Technology and Structural Unemployment: Reemploying Displaced Adults February 1986 NTIS order #PB86-206174 'iffii©1Jl0il@~@®11 ';:'Oil", >:;1iWl!!l©1(:Woo&~ l!!l Oil 1liil£1m@111l11li1m1i', REEMPLOYING DISPLACED ADULTS 'iil'-.--­ ~:::.::::':::" - Recommended Citation: U.S. Congress, Office of Technology Assessment, Technology and Structural Unem- ployment: Reemploying Displaced Adults, OTA-ITE-250 (Washington, DC: U.S. Gov- ernment Printing Office, February 1986). Library of Congress Catalog Card Number 85-600631 For sale by the Superintendent of Documents U.S. Government Printing Office, Washington, DC 20402 Foreword The problems of displaced adults have received increasing attention in the 1980s, as social, technological, and economic changes have changed the lifestyles of mil- lions of Americans. Displaced adults are workers who have lost jobs through no fault of their own, or homemakers who have lost their major source of financial support. In October 1983 OTA was asked by the Senate Committee on Finance and the Senate Committee on Labor and Human Resources to assess the reasons and out- look for adult displacement, to evaluate the performance of existing programs to serve displaced adults, and to identify options to improve service. In June 1984, the House Committee on Small Business asked OTA to include in the study an ex- amination of trends in international trade and their effects on worker displacement. Worker displacement will continue to be an important issue for the remainder of the decade and beyond, as the U.S. economy adapts to rapid changes in inter- national competition, trade, and technology. While increasing automation and other industry adjustments to new competitive forces benefit the Nation as a whole, they do mean that millions of workers are displaced. The report shows that changes occurring in trade and technology mean that people whose work involves mainly routine manual and mental tasks, particularly in manufacturing, are vulnerable to displacement. Tasks, jobs, and processes that are highly dependent on semiskilled labor are those most likely to be moved offshore, lost to import penetration, or auto- mated. As a result, less educated and less skilled workers are overrepresented among the displaced, and are unlikely to qualify for highly skilled technical, professional, or managerial positions which are less vulnerable to displacement. This report concentrates on the problems of displaced blue-collar and nonpro- fessional white-collar workers. These workers are likely to face extended periods of unemployment, loss of health insurance and retirement benefits, and reemploy- ment only in a new job with lower pay. For many semiskilled blue-collar workers the best route back to a good job is retraining, although even with retraining, ini- tial wages are often lower than on the old jobs. Most displaced workers can bene- fit substantially from other reemployment services, such as job search assistance, counseling, and job development. Relocation assistance is appropriate for some. This report gives an overview of Federal programs that provide such services, and evaluates the extent to which both private and public programs are meeting the needs of displaced workers. It also includes an assessment of the extent to which adult educational systems and new educational technologies can help displaced workers and homemakers prepare for new jobs. In many cases, this preparation involves basic education, an area where technologies such as Computer Aided In- struction and interactive videodisks are especially promising. OTA thanks the many people—advisory panel members, government officials, reviewers, and consultants—for their assistance. As with all OTA studies, the infor- mation, analyses, and findings of this report are solely those of OTA. Director . Ill Technology and Structural Unemployment: Reemploying Displaced Workers Advisory Panel Joseph Weizenbaum, Chairman Massachusetts Institute of Technology Kathy Alessandro Sar A. Levitan Downriver Community Conference The George Washington University Paul Barton Robert Machin National Assessment of Educational Alliance Mortgage Co. Progress Jill Miller Marc Bendick Displaced Homemakers Network The Urban Institute Iles Minoff Paul Boyer Human Resources Development Institute University of Wisconsin-Madison Ronnie Straw Dennis Carey Communications Workers of America Hay Associates Burdette G. Taylor Dick Greenwood IBM Corp. International Association of Machinists and Vi Traynor Aerospace Workers American Electronics Association Donald Hancock Elizabeth Useem Vanderbilt University University of Massachusetts Carol Hollenshead Gary Wuslich University of Michigan LTV Steel Co. Robert Karasek University of Southern California NOTE: The Advisory Panel provided