Job Front: As Windows Shut, Doors Open
The job news is not encouraging, even though--keep the faith--the economy is recovering and the employment outlook for the 1990s is bright.
The latest government figures, released Friday, showed that unemployment rose again in March and is now at worrisome levels.
One reason is rising unemployment in services, the industries from retail to finance to high technology that supply jobs to 70% of the 117 million employed Americans. Layoffs, moreover, are hitting managers as well as clerks, highly paid executives and stockbrokers and employees of television networks.
The media sense a trend. Fortune magazine has just run a cover story on out-of-work six-figure executives adjusting to job-hunting. The impression is that this is a white-collar recession--the front office pounding the pavement while factory workers are doing OK.
That impression is wide of the mark; it spots a trend but misunderstands it. The real story about services is more interesting and enlightening, not only about today’s employment picture but as an indicator of where jobs will be in the 1990s.
The immediate facts are that in this recession, as in all others, unemployment is hitting factory and construction workers much harder than office staff. Retail workers suffered layoffs but in many service trades employment is up. Computer service jobs rose in the latest month by 48,600, or 6% of the total, according to the Bureau of Labor Statistics. Health service jobs continued to rise sharply.
Yet change is coming to services. “The transformation that occurred in U.S. manufacturing in the 1980s--increased foreign competition, big companies restructuring and laying off workers, smaller companies starting up--is going to happen in services in the ‘90s,” says David Lewin, head of the Institute of Industrial Relations at UCLA.
The trend is already well-launched, with accounting firms cutting partners, merging or going out of business, and with banks and brokerage houses laying off thousands of employees. Foreign competitors have come into the U.S. advertising industry and are moving into U.S. insurance. Equitable Life is inviting an investment from France’s Axa-Midi, the company that was spurned by Farmers Insurance. There are even strains at law firms.
To some financial experts, that spells fewer employees and vacant office space for the rest of the decade. But that’s a narrow and shortsighted view. The U.S. economy created more than 2 million jobs a year in the 1980s, even as big companies slimmed down, particularly in manufacturing. A similar pattern will characterize services in the ‘90s.
In business services--from advertising to computer programing to repair of office machinery-- the government projects a gain from 5 million jobs to 8 million during the decade. In Labor Department job descriptions, a lot of that growth appears to be for computer systems analysts and programmers.
But don’t think merely of keyboards and screens--think of the transformation of industries. In petroleum exploration, for example, computers reading charts of geological formations can do in hours work that took days for teams of geologists. The result is not unemployed geologists but more exploration in all parts of the world, because computing has lowered the cost.
In television, the major networks are losing viewers and laying off employees. Government figures show radio and television employment to be down. But jobs in cable television and pay-per-view TV are increasing--and that may well represent the future.
Think about it. The recent Tyson-Ruddock heavyweight championship fight in Las Vegas took in $35 million from pay-per-view TV, more than any network could hope for in advertising revenue from a single event. So, watch for the Super Bowl to go pay-per-view in the near future--and for jobs to multiply in the ‘90s from the transformation of television.
Or think about the transformation of communications. Motorola last week commissioned Lockheed to build 77 satellites for a network that by the mid-90s will allow a call from any point on Earth to any other point at vastly reduced costs. To gauge the possibilities, imagination is more useful than calculation.
One of the government’s more surprising projections, given today’s brokerage layoffs, is that finance will add about 1 million jobs in the ‘90s. There will be fewer bankers, insurance and real estate agents, but more securities and commodity brokers and investment advisers.
The thinking is simply that an aging population, saving for retirement, will want assistance and advice. But the business probably won’t go to traditional big companies. The flexibility of small operations and individual service will be the key to success.
Similarly, jobs in medical services are estimated to grow from 7 million to 10 million in this decade as the population ages. But it’s doubtful that jobs will grow rapidly in high-cost hospitals. Rather, the trend is to smaller units and care at home--products and procedures individuals can use themselves.
This is all very hopeful but when does the job growth begin? Soon, says the government, but really it will occur gradually and become more evident in the next few years. Meanwhile, potential job seekers should be prepared. Note how computing is central to all new industry and think about getting or updating an education--a sure-fire growth field for the ‘90s.
