Labor market changes leaving many behind

September 07, 2010|By Thomas F. Schaller

Another Labor Day has come and gone. The official unemployment rate nationwide hovers near 10 percent, and the effective rate — including as it does those no longer actively seeking employment — is even higher. Many who kept their jobs have taken pay cuts, suffered furloughs or are working reduced hours.

Economists continue to debate whether the $787 billion stimulus package passed by Congress and signed by President Barack Obama in February 2009 was too small or too big, and whether or not it prevented the loss of millions more jobs and a deeper recession. Of course, the academic debates taking place in the job-secure halls of thinks tanks and universities provide little comfort for those without work.

But the short-term factors are only part of the broader labor market situation, which has changed drastically during the three or four decades since my parents' generation first entered the workforce. Coupled with the globalization of the economy and loss of millions of American jobs to cheaper overseas labor markets, the high-tech, post-industrial work environment of today is unrecognizable to many current retirees.

My parents worked hard their whole lives. Neither had a college degree, and when I was young my father was a self-employed house painter and my mother was a waitress. My dad later got a unionized truck-driving job; my mom so impressed lunching employees from a nearby data services company that she eventually stopped waiting on them and started working alongside them. He retired with a Teamsters pension, and she rose to become one of the company's six vice presidents before retiring with a sizeable 401(k).

Employment arcs like those of my parents are still possible but increasingly rare. Today, few college-educated American employees are lucky enough to find a job with a fixed-benefit pension, and the fixed-contribution plans their employers contribution to may prove insufficient to last for the duration of their retirements.

Leaders of both parties stress the need to retrain the American workforce for the emerging economy. But their sensible calls for improved science and technology education cannot solve all the problems caused by the steady replacement of well-paying, salaried jobs with decent benefits to hourly wages with limited or no benefits.

To upgrade workers' skill sets, we can try to shoehorn as many young people as possible into four-year universities or at least community colleges. (There's also what we on campus call "continuing education" for "nontraditional" students — the polite term for older folks coming to campus.) But there are insufficient resources and classroom space for every American to get a college degree, and not everyone is cut out for it or interested in attending.

Even if we can retrain former steelworkers to assemble microchips or program software, these workforce upgrades only matter if Americans creating the products of the new millennium can earn enough to purchase what they manufacture — the same philosophy that animated far-from-socialist automaker Henry Ford's employment practices. The ability of fast food workers to buy a Whopper once their shift is over is not the same as an autoworker being able to afford the car he just assembled.

I try to remind myself how fortunate I am to have job security. I shudder to think what life has been like the past two years for people who have defaulted on their mortgage, run up crippling amounts of credit debt, or drained down their retirement savings. For this to occur in midlife must be particularly unsettling, especially for parents with dependents at home. If there is a silver lining, economists tell us it is that people are learning to curb their spending appetites and become better savers, debt-holders and long-term financial planners.

Tragically, some Americans facing intense financial duress chose the most extreme measures, taking their lives and sometimes those of others. Labor Day was actually born of similarly morbid circumstances: First celebrated in 1882, it wasn't until 1894, in a symbolic response to the killing by government officials of striking Pullman car workers, that President Grover Cleveland officially made it a federal holiday.

Most years, Labor Day weekend is an opportunity to take an extra weekend day to relax with family and friends. Unfortunately, for too many Americans, Labor Day this year was just another Monday without work.

Correction: In my column two weeks ago, I unknowingly attributed a Bible quote to Jesus that he was repeating as part of a parable, not as his own thoughts. I apologize to readers for the error.

Thomas F. Schaller teaches political science at UMBC. His column appears regularly. His e-mail is schaller67@gmail.com.

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