When a Factory Closes

<v TV Host>This program is made possible by grants from the Pennsylvania Public Television Network, <v TV Host>the Pennsylvania Humanities Council, and the Philadelphia Foundation, <v TV Host>United Methodist Urban Ministries, American Baptist National Ministries, and the <v TV Host>Presbyterian Church USA. <v Host>This is the Yale forklift plant in Philadelphia. <v Host>Last year, the Eaton Corporation, which owns Yale, decided to close this plant. <v Host>The corporation blamed foreign competition for the shutdown. <v Host>Eaton's decision caused 420 men and women their jobs. <v Bill Reis>I can remember riding down the boulevard, going home, and I have a couple of kids. <v Bill Reis>I have responsibilities. I had bills to pay and ridin' down the boulevard and thinking <v Bill Reis>just for a split second, you know, what am I gonna do with myself? <v Jack Thomas>16 years and I have nothing to show for 16 years <v Jack Thomas>anywhere. No pensions, no seniority, no vacation time. <v Tom Barrett>I think about a Japanese someplace or a Mexican somewhere doing the actual <v Tom Barrett>job that I did. Somehow, somewhere, someplace or somebody doing my job.

<v Tom Barrett>But he's not an American. It's no longer my job <v Tom Barrett>anymore. It's gone. I was working at- in the plant and a man named <v Tom Barrett>Charlie Miller. <v Tom Barrett>He said to me, he said- we were talking about the closing of the plant and I was <v Tom Barrett>complaining about the closing of the plant. <v Tom Barrett>And he said to me, "Tom," he said, "Don't you realize we're the last of the buffalo?" <v Tom Barrett>And I said, "What the hell you mean, Charlie? <v Tom Barrett>We're the last of the buffalo?" And he said, "Well, our type of work is leaving <v Tom Barrett>the country." And he said, "We're just like the buffalo." He said, "We're the last <v Tom Barrett>remaining few people who do this work with our hands and minds. <v Tom Barrett>It's heavy work." And he said there's not going to be no more. <v Host>The Eaton Corporation, an international conglomerate, is headquartered in Cleveland. <v Host>When Eaton closed its forklift operations in the United States, it did what thousands

<v Host>of American companies have done in the past decade. <v Host>The Eaton story is an example of what happens when a factory closes. <v Host>It reveals the personal costs American blue-collar workers are now paying because <v Host>of such shutdowns. And it explains why millions of these workers will never get <v Host>their jobs back. <v Dr. Barry Bluestone>We're losing jobs that will never come back in the basic industries such as steel and <v Dr. Barry Bluestone>auto and petrochemicals and those permanently displaced workers, perhaps <v Dr. Barry Bluestone>2 million of 3 million or more are going to have to be retrained <v Dr. Barry Bluestone>or are going to have to find another way of making a living because those jobs are never <v Dr. Barry Bluestone>coming back. <v Otis Port>We've talked with a lot of people and they've pulled a lot of numbers out of the air. <v Otis Port>And I'm sure that most of them are just guesstimates, but I would be surprised if <v Otis Port>anywhere near half of the people who are unemployed now get their jobs back. <v Otis Port>American businesses learned- is learning rapidly how <v Otis Port>to increase productivity and- and do more with less. <v Otis Port>That's again, that's the only way we're gonna survive against products that are built

<v Otis Port>in low wage rate countries. <v Host>Today, 22 percent of the labor force is engaged in manufacturing. <v Host>But that labor force is shrinking rapidly. <v Dr. Theodore Hershberg>The projections for the year 20, let's say the year 2000 or 2005, are they at <v Dr. Theodore Hershberg>only about 5 percent of the American labor force will be engaged in manufacturing <v Dr. Theodore Hershberg>activity. <v Dr. Barry Bluestone>What's happening today is different from what's happened in the past. <v Dr. Barry Bluestone>For example, if you look at the movement out of agriculture, <v Dr. Barry Bluestone>out of farming, into manufacturing, that was a tremendous change <v Dr. Barry Bluestone>in our society. We had 38 percent of the labor force in agriculture in <v Dr. Barry Bluestone>1900. By 1980, only 3.8 percent, only one-tenth as many workers <v Dr. Barry Bluestone>were in the farming as 80 years before. <v Dr. Barry Bluestone>But note it took 4 or 5, perhaps 6 generations <v Dr. Barry Bluestone>to move out of agriculture into the new manufacturing base. <v Dr. Barry Bluestone>What we're seeing today is a transformation every bit as- <v Dr. Barry Bluestone>as dramatic as the movement out of agriculture into manufacturing, but it's

<v Dr. Barry Bluestone>occurring in 10 years. <v Host>The Yale forklift was once a symbol of American quality. <v Host>Many Yale lift trucks outlasted the companies that bought them. <v Host>But today, the American built Yale truck is a relic. <v Host>Americans no longer build the truck. <v Host>Japanese and Mexican workers do. <v Host>Eaton Corporation officials decided that it was not to their benefit to talk to us about <v Host>why they closed their American forklift operations. <v Host>So we went to one of Eaton's competitors for an explanation. <v Robert Cornelius>The market has dropped considerably. <v Robert Cornelius>The last few years has been a disaster. <v Host>Robert Cornelius sells American built Baker lift trucks. <v Host>He told us that during their peak years, Baker, Yale, and their American competitors <v Host>sold over 80000 lift trucks in the United States annually. <v Host>Now, he says, only about 55000 trucks are sold in the United States <v Host>each year, and 15000 of them have been made in Japan. <v Host>Mr. Kornelius recently lost a customer to Japanese competition.

<v Robert Cornelius>The customer did not know it was made in Japan, because afterwards, <v Robert Cornelius>when he received the truck and it said made in Japan, <v Robert Cornelius>he felt bad. <v Host>The name of the Japanese built forklift that underbid Mr. Cornelius by a couple <v Host>of thousand dollars is Yale. <v Host>Has Yale become more of a competition to you since it moved to Japan? <v Robert Cornelius>Yale has given us fits, so to speak, with low prices. <v Host>Low priced foreign products have done more than give the American competition fits. <v Host>In the past year alone, they have been blamed for the loss of 78000 American <v Host>blue-collar jobs. Philadelphia's Eaton workers are counted among those <v Host>casualties. <v Danny Chmelko>They're multinational, so their allegiance lies to the buck and the shareholder. <v Danny Chmelko>If they can make money in the Antarctic and they can <v Danny Chmelko>get penguins to work for them and they can feed these penguins fish and keep them happy <v Danny Chmelko>so that they can exist, that's what they'll do.

<v Host>Most of Eaton's Philadelphia workers spent at least 20 years with the company. <v Host>Many of their fathers worked for Yale when it was operating in the Bridesburg section of <v Host>Philadelphia. Like Tony Galvin, they were raised within walking distance <v Host>of the old plant. <v Tony Galvin>My family lived in this neighborhood, I guess, all my life. <v Tony Galvin>My father worked here. I've had several uncles work here. <v Tony Galvin>I still have an uncle that lives down a street that's now still unemployed. <v Tony Galvin>I worked here for some 25, I guess, 25, 26 years. <v Tony Galvin>When a plant like this leaves a particular community, it destroys the community. <v Tony Galvin>I think they have- they have a responsibility as a community. <v Tony Galvin>You can see the deterioration in the neighborhood now. <v Tony Galvin>This is not the only plant. It's like the hornets coming in and just devastating <v Tony Galvin>everything in its path. If you were to travel up state road and see the number of plants <v Tony Galvin>that have closed, this is only 1 of many. <v Host>Eaton tried to cushion the shock for its Philadelphia employees. <v Host>It gave them a 1-year notice. <v Host>It agreed to generous severance pay. <v Host>It set up an employer referral service.

