Dislocated Workers: Past Participants in the American Dream

They’ve toiled for decades in America’s factories, mills and mines. They are the backbone of the labor force, loyal and diligent workers who suddenly find themselves in an unfamiliar place: the unemployment line.

They are the millions who lost their jobs when plants or businesses closed, merged, relocated or cut their payrolls because of imports, competition, technology, economic shifts or other forces beyond their control.

Their ranks have grown in recent years, experts say, even as the federal unemployment rate has dropped.

“The displaced worker represents a larger percentage of the unemployed than ever,” said Malcolm Lovell Jr., who recently chaired a federal task force on worker dislocation. Suggestions in his report to Labor Secretary William E. Brock III included greater private-sector effort and improved retraining programs.

The loss of factory jobs, some experts say, is a result of the U.S. economy’s continuing drift from manufacturing toward service industries.

“We’re losing good, high-paying jobs,” said Larry Mishel, an economist with the Industrial Union Department of the AFL-CIO. “Our wage structure is deteriorating. . . . We are unlikely to be able to sustain our standard of living if things continue. That’s the bottom line--how are people going to be able to live?”

Mishel continued: “We’re faltering. We will continue to. . . . We’re undergoing a large structural change. It means we have to make choices as to what type of economy we want to have. I see us shifting to a lower standard of living with low productivity growth and a deterioration of job opportunities.”

About 10.8 million adults lost their jobs between January, 1981, and January, 1986, because of plant shutdowns, relocations, slack work orders or elimination of their positions, the Bureau of Labor Statistics says.

Of those people, 5.1 million had been on their jobs at least three years. The bureau surveyed that smaller group and found that 67% of them found new jobs within that five-year period, although many took lower wages. About 18% of them were still without work at the start of 1986.

The figures represented an improvement from the previous five years. A 1984 survey of a comparable segment of the 11.5 million workers displaced between 1979 and 1983, also done by the Labor Department, found that only 60% of them had found new work and that 26% were still unemployed.

Displaced workers are a distinct breed among the unemployed. They tend to be more middle class and to have stable work histories.

“Typically, they’ve held one job all their lives,” said Bill Batt, a Labor Department expert on plant closings. “They may have never applied for a job. They’re not in-and-out members of the labor force.”

“They’re the mainstream of our economy and our society,” said Gary Hansen, an economics professor at Utah State University, who also served on the dislocation task force. “It’s my neighbor and your neighbor being laid off.”

The displaced worker “has been a participant in and a recipient of the American dream,” he added. “All of a sudden, we’re pulling out the rug from under these folks . . . . You’re removing their livelihoods.”

When that happens, there are major adjustment problems.

“People who’ve spent 18, 20, 30 years in the steel industry . . . did not prepare themselves to go into other occupations,” said Leon Lynch, vice president-human affairs of the United Steelworkers of America.

The recently passed Senate trade bill included union-supported provisions that employers of 100 or more people must give their workers 60 days’ notice of impending plant closings and layoffs. The House version of the legislation, which has not yet reached the floor, is tougher. It would apply to employers of 50 or more and require notifications of 90 days to 180 days, depending on size of the work force.

Many other countries have such laws. Canada’s system of advance notification, in particular, is often praised as a model.

The Senate bill’s chief sponsor was Howard M. Metzenbaum (D-Ohio). Residents of his state and of four others in the Midwest--Illinois, Indiana, Michigan and Wisconsin--accounted for more than 20% of the displaced workers surveyed.

The region is dominated by the steel and automobile industries, both severely affected by foreign competition, changing technology, the decline in demand for steel and the use of outside parts suppliers and assemblers.

The number of hourly workers in the steel industry fell from 393,000 to 169,000, or about 57%, from 1973 to 1983, according to the American Iron and Steel Institute.

In Michigan, auto industry jobs numbered 410,000 in 1978, the peak year, and are estimated at 314,000 for 1987, said Donald Grimes, a University of Michigan research economist.

Autos and steel are not alone. Thousands of other jobs have been lost jobs in the textile, mining, meatpacking and oil industries.

“It’s endemic to the whole economy,” said Lovell, director of the Labor-Management Institute at George Washington University.

In California, often cited as a growth state, 1.3 million people lost their jobs between 1979 and 1984, according to a 1987 study conducted by Philip Shapira of the Office of Technology Assessment.

The study found that one in four manufacturing workers lost their jobs in that period, and most were victims of the slump in technology.

Lynch, the steel union official, noted that some displaced workers had no desire to be trained for new occupations.

“People feel very, very insecure about their educa tional training,” he said. “They feel they can’t learn enough in a short period of time to compete with young, bright students.”

The Job Training Partnership Act, a major federal training program for displaced workers and disadvantaged people, served no more than 5% of the eligible workers displaced between 1979 and 1984 in the program’s first two years of operation, 1983 and 1984, according to a report of the Office of Technology Assessment.

Julie Gorte of that office attributed the low participation to a lack of awareness and the limited retraining available. Some services, she said, offer basic training that skilled displaced workers don’t need.

In addition, displaced workers often have trouble adjusting to lower pay.

A recent article based on a study prepared for the Joint Economic Committee said that from 1979 to 1985, 44% of new jobs paid no more than poverty-level wages.

That was more than double the rate of low-wage jobs created in the 1960s and 1970s, said the authors, Barry Bluestone of the University of Massachusetts-Boston and Bennett Harrison of the Massachusetts Institute of Technology, professors of political economics. Their study found that the worst erosion of high-paying jobs took place in the Midwest.

Closing Notice

Experts are divided on whether a law mandating notice of plant closings will ease the problem. Opponents say it may sustain weak, unproductive plants and inject the government into the private sector. Supporters say it will give workers time to look for new jobs and towns a chance to work to save plants.

“The days of feudal barons are over,” Sen. Edward M. Kennedy (D-Mass.) said when the Senate measure was passed.

“The question is, are we going to treat people like people, or like chattels in corporate America?”