European Stars and Stripes (Newspaper) - May 13, 1992, Darmstadt, Hesse                                Page 18 a the stars and stripes wednesday May 13, 1992money matters Lack of Young buyers May Hurt Economy a i 1 ten  pm months of february and March the decline exceeded by John cunn1ff the associated press new York a where have All the Young folks gone the question puzzles Many people a few demographers included and it is becoming of special concern to economists. With fewer people marrying and having children they Arentt buying a Range of consumer items from cups and saucers to houses and toys. Moreover the downturn Isnit limited to the United states but can be found in Many other industrialized nations As Well. Economist Gert von Der Linde and demographer Richard Hokenson both at Donaldson Lufkin amp Jen re Etc inc., predict that in the 1990s, the 20-to-29 age group will fall by 17 million just in North America and Western Europe. Such a decline is certain to deflate the sales potential of Many goods and services. And it could mean less borrowing and More saving. In some respects the Impact can be Good. Americans in the 1980s overloaded on credit and left savings somewhat undernourished leading to an inflow of foreign lending and fears that americans were Selling their country. But right now the important thing in the minds of Many economists is to get the Economy moving again and that Means consumer spending must improve. With relatively fewer Young people to do the spending that task is impeded. Although the relationship has not been established with certainty the aging of the population May have much to do with the change in spending patterns that has been observed in the past couple of years. Rather than taking on More debt As the Cost of borrowing Falls for example Consumers have been avoid ing new commitments and instead have been using the Opportunity to reduce existing debts. During March for instance the amount of consumer instalment credit outstanding fell at a 2.7 percent annual rate resulting in a decline of $1.61 billion. For the tide of $2  Strong consumer sector is widely viewed As necessary for the Economy to stage a sustained Advance since it accounts for about two thirds of economic activity. New customers Are the prime source of Market  Consumers age they spend less. Having accumulated assets they no longer have the pressing need or desire for More. Their energies turn toward conserving and protecting what they have. The biggest population gains Between now and the year 2000 Are destined to be among those age 40 to 59, and the Impact of this trend already May be hurting retail sales in general and automobile sales in particular. It could account for at least some of the indecisiveness of housing markets and it could explain in part the prolonged and widespread consumer caution. It could be still another Factor in a weak rather than robust recovery. Low wage jobs the study shows that even when some breadwinners work full time year round they Are paid so Little that it is barely possible for them to sustain their families. Robert Greenstein the centers director said a too Little attention has been paid to declines in wages that have depressed incomes and lowered living standards for hard working americans in inner cities suburbs and Rural areas  Cato Institute economist William Nis Kanen a member of the Council of economic advisers in the Reagan administration said a major explanation appears to be that a internationalization of the Economy has basically increased the Supply of Low wage Labory available in the United states and created a Brake on wage increases at the Low end of the skill scale. He said the same thing is happening in other Industrial countries. As International Trade grows and products move More easily across National boundaries Low skilled production workers in the United states Are increasingly competing with poorly skilled workers in All other countries producing the same products Niskanen said. 14 million share rising from wire reports Washington a More than 14 million american workers hold Low paying jobs nearly double the number of a decade ago the census Bureau says. The bureaus study released monday showed Low wage jobs on the increase even in the economic Boom that ended with the present recession. The rising share of Low wage jobs cuts across boundaries of race language age and education. Whites Blacks and hispanics Young people the Middle aged the elderly High school dropouts and High school graduates were All More Likely to hold Low paying jobs in 1990 than in 1979. Blacks hispanics the Young and the less educated were the most Likely to hold such jobs. The Bureau defined a Low wage Job As one paying below $12,195, or about $6.10 an hour in 1990, and below $6,905, or $3.45 an hour in 1979. A if you finished High school in 1979 and had reasonably decent skills its More Likely that you would be entering growth in Low paying jobs the . Census Bureau released on monday a study about full time year round workers. The Chart below shows the percentage in certain Low wage categories. Men women. Workers 18 to 24 workers 35 to 54 High school dropouts High school graduates 22% 13% Whites 17% 11% Blacks 25% 19% hispanics 31% 20% into some Type of manufacturing Job a said Isaac Shapiro a researcher at the Center on budget and policy priorities a Washington issues group. A now that person is More Likely to