The Living Wage Gets More Scarce -- In 1982, The Average Washington Manufacturing Worker Made A Wage That Was 45 Percent Above The National Average. Today As Inflation Erodes Buying Power, The Number Of Good Jobs - The Kind That Support A Family - Is Falling While Low-Paying Service-Sector Jobs Are On The Rise.

Carol Stocks loves her work - in fact, it's as much love as work. Every weekday, she schools a group of giddy 4-year-olds in the fundamentals of reading and math, science and art, the rhythms of the seasons and telling time.

"Everything is perfect about this job," says Stocks, a day-care teacher, "except what it pays."

Stephanie Bush has had 20 jobs. She hated most of them.

"I worked at Wendy's," Bush recalls, "serving and cooking French fries. I hated it. I hated everything about it."

Bob Kodama once made money selling dirt. A mechanical engineer by training, Kodama designed a machine that sifted the big chunks from a bunch of fill. A few tons of manure and other amendments later, he was selling topsoil.

"If you have any ambition, you can make money," he says. "It's how open-minded and creative you are."

These people have one thing in common. They want to work. They need to work.

What a simple proposition that used to be.

In the 1950s and 1960s, most men in Washington state made good money - enough to support their children and stay-at-home wives.

As late as 1982, the average Washington manufacturing worker made a wage that was 45 percent above the national average, according to the state Office of Financial Management. By 1994, that figure had dropped to about 7 percent.

State businesses slashed tens of thousands of high-paying jobs. The new jobs that replaced them were primarily service jobs -

cooking our meals, cleaning our houses, making our lattes, and caring for our children.

Today, a dual economy has emerged in Washington. One is for trained and experienced workers in aerospace, high-tech, finance, international trade, the high end of business services and health services.

The other is for people who perform low-paying service, retail and manufacturing jobs, a group that has lost more buying power over the last two decades than any other.

Between these two groups yawns a wage gap that even the booming field of high-tech, for all its promise as a generator of family-wage jobs, has failed to close.

High-tech jobs pay well above the average, but they employ only 11 percent of the state work force, and the wage gap between the haves and have-nots exists even within that sector.

Preliminary research by the state Employment Security Department shows a sharp division between the wages of highly skilled high-tech workers and the $7.50-an-hour wages of entry-level high-tech manufacturing workers.

Even for the "haves," job security is a big concern. Risk is a fact of life, even for today's educated worker.

For Stocks, Bush, Kodama and others, the new economy forced some decisions about about how they earn a living. Here's how the economy has changed and how they responded.

Mary Wood

As late as 1979, high-wage manufacturing jobs and the power of strong labor unions made Washington state a paradise for most workers. Buoyed by those high-paying manufacturing jobs, the average yearly income for all Washington workers was nearly 9 percent higher than the national average, according to the state Office of Financial Management.

Mary Wood had one of those good manufacturing jobs. She made the most of it.

In 1949, Wood started at Boeing at $1.05 an hour, decent money in those days - though below the rate men earned. "We (women) had to fight for $1.15," recalls Wood, a wiry, cheerful woman now in her 70s. Married and divorced twice, she bought her own home, reared four children and put two of them through college, almost entirely on the strength of her Boeing wage.

But in the 1970s and 1980s, the state began to see several trends catching up with Washington's industries:

-- The failure of state businesses to keep up with technological change.

-- A collapse in timber and crop prices.

-- The appreciation of the dollar against foreign currencies, which made products produced here and exported more expensive and less attractive to foreign markets.

"For the most part, workers had to accept large wage reductions. Amidst frequent and highly publicized plant closures and mass layoffs, Washington production workers made heavy wage concessions, exchanging high wages for greater job security," the state reported.

The result: The real wages of Washington workers - their wages, adjusted for the eroding effects of inflation - began to slide.

Between 1979 and 1989, average yearly earnings for a Washington worker dropped more than $2,000 in buying power, an across-the-board drop affecting most workers and occupations.

Nationally, many economists have blamed the wage depression on the replacement of high-paying manufacturing jobs with low-paying service jobs.

But in Washington state, real wages also dropped within industry sectors, even in high-paying fields such as construction and transportation. Average earnings for construction workers were 20 percent above the national average in 1979 - by 1987, they had dropped to the national average.

Real wages took an uptick in the late 1980s, fueled by a new hiring spree by Boeing. But by 1993, Boeing began mass layoffs, flattening the wage curve. Today, Boeing is hiring again, but it won't be clear for some time how that will change the state's average wage. As late as last year, the average wage of a Washington worker still had not recovered the buying power it had in 1979.

