The Idle Army of Unemployed

By Christopher Byron

The slump leaves 8.2 million jobless, and still more face a pink slip

"This is turning out to be the worst summer this town has ever seen. All we got is unemployment, and the lines are getting longer. Men with families and no work. We're getting butchered."

--Steelworker Ron Weisen, 44, of

Homestead, Pa.

"It's really hard to keep enthusiastic, to get my energy going. I have to psych myself up for each interview, and the more I get turned down, the harder it is to go to the next. Sometimes I feel like crying before I leave the house."

--Personnel Adviser Debbie

Pelligrino, 30, of College

Park, Ga.

"I've been looking for a job since this winter, but there's nothing. Man, the people who got the money hire who they want to hire. Cubans hire Cubans, and Haitians work for almost nothing. Foreigners got it made over here, especially if they speak Spanish."

--Kenneth Jerome Brown, 21,

of Miami

They are sometimes black, but more often white; traditionally male, but increasingly female; frequently teenagers, but usually adults. They might be autoworkers from Detroit, or tiremakers from Akron, but could be hamburger jockeys let go by Burger King or Wendy's, or salesmen and clerks laid off by a Chicago plastics company with weakening orders.

They are, in all their faces and feelings, the unemployed American workers of 1980. And, as the recession rumbles on and their numbers grow, their plight has become a major presidential campaign issue. The Department of Labor reported last week that the jobless in the U.S. have increased to 8.2 million, a startling jump from the 6.3 million without work in February. Now 7.8% of the American labor force sit on the sidelines of business, and Carter Administration economists predict that the rate will reach 8.5% later this year and stay there through most of 1981.

Though the July jobless rate for adult males held steady at the June level of 6.7%, the unemployment rate among women rose, and now matches that of men. Joblessness among blacks jumped sharply, to 14.2%, while unemployment among teen-agers rose to 19%.

Outraged calls from politicians to do something about unemployment grow daily. Republican Presidential Candidate Ronald Reagan has proposed a $36 billion tax cut to help bolster the nation's "disintegrating economy." Liberal Democratic Senator Edward Kennedy has virtually accused President Carter of turning the nation's unemployment figure into a kind of statistical body count in the war on inflation.

Meanwhile, even Carter Administration officials declare the current combination of unemployment and inflation to be "unacceptable." Last week House Speaker Tip O'Neill told reporters that Carter plans to present the nation with yet another economic package, perhaps as soon as this week. The new program, according to O'Neill, is likely to focus on the problem of unemployment.

Monthly fluctuations in the unemployment rate are one of the most closely watched and politically potent trends in the economy. Half a century after the Depression knocked one worker in four out of a job, the legacy of hollow-faced men standing in breadlines remains a haunting national memory.

Ironically, the latest figures come at a time when the economy is beginning to recover at least some strength on its own. The Commerce Department's index of leading economic indicators, a composite figure designed to forecast future trends in the economy, last week posted a jump of 2.5% during June, the first such rise in eleven months and the biggest jump since June of 1975.

The conditions of the unemployed have changed, of course, since the Depression. A laid-off autoworker in 1930 had no unemployment compensation or Government benefits at all, while a similar unemployed person today could receive up to 90% of his after-tax pay for at least half a year from the time he loses his job.

Yet the stigma of unemployment involves more than just a lowered income. Employment is now the talisman of modern man. In societies from ancient Greece to the aristocracy of 18th century Britain, work was left to a lower class. In contemporary society, labor is considered more a blessing than a burden, and something that can give meaning to life. In casual conversation, the first two questions asked of someone are usually,"What's your name?" and "What do you do?"

During the past generation, Americans have come to view joblessness as a failure of the economic system rather than of the individual. People now look to Government to solve the problem of idle workers, or at least to ease the financial burden of being out of a job.

As a result, the cost of unemployment to the Government has become staggering. Each percentage-point increase in the jobless rate costs the federal budget some $25 billion in a combination of lost taxes and allotted unemployment benefits. Payments under the panoply of federal programs designed to return laid-off workers to the labor force or to train those without skills will swell this year to $11 billion. Since the Federal Government launched its all-out war on unemployment, beginning with President John Kennedy's New Frontier in the early 1960s, a startling $88 billion has been spent on an encyclopedia of job programs. But, at the same time, the number of unemployed people increased from 3.9 million in 1962 to the current 8.2 million, and the jobless rate from 5.5% to 7.8%.

