THE PERILS OF A DUAL ECONOMY
Levinson, Mark & Harrington, Michael
In the wake of the economic recovery in 1983-84, a kind of euphoria spread through some, but by no means all, of the upper reaches of American society. John Naisbitt, author of the widely read...
...Only 28 percent of the jobs in this industry were good jobs (jobs in the top third of U.S...
...A special study by the Bureau of Labor Statistics in late 1984 gets somewhat more concrete...
...For now, we simply note that the New York Stock Exchange analysis coincides with our own regarding the basic trends...
...A subset of hightech manufacturing industries, however, with both high R&D expenditures and high levels of scientific engineering and technical workers, did experience a 26.3 percent growth rate...
...47-68...
...For we will argue that, even if those growth rates are achieved, the changing American occupational structure is becoming bifurcated, and that this may create serious difficulties for many working people, as well as for American business...
...And 1983 was a time of partial recovery in which the effects of the worst recession in half a century were still being felt...
...The most significant gains in that decade were made at the top, where professional and technical workers increased by 4.8 million, and in the lower wage reaches of the middle, where service workers increased by 3.5 million, sales personnel by 2.84 million, and clericals by 4.7 million...
...in the latter the gains are mainly in the service-producing sector...
...That totals 1.694 million new, well-paid jobs...
...13 Michael Urquhart, "The Employment Shift to Services: Where Did It Come from...
...Notes An earlier version of this article was published by the Research Institute of the Friedrich Ebert Stiftung in Bonn, Germany...
...The first edition used 1978 statistics, the second was based on 1983 data...
...A study by Michael Urquhart complements this analysis...
...Rosenthal then argues that the occupational structure in 1995 will, on the basis of Bureau of Labor Statistics data, resemble that of 1982...
...However, his basic argument is seriously flawed in several ways...
...The wages of those reemployed are on average 21 percent below their previous wage level...
...The heaviest job losses were suffered in the Atlantic seaboard areas and parts of the industrial Midwest, which accounted for about half of the lost jobs...
...2 We also will not dispute here Naisbitt's, and the Department of Labor's, hopeful economic premises...
...An analysis by Lester Thurow emphasizes the complexities of these trends.' In the '70s, Thurow points out, American research and development (R&D) fell while Europe's rose...
...Current Statistics," Monthly Labor Review, October 1984, Table I I, p. 62...
...Under these conditions—the relative cheapness of workers in the United States and their high cost in Europe—the divergence between the two areas becomes quite explicable...
...For a variety of technical reasons, the BLS study does not focus on office workers (the disappearance of manufacturing jobs is somewhat easier to define...
...So if the growth sectors of the future are, as the Exchange maintains, dominantly wholesale and retail trade and personal and business services, that will even further accentuate the trends we have described here...
...The main sources of new jobs in the American economy since 1962, the Exchange says, "have been personal and business services, government, and wholesale and retail trade...
...By 1983, this figure had shrunk to just above 40 percent with most falling below the low budget line and a few rising above the high budget marker...
...In the former the losses are primarily in manufacture...
...for instance, machine-tool operators and metalworking craftsmen, which are 29 and 31 on the projected 1995 list in the Stock Exchange study, are not even found in the top 40 jobs of the BLS study...
...We believe that the categories used tend to conceal some of the changes that will take place, but this is not crucial here...
...Furthermore, wages in the high-tech sector are two-tiered...
...Only 59 percent of those reemployed are covered by health insurance...
...Monthly Labor Review, April 1984...
...Ironically, in years of high joblessness those with jobs do fairly well, and an analysis of the employed thus paints a darker reality in a rosy light...
...All these data tend to support the theories developed by Barry Bluestone, Robert Kuttner, and others, that the "middle" of America's society is in deep trouble...
...They argue that the trends described here are simply part of the process of economic development— a process that results in a shift of employment from agriculture to goods-producing industries and, finally, to services...
...In an important study, Wassily Leontiev notes that, during the 19th century, "the 'productivity'—or should one say the Indispensability'—of labor increased steadily and so did the demand and consequently the price paid for it...
...For example, 27.4 percent of them were receiving 20 percent or even less of their previous pay...
...The number of computer programmers, he emphasizes, will increase at a 76.9 percent rate between now and 1995...
...Source: Bureau of Labor Statistics, in Robert Samuelson, "Middle-Class Media Myth," National Journal, December 31, 1983...
...If one adds the 39.9 percent who are still unemployed or just left the work force, the loss of income affected about 59 percent of the more than 5 million workers whose jobs had disappeared...