Low-wage workers suffered the most. From the early 1970s to the late 1980s, the annual pay for an entry-level retail or service job slid from above the poverty level for a three-to-four-person family, to below the poverty line.

Today, in a state that boasts with justifiable pride of the high-wage jobs it has promoted in high-tech and international trade, low-wage jobs are still being created at a faster rate. In 1994, 1.07 million jobs in this state paid less than $2,000 a month - about half that number, 580,000, paid more than $2,500 a month.

CAROL STOCKS

Carol Stocks has one of the "service" jobs. A lean, intense woman who grew up poor on a farm in Michigan, Stocks, 43, lets little go to waste. That includes the jittery energy of the "no-nappers," 20 4- and 5-year-olds, from both blue-collar and white-collar families, from both one- and two-parent households at St. Columba's Children's Center in Kent.

On a spring day, the no-nappers' agenda includes the alphabet and nutrition, videotaping the life cycle of a family of brown rats, and math estimation skills. Stocks believes she has one of the most important jobs in the state. Most child development experts now agree that the experiences of children from birth to age 5 are critical.

Her pay: $7 an hour. Top of the scale.

With her husband James in technical school, Carol's family, including two teenage boys, gets by on the $12,000 she takes home a year. She has a bachelor's degree and could make three times that in a public school classroom, but she prefers feeding the newly hatched intellects of 4- and 5-year-olds.

The board of St. Columba's recently approved a 10 percent pay increase for its teachers, despite the effect on tuition. Stocks understands the economic pressures that weighed on that decision. "There's no middle income any more," says Stocks. "A lot of people are just trying to get by."

Other forces at play

Besides the emergence of the low-wage service job, other forces in the state's economy have caused workers to reconsider their roles in the workplace. Among them:

-- The transformation of the corporate work force - This includes buyouts, consolidations, layoffs, cost-cutting, driven by everything from the need to please shareholders to the necessity of competing in an international marketplace, to the soaring salaries of American chief executive officers.

-- Boeing's incredible-shrinking payroll from 107,000 workers in 1989 to 72,000 in late 1995, has been well-documented. But other state industries have lost workers as well. More than 67,000 Washington workers have suffered from either mass layoffs or plant closures since 1989, according to reports supplied by businesses with more than 100 employees.

-- The shift to automation and information technology - This has destroyed jobs in businesses ranging from banking to food service to pumping gas and created whole new categories of both low-wage production jobs and high-wage design and engineering jobs.

-- The shift to more use of temporary, part-time and contract workers - Twenty-two percent of all state workers are now less than full-time, almost 3 percent above the national average. Today, at Microsoft, about 3,000 temporary and contract workers labor alongside the company's 12,000-strong work force in the Puget Sound region.

While many employees work part-time by choice (two-thirds, according to one state survey), it deflates their earning power.

JERRY DAVIES

One career field buffeted by these converging trends was banking. A managerial job in banking was once considered the most stable of positions, but consolidations, automation and conversion to outsourcing shrank banking employment in Washington state by 20 percent between 1990 and 1995.

Jerry Davies watched it happen, and it changed his life.

There once was a bank in Seattle called the National Bank of Commerce, a corporate citizen of the World's-Fair Space-Needle era. In 1975 it changed its name to Rainier Bank and became the incarnation of Seattle's hometown bank, with its namesake Rainier Tower and Seattle-sky-blue logo.

Then, in a sequence of mergers and acquisitions, Rainier Bank disappeared. First it was acquired by California-based Security Pacific. Then Bank of America acquired Security Pacific, after selling off a number of its assets to West One Bank - which has since been acquired by U.S. Bank.

Jerry Davies hung in there. Davies was a vice president in charge of, among other things, Security Pacific's automated-teller machines.

He remembers the day the first ATM was installed. Management was told they would have to lay off a teller.

Davies told employees that "change was coming," he recalls. "We might not like or accept it, but those who would survive would be the ones who were flexible and focused on themselves."

As Security Pacific retrenched, Davies was told to write a plan that would eliminate half a dozen jobs in his department. When Bank of America acquired Security Pacific, he was offered a transfer - to California.

Davies grew up here, has a family and volunteers in community events like Seafair. "Do I really want to go to California, manage 500 people and work for the Bank of America?" he asked himself.

In a heartbeat, he knew the answer.

