USA Today, January 13, 2011, Thursday

USA Today

January 13, 2011, Thursday

USA Today

Tense time for workers, as career paths fade away

If you're a travel agent, bank teller or a file clerk; if you run a printing press, answer a switchboard or work at a sewing machine; if you repair watches or cameras; if you make anything that can be made more cheaply elsewhere, or do anything that can be done by a robot or computer, then you may feel history is against you.

An old vision of the post-industrial future — that work could be done by machines but nothing would take work's place — is being realized with a vengeance in the second decade of the 21st century.

Although most economists expect the U.S. job market to register at least small gains this year, many Americans who have a job still fear losing it. Many who don't have a job fear they never will find one. And many in both camps worry that the recession, which officially ended a year and a half ago, speeded up inevitable changes in the workplace.

Harry Holzer, a Georgetown University government professor and co-author of Where Are All the Good Jobs Going, says these fears are somewhat exaggerated — yet understandable.

"The U.S. economy churns a lot, more than in most countries," he says. "A lot of jobs are created and destroyed, and it creates a lot of anxiety. In a recession, the insecurity is even worse."

The fears now driving Americans' economic insecurity:

•Globalization and automation may export or eliminate not only jobs, but entire occupations — ways of life, really.

The Labor Department predicts that during the next decade there will be fewer workers in almost one-quarter of the 750 occupations it tracks, even as the total number of jobs increases by 10%.

•A disproportionate number of new jobs could be the kind that, as Studs Terkel put it in his book Working, "dulls the senses and breaks the spirit."

In April, MIT economist David Autor published an influential paper that described the U.S. labor market as increasingly polarized, with growth at the high-skill, high-wage and low-skill, low-wage ends, and contraction in the vast middle.

•After a mostly "jobless" economic recovery, the nation eventually might accept a basic level of unemployment much higher than the 4% to 5% many economists and policymakers have long considered indicative of "full employment."

Although 23 of 27 prominent economists surveyed last month by USA TODAY say they expect the nation's unemployment rate to eventually return to 5%, only three think it will do so before 2015. A few, such as Wells Fargo's Mark Vitner, believe it won't get lower than 6% before 2020 — with each percentage point representing several million jobs.

Gary Burtless, a Brookings Institution labor economist, sees a growing chasm between the unemployed and the employed as the economy recovers. Might the latter back policies that slight the former, or at least make high employment a lower priority?

"Do the political math," he says — many more people have jobs than lack them.

Alexei Bayer, a financial analyst, even questions the very notion of growth, arguing that the past 2,000 years — including the Dark Ages — suggest prosperity is more aberration than given. "At least for now," he writes, "the U.S. may have run out of sources of growth."

Today's labor market insecurity, even for jobholders, is a product of what economist Joseph Schumpeter called "creative destruction" — the fact that capitalism, as he wrote in 1942, "incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one."

This revolution has helped create what Jeff Saut, chief investment strategist at Raymond James, has called "a bubble in pessimism" that's reflected in fewer marriages, a lower birthrate, less immigration and reduced mobility since the recession began in December 2007.

Employment angst has become part of the culture. On television, the WE network's series Downsized chronicled a family's struggles after the collapse of their construction business. The Lifetime network's The Fairy Jobmother helps jobless families.

The protagonists of the 2010 film The Company Men cope with losing their jobs at a soulless corporation that formed the basis of their identifies.

"Creative destruction" has even entered the political lexicon. Last fall, Democratic U.S. Senate candidates Joe Sestak of Pennsylvania and Russ Feingold of Wisconsin accused their Republican opponents, Pat Toomey and Ron Johnson, of embracing the doctrine, thus betraying an insensitivity to the unemployed. Toomey and Johnson won.

Burtless says he worries about conflict between those with jobs, whose financial prospects actually have gotten better lately, and those without them. To still be out of work, as the economy picks up and productivity increases, he says, "is like being kicked while you're down."

A new kind of joblessness?

Because of their more generous social welfare benefits and slower-growing economies, many western European nations have been willing to tolerate a relatively high level of unemployment. Not the USA, where work is considered a right and an obligation, and being out of it is considered temporary.

"As soon as someone loses his job, he can't wait to get another one," Burtless says.

Now, that assumption is under attack.

To many, it seems there's something new about this kind of unemployment, that "this is something we've not experienced before," says Linda Barrington, of the Cornell School of Industrial Relations' Institute for Compensation Studies.

The nation has set post-World War II records for the number of weeks one can collect unemployment compensation (99); for unemployed who have been out of work for more than six months (more than 40%); for the number of consecutive months the unemployment rate has been over 9% (20 in December).

This month, the Bureau of Labor Statistics lifted its ceiling for recording how long people have been out of work from two years to five years.

Unemployment is starting to seem like more than a temporary setback.

