Not since the Depression devasted Wales during the 1930s, when hundreds of thousands of Welsh were forced to leave their homeland to find work, has unemployment grown so rapidly in what was once the most important mining and metalworking region in Britain.
At least 20,000 steelworkers are losing their jobs here this year. The fire has been extinguished forever in the big blast furnaces at the British Steel Corp. plant at Shotton on the Dee River in the north, and production and manpower are being cut in half at the giant British Steel plants at Newport and Port Talbot in southern Wales.
In the historic Welsh coal-mining valleys, 20 of the 35 remaining pits are threatened with closure, which would eliminate the jobs of half of the 30,000 working miners left in Wales. Jobs also are disappearing in textile mills, on the docks and in long-over-staffed local government.
Wales is on the front line of Prime Minister Margret Thatcher's battle to reduce inflation and restructure the British economy during a deep recession. It is becoming a crucial test of her survival-of-the-fittest policies to try to weed out inefficiency in the government-subsidized sector of the economy and encourage new, more efficient industries.
In Wales, Thatcher's policies have hastened the long decline of the government-owned coal and steel industries that had been the backbone of the region's economy.
Her efforts to cut government spending across the board have also hit particularly hard in Wales, where three of every five workers depend on employment by the government or government-owned industry. As a result, unemployment is rising even faster in Wales than in the rest of Britain, where more workers are jobless now than at any time since the Depression.
But government officials and businessleaders in Wales are betting that after a few tough years Thatcher's long-term strategy might work there because the collapse of coal and steel has been accompanied by the rise of new, competitive high-technology industries.
While nearly 90 percent of the jobs in coal and steel in Wales have disappeared during the past two decades, many have been replaced with work in new auto, aluminum, electronics and other factories attracted to Wales by the ability of hard-working Welsh laborers to adapt themselves to new trades.
More than 100 U.S. firms, including Ford, Alcoa, Borg-Warner and Continental Can, plus the Japanese electronics giants Sony, Matsushita and Hitachi have built branch factories in Wales making goods for Britain and the rest of Europe.
They find Welsh workers cooperative, quick to learn and willing to work in shifts around the clock without the restrictive rules that drag down productivity in many other parts of Britain and some older industries in Wales. Both Conservative and Labor governments in London have helped by building hundreds of pilot factories for new businesses big and small and giving them partial rebates for capital invested in Wales.
"It's a strange situation," said Ian Kelsall, director of the Welsh branch of the British Confederation of Business and Industry.
"The fact is that while men are being laid off in such large numbers, new industry is still coming into Wales. The government is building new factories for them like mad. Some companies that are now laying people of or postponing recruitment say they expect to expand their plants as soon as the recession is over."
This is what Thatcher and her supporters hope to see happen throughout Britain -- the "reindustrialization" that many economists argue is necessary for both the British and American economies in a changing world.
But in Wales, as in the rest of Britain, Thatcher is gambling that enough new jobs will be created with relatively little government assistance fast enough to avoid a catastrophic economic and social collapse that is increasingly feared by many British labor and business leaders and politicians of all parties. This danger also can be seen in Wales.
"It is the most severe situation we have faced here in decades," said John Clement, industry director of the British government's Welsh Office in Cardiff. "Wales has been much more seriously affected than any other part of the United Kingdom."
Many Welsh workers complain about suffering disproportionately from Thatcher's policies. Welsh miners are talking about disruptive action to block more pit closings. Leaders of a reviving Welsh separatist movement seeking independence from the rest of Britain are seizing on a growing animosity toward the "bloody English." A report by a bipartisan parliamentary committee on Wales warned this month that the economic emergency could lead to "serious social disorder" there.
"The danger is that dissatisfaction can be channeled into Welsh separatism," said David Jenkins, deputy secretary of the Welsh Trade Union Congress. "I hear people saying things like, 'Wales is being singled out,' and 'Thatcher is doing nothing for Wales.' There is a fear that social unrest could come out of the frustration and anger in Wales."
"There is already great alienation in the Welsh-speaking community," contended Dafydd Williams, general secretary of the Welsh nationalist party, Plaid Cymru, which represents the Welsh-speaking minority in Wales and has two members in the British Parliament.
He pointed to the continuing sabatage of television transmitters by militants seeking an all-Welsh channel and their burning of holiday homes bought by English families in Welsh-speaking areas.
