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This is to certify that the

dissertation entitled

Reemployment Experiences of Dislocated
Workers in a Community Experiencing
High Unemployment

presented by

Sharon Marie VandenHeuvel

has been accepted towards fulfillment
of the requirements for

_D_Q.C._£_Q_r_ degree in MM

 

 

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MSU Ie An Afirmdlve Action/Ewe! Opportunity Inflation
WI

REEMPLOYMENT EXPERIENCES OF DISLOCATED WORKERS

IN A COMMUNITY EXPERIENCING HIGH UNEMPLOYMENT

by

Sharon Marie VandenHeuvel

A DISSERTATION

Submitted to
Michigan State University
in partial fulfillment of the requirements

for the degree of

DOCTOR OF PHILOSOPHY

Department of Educational Administration

1989

(00450534

ABSTRACT

REEMPLOYMENT EXPERIENCES OF DISLOCATED WORKERS IN A
COMMUNITY EXPERIENCING HIGH UNEMPLOYMENT

by

Sharon Marie VandenHeuvel

Title III of the Job Training Partnership Act.(JTPA)
was enacted to provide short-term education and training for
dislocated workers which would enable them to find
employment in the private sector. This study was designed
to examine the impact of a Title III program on
participants' reemployment rates, earnings, and perceptions
of long-term employment and job satisfaction at their
current jobs compared to those of nonparticipants. The
closing in September, 1986, of a iron plant located in
Muskegon, Michigan, provided the setting for this
examination. The program, which operated between July 3,
1986, and June 30, 1987, offered education and training to
614 workers who were permanently laid-off. In February and
March, 1989, data were collected through telephone
interviews or mailed questionnaires from 127 of the laid-off
workers. Sixty-four had been participants in the program;

63 had not.

Data analysis indicated there was no significant
difference in reemployment rates or earnings between
participants and nonparticipants. .Although.80 percent of
the respondents had found full-time employment by the time
of the interviews, most jobs were in entry-level, low-wage
positions. Fifty-six percent of participants did not find
jobs related to the training. There was no significant
difference between participants' and nonparticipants'
perceptions of long-term employment and job satisfaction at
their current jobs. Even though most workers had worked 16
or more years at the laid-off jobs, the majority believed
they now had job security. Sixty-eight percent of the
respondents were paid less than at the laid—off jobs, yet 75
percent indicated they were satisfied with their current
jobs. Opportunities for decision making and advancement
played a major role in job satisfaction.

These findings suggest three potential problems when
implementing dislocated worker programs: Recruiting and
outreach efforts have initiated little response from laid-
off workers, training is not always compatible with labor
market demands, and linkages are often weak with the private

sector.

© Copyright by
Sharon VandenHeuvel

1989

Dedicated to
My Parents

Paul and Alice Lange

ACKNOWLEDGEMENTS

This study could not have been completed without the
support, guidance, and help of many people.

The members of my committee, Richard Gardner, Eldon
Nonnamaker, Marvin Grandstaff, and Louis Hekhuis guided,
taught and supported me throughout my graduate studies, as
well as during the dissertation experience. Louis Hekhuis,
committee chair, was always accessible when I needed
direction. His kindness, support, and encouragement are
appreciated. To Diane Krasnewich, who provided statistical
guidance during the data analysis and tried to keep me sane,
thank you.

Cris Oman's computer expertise was invaluable when it
came time to key in the data from the questionnaires. John
Morgan from MESC gave hours of his time to help me collect
the data I needed to begin this study. This project could
not have been started without his support and assistance.

Several other people were instrumental in helping me to
complete this project. Paula McClurg, Sandy Winger, and the
rest of the library staff at Muskegon Community College
spent hours tracking down material. A special thanks to
Diana Baran, Sandy Ellis, Brett Huff, Barbara Haggarty,

Sandy Schiller, and Jill VandenHeuvel who spent many

vi

evenings completing the telephone interviews. I owe a large
debt to my good friends, Pat Huff, Sally Clark, Sandy
Schiller, Diane Matt, and Mary McCann who listened when I
complained, encouraged me when I was down, and laughed when
I was crazy! Finally, thank you to my husband, son, and
daughter for their patience and understanding when I

deserted them while I devoted myself to this dissertation.

vii

TABLE OF CONTENTS

LIST OF TABLES/FIGURES . . .
LIST OF APPENDICES . . . .

CHAPTER I: INTRODUCTION . .
Introduction and Rationale
Need for the Study . .

Significance of the Study
Purpose of the Study . .
Research Questions . .
Theoretical Explanations .
Limitations of Study . .
Definition of Terms . .
Summary . . . . . .

CHAPTER II: LITERATURE REVIEW

Theories on Plant Closings

Government Employment and Training Assistance

Plant Closing Initiatives in the U. S.
Legislative Initiatives in Other Countries .

Dislocated Worker Projects

Surveys and Studies on Dislocated Workers

Summary . . . . . .

CHAPTER III: METHODOLOGY . .

Population . . . . .

Sample . . . . . .
Data Collection Procedures
Questionnaire .. . .

Pilot Test . . . . .
Data Analysis . . . .
Summary . . . . . .

viii

24

24
32
40
44
46
52
61

66

66
68
70
71
73
74
74

CHAPTER IV: ANALYSIS OF DATA . .

Background Characteristics of Respondents . .
Post Reemployment Rates . .
Reemployment Rates at Time of Interviews . .
Reemployment Earnings . .
Perceptions of Long-Term Employment . . . .
Perceptions of Current Job Satisfaction . . .

Summary . .

CHAPTER V: SUMMARY,

Summary . .
Major Findings
Conclusions .
Recommendations
Final Notes .

APPENDICES . . .

LIST OF REFERENCES

CONCLUSIONS, AND

ix

RECOMMENDATIONS

76

76
94
97
99
102
102
105

106
106
113
116
119
136
140

155

Figure 1:
Table 1:
Figure 2:
Figure 3:
Table 2:
Table 3:
Figure 4:
Table 4:
Table 5:
Table 6:
Table 7:
Table 8:
Figure 5:
Figure 6:
Table 9:
Table 10:

LIST OF TABLIES/FIGURES

Annual Jobless Rates . . . . . .
Characteristics of Dislocated Workers
Respondents Seniority at Laid-Off Jobs

Job Status of Respondents at Laid-Off
Jobs . . . . . . . . . .

Reasons for Not Relocating . . . .
Program Enrollment . . . . . .

Number of Weeks Between Layoff and
Enrollment in Program . . . . .

Number of Weeks Scheduled for Training
Reasons for Dropping out of Program .

Reasons Respondents Did Not Believe
Program Was Beneficial . . . .

Number of Jobs Since Layoff . . .
Number of Weeks Without a Job . . .

Types of Companies Respondents Found
New Employment . . . . . . .

Present Wages Compared to Wages at
Laid-off Jobs . . . . . . .

Current Wages for Respondents . . .

Perceptions of Current Job Satisfaction

10

78

80

83

85

87

89

91

92

93

95

96

98

100

101

104

LIST OF APPENDICES

Appendix

A. Letters to Subjects Who Could Not Be

Reached by Telephone . . . . . . . . 140
B. Questionnaire . . . . . . . . . . . 141
C. Follow-up Letter . . . . . . . . . . 151

D. Letters Sent Prior to Project Solicitation . 152

E. Script for Telephone Interviews . . . . . 154

xi

CHAPTER I
INTRODUCTION

IDENTIFICATION OF THE PROBLEM

Every time we allow a potential worker to drop out of
the productive workforce, we incur potential future
liabilities in terms of lost production, lost taxes,
and increased welfare and unemployment taxes . . .
unless adequate training is provided, we could find
ourselves with increasing labor shortages and
increasing unemployment as our labor force does not
match the needs of industry.

Malcolm S. Cohen

A Preliminary Analysis 9:
Employment and Training

Programs ip the state 9; Michigan
(1988, p. 1)

 

 

 

For in the new world economy, it is the skills and
creativity of the men and women who work in our offices
and factories that will determine our ability to keep
the jobs we have and secure new ones.

Governor James J. Blanchard
The Michigan Strategy
(1988, p. 8)

 

Over the last ten years the phrases "plant closings"
and "dislocated workers" have unfortunately become familiar
household terms. Pick up a newspaper on any given day, and
most likely there will be a feature article on another plant
that is shutting its doors, displacing hundreds of workers.
In the past 20 years, millions of workers have lost their
jobs because of structural changes in the U. S. and world
economies induced by increased foreign competition, higher

energy prices, advanced technologies, and consumer

demographic trends. This concept is called structural
unemployment. While the traditional manufacturing base of
the economy; namely, steel, automobiles, rubber,
electronics, and textiles, has been steadily declining,
another structural change has been taking place. There has
been a rapid growth in energy, high technology, and the
service sector. In 1986, the Office of Technology
Assessment (OTA) of the U. S. Cbngress estimated that
between 1970 and 1984, 94 percent of all new jobs created in
the U. S. were in the service sector with only 1 percent in
the manufacturing sector.

Most economists agree that the service sector will
continue to account for a greater proportion of employment;
however, it is unknown if dislocated workers from declining
manufacturing industries will be able or willing to take
advantage of this new growth. For the purposes of this
dissertation, a dislocated worker is defined as a worker who
has been permanently laid off from a job.

There is enormous local, state, and federal concern
about the problems dislocated workers and their communities
have when faced with plant closings. Every time a plant
closes or permanently lays off large numbers of workers, the
workers, their families, and communities incur future
potential liabilities in terms of lost production, lost
‘baxes, and increased welfare and unemployment taxes (Cohen,
1988). Case studies on plant closings report on the growing

need of workers for assurances about the security of their

jobs. "Americans have long considered it a basic goal to
have the opportunity to provide for their families. 'Yet,
the U. S. has a growing number of people with special
burdens that keep them out of the mainstream of the labor

force" (Jobs for the Hard-to-Employ, p. 11).

 

 

The dislocation problem exists when laid-off workers
try to become reemployed elsewhere in the economy.
Difficulties arise when a worker is unable or unwilling to
take a suitable new job or because job vacancies do not
exist which are compatible with the worker's skills. Barth
(1981) states, "The dislocated problem results from a
mismatch between the demands of the employers with jobs to
offer and the capabilities and needs of dislocated workers"
(c. 2, p. 3).

A review of the literature reveals a consensus that
the demographics of<dislocated workers.do differ from.the
"general" unemployed workers in that dislocated workers tend
to»be older, white, less educated, much more experienced,
accustomed to higher earnings and income, and less likely to
have had recent experience in job search techniques (Barth,
1981; Horvath, 1987; Kulik, 1984: Bartholomew, 1987; Thor,
1982). Most researchers in the area of employee
dislocation agree that dislocated workers are less likely
than the average unemployed worker to believe that their
jobs are permanently lost and probably less accustomed to
receiving unemployment related services. They are also

likely to experience significant earning losses and both

psychological and health problems in adjusting to the fact
that they have lost long-time jobs.

Studies indicate that younger dislocated workers (22 to
44 years of age) who have the skills in demand or the right
educational background have little trouble finding another
job. However, a large percentage of dislocated workers
remain out of work for many weeks, months, or even years

(Gordus, 1981: Kulik, 1984).

NEED FOR THE STUDY

A plant closing is much more devastating in times of
high inflation and unemployment. IReemployment possibilities
are even more limited in this situation when there are few
vacancies and many job hunters. The occurrence of job loss
and the length of unemployment are only two aspects of
personal costs associated with economic dislocation.
Studies by Kulik, 1984; Cohen, 1988: and Bendix, 1982,
indicate that not only do workers lose their jobs, but the
new jobs they eventually obtain do not usually provide as
much income, status, or security as their old jobs.

Most of the recent studies completed on dislocated
workers indicate that permanently laid-off workers do not
suffer just temporary losses until reemployment.is found.
Many never make a complete occupational or annual earnings
recovery. It is estimated by Bendick and Devine (1980)
that if a worker is unemployed by economic change and lives

in an area of high unemployment (above 8.3 percent), his or

her expected duration of unemployment is increased by 20
percent.

The U. S. is faced with the dilemma of what policies
are needed to cope with rising plant closings that would
effectively help dislocated workers re-enter the labor
market. Studies suggest that current social services do not
help a majority of those experiencing unemployment. Margoli
and Farran (1984) report that unemployment assistance is
available to less than one-half of the unemployed and that
the amount and duration of benefits rarely exceed 50 percent
of a worker's weekly wages. Although the federal government
has assisted the unemployed for years with special
legislative acts, federal policy fails to recognize that
when unemployment occurs during a recession, or when a large
plant closes, there is a decline in the availability of
community resources to assist dislocated workers. Fermanfis
(1984) analysis of the plight of the unemployed in Michigan
during the 1980-81 recession points out two things that
occur as unemployment increases:

First, there are reductions in state and federal funds

for human services when revenues decline;. .. there

is increased competition for shrinking resources among

advocates for the unemployed, the aged . . . (p. 152).

As industries modify their technologies, shift their
resources from one industry to another, and fail to compete
internationally, a variety of decisions will face
policymakers, labor leaders, and communities. ‘When new jobs

are created, the skills required are frequently different

from skills possessed by workers whose jobs have been

eliminated. "The workers who are likely to lose their jobs
are frequently semi-skilled or skilled, relatively high
paid, experienced manufacturing workers whose jobs are
phased out because of foreign competition or incorporation
of new computerized, automated, or energy efficient
technologies in the workforce" (Barth, 1981, C. 2, p. 25).
Therefore, it is vital that local, state, and federal
decisionmakers understand what factors are necessary to
recruit dislocated workers into and retain them in programs
that will allow them to become productive, self-supporting

members of the community.

SIGNIFICANCE OF THE STUDY

Michigan.Business Climate

 

The problems of dislocated workers caused by plant
closings and massive layoffs are likely to continue. When
plant closings occur in communities that are already plagued
with high unemployment, the concern for maintaining the
population and industrial base of the area and assisting
dislocated workers in finding replacement jobs to preserve
the tax base becomes paramount.

Michigan has been traumatized by the effects of the
downturn in the national economy for a number of years.
According to Governor Blanchard in his January, 1988 report,

The Michigan Strategy: Building the Future, the state was

 

threatened with bankruptcy at the beginning of this decade,
with a $1.7 billion deficit, depression-level joblessness

with an unemployment rate of 17.3 percent, and decay of

plants and technologies. Michigan's economic base has been
dominated by manufacturing, with the greatest loss in
percentage decrease of employment in gray iron foundries.
The U. S. Department of Commerce data indicate Michigan was
particularly hard hit by the recession of the early 1980%L
losing much of its manufacturing base (Th3 Mggkgggn
Chronicle, September 24, 1988).

Governor Blanchard described the barriers to progress
in Michigan as the GM layoffs, the twin federal deficits of

budget and trade, and Wall Streetfis Black Monday response to

 

Washingtonls lack of progress in addressing the nationls
economic perils (Blanchard p.1n. The series.of GM plant
closings precipitated job losses not only in motor vehicle
unemployment, but in parts, equipment, suppliers, and other
related industries. Since 1979, auto plant closings have
resulted in nearly a 30 percent decline in auto-related
employment, from a high of 409,600 jobs to about 288,000
(Bergstrom, 1988).

To determine the demands of the workforce, economic
development analysis reports were examined from the state of
Michigan. One of the purposes of the review was to
determine the training and/or retraining needs that would
emerge from the proposed targeted activities and the
potential need for job skills. In The Michigan Strategy,
1988, Blanchard cited the protection and creation of
Michigan jobs as the single leading priority of state

government. In support of that effort, he identified eight

 

areas in which the state will initiate new activities. A
third of the state's new initiatives are designed to retrain
workers and to create jobs resulting from the rapid

introduction of new technology into Michigan's businesses.

Muskegon Business Climate

 

Much of Michigan has been dependent on the automobile
industry for its economic health. West Michigan, and
Muskegon in particular, is no exception. On May 23, 1982,

The Muskegon Chronicle began an 18-part series on Muskegon's

 

economy in which reporters described the loss of 12,000
manufacturing jobs over the last 30 years. Community
participants in a randomly selected survey attributed the
loss of jobs to high taxes, high workers' compensation
costs, auto-related businesses, and labor problems.
Employers' perceptions of the reasons for departing
industries were Reagan policies, the state legislation, "a
tough labor town image", bad union relations, exasperated
management, Michigan's workers' compensation, unemployment
insurance rates, state taxes, and regulatory laws (Thompson,
1988). Overall, the consensus was that Muskegon had a bad
climate for doing business.

Since the report was written six,years ago, many
industries and businesses have left Muskegon for similar
reasons. In the past three years, Muskegon has had five
major plant shutdowns, dislocating approximately 1,600
workers (Morgan, 1988). With the closing of foundries and

the resultant loss of jobs, Muskegon has been perceived as

an area of declining or dying industries. The workers who
permanently lost their jobs as a result of these closings do
not always find it easy to secure replacement jobs because
of the already high unemployment rates. Figure 1, page 10,
shows Michigan's and Muskegon's unemployment rates compared
to the U. S.'s overall unemployment rate.

The 1988 Muskegon/Oceana Consortium: Adult Training
and Re-Training Grant Application indicated that the
existing labor force in the area (both employed and
unemployed) is disproportionately concentrated in skilled
and unskilled blue-collar occupations. This suggests that
the area may have a competitive advantage for firms
requiring skilled and unskilled blue-collar labor. However,
between 1980—85, the number of unskilled workers increased,
while the number of skilled workers in the area declined.
"Even though there is an abundance of unskilled workers in
the area, it is unlikely these workers will accept the
low-wage levels of unskilled workers in the South and third
world countries" (p. ii).

Skilled workers required for more advanced and complex
manufacturing processes do appear to be in demand. However,
20 percent of the firms surveyed in this report indicated
that the supply of skilled workers to be unsatisfactory to
fill these demands. The area is substantially
underrepresented in professional and managerial occupations
and in the proportion of residents with four or more years

of college education. "Several small industries looking to

10

 

 

 

 

1970 1980 1981 1982 1983 ' 1984 1985 1986 1987

- MUSKEGON D MICHIGAN UNITED STATES

Figure 1: Annual jobless rates: Annual average percent unemployed

Source: MESC - Muskegon, Michigan. 1988

11

locate here, and a few local employers, have learned for
them--'a good person is hard to find”'(Thg Mggkgggn

Chronicle, November 27, 1988, p. 1C). Seeking qualified

 

applicants for even a handful of specialized technical,
professional, and managerial jobs, these firms have
discovered the local labor pool has run dry.

The demographic make up of Muskegon's population is as
follows: 13 percent nonwhite, 51.6 percent females, 89
percent between the ages of 16 and 54, and over 25 percent
without a high school diploma (Muskegon/Oceana Consortium:
Adult Training and Re-Training Grant Application, 1988). As
a result, this population might need some type of adult
basic or remedial education to be considered employable.
Additionally, this area has the second highest unemployment
rate within the state, 11 percent for the fiscal year 1988,
with a large percentage of those unemployed being dislocated
due to plant closures (Hausman, 1988, March.9)..A match must
be made between the demands of the workplace and the

knowledge and skills of the workforce.

Job Training Programs

 

Much of the impetus for job training in Michigan has
come from the Governor's Office for Job Training. Governor
Blanchard contends that 1.3 million Michigan workers are not
equipped to fill increasingly complex, high-technology jobs.

A common criticism of the education and training
programs for the unemployed is that very little evaluation

has been done to determine the effectiveness of these

 

12

programs (Cohen, 1988). For example, in the state of
Michigan alone, over $800 million a year is spent on 70

state and federal human-investment programs (Investing ig

 

_P_e_gp_l_e_, 1988). This figure does not include funds spent by
local governments and by private organizations such as
firms, unions, foundations, and charitable groups (Cohen,
1988).

Cohen's research indicated that out of the 70 programs,
impact evaluations have been done on only two programs, and
only six process evaluations have ever been done. It
appears the government is willing to allocate monies for
human-investment programs, but not for evaluating the
effectiveness of the programs. As a result, very little
evidence suggests that the federal and state funded
programs do improve the employability of participants (Cook,
1987). ‘Title III of therJob Training and Partnership Act
(JTPA), which consists of training and/or retraining
programs for the dislocated workers, has also lacked
systematic monitoring or evaluation. Cohen theorizes that
because the federal government has turned the programs over
to the states and there has been no systematic monitoring or
evaluation of the programs, it is unclear how effective JTPA
really is.

Because of a reduction in funds available to trainees,
stress on business needs rather than client needs and
pressure for short-term rather than long-term training have

impaired the effectiveness of JPTA in assisting dislocated

13

workers (Levitan, Gallo, 1988). One important measure of
success is placement; therefore local delivery areas have
been known to "cream" off the most likely applicants to
succeed, leaving the most needy applicants to fend for
themselves. For the purposes of this study, training and
retraining are used synonymously; therefore training will be
used throughout the study.

