The MacNeil/Lehrer Report; Worker Retraining

[Tease]

JOHN PASCARELLA, steelworker: Since I got out of high school I've worked two places. One was in the rubber industry; now I'm in the steel industry. And I don't know too much more about, you know, anything else. So training to me would help me.

[Titles]

ROBERT MacNEIL: Good evening. The government had the first glimmers of good news on the economy for a long time today. The Labor Department reported that the unemployment rate went down from 10.8% in December to 10.4% in January. President Reagan called a news conference to put an optimistic gloss on the labor figures and other statistics.

Pres. RONALD REAGAN: Today millions of Americans can take heart. Employment has -- unemployment has finally started down. This dip in unemployment coming just after the word of higher retail sales, higher auto sales is one more sign that America is on the mend. Confidence is returning and with reason. And while we may see some ups and downs on the way to recovery, we're on the move now, and that's our best hope for more productive, lasting jobs.

MacNEIL: But as Mr. Reagan went on to acknowledge himself, many of those presently unemployed will never return to their old jobs because industries like steel and autos and rubber will never employ the number of workers they once did, even when the economy recovers. It's a problem that labor economists call structural unemployment, and the solution is worker retraining. That sounds simple enough, but matching workers and jobs and paying to retrain them is a complicated equation with many pitfalls. Tonight, how worker retraining will work and who will pay for it. Jim?

JIM LEHRER: Robin, there's only one solution to the trauma of having a skill for which there is no longer a demand -- finding and acquiring a new one. Finding it usually means moving to another city or town, possibly to another state and another part of the country. Acquiring it means going back to school, taking a low entry position that includes on-job training, or signing up for a union- or management-run retraining program. Everyone concedes that there are not enough of these programs currently available to handle the numbers of the so-called structurally unemployed now being thrown out of work. President Reagan said as much in his State of the Union message and in his budget. Right now, only $25 million a year in federal money goes toward retraining and relocation of these workers. He wants that amount upped eight times, to $199 million, all to be given in block grants to the states to help train, find work, and relocate workers whose jobs have permanently disappeared. A second proposal would let states use up to 2% of their unemployment trust funds, or about $450 million in all for such efforts too. Robin?

MacNEIL: One area of declining industry is the Mahoning Valley in eastern Ohio. The steel industry there dates back to the mid-19th century, and produced steel that supported U.S. troops in four wards. Today the mills are closed and 50,000 workers are unemployed. According to one local observer, 20,000 of those workers will never have regular jobs again. Producer Ken Witty and reporter Gordon Earle went this week to Ohio to talk to people there about the prospects of retraining.

[voice-over] One of the 50,000 jobless workers in the Valley is 35-year-old John Pascarella, a second-generation steelworker who went into the mills after high school. John lost his job at Copperweld Steel 14 months ago.

JOHN PASCARELLA: Here's what's the shame. I'm a steelworker, don't have a job. They shut down these places here like this here. It seems to me they could use them for something. I tell you, it's a real shame. Nothing moving. Everything's dead.

MacNEIL [voice-over]: As a millworker, John has had layoffs before. The factory where he'd been employed for 14 years shut down on him. But until this recession, he'd never been out of work for so long with such little prospect of going back.

Mr. PASCARELLA: I don't know. It's really tough. I really don't know what I'm going to do.

MacNEIL [voice-over]: He spends his days mostly at home, often with friends like Tom Voitco. Tom is another unemployed steelworker. He got laid off two months ago at Jones and Loughlin. How do they feel about retraining for new kinds of work?

Mr. PASCARELLA: If you take one of these training schools and you do learn a trade, no matter what it is, there are still 50,000 people out there that already know this trade that are laid off. So if I train for this job and I'm new at it, and an employer -- I know that I would -- would hire somebody that has quite a few years experience rather than take me for a shot of school. So, whether it would benefit me, I don't know.

TOM VOITCO, steelworker: I'd be glad to go to school and be retrained, but what jobs are -- I mean, the jobs aren't there, too. What are you qualified for, you know, you're just not -- I'm not going to go and say I'm going to be a computer expert and go to school to be in computers and stuff like that because I don't think I'm capable of doing that, you know. But there's a lot of other skills -- you know, manual labor skills that you have to be trained for -- welding, stuff like that -- that I'd like to, but those jobs are -- there's 50,000 of those people out in the street, too.