...2 Arthur J. Andreassen, Norman C. Saunders, and Betty W. Su, "Economic Outlook for the 1990s: Three Scenarios for Economic Growth," Employment Projections for 1995, U.S...
...In that way—hardly realistic in terms of pay and status—the number of lower-echelon jobs declines in percentage terms between 1982 and 1995, from 37.3 percent to 35 percent...
...Rosenthal's analysis ignores the fact that the wage portion of national income fell from 63 percent in 1978 to 59.8 percent in 1984, while interest income rose from 10.3 percent to 14.4 percent...
...Thurow thinks that this is one of the reasons for the current crisis in the American machinetool industry, which lost almost 50 percent of the market to the West Germans, Japanese, and South Koreans during the recovery.' For now, however, we can make a preliminary generalization about the generation of jobs in the 1970s, which was obviously part of the transformation of the American economy from secondary to tertiary activity...
...Firms know employees are apt to leave before the costs of training can be recouped in higher productivity, and employees know that they 418 may soon move to other jobs that require very different skills...
...22 As we noted earlier, the trends we have outlined here have been visible for a decade and a half...
...Women's labor-force participation was, of course, one of the most striking developments...
...Let us now turn to the more recent developments during the recovery of 1983-84...
...Projections about 1995 are obviously very chancy, for one must make assumptions about the economic future—about such matters as growth and unemployment rates, and prices— which are extremely difficult to establish in terms of next year, and even more so of the next decade...
...These points are usually made by people who speak of the success of the American economy in recent years...
...He then compares employment in 1973 for each occupation in the same order as in 1982, and he calculates the 1973 distribution for each third...
...Only in the fairy-tale mind of Ronald Reagan is it possible to have "prosperity" and decreasing opportunity for the poor...
...To begin with, Rosenthal is right: the occupational shifts are often more complex than some have suggested, and one must take into account the disappearance of low-paid as well as of high-paid jobs...
...In short, the trends we have identified in the 1970s are at work in the recovery period of the 1980s—only more so...
...Fallows doesn't say...
...This is accomplished primarily by including wholesale and retail trade in the "goods-producing sector," a stratagem that raises the job percentage of that sector in the economy to 45.7 percent...
...This was a 27 percent rise, almost 10 points higher than the rate of increase between 1960 and 1970...
...industries...
...In a Business Week analysis, the white-collar problem was put into focus...
...Since 1979, the numbers of steel-industry personnel of this type have declined by 40 percent, of auto personnel by 15 percent...
...These workers had been at their jobs for at least three years before they were discharged...
...4 This analysis captures another aspect of the labor-market shift...
...The Role of High-Tech Industries BUT WHAT ABOUT EMPLOYMENT POSSIBILITIES in the emerging high-tech industries...
...Finally, Robert Kuttner has written an excellent summary statement of the reality we are trying to define here: During the three decades after World War II, America not only generated lots of jobs, it generated plenty of good jobs...
...now 14 percent were below their old wage but not by more than 20 percent...
...The Stock Exchange study also uses much more optimistic assumptions...
...Comparing the distribution in 1973 with 1982, Rosenthal shows that the percentage of workers in the top third has increased significantly, the middle third has declined slightly, and the bottom third has not seen an increase but a drop...
...New jobs are being created at a phenomenal rate-4 million in 1983, probably an equal number in 1984...
...Department of Labor (Washington, D.C.: Government Printing Office—hereafter G.P.O.—March 1984...
...The Exchange's account of the personal and business sector is somewhat more realistic...
...By the summer of 1984, 30 percent of those surveyed had not been recalled...
...Even so, the tendencies that are visible in Rose's chart reinforce the basic thesis developed here...
...median income...
...Calculated from Table B-22, Report of the Council of Economic Advisers, 1985, pp...
...But, he says, this process is not taking place in today's technological revolution and, particularly as the service sector is more and more automated, it will occur less and less in the future.' All this anticipates a principal analytic proposition that will emerge at the end of this article...
...The fastest growing jobs, Rosenthal argues, are to be found in fairly skilled occupations, such as computer-service technicians and legal assistants...
...In January 1984, 60.1 percent of them had found other jobs, 25.5 percent were still unemployed, and 14.4 percent had left the labor force...
...In fact later in the same article Fallows seems to recognize this: [We] have to come to grips with certain uncomfortable human truths...
...Source: Steven Rose, Social Stratification in the United States (Baltimore: Social Graphics Co., 1983), p. 11...
...25 percent were above their old wage by 20 percent or less...
...Bureau of the Census (Washington, D.C.: G.P0., 1984...