At every level of government, serious problems arise as
workers dislocated by plant closings move to enroll in
government programs that will compensate them for their
losses. This research, examined reemployment rates,
earnings, and perceptions of current job security and job
satisfaction for participants and nonparticipants of a
training program. The results may provide decisionmakers
with information on whether or not the present government-
sponsored training programs are meeting the needs of
dislocated workers. This information, if used effectively,
could be valuable when allocating resources for dislocated
worker programs. For example, should more money be expended
for remedial education rather than the job training itself?
Should more funds be expended for On-The-Job-Training (OJT)
rather than classroom training? Should more emphasis be
placed on long-term training rather than short-term
training? Should programs emphasize job search skills
rather than classroom training? Who should be trained? How
much of the post-training success can be attributed to the

training?

l4

PURPOSE OF THE STUDY

Although much research and writing has been done on
plant shutdowns and dislocated workers in the last ten
years, it has been done sporadically. Most recent studies
or evaluations of dislocated worker programs are short-
term, usually 30 days to 90 days after the training programs
have ended. Short-term evaluations may be risky and
misleading. The effects of training are revealed over a
relatively long period of time. The placement requirement
of most government-sponsored training programs. iS‘thatla
participant must remain on the job for a specified number of
days. For example, the Title III portion of JTPA stipulates
that a worker needs to be reemployed for 30 days in an
unsubsidized position at a minimum wage of $5.40 an hour to
be counted as a placement by the local Service Delivery Area
(SDA). The only other mandate by the federal government is
that local SDA's do a follow-up 90 days after the
unsubsidized placement (Doby, 1988).

Other programs like M-Job (which is a Michigan human-
investment program) count as placements participants who
gain full-time employment for at least 30 days at a minimum
of $5 an hour within 12 months of enrollment in the program.
As a result, data on long-term full-time placement after job
training or retraining is practically nonexistent. The few
follow-up studies that have been conducted did not examine
dislocated workers' perceptions of long-term employment

prospects and job satisfaction.

15

The purpose of this dissertation is to determine what
happened to the 614 workers who were displaced from an iron
foundry in Muskegon, MI, in September, 1986, when one of the
major plants shut down. This study will examine the impact
of short-term humanrinvestment programs (funded under JTPA
and/or Trade Readjustment Act (TRA) on participants'
reemployment rates, earnings, and perceptions of long-term
employment and job satisfaction compared to
nonparticipants'. Nonparticipants are the dislocated
workers who elected not to participate in any human-

investment program.

ASSUMPTIONS
The basic assumptions on which this study is based are
as follows:

1. Dislocated workers are reluctant to enroll in
government-sponsored training programs.

2. Many dislocated workers do not have transferability of
skills.

3. The investment in training programsrfor'dislocated
workers will provide a benefit to society in the forms
of increased skills, knowledge, earnings, and taxes.

4. Job satisfaction may be as important as wages earned
in maintaining long-term employment.

5. Society has a vested interest to assist dislocated
workers to achieve at least functional literacy and/or

achieve economic viability.

16

HYPOTHESES
The following five hypotheses, stated in the null form,
were tested in this research:
HYPOTHESIS 1: There is no significant difference in the
frequencies per classification for the number of weeks

between job termination and reemployment for participants
and nonparticipants.

 

HYPOTHESIS 2: There is no significant difference between
participants' and nonparticipants' reemployment rates at the
time of the interviews.

 

HYPOTHESIS 3: There is no significant difference in the
frequencies per wagerclassifications for participants and
nonparticipants.

 

HYPOTHESIS 4: There is no significant difference between
participants' and nonparticipants' perceptions that their
current jobs provide long-term employment.

 

HYPOTHESIS 5: There is no significant difference between
participants' and nonparticipants' perceptions of current
job satisfaction.

 

Other questions that were descriptively examined are:

1. Do participants perceive that.their'present jobs are
related to the training received?

2. What are the ages of participants and nonparticipants?
3. What is the number of weeks of training completed by
participants?

4. What are the perceptions of participants about the
training'program?

5. What are the levels of education of participants and
nonparticipants?

THEORETICAL EXPLANATIONS
Bendix and Devine (1980) state that it is definitely
harder for job seekers to find employment.in areas of few
vacancies and many job seekers. As a result, upgrading
dislocated workers' skills and education through government

training programs is necessary if these workers are going to

17

be successful in competing for the jobs that require more
skills and education. However, Cook (1987) and Cohen (1988)
indicate that there is little evidence suggesting that the
training programs sponsored by the government do improve the
reemployment rates and increase wages of dislocated
workers. Government training programs attract only a small
proportion of workers who qualify for the programs. There
may be some theoretical explanations for Cook's and Cohen's
findings.

The Human Capital theory and Herzberg's theory on
factors that influence job satisfaction were examined as
explanations for low levels of participation in training and
levels of current job satisfaction as perceived by the

reemployed workers.

Human Capital Theory

 

The Human Capital theory was developed in the 1960's
and attempted to explain the relationship between education
and economic growth. The theory is based on the idea that
individuals possess human capital in which investments can
be made. "These investments, if made carefully and
rationally, can add to the worth of the capital and result
in a return on the investment” (Bartholomew, 1987). The
main concept of the human capital theory is that people
will continue to make these kinds of investments, such as
participating in training programs, as long as the benefits
of future returns outweigh the costs of investment,

including wages not earned while in school (Thurow, 1970).

18

For example, it is a difficult task to convince a
dislocated worker who once made an hourly wage of $12 in a
traditional manufacturing setting to participate in a
training program for a job in the service or high-tech

sector that most likely will result in a lower paying job!

Herzberg's Theory

 

Herzberg's theory (1966) was used as a base for
estimating job satisfaction in this study. Herzberg
developed a theoretical framework which illustrates that
many factors influence job satisfaction. He classified
working conditions into two major categories. The
dissatisfiers, called hygiene factors, are primarily
associated with compensation factors, such as salary, fringe
benefits, company policies, job security, and physical
working conditions. The dissatisfier factors associated
with the conditions surrounding the "doing" of the job are
called extrinsic factors. They describe the environment and
serve primarily to prevent job satisfaction since people are
constantly trying to adjust to these factors. The
satisfiers, called motivation factors, are primarily
associated with opportunities for personal growth,
promotion, recognition, and participation in decision
making. These factors are related to the inner structure of
work and are referred to as intrinsic job factors. It may
be that the majority of dislocated workers are more
concerned with the hygiene factors at the expense of

motivational factors resulting in low participation in

19

training programs. Improvements in hygiene factors will
serve to remove the impediments to positive job attitudes;
however, while hygiene factors can influence the degree of
job dissatisfaction, they have no relationship to actual

satisfaction in work.

LIMITATIONS

This research is limited by the fact that it was a case
study of a group of dislocated worker from one plant in a
community that has a history of high unemployment. While
this means that generalizations cannot be made to all
dislocated workers in other geographic regions, it is
important to note that the foundry workers interviewed for
this study resemble the larger population of dislocated
workers in several dimensions: wages, skills” education,
and employment sector. The majority of the foundry workers
were high-wage, semi- or low-skilled workers, with 24
percent having less than a high school education. Only a
small proportion (13 percent) of the dislocated workers
elected to enroll in a training program, which is a similar
pattenn among other dislocated workers around the country.
The intent of this study is not to generalize about all
displaced workers, but to raise issues for consideration and
further study.

The study is limited to those dislocated workers who
chose to participate in an interview, so the results may not
reflect dislocated workers who chose not to participate in

the study. .Also, this study was completed 2 1/2 years after

20

the plant closure which made it difficult for some of the
dislocated workers to remember exact time frames that were
required to answer some of the questions on the

questionnaire.

DEFINITION OF TERMS
For the purposes of this study, the following terms are
defined:

Cyclical unemployment: Seasonal fluctuations which can

 

be caused by change in demand, strikes, weather, and model
change-overs.

Deindustrialization: A widespread, systematic

 

disinvestment in the nation's basic productive capacity.

Disinvestment: Financial resources and real plant and

 

equipment which has been diverted from productive investment
in basic national industries into unproductive speculation
mergers and acquisitions, and foreign investment.

Dislocated worker: Workers who are permanently laid

 

off from jobs due to increased international competition
and/or changing technology after putting in years of service
and who have acquired very specific skills.

Dislocated worker programs: Programs which provide

 

skills and education to participants which would allow
participants to become self-supporting through wages earned
in stable, full-time employment.

Effectiveness: Reemployment in an occupation related

 

to training.

Frictional unemplgyment: Time spent looking for a job.

 

21

Human-investment programs: Employment and training

 

programs to assist subgroups of the population by reducing
unemployment and increasing an individual's skills so as to
raise his/her standard of living.

Impact evaluation: Evaluations that measure outcomes

 

of programs.

Job satisfaction: The positive feelings reemployed

 

dislocated workers have about their work.

Long term: Employment or training lasting more than 12

 

months.

Nonparticipants: Dislocated workers who did not

 

participate in a human-investment program.

Older person: A person who is 55 years or older.

 

Other workers: Workers who were not classified as

 

skilled, semi-skilled, or unskilled (e.g. floor supervisors
or secretaries).

Participants: Dislocated workers who participated in a

 

human-investment program.

Process evaluations: Evaluations that focus on how

 

 

programs are being implemented and how services are being
delivered.

Reindustrialization: Investing capital in basic plants

 

and equipment.

Runaway shop: A plant that closes down and moves to

 

another location.

22

Semi-skilled workers: Production workers who learned a

 

skill while on the job without formal education or
apprenticeship program (e. g. coremaker, grinder, fork-
lift operator).

Short term: Employment or training lasting 12 months

 

or less.

Shutdown: A shutdown occurs when a work organization

 

permanently dislocates most or all of its employees.

Skilled workers: Workers who obtained a skill or

 

skills through education and or apprentice programs (e4;
maintenance worker, pipe fitter, millwright, electrician).

Structural Unemployment: Unemployment caused by

 

 

cyclical unemployment and changes in the U. S.rand world
economies induced by foreign competition, higher energy
prices, advanced technologies, and consumer demographic
trends.

Unemployed: People who are seeking work.

 

Unskilled: People not skilled in a specified branch

 

of work or who lack technical training ( e.g. laborer).

Younger person: A person who is under 55 years of age.

 

SUMMARY
Plant closings have become common.practice in the U.
S., causing millions of workers to become permanently laid-
off; Many of these workers either do not have the skills or
education necessary to re-enter the labor market quickly.
Some experience long durations of unemployment or find

employment in low-wage, entry-level positons. Policymakers

23

are faced with.the dilemma of what policies are needed to
assist dislocated workers to obtain the education and skills
they need to enable them to compete in the labor market. A
common criticism of the education and training programs for
dislocated workers is is that very few longitudinal studies
have been done to determine the effectiveness of the
program.

Chapter II reviews legislative initiatives and case

studies pertinent to dislocated workers.

CHAPTER II
REVIEW OF THE LITERATURE

INTRODUCTION

The workers displaced by the current closing are
having a much harder time finding new jobs than they
‘would in a healthy economy; Foreign imports, declining
consumption, high industrial investment costs, and
changing technologies all have eroded employment in
manufacturing industries where these workers would
ordinarily look for jobs at comparable wages and skill
levels. The growth occupations of today and tomorrow
are likely to require skills and technical experience
the typical displaced worker does not possess.

A Union Response 39 Plant Closings
(1982, p. 1)

 

 

This review of the literature includes: (a) theories on
plant closings, (b) government employment and training
assistance (federal and state), (c) plant closing
initiatives in the U. S., (d) legislative initiatives in
other countries, (e) summaries of dislocated worker

projects, (f) surveys and studies on dislocated workers, and

(g) summary.

Theories pp Plant Closings

 

While there has been much debate over what causes plant
closings, there is little argument about the impact of plant
closings on workers, their families, and the communities in
which the plants are located. In small communities, plant

closings may cause a devastating rippling effect. As plants

24

25

close, community tax bases shrink: and as a result of this
shrinkage, public services often suffer. Other industries
and retail stores who provided supplies to the closed plants
may experience a reduction in sales that often forces their
own closing. Faced with potentially great losses,
communities often respond to plant closings with a sense of
urgency and despair.

There are many theories concerning the causes for large
numbers of plant closings in the U. S. IMany economists cite
deindustrialization as the primary factor for a large
majority of the closings. Others credit changes in consumer
demands, failure to keep pace with technology, poor
management, international competition, and creative
destruction (referred to as the free-market concept) as
principle contributors to plant shutdowns or cutbacks. Three
of these concepts (deindustrialization, free-market, and

international competition) are discussed in more detail.

Deindustrialization

 

To Bluestone and Harrison (1982), deindustrialization
is the culprit for a large majority of plant closings. Using
Dun & Bradstreet statistics, deindustrialization is the
major contributor to over 30 million jobs lost in the 1970%;
because of plant closings. Bluestone and.Harrison.define
deindustrialization as a widespread, systematic
disinvestment in the nation's basic productive capacity.
The bottom line is that capital has been diverted from

productive investment in basic industries in the U. S. into

26

unproductive speculation, mergers and acquisitions, and
foreign investment which leaves "shuttered factories,
displaced workers, and a newly emerging group of ghost
towns" (p. 6). These authors suggest that government
intervention might be necessary to control plant
disinvestment policies.

Staudohar and Brown's (1987) research indicates that
deindustrialization is becoming more widespread.

In the past, deindustrialization has proceeded on a
selective basis. Particular industries and geographic

areas have borne the brunt of decline. Today,
deindustrialization and its problem of plant closure
has a new dimension. A broad cross-section of

manufacturing industries is shifting production

activities to locations in the Sunbelt and outside the

U. S. Because the incidences of plant closure has

spread to more industries of a wider geographic area in

the U. S., the problem merits greater public attention

today (p. xv).

Economists are quick to point out that corporate
managers have not stopped investing; many are just not
investing in their own basic industries. For example, U. S.
Steel's nonsteel assets grew 80 percent to $4.7 billion
during the past three years, while steel assets increased
only 13 percent to $5.9 billion. In Pittsburgh, the U. S.
Steel Corporation announced it would permanently close 14
mills in eight states within the year, laying off 13,000
workers. The Federal government, to save jobs, gave U. S.
Steel a $850 million tax break, which was later used.as a
down payment to purchase Marathon Oil (Bluestone, 1982).

General Electric (GE) has diversified its holdings,

making everything from toaster ovens to jet engines, and is

27

expanding its capital stock.outside the‘U.£L During the
1970's, GE expanded its worldwide payroll by 5,000. It did
this by adding 30,000 foreign jobs and reducing employment
by 25,000 in the U. S. RCA cut its U. S. workforce by
14,000 and increased its foreign workforce by 19,000: and
Mobil Oil acquired Montgomery Wards department chain
(Babson, 1973: Klein, 1983). This type of disinvestment may
be a major contributor in escalating the number of plant
closings across the U. S.

One thing that has become clear over the past five
years is that plant closings are not confined to the
industrial Frostbelt, or Rustbelt states: they occur in
large numbers all over the country. In fact, one study
completed in 1976 by Birch (1979) indicated that the South
or Sunbelt states had a higher proportion of plant closings
than the North, West, or Northeastn .Almost half the jobs
lost to plant closings, including runaway shops, during the
1970's occurred in the Sunbelt states and in the West.
Runaway shops move their plant and equipment into areas
where wages are lower, unions are weaker, and government
provides a good business climate. In the 1970's somewhere
between 450,000 and 650,000 jobs were transferred elsewhere
because of runaway shops (Bluestone, 1982).

Free-Market Concept

 

Other economists such as Joseph Schumpeter from Harvard
University would argue that America is not undergoing

deindustrialization. Dislocations caused by plant closings

28

are viewed as "necessary creative destruction" to eliminate
inefficient operations and to provide new economic
opportunities (Perrucci and Targ, 1988). This viewpoint is
called the free-market concept, which means no government
intervention. Businesses should be left alone to operate by
the law of supply and demand. Moses Abramowitz (1981)
summarizes the free-market concept:
The pace of growth in a country depends not only on
its access to new technology, but on its ability to
make and absorb the social adjustments required to
exploit new products and processes. Simply to recall
the familiar, the process includes the displacement and
redistribution of population among regions, and from
farm to city. It depends on the abandonment of old
industries and occupations and the qualifications of
workers for new, more skilled occupations (page 2).
Proponents of the free-market approach claim that if
deindustrialization is taking place, it is good and healthy
for the country. McKenzie (1984) supports this philosophy
by stating that as some firms go under, they release their
resources to other, more cost-effective firms that offer
consumers more of what they want at more attractive prices.
The free-market advocates are against any government
policies regulating free enterprise. They argue that
dislocated workers eventually find other jobs and that some
assistance, such as unemployment insurance benefits (UIB)
and job placement services, is available in all states to
help dislocated workers. Also, the Federal Trade Adjustment

Act (TAA) of 1974 gives extra financial support to workers

who lose their jobs as a result of foreign competition.

29

The latest legislation enacted in 1983 which provides
education and training for dislocated workers was the
creation of the Job Training Partnership Act (JTPA). The
protectionists argue that these measures are inadequate
because UIB are for a specified number of weeks, and TAA and
JTPA funds have been drastically cut during the Reagan
administration. Legislation, therefore would be required to
minimize the impact of plant closings (Staudohar, Brown

1987).

International Competition

 

Other analysts have traced the decline of industry to
international competition. Failure to use the latest
technological innovations to make products more competitive
with imported products has resulted in many plants closing
their doors, dislocating millions of workers. For example,
many plants in Japan and Germany are newer and more modern
than many plants in the‘U.£L, enabling these countries to
have a competitive advantage in international marketsc This
fact, coupled with a labor force that is paid considerably
less than their U. S. counterparts, makes it next to
impossible for many industries in the U; S. to compete with
industries in other countries.

During the boom years, U. 8. economic expansion abroad
not only generated enormous short-run profits, but also
established excess (unused) productive capacity in one basic

industry after another.

30

Through their multinational subsidiaries and the

profitable sale of patents and licenses to foreign

enterprises, the leading American firms even helped to

generate their own future competition. In the 1970's

this competition came back to haunt them in virtually

every major industry: steel, automobiles,

shipbuilding, and electronics (Bluestone, 1982, p. 15).

Bendickls research (1982) reported that businesses
cite competition in the market place as the major reason for
closures or layoffs. About 70 percent of the businesses
indicated that reduced product demand and/or increased
competition were major factors influencing their decision to
close or lay off workers. Over 35 percent of the closures
and layoffs in establishments with 100 or more employees
were within industries in which the Department of Labor
(DOL) had certified as being adversely impacted by
international trade.

Many argue that deficiencies in industrial policies in
the U; S. have contributed to a decline in the industrial
sector. As global trade expanded, U. S. firms were forced
to meet foreign competitors staffed with superior work
forces and managers who were backed by sound government
policies. U. S. businesses are bound by restrictive General
Agreement on Tariffs and Trade (GATT). Iacocca (1984)
summarized his feelings about GATT in relationship to Japan
by stating that we can't afford a trading partner who
insists on the right to sell, but who refuses to buy!

Candee Harris (1984) reported on the intersection of

recession, structural change in the economy, and plant

31

closings. She wrote that in 1982 there were 1.4
million fewer manufacturing jobs than in 1970.
Closings of large firms eliminated over 16 million jobs
between 1976 and 1982. Almost one-third of these were
in the manufacturing sector. While small manufacturing
firms--those with fewer than 100 employees-~registered
annual new employment growth rates around 6 percent
between 1976 and 1982, larger firms contracted their
employment. Rates of employment loss due to closings
of manufacturing branches doubled in the 1980-82 period
over the 1978-1980jperiod.... combining with lower
replacement rates to produce a net decline of 542
percent in manufacturing (p. 16).
Declining rates of profits across all sectors of the
U. S. economy have pushed capital investors in search of
better returns. This has resulted in investment
opportunities and cheaper labor’in'Third World countries.
It has been suggested by many economists that a change is
needed in the U. S. federal tax code to eliminate loopholes
that provide incentives to close plants, to move production
overseas, and to participate in wasteful conglomerate
acquisitions. While it is agreed that the economy benefits
from relatively unrestricted trade, quotas and tariffs have
become a particularly delicate political issue as more
American industries encounter stiff competition from foreign
markets, resulting in job displacements (Gordus, 1981).
Because of structural changes in the economy, the U. S.
economy may be experiencing a significant shift in
employment patterns. Audrey Freedman, a labor economist,
noted a 25 percent increase in the number of temporary and

part-time workers in the total workforce between 1975 and

1985. "By 1985 about 29.5 million of the 107 million U. S.

