The Challenge of Finding Good Jobs in Hard Times: A 10-Year Follow-up of Displaced Apparel Manufacturing Workers

Schedule:
Friday, January 16, 2015: 5:25 PM
Balconies J, Fourth Floor (New Orleans Marriott)
* noted as presenting author
Cynthia Rocha, PhD, Professor and Director, University of Tennessee, Knoxville, Knoxville, TN
Steven Stothard, MSW, Doctoral Student, University of Tennessee, Knoxville, Knoxville, TN
Denise Denton, MSW, Doctoral Student, University of Tennessee, Knoxville, Knoxville, TN
K.B. Martin, PhD, Instructor, Tennessee Technological University, Cookeville, TN
Background/Significance:

As income inequality continues to grow, American workers face many new challenges. Since the turn of the century, downward pressure on wages of less skilled workers has increased and wage inequality continued to grow throughout the 2000s (Lemieux, 2008; Ebenstein, Harrison, McMillan, & Phillips, 2009). The “great recession,” beginning in December of 2007, has been followed by a weak and jobless recovery that has persisted into the second decade of this century (Oberg, 2011). This study examines the extent to which human capital investments and assets, and economic vulnerability, predict financial well-being for apparel manufacturing workers 10 years post lay-off. The workers were given severance packages and provided job training to obtain employment in other occupations when the plant closed.

Methods:

This study is a cohort design, following a 10% probability sample of 2000 apparel manufacturing workers over a 10 year period who were displaced from the same plant in 1998.  In 2008, 102 members (52%) of the original sample were found and re-interviewed.  The remaining 79 (44% of the current sample) from the original 1998 cohort were located through non-purposive sampling methods. Three research questions are asked: 1) Are workers’ new wages and insurance benefits 10 years after their manufacturing plant closed commensurate with their insurance benefits and previous manufacturing wage, adjusted for inflation? 2) Are human capital investments and assets significantly correlated with increases in previously laid off workers’ current income?  And 3) controlling for human capital and asset influences on income, is there an independent effect of economic vulnerability on individual income? Bivariate and multivariate linear regression were used to test the research questions in this study.

 

Results:

Results indicate that workers lost wages and insurance benefits over the 10 year period, despite human capital investments in training. Workers’ average income at the time of the survey in 2008 was $1,633 per month, around $450 lower than their plant wage ten years earlier, adjusted for inflation.  Less financial difficulty at lay-off and more hours worked currently were the only predictors of higher wages. The workers in this study lost wages if they became immediately reemployed and they continued to lose wages, regardless of whether they had finished a training program. 

Conclusions/Implications:

The viability of human capital investments in training and education are discussed in light of increased structural challenges for workers that are largely out of their individual control. Government policies can be designed to attract and invest in higher wage, higher skilled employment to reverse the decreasing opportunity structure plaguing workers in declining industries. As workers become more and more economically vulnerable, social workers are well poised to design and promote economic policies that meaningfully support the workforce and establish employment pathways -- beyond low wage training programs -- that offer a living wage and benefits.