...Thus, the number of people in the "middle middle class" has fallen while the percentage of those below the low budget line has jumped from 30 to 40 percent...
...What are the wage implications of these trends...
...The agony of restructuring suffered by these strata was the result of the 1981-82 recession, which had exacerbated the tendencies we have outlined in the previous section...
...There are very few classic blue-collar jobs on the list and most of the occupations predicted to grow are nonunion...
...they account for just one job in 425 eight in 1984...
...At the same time, if we look only at the service sector proper, food, cleaning, health, and child-care services rose by 2.548 million jobs...
...The Stock Exchange projections differ on a number of counts from those of the BLS, but the occupational universe described is essentially the same...
...These qualifications do not suggest that the recovery was a sham...
...These are precisely the jobs that are disappearing today...
...The three computer jobs on the list of the 40 fastest growing occupations (computer-systems analysts, computer programmers, computer operations) will add 2 percent to total employment...
...The Stock Exchange engages in a related conceptual maneuver when it places sales workers and clerical workers (along with craft workers) in the "middle echelon" of occupations, and puts operatives in the "lower echelon...
...We take the BLS and Stock Exchange scenarios, then, as the limit of the most optimistic expectations...
...258-59...
...But that, the BLS analysis tells us, will add only 8 tenths of 1 percent to the job total in that period, or less than a third of the projected increase for building custodians...
...Between 1972 and 1982, the number of accountants grew by 473,000, computer specialists by 479,000, engineers by 463,000, engineering and scientific technicians by 279,000...
...Thurow writes: The reason for this paradox can be found in the two continents' very different labor markets...
...And if, as we think likely, the American economy does much less well than those two studies assume, our somewhat pessimistic account of the shape of the labor force at century's end will be all the more compelling...
...As Business Week pointed out in early 1985, fully two-thirds of the jobs created between 1974 and '84 had gone to women...
...R&D is on the increase, it has not reached European levels...
...The Record of the 1970s LET US SUMMARIZE some of the recent shifts in the American occupational structure...
...These trends became even more pronounced during the economic recovery of 1982-84...
...Retail trade accounted for less than 10 percent of the losses and services for about 10 percent...
...A study of unemployed Michigan auto workers reaches similar conclusions...
...In 1978, 55 percent of the population lay between the low and high budget lines...
...All the figures we have just cited compare the gross total of workers employed at the On Analysis and Statistics . . . In the March 1985 issue of Monthly Labor Review Neal H. Rosenthal offers a criticism of the kind of argument we make in this article...
...37-38...
...the very character of the occupational structure was in profound transition...
...The increase in female labor-force participation is an aspect of the trend toward a new occupational structure with educated and trained people at the top, a middle "sliding" down the wage scale, and a growing population of the marginalized...
...15 Monthly Labor Review, October 1984, Table 12, p. 63...
...and 23 percent had found a substantially better (by more than 20 percent) job...
...Women are concentrated in clerical occupations (almost 80 percent of the total), the food and health sectors (60 percent), and sales (near 50 percent...
...They will account for 15.5 percent of the total job increase in all jobs between 1982 and 1995...
...His claim that the current economic transformation will create more opportunities than it destroys requires careful examination...
...Why should we decide that the whole national history of migration, adjustment, and advancement must now come to an end...
...424 change in the American work force...
...So the employment shift to services does not essentially stem from an actual migration of workers from one sector to another, but rather results from the expansion of the labor force and especially the increasing participation of women...
...Job Generation During the 1983-84 Recovery PRESIDENT REAGAN'S SUPPORTERS argue that the principal reason for his landslide victory in the 1984 election was the extraordinary performance of the American economy in creating new jobs...
...5 Lester Thurow, "Jobs versus Productivity: The EuroAmerican Dilemma," Technology Review, October 1984...
...Projections are that the labor force will grow by 21 million between 1982 and 1995, to 131 million from 110 million...
...For a summary of this study, see Research Bulletin, April 1985 (Detroit: United Automobile Workers of America, Research Dept...
...Granting that the quality of the new jobs generated in the 1970s did not correspond—in terms of either value-added or worker's pay— to that of the postwar boom period, doesn't this trend still stand in stark contrast to the European failure to create new work opportunities...
...The result is a much less welltrained labor force...
...Therefore, the figures are rounded to the nearest 5 percent with a plus or minus...
...A working-class family's child with no education beyond a high-school diploma could nonetheless choose among a number of relatively well-paid jobs, with a wage sufficient to buy a house and support a family, usually on one income...