32

‘workers were temporary or part-time employees" (Serrin,
1986, p. 9). U. S. appears to be changing from a full-time
productive workforce to a workforce consisting of temporary
or part-time low-paid workers. "The redesign of full-time
into part-time jobs, the disproportionate growth of part-
time or part-year work, and the spread of wage freezes and
concessions from one industry to another all suggests a
decline in annual earnings" (New York Times, December 1986,
p. 18). Labor Department data shows that in the July-
September, 1988 quarter, the number of "discouraged workers"
who gave up finding a job rose from 910,000 to 930,000.
More than half were women, and one-third were blacks.
Another 5.1 million worked part-time but wanted full-time

jobs and could not find them (The Muskegon Chronicle,

 

October 25, 1988, p. 1, 4B).

GOVERNMENT EMPLOYMENT AND TRAINING ASSISTANCE

Federal Training and Retraining Legislation 12 the g; S.

 

 

National concern over dislocated workers began to grow
in the 1980's when it became apparent that a large
proportion of employment cutbacks in the steel, auto,
rubber, and textile industries might be permanent, leaving
many dislocated workers with little possibility of
reemployment in the same industry. The ability of these
workers to readjust after plant closings or large cutbacks
has been the subject of considerable interest to
policymakers, labor leaders, and economic analysts (Horvath,

1987).

33

Over the last 25 years, the Federal government has
initiated several employment and training efforts to assist
disadvantaged subpopulations. Attempts to compensate
dislocated workers for their job losses have taken two major
forms: readjustment services and income replacement. Job
search assistance, skill training, and out-of-area vacancy
information have been made available through public and
private employment and training agencies to assist workers
in finding new employment. In the past, however, these
services have not been targeted specifically to dislocated
workers but have been available to all individuals seeking
work or training. Employment Security Commissions have
provided job placement assistance, but staff reductions
occurring since 1977 have substantially lowered the level of
individualized services that can be provided to workers
through this channel (Horvath, 1987).

In 1961 the Area Redevelopment Act (ARD) was enacted by
the Federal government. This act provided up to 16 weeks of
training for unemployed and underemployed workers and paid
them an amount equal to unemployment compensation.during the
training. ARD was followed by the Manpower Development and
Training Act (MDTA) of 1962, the first national retraining
legislation. IMDTA provided training for experienced workers
dislocated by automation, but it was later redirected toward
the poor (Somers, 1968). In the next 20 years, government-
supported training programs as remedies to labor market

problems came and went. In 1964, the Economic Opportunity

34

Act created the youth employment program. This act was
followed in 1967 by the Work Incentive Program (WIN), which
was aimed at acquiring work experience and support services
for welfare recipients. Next, the Trade Adjustment Act
(TAA) was initiated in 1974 to give assistance to
dislocated workers who were laid off due to import
competition. The TAA program, which provides income support,
training, and job search and relocation assistance to
participants through the employment service, has focused
primarily on income maintenance rather than adjustment
services (Kulik, 1984).

Prior to revisions of TAA in 1981, benefits were
calculated at 70 percent of the worker‘s average weekly wage
up to a ceiling of the manufacturing average, for a base
period of 52 weeks. Up to 26 additional weeks were offered
to participants enrolled in approved training. Now, TAA
benefits are available to eligible dislocated workers for 52
weeks in duration plus a 26-week extension if enrolled in a
training program minus state unemployment benefits. (Morgan,
1988).

After Nixon became President, the Comprehensive
Employment and Training Act (CETA) was enacted in 1973.
This program, established to create jobs, was funded by the
Federal government but was managed locally. Dislocated
workers formerly could receive retraining and other services
through CETA only if they met that program's eligibility

requirements. Since most dislocated workers received income

35

support benefits and had significant assets, the majority
found it difficult to qualify for CETA under the established
income criteria. The 1978 CETA amendments further
intensified that program's focus on the disadvantaged. In
1980, 95 percent of all CETA.enrollees were classified as
economically disadvantaged (Barth, 1981). Many dislocated
workers were reluctant to seek services from a program that
had been associated with a low-income, public assistance
population (Kulik, 1984).

President Reagan eliminated CETA in 1983 in his efforts
to cut employment and training spending. In CETA's place
emerged the 1983 JTPA. Congress appropriated $3.8 million
for the first year of operation (Levitan, Gallo, 1988).
JTPA consists of a number of separate programs. Since JTPA
is the primary vehicle for assisting dislocated workers, a
more detailed understanding of the act is pertinent.

Features 9: JTPA: The heart of the act is Title II,

 

which provides training grants to states, summer jobs
program for youth, and set-aside funds for education and
older worker programs. Title III, another part of the JTPA,
attempts to respond to the number of plant closings and to
the needs of dislocated workers“ The main thrust of Title
III is to provide education and training to dislocated
workers so they can acquire the skills they need to obtain
employment in which they can support themselves and their
families without relying on public assistance. JTPA

emphasizes this commitment by requiring that 70 percent of

36

the resources allocated for Title III be applied toward
training (Bartholomew, 1987).

The structure of JTPA was built on the belief that
flexibility and responsibility are necessary at the state
and local levels in order to tailor successful programs
(McDonald, 1988). .As a result, the responsibility for
implementing Title III is left in the hands of state
government. The act defines a more active role for the
business community in developing assistance programs and
concentrates resources on training and job placement
services, rather than on income maintenance (Kulik, 1984).

The JTPA legislation contains provisions to build and
strengthen partnerships with the private sector, local
government, and organized labor. Each of these entities
must review programs which involve a significant portion of
their jurisdiction. The vehicle used to accomplish this
task is the Private Industry Councils (PICs). These
councils are authorized to provide technical assistance in
identifying dislocated workers and job openings suitable for
them.

Evaluation pf JTPA: Several important features were

 

added to the JTPA, such as performance standards to assess
local program success. The state training agencies rely
primarily upon on-the-job (OJT), classroom instruction, and
job search assistance. Program success was and still is
measured by the number of job placements, participants'

earnings, and training costs.

37

There is some evidence suggesting that JTPA does
improve the employability of participants. A recent report
released by the National Commission for Employment Policy
(McDonald, 1988,) indicated that JTPA has been a major
success with.over two million persons placed into jobs in
its first five years of operation. It states that three out
of every four adults who were served by Titles II-A and III
programs found jobs. The average wage for participants in
these programs is $5.11 and $7.41 an hour respectively
(McDonald, 1988). However, Levitan and Gallo (1988) believe
that because of reduction in funds available to trainees,
there has been pressure for short-term rather than long-term
training which has impaired JTPAJs effectiveness. These
researchers conclude that two—week job search courses, which
have become common, are unlikely to drastically improve the
employability of participants. 'Length of classroom training
and OJT has in many cases become even shorter than the
abbreviated CETA courses. Limitations on stipends and
support services have encouraged local administrators to
avoid serving the dislocated workers most in need.

Cohen (1988) theorizes that because the federal
government has turned the program over to the states and
there has been no systematic monitoring or evaluation of the
program, it is unclear how effective JPTA really is.
Levitan and Gallo(1988) summarize a common practice used by
some SDAs:

Localities commonly retain individuals on the rolls for
90 days after completion of training in a holding

38

status in order to maximize the SDA's job placement

rate. Until 1986 the SDAs were allowed to count the

holding period as part of the training (p. 17).

Because dislocated worker projects have consumed only
two-thirds of the appropriated funds, it appears that many
dislocated workers who may be in need of training assistance
do not apply for it. Two possibilities exist why Title III
funds not.being utilized are: First, formula allocations
often give states without significant displacement problems
more money than they need. Second, services are often not
available or near the location of the dislocated workers.
Somers (1968) reported that only 6 percent of 1,000
dislocated workers in Omaha, Nebraska, elected to enter a
training program. Of the 6 percent, four out of ten dropped
out before completing the program. If substantial upgrading
is to be attempted, it probably cannot be achieved through
crash programs.

If the goal of federal training programs is to move the
unemployed into the skilled sectors of the labor market, it
will most likely be necessary to adapt more demanding
qualifications in terms of formal education and aptitude.
An alternative is a more intensive program over a longer
period of time involving preliminary investments in
improving the basic educational level of the trainees
(Somers, 1968). Zrmplementing these changes would presumably
require additional financial support for the trainees.

Reports and evaluations on the effectiveness of‘JTPA

suggest a need for SDAs to do more longitudinal evaluations.

39

This researcher believes it is important.to know if these
short-term training programs do lead to permanent, rather
than temporary, self-supporting positions that are related

to the training.

State o_f Michigan Assistance Program

 

Altogether approximately $800 million a year is spent
on 70 government employment and training programs in
Michigan (Cohen, 1988). Cohen views these 70 programs as
necessary human-investment programs; but to determine their
effectiveness on job placements and wage impacts, they need
to be evaluated on a regular basis. One state-funded
program to aid dislocated workers is the Michigan Job
Opportunity Bank (MJOB). This program was established in
1985 and aimed at unemployed and dislocated workers who had
worked at a job for at least three years before becoming
unemployed.

Only monitoring of the MJOB program has been done since
its inception. This may involve no more than calculating
the percentage of participants placed or counting the number
of days students attend classes. Monitoring does not prove
that the program has increased participants' wages. "If the
program operators recruited the easiest trainees to place,
in order to look good on their placement monitoring, or if a
program terminated anyone with special problems so as to
maximize the placement rate, the program may look good based
on the monitoring results" (Cohen, 1988). Monitoring alone

should not be used as a substitute for impact evaluations.

40

PLANT CLOSING INITIATIVES IN THE U. S.

Plant Closing Legislation

 

Since 1979, there have been over two dozen plant-
closing bills introduced to the legislatures in at least 12
states. The main thrust of these bills has been to provide
dislocated workers with increased benefits, severance pay,
pension benefits, continued health insurance, job training,
job relocation assistance, and specific periods of plant
closing notification (O'Connell, 1986: Felsten, 1981).

After many years of debate on Federal legislation for
plant closings, a bill was enacted on February 4, 1988,
requiring that plants with 50 or more employees give
employees at least 60 days' notice before the expected
shutdown or cutback. .Although this legislation is an effort
to ease the pressure on employees and the community, there
are many loopholes in the bill. If this legislation is
enforced, it may provide workers and communities with the
time and resources needed to adjust to the "cultural shock"
once a plant closing has been announced. It seems logical
that if employees are given sufficient notice of plant
closures, they will be in a better position to re-enter the
job market faster. However, there are no national
statistics to indicate this is true. There are also no data
on what the "optimal" notification of a plant closing should
be.

A study by Portis and Suys (1970) on the effects of

early notification at the Kelvinator plant in London,

41

Ontario, reported that only 26 percent of the production
workers left Kelvinator before closing while about 25
percent.of the managerial and office staff remained until
the shutdown. Of those who stayed until the shutdown, 82
percent indicated they stayed to receive severance
benefits, and 31 percent said they could not find other
jobs. These statistics indicate that severance benefits
conditional upon remaining on the job until closure may have
a negative effect on blue-collar job search. .Also, blue-
collar workers may not look for a job until closure because
they are less able to take time off work to do so when
compared to white-collar workers.

Other studies report that the higher percentage of
workers receiving good job offers appears to be related to
their occupational status. Fewer blue-collar workers as
compared to white-collar workers leave their companies
before shutdown because they receive fewer offers. Gordus
(1981) summarizes her findings of most significant plant
studies published in the past two decades by stating:

High occupational status workers seem not only to

engage in a more organized, intense and mobile job

search than other groups, but they also have the
greatest reemployment potential; other groups, such as
older workers, who engage in late starting, low-
mobility and low-intensity job searches also seem to

have low reemployment potential (page 95).

Occupational status also appears to have impact on job
search mobility. Foltman's studies (1968) note that only 22

percent of blue-collar workers sought jobs more than 50

miles from their home plant, while 33 percent of white-

42

collar workers did so. Mueller (1981) reported that "even
those whose financial positions had worsened were unwilling
to move" (p. 64). In 1965, a $4 million allocation under
MDTA was authorized to test the effectiveness of mobility
assistance in reducing unemployment. Out of 6,200
unemployed workers who met the eligibility requirements and
expressed an interest in moving, only one-third relocated
(Mangum, 1968). Follow-up studies indicated an average of
20 percent returned home and another 20 percent had changed
jobs. Nine out of ten relocatees were white males between
the ages of 25 and 44. Idpsky"s study (1970) on General
Foods Corporation plant closings found only 22 percent of
the 825 dislocated workers were willing to move.
Professional, technical, managerial, and skilled workers
were more willing to move than operative, laborer, or
clerical workers. Younger workers tended to relocate more
than older workers.

ngg pf Plant Closing Notification: Supporters of

 

 

plant closing legislation list several reasons for the need
of government policy regulating advanced notification to
workers and communities. This notification gives workers
time to prepare for new jobs and train for new skills, gives
communities a chance to negotiate with plants for staying
open, and gives employees an opportunity to buy the
companies. In plants where the educational level of the
workforce is low, workers will be at a considerable

disadvantage in the labor market. Consequently, intensive

43

retraining is often necessary tijrepare these dislocated
workers so they can compete in the labor market.
Prenotification may allow these workers time to assess the
current labor market and to enroll in counseling programs
that will assist them in finding the most advantageous
training programs for them.

Unions view plant closing legislation as helpful in
those situations where workers may not have bargaining
leverage to get the protection they want in the union
contract. Unions appear to lack the power they had 15 years
ago. Because 80 percent of the private sector is nonunion,
union members may suffer from the competition of workers
elsewhere (O'Connell, 1986).

Cons pf Plant Closing Notification: Many employers

 

 

view advance notice unfavorably. They fear repercussions
from disgrunted employees which could result in reduced
productivity until permanent closure. They also argue that
state plant closure laws would place unconstitutional
restraints on interstate commerce. They believe laws would
create more, not less, unemployment because large firms
would establish or increase operations in other states to
avoid penalties. In addition to these arguments, many
entrepreneurs believe that workers receive adequate economic
protection through state unemployment benefits, job search
services, and federal and state training programs. They

also believe that because of the generous wages received,

44

workers should assume the risk of closure (Staudohar and
Brown, 1987) .

James Stern (1969) reported on a positive effort by
Armour management in Omaha when a plant closing was
announced. The Armour plan gave workers who found
employment elsewhere before the closing or who enrolled in a
federal training program the opportunity to start their new
venture before the plant closed without the loss of
severance pay; This is by no means a typical procedure when
a plant closes down, but it certainly illustrates that
management can play an important role in cooperative efforts
with unions and communities to enhance the effectiveness of

assistance programs offered to dislocated workers.

LEGISLATION INITIATIVES IN OTHER COUNTRIES

Plant closings and relocation problems are not unique
to the U. S. Many countries in Western Europe and Canada
already have strong plant closing legislation that appears
to be working well. The idea that workers should have a
legal collective right to notification and consultation
before a plant closure emerged in western Europe as a
widespread political issue when there was mass labor unrest
in 1968-69 (Harrison, 1984). Prenotification periods were
negotiated and legislated in nearly every country, ranging
from 2 to 12 months, for plants with 100 or more employees.

In Germany, most firms are expected to provide the
regional government and the works council within the plant a

year‘s notice prior to making a final decision about closure

45

or major layoff. Although there are no legal penalties if a
firm fails to give notice, those firms that do not comply
may be liable for paying some of the retraining costs of
employees.

Harrison reported that European countries operate
extensive and expensive manpower programs. For example,
Sweden spends almost 10 percent ($2 billion) of its national
budget annually to train and retrain workers. This
would be equivalent to U. 8. expenditures of $50 to $60
billion instead of the $8 billion spent through CETA in 1981
(Martin, 1983). Germany spends $1.5 to $2 billion annually
for retraining and encourages participation by supplementing
normal UIB to bring the earnings of training program
participants up to 90 percent of their previous net
earnings. Whereas UIB in the U. S. in 1975 replaced an
average of only 50 percent of gross earnings (Martin, 1983).
Martin summarizes that in European countries dislocated
workers have superior protection in three areas:

1. Advance notification and appeal options by employees

2. Generous UIB that includes maintenance of health
insurance and pension coverage

3. Eligibility for training and retraining in available
government programs with monetary encouragement to
participate.

European employers are encouraged to avoid dismissal by
putting workers on short work weeks and paying them for 20
to 30 hours, and the government pays the balance of the
weekly wage. In contrast, workers in the U. S. receive no

supplemental pay when they are not working full time, which

46

is a financial hardship for many workers. European
employers are also encouraged to build up inventories that
are carried with low-interest government loans, and they may
apply for grants to train and retrain workers in a plant
during low productivity. European and Canadian employees
appear to have more job protection than employees in the
th S. A commitment to full employment, active trade unions,
plant-level workersfl councils, and legislation have made
programs to assist dislocated workers an integral part of
European economic policies.

Pragramatic concepts integrated into the policies of
Western European countries include the following: Sweden
pays firms to retain workers that might be laid off by
granting subsidies to promote production when demand is low.
The United Kingdom pays firms to retain workers by giving
investment subsidies and low-interest loans to businesses
and forces plants to locate in high unemployment areas.
France uses payroll taxes to fund in-plant training
programs” ‘West Germany pays firms to retain workers, and
all Western European countries require advance notice to

workers who will be laid off (Barth, 1981).

SUMMARIES OF DISLOCATED WORKER PROJECTS
Since there is no consistency in evaluating human
investment programs, very little is known about the
effectiveness.of programs that assist.dislocated.workers.
JTPA (Title III) programs for dislocated workers have

reported that placement rates have been high. Title III

47

participants have been primarily white:(70 percent), male
(59 percent), and of prime working age (87 percent), with at
least a high school education.(Kulik, 1984). Of those who
left the Title III program by June 30, 1985, 69 percent were
reported as being employed. Those who received on-the-jdb
training had the highest placement rates of over 80 percent.
Those who received only job search assistance showed a 66
percent placement rate, while those who participated in
classroom training had a 52 percent placement rate.

Two significant evaluations of the Title III portion of
JTPA were conducted by Bloom (1987) and Kulik (1984). These
evaluations provided an assessment of the design,
implementation, and economic impact.ofrdislocated worker
programs on dislocated workers reemployment rates and
earnings. Program objectives of these pilot programs were
to retrain dislocated workers which in turn would increase
their earnings through reemployment and to reduce their need

for unemployment insurance (UI).

Bloom's Evaluation, 1987

 

Bloom reported on the pilot program entitled
"Retraining Delaware's Dislocated Workers," which was
sponsored by the Delaware Department of Labor. The purpose
of the program was to assist 65 dislocated workers in
increasing their earnings and to reduce their need for UIB
through training; Outreach was extended to all UI claimants
who had been receiving benefits for 7 to 12 consecutive

weeks. Out of 965 eligible claimants, 380 were interviewed

48

at the local UI office. Of these, 335 attended orientation,
and 285 who attended the orientation applied to the program.

To be eligible for the program, the UI claimants had to
have completed at least ten years of formal education, have
transportation, and would not be called back by previous
employer. Based on these criteria for eligibility, 175
applicants were eligible. Because of resource restrictions,
65 applicants were randomly selected to participate in the
program. Participants could receive four services: job-
search workshops, individual counseling, jobrdevelopment,
and retraining. Retraining was provided to only 13
participants and was only provided after it became clear
that job search assistance would not be enough for
participants to gain reemployment.

The program was in operation from late January to early
July, 1983. Of the 65 candidates selected for the program,
nine never attended and seven dropped out. Of the remaining
49 who became participants, 39 (80 percent) were placed in a
job by the end of the program. Four were still completing
the training and six had not found jobs.

To estimate the impact of the program, participants'tfl:
and earning rates were compared to a control group, which
was comprised of the remaining applicants who were not
selected in the random selection. Impacts were measured at
2, 5, 8, and 11 months after the program began. For the
year, participants received $100 more in UIB than they would

have in the absence of the program, which was not

49

statistically significant. Program candidates earned
consistently less than the control group during all but the
first follow-up quarter, when both groups were unemployed.
There was no indication that the program increased
participants' earnings in the short run and suggests the
program may have reduced earnings.

The program was very successful in terms of placement
rates since 80 percent of participants found employment.
However, impact analysis indicated that the program was
ineffective in meeting the objectives of the program. The
program staff suggested that future training programs should
include more detailed interviews and further individual
assessment. This would procure only participants who are
most in need of the service and most likely to benefit from
it. This study reinforced the belief that the majority of
dislocated workers are unwilling to participate in training.

Crist et al, (1984) indicated that the more prior
education a dislocated worker has, the more likely he or she
will enroll in additional training. The majority of workers
most likely to participate in training programs are between
the ages of 24 and 34. Minorities who continue to be
disadvantaged in the labor market receive the least
training. To determine the long-term success of the
program, a follow-up study should be done after the second
year to determine how many of the reemployed are still

employed.

50

Kul ik's Evaluation4 1984

 

This evaluation provided an assessment of the design,
implementation, and economic impact of "The Downriver
Community Conference Dislocated Worker Project." The
project operated between July, 1980, and September, 1983,
serving approximately 2,100 laid-off automotive workers in
the Detroit metropolitan area. This program was funded by
the Department of Labor through a combination of local CETA,
Title II-B, Title II-C monies, and a Title III national
demonstration grant. The project operated in two phases.