Mr. PASCARELLA: You know, I can't afford to go down and even take a mini-course at the college for $76 to get a little bit of training that might help in a job. I don't have that kind of money. And if you can't get help from the government for this training, how do you go about getting this training? If the government come in and said that they was going to retrain eveybody, I'd be morethan glad to go.

MacNEIL [voice-over]: Some steelworkers are already in the process of retraining. The union has been working jointly with the federal government to send some members back to school. These workers are brushing up on their math in a two-year electrical engineering course at a technical institute. When they're through they'll know how to maintain and repair industrial robots. Local 1375 has been a leader in the retraining effort. That's thanks, in large part, to Mike Rubics and his fellow members of the local's unemployment committee. But Rubics doesn't see their small effort as a solution to the unemployment problems of the Mahoning Valley.

MIKE RUBICS, Local 1375: It's not large enough in terms of the size of the program to answer all of our members' needs that are out of work. We have about 800 people in the mill now, 400 of whom or 200 -- at least 200 may never go back to work. Twenty people being retrained for a robotics class doesn't answer the needs because it's simply not enough. Secondly, when you get past the robotics class, what else can you retrain them to be -- barbers, butchers? You know, not everybody can run a computer or be into computers. And so we don't know what else to train people for, and this whole root problem of not enough jobs, simply not enough jobs in the area, you have to deal with. You cannot retrain people without jobs. You have to have the jobs to -- you know, even if they're high technology you have to have them in the offing before you can retrain people for them.

LEHRER: From that specific situation to an overview of the retraining problem now, from Herbert Striner, a manpower policy expert and professor of business at American University. He has written a book and many articles on this subject. In national terms, how serious has this retraining problem become?

HERBERT STRINER: Oh, I think it's one of the most critical problems confronting this country as we go into the economy of the '80s and '90s where high-skill needs are absolutely essential.

LEHRER: But the union official just said that what they are doing in a small way only touches the problem. Is that true nationally as well?

Dr. STRINER: I think that's true. And one of the problems we have is that we are the last major industrial country in the world that has no compulsory reporting of job vacancies. We literally don't know how many jobs are open now and how many jobs will be open in the next year or two, while in countries like West Germany, Belgium, France, they do know because they have a compulsory reporting system, and on that basis they know what jobs need filling and what training programs have to be started.

LEHRER: The point that the two men made, that they're not even sure what they ought to retrain for, they're not sure what jobs would be available. How do you make -- is that what you're talking about in terms of matching the unemployed worker with the need, not only today but in the future?

Dr. STRINER: Exactly. Exactly, because, you see, take West Germany as a case in point.Back in the early '60s West German industrialists and government economists determined that it was essential that they know where the new jobs were going to be and how many people were going to have to be retrained. And they found that between one and five percent of the labor force would have to be retrained in the future in order to supply the skills that they anticipated would be called for.

LEHRER: On a continuing basis.

Dr. STRINER: On a continuing basis. So that in 1969 the West German government, using our GI Bill of World War II as a model, passed a law stating that every German, whether he or she was employed or unemployed, had the right to go back into a full-time retraining program with a stipend so that an individual who could go to school and wanted to go to school, but had to support a wife and child, would have a stipend so he could do that.

LEHRER: And that contrasts with the retraining concept in the United States which is primarily on an emergency basis, right?

Dr. STRINER: Oh, oh it's hopeless. It's tokenism. Because, while the Germans and the French and some of the other countries train about 2% of their labor force a year, all of our so-called manpower training programs have never trained more than between one-tenth and one-half of one percent a year.

LEHRER: Has the need been there, though, before recently -- before now?

Dr. STRINER: Yes, the need has been here. Economists who have been in the field of manpower and labor have been concerned with this question, have for many years -- I've been in this field since the '60s, and we've always known about the retraining needs. But we've never had a leadership or a dedication to getting the information on where the vacancies were and the willingness to say that we have to invest in human resources. And, by the way, it's more expensive to pay someone who's unemployed than for retraining.

LEHRER: Well, that was my next question. What would it cost -- let's say -- I mean, this is truly a pie-in-the-sky question, but just for perspective purposes, let's say that the federal government should decide tomorrow, "We are going to resolve, all by ourselves, the retraining problem in this country." What would it cost?

