THE DEMISE OF WELL-PAYING JOBS
139 Cong Rec E 666, *
Congressional Record -- Extension of Remarks
Wednesday, March 17, 1993
103rd Cong. 1st Sess.
139 Cong Rec E 666
REFERENCE: Vol. 139 No. 33
TITLE: THE DEMISE OF WELL-PAYING JOBS
SPEAKER: HON. MARCY KAPTUR OF OHIO
IN THE HOUSE OF REPRESENTATIVES
TEXT:
Text that appears in UPPER CASE identifies statements or
insertions which are not spoken by a Member of the House on the floor.
[*E666] WEDNESDAY, MARCH 17, 1993
MS. KAPTUR. MR. SPEAKER, LAST WEEK THE NEW YORK TIMES FEATURED MY COMMUNITY IN A
FRONT-PAGE ARTICLE DETAILING THE DEMISE OF DECENT, WELL PAYING JOBS TO JOBS THAT
ARE PART-TIME, WITHOUT BENEFITS.
THE JOB EROSION THAT HAS FACED FAMILIES IN OUR COMMUNITY FOR MANY YEARS IS A
DIRECT RESULT OF MULTINATIONAL CORPORATIONS LEAVING THE UNITED STATES AND
ATTEMPTING TO COMPETE INTERNATIONALLY ON THE BASIS OF LOWER WAGES, NOT HIGHER
INVESTMENT, OR MORE SKILLED WORK FORCES HERE AT HOME.
PEOPLE HAVE BEEN TOLD TO BEAR THE BRUNT OF OUR COMPANIES' COMPETITIVE FIGHTS
WITH FOREIGN FIRMS. OUR NATION MUST HOLD THESE FIRMS ACCOUNTABLE IN OUR
MARKETPLACE LEST WE LOSE THE MIDDLE CLASS AND THE STANDARD OF LIVING WE HAVE
BUILT TOGETHER IN THIS CENTURY. THE ARTICLE APTLY DESCRIBES WHAT IS HAPPENING TO
THOUSANDS OF FAMILIES ACROSS OUR NATION.
NEW JOBS LACK THE OLD SECURITY IN A TIME OF DISPOSABLE WORKERS
(By Peter T. Kilborn)
Toledo, March 12. -- Employment agencies call them contingent workers, flexible
workers or assignment workers. Some labor economists, by contrast, call them
disposable and throwaway workers.
Whatever they are called, their numbers are climbing. Federal figures are
sketchy, but about half of the jobs people have been getting in the last year
are part-time or temporary or involve other unconventional arrangements. That is
up from less than a quarter of the new jobs a decade ago.
Most of these new jobs pay less than regular jobs, and few come with good
benefits. The standard American job, with a 40-hour workweek, medical benefits
and a pension at age 65, is on the wane.
"The entire system has fragmented," Labor Secretary Robert B. Reich
said in an interview earlier this month.
A MARKET IN MOTION
Audrey Freedman, an economist for Manpower, the big temporary-help company,
said: "The labor market today, if you look at it closely, provides almost
no long-term secure jobs. It's a market in motion."
As the Clinton Administration ponders changes in the nation's health and welfare
systems, the shift in the job market takes on added importance, as it will have
long-term implications for Government regulators and taxpayers.
Labor market specialists say the shift accelerated in the recession as companies
tried to hold down costs. But they say that much of the shift seems here to
stay.
Many companies have adopted a form of work-force management to compete in the
world market. They keep a core of managers and valued workers whom they favor
with good benefits and permanent jobs. They take on and shed other workers as
business spurts and slumps.
Toledo is home to glass and automobile companies which, while shrinking, are
unionized and make little use of contingent workers. It is home too, to
expanding nonunion retail stores, service businesses and small manufacturers
that do employ such workers.
State officials report a smattering of offers of very good jobs, requiring high
skills and years of experience and paying $12 to $20 an hour, and a surge of
offers for low-skill, low-paying jobs.
The area's biggest new employer is the Maijer (pronounced MY-er) discount food
and department store chain of Grand Rapids, Mich. It is hiring nearly 3,000
workers for four giant stores it is building here. Nearly all the jobs are
part-time and the pay is $4.30 to $4.40 an hour -- 5 cents to 15 cents more than
the Federal minimum wage.
The second-biggest new employer is an air-cargo company, Burlington Air Express.
Burlington will soon have more than 1,200 sorters working three-hour shifts five
days a week. The pay is $8 and hour to start, or $120 a week. Burlington's job
advertisements say applicants must "be able to lift 70 pounds
consistently."
State officials say that companies have little choice but to pay wages as low as
their competitors.
QUALITY PUT IN JEOPARDY
But industries that strive for quality production run a risk in managing workers
this way. The employees have little incentive to give their all when the
employer gives little.
"The people never stop looking for full-time employment," said Lin
Avendano, an official of the Ohio Bureau of Employment Services. "And when
they find it, they leave in an instant."
James J. O'Shea, the 50-year-old manager of a Toledo branch of the Ohio Bureau
of Employment Services, put the problem in a personal perspective:
"Opportunity -- that's the thing that was here in abundance when I was 18.
"The whole middle of the job market is gone, the $8-an-hour to $13-an-hour
jobs. Those middle, family-supportive jobs we've lost."