...retail trade, at $5.74 an hour in 1983, is well under the national hourly average.° Within the personal and business service sector, 27.6 percent of the employees are professionals, but 33 percent are service workers and another 17.3 percent are clericals...
...M. H. & M. L. q 421 computed on the basis of those who had found full-time jobs...
...Following Eileen Appelbaum, we define as high-tech those industries in which either the percentage of total investment devoted to Research and Development (R & D) expenditures or the number of scientists, engineers, and technical employees is at least twice the average of all U.S...
...One is that some—perhaps most—displaced workers will never again be as well off as they used to be...
...Samuelson emphasizes that there is very little shift in these percentages from 1982 to 1995...
...What happened to these workers after their jobs disappeared...
...The year 1978 was, in wage terms, the peak of the recovery from the 1974-75 slump...
...22 Daniel Bell, The End of Ideology, (Glencoe, Ill.: Free Press, 1960), p. 268...
...25 THE OCCUPATIONAL SHIFTS described here lead to an entrenched dual economy...
...As a consequence of the decline in smokestack industries, it reported, a million TABLE 1 Occupations with Largest Job Growth 1982-95 Occupation Percent of Total Job Growth Building Custodians 3.0 Cashiers 2.9 Secretaries 2.8 General Clerks, office 2.7 Salesclerks 2.7 Nurses, registered 2.5 Waiters and waitresses 2.2 Teachers, kindergarten and elementary 2.0 Truckdrivers 1.7 Nursing aides and orderlies 1.7 Total: 24.2 Source: U.S...
...Thus the BLS "moderate" scenario assumes "stable economic growth through the mid-1990s" and expects productivity to do significantly better than in the 1973-79 period (when it declined compared to the '60s...
...A New York Stock Exchange study of job trends in the United States came to empirical conclusions quite similar to ours...
...See Table 2. Indeed, a chart cited by Samuelson to refute the notion of the sliding middle actually lends credence to it...
...The United States had a boom in relatively low-paying jobs in the service sector because employing such workers was a profitable strategy...
...Challenge (May-June, 1983), p. 60...
...Daniel Bell, for instance, was describing in 1960 trends toward the gradual transformation of work (and his data are from the 1950s...
...There are good reasons to doubt Fallows' optimistic conclusion...
...Over 100,000 Michigan auto workers experienced permanent or indefinite layoff between 1979 and 1982...
...And doesn't this explain why the American unemployment rate, which was normally higher than the European in the 1950s and '60s, is now lower than that of most European countries...
...We note, however, that the Department of Labor's projections, which yield a labor force of 131 million in 1995, assume even in the most moderate of three scenarios that GNP growth will outpace both the 1973-77 and 1977-82 rates in the low scenario...
...Cambridge, Mass.: Ballinger, 1984), pp...
...So the logic of job disappearance is the mirror image of job generation...
...These are fairly optimistic projections and some may be skeptical...
...First, it is important to define high-tech industries...
...2° The low-wage production jobs in the industry are poor in other respects too: they are tedious, and many of them expose workers to substantial occupational health hazards...
...But for the analysis of our future occupational structure, even if these excessively hopeful projections were to come true, our basic case would still stand...
...After correcting for inflation, wages have fallen 6 percent in absolute terms...
...The consequent yearly wage in retail trade is substantially under the poverty line for a family of four (which was just over $10,000 a year for an urban family of four in 1984), and it was just above that line in the service sector...
...Indeed, it is hypothesized that the '80s and the first half of the '90s will resemble the '60s in terms of productivity gains...
...In 1982, the median income for full-time workers was $22,352— that is, more than half of the income in the United States is to be found in the top third of the highestpaid occupations...
...Yet these industries added only 444,000 new jobs, 2 percent of the 19 million jobs created during the 1969-79 decade...
...Of those reemployed, 33 percent are in nonunion jobs...
...actual, not projected, figures) there was a 37 percent decrease in the jobs of machine operators, a 53 percent increase in clerical workers, and a 55 percent increase in service workers...
...If the reader has followed us through this maze, our point is clear: Rosenthal's argument is anything but definitive and, in the use of statistical data about the future, quite unpersuasive...
...Blue-collar jobs are deteriorating at a rate that will lead to the further proportional decrease of that sector in our economy, and the importance of the low-wage strata, and their problems, is accelerating...
...Is Appelbaum, p. 38...
...The average weekly wage in manufacturing in 1983 was $478.98, in services it was $238.71, and in retail trade $171.05...
...It anticipates 3.5 percent real growth in GNP per year between 1982 and 1995, with productivity rising by 2.2 percent...
