Prophets of pessimism are busily spreading a new myth about America's jobs situation. They acknowledge that millions of new jobs are being created in this country (13 million since 1982), but then go on to argue that they are not the right kind of jobs -- that they are in the service sector rather than the industrial sector and are thus mostly part-time, low-wage, dead-end positions. (For a couple of examples of this, see the article by Lance Compa in Outlook of March 15 and one by Barry Bluestone and Bennett Harrison in the business section May 17.)
Seldom have I seen such bad information given such wide play and granted such instant credibility. It's as if we were to accept the idea that producers of goods have no need of telephones, computers, engineering, banking, insurance, accounting, training or any of a host of similar services.
In truth, manufacturing and services need each other. These are not competing functions. Remember, the industrial sector isn't shrinking, except as percentage of the work force, and that's not because it's getting smaller (it isn't) but because of the incredible boom in the service sector. When one sector profits, as services have, the other will benefit as well.
The myth of the inferiority of service jobs has become the predicate for discussions on many issues that profoundly affect our competitiveness. What is most troubling is that those who believe this myth will not prepare for the future but rather will remain shivering fearfully in the shadows of the past, or worse, will be feverishly preparing laws to preserve the past. We can't afford that as a society or as a nation.
New life has been injected into this 20th Century Flat Earth Society by a recent study that brought forth a plethora of bad news. Most often cited is its finding that 58 percent of the jobs created between 1979 and 1984 paid $7,000 per year or less.
But look at the time frame again: 1979-84. Four of the six years studied were low-growth, high-inflation years of a recession that this president inherited. By all accounts, the recovery didn't begin until the end of 1982. Let's look at it again -- in a different way. Comparing 1979-82, inclusive, with the succeeding four years is telling:
In 1979-82, real economic growth was 0.3 percent; in 1983-86 it was 3.8 percent (These are average annual rates.) Inflation in the first four years was 10 percent, in the second, 3.2 percent. Growth in real disposable income went from 0.7 percent to 3.7 percent, and in employment from 0.1 percent to 3.4 percent. The total number of new jobs in 1979-82 was 0.1 million; in 1983-86 it was 12.7 million.
By expanding the aperture on our inquiry these figures present quite a different picture. We actually see a trend line rising rapidly toward opportunity, not sinking toward despair.
Yet the proponents of protectionism continue to press, citing the service sector as the villain. As a plant closes, goes the argument, everyone goes to work in a fast-food restaurant. Baloney!
Of course plants close. Some facilities were simply too old. Others were unable to modernize or adapt to changing consumer preference or new technologies. Other changes may have been the result of bad management decisions. Meanwhile others open. In the past year, more than 50,000 new businesses opened each and every month. This is important, for in the past decade nearly half of all new jobs were created by firms less than four years old.
In a recent speech, I talked about the service sector, pointing out that our reluctance to move into service parallels our reluctance 50 years ago to move from agriculture to industry. I went on to say that if we are willing to seize the opportunity for growth -- in manufacturing as well as in services -- that these new services offer, we will surpass the tremendous economic growth experienced with our move off the farm.
The service sector has been characterized as ''McJobs.'' In a phrase, it just isn't true. So much of the service sector consists of higher-paid work: transportation, public utilities, communications, finance, banking, insurance and data processing. In the five years of this recovery, only one major segment of the job sector has declined: minimum-wage jobs have fallen 25 percent, while those jobs paying $10 an hour or more have increased by 50 percent. Beyond that, 90 percent of these new jobs are full-time.
With the tremendous growth in the service sector has come an accompanying need for higher skills. The number of jobs that require skills is growing much faster than those that require little education. The skills requisite to this new marketplace are cognitive, reasoning, math and communication skills. The majority of new jobs will require postsecondary skills.
We don't need to be fighting the service sector -- it is essential to a productive, growing manufacturing sector. We need to be positioning ourselves so that we can take full advantage of both. To do so, we need skills -- basic skills and flexible skills. To this end the president has proposed the worker readjustment act and the AFDC/Youth proposal as part of the Trade, Employment and Productivity Act of 1987. Both these programs are aimed at equipping our present and future work force with the skills that will enable it not just to survive, but to thrive in a changing market.
The piece by Lance Compa in the Outlook section hinted at no less than a class confrontation brought on by the alleged proliferation of low-paid, part-time jobs. Let me say that a class confrontation is indeed possible if we have skilled, educated, gainfully employed people on one side and unskilled unemployable people on the other.
We argue about labor-intensive jobs being ''exported,'' when we should be concentrating on investing in our human capital. We can create the technology that can foster the higher skilled, better-paying, more productive jobs. These are the jobs that represent the future rather than the past. If we don't concentrate our efforts on acquiring these new skills, we'll be importing people to fill these jobs, or doing without the growth the jobs could provide.
The days of disguising functional illiteracy with a high-paying assembly line job are soon to be over. We have work to do -- lots of it -- in making sure we're ready to continue to be the most productive nation in the world. It's in our interest as a society to make sure everyone has the skills he needs.
We know opportunity lies ahead; but it is tough to focus on the 21st century when the debate remains in the 19th.
The writer is secretary of labor