Armed with knowledge from a how-to-start-a-small-business course, Davies and a friend from Security Pacific wrote a plan for a new business that would service and sell ATMs.

After 30 years in banking, Davies quit.

His new business was called Electronics Transactions Advantage (ETA Inc.).

The company services, repairs and sells ATMs for 23 area banks and financial institutions. Many of the 19 employees are former bank employees.

The tradeoffs have been considerable. They all work longer hours, but they have more flexibility for family matters.

Davies is a born salesman. His brown eyes gleam with an optimistic intensity when he talks ATMs. But he's thought about his role in the "new economy," - working for himself and a few others, outsourcing a service that many banks once performed for themselves.

He goes to bed with economic insecurity and gets up with it in the morning.

"I would have made more money," with the big bank, he says. "I would have had a sound retirement.

"I have good friends who work at Seafirst. It's nice to see them doing so well. But I know in my heart that I'm doing the right thing."

WHO WON?

The new economy has created some wage and income winners. Foremost are the elderly, who survived the slump in earning power because of the inflation-fighting power of transfer payments, primarily Social Security, Medicare and Medicaid.

Now-retired workers like Mary Wood, who enjoyed the ample wages of Washington workers in the 1950s and 1960s and have received Social Security payments that rise with the cost of living, were doubly blessed.

Wood's career also demonstrates the enduring value of a high-wage manufacturing job, buttressed by a strong union.

Even in the 1980s, aerospace workers were one of the few groups to sustain real wage gains in the state. Today, Mark DeHahn, a Boeing avionics worker, supports four children and a stay-at-home spouse on $40,000 a year. "We don't fly to Disneyland, but we don't lack for a whole lot," says DeHahn.

The highly educated, those with master's degrees or higher, have sustained the biggest increases in earning power.

Women have made big wage gains, thanks to a dramatic improvement in their pay levels above those of the 1950s and 1960s.

However, women, especially those with children, pay dearly for the right to work.

RUTH ANN ROPER

Ruth Ann Roper's daughter is one of Carol Stock's "no-nappers." Full tuition at St. Columba's is $415 a month, which was 30 percent of the $1380-a-month take-home pay from the sales representative's job Roper held until recently. Other work-related expenses, including $400 a month in gas, parking and mobile phone bills, added up to two-thirds of her take-home pay.

This economic equation made so little sense that Roper recently left her job. She's looking for another one. Without her paycheck, "we'd be able to afford our house, but not the vehicles we own. Not the programs (swim lessons, skiing, vacations) we do with the kids," says Roper.

BOB KODAMA

People who invested in the stock market have done well. The Dow Jones industrial average has risen more than 500 percent since 1979. The middle class has benefited - nearly half of all shareholders have household incomes of between $25,000 and $75,000 a year, according to the New York Stock Exchange.

Bob Kodama's work is playing that market. He knows the market, and he knows one of the emerging economy's big winners - computers and software.

Kodama grew up in southwest Seattle and lives there still. His father worked for the post office. Kodama earned a master's degree in mechanical engineering from the University of Washington.

He started his career at Boeing and Seattle City Light and worked at other engineering jobs. "I never worked for anyone longer than two years. Then I got bored," he says.

He started several business ventures. He made money at all of them - even selling dirt. When he decided to start trading stocks, he talked to friends who did it, found a discount brokerage in Chicago with a toll-free number and went to the Normandy Park Library to read the computer trade magazines.

His office: a computer, a daily stock listing service and a little gizmo that looks like a walkie-talkie but gives him instant market updates - plus a library card.

He's doubled the value of one stock portfolio and increased the other 50 percent since he started two years ago. "I make as much money between 6:30 and 1:30 every day as I ever did in business," he says.

But at one point, he was as much as $34,000 in the hole. The risk, he says, is not for the squeamish.

"You have to have the temperament and the discipline and the patience. If I screw up," he says, with the confidence of someone who hardly ever does, "it's my fault."

Some people might say that there's no economic or social utility to Kodama's way of making a living. Millions like him produce an inexorable pressure on companies to turn an ever-greater profit.

But he thinks of it as a level playing field. "It's pure business," he says. "It's the ultimate equal-opportunity employer."

In his off time, Kodama works out and travels - to Hawaii, Utah and Mexico. He volunteers at the nursing home where his father stays, and often works alongside Southeast Asian immigrants making minimum wage.

Kodama turns the light of his own self-confidence on their situation. "That's a good job to them," he says. "They're probably working to save money to go to school."