Dr. STRINER: Well, we've never done anything like this in recent years in the United States, so we have to look at a proxy. The best proxy we have is West Germany.The Germans have done a fascinating series of studies on their program since it was started in the '60s, and about three years ago they did an evaluation which indicated that it cost about $3,500 per trainee. Now, that sounds low for this reason. They subtracted out what they would have had to pay that trainee for being unemployed.

LEHRER: I see. The difference between the training program and the unemployment costs?

Dr. STRINER: Correct. I would guess that after subtracting out what we're paying someone just in terms of unemployment insurance, welfare benefits and so on, that the training program for an individual would probably run around $12,000 to $13,000 a year, including everything. But we're now paying -- the average unemployed worker costs this economy about $25,000 a year.

LEHRER: Thank you. Robin?

MacNEIL: The United Auto Workers, thousands of whose members have lost jobs, have become very active in retraining. Donald Ephlin, UAW vice president and director of the union's Ford department, is one of the organizers of the retraining program. He's in California right now to coordinate a retraining program for 2,500 Ford workers who were due to lose their jobs in May. Mr. Ephlin joins us at public television station KQED in San Francisco. Mr. Ephlin, describe the kind of training program you're there to set up.

DONALD EPHLIN: Well, here in California, because this Ford plant will be closing in May, we are working with the state of California in a combined effort to try to get an inventory of available jobs, to interview and counsel with our members who will be laid off and try to match them with these available jobs, and then provide them with the necessary training to fill those jobs.

MacNEIL: Now, who's going to pay for that?

Mr. EPHLIN: The Ford Motor Company and the UAW in our contract last year established a special development and training fund of 5" per hour worked. So all the active employees in a sense are helping to finance this effort.

MacNEIL: So at least between your union and that company the principle is established of contributing to a retraining fund out of company and worker earnings, is it?

Mr. EPHLIN: That's right -- 5" per hour starting in March of last year has been going into this fund.

MacNEIL: What facilities and institutions will you use to retrain these people? Where will they retrain?

Mr. EPHLIN: Usually we use the resources of community colleges because through the network of community colleges we can offer these same programs anywhere around the country where we have unemployed workers looking to be retrained.

MacNEIL: And do they get a stipend, as it was just described, so they can support their families while they're doing this?

Mr. EPHLIN: No, our fund would not support paying a stipend or, another important feature, a relocation allowance, which is very important.

MacNEIL: Well, how do they support themselves while they're retraining, then?

Mr. EPHLIN: This is, obviously, one of the difficulties. We're doing part of this while people are on unemployment compensation, but there is obviously a great need in this area.

MacNEIL: So, if they don't have any savings of their own they'd either have to be on unemployment benefit or welfare in order to afford to go for the retraining, is that it?

Mr. EPHLIN: Yes. All our program can do is pay for the schooling.

MacNEIL: How are you going to pick who studies what and what jobs you retrain them for?

Mr. EPHLIN: Through -- we have a small professional staff who conduct interviews to get an inventory of the people's talents and their abilities, and then try to match them with the jobs as best we can. The state of California is working with our two organizations trying to do this job.

MacNEIL: If workers agree to join this training program, do you guarantee them that you'll get them a job at the end of it?

Mr. EPHLIN: No, this is one of the great needs.Unfortunately, we've talked so much about training that people think this is the answer in itself, but unless we do something to create jobs, the retraining is all for naught.

MacNEIL: Are you having trouble signing up workers when they discover that you can't guarantee them a job at the end of their training because they think that's just too much of a risk to take?

Mr. EPHLIN: The workers are more than willing to even gamble on it, but we have tried to be careful and not to mislead people because it only adds to their frustration if you put them through the added cost and problem of going through a retraining program only to continue to be unemployed. It adds to their frustration. This is our greatest problem.

MacNEIL: Well, thank you. Jim?

LEHRER: Finally, a view of the worker retraining dilemma from Hubert "Herky" Harris, executive vice president of the Associated Builders and Contractors, the Washington-based trade association of some 16,000 non-union contractors around the country. Mr. Harris was the assistant director of the Office of Management and Budget in the Carter administration. Are the union and government programs the answer to retraining, Mr. Harris?

