Volume
3, No. 3, June 2003
New Economy Information Service E-Bulletin
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In this issue:
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Training workers to meet the challenges of a rapidly changing labor market is the focus of a task force that convened its first meeting in Washington on June 3. The task force, co-sponsored by NEIS and the Albert Shanker Institute, will propose ideas on how trade unions, with their wealth of experience in top-quality training programs, can cooperate with business, educators, professional associations, and community leaders to create innovative training strategies tailored to accommodate the realities of the 21st century marketplace. The group is co-chaired by Sandra Feldman, President of the American Federation of Teachers, and Morton Bahr, President of the Communications Workers of America. Among the members of this private sector initiative, which is still in formation, are the presidents of four other AFL-CIO unions; William Daley, former Secretary of Commerce and now President of SBC Communications; and a distinguished group of scholars and educators. (See full Task Force membership list below.)
These distinguished Americans agree that, in an age of globalization and a growing shortage of critical skills, U.S. workers --and the U.S. economy -- stand to gain enormously by creating new partnerships and networks around training.
In remarks to the opening meeting President Bahr told how his union's training and education programs have won solid support from his union's membership, and have become so valuable to cooperating companies that they survive comforably in times of stress. Bahr also argued that labor can take better advantage of opportunities arising in this field, and will benefit by explaining its work in training and education to the wider public.
Anthony Carnevale, Vice President of the Educational Testing Service, told the group that if the population of the U.S. grows 2% a year as projected, we will face a shortage of some 13 to 15 million workers by the year 2020. About two-thirds of this shortfall will come in occupations that require some advanced education and training. Some of these higher skilled workers will become available as certain baby-boom workers delay retirement, and some can be found through immigration. Some employers will try to ease skills shortages by sending work abroad. But all these solutions are either inadequate or will pose significant political liabilities. Therefore the challenge will in some measure require re-training elements of our existing workforce. And the problem is not far-off: there are spot shortages of workers in some skills now, and pressures will grow if there is an economic recovery.
"Today everybody has a line in their speeches about life-long learning," said Carnevale, "but hardly anybody has a line in their budgets." Many colleges are now cutting back on the services they offer so-called "non-traditional" students -- those who are upgrading vocational and professional qualifications rather than seeking undergraduate or graduate degrees. "Higher education moves votes," Carnevale noted, "training doesn't. " But many workers understand their need to improve their training and education. This growing awareness can provide concerned labor and business leaders a potent public issue.
John Flynn of the Bricklayers described an analysis by his union that foresees the need to train between 50 and 100 thousand workers in a range of masonry skills in the coming decade. He pointed out that while some employers are hesitant to invest in training because of the risk that workers will then jump to other jobs, others, including some associated with the Business Roundtable, argue that investments in training are well worth it.
The group's discussion also touched on the importance of community involvement, as exemplified in the Wisconsin Regional Training Partnership, and on the importance of a skilled workforce to America's national security and social cohesion.
The Task Force will meet again in the Fall to develop its analysis and recommendations. Please send suggestions and materials to malcaravatti@newecon.org.
Task Force Members
Sandra Feldman, President, American Federation of Teachers; Co-chair
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"Go Rust, Young Man!" "The widespread loss of manufacturing jobs over the past two years has concealed a looming shortage of highly skilled employees that could undercut manufacturing competitiveness and weaken the U.S. economy, according to a study entitled "Keeping America Competitive: How a Talent Shortage Threatens U.S. Manufacturing." This counter-intuitive insight comes in an April 24 report by Business Wire, Inc., about a study undertaken by the National Association of Manufacturers, the Manufacturing Institute and Deloitte & Touche. This skills shortage "appears to be the result of a convergence of factors, including demographic shifts, failures of the educational system, and an outdated image of manufacturing tied to the negative stereotype of the 'assembly line.'" Says Jerry Jasinowski, President of the NAM, "Unchecked, the shortfall could quickly hobble our manufacturing competitiveness once the global economy recovers in earnest." NAM's message to the dispossessed proletariat of Silicon Valley: come back to the factory: "Today's manufacturing company is a major source of high-tech innovation, wealth creation and exciting, varied opportunity. Manufacturing's varied jobs and careers averaged $54,000 in total compensation in 2000 -- 20 percent higher than the average of all American workers -- while 83.7 percent of manufacturing employees receive health benefits from their employers, more than any other sector except government." In an article on this same theme in Industry Week entitled “The Next Crisis: Too Few Workers,” industry analysts point out that while manufacturing companies may employ fewer workers in the future, the jobs that will be available will require higher skills than 'traditional' manufacturing. For example, the pharmaceutical industry is already experiencing supply shortages in Ph.D.s, M.D.s and veterinarians. http://www.industryweek.com/
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Governor Rendell Challenges the Training Bureaucracy Pennsylvania's Governor Ed Rendell believes that workforce skills are key to modernizing his state's vintage-industry economy. His Deputy Secretary for Workforce Development, Sandi Vito, says that the state's employment and training program is a "system in need of repair." This fall Gov. Rendell will present a plan for thorough-going reforms. According to an advance release, his new package will stress: Pennsylvanians may recall that Governor Rendell faced some union opposition in his primary campaign, and worked hard to win support in some of the state's economically troubled regions. How well his laudable workforce goals advance may depend on whether unions and community leaders as well as employers are partners in the program.