The impact analysis focused on reemployment rates,
overall post-layoff employment rates, and average weekly
earnings from layoff to interview date. The majority of
participants were between the ages of 25-44, married, and
had families. Close to 60 percent of the eligible workers
had completed high school: however, when the participants
were tested, one-fifth scored below a sixth-grade literacy
level. The participants had an average of ten years on the
their last jobs and earned about $10 an hour. Enrollees
were required to attend a two-week assessment and job search
training sequence. Program services provided were job
search assistance, job development, on-the—job training,
relocation assistance, and classroom training. Fifty
percent of all participants received some form of training;
however, only 8 percent of program enrollees relocated, and
20 percent of those who relocated subsequently returned

(Flaim and Sehgal (1985). The training programs emphasized

51

short-term, technically-oriented courses that met employers'
needs.

The conclusions were that the first phase of the
project showed significant effects on the employment and
earnings of participants. The project increased
participants".likelihood of post-layoff reemployment and the
percent of time they were employed post-layoff by 20
percentage points. The project also raised participants'
average weekly earnings during the post-layoff period by $77
over the amount expected in the absence of the program.

The second phase of the project showed no positive
impacts: in fact, the program actually decreased
participants' reemployment rates and had no effect on
overall employment rates and earnings. Participants were
interviewed two years after layoff, and.it was found that
only 50 percent of participants had secured employment.
Participants who became employed earned 30 percent below
their previous jobs. Despite increased access to training
opportunities" this training did not yield statistically
significant improvements in participants' reemployment
experiences. In the second phase, the program actually
lowered the reemployment rates.

This study clearly indicated what other studies have
shown: Younger and better educated workers in all cases
participated in training programs at a much higher rate than
those age 55 or older. A positive aspect of the Downriver

program was that orientation, assessment, and job search

52

skills workshops were a mandatory part of eligibility.
Participants completing the job seeking skills workshops and
those who indicated an interest in retraining were evaluated
by staff members and employment counselors. Only
participants who were deemed capable of succeeding in the
classroom retraining program were permitted to enroll. This
concept reinforces Levitan and Gallofls theory (1988) that
the least educated and most unskilled worker is not being
served by the government training programs.

These two studies indicate the possible need for more
long-term rather than short-term training. Also,
longitudinal studies would provide such information as: Did
the jobs offer long-term stability? Iknv many of the
dislocated workers returned to similar occupations as the
laid-off jobs when the economy improved? Were the new jobs

related to the training?

SURVEYS AND STUDIES

The U. S. government does not have data on the
prevalence of plant closings or how many facilities shut
down each year and for what reasons they close down. The
number of workers affected by plant closings and the effects
on the communities are in some dispute. Bendick (1982)
argues that the number of dislocated workers who are at risk
of being unemployed longer than 26 weeks has been greatly
overstated. He also points out that the overall magnitude
of the dislocated worker population is not strikingly large.

They constitute less than one percent of the U. S. labor

53

force and less than 14 percent of the unemployed. At the
same time there is evidence that particular demographic
groups, such as older workers, unskilled workers, workers
with low levels of education, and workers with high
seniority may be adversely affected by structural economic
changes (Kulik, 1984: Gordus, 1981; Foltman, 1968).

Richard Wilcock (1963) examined the shutdowns of four
meat-packing plants and found a relationship between
dislocated workers' ages and adjustment. "Loss of long-term
jobs with tenure was a traumatic experience: the age of the
older worker was now no longer an advantage (seniority), but
suddenly an economic liability" (Palen, Fahey, 1968, p. 72).
Cobb and Kasl (1977), Felsten (1981), and Brenner (1973)
reported on the consequences of job loss. They revealed
that among people who were terminated from a job, two-fifths
had experienced deterioration in their physical and
emotional well-being, such as chronic headaches, upset
stomachs, high blood pressure, high cholesterol, heart
disease, ulcers, and depression. 'They'also found that the
suicide rate for dislocated workers was 30 times the
expected rate for unemployed people.

Several surveys have been conducted.to determine the
magnitude of dislocated workers in the'U.EL In 1986, the
Employment and Training Administration sponsored a special
supplement to the Current Population Survey (CPS) to gather
data about dislocated workers in the U. S. This survey

revealed that between January 1981 and January 1986, there

54

were 10.8 million workers who were 20 years of age and older
who replied they had lost jobs permanently because:of the
closing or moving of a plant or company, slack work,
elimination of shifts or positions, or employment cutbacks
(Horvath, 1987). Of those, 5.1 million had been on their
laid-off jobs at least three years, and data was reported on
these 5H1 million. Pertinent information gained from this
survey were:

1. About 67 percent or 3.4 million of the 5.1:million
dislocated workers were reemployed at the time of the
survey. Of this 3.4 million, 82 percent were working
full time, 10 percent were working part time, and 8
percent were self-employed.

2. Although 1.4 million (56 percent) of the reemployed
full-time workers reported weekly earnings equal to or
higher than that on their lost jobs, 730,000 (30
percent) reemployed were at jobs that paid up to 20
percent less than their last jobs.

3. About one-third of the laid-off workers between 55 and
64 years of age and two-thirds of those over 65 years
of age had left the labor market after losing their
jobs.

4. Approximately one-half (56 percent) of the dislocated
workers had lost their jobs in the manufacturing
sector; only 10 percent were in the service sector.

5. About one-third.of the dislocated workers had worked
for ten years or more on the laid-off job.

6. The median period without work for the 5.1:million was
18 weeks. However, dislocated workers 55 years or
older were unemployed for an average of 30 weeks.

7. Two-thirds of the dislocated workers were men who were
25-44 years of age.

8. Of those who were reemployed in January, 1986 55
percent were working in a different occupation than
the laid-off job.

In addition to these findings, the results of this

survey indicated that following displacement, reemployment

55

was more difficult for older, less educated, and minority
workers. Although the data collected from this survey
revealed the magnitude of problems dislocated workers
encounter, no information was obtained on what, if any,
training programs these dislocated workers had taken.

Even though these statistics do not necessarily reflect
a dismal outlook for dislocated workers, the fact is that
almost one million dislocated workers were making
considerably less than they were making at their last jobs.
Age appeared to be a negative reemployment factor. The
median period without work for the 5;1 million dislocated
workers was six months: however workers 55 years of age
and older were unemployed for an average of 30 weeks.

Another study conducted by Ashton and Iadicola in 1986
reported by Perrucci and Targ (1988) found that 65.4 percent
of reemployed blue-collar workers, who were displaced by
the shutdown of the Fort Wayne International Harvester
plant, reported a loss of earnings at their current jobs
compared to the last job they held at the plant. Also,
Barth's (1981) evaluation of RCA's plant shutdowns indicated
that the average age of the displaced workers was 44 with a
median of 14 years on the job. Seventy-one percent of these
dislocated workers were still unemployed eight months after
closure.

In 1961, ten months after Mack Truck abandoned its
2,700 workforce assembly plant in Plainfield, New Jersey,

23 percent of its workforce were still without a job. .A

fu

56

similar proportion of workers remained unemployed after
Packard shutdown, laying off 4,000 workers. Another one-
third who found jobs after the closing lost them within the
first 24 months (Staudohr, 1987).

A study on dislocated workers was initiated by the
U. S. General Accounting Office (GAO, 1986) to evaluate the
effectiveness the TRA, which is part of TAA, and the JTPA
programs. These programs were established to address the
reemployment problems of dislocated workers. The
conclusions were that federal assistance has been declining:
and at most, these programs together provided assistance in
1984 to only about 8 percent of the dislocated workers.

In the JTPA training program, 80 percent of
participants received only jobmplacement.assistance, less
than half received skills training, and less than a quarter
received support services. Using the Bureau of Labor
Statistics data, about 2.3 million workers were dislocated
annually between 1979 and 1984. The implication is that
because federal assistance to dislocated worker programs is
dwindling, services offered tend to be short term rather
than long term. For example, in the fiscal year July 1985
through June 1986, JTPA Title III funding was approximately
$223 million, while in the fiscal year July 1986 through
June 1987, Title III was funded for only $169 million
(Levitan 1988).

TAA outlays have shown a similar decline. Since 1981,

funding for TAA has gone from $144 million to $53 million.

57

The possibility exists that many dislocated workers who are
in need of extensive education and training are not
receiving it. This study confirmed what other researchers
have reported. The largest percentage of enrollees in
government human-investment programs are white males between
22 and 44 years of age (59 percent) with at least a high
school education. However, according to Cohen (1988) by
1995, 85 percent of all new entrants to the U. S. labor
force will be either minorities, women, or recent
immigrants. The‘U.£L Department of Education estimates
that 27 million Americans (one out of every 5 adults) are
functionally illiterate (999999999 9999, 1988). This
suggests that the demographics of future dislocated workers
will reflect these populations, and training programs will
need to be adjusted to serve these subpopulations.

Bendix (1983), in his nationwide research on dislocated
workers, showed that dislocated workers had a
disproportionate lack of education. "One-third had not
graduated from high school, and another one-third had
reading and writing skill levels below the high school
graduate level" (p. 5). Bendix urges the federal government
to put emphasis on preparing dislocated workers for job
training rather than the training itself.

Studies by Ferman (1980), Cook (1987), and Kulik (1984)
revealed there was very little interest in training by
dislocated workers. A variety of reasons for this have been

cited by researchers. Ferman (1980) reported, after

58

evaluating several plant closings, that participation in
retraining ranged from 6 percent at one plant to 16.4
percent at another. Some of these reasons are lack of
formal education, lack of sufficient funds, lack of
transportation, too old.to benefit from training, fear of
failure, lack of self-confidence, and discrimination (Long,
1983).

Another study of the TAA program by Corson et al (1979)
noted that TAA recipients not recalled to former jobs
experienced longer initial spells of unemployment than did
otherwise similar recipients of unemployment insurance.
Those TAA recipients also had earnings on their new jobs
that were 18 percent lower than those of their unemployment
insurance counterparts.

Studies suggest that workers' use of such adjustment
services has been limited, possibly because of the generous
base benefits and limited outreach and recruitment methods.
The paucity of research suggests that higher UIB, longer
periods of compensation were associated with higher
reemployment earnings. It may be that pre-employment
earnings, educational attainment, and UIB enable workers to
resist financial pressures for reemployment in relatively
low-paying or unstable jobs. In fiscal years 1976-80, only
about one quarter of all TAA recipients requested employment
services. Less than 3 percent were referred to training,
and about the same share were placed in jobs (Congressional

Resource Service, 1980p. The low level of service use has

59

been ascribed to many factors, including long delays
involved in certifying plants and workers as TAA eligible.
These delays frequently resulted in retroactive payments to
workers who had, in the meantime, found employment. An
early study of TAA by Neuman (1978) indicated that TAA
recipients did search a long time for jobs and found higher
paying ones.

The strongest association established in the literature
between a worker's demographics and reemployability has
been that of age. Almost all studies (Dorsey, 1967; Aiken,
1968: Kulik, 1984; Barth, 1981) have agreed that age is
inversely related to reemployability. In four out of five
case studies that Hammerman (1964) undertook, workers over
45 years of age had a significantly higher unemployment
rate than did those below that age. The highest
unemployment rate is in the 55-59 age group. Lipsky's
study (1970) found that workers over 55 displaced from the
Baker plant were unemployed for an average of 23.6 weeks,
while the average worker remained unemployed for 18.6 weeks.

These studies have demonstrated that one of the most
serious problems facing workers dislocated from
manufacturing industries is the reality that their jobs are
permanently eliminated with little prospect for a new job in
the same occupation. Case studies suggest that dislocated
workers may experience prolonged unemployment; and if they
do become reemployed, it may be because they are forced

into jobs offering lower pay, status, and security. Flaim

60

and Sehgal (1985) reported that of the 5.1 million
dislocated workers who had worked at least three years on
their laid-off jobs (as reported in the January, 1984,
supplement to the CPS) approximately 220,000 had worked
largely in the steel industry. Less than one-half (46
percent) of these workers were reemployed, 40 percent were
still looking for jobs, and 16 percent had dropped out of
the labor force. Of the 46 percent who were reemployed,
only 25,000 were working in durable-goods industries, while
20,000 were in service industries, 15,000 in construction,
and 15,000 in retail trade. These reemployed.dislocated
workers reported a 40 percent decrease in earnings at their
new jobs as compared to their laid-off jobs.

A study for the Joint Economic Committee of Congress
prepared by Bluestone and Harrison reported that over one-
half of the eight million new jobs created from 1978 to
1984 in the U. S. paid less than $7,000 a year. Non-
transferability of work experiences, seniority-related wages
and benefits, lack of information about the labor market,
and age discrimination combine to make readjustment
difficult for these dislocated workers.

It has been found that allocating funds for retraining
dislocated workers does not guarantee that dislocated
workers will make a quick and easy adjustment to a new job
in a new industry. In a study conducted by the Hudson
Institute (1987), it was indicated that the number of jobs

in the least-skilled job categories will continue to

61

disappear, while high skilled professions will continue to
grow rapidly at least through the year 2000. If this is the
case, training will be essential if dislocated workers are
to be competitive in the labor market. However, it is
doubtful that short-term training could possibly prepare
unskilled and semi-skilled blue-collar workers for these
positions.

Major changes in the structure of our economy and a
tight job market have combined.to make plant closings an
increasingly devastating phenomenon. Local labor conditions
as well as the quality of the training affect whether
completion of a retraining program will lead to a desirable,

well-paying job (Bartholomew, 1987).

SUMMARY

Whatever theory is accepted for plant closings, the fact
remains that there are about 11 million dislocated workers
in the U. S. (DOL, 1986). A large majority of the
dislocated workers are without the necessary skills and
education to find comparable positions. Today, the scenario
that confront many workers is the lack of job security.
Their jobs have been eliminated, and they are faced with
unemployment after many years of job stability and high
wages. Despite expanding employment in energy, high
technology, and service sectors, laid-off auto, rubber, and
steel workers are not easily absorbed into new occupations.
The literature reveals that the majority of dislocated

workers are white males who are unskilled or semi-skilled,

62

between the ages of 25 and 44 years of age, have low levels
of education, and have several years of seniority. A number
of factors combine to make adjustment difficult for'these
workers, including non-transferability of work experience,
seniority-related wages and benefits, lack of information
concerning the labor market, and age discrimination.

Because of the shift in capital investment, research
studies on dislocated workers indicate that blue-collar
workers often do not live where the new jobs are; and they
are reluctant to move. Many jobs in the non-unionized
sectors offer considerably lower wages than the highly
unionized older industries. Jobs paying comparable salaries
often require education or skills the blue-collar workers do
not possess. Although most dislocated blue-collar workers
eventually return to the workforce, many suffer major
economic losses from extended periods of unemployment.
Studies to date have documented the numerous deleterious
effects on workers involved in plant shutdowns: protracted
unemployment after displacement, loss of earnings, failure
to gain steady post-termination employment, chronically low
geographic mobility, and insurgence of physical and mental
difficulties (Mick, 1975).

Over the past 25 years, the‘U.£L initiated several
employment and training efforts to assist disadvantaged
subpopulations. The major evaluations and studies on
dislocated worker programs indicate that overall the

programs have not successfully met the objectives of raising

63

reemployment rates and earnings for participants. Most
researchers agree that there needs to be more longitudinal
studies on the dislocated worker programs and the
participants. Even though employment and training programs
are available to dislocated workers who meet the eligibility
requirements, only a small proportion of these workers elect
to participate in the programs.

In unionized industries that have negotiated
supplementary unemployment benefits, individuals who receive
these benefits may attempt to wait until they are convinced
that the plant will not recall them or until they run out of
benefits. If a project opens its doors immediately after
the shutdown, lower enrollment than planned may result.
Until it is obvious that the plant will not.be reopened.or
recall notices will not emerge, senior workers may not.be
willing to participate in the program. Furthermore, when
UIB, TAA, and SUB, pay amount to 50 to 70 percent of take
home pay, there may be little inclination to participate in
a program that promises employment with an expected wage
replacement rate of 65 percent and a concomitant loss of
fringe benefits (Cook, 1987).

European countries and Canada have adopted a variety of
approaches with respect to plant closings, which appear to
be helpful for the dislocated workers and their communities.
The center of these approaches continues to be early
notification, which enables workers to make the necessary

adjustment more easily and enables the government to provide

64

compensation, services, and transition assistance
effectively. These extensive and expensive manpower
programs could be used as guidelines in the U. S. for
implementing training programs for dislocated workers and
legislating policies regulating plant closings.

The U. S. has not yet made a total commitment to the
unemployed and dislocated worker. In the situation of
dislocated workers, U. S. tends to operate in crisis
situations, and each plant closure is handled differently.
Gregory Hooks (1984) made a good point when he stated that
U. S. welfare policies, which are expensive, do little or
nothing to prevent victimization in the first place and have
had minimal success in rehabilitating those in need.
William Schweke, (1980, preface) summarized the rational for
U. S. Plant closing legislation:

The problems of capital mobility and major job losses
are real and growing. The major victims are the laid-
off workers and their families. The massive job cuts
often flood the labor market, overwhelming local
employment opportunities. State and municipalities
also face several fiscal difficulties, as their tax
base erodes and public spending rises to pay for the
social costs of economic dislocation, which include
rapid increases in juvenile delinquency, crime,
divorce, mental illness and despair.

This study examined the impact of a government-
sponsored training program funded under Title III of.TTPA
and/ or TRA on participants" reemployment rates, wages, and
perceptions of long-term employment and job satisfaction at

current jobs compared to nonparticipants' 2 1/2 years after

the plant closure.

65

The next chapter will describe the research design,
methods, population and study instrumentation designed to

accomplish the objectives of this study.

CHAPTER III

METHODOLOGY

This chapter describes the methodology of the study:
the population, sampling techniques, the procedures used to
collect data, the interview questionnaire, and data

analysis.

THE POPULATION

People interviewed for this study were professional,
skilled, semi-skilled, and unskilled workers who had lost
their jobs when an iron foundry, located in Muskegon,
Michigan, shut down one of its major plants in 1986. The
total population of dislocated workers from this closing was
614. One hundred and two of them either retired or went on
workman's compensation, leaving a total of 512.

The employees and the community received approximately
one year's notice of the impending closure. As a result of
this pre-layoff notice, the Michigan Employment Security
Commission (MESC) of Muskegon received a $150,000 grant
through JTPA to assist the workers slated for the layoff in
the areas of counseling, job referrals, and relocation.
MESC also aided the workers to enroll in remedial education,
classroom tmaining, and/or on-the-job training. The grant

was in effect from June 1986 through July, 1987. After

66

67

July, 1987, the dislocated workers could still enroll
in training assistance under TRA, which was in effect for
two years after the plant closure.

MESC set up an office in June, 1986, at the layoff site
to begin taking applications from the workers who wanted or
needed assistance. The belief that some workers would
relate better'to another employee who was facing'the.same
predicament resulted in hiring a peer counselor from the
union to work with the dislocated workers. All workers were
offered reemployment and training assistance on a first come
first serve basis through MESCL These dislocated workers
qualified for 26 weeks of UIB plus 26 weeks of TRA benefits
if they were still unemployed. In addition to these
benefits, another 26 weeks of TRA benefits could be obtained
if the laid—off workers were enrolled in a training program.
Although MESC projected that 215 workers would participate
in the program, only 81 signed up for training assistance.

A list of the laid-off workers was received from two
sources. Permission from the Governor‘s office for Job
Training and Retraining was granted to the researcher to
gain access to JTPA records on the workers who had signed up
for assistance. Also, the president of the company supplied
a list of all workers whose jobs were terminated. From
those two lists, the dislocated workers were categorized as
participants or nonparticipants in human-investment

programs.

68

All information available about the population was
collected to establish similarities or dissimilarities
between participants and nonparticipants. Lengthy
conversations with the president of the foundry and the
director of the MESC project revealed that the participants
seemed to have more advantages in the labor market than
nonparticipants. Nineteen (30 percent) of the participants
were classified as skilled, while 12 (19 percent) of
nonparticipants were in that category. Thirty-six (56
percent) of participants were listed as semi-skilled
compared to 46 (76 percent) of nonparticipants. There were
three (5 percent) who were either floor supervisors or
secretaries (listed as other) in the participant sample
compared to none in the nonparticipant group. Thus,
participants included more supervisors and skilled

tradespeople than did nonparticpants.

THE SAMPLE

The sample included 152 dislocated workers. All
81 participants who had signed up for the MESC TRA or Mona
Shores Adult Continuing Education assistance programs were
included in the sample, excluding five who were used in the
pilot test. The other 76 subjects that made up the sample,
called nonparticipants, were randomly selected from the
list that contained all the names of the laid-off workers
that was provided by the president of the foundry. Five

others from the list were selected for the pilot test.

 

‘z”:.-'Af-’-ne_.

