It is clear that the job market in this country is going through a fundamental transition, second in its impact only to the massive move from farm to factory that began a century ago.
This upheaval is fed by a number of forces -- new technologies, tough international competition and powerful changes in consumer choices.
One place to read the early signs of this shift is the state of Massachusetts. A century ago, its mill towns and city factories made it a capital of the industrial age. Then two decades ago, the sprouting of computer and research firms surrounding Boston on Route 128 made it a nursery of the high-tech era.
It is likely, some experts argue, that Massachusetts provides a glimpse of what the entire nation will experience in the coming decades. "It's a precursor of what will happen elsewhere," says Ben Chinitz, dean of the college of management at the University of Lowell.
The state emerged from the 1981-82 recession in fine shape, if unemployment is the criterion. This May, for instance, the state's jobless rate was only 4 percent, one of the lowest in the nation, and well below the nation's average of 7.5 percent that month.
This rosy complexion is in sharp contrast to the state's appearance after the 1974-75 recession, when it emerged with an unemployment rate of 9.5 percent -- fourth worst in the nation.
Behind this improvement is a strong increase in new jobs in the state, says Chinitz.
Another reason for Massachusetts' declining unemployment rate is a slowing of its population growth, as fewer young people enter the labor force seeking new jobs.
And something else has been happening. Massachusetts has been losing ground to the rest of the nation in terms of the wages received by its manufacturing workers and in its standard of living compared with other states, says D. Quinn Mills, a professor at the Harvard Business School. In 1973, the state's manufacturing workers received 5 percent less than the national average manufacturing wage. In 1982, they received 10 percent less, according to a study by the Federal Reserve Bank of Boston.
Granted, Massachusetts is losing ground from an enviable position as a longtime leader in wealth among the states. But its relative decline is a "microcosm of where the United States is headed," warned Mills, speaking at a Harvard conference on industrial policy a week ago.
Fifty years ago, Massachusetts was twice as heavily industrialized as the average for the nation, based on the proportion of its work force holding factory jobs. As its traditional industries declined, it has lost much of this advantage. "It's gone through a process of deindustrialization," says Chinitz.
A driving force for that shift was the availability of cheaper labor in other parts of the United States and overseas.
The entire nation is facing a growing threat to its industrial sector in the same sense, says Mills. Many observers had hoped and predicted that labor costs would become less of a competitive disadvantage for the United States as the wage scales and standards of living rose in the industrial centers of Europe and Japan.
Instead, the gap has been growing. In 1975, for instance, a U.S. steelworker received an average of $10.24 an hour in wages and benefits, while a Mexican steelworker got $2.27 (22 percent of the U.S. figure). In 1982, while the U.S. steelworker received $22.20, the Mexican steelworker got $3.28, only 15 percent of the American figure. And with the dollar's escalation, that gap is even wider, Mills said.
Longer range, it is the Third World, led by Mexico, South Korea and Brazil, that represents the greatest long-range challenge to U.S. industry. A flood of young workers entering their labor markets between now and the year 2000 will keep downward pressure on labor costs, Mills said. And those nations are pouring resources into manufacturing.
In this country, there will be a gradual decline of new workers entering the job market, and very likely shortages of skilled manufacturing labor, says Mills.
Such shortages will put upward pressure on manufacturing wages in this country, and there will be an incessant struggle to hold on to manufacturing jobs because of the competition from lower-wage countries, he noted.
There is another lesson from Massachusetts' experience. The decline in industrial jobs there has been offset in part by the impressive growth of high-tech manufacturing employment and service jobs. The state's computer industry has spawned software specialists, technical consultants, programming consultants and experts to teach programmers -- communications experts to let computers communicate more easily.
The worry, says Mills, is that typically, there is more capital invested in manufacturing jobs than in service jobs, sales, consulting and other non-manufacturing work. Typically, the more capital invested in a job, the more tools a worker has to command. And that makes the worker's labor more valuable, contributing more to a rising standard of living.
The hope is that some of the new kinds of jobs being created in the state -- in telecommunications, computing and business services -- will attact a rising level of professional and skilled workers repesenting an investment in capital of a different kind: knowledge.