Misconceptions abound about the nature and number of the American unemployed. Rates of joblessness vary widely. While 6% of white adult males are currently without work, 12.7% of adult black men are looking for jobs. Some 15.6% of white teen-agers are in the ranks of the jobless, but a stunning 36.6% of black teen-agers can find no work. While thousands of workers go several years without finding regular full employment, the average length of joblessness is still only twelve weeks.

The unemployment benefits available to U.S. workers can also be very different, depending on a worker's occupation and location. Of the 8.2 million unemployed, only about 4.2 million are qualified for and currently receive unemployment compensation benefits. Independent contractors, for example, as well as some farm laborers and domestic workers, get nothing at all when they are laid off. Maximum benefits, which in most states last 26 weeks, range from $90 per week in Alabama to $202 weekly in Ohio. Eligibility requirements vary widely. In California, for instance, a person can get at least some benefits if he works full time for seven consecutive weeks at the current minimum wage of $3.10 per hour. In Nebraska, on the other hand, an applicant qualifies if he has earned at least $600, but $200 of that must have been made in each of two preceding quarters.

Workers in the old-line "sweat and toil" industries, which once symbolized America's economic might, are now suffering the worst unemployment. Stretching across the nation's manufacturing heartland, from the foothills of the Alleghenies, west to the Mississippi River and north to Michigan's Upper Peninsula, stands an idle army of the jobless.

The damage has been most severe in autos and steel, which together constitute a sort of senior service in American industry. Both are reeling from the one-two punch of high interest rates and rising gasoline prices. These have helped send 1980 car sales to a 20-year low, and cut demand for steel by automakers, the steel industry's biggest single customer, by 42% so far this year. As sales have slumped, losses have mounted. Last week the troubled Chrysler Corp. reported a loss of $536.1 million between April and June, the biggest single deficit in its history.

In Detroit, the loss of jobs has been on the scale of a 1930s-style depression, with some 312,000 workers, or nearly one-quarter of the auto industry's work force, unemployed. Pittsburgh, Birmingham, Gary, Ind., and other steel centers are also hard hit, with some 75,000 steelmen, or approximately 18% of the industry's employees, laid off.

Typical of the suddenly idle worker of 1980 is Wilson Painter Jr., 31, a Pennsylvania apprentice machinist who was let go by U.S. Steel in May. A big-boned man with the look of a football guard, Painter tries not to dwell on the future. Instead, he spends his empty hours playing with his two children, helping his wife Kathy around the house, or ritualistically unpacking and cleaning the precision calipers, gauges and scales that lie neatly slotted in his tool chest. Painter was halfway through a program to become a journeyman machinist when he was laid off. Those tools still represent his dream of advancement. His determination unbending, he says: "A man's got to keep his hands in tune, his mind alert. You can't let them slowly kill you and let your family go naked. Not this man."

Three hundred miles to the west, James Heffernan, 35, of Anderson, Ind., married and the father of two, feels the same sense of ennui and frustration. Laid off in June for the first time in his life by the Delco-Remy battery division of General Motors, Heffernan putters about the yard and collects his unemployment checks in the mail. Says he: "Getting these checks is the most depressing experience of the week for me. I would much rather be back at work."

Employees in the established industries of auto, steel and rubber, with their strong unions, experience the least financial pinch from unemployment. Workers receive not only regular unemployment compensation when laid off but also so-called supplemental unemployment benefits, or "subs."

The sub benefits, which are paid from company-funded programs that the unions have negotiated into wage contracts since as long ago as 1955, provide laid-off workers with the difference between unemployment compensation and up to 90% of their former after-tax pay. Depending upon how well funded the plans are, payments can last for many months before the money is used up. Since expenses for everything from commuting to child care usually decline during periods of unemployment, workers can sometimes find themselves very nearly as well off, and occasionally even better off, without a job. When employed at U.S. Steel's South Works plant in Chicago, Stan Machusek, 25, earned about $250 for a four-day work week. Last May he was laid off. Now he has an income from benefits of $256 a week, which is 80% of the net pay he would receive for a full five-day week. Says Machusek: "It's like getting a long vacation."

Some 450,000 idle workers currently enjoy federal unemployment benefits that often result in higher incomes than when they were working. These people are covered by the Federal Government's Trade Adjustment Assistance program, which was first set up in 1962 as a way to compensate workers who lose their jobs as a result of increased foreign imports. Over the years Congress has substantially relaxed the qualifications for this form of assistance and boosted the size of aid until qualified workers can now draw as much as $269 per week for as long as 18 months. The money is in addition to regular unemployment and sub benefits.

