Midwest rallies to train workers, lure business, stem jobs exodus. Service jobs haven't made up for manufacturing loss
Parma, Ohio — It sounds a bit like a football team's pep rally. A band is playing and the audience, largely General Motors (GM) workers, is clapping enthusiastically. The opposing team of overseas carmakers is nowhere to be seen. Cheerleading GM officials are announcing plans for a $580 million expansion and modernization of the 37-year-old Chevrolet plant here in suburban Cleveland. It is hailed as another key step forward in the battle against overseas imports.
Taking the podium in shirtsleeves rolled up to beat the heat, Ohio Gov. Richard F. Celeste calls the GM investment a strong vote of confidence in Ohio. ``If you give us a fair chance to compete, we can do it,'' he yells to enthusiastic clapping.
But behind all the noise and cheers lies a sobering fact. The Parma stamping plant, which now employs 2,400 workers and once had several thousand more, expects to offer no new jobs with the expansion.
``I think you have to look at what would happen if this action weren't taken -- eventually employment would start to dry up,'' GM vice-president David D. Campbell explained later to a group of GM officials and reporters.
The incident of a few weeks ago says a lot about both the new shape of Midwestern manufacturing and the region's growing determination to fight back.
Company leaders know their industries must be lean to survive. They must produce more with fewer workers. New technology has to be substituted for labor wherever possible to keep from falling further behind.
``There isn't any choice -- it's the competitive model at work,'' says Stanley Duobinis, an economist with Chase Econometrics who insists some of the results are looking good. ``Productivity is really booming. Shipment figures are growing quite rapidly.''
But the reverse side of such forward motion is that the Midwest continues to wrestle with a serious employment problem.
The nation's heartland has lost well over 1 million manufacturing jobs since 1979. Illinois, which lost one-fifth of its factory jobs, leads the national list, according to the US Bureau of Labor Statistics.
Ohio ranks third, behind Pennsylvania. Michigan is in fourth place. Agriculturally-dependent Iowa and southern Minnesota have been hard hit by the farm financial crunch.
Meanwhile the region's transition to service jobs has been proceeding much more slowly than the national average. The gains have not made up for the losses. Business services, a large chunk of the service sector, lean on the region's manufacturing for much of their strength.
The latest employment outlook survey issued by Manpower Inc. says the traditional ``winter weakness'' is expected to affect Midwestern hiring during the fourth quarter. Only in finance, insurance, and real estate will area employers be hiring more people than the national average.
Unemployment, down to 7 percent nationally for August in the civilian sector, has generally been higher than the national average in the Midwest for the last decade.
But leaders in government and business in the Midwestern states are pushing harder these days -- and with notably more success than during the recent recession -- to equip workers for available jobs and nurture new and expanded investment.
Though the still-high dollar is not helping pave the way to a greater flow of US exports, most Midwestern states now have not one but several trade offices overseas. And a team of Great Lakes governors is expected to visit East Asia soon on a joint trade mission.
Midwestern states have become more competitive with the Sunbelt over the last year or two. Jobs in both regions are now growing at a similar pace.
The once strong outmigration from the Midwest has tapered off. And some businesses have moved North. Ohio, for instance, recently welcomed back an electric-generator manufacturing plant that had moved to Alabama, and Youngstown has become the new home of a North Carolina furniture manufacturing plant.
As Ameritech Chief Executive Officer William L. Weiss put it to those attending the recent Midwest Governors' Conference on Michigan's Mackinac Island: ``When it comes to taking a punch and coming back for more, we've got the `right stuff.' ''
Midwestern leaders are touting anew the region's natural assets, such as its central location, agricultural capacity, ample fresh water supply, and highly skilled work force. And they are trying hard to play down and in some cases change the traditional business drawbacks -- high taxes, high wages, and strong unions.
Iowa last summer scrapped several taxes on machinery and equipment while number of states, such as Minnesota, Michigan, and Ohio, recently lowered income taxes. Indiana, which has lured 95 new plants to its northeastern section within the last two years, attributes much of its recent success to its relatively low workers-compensation and unemployment-insurance rates. Last of a series. Others articles appeared Sept. 17 and 18.
A more concerted effort is being made in the Midwest these days to help workers find jobs and update their skills. All states get federal Job Training Partnership Act (JTPA) funds, geared largely to economically disadvantaged and displaced workers. But Linda Spencer, an employment specialist with the Northeast-Midwest Congressional Coalition, notes: ``Traditionally the Midwest has used federal job-training funds in a much more creative way than other regions.''
And several Midwestern states fund special efforts of their own. Iowa took the novel approach of selling bonds to develop more dollars for its job-training efforts. And Illinois is the only state in the nation so far to offer workers individual vouchers so they can upgrade or change obsolete skills.
``We felt this was a gap that wasn't being filled,'' says Robert English, chairman of the Prarie State 2000 Fund that was recently given a $3 million grant from Illinois for job training.
For the last three summers the Michigan Legislature has funded the largest summer-jobs-for-youth program in the nation. Some 55,000 young people, working in this Michigan Youth Corps for the minimum wage, have done everything from picking up litter along the highways to maintaining county fairgrounds and staffing day-care centers.
Greg Mikulen, who has been putting protective concrete around cookout areas and picking up litter for the last few months in Michigan's Walter J. Hayes State Park, says he has earned more in past years as a construction worker but is just glad this summer to have a job at all and get more experience. ``It gives everybody a nice big push into the job market,'' says Scott Powers of Sand Lake, also working at Hayes Park.
Michigan was also one of the earliest states to tie customized job training to its economic development efforts. ``We tell any companies that want to come into the state or expand that we'll, carte blanche, provide them with a trained labor force,'' explains Jim Remensnyder of the Michigan Business and Industrial Training Program.
Steve Corona, director of the Private Industry Council Inc. of northeastern Indiana reports a similar emphasis in job training there.
``With all this talk about high-tech and service industries we were somewhat surprised -- but 56 percent of the people we place are in manufacturing, assembly-line positions. Like it or not we're still tied to the automobile industry.'' CHART/MAP: Contrasts in regional unemployment rates:
1979 1984 National 5.8 percent 7.5 percent New England 5.4 4.9 Mid-Atlantic 6.9 7.3 Midwest 5.8 8.95(also have state by state)
Ill. 5.5 9.l
Ind. 6.4 8.6
Iowa 4.1 7.1
Mich 7.8 ll.2
Minn. 4.2 6.3
Ohio 5.9 9.4
Wis 4.5 7.4 South 5.29 7.4 West 5.6 7.3 CHART: The shift from manufacturing to service jobs Manufacturing:
1979 1984 US Total 21,067,400 19,331,500 Down 8.2 percent/loss of 1,735.9 jobs Midwest 5,780,00 4,780,100 Down 17.3 percent/loss of 999,900 jobs Service: US Total l7,168,900 20,837,300 Up 21.4 percent or 3,668,400 jobs Midwest 3,598,000 4,082,300 Up 13.5 percent or 484,300 jobs* *smallest increase among the regions Source: Bureau of Labor Statistics