...Just as the shift from high-labor-cost manufacturing to lowlaborcost services was gaining momentum, the influx of women provided a cheap pool of labor for business...
...Leaving aside the blithe disregard for the human and social cost of the American approach, there are economic reasons for being critical of it...
...The [displaced worker] will not be filling the new professional slots that computerization will open up...
...The changes from 1978 to 1983 are dramatic considering that this is such a short period...
...The yearly manufacturing wage comes out to somewhat more than $24,000, or in the area of U.S...
...These percentages, however, are (2) Rosenthal's procedure also results in some very suspect categories...
...Even critics of the president tend to be sanguine about the loss of jobs, confident that more and better jobs will be created...
...When one uses a year of high unemployment as the base year for computing future trends, there is no way to go but up, and the rates of job growth into the future are an artifact with a dismal starting point...
...We simply argue that the evolution of the American occupational structure is not as dynamic as some of President Reagan's more enthusiastic supporters suggest...
...As Rosenthal sets up the problem, significant shifts of the declining middle are hidden because they take place within that sprawling upper third...
...Urquhart found that new employees in the service sector are twice as likely not to have worked at all in the previous year than to have been employed in the goodsproducing sector...
...9 Wassily Leontiev, "Technological Advance, Economic Growth, and the Distribution of Income," Population and Development Review, September 1983, p. 403 and passim...
...He extended that theme in an analysis he wrote in the early 1970s...
...Of those who had not been recalled, 50 percent had found new jobs, 40 percent were still unemployed, and 10 percent had given up looking...
...But, more central to our analysis, the recent recovery has accelerated the shift to services that had become so visible in the '70s...
...Data Resources, Inc., estimates that the number of new high-tech jobs that will be created between 1983 and 1993 will be 730,000 to 1 million, less than half the jobs lost in manufacturing between 1979 and 1982...
...21 Part of the problems with these critics is that they rebut the thesis of a "cataclysmic" TABLE 2 Occupation: Shares in Total Labor Force: 1950 1982 1995 1982" Professional, technical workers 8.6% 16.3% 17.1% $410 Managers 8.7 9.4 9.6 430 Sales Workers 7.0 6.9 6.9 317 Clerical Workers 12.3 18.8 18.9 248 Craft Workers 14.2 11.4 11.6 375 Machine Operaters 20.4 12.8 12.1 252 Service Workers 10.5 16.0 16.3 207 Laborers 6.6 5.8 5.5 243 Farm Workers 11.8 2.7 1.9 186 Total: 100 100 100 $309 *Average weekly earnings...
...Almost half of the jobs that were permanently ended were in manufacture, most of them in durable-goods production...
...We first take the period from early 1983 to August 1984, utilizing Bureau of Labor Statistics figures for average employment in 1983 and preliminary estimates of employment from August 1984...
...Finally, Rosenthal concludes that while previous analyses showing increasing inequality and polarization between the 1960s and mid-'70s seem to be correct, his work regarding the decade 1973-82 indicates that there will not be a bifurcation in the labor market in the future...
...In the past such growth was closely associated with economic progress and a rise in per capita GNP...
...Department of Labor, Bureau of Labor Statistics, Publication no...
...Thus the computer and data-processing services industry, largest of the high-tech service industries, has added only about 300,000 jobs since 1969...
...But, it comments, "There has always been and probably will always be more people working in the lower-skill, lower-income jobs than in higher-skill, higher-income jobs...
...9 We disagree...
...Business Week noted that when women started flooding into the work force in the early 1970s, the gap [between male and female wages] actually widened...
...There are, it should be noted, critics who seriously question this interpretation-Sar Levitan, Clifford Johnson, and Robert Samuelson are among them...
...20 Appelbaum, pp...
...white-collar (clerical and managerial) employees have lost their jobs...
...16 Eileen Appelbaum, "High-Tech and the Structural Employment Problems of the 1980s," in American Jobs and the Changing Industrial Base, Eileen Collins and Lucretia Deway Tanner, eds...
...And in the '80s, though U.S...
...By the simple expedient of subtracting wholesale and retail trade from goods-producing—not the least because the pay in those sectors is significantly below that in manufacturing as well as for more obvious and traditional reasons—we find that goods-producing provided 28.8 percent of employment in 1982, which is more in line with the usual calculation...
...12 Donald Tomaskovic-Devey and S. M. Miller, "Can High-Tech Provide the Jobs...
...State and local government, a key source of good service jobs, peaked in 1981 and has reduced its labor force since then by several hundred thousand workers...
...17 Employment in high-tech service-sector industries is growing rapidly, but the small size of the sector limits the total number of jobs created...