Even as their jobs disappear in the old, established industries, some laid-off employees talk with calm confidence about being recalled to work in only a few weeks or months, well before the normal 26 weeks of unemployment benefits run out. When Keith Brown, 33, a purchasing agent for a division of the lumber giant Boise Cascade, in Chamblee, Ga., was let go from his $22,000-a-year position, the first thing he did was to take his family on a vacation to Florida's Gulf Coast. He assumed that when rehired he would not be eligible for a vacation.

For many workers, especially those with small companies in industries that are not strongly unionized, the loss of a job means hardship. Laid off in April from his job as a stockroom clerk for a car-parts distributor, Harold Pollard, 42, of Atlanta, became embroiled in a dispute with his employer over the terms of his dismissal. As a result, for the past four months he has not received any unemployment compensation, though he now expects his first check this week. Meanwhile, he and his wife have subsisted on her $100 per week income as a cleaning lady. They have fallen behind in mortgage payments on their $20,000 house in Atlanta's largely black southwest side, and are worrying about the unsettling prospect of foreclosure.

In many families in which the wife has gone to work to help establish a more comfortable living standard, the loss of one of the two salaries can be a heavy blow. Edward and Gail O'Brien, both 27, of Rochester, were forced to sell their three-bedroom house and move to a rented town house after Gail went through a succession of layoffs. Now the O'Briens and their ten-year-old daughter Stacey are struggling to keep up by means of Gail's $125 per week unemployment checks and Ed's $800 per month take-home pay as a production supervisor for a weather-stripping and auto-trim manufacturing company. Previously their joint income was about $35,000 per year. The biggest problem: $20,000 in consumer debts, accumulated in happier times while both held well-paying jobs. Says Ed plaintively: "We fell into the credit trap. We certainly won't do that again."

By far, the two groups that suffer the most when unemployment goes up are the nation's 25 million blacks and 12 million Hispanics. They traditionally have endured unemployment rates that are about twice the national average. In addition, their jobs have by and large been concentrated at the bottom end of the income ladder in labor-intensive industries such as textiles, the hotel and restaurant service trades and garment making. Those are usually among the first businesses to begin laying off workers during economic downturns.

In the nether world of the chronically unemployed minorities, almost every major city has a place where the day laborers gather before sunrise in hope of being tapped by a construction foreman or work boss for a day's worth of heavy lifting. When the economy slumps, so does the need for such men. But often it is the only work available.

One such laborer is Joe Gaines, 33, of Los Angeles. At about 6 on most mornings he can be found, in the company of dozens of other men, loitering under the 40-ft.-high neon signs of Lucy's Drive-In at the corner of Pico Boulevard and La Brea Avenue in Los Angeles' Miracle Mile district. Gaines is hoping for a job as a manual laborer, but if by 10 a.m. or so he has not found one, he heads for the beach. He is not lazy; the beach is merely, as he puts it, "the only cheap place around."

Many of the fields in which blacks and Hispanics have traditionally gained entry into the labor market have suffered devastating long-term employment losses, as automation and rising foreign competition have chipped away at domestic jobs. Says Bayard Rustin, chairman of the A. Philip Randolph Institute, an organization working to improve employment for blacks: "Twenty years ago blacks could get jobs putting televisions and radios together. Shoes and clothing used to be made by the under class. But these industries, and more like them, are being eliminated from the U.S."

With the nation's black and Hispanic populations increasing, on average, more than twice as fast as the white population, and the number of low-paying jobs open to them continuing to dwindle, enormous competition for jobs has developed at the low end of the employment scale. As Rustin points out, this competition simply intensifies during recessions, when overqualified laid-off people, such as engineers and electronics technicians, wind up becoming waiters and taxi drivers and snatching up the semiskilled and unskilled jobs.

Competition for jobs among blacks and Hispanic immigrants from Mexico or Cuba and black immigrants from elsewhere in the Caribbean has become especially acute. Says Wanda Frye, 36, a black divorcee with three children who was laid off in early June from her grueling job as a laborer in U.S. Steel's aging South Works plant: "Imported steel, imported cars and now imported people too! The foreigners are coming in and taking over jobs and using what we could be using. It's just not right."

Adds Kelvin Fair, 19, a black Miamian who has almost given up his job search altogether and now spends his time watching daytime television and hanging around a neighborhood park: "Refugees come here and get jobs when I've been here all my life. It just doesn't seem fair."

The Hispanics see it differently. Jesus Alvarez, 38, a transportation supervisor from Havana, has been looking for a job in Miami for the past two months, but without success. Says he: "In this country I cannot complain, because I have come as a refugee and been accepted. But I'm 38 years old and have always worked. I feel bad. My spirits are low."

