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Technological Change and is In t o Impact In Four Industries Hosiery/Folding paperboardiboxes/ Metal cans/Laundry and cleaning U.S. Department of Labor Bureau of Labor Statistics February 1984 Technological CLang® and Its L a ta Smpta Sn F®mf Industries Hosiery/Folding paperboard boxes/ Metal cans/Laundry and cleaning U.S. Department of Labor Raymond J. Donovan, Secretary Bureau of Labor Statistics Janet L. Norwood, Commissioner February 1984 Bulletin 2182 For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 . . - /■ - :: ■> ' ■ ; r i; ■ r ' m ciate Commissioner, under the direction of Charles W. Ardolini, Chief, Division of Industry Productivity and Technology Studies. Individual industry reports were written by staff members of the division under the supervision of Rose N. Zeisel and Richard W. Riche. The authors are: A. Harvey Belitsky (hosiery), Richard W. Lyon (folding paperboard boxes), Charles L. Bell (metal cans), and Robert V. Critchlow (laundry and cleaning). The Bureau wishes to thank the following organiza tions for providing the photographs used in this study: Adams-Millis Corporation; American Machinist Magazine; and Ellis Corporation. Material in this publication other than photographs is in the public domain and, with appropriate credit, may be reproduced without permission. This bulletin appraises some of the major technologi cal changes emerging among selected American indus tries and discusses the impact of these changes on pro ductivity and labor over the next 5 to 10 years. It con tains separate reports on the following four industries: Hosiery (SIC 2251,52); folding paperboard boxes ( SIC 2651); metal cans ( SIC 3411); and laundry and cleaning (SIC 721). This publication is one of a series which presents the results of the Bureau’s continuing research on produc tivity and technological developments in major indus tries. Preceding bulletins in this series are included in the list of b l s publications on technological change at the end of this bulletin. The bulletin was prepared in the Bureau’s Office of Productivity and Technology, Jerome A. Mark, Asso iii " ■■ r 1 ' \ . .1 C o n s e n ts Page Chapters: 1. H osiery............................................................................................................................ 2. Folding paperboard boxes ........................................... 3. Metal cans........................................................................................................................ 4. Laundry and cleaning..................................................................................................... 1 10 20 31 Tables: 1. Major technology changes in hosiery............................................................................. 2. Major technology changes in folding paperboard boxes................................................ 3. Major technology changes in laundry, cleaning, and garment services......................... 2 11 32 Charts: 1. Output per employee hour and related data, hosiery, 1960-82 ..................................... 2. Employment in hosiery, 1960-82 ...................................... 3. Output per employee hour and related data, folding paperboard boxes, 1963-82 ........ 4. Employment in folding paperboard boxes, 1963-82 ...................................................... 5. Output per employee hour and related data, metal cans, 1960-82 ................................. 6. Employment in metal cans, 1960-82 .................................. 7. Output per hour of all persons and related data; laundry, cleaning, and garment services, 1960-82 ......................................................................................................... 8. Employment in laundry, cleaning, and garment services, 1960-82 and projections for 1982-90................................................................................................... v 5 8 15 17 24 28 38 40 GEfsuptur 1. Hosiery been automated and in part because the diffusion of ex isting automated equipment is still limited. Major advances include the introduction of faster knitting and sewing machinery, the incorporation of electronic controls, and the modification of several op erations. These modifications in hosiery manufacture have reduced the number or complexity of the proc esses. For example, hosiery made without a recipro cated (formed) heel greatly increases output per hour compared with traditional methods which include a formed heel. Similarly, the heat-setting process of board ing which shapes the stocking has been eliminated for some hosiery lines. This will be discussed in more de tail in the productivity section. Major technological changes in hosiery manufacture, their diffusion, and their labor impact are discussed be low and are presented in table 1. S u m m a ry Advances in technology, particularly in regard to pantyhose and tube-type socks, have been largely re sponsible for the strong productivity growth trend in the hosiery industry (SIC 2251 and 2252) in the last two decades. Technological advances include higher speed, more automated knitting and sewing machines, and specialized electronic equipment which increases the mill’s flexibility in production scheduling. These de velopments are expected to continue to affect produc tivity favorably in the 1980’s. Productivity grew very rapidly during the period 1960-82, averaging 6.8 percent annually, compared with 2.6 percent in all manufacturing.1 In addition to lower unit labor requirements associated with new automatic machinery, productivity has been increased by the elimi nation of some processing. While productivity growth has slowed down in recent years (1975-82, 2.6 percent), the rate is expected to improve with greater diffusion of new technologies. Capital expenditures (in constant dollars) in the women’s hosiery sector in the 5 years 1977-81 averaged only about 25 percent of the peak level of 1969. The relatively high outlays made in the last half of the 1960’s were in response to the capital requirements for panty hose production. In contrast, many of the firms engaged in manufacturing men’s hosiery did not invest in the newest and most costly machines until recent years. Employment in the hosiery industry in 1982 averaged about 63,000 persons, 41 percent below the 1969 peak. The sharp decline occurred in the first half of the 1970’s, but since then, employment has been relatively stable. Women employees account for a very high proportion of the work force—75 percent in 1982. Knitting Faster, more automated knitting machines have re placed large numbers of older machines in the last 15 years. In 1980, there were 29 percent fewer knitting machines than in 1963, while production was 53 per cent greater. Unit labor requirements are considerably lower on the newer machines. Some of the advances in knitting technology are a function of new or improved yarns. Stretch nylon, spandex (elastic fiber), and improvements in texturizing yarn which assure stretch-recovery properties have made possible the construction of today’s hosiery. Women's seamless hosiery is manufactured on multifeed,2high-speed automated circular knitting machines. For pantyhose, the primary product, circular machines knit blanks (legs of pantyhose) which are similar to stockings, except that they are longer. In a subsequent operation, the upper parts of the knitted blanks are sewn together to form the panty. Some of the newer four-feed machines can knit a pantyhose blank in about 1 minute, compared with about 10 minutes required on older two-feed machines 15 years ago. These machines have automatic lubrication controls, automatic stop motion controls for needle and thread breakage, and may utilize electronic processors. Technology in the 1980’s Hosiery manufacture includes the major processes of knitting, sewing, dyeing, boarding, and packaging. Technological developments in these processes in the last two decades have greatly reduced unit labor re quirements. Nevertheless, the industry remains highly labor intensive relative to other industries, in part be cause of the many discrete procedures which have not 2 Feed on the standard machine refers to the number o f strands of yarn; speed refers to the speed o f the cylinder. 1Rates of change are based on the least squares trends method. 1 Tab8@ 1. Major technology changes in hosiery D e s c rip tio n T e c h n o lo g y K n ittin g M u lt if e e d , h ig h - s p e e d D iffu s io n L a b o r im p lic a tio n s m a c h in e s f o r p a n t y h o s e a n d o th e r h o s ie r y have a u t o m a t ic c o n t r o ls , e .g ., l u b r ic a t i o n , s t o p m o t io n , a n d m o n ito r in g . N e w e r m a c h in e s in c o r p o r a te m ic r o p r o c e s s o r s w h ic h c o n t r o l s o m e o p e r a tio n s . M o r e a d v a n c e d m a c h in e s w it h m ic r o c o m p u t e r s o p e r a te d fr o m a k e y b o a r d m a k e p r o d u c t io n c h a n g e s e a s ie r . U n i t la b o r r e q u i r e m e n t s f o r D iffu s io n o f fo u r-fe e d m a c h in e s fo r k n it t in g m a c h in e o p e r a to r s a n d p a n ty h o s e p ro d u c tio n a d v a n c e d m a in te n a n c e w o r k e r s a re m u c h fro m 3 6 to 5 6 p e rc e n t o f m a c h in e s lo w e r t h a n o n o ld e r m a c h in e s . b e tw e e n 1 97 5 a n d 1 98 0 ; a ra p id S k ill r e q u ir e m e n ts f o r o p e r a to r s ra te o f a d o p tio n is e x p e c te d to m a y b e r e d u c e d . F ix e r r e q u ir e s c o n tin u e in th e 1 9 8 0 ’s. k n o w le d g e o f e le c t r o n ic s . M ic ro p ro c e s s o rs a re in c re a s in g ly u tiliz e d . M ic ro c o m p u te rs a re in lim ite d u s e a n d th e ir c o s tlin e s s m a y lim it w id e a d o p tio n in th e n e a r te rm . A u to m a tic s e w in g o f u p p e r p a rt o f p a n ty h o s e A u t o m a t ic lin e c lo s e r p u t s s e a m U n it la b o r re q u ire m e n ts fo r in t o p a ir o f le g s t o fo r m p a n o p e ra to rs a re g re a tly re d u c e d a nd ty h o s e ; a u t o m a t ic g u s s e t s e a m e r s k ill re q u ire m e n ts c o u ld b e lo w e r. s e w s in g u s s e t ; a u t o m a t ic lin e c lo s e r / g u s s e t m a c h in e com p le te s b o th o p e r a tio n s . A u to m a tic line c lo s e r is u se d by m a jo r firm s ; a u to m a tic g u s s e t s e a m e r is e x p e c te d to g a in w id e r a c c e p ta n c e b y m a jo r firm s in th e 1 9 8 0 ’ s. A u to m a tic to e clo s in g T h is m a c h in e c o m b in e s to e tu rn in g O u tp u t p e r o p e ra to r h o u r is d o u b le a n d s e w in g ; in c o rp o ra te s a u to m a tic th a t o f th e o ld e r, le s s a u to m a tic o p e ra tio n . U n it la b o r re q u ire m e n ts c o n tro ls . R e q u ire s le s s o p e ra tin g a n d m a in te n a n c e tim e p e r u n it th a n fo r m a in te n a n c e a re re d u c e d . o ld e r, le s s a u to m a te d s e w in g m a c h in e s . U s e d fo r p a n ty h o s e a nd tu b e s o c k s . M a c h in e s a re in u s e by a m a jo rity o f p a n ty h o s e a n d tu b e s o c k m a n u fa c tu re rs . F u rth e r d iffu s io n is e x p e c te d . A u to m a tic d y e in g a nd e x tra c tin g N e w m a c h in e s a u to m a tic a lly c o n tro l d y e in g a n d e x tra c tin g a fte r m a n u a l lo a d in g . R e d u c e s u n it la b o r re q u ire m e n ts to a b o u t h a lf th a t o f th e o ld e r m a c h in e s w ith m a n u a l c o n tro ls . N o e x tra c to r o p e ra to r is n e e d e d . A u to m a tic h a n d lin g a nd p a c k a g in g N ew p a c k a g in g e q u ip m e n t a u to m a tic a lly s e ts up p a c k a g e , in s e rts p ro d u c t, a n d a tta c h e s la b e ls . A u to m a tic c o n v e y o rs (c a ro u s e l ty p e s a nd o th e rs ) m o v e h o s ie ry to p a c k a g in g s ta tio n s . R e d u c e s u n it la b o r re q u ire m e n ts fo r A u to m a te d p a c k a g in g is lim ite d to p a c k a g in g to a b o u t h a lf th a t o f th e p la n ts w ith lo n g p ro d u c tio n ru n s m a n u a l p ro c e s s . C o n v e y o rs re p la c e a n d s ig n ific a n t d iffu s io n is n o t e x p e c te d . C o s tly a u to m a tic o r re d u c e u n s k ille d m a te ria ls c o n v e y o rs a re a ls o e x p e c te d to b e h a n d le rs . lim ite d to la rg e firm s . nological advances in knitting have also been adopted in the last 10 years, particularly in speed, automation, and maintenance. The major products in this category are men’s dress socks, girls’ and boys’ and women’s socks, and casual and athletic socks. The time required to knit the legs is reduced in other ways. Reciprocation of the heel and toe is now omit ted on more than 80 percent of the pantyhose, greatly reducing unit labor requirements. Reciprocation of the heel, for example, involves knitting a pocket shape into the heel area. The new generation of hosiery and pantyhose ma chines incorporates electronic processors or micro computers which reduce downtime for size and style changes, and for maintenance. Visual display units pro vide information to the operator, the fixer, and man agement which could increase quality and productiv ity. With the automated knitting machines, unit require ments for knitters and fixers are greatly reduced. Skill requirements for the operator may also be reduced. This reduction in unit labor and skill is changing occupa tional requirements; e.g., operator and fixer jobs are be ing consolidated (see the section on occupations). The diffusion of the four-feed knitting machines for women’s hosiery advanced from 36 to 56 percent of all knitting machines between 1975 and 1980. The outlook is for continued rapid replacement of the older knitting machines by automated machines in the 1980’s. In hosiery other than women ’s—primarily socks—tech A b o u t 4 0 p e rc e n t o f h o s ie ry o u tp u t is p ro c e s s e d by th e s e u n its. T h e y a re lik e ly to a c c o u n t fo r an in c re a s in g s h a re o f o u tp u t d u rin g th e 1 9 8 0 ’ s. For men’s dress socks, the changes have been largely modifications to the traditional process that produces socks with reciprocated heel and toe. Modern knitting machines operate at higher speeds, but they are princi pally one- or two-feed machines. The newest machines have automatic lubrication and sophisticated electronic controls. They increase the mill’s flexibility to change product lines with less downtime, and lower unit labor requirements for operators and fixers, compared with older machines. For the “true rib” pattern, new double-cylinder knit ting machines produce the pattern 30 to 40 percent faster than the older double-cylinder machine. These machines also improve quality, but require more highly skilled fixers. Their limited diffusion