69

Thirty subjects from the nonparticipant list had either
retired or were on disability within five weeks of the
closing. These 30 were removed from the sample, and another
30 names were randomly selected from the population. Out of
the total sample of 152, 127 questionnaires were
successfully completed. This included 105 telephone
interviews and 22 (people without telephone service)
returned mailed questionnaires. The 25 nonrespondents
included one person who had died since the layoff, four who
had moved leaving no forwarding address, seven who refused
to participate, and 13 who had no telephones.
Questionnaires were sent to those 13 people, but they did
not return them.

Survey response rates were high and uniform between
participants and nonparticipants. The rate of response was
84 percent. Of the 127 respondents who completed the
questionnaires, 64 were participants and 63 were
nonparticipants. The dislocated workers participated in the
survey voluntarily. Their anonymity was assured because no
identification information was solicited from individuals,
and results were reported in group form.

The 127 respondents included 125 males and 2 females.
Chapter IV illustrates the age range, the racial ethnic
composition, the education level, and the number of years on
the laid-off job of the subjects categorized by participants

and nonparticipants.

70

DATA COLLECTION PROCEDURES

Data were obtained through structured telephone
interviews and mailed questionnaires conducted between
February 13 and March 14, 1989, approximately'z 1/2 years
after the plant closing. A maximum of eight attempts were
made to contact each person by telephone. One hundred and
five telephone interviews were successfully completed. If
the interviewers were unable to make contact after eight
attempts, a: letter (Appendix A) and the questionnaire
(Appendix B) were sent to the subjects. Thirty-seven
letters and questionnaires were sent to those who either
could not be reached by telephone or who had no listed
telephone number. A follow-up letter (Appendix C) was sent
ten days after the first letter was mailed to those who had
not returned the questionnaires. A total of twenty-two
completed questionnaires were returned by mail.

Before the telephone interviews occurred, each person
in the sample received two letters. The first letter was
sent three weeks prior to the interviews by the director of
the MESC program (Appendix D). This letter briefly
summarized the purpose of this project and informed the
subjects that the researcher’had.received permission from
the Governor's Office for Job Training to access
confidential information. One week after this letter was
‘mailed, a letter explaining the project in more detail,

encouraging participation, and assuring the respondents of

 

71

anonymity was sent by the researcher (Appendix D0. The
following week the interviews began.

Six interviewers were hired to complete the interviews.
The interviewers were trained by the researcher, and a
standard script was used by each interviewer (Appendix E).
Also, a tape of an interview completed by the researcher was
given to each interviewer to maintain a high rate of
consistency during the interviews. IEach interview lasted

approximately 15 minutes.

THE QUESTIONNAIRE

The questionnaire was developed after pertinent
literature to the problem under investigation was reviewed.
The questionnaire was submitted for recommendations and
revisions to a panel of experts in the areas of dislocated
workers and questionnaire development.

The questionnaire contained 55 questions. The final
version consisted of five parts.

Part I of the survey dealt with demographic
information. Questions about sex, age, race, marital
status, and educational attainment were asked. It is
important for communities to be aware of demographic
characteristics of the dislocated worker population,
especially regarding age and education, in order to target
particular programs to meet their needs.

Section II was designed to examine the types of jobs
workers held at the closed plant, how long they had worked

in those jobs, and what their skill levels were. This

72

information can be used to determine what assistance might
be needed by dislocated workers enabling them to gain post-
closure employment.

Section III contained questions about benefits received
by the dislocated workers. This section was used as a
reliability check for the answers given in Section IV.
Because this survey was completed over two years after the
layoff, some of the respondents had difficulty remembering
what benefits they received, how long they received
benefits, and how much time had lapsed before they became
reemployed.

Section IV asked questions about recent employment and
the number of jobs that each worker had held since the
closure. It also examined compensation factors, working
conditions, and advancement factors for the dislocated
workers in their present jobs based on responses ranked on a
four-point Likert scale ranging from Very Satisfactory to
Very Dissatisfactory. These questions were used to test
Herzberg's theory (1963) on satisfiers (called motivational
factors) and dissatisfiers (called hygiene factors).
Herzberg suggests that if the majority of dislocated workers
are more concerned with hygiene factors at the expense of
motivational factors, low participation may result in human-
investment programs. This section also explored the Human
Capital theory (Bartholomew, 1987) that people will
participate in human-investment programs as long as the

benefits of future returns outweigh the costs of investment.

73

Section V examined what training, if any, the
dislocated workers participated and how long after the
layoff they were ready and willing to participate. Of the
614 total dislocated population in this study, only 81 or
(16 percent) elected to participate in a human—investment
program. This percentage is consistent with what other
studies on dislocated workers have found (Ferman, 1980;
Cook, 1988: Kulik, 1984: Somers, 1968). Other questions
focused on each worker's perception of the benefits of the
assistance programs and on his/her personal decision whether
or not to retrain. These questions were asked to try to
understand what motivated these subjects to participate in a
human-investment program or deterred them from

participation.

PILOT TEST

The interview protocol was pilot-tested on ten randomly
selected dislocated workers, five from the participant
sample and five from the nonparticipant sample. The
dislocated workers interviewed were very polite and willing
to participate in the study. They freely talked of their
experiences since the layoff and asked questions if they
did not understand any of the survey. This helped the
researcher make the needed revisions. One question on the
questionnaire was changed, one question was added, three
questions were revised to include more choices in the
response categories, and several "go to" statements were

added.

74

The pilot test helped establish the final order of
segments on the questionnaire used to complete the
interviews.

DATA ANALYSIS

This study analyzed qualitative and qmantitative data
collected from a sample of dislocated workers comprised of
participants and nonparticipants of a human-investment
program. Data collected from telephone interviews and
mailed questionnaires were used to determine ranges, means,
and standard deviations for length of education, work
history, number of weeks of unemployment, number who found
new employment in the same occupation, earnings at laid-off
job and present job, perceptions of present job security and
job satisfaction, number of weeks of training completed, and
perceptions of training assistance for each group. Data
were calculated in crosstabulation form using the program AB
TAB. Standard procedures for hypotheses testing and Chi
Square were used in the analysis of data. .Alpha level for

all hypotheses testing was .05.

SUMMARY
The purpose of this study was to determine if
government-sponsored training programs make a difference in
facilitating participants' reemployment into full-time jobs
that enable the dislocated located workers to become self-
supporting. Dislocated workers' perceptions of long-term
employment outlook and job satisfaction were also analyzed

and compared with.nonparticipantsh Five hypotheses were

75

developed to test these factors by comparing a sample of
participants of a human-investment program with
nonparticipants.

Chapter IV will discuss the results of the analyses.

Chapter IV
Analysis of Data

Introduction

 

The purpose of this study was to examine the impact of
a short-term government-sponsored human-investment program
on participants' reemployment rates, earnings, and
perceptions of long-term employment and job satisfaction
when compared to those of nonparticipants. This study was
guided by five hypotheses. Data were crosstabulated for each
question by training and nontraining using the AB TAB
statistical program. Both frequencies and percentages were
reported. Standard statistical procedures for hypothesis
testing and chi-square were used in the analysis of the

data. Alpha level for all hypothesis testing was .05.

Background Characteristics 99 Subjects

 

 

Until the plant closure undermined their financial
security, the dislocated workers in this study were stable
members of the working class, earning wages that supported a
comfortable way of life. Their steady work histories and
belief in the importance and necessity of work distinguished
them from the "hard core" unemployed. They earned over $12
an hour and received fringe benefits, including medical

coverage, paid vacations, and retirement pensions. Table 1

76

77

on pages 78 and 79 gives a profile of the 127 dislocated
workers who were interviewed for this study.

Ninety-eight percent of all the dislocated workers were
males, and 80 percent were white. Forty-five percent were
36 to 44 years of age, while 33 percent were 45 to 54. The
distribution of ages for participants closely matched that
of nonparticipants. Ninety-two percent of all respondents
indicated they were married and supported dependents.

This sample is somewhat atypical of other foundry or
factory dislocated workers in that 69 (54 percent) of the
laid-off workers had at least a high school education, with
19 (15 percent) having education beyond high school.
Bendick's nationwide research in 1983 on dislocated workers
showed that one-third of them had not graduated from high

school.

PAST WORK HISTORY

Thirty-four (27 percent) of the total respondents had
worked 16 or more years at the foundry, while 45 (35
percent) had worked over 20 years. Figure 2, page 80,
illustrates the seniority of participants and
nonparticipants at the laid-off jobs. When interviewed,
many of the subjects related that even though collecting
unemployment checks for short periods of time was an
accepted norm by production workers, being permanently out
of a job was devasting. One person said, "You know it's

coming, but you are never really prepared for the last day.

CHARACTERISTICS OF DISLOCATED WORKERS

78

TABLE 1

 

 

Participants Nonparticipants Total
Variable N % N % N %
Sex
Male 61 95 63 100 124 98
Female 3 5 0 0 3 2
TOTAL 64 100 63 100 127 100
Age
25 - 35 9 14 11 17 20 16
36 - 44 3O 47 27 43 57 45
45 - 54 21 33 21 33 42 33
55 - 59 4 6 3 5 7 6
60 - 64 0 0 1 2 1 1
TOTAL 64 100 63 100 127 *101
Race
White 52 81 50 79 102 80
Black 9 14 11 17 20 16
Am. Indian 1 2 0 0 1 1
Asian 0 0 0 0 0 0
Hispanic 1 2 2 3 3 2
Mexican 1 2 O 0 1 1
TOTAL 64 100 63 *99 127 100
Marital Status
Married 58 91 59 94 117 92
Single 2 3 1 2 3 2
Other 4 6 3 5 7 6
TOTAL 64 100 63 *101 127 100

79

TABLE 1 (CONT.)

 

 

Participants Nonparticipants Total
Variable N % N % N %
Grade Level of
Education

8th or less 2 3 6 10 8 6
9th to 12th 16 25 14 22 30 24
H. S. Grad. 34 53 35 56 69 54
Some College 9 14 6 10 15 12
College Grad. 3 5 1 2 4 3
No Answer 0 0 1 2 1 1

TOTAL 64 100 63 *102 127 100

 

*Percent totals do not equal 100 due to rounding.

80

40“

35“

...........
..........

......
.......

 

    

      

 

 

 

 

<1 1 -3 4-6 7-9 1 0-12 13-15 1 6-20 >20

(Years)
I Participants D Nonparticipants

Figure 2: Comparison oi participants' and nonparticipants' seniority at the laid-oft jobs

81

You keep thinking something will happen that will cause the
foundry to stay open." Another said, "Fifteen years ago, no
education, no skills, no experience was necessary--just a
strong back and a tolerance for pain." One more comment
summarized the feelings of many of the dislocated workers,
"I'm 57 years old and all used up. I have no high school
education and have only worked at one place. Who would hire
me?"

The interviews revealed much information that could not
be analyzed as data. For example, although working in the
foundry jobs was hard and dirty, many of the respondents
said they liked their jobs. After years of working full
time at one place, some of the subjects thought of the work
place as their second home. These workers lost not only a
job, but a family of co-workers. They no longer had the
security of knowing what was expected of them each day.
Many experienced grief and fear wondering how they would be
able to continue paying their bills each month.

Even though the dislocated workers were given a one
year notice of the impending shutdown, 63 (98 percent) of
the participants and 59 (94 percent) of the nonparticipants
stayed until the final closure. The five workers who left
before the layoff did so because they had found another job.
All five workers indicated they found new employment through
friends. The:122 (96 percent) who stayed on the job until
the very last day gave a variety of reasons for their

staying. Some of the reasons included: staying in hopes of

82

being retained, being unable to find another job, and
depending on the high pay at the foundry.

The nature of the foundry jobs and the fact that the
plant was unionized meant that anyone who was a member of
the union and was willing to work had a chance at getting a
good paying job. However, major shifts in the economy,
along with the economic recessions of the '80s, eliminated
many semi-skilled and unskilled jobs throughout the country.
This economic situation left behind millions of dislocated
workers with low levels of skills and education. These low
levels of skills and education have diminished the chances
of many dislocated workers "selling" themselves to employers
in new industries.

Most of the former foundry workers who looked for work
after the closure had a difficult times One man who had
worked 22 years at the plant said:

I never thought I would have to start over in a new

career at my age. I don't even know how to begin. I

don't know how to even fill out the forms because I

can't read too good. Who would hire me?
Another said:

I feel like I did when I was 18 and was confused on

what to do with my life. I have been working hard for

26 years at the same plant. I have felt secure in my

job for years, even though there were slowdowns and

occasional layoffs. I always knew I would be called
back. I made enough money to support my family and

even save a little. When the boom fell, it was such a

tremendous shock. No one believed it would really

happen. I will never feel secure again.

Figure 3, page 83, shows that 31 (24 percent) of the

laid-off workers were classified as skilled: 81 (65

83

The majority or ioundry workers were clasified as semi-skilled:

I Skilled (24%)
' Semi-skilled (65%)
VA Unskilled (9%)
Other (2%)

   

Figure 3: Job status of respondents at the laid-off jobs.

84

percent), as semi-skilled; 11 (9 percent), as unskilled; and
3 (2 percent), as other (See Chapter I terms).
Although relocation funds and assistance were available to
the workers, only 26 (20 percent) have moved from the
Muskegon area. The primary reasons given by the 26 who
moved were: 8 (31 percent) listed job promise, 4 (15
percent) said they had friends there, and 14 (54 percent)
replied there were no jobs in Muskegon. The remaining 101
respondents (80 percent) who stayed in Muskegon to look for
another job gave the reasons listed in Table 2, page 85.
Fifty-seven (56 percent) listed family ties as the
predominant factor for staying in Muskegon. Several of the
respondents expressed that they had lived in Muskegon all
their lives and that their relatives and friends all lived
there. It was frightening for them to even think about
leaving familiar surroundings and friends to look for a new

job in a different town or state.

BENEFITS

One hundred fifteen (91 percent) of the dislocated
workers in this study received unemployment checks, which
brought in 70 percent of their pay for 26 weeks; and 74 (58
percent) received up to an additional 26 weeks of TRA
benefits, which was equal to their unemployment checks. The
unemployment and TRA checks covered the barest necessities.
House jpayments, car payments, and the need for medical
insurance caused most of the laid-off workers to fear a

financially insecure future. For those who enrolled in a

85

TABLE 2

REASONS FOR STAYING IN MUSKEGON

 

 

Variable Participants Nonparticipants N %
Family Ties 31 26 57 56
No Job Prospects 0 4 4 4
Could Not Afford

To Move 6 3 10 9
Retired 1 0 1 1
Disabled 0 1 1 1
Other 10 13 23 23
No Answer 3 3 6 6

TOTAL 51 50 101 100

 

86

human-investment program, another 26 weeks of TRA benefits
were available, bringing the total number weeks of possible
assistance for those who qualified to 78. However, only 81
(13 percent) of 614 laid-off workers took advantage of this
benefit. The Human Capital theory was discussed in Chapter
I as a possible explanation for low enrollment in training
programs.'This theory is based on the concept that people
will make investments in their lives, such as participating
in training programs, as long as the benefits of future
returns outweigh the cost of the investment. The results
of the data in this study indicated that the majority of
these laid-off workers did not believe the investment in
training would enhance their future employment and wages.
Several of the nonparticipants indicated they would have
liked to enroll in a training program, but they could not
afford to do so. One respondent said, "Even though TRA
benefits would pay for the schooling, I need to get a job

first to support my familyJ'

TRAINING
The unemployment and retraining project director from
MESC met with the laid-off workers three months before the
plant closed. Over half of the 614 scheduled for layoff
indicated to the director they would need some type of
assistance. After the layoff, only 81 people elected to
participate in a human—investment program. Table 3, page

87, shows total enrollment in each category.

87

TABLE 3

ENROLLMENT BY TYPE OF ASSISTANCE

 

Variable *N *%

 

MESC TRA PROGRAM

Job Referrals 18 28
Job Search Assistance 11 17
On-The-Job-Training 7 11
Relocation Assistance 3 5
Classroom Training 37 58
Counseling/Aptitude Testing 9 14

MONA SHORES ADULT CONT. ED.

Adult Basic Education 3 5
High School Completion 7 11
Classroom Skill Training 0 0

 

*N and percent totals add up to more than 64 and 100
respectively because of multiple enrollments by some
participants.

88

Training assistance was grouped into two categories:
MESC TRA program and Mona Shores Community Education
program. MESC TRA program included six basic services:
referrals to other jobs, job search assistance, OJT,
relocation assistance, classroom training, and
counseling/aptitude testing. Mona Shores Community
Education program offered assistance to participants in
adult basic education, high school completion, and classroom
skill training. In addition to these two programs, the
foundry hired a transition team and offered resume writing
assistance to anyone who wanted it. Fourteen (11 percent)
of the 127 respondents participated in these workshops.

The scheduled laid-off workers were offered the
opportunity to enroll in the goverment-sponsored human-
investment program with the assistance of the MESC office
between June 1, 1986 and July 30, 1987, through the
assistance of the MESC office. Most case studies on
dislocated workers report that workers tend.to wait until
their unemployment runs out before they seek assistance.
Figure 4, page 89, shows that in this case only 21 people
(33 percent) waited longer than 26 weeks to enroll in an
assistance program, 24 (38 percent) enrolled within the
first 12 weeks, 18 (28 percent) enrolled between weeks 13
and 26, and 1 (2 percent) enrolled before the scheduled
layoff. Workers 45 years of age and under participated in
the assistance programs at a higher rate than workers who

were over 45 years of age. The majority of participants (47

Percent

89

25q

204

13q

10"

3.1

 

 

0

Before 0-2 3-5 6-12 13—15 16-20 21-26 27-30 31-52 >52
Layoff

(Weeks)

Figure 4: Number or weeks atter layoff participants enrolled in training programs.

90

percent) were between 36 and 44 years of age. Fourteen
percent were between 25 and 35; 33 percent, 45-54; and 6
percent, 55-59. Retraining literature suggests a variety
of reasons for the hesitation of older adults to
participate in retraining. The reasons involve fear of
school, lack of self-confidence, financial problems, and
transportation difficulties. Also, older workers tend not
to enroll in human-investment programs because they believe
they are too old to begin a new career and do not have
enough working years left to recover the cost of the
investment (Bartholomew, 1987). The four primary reason
given by dislocated workers in this study for not
participting in training were an found other employment,
(b) lacked confidence, an lacked transportation, and U”
felt training not worthwhile.

The number of weeks scheduled for assistance or
training varied from 1 to over 30. The length of time that
respondents were scheduled for training is listed in Table
4, page 91. Fourty-four (69 percent) of participants
completed the assistance program. A variety of reasons were
given by participants for not completing the scheduled
training. Table 5, page 92, lists those reasons.

When asked if their present jobs were related to the
assistance received, 20 (31 percent) participants answered
"yes", 36 (56 percent) said "no", and 8 (13 percent)
indicated they were not working. Many of the participants

said they enrolled in training classes, such as welding or

91

TABLE 4

NUMBER OF WEEKS SCHEDULED FOR TRAINING

 

Variable N %

 

No. of Weeks

0 - 2 3 5

3 - 5 2 3

6 - 12 6 9

13 - 15 3 5
16 - 20 0 0
21 - 26 16 25
27 - 30 8 13
> 30 14 22
NO answer 12 19
TOTAL 64 *101

 

*Percent total does not equal 100 due to rounding.

NOTE: The 12 in category "No Answer" were people who
signed up for job referrals with no predetermined
number of weeks.

92

TABLE 5

REASONS GIVEN FOR DROPPING OUT OF PROGRAM

 

 

Variable N %
Found another job 12 60
Personal problems 3 15
Benefits ran out 5 25

TOTAL *20 *100

 

*Total participants was 64; 44 completed.training; 20 did
not.

93

auto body repair because positions in the classes were
available. However, when they finished the training, they
could not find jobs in those areas of training.

Even though 36 (56 percent) of participants did not
find jobs in the area of assistance or training received, 42
(66 percent) said they'believed.the assistance.or'training
was very beneficial, 15 (23 percent) did not believe the
assistance was beneficial, and 7 (11 percent) did not
respond. Table 6 represents why respondents did not view

the assistance or training as beneficial.

TABLE 6

WHY ASSISTANCE WAS NOT BENEFICIAL

 

 

Reason N %
Too Short 2 3
Could Not
Comprehend 2 3
Not Pertinent 6 9
To Employment
*Other 5 8
TOTAL 15 23

 

*NOTE: "Other" category included three different reasons:
too noisy in classroom, poor instructor, and did not learn
enough to get a job.

PRESENT EMPLOYMENT
Nonparticipants reported more steady employment than

participants since the layoff. Thirty-eight (Sixty percent)

94

of nonparticipants had only one job since the layoff
compared to 31 (48 percent) of participants. Eighteen (29
percent) nonparticipants had held two or more jobs since the
layoff compared to 28 (44 percent) participants, Table 7,
page 95. This difference might be attributed to the
training. Participants may have waited longer to look for a
new job because they were enrolled in training. Another
explanation could be that participants took temporary jobs

until the training was over.

