The Reagan administration's formula for licking unemployment calls mainly for the government to stand aside while an unleashed American industrial machine puts the jobless back to work.
That formula fits neatly with President Reagan's philosophy of reducing the govrnment's role. It moves decisively away from the Carter administration's concept of "reindustrialization," which envisioned government, business and labor tackling economic problems together.
But now, as Reaganomics is about to get its first actual test, some businessman are warning that the economy could face serious difficulties if the government reduces its responsibility for educating training and improving the quality of the work force.
The Business Roundtable, representing a blue-chip roster of corporate America, has called for a national policy to deal with a "growing imbalance between the supply of workers and the skills demanded" because of the aging of the labor force, the continued movement of women into jobs and an increase in the number of young, unskilled blacks and Hispanics.
Testifying before the Senate subcommittee on employment and productivity in June, the chairman of TRW Inc., R.F. Mettler, called for a "public-private effort to address the problems of structural unemployment." Metler, who heads a Business Roundtable task force, acknowledged that the nation has skimped on its investments in training and educating workers.
Echoing these concerns, labor representatives such as United Auto Workers consultant Harley Shaiken have called for a "national debate on the social consequences of micro-electronics."
While business groups are increasingly concerned about shortages of trainable workers in the mid-1980s, labor organizations are increasingly worried about loss of jobs.Both sides share a fear that the administration's economic visions may not square with the kind of American economy and work force that is emerging in the 1980s.
Doubters say that Americans are out of work today not only because the economy is slack, but also becaue of barriers posed by racial discrimination, age, education and the places they have chosen to live.
The role that race plays in employment can be judged in a single statistic gleaned from former vice president Mondale's task force on youth employment: the jobless rate for black high school graduates under 24 is higher than that for white high school dropouts in the same age bracket.
Of the nation's 8 million unemployed, 4 million to 6 million are estimated by Labor Department analysts to lack the basis skills of communication, personal relations, motivation, self-confidence, reading and calculating that would enable employers to train them for the jobs that will open up in the next few years.
Labor projections suggest that the number of unskilled and semi-skilled jobs will shrink in the next few years as computers take their places in factories and offices.
Even skilled workers might not benefit from a new business boom if the jobs created are in the wrong places. While thousands of good jobs are going begging in the booming electronics centers in California and Texas, thousands of skilled workers are jobless in the Northeast, and many of them are unwilling to move. Machinists can earn more than $30,000 a year, yet a trade association reports a shortage of 60,000 machinists.
Lurking behind these odd statistics is the expected speedup of automation in the 1980s, which Business Week magazine said could effect 45 million jobs out of the 103 million jobs in the economy now. The magazine said that while the "unprecedented" change may not cause widespread unemployment, they will "result in a fundamental change in most workplaces and a painful adjustment for the workers involved."
The main factor will be the widespread introduction of silicon integrated circuits with 64,000 transistors on a single chip a quarter-inch square.
Already microprocessors are replacing secretaries, and electronic sensing devices are substituting for assembly line workers. Industrialists talk of "paperless offices" and "peopleless factories." General Motors vice president Richard Beecher predicts that by 1990 there will be 50,000 computer-controlled robots working in the world automotive industry.
Ever since the Luddite movement attempted unsuccessfully to prevent the introduction of industrial machinery in England in the early 19th century, pessimists have predicted that new technology would wipe out jobs. Yet each new step up the technological ladder has created new productivity, new wealth, new jobs.
In the 1950s, there was wide concern about the impact of automation. Yet between 1960 and 1980, the U.S. economy added 30 million jobs and the labor force grew by 50 percent.
Whole new industries, producing energy, electronics and environmental equipment, have arisen to confound the prophecies of the pessimists. The 1980s may also see the creation of industries built around the new technologies as gene-splicing.And the computer industry, a $10-billion-a-year global enterprise that could be $25 billion by 1985, will employ millions of people.
To the extend that the new electronic technology sharpens the competitives edge of U.S. industry, computers can help the job loss resulting from imports. Automation could benefit the industrial nations by "eroding the comparatives advantage that developing countries, with their lower labor costs, now hold," according to Colin Norman of Worldwatch Institute. Some predict that as American multinational companies switch to the new technology, they might close their overseas plants and once again manufacture most of their products in highly automated plants in this country.
But the jobs won't be the same. Norman notes that the textile industry plans to spend $2 billion a year on new equipment, some of it computer-controlled. "As a result, as many as 300,000 relatively low-paid jobs could disappear from American textile plants by 1980, he writes in a Worldwatch report Norman says a British spinning mill using the new technology will produce as much with 95 employees as three mills employing 435 formerly did.
Many of the jobs that the new technology will supplant, such as those in hazardous textile mills, are low-paid dangerous and difficult.
