The Impact Of Economic Change
March 15, 1996
Is the U.S. downsizing, as some contend, or is it simply in a period of change? Some economic analysts think it's the latter. They contend that the story of America in the 1990s is slow growth and rapid change, rather than contraction and decline.
Some of the significant changes:
- Software, which hardly existed two decades ago, is now more important than steel.
- Jobs are moving from Fortune 500 companies -- which have been cutting employment for at least a quarter century -- to small business, which is the engine of expansion.
- Women, who have obtained two of every three new jobs in the past 30 years, have displaced millions of older men in the workplace.
- While the media concentrate on the 40,000 layoffs over three years at AT&T, every week during 1995 employers actually hired or called back an average of 390,000 workers.
During the current five-year-old business expansion, the number of civilian workers has risen by about eight million. Employed Americans, as a share of the population over age 16, is close to the record of 63.2 percent set last winter.
Anemic as job growth may seem compared to the record of the 1950s through the 1980s, so far in the 1990s:
- Personal income after taxes rose by more than $1.1 trillion -- or 26.7 percent.
- Real disposable income per capita has increased 7 percent.
- Due to productivity gains, the real gross value of industrial output has increased by $330 billion -- or 17 percent.
- Real exports of merchandise soared $185 billion -- or 45 percent.
Furthermore, there is no evidence that corporations are favoring stockholders over workers. Worker compensation and dividends each increased by about five percent last year.
Source: H. Erich Heinemann (Heinemann Economic Research), "The Upsizing of America and How It's Happening," Washington Times, March 15, 1996.
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