The Growing Gap in Retraining

By Alexander L. Taylor III

Millions of jobs call for new skills, but few are acquiring them

Tucked away in the $5 billion public works job bill that President Reagan is expected to sign is a provision that could allocate as little as $75 million for worker retraining programs. That modest sum is a sign of recognition--a lamentably small sign--of one of the nation's most pressing problems.

As the U.S. economy sloughs off its declining manufacturing industries and increases its dependence on faster-growing service and technology sectors, an ever widening gap has opened between the new jobs that are being created and the skills of available workers. This skills shortage afflicts not only laid-off workers in fading industries, but also young people just entering the work force and wage earners already on the job. Each segment needs massive retraining. Says Albert Angrisani, Assistant Labor Secretary for Employment and Training: "Everybody, no matter what the occupation, has to understand that the skills they come out of high school or college with are not going to get them through a lifetime of work."

The most visible candidates for retraining are the roughly 2 million so-called displaced workers, many of whom once worked in basic industries. Most have been displaced by new technology or foreign competition, and there are few signs of a letup on either front. Experts have estimated that every year from now on at least 1 million people, and perhaps as many as 2 million, will be similarly displaced. Despite the attention and publicity given older workers laid off by declining industries, their options remain almost unrelievedly bleak.

The terrible truth, which few can face squarely, is that the skills that supported these men and women so well for so many years have lost their value in the marketplace. Management Expert Peter Drucker suggests that blue-collar manufacturing is going the way of agriculture in the postwar period: employment will decline markedly even if output rises. By the year 2005, Drucker figures, only 5% to 10% of the work force will be involved in manufacturing, compared with 20% today. That conclusion, striking as it is, is not very controversial. Last week, in a "technical memorandum" that was presented to Congress, the Office of Technology Assessment made these sobering points:

> Automotive industry sources say that 1.7 jobs are lost for every new robot.

> An internal study by General Electric shows that it is now technologically possible for the company to replace half its 37,000 assembly workers with machines, though G.E. is quick to note that it has no plans to do so.

> Of firms most likely to use automation, 40% have some form of it, but only 22% are involved in education and training for the new technology.

The new jobs being created in the U.S. hold little appeal for former assembly-line workers. According to the Government, the U.S. added 1.6 million restaurant and tavern jobs between 1973 and 1980, more than the current total in the steel (327,000) and auto (666,000) industries. During the 1980s, more new secretaries (700,000), nurse's aides and orderlies (508,000), janitors (501,000) and salesclerks (479,000) are expected to be hired than workers in any other job categories.

Enticing well-paid workers into retraining programs, even where such instruction is available, is often difficult. General Motors is training laid-off employees at two of its closed California auto plants for high-paying positions in the aerospace and data processing industries. Yet only 1,522 of the 5,400 eligible workers at its Fremont plant have signed up because many think they will be rehired when GM and Toyota begin building small cars at the plant.

Another obstacle to retraining is convincing workers that they and their families may have to move to find new jobs. Harvard Economist James Medoff believes that worker re-education must take place where jobs actually exist, because the best training is done by employers who need to hire workers. While Medoff is convinced that business, along with schools and labor, should handle that job, he advocates taxpayer financing of the cost of moving workers. To pay for their relocation, he suggests that a national fund be accumulated from an increase in unemployment insurance taxes.

Even the best program is worthless unless there is something for the worker to do once it is over. Unfortunately, that is seldom the case, as former Rubber Worker Russell Silcox, 56, knows well. He has not held a permanent job in 4 1/2 years despite taking a 40-week course in diesel mechanics and spending six weeks in a Government-funded program making plastic coat hangers. Earlier this month he began a twelve-month training program as a heavy-equipment mechanic. His family of four is just getting by on his unemployment benefits and his wife's nursing-home job.

Far more fortunate in finding beneficial retraining programs are workers with jobs. U.S. corporations spend about $30 billion annually to train new employees and upgrade the skills of wage earners. Digital Equipment, for example, has 1,800 of its 67,000 employees engaged in worker reeducation. At the moment 450 Digital repair and installation technicians and administrative personnel whose jobs were eliminated by technological change are being tutored for sales.

Control Data of Minneapolis has been investing in the corporate retraining business for several years. It sells a computer and software system called Plato that lets workers teach themselves skills ranging from high school math to robotics, then follows up with on-the-job instruction. Insists Chairman William Norris: "You can't retrain unless you use computers. It costs too much for small companies otherwise." Control Data's effort has yet to pay off, but the company hopes Plato will be in the black next year.

One of the most dismaying situations prevails at the entry level to the work force. Many young people just out of school have a stunning lack of basic proficiencies. In Delaware, students can graduate from high school with just a single credit in math and science. A different problem exists in higher education, where colleges and universities have been unable to beef up their engineering and electronics faculties fast enough to meet the demand. According to Pat Choate, a senior policy analyst at TRW Inc., the shortage of new engineers amounts to probably 40,000 a year, and there is also a scarcity of computer programmers and systems analysts. Says Choate: "We have got to make sure that the college offerings meet the projected needs of our society."

The Federal Government has hopes for the $3.5 billion Job Training Partnership Act, which begins Oct. 1. Seventy percent of its funds will go toward instruction. During its first year, the new act is expected to provide training for 1 million disadvantaged youths and adults as well as 100,000 displaced workers.

This latest Government effort, however, is merely a Band-Aid solution, and Government money cannot supply anywhere near the whole answer anyway. As far as technology and automation are concerned, suggested the Office of Technology Assessment in its report last week, "there is little evidence that any sector--including private industry--is seriously considering the long-range implications." The implications of that message are weighty, and the sooner they sink in, the better.

--By Alexander L. Taylor III.

Reported by Gisela Bolte/Washington and Sara White/Boston

With reporting by Gisela Bolte and Sara White This file is automatically generated by a robot program, so viewer discretion is required.