What is our response to layoffs, particularly high-paid manufacturing/mechanical jobs? Retrainining and more education have been the policy "heralded as a sure path to new and better-paying jobs" Uchitelle writes in his book. There's only one problem: the policy doesn't work. And nobody came to understand that reality better than the nearly 2,000 aircraft mechanics who lost their jobs when United Airlines began laying off and eventually closed its aircraft maintenance facility in Indianapolis.
Uchitelle retraces the beginning of the mechanics' downfall. A hard-line union attitude about work hours and over-time resulted in a deliberate slowdown in worker productivity by the mechanics. United struck back by beginning to outsource work to other non-union contractors in the south, whose wage costs were half those of United mechanics, resulting in layoffs of union mechanics. The union quickly softened its stance and, initially, worked with the company to retrain and educate laid off workers.
The federal government stepped in with federal grants to help with the retraining. The Indianapolis Private Industry Council, Uchitelle explains, acted as a conduit for funneling the federal dollars into retraining efforts. The Council contracted with Goodwill Industries of Central Indiana. Their goal was to get most of the laid off mechanics re-employed at 90% of the previous wage, which in the case of the mechanics was $31/hour. And since the laid off workers were earning only $336/week in unemployment benefits, down from the $1,100 they earned in their previous jobs, the mechanics welcomed the assistance the training program offered. Nonetheless, the efforts failed and failed miserably. Uchitelle writes, "But the employment goals were not met. They could not be met; they were too optimistic, mythically optimistic."
Uchitelle found that the aircraft mechanics didn't need any training or education. As it turns out, they were way over-qualified for the supply of jobs the market offered. Uchitelle explains:
But training for what? The reality, as the aircraft mechanics discovered, is painfully different from the reigning wisdom. Rather than having a shortage of skills, millions of American workers have more skills than their jobs require. That is particularly true of college-educated people, who make up 30 percent of the population today, up from 10 percent in the 1960's. They often find themselves working in sales or as office administrators, or taking jobs in hotels and restaurants, or becoming carpenters, flight attendants and word processors . . .
So the demand for jobs is considerably greater than the supply, and the supply is not what the reigning theory says it is. Most of the unfilled jobs pay low wages and require relatively little skill, often less than the jobholder has. From the spring of 2003 to the spring of 2004, for example, more than 55 percent of the hiring was at wages of $13.25 an hour or less: hotel and restaurant workers, health care mployees, temporary replacements and the like.
The outcome of the retraining and education efforts of the aircraft mechanics who participated in Goodwill's program made Uchitelle's point abundantly clear. Instead of the $31 an hour they were accustomed to earning, more than half of the laid off workers who participated in the program found jobs earning between $14 and $20 an hour, such as HVAC repairmen, auto mechanics, computer maintenance workers or truck drivers. Nearly one-fifth of those workers wound up in jobs which paid less than $13.25 an hour, working in jobs at warehouses, construction, retail and restaurants. Only 15 of the 185 who completed the program found jobs earning at or above their old wage. Of those 15, half of them were re-employed elsewhere as aircraft mechanics, and they were typically younger, lower-paid workers earning close to that of their non-union counterparts. Describing the utter failure of the efforts, Uchitelle writes:
The process was like a funnel: wide at one end, where all the laid-off workers go in, and narrow at the other, where a limited number gradually emerge into retraining and, if they are lucky, new jobs at decent pay. Mark A. Crouch, a professor of labor studies at Indiana University, used another analogy to describe the recycling of laid-off workers. He called it a "burial program."
Uchitelle's book really brings home the point that our current approach is just not working. We need an economy that is producing better paying jobs to match the skills and education of our workforce, not more low-paying jobs that offer no hope of prosperity to job-seekers.