Rising Tide Finally Floats Workers

It's early morning at the Port of Baltimore.

Sunlight shimmers on the Patapsco River; black ships as long as upended skyscrapers slide up against the waterfront, their horns moaning. Crane winches hum, swinging 20-ton boxes; steel thunders against steel.

This morning, it's more than just the colossal sounds and sights of the port that make Richie Hughes feel big. He's making good money, with good prospects for job security.

After three decades in which their ranks collapsed by more than 60 percent, longshoremen, like their blue-collar colleagues across the country, are on the comeback.

The full-throttle economy deserves much of the credit but so do two once-hostile forces, now become allies.

Freer trade and new technology have moved into the blue-collar corner.

Most of America's 32 million blue-collar workers, in fact, are halting their long, forced retreat in pay and jobs.

"Wages are great - we're up to $23 an hour - and in terms of jobs, we're solid," says Mr. Hughes, head of International Longshoremen's Association Local 953.

American labor is exploding conventional wisdom of an inevitable decline. Half of all job openings between 1994 and 2005 will be either blue-collar or low-skill, white-collar jobs, according to a study by the Hudson Institute.

Call it the bleaching of America's blue collar: Labor is seizing on new innovations and skills as higher education increasingly fetches higher pay. Brains carry more clout than brawn.

Today's craftsmen and factory workers are far more likely to have spent some time in college than those a decade ago.

They still work with their hands but are more likely to reach for high tech than a toolbox - to fix a copier or wire up a modem than assemble something.

"There is a new, well-paid blue collar worker, one who has found his way into services," says Mark Niemira, an economist at the Bank of Tokyo-Mitsubishi in New York.

That's good news for most working Americans. Blue-collar labor has long signaled trends for the entire work force.

Also, traditional labor generates a slew of supporting jobs, ranging from finance and health care to retailing and public services.

Widening pay gap

But not everyone who carries a lunchbucket is winning. Although technology and trade now benefit trained workers, the two forces still imperil the wages and jobs of the less-skilled. The split is part of the wide skill gap dividing the entire US work force.

Households in the lowest fifth of the income scale last year saw their incomes stagnate while the top fifth took a record high 49 percent of all earnings, according to the Census Bureau.

The widening inequality helps explain why real median income, while rising in the past two years, still remains below its 1989 peak.

Blue-collar workers as a group have made slight gains in compensation in recent years. But the payoff differs widely according to education and high-tech savvy.

Highly skilled workers are prospering the most. Unskilled workers are gaining a bit, but largely because of a minimum-wage hike and labor shortages. Semiskilled workers take home stagnant incomes.

"What's most salient is the middle has been sagging for many years," says Alan Krueger, a labor economist at Princeton University in New Jersey.

Freer trade intensifies the income inequality between skilled and less-skilled workers by favoring highly specialized labor. Foreigners seek the US goods and services not produced in their own economies and US consumers clamor for cheap imports made by low-skilled labor abroad.

Despite the wage gap, the economy gains overall, according to some estimates. When trade's share of gross domestic product rises by 1 percent, it lifts per capita income by at least 2 percent, according to a study by the National Bureau of Economic Research.

Riding a strong economy

Along with the lasting trend of trade, the passing trend of robust economic growth also helps skilled labor. The seven-year expansion has created an estimated 12 million jobs, mostly in professional services but many in manual work.

The next recession will test the staying power of these changes.

For now, there's plenty of life in the labor market.

"Big companies, especially in aerospace, are desperate for skilled labor, they are hiring everyone," says Steve Sleigh, of the International Association of Machinists & Aerospace Workers.

At an AlliedSignal Inc. plant in Towson, Md., about 350 aerospace workers parlayed technology-driven, leaner manufacturing techniques into a 12 percent raise, to $13.50 an hour.

In communications, the stampede toward information technology is opening up thousands of well-paying, high-skilled jobs, says George Kohl, research director for the Communications Workers of America.

Bell Atlantic, for example, needs 2,000 service representatives just a few years after massive job cuts.

"Communications workers face a hiring boom for high-paid, high-skilled technical jobs," Mr. Kohl says.

Much the same story plays out even in some sectors that aren't considered high-skill.

"There aren't as many jobs, but they demand more skills and they pay better," says Ken Reichard at the United Food & Commercial Workers International Union. Retailers are retraining employees to handle new technology and shifting many of them into customer service, he says.

For longshoremen on the nation's waterfronts, technology for decades brought relentless layoffs. It has now changed from foe into friend (see story, left).

Innovations take time

But if high-tech is benefiting labor, it is bringing change at the same frustratingly slow pace that electricity, steam power, and other innovations did during the past two centuries, economic historians say.

Initially, such new technology destroys jobs and shakes up the workplace. It rewards adaptable, skilled workers and penalizes inflexible, unskilled workers.

Two decades might pass before productivity growth - the ultimate engine behind better pay and living standards - surpasses its level prior to the introduction of the technology, says Jeremy Greenwood, an economist at the University of Rochester in New York State.

"It is about the time now, about 25 years after the start of the information age, that we should start seeing productivity and wages pick up," says Mr. Greenwood. Still, high tech will continue churning the work force, bringing both layoffs and new hiring. As one company adds workers to stay competitive, others cut for the same reason.

"There is an enormous amount of productivity gain still to be made from computers - we have just begun," says Marvin Kosters, a labor economist at the American Enterprise Institute, a conservative think tank in Washington.

Middle-term, time is on labor's side. Retirement will trigger massive hiring in many trades. The auto industry intends to bring on 250,000 workers to replace retirees by 2003.

Long term, though, blue-collar labor will shrink from about 24 percent of the work force in 1994 to about 22 percent in 2005, predicts the Bureau of Labor Statistics. The bright side of that trend: Its pace is far slower than during the past three decades.

Textbook Answers to Job Threats

Many forces stir layoffs or choke wage growth, such as trade and new technology. But workers can turn these threats to their advantage, experts say, through education.

"Take charge of your own career," says Curtis Plott of the American Society for Training and Development in Alexandria, Va. "If you don't ... no one will." Here's how:

* Assess your current skills, what you want to learn and do in your career, and gather leads on how to get there.

* Talk to your manager about what skills you need to strengthen. He or she might also refer you to training programs (government and companies spend $55 billion a year on them) and help you gain tuition reimbursement. Just as important, your boss will admire your ambition.

* Open the blue pages of the phone book. They list a gold mine of government training programs.

* Ask your union, trade, or professional association for advice on training and industry trends.

* Find leads by asking for help at your public library or the career office of a local college or community college.