US Work Force Hit Hard As Manufacturing Jobs Flee

ECONOMIC OUTLOOK

AMERICA is shedding manufacturing jobs at a startling pace, despite the current economic upturn.

Job losses are piling up in nearly every state. In Ohio, 9,000 manufacturing jobs vanished from August 1992 to August 1993. Massachusetts lost 19,000 jobs; Pennsylvania, 25,000; New York, 44,000; and California, 89,000.

Congressmen, such as Rep. Lee Hamilton (D) of Indiana, are hearing a loud message from the man in the street: Save our jobs.

``There is a lot of anxiety,'' Representative Hamilton says. ``Unfortunately, this trend does not seem to be coming to an end.''

Even during the present recovery, hundreds of manufacturing jobs a day are flying out of the United States. They are going to low-wage countries such as Mexico and Brazil, which can beat US manufacturers on price, and to high-tech nations like Japan and Germany, which often whip the US on quality.

There's some good news, of course. The Southern economy is rallying. The new Mercedes-Benz factory in Alabama will hire 1,500 employees. A huge BMW plant is going up in South Carolina.

Further, US automakers, after a 10-year effort to improve quality and lower costs, are finally beating back foreign competitors and regaining market share. Nationwide, manufacturers saw productivity rise an impressive 4.6 percent in 1992, and 5 percent this year.

But mostly, the news is deeply troubling to economists and laymen.

What to do? Move quickly, some experts say. Otherwise, the national standard of living could decline, not just for blue-collar manufacturing workers, but for nearly everyone.

Julie Fox Gorte, a senior associate at the congressional Office of Technology Assessment, noted Tuesday at a Joint Economic Committee meeting: ``We're going to stay on this path of stagnation, as far as I can tell, just about forever'' unless government and industry can find answers.

Philip Braverman, chief economist with DKB Securities Corporation, says: ``The situation we are in is ... unique for modern times.'' He says fundamental problems in the economy have plunged the US into ``a disguised depression.''

Robert Reich, the secretary of labor, will be grilled later this month by the economic committee, which is looking for answers. Meanwhile, the committee is tapping experts, like Dr. Gorte and Dr. Braverman. No `silver bullet'

Gorte cautions that there is no ``silver bullet'' that can wipe out America's manufacturing problems overnight. She sees four major steps that the US can take: create a better-trained work force; provide easier business credit; diffuse technology among small- and medium-sized enterprises; and expand the government-industry partnership to share the costs of high-risk research.

The American aircraft industry is a testimonial to the effectiveness of government-industry cooperation. The industry, which has dominated the world market for decades, was developed in large measure with federal defense funds.

Braverman says the most immediate need, however, is easing the current ``credit crunch,'' which he says is a ``major depressant on the US and global economy.

Private-industry borrowing during the current ``expansion'' has grown at an annual rate of only 3 percent - far below the normal 9 percent during a recovery, and even below the ordinary 6 percent in a recession. Most hurt by this are small businesses, the engine of job growth.

Anthony Carnevale, chairman of the National Commission for Employment Policy, says the difficulties of small business are particularly critical right now. As huge companies like General Motors, IBM, and Kodak shrink, America's manufacturing capacity is gradually shifting to the small-to-medium-sized firms. Unless they get help with technology and financing, they won't be able to offer the jobs America needs.

Even with help, jobs may be scarce. Dr. Carnevale, as well as Gorte, warns that it will be extremely difficult to return to the prosperity of earlier times.

Carnevale says successful companies restructure and cut costs by replacing three, four, or five workers on the floor with a single technician and additional machinery. That sort of progress is necessary to compete on the international market.

Gorte agrees, and points to the American semiconductor industry. In the mid-to-late 1980s, the industry was in trouble, referred to by some as the ``semi-dead'' industry. Japan was gobbling up market share at US expense. Fewer jobs returned

Then, led by Intel, the US fought back. Prosperity returned to American manufacturers, but not as many jobs. From a peak of 247,000 jobs in 1988, the semiconductor industry now employs only 213,000 workers.

A study conducted earlier this year by the committee concluded gloomily that the lag in manufacturing, as well as construction, put the current economic expansion at ``serious risk.''

Ordinarily, these two sectors roar out of a recession with thousands of new jobs. This time there are actually fewer jobs. The reasons are not entirely clear, but as the report notes: ``[Few] workers can be as confident in job or income security today as they could only a few years ago.''

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