HELP WANTED

	July 2, 1999
	William Rodgers, professor of economics at The College of William and Mary; Irene Cohen, CEO of the Corporate Staff Administration; Bill Banis, director of university career services at Northwestern University; and Alan Krueger, a labor economist at Princeton University, discuss jobs in America.

JIM LEHRER: Our economics correspondent, Paul Solman of WGBH-Boston, has the jobs story. PAUL SOLMAN: Today's 0.1 percent uptick in the overall unemployment number is, according to the Bureau of Labor statistics, statistically insignificant. Much more striking, to BLS Chief Katharine Abraham, is that the economy added a hefty quarter-million jobs in June. KATHARINE ABRAHAM: The unemployment rate was essentially unchanged in June, at 4.3 percent. The rate has been between 4.2 and 4.4 percent now since last November. Non-farm employment, as measured by our establishment survey, increased by 268,000 in June, well above the monthly average for the first five months of the year. PAUL SOLMAN: Where were job gains? Well, in high-paying high-tech, in banking and brokerage firms, and there were also big gains in the lower reaches of the economy: 20,000 new jobs in amusement parks and recreation, for example; and in retail, especially eating and drinking establishments. And there was also strong job growth in the construction industry. While the data don't suggest the U.S. is becoming a nation of hamburger-flippers, as the cliché would have it, they do confirm the long-term trend to a mainly service economy: The manufacturing sector shed another 35,000 jobs in June, putting factory job loss at nearly half a million in the last 15 months alone. To give the unemployment number some historical perspective, here it is over the last 50 years: In the post World War II boom of the early 1950's, the unemployment rate fell to 2.5 percent. After snaking up and down for two decades, it bottomed out at 3.4 percent in 1969. The rate spiked twice in the 1970's, and hit almost 11 percent during the recession of the early 80's. It's been dropping ever since, with one interruption. A closer look at the last decade shows an uptick during the recession of the early 90's, followed by continuing declines. And for almost two years now, the jobless rate has stayed under 5 percent. The jobless rate for African American workers, meanwhile, has traced the recent downward trend of the national average. Today it reached a record low of 7.3 percent. PAUL SOLMAN: Joining me first are two economists, Alan Krueger of Princeton's Woodrow Wilson School, and William Rodgers of the College of William and Mary. He is co-author of a recent study on how young men are faring in today's labor market. Welcome to you two. Alan Krueger, what do you make of today's numbers? ALAN KRUEGER: Well, I think your report had it right, that essentially unchanged from last month when we look at the unemployment situation -- we still have near record low unemployment. The economy, I think, is doing quite well. The manufacturing sector is a weak area. That's a trend that's been going on for some time, but I don't think that's going to affect overall job growth or the overall economy. PAUL SOLMAN: William Rodgers, who is getting which jobs, I mean, in addition to what we've just heard, or do we just have it right and you don't need to say anything? WILLIAM RODGERS: Right. I think my sense is that if you -- I like to describe to my students that you can picture a job ladder, and that at the top of this ladder, they have the highest skilled workers and then at the bottom you have the lowest skilled workers. And as the market has tightened since 1991 - PAUL SOLMAN: The labor market. WILLIAM RODGERS: The labor market, excuse me, has tightened -- you've move further and further down the ladder where you're now picking up more of the lower skilled workers, such as in the service sector, in retail, and in that -- especially benefited minorities, in particular African Americans. PAUL SOLMAN: So, what's happened? You've done this study on young men in the work force, right? WILLIAM RODGERS: Yes. PAUL SOLMAN: What's happened to minority men? WILLIAM RODGERS: Sure. As you pointed out in your opening segment the African American unemployment rate has fallen to historical low, but especially amongst less educated African Americans, who are not enrolled in school, Richard Freeman and I, and my co-author, found that we've seen dramatic increases in employment and wages, which is very different from the 1980's expansion, and that they have been in these -- in these areas that we've mentioned earlier. PAUL SOLMAN: You know, we've talked a lot on this show and other places about a two-tier economy, you know, good jobs at the top, good jobs at the bottom and not much in between, manufacturing jobs losing there and we've lost manufacturing jobs and have been losing them. Is that a fair statement, or have we turned around this supposed trend to a two-tier economy? WILLIAM RODGERS: Well, I think you have to really make a distinction between types of service -- service jobs. That -- Richard and I found is that amongst young men, when they first start out they are in these lower paying service jobs, but they do then move on to more