is due, to some extent, to their substantial cost relative to the payback period. It is expected that diffusion of these new dou ble-cylinder machines will continue to be slow. 2 the blanks are sewn together, an automatic gusset seamer can be used to sew in the gusset or crotch to complete the panty section. With this machine, the sewing op erator only loads the garment on the seamer and moni tors it; the machine completes the job. An automatic line-closer/gusset machine is also used which combines both processes. These automated operations greatly reduce the time otherwise required for an operator to perform the job manually on an older sewing machine. When an auto matic gusset seamer and an automatic line closer are used together, the time required for both operations is much less than the job of manually sewing only the two legs together. The sewing-machine operators handling the auto matic machinery are basically loaders. They can be trained in a few weeks, much less time than is neces sary to train operators for the conventional manual process. The major manufacturers of pantyhose have intro duced the automatic line closer in almost all of their production. However, most major manufacturers do not have automatic gusset seamers. Within the next 5 to 10 years, the principal hosiery manufacturers are likely to invest in the automatic gusset seamer. For socks other than men’s dress socks, important advances have been made in higher production rates and lower unit labor requirements. Installation of elec tronic controls which permit greater production flexi bility and reduce downtime is largely responsible for these improvements. In addition, one of the major changes in sock manu facture is the elimination of heel and toe reciprocation. These “tube” socks have been widely adopted for casual wear. Output per hour is about 30 percent higher for the tube sock than for the traditional sock with heel and toe. Electronically programmed controls Sophisticated electronic equipment (microprocessors and microcomputers) is increasing in importance in the hosiery industry. Microprocessors, used for monitoring and operating machinery, have received growing acceptance by ho siery manufacturers. These electronic devices are pro grammed to monitor or control one or more specified details of a machine’s operation. Because of their rela tively low price, and their effectiveness in reducing downtime, they are replacing the older electro-pneu matic and mechanical methods of control. Microcomputers are increasing in importance only slowly. These units facilitate production changes. In knitting, for example, they are operated directly from the keyboard of a control panel on each machine, al lowing the operator to make program changes (e.g., in size or style) with little or no downtime, while consid erably increasing the flexibility of the machine. This is particularly important for shorter runs and fashion changes. Unit labor requirements tend to be lower with more sophisticated electronic controls. Moreover, highly skilled mechanics are not required to make the style or size changeovers. In some cases, the operator’s skill re quirements are slightly reduced, and training could re quire less time. With such controls, however, the mill requires skilled fixers who are knowledgeable in electronics. Currently, machines incorporating microcomputers account for less than 5 percent of the knitting machines used in the women’s hosiery sector. In the men’s sec tor, diffusion has been even more gradual. The costli ness of the machine could remain an obstacle to much wider adoption for at least the next 5 years. Automatic to© closing Toe-closing operations on a sewing machine have re placed the traditional reciprocated knitted toe for panty hose and tube socks. According to one plant’s estimate, doing away with the reciprocated toe for socks reduced the time for knitting by 18 percent. New toe-closing machines combine the toe-turning and sewing procedures in one operation, and greatly increase output per hour over earlier sewing machines. They are more automated and require less manual work, particularly for positioning. They also yield more con sistent quality by accurately controlling the shape of the toe seam. According to one estimate, newer ma chines double the output per operator hour over the Automatic sewing of upper part ©f pantyhose After the leg blanks of pantyhose are knitted, the up per parts are sewn together to form the panty. Two blanks are cut open at opposite sides and seamed to gether in front and back. In some mills, the automatic line-closing machine now performs this operation, re placing the labor-intensive manual operations per formed on a traditional sewing machine. Then, after An operator pulls sock onto arm of automatic toe closing machine 3 Automated packaging can reduce unit labor require ments to about half that of the largely manual opera tions, and could improve quality. This process is han dled by packers (folders, baggers, boxers), who are gen erally semiskilled workers. Similarly, mechanized con veyors replace or reduce the number of unskilled ma terials handlers who move carts manually. While the most advanced packaging systems have been adopted by some of the larger manufacturers with longer production runs (primarily of pantyhose), many manufacturers continue to use largely manual packag ing procedures. The outlook is that the automated sys tems will continue to show only moderate diffusion in the next decade. Similarly, the diffusion of costly con veyor systems is also likely to be limited to the larger manufacturers. labor-intensive work required on earlier sewing ma chines. Moreover, they are relatively easy to operate and maintain since the operators load the machine and thereafter primarily monitor its operation. Although an automatic toe-closing machine has been available since 1967, its diffusion has been relatively limited until quite recently. It has now been adopted by the majority of firms manufacturing pantyhose and tube hose, and greater diffusion is expected. Automatic dyeing and extracting After the hosiery is scoured, it is dyed.3 Goods are loaded manually into the newer machines, which then dye and extract the hosiery automatically. The machine is programmed to control water ratio, temperature, tim ing, etc. These machines permit higher rotation speed and incorporate improved electronic controls, greatly reducing the cycle time. Also, dyeing and extracting are combined in a single unit, thereby eliminating labor handling between machines. The older machines with two separate operations and few controls still account for more than half of the hosiery produced. The newer automated machines reduce unit labor re quirements to about half that of the older machines. No extractor operator is needed. Also, relatively little train ing is required for dyeing machine operators. However, maintenance is much more complicated on the newer equipment, and a knowledge of electronic controls is generally important. Currently, about 40 percent of hosiery output is proc essed by automatic dyeing and extracting units. Al though these machines are quite costly, they are likely to account for an increasing share of output in the 1980’s. Output and Productivity Outi@®ic Output Automated handling and packaging The labor-intensive process of packaging the hosiery has been modified during the past decade by many im provements, ranging from simple mechanization to so phisticated automation. The efficiency of this process depends to some extent on the automaticity of the materials-handling system which delivers the hosiery to the packaging station. Although not a new technology, highly mechanized conveyors are much more efficient than those available 15 years ago, and can operate with automatic controls in a carousel-type network. The most advanced packaging systems automatically fold, package, and label the hosiery. They may also permit rapid changes by the packer for shorter runs. In addition, auxiliary equipment counts the packaged ho siery and may place them into shipping cartons. Faster packaging is in line with the faster knitting and sew ing-machine operations, thereby optimizing output per hour in the mill. 3 Scouring is the process of removing foreign matter from hosiery. Scouring and dyeing can be done in a one-bath procedure, saving time, water, and energy. 4 The output of the hosiery industry increased at an average annual rate of 3.4 percent during the period 1960-82. In the first decade of that period, output rose almost steadily at an average rate of 7.2 percent annu ally to a peak in 1970. This compares very favorably with 5.3-percent growth for all manufacturing output in that time. However, in 1970-82, opposing trends in hosiery output resulted in an average annual rise of only 2 percent. Output was seriously depressed by the mid1970’s recession, but, after fluctuating sharply, it rose to an alltime high in 1981. In 1982, however, output fell again (about 8 percent), probably due to the most recent recession (chart 1). The increase in women’s hosiery was largely respon sible for the industry’s growth. Production in 1982 was more than double that of 1960. Women’s hosiery ac counted for about 42 percent of the industry’s output in 1960, and 52 percent in 1982. Per capita consump tion of hosiery rose from about 15 pairs in 1964 (earli est data) to about 20 pairs in 1982. The principal product in women’s hosiery in the last decade has been pantyhose, the combination in one gar ment of stockings and underpants. It was a relatively new product in 1968 (accounting for 14 percent of women’s hosiery) but within only 2 years, output jumped to 70 percent. In addition to improvements in yarn, demand for pantyhose has been increased by a new marketing strategy which made them widely avail able in supermarkets and drug stores, whereas they were formerly sold mainly in specialty and department stores. Although a marked shift from dresses to pants has led to a considerable expansion of knee-high hosiery, panty hose remains the principal form of hosiery. The more rapid growth in recent years is largely due to new styles, such as “control top” pantyhose, and to the importance of color and texture of hose. Chart 1L Output per employee hour and related data, hosiery, 1960-82 I ndex, 1977— 100 (R a tio scale) 5 While the composition of men’s hosiery was also af fected by new products and changes in yarn quality, output grew by comparatively little—21 percent be tween 1960 and 1982. As a result, men’s hosiery de clined from 33 percent of total hosiery output in 1960 to 22 percent in 1982. Per capita consumption of men’s hosiery has been rather stable since 1964 but was at its lowest in 1982. This can be attributed to a shift away from natural fibers to more durable manmade fibers, offset by increased demand related to fashion changes. Those included leisure-wear styles, patterns and colors, and tube hosiery for casual and athletic wear. Output of socks other than for men was almost twice as high in 1982 as in 1960. This sector accounted for 25 percent of total hosiery output in 1960 and about 26 percent in 1982. An important source of growth in this category is likely to continue to be tube hosiery. Unlike other sectors of the textile industry, imports of hosiery have not been significant. Exports are also a rather minor proportion of the industry’s shipments. boarded. Since unboarded hosiery is shapeless until stretched over the leg, the elimination of boarding tends to simplify other processes such as dyeing, drying, in spection, and packaging. Wider adoption of some new technologies and con tinued strong output of less labor-intensive types of ho siery are expected to affect productivity growth favorably. Investment Capital ©itpeodlityriis Capital expenditures for hosiery equipment have been increasing rapidly in the last several years to a peak of $55 million in 1981 (latest data). In real terms (i.e., ad justed for changing prices), however, they have been quite stable at very low levels.4 In the women’s sector, the largest real outlays for new equipment were made in the last half of the 1960’s and in 1970. In contrast, in the 5 years 1977-81, real outlays were only about 25 percent of the peak in 1969. In 1981, they were at the lowest level for at least 18 years, except for 1976. Outlays per production worker, however, reflected the drop in employment in the 1970’s and have remained relatively strong. The large outlays for women’s hosiery equipment in the late 1960’s and in 1970 were in response to the spe cial capital requirements for new pantyhose knitting machines, since pantyhose were initially made on regu lar stocking machines. When the economy turned down and pantyhose production dropped sharply, excess ca pacity was considerable. Outlays for new machinery were then sharply reduced in succeeding years. In the sock sector, real expenditures were at their peak in 1966; in the 1970’s, they averaged nearly 40 percent less. Unlike the women’s sector, most of the firms engaged in manufacturing men’s socks have not invested in the newest and most costly knitting ma chines, although many of the machines in use are 25 years old and more. Outlays were made to recondition machines. In the last several years, however, real out lays have been rising, mainly due to the demand for higher speed knitting machines that produce tube hosiery. Productivity Over the 1960-82 period, productivity of the hosiery industry grew at the very rapid rate of 6.8 percent per year. In all manufacturing, the productivity growth rate was only 2.6 percent. Hosiery productivity increased in all but 3 years dur ing the period 1960-75. From 1960 to 1970, productiv ity increased 7.1 percent annually and was associated with about the same rise in output and only a fractional increase in employee hours (chart 1). From 1970 to 1975, a sharper productivity gain (8.3 percent) was at tained. However, during that period both output and hours declined, -3.2 percent and -10.6 percent, respectively. From 1975 to 1982, the industry’s productivity growth rate slowed down considerably to 2.6 percent a year. In those years, output once again rose an aver age of 4.3 percent annually, but employee hours also increased—at the rate of 1.6 percent. In manufacturing, the productivity growth rate also slowed to 1.4 percent annually in those 7 years. The industry’s strong productivity growth rate through most of the last two decades is associated with advances in technology, particularly in regard to panty hose and tube socks, which reduced unit labor require ments. For example, many of the knitting machines pro ducing women’s hosiery in 1970 were running at only 250 rpm, whereas the newer machines can operate more than three times faster. Pantyhose and some socks are knit without time-consuming reciprocated toe and heel. New stretch yarns permit the manufacture of some hose in only one size, contributing to larger batch production. Several types of hosiery omit the process of board ing, i.e., placing the hose on forms that shape it. Proba bly less than 20 percent of pantyhose are still fully Research and ddwetopmtsinit Relatively little research and development is carried out by domestic hosiery or machinery manufacturers. Research-and development, as well as manufacture, of the most advanced knitting machines and auxiliary equipment have been carried out abroad, principally in Italy and Japan. In addition, yarn manufacturers through their research and development have improved the quality of yarn, enabling the construction of today’s hosiery. 