporate work force is unprecedented in recent history.

major corporations, released Monday, found profits in the first quarter up 142 percent from the first quarter of 1993. The federal deficit is shrinking faster than expected because of rising revenues.

And most significant, the Conference Board reported Tuesday that the recovery has at last broadened geographically. For the first time since 1988, the research group reported, every region of the nation has experienced year-over-year growth. This fills the gaping hole that has existed in the recovery so far with certain regions, notably California and the Northeast, remaining mired in recession long after others were well into the upswing of the business cycle.

Assuming that the recovery is now entrenched and that not even the folly, not to say mischief, of the Federal Reserve is likely to derail it, it is possible to get a better idea of where it is leading us. And if you're a wage earner or a salaried worker -- which is almost everybody -- it is not exactly to the promised land.

There are, of course, a lot of very encouraging things about this particular business cycle. In many ways it is as promising as any of the recoveries experienced since World War II if you look at things like rising productivity, improvements in global competitiveness, profits, the relatively favorable outlook for inflation, capital investment and technology-driven development.

But the corporate downsizing fad has not yet run its course. The recent improvements in performance of companies like IBM, General Motors and Sears -- who between them have unloaded 209,000 workers in the last three years -- have become the most fashionable examples in the corporate culture.

Job security is a concept that is disappearing. Wages are still stagnant. Labor seems stuck back where it was before the Wagner Act.

Incomes are far more unevenly distributed than they were a decade ago. Part-time or temporary workers are the fastest-growing segment of the work force.

Whether, for most Americans, the 1990s will be more economically satisfying than the 1980s is still an open question.

Robert Reno is a columnist for Newsday.

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