Sears Roebuck, IBM, United Technologies and Boeing are among a large group of US companies that continue to retrench by shrinking their workforces. Herein lies one of the biggest dilemmas facing the Clinton Administration: how to staunch the continuing loss of 'good' jobs despite a recovering economy.
'Good' jobs, in the new vocabulary of the workforce, provide full- time employment, health benefits and pensions and lead to a middle-class life. 'Bad jobs' offer none of these.
Robert Reich, the US Secretary of Labour, is in single-minded pursuit of good jobs as his top priority. He considers the low-wage, low-skill track on which the US embarked in the 1980s can only lead to lower national living standards - and ultimately to second-rate economic power. Mr Reich is the first to acknowledge that the road to a highly skilled, well-paid workforce will be long and bumpy. It will require a complete overhaul of a corporate culture that continues to regard workers as mere cogs performing mindless tasks as part of a mighty production machine.
But he is convinced that if this great leap, and others, are taken, the US will reverse a period of modest decline and embark on a new era of prosperity - a golden age that will last beyond the 21st century.
Others see merit in his formula. The European Community, for example, which is grappling with its own high unemployment and under-employment, has launched new studies of the US high skills strategy to determine the impact on longer-term American competitiveness.
'These things take time, but if the US actually invests heavily in its workforce, the eventual outcome could be a formidable competitive edge,' an EC official said.
Results, however, will not be instantaneous. America has clung far longer than other successful economies to a 'trickle-down' style of management that regards workers as order-takers, not problem-solvers. This is a hangover from the Henry Ford school of management, which spawned the assembly line and the mass-produced Model T. It explains why US companies still spend two- thirds of their annual dollars 30bn training budget on university graduates rather than on other workers, who comprise 75 per cent of the labour force.
Other countries, notably Japan, Germany and the Asian 'tigers', have embraced the team approach to production, under which workers and managers join in smaller groups to perform tasks, solve problems and even share profits.
These new ways of organising work are not unknown in the US. Motorola, Xerox, Corning Glass and others have made notable progress in training flexible, highly involved workers. New United Motor Manufacturing Inc, the joint venture of General Motors and Toyota in Fremont, California, is another good example. It is rated as the most efficient car plant in the US as a result of highly unorthodox practices, including no lay-off clauses, rotating four-week training programmes, management pay cuts during lean sales periods, and team- set productivity quotas. But these companies are the exception rather than the rule. It is estimated that only 5 per cent of the 5 million US companies have made the transition.
Meanwhile, the good jobs continue to disappear in the US. Most will not reappear because of big structural changes in the international economy. Traditional, non-supervisory, middle-class jobs - in mining, which pay on average dollars 630 a week; in construction, dollars 533 a week; and manufacturing, dollars 455 a week - are shrinking fast. Conversely, lesser-paid jobs with few benefits are growing: services, dollars 322 a week; finance and insurance, dollars 373 a week; and retail, dollars 200 a week.
The Administration contends that the response to the continued haemorrhage of good jobs and to structurally induced layoffs should not be a hands-off approach by government. Instead, Mr Reich and other government officials want to experiment with a programme of carrots and sticks. Under consideration are proposals for:
A tax credit to reward companies that hire above a certain base employment figure;
A mandatory programme requiring companies to spend part of each dollar in federal research grants on worker retraining;
Required company spending on worker retraining amounting to 1.5 per cent of total payroll;
A government reprieve allowing companies to reduce basic pay in return for giving all workers annual bonuses based on profits.
None of these steps will stop the loss of high-paying jobs associated with a past era. But staying with Model T techniques will virtually ensure a fossilised, low-wage labour force.Reuse content