4 Deflated Bureau o f the Census expenditure data. 6 0 ©<oupati©ns sector, and the occupations affected include knitters, sewing-machine operators, boarders, and occupations in packaging. Two b l s surveys suggest a sharp decline in these occupations from 1970 to 19815 while output increased more than 15 percent. Sewing-machine operators constituted the largest oc cupational group. These operators sew the upper part of pantyhose on increasingly automated sewing ma chines by joining together the leg blanks, with or with out a gusset. In number, they declined about 20 percent from 1970 to 1981, but increased sharply as a propor tion of the total—from 10 percent to 23 percent. Folders and boxers are the second largest occupa tional group, although a change in packaging from box ing to bagging greatly reduced their number. Overall, the occupational group of baggers, folders, boxers, and automatic packaging-machine operators declined 50 percent from 1970 to 1981. While these manual tasks are being replaced by mechanized and automated equip ment in some plants, they remain highly labor intensive. Knitters of seamless hosiery and fixers have been par ticularly affected by machine improvements, in terms of their number and their job duties. They numbered about 60 percent less in 1981 than in 1970 as automated machines increased output and reduced downtime. In addition, various automatic devices on the newer knit ting machines simplified their duties. Fixers, involved in machine repair, maintenance, and style changes, are now required to have knowledge of electronic equip ment. In some plants, the knitter and fixer jobs have been consolidated. The duties of the knitter are, in those cases, assumed by a fixer who both operates and fixes the knitting machines. This is only possible where there is an adequate supply of fixers. An even more striking decline in employment—about 80 percent from 1970 to 1981—took place in boarding, primarily as a result of the elimination of the process for a very large portion of the pantyhose. The affected occupations include preboarders, who shape and set the stitch in hosiery prior to dyeing, and boarders, who shape and dry hosiery after dyeing. The duties of many of the remaining boarders have been simplified by au tomatic boarding machines. Nearly all of the occupations in hosiery are classified as semiskilled, and women hold the large majority of these positions. In some occupations (e.g., sewing-ma chine operator and boarder), virtually all of the jobs are held by women. Women also account for the greater share of employment in occupations such as knitter, in spector, pairer, folder, and boxer. Most of these occu pations can be learned with relatively short-term train ing on the job. Technological changes in the last decade have re duced unit labor requirements and changed the relative importance and duties of many occupations. The im pact has been most pronounced in the women’s hosiery 5 Industry Wage Survey: Hosiery, September 1970, Bulletin 1743 (Bureau o f Labor Statistics, 1972), pp. 10-11; Industry Wage Survey: Hosiery, August 1981, Bulletin 2151 (Bureau of Labor Statistics, 1982), p .8. The larger domestic hosiery manufacturers do, how ever, make modifications to and improvements in their machinery. For example, one hosiery manufacturer re cently produced a unitary cam for its women’s hosiery knitting machinery which takes less than 1 hour to change, compared with at least 4 hours previously re quired for their commercially purchased cam. In addi tion, hosiery manufacturers make some spare parts in their own machine shops or in shops within the com munity, reducing downtime caused by long delays for new parts. Emplo^mant and Oeeyp@ti@inial Trends Employment in hosiery manufacturing averaged about 63,000 persons in 1982, 41 percent below the 1969 peak of 107,000. The sharp decline occurred in the first half of the 1970’s, and hit its lowest level in 1975. Since then, however, it has been relatively stable (chart 2). Employment was about equally divided between the two major sectors (women’s hosiery and socks) in 1982, as was the case in 1960. Employment in each of the sectors in 1982 was about 40 percent below its 1960 level. But employment patterns between those two pe riods varied, reflecting differences in output and tech nology. Employment in the women’s hosiery sector rose in the last half of the 1960’s to a high in 1969 of more than 70,000 workers, as pantyhose production rose sharply. The 1970’s saw an almost steady decline to a low of 28,000 workers in 1977. Since then, employment has been relatively stable. In contrast, employment in the sock sector declined slowly but steadily from its high in 1960 to a low in 1975. By 1975, only about 30,000 workers were in plants producing men’s and other socks, compared with 51,000 in 1960. Since then, employment in this sector stabilized at only slightly above the low point. The ratio of hosiery production workers to all ho siery employees has remained relatively high. This is associated with the difficulty or cost of automating some processes, and the relatively limited diffusion of some new machinery. In 1982, production workers consti tuted 90 percent of all hosiery workers, compared with only about 68 percent in all manufacturing. Women employees account for a very high propor tion of the hosiery work force—about 75 percent in 1982, compared with 64 percent in all other knitting industries. The rate is somewhat higher in the women’s hosiery sector than in the sock sector. 7 Chart 2= Employment m hosiery, 1980=82 Em ployees (In th o u s a n d s ) 08 96 84 72 60 48 36 24 0 1 Least squares trends method. 2 Full- and knee-length women's hosiery. SOURCE: Bureau of Labor Statistics. to shortages of trained fixers and maintenance person nel in electronics and air-conditioning. Skill shortages and training are complicated by de mographic factors. During the 1950’s and even part of the 1960’s, young, trained fixers were available. Moreo ver, most companies were located in rural areas which offered only limited alternative job opportunities to fixers. Currently, however, the average age of fixers is about 55, and younger, experienced fixers are in short supply. Consequently, manufacturers have had to be come involved in training to replace those who retire. Fixers are also more mobile and shift employment among the many hosiery plants that are, for example, concentrated in North Carolina. Some fixers have also taken jobs that have become available in other indus tries with higher wage scales. According to a survey of hosiery executives, shortages of some skills will con tinue to have a major impact on the industry through the year 2000.6 Although training is usually provided on the job un der supervision, some special programs are also avail able. One of these is a comparatively short, intensive, cooperative training program for fixers. It was insti tuted in 1979 through the joint efforts of more than 100 hosiery manufacturers and the Catawba Valley Tech nical College, located in North Carolina within close radius of most of the hosiery firms. It is a 1-year pro gram which involves daily classroom work (theory and practice on machines) and a minimum of 20 hours per week of on-the-job training under supervision. The pro gram attempts to train fixers who will, in time, be eli gible for higher level jobs. The principal occupations held by men—fixers and sewing-machine repairers—are highly skilled and re quire extensive training. These are the highest paying jobs in the industry. Fixer training, which combines onthe-job and classroom training, usually requires 3 years to attain one level of the craft and an additional year for the top grade. Shortages of such skilled labor have been a problem. Adjystaenft of workers to technological change Programs to protect the worker from the adverse ef fects of changes in machinery and methods may be in corporated into union contracts, or they may be infor mal arrangements between workers and management. In general, such programs are more prevalent and de tailed in formal contracts. Only a small number of labor-management contracts are found in the hosiery industry. About 5 percent of all hosiery workers are in plants covered by collective bargaining compared with about 15 percent in all tex tile industries. The major union is the Amalgamated Clothing and Textile Workers Union. The principal form of job security for organized ho siery workers is seniority. Contract provisions gener ally state that preferences in layoffs and reemployment shall be given to employees on the basis of qualifica tions and seniority. Provision for payment to employ ees who are permanently separated from a firm because of a technological change or plant closing is rare in these labor-management contracts. However, at the time of a plant closing, negotiations over severance pay may take place. Retraining for jobs may be the major factor in em ployees’ adjustment to more sophisticated machinery, particularly where a labor shortage exists. Officers of leading hosiery manufacturing firms refer, especially, 6Kurt Salmon Associates, Inc., and the National Association o f Ho siery Manufacturers, The Future o f the U.S. Hosiery Industry-Report on the Findings o f a M odified D elphi Survey o f the U.S. Hosiery In dustry through the Year 2000 (Atlanta Ga., December 1978). SELECTED REFERENCES “Hosiery and Underwear” in Body Fashions/Intimate Apparel, monthly. Hosiery Industry through the Year 2000. Atlanta, Georgia, D ecem ber 1978. Kinkead, Gwen. “Socko Productivity,” Fortune, September 8, 1980. National Association o f Hosiery Manufacturers, Inc. Hosiery Statis tics. Charlotte, North Carolina, selected years. Kurt Salmon Associates, Inc., and the National Association o f H o siery Manufacturers, Inc. The Future o f the U.S. Hosiery Indus try—Report on the Findings o f a Modified Delphi Survey o f the U.S. Speizman Industries, Inc. Survey & Analysis o f Circular Hosiery M a chinery in the United States. Charlotte, North Carolina, selected years. 9 Chapter 2„ FoUdling Pap®rb@ardl Boxes duction worker positions, including those affected by mechanization of material handling. Training to pro vide workers with the skills needed for advanced tech nology has been a major method of work force adjustment. Summary Technological changes are underway in the major steps in the manufacture of folding paperboard boxes (SIC 2651). New computer and laser methods of pre paring dies used in cutting and creasing presses, the more widespread use of advanced model offset and gravure presses for carton printing, and the use of ad vanced reciprocating platen cutting and creasing presses represent significant changes. Benefits of this new tech nology include productivity gains, quality improve ment, and raw material savings. Output of folding paperboard boxes experienced slow growth over the period 1963-82, increasing at an aver age annual rate of only 0.6 percent.1However, the an nual growth rate in output rose to 0.9 percent during the more recent period 1973-82. The level of output of folding paperboard boxes is related to general business conditions and consumer spending, as well as competi tion from other packaging materials. Productivity in the folding paperboard boxes indus try failed to keep pace with the rate of increase in manufacturing. Between 1963 and 1982, output per em ployee hour increased at an average annual rate of 1.9 percent—well below the 2.3-percent average annual rate of gain achieved in manufacturing. The productiv ity increase resulted when output rose at an annual rate of 0.6 percent, and employee hours declined at an av erage annual rate of 1.3 percent as modernization and mechanization lowered labor requirements. Employment in the folding paperboard boxes indus try declined slightly from 1963 to 1982 as inefficient plants were closed and new technology was introduced more extensively. During that period, employment de clined at an average annual rate of 1.1 percent, with the total work force in 1982 numbering 43,700—down by about 7,600 workers from 1963. Although the introduction of new technology has not led to widespread displacement, employment cutbacks and skill changes in some key occupations, including diemaker and cutting and creasing press operator, have resulted. Advances in printing technology have affected press operators, camera operators, and platemakers. Women are employed in about 1 out of every 4 pro Industry structure The folding paperboard boxes industry in 1977 con sisted of 574 establishments, 79 percent of which were located on the Eastern Seaboard and in the North Cen tral States.2 Proximity to markets and accessibility to folding boxboard supplies are major considerations in plant location. In 1981, over 40 percent of total output was for use in packaging food and beverages. The number of establishments in the industry is de clining, but average capacity to produce folding paperboard boxes is increasing. Between 1977 and 1981, the number of plants was estimated by the Department of Commerce to have decreased by nearly 6 percent, as less efficient production facilities were closed.3 Over the same period, average cutting and creasing press ca pacity—an indicator of plant production capability—in creased by an estimated 20 percent.4 T©elho©l®gy m th® 19S@9s Technological change in the folding paperboard boxes industry generally involves improvements to ex isting technologies, rather than sharp departures from past methods. However, in some operations, including the preparation of dies used on cutting and creasing presses, computers and other innovations have reduced labor requirements and modified craft skills. Other ma jor changes include the more widespread use of offset and gravure printing; advanced reciprocating type platen cutting and creasing presses which require less labor; more automatic removal of waste material fol lowing cutting of cartons; and faster and more auto matic carton handling, gluing, and packing methods. In 11977 Census o f Manufactures (Bureau o f the Census, August 1981), p. 26C-9. 