It is an apparently conventional dispatch leading page one of The New York Times, yet to a critical eye it is an archetype of a core flaw in American media economic coverage.
"In a stunningly grim portrayal of the midsummer economy," the article by Robert D. Hershey Jr. begins, "government figures showed today that American business and industry lost 167,000 jobs in August as factory employment skidded to its lowest level since April 1983." The report, last Sept. 5, goes on to note that "manufacturing was particularly weak ... with losses appearing for 16 of the 20 industries specified." What's wrong? Hint: See a Washington Post story by Barbara Vobejda Aug. 18):
"To some, the numbers carry ominous signals--a dangerous slide in the, American industrial base--To others, they merely reflect what we should already know: that the economy is now undergoing a fundamental restructuring." She added that a government expert "attributed the decline in manufacturing jobs in part to significant gains in productivity, which have enabled employers to produce more goods with fewer workers."
The difference? The thrust in Hershey's long Times story appears to be a recession-causing lag in American manufacturing performance, the most severe since 1983. Vobejda, on the other hand, provides a crucial perspective on what the numbers really signify: another step in a painful, sometimes debilitating national transition from the smokestack era.
Lance Morrow, in Time on March 29, put it this way:
"In the terrible highland clearances of the 18th Century, thousands of Scots were driven from their farms so that landlords might turn the fields over to the mass grazing of sheep, a more efficient and profitable enterprise. The wool business prospered .... It was the end of a way of life .... A transformation that merciless and profound is occurring in the American workplace."
American media have periodically noted that transformation, in individual features, editorials, book reviews and TV mini-documentaries. The problem is that context is not included regularly in daily reporting. Day-to-day coverage tends to be a business-as-usual recording of layoffs, corporate downsizing and wage and job-opportunity shifts as if these were recession phenomena little related to something greater. This clouds comprehension of an economic upheaval that is far more than a recession--it is a revolution.
Harvard's Daniel Bell refers to it as "The Third Transition," an "Information Age" or "Post-Industrial Society." Alvin Toffler, in a 1980's bestseller, called it "The Third Wave," comparable to two previous historical watersheds--the onsets of organized agriculture and factory industry. Others sum it up simply as "the Second industrial Revolution."
In research for a book I found the revolution to be three-tiered:
1. Reindustrialization around high
automation and the births of
new industries and sciences).
2. Internationalization of economics,
politics, science, technology
3. The ascent of a scientific, technocratic
Add to these a current global economic slump afflicting even dynamic Japan, and a delayed partial U.S. military demobilization from a half-century's wartime footing, and it should be apparent that our problems do not lend themselves to ordinary beat reporting. Factor in definitions of recovery pegged to the record immediate postwar global GNP growth and unprecedented U.S. prosperity, and reality is further clouded.
In the two postwar reconstruction decades ending in 1973, global manufacturing output tripled, and in 1960-80 gross world product growth averaged double the historical norm--some 5 percent annually. Our own growth set records, doubling our median family income in a quarter-century.
That era, an atypical economic Camelot, ended with OPEC's 1970's oil shocks. Since then, real (adjusted for inflation) American wage growth has inexorably slowed and targets closer to long-term U.S. trends--some 2 percent annually--seem more achievable.
Further, just as Marshall McLuhan's "global village" has become economic as well as sociopolitical and communications reality, so has science/technology propelled us into a new unknown. As Robert L. Bartley, Wall Street Journal editorial page Editor, has written, "Not even in the first Industrial Revolution, when James Watt invented the steam engine, would you find today's profusion of scientific breakthroughs: the splitting of the atom, the development of the computer and the decoding of the gene. The Second industrial Revolution ... is changing world society in myriad ways."
How well does regular economic coverage reflect these realities?
Take the reporting of layoffs. "LAYOFFS MOUNT AS COMPANIES LOOK FOR PROFITS," a typical front-page USA Today headline proclaimed (Oct. 14, 1991). It was accompanied by a graphic enumerating some 30,000 layoffs by 20 companies. Such reports have become de rigeur, with overtones of manufacturing decline or deindustrialization.
But the headlined layoff waves do not necessarily signify that we are deindustrializing. For more than three decades, our manufacturing base as a ratio of Gross National Product scarcely has changed--hovering at 21 to 24 percent (in 1990, 23.3 percent). What has changed is employment in manufacturing. Like that in farming, it has shrunk (from one-third of nonfarm jobs four decades ago to less than one-fifth). It is fated to continue to do so, well below Hershey's and The Times's 1983 benchmark (eventually, some say, to the percentage of workers in agriculture today).
Steel, auto, textile, and other "Second Wave" enterprises all are being streamlined. In the 1980's U. S. factory productivity rose by 3.6 percent--almost triple its 1970's ratios. Six years ago, for example, Ford reported building 10 percent more cars than it did about a decade earlier--with 47 percent fewer production workers. The U.S. steel industry, one of The Times's admirably redeeming overviews reported (March 31 last year), "now often rivals--and outperforms--its competitors in Germany and Japan." Computerized, automated, "flexible" manufacturing are the new norms.
"Theft" or "export" of American jobs and companies? Would you believe economic internationalization? One-fifth of U.S. corporate assets (about triple the total deployed by Japan) are now outside our borders. Foreign operations engage over one-third of the employees--and at times yield more than half the profits--of firms such as GM and Ford. Quietly, amid headlines about Japan's tentacles, the U.S. has remained by far the largest international direct investor, with nearly four-fifths of the world total.
