The Unyielding 5%

In Cleveland, Warner & Swasey Co.

has rehired hundreds of machinists who were laid off during the recession of 1970. In La Crosse, Wis., Trane Co. is hiring new workers off the street for the first time in three years. In Indiana's South Bend-Elkhart industrial belt, more than 1,000 new factory jobs are waiting to be filled. Such stories are not unusual anywhere in the U.S.: a booming economy has created 2.7 million new jobs in the past year. But the surge --and the soaring cost of living that attends it--has also drawn 2.1 million new job hunters into the labor force, and so the unemployment rate has not been dropping as it did in past booms.

In fact, for the past five months the jobless rate has stubbornly held at 5% --a figure that few other industrialized nations would tolerate. May figures due out this week could show some decline. Yet even Herbert Stein, head of the Council of Economic Advisers and an eternal optimist about the economic outlook, predicts that the jobless rate will drop only to about 4.5% by year's end. That expectation has led the Administration to redefine "full employment" by dropping the old numerical target of a 4% unemployment rate and shoot instead for a condition in which persons who want to work and seek it realistically can find employment."

The redefinition is small comfort to the 4.2 million people now vainly looking for work. Predictably, most are uneducated, unskilled, nonwhite and/or female. Although only 2.4% of married men are without jobs, some six out of 100 women are still looking. The non-white jobless rate (9.1%) continues to be slightly more than double that for whites (4.5%). In April some 15.4% of teen-age job seekers were without work, scarcely fewer than a year ago. An unusually high percentage of teen-agers are looking for employment now, partly because they no longer face the draft. People who fall into more than one of the hard-to-hire categories face particularly tough going. In the Watts section of Los Angeles, reports Herbert Hill, national labor director for the N.A.A.C.P., more than 40 out of every 100 black women are unemployed.

Even people in skilled and professional categories, however, are feeling the pinch. In Southern California, more than 16% of those without work are in professional, technical or managerial classifications. Nationally, many teachers and recent college graduates with liberal arts degrees find themselves unwanted, and managers in the over-50 set who were forced to take early retirement and itch to get back in the saddle are pounding the streets. Ross Kalegi, owner of an Akron employment agency, describes the plight of one: "He was making $18,000 a year as a sales executive at a rubber firm, but he was forced to retire at 57. He isn't worth anywhere near his old salary on a new job, so he turns down everything we refer him to."

The cruel irony is that plenty of good jobs are going begging, mostly in skilled or semiskilled trades. Laments Joseph Koller, manufacturing manager of Barrett Electronics in Northbrook, Ill. "I've been looking everywhere for six welders. We've had listings running for eight months." Other companies have become so shorthanded that they have revived apprentice and job-training programs that have been dormant for years.

Students of labor markets point to several reasons for the mismatch between discouraged job hunters and empty jobs. Low wages make some jobs (domestic work, light manufacturing) less attractive than the dole. Lack of good public transportation effectively prevents city workers from reaching suburban jobs. Many vocational schools have equipped students with outmoded skills. The heavy burden of employee fringe benefits and employer contributions to Social Security and unemployment-compensation funds prompts some big employers, like those in the auto industry, to work their labor forces overtime instead of hiring. The Nixon Administration has sharply reduced funds to hire ghetto youth and support ? job training programs for minorities --cutbacks that, asserts the N.A.A.C.P.'S I Hill, could consign many ghetto dwellers to a future in which they "have no anticipation of ever entering the labor force" and will have to turn to crime.

While that view may be overstated, there is abundant reason for concern.

The distribution of jobless rates among various population groups has hardly changed at all since, say, April 1965 --indicating that the nation has made dishearteningly little progress including blacks, women and youths in productive jobs even in a flat-out boom. And as the boom gives way to an inevitable 1974 slowdown, unemployment rates could well climb next year from the present unsatisfactory level.

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