Today’s Top Job Is Preparing for Employment Tomorrow

We are in transition to a new age of work, and we must rethink the whole subject of jobs and the ways people work and live.

That grand statement might well stand as the rallying point for the Group of Seven jobs summit convening Monday and Tuesday in Detroit. At the Clinton Administration’s invitation, economic ministers from the world’s major industrial nations--Britain, Canada, France, Germany, Italy, Japan and the United States--will ponder “how to create more jobs for people who have been left behind due to the changing global economy.”

There are no easy answers to the worldwide problem of unemployment and layoffs, although desperation measures, such as working shorter weeks to spread the work around, may look like solutions.

Germany last week hailed an agreement between employers and the national metalworkers union that includes a cutback to a 30-hour week--from 36 hours--to avoid layoffs. The move was taken only “after German firms had laid off 10% of the work force,” economist Hans Meltzer of Deutsche Bank Research explained from Frankfurt.

Meltzer acknowledged that cutting the workweek would not reduce Germany’s 8.9% unemployment--nor would it increase productivity. “New investment and new products are needed to do that,” he said.

In fact, shortened workweeks increase costs because even though wage costs fall, overhead--the costs of plants, equipment and interest on debt--remains roughly the same while production declines. “It’s a bad idea and an admission they can’t create jobs,” said labor economist James Medoff of Harvard University.

The thinking of U.S. business is different: Cut personnel costs to increase productivity--output per labor hour or dollar invested--and thereby make the total economic pie bigger so there is more to go around for all.

And U.S. industry, after several rounds of restructuring, is increasingly productive. The government reported last week that productivity rose 4.2% last year, a major gain.

Yet job creation has been anemic and the layoffs continue, even though national unemployment at 6.5% is not alarming. Raytheon, the Lexington, Mass.-based defense contractor, announced layoffs of 4,400 employees, 7% of its work force, last week. The coming merger of Grumman with either Northrop or Martin Marietta will result in more cuts.

Even prosperous firms are reducing staff. Fleet Financial Group, the 14th-largest U.S. banking company, is cutting 5,500 employees, or 19% of its work force. The bank said it needs “to be competitive,” but not so much with other banks as with machines and toll-free telephone numbers that now perform traditional functions of banking.

Epochal change is under way. In Japan, once the home of lifetime employment, large companies are looking to cut staff and restructure.

In U.S. industry, there is discouraging news on incomes. Frank Levy of the Massachusetts Institute of Technology, who noticed that incomes of non-college workers stalled in 1973, now reports that college-educated men in mid-career are suffering income declines.

In fact, they’re suffering layoffs along with clerks, secretaries, technical and sales staff as corporations downsize.

This is technological unemployment comparable to that of the late 19th Century, when railroads and emerging industry created the modern corporation and transformed a work force then heavy with domestic servants and farm laborers.

Today computers and telecommunications are shifting the balance again--at least in developed countries--toward smaller units and decentralized operations. Education and flexibility are a must for workers.

President Clinton is thinking correctly when he emphasizes training and education and suggests longer unemployment benefits to accommodate a two-year stretch between jobs.

But there are no easy answers. Occupational training is difficult in unpredictable times. Recall widespread predictions in the 1980s that the United States would not have enough engineers; Japan would have all the engineers, U.S. high-tech industry would shrivel.

But along came Sun Microsystems’ engineering workstation, which enabled fewer engineers to do more work faster--in short, made them more productive. And now there’s a surplus of engineers in Silicon Valley.

Secretaries, clerks, the corporate copy center or computer room? Now there’s Kinko’s chain of 650 business service stores that do a lot of office work.

Would shorter weeks for office employees keep Kinko’s from doing that work? No.

“Productivity is necessary but also painful,” said MIT’s Levy.

It seems we’re getting poorer, but we should not forget that we’re really getting richer, in a world of expanding markets and a country of expanding opportunities for individuals.

Geoffrey Kessler of Northridge, who runs the Kessler Exchange, a national research organization for small business, finds growing opportunities in 10 categories ranging from health care to foreign trade to subcontracting to big companies or government agencies that have downsized and now need help with outplacement of employees, among other things.

“Not only is there opportunity, but there’s government and corporate money available to help start your business,” Kessler said.

Still, it’s no picnic out there. Celia D. Crossley & Associates of Columbus, Ohio, helps people find jobs. Crossley, who was a human resources consultant before setting up her present firm, reports that of the 76 people she has worked with since 1991, by far the largest number--41--have gone to work for smaller companies. “Jobs aren’t obvious these days,” she said. “They take some digging and a longer time to find.”

Staff members in the Clinton Administration believe that these times demand a thorough rethinking of the way people work and live.

But meanwhile, “we are in a transition and we should manage it better,” said Eric Mann, an economist with Los Angeles’ Labor Community Strategy Center. Mann advocates public spending to create jobs.

Transitions can be lengthy. The corporate age we have lived in until now began in the 1870s, as the railroads organized their far-flung operations, and culminated in the 1920s, when Pierre S. DuPont organized General Motors. That age brought unprecedented prosperity to working people in many parts of the world. And the new age will do the same.

Meanwhile, maybe the Group of Seven can think of ways to speed the transition and ease the pain of productivity.