We are indeed the people about whom J.-J. Servan-Schreiber, in his 1960's book "The American Challenge," warned.
Ironically, then, the case can be made that the more Americans displaced from jobs in a successful effort to maintain our manufacturing production (as opposed to employment) base, the better the U.S. is responding to the New Industrial Revolution.
Among the Revolution's other traits: * Internationalized research.
Accelerated R&D has become so
expensive, yet so crucial, that
IBM, for example, maintains
several of its major labs abroad,
including a 1,500-member facility
near Tokyo and the Swiss lab
that achieved high-temperature
superconductivity. * Cross-border alliances. They
were first prominent in automaking
(Chrysler and Mitsubishi,
Ford and Mazda, and GM and
Isuzu) and are now even in
computers and chip-making--most
notably, IBM and the
German giant Siemens. These
ease foreign-market entree and
spread spiraling research costs. * Small-firm job generation. As
Fortune 500 giants restructure,
most U.S. jobs now are created
by companies with 200 or fewer
employees. * Part-time/temporary staffing. To
cut overhead and increase flexibility,
firms now contract for
previous in-house functions and
classify many new jobs as part-time
or temporary. * A services boom. In all advanced
economies, most new jobs are in
services. Besides fast-food, security-guard,
and other menial-pay
posts, these encompass higher-echelon
jobs such as accounting,
finances, health, education,
engineering, transportation, and
lodging. Raising services productivity,
into job changes there--will be
one determinant of economic
Clearly, another will be education and training. On-the-job apprentice-ships for jobs with high blue-collar wages are largely history. Skills and credentials now command the opportunities. The uneducated and unskilled, warns Congress's Office of Technology Assessment, face being "stuck at the bottom." That, to recall a Sixties' phrase, is "social dynamite."
The ramifications of these changes unfold day by day, and therefore belong, in perspective, on daily reporting agendas. Are they? Based on my own forays outside the media culture to try to divine what really is happening and options for coping with it, I offer these suggestions for ensuring that spot news is reported against a backdrop that enlightens, not confuses or panics:
Give context. This might mean only a sentence or paragraph in reports on: layoffs or corporate downswing; wage comparisons (among countries or years); corporate profit changes (when investment, not short-term net, may be the key); union membership (inexorably destined to decline in manufacturing, necessitating new arrangements for worker benefits).
It also means greater willingness to use "R" words--restructuring, reindustrializing, or even the apparently (for journalists) dread revolution, as in Second Industrial Revolution.
Chercez balance. Journalism must be more than unipolar--attracted to the negative. Emphasizing only layoffs can cumulatively distort developments. In my hometown Syracuse Post-Standard, for instance, a page one headline last year (Jan. 25) read SYRACUSE AREA LOST 7,800 JOBS DURING 1991. The article, based on a state Labor Department announcement, omitted any mention of new jobs. Yet the previous Oct. 31, back on Page B9., the paper had run data reporting area employment up 22 percent--58,000 jobs, mostly in service positions (including insurance, banking, engineering, architecture, computer, and legal services). Ready material for a balance paragraph, leaving a far more accurate impression.
Diversify sources and viewpoints. Interest groups have specific mindsets and interests. Only pluralistic sources can lead to truly independent analysis. This means, among other things, closer general-desk attention to authorities and insights in economic publications: Business Week, Fortune, The Wall Street journal, The Economist and The Financial Times of London. All have excelled in both incremental reporting and in-depth overviews. If possible as well, specialized periodicals such as Harvard Business Review, should be used.
It further means extending "usual suspects" lists for interviews, by tracking think tank studies and reports; writers of major overviews; the executives, economists, and other authorities they quote; and case examples ranging from humane corporate restructurings to retraining, school reforms, and other major efforts. Thanks to on-line information services, such monitoring and followup are more feasible than ever.
Sharpen credibility detectors. Are major new layoffs being reported? Where's the perspective paragraph correlating them with new jobs? To structural trends in the locality, region, nation, or industry? If there are no data, aren't there expert estimates? Are scapegoats suggested? If so, where's the qualifying caveat?
If layoffs relate to Pentagon cutbacks, what's the specific longer-term public interest in saving the cost of the affected bomber, submarine, military base or other program? What are options for repositioning affected contractors' businesses? What about successful case examples? Are there ameliorative proposals, such as relocation or retraining aid?
If local or regional educational shortcomings are the subject (as increasingly they will be), to what extent is money the issue? Statutory or bureaucratic constraints? Business apathy? Teachers unions? What reforms are being tried elsewhere? What tax or other incentives might stimulate or expand compensatory training by U. S. businesses?
Persevere. If you fall short in one report, return to the subject. Surveys show that Americans want more and better economic coverage, and, news cycles notwithstanding, an Industrial Revolution is not a one-day phenomenon. Why should coverage of it be?
Alfred Balk, a member of the journalism faculty at Syracuse University, is a former Editor of Columbia Journalism Review and World Press Review and former Managing Editor of the technology monthly IEEE Spectrum. His writings on economics and technology include "The Myth of American Eclipse: The New Global Age" (Transaction Books, 1990). He has two daughters and lives with his wife, Phyllis, a nurse, in Syracuse.…