EXAMINING THE HYPOTHESES
HYPOTHESIS 1: There is no significant difference in the
frequencies per classification for the number of weeks
between job termination and reemployment for participants
and nonparticipants.

Subjects were asked to indicate how many weeks they
were laid-off before they became reemployed at other jobs.
Table 8, page 96, shows both the data and results of a chi-
square test for homogeneity. The level of significance,
which was .1902, DID NOT meet the criteria for statistically
significant differences. The null hypothesis was accepted.

The largest difference occurred in the 52 plus category
where 39 percent of program participants indicated they were
unemployed as compared to 21 percent of nonparticipants.
This might reflect that participants were spending time in
the human-investment programs that otherwise might have been
spent in serious job searches. Another explanation is that

participants might have initiated longer job searches during

which they held out for better jobs.

95

TABLE 7

NUMBER OF JOBS SINCE LAYOFF

 

 

No. of Jobs Participants Nonparticipants Total
N % N % N %
0 8 13 10 16 18 14
1 31 48 38 60 69 54
2 18 28 9 14 27 21
> 2 7 11 6 10 13 10
TOTAL 64 100 63 100 127 *99

 

*Note: Percent total does not equal 100 due to rounding.

96

TABLE 8

NUMBER OF WEEKS WITHOUT A JOB

 

 

Participants Nonparticipants Total

Weeks N % N % N %
0 3 5 0 0 3 2
.1-5 9 14 17 27 26 20
6-10 -1 2 2 3 3 2
11-15 1 2 2 3 3 2
16-20 6 9 2 3 8 6
21-25 2 3 2 3 4 3
26-30 4 6 8 13 12 9
31-35 0 0 2 3 2 2
36-51 5 8 5 8 10 8
52 plus 25 39 13 21 38 30
Still Unemployed 8 13 10 16 18 14

TOTAL 64 *101 63 100 127 *98

 

*NOTE: Percent does not equal 100 due to rounding.

x2(9, y = 127) = 12.43 Significance = .1902
(chi-square statistic does not include the category
"Still Unemployed").

97

HYPOTHESIS 2: Therezis no significant difference between
participants' and nonparticipants' reemployment rates at the
time of interviews.

At the time of the interviews 56 (88 percent)
participants and 53 (84 percent) nonparticipants were
working. Fifty-one (80 percent) participants were working
full time compared to 45 (71 percent) nonparticipants. The
level of significance was .2762. This DID NOT meet the
criteria for statistical significance. The training did not
appear to improve participants' reemployment rates.
Participants had been at their current jobs less time than
nonparticipants. Twenty-four (43 percent) participants had
been at their current jobs less than a year, compared to 13
(25 percent) nonparticipants. Twenty-one (33 percent)
participants had been at their present job between 1 and 2
years as compared to 24 (38 percent) nonparticipants.

Figure 5, page 98, depicts the types of companies in
which respondents found employment. Based on past studies
on dislocated workers, it was expected that most workers
would not find employment in occupations similar to their
laid-off jobs. .Another expectation was that those who found
jobs in a retail or service industry would in all likelihood
earn less money than they earned at the laid-off jobs.

A surprising factor was that the dislocated workers who
found employment in similar occupations to the laid-off jobs
also experienced much lower wages compared to their laid-off

jobs.

98

SOT I Participants

Nomarticlpants

 

Percent

 

 

 

 

 

 

 

Foundry Factory Retail Service Construction Other
Figure 5: Types at companies respondents found new employment

' NOTE: Due to rounding percent does not equal 100.

“Other Catagory“ included those who worked at various jobs (or friends or
became self-employed.

99

HYPOTHESIS 3: There is no significant difference in the
frequencies per wage classification for participants and
nonparticpants.

Figure 6, page 100, shows that of the 109 dislocated
workers who were working at the time of the interviews, 41
(73 percent) of the 56 participants were making less than
they were at the laid-off job compared to 33 (62 percent)
out of 53 nonparticipants. Six (11 percent) of the
participants were making the same wages at their current
jobs as they were making at their laid-off jobs, while 8 (15
percent) nonparticipants were also making the same wages as
their laid-off jobs. Nine (16 percent) participants
indicated they were making more money now than before the
layoff, and 12 (23 percent) nonparticipants were also
earning more wages.

Table 9, page 101, illustrates corresponding earnings
for participants and nonparticipants at the time of the
interviews. A chi-square test for homogeneity was used to
test the hypothesis. The significance level was .6279,
which DID NOT meet the criteria for statistically
significant differences. The null hypothesis was accepted.
Differences were observed in the $501-600 and over $600
categories, but these differences were not significant.

It appears participants earned about the same as
nonparticpants in the predetermined wage categories $500 and
under, while nonparticipants earned more in the
predetermined wage categories $501 and above. There is no

indication that the training programs increased

100

Participants

I More wages (16%)
E] Same wages (11%)

Less wages (73%)

 

Nonparticipants

I More wages (23%)
Same wages (15%)

Less wages (62%)

 

Figure 6: Percentage comparison of present wages compared to wages at the
laid-oft jobs.

101

TABLE 9

CURRENT WAGES FOR RESPONDENTS

 

 

Participants Nonparticipants Total

Wages N % N % N %
Less than $200 8 14 10 19 18 17
5200-300 11 20 9 17 20 18
$301-400 15 27 10 19 25 23
$401-500 14 25 11 21 25 23
$501-600 4 7 6 11 10 9
Over $600 4 7 7 13 11 10

TOTAL 56 100 53 100 109 100

 

x2(5, y =- 109) = 3.147

Significance = .6773

102

participants' earnings. A relevant question to ask is
whether the program improved participants' long-term
prospects.

HYPOTHESIS 4: Thereris no significant difference between
participants' and nonparticipants' perceptions that their
current jobs provide long—term employment.

Perceptions were measured by the percentage of
respondents who answered "yes" to the question, "Do you
believe you have job security at your present job?" Of the
109 respondents who were working at the time of the
interviews, 44 (79 percent) participants responded "yes"
compared to 35 (66 percent) nonparticipants. It was
surprising to the researcher that such a large percentage of
respondents answered "yes" to this question. Seventy-nine
percent of all the respondents had worked 16 or more years
at their laid-off jobs, and the majority of them had
indicated that they thought they bad job security and never
believed they would become permanently laid-off. Yet, at
the new jobs, these workers still had faith in the concept
of job security. The .1286 level of significance indicated
there was no significant difference between the two groups;
the null hypothesis was accepted.

HYPOTHESIS 5: There:is no significant difference between
participants' and nonparticipants' perceptions of current
job satisfaction.

Several questions were asked based on Herzberg's theory
on compensation factors, working conditions, and advancement

factors relating to job satisfaction. The answers to the

103

questions were ranked on a four-point Likert scale ranging
from very satisfactory to very dissatisfactory.

Hypothesis 5 was tested by examination of the
question," How would you overall describe your present job
satisfaction?" Table 10, page 104, shows the data and
results for a chi-square test. Although 74 (68 percent) of
the respondents said they were making consideraby less than
the laid-off job, 83 percent of the participants indicated
they were either very satisfied or satisfied with their
current jobs compared to 75 percent of the nonparticipants.
Many of the respondents said that even though they were
making less money on the new job, the working conditions and
environment were much better than at the foundry. The level
of significance was .1911. This DID NOT meet the criteria
for statistically significant differences. The null
hypothesis was accepted.

It appears from the responses that the respondents are
more concerned with Herzberg's motivational factors rather
than with the hygiene factors. A positive relationship with
the supervisor and opportunities for decision making and
advancement play a major role in overall job satisfaction
for these workers. One worker said:

Getting laid-off was the best thing that happened to

me. Iralways wanted to go into business for myself,

but I never felt I could quit my job to do it. This
layoff gave me the chance to start my own business, and

I am making enough to support my family. There is
nothing like being your own boss.

104

TABLE 10
PERCEPTIONS OF JOB SATISFACTION

(Percent of Number)

 

 

 

 

 

Key: Very Satisfactory = VS Participants = P
Satisfactory = S Nonparticpants = NP
Dissatisfactory = D
Very Dissatisfactory = VD

Variable VS S D VD N

P NP P NP P NP P NP

Wages 5 17 61 53 23 19 11 11 109

Fringe Benefits 9 9 52 51 21 26 18 13 109

Vacation Policies 16 13 61 47 16 28 7 11 109

Work Week 14 19 73 53 7 25 3 4 109

Physical Conditions

of work place 25 26 71 49 4 21 0 2 109

Opportunities

for decision-

making 14 21 50 45 29 26 7 8 109
Relationship to

Supervisor 38 34 59 47 4 13 0 0 *106
Advancement

Opportunities 9 9 57 55 29 25 5 8 *107
Overall Job 13 27 7O 48 13 15 5 10 *108

Satisfaction
x2(3, y = 108) = 5.15 Significance = .1911

*NOTE: Total number equals 109 (56 participants, 53
nonparticipants). Nonresponses were not included.

105

Many respondents said they liked their jobs because they did
not have to work so hard, the work place was cleaner, they
had the opportunity to participate in decision making, and
there were chances for promotion.

Herzberg's theory that dislocated workers might be more
concerned with hygiene factors at the expense of
motivational factors was examined as a possibility for low
enrollment in training programs. However, this did not
appear to be the case based on the responses given to the
questions relating to hygiene and motivational factors.
When respondents were asked, "What do you view as more
important in a job, wages or job satisfaction?", 38 (59
percent) participants answered job satisfaction compared to
34 (54 percent) nonparticipants. Over 50 percent of
participants and nonparticipants indicated that job
satisfaction was more important to them than wages.
However, many of the respondents did indicate that it would

be ideal to have both "good wages" and job satisfaction.

SUMMARY
This chapter has presented an analysis of the findings
and a statistical examination of the relationships among
variables relevant to this study. Five hypotheses were
tested using empirical methods. .All five null hypotheses
were accepted.
Chapter V includes a summary of the study, conclusions,

and recommendations based on the research findings.

CHAPTER V
SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS

SUMMARY

"Nationwide there are approximately 100,000 workers a
year who are unemployed, whose old jobs have permanently
disappeared, and who have not been readily absorbed by other
job openings" (Bendick, 1983).

Researchers and economists are not in agreement on the
primary causes of such unemployment or what to do about it.
Some claim cyclical factors are to blame. Others cite
structural factors, such as new technology or changing
patterns of international trade. Bluestone (1982) advocates
that deindustrialization has played a major role in a large
majority of plant closings, causing millions of workers to
become permanently laid-off.

Over the past 25 years, the federal and state
governments have been searching for solutions to the
reemployment problems of dislocated workers. Several
employment and training efforts to assist disadvantaged
groups have been initiated. The main focus of these bills
has been to provide extended benefits, such as severance
pay, pension benefits, continued health insurance, job
training, relocation assistance, and plant closing

notifications (O'Connell, 1986: Felsten, 1981).

l06

107

With the increased number of manufacturing plant
closings in the last 15 years, attempts to compensate
dislocated workers for their job losses have taken two major
forms: readjustment services and income replacement. The
latest legislation that specifically targets dislocated
workers is Title III of JTPA. The goal of the bill is to
provide training and employment services to dislocated
workers enabling them to acquire job skills needed to obtain
reemployment sufficient to support themselves and their
families. Title III is unique in that it gives
responsibility to state governments for planning and
implementing the dislocated worker programs.

A review of the literature indicated that the
effectiveness of JTPA is in question. Major evaluations and
studies on dislocated worker programs reported that training
did not make a significant difference in reemployment rates
and earnings for participants (Cohen, 1988; Bloom, 1987;
Kulik, (1984). Ferman, 1980: Gordus, 1981; and Cook, 1988,
found dislocated workers had very little interest in
training. After evaluating several plant closings, Ferman
reported that only 6 to 16 percent.of dislocated workers
participated in training programs.

The dislocated worker population tends to be white
males, who are older, less educated, more experienced,
accustomed to higher earnings, and less likely to have had
recent experience in job search techniques when compared to

the "general" unemployed (Barth, 1981; Horvath, 1981;

108

Bartholomew, 1987: Thor, 1982). The strongest association
established in the literature between a worker's
demographics and reemployability has been that of age.
Studies by Dorsey, 1967; Aiken, 1968; and Barth, 1981,
agreed that age was inversely related.to reemployability.
Workers over 45 years of age had significantly higher
unemployment rates than did those below that age.

Nontransferability of work experience, seniority-
related wages and benefits, lack.of information about the
labor market, low levels of education, and age
discrimination combine to make readjustment difficult for
dislocated workers. Local labor conditions as well as the
quality of the training affect whether completion of the
training will lead to a desirable, well-paying job.

The purpose of this study was to determine what
happened to 614 workers who were displaced from an iron
foundry in September, 1986. The company was located in
Muskegon, MI, an area that has been hit hard by plant
closings the last five years.

.A reemployment and training project, federally funded
through JTPA and TRA and administered by MESC, offered the
laid-off workers free assistance in counseling, job
referrals, relocation, remedial education, classroom
training, and/or OJTu The goal of the project was to give
the dislocated workers the training and assistance needed to

find new jobs in the private sector.

109

Workers who enrolled.in the program were eligible to
receive 26 weeks of TRA benefits in addition to the benefits
already collected. However, only 81 workers elected to
participate.

This study was designed to examine the impact of the
short-term, human-investment program on participants'
reemployment rates, earnings, and perceptions of long-term
employment and job satisfaction at their current jobs
compared to nonparticipants. Data were collected through
telephone interviews or mailed questionnaires from 127
dislocated workers from the foundry; Sixty-four respondents
had participated in the human-investment program; 63 had not
participated. The sample initially drawn was comprised of
152 laid-off workers. All 81 participants were included in
the study, and a random sample of 81 was drawn from the
pool of nonparticipants. ZFive from each group were used for
the pilot test. Twenty-five subjects did not respond or
refused to participate, which made the response rate 84
percent.

Five hypotheses were developed to guide the study:

1. There is no significant difference in the
frequencies per classification for the number of weeks
between job termination and reemployment for participants
and nonparticipants.

2. There is no significant difference between
participants' and nonparticipants' reemployment rates at the

time of the interviews.

110

3. There is no significant difference in the
frequencies per wage classification for participants and
nonparticipants.

4. There is no significant difference between
participants' and nonparticipants' perceptions that their
current jobs provide long-term employment.

5. There is no significant difference between
participants' and nonparticipants' perceptions of current
job satisfaction.

The first four hypotheses were intended to determine if
participation in the training program made a difference in
reemployment rates, earnings, and perceptions of long-term
employment. The fifth hypothesis, which was based on
Herzberg's theory of compensation and motivational factors,
related to participants'jperceptions of job satisfaction as
compared to nonparticipants.

Five assumptions guided the formulation of the
hypotheses:

Assumption 1: Dislocated workers are reluctant to enroll in

 

government-sponsored training programs.

The literature has reflected that only a small
proportion of dislocated workers participate in training.
In this study, only 13 percent of the laid-off workers opted
to enroll in the assistance program. Workers 45 years of
age and under participated in training at a higher rate than
workers over 45. The primary reasons given by respondents

for not participating in the assistance program were

111

(a) found another job, (b) lacked confidence, (c) lacked
transportation, and (d) did not believe training was

worthwhile.

Assumption 9: Many dislocated workers do not have

 

transferability of skills.

Many of the dislocated workers indicated that they had
worked over 20 years at the laid-off jobs and only knew how
to do one specialized job. Fifty-seven percent of those who
found employment, found it in another occupation, where
their skills were not transferable. Most.of the new jobs
were in entry-level, low-wage categories that required low

skill and education levels.

Assumption 9: The investment in training programs for

 

dislocated workers will provide a benefit to society in the
forms of increased skills, knowledge, earnings, and taxes.
The research findings indicated that training was not
always compatible with labor market demands. While 69
percent of the participants completed the program, 56
percent did not find employment in the area of the training,
and 13 percent were still unemployed at the time of the
interviews. Sixty-six percent said they believed the
training was very beneficial, while 23 percent indicated it
was a waste of time; eleven percent did not respond. The
primary reasons participants did not think the training was
beneficial was because the training was not pertinent to

employment, or they did not learn enough to get a job.

112

Although many of the participants increased their skills and
found employment, the training did not increase their
earnings compared to nonparticipants. Nevertheless, these
new jobs represent a benefit to society in the form of

increased taxes which help to offset the program costs.

Assumption 9: Job satisfaction may be as important as wages
//

 

earned in maintaining long-term employment. «

The literature indicated that dislocated workers on the
whole are skilled, high—wage workers and would probably not
accept entry-level, low-wage positions. The data in this
study presented a different picture. The workers did accept
entry-level jobs or ones paying lower wages than their
previous jobs. Over 59 percent of this sample indicated
that job satisfaction was more important to them than wages,
and a large proportion believed they had job security at

their present place of employment.

Assumption 9: Society has a vested interest to assist

 

dislocated workers in achieving at least functional literacy
and/or achieve economic viability.)

This population of dislocated workers had a fairly high
level of education. Sixty-nine percent had completed high
school or had some posthighwschgol_educatio§y 24 percent
had between a ninth and twelfth grade level of education,
and 6 percent had eight years or less of education.
However, this researcher has no knowledge about

participants' levels of comprehension or state of literacy.

113

Rielley (1983) and Frager (1985) found in their
research that the key element.of any training program for
dislocated workers is to determine their abilities in basic
skills such as math and reading and to bring their skill
levels up before placing them in retraining programs.
Rielley also found that making basic skills remediation
concurrent with occupational training appeared to cause a
high dropout rate in training programs.

Because the U. S. is shifting from a manufacturing to a
service and information society, workers need the ability to
adapt to a changing labor market. "Current economic
challenges demand that we revitalize our education and
training systems to equip the current and future workforce
with academic, personal management, and teamwork.skills"

(Governor's Commission for Jobs and Economic Development,

p. 1).

MAJOR FINDINGS
Descriptive data analysis showed that the dislocated

workers were predominantly white males between the ages of

25 and 59 who had family responsibilities. Over 65 percent»!

percent of the respondents had completed high school or
received additional post-high school training. The majority‘
of these workers were experienced semi-skilled workers with
over 16 years at the laid-off jobs and earned approximately

$12 an hour.

114

The remainder of the findings is arranged around the

five hypotheses:

Post-Layoff Employment:

 

The data relating to hypothesis 1 revealed that there
was no significant difference (p =>.05) between
participants' and nonparticipants' reemployment rates after
the layoff. Twenty percent of all respondents found
employment within the first five weeks after layoff, while
44 percent found employment by week 30. The largest
difference occurred in the 52 weeks plus category where 39
percent of program participants indicated they were

unemployed as compared to 21 percent of nonparticipants.

Current Employment Status:

 

This second hypothesis examined employment rates 2 1/2
years after the layoff. At the time of the interviews, 88
percent of the participants were working (80 percent full
time, 8 percent part time). This is compared to 84 percent
of the nonparticipants who were working (71 percent full
time, 13 percent part time). The remaining respondents were
not working. There was no significant difference found

(p =>.05).

Current Earnings:

 

Data analysis for the third hypothesis revealed that
73 percent of participants were making less money at their

current jobs than they were making at the laid-off jobs

115

compared to 62 percent of nonparticipants. Predetermined
wage categories were used to test this hypothesis. The
results of a chi-square test showed there was no indication
that the training program increased participants' earnings
compared to nonparticipants' (p =>.05). Differences were
observed in the $501-600 and over $600 categories, but these
differences were not significant. Nonparticipants were

earning more in these two categories than participants.

Perceptions 99 Long Term Employment:

 

 

The fourth hypothesis examined whether there was
significant difference in participants'rand nonparticipants'
perceptions of long-term employment at their current jobs.
Of the 109 respondents who were working at the time of the
interviews, 79 percent of the participants and 66 percent of
the nonparticipants responded that they believed they had
job security at their present jobs. There was no

significant difference between the two groups (p =>Jfin.

Perceptions 99 Current Job Satisfaction:

 

 

The fifth hypothesis was intended to determine if there
‘was a significant difference in perceptions of overall job
satisfaction between participants' and nonparticipantsh
Eighty-three percent of participants and 75 percent of
nonparticipants indicated they were either satisfied or very
satisfied with their current jobs. 'There was no significant

difference between the two groups (p =>.05).

116

CONCLUSIONS

The findings from this study support all five
null hypotheses. According to the first hypotheses, there
was no difference in reemployment rates between participants
and nonparticipants. More program participants than
nonparticipants were unemployed for over a year: however,
the difference was not significant. This difference could
be attributed to two factors. First, participants might
have waited to do serious job searches because they were
spending time in training. Second, participants may have
held out for better-paying jobs related to the training. If
reemployment rates are the primary method of measuring
effectiveness of human-investment programs, this program was
successful. Even though Muskegon is an area that has
suffered from high unemployment rates for years, the
majority of the dislocated workers found full-time
employment within the first year after the layoff. In terms
of wages and employment related to the training, the program
was not as successful.