During the past two years, the average time a worker has been unemployed has doubled to 34 weeks, and the government calls 1.3 million people "discouraged workers" — not looking for a job because they believe there are none. In the past year, their number has tripled.

Economists debate whether this is merely cyclical or a result of a basic mismatch between workers' skills and the work that needs to be done. Both sides are encouraged by estimates from the Bureau of Labor Statistics, which predicts that by 2018 the economy will have 15 million more jobs than in 2008.

The bureau expects there to be lots of home health and child-care aides, fast-food counter clerks, security guards, janitors, lawn care workers, nurses, skin care specialists, sports coaches and scouts, aerobics instructors, fitness trainers and public relations people.

Newer occupations, such as solar photovoltaic installers and wind turbine service technicians, also will grow quickly.

But there's a lot of what Georgetown's Holzer calls "churn": although the number of biomedical engineers will increase 72%, textile bleaching and dyeing machine operators will decline 44% by 2018.

"Do Not Call" orders are likely to reduce the number of telemarketers (-11%). The rise of e-readers will dictate fewer bookbinders (-12%). Automation and e-mail mean fewer postal service clerks (-18%), sorters (-30%) and letter carriers (-1%).

Even jobs that once seemed cutting-edge will see their ranks decline, including desktop publishers (-23%) and semiconductor processors (-32%).

Most experts agree, however, that the economy will recover, because the USA still has plenty of workers, factories and capital. Demand for goods and services will increase, jobs will be created and the jobless rate will fall, albeit slowly.

"The way work is done and what needs to be done doesn't change very fast, even now," says Heidi Shierholz of the Economic Policy Institute, a Washington think tank. "The jobs we have when the economy recovers will look much like the ones that were lost. People think work is changing faster than it is."

Global trade and technological advances should create roughly as many jobs as they destroy, if the American economy is as dynamic, creative and entrepreneurial as most economists believe.

Business start-ups reached their highest level in 14 years in 2009, exceeding the number of start-ups at the peak of the 1999-2000 technology boom, according to the Kauffman Foundation Index of Entrepreneurial Activity.

"The American Dream is owning your own house, but it's also starting and running your own business," Barrington says. "That's the spirit you need for economic growth."

In Nashville, past and future

Different sides of the creative destruction process are visible in two Nashville suburbs.

•In Hermitage, Tenn., James Scott talks like a worker who suspects he has seen his best days.

The 54-year-old printing press operator has struggled to find full-time work with a commercial printer since he was laid off two years ago.

In the digital age, when orders for everything from brochures to magazines are dropping, the printing industry "is flooded with people looking for jobs," he says. He has had to take a $2.50-an-hour cut and work fewer hours than he would like. Nationally, the number of printing machine operators dropped by 50% from 2007 to 2009, and the Labor Department expects the demand for printers to decline 5% over the next decade.

The usual prescription for Scott's plight is retraining. But he's reluctant, in part because he doesn't expect any new job to match his current wage of around $17 an hour.

And he says he can't afford to miss even a few paychecks; last year he narrowly avoided foreclosure on his home of 27 years only by getting his monthly mortgage payment reduced by about $200.

"I'm 54, in debt up the yin yang and I need every cent of disposable income," he says. "If I retrain, I don't know if I can pay for that and, at my age, who's going to hire me?"

His outlook: "I may wind up just trying to last until I'm worked out and dead. It doesn't look like I'll ever be able to retire."

•In Franklin, Tenn., Sal Novin looks forward to the kind of future he anticipated as a kid watching The Jetsons, the TV cartoon show about a family of the future whose maid is a robot.

Last March, Novin, 37, founded a company that uses so-called artificial intelligence software to automate health care insurance claims.

He has a degree in biophysics with an emphasis on statistics, and he has spent his career as a software engineer studying how companies can use technology to reduce expenses. In 2009, Novin was named the Nashville Technology Council's "Innovator of the Year."

Despite the slow economy, Novin says he's optimistic. His new company, Healthcare Productivity Automation, uses "computer robots" running its software to process routine health care claims usually handled by people. The program reads a computer screen, enters data and decides the best way to process a claim. It can do this faster and more accurately than humans, he says, and thus helps avoid claim backlogs.

The company plans to develop other technologies to automate work for health care insurers and providers. Novin calls it "the beginning of the automation of white-collar work." He knows this will leave some people out of a job but says cutting administrative costs and reducing errors benefit patients.

As for workers, "we can make people live healthy and productive lives, rather than pushing paper around," Novin says. Harking back to The Jetsons, he says, "I long for that day when all you have to do is push a button. You can spend your time on interesting things rather than repetitive work."

Contributing: Naomi Snyder of The Tennessean in Nashville; Mike Chalmers of The News Journal in Wilmington, Del.; Jeff Martin of the Argus Leader in Sioux Falls, S.D.; John Wisely of the Detroit Free Press