Fewer 'Forever' Jobs
MANY forces are behind the changes leading to today's corporate restructuring and downsizing. Among them are new technology, new foreign markets, and new trade rules. But any analysis that singles out freer foreign trade or greedy corporations or ''Wall Street'' as the lone culprit(s) is very wide of the mark.
It's true that corporate profits, executive salaries, and the income of the wealthy have risen, while middle-class income has stagnated since the early 1970s.
But that's not a reason to blame corporations for trying to maximize profits. That's what corporations are expected to do. That's what their shareholders, who include tens of millions of ordinary Americans, individually and through their pension plans, want them to do.
Some companies have laid off workers because of poor sales or low revenues, then turned around and granted top executives generous salary and compensation increases. That may not be smart, especially from a public-relations standpoint, but it's an issue for the company's directors and shareholders, not the government. It's not possible to legislate good management.
Many people have had a tough go of it following layoffs. For some, the toughest part has been the mental adjustment to being jobless, however long or short, when one thought a job was forever.
But the middle class, which includes the overwhelming majority of Americans, is not without responsibility for its current situation. There are few ''forever'' jobs in today's economy, and that fact has been apparent for years now.
Many people have lived far beyond their means: They are up to the limit in credit-card debt (the most expensive debt there is); they are living from paycheck to paycheck; they buy things they don't really need; they spend money on things that damage their health and well-being, such as tobacco, alcohol, and gambling; and most importantly, they do not save. A reversal of these financial bad habits would go a long way toward shielding American families from the effects of layoffs and job transition.
It is also well to remember that the employment picture is nowhere near as bad as some portray it. The national unemployment rate last month was only 5.5 percent. That's very good. During the first three years of the Clinton administration, more than 8 million new jobs were created. That's also very good.
The problems of downsizing and layoffs are mostly concentrated in large corporations. Those corporations' share of the American work force peaked in 1969 and has been declining ever since. Most job creation takes place in new small businesses and start-up firms.
A great deal has been made about laid-off white-collar employees and highly paid laborers having to take jobs at a lower salary than they previously earned. That's of course regrettable, but it's also not new. Millions of people each year have to start over in a new job, a new profession, a new business. The great hope of the American economy is that it is open and growth-oriented enough for such people to work their way back to their previous prosperity.
People have to help themselves, too. When the choice is between losing the house, and taking a lower-paying job or a spouse returning to the workplace, the answer should be easy to arrive at. Often an entry-level job is the stepping stone to something much better later on.
The real issue is how to prepare people to cope with the new economy. We'll look at that on Monday.