Archives - Economics: Page 27
Author: paul carson (Mon Mar 27, 2006 3:25 am)
Layoffs have disrupted the lives of millions of Americans over the last 25 years. The cure that these displaced workers are offered — retraining and more education — is heralded as a sure path to new and better-paying careers. But often that policy prescription does not work, as this book excerpt explains. It is adapted from "The Disposable American: Layoffs and Their Consequences" by Louis Uchitelle.
United Airlines closed its maintenance center near the Indianapolis airport in 2003.
Jo Goodrum, a thin, energetic woman older than her audience of aircraft mechanics — old enough, perhaps, to be their mother — got their attention with a single, unexpected sentence, which she inserted early in her presentation. Her husband, she said, had been laid off six times since the late 1980's. And yet here she was, standing before them, in one piece, cheerful, apparently O.K., giving survival instructions to the mechanics, who would be laid off themselves in 10 days.
They were, in nearly every case, family men in their 30's and 40's who had worked for United Airlines since the mid-1990's. Summoned by their union, they had gathered in the carpeted conference room at the Days Inn next to Indianapolis International Airport, not far from United's giant maintenance center, a building so big that 12 airliners could be overhauled in it simultaneously. That no longer happened. Most of the repair bays were empty. The airline was cutting back operations, and the 60 mechanics at the meeting were in the fourth group to be let go.
Confrontation had brought on the layoffs. Influenced by militants in their union local, Hoosier Air Transport Lodge 2294 of the International Association of Machinists, the 2,000 mechanics at the center had engaged in a work slowdown for many months, and then a refusal to work overtime. But rather than give ground, United responded by outsourcing, sending planes to nonunion contractors elsewhere in the country.
That scared the mechanics. They quieted down and, in effect, authorized the leaders of Lodge 2294 to make peace. Their hope was that if they cooperated, United would ease up on the layoffs and revive operations at, arguably, one of the most efficient, high-tech maintenance centers in the world. In this state of mind, the union was helping to usher the 60 laid-off mechanics quietly away. It had rented the conference room on this cold January evening in 2003 to introduce the men to what amounted to a boot camp for recycling laid-off workers back into new, usually lower-paying lines of work.
Similar federally subsidized boot camps, organized by state and local governments, often in league with unions, have proliferated in the United States since the 1980's, and now many cities have them. Unable to stop layoffs, government has taken on the task of refitting discarded workers for "alternate careers." In deciding as a nation to try to rejuvenate them as workers, we put in place a system, however unrealistic, that implicitly acknowledged layoffs as a legitimate practice.
The presumption — promoted by economists, educators, business executives and nearly all of the nation's political leaders, Democrats and Republicans alike — holds that in America's vibrant and flexible economy there is work, at good pay, for the educated and skilled. The unemployed need only to get themselves educated and skilled and the work will materialize. Education and training create the jobs, according to this way of thinking. Or, put another way, an appropriate job at decent pay materializes for every trained or educated worker.
If the workers were already trained, as the mechanics certainly were, then what they needed was additional training and counseling as a transition into well-paying, unfilled jobs in other industries. If the transition failed to function as advertised, well, the accepted wisdom suggested that it was the fault of the workers themselves. Their failure to land good jobs was due to personality defects or a resistance to acquiring new skills or a reluctance to move where the good jobs were.
That was the myth. It evaporated in practice for the aircraft mechanics, whose hourly pay ranged up to $31. Not enough job openings exist at $31 an hour — or at $16 an hour, for that matter — to meet the demand for them. Jobs don't just materialize at cost-conscious companies to absorb all the qualified people who want them.
You cannot be an engineer or an accountant without a degree; in that sense, education and training certainly do count. Furthermore, in the competition for the jobs that exist, the educated and trained have an edge. That advantage shows up regularly in wage comparisons. But you cannot earn an engineer's or an accountant's typical pay if companies are not hiring engineers and accountants, or are hiring relatively few and can control the wage, chipping away at it.
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