...A few selective figures should reinforce this point...
...John Naisbitt, "Reinventing the Corporation," New York Times, December 23, 1984...
...We cannot here do justice to the complexity of Rosenthal's analysis nor can we state all of our objections to it...
...6 "How to Get Jobs," Economist, July 28, 1984...
...19 Moreover, assembly jobs in high-tech industries are subject to competition from low-wage labor, particularly in Third World countries such as Malaysia, Taiwan, the Philippines, and Mexico, where assembly workers earn as little as 500 an hour...
...4 "Women at Work," Business Week, January 28, 1985...
...Some 49 percent of the professional and technical workers whose increase is cited as a good omen made less than $19,968 in 1982—they were located in the middle and the bottom thirds and were paid about $2,500 less than the 1982 median income...
...21 Sar Levitan and Clifford Johnson, "The Changing Work Place," Annals of the American Academy of Political and Social Science, May 1984...
...wholesale trade paid $8.54...
...24 In the second edition, Rose examined the dynamics of income distribution, using the poverty line of 1983 ($9,800 for an urban family of four), the BLS "Low Budget" ($17,000), Medium Budget ($27,500), and High Budget ($41,000...
...The difference is not primarily in the figures but in their interpretation...
...Quite simply, the labor force is not growing at anywhere near the 2.2 percent annual growth experienced between 1965 and 1979, when most baby boomers entered the work force...
...It is of some moment that the production workers in high-tech firms commonly labor for around $4 an hour...
...Another familiar factor—economic geography— is also quite visible in the Bureau of Labor Statistics (BLS) analysis...
...Samuelson insists that the 13 years between 1982 and 1995 will not see an equivalent transformation, which is right to some extent—but not as much as he thinks.23 The sociologist Steven Rose has published two editions of an intricate scholarly poster graphically representing the social structure of the United States...
...23 For a critical discussion of these issues, see David B. Bills, with the assistance of Virginia Lambert, "Changes in Social Stratification and Mobility in American Society," 1984 (Chicago: Illinois Institute of Technology, unpublished ms...
...1) There is the method of dividing occupations into thirds on the basis of the wages and salaries of occupations rather then on the basis of people or income...
...It went from 36.5 percent in 1960 to 42.6 percent in 1970, to 51.9 percent in 1980...
...So even if hightech industries employ more people than these studies indicate, the trend toward bifurcation of the labor market will continue...
...The Southeast and Southwest, the Mountain States, and the Pacific areas were much less affected...
...4) Rosenthal's account of the future is also open to serious question...
...In this case, the past is not a guide to the future...
...The old liberal wisdom—that in the long run the private economy will generate new and better paying jobs, and that this is the only real solution to poverty—becomes less and less relevant...
...But, as we emphasize throughout this article, there was no sudden, and surprising, discontinuity in the early 1980s—or, for that matter, in the 1970s...
...The almost 11 percent officially unemployed in the latter year included a significant number of workers who were in marginal jobs...
...state and local government added another 3.5 million...
...For example, the income spread in the top third stretches from $20,020 a year to $40,820, a range that is greater than the difference between the lowest pay of the bottom third and the highest pay of the middle third...
...But the "service-producing" sector added 3.645 million jobs, or 73.7 percent of the total...
...We are, the Stock Exchange agrees, generating more low-paying than high-paying jobs...
...There has been, it would seem, more than a little singleentry bookkeeping—with analyses of new jobs 419 in gross terms that don't take into account the loss of existing jobs...
...retail trade followed with 1.1 million...
...The service sector proper (such as food and health) led the way with 1.6 million jobs...
...Three categories— noncollege teachers, registered nurses, and truck drivers—are in the "middle" of American society in terms of remuneration...
...If job growth continues at the current rate, there still will be more jobs created than there are workers to fill them.' In criticizing Naisbitt's analysis, we will focus not on the extremely optimistic assumptions about economic growth, which undergird it, but rather on the character of the jobs generated in the past, present, and future...
...The blue-collar percentage of employed Americans dropped meanwhile from 35.3 percent in 1970 to 29.7 percent in 1980...
...Sweden and Austria are obvious exceptions...
...85-492, November 30, 1984...
...Manufacturing, which on average pays nearly three times the minimum wage, added only 1 million jobs between 1968 and 1978 and has lost nearly 3 million jobs between 1980 and 1982...
...The differences have to do, one suspects, with the job classifications used...
...8 International Competitiveness: Perception and Reality, New York Stock Exchange (New York, 1984), p. 44...