Unionism Leans on More Educated Workers A new study "The Decline of U.S. Labor Unions and the Role of Trade" by international economist Robert Baldwin was released at a seminar held at the Institute for International Economics on June 4. Baldwin's central thesis addresses the decline in the proportion of American workers belonging to unions between the years 1977 and 1997. The proportion of union members in the work force fell from 25 percent to 14 percent, a drop of 44 percent. The study examines various reasons why this has occurred, and argues that international trade may not be as important as some think. But Baldwin's wide-ranging analysis reveals what for readers of this bulletin may be an especially interesting point: while union membership is still declining across the workforce, it is declining more slowly among more educated workers. The decline in unionization was more severe for workers with basic education - 12 years or less - where union membership fell by 52 percent. In contrast, the extent of decline among workers with more than 12 years of education was considerably less - a decline of 32 percent.
Unions also had more difficulty protecting the wages of workers who have less education. The "wage premium" (the amount a unionized worker earns above the wage of a non-union worker) for union workers with less than 13 years of education fell from 58 to 51 percent over the twenty-year period, whereas it actually rose a bit for better-educated union members, from 18 to 19 percent. |
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German Chancellor Gerhard Schroeder won a strong majority for a package of reforms at an extraordinary Congress of his party on June 1, after threatening to resign if his party's left refused to back him. The measures, which will be introduced to parliament later this year, will cut benefits to the long-term unemployed, trim public spending on health care and pensions, and make it easier for companies to lay off workers and raise the age of retirement. Germany's Green Party followed suite at a special congress soon after, voting nine to one to endorse Schroeder's reforms. A referendum held in Italy on June 16 to extend provisions of the country's controversial Article 18 of the labor code to small businesses was defeated when turnout fell far below the 50% minimum. (Under Article 18, an employer can be forced to rehire a worker dismissed for what a judge considers "just cause" -- a rule that employers say discourages them from hiring full time employees.) The Italian referendum was backed by Italy's large left-wing labor federation, although two moderate union groups urged members to abstain from the vote. "We have lost," Fausto Bertinotti, head of the Refounded Communist Party, exclaimed. "A profound injustice that divides workers remains in the country." The Government of Prime Minister Silvio Berlusconi may now press ahead for other changes in Italy's labor law and social welfare system. Debate in Germany was enlivened by an exchange between the Social Democratic labor minister, Wolfgang Clement, and the head of the country's Catholic Church. "In terms of vacation time, public holidays, and working hours, we have without doubt reached the limit," an exasperated Clement told Stern Magazine. Cardinal Karl Lehmann retorted that any reduction in time off would "have a damaging impact on the social climate." Germans have what are, from one perspective, enviable holiday benefits. According to one account, they get up to 17 public holidays a year, compared to 8 for Britain and 11 for France. Their workweek is also shorter, only 35 hours. And they get a more generous vacation: about 30 days a year, compared to 26 days for the rest of the EU. Europeans seem unlikely to give up their “social contract” easily, but so far the strategies put forward by those who value it have been almost entirely defensive.
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This E-Bulletin is published by the New Economy Information Service
(NEIS), a project of the Foundation for Democratic Education. NEIS
provides information and reviews debate on the impact globalization
and technological change has on democracy at home and abroad.
Current interest focuses on how American workers can be equipped
with the skills they need for decent employment and economic
security, and on how the globalization of the economy and the
expansion of democracy can strengthen one another.
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