advice and comment throughout the assessment, but the members do not necessarily approve, disapprove, or endorse the report for which OTA assumes full responsibility. iv . OTA Project Staff–Technology and Structural Unemployment: Reemploying Displaced Adults Lionel S. Johns, Assistant Director, OTA Energy, Materials, and International Security Division Audrey Buyrn, Industry, Technology, and Employment Program Manager Julie Fox Gorte, Project Director Katherine Gillman, Senior Analyst W. Wendell Fletcher, Senior Analyst Bradley T. Shaw, Analyst Deborah R, Cichon, Analyst Paula M. Wolferseder, Research Assistant Margaret Hilton, Analyst 1 John A. Alic, Senior Analyst Eric Basques, Analyst Edna Saunders, Administrative Assistant Andrea Amiri, Secretary Individual Contractors Joel Fadem John Hansen Bernard Ingster Howard Rosen Anne Covalt, Editor Contractors Human Resources Data Systems, Inc. National Institute for Work and Learning Norman D. Kurland & Associates The Urban Institute Industry and Trade Strategies ‘Analyst from August 1983 to September 1984. Acknowledgments This report was prepared by the staff of the Industry, Technology, and Employment Program of the Office of Technology Assessment. The staff wishes to acknowledge the contribution of OTA’S contractors in the collection, analysis, and preparation of material for the report, and to thank the following individu- als, organizations, and government agencies for their generous assistance: Abt Associates Inc. Mathematical Policy Research Inc. Hal Axtell, Ford Motor Co. National Commission for Employment Policy William L. Batt, U.S. Department of Labor National Governors Association Business Council for Effective Literacy S.D. Warren Co. California Employment Training Panel The Boeing Co, Congressional Research Service United Auto Workers Paul Delker, U.S. Department of Education U.S. Department of Defense: Displaced Homemakers Network Department of the Army Employment and Immigration Canada Department of the Navy Ford Motor Co. Office of the Secretary of Defense Francis Fisher, The Urban Institute U.S. Department of Education: General Electric Co. Office of Educational Research and General Motors Corp. Improvement H. Peter Gray, Rutgers University Office of Vocational and Adult Education John Hartmann, International Trade U.S. Department of Labor: Administration Bureau of International Labor Affairs Industrial Adjustment Service, Canada Bureau of Labor Statistics Interstate Conference of Employment Security Bureau of Labor-Management Relations and Agencies Cooperative Services Allan Jacques, Employment and Immigration Employment and Training Administration Canada U.S. General Accounting Office Stan Jones, United Auto Workers of America Westat Inc. Mainstream Access Inc. Weyerhaeuser Co. Contents Chapter Page l. Summary ... .., .., ... ... ,., ,.. 3 2. Policy Issues and Options . 47 3. Worker Displacement . , ., . 105 4. Employment and Worker Displacement. , ., . ., ., . 135 5. National Displaced Worker Programs. ., . 163 6. Design and Performance of Displaced Worker Projects , , . 225 7. Adult Education and Displaced Workers . , . 271 8. The Effects of Technological Change on the Nature and Availability of Jobs.,., . 321 9.The Effects of International Trade on U.S. Skills and Employment . 371 10. Displaced Homemakers. , . ., . , . 409 Index . 439 vii Chapter 1 Summary — -. Contents Page Overview . 3 Introduction . , 5 Displaced Workers: Definition and Description . 6 Displacement, Employment, and the U.S. Economy . 10 Displaced Worker Programs . 14 Design and Performance of Displaced Worker Projects . 25 Adult Education in the United States. 26 Causes of Displacement . 28 Technological Change . 29 International Competition . 31 Displaced Homemakers: Program Structure and Performance . 33 Policy Issues and Options . 36 List of Figures Figure No. Page 1-1. Percentage of Displaced Workers and Percentage of Labor Force, by Occupation . 8 1-2. Displacement by Industry, 1979 to 1984, and Percentage of Total Labor Force Accounted for by Each Industry, 1979 . 9 1-3. Percentage of Labor Force and Percentage of Displaced Workers, by Region, 1984 . 10 1-4. Displaced Workers Weeks Without Work, as of January 1984 . 11 1-5. State Unemployment Rates and Displacement, July 1985 . 12 1-6. Production Workers as a Percentage of Manufacturing Employment.. 13 1-7. Production Workers as a Percentage of Employment in High- Technology Industries . 14 1-8. Manufacturing Occupational Distribution . 31 1-9. Occupational Distribution in Services . 31 1-1o. Trade as a Percent of GNP, 1950-84. 32 Ch. l—Summary ● 5 manual labor and routine mental tasks are vul- citizens’ lives, the United States will have to nerable to computer-based technology. Through move on many fronts to upgrade