PEN-L message, Scott Clark's American dream

(“There are now about as many temporary, on-call or contract workers in America as there are members of labor unions”, reports today’s Washington Post - each representing about 13% of the US workforce. 51 year old Scott Clark reflects this “historic shift”: a former “proud union man”, he works up to 15 hours a day as a free-lance mail courier, his benefits and retirement plans having evaporated with the closure of the Virginia plant where he worked until 2001. The Post article is another grim recitation of how low-cost overseas labour and technological change have deprived US workers of their comparative advantage in the global labour market, resulting in a hollowing out of manufacturing, and the spread of permanent job losses to the service sector. At the same time, pay inequality is growing between the mass of unorganized and poorly-paid retail and casual workers and an expanding cadre of college-educated administrative and professional employees at the top of the new working class. Clark, the laid-off factory worker, is equally skeptical of Bush, Kerry and the corporations, but still feels himself “part of the American dream, doing better than his parents did.”)

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Navigating With a Shared Vulnerability

By Griff Witte

Washington Post

Sunday, September 19, 2004

Scott Clark knows how to plate a circuit board for a submarine. He knows which chemicals, when mixed, will keep a cell phone ringing and which will explode. He knows how to make his little piece of a factory churn hour after hour, day after day.

But right now, as his van hurtles toward the misty silhouette of the Blue Ridge Mountains, the woods rising darkly on either side and Richmond receding behind him, all he needs to know is how to stay awake and avoid the deer.

So he guides his van along the center of the highway, one set of wheels in the right lane and the other in the left. "Gives me a chance if a deer runs in from either direction," he explains. "And at night, this is my road."

It's his road because, at 3:43 a.m. on a Wednesday, no one else wants it. Clark is nearly two hours into a workday that won't end for another 13, delivering interoffice mail around the state for four companies -- none of which offers him health care, vacation, a pension or even a promise that today's job will be there tomorrow. His meticulously laid plans to retire by his mid-fifties are dead. At 51, he's left with only a vague hope of getting off the road sometime in the next 20 years.

Until three years ago, Clark lived a fairly typical American life -- high school, marriage, house in the suburbs, three kids and steady work at the local circuit-board factory for a quarter-century. Then in 2001 the plant closed, taking his $17-an-hour job with it, and Clark found himself among a segment of workers who have learned the middle of the road is more dangerous than it used to be. If they want to keep their piece of the American dream, they're going to have to improvise.

Figuring out what the future holds for workers in his predicament -- and those who are about to be -- is key to understanding a historic shift in the U.S. workforce, a shift that has been changing the rules for a crucial part of the middle class.

This transformation is no longer just about factory workers, whose ranks have declined by 5 million in the past 25 years as manufacturing moved to countries with cheaper labor. All kinds of jobs that pay in the middle range -- Clark's $17 an hour, or about $35,000 a year, was smack in the center -- are vanishing, including computer-code crunchers, produce managers, call-center operators, travel agents and office clerks.

The jobs have had one thing in common: For people with a high school diploma and perhaps a bit of college, they can be a ticket to a modest home, health insurance, decent retirement and maybe some savings for the kids' tuition. Such jobs were a big reason America's middle class flourished in the second half of the 20th century.

Now what those jobs share is vulnerability. The people who fill them have become replaceable by machines, workers overseas or temporary employees at home who lack benefits. And when they are replaced, many don't know where to turn.

"We don't know what the next big thing will be. When the manufacturing jobs were going away, we could tell people to look for tech jobs. But now the tech jobs are moving away, too," said Lori G. Kletzer, an economics professor at the University of California at Santa Cruz. "What's the comparative advantage that America retains? We don't have the answer to that. It gives us a very insecure feeling."

The government doesn't specifically track how many jobs like Clark's have gone away. But other statistics more than hint at the scope of the change. For example, there are now about as many temporary, on-call or contract workers in America as there are members of labor unions. Another sign: Of the 2.7 million jobs lost during and after the recession in 2001, the vast majority have been restructured out of existence, according to a study by the Federal Reserve Bank of New York.

Each layoff or shutdown has its own immediate cause, but nearly all ultimately can be traced to two powerful forces that reinforce each other: global competition and rapid advances in technology.

Economists and politicians -- including the presidential candidates -- are locked in a vigorous debate about the job losses. Is this just another rocky stretch of the U.S. economy that, if left alone, will foster new industries generating millions of as-yet-unimagined jobs, as it has during other times of upheaval? Or is the workforce hollowing out permanently, with those in the middle forced to slide down to low-paying jobs without benefits if they can't get the education, credentials and experience to climb up to the high-paying professions?

Over the next several months, The Washington Post, in an occasional series of articles, will explore the vast changes facing middle-income workers and the consequences for businesses and society.

Some of the consequences are already evident: The ranks of the uninsured, the bankrupt and the long-term unemployed have all crept up the income scale, proving those problems aren't limited to the poor. Meanwhile, income inequality has grown. In 2001, the top 20 percent of households for the first time raked in more than half of all income, while the share earned by those in the middle was the lowest in nearly 50 years.

Within the middle class, there has been a widening divide between those in its upper reaches whose jobs provide the trappings of the good life, and those in the lower rungs whose economic fortunes are less secure.

The growing income gap corresponds to a long-term restructuring of the workforce that has carved out jobs from the center. In 1969, two categories of jobs -- blue-collar and administrative support -- together accounted for 56 percent of U.S. workers, according to an analysis by economists Frank Levy of MIT and Richard J. Murnane of Harvard. Thirty years later the share was just 39 percent.

Jobs at the low and high ends have replaced those in the middle -- the ranks of janitors and fast-food workers have expanded, but so have those of lawyers and doctors. The problem is, jobs at the low end don't support a middle-class life. And many at the high end require special skills and advanced degrees. "However you define the middle class, it's a lot harder now for high school graduates to be in it," Levy said.

College graduates aren't immune, either. In places like Richmond, the overall health of the economy masks layoffs that have snared not only blue-collar workers like Clark, but also thousands of office workers at companies like credit card giant Capital One Financial Corp. and high-tech retailer Circuit City Stores Inc. Those cutbacks have educated even those with bachelor's degrees in the new ways of a volatile economy. A University of California at Berkeley study last year found that as many as 14 million jobs are vulnerable to being sent overseas. Many economists, though, say offshoring is more opportunity than threat because it allows companies to make and sell goods for less, and offer even better jobs than those that are lost. "Offshoring can't explain job loss. It can only explain job switch," said David R. Henderson, a Hoover Institution economist.

Full: http://www.washingtonpost.com/wp-dyn/articles/A29609-2004Sep17.html?referrer=email