<v Host>But because millions of blue-collar workers are looking for jobs, Eaton's efforts <v Host>did not eliminate the substantial number of economic casualties caused by <v Host>its plant closing. <v Bill Reis>I get up five o'clock in the morning, start my fireplace <v Bill Reis>for heat. I make the kids lunches for school. <v Bill Reis>I make the breakfast and get them all up in <v Bill Reis>one and get them off to school. <v Bill Reis>And I do the housework, dust, clean and <v Bill Reis>then I get my wife up later on in the morning, get her off to work <v Bill Reis>and read the paper for jobs and go out for interviews and <v Bill Reis>look for work in the afternoon. <v Host>Bill Reis's day has changed dramatically in the past year. <v Host>When he was employed at Eaton, he spent his day working as a skilled metal grinder. <v Host>Now he is 1 of 3 million blue-collar workers who have lost their jobs. <v Bill Reis>I'm 47 now and

<v Bill Reis>it's pretty hard to go out and look for a job now. <v Bill Reis>You did one job for 17 years and then you gotta start all over again. <v Pat Reis>Did you girls mark up these sets? Anything missing on any of them? <v Host>While Bill Reis is unemployed, his wife Pat works as an attendant at <v Host>Lower Bucks County Hospital outside Philadelphia. <v Bill Reis>Yeah, she works at the hospital. <v Bill Reis>Lower Bucks. <v Bill Reis>And I'm the housemaid now. <v Pat Reis>I don't like the idea of him being laid off because <v Pat Reis>he doesn't- I mean, he feels bad that I have to come to work and he stays home. <v Host>Bill's daughter, Karen, is studying medical technology at Rutgers University. <v Host>She works as an attendant at Lower Bucks County Hospital on weekends to help pay <v Host>for her tuition. Donna, the Reises' younger daughter, is a senior <v Host>at Bishop Cornwell Catholic High School. <v Host>Tuition there is 900 dollars.

<v Donna Reis>I did want to go to college, but I know they would go out of their way for <v Donna Reis>me to go through college, but I wouldn't want them to do that, <v Donna Reis>you know? <v Host>The Reises live in a modest 1-story home in a blue collar neighborhood outside <v Host>Philadelphia. While Bill worked at Eaton, the family lived comfortably. <v Host>Now the family's comfort, its security, its way of life had been threatened by the <v Host>layoff. <v Bill Reis>We don't have car insurance. <v Bill Reis>That was due in January. <v Bill Reis>They wanted 500 dollars for that for a first down payment. <v Bill Reis>And I knew we didn't have the money to pay them what they wanted. <v Bill Reis>So I just went up there and told <v Bill Reis>the man here is 200 dollars. <v Bill Reis>You just have to take it. <v Bill Reis>That's the best I can do for right now. <v Bill Reis>He didn't like it too much. <v Bill Reis>He said you either have to sell your car or <v Bill Reis>find some other means to get the money to pay the bill,

<v Bill Reis>that just cut down. I'm a camper, and I like to go out even <v Bill Reis>if it's out in the boondocks. <v Bill Reis>A weekend out there away from everything, and <v Bill Reis>long as you got a good job and a decent pay, you know you can do <v Bill Reis>it, but without the job, you're- you're stuck, <v Bill Reis>you just can't do it. <v Host>Until the layoff, the Reises owned a camper. <v Host>But their daughters' tuition bills ended that. <v Bill Reis>I got 1 in high school. <v Bill Reis>And it's her last year and yeah this oldest one's in college. <v Bill Reis>In uh Rutgers and she travels every day <v Bill Reis>and she's got 2 years to go. <v Bill Reis>And the 900 dollars high school <v Bill Reis>tuition. <v Bill Reis>I paid that off with my severance money and <v Bill Reis>I sold my Mineo, and I make college tuition with

<v Bill Reis>that. <v Karen Reis>It was very strange around the house while they were trying to make the decision. <v Karen Reis>Everybody started getting on everybody's nerves and touchy. <v Karen Reis>But other than that, it was just something that we had to do. <v Karen Reis>My dad didn't really want to get rid of it, but he saw that he had <v Karen Reis>to. He had no other choice. It was either get rid of it or have him take it back <v Karen Reis>because it- it was just too expensive. <v Donna Reis>When trailer payments weren't paid, they would sit and they'd argue and fight <v Donna Reis>because my mom said we had to sell it and my dad didn't really want to get rid of it <v Donna Reis>because he worked hard to get it in. <v Donna Reis>They would sit and fight and argue until finally my dad realized <v Donna Reis>that it had to be sold. <v Pat Reis>He's like a bear now. You know, he used to be a pussy cat, I guess you would call it. <v Pat Reis>Uh my girls have seen the effects of it from him. <v Pat Reis>Every little thing that happens, he uh he growls at

<v Pat Reis>them. And I've seen it with myself. <v Pat Reis>I mean, even though I still love my husband, it's <v Pat Reis>just the idea that I feel the burden. <v Pat Reis>I mean, it's bad when you take home a paycheck today and tomorrow, you have nothing. <v Donna Reis>She cries at night sometimes knowing that some bills aren't paid. <v Donna Reis>You see a lot of tension between the 2 of them. <v Donna Reis>[background chatter] <v Host>On this day, Bill Reis is applying for extended unemployment benefits. <v Host>To remain eligible for unemployment compensation, he must continue to apply <v Host>for at least 4 jobs within a 3 day period each week. <v Bill Reis>I got about 13 dollars an hour at <v Bill Reis>Eaton. <v Bill Reis>And I'm willing to work for 8, 9, <v Bill Reis>9 dollars an hour, which is substantial, less money. <v Bill Reis>But I know these places around here don't- don't

<v Bill Reis>pay as much as they did. <v Bill Reis>And they'll come right out and tell you they don't pay that much. <v Bill Reis>And lot of places hire you for 5 dollars <v Bill Reis>an hour and 4.75. <v Bill Reis>And it don't even match what you bring home for unemployment. <v Speaker>[background chatter] <v Bill Reis>See what we can come across today. <v Donna Reis>?inaudible? <v Bill Reis>?inaudible? Machine shop supervisor, working <v Bill Reis>foreman. <v Bill Reis>We can't do that. <v Bill Reis>Nah. They want NC operators. <v Donna Reis>What's that?

