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What workers are experiencing is an epochal, technology-driven change akin to the industrial revolution in the 19th century. The displaced workers must now reintegrate themselves into an economy that increasingly rewards only highly skilled labor. The question then becomes: How do they make that leap? The answer is not being provided by either politicians or the economy itself, which leaves the unemployed to stare at the enormous gap between a job as a grocery clerk or some high-skill, high-wage position they cannot dream of getting. What to do with these workers, how to make them productive consumers, is the fundamental dilemma of the American economy. "Every time I lay off 3,000 guys," says Chrysler chairman Lee Iacocca, "I know there are 3,000 less customers who are able to buy our products."
Future growth depends upon a solution. Dave King, 54, was laid off last week from his toolmaking job in Troy, Michigan, only two months after finding the position. He fears he will have to take a truck-driving job at $7 an hour, less than half his former pay. "The older people like me are really in a bind," he says. "The younger ones can get retraining. But who's going to retrain you if you've got only five or 10 years left?" The depth of the need for some coherent system of retraining was demonstrated recently in California, when more than 1,000 people arrived at 4 a.m. and waited for up to six hours to enroll in tuition-free nursing and medical-technology training classes at the North Orange County Regional Occupation Program.
The bogy behind much of the adverse change in the job market is global competition, the single most powerful economic fact of life in the 1990s. In the relatively sheltered era of the 1960s, a mere 7% of the U.S. economy was exposed to international competition. In the 1980s that number zoomed past 70%, and it will keep climbing. The first and most visible victim of the competition was the automobile industry, which suffered massive layoffs in the late 1970s and 1980s. The latest point of impact is America's service sector, which includes everything from banks to airlines, publishers to insurance firms. "Our service market is now being increasingly populated by deep- pocketed foreign players. The pain of that bears most acutely on the American worker," says Stephen Roach, senior economist at Morgan Stanley.
PART OF THE AMERICAN COMpetitive response has been technological, driven by the computer chip, which some analysts say has caused more industrial dislocation than any other advance in the history of capitalism. In the early 1980s it arrived in manufacturing in the form of robots and computerized machine tools; in the 1990s it is replacing back-room white-collar clerical workers in service industries by the score. Like the historic shift from agriculture to heavy industry in the 19th century, the advent of a new technology ought to be creating a whole new class of jobs to replace the ones lost. That's not happening: the transition has left too many workers in an economic twilight zone.