Middle Class Anxious Over Jobs

PAUL is a longtime New York-based computer analyst with International Business Machines by day and a delivery-car driver by night. He works a second job to support his family, which includes a newborn. With the tens of thousands of layoffs his company has already made, he says he expects the dreaded pink slip any day now.

On this Labor Day weekend, many American workers taking time off do not feel very secure about their jobs, and those in search of gainful employment are edgy about their prospects.

That assessment, documented by polling firms across the country, was echoed by Labor Secretary Robert Reich this week. Addressing the Center for National Policy here, he painted a dim picture of the job outlook for what he says is an increasingly fragmented middle class.

While the skilled top tier is faring well, Mr. Reich says, it stands in sharp contrast to an expanding number of largely inner-city, poorly educated, and untrained men and women.

Paul falls into the huge middle class, a group of people who are what Reich calls ``an anxious class, most of whom hold jobs but who are justifiably uneasy about their own standing and fearful about their children's future.''

This sober view comes just as Democrats are returning home for their 1994 congressional campaigns, invoking the Clinton administration's claim of economic successes, including the creation of 4 million jobs since President Clinton entered office.

But as Reich, his labor economists, and private-sector analysts know, despite the plunge in the unemployment rate, nagging problems persist. The long-term jobless have become a larger portion of the total unemployed. Youth unemployment rates - especially in blighted urban areas - remain staggeringly high. And sluggish wage gains leave the so-called working poor vulnerable to even the mildest inflation.

Reich is fighting this adversity by focusing on quality, insisting that ``the fundamental fault line running through today's work force is based on education and skills.''

The ultimate jobs challenge is to help create the ``kind of environment to enable more people to get the learning they need to thrive in this new economy,'' says Douglas Ross, Labor Department assistant secretary for the employment and training administration.

With a very tight budget, Mr. Ross has pushed for a school-to-work program, an expanded Job Corps, and the promotion of on-site training in companies nationwide, among other initiatives.

Ross says he is frustrated that this fiscal year the government has been able to assist far fewer than one-half of the 1.3 million permanently laid-off workers who have lost their jobs because of corporate downsizing, defense cutbacks, trade agreements, and technological innovations that supplant people with automation. The private sector should assume more responsibility and recognize the value of workplace training.

THE strain on those federal resources will mount, says Sung Won Sohn, chief economist of Minneapolis-based Norwest Corporation, a financial-services company. He says the government does not accurately report the number of unemployed, and it underestimates the needs of about 5 million Americans who are working far fewer hours than they need to.A new study by the labor-backed Economic Policy Institute in Washington asserts that the latter group is part of a trend - the growth of small business and contingent work (temporary and part-time) that has pushed wage levels down. Labor economists Lawrence Mishel and Jared Bernstein, authors of an EPI study called ``The State of Working America, 1994-95,'' also attribute the slippage in wages to diminished union bargaining power, expansion of low-wage service-sector employment, competition from an influx of relatively cheap immigrant workers, and foreign goods produced by low-cost labor overseas. (See story, Page 9.)

While many businesses report an interest in expansion over the next several months, that outlook will likely change, Mr. Sohn contends. Pent-up demand for big-ticket items such as houses, autos, and home furnishings has been satisfied, he says. He adds that he expects the higher interest rates to further dampen the economy over the next few months, and ``we might see a significant slowdown in employment gains.''

``The middle class is still unhappy with the economy, the recovery, and, generally, with the track the country is on,'' says populist Republican analyst and author Kevin Phillips. Pressing for budget cuts that would win kudos from corporate America and interest-rate cuts from the Federal Reserve, Mr. Phillips says Mr. Clinton ``pushed aside his election-year rhetoric [to create higher-skilled, better-paying jobs] in 1993 to bet on Wall Street.'' That has left ``CEOs and stockbrokers doing very well, but high school graduates aren't going anywhere, and kids who come home after college can't get a job,'' he says.

But that ``won't play too much'' in this year's congressional elections, Phillips predicts, because given the Bush administration's poor record on job growth, ``Republicans have very little credibility.''

But Sohn predicts a voter backlash: ``The Democrats will be running against the Fed. There will be a lot of complaints about high interest rates.''