...Furthermore, in the Bureau of Labor Statistics analysis of employment projections 6 of the 10 occupations that will increase most by 1995 are relatively low-paid (building superintendents, cashiers, office clerks, sales clerks, waiters and waitresses, nursing aides and orderlies...
...24 Steven Rose, Social Stratification in the United States (Baltimore: Social Graphics Co., 1983), p. 11...
...In the United States, Thurow notes, management flexibility gives rise to a corresponding labor flexibility, and so the labor turnover rate in the States-4 percent a month—is vastly higher than in Europe...
...Bureau of Labor Statistics, "Employment Projections for 1995," Bulletin # 2147, March 1984, p. 43...
...19 Business Week, March 28, 1983, p. 85...
...This procedure does not take into account the significant increase in unearned income that is a major part of the argument about the sliding middle...
...25 Robert Kuttner, The Economic Illusion, (Boston: Houghton Mifflin, 1984), p. 170...
...The worst-paid European workers," Thurow concludes, "make much more relative to the average European than the worst-paid American workers make relative to the average American...
...See Table 1. The 10 top growth jobs on this list will account for 24.2 percent of the total employment increase projected for 1995...
...18 Rapidly rising productivity in the high-tech industry, combined with the small size of the high-tech sector, constrains the ability of this sector to provide employment...
...International Competitiveness: Perception and Reality, published in 1984 by the New York Stock Exchange (hereafter NYSE...
...This dual economy persists despite the current recovery...
...But the men and women who had found new jobs had often been subjected to the "sliding" phenomenon—had been reemployed at a wage that was lower than the one they had earned before...
...This tendency, the article continued, is being 417 somewhat counteracted...
...41-42...
...Relative to the price of capital, American wages were 37 percent lower in 1983 than in 1972...
...the Exchange notes...
...11 During that 20-month period, total employment went up by 4.9 million workers, and private-sector employment by 4.8 million...
...q 426...
...How can it happen...
...These conceptual problems can be seen in the Stock Exchange's valiant effort to paint the economy as much less service-oriented than do the government's figures...
...income distribution), 9.2 percent were in the middle, while 62.8 percent were low-paying jobs...
...In other contexts, we would strongly argue that these surprise-free and very optimis422 tic projections are profoundly flawed...
...He concedes that there have been losses in some of the well-paying smokestack industries but holds that they are not significant in the total employment picture and, in any case, the disappearance of lowpaid jobs (textiles, apparel, and leather) have offset any impact that auto and steel might have on the composition of the labor force...
...3 All statistics on the labor force in this section of our article, unless otherwise noted, are from The Statistical Abstract of the United States, 1984, U.S...
...An occupational structure characterized by a polarization between highly paid professional and technical workers on the one hand and poorly paid, unorganized, lower-level workers on the other will be threatened, not by revolution, but by social demoralization and/or constant outbreaks of individual, nihilistic violence...
...Construction and production work, taken together, accounted for one job in four in 1950...
...Rosenthal's criticism is based on a procedure that divides 416 occupations into thirds on the basis of 1982 earnings...
...The Coming of Post-Industrial Society (New York: Basic Books, 1973), p. 125 ff...
...In the 11 years between 1970 and 1980, there was an enormous increase in the number of jobs, as the labor force added 23.655 million new participants...
...420 beginning and end of a time period...
...8 In those years, it was not simply the number of people entering the labor force that signaled an important change...
...Note, however, that between 1950 and 1982 (which are TABLE 3 Percent of the Population* Reference Point 1978 1983 Below The Poverty Line 15- 15 Between The Poverty Line And Low Budget Line 15+ 25 Between The Low And Medium Budget Lines 25+ 20 Between The Medium and High Budget Lines 30 20+ Above The High Budget Line 15 20Total: 100 100 • Because the budgets are for an urban family of four, our estimates are imprecise...
...We shall focus only on what we take to be his main argument...
...We will begin by looking at where the new jobs appeared and where old jobs disappeared (a point not much stressed by the Administration's supporters...
...Robert Samuelson, "Middle-Class Media Myth," National Journal, December 31, 1983...
...There are Europeans who have interpreted these trends as proof of the superior flexibility of the American labor market...
...In 1984, for instance, the London Economist noted that between 1973 and 1982 real earnings for industrial workers in Britain rose by 10 percent while employment declined, and that real earnings dropped in America while employment went up by 16 percent...
...The Bottom Could Drop Out of Capital Goods," Business Week, December 3, 1984...
...What, one wonders, will they be doing...