<v Bill Reis>It's a miracle controlled machines, they're computerized. <v Bill Reis>We don't know how to do it. Here's an assembler's job, small company. <v Bill Reis>My God, minimum wage? <v Donna Reis>No benefit. <v Bill Reis>No benefit. <v Donna Reis>You've gotta be kidding. <v Bill Reis>Apply in person. <v Bill Reis>You know, we could try that place today. <v Bill Reis>1 to 3. Don't know, there's hardly anything in here today. <v Bill Reis>Just that 1 job. <v Donna Reis>Let's try it. <v Speaker>[background chatter] <v Bill Reis>After a while, it gets depressing. <v Bill Reis>Well, I got to look for jobs I'm not qualified to do. <v Bill Reis>They tell me I gotta look into something into a different category <v Bill Reis>of work than what I'm used to and what I've been doing. <v Bill Reis>And I applied for warehouse machine operator, <v Bill Reis>truck driver. <v Bill Reis>And 9 out of 10 places don't even take an application.

<v Bill Reis>Or if they do take your application, they don't even interview you. <v Receptionist>The only position that we have is for an assembler at minimum wage. <v Receptionist>Do you want us to hold your application? <v Bill Reis>?inaudible? <v Receptionist>At present. We're a new firm and we're just slowly <v Receptionist>building at this point, all we have is assembly work. <v Bill Reis>They don't want anybody on machines or anything like that? <v Receptionist>Not at this point, whereas I explained, we're brand new and <v Receptionist>our needs are very small at this time all we need is assemblies. <v Bill Reis>Okay, you can hold onto that. <v Receptionist>Someday, if we grow, maybe we'll be able to use your talents. <v Receptionist>Thank you for stopping in. <v Karen Reis>It makes me madder than hell. <v Karen Reis>But there's not too much I can do about it really. <v Karen Reis>Gets me upset. He'll try.

<v Karen Reis>My dad's stubborn. <v Karen Reis>He'll try. <v Bill Reis>I just like to live comfortable, and <v Bill Reis>make a good living. <v Bill Reis>I- I ain't, you know, I'm not gonna get rich. <v Bill Reis>But I just want a comfortable living and raise my kids <v Bill Reis>that's all. <v Host>Bill Reis's problems are small when compared to the tragedies that are all too common <v Host>for the unemployed. <v Host>Barbara Murphy has seen unemployment destroy families. <v Host>She is director of the Bucks County Catholic Social Services Office. <v Host>The office aides the community where the Reises live. <v Barbara Murphy>We see many, many problems because of unemployment. <v Barbara Murphy>We see families where alcoholism becomes <v Barbara Murphy>a concern. We see the compounding of <v Barbara Murphy>the drug situation, both men, women and children seeking

<v Barbara Murphy>whatever relief there would be in turning <v Barbara Murphy>to drugs. <v Barbara Murphy>We see a much higher incidence of spouse abuse, <v Barbara Murphy>child abuse. And I guess I would have to say almost the ultimate <v Barbara Murphy>where the the stress is such that with people seeing <v Barbara Murphy>not any light at the end of that tunnel turning to suicide. <v Barbara Murphy>And that's both husbands, wives and and even as we know, <v Barbara Murphy>increased numbers of children who suicide. <v Reverend David Gracie>It is a very devastating thing. <v Reverend David Gracie>It goes immediately to one's sense of worth. <v Reverend David Gracie>It goes immediately to one's sense of dignity as a human <v Reverend David Gracie>being who is a productive human being. <v Host>The Reverend David Gracie is an Episcopalian priest who took part in the march <v Host>protesting the closing of the Eaton plant.

<v Reverend David Gracie>I think that the basic issue is the issue that Pope John Paul <v Reverend David Gracie>put his finger on in his encyclical on human labor. <v Reverend David Gracie>And that is that the job exists for the sake of the worker. <v Reverend David Gracie>The worker does not exist for the sake of the job. <v Host>Dr. Harvey Brenner is an epidemiologist at Johns Hopkins University. <v Host>His research has concluded that when the annual unemployment rate climbs 1 percent, <v Host>37000 additional deaths occur from cirrhosis, heart disease and <v Host>other stress related illnesses. <v Dr. Harvey Brenner>We see that the suicide rate increases certain aspects <v Dr. Harvey Brenner>are very- great violence increase <v Dr. Harvey Brenner>immediately. The infant mortality rate tends to increase. <v Dr. Harvey Brenner>There are sharp increases in pathological alcohol consumption, especially spirits. <v Host>The losses become more dramatic when the second shock of unemployment sinks in. <v Host>The shock that comes when the unemployed person finds that his next job pays less

<v Host>and has fewer benefits than his previous job. <v Dr. Harvey Brenner>As long as they were in limbo, as long as they were between <v Dr. Harvey Brenner>jobs, between positions, it was possible to imagine that the <v Dr. Harvey Brenner>recession would go away. <v Dr. Harvey Brenner>That is all of the bad things in terms of poor income <v Dr. Harvey Brenner>and lack of work and low self-esteem would ultimately go away. <v Dr. Harvey Brenner>They don't go away for many people because what is left afterward <v Dr. Harvey Brenner>is an even lower position than they had to begin with. <v Dr. Harvey Brenner>So they go through a second period of loss or if you like, a second period <v Dr. Harvey Brenner>of grief associated with loss. <v Dr. Harvey Brenner>A second major loss in life. <v Dr. Harvey Brenner>That loss from most of these people will be permanent. <v Dr. Harvey Brenner>They will not regain their economic and social position for the remainder of their lives. <v Host>Jack Thomas, a former Philadelphia Eton worker, his wife, Lee, and their 2 <v Host>boys are victims of the second shock of unemployment. <v Jack Thomas>I believe my best year was 1978, and if memory recalls

<v Jack Thomas>me right, I made just a little over 23000 dollars. <v Jack Thomas>Right now, my base pay is 14000 dollars. <v Jack Thomas>You're looking at roughly 10000 dollars difference. <v Jack Thomas>And that's a lot of change. <v Lee Thomas>He's not making the money he used to make. <v Lee Thomas>It's his third job since he was laid off from Eaton in as many years. <v Lee Thomas>He still doesn't feel like he belongs there. <v Lee Thomas>He doesn't feel like he fits in. <v Lee Thomas>I think if he wasn't married and didn't have a family to support, he wouldn't have taken <v Lee Thomas>the job. <v Jack Thomas>When I was on unemployment, I was bringing home 198 dollars a week. <v Jack Thomas>And I have a stack of papers that I can show <v Jack Thomas>you. I wasn't sitting on my buns. <v Jack Thomas>I was out looking for a job, but I was getting 198 dollars <v Jack Thomas>to be at my house. <v Jack Thomas>And right now I'm bringing home 210 dollars a week and I'm putting in

<v Jack Thomas>40 hours. <v Host>Dr. Barry Bluestone's research indicates that Jack Thomas is an example of <v Host>what usually happens to an unemployed blue collar worker when he finds another job. <v Dr. Barry Bluestone>If you take the typical auto worker who lost their <v Dr. Barry Bluestone>job 2 years ago, today that auto worker is making 46 percent <v Dr. Barry Bluestone>less. The average auto worker is making 46 percent less <v Dr. Barry Bluestone>than the auto worker who kept his job. <v Dr. Barry Bluestone>Over a period of 6 years, you would think surely enough time for an auto worker <v Dr. Barry Bluestone>to regain a decent job, we're finding that the average auto worker is <v Dr. Barry Bluestone>still 16 percent worse off than he would <v Dr. Barry Bluestone>have been if he had kept his job. <v Dr. Barry Bluestone>In steel, the numbers are almost the same. <v Dr. Barry Bluestone>In aerospace, they're similar. <v Dr. Barry Bluestone>In the petrochemical industry, they're similar. <v Host>Jack Thomas did not expect this problem when he got out of the army in 1968. <v Host>He had just completed 13 months in Vietnam where he earned a Purple Heart.