Stephanie Bush

Stephanie Bush is back in school. She's 34, the mother of a third-grader and 14-year-old. Years ago, she dropped out of a Seattle high school to move to Oakland with the man she loved.

Bush embarked on a downward cycle, a string of low-wage jobs from which she has yet to disentangle herself. "I've had packaging jobs. I've had warehousing jobs. I've had a lot of jobs," she says. "I had one or two that I liked."

She packaged crab at Tyson Foods on a refrigerated assembly line, and she had a good job as an assembler at Nintendo of Redmond, one with variety and decent wages. But the plant went to a four 10-hour-day schedule, and she could not catch a bus from her home in the Judkins area early enough to get to work. Nintendo later moved 136 of those production jobs to Mexico.

Besides their boredom and repetitive nature, the distinguishing feature of Bush's jobs was that they never paid more than about $6 an hour and offered no medical benefits.

Bush went on welfare. It was easier to support her family. But she wants to work. She enrolled in a retraining program called "Washington Works," for mothers who want to get off the dole.

She is determined to stick with it, despite the fact that she has to earn her high-school-equivalency degree first.

A clerical job at Nordstrom's, Metro or the phone company - that is Bush's idea of nirvana.

Bush is lucky to have found "Washington Works." Most workers in her situation - younger people with a high-school education or less - are not as lucky.

Who lost?

Young state workers, ages 20 to 24, lost the most in real wages of any group between 1980 and 1990. Ages 25-34 were the second biggest losers. Also affected where those without high-school educations, and those with only high-school educations.

These groups comprise a big chunk of the new "working poor." The young, the poorly educated, stuck in jobs that pay from $5 to $7 an hour - this is the group that most concerns policy-makers, from congressmen debating the minimum wage to social historians, who fear this group will become disenfranchised from the American way of life.

Nationally, average real wages last year showed an uptick for the first time in a decade. But low-paying jobs continued to hold their place as the areas of greatest growth.

According to the federal Bureau of Labor Statistics, those high-growth jobs through the year 2005 will be low-skilled and low-pay - cashiers, janitors, maids and housecleaners, retail salespersons, waiters and waitresses.

Paul Sommers, executive director of the Northwest Policy Center, notes two problems with bringing low-wage workers into the new economy.

The first is that employers with high-skill needs are looking nationally and internationally. "New employers have specialized needs that they can't find here," says Sommers. "Microsoft and AT&T recruit all over the country, all over the world."

The second problem: the specialization of the work force. "Before," says Sommers, "if you were an accountant at Boeing, you could walk right into" another company "and be an accountant. But people who are laid off at Boeing - there isn't a subset at Microsoft for those people."

Sommers believes that the government must rethink its approach to retraining to more closely align efforts with businesses that can quickly forecast their market needs. "Washington Works" has received high marks for doing this.

Another problem, notes Jim McIntire, director of the University of Washington's Fiscal Policy Center, is that the world economy itself is bifurcating, with low-skilled workers in other countries lining up by the millions to do the jobs Americans used to do. Despite gains in worker productivity, low-skilled workers have still lost jobs to foreign factories, which pay their workers wages no U.S. worker could survive on.

"You can have all the productivity gains in the world, but if you're paying someone $15 an hour to do what someone else is being paid 67 cents an hour, that's very hard to overcome with increases in productivity. The whole point of international trade is not to benefit more productive workers. It benefits more highly skilled workers," McIntire says.

So far, political solutions have been few, beyond the current debate over increasing the minimum wage. Democrats have pushed an increase of the federal minimum wage from $4.25 to $5.15 an hour, saying such an increase would help millions of the "working poor." The increase has passed the House, but many Republicans still oppose it, saying the wage increase could drive up operating costs for small businesses.

In 1950, Malcolm Cowley, a world-class literary critic, spent time in Seattle. He recalled later that "everyone seemed to be middle class and literate, no matter what his trade. We lived on a street lined with picture-window houses that were owned, not rented, by business people, skilled mechanics, and college professors."

Roger Sale, a Seattle historian, added his own thoughts on Cowley's observations in his history of Seattle: Cowley, said Sale, saw "a city of possibility where all was not yet ravaged and the bourgeoisie still strong."

That image of Seattle was a vision of egalitarian America. For low-income workers, the income gap threatens to put that America out of reach. For Stephanie Bush, it would take very little to close it.

"If I could make $8 an hour," says Bush, "I'd be cool."