enter a service sector Job such As clerical work. It May be flipping  the study said the increase in the Low end of the Job Market was caused by a structural or Long term factors rather than by the  and Downs of the eco nomic Cycle. Economists say the nation lost manufacturing jobs in the 1980s. Some conclude that such jobs were replaced by lower paying positions in companies Selling services rather than products. Increased International Competition declining Union membership and the failure of the minimum wage to keep up with inflation also account for the increase in Low wage jobs Shapiro said. In 1979, about 12 percent of the nations full time workers had what the census Bureau characterized As Low annual incomes. In 1990, the figure was about 18 percent. The study is Likely to fuel debate on whether the millions of new jobs created in the United states in recent years Are Good jobs or As Many critics contend Low Quality Low pay positions. The report said that wages Are the source of about four fifths of All income in the United states and that a declining wage rates can be a source of economic and social  the Center on budget and policy priorities a Liberal leaning think tank said 1990 1979 14% 8% 24% 20% 43% 23% 13% 10% 36% 21%labor Market still uneven despite new hiring by John d. Mcclain associated press Washington a Thornton computer management systems in suburban Cincinnati is looking for a new Programmer after laying off seven of 22 employees during the recession. Casey Jones Village a Jackson tenn., tourist attraction is hiring workers for its shops restaurants and other retail outlets. But . Prince and sons a general contractor is standing Pat. A right now we have no work so we re not hiring and i Don t foresee any improvement anytime soon a said Willard Prince a partner in the Albany ga., company. A there s just not enough work in this area to go  these examples illustrate How uneven the labor Market is despite the fact that unemployment edged Down to 7.2 percent in april As 126,1 00 new jobs were created. In april 135,000 new jobs were added in the retail and service sectors including department stores hospitals and government. Those gains offset weakness in manufacturing which posted Only a Small increase in jobs and construction which lost 11,000. A Survey of 500,000 companies by the National federation of Independent business in april indicated that just 20 percent plan to hire new employees Over the next six months. Six percent said they expected More layoffs. The responses portrayed the weakest second Quarter hiring sentiment since the recession years of the Early 1980s, said William c. Dunkelberg the federations chief economist and Dean of Temple University a school of business and management in Pennsylvania. A the Job generating machine appears ready to move Forward but Only in first gear a Dunkelberg asserted. Another april Survey this one by the . Chamber of Commerce showed that despite rising business Confidence Only 23 percent of 7,446 respondents expressed optimism about employment Over the next six months. Nearly 14 percent said they expected to Cut More jobs while another 63 percent foresaw no change the chamber Survey showed. The Bush administration is forecasting that the unemployment rate will drop to 6.8 percent by the fourth Quarter. The business Council comprising the chief executives of 100 of the nation s largest corporations forecast late last week that unemployment would remain above 7 percent for the rest of the year. Still Prince the Georgia contractor said he is not despondent despite being Down to two workers from As Many As 10 a year ago. A a it la change a he said. A a in be been in this business Over 30 years and it comes and  Norwood Jones president of the firm operating the Casey Jones Village said the Economy a seems to be All rights in Jackson. A a there a no big problem at least As far As unemployment is concerned a he said. John Haubrich general manager of Thornton computer management systems said a a we re seeing a Little sign of Light and Are in the Market for a new  Temple University a Dunkelberg said the federations Survey suggested the Best Job prospects during the next six months will be found in the construction and manufacturing industries. Thirty one percent of the respondents in the construction Field expressed hiring plans compared with just 5 percent who said they anticipated Job cuts he said. Twenty eight percent of the manufacturing participants said they foresaw new jobs while 5 percent feared More cutbacks. A wholesale and retail Trade look pretty Strong a Dunkelberg added saying that slower growth is projected in other industries such As services. Most of the Job growth will be in Small and medium sized companies not the Fortune 500, Many of which Are restructuring and permanently laying off employees economists believe. A the big firms Are still shedding a Dunkelberg said. The labor department said the net gain of 126.000 new jobs in april amounted to the most created in one month in nearly a year. They included 72.000 positions in the services Industry among them 30.000 in the health Field. Business services added 21,000, although Many of those apparently were temporary. The retail Trade also posted a solid gain. William g. Barron jr., Deputy commissioner of the departments Bureau of labor statistics said expansion in the business services often is a bellwether of Job growth