The second hypothesis disclosed that three—quarters of
the respondents were working full-time, and 54 percent were
still employed at their first job after the layoff. On the
average, participants had been at their current jobs less
time than nonparticipants, which could be attributed to the
time participants spent in the training program. .Age was
crosstabulated with the answer to the question "Are you

employed now?" The results indicated respondents age 45 and

117

over had an unemployment rate of 28 percent compared to a 5
percent unemployment rate for those under 45 years of age.
Age did appear to have an inverse relationship to
reemployment.

The third hypothesis was used to examine current
earnings for participants and nonparticipants. There was no
significant difference between the two groups: however,
nonparticipants did earn more in the $501-600 and over $600
categories than participants. Because there were no
differences in skill or educational levels between
participants and nonparticipants, these facts are hard to
explain. One explanation might be that nonparticipants were
working longer at their present jobs compared to
participants, and earning differences were due to wage
increases. Overall, there was no indication that the
training program increased participants' earnings compared
to nonparticipants. This fact raises the suspicion that
short-term training may result in participants finding jobs
in low-paying occupations that would have occurred without
the training.

The results of hypothesis four were surprising.
Although 72 percent of all respondents had worked 16 or more
years at the laid-off jobs, the data showed that when jobs
were found, workers still had faith in the concept of long-
term employment. There was no significant difference in
perceptions that current jobs offered the prospect of long-

term employment. A limitation of this research hypothesis

118

is that workers can only "assume" they have job security. A
follow-up study three and five years after reemployment
could determine if, in fact, these presumptions were true.
For the last hypothesis, a Likert scale was used to
measure levels of satisfaction of participants and
nonparticipants for compensation and motivational factors.
Three-fourths of the respondents indicated that they were
either satisfied or very satisfied with their current jobs.
Although two-thirds of the respondents were making less
money than at the laid-off jobs, over half reported they
were satisfied with their earnings and jobs. It appears
that many respondents are more concerned with motivational
factors rather than compensation factors. A positive
relationship with the supervisor, opportunities for
decision making, and possibilities for advancement played a
major role in overall job satisfaction. One employee said:
The wages are about half of what I was making at the
foundry, but I like this job much better. People here
are nice. My supervisor asks my opinion about things,
and I have a chance to move up in the company.
Although itfis a hard adjustment to make less money.
In summary, the results of this study indicated that
the current Title III dislocated worker programs have had
only limited success in solving the problems caused by
economic dislocation. It is not the intent of this research
to suggest that dislocated worker programs should be
abolished. In fact, there is a strong need for continued

federal policy which supports such programs. The question

is not if dislocated programs are needed, but how can they

119

be modified and strengthened to better serve this

subpopulation.

RECOMMENDATIONS

There is clearly a need for federal policy that reduces
barriers to reemployment in occupations providing self-
supporting wages for dislocated workers. Title III was
enacted as a panacea for problems encountered by dislocated
workers due to economic dislocation. "As a vehicle to
meaningful employment; however, it has fallen short of
expectation" (Smith, 1985). The literature confirms that
only a small proportion of dislocated workers elect to
enroll in human-investment programs.

Two theories are suggested as potential explanations
for workers" lack of participation in training programs. The
Human Capital theory assessed the workers' reaction to the
training opportunities and their decisions to either train
or not to train. This theory is based on the belief that
workers will only enroll in training if the benefits (jobs
and earnings) outweigh the investment of training.
Herzberg's theory suggests that workers who are more
concerned with compensation factors (e. g. wages and
benefits) at the expense of motivational factors (e. g.
opportunities for advancement and decisionmaking) will
result in low participation rates in training programs.

Research leads one to assume that a large proportion of
dislocated workers do not think the benefits outweigh the

investment. Those who do enter training programs often find

120

the rewards disappointing. A common criticism expressed by
the dislocated workers was they did not know where to apply
for work related to their laid-off jobs. Finding steady
jobs that paid well was very difficult. One man
interviewed said: "If someone would have give me a list of
all factories or foundries in the county, I could have
applied for a job. I had no idea where to begin lookingJ'

A more positive picture of the JTPA was reported by
McDonald (1988). She indicated that over 2 million people
were placed in jobs the first five years JTPA was in
operation. Nearly three out of every four adults who were
served by Title III programs found jobs. The average
starting wage today for participants is $7.41 an hour.
Although this report is encouraging, it does not indicate if
jobs were related to the training or if they offered long-
term employment prospects.

Based on the review of the literature and the results
of this research project, the following suggestions are

offered.

1. Outreach and recruitment should 99 intensified 99 raise

 

 

the rates 99 participation.

 

 

There are several explanations why recruitment and
outreach efforts have solicited little response from
dislocated workers. First, a major reason laid-off workers
do not participate in training is because they do not

believe they can afford to train, even though the training

121

is free. They need income to support their families while
they are in training. Second, many lack the basic skills
needed to complete the program. Third, financial commitment
is often lacking to hire enough counselors and support staff
who can spend time with each laid-off worker to do the
testing and evaluation needed and to offer continuing
support and motivation throughout the training.

In an attempt to raise the proportion of dislocated
workers who participate in training, three recommendations
are offered: (1) Adequate support and incentives should be
given to trainees. This could be in the form of extended
UIB benefits, subsidies, or income earned through
employment. Very few workers are able to forego wages to
participate in training. (2) A financial commitment from
the government is needed. to ensure adequate staffing for
pre-training evaluations. Continued communications with
the dislocated workers, once enrolled, should be established
to offer guidance, assistance, and motivation. This would
help increase retention rates in training programs. (3)
Enrollment into programs should be speeded up.
Participants often experience exasperating waits before
enrollment. This results in some dislocated workers
becoming discouraged and not participating in training. (4)
Intensified efforts should be made to assist program
participants in finding employment in an occupation for

which they were trained.

122

The implementation of these recommendations could
increase the success of Title III participants, which in

turn might encourage others to enroll in training programs.

2. Economic development 99 99 employment strategy should

 

 

receive top priority 9y local administrators 99 communities

 

 

 

that are plagued with high unemployment rates.

In the absence of new jobs in a community, training and
placement programs only serve to reallocate existing jobs
between participants of the programs and nonparticipants.
In communities, such as Muskegon, which have been plagued
with high unemployment rates, it would appear to make sense
for those communities to put less effort on training and
more effort and funding into attracting new businesses
and/or expanding the existing ones. This suggestion may
seem to be an unjust solution. However, studies have shown
repeatedly that training programs have not made a
significant difference in reemployment rates and earnings.
When employment is found, it is often in low-paying jobs
that are not related to the training. In fact, many
researchers argue that participants of training programs
would have eventually found the entry-level, low-wage jobs
without the training. If one assumes this to be true,
utilizing scarce resources to generate jobs would be sound
public policy.

This is not a simple task. First, redirecting

resources for economic development at the expense of

 

,5

123

training programs for dislocated workers would cause severe
economic hardships for many dislocated workers. Second,
successful economic development linkages among the state
regulatory agency, the employment agency, the local private
industry council, and the local economic development
organization is difficult to establish. Often, to the
detriment of the community, these agencies and councils
operate in a highly politicized climate. Becauseaof this
situation, communities frequently are slow to react when a
prospective business indicates a possible desire to locate
in the community. This may lead the prospective new company
to locate elsewhere. Although a supply of skilled and
professional workers are important to a prospective new
employer, economic factors like low energy costs, low
levels of unionization, low taxes, and low wages greatly
influence where a company decides to locate (Grant, 1984).
Muskegon, the site of this study, has been traumatized
over the loss of 12,000 manufacturing jobs over the last 30

years (The Muskegon Chronicle, May 23, 1982). In a randomly

 

selected survey, employers attributed the loss of industries
to Reagan policies, the state legislation, a tough labor
town image, bad union relations, exasperated management,
Michigan's workers' compensation, unemployment insurance
rates, state taxes, and regulatory laws. All of these
reasons have hindered successful economic development. If
communities are to overcome such negative images, all

government agencies, plus the private sector must unite in a

 

124

joint effort to make their communities more appealing to
prospective new businesses.

Muskegon could be used as a good example for other
communities that have high unemployment rates and a poor
labor town image. Muskegon has made tremendous progress in
changing this negative image into a positive one through
joint cooperation of the public and private agencies.
Muskegon is now promoted and marketed as a "great" climate
for doing business. In fact, last year it won the
Community for Economic Excellence award through.the Michigan
Department of Commerce.

Combining economic development efforts into one
effective, consolidated group is important. "There needs to
be a central focus organization that has somebody held
accountable for the major efforts . . . and to coordinate it
with the local units of government, labor unions, and
business" (John Hausman, March 9, 1988, p. 5A). A single
agency will result in greater cost-effectiveness, central
coordination of development efforts, and joint funding.

One way Title III has attempted to encourage economic
development is by offering entrepreneurial training to
dislocated workers. This training is unique in that
previous Title III programs offered assistance to dislocated
workers by matching skills to existing job openings through
assessment, job search training, training in high-demand

occupations, or providing relocation assistance.

 

125

Small business training, which was piloted in Ohio,
encouraged dislocated workers who had the aptitude to start
their own businesses. Because firms with fewer than 100
workers employ 50 percent of all private nonfarm workers in
the U. S., (Mangum, 1988) this new program seems worthy of
future consideration. Program effectiveness is measured by
the rate of dislocated workers who become self-employed as a
result of the training. Another measure of success is the
number of new jobs that are created as a result of the new
businesses. Follow-up studies 1, 3, and 5 years after the
training would be recommended because of the high failure

rate inherent in small businesses.

3. Local government should develop closer ties with the

 

 

private sector.

 

While JTPA depends entirely upon the private sector to
provide jobs for dislocated workers, many employers resist
hiring program participants (Smith, 1985). This suggests
that the links between JTPA and the private sector are weak.
Training programs that are isolated from the labor market
cannot assure jobs for graduates. Developing such ties is a
complicated matter. Smith, who studied private sector
employees' lack of interest in public employment and
training programs, found that employers were wary of the
quality of those workers. .Although.JTPA offers financial
subsidies to employers who provide program participants with

OJT, employers have responded with less enthusiasm than

 

126

expected. Smith found that most employers did not find the
OJT subsidy appealing. His research indicated that
employers appear to have little experience with public
manpower programs and rely heavily on informal sources to
fill their job openings. Over half the employers said their
experience with CETA was unsatisfactory because candidates
had not been adequately screened by program administrators.

Developing closer links with the private sector will
involve long-range planning. First, if the private sector
is reluctant to hire program participants because of
negative past experiences. local governments must work to
change the image of this program and to reduce the financial
risk factor for the employer. One solution would be to
screen and test program candidates more carefully and
critique the candidates' skills and education background.
This profile could be sent to all interested area businesses
and industries.

If businesses were willing to hire and train
candidates, 100 percent reimbursement for wages could be
made for the time it takes to complete the training.
Another alternative is to offer private employers tax
deductions for training and hiring dislocated workers.
These monetary incentives would serve two purposes: First,
it would help offset any financial risk by the employer;
second, dislocated workers would receive the training they
need to move quickly into new jobs. A disadvantage of this

plan is that some employers may take advantage of these

127

options by releasing OJT participants as soon as the
subsidies expire. In the long run, the cost of such
subsidies may be less than the cost of providing income to
the person during unemployment. Also, if applicants were
screened properly to insure proper levels of education,
skills, and motivation, employers might be more willing to
hire, train, and retain these workers in the future.
Another approach to developing closer links with the
private sector is to integrate all job training and adult
education services creating a unified, more efficient human
investment system. Michigan is in the process of doing this
through.the Michigan Opportunity Card CMOCL. The goal of
this project is that each community will survey the area for
all possible training sites. This information will be used
in conjunction with the MOC. The long-range plan is that
each person in the community could receive a card, which has
a computer chip with his or her credentials on it. This
person will be able to go to a MESC office and insert the
card to access information on what training is available and
where. Jackson, MI, has taken this process one step
further. Cardholders will be able to identify by job
classification where local job opportunities exist. Not
only will this help dislocated workers to be more
knowledgeable about training and job possibilities, it
could be an advantage to employers. If they listed all job
openings when they occurred with the local employment

office, they could receive in one day a list of people with

128

the required skills and education. The concept is a good
one: however, money has not been allocated for the hardware
to complete the process.

To make this program a success, there must be support
and direction from the private sector and financial support
from the federal and state governments. Even though
cardholders can access information on their own,
administrators, social workers, and counselors will be
required to help determine what type of training or
education each person might need to enhance reemployment
opportunities. This central training clearinghouse can act
as an interface between the needs of the business community

and the educational institutions.

4. Training should 99 tied more closely 99 employment

 

 

 

Although 31 percent of the dislocated foundry workers
did find jobs in the area of training, 69 percent did not.
‘Wilms (1986) suggests that the public sector provision of
training is often driven by the needs of the training
institutions themselves, rather than the demands of the
labor market. Several foundry workers in this study said
that the training was not related to the job market. They
finished the training, but there were no jobs available.
They felt frustrated and cheated. This finding is supported
by other studies which have shown that job training is often
not matched to labor market demand, making its economic

payoff questionable (Cohen, 1988:‘Wilms, 1985). The success

129

of a training program should depend on placement in jobs
related to the training. Training programs must be tied
specially to the private sector employers. This is often a
difficult task because of the unpredictability of employers'
hiring patterns. However, "Training workers because
positions are available in particular established training
programs is irresponsible and wasteful" (Bartholomew; 1987).

For most people, the job search process is a hit or
miss affair of either asking friends or randomly sending out
resumes. Although the state employment agencies offer
assistanee in job referrals, they only corner a small
fraction of the placement market and tend to concentrate on
low-skilled or entry-level jobs. Part of the problem may
be that employers rarely plan their future hiring needs far
in advance (Wilms, 1986). IMost firms hire workers based on
the firm's economic health. If JTPA administrators and the
federal and state employment agencies had a closer link with
the labor market, JTPA administrators could guarantee
screening and testing of all possible candidates. This in
turn might encourage the private sector to list all job
openings with these agencies.

Sweden has an elaborate system to keep track of job
openings. By law, employers are required to report all
vacancies to the employment services. These vacancies are
coded and entered into a computer system each day, and the
file can be searched by every employment service counselor

in the nation through computer terminals in all local

130

employment service offices. It allows workers' credentials
stored in the system to be compared with newly listed
vacancies each night. The employment agency is
automatically notified of a match the next morning (Bendick,
1983).

In contrast, MESC have spent millions of dollars to
computerize job openings around the country. Because
employers are not required to report job vacancies, only a
small percentage of job openings are reported to MESC. It
is not being suggested that the government legislate that
all job openings be listed with local MESC offices; however
with some modifications to Sweden's system, there may be
possible applications for the U. S.

For example, it might be more applicable if each
community developed a local-area job bank and/or
occupational-specific job bank. This has been attempted at
local MESC offices; however there has been low participation
from the private sector. To encourage firms to list job
openings through such a system, a financial incentive might
be offered to the firm. Prospective employers would not
have to spend time and money in advertising job openings;
and all workers, would have access to job openings in the
area. lThus, faster placement of dislocated workers would
save the government money in unemployment insurance and
welfare benefits.

Even if this process were in place, it would not cure

all the problems for dislocated workers. Often job openings

131

are available, but people with the right education and
skills are not. In other cases, workers are being trained
for job openings that no longer'exist when.the training is

over .

5. Human-investment programs should 99 tailored 99 meet the

 

 

needs the participants.

 

Training has historically been prescribed as a remedy
for structural unemployment- iHowever, Bendix, 1983: Gordus,
1981: and Kulik, 1984, and believe that job search
assistance should form the core of all programs. In Kulikfis
evaluations.of dislocated workers, she concluded that job
search assistance may be as effective as a combination of
job search and short-term skill training. Because job
search assistance is less expensive than the combined
effort, focusing more attention on those activities will
make it.possible to serve more persons with.the resources
available.

The vast majority of new job openings in the next
decade are not in glamorous high-tech occupations. The
U. 8. Bureau of Labor statistics projected that between
1980-1990 there will be 700,000 new job openings for
secretaries, 500,000 openings for truck drivers, and 500,000
for nurses aides (Lusterman, 1977). High-tech occupations
may have high growth rates, but the total number of jobs is
very small compared to the numbers available in traditional
fields. In contrast to the U. S. Bureau of Labor

statistics, researchers for Countdown 2000, predict that

 

132

over the next 13 years, there will be rising educational and
skill requirements for all new jobs. More than half will
demand some education beyond high school, and almost one-
third will require a college degree. If this becomes a
reality, dislocated workers who enroll in short-term
training programs will still not have the skills and
education to move into these positions. 'Therefore, it is
recommended that skill training be used only when there are
job vacancies that require the use of those skills, when the
dislocated workers have the aptitude for the training, and
when there is adequate local training resources available.
It is paramount that participants are carefully screened to
assure they have the ability to successfully complete the
training. For those who need it, basic levels of education
should be raised to the level of entry-level positions, and
job search assistance made available to them. For those
whose education is already at an acceptable level, short-
and long-term education and training with adequate support
and incentives should be available to enable dislocated

workers to become competitive in the labor market.

6. Bureaucratic federal policies should 99 eliminated which

 

 

set 99 barriers _t_:_9 individual worker's investment E their

 

 

own retraining.

 

The Internal Revenue Service stipulates that
individuals can deduct educational expenses if they are

related to maintaining the skills in their current

133

occupations but run: if they are preparing for new
occupations. If a person is unemployed, he or she will
probably be upgrading skills or preparing for a new
occupation. In most states unemployment compensation is
available only to those workers who are available for work.
An unemployed person interested in training must wait until
his/her unemployment compensation has run out or give up the
wage replacement he/she is depending on. Because the cost
of education is not cheap, it is difficult for a person who
is working full time and supporting a family to invest money
in education. Schooling is almost an impossibility if the
person is unemployed.

With rapid economic and technological changes, workers
are faced with the need to be responsible for their own
retraining. Many people are reluctant to make sizable
investments when there is no certainly it will pay off in
future jobs and increased earning. Gordus, 1981, reported
that age and education levels.ofrdislocated workers along
with the inadequate financial assistance offered them, limit
their willingness to participate in training programs.

A solution would be to allow those individuals who are
willing to invest in retraining to deduct the expenditures.
Another solution would be to continue UIB if an individual
is laid-off, but willing to enter a training program. A
third option would be to allow individuals to earn income
through supplemental employment without cutting off whatever

benefits they already receive.

134

JTPA has responded to this need of income support while
dislocated workers are in training. Title III was amended
in 1988 by the Economic Dislocation and Worker Adjustment
Assistance Act (EDWAA), which substitutes a complete new
Title III program of employment and training assistance for
dislocated workers. Services go beyond those authorized by
other JTPA programs. In addition to the training, up to 25
percent of the funds may be used for needs-related payments
and other supportive services (John Morgan, 1988).
Hopefully, this act will encourage more dislocated workers

to participate in training programs.

7. Funding 99 training programs targeted for subpopulations

 

 

 

should 99 combined into one master fund.

 

The U. S. has been constructing publicly funded
protection programs for years. Each program offers a unique
combination of benefits and sets its own eligibility
standards. In the state of Michigan there are 70 separate
human-investment programs, costing the government $800
million a year. This system creates "turf protection" from
the agencies that administer the programs and creates
confusion for the subpopulations who are in need of
assistance. Sensitivity to government action and the turf
protection of special interest programs promise to create
pressures for their proliferation.

A solution to this problem would be to create one fund

that covers all jobless workers. Although dislocated

135

workers differ in important ways from disadvantaged
individuals and the "general unemployed" who participate in
human-investment programs, it is possible to provide the
same range of services through a common delivery system.
This plan would entail a more centralized mode of operation.
Duplication of services in the form of testing, screening,
and evaluation could be eliminated. Modifications would
have to be made to the assessment process used to identify
participants' reemployment needs (Kulik, 1984). This plan
would not be easy to implement. Any reorganization of
public programs causes opposition from different factions
within a community. It is difficult to devise an equitable
and comprehensive program for all. However, it should still
be considered.

Sources for the fund should come from the federal,
state, and local governments, as well as from the private
sector. The French system for financing worker training
should be considered. Each employer of 10 or more workers
has a legal obligation to expend 1.6 percent of its total
wage bill to maintain and expand the skill level of the
French labor force (Bendix,1983). This system could be
adapted in the U. 8. One possibility would be to redirect
some of the payroll taxes already collected through UI to
support this fund. .Another option would be to collect an
education tax from businesses. This fund would benefit
employers as well as unemployed workers by providing a

trained work force.

136

There are many questions to be answered before a plan
such as this could be implemented. First, who would be in
charge of the fund each community? Second, who would be
served through the training fund? Third, how could the
plan be successfully implemented involving federal, state,
local agencies, the private sector, and educational

institutions.

