Technology and Employment Innovation and Growth in the U.S. Economy (1987) / Chapter Skim
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10: Policy Options and Recommendations
10: Policy Options and Recommendations
Pages 177-193
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From page 177... ...
standard of living and average real wages increase as a result of the productivity advances associated with technological change, individuals also suffer losses. Many of our public policy recommendations stem from the belief that a portion of the affluence created by technological change should be used to assist those suffering losses as a result of it.
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From page 178... ...
RECOMMENDATIONS FOR THE PUBLIC SECTOR Policies for Worker Adjustment Our review of the evidence on the employment effects of technological change has identified two groups of workers that may be adversely affected: experienced workers, who may lose their jobs as a result of the adoption of technology, and labor force entrants, who may find that job opportunities are reduced by technological change. Our public policy recommendations also address the impacts of technological change on female and minority workers.
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From page 179... ...
Moreover, the requirement that such a determination be made introduces severe delays and uncertainties into the delivery of services to displaced workers. One of the essential attributes of successful worker adjustment programs is rapid response as we noted in Chapter 7 and discuss below, workers benefit most from adjustment assistance that is offered prior to or immediately after displacement, rather than after a lag of several months.
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From page 180... ...
We recommend that some or all of the following options be implemented: · broadening the range of employment services provided to displaced workers and those facing imminent displacement, including job counseling, skills diagnosis, job search assistance, and placement services; · increasing the share of Title IIIfunds devoted to training in basic and job-related skills; · broadening income support for displaced workers engaged in training; · instituting a program of federally provided direct loans or loan guarantees, administered by state or local authorities, to workers displaced by technological change, plant shutdowns, or large-scale layoffs (these loans could be used by displaced workers to finance retraining or relocation or to establish new businessesJ; and · establishing a program for demonstrations and experiments with rigorous evaluation requirements to test and compare specific program designs. In addition to these modifications to JTPA, we recommend revising state unemployment compensation laws to guarantee explicitly that displaced workers who are eligible for unemployment compensation can continue to receive benefits while undertaking retraining.
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From page 181... ...
There are few data on the ideal mix of job counseling, job search assistance, skills diagnosis, or training in basic or job-related skills within these programs. Therefore, estimates of participation rates, training costs and duration, and overall program effectiveness for the economic adjustment program detailed here are subject to uncertainty.
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From page 182... ...
We have made estimates of the costs to the federal government of job search assistance, training, and extended unemployment compensation for two values of the annual flow of displaced workers: 1 million workers and 2.3 million. As estimated rates of participation in these adjustment assistance programs are increased from 5 to 30 percent of the displaced worker population, the estimated costs of these policy options range from $131 million (S percent participation rate)
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From page 183... ...
We have concluded that substantial (a minimum of 2-3 monthsJ advance notice of permanent plant shutdowns and large permanent layoffs others significant benefits to the workers who are displaced and to the nation by reducing the average duration of the workers' unemploy ment and lessening the public costs of such unemployment. The current system of voluntary advance notice, however, fails to provide sufficient advance notice to many U.S.
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From page 184... ...
as Chapter 7 notes, too few workers are notified in advance of permanent plant closures or large permanent layoffs, thus hampering their adjustment. When workers receive sufficient advance notice, the evidence suggests that they adjust more rapidly and more successfully to job loss, which reduces the costs of displacement to them and to the public sector.
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From page 185... ...
The choice of enforcement mechanisms for either policy option is particularly important for the effectiveness of advance notice policies. We strongly urge that action be taken by the federal government to aid worker adjustment to technological and other types of economic change by extending advance notice of plant closures and layoffs to as many workers as possible.
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From page 186... ...
It appears that technological change will not induce large-scale unemployment in the occupations historically accounting for a large proportion of minority and female employment. Nevertheless, policies to reduce discrimination within the job market broaden the employment prospects for minority and female labor force entrants as well as experienced minority workers and women, thus improving the ability of these groups to adjust to workplace changes triggered by the adoption of new technolog~es.
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From page 187... ...
We therefore support the development and evaluation of additional public policies to encourage the more rapid adoption of new technologies within the United States. We recommend increasedfederal support for activities and research to encourage more rapid adoption of new technologies.
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From page 188... ...
We urge that a portion of these budgets be devoted to improvements in the collection and analysis of employment, productivity, and output data on the nonmanufacturing sector of this economy. We recommend that a new panel study or a supplement and follow-up to the Current Population Survey be undertaken by the Bureau of Labor Statistics to examine the effects of technological change on the skill requirements, employment, and working conditions of individuals of working age.
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From page 189... ...
Better data on the needs of displaced workers and better evaluations of the effectiveness of adjustment assistance programs for them, including retraining and advance notice of plant closures and large-scale layoffs, are urgently needed. To promote the development of the most appropriate evaluation designs and techniques, it may be useful to divide the responsibility for the evaluation of worker adjustment programs between the agencies in charge of program administration (at the federal level, the Departments of Labor and Education)
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From page 190... ...
Health and Safety Impacts of Technological Change We recommend a major interdisciplinary study of the consequences of technological change for workplace health and safety and the regulatory structure designed to ensure that worker health and safety are protected. These areas also should be monitored carefully by federal and state agencies.
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From page 191... ...
Retraining and employment security programs similar to the UAW-Ford and UAW-GM training and job security programs, as well as the new training programs established by the agreements between the Communications Workers of America and Pacific Telesis and the American Telephone and Telegraph Company, have considerable promise for application in other industries. PROTECTION FROM THE COSTS OF DISPLACEMENT We recommend that management and labor explore the use of severance payments for permanent layoffs of experienced workers.
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From page 192... ...
Supplemented by our proposed system of loans (discussed earlier in this chapter) , these union-management agreements protect the interests of an important portion of the displaced worker population and provide a partial cushion against the financial consequences of job loss.
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From page 193... ...
POLICY OPTIONS AND RECOMMENDATIONS 193 techniques and to instruct both students and managers in their application could contribute to more rapid and effective adoption of new technologies in U.S. industry.
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