Verizon strike & high-tech

Doug Henwood dhenwood at
Wed Aug 9 14:20:40 PDT 2000

[The BLS displaced worker survey cited in the CBS MarketWatch piece is at <>.] - MediaGrok - August 9, 2000

Will Verizon Strike Foretell the Fate of Unions?

Any company that has more than 86,000 workers on strike automatically disqualifies itself as a typical tech company. Nonetheless, the media is turning the strike at the telecommunications monolith Verizon into a referendum on the place of unions in the new economy. Not surprisingly, the libertarian line about unions - that the empowering magic of the Web has made them obsolete - has found its way into many stories.

"(T)he closely watched contract negotiation between Verizon Communications and its two unions is fast becoming a barometer for how the labor movement will galvanize workers in emerging sectors of the economy," wrote the AP's Kalpana Srinivasan. "Although issues of wages, benefits and working conditions are also under discussion, the future of organized labor in fast-growing areas like high-speed lines and wireless communications has emerged as the central issue of this strike," echoed the New York Times.

Charles Cooper put it bluntly in an opinion piece on ZDNet, writing, "They say the strike at Verizon Communications does not directly concern the computer industry, but don't kid yourself: This labor action represents Silicon Valley's greatest nightmare."

Cooper smugly concluded that techies neither need nor want unions. "Despite the nutty hours and frenzied pace, the vast majority of tech workers remain quite content with the status quo," he wrote. This sentiment was repeated by Harris Miller, president of the Information Technology Association of America, who said, according to the AP, that union membership isn't attractive to high-tech workers because employers treat them so well.

Interestingly, an excellent story on CBS MarketWatch - hardly a lefty organ - gave the lie to these blithe assertions. The story wasn't about Verizon; instead, it was about the workers who get screwed despite, or because of, the U.S. economy's strength. "Despite the tight labor market, companies still are laying off workers to the tune of more than 2 million a year," wrote Kristen Gerencher.

Further down, she noted that "while job creation continues to grow at a steady rate of 2.5 percent a year, technology-related productivity gains have made adding workers unnecessary even when companies expand. Increased automation, mergers and acquisitions, and competition from smaller businesses are driving companies to downsize not only through layoffs, but also through 'buy-out' packages that encourage older workers to accept early retirement, experts say." Who needs pesky unions that might disrupt such streamlining? - Michelle Goldberg

Workers of the New World Unite,1151,17406,00.html?nl=mg

Push to Unionize the New Economy (AP)

Will Organized Labor Grab a High-Tech Foothold?,5859,2612682,00.html

Phone Talks Said to Stall, With Strike in Third Day (Registration required.)

Verizon's Earnings Not Enough (Reuters),1367,38093,00.html

Verizon Profit News Disappoints as Company Inks DSL Merger With NorthPoint (AP)

Verizon Gets Static From Unions, Wall St.

Making the Most of a Bad Situation


CBS - August 9, 2000

A quarter of fired workers still jobless, study finds By Kristen Gerencher,

WASHINGTON (CBS.MW) - About a quarter of U.S. workers whose jobs were eliminated from 1997 to 1999 haven't been reemployed, and almost half of those age 55 to 64 weren't reabsorbed into the workforce, according to a new Labor Department report on the state of displaced workers in the U.S.

Despite low unemployment and strong job growth, 3.3 million Americans who held their jobs for at least three years lost them from 1997 to 1999, on par with the previous two-year period. Another 4.3 million people were displaced from jobs they'd held for less than three years.

Of the total number of dislocated workers who found new jobs, 58 percent were earning as much or more in their new positions, while 42 percent or 680,000 people were earning less. Of those making less, three out of five had their wages reduced by 20 percent or more.

When the survey was conducted in February, 74 percent of the longer-term displaced workers were reemployed, 10 percent were unemployed, and 16 percent were no longer in the labor force. The ability to find a new job proved greatest for workers age 20 to 54, while only 56 percent of those age 55 to 64 and 26 percent of displaced seniors age 65 and older were reemployed.

Still, as an indication of the strength of the economy, only 45 percent of the long-tenured dislocated employees reported receiving unemployment insurance benefits after losing their jobs, down from the 61 percent who were filed for unemployment during weaker labor market conditions in the early 1990s.

Little need for unemployment checks

Downsized workers may be passing on unemployment because they're being reabsorbed more quickly than in the past. Of the 5.8 million displaced workers who found jobs at some point after being let go, three out of five reported landing new positions in five weeks or less, the Labor Department said.

That's up from the 1993-95 period, when only one in two of the 7 million displaced workers who found new jobs did so in that short a time. See second story in the series.

Technicians and related computer-support professionals led the proportion of displaced workers who had found new jobs at 86 percent, while machine operators, assemblers and inspectors brought up the rear at 66 percent.

Where the jobs aren't

Half the displaced workers surveyed said plant or company closings or relocations precipitated their dismissal, 22 percent cited a lack of work and 29 percent said their position or shift was eliminated.

The nation's declining manufacturing base continued to be the leading contributor to job losses --1 million lost factory jobs accounted for about a third of all displacements. While high, that's down from about 50 percent during the recession years of the early 1980s that saw the collapse of the U.S. steel industry and the declining employment at U.S. automakers.

On the service side, the retail and financial services industries slashed the most jobs, accounting for 19 percent and 8 percent, respectively, of all displaced workers in the two-year period. Wholesale and retail trade purged 616,000 jobs, and finance, insurance and real estate eliminated 245,000 jobs, making them among the riskiest industries for workers, the survey said. See first story in the series.

While men make up a larger share of the dislocated pool than women, men were more likely to have moved on in their careers with a 79 percent reemployment rate versus 67 percent for women. Both sexes had about the same chance of being unemployed, but women were nearly twice as likely to leave the labor force after a lay-off than men, with a ratio of 21 percent to 12 percent.

Reemployment rates across racial lines remained steady from the previous survey at 74 percent for whites, 72 percent for blacks, and 70 percent for Hispanics, the Labor Department said.

White, blue collars close gap

Although blue-collar jobs continue to be eliminated at a greater reat than white-collar positions, the disparity in the job-loss rate has been cut in half in the last five years as more people move from goods-producing jobs to service-sector work.

As recently as 1993-95, an estimated 11.3 percent of 29.8 million blue-collar employees lost their jobs, compared with 7 percent of 68.7 million managerial and office workers who were let go.

During the 1997-99 period, that spread narrowed to 7.7 percent of 31.1 million blue collar workers compared with 5.6 percent of 74.7 million white collar workers.

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