1977 is the latest year for which Census data are available. 31982 U.S. Industrial Outlook (U.S. Department of Commerce, Bu reau of Industrial Economics, January 1982),pp. 50-52. 4Paperboard Packaging, August 1981, p. 51. 1Rates o f change are based on the least squares trends method. 10 and fed into a sheet-fed printing press where the design is printed onto the paperboard. (In long production runs using web-fed presses, the paper is fed continuously from the roll into the press and the sheet-cutting step is eliminated.) After printing, the sheet is sent through a cutting and creasing press which cuts out each car ton blank and puts creases where the carton is to be folded. The carton blanks, still held together as a full sheet by small connections, then proceed through strip ping where they are separated and the excess paperboard removed. (On web-fed cutter/creasers, the car ton blanks are automatically stripped of excess paperboard and placed on a conveyor delivery belt.) After general, mechanization is requiring a greater involve ment in machine monitoring. Occupations affected by new technology include diemakers; printing press op erators, camera operators, and platemakers; cutting and creasing press operators; and material handlers and packers. Table 2 describes major innovations in the in dustry, their impact on labor, and prospects for further diffusion. Production! Stops and iiajor Innovations Production of folding paperboard boxes typically be gins when a roll of paperboard is cut into separate sheets Table 2. EViajer technology changes in folding paperboard boxes T e c h n o lo g y Im p ro v e d p rin tin g p ro c e s s e s D e s c rip tio n O ffs e t p r in t i n g L a b o r im p lic a tio n s ( p r e d o m in a n t ly s h e e t-fe d ) h a s d is p la c e d le tte rp re s s a s th e m a jo r m e th o d o f p r in tin g c a r to n s . In o ffs e t p rin tin g , p h o to g r a p h ic m e th o d s a re u s e d to p re p a re p r in tin g p la te s fa s te r a n d a t lo w e r c o s t c o m p a re d to le tte rp re s s p r in tin g w h e re th e p la te s a re m a d e fro m h o t m e ta l. G ra v u re p rin tin g , w h ic h a ls o in v o lv e s p h o to g ra p h ic m e th o d s to p re p a re p r in t i n g c y lin d e rs , is b e in g u s e d m o re e x te n s iv e ly fo r lo n g e r p r o d u c tio n ru n s , w ith te c h n o lo g ic a l a d v a n c e s in c o l o r s c a n n e rs a m o n g im p ro v e m e n ts re p o rte d . F le x o g ra p h y , a fo r m o f le t te rp re s s p r in tin g w h ic h u tiliz e s lig h t a n d fle x ib le ru b b e r o r p la s tic p la te s , is in g ro w in g u s e fo r lo n g e r p re s s ru n s . C o m p u te rs a re b e in g u s e d m o re w id e ly o n o ffs e t p r in tin g p re s s e s to c o n tro l in k a n d w a te r flo w ra te s , p re s s s p e e d , a n d re la te d v a ria b le s . R a d ia tio n in k c u rin g Im p ro v e d e q u ip m e n t fo r c u ttin g a n d c r e a s in g D iffu s io n G a in s in o u t p u t p e r e m p lo y e e O ffs e t p rin tin g (s h e e t fe d ) re p o rte d ly h o u r h a v e b e e n r e p o r te d in c o n is th e p ro c e s s u s e d fo r a b o u t 50 v e r s io n s fr o m le tt e r p r e s s t o o f f s e t p e rc e n t o f to ta l p rin tin g o f fo ld in g p a p e rb o a rd b o x e s . W e b -fe d p r in t in g . N e w s k il ls r e la te d to g ra v u re a c o u n ts fo r s lig h tly o v e r 20 c a m e r a w o r k a rid f ilm p r o c e s s in g a re r e q u ir e d in b o th o f f s e t a n d p e rc e n t a n d fle x o g ra p h y fo r le s s g ra v u re in s t a l la t io n s a t f ir m s th a n 2 0 p e rc e n t o f to ta l p rin tin g w h ic h p e r fo r m th e s e t a s k s in - v o lu m e . L e tte rp re s s is u s e d in h o u s e . A u to m a te d p la te m a k in g a b o u t 10 p e rc e n t o f p ro d u c tio n . e q u ip m e n t re d u c e s la b o r r e A b o u t 1 o u t o f 5 p la n ts u s in g o ffs e t q u ir e m e n ts o f p la te m a k e r s in o f f p re s s e s c a rrie s o u t p re p a ra to ry s e t in s t a lla t io n s . C o m p u te r c o n w o rk in -h o u s e , a n d m o s t o f th e s e t r o l o f p r e s s o p e r a tio n s in c r e a s e s u s e a u to m a te d p la te m a k in g m o n ito r in g fu n c tio n s and e q u ip m e n t. C o m p u te r c o n tro l o f d e c r e a s e s d ir e c t , m a n u a l in v o lv e p re s s o p e ra tio n s is e x p e c te d to m e n t in c o n t r o l o f p r e s s o p e r a b e c o m e m o re w id e s p re a d . t io n s . In fra re d a n d u ltra v io le t in k c u rin g s y s te m s a re b e in g e m p lo y e d to re d u c e th e d e la y b e tw e e n c a rto n p rin tin g a n d c u ttin g a n d c re a s in g im p o s e d by re la tiv e ly s lo w -d ry in g c o n v e n tio n a l lith o g ra p h ic inks. L a b o r re q u ire d to s to re s h e e ts p rin te d w ith c o n v e n tio n a l o ffs e t in k s fo r d ry in g b e fo re c u ttin g a n d c re a s in g is re d u c e d . In -lin e p ro c e s s in g , m a d e p o s s ib le w ith u ltra v io le t c u rin g , w o u ld e lim in a te th is la b o r. P re s s m a in te n a n c e d u e to c lo g g in g c a u s e d by s p ra y s u s e d to fa c ilita te d ry in g o f c o n v e n tio n a l in k s a ls o is c u t b a c k o r e lim in a te d . T h e h ig h c o s t o f c o n v e rs io n to u ltra v io le t c u rin g a n d th e h ig h p ric e o f u ltra v io le t in k s d e te r th e ir w id e s p re a d use. L e s s e x p e n s iv e in fra re d d ry in g s y s te m s , h o w e v e r, m a y s e e m o re ra p id g ro w th s in c e th e y c a n be in s ta lle d o n e x is tin g p re s s e s a t re la tiv e ly lo w c o s t. N e w m o d e l re c ip ro c a tin g p la te n c u ttin g a nd c re a s in g p re s s e s a re b e in g u s e d to c u t a n d c re a s e fo ld in g p a p e rb o a rd b o x e s a fte r p rin tin g . T h e s e a d v a n c e d c u tte r /c r e a s e r s a re fa s te r th a n o ld e r m o d e ls a n d m a tc h th e c a p a c ity o f m o d e rn p re s s e s . T h u s , o n w e b -fe d g ra v u re p re s s e s , p rin tin g a n d c u ttin g a n d c re a s in g c a n be m a d e c o n tin u o u s ra th e r th a n s e p a ra te p ro d u c tio n s te p s . C re w re q u ire m e n ts fo r re c ip ro c a tin g p la te n c u ttin g a n d c re a s in g p re s s e s a re lo w e r th a n fo r c y lin d e r fla tb e d m a c h in e s . S o m e n e w m o d e l c u tte r /c r e a s e r s re m o v e s o m e o r all s c ra p a u to m a tic a lly , th e re b y r e d u c in g la b o r r e q u ir e m e n ts in s t r ip p in g o p e r a tio n s . L a b o r in v o lv e d in s t a c k in g a n d h a n d lin g o f p r in te d s h e e t s p r io r t o c u t t in g a n d c r e a s in g is e lim in a t e d w it h in lin e , c o n t in o u s p r o d u c t io n on w e b -fe d g ra v u re p re s s e s . O p e r a to r s o f n e w m o d e l c u t te r /c r e a s e r s a t s o m e f ir m s h a v e r e c e iv e d o n - th e - jo b and c la s s r o o m in s tr u c tio n in o p e r a tin g a n d m a in te n a n c e p r o c e d u re s . P la t e n c u ttin g and c r e a s in g p r e s s e s a c c o u n te d f o r ju s t u n d e r 4 0 p e r c e n t o f t o t a l c u tte r /c r e a s e r s in use in 1981, a nd m o re w id e s p r e a d a d o p tio n o f t h is r e la tiv e ly e x p e n s iv e te c h n o lo g y is a n t ic ip a t e d . II Tabs® 2. Itflajor technology changes in folding paperboard boxes—Continued T e c h n o lo g y ^ C o m p u te r a n d la s e r m e th o d s to p re p a re th e d ie s u sed o n c u ttin g a n d c re a s in g p re s s e s L a b o r im p lic a tio n s D e s c rip tio n C o m p u te rs a re b e in g u s e d to g e n e ra te d ie la y o u ts a n d to p ro d u c e ta p e s to c o n tro l la s e rs in th e c u ttin g o f d ie b o a rd s . D iffu s io n T h e n u m b e r o f la s e r d ie -c u ttin g C o m p u te r a n d la s e r m e th o d s o f s y s te m s is e x p e c te d to in c re a s e d ie m a k in g c h a n g e c r a ft s k ills o f s ig n ific a n tly . A lth o u g h e x p e n s iv e d ie m a k e rs a n d e lim in a te k e y a n d in re la tiv e ly lim ite d u s e (25 m a n u a l s te p s in d ie c o n s tru c tio n . L a s e r c u ttin g is h ig h ly a c c u ra te a n d s y s te m s fo r a ll in d u s trie s in th e re p la c e s th e jig s a w in c u ttin g th e U n ite d S ta te s in 1 9 8 1 ), th e y p ro v id e h ig h q u a lity d ie s . T h e w o o d d ie b o a rd . A fte r c u ttin g , re p o rte d s h o rta g e o f s k ille d h o w e v e r, h a n d m e th o d s a re s till d ie m a k e rs c o u ld b e an in c e n tiv e to u s e d to in s e rt th e s te e l c u ttin g a nd fu rth e r d iffu s io n o f la s e r s y s te m s . c re a s in g “ ru le s ” in to th e d ie p a tte rn . O n e m a n u fa c tu re r re p o rte d th a t la s e r c u ttin g o f o n e ty p e o f d ie re q u ire d o n ly 2 h o u rs , c o m p a re d to 7 h o u rs u s in g c o n v e n tio n a l m a n u a l m e th o d s . T ra in e e s re p o rte d ly n e e d o n ly a fe w w e e k s o f tra in in g o n ta p e c o n tro lle d la s e r d ie -c u ttin g s y s te m s to b e c o m e p ro fic ie n t. N e w p o s it io n s r e la te d t o c o m p u te r o p e ra tio n s n e e d e d . A u to m a tic s trip p in g o f p a p e rb o a rd w a s te D e v ic e s w h ic h re m o v e a u to m a tic a lly A lth o u g h s trip p in g o f p a p e rb o a rd w a s te re m a in s re la tiv e ly la b o r th e p a p e rb o a rd m a te ria l a tta c h e d to c a rto n b la n k s fo llo w in g c u ttin g in te n s iv e , th e u s e o f a irh a m m e rs a n d c re a s in g a re b e in g u s e d m o re g re a tly le s s e n s p h y s ic a l e ffo rt. T h e o c c u p a tio n o f s trip p e r is e x p e c te d e x te n s iv e ly . to d e c lin e in im p o rta n c e a s n e w te c h n o lo g y is a d o p te d . A u to m a tic s trip p in g d e v ic e s a re in s ta lle d a s c o m p o n e n ts o f a d v a n c e d p la te n c u ttin g a n d c re a s in g p re s s e s w h ic h a c c o u n t fo r n e a rly 4 0 p e rc e n t o f c u tte r /c r e a s e r s in u s e . A d o p tio n m a y b e e x p e c te d , in g e n e ra l, to p a ra lle l in s ta lla tio n o f th e s e im p ro v e d p re s s e s . N e w te c h n o lo g y to g lu e c a rto n s F a s te r d ry in g g lu e s , n e w a ir-b ru s h P ro d u c tiv ity in g lu in g lin e o p e ra tio n s a n d e x tru s io n g lu in g s y s te m s , a n d h a s in c re a s e d , a n d m a n u a l ta s k s o f fo ld e rs a n d g lu e rs c u t b a c k . N e w ' a u to m a tic c o n tro ls a re in c re a s in g e ffic ie n c y in g lu in g o p e ra tio n s . N e w c o m p u te r-c o n tro lle d g lu e rs re q u ire lo w e r o p e ra to r s k ill le v e ls a nd p ro g ra m m a b le , c o m p u te r-c o n tro lle d lim ite d tra in in g . g lu e rs s to re c a rto n d im e n s io n s fo r a u to m a tic s e t-u p a n d p e rfo rm q u a lity c o n tro l a n d in s p e c tio n ta s k s . R a te o f a d o p tio n o f im p ro v e d g lu in g p ro c e d u re s m a y b e e x p e c te d g e n e ra lly to k e e p p a c e w ith th e in tro d u c tio n o f m o re e ffic ie n t e q u ip m e n t in o th e r p ro d u c tio n s te p s . T h e p o te n tia l fo r w id e a d o p tio n o f c o m p u te r c o n tro l is high. im p ro v e d p a c k in g m e th o d s A u to m a tic e q u ip m e n t to p la c e c a rto n s in c o n ta in e rs fo r s h ip m e n t is b ein g u s e d m o re w id e ly . Im p ro v e d m a te ria l h a n d lin g m e th o d s , in c lu d in g a u to m a tic c o n v e y o r s y s te m s , a re b e in g u s e d to tra n s p o rt a n d lo a d s h ip p in g c o n ta in e rs . N e w ty p e s o f film s tre tc h w ra p s a re b e in g e m p lo y e d in p la c e o f p a c k in g o f c a rto n s in c o rru g a te d c a s e s . stripping, the cartons can be packed for shipment. Some types of cartons also are folded and glued prior to leav ing the plant. M o s t firm s a re fu rth e r m e c h a n iz in g m a te ria l h a n d lin g ta s k s . N e w a n d s tro n g e r film s tre tc h w ra p s w ill lik e ly b e u s e d m o re e x te n s iv e ly . ing paperboard boxes depends on the length of the pro duction run, the quality desired, the complexity of graphics, color requirements, and related factors. In general, web presses, which accept paperboard stock continuously from a large roll, are used for longer press runs, and sheet-fed presses, which handle separate sheets of paperboard stock, are used for medium and short runs. The shift to predominantly sheet-fed offset and webfed gravure printing has affected employment and skills of press operators, camera operators, platemakers, and others. In addition to offset and gravure printing being used more widely, productivity and employment in folding paperboard boxes plants are being affected by diffusion of faster presses incorporating automatic con trols, new platemaking methods, the use of improved inks and drying techniques, and related developments. Printing m ethods The technology of printing folding paperboard boxes is undergoing substantial change. The most signifi cant development is the expansion in use of offset, and to a lesser extent gravure printing, which involve photo graphic methods to make the plates used on printing presses, and a corresponding sharp decline in letterpress printing in which printing plates are made from hot metal. Flexography, an adaptation of letterpress print ing that uses rubber or plastic printing plates, is in lim ited use for longer press runs. The printing method used by manufacturers of fold P ro d u c tiv ity g a in s re p o rte d as p ro d u c tio n is fa s te r a n d la b o r tim e o f b u n d le r-p a c k e rs , fo rk -lift o p e ra to rs , a n d o th e r m a te ria l h a n d le rs is re d u c e d . 