The New Service Class

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While that may be grim news for many, the demand for skills provides great flexibility for managers and professionals who suddenly find themselves out of work in manufacturing industries. And even though many of the displaced may be less fortunate than Dychkewich, having to take pay cuts in their new positions, experts say they still stand to be handsomely rewarded by service- industry standards.

For manufacturing workers with less adaptable skills, the wage gap between industries is still daunting. Two years ago, the Pequot Indians opened their now-packed Foxwoods casino in Ledyard, Connecticut. So profitable have such gambling dens become that the Pequots could afford to staff the casino with 9,000 craps dealers, bartenders and other workers. But fully 56% of the nearly 1,300 employees who arrived after losing their jobs at local defense contractors like Electric Boat had to take pay cuts of at least $2,500 a year, according to Donald Peppard, a Connecticut College economist. One welder- turned-security guard was making $23,000 less than he had been earning. The workers who came from service jobs fared considerably better. Peppard found most earning at least $2,500 more than in their old positions.

The irony, of course, is that the layoffs that have bedeviled workers like those at Electric Boat are now providing job opportunities in service industries. Four years ago, accountant Greg Smith, 36, lost his $55,000-a-year position as an audit manager for a food-service firm that trimmed its payroll. After a succession of part-time work and other jobs, Smith joined the consulting firm Grossberg Co. in Maryland last summer as an auditor who sniffs out financial fraud for clients who have pared back their own accounting departments. Today Smith figures that between his salary and his cut of hourly billings, he has nearly doubled his old income. Because of downsizing, he says, "a lot of companies eliminated internal controls and positions, and that's worked in my favor because now these companies have to come to me."

The temporary-work sector is mirroring a growing sophistication in the upper ranks of the service economy. No longer solely providers of secretaries and clerical workers, these agencies now routinely send out doctors, lawyers, scientists and senior executives. As a result, the wage levels of temporary workers have been steadily climbing.

Such changes show up sharply at agencies like On Assignment in Calabasas, California, which places chemists, biologists and other scientists in temporary jobs. Thanks partly to layoffs at pharmaceutical companies, revenues at On Assignment have grown from $7 million in 1989 to an estimated $48 million this year. On any given day the company has 1,400 scientists working in jobs around the country for hourly wages of up to $35. (Pharmaceutical firms seem to thrive on outsiders. In New York City last week, an agency called the Cantor Concern swiftly filled a drug company's order for a specialist to help the firm decide whether to keep its in-house printing facilities. The pay rate: $2,000 a day.)