higher paying service jobs in terms of the trades, construction. PAUL SOLMAN: Mm-hmm. WILLIAM RODGERS: In terms of auto mechanics, precision production and actually in the data we're seeing a slight shift, even for young -- all young, less educated men being able to move into the higher paying occupations. PAUL SOLMAN: So we're seeing a diminution of that trend towards a lot of people at the top, a lot of people at the bottom and fewer and fewer in-between or no? WILLIAM RODGERS: I wouldn't say it's diminution. I think the business cycle because we've tightened so much there have been shortages in construction and some of these other higher paying occupations that, yes, once these men age and get to the mid-20's and on, they get into the jobs, but it looks as if the tightening of the market has helped to bring them in a little earlier. PAUL SOLMAN: So you're encouraged? WILLIAM RODGERS: Yes. PAUL SOLMAN: All things considered. We're going to bring in two people now who helped those wanting to get into the job market, Irene Cohen of Headway Corporate Resources, finds workers for big and small companies and Bill Banis is the director of career services at Northwestern University and has been placing college graduates for more than 26 years. And, welcome to both of you. I guess the question is for -- for you, what are the jobs, Irene Cohen, let's start with you, what are the jobs that people are getting -- that you're getting for them, I guess? IRENE COHEN: Well, primarily you're seeing the greatest growth in technical and professional areas. I mean, you're talking about the Internet having a profound impact on the market in every functional area. I mean, we're seeing people who are three, four and five-year associates in financial investment houses who are being recruited out by the Internet companies, Internet start-ups most particularly, and then, of course, you have all levels of Internet services. You've got Web masters. You've got - PAUL SOLMAN: Web masters? IRENE COHEN: Yes -- who take care of the Web sites, and you've got an interesting field, you've got a great need now for firewall specialists because you're looking at security concerns because the Internet is so accessible to everyone. PAUL SOLMAN: Wait, wait. Fire wall -- you mean, electronic Internet fire wall to make sure that my credit card doesn't get stolen or something? IRENE COHEN: Exactly, exactly. PAUL SOLMAN: How much people like that making? I mean - IRENE COHEN: Those people -- the average salary of a technology specialist runs about $70,000 to $80,000, and the highest salaries, of course, are paid out in the Washington area, and - PAUL SOLMAN: Washington State? IRENE COHEN: Washington State, exactly, but you're seeing growth in jobs in almost all -- anything that we now label the knowledge worker. Someone with experience can get a job because companies are absolutely desperate for experienced workers. PAUL SOLMAN: Okay. You're in New York. Bill Banis you're in Chicago, and you've got these young graduates coming out. They are knowledge workers, presumably, if they have gone to Northwestern. Is that -- how much are they making, and what kinds of jobs are they getting? BILL BANIS: I think what happens today on college campuses reflects a broader economy. We certainly see the high-tech and the engineering students continuing to do very well. I would not want to be a technical recruiter in 1999. They have a very tough job. But beyond that - PAUL SOLMAN: A job of finding enough people. BILL BANIS: Finding enough talent, that's correct. PAUL SOLMAN: Mm-hmm. BILL BANIS: But beyond that, I think the college recruiting scene reflects the broad transition in the economy from an industrial base to a service base. PAUL SOLMAN: Mm-hmm. BILL BANIS: And on campus, in particular, we see consulting firms now being dominant player in really taking talent away from high-tech and traditional manufacturing. Salaries this year continue to climb. We've had some undergrads with no experience except for internships break $50,000 routinely. PAUL SOLMAN: Coming right out of college? BILL BANIS: That's correct. But that's not an average. That's the high end. The average this year, the range will be between low to mid-20's to about mid-40's. We suspect it's going to come in for our class around $42,000 to $44,000. We just graduated two weeks ago, so we're still crunching numbers. PAUL SOLMAN: You mean so your typical senior who graduates will make about $43,000 a year next year? BILL BANIS: It's looking that way. And I think there's another story. With the economy expanding, I think one of the untold stories of the last three or four years is how well our traditional liberal arts and humanities and social science students are doing. For the first time since I've been doing this work, I've seen English majors, for example, command salaries on par with engineers. And that's because of the influence of consulting firms. PAUL SOLMAN: Miss Cohen, who is working now who wasn't working say, I don't know, five, ten years ago when the unemployment number was a lot higher? IRENE COHEN: Well, I think anyone who is coming out with a decent education, the college level, is working, but I do tend to feel a different trend in the colleges, and that is that many of our college grads who before were immediately heading toward the consulting firms, who were paying very high salaries, are now very anxious to get their hands on that $90 million Internet start-up, and they are running to small Internet start-ups, and I think that one of the statistics that I've seen is that about 40 percent less college grads are going into the management consulting firms in the Northeast and heading right towards the big bucks. PAUL SOLMAN: Alan Krueger, let's go back to you in Princeton. We didn't get you in on this issue of the two-tier economy and the widening income gap that we've been talking about in this country since 19, you know, the early 70's. I mean, here we hear about $90 million Internet start-ups and $42,000-a-year starting salaries, which is a lot higher than the medium income in this country, is it not? ALAN KRUEGER: Absolutely. What - I think it's been going on in contrast to the trend in the late 1970's and the 80's when inequality grew tremendously, the last ten years and especially the last three or four years, the bottom of the distribution has done quite well - PAUL SOLMAN: The very bottom. ALAN KRUEGER: -- high school dropouts, less-skilled workers, which is the group that really got clobbered in the 1980's. I think they have regained not all of what they lost, but a substantial fraction of what they lost in the 1980's. PAUL SOLMAN: So this is the bottom fifth or - ALAN KRUEGER: The bottom 20 percent, absolutely. PAUL SOLMAN: Right. ALAN KRUEGER: The top, meanwhile, has continued to do very well and that's what you hear about from the other speakers. The middle has been somewhat weak. There's been real wage growth at the middle, but it's been weaker than it has been at both tails of the distribution. PAUL SOLMAN: William Rodgers, I want to know who -- who are the four-plus million people who don't have jobs? I mean, if it's 4.3 percent unemployment, that's a little over four million people. I mean, is that just the people who are kind of looking to change jobs, or -- I mean, who are they? WILLIAM RODGERS: That's a difficult question. I think my sense from the work Richard and I had done - PAUL SOLMAN: Richard Freeman. WILLIAM RODGERS: Richard Freeman and I had done. PAUL SOLMAN: Right. WILLIAM RODGERS: Is that -- particularly we looked at the folks in the tightest economies, economies that had unemployment rates below 4 percent in every year since 1992, and, you know, we're still seeing about a third of these young men, you know, they are not participating, and these are also men -- we looked at only people who were not enrolled in school. PAUL SOLMAN: So, you're talking about people 18 to 24, 25 or something like that? WILLIAM RODGERS: Right. Where their choice is either working or not working. And -- and this is one of the areas we're looking into. I think one of our speculations is if we take my home state, Virginia, and I know other states have been -- in terms of their level of incarceration, have really increased that greater level and one potential possibility is that these men are coming back on to the streets and now they have had contact with the criminal justice system and are having a harder time getting jobs so that could be one area of -- of types of men who are -- still haven't been pulled into the fold, if you will. PAUL SOLMAN: So there are a third of those young men still don't have -- still don't have jobs? WILLIAM RODGERS: This is again in - PAUL SOLMAN: Non-white? WILLIAM RODGERS: It's a little bit lower for young whites, but still it's a substantial share. But again, these were just the men in our areas where we thought this is as good as it's going to get. PAUL SOLMAN: Is there anyone in America -- briefly to each of you -- is there anyone in America who can't find a job at this point, Professor Rodgers? WILLIAM RODGERS: Who can't find? I think, you know, there are folks who again in this last group of segment of folks who are in terms of being at that -- my back to my job ladder in the lowest part in terms of skills or they are in a particular urban areas where the growth hasn't touched them while the growth has occurred in the suburbs -- in our conversations with folks in the last few weeks we've been hearing stories of that. PAUL SOLMAN: Alan Krueger, anybody who can't find a job? ALAN KRUEGER: I think there are certainly some. There are still six million people unemployed and looking for work. Where we've been very successful is in reducing the short-term unemployment. The longer-term unemployment, people who have been searching 15, 20 weeks or longer, has remained stubbornly high, and it's come down but not nearly as much as one would hope and not as much as the short-term rate and I think that this is related to issues that Bill Rodgers raised. There are people who don't have the skills that are currently demanded by employers. These tend to be less skilled workers, particularly people who might have had contact with the criminal justice system are being spurned in the labor market. Another point I want to make - PAUL SOLMAN: We don't have time for another point and we don't have time for Mr. Banis and Ms. Cohen. Thank you all very much; we appreciate it.