<v Host>When he came home, he worked here, where the Nesbitt Company used to make heating and <v Host>ventilating equipment. 7 years later, Nesbitt moved south <v Host>and did not ask Jack to come along. <v Jack Thomas>They found some tax free land in the south. <v Jack Thomas>They found paid training. <v Jack Thomas>And I'm not knocking the south, but they were putting me out of work. <v Host>Jack quickly found work at Eaton, where he also stayed for 7 years. <v Host>Then once again, he lost his job to a plant closing. <v Jack Thomas>I was really disturbed. Like I said before, I want a job where <v Jack Thomas>I can be somewhere forever. <v Jack Thomas>I mean, I have friends and relatives who have years and years <v Jack Thomas>with 1 company, and the <v Jack Thomas>company helps them and they help their company. <v Jack Thomas>[background chatter] <v Host>Jack likes to work with his hands. <v Host>His hobby is repairing model railroad cars. <v Host>Being a production dispatcher at Eaton didn't allow him to use his skills.

<v Host>So when he thought Eaton was heading for a shutdown, he decided to go to an auto <v Host>body repair school while continuing to work 12-hour days at Eaton. <v Jack Thomas>I took advantage of the G.I. Bill and went to a local school <v Jack Thomas>for auto body repair. <v Jack Thomas>It was timed just about right. I saw Yale going downhill and <v Jack Thomas>I figured I'd better get some- something else to fall back on in <v Jack Thomas>case they did. <v Lee Thomas>Jack's schedule was: get up at 7:00 in the morning, be at school at 8:00. <v Lee Thomas>From 8 to 3 was school. <v Lee Thomas>I would have to make break- a lunch for him before he'd go, pack lunch. <v Lee Thomas>I'd have to have dinner ready when he came home from school at 3:15 because he had to <v Lee Thomas>leave the house a quarter to 4:00 to go to his full-time job, which he worked from <v Lee Thomas>4:00 o'clock to 4:30 at Eaton Corporation. <v Lee Thomas>That was the night shift. He'd come home. <v Lee Thomas>He'd need about half an hour to unwind.

<v Lee Thomas>He'd read the paper or something. Then he'd go to bed for an hour and a half. <v Lee Thomas>Get up. Start the day all over. For a year and a half, almost 2 years, he did this. <v Lee Thomas>I woke him up 1 time and he knew where he was at. <v Lee Thomas>He didn't remember what day it was. <v Lee Thomas>He didn't know where he was supposed to go to. <v Lee Thomas>And that's when I started to really get concerned. I thought, you know, I mean, I knew he <v Lee Thomas>was overdoing it, but he wouldn't quit. <v Lee Thomas>He's not a quitter. <v Host>Jack finished school on almost the same day that Eaton shut down. <v Host>He has a job today, but not because he went to school. <v Host>And he is making little more than half of what he made at Eaton. <v Jack Thomas>Once you've done your training, most of your schools lead you to believe that <v Jack Thomas>when you're done, you're going to go out and you're going to set the world on fire. <v Jack Thomas>And it doesn't happen. And you go to a place and they say, well, you know, what <v Jack Thomas>kind of experience do you have? <v Jack Thomas>Well, I just got out of school. Well, fine. We have a job here and we can make- start you <v Jack Thomas>out at 3.50 an hour. <v Jack Thomas>You can't support a house. You can't support kids. <v Jack Thomas>You can't feed yourself on 3.50 an hour.

<v Jack Thomas>And you get angry. Uh the job that I have <v Jack Thomas>now, I took 1)because I want to stay in painting <v Jack Thomas>for a while, and 2) I need the benefits. <v Jack Thomas>I could've went to any number of small body shops to practice my trade. <v Jack Thomas>But the majority of those body shops can't afford to pay BlueCross and BlueShield <v Jack Thomas>and I can't afford to pay it on my own. <v Lee Thomas>I think Jack's a victim of circumstance, the wrong place <v Lee Thomas>at the wrong time. Even was a very good place to be. <v Lee Thomas>But since then, things for him just don't go right. <v Lee Thomas>There were times when I felt that he was blaming me and the children for him not being <v Lee Thomas>able to try something new. The past years it's been um- <v Lee Thomas>it hasn't been as good as it was. We go to counseling now. <v Lee Thomas>I expect it may get a lot worse. <v Lee Thomas>Until he finds what he looking for. <v Lee Thomas>Until he finds something that means as much <v Lee Thomas>to him, I guess as I do, that he can feel

<v Lee Thomas>that he's accomplishing something in life. <v Lee Thomas>I think he's going to have <v Lee Thomas>this depression to some extent or other. <v Lee Thomas>I don't know. I don't know whether he resents me, whether he resents his whole life. <v Lee Thomas>It hurts when you don't have what you used to have. <v Host>Tom Barrett worked at Eaton for 23 years. <v Host>Shortly after he lost his job, his wife Phyllis was laid off. <v Host>They have 3 sons. Their oldest boy is out of school and laid off <v Host>like many other unemployed workers. <v Host>Tom is trying to go into business for himself. <v Tom Barrett>I knew the plant with closing so I uh um- we took our vacation <v Tom Barrett>money, matter of fact, that year, and I- I bought

<v Tom Barrett>a very old 1971 Chevy truck. <v Tom Barrett>And it was in bad, very bad shape. <v Tom Barrett>And my wife and I had a big- that was our first fight over <v Tom Barrett>money, when the plant- knowing the plant was going to close, I told her we <v Tom Barrett>couldn't take a vacation this year, that I was gonna spend our vacation money on this <v Tom Barrett>truck. And I actually rebuilt the truck. <v Tom Barrett>My brother helped me. We- I rebuilt the truck from the ground up. <v Tom Barrett>We put another motor in the windshield and it didn't cost <v Tom Barrett>a lot of money, the truck. But in the long run, the investment I put in it was pretty <v Tom Barrett>extensive. I would like to have a small business. <v Tom Barrett>More a something more in control of my fate than than <v Tom Barrett>than it was at the plant. <v Tom Barrett>I'd like to start a small business and earn a living. <v Tom Barrett>Just earn a living that's- I'm not- at my age, I'm not out to uh <v Tom Barrett>conquer the world anymore, I just- I just want to earn a living and I hope to

<v Tom Barrett>be able to use a truck to do in real estate, clean house <v Tom Barrett>and I'm cleaning cellars, I'm doing anything manual that I <v Tom Barrett>can to make a dollar. <v Tom Barrett>I had a choice between maintaining the insurance on my truck <v Tom Barrett>that I bought to work with and the car. <v Tom Barrett>So I- I sold the car in order to keep the truck on the road 'cause I could <v Tom Barrett>earn a dollar with the truck. I can't earn anything with a car. <v Tom Barrett>So I let the car go and we're just using the big truck now to go <v Tom Barrett>grocery shopping and we're driving around this big old truck. <v Tom Barrett>The insurance is due in April. <v Tom Barrett>And I don't know, I may be parking the truck uh if <v Tom Barrett>I can't get enough money up for the insurance on a truck, <v Tom Barrett>I may not be. I may have to go out of business. <v Tom Barrett>The small, tiny business that I'm in and work for somebody <v Tom Barrett>else until things do get better and then go back on my own again.