Both Thatcher and her industry secretary, Keith Joseph, have been the targets of jeers and thrown eggs and tomatoes from angry crowds confronting them on recent visits. Nearly 5,000 protesters turned out in a downpour to harass Thatcher on her way to speak to the annual conference of Welsh Conservative in Swansea last month.
Thatcher made matters worse by suggesting in her speech that the Welsh could once again move elsewhere to find work. This was resented by those who remember what is referred to here as the "exile" of hungry Welsh workers in a tide of emigration beginning during the Depression that was not finally reversed until this past decade.
"She made a terrible mistake," said Clement of the Welsh office, " and we've been trying to fudge it ever since."
"We've seen it all before," Clement said. "Industrial regeneration is nothing new to Wales."
After long centuries of pastoral subsistence farming in the green valleys of its predominantly hilly and mountainous terrain, Wales emerged early in the industrial revolution as an important source of copper. In the early 1800s, south Wales became one of the world's great iron-producing regions, supplying the rails for the great railroads built across Britain and the United States.
When those industries disappeared, they were replaced by coal mines in the steep-sided valleys of south Wales and steelworks built on rivermouth flatlands on the northern and southern coasts. They were hurt by the Depression, but recovered sufficiently, along with an influx of industry, to attract back to Wales some of the sons and daughters of those forced to leave in the 1930s.
Now the old blast furnaces are being torn down and some of the coal pits and abandoned coal towns are being turned into industrial museums. The ugly scars left by the mine pits and slag heaps have been landscaped and made green again. Residents of coal-mining valleys fear the fast-approaching day when the last pit closes.
Unlike the 1930s, when despair seemed to paralyze jobless families huddled together in the towns of the Welsh industrial valleys, today there are generous severance payments to miners and steelworkers whose jobs are eliminated and welfare state payments and social services after that.
"The Welsh labor force has had to be adaptable," Clement said. "The Welsh also are reluctant to move away. Going to the next valley is moving to another country. This means a dependable work force with low turnover for industry moving here."
New superhighways, fast trains and improved harbors also have ended the relative isolation of south Wales, where seven of every 10 Welsh residents live, from Britain's governmental and economic heart in southeast England.
London is now just over two hours by car or train from Cardiff, Newport and the other major Welsh cities. This makes Wales geographically more attractive to international industry than hard-pressed industrial areas of northern England.
Labor leader Jenkins does not disagree with the need to restructure the economy of Wales and the rest of Britain. "We agree that we cannot have uncompetitive or overmanned industries for which there are no longer enough customers," he said.
But he disagrees with the Thatcher philosophy of leaving this change to private industry and market forces within a climate of government austerity.
"Change must be managed, planned and phased by government," he said. "This government chooses to stand back and let market forces to the work.
"I have no doubt that Thatcher's policies will eventually accomplish what she seeks in bringing down inflation and restructuring industry," Jenkins said. "The question is what will happen in the meantime. It will leave pockets of high unemployment and the potential for social unrest."
Arguing that private industry alone cannot be expected to revitalize the Welsh economy, Jenkins pointed out that Thatcher's Labor Party predecessor as prime minister, James Callaghan, who comes from Wales and represents it in Parliament, went to great lengths and expense to persuade Ford to build its new plant at Bridgend.
The Port Talbot and Newport steel plants also were put into southern Wales by Labor governments depending on strong political support here.
Even Thatcher finally decided, at the strong urging of her Welsh-born secretary of state for Wales, Nicholas Edwards, to force the promising government-owned electronics firm, Inmos, which does most of its research and development work in the United States, to build a new factory in south Wales in exchange for more investment money from the government.
"This is the first time Thatcher has decided to direct industry to where it was needed even though Inmos didn't want to come to Wales," Jenkins said. "This is government intervention, contrary to market forces. It is an important shift that may make a change in the government's thinking."
Williams and the Welsh nationalists want much more government intervention of this kind to help Wales, including an overall economic plan to direct private industry there. "We need a new Ford plant here every three weeks to make up for the job losses we're suffering," he argued.
"The worst thing that could happen would be for the Welsh people to simply submit to what is happening to them," Williams said, "by leaving Wales or staying and accepting unemployment. We hope to mobilize frustrated Welsh young people to do something aboukt this. London better watch out."