12 Offset lithographic printing is of high quality and is well suited for exacting multicolor work. Offset print ing plates reproduce anything that can be photographed and can be prepared quickly and inexpensively. In off set printing, the photo image to be printed is developed onto a metal printing plate—usually aluminum. The platemaking process is different from hot-metal type setting, and involves new skills relating to camera work and film processing. The thin, lightweight offset plates are much easier to handle than the heavy lead plates used on letterpress printing presses. The time required to prepare a press for running (makeready time) can be substantially less with offset than with letterpress. Plate-to-plate register on multicolor work is accom plished by labor-saving plate mounting systems and pre cise register adjustments incorporated into the design of offset presses in contrast to the manual loosening, moving, and retightening of heavy metal plates to ob tain correct color-to-color register necessary with let terpress. As an example, makeready requiring 24 hours for a six-color production run with letterpress equip ment has been accomplished in 4 hours with offset presses. Additional advances in the offset process, raising pro ductivity, include computer control of ink and water flow rates, ink shades, and press speed. Mechanical im provements, especially innovations in sheet handling through the press, allow running speeds to be raised, and automatic platemaking equipment reduces labor re quirements of platemakers and changes skill require ments in film processing. Web-fed offset presses are being employed to a lim ited extent in the industry. Printing plates of increased durability, that can make more impressions than before, increase the capability of offset for longer press runs. At the same time, automatic color register controls and faster plate changes on web-offset presses enhance their capability for short-run work. The web-fed gravure process also is being used more widely in the printing of folding paperboard boxes. Gravure is a high speed process, and its primary im portance is in long runs of high quality multicolor work. Growth of gravure printing has been considerable over the past 10 years and over 20 percent of printing of folding paperboard boxes is by this process. Among technical advances being incorporated into the gravure process are color scanners which permit close control of color and balance, and color data processing systems that let color copy and text be viewed, moved, and stored. These prepress innovations improve quality in subsequent printing. Changes in press operations include better register and tension controls, improved butt splic ing and ink drying, and computerized press manage ment systems. In the future, computerized press con trols may be employed to adjust ink viscosity and color to compensate for atmospheric changes and variation in the inks. Factors which could slow diffusion of gravure printing include the high cost of and extended time required for cylinder preparation. Radiation inic ©yring Radiation ink curing methods, including infrared and ultraviolet processes, are replacing the use of conven tional oil-based lithographic inks which dry relatively slowly. In infrared drying, infrared reactive ink is used in combination with infrared lamps which accelerate drying. A major benefit is the reduction in labor to store printed cartons for drying prior to cutting and creasing. Moreover, the need for spray powders, which prevent smearing of conventional inks, is substantially lessened. Thus, materials and labor for press cleanup are reduced. In ultraviolet ink curing, a photosensitive ink or coat ing polymerizes instantly into a dry film when exposed to ultraviolet light. Drying time is virtually eliminated. Thus, ultraviolet curing eliminates storing of printed cartons prior to cutting and creasing and thereby re moves an obstacle to continuous processing with offset printing. One barrier to broader adoption of ultraviolet ink curing is the relatively high cost of inks. Special graphics that promote or enhance carton contents are seen as a possible primary application of the ultraviolet process. Gutting and ©resting presses Advances in cutting and creasing presses increase productivity and improve quality of folding paperboard boxes. Formation of carton blanks from paperboard sheets or rolls following printing is performed on equip ment that cuts out the cartons and creases them where they are to be folded. New and faster cycling recipro cating platen presses being introduced operate at speeds upwards of three times faster than the older cylinder flatbed presses and require fewer cutting and creasing press operators and feeders. Increases in the speed of cutting and creasing equip ment to match the capacity of modern printing presses has enabled the industry to achieve in-line printing and cutting and creasing operations. In web-fed gravure op erations, for example, printing and cutting and creasing can be joined in a continuous process. Dtemaking New technologies involving computers and lasers are being employed to prepare the dies used in cutting and creasing presses. These technologies increase produc tivity in diemaking and modify craft skills of diemakers. Dies are arrangements of steel rules, both sharp and round edged, which form the pattern of cuts and creases required for a particular type of carton. In conventional diemaking, the skilled diemaker, after a series of preliminary steps, arranges and secures the S3 type incorporating automatic controls are major changes that raise quality and lower labor requirements of folders and gluers. For example, recently introduced programmable computer-controlled gluers have memories for storing dimensions of as many as 20 dif ferent cartons and automatically perform set-up, quali ty control, and inspection tasks. Productivity is increas ed as a result of faster makeready and changeovers. Labor skill levels are reduced and required operator training is limited. steel rules to form the die. The sequence of steps un dertaken by the diemaker involves the use of jigsaws and other handtools to carry out repetitive, highly skilled tasks. The process is exacting and labor intensive. Automated diemaking systems mark a sharp depar ture from conventional diemaking. In these systems, computers draw the dies in accordance with specifica tions for a particular type of folding paperboard box and generate the tapes used to guide laser or chemical milling equipment in cutting or etching of the dies. In the preparation of dies for use with the reciprocating cutting and creasing press, a laser beam cuts grooves in a hard plywood board into which cutting and creas ing knives are then positioned by hand. Computers also are being used in connection with other major steps of diemaking including, for example, the control of ma chine tools in cutting and shaping the steel rules. Using these methods, productivity is increased and the need for the traditional craft skills of the diemaker is eliminated. The rearrangement of diecutting production facilities is affecting employment of diemakers, structural de signers, and sample makers at plants where dies for merly were prepared by conventional methods. New skills and occupations, including computer program mers, are needed and training in computer methods and electronics is being provided. Moreover, the trend to subcontract the laser cutting of dieboards to specialized service companies has curtailed demand for diemakers and designers. Computer methods of die preparation also are being used in smaller firms. One company which uses a digi tal plotter and a business computer to design dies re duced die construction time by 30 percent. In this sys tem, the die layout generated by the computer is at tached directly to the dieboard, and the diemaker com pletes the die by conventional hand methods. However, carton design is no longer his responsibility. Packing New methods of packing and handling reduce labor and material requirements of bundler-packers in pre paring folding paperboard boxes for shipping. Machines that automatically pack cartons in corrugated cases are replacing manual methods in that task. Material and other cost savings also have been reported from stretch wrapping cartons in film, rather than packing them in corrugated cases, and from the use of fiberboard sheets in place of heavier wood pallets. Output and Productivity Outlook Output Output of folding paperboard boxes (Sic 2651) is tied closely to business conditions and consumer spending, with 43 percent of the physical volume of shipments for use in packaging foods and beverages in 1981.5 Al though over 500 companies produce the multitude of products which make up the folding paperboard boxes industry, the four largest firms reportedly account for 22 percent of total annual shipments.6 Over the period 1963-82, output of folding paperboard boxes experienced slow growth and increased at an annual rate of only 0.6 percent (chart 3). The rate of growth in output during 1963-73 was an even lower 0.3 percent, however, while output during 1973-82 in creased at a higher annual rate of 0.9 percent. The small annual growth rate has been attributed, in part, to changes in product mix and the use of increasingly less dense folding boxboard, which have been reflected in lowered tonnage figures. The outlook for 1982-87 is for output of folding paperboard boxes to increase at an annual rate of 1.2 Stripping and finishing Automatic stripping of waste material is improving efficiency in folding paperboard boxes plants. Platen cutters and creasers with stripping devices are available which can remove automatically waste material follow ing cutting of the carton blanks. Newly available “blank ing” diecutters completely separate carton blanks from waste material and count and stack them for packing. Although much waste removal is still accomplished manually using airhammers, this method is costly and generates substantial waste. The trend toward automatic production suggests that machine methods of stripping will be used more extensively during the 1980’s. New technologies to process cartons that must be glued and folded prior to shipment are being adopted. Improved glues, new airbrush and extrusion gluing sys tems, and more versatile equipment of conventional 51981 Marketing Guide, Paperboard Packaging Council, Washing ton, D.C., 1982. The folding carton industry, for which statistics are compiled by the Paperboard Packaging Council, is broader in scope than SIC industry 2651, Folding paperboard boxes. In addition to those products in SIC 2651, it includes cartons for wet foods and perishable bakery products which are classified in SIC industry 2654, Sanitary food containers. Shipments o f cartons for foods and bever ages, including these two end uses, accounted for 60 percent o f the total in 1981. 61982 U.S. Industrial Outlook (U.S. Department o f Commerce, Bu reau o f Industrial Economics, January 1982), pp. 50-52. 14 Chart 3- Oytput per empS©y®@ h@yr and’ related datasfolding paperboard b©xesg1963=82 I ndex, 1977=100 (R a tio scale) 15 riod—standing at $1,275 in 1980—and contributed to the gradual improvement in productivity that has taken place in the industry. The direction of a major portion of capital outlays—following the pattern of recent years—is toward the rebuilding and retrofitting of costly printing presses and other existing equipment. Thus, typical expenditures may involve the modification of presses to incorporate new technologies such as com puter control of ink thickness by means of “add-on” densitometers, and infrared drying systems. percent if higher levels of consumer expenditures for nondurable goods are realized.7 However, competition from plastics and other substitute materials are expected to limit growth for various categories of folding paperboard boxes. Productivity Productivity in the folding paperboard boxes indus try did not keep pace with the rate of increase in manu facturing over the span of nearly two decades. Between 1963 and 1982, output per employee hour in the indus try increased at an average annual rate of 1.9 percent, compared with a significantly higher average annual rate of 2.3 percent for manufacturing. Over this period, the productivity gain in the folding paperboard boxes industry resulted when output increased slightly, at an average annual rate of 0.6 percent, and employee hours fell at an average annual rate of 1.3 percent. The intro duction of improved technology and production methods was the major source of the productivity gain and decline in employee hours. The pace and direction of productivity change was uneven over the period 1963-82. Between 1963-73, out put per employee hour increased at an average annual rate of 2.0 percent, but at only a modest 0.5 percent annually during 1973-82. The industry experienced a slight average decrease in productivity during 1978-82 of 0.3 percent as declines in 1979 and 1980 were not fully offset by gains during the final 2 years of the period. The longest span of consecutive yearly gains in pro ductivity covered 1970-76, when output per employee hour increased at a high average annual rate of 4.5 per cent. This gain resulted when output increased at a rela tively modest average annual rate of 1.3 percent, and employee hours declined sharply, at an average annual rate of 3.0 percent. Competition from substitute mate rials slowed market expansion and provided folding paperboard boxes plants with an incentive to adopt more efficient technology. Investment Real expenditures for new plant and equipment in the folding paperboard boxes industry totaled $46.3 mil lion in 1980 (1972 dollars), having declined since 1963 at an average annual rate of 0.6 percent.8 In contrast, real capital expenditures per production worker rose at an average annual rate of 0.7 percent over this pe Employment m d Oecupationafl Trends Employment Employment in the folding paperboard boxes indus try declined at an average annual rate of 1.1 percent between 1963-82, as output of folding paperboard boxes failed to keep pace with gains in output per employee hour over this period (chart 4). The closing of less ef ficient plants and the introduction of new production technologies were factors contributing to the gain in productivity and decline in employment. In 1982, an estimated 43,700 workers were employed in the folding paperboard boxes industry, down by 7,600 workers from the level in 1963. After employment fell to a low of 38,300 workers in 1975, a recession year, the market for folding paperboard boxes rebounded and employment increased at a high average annual rate of 8.0 percent between 1975-77. Since 1977, employment has been relatively stable with the number employed fluctuating within a narrow range of about 44-46 thou sand workers. The outlook for employment in the folding paperboard boxes industry is uncertain. Moderate growth in numbers employed could result if the projection by the Department of Commerce of an annual rate of increase in shipments of 1.2 percent during 1982-87 is realized. The actual level of employment through the mid-1980’s will be determined largely by rates of growth in over all industrial activity, by productivity changes within the industry, and by the extent alternative packaging materials are used. Rising consumer spending and a consequent increase in demand for dry foods and other nondurable products packaged in folding cartons could result in employment gains. However, if competition from plastic containers and other substitute materials intensifies, the potential for such gains would be diminished. 