...In addition, Thurow continues, there are millions of Americans who work at levels well below the unenforced, legal minimum wage of $3.35, not to mention the average wage of $8.01...
...What about the middle-range future...
...The growth of high-tech employment has meant an increase in professional, technical, and managerial jobs at the top, but it has also meant an increase in clerical, sales, and nonprofessional service jobs at the bottom...
...1 6 423 Despite the widespread belief that high technology has been a major source of employment growth, high-tech industry growth rates did not differ much from employment growth in overall manufacturing, which measured 4.2 percent over the decade, and they compare unfavorably with the growth of total employment, which increased 27.6 percent...
...As a result, there is little sense of what happens to individuals during that period...
...The study looked at 5.1 million workers whose jobs were abolished or plants shut down between January 1979 and January 1984...
...With double-digit unemployment still fresh in our minds [Naisbitt conceded], the idea that labor shortages are imminent may be hard to swallow...
...John Naisbitt, author of the widely read book Megatrends, wrote at the end of 1984 that "job creation is one of America's great untold stories...
...Thus James Fallows: There are good reasons to believe that today's economic change is very much like past changes that the United States has undergone—and therefore to conclude that it will create many more opportunities than it destroys...
...Companies such as Intel, National Semiconductors, Atari, Apple Computers, and Wang Laboratories all have moved jobs to the Far East...
...The Stock Exchange is, as one might expect, even more bullish...
...The Future of Jobs in the United States WE SHALL RELY PRIMARILY here on two analyses of the job future in the American economy, both of them previously cited (see Notes 2 and 8): Employment Projections for 1995, published in March 1984 by the Bureau of Labor Statistics (hereafter BLS), and U.S...
...Indeed, he predicted that the United States was close to a time of labor shortages...
...Some of those let go find better jobs, but, as quoted in the BLS study, Business Week said that 34 percent of these people had to take pay cuts...
...See also, on long-term unemployment among blue-collar workers, Chicago Steelworkers: The Cost of Unemployment (Chicago: Hull House and Local 65, United Steelworkers of America, 1985...
...Here the tertiary occupations are split into high- and low-wage sectors, with the latter being more numerous than the former...
...Wholesale trade pays, on the average, about 500 more than the average private-sector job ($8.02 was the average in 1983...
...In 1977 the BLS surveyed the semiconductor industry, which then employed 242,600 workers...
...14 "Suddenly the World Doesn't Care," Business Week, February 4, 1985...
...The goods-producing sector accounted for 26.3 percent of the job increase (1.299 million jobs), with a heavy concentration in the durablegoods sector (724,000 openings...
...Sweden has 13 times as many programmable robots in proportion to the size of its labor force as America, because it makes business sense in that economy to substitute machines for people...
...These projections envision a 2.8 percent growth rate in 1982-90 and a 2.7 percent pace in 1990-95, as against 2.2 percent in 1973-77 and 1.6 percent in 1977-82...
...This has not happened in Europe...
...Of the workers employed in this industry, approximately 58 percent were production workers in the plant, 14 percent were office (nonplant) workers, and the remaining 28.9 percent were administrative, executive, professional, and technical employees...
...But Rosenthal focuses on percentage increases in jobs rather than on their actual growth...
...Most of those "women's jobs" were located in the sliding middle, a point to which we will return...
...But manufacturing occupations were down and retail and service up...
...12 U.S...
...This definition encompasses 32 manufacturing industries as well as such service industries as computer programming, data processing, and research laboratories...
...Indeed, this projection puts the trends we have described here at the core of the 1995 reality: the growth of some well-paid professional and technical occupations (accountants, engineers, physicians, lawyers) and a large number of poorly paid service occupations (cashiers, salesclerks, kitchen helpers, and so on...
...Part of the solution to the crisis, the Economist seemed to say, was that Europe should become more "American...
...The female/male gap was 57 percent in 1973, 64 percent in the early 1980s, and is projected, in one study, to rise to 74 percent of the male wage by the year 2000...
...10 James Fallows, "The Changing Economic Landscape," Atlantic, March 1985, pp...
...For the changes he then defined, see Table 3. In fairness, it should be noted that the years compared-1978 and 1983—would tend to emphasize the worst aspects of these trends...
...3) Rosenthal compares a relatively good base year, 1973, when unemployment was 4.8 percent, to 1982, the worst employment year since the Great Depression...
...Indeed, most of the jobs in hightech industries are not high-tech jobs...
...Yet America has generated jobs and Europe has not...
...This analysis is not partisan...
...Between 1958 and 1968, for example, manufacturing added 4 million workers...
Vol. 32 • September 1985 • No. 4
