The Villain Outsourcing Strikes Again

William Krehm

Outsourcing is happening domestically as well as abroad. The result is not dissimilar in producing more rigid social groupings as chances for training unskilled workers for promotion within the corporation are vanishing ever faster.

The Wall Street Journal (06/06, "Promotion Track Fades for Those at Bottom" by Joel Millman) recounts: "NEW YORK – Unwed, unemployed and saddled with three young sons, Valerie Beatty hit bottom in 1989 when she was 25 years old. The daughter of a middle-class Harlem family, Ms. Beatty recalls when she abandoned hope of what she calls ‘bettering myself.’

"Too broke to pay tuition at Bronx Community College, she dropped out and scraped by on food stamps, baby-sitting jobs, and whatever cash her boys’ father gave her to buy school clothes."

Advancement Train Slows Down

"Then her life began to turn around, thanks to a cleaning job she landed in 1992 with the Metropolitan Transport Authority, a state agency that runs New York City’s buses and subways. The job paid only $18,000 a year but put her on a track for training and promotions. Within a decade, she advanced from cleaner to subway motor inspector. Today she makes $50,000 a year and lives in a tidy ranch home on Long Island. Now 41, she ticks off her next goals: seeing her sons graduate from college, building a retirement home and opening a restaurant.

"But the train that Ms. Beatty and many other black New Yorkers rode into the middle class is slowing down. The MTA was once full of jobs like motor inspector or turnstile repairman – jobs that a person with limited education could jump to with some training. As in the corporate world, many of these jobs have disappeared, often because technology upgrades mean fewer people are needed. At the MTA, for example, new subway cars last 138,000 miles between overhauls, compared with 8,000 miles in 1982. Around the system, the jobs that do open often require a college education and computer skills.

"The MTA reduced its staff 13%, to 48,000. When the MTA does fill new jobs it is less likely to promote from within because it believes it will attract better talent on the outside. Car cleaners used to have the inside track for promotion to motorman, tower operator and token booth clerk. Since then, those jobs have been thrown open to outsiders.

"[This is] mirroring what is happening [elsewhere]. Traders on Wall St. once started as floor runners out of high school. Newspapers would lure high school dropouts to the print shop, and later promote them to be reporters. ‘Macy’s used to fill executive training corps by recruiting stock boys,’ says Phil Kasmitz, a City University sociologist who studies the working poor. Over the years, employers have outsourced positions such as cafeteria server, security guard, and janitor that might have offered a chance to move up.

"Annette Bernhardt, a sociologist at New York University Law School, found that 12% of workers who started in the labor market in the late 1960s and early 1970s remained stuck in low-wage jobs 10 to 15 years into their careers. But for workers who entered the labor market in the 1980s and early 1990s, that percentage had more than doubled, to 28%.

"Traditionally unions helped unskilled workers attain middle-class lives. But organized labor now represents only 11% of the work force, down from one-third in the 1950s."

Returning to the experience of Valerie Beatty with which the article opens, the reporter recounts the contribution of the community in which she lived to her career difficulties. "The Beatty household wasn’t wealthy, but it was stable until the mid-1970s when the parents divorced. Valerie, then 11, stayed with her mother. Enrolled at Manhattan’s Julia Richman High School, which emphasizes health service careers, Ms. Beatty worked after school and dreamed of becoming a doctor.

"But Harlem was less conducive to such dreams. The black middle class had fled to the suburbs and urban unemployment swelled. When both of Ms. Beatty’s parents saw their employers leave Manhattan, her mother retired and her father ended up driving a gypsy cab.

"At 17, she was pregnant. She ignored her parents’ pleas to get an abortion and had two more sons by the time she reached 25. Ms. Beatty says she was married once briefly but marriage wasn’t for her.

"She eventually turned to the MTA, where an older brother had found work after leaving the Army and three other relatives had risen quickly through the ranks. In 1991 she passed a civil-service exam – a prerequisite in New York City for getting a public job – and 10 months later she grabbed an opening as an $8.56-an-hour subway cleaner.

"Leaving her kids to be watched by a neighbor, Ms. Beatty worked from 10 p.m. to 6 a.m, mopping subway-car floors and clearing trash from under the seats. She would rush home to her South Bronx apartment to see her children to school."

Unpaid Training Sessions

"Besides gruelling shifts, Ms. Beatty spent many unpaid hours attending skill-training sessions offered by the MTA. There she learned the basics of electrical circuits and the remedial math she needed to qualify for a promotion. She hoped to enter a MTA training program that would propel her to a position as an inspector, checking subway cars when they roll into the maintenance shop and repairing or replacing any worn or damaged parts.

"Once it was fairly easy for a motivated subway worker to get into a training program. In the 1980s, the MTA Training Center, housed in a converted elementary schools in Brooklyn, bustled with day and night classes. Hundreds of cleaners, security guards and entry-level workers passed through each year, some undergoing formal MTA training and others attending seminars for promotional exams in the months ahead.

"Between 1981 and 1991, the MTA offered a promotional exam for car-inspector jobs five times – twice in 1986 alone – and attracted more than 1,500 applicants from its own ranks. Since 1991, the MTA offered the exam only once, in 1999, when Ms. Beatty was one of 145 applicants who took the test. She was one of 35 selected.

"Ms. Beatty had to wait till 2001 to start her training. For 18 months, the MTA paid her to attend all-day sessions. Commuting with a fellow student from Long Island early on, she suffered a car accident, which left her with a badly injured ankle. Warned she would have to wait years to requalify if she dropped out, she hobbled to classes on crutches.

"She says she loved the technical classes dealing with power tools, traction motors, pneumatic brakes and propulsion systems, but she struggled with math, as did many others who hadn’t been in a classroom for years."

College Degrees as an Ever More Expensive Need for Advancement

"In 2002, the MTA started requiring that new entrants in the subway car maintenance program either have a recent degree from a vocational high school or a community-college degree in technology because so many jobs demand electronic skills. Mrs. Beatty with her 20-year-old diploma from a regular high school wouldn’t make the cut today.

"Three months ago under pressure from the Transport Workers Union, the MTA started a new subway-inspector training course with 13 students, all from the union’s ranks. Of the 13, six are former cleaners, and all of them have technical degrees. The others came from skilled jobs such as forklift operator and signalman’s assistant.

"Richard Gorman, the assistant vice president for employment services at the MTA’s New York City Transit division, says the authority would like to offer more promotions for low level employees but the need for computer skills and rudimentary math ability makes it difficult. The union counters that many of those skills can be taught.

"Both sides agree that improved productivity at a system that was once notorious for breakdowns and graffiti has reduced the pool of new jobs to which cleaners and security guards can aspire. Staff at a big Coney Island maintenance depot has been cut from over 1000 to 600 in the past five years. When MTA replaced subway tokens with prepaid Metro Cards, 120 skilled machinist positions were eliminated. [The union] persuaded the MTA to retrain the workers to repair card-vending machines."

The complex many-faceted problem seems to be crying for a shift in the concept of a corporation, whether public or private. It has to do with helping to maintain the community it works in as well as its own equipment. With this, in the long run both corporation and society could come ahead.

But meanwhile let us ponder yet another paradox. The moral of The Wall Street Journal I have summarized is that a technical education has become so crucial that those without can find their careers and lives blocked forever. Why then would our government not recognize education, and accordingly health and social services that protect the education once it is delivered as investments. Surely that is a bad leak of that famous item "efficiency" that is so incessantly praised and so little protected.

William Krehm

-- from Economic Reform, July 2005