<v Phyllis Barrett>In the beginning, he was depressed. <v Phyllis Barrett>He was very, very mad at the company for moving. <v Phyllis Barrett>He thought he was going to be secure and that he put <v Phyllis Barrett>so much of himself into that company and they turned around and didn't <v Phyllis Barrett>care what happened to him. <v Phyllis Barrett>He just. <v Phyllis Barrett>It affected men, I think. Terrible. <v Phyllis Barrett>They just. <v Phyllis Barrett>They're- all their dreams were, you know, in that factory, goin' to work <v Phyllis Barrett>supporting their family and it was taken away from them. <v Phyllis Barrett>They felt lost. <v Phyllis Barrett>They were scared. They didn't know what to do. <v Phyllis Barrett>And it is going to be hard for them to find other jobs. <v Phyllis Barrett>Especially the kind of work that they did, which is no longer around. <v Tom Barrett>At 43, it's hard to start over again. <v Tom Barrett>And I have to compete with people like my 18-year-old son. <v Tom Barrett>If he walked in for a new job in a factory or a whatever,

<v Tom Barrett>whatever field he chooses, I would feel that if I was the employer, <v Tom Barrett>I would hire my son. He's- he's 18 and bright-eyed, and I'm 43 and <v Tom Barrett>uh [laughs] I would hire him. <v Tom Barrett>I had BlueCross and BlueShield, a dental plan, and I had a retirement plan. <v Tom Barrett>Right now we have- we have no coverage at all. <v Tom Barrett>I don't know. I hope, I pray to God nothing goes wrong with the uh with <v Tom Barrett>her health or my health, you know, or the children. <v Tom Barrett>But right now we have no coverage. <v Tom Barrett>We're not covered at all. <v Tom Barrett>That's a big thing in your life. <v Tom Barrett>A little more security. We lost due to the closing of the plant. <v Tom Barrett>Learned to live with a little fear. <v Phyllis Barrett>Right now there is no American dream. <v Phyllis Barrett>There is no money or jobs out there to save for <v Phyllis Barrett>a dream.

<v Host>Do these victims of the second loss, these workers who have found jobs that pay far <v Host>less than their previous jobs paid, for them the health risks are as serious <v Host>as for those who remain unemployed? <v Dr. Harvey Brenner>In the second phase of loss and grief, <v Dr. Harvey Brenner>we typically find an increase in heart disease mortality <v Dr. Harvey Brenner>and stroke mortality. <v Dr. Harvey Brenner>In a variety of chronic disease-related death, um <v Dr. Harvey Brenner>diseases which take a while to develop, which is why we call them chronic, <v Dr. Harvey Brenner>but uh mortality does not occur immediately. <v Dr. Harvey Brenner>It takes about 2 to 3 years to come <v Dr. Harvey Brenner>to its peak following the recession. <v Host>The 2500 jobs lost at Eaton's Philadelphia plant since 1968 <v Host>are a small fraction of the 30 million industrial jobs that have disappeared in the

<v Host>United States in the past 15 years. <v Host>There are many reasons those jobs are gone. <v Man>You still have some people working here? I thought the plant was closed. <v Security Guard>The production part is. That's closed tight. <v Host>Companies like Eaton, for example, rarely closed factories because of bankruptcy. <v Host>They often close plants because such shutdowns improve their financial picture. <v Joseph Eagen>I noticed in BusinessWeek this week it said, "In 1982, Eaton <v Joseph Eagen>closed 5 facilities and discontinued its lift truck operation. <v Joseph Eagen>Through contributing to company's first loss in 50 years, these actions strengthened <v Joseph Eagen>Eaton's financial position. <v Joseph Eagen>Over the past 3 years, Eaton cut its debt by 40 percent, drove down its break, even cost <v Joseph Eagen>by 500 million, generated positive cash flow of 300 million." Well, <v Joseph Eagen>that says it all. <v Joseph Eagen>It's become a financial corporation instead of making products. <v Host>The Reverend David Gracie thinks the Eaton closing is an example of a corporation <v Host>emphasizing profits over workers.

<v Reverend David Gracie>But what we have with Eaton and what we've seen with other corporations is <v Reverend David Gracie>that it becomes the sole measure and not just profit, but the <v Reverend David Gracie>highest possible profit becomes the only determining factor <v Reverend David Gracie>about where you produce, who you hire, who you fire. <v Reverend David Gracie>And we can't let that continue. <v Host>Eaton does not agree that it turned its back on workers for the sake of profits. <v Host>The corporation feels it did what it had to do to stay in the forklift business. <v Host>In a telephone conversation, Eaton vice president Daniel Brubeck stated <v Host>that: "Japan can beat the pants off us in making the mass-produced forklift. <v Host>To avoid being pushed out of the market, Eaton bought into a Japanese forklift firm. <v Otis Port>You're talking basically about whether or not a company can sell its product. <v Otis Port>Now, if the most important thing to a company is selling its product, it's got to do <v Otis Port>whatever it needs to do in order to remain competitive. <v Otis Port>Now, as you said, the Japanese are selling forklifts in the US for <v Otis Port>substantially less, approximately 20 to perhaps as much as 30 percent

<v Otis Port>less than what forklifts made in the United States sell for. <v Otis Port>If a company wants to continue selling product, continue to continue to be profitable, to <v Otis Port>continue to be viable, to remain in business, it's got to do whatever is necessary. <v Otis Port>In this particular case, going offshore makes the most sense, providing the company <v Otis Port>doesn't have the wherewithal or the expertise to automate. <v Host>Dr. Bluestone wants companies to find automation much more attractive than relocating <v Host>plants overseas. He wants current tax and tariff laws changed <v Host>because he says they give companies incentives to relocate. <v Host>He wants changes in interest rate regulations that would make it cheaper for a company to <v Host>modernize rather than relocate. <v Host>And he wants legislation that requires companies that are not going out of business to <v Host>give a 1-year notice to employees of a plant that is about to shut down. <v Dr. Barry Bluestone>We need to slow down that capital mobility. <v Dr. Barry Bluestone>I don't think it's possible or perhaps even desirable to stop it altogether. <v Dr. Barry Bluestone>But the speed at which capital is moving, just the sheer velocity

<v Dr. Barry Bluestone>of capital mobility is so rapid that it leaves workers, <v Dr. Barry Bluestone>their families and communities with no way to plan. <v Dr. Barry Bluestone>So some of the national legislation we need includes plant closing legislation <v Dr. Barry Bluestone>like several European countries have. <v Otis Port>The European companies used to be much better at international competition than they are <v Otis Port>now. And I have and, you know, I have not looked into the situation carefully, but I <v Otis Port>would suspect that those penalties are one reason why they are losing market share in the <v Otis Port>international markets. The penalty wouldn't work without substantial tariffs <v Otis Port>at the borders. In other words, you're- the minute we start embarking on a course like <v Otis Port>that, we're taking the first steps towards erecting a fence around the United States. <v Otis Port>And it just ain't going to work in today's world. <v Host>No one would be debating this issue if foreign products were not saturating the American <v Host>market today. We import 28 percent of our cars, 18 percent <v Host>of our steel, 55 percent of our electronic consumer goods. <v Host>Foreign products are a large part of the U.S.