7 1983 U.S. Industrial Outlook (U .S. Department of Commerce, Bureau of Industrial Economics, January 1983), p. 5-9. ©©<supgjfi©ns 8Deflated Bureau o f the Census capital expenditures data. Unpub lished deflator series developed in the U.S. Department of Commerce, Bureau o f Industrial Economics, Office of Research, Analysis, and Statistics, to calculate constant 1972 dollar expenditures for SIC 265, paperboard containers and boxes. Deflated expenditures data for 1980 are the latest available. The diffusion of improved technology in the folding paperboard boxes industry is bringing about a threefold impact: Some positions are being eliminated; the job content of others is being altered; and new positions 16 Chart 4„ Employment in folding paperboard box©s3 1963-82 Em ployees (in th o u s a n d s ) 1 Least squares trends method. SOURCE: Bureau of the Census. Data for years prior to 1963 are not available. 1982 data are estimates. 17 place them on storage racks for drying prior to proc essing on cutting and creasing presses, are reduced at plants where these two tasks are carried out in one con tinuous operation. Modern fast drying inks and high speed cutting and creasing presses facilitate in-line proc essing. Productivity of folding and gluing machine op erators and bundler-packers also is increased in plants which introduced improved technology to increase out put in gluing and folding, and bundling and packing tasks. The occupations of cutting and creasing press opera tor and assistant have been particularly affected by the introduction of new production equipment. In addition to reductions resulting from continuous processing, ad vanced reciprocating type platen cutting and creasing presses being installed reportedly lower labor require ments significantly. are being added. The impact of technology on occupa tions has not been extensive and plantwide, since tech nological changes, for the most part, have involved re finements to existing production equipment which have increased speed and capacity. However, for some po sitions, including diemaker and cutting and creasing press operator, innovation has resulted in displacement and major skill changes. As a broad general impact oc curring in most departments, mechanization is requir ing fewer manual tasks of production workers and a greater involvement in monitoring production equip ment including new electronic devices related to qual ity control. Although detailed BLS occupational data for 1980 and projections for 1990 are not available for this industry, major changes underway are discussed below. Employment of diemakers is being cut back by the use of computers and lasers to prepare the dies used in cutting and creasing presses. As indicated earlier, skilled diemakers traditionally use handtools, including jigsaws, to prepare the dies which form the pattern of cuts and creases required to turn out a specific type of carton. Automated diemaking systems being introduced use computers and lasers for carton designing and dieboard cutting, thus replacing traditional craft skills. More over, the cutting and creasing dies can be prepared by computer methods at a central corporate facility, and the completed dies shipped to company plants in various locations. Thus, tasks formerly undertaken by diema kers at the local plant can be centralized with the func tions remaining at the local plants limited primarily to die maintenance and reknifing undertaken by a smaller staff. New positions, including computer programmer, are needed to carry out diemaking by advanced laser methods. Developments in printing technology, including the shift from letterpress to predominantly offset and gravure printing, have brought about changes in em ployment and job skills of pressmen, platemakers, and others. Automatic equipment to prepare the plates used on printing presses has increased productivity of platemakers and has required new skills for film processing. The more widespread use of automatic controls and computers in connection with pressroom operations is expected to increase the proportion of operator duties involved in monitoring. Employees engaged in the handling of paperboard stock in process—many of them women—are being af fected by technologies which facilitate continuous proc essing. Labor requirements of production workers who remove paperboard cartons from printing presses, and Adjustment of workers to technological change Technological changes in the folding paperboard boxes industry are not expected to result in major dis placement of the work force. As indicated earlier, in novation generally has involved the gradual improve ment in the speed and capacity of existing technologies. Normal equipment replacement cycles for expensive technologies such as printing presses are extended; thus these innovations tend to be phased in gradually. Training has been a major method of adjustment to skill demands of new technology. Where major pro duction equipment is involved, such as reciprocating platen cutting and creasing presses, training may be ex tensive and provided in classrooms and on the job over a period of several months. As a general trend, training for computer-related occupations and those involving electronic maintenance frequently involve extended in struction in a technical institute or college. A substantial majority of the industry work force is covered by collective bargaining agreements. Provi sions in these contracts that relate to seniority, reas signment, and retraining are available to assist workers in adjusting to any displacement resulting from techno logical change. Techniques such as advance planning for work force changes and the use of attrition to ac complish staff reductions reportedly have been effec tive in some plants undergoing change. Major unions which represent workers in the folding paperboard boxes industry include the United Paperworkers International Union (AFL-CIO), and the Inter national Printing and Graphic Communications Union (AFL-CIO). 18 SELECTED REFERENCES “Automated Control Creates Finer Printing,” Modern Packaging, February 1972, pp. 34-37. “N ew Horizons in. Laser Diemaking and Carton Design,” Paperboard Packaging, May 1981, pp. 110, 112. Market Profde o f the Boxboard Containers Industry, 1981-1982. Boxboard Containers Magazine. Chicago, Illinois, 1981. “N ew Sheet Fed Offset Press Adds Speed, Cuts Makeready Time More Than Half,” Paperboard Packaging, April 1979, pp. 19, 22, 26. Chesnut, W. Richard. “Rotary Diecutting Appears Ready to Enable Gravure Printing to Achieve Good Cost Effectiveness,” Paperboard Packaging, March 1979, pp. 44, 46, 48, 50. Paperboard Packaging Council. Marketing Guide—Folding Carton In dustry Statistics fo r 1981. Washington, D.C ., 1982 Paperboard Packaging Council. The Folding Carton. Washington, D.C., 1975. “Coating and Drying Systems; Automating Plate and Die Making.” Technical and Production Seminar on New Technology, presented October 28-29, 1980. Chicago, Illinois. Sponsored by the Paperboard Packaging Council. Washington, D.C., 1980. Scarlett, Terry. “Printing Inks—Their Evolutionary Trend,” Graphic Arts Monthly, December 1981, pp. 35-39. “Folding Cartons Await Consumer Confidence,” Paperboard Pack aging, January 1982, pp. 48, 50, 54. Schipke, A. J. “Folding Carton Flexo—N ew Equipment Approaches for New Markets,” Paperboard Packaging, July 1981, pp. 52-57. Fuchs, Josef. “N ew Platen Die Cutter Technology Improves Pro ductivity Potential,” Paperboard Packaging, September 1980, pp. 98-103. Smith, Leonard S. “Outlook and 1981 in Review —Some Improve ment Expected for 1982 Container Sales,” Boxboard Containers, December 1981, pp. 21, 23-27. Huck, Charles. “Laser Diemaking Helps Meet Increasingly Stringent Demands o f Carton Plants,” Boxboard Containers, May 1981, pp. 31-36. “Technology Pushes Package Graphics,” Modern Packaging, O cto ber 1978, pp. 35-38. McGorty, Cal, and Kyle Sherwood. “The Folding Carton,” Modern Packaging, December 1979, pp. 75-79. York, James D. “Folding Paperboard Box Industry Shows Slow Rise in Productivity,” Monthly Labor Review, March 1980, pp. 25-28. 19 Chapter 3= Metal Cans Summary Industry Struetur© Technological change has had widespread impact on the metal can industry (SIC 3411) during the past 15 years. The major advance, the two-piece can line, fun damentally alters the can manufacturing process. This technology, which has been widely diffused through out the beverage sector, increases speed and automaticity, and significantly reduces unit labor re quirements for skilled and unskilled workers. In com ing years, the thrust of technological development is likely to occur in the food can sector, as it adapts the two-piece technology for its use. Productivity in the metal can industry rose at a mod erate average rate of 2.6 percent annually between 1960 and 1982, equal to the average rate for all manufactur ing.1 However, unlike most other industries, the great est rise occurred toward the end of the 1970’s and early 198Q’s and is associated with technological and struc tural changes. From 1979 to 1982, productivity gains accelerated to 5.5 percent (average annual rate) as em ployee hours and output dropped sharply, at the rate of 8.2 and 3.1 percent, respectively. Productivity gains are expected to continue, although probably at a slower rate than during the past decade. Expenditures for new plant and equipment nearly tri pled between 1960 and 1980 to reach $205 million (in current dollars). Nevertheless, after adjustment for in flation, outlays in 1980 were less than two-thirds the peak outlays in 1975. The overall decline in real invest ment since 1975 reflects low profitability, industrywide excess capacity, modest long-term growth projections, and the decision by several of the major can companies to diversify into nonpackaging industries. Employment in the can industry declined during the 1970’s, reversing the trend of the previous decade. By 1982, employment had fallen to 52,200, 30 percent be low the peak year of 1970. The sharpest decline, which followed the 1974-75 recession, reflects increased usage of labor-saving machinery, the closure of a number of large plants, and a drop in output. With the likelihood of only modest long-term growth in the 1980’s, contin ued closings of marginal plants, and greater use of new technologies, the downtrend in employment will proba bly continue. Changes in work rules and job consoli dations are also expected to contribute to the decline. Changes in the structure of the metal can industry have had a positive impact on productivity and tech nological development. Average industry productivity has probably been improved by the increased number of smaller, more efficient, specialized plants which are replacing large, older establishments. The metal can industry is composed of establishments primarily engaged in the manufacture of metal cans, can lids, and parts of metal cans for packaging three major groups of products: beverages, food, and general nonfood products. Plants owned by the can companies and those owned and operated by can users, such as the brewers and food processors, are included in these data. The metal can industry has historically been domi nated by a few large companies, which retain a pre dominant position in the industry today. Nevertheless, concentration ratios have significantly declined in the last two decades. The market share of the four largest firms fell from 80 percent in 1958 to 73 percent in 1963 and to 59 percent in 1977.2 A large part of the decline can be attributed to the increase in productive capacity of the so-called self-manufacturing (or “captive”) plants, which are owned and operated by large-scale food pro cessors and brewers. To reduce packaging and trans portation costs, these companies have built their own canmaking plants adjacent to bottling or canning facili ties and equipped them with the latest can manufactur ing technology. The productivity level is believed to be higher for self-manufacturing plants. Generally, these plants are smaller and may specialize in the production of a lim ited number of standard-sized cans in large volume runs. Of total can shipments, the self-manufacturing share in creased from about 18 percent in 1961 to 28 percent in 1980. Their market share will probably continue to rise during the 1980’s. The major can companies have responded by offer ing other types of services, including the building of “dedicated facilities” near can users. These plants are known as “dedicated” because a can company contracts to dedicate a share of the plant’s output to a specific customer. 2These data come from the Census o f Manufactures which is con ducted every 5 years. 1Rates of change are based on the least squares trends method. 