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June/July 94, #125 ->
Trendevents: Job Summit Plummets
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Technocracy ->
Periodicals ->
Social Trends Newsletter ->
June/July 94, #125 ->
Trendevents: Job Summit Plummets
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There was the usual ballyhoo about the Job Summit called by the Clinton Administration and held in Detroit during the month of March to find out why the industrial nations are still having their highest unemployment rate since the not so Great Depression.
It took a long time before the leadership of the seven industrial nations--Germany, France, Britain, Japan, Russia, Canada and the United States--would admit and become sensitive to the seriousness of the unemployment problem. Many of the European leaders initially opposed the idea of a job conference, but when unemployment became the hottest issue in the elections of Western Europe, where there are already 35 million people out of work, the powers-to-be had to make it appear that they were concerned and sensitive to the plight of the workers, so they agreed to send their ministers to the Job Summit.
Although the ministers of the seven industrial nations discussed what to do about the ever growing unemployment problem, no new ideas or anything of substance came out of the conference. Yet, the seriousness of the situation was not overlooked by some of the participants at the Job Summit. Dominique Moisi, deputy director of the French Institute for International Relations said, "If we don't find answers to that problem (unemployment), our entire system will collapse on itself." He added that France could face a replay of the revolutionary events of May, 1968, but this time around it won't be the young people bored with growth and the affluent society who take to the barricades but young people desperate to find a place in a system that rejects them. (Only recently the French government tried to lower the minimum wage for the youth of France but was forced to rescind the edict as a result of a revolt on the part of the young people of France.) Western Europe has an average unemployment rate around 11 percent with Spain topping the list at 23 percent, and the outlook is rather bleak.
Labor Secretary Robert Reich, one of the representatives of the United States at the summit, made a pertinent point when he said, "But we have learned in recent years that the paper economy and the people's economy are not always the same thing." While he made this statement in Detroit for public consumption, it does not mean the power brokers of the beltway in Washington are going to be persuaded or any more concerned with what happens to the millions of Americans who are unemployed or have lost their jobs permanently. While they will put up a good articulated front, their mind set will continue to be, "Let them eat cake."
The federal government has changed the way it determines the national unemployment rate. But the supposedly improved method does not even come close to giving an accurate picture of the devastating job crisis that is becoming more entrenched.
Millions of Americans who thought they were secure in their jobs now find themselves caught in the hideous undertow of long-term unemployment. The jobless go quietly. Here today, gone tomorrow. When enough time goes by, the government no longer counts them as being unemployed.
It has become a scary situation with serious implications. It's not just the underclass of the inner-city that has become permanently unemployed; it now includes an increasing number of the middle-class, and even those of the white-collar professions. No one is immune to the massive layoffs and downsizing that is going on in industry and business, and even in government.
According to Bob Herbert, columnist for the New York Times News Service, in an article with the caption "Counting the jobless", the Bureau of Labor's official rates on unemployment are much lower than the true rates. As he points out, for example, discouraged workers--people who have given up looking for a job--are no longer counted as unemployed. While the bureau will readily tell you the number of Americans who fall into the discouraged category, it doesn't factor the discouraged workers into the official unemployment rate. Before the change, the bureau counted 1.1 million discouraged workers. After the change, 600,000.
In his column, Herbert mentions that there are endless examples of Americans who are out of work but not counted as unemployed. These former workers were considered unemployed, even when they could expect their jobs to return. No more. Now laid-off means fired, not to be rehired any time in the future. For the thousands of workers who are being laid off or their jobs have disappeared or have moved overseas, they are surely out of work, but under the bureau's changing procedure, they are not officially counted as unemployed.
The official recorded unemployment rate for January was 6.7 percent, but this figure only represents to a small extent the unemployment and underemployment problem that confronts the United States. Herbert thinks a better indicator of the prevailing conditions would be a statistic that showed the number of people who wanted a job but could not find one. He says, "That number would be astonishingly high." In closing his article he inserts a statement from Keith Brooks, director of the New York Unemployed Committee, who makes the essential point: "Does our government recognize the depth of the job crisis in this country? I think not."
Despite the "recovery" of the economy, there can be no solace for the thousands of workers who are receiving pink slips in the continuing rash of job-slashing. Corporate streamlining, even as the bottom line of business improves, does not mean that the reduction of the work force is over by any means.