<v Host>market because many American consumers believe they are reliable and often less <v Host>expensive than their American competition. <v Host>The lower wage overseas is 1 reason foreign products are cheaper, but not the <v Host>major reason, according to Richard DeLone, an employment policy analyst. <v Richard DeLone>Some industry studies looking at, for instance, Japanese auto industry versus <v Richard DeLone>the U.S. auto industry, conclude that labor costs and labor <v Richard DeLone>productivity aren't all, in fact, all that much different, as we imagined it to be, but <v Richard DeLone>it has much more to do with the kind of capital plan, capital investments and marketing <v Richard DeLone>strategies that had been chosen. <v Richard DeLone>There have been several studies done by quality experts, by productivity experts <v Richard DeLone>and by management consultants. <v Richard DeLone>And generally the number is pretty consistent, about 80 percent of it. <v Richard DeLone>Maybe a little bit more is attributable to management. <v Richard DeLone>If Detroit had started manufacturing small cars in 1971 <v Richard DeLone>instead of- instead of waiting until the late 70s, its products <v Richard DeLone>would be competitive. But they decided now they're going to continue to manufacture

<v Richard DeLone>dinosaurs and they did. You can't blame the workers for that. <v Otis Port>So many of the things that are- that are wrong with or that uh that U.S. <v Otis Port>businesses done improperly or incorrectly have been due <v Otis Port>I think in large part to the fact that a lot of our executives today have never worked <v Otis Port>in a factory, have no line experience. <v Otis Port>They've gone to a business school that's trained them to be financial manipulators, and <v Otis Port>they're exceedingly good at that. <v Otis Port>What they just don't understand the problems in the factory floor and a lot of the <v Otis Port>decisions that should be made aren't being made or are being made <v Otis Port>improperly. <v Host>Although most of the blame for shutdowns goes to management, some of the blame must be <v Host>shared by unions. This was once the Midvale-Heppenstal steel mill in Philadelphia. <v Host>This was once the largest steel press in the Western Hemisphere. <v Host>Foreign competition threatened its existence for years, but the final blow came <v Host>in 1977, when workers and management could not agree on a new contract. <v Robert Fina>Primarily, there was a union dispute going on <v Robert Fina>at Midvale with a long strike and a long strike that turned, I suppose, um

<v Robert Fina>unfortunately nasty on both sides. <v Dr. Harvey Brenner>There's a maintenance of a pattern of <v Dr. Harvey Brenner>um uh bitterness on the part of those whom we refer <v Dr. Harvey Brenner>to as labor and management. <v Dr. Harvey Brenner>But as part of the tradition of their training, as part of the pattern of their <v Dr. Harvey Brenner>behavior with each other, and unless that is broken into, somehow, it just maintains <v Dr. Harvey Brenner>itself under conditions of crisis. It becomes worse. <v Dr. Harvey Brenner>There is- there is warfare. There are strikes, there are lockouts, there are shutdowns. <v Dr. Barry Bluestone>If we are to move toward greater cooperation between business, labor <v Dr. Barry Bluestone>and government, it has to be based on some semblance of fairness. <v Dr. Barry Bluestone>You know, what we have now, in effect, is a poker game in which <v Dr. Barry Bluestone>labor and management come to the table together, but management <v Dr. Barry Bluestone>has all the chips. <v Dr. Barry Bluestone>We have an economy now which allows management to say, if you don't like the deal we're <v Dr. Barry Bluestone>offering, we'll pick up our chips and go somewhere else.

<v Otis Port>I suppose that uh that I would lay most of the blame on the unions <v Otis Port>for the confrontational nature of the relationship between labor <v Otis Port>and management. <v Otis Port>The 1 thing that the Japanese do that we need to learn more about, <v Otis Port>that we need to learn how to do better is cooperate between labor and management. <v Host>This is an American version of what the Japanese do to create cooperation between labor <v Host>and management. These men are hourly employees at Merck Sharp and Dohme, <v Host>the pharmaceutical company. <v Host>They are part of a group of employees and supervisors who are meeting to improve <v Host>productivity and discuss how to save the company money. <v Host>They belong to what is called a quality circle, a process widely used in <v Host>Japan. <v John Dresher>A fellow named General MacArthur, Douglas MacArthur, imported it to Japan <v John Dresher>when he was in charge of the occupation and along with the help of a <v John Dresher>Doctor Ishikawa. <v John Dresher>They were able to expand the program to the point where

<v John Dresher>it became a very efficient way of managing, and a very concerned way of managing, concern <v John Dresher>in regards to how you treat people. <v John Dresher>And the better you treat people, the net result is the better your product, the better <v John Dresher>your product, the stronger your company becomes. <v Manager>Is this your first experience of being able to have a say in <v Manager>your work process? This quality circle? <v Worker>Yeah, I think as a group it is, like- like Bob had said, <v Worker>you know, he was on a 1 to 1 basis. You had to go into the office and when you're on your <v Worker>own, if you want any ramifications done or something. <v Worker>But here we can meet as a group you know and- and share the ideas <v Worker>and come up with 1. <v Manager>What advantages do you see to this type of process? <v Manager>Over the former process where you would just end up going up to your boss and saying, <v Manager>look, I had this idea, this isn't working. <v Worker 2>Everyone's an equal now. In this room, everyone's an equal. <v Worker 2>My idea is just as valuable as a director's or anyone <v Worker 2>from corporate, or my immediate supervisor, or someone who may be my coworker.

<v Worker 2>All our opinions are equal. <v John Dresher>Both sides, if you will, have to make a commitment. <v John Dresher>They've gotta learn to listen, when I'm not so sure that everyone was willing to listen <v John Dresher>in the past, and if they listened, do they really understand? <v John Dresher>I think maybe what's happened to the economy in the last couple of years has- has forced <v John Dresher>us to understand each other. <v Host>This supermarket is a good example of what can happen when both sides are willing to <v Host>listen. Cooperation between management and labor created this O & O, <v Host>a former A & P that is now owned and operated by employees. <v Host>When A & P decided that it was going to close its supermarkets in the Philadelphia area, <v Host>the Food and Commercial Workers Union, representing A & P workers, stepped in. <v Wendell Young>The week that we were going to announce uh the- that the- we're going to bid on 2 <v Wendell Young>stores, we decided to put a bid on all the stores that A & P were closing in southeastern <v Wendell Young>Pennsylvania [fade to background]. <v Host>Wendell Young is president of Philadelphia's Food and Commercial Workers Union. <v Host>By negotiating with A & P, he put many union members into the supermarket business. <v Wendell Young>What happened was, after we bid on these 2 stores and then extended the bid on

