But reality is perverse. In many companies, reaction to the recent downturn has been to slash workforce development programs. A survey of corporate executives by Booz-Allen found that 33% planned cuts in their training and education funds. Companies that do have openings for skilled workers now expect to find them readily on the open market, and are less inclined to train.

Workers, of course, are more eager than ever for a chance to improve their skills: the bubble time is over. In a recent public opinion survey by the Heldrich Center for Workforce Development at Rutgers, 62% of respondents said it is very important for government and employers to provide training for laid-off workers. This may reflect some understanding that when the economy revives, the old jobs may not automatically reappear (a difference from the pattern of Old Economy recoveries.) Even in tomorrow's recovery, another echelon of those with low skills may be shunted off to the fast food counters.

Of course, some larger companies that have momentum to ride through a recession are using slack time to build up their employees' competencies. A report in CIO Magazine, for example, quotes managers at Sears Roebuck and United Parcel Service on how they will use the slowdown to beef up skills. http://www.cio.com/archive/091501/hs_less.html But, in the main, the anecdotal evidence is dis- couraging. For example, a Washington Post report on the hard-hit manufacturing region along the Blue Ridge foothills of North Carolina tells of trainees taken on in the boom who were suddenly dumped in the bust. Not an inspiring experience. http://www.washingtonpost.com/wp-dyn/articles/A7466-2001Nov23.html

The paradox that training opportunities fade away at the very time they should be most useful and desirable sounds like the kind of market failure that cries out for a public policy solution. But it's not so simple. It is not easy to devise incentives that can persuade companies to make long-term investments in training when the pace of business is so fast that managers and stockholders are unsure that those investments will pay off. Strains on loyalties pull in both directions: employees a company has trained also have the freedom to take that training investment with them and walk away to a competitor. And government-funded programs intended to swing into action to counter a business down-turn often don't get underway until the need has passed.

Readers who have suggestions on how to deal with the training/recession paradox are invited to e-mail them in. One interesting idea we've come across is sketched out below.

Individual Learning Accounts

What can be done to promote re-training of New Economy workers during an economic downturn, given their high mobility and the need to tailor training programs to individual needs? Here is a proposal from Sam Leiken of the Council on Adult and Experiential Learning(CAEL). [www.cael.org.] In simple outline, this proposal would enable an employee to make tax-deductible contributions up to a total of $5,250 to an Individual Learning Account (sometimes also called a Lifelong Learning Account.) His employer would get a dollar- for-dollar tax credit for a matching contribution of up to $500 to an employee's account made in any one tax year. The account's owner would be entitled to draw down the account at any time to pay for an accredited program of training or education without being taxed on it. Leiken argues that this plan would fill a need not served by any of the various loan and tax benefits currently available for training and education. These either are restricted to relatively young people or to people who are at least half-time students, and are not open to third party (employer) contributions. (For a detailed discussion of the learning accounts plan, go to the NEIS website, http://www.newecon.org/CAELdocuments.html

Any employer--even a temporary employer--could make a contribution to an individual's learning account, either voluntarily or as part of a collective agreement. The account would be fully "portable."

Employers, unions or professional associations could develop special programs of education and training for groups of individuals who held these accounts. Workplace "learning representatives"--specially-trained counselors who work closely with individual employees who want to improve their skills--could assist in planning the most effective use of these funds.

Both workers and employers would find these accounts to be a valuable resource at times when business slows, new technologies become available, or new opportunities beckon.

AFL-CIO Department Spots Growth in Up-Market Jobs

The AFL-CIO's Department for Professional and Technical Employees has gathered an array of data that charts the nation's changing workforce--and suggests some intriguing questions about the future of trade unionism. (For a text of this study, you'll have to write to: Dept. for Professional and Technical Employees, 815 16th Street, NW, 4th Floor, Washington, D.C. 20006. It's not on the web.)

Paul Almeida, the Department's President, notes with some asperity that what government statisticians define as the service sector will account for almost all job growth in the U.S. over the next decade. "The derogatory stereotypes frequently assigned to service sector employment--'hamburger flipper' among them--are quite misleading. In fact the majority of the workers in the service sector are engaged in complex employment that requires substantial training."

The study itself, compiled by Assistant to the President Pamela Wilson, contends that "Professionals are expected to experience the largest increase of any occupational category between 1998 and 2008." Further, she argues, "…[P]rofessionals are joining and forming unions at a faster rate than any other occupational group. There are more union members in the professional specialties than in any other occupational classification. Significant numbers of technicians and administrative support workers also enjoy union representation."

These data, if borne out, will cause some to puzzle over the perceptions many have about the labor movement. While unions do embrace the "janitors, hotel housekeepers, nursing home workers and fruit pickers" cited in the recent New York Times report on the AFL-CIO Convention, the real core of union membership seems to be somewhere else. If this is so, what could it be--nostalgia, ideology, politics or something else--that is fogging up the lens? (For the New York Times article, see: http://www.nytimes.com/2001/12/05/national/05LABO.html?searchpv=past7days)

Brits Break Into Honda

Britain's Amalgamated Engineering and Electrical Union won a December 10 union recognition vote to represent workers at Honda's Swindon plant by a three-to-one margin. According to London's Financial Times, "The vote has implications for Honda's other overseas subsidiaries, in that it could strengthen the hand of unions seeking recognition in the U.S."

The American United Auto Workers has fought in vain to represent workers in Japanese-owned auto plants in the U.S., and just last October lost a heartbreaking vote by a two- to-one margin at the big Nissan plant in Smyrna, Tennessee. The word is that Honda's Ohio plants are its next targets.

Many American observers will undoubtedly credit the AEEU's win at Honda to British industrial relations practice under Tony Blair's Labour Government. But some attention might also be paid to the strategy being employed by Sir Ken Jackson's AEEU, which may be the UK's fastest growing union. (That's right--growing!) The AEEU dispenses with the rhetoric of envy and class struggle that scorched the British Labour movement in the days when Arthur Scargill and Prime Minister Lady Thatcher played their Punch and Judy roles. It offers to assist co-operative management in making Britain's once seedy factories into world class competitors. It offers serious skills training and a host of other services to prospective members.

Here's a bite from the Financial Times that deserves note. (It explains why Honda didn't make an all-out effort to beat the unions): "Toyota's decision nine years ago to sign a single union agreement with the AEEU from the start of production at its Burnaston plant in Derbyshire, and the subsequent absence of industrial unrest, has eased fears that workforce flexibility--one of the manufacturer's main reasons for siting plants in the UK--might be compromised."
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT31MUCR2VC&live=true&tagid=ZZZPB7GUA0C&subheading=UK

About NEIS's E-Bulletin

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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