Just as agricultural productivity has risen over the decades while the number of farm workers has steadily declined, manufacturing may be in a natural phase of evolution toward increased productivity and declining employment, say the optimists. Manufacturing jobs have stayed constant at about 20 millions since 1969, but these jobs' share of the total work force has fallen from one third to one fifth.
Yet even the strongest enthusiasts of the new technology acknowledge that the adjustment will be extremely bumpy, with new industries and jobs arising in some parts of the economy while skills rapidly fall into disuse in others.
Juan Rada, a consultant for the International Labor Office whose detailed study of the microelectronics industry was published in 1980, concludes that "we may be facing a transition to a socity that no longer needs to make full-time use of its entire potential labor force."
Until now the United States has been able to make this transition by absorbing steadily increasing uemployment rates and by adding a vast number of relatively low-paid jobs in the service sector.
While employment in manufacturing and mining has remained almost constant since 1970, some 14 million new jobs have been created in retailing, finance, state and local government and other services. There has been a sharp increase in the number of people producing memos, guarding buildings, caring for the sick, working on city garbage crews, and waiting on table, but not in the number digging for coal or turning out refrigerators, computers, planes, missiles and automobiles. Today, the number of people working in restaurants, bars and fast food establishments (where pay averages $3.91 an hour) is about the same as the number in the construction industry (where pay averages $10.50 an hour).
"Most of the growth in the American economy is leading toward an economic structure which creates badly paid and unproductive work for a large segment of the work force," writes economist Anthony Carnevale, a former aide to the Senate Budget Committee who is now a consultant to the American Society for Development and Training.
Some of the semi-skilled jobs appear to be likely targets for automation. While employment in banking rose rapidly in Europe and the United States in the 1970s, some European studies predict a 20 percent to 30 percent decline in the 1980s, as human tellers are replaced with automatic money machines.
Business Wee predicts that some 38 million of the 50 million white-collar jobs in the United States eventually will be automated.
Electronic mail could displace millions of postal workers in Japan, Europe and the United States. Rada's report to the ILO says that private communications satellites using electronic mail techniques could take over 30 per cent of the Post Office's volume of correespondence by 1986.
Skeptics in business and labor say they doubt that the adjustments likely to occur in the 1980s can take place smoothly without national manpower policies that provide incentives for retraining and financing to educate and train the millions of people who are badly prepared to find work int he new industries.
Many liberals now acknowledge that the manpower programs of the 1970s would not be well suited to the 1980s. In the decade past, children of the "baby boom" matured and began looking for jobs. To deal with this demographic bulge, federal economic policies were aimed at creating more jobs, even at the risk of inflation. Government programs, such as the Comprehensive Employment Training Act, provided temporary employment but little permanent training.
In Congress, liberals joined conservatives this year in cutting $2.3 billion from CETA, laregly in recognition of changing times, and changing needs.
However, neither business-minded conservatives nor liberals appear to want the federal government to opt out of a role in making manpower policy.
Corporate executives are eyeing declining high school enrollments and low academic performances and wondering if there will be enough qualified young people available for the new jobs. They have been urging the Reagan administration to support regional or state "customized training" that would provide remedial and basic education for the unemployed followed by technical training for specific jobs available in those areas.
Employers' belated concern about the quality of the labor force comes after some 20 yuears in which industry has enjoyed the luxury of a large surplus of unemployed workers, as well as too many college graduates for the professional and technical jobs available.
Some labor officials and economists suggest that corporations are mainly interested in increasing the size of the pool of qualified workers to hold down wages. Others say the talk of unproductive labor is a smokescreen to cover a more serious problem: unproductivity and incompetence of management.
"Industry has to find something to blame," said a government expert who believes the number one problem is unemployment due to automation, not a shortage of skilled workers. "First it was government regulation, then it was the high cost of capital, and foreign imports. Now it's labor unproductivity."
Consultant Carnevale feels that corporate leaders are sincere in their new interest in the fashionable subject of "human capital."
"In the past we had unemployment of to the side and an economic system that was working well. Now the system itself is at stake. It's no longer a well-functioning economy in which some pieces are left out."
In West Germany about 2 percent of all workers are being retrained at any one tme, compared with .1 to .5 percent in the United States. This intensive training is mandated in West German law.
If millions remain unemployed, and millions of other productive women who would like to work are unable to do so because good jobs are not there, Reagan's policies could end in unrest even if they succeed in putting millions to work.
Unanswered by the Reagan policies are questions with a profound significance for the country in the computer age: Is maximum productivity the single goal? Or is the objective a socity in which all persons have an opportunity to work? Without a balance, says Carnevale, there is a real danger that the aspirations of a "bottomless pit" of people will go unfulfilled. The consequence of that, he warns, would be a country full of "frustration and anger."