There are reports that cutbacks of the labor force are on the decline; nevertheless, layoffs and the displacement of workers continue at a high rate. As the government reported hiring increases (part-time or low-paying MacJobs?), U.S. employers laid off 192,572 workers (Tampa Tribune 4/6/94) in the first quarter of this year, the largest first-quarter figure since 1989.
To get some idea that the reduction of America's work force is far from over and will continue for years to come, just the figures in the communications industry alone give a vivid picture of the deep cutbacks that will continue in the work place. In the first two months of the year, GTE announced it would discharge 17,000 workers; Nynex said it would cut 16,800; AT&T also gave notice that it would cut its work force by another 15,000; and Pacific Bell announced a cutback of 10,000. Even companies in the service industry, which has not been hit nearly as hard as manufacturing, are now laying off employees in the hundreds and thousands.
Downsizing and massive layoffs demonstrate to investors that companies are serious in long-term profitability. Gone are the days when layoffs were a sign of weakness. Now companies want to send the message to Wall Street that they are mean and lean, and competitive.
To allow this condition to continue where financial and profitability is the only objective, and most workers are no longer needed in the scheme of things, who will have the wages and salaries to buy the glut of goods and services that industry can produce? That is the question and the crux of the matter that must be answered. The solution to this paradox will not be found within the framework of the present economic system.
If there is one thing that American workers have learned in recent years, it's that progress under the present economic system comes at a steep cost, and usually they are the ones who have to pay for it in more than one way. While companies and business establishments are restoring their profitability and net worth through downsizing and installing automation, middle managers, scientists and engineers, and other skilled workers are now pounding the streets for meaningful kinds of jobs or work that no longer exists.
Those industries and companies that are investing most of their capital expenditures in automation and updating their technology are getting rid of their employees the quickest. The communications industry is a good example why fewer and fewer workers are needed in this age of technology. According to Stephen S. Roach, senior economist of Morgan Standley & Co., "There have been 60,000 layoffs in telecommunications alone this year."
Just how did this massive displacement of employees come about? When it comes to the application of technology and the use of new materials in telephone communications, there is little comparison between the old method that uses copper wires and the new method that uses glass fiber optics in the transmission of information. Conventional telephone cables use electricity that travels through a 3-inch cable containing 1,200 pairs of copper wire that can carry 14,400 telephone conversations. But a half-inch fiber optic cable for telephone use that includes only 72 pairs of fiber can transmit 3.5 million conversations.
Charles Richardson, director of the Technology and Work Program at the University of Massachusetts, says he sees plenty of evidence of technologies that have enhanced competitiveness while effectively destroying lives. "What's the point," Richardson asks, "of having the most technologically advanced country in the world, if no one can live in it because there are no jobs left?"
Wasn't technology supposed to liberate us? Technology liberated the farmer for a generation or two. Then it practically eliminated him as the agribusiness conglomerates took over. Technology has cut in half the time required in some jobs and in some cases eliminated the worker. But instead of firms cutting the work week in half (with adequate pay), corporations are cutting their work forces in half.
Without wanting to sound repetitious, it should be understood by now that jobs per se have become an anachronism in this age of science and technology. It isn't the technology and scientific innovations that are at fault for America's present job problems; it is the present economic system that is concerned only with using our research, development and technology for merely financial considerations and maximizing profits. The perpetuation of this financial and monetary structure, or Price System, by the special-vested interests and by what has been referred to as the inner circle has sabotaged the use of technology for meaningful and exigent purposes.
This nation still has enough resources left and the agricultural and industrial capacity to produce a high and sustainable standard of living for every American man, woman and child. There is no excuse for poverty in the midst of plenty. But this so-called market oriented economy, which is geared to and based upon commodity valuation and a monetary price mechanism (more concerned with maintaining artificial scarcity), is obsolete and cannot deal with the distribution of a glut or plethora of goods and services that are being produced, even when the industrial capacity of the country hovers around 80 to 83 percent. The time for depending on jobs, wages and salaries, investments and global dumping of surpluses to keep the system afloat is no longer feasible, not when inundated with a glut of goods and services.
This problem can be easily rectified--it should have been done long ago--by implementing a scientific-measuring accounting system in which production and distribution are brought into balance, and the resources and technology are used (requisitioned or allocated) to meet the necessary physical requirements of this high-energy and industrial society and the essential needs for every American citizen. If we do not make a transition in this direction soon, the United States could develop into an uncontrollable and unmanageable situation that could bring serious consequences.