Newspaper article The Christian Science Monitor

The Jobless Recovery and Labor's Future

Newspaper article The Christian Science Monitor

The Jobless Recovery and Labor's Future

Article excerpt

HAS employment growth come unhooked from economic growth? That is, can we expect to see lingering high unemployment and only minimal job creation in the United States and other developed countries at a time when they are officially, at least, in an economic recovery?

The near-term answer, it seems, may be yes. As the United States moves into the third year of a recovery that officially began March 1991, unemployment remains relatively high: 7 percent.

Not only have corporations in trouble been shedding workers in numbers sufficient to populate whole towns; but as the recent announcement that consumer-goods giant Procter & Gamble will shrink its workforce 12 percent over two years indicates, even healthy companies are looking to less, not more, employment.

It all suggests an eerie prospect of factories staffed largely by robots, while the profits go to some pension fund somewhere; capitalism without a human face, in other words. No wonder President Clinton felt at the Tokyo summit of the Group of Seven nations the need to call a "jobs summit" this fall.

David Wyss, of the consulting firm DRI/McGraw-Hill in Lexington, Mass., is one who sees employment growth as to a certain extent coming unstuck from overall economic growth. The workweek in the manufacturing sector is at its highest in 25 years, and yet manufacturing employment is still going down, he notes. (The manufacturing sector of gross domestic product has held pretty much steady since World War II, even so, by the way.) It's cheaper to put workers on overtime than to hire more because of the cost of benefits, particularly health care, and also of the cost of hiring itself: interviewing, screening, and training.

One test of health-care reform in the US will be whether it achieves overall savings on medical spending that are not offset by further cramping job creation; health care has been a major source of new jobs in recent years.

Mr. Wyss and other observers see the high cost of hiring as tending to make American workplaces more like European ones, where generous benefits have long made it hard to bring on new workers, even though Europeans who have jobs have not experienced the same wage stagnation as their American counterparts. …

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