HUBERT HARRIS: I think the program just described by the gentleman from the UAW is an excellent start. It's important, I think, for the organization that represents the workers to take a responsible role in explaining to them the dilemma they face in trying to go back to a highly paid job that might not exist any longer. So if the union and the worker recognize this, and if the unions will work together with the workers and the companies to formulate a program with their own organization, I think it certainly is a step in the right direction. But historically government has not solved many of our problems in unemployment. We've been working on it since I can remember, and I imagine you feel the same way.Pouring money and new programs into the solution is not going to solve the problem. What we have to do is create a climate that will allow broader and new ideas to enter into the retraining and the whole employment issue.

LEHRER: All right. Your members, the non-union contractors around the country, have retraining programs underway. Tell me about them. What are your people doing?

Mr. HARRIS: We started several years ago a program called "Wheels of Learning," which is a task-oriented concept of construction skill training. We build on the skill of an individual a step at a time. We combine on-the-job work experience with a course of classroom attendance to try to combine what he learns and what he does during the day with the theory or the application of the technical material at night. And we have found a tremendous increase in productivity and the ability to convert an unskilled or someone not skilled in construction activities -- to convert him into a productive worker in a fairly short fashion.

LEHRER: Now, specifically now, with this rise that we've been talking about up to now of the structurally unemployed, those coming from industries where their jobs have gone away and they're not -- are you specifically, are your people specifically going after those people -- the unemployed steelworker, the unemployed autoworker and so on?

Mr. HARRIS: Jim, I don't think you could say that we're out recruiting right now, because we have many of our own people who are waiting to be called back. But it's obvious that the construction industry is beginning to move. I talked to the head of the Homebuilders Association today, and he told me that they're beginning to see real movement. And as this picks up there'll be a growing demand for skilled workers. And those in our industry -- in the industrial and commercial side of construction -- will begin to see a greater demand for skills.So we think that logic would have it that those that have a work skill, who are able to come in and prove that they've held a job and done it well, would be attactive as an entry-level trainee in the construction industry.

LEHRER: But as an entry-level trainee.

Mr. HARRIS: That's right.

LEHRER: And what has been your experience thus far in trying to get, say, a man who worked as a steelworker, an autoworker for 30 years or 20 years, suddenly unemployed, to be willing to take an entry job, particularly a non-union job?

Mr. HARRIS: That is a good point, and certainly one that we have debated within our own organization. The problem you have is a person that has a work skill is more valuable than someone that doesn't have a demonstrated work skill, and so he usually can command a higher starting salary per hour or rather a wage per hour. The problem is moving from a $25-per-hour wage, which many of the steelworkers have, for example -- and that's a total wage -- into something on the order of $6 or $7 net to get started. Our program, the Wheels of Learning, will allow a person who really works at it to become a journeyman within two years if he applies himself and works hard and has the opportunities. And if he does this, his pay level will rise accordingly. Shifting from a union environment into a non-union environment is not a problem for us.

LEHRER: But is it a problem for some of the workers? Do some of your people tell you that?

Mr. HARRIS: Many of our workers still carry union cards. They just prefer to work in an open-shop environment. So it is not a problem for us.

LEHRER: But to be specific, like those two men in Mahoning, Ohio, if they were to come -- they've been working for years now, they're probably making -- I don't know what their hourly rate is, but it's way up there when they were working as steelworkers. If they were to come to one of your members and say, "Okay, I'm ready to retrain as a carpenter," say. They would have to start at the very beginning salary, go to school and do all these things that'll take them two years before they would be back up even close to what they are making now, right?

Mr. HARRIS: That is essentially correct. We have one company that I spoke to recently -- BENK in Birmingham, which is an industrial construction company that does a lot of work in plants all over the Southeast -- and they are presently now training steelworkers who are out of work at no cost to the steelworkers in the area of welding. They don't know whether there'll be any jobs at the end of the training, and they don't know whether they'll actually be able to use these people. But the training facilities are there, the teachers are there, the programs are in place, and having these people learn the skill is something that would be helpful to them from a manpower perspective when indeed the boom does reoccur. And we think that the construction industry will recover and in the short term. And therefore there will be a demand for skilled workers.

LEHRER: And, in a word, you believe that private-sector approach is the better solution than government doing it?

Mr. HARRIS: I do indeed.

LEHRER: Thank you. Robin?

MacNEIL: Dr. Striner, can the private sector do it in this country?