<v Wendell Young>all the stores, it generated negotiations with the parent company A & P. <v Wendell Young>We came out with this new program of super fresh, which is part ownership, where <v Wendell Young>employees get 1 percent of the gross volume. <v Host>During negotiations, the union agreed to an average pay cut of 2 dollars an hour for <v Host>its super fresh employees. <v Host>O & O owners and employees have also taken the cut. <v Host>A & P agreed to remain in Philadelphia through the newly created subsidiary Super <v Host>Fresh, and A & P agreed that the chain would be partly owned by employees. <v Host>A& P sold to stores outright to 43 union employees who turned them into <v Host>O & O's. This agreement saved over 2000 jobs and made Leo Maiorini, <v Host>an owner of a supermarket. <v Leo Maiorini>There are 25 of us that own the store. <v Leo Maiorini>I would estimate there were done somewhere in the vicinity of 30 percent better than A & <v Leo Maiorini>P did. I don't feel as restricted as I did when I worked for A & P. <v Leo Maiorini>Anything that we want to do in a store, the sale items, how we want to run the business <v Leo Maiorini>and so on, I have a direct input into it, which I did not have working for a chain,

<v Leo Maiorini>and that in a sense has to make you feel like you're part of something. <v Leo Maiorini>We're in it to make a profit, but we're not in it to make it an exorbitant profit. <v Leo Maiorini>This is a living for us. <v Leo Maiorini>We- we don't have to answer to a board of directors in- in the sense that a chain does. <v Leo Maiorini>If our bottom line is too little or- or- or not enough. <v Leo Maiorini>So we- we basically price str- do a price structure where it's enough for us to show <v Leo Maiorini>a moderate profit, but then just enough to run the business and keep us- to keep us <v Leo Maiorini>working. <v Host>Until the workers bought the O & O's work of buyouts in this country took place only in <v Host>heavy industry. They had saved over 100000 jobs, and Wendell Young <v Host>believes they could have saved more. <v Wendell Young>A good friend of mine, Norman Lahnslager, was involved in that Eaton situation in <v Wendell Young>northeast Philadelphia, and I think it'd be much easier to do in an Eaton situation than <v Wendell Young>in a retail store where you have 8 to 10 to 12 thousand different items and you have <v Wendell Young>to know all kinds of how light moves and a lot of different factors involved the retail <v Wendell Young>store like this.

<v Host>Even if labor and management become partners in an effort to save jobs in industry for <v Host>this country, there is another hurdle that may be bigger than both of them. <v Otis Port>Studies have been done which show that it is possible to build most products <v Otis Port>that the Japanese undersell us on here in the United States for at least <v Otis Port>as little as the Japanese to providing we automate. <v Otis Port>But you still throw the people out of business. <v Host>It is the catch 22 of today's economy in order to compete with foreign <v Host>markets. Companies have a choice either move overseas or automate. <v Host>Either decision tosses millions of Americans out of work. <v Host>This is a robot arm at Marck Sharp and Dohme. <v Host>To some workers, it is simply called scab. <v Interviewer>How did you do it for me? <v Line Supervisor>[coughs] Excuse me. We had 2 people hand-feed the belt, pick them out of the <v Line Supervisor>trays, and put them onto the belt. The advantage is you have control <v Line Supervisor>mechanically over the line.

<v Line Supervisor>You have complete control, and actually what we're doing is competing with foreign <v Line Supervisor>markets. A foreign- look at the Japanese. <v Line Supervisor>They're using robots- look their um the auto industry, completely mechanized. <v Line Supervisor>We have to compete with the competition. <v Host>Merck Sharp and Dohme is part of the high tech industry. <v Host>It is eliminating some of its jobs through such high tech innovations as this robot arm. <v Host>To compete with overseas markets, heavy industry is doing the same. <v Host>Detroit's automakers have installed 2800 robots in their factories, <v Host>and that is just the beginning. <v Host>A Harvard Business School study concluded that to compete with Japan, Ford can keep <v Host>only half of the 256 thousand workers it had in 1978. <v Otis Port>We are right now on the threshold of a massive transition to robotics. <v Otis Port>There are industries that are talking about displacing tens of <v Otis Port>thousands of workers over the next 20 years or so by robots. <v Otis Port>Going to robotics fully means redesigning your plant to make maximum

<v Otis Port>effect, to realize maximum benefits from the robots. <v Otis Port>And when that happens, you're going to displace a lot of the peripheral workers <v Otis Port>other than just the guy who's doing the job that the robot does as well. <v Otis Port>So some people say that it's possible that each robot may displace as many as 8 or 9 <v Otis Port>workers. I think that's a little bit high, but let's say it's at least 5 or 6. <v Host>Some economists estimate that robotics will permanently eliminate over a million <v Host>blue-collar workers by the year 2000. <v Host>Where do these blue-collar workers turn for jobs? <v Host>1 answer often given is high technology. <v Dr. Barry Bluestone>High tech at most today employs 2 and a half percent <v Dr. Barry Bluestone>of the total labor force. <v Dr. Barry Bluestone>97 and a half percent of all workers in America work outside of high tech. <v Dr. Barry Bluestone>And even in Massachusetts, the high tech capital of the world, we are <v Dr. Barry Bluestone>up all the way to 11 percent of the labor force in high tech. <v Dr. Barry Bluestone>Almost 9 out of 10 jobs are outside of that sector. <v Dr. Barry Bluestone>So even if the rest of the country were to catch up with Massachusetts, we're still <v Dr. Barry Bluestone>talking 90 percent or more of the labor force outside of high tech.

<v Dr. Barry Bluestone>It's not going to save us. <v Otis Port>High technology is using high technology. <v Otis Port>Texas Instruments, which makes computers and microchips and all <v Otis Port>that kind of stuff, used to make watches, calculators, <v Otis Port>uses robots. IBM uses a lot of robots, as a matter of fact, they're- they've even become <v Otis Port>a robot producer or supplier, and they are selling robots on the open market now. <v Otis Port>Now, most of your high technology jobs, there are not <v Otis Port>that many of them to begin with. <v Otis Port>And secondly, they're not all that well-paying. <v Dr. Barry Bluestone>It means for the ex-shoe worker or the worker once had a job in the apparel <v Dr. Barry Bluestone>industry, that worker is 5 times more likely to end up working at McDonald's <v Dr. Barry Bluestone>than working at Digital or Wang or Prime Computer. <v Dr. Barry Bluestone>The implications for America of that downward mobility is <v Dr. Barry Bluestone>immense. It's tremendous. <v Host>And high technology does not guarantee job security. <v Host>The workers and the quality circle at Merck Sharp and Dohme are threatened with layoffs <v Host>because the product they produce is being phased out.

