America’s Peace Dividend, by Ann Markusen (ed.)

 

Comments on Michael Oden, Laura Wolf-Powers and Ann
Markusen's
"Post-Cold War Conversion:
Gains, Losses and Hidden Changes in the U.S. Economy"

Owen E. Herrnstadt

 

Almost every day for the past few years, we have heard reports of a booming economy and record levels of low unemployment. Despite this euphoria, U.S. manufacturing workers, particularly those in the defense industry, remain seriously concerned about their future. Indeed, today the number one issue facing members of the International Association of Machinists and Aerospace Workers (IAM), which represents more workers than any other union in the defense industry, is that of job security.

Why are some of the highest skilled workers in America afraid for their future? In order to answer this question, the past must be examined, and the past is precisely what is examined in Michael Oden, Laura Wolf-Powers and Ann Markusen's paper, "Post Cold War Conversion: Gains, Losses and Hidden Changes in the U.S. Economy." In this paper, Oden, Powers and Markusen report on the impact that post cold war conversion has had on defense workers in the manufacturing industry and the failure of U.S. policy to develop and effectively implement programs for easing the transition of defense workers from an economy geared towards the Cold War into one geared towards peacetime.

The authors convincingly document the negative impact downsizing in the defense industry has had on U.S. workers. They cite statistics such as over a ten year period defense related private sector employment declined by forty percent. Meanwhile, nearly 1.5 million workers lost their jobs in the defense industry with over sixty percent of the number of these workers coming from the manufacturing industry, they report.

The authors also describe the misery that dislocated workers experience during roughly the same period, citing lower wages that were received when these workers were finally re-employed. Additionally, the authors note that the jobs eventually obtained by these dislocated workers failed to take advantage of their defense-based skills.

Their study blames this failure on the lack of any cohesive employment policy in the post Cold War conversion era. Indeed, they conclude that policies were never developed and/or effectively implemented that encouraged defense companies to restructure in such a way that would retain skilled labor. Rather, they argue that policies were adopted that had the effect of encouraging fast-paced mergers and consolidation of large contractors. The consequent loss of major manufacturing and research facilities and the "migration" of jobs outside of the manufacturing industry resulted in staggering unemployment. At the same time, worker re-employment and adjustment programs were, with only a few exceptions, a failure. Oden, Powers and Markusen's conclusions are well-supported by the IAM's experience with post Cold War conversion. During the five year period from 1990 to 1994, 500,000 workers in the U.S. aerospace industry and roughly one million workers in the related aerospace industry lost their jobs. Although several thousand of these jobs were lost in commercial aerospace, many of them were lost due to downsizing in defense aerospace. Several hundred thousand more workers lost their jobs in other industries, such as ship building and ship repair, due to defense downsizing. IAM members who lost their jobs during this period suffered similar experiences to the laid–off workers described in the paper – long periods of unemployment and lack of equivalent pay and benefits once re-employed.

As the authors note, the failure to develop coherent employment policies during the post cold war period not only resulted in severe job losses for defense manufacturing workers, it also represented a lost opportunity to experiment with new and innovative schemes for converting defense manufacturing into commercial manufacturing. Indeed, the IAM had been ready, willing and able to work with federal, state and local authorities as well as private firms on conversion activities. The union had created a full–time position specifically devoted for these activities. Unfortunately, instead of innovative government conversion programs, the IAM's efforts were only met by frustration and an overwhelming sense of a lack of commitment on behalf of government.

Why do defense workers have a constant fear for their future? These workers, who displayed such loyalty to their country, found that when they needed their government, their government failed them. During the post Cold War period, government devoted its resources towards mergers and consolidations of the defense industry while virtually ignoring the negative impact these activities had on workers.

The remainder of the defense workforce is only too mindful that its government was all too quick to abandon them during this post Cold War period. Although these workers face uncertainty over their future in this period, one thing they can be sure of from past experience – as documented by Oden, Powers, and Markusen – is if they should become the victims of defense downsizing, their government will not be there to help them.

 

America’s Peace Dividend