Dr. STRINER: No. I don't think it can, because the magnitude of the problem is such that the companies can't really do a retraining job. Mr. Ephlin, for example, described what I think is a fine effort, but these are individuals who, unless they have private resources available to them, they can't take the training program. Everything that we've learned in terms of the 1960s, the 1970s, with experiences of industrial countries like Germany and France, most of Western Europe and also the case of Japan, indicates that in order to maintain a sufficiently high level of retraining, you have to have a major commitment in terms of human resource investment. And it's not just in retraining, because basically we haven't mentioned anything tonight about the 20 to 30 percent of the adult population in the United States who can't read at the fifth-grade level. And if you can't read and write at the fifth-grade level, you can't be trained because you can't even read the technical manuals.

MacNEIL: Mr. Ephlin, in San Francisco, do you think that the private sector can solve this, the unions and the companies together can solve this?

Mr. EPHLIN: Certainly not. Our effort is to supplement government programs that we think should be in place, and it was intended originally for our active workers to be able to take programs to upgrade their skills. This is certainly not a substitute for the necessary government programs.

MacNEIL: Mr. Harris, you were the one who suggested government couldn't do it, yet even Mr. Reagan, who often says you should made government smaller and it can't solve all problems, is proposing that government get in and increase the amount of money. Why do you think government's not necessary in this?

Mr. HARRIS: I think you misunderstood the direction that I was pointing. That is, the government is not the ultimate solution. It can contribute. It can certainly provide facilities and it can indeed provide encouragement to the workers.

MacNEIL: And you think it should do so?

Mr. HARRIS: I do, indeed, but I don't think we should depend on government to bail us out from this particular problem. We've depended far too long in far too many different ways, and in my opinion, much of the problem we have now has been through the dependence on government to solve everything rather than allowing the individual to know the truth, that there were changes coming.

MacNEIL: Mr. Ephlin, Mr. Harris also said -- he congratulated you for being realistic with your workers. Is one of the problems here that unions are reluctant to tell their workers that they won't be getting -- their unemployed workers they just won't be getting -- many of them -- those jobs back, even when the recovery comes? Describe the problem there for us.

Mr. EPHLIN: Well, we have been right up front with our people, particularly in states like Michigan, where we are solely dependent on the auto industry. And we have told our members that are laid off that the industry will never again employ the total number that we did back in '78, for example. And so we suggest to some of the younger workers that they do seek to be employed in other industries elsewhere.

MacNEIL: And, Dr. Striner, is it a common situation that workers are reluctant to undertake retraining because they believe they're going to find employment back in the thing they're skilled for?

Dr. STRINER: No. Back in the middle 1960s when I was with the Upjohn Institute for Employment Research, I was involved in a number of studies trying to deal with this question of what the worker would be willing to do in terms of relocation, physically and in terms of a new skill. And the workers who had been unemployed for some time indicated that if they had funds for moving, they would move. If they had a reason to believe that there were indeed vacancies for the skills that they were about to be retrained with, they would go into those skill training programs.I don't think you have a problem from the point of view of the unemployed worker. I think the problem is making up our mind to achieve and accept the necessity to invest at a sufficiently high level for retraining.

MacNEIL: Do you think, Mr. Harris, since you brought it up, do you think that presently unemployed workers from the old industries have a realistic vision of what the future holds for them or they're nurturing false hopes of going back to their real jobs -- their old jobs?

Mr. HARRIS: In general I would say that they nurture these false hopes that somehow or another the solution to the problem is going to be down the road in a little while and they'll be back at a high level of income doing what they know how to do. And therefore there's a disincentive -- a mental disincentive, if you will -- to get in and begin learning a different skill in another area.

MacNEIL: Mr. Ephlin, are UAW workers who have had high earnings in the past, are they willing to recognize the need to go and work for $6, $7 an hour in a non-union situation like Mr. Harris describes?

Mr. EPHLIN: Well, our members are very realistic and they want to work. Obviously they would prefer better-paying union jobs, but they realize that they may have to go into other lower-paying industries, and they're quite willing to do that to get good jobs. I would add that over the years both we and the building trades union have had apprenticeship programs to train construction workers -- building tradesmen -- and there is a great excess supply of those in most areas of the country already. So we have not been focusing on construction, obviously.

MacNEIL: Right. Well, Mr. Ephlin, thank you for joining us in San Francisco; Dr. Striner and Mr. Harris, in Washington. Good night, Jim.

LEHRER: Good night, Robin.

MacNEIL: That's all for tonight. We will be back on Monday night. I'm Robert MacNeil. Good night.