<v Worker>I don't think there's anyone who feels absolutely secure in my position that I've got it <v Worker>and that's it. <v Worker>You can go anywhere, any industry today, and you're going to find out that <v Worker>you don't have the securities of the 60s and the early 70s. <v Host>Most blue-collar workers have little chance of getting a high tech job without going <v Host>through retraining programs like the one at this computer school. <v Host>Because of the expense involved, only about 1 tenth of 1 percent of the American <v Host>workforce is usually in a retraining program. <v Richard DeLone>The status of retraining in the U.S. <v Richard DeLone>today is just about at ground 0. <v Dr. Barry Bluestone>In some countries Germany, Sweden, we have a very active <v Dr. Barry Bluestone>training, retraining and retraining program. <v Dr. Barry Bluestone>That is, the government is committed to a large <v Dr. Barry Bluestone>program of retraining, migration allowances. <v Dr. Barry Bluestone>I think in Sweden, for example, something between 2 and 3 percent of the labor force is <v Dr. Barry Bluestone>always undergoing retraining.

<v Dr. Barry Bluestone>They're always on top of the new technologies. <v Richard DeLone>Well, a number of West- uh Western European countries have an approach, <v Richard DeLone>which seems to me to make more sense. <v Richard DeLone>Germany, France, and others. <v Richard DeLone>And the basic element of that approach, which is- which is missing here, <v Richard DeLone>I think it's particularly important, is that this is a continuous <v Richard DeLone>process. It's not an emergency service that you're trying to slot in <v Richard DeLone>and that it has a routine, predictable funding base, because <v Richard DeLone>corporations are taxed to contribute to retraining. <v Host>Many blue-collar workers who have found jobs have found them in the service sector. <v Host>Today, McDonald's employs more people than U.S. <v Host>Steel. But salaries for service jobs do not compare with blue-collar wages. <v Richard DeLone>There's been tremendous amount of job creation in this society in the last 10 or 15 <v Richard DeLone>years. And a lot of those jobs have been low-paying jobs. <v Richard DeLone>You look at the- at the fast food industry is just 1 commonly cited example. <v Richard DeLone>Didn't exist really 15 years ago.

<v Richard DeLone>And now it's all over the place and employs tens <v Richard DeLone>and tens of thousands of people. <v Richard DeLone>That's become sort of the new unskilled labor in America. <v Dr. Barry Bluestone>Large numbers of the 3 million workers who have lost their jobs in the last 4 years <v Dr. Barry Bluestone>in the basic industries are finding either that they can't find new jobs at all <v Dr. Barry Bluestone>because the entire economy of their communities is in <v Dr. Barry Bluestone>disarray or when they're finding new jobs, they're finding them in <v Dr. Barry Bluestone>McDonald's and Kmart, jobs that pay perhaps no more than one <v Dr. Barry Bluestone>half or one third of the wage they were used to. <v Host>And although service jobs are growing rapidly, they are not coming close to replacing the <v Host>number of jobs lost in this country. <v Otis Port>The service sector is not capable of absorbing, or at least it doesn't seem <v Otis Port>to be capable of absorbing all the people that are being displaced from the industrial <v Otis Port>sector. So the question is, what do we do with those people? <v Host>Small businesses like the Delta Paper Company in Philadelphia are a partial answer. <v Dr. Theodore Hershberg>We found also statistically that over the last 5 years that 80 to 90

<v Dr. Theodore Hershberg>percent of the jobs that were created came from small businesses, came from firms <v Dr. Theodore Hershberg>that employed 200 people or less, with the majority of those firms employing 50 <v Dr. Theodore Hershberg>people or less. That's a national statistic. <v Host>That is the good news. The bad news is that jobs in small businesses often pay <v Host>less than similar jobs in large firms and often have a short lifespan. <v Host>Last year, over 25000 businesses went bankrupt. <v Host>The vast majority of them were small businesses. <v Dr. Barry Bluestone>It is true that small business produces a lot of new jobs, but it also <v Dr. Barry Bluestone>is true that it destroys a lot of new jobs. <v Dr. Barry Bluestone>The average period of time between a startup <v Dr. Barry Bluestone>of a new small firm and its closing is very brief 2, 3 <v Dr. Barry Bluestone>years. We know, for example, that of all the small businesses <v Dr. Barry Bluestone>that existed in 1969, 51 percent of them were no longer <v Dr. Barry Bluestone>in business by 1976. <v Otis Port>Frankly, when you take all the possibilities and add them all up and I haven't done this

<v Otis Port>methodically, so I'm just speculating, OK, it seems to me that we're still not <v Otis Port>going to be able to absorb all the people that are <v Otis Port>being displaced from the manufacturing sector into productive jobs in the U.S. <v Host>In northeast Philadelphia, many former Eaton workers have not been absorbed by the <v Host>economy. They represent the painful end of an era in the American workplace. <v Danny Chmelko>I think a lot of these people saw their dreams shattered. <v Danny Chmelko>They came into this plant as young boys following their father's <v Danny Chmelko>footsteps in the same plant when it was down at ?Taconey? <v Danny Chmelko>Street and Bridesburg. Now they've seen their dreams shattered. <v Danny Chmelko>Their job is eliminated. Their sons will never have an opportunity to follow <v Danny Chmelko>in their footsteps. It's a say- it's a shame to see a dream turn into a nightmare, <v Danny Chmelko>but it's no doubt it's been shattered for them. <v Dr. Theodore Hershberg>The economy that offered low-skilled, entry-level jobs is gone. <v Dr. Theodore Hershberg>So here they are. And we didn't create it ?inaudible? <v Dr. Theodore Hershberg>He doesn't deserve that problem.

<v Dr. Theodore Hershberg>It's a national problem. That guy sitting up in- in- in the northeast whose unemployed, <v Dr. Theodore Hershberg>he didn't create that problem. It's now his problem now. <v Dr. Theodore Hershberg>What's he going to do? He can't solve it by himself. <v Dr. Theodore Hershberg>And our cities aren't going to solve it by themselves. It's a national problem; it needs <v Dr. Theodore Hershberg>to be addressed politically. <v Host>There are no easy political solutions for the problems facing blue-collar workers today. <v Host>The combination of solutions we have seen are only a partial answer. <v Host>Unless labor management and government can develop long term solutions to the problem, <v Host>millions of skilled Americans who are once the backbone of this nation will become <v Host>economically crippled for the rest of their lives. <v Dr. Theodore Hershberg>What it means for our society is that workers who <v Dr. Theodore Hershberg>have always believed in the American way of life, have believed that if <v Dr. Theodore Hershberg>they worked hard, if they played according to the rules of the game, <v Dr. Theodore Hershberg>they would be able to have a better life in the future than they are today. <v Dr. Theodore Hershberg>For those workers, we're finding that the American dream is shattered. <v Host>Bill Reis found a job 11 months after being laid off. <v Host>It paid 120 dollars less a week than Eaton.

<v Host>6 weeks after getting the job, he and 3 other workers were laid off. <v Host>Jack Thomas is still earning about 10000 dollars less a year than he was making at Eaton. <v Host>Tom Barrett's trash collection business is failing. <v Host>He is now actively looking for work. <v TV Host>This program was produced by WITF TV, which is solely responsible for its

<v TV Host>content and was made possible by grants from the Pennsylvania Public Television <v TV Host>Network, the Pennsylvania Humanities Council, and the Philadelphia <v TV Host>Foundation, United Methodist Urban Ministries, American Baptist National Ministries, <v TV Host>and the Presbyterian Church, USA.