20 Although most other technological developments represent modifications or improvements to existing processes, they nevertheless impact favorably on pro ductivity by reducing unit labor requirements. As an example, high-speed palletizers and labeling machinery are being adopted. Also, prompted by proposed health regulations, the industry is replacing its soldered can lines (solder has a high lead content) with newer welded side seam processes. To shorten drying time and reduce energy costs and air pollution, alternative drying methods, water-based coatings, and ultraviolet inks are becoming more commonplace. Productivity growth has also been positively affected by the presence of the basic aluminum producers in the metal packaging market since the mid-1960’s. They first developed the costly, sophisticated, high-speed twopiece technology (described below). Since the major can companies with large investments in an older steel technology were reluctant to convert to the new proc ess, aluminum companies successfully began the manu facture and marketing of their own cans to the bever age and beer industries. The major can companies fol lowed suit. By 1982, almost 60 percent of all cans manu factured were the aluminum, two-piece type. Also, average industry productivity levels have been improved by the shutdown of numerous large, techno logically and structurally obsolete establishments, and the construction of many small, more efficient, and bet ter located plants. Between Census years 1963 and 1977, the number of plants increased from 270 to 403, while the number of very large plants (more than 500 workers) declined from 30 to 18. Shipments from plants with more then 250 employees fell from 67 percent of the total in 1963 to 52 percent in 1977. During the same period, plants with between 100 and 250 workers more than doubled in number and increased their share of the market from 17 to 31 percent. Census data tend to substantiate that the smaller es tablishments have been more labor efficient than the larger ones. In 1977 (latest available data), smaller plants (with less than 100 workers) produced 18 percent of the industry’s total value added with only 11 percent of all employees. In contrast, the largest plants (with more than 500 workers) accounted for only 15 percent of the industry’s value added yet employed 24 percent of all workers. In addition, a special 1967 Census study which divided can industry establishments into quartiles according to4heir labor efficiency (as measured by value added per employee hour) yielded a similar re sult. The average size plant in the most “efficient” quartile, i.e., highest value added per employee hour, em ployed only 76 workers, compared to an industry av erage of 216. Tw®=p5©<g<s earns The single most important technological innovation in this industry has been the development of a process for fabricating metal cans out of two rather than three pieces. Although the two-piece can (bottom and sidewall of one piece with a separate top, compared to a conventional three-piece can with a separate seamed sidewall, top, and bottom) was first produced in 1958, it was not until the mid-1960’s that its production be came economically feasible. This occurred when the drawn-and-ironed ( D&l) technology was developed by the major aluminum producers to enable economical production of the elongated cans used to package bev erages and aerosols. The machinery is more costly than three-piece lines and is most practical for use where long production runs are possible. By 1982, almost all beverage cans were the two-piece type, up from only 11 percent in 1970.3In contrast, use of the two-piece can for food packaging has thus far been limited. Because food in cans is vacuum-packed, the d&i can is not a viable alternative to the three-piece container; its thin walls could buckle under external pressure. Carbonation prevents this from occurring in beverage cans. Consequently, an alternative two-piece technology, the drawn-and-redrawn ( d &r i ) process, was developed in 1975 to produce a stronger, shallow can with a sidewall and bottom of essentially the same thickness. Another recent innovation now being introduced com bines the draw/redraw technology with partial draw ing and ironing. In 1982, only about 13 percent of food cans were the two-piece type, but this percentage should be substantially greater by the late 1980’s. Until recently, the D&R technology was not practical for larger-sized cans. In the typical D&l process, a coil of metal (most fre quently a 37 to 60 inch-wide sheet of aluminum, al though steel-based metals are also used) is automatically fed through a multiple press with as many as 12 cup pers. Each cupper forms a circular disc which is drawn T eefh M S o g y Developments in technology in the metal can indus try are being directed towards reducing labor, material, and energy costs, and increasing automation. The most important innovation of the last two decades—the twopiece can line—is a radical departure from conventional manufacturing methods. This is a continuous process system which is currently used extensively for bever age can production and is expanding in modified form into other can sectors. It both simplifies and reduces the number of processing steps, and lowers unit labor costs while substantially boosting capacity. Many of the more modern lines are computer-controlled. in d u stry shipment data for 1965-80, Current Industrial Reports-, for 1981 and 1982, adjusted Can Manufacturers Institute data. 21 Production line w hich draws and irons the w alls of two-piece cans to form a shallow cup. The cup is then automatically conveyed to a “body maker” machine where a punch presses it through a series of rings to stretch out the sidewall. In subsequent steps, the can is trimmed, washed, sprayed, and dried prior to decoration. The entire process is fully automated. Tenders or operators monitor the equipment. This process eliminates several of the steps necessary for conventional three-piece can assembly. In the three-piece line, the metal is first uncoiled, sheared into sheets, then decorated (the decorating steps are dis cussed below) and slit into individual body blanks. Each step requires at least one operator. The body blank is subsequently rolled into a near cylinder and either sol dered or welded. Significant labor savings result from the adoption of the two-piece line. The two-piece can line reduces to tal labor requirements by an estimated 25 to 30 percent when compared to an equivalent conventional three-piece line. (Because of a wide range of possible system variations, comparisons are a rough approxima tion.) A number of steps are eliminated, operating speeds are higher, and capacity is substantially greater. Maxi mum speeds are approximately 1,500 cans per minute, well above three-piece line capabilities. Capacities for two-piece lines average between 250 and 275 million cans a year, compared to 120 million cans for a three-piece tin-free steel line, and about 100 to 120 mil lion cans for a three-piece soldered can production line, depending on the number of shifts in operation.4 Labor savings also result from mechanized material handling. The two-piece can line is a continuous proc ess system from start to finish with elaborate automated conveyors between operations, monitored by solid-state sensing devices. By contrast, the three-piece line may consist of several noncontiguous components. Materials handling (as by forklift truck operator, for example) would be required between these operations. 4“Cans: Dynamic Technology Continues,” Beverage World, July 1976, p. 52. 22 The effect of welded seam technology on unit labor requirements depends on the extent of replacement. In the simplest conversion, in which the solder bodymaker machinery is replaced by a welding sequence, the labor effect is minimal. In this case, the solder bodymaker operator and mechanic may be retrained to operate the welding components. If a new line is installed, some work stations may be consolidated. In an example cited by a union official, one operator assumed the duties of both the slitter and double seamer operators. In addi tion, such a system may run at slightly faster speeds than conventional three-piece lines due to a reduction of several cooling, reheating, and chilling steps. Of major importance is the labor saved in the deco rating process of the two-piece beverage can. The ap plication of the exterior decoration becomes an integral on-line component of the two-piece system and is a simplified process. There are two basic decorating steps: The already formed body is first coated with an enamel undercoat; the design is then applied using a dry offset process. All colors are transferred from a blanket cylin der to the can at the same time. A single mechanic may be responsible for this work station. By contrast, most three-piece lines use lithography to apply the exterior decoration at a work station usually separated from bodymaking operations. The decoration is first applied to flat metal sheets before the can is formed. In addi tion to unskilled material handlers charged with bring ing the sheets to and from the station, a “litho” feeder must supply the sheets to the lithograph equipment. The sheets must pass through a printing press, generally once for each color in the decorating scheme. The press is operated by a lithograph pressman, one of the most skilled and best paid positions in the plant. Each sheet is subsequently baked in an oven to cure the inks, then removed by an unskilled litho oven unloader. (The decorating processes described herein refer to beverage cans. Most food cans, which have beaded walls, are sold with a paper label.) Aside from labor savings, several other features of the two-piece can help explain its rapid adoption by the industry. One principal benefit is associated with re duced unit material requirements. In 1962, for instance, the net weight of three-piece double reduced tinplate (itself a lightweight product introduced in 1961) cans was about 122 pounds per thousand. By 1976, the lightest D&i steel cans weighed 76 pounds per thousand. The average weight for d &i aluminum cans has fallen from 42 pounds per thousand for the first cans in 1964 to 29 pounds in 1979. Another benefit of the two-piece can is that since it has neither bottom nor side seams, it is less susceptible to leakage and not subject to testing for seam quality. Moreover, health considerations have also encouraged the adoption of the two-piece can. The Food and Drug Administration has proposed reducing the use of solder in food can seams because of its lead content. Output and Productivity Outlook Output per employee hour in the metal can industry rose at an average annual rate of 2.6 percent during the years 1960-82, equal to the average rate for all manu facturing during the same period. However, unlike most other industries, the major increases occurred toward the end of this period, rather than in early years. For instance, in the years 1960-65, productivity in the can industry edged upwards at an average of only 0.7 per cent per year, compared to the strong 4.8 percent av erage annual increase for all manufacturing industries. Can industry productivity improved in the 1965-73 pe riod (to 1.8 percent), but was still significantly lower than the average for all manufacturing industries (2.7 percent). However, during the 1973-82 period, can in dustry productivity rose at an average annual rate of 4.0 percent—more than double the 1.6 percent yearly rate for all manufacturing industries. In the last three of those years, can productivity jumped 5.5 percent an nually (chart 5). The significant gains recorded during the 1973-82 period reflect a sharp reduction in employee hours (4.4 percent annually) but only a slight decline in output (0.6 percent). In 1979-82, hours fell by 8.2 percent an nually, to the lowest level in at least 35 years. As dis cussed earlier, the reduction in hours in 1973-82 was made possible by the widespread adoption of new tech nology, especially two-piece can lines, which have the capability of producing larger volumes of cans at higher speeds with fewer workers. The expanded capacity of two-piece lines, coupled with limited growth in demand, caused companies to shut down many of the older, less efficient, larger-sized plants. At the same time, the con struction of many of the newer establishments, espe cially self-manufacturing plants, which produce a lim ited number of lines in large volumes, affected posi tively the industry’s productivity average. More re cently, changes in work rules and consolidation of jobs have also contributed to the productivity growth. Productivity has also been affected by the changing composition of output. The beverage can sector, which Welded three=pieee lines As an alternative to the standard soldered side seam, welding was introduced in the late 1960’s. Welding is currently used for an estimated 15 percent of food-can lines in place, and an additional 10 percent are expected to be changed over to this type of process in the near future. Major advantages of this process include its leadfree content, reduction in the weight of the metal and in the thickness of the sideseam, its ability to join cheaper tin-free steel (which solder cannot), and its low capital cost compared to the two-piece alternative. 23 I ndex, 1977=100 (Ratio scale) 24 61 percent of total can output in 1982, compared with only 26 percent in 1965. Shipments to the soft drink market increased from 8 million base boxes6 to 53 mil lion and shipments to the beer market more than dou bled to 63 million base boxes in that period. The strong growth in the beverage sector during most of this period can be attributed to consumer pref erence for disposable packaging, new product innova tions, such as the development of the ring-pull opener, and a significant increase in per capita consumption of beverages, which is a function of rising real incomes and favorable changes in demography. Annual per capita consumption of all types of packaged soft drinks increased from approximately 151 12-ounce units in 1965 to 420 12-ounce units in 1982. Because of consumer preference for disposable pack aging, the soft drink industry has been able to expand its market share at the expense of returnable bottles. While can shipments increased from 13 percent of to tal packaged soft drink shipments (in equivalent 12ounce units) in 1965 to 37 percent in 1982, the share of returnable bottles decreased from 82 percent to only 16 percent. Nonreturnable soft drink bottles have also in creased from 5 percent to 26 percent of the market. However, plastic containers now constitute about onefifth of the soft drink market. Similarly, beer can shipments demonstrated signifi cant growth during this period as beer consumption grew. Annual per capita consumption of beer in all forms increased from 15.9 gallons in 1965 to 24.3 gal lons in 1982. The share of this expanding market pack aged in metal cans increased from 40 percent in 1965 to 60 percent during the mid-1970’s and stood at 62 percent in 1982. Since the mid-1970’s, the leveling off of output growth in the beverage can sector is in large part a result of increased competition from substitutes, particularly the smaller-size beer bottle and the 2-liter plastic bottle for soft drinks, as well as some weakness in the total soft drink market. Because soft drinks are discretionary pur chases, sales tend to fall during economic slowdowns. For example, beverage can production increased only marginally during the 1971 recession after several years of robust growth, and declined during the 1975 (higher sugar prices were also a factor that year) and 1980 recessions. Another cause for the recent slowdown in beverage can output growth has been the enactment of anti-litter laws requiring mandatory deposits on beer and soft drink containers, in effect in seven States in 1982. In the case of the beer market, packaged sales in those States declined initially or the rate of increase in con sumption slowed after implementation of the laws. has benefited from the greatest technological change, has grown, rapidly, while the other less technologically advanced sectors (food and nonfood) have experienced no growth. Economies of scale are greatest for bever age cans because large volume runs are possible, re quiring less downtime to change exterior decoration, labels, and can sizes. There are fewer sizes and larger markets for these products. Although levels of output per employee differ widely within the industry, one can company reports that it has been able to increase its production of cans from 826,000 per employee per year in 1971 to 1,200,000 in 1980—a 56-percent increase. One of its most recently constructed plants produces at a rate of 6 million cans per employee per year.5 Data on another measure, payroll per unit of value added (i.e., value of shipments less materials and other costs), also indicate considerable improvement in effi ciency in the can industry over the last two decades. In 1960, payroll per unit of value added was .50; by 1980, jt had declined to .31. During the remainder of the 1980’s, productivity gains are expected to continue, but probably at a slower rate than during the past decade. Output After strong growth in the 1960’s and early 1970’s fueled by interest in convenience packaging, can out put has been depressed by weaker demand in major markets, increased competition from alternative pack aging forms, and generally less favorable economic con ditions. During the years 1960 to 1965, output increased at an average annual rate" of 2.4 percent, and significant gains of 4.4 percent were registered during the years 1965-73. In contrast, output edged down 0.6 percent annually during the 1973-82 period. In the last three of those years, output fell at an average rate of 3.1 per cent annually (chart 5). Overall, during the years 196082, output increased at an average annual rate of 2.4 percent, less than the 3.3-percent increase recorded for all manufacturing industries. Industry growth during the years 1965—82 is attrib utable solely to the relative strength of the beverage sector; both the food and general line sectors experi enced declines. During the period of most rapid indus try expansion (1965-73), beverage can output increased more than 12 percent annually; the other two sectors rose slightly. During the years 1973-82, the industry output decline occurred as the market for food and general line containers fell, while beverage can output leveled off. Consequently, the beverage can sector increased to s Address by Alan W. Larson. Reshaping the Can Business: A Proud Industry L ooks A head (American Can Company, May 1981), p. 6. 