Bad as it is for nonwhites as a whole, unemployment is particularly severe for black youths, ages 16 to 24, who in city after city have jobless rates of 40%, 50% and even higher. The cost is not just in lost output to the economy but in social alienation, welfare dependency and ultimately crime and violence throughout urban America. This makes the problem the most expensive single aspect of the entire unemployment dilemma.

Former New York City Police Commissioner Patrick Murphy, now president of the Police Foundation, reports from his own experience in New York, Detroit, Syracuse and Washington that areas with high unemployment tend to have crime rates as many as 50 to 100 times higher than elsewhere in the same cities. Massachusetts Institute of Technology Economist Lester Thurow warns that the U.S. cannot "ignore the long-run consequences of having a generation of young people who have either dropped out of the economy or have not gained the work experience that leads to skills in later life."

Whether the person is a veteran automobile worker or an inner-city black youth, unemployment takes a heavy psychological toll. Jerroll Kuerzi, 53, the father of eight, was an industrial engineer at the recently closed Ford Motor plant in Mahwah, N.J. He had already felt the sting of economic upset twice in his life: as a six-year-old during the Great Depression, when his parents were forced to sell the family home; and in the 1958 recession, when he lost both his job with International Harvester and his home in Indianapolis. In June, economic downturn tripped Kuerzi a third time, when he was laid off from his $40,000 per year job.

Though he can count on a full year's severance salary from Ford, plus 23 weeks of unemployment insurance, the real shock is that a lifetime of skills and experience was ultimately unable to protect him from dismissal. Says he: "I really didn't think I'd be let go again. All I ever thought would happen was retirement at 60, and I wasn't looking forward to that."

Susan O'Brien, 35, of San Antonio, the divorced mother of a teen-age son, feels as if she is being hounded out of the mainstream of life. Seven months ago, she was laid off from her position as a quality control reviewer for the Texas Department of Human Resources, which administers the state's welfare programs. Says she: "When you lose your job your friends stop coming by, and when you keep getting turned down at interviews you begin to have doubts, to wonder whether there is something wrong with you." This month her unemployment benefit checks of $105 per week will be exhausted, her savings will have been used up, and Susan O'Brien will face the numbing and ironic prospect of perhaps having to go on welfare herself.

Yet despite the 8.2 million jobless in the U.S., the economy is already short of some workers, and a major economic problem of the late 1980s will be the paucity of skilled laborers. Aerospace firms in Southern California are looking for engineers, with some salaries starting at $36,000 a year. SCM Corp.'s Smith-Corona typewriter division in New York City needs toolmakers even though it has laid off assembly-line workers.

Later in the decade, firms may be bidding against each other to get good workers. The number of jobs in the 1980s is expected to grow only two-thirds as fast as in the 1970s. But because of the end of the brisk population growth of the baby-boom era, the numbers of new workers entering the labor force will increase very slowly. Though there are now an estimated 2.3 million more workers than jobs in the economy, projections by the Bureau of Labor Statistics show that by 1990, the gap could narrow to only 300,000 more workers than jobs.

A vital task of employment policy in the 1980s must be, therefore, to develop and promote programs that make sure the workers are there when needed, five or ten years hence. The Government cannot be counted on to do the job; its job-creating programs have mostly been failures. Instead, the challenge must be met by U.S. business. To a large degree, the present economic slump is a direct consequence of the failure of American companies to adapt to the changing nature of world business competition. Detroit automakers and Pittsburgh steelmen demand protection from Japanese and other foreign imports so that they can go right on making the same products that they have been making.

By contrast, fast-growing new businesses like microelectronics, data processing and telecommunications are already short of workers. As the economy becomes more and more "information oriented," the demand for secretaries, for example, continues to increase. Office construction is booming in cities from New England to the Sunbelt. Companies with strong positions in growth fields such as energy development and conservation, natural resources and aerospace, also have equally bright prospects.

There is no doubt that during the next few years American society will undergo severe strains because of unemployment. Yet the ability to adapt to economic change has always been the quintessential characteristic of the free-enterprise system. Any attempt by Government to protect jobs by, in effect, seeking to guarantee the maintenance of the status quo would be both foolhardy and doomed to failure.

Though the recession is now slowing, if not ending altogether, the sense of alienation among those who remain without work is bound to grow sharper than ever. Being unemployed during an economic downturn is clearly no longer the ordeal that it once was. Yet the cruelest lesson of the recession of 1980 may be that returning quickly to work is no longer certain.

This file is automatically generated by a robot program, so viewer discretion is required.