FINAL NOTES

The impact of dislocated workers on the national
economy should not be underestimated. The Bureau of
Economic Analysis of the U. S. Department of Commerce
estimated that for every one point increase in the
unemployment rate sustained over a year, the nation loses
$68 billion in output (gross national product) and $20
billion in tax revenues. An additional $3.3 billion must be
spent on unemployment benefits, public assistance, food
stamps, and other programs.to)aid the jobless (Bluestone,
1983). In his analysis of plant closings, Stuadohar (1986)
indicated that if plant closings have been responsible for
boosting the unemployment rate by just three points (out of
the existing 10.1 percent) then closings would account for
nearly $200 billion in foregone output and contributed
nearly $20 billion to the federal deficit.

As the U. 8. moves into the postindustrial era, long-
range plans must be made by the federal, state, and local

governments to offset the changes that are occurring.

137

Because low-paying service jobs are replacing many high-
paying manufacturing ones, human-investment programs that
reduce the hardships faced by dislocated workers and their
communities because of plant closings are essential.

The success of any program for the retraining and
placement of workers affected by permanent displacement is
closely dependent upon the state of the labor market.
Therefore, it is essential that the private sector play a
fundamental role in the design of the programs. There
must be intensive efforts at economic development where new
job opportunities are forthcoming. Only then can training
and retraining function effectively as a manpower
utilization catalyst and help to promote:a sound economy.

Many research studies have indicated that basic
education and job search assistance should form the core of
all programs. Basic education should receive far more
attention during times of normal employment than it
presently does. To decide whether a potential trainee will
be able to meet the demands of a specific course, a broad
evaluation is necessary. This evaluation should include
such factors as education, test scores, prior experience,
attitudes, and motivation. Any program that aims to help
the unemployed will be self-defeating if it imposes criteria
that exclude those who need help the most.

If short-term training is not sufficient for workers
to re-enter the labor market in self-supporting jobs, long-

term training should be an option. Occupational retraining

138

programs should provide adequate support and incentives for
potential participants so they can maintain a reasonable
standard of living while in training.

To solve the problems of dislocated workers will
require the cooperation of industry, labor, government, and
education. Community colleges, which already have close
linkages with the government agencies, can play a major role
in the efforts to deal with massive layoffs and plant
closings. Community colleges are currently the major
provider of vocational education, general education, and
community services. They have the facilities, staff, and
experience to provide high-quality, job-oriented training
that can be tailored to suit special needs.

Further research is needed to determine if basic skill
training and job search assistance promote reemployment into
self-supporting positions with the prospect of long-term
employment. Longitudinal studies at three and five years
after the training need to be conducted to determine if
participants of human-investment programs are still employed
at the same job and if they have made a complete
occupational or annual earnings recovery. Research is
needed to determine the best means for motivating dislocated
workers to participate in training and for lowering the
dropout rates. Results of such research would be of
interest to federal, state, and local policymakers and
important to the reauthorization of dislocated worker

programs.

139

Because of the structure of the American economy, the
issues of plant closings and dislocated worker are likely to
continue, it is time to analyze the problem from a long-term

economic and social perspective rather than a quick-fix,

short-term approach.

APPENDICES

APPENDIX A

LETTER TO SUBJECTS WHO COULD NOT BE REACHED

BY TELEPHONE

 

APPENDIX A

LETTER TO SUBJECTS WHO COULD NOT BE REACHED
BY TELEPHONE

Dear (Name):

About two weeks ago, you received a letter explaining a
research project I am doing on the workers who were
permanently laid off when (Name) closed in September, 1986.
Because I have been unable to reach you on the telephone, I
have enclosed the questionnaire for you to complete. To
measure the effectiveness of government-sponsored training
programs and government assistance for dislocated workers,
the government is continually seeking to determine the needs
and problems of workers resulting from permanent layoff from
a job. You are one of a small number of dislocated workers
who are being asked to give his or her opinions on these
matters.

Filling out the enclosed questionnaire should take about 15
minutes. Your participation is voluntary. However in order
that the results will truly represent the thinking of people
who have at some point in their lives been permanently laid
Off from a job, IT IS IMPORTANT THAT EACH QUESTIONNAIRE BE
COMPLETED AND RETURNED 99 SOON 99 POSSIBLE.

There is no risk to you, and you may be assured of COMPLETE
CONFIDENTIALITY. You name will never be placed on the
questionnaire, nor will it ever appear in the written
results of the data collected.

The benefit of this research is that your local, state, and
federal government will have a better understanding of the
needs and problems of dislocated workers and can make
adjustments to serve those needs.

I would be most happy to answer any questions that you may
have. If you do have questions about the questionnaire, you
may telephone me at (616) 773-1106.

Thank you in advance for your time, effort, and
consideration given to this project. Please return the
completed questionnaire in the addressed, stamped envelope.
Sincerely,

Mrs. Sharon VandenHeuvel

Instructor, Muskegon Community College

enclosures 2

140

 

I,

APPENDIX B

QUESTIONNAIRE

DISLOCATED WORKER SURVEY INSTRUMENT

This study is designed to determine what proportion of

dislocated workers from (Name) in Muskegon, MI, are
reemployed and to determine what proportion of workers
entered a government- sponsored training program. Please

answer all of the questions. If you wish to comment on any
of the questions, please use the space in the margins or at
the end of the survey.

Thank you for participating in this survey.

Mrs. Sharon VandenHeuvel
Doctorate Candidate
Michigan State University

PART 9: Demographic Data

Please check one answer for each question.

1. GENDER

Male [ ] (1)
Female [ l (2)

2. AGE

18-20
21-24
25-35
36-44
45-54
55-59
60-64
65 and older

f—‘Hr—‘HHHI—‘H
A
V

3. RACE

White

Black

American Indian
Asian

Hispanic
Mexican

Other

Hf—‘f—‘r-‘HF—‘H
HHI—II—II—‘HI—l
A
V

4. MARITAL STATUS

 

Married
Single
Divorced
Separated
Widowed

HF—‘HHH
L—lI—JI—JHL—J
A

w
v

141

PART

142

5. EDUCATION

 

What is the highest level you completed in school?

Eighth Grade or Less
Ninth Grade to Twelfth
High School Graduate
Some College

College Graduate

A
U
V

II: Past-work history

Please select one answer for each question.

6. How many years did you work full time at (Name)
before you were laid off?

-6
l
)

10-12 13-15 16-20 20+

9
] [ 1 l ] [ ] [ ]
) (5) (6) (7) (3)

7. Did you leave your job at (Name) before you would
have been laid off?

less than 1 1 3 4 7
[ l [ l [ [
(1) (2) ( (

3 4

Yes [ ] (If yes, go to question #8) (1)
No [ ] (If no, go to question #9) (2)

8. Why did you leave your job at (Name) before you
were laid off?

 

 

Found another job [ ] (1) Moved [ ] (4)
Illness [ ] (2) Other (specify)
Retired [ ] (3) (5)
9. JOB STATUS A! (Name)
Skilled (obtained a skill or skills [ ] (1)

through education and/or
apprentice program, e.g. pipefitter)

Semi-skilled (learned skill on the job, [ ] (2)
e.g. production worker)

Unskilled (laborer) [ ] (3)

Other (please be specific) (4)

 

 

10.

11.

12.

13.

14.

15.

16.

143

Since you have left (Name), how many weeks were you
without work?

0‘5 [ ] (1) 25’30 [ J (1)
6-10 [ 1 (2) 31-35 [ ] (2)
11-15 [ ] (3) 36-51 [ 1 (3)
16-20 [ ] (4) 52 plus [ ] (4)
21-25 [ ] (5) Still Unemployed [ ] (go to #14)(5)

How many hours a week did you work at the first job
after layoff?

Under 30 hours a week [ ] (1)
30 hours or more a week [ ] (2)

How long did you work at the first job after
layoff?

Under 3 months [ ] (1) 7 to 12 months [ ] (3)
3 to 6 months [ ] (2) Over a year [ ] (4)

Are you still at the first job after layoff?

Yes [ ] (1)
No [ ] (2)

Since your last job at (Name), have you moved to a
different city, county, or state to look for work
or take a new job?

Yes [ ] (If yes, go to question #15) (1)
No [ ] (If no, go to question #16) (2)

Why did you look for work or take a new job in a
different city, county, or state?

Job promise

Friends there

No jobs in Muskegon
Other (please be specific) (4)

r—nr—rr—I
“HI—l
A
N
v

 

 

(Continue to question #17)

Why did you decide not to look for a job outside
of Muskegon?

Family ties

No job prospects

Could not afford to move
Retired

Disabled

Other (please be specific) (6)

HHHHH
A
U
V

 

 

 

 

P T III:

17.

18.

19.

20.

PART 9y:

21.

22.

23.

144

Benefits
Please check one answer for each question.

Did you receive unemployment benefits after being
laid off from (Name)?

Yes [ ] (If yes, continue to #18) (1)
No [ ] (If no, continue to #19) (2)

How many weeks did you receive unemployment state
benefits?

0'5 [ ] (1) 21'25 [ ] (5)
6-10 [ 1 (2) 26-36 [ 1 (6)
11-15 [ 1 (3) 36 plus [ 1 (7)
16-20 [ 1 (4)

Did you receive Trade Readjustment benefits due to
lay off caused by foreign competition?

Yes [ ] (If yes, continue to #20) (1)
No [ ] (If no, continue to #21) (2)

How many weeks did you receive Trade Readjustment
benefits?

0'5 [ ] (1) 21725 [ J (5)
6-10 [ 1 (2) 26-30 [ 1 (6)
11-15 [ 1 (3) 30-51 [ 1 (7)
15'20 [ ] (4) 52 [ J (8)

Present Work Status
Please check one answer for each question.

How many jobs have you had since leaving (Name)?
0

1

2
More than 2

”Ht—1H
A
V

Are you employed now?

Yes [ ] (If yes, continue to #23) (1)
No [ ] (If no, continue to #40) (2)

Are you working full-time or part-time?

Full-time [ ] (1)
Part-time [ ] (2)

 

24.

25.

26.

27.

28.

145

How long have you been employed at your present
job?

Under 1 year
1-2 years
Over 2 years

A
N
v

Is your present job in the same type of occupation
as your former position at (Name)?

Yes [ 1 (1)
No [ ]

What is your present job title? (1)

 

What type of company do you work for now?

foundry
factory
retail
service
construction
other (Please be

Hl—Il—‘Hf—i

]
l
1
l ’(4)
specific) (6)

 

Do you believe you have job security at your
present job?

Yes
No

f—tl—I

A
N

V

WAGES:

29.

30.

At your current job, what are your average weekly
earnings before deductions (include any overtime
pay, commissions, or tips received).

Less than $200
$200-300
$301-400
$401-500
$501-600
Over $600

Hr—‘HHHH
A
V

Your present wages compared to (Name) wages are:

More
Less
Same

”mm
A
N
V

 

146

Compensation factors: Please select one choice

 

31. How would you describe your present wage?

Very satisfactory [
Satisfactory [
Dissatisfactory [
Very dissatisfactory [

32. How would you describe your fringe benefits?

Very satisfactory
Satisfactory
Dissatisfactory
Very dissatisfactory

]
J
l
]
33. How would you describe vacation policies?

Very satisfactory
Satisfactory
Dissatisfactory

]
1
Very dissatisfactory ]

r—Ir—n—u-fi

Working Conditions: Please select one choice

 

34. How would you describe the number of hours
a week you are required to work?

Very satisfactory
Satisfactory
Dissatisfactory
Very dissatisfactory

t—JI—Ji—JH

35. How would you describe your opportunities to
participate in decision making that affects
employees.

Very satisfactory
Satisfactory
Dissatisfactory
Very dissatisfactory

L—Jt—JI—JL—l

36. How would you describe the physical conditions
your work environment?

Very satisfactory
Satisfactory
Dissatisfactory
Very dissatisfactory

”Hf—1H

 

37.

147

How would you describe the relationship you
have with your supervisor?

Very satisfactory
Satisfactory
Dissatisfactory

Very dissatisfactory

l—‘f—‘f—‘H
A
v

Advancement factors:

 

38.

39.

'u
a
'5

40.

41.

How would you describe your opportunities for
advancement at your current job?

Very satisfactory
Satisfactory
Dissatisfactory
Very dissatisfactory

]
l (2)
]
I

How would you overall describe your present job
satisfaction?

Very satisfactory
Satisfactory
Dissatisfactory
Very dissatisfactory

HHHH
HHS—EH
A
N
V

Job and Training Assistance. Please indicate
all the applicable choices for each question.

In which of the following did you participate?

MESC TRA program

Mona Shores Comm. Ed. Prog.
(Name) transition team prog.
None of these

Other (please specify)

(Go to #41) (1)
(Go to #42) (2)
(Go to #43) (3)
(Go to #44) (4)
(Go to #43) (5)

l—IHHHH

In which of the following did you participate
through MESC's TRA program:

Referrals to other jobs

Job search assistance
On-the-job training
Relocation assistance
Classroom training
Counseling/aptitude testing
None of these

Other (please be specific) (8)

HHHHHHH
I—JI—‘I—JHl—‘I—IH
A
V

 

(Continue to question #43)

42.

43.

44.

45.

46.

47.

148

Which of the following did you participate
in at Mona Shores High School?

Adult Basic Educaton [ ] (1)
High School completion [ ] (2)
Classroom skill training [ ] (3)

If you participated in any of the assistance
programs listed in questions 41, 42, or 43 for
what type of job were you training or searching?
(e.g. carpenter, computer operator)

Please be specific (1)
(Please continue to question #45)

Why did you choose not to participate in an
assistance program?

Found another job [
Disabled [
Personal problems [
Retired [
No transportation [
Lacked confidence [
Not worthwhile [
Other (please be specific)

L—JI—‘I—th—ll—IH
A
V

 

(Please go to question #54)

How many weeks after layoff did you start in a
training program?

0-2 [ l (1) 21-26 [ ] (6)
3-5 [ l (2) 27-30 [ l (7)
6-12 [ ] (3) 31-52 [ ] (8)
13-15 [ ] (4) Over 52 [ ] (9)
16-20 [ ] (5) Before layoff [ ] (10)

How many weeks were scheduled for the training?

0‘2 [ J (1) 15‘20 [ l (5)
3'5 [ J (2) 21-26 [ ] (6)
6-12 [ 1 (3) 27-30 [ 1 (7)
13-15 [ 1 (4) Other (specify)

(8)

 

Did you complete the training?

Yes [ ] (If yes, go to question #50) (1)
No [ ] (If no, go to question #48) (2)

 

48.

49.

50.

51.

52.

53.

149

How many weeks of the training did you complete?

0'2 [ J (1) 21'25 [ ] (6)
3-5 [ ] (2) 27-30 [ ] (7)
6-12 [ ] (3) Still attending [ ] (8)
13-15 [ ] (4) Other (specify)

16-20 [ ] (5) (9)

 

Why didn't you complete the training?

Found another job

Training too difficult
Personal problems

Sickness

Felt ill at ease in program
Other (please specify) (6)

HHHHl—‘W
A
U
v

 

Is your present job directly related to the
training you received?

Yes [ ]
No . [ ] (2)
Not working [ ]

What assistance did you receive from the time
you were laid off until you found employment?

Counseling [
Job Shop [
Placement [
Assessment [
On-The-Job-Training [
Classroom Training [
None [
Other (Please be specific)

]
]
]
J (4)
]
]
1

(Go to #54) (7)

 

Do you think the assistance you received
was beneficial?

Yes [ ] (If yes, go to #54) (1)
No [ ] (If no, continue to #53) (2)

Why wasn't the assistance beneficial?

Too short

Too long

Could not comprehend

Not pertinent to employment
Other (please specify) (5)

HHHH

I—JI—lI—JH
A
V

 

 

150

54. What do you view as more important in a job?

Wages (including fringe benefits) [ ] (1)
Job satisfaction [ ] (2)

55. Do you have any personal comments that you would
like to add to this interview? (1)

 

 

 

THIS IS THE END OF THE SURVEY

THANK YOU FOR YOUR PARTICIPATION

APPENDIX C

FOLLOW-UP LETTER

APPENDIX C

FOLLOW-UP LETTER

Dear (Name):

About two weeks ago, I sent you a letter asking you if you
would be willing to participate in a follow-up study on
workers who were permanently laid off when (Name) shut down
a plant in September, 1986. As of this date, I have not
received the completed questionnaire.

Because you are one of a small number of workers who are
being asked to give his or her opinion about the layoff,
YOUR PARTICIPATION IS VERY IMPORTANT. If you have not
already completed the questionnaine, would you please take
about 15 minutes to complete the enclosed questionnaire and
mail it TODAY in the addressed, stamped envelope» ,At the
end of the questionnaire, add any comments you would like to
make about what you liked or disliked regarding the way the
layoff was handled by (Name),1MESC, and the community.

If you have any questions, please call me at (616) 773-1106
(collect if you live outside the 616 area code). Thank you
very much for your cooperation.

Sincerely,

Mrs. Sharon VandenHeuvel
Instructor, Muskegon Community College

enclosures 2

151

R)

 

APPENDIX D
LETTERS SENT TO SUBJECTS PRIOR

TO PROJECT SOLICITATION

_- 51“ AVJ‘I'LD‘
.
I

 

rt"

APPENDIX D

MESC LETTER TO SUBJECTS

Dear (Name):

Sharon VandenHeuvel, an instructor at Muskegon Community
College, has received permission from the Governor's Office
for Job Training to conduct a follow-up study on (Name)
employees who were permanently laid-off when (Name) closed
down in 1986. Sharon has discussed her project with me in
length, and I believe it is a worthy project for you to
become a participant. I have given Sharon your name,
address, and telephone number.

The main objective of Sharon's project is to determine the
needs and problems of dislocated workers which occur as a
result of a permanent layoff. She will also try to
determine how many of the laid-off workers are reemployed.

Your participation in this project could make a difference
in local, state, and federal policies that pertain to
government assistance to dislocated workers.

You will be receiving a letter from Sharon within the next
two weeks explaining this research project in more detail.
I would like to encourage you to participate in this study
because the results could benefit the community.

Sincerely,

John Morgan, Counselor
MESC

152

153

APPENDIX D

LETTER SENT TO SUBJECTS BY REACHER
PRIOR TO INTERVIEWS

I am an instructor at Muskegon Community College, and I am
doing a follow-up study on (Name) workers who were
permanently laid off when Plant 3 closed down in 1986
because of changes in the economy.

To determine the effectiveness of government-sponsored
training programs and government assistance for dislocated
workers, the government is continually seeking to find out
what the needs and problems are of workers who have been
permanently laid off from a job. You are one of a small
number of dislocated workers who are being asked to give his
or her opinions on these matters.

Participating in a telephone interview, should take about 15
minutes. Your participation is voluntary. You may choose
not to participate at all or not to answer certain questions
without.penaltyu However, in order that the results will
truly represent the thinking of people who have at some
point in their lives been permanently laid off after putting
in many years of service on a job, IT IS IMPORTANT THAT EACH
INTERVIEW BE COMPLETED. Your opinions will be of great value
to this research project.

There is no risk to you, and you may be assured of COMPLETE
CONFIDENTIALITY. Your name will never be placed on the
interview form, nor will it ever appear in the written
results of the data collected.

The benefit of this research is that your local, state, and
federal government will have a better understanding of the
needs and problems of dislocated workers and can make
adjustments to fit those needs.

One of the trained interviewers listed below will be calling
you next week in the evening to set up a time that would be
convenient for you to answer a series of questions about
your past and present employment status.

Thank you in advance for your time, effort, and
consideration given to this project.

Sincerely,

Mrs. Sharon VandenHeuvel

Interviewers: Diana Baran, Barbara Haggert, Sandy Schiller
Brett Huff, Sandy Ellis, Jill VandenHeuvel

APPENDIX E

SCRIPT FOR TELEPHONE INTERVIEWS

 

APPENDIX E

TELEPHONE SCRIPT

Hello Mr. or Mrs. (Last Name):

I am (Name) one of Sharon VandenHeuvel's interviewers.
Sharon is the one who sent you the letter on her follow-up
study on (Name) employees who were permanently laid off when
plant (Name) shut down in 1986.

Are you willing to participate in this study?

If yes . .."Do you have about 15 minutes now to complete
the questionnaire?" If yes, continue with the script:

I want you to know that all information will be kept in
confidence. The questionnaire is set up in several
sections. If you have any questions as we go along or do
not understand a question, just stop me and I will repeat
the question.

At the end of interview: "Thank you very much for your
cooperation in participating in this project. If you are
interested in reading the results of the survey, a copy will
be in John Morgan's office at MESC sometime in December."

Goodbye

If they cannot participate now "When would be a good time to
call you back to complete the interview? I look forward to
talking with you on (repeat date and time)J'

If they do not want to participate, "Thank you for
l istening, goodbye."

154

 

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LII...

 

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if

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