6 A base box is a measurement o f the surface area o f metal used in production, totaling 31,360 square inches, equivalent to 112 sheets, 14 in. x 20 in. in size. 25 Moreover, the can industry has generally lost market share to both refillable bottles and draught beer, al though the extent has varied considerably from State to State. The extension of similar laws to major indus trial States (two highly populated States will implement container deposit laws in 1983) will likely reduce can sales temporarily. The long-term effect of the anti-litter laws is unclear, but the can industry expects to ex pand its market share. Projections for the beverage sector suggest modest long-term growth. However, introduction of the half liter plastic bottle may pose a threat to the single-serv ice soft drink market once technological problems are resolved. Food and general line. Output of the second largest can sector, food, was lower in 1982 than in 1965. It re mained relatively stable during the early part of this period but has gradually fallen since 1974. Conse quently, food can shipments declined from 60 percent of total can shipments in 1965 to 33 percent in 1982. Changing consumer tastes, such as a preference for fresh fruit and vegetables, have adversely affected the can market. Similarly, consumers have demonstrated a strong preference for the convenience of specialty fro zen foods. Nor has the can industry benefited from in creasing commercial demand for packaged foods since restaurants generally require large volume containers rather than cans. Food can production tends to be less susceptible to cyclical changes in demand than either the beverage or general line sectors. However, output is often affected by weather and crop conditions. Droughts contributed to packing declines in both 1979 and 1980. After a good harvest year (as in 1974, for example), packing may de cline because of excessive inventory accumulation. An impending competitive threat to the canned food market is the “retort pouch,” a flexible, laminated poly ester container with packaging qualities considered by many to be superior to metal cans. At least one major can company and one aluminum company, as well as food processors, have been instrumental in the devel opment of this competitive product. However, because present pouch packaging speeds are still comparatively slow and the pouch continues to meet some resistance from consumers, it appears unlikely that the retort pouch will become a serious competitor before the middle of the decade. A more immediate challenge is coming from the manufacturers of the plastic bottle and aseptic con tainer (a flexible laminated container with sterilized con tents requiring no refrigeration) for packaging such products as sauces and fruit drinks. The third can sector, general line containers, has, like the food can sector, contracted in recent years. Sales of aerosol cans have been hurt by environmental con cerns and, more recently, by lower discretionary spend ing. The paint and varnish can market, which had ex perienced the greatest growth in this sector, has re cently been weakened by recession and increased usage of plastic containers. Overall, shipments of general line containers declined from almost 18 million base boxes in 1965 (15 percent of all can shipments) to about 12 million base boxes in 1982 (7 percent of the total). The peak year was 1972, when 21 million base boxes were produced. Because of high transportation costs, foreign trade is not significant in the can industry. Exports accounted for less than 1 percent of all can product shipments in 1982. Rather than ship cans overseas, the major can companies have established subsidiaries abroad to serve foreign markets. The import penetration ratio is also very low—less than 1 percent. Investment Capital expenditures Real capital expenditures7 peaked in 1975, then fell by almost 50 percent in 1976 to the lowest level since the early 1960’s. Although they fluctuated somewhat during the period 1976-80, real expenditures averaged 27 percent less than in the preceding 5-year period (1971-75). Because of the significant decline in employ ment, outlays per production worker fell 15 percent between these two periods. The industry decreased its investment due to weaker demand in major markets, low profitability, projections indicating modest output growth, and current over capacity. In addition, the major can companies have been diversifying into other nonpackaging industries. In current dollars, can industry investment rose to $205 million in 1980 (latest available data), a nearly threefold increase over 1960, but well below the $232 million spent in 1975, the peak year. An average of 90 percent of new expenditures has been used to purchase machinery and equipment. Although can industry expenditures per production worker exceeded the manufacturing average in the 1960’s and early 1970’s, the reverse has been true in re cent years. In the 5 years 1963-67, current-dollar ex penditures per production worker were 36 percent higher in the can industry than in all manufacturing; by 1976-80, they had fallen 2 percent below the manufac turing average. Empl@pn)(snt amd ©©eupational Tremids Employment In the 1960-82 period, can manufacturing employ ment data showed two distinct trends: a steady rise from 7 Deflated Bureau of Census data. '26 ment could be retrained to maintain the new welding machinery. In an entirely new system, the labor adjust ments can be more significant, because job consolida tions down the line are possible. Duty or skill consolidation increases the flexibility of the work force and, thereby, could result in the reduc tion of the number of workers required per processing unit. In the can industry, a major industrywide effort is currently underway to review, and where necessary, combine and reclassify jobs in recognition that “changes in business or equipment may create conditions which will not justify the (existing) pure classification. During such circumstances, nonskilled functions may be added to a trade, craft, or skilled job ...”.8One example of the type of job combination is the case in which the pro duction mechanic assumes some quality control respon sibilities; i.e., examining, testing, and measuring equip ment for quality specifications, and visually checking the product for defects. Similarly, the skilled mechanics may be assigned to duties normally the responsibility of maintainers. Some unskilled jobs, such as production checker and compound mixer, have also been combined. A typical plant has more than 20 job classes. In one of the highest classes is the electronic repairman who is responsible for using electrical testing devices to en sure proper operation of electronic control components. Also highly skilled are the mechanics, who ensure that the components are properly functioning. Least skilled are the workers responsible for packing and shipping cans, such as the palletizer operators, packers, sorters, wrappers, and strappers. Most companies provide comprehensive apprentice ship programs. The machinist and lithograph pressman training programs include an 8,000-hour period of ap prenticeship. An apprentice in the litho shop might be gin training as a press feeder. Other apprenticeship pro grams vary from a mimimum of 3,000 hours for the least skilled positions, such as the automatic carton packer, to 6,000 for the can bodymaker and sideseamer. the mid-1960’s to a peak in 1970 and a gradual decline in the 1970’s with cyclical fluctuations in the 1970 and 1975 recessions. By 1982, employment was down to 52,200—about 16 percent less than in 1960 and 30 per cent below its 1970 peak (chart 6). Employment was relatively stable in the first half of the 1960’s following the 1961 recession. Employment then rose sharply as output increased more rapidly than productivity. To accommodate the growing demand for beverage cans, many new establishments were added, including a number of larger-sized plants. In contrast, the employment decline in the 1970’s oc curred as productivity growth outstripped demand. Many forces came into play, including the impact of new technology on unit labor requirements, the change in composition of output (expansion of the technologi cally advanced beverage sector, with some contraction in the more labor-intensive food and general-line sec tors), and less favorable economic conditions. In addi tion, as cited earlier, smaller, more efficient dedicated and self-manufacturing plants have been replacing larger, less specialized, labor-intensive facilities. In 1972, 43 percent (30,000) of workers were employed in es tablishments with more than 500 employees; 5 years later, this figure had dropped to only 24 percent (15,000). The trend of plant closings and job consolidations, the continued diffusion of new and improved machin ery, and modest output growth are likely to further de press employment in the 1980’s. Ooeupsiti©ns Changes in the can manufacturing processes have had a significant impact on skill requirements. As mentioned in the technology section, the intro duction of the major new innovation—the two-piece can line—has eliminated certain manufacturing steps and changed others. For example, because the decorat ing process :°> simplified on a two-piece line, several unskilled positions in the lithography shop can be elimi nated, including the litho feeder and oven unloader. Also, because the line is a fully automated, continuous process system, requirements are reduced for the un skilled workers (e.g., forklift truckdrivers) who trans port the material between work stations. In addition, because the respective job requirements for the three-piece and two-piece can lines are so different, many skills are virtually nontransferable. Press and part manufacture skills do have some crossover value, however. The adoption of the new welded seam processes has generally had less impact on job content than did the two-piece line. The extent of the labor adjustment de pends on whether the new welding machinery merely replaces the soldering sequence in an existing line or an entirely new welding system is installed. In the first case, the mechanic responsible for the soldering equip Adjustment of workers to teohnologsoaS change Programs to protect employees from the adverse ef fects of changes in machinery and methods of produc tion may be incorporated into contracts or they may be informal arrangements between labor and manage ment. In general, such programs are more prevalent and detailed in industries and companies $hich nego tiate formal labor-management agreements. Such con tract provisions to assist workers in their adjustment to technological and associated changes may cover new wage rates, new job assignments, retraining, transfer rights, layoff procedures, and advance notice of changes 8 Master Agreement between Continental Can Company and United Steel Workers o f America, p. 170. 27 Chart 6. Employment in metal eans, 1960=82 Em ployees (In th o u s a n d s ) 90 80 70 60 50 40 30 0 1 Least squares trends method. SOURCE: Bureau of Labor Statistics. 28 Major industry contracts provide for severance pay ments, interplant transfer rights, and seniority regula tions governing layoff and recall to protect workers against the negative effects of technological change. One contract states, “employees laid off because of a reduction in force arising out of the closing of their de partment or unit of the plant as a result of technologi cal change, will be paid a severance payment.”9 planned by management, e.g., machine changes or plant closings. They may include various types of income maintenance programs such as supplementary un employment benefits ( SUB ) or severance pay. The can industry has long been highly unionized. According to one 1981 estimate, substantially more than half of the production workers were covered by col lective bargaining agreements, well above the 40-percent average of all manufacturing. The United Steel workers of America ( ;USW ) and the International As sociation of Machinists and Aerospace Workers ( IAM ) are the principal unions in the industry. The Teamsters, Sheetmetal Workers, and Food and Allied Service Workers represent a smaller number of workers. It seems likely that the proportion of can industry workers covered by union agreements is declining. Membership in the two largest unions has fallen faster than the overall decline in production worker employ ment. Many older, unionized plants have closed; at the same time, workers in some plants which have recently begun operations are not represented by unions. In the “for-sale” sector of the industry, master agree ments are established for the large multiplant compa nies, and bargaining is conducted on an industrywide basis. Wage and benefit settlements for these companies have followed the pattern of other basic-metal indus tries. In the self-manufacturing sector, negotiations are conducted on an establishment or companywide basis. Hourly wages