A Day to Celebrate the American Learning Force

Is the glass half empty or half full this Labor Day? That depends.

If American business were asked, the answer would emphatically be full. U.S. companies are confidently competitive again, both at home where they are modernizing constantly and overseas, where U.S. firms lead the world in investment once more.

Actually they are joining a trend. Global investment from all countries is rising after a two-year decline, the United Nations reports. And that international bullishness is behind the buoyancy in the U.S. and other stock markets.

But the glass seems half empty for working people, particularly for middle income earners paid $25,000 to $50,000 a year. These people, who make up a majority of the work force, have found wage hikes to be few, benefits getting skimpy and jobs growing more uncertain in recent years.

Robert Reich, the phrase-making Secretary of Labor, spoke last week of an “anxious class” in the middle of the U.S. labor force. The economy has created 2.5 million jobs in the last year, Reich said, and yet “some workers are surging ahead, others are treading water and still others are sinking--in the same economy, at the same time.”

The big question is: What causes this dissonance? And how can we reconcile the renewed confidence and competitiveness of U.S. business with anxiety in the ranks of the workers?

Some point to the precipitous decline of union labor and say competitiveness is based on low wages. Unions represent only 13.5% of the U.S. work force now, fewer than one worker in seven. And union members earn higher wages on average, $14.76 per hour compared to $11.77 for non-union workers, in addition to getting better benefits.

But the differentials are not enough to account for the shift in U.S. industry’s global prospects, especially as union representation is declining in all other countries, too.

Something else is going on. And clues to it lie in the rise of technicians, the 20 million U.S. workers who design, manufacture and operate computerized machinery in business, medicine and every facet of American life.

Where U.S. labor, even a decade ago, was dominated by assembly workers doing relatively unskilled, repetitive tasks, increasingly it is represented by the technician who knows how to manipulate circuit boards to make machinery intelligent, to calculate a sales and inventory program or to analyze human tissue in a diagnostic clinic.

Such higher skilled tasks demand that workers take special training, often at local community colleges.

The new jobs offer decent wages, from $13 to $20 an hour, and pay off in the productivity gains that have made U.S. business a global powerhouse once again. Overall, productivity in manufacturing and services grew 4.2% last year; the gains continue this year.

Rising productivity has made U.S. companies venturesome investors, accounting for $50 billion of the world’s $195 billion in multinational investment last year. Major companies are prominent: Coca-Cola, Motorola, GE and Boeing are expanding in Asia; Wal-Mart plans to open stores in Europe and Central America.

But smaller companies are increasingly global, too. Economist Thomas McManus has compiled a list of U.S. companies doing well in exports and foreign sales that includes such firms as:

* Verifone, Inc., the Redwood City, Calif.-based maker of devices that verify credit card transactions. It gets 25% of its $260 million sales from customers in 70 countries.

* Loctite Corp., of Hartford, Conn., which makes sealants and specialty chemicals and gets half its $600 million a year in sales from abroad.

* Cordis Corp., a Miami-based maker of catheters and other medical devices, which gets almost 40% of its $255 million in sales outside the United States.

International success is why some U.S. companies--such as Coke and Gillette--attract premium prices on the U.S. stock market, and why other firms will in time, says Stefan Abrams, investment manager for Trust Co. of the West.

Clearly, investors have opportunity in the new economy. Less clear have been opportunities for workers. But now the rise of community colleges--”the unsung heroes of the new middle class,” according to Reich--is opening a path to better jobs.

Community colleges offer two-year associate degrees or courses in academic subjects and technical skills, with tuition often subsidized by companies or state development offices. Enrollments have grown 30% to 6.5 million in the last decade.

Such schools and continuing education are mainstays of the new global economy, an economy in which it is not a case of U.S. workers--as is often charged--being forced to compete with $2-an-hour labor in Malaysia, but of trying to keep up with the headlong pace of technological change.

It is an economy that calls for and rewards individual initiative, but is not favorable to groups. “Organized labor should ask itself why young people, who want to participate in decisions about their jobs, don’t want to join unions,” says David Lewin, professor of industrial relations at UCLA.

Unions organized the first celebration of Labor Day in 1882. The fight then was to earn and live. The fight now is to learn and grow. The glass is half full.