New laws cushion '80 joblessness
Electrician Jerry Orcutt is finding that unemployment is nto what it used to be. The California worker felt the full force of the 1974-75 recession when he was left without a job, receiving half his $120-a-week income through unemployment insurance. But in 1980, Mr. Orcutt is one of many Americans economically cushioned by new or expanded government programs that come to the rescue of those who are put out of work.
"We've learned a lot since the last recession," says Eli Ginzberg, chairman of the National Commission on Employment Policy, pointing out that government is helping more to ease the burden of unemployment.
In Mr. Orcutt's case, his Sacramento-based company, known as River City Electrical Contractors, avoided firing any workers by joining a new California program that allows firms to lay off workers only one or two days a week during slack business. Employees receive partial state unemployment benefits and stay on the company payroll part-time. On the days he's "laid off" he gets 50 percent unemployment compensation.
"There isn't enough work for everybody so we spread it out," says Mr. Orcutt, who praises the "work-sharing" idea that so far has been used by nearly 900 California firms since 1979.
In May, the US unemployment rate jumped to 7.8 percent, the quickest rise since the post-World War II period. By this fall, most economists expect the rate to reach 9 percent -- the same as the 1975 high. Each percentage point roughly equals 1 million people looking for a job.
The sophisticated array of job-creating and money-bestowing programs, compared with five years ago, is topped by the Comprehensive Employment Training Act.CETA began consolidating federal training and employment programs in 1974 to provide as many as 750,000 temporary jobs in its peak year, 1978.
"CETA in 1974-75 was untested but it is a reasonably operative system today," states Dr. Ginzberg, who is also a Columbia University labor economist.
"It is a source of strength, a piece of machinery that has been tested and can be responsive. Our level of public-service employment will be considerably above the last time around. And Congress will likely push a new public works package . . . ."
But Congress, which currently is inching toward a fiscal 1981 "balanced" budget to begin this fall, may cut millions of dollars off CETA funding. President Carter recommended a drop in CETA money from $10.5 billion to $9.6 billion. One reason for the cuts is that the much-maligned program has become more "efficient." This includes a new program that provides jobs through private companies rather than local government offices.
Other recent laws, such as the Regional Rail Reorganization Act of 1973 and and the Redwood National Park Act of 1978, compensate workers who lose their jobs because of new public policy.
And, adds Dr. ginzberg, "One of the biggest differences between this [ recession] and last time is the Trade Adjustment Act."
This 1974 law pays an average 26 weeks of unemployment benefits, at 70 percent of regular wages, to workers laid off by US firms hurt by competition from foreign imports. Chief beneficiaries have been auto, steel, shoe, and electronic workers, numbering close to half-a-million since 1975.
Many businesses, even if not hurt by imports, can join the program. US labor officials project a need of $1.1 billionbeyond the present $450 million already spent in fiscal 1980 for trade-affected employees.
Another recent job-creator is a 1978 tax break -- so far little used -- that provides employers with a 50 percent tax credit on the first $6,000 in wages paid to a "hard to employ" person, such as "disadvantaged" youth. Roughly 230, 000 people have been hired so far under the program.
Also in the works is the latest youth-employment program, aimed at the age group with the highest unemployment rate. About $1 billion a year has been spent for over the past decade to cut teen-age unemployment, Dr. Ginzberg points out. But the biggest help may be demographic: The under-21 population is declining fast.
"We are over the peak on the baby boom. We have less flow of kids into the jobs and fewer women entering the labor force now. There's not as much competition in terms of what is open," says the Columbia University professor.
Shortly after President Carter took office in 1977, Dr. Ginzberg says, the government launched the biggest public jobs program since the Great Depression of the 1930s. It came shortly after Federal Reserve Board chairman Arthur Burns and US Sen. Hubert H. Humphrey called for the federal government to be the employer of last resort. The result was the Humphrey-Hawkins Full Employment Act of 1978. Its goal is to bring unemployment to 3 percent for adult workes by 1983, an aim that has focused retraining and youth employment programs.