In Toledo, about 25 temporary-help agencies have displaced most of the
permanent-placement agencies. One is Claus Temporaries Inc., whose owner, Pete
Claus, finds welders, assemblers, electricians and other workers for small
factories as well as clerical workers for offices. Mr. Claus arranges with
client companies to pay employees' wages, unemployment insurance and their
workers' compensation. But the workers receive no health or pension benefits
because, he said, the market would not bear the cost.
'NEW AMERICAN SWEATSHOP'
Mr. Claus said some companies in Toledo were using services like his to provide
their entire work force. "I call it the new American sweatshop," he
said. "It's four people who are owners or managers in a shop that has 200
people. They might have 12 permanent employees who are making $6.50 an hour. All
the others are paid $4.75. And they're all temporaries."
Robert E. Soncrant, who recruits businesses to do their hiring through Mr.
O'Shea's state job service office, cited another development. "You find
unscrupulous employers who bring people in for 29 days and then let them
go," he said. "Why 29 days? Because the employer has an agreement with
the union that says that at 30 days the people have to join the
union."
Just how many Americans are landing contingent jobs is impossible to pin down.
Mr. Reich said he thought about 30 percent of the work force was composed of
contingent workers while current statistics suggest that far more of the new
jobs are.
The Bureau of Labor Statistics's employment report for February, showing a
decline in unemployment to 7 percent of the nation's labor force from 7.1
percent in January, said part-time jobs accounted for 90 percent of the 380,000
new jobs in February. So large a figure is almost certainly a fluke, but it
confirmed a less-pronounced, longer-term decline of conventional jobs.
Twenty-four percent of the 1.6 million new jobs since February 1992 were
part-time. The University of Toledo reports that 30 percent of its graduates
have to take contingent jobs, an uncommonly high proportion for college
graduates. Three years ago, 10 percent of the graduates took contingent jobs.
Other numbers reflecting the growth of contingent workers are still murkier. The
Bureau of Labor Statistics says another 24 percent of the 1.6 million new jobs
represented growth in self-employment. An indeterminate part of the growth in
self-employment includes consulting and independent contracting. The Internal
Revenue Service offers one hint of what part of those might actually be
contingent workers: Employers illegally classified 90,000 workers last year as
self-employed contractors. For legitimate independent contractors, employers are
not required to pay Social Security and unemployment and workers' compensation.
No one is keeping track of the temporary workers employed directly by companies,
without intermediaries.
The bureau says its latest figures show that 1,456,000 people were working
through temporary-help agencies in January, 206,000 more than in January 1992.
The increase, said Thomas Nardone, a bureau economist, amounted to 30 percent of
the jobs that employers reported filling during the year. "It's quite
huge," he said.
No one knows how firm this trend is. As the economy improves and the pool of
workers shrinks, employers might have to sweeten their terms. Nor is it clear
how Government should deal with the trend. Some workers, especially high-paid
consultants, welcome the independence. The jobs can be a [*E667]
boon to retirees, students and people with children at home.
Here in Toledo, though, the loss of old-fashioned jobs and the growth of
contingent work is taking a cruel toll on many job seekers. Gordon Mills, 44,
had a 40-hour-a-week, $6-an-hour job as the night auditor for a motel. But his
back, injured in an earlier job, began bothering him and he took a two-month
leave for therapy.
"I knew they had hired this girl to do the job," he said, "but I
thought she was temporary. When I came back, they cut my hours to 16 and she was
getting 24." He walked out and is now living on $343 a week in workers'
compensation pay for his back injury. Mr. Mills has gone back to school to study
accounting.
Toledo's new job market can even be rough on those who seem qualified for the
better jobs. Nannette Keating, 40, separated and the mother of two children, 3
and 6, has a bachelor's degree in public administration from the University of
Toledo. She worked many years in government jobs before she went to work for a
private adoption agency. But as the economy declined, the agency lost its money,
and she was laid off last April.
Eventually, Ms. Keating wants a good job, but for now she said she would settle
for any kind of job. "I've applied at retail stores, food stores, outlet
stores," she said. Despite the high turnover among such employers, she said
they told her they knew she would quit for a better job, so they turned her
away.
Norman J. Drzewiecki is 24, single, a graduate of Rogers High School here and
living with his parents. Four years ago, with industrial jobs here fading, Mr.
Drzewiecki joined the Air Force, where he was a laborer,
delivery driver and shipping and receiving clerk.
Mr. Drzewiecki had planned to enroll in Air Force training to become a
load-master handling air cargo. But with the Air Force shrinking, he was
discharged in September.
He looked for work at Ohio Bell, where his father has worked for 39 years as a
repairman. But he was turned away. He is collecting $195 a week in unemployment
that Congress just voted to extend until October, so he says he can afford to
keep looking for a career job.
WORRY OVER TEMPORARY OFFER
The few jobs he found were temporary or part-time or both. One work offer was
for 60 days to 150 days. "After that you don't know," Mr. Drzewiecki
said. "I'd hate to get into a job, give it my best effort and after 150
days, they say: 'Thanks a lot. Here's your last paycheck.' "
The President's economic plan offers new spending for education and continuous
job training to enable people to move from one good job to another. But with
industry relying on contingent workers, who might provide those better jobs is
uncertain.
The job trend also lends some urgency to the Administration's promises to
overhaul the nation's pension and health-care systems. By denying contingent
workers health and pension benefits, employers are shifting more of the burden
of supporting the lowest-paid workers to the welfare system.
Richard S. Belous, vice president of the National Planning Association in
Washington and author of a study of the phenomenon, said: "We've made our
labor market more flexible. But we've done zilch about making the social welfare
system flexible."