(2 of 4)
Even in a perfect economy, some members of the labor force would turn out to be unemployed whenever the statistics were collected—people shifting from one job to another or changing careers, for example, and people just coming into the labor force and beginning to look for work. Economists call this phenomenon "frictional" unemployment, and some, including Feldstein, are counting it as part of structural unemployment when they use a rate as high as 6% or 7%. According to some rough calculations, about half of that is probably frictional.
The other half, involving perhaps 3 million people, reflects a much more serious problem in the labor market: the mismatch between workers' skills and the skills needed by employers. Growing numbers of young people, particularly from minority groups, are joining the work force with such poor educational backgrounds that they are ill prepared for most jobs. The unemployment rate among black teen-agers has reached 50.1%. Foreign competition has cost hundreds of thousands of workers their jobs in such declining industries as autos, steel and textiles. In the auto business alone, 255,000 employees, or 23% of the blue-collar work force, are on indefinite layoff. Company and union officials concede that most of these workers will not be recalled, even if the economy recovers. Says David Herlick of Woodhaven, Mich., a Ford worker who was laid off 15 months ago: "There's no light at the end of the tunnel. There's just a big iron gate."
More ominous, new forms of automation Like computerized robots are eliminating blue-collar jobs at a swift pace. The Congressional Budget Office estimates that by the end of the decade, advances in microelectronic technology could cause 3 million jobs to disappear, a total that represents 15% of the manufacturing work force. At the same tune, of course, millions of new positions will be created for those who can work with the electronic gadgetry. The problem is that most assembly-line workers, particularly the older and less educated ones, will find it tough to learn sophisticated skills Like computer programming.
While most economists agree that structural unemployment is something to be very concerned about, many believe that the Administration is trying to use the concept as a smokescreen to cover its failed policies. "How do you measure structural unemployment?" asks Sar Levitan, an economics professor at George Washington University. "You pull a figure out of the air. Those who talk about it are playing with numbers to build up a justification for unemployment." Says Barry Bosworth, an economist who was director of the Council on Wage and Price Stability under President Carter: "We have an enormous number of jobless people who are fully employable. They were employed just a year or two ago. But now, in the midst of a recession, all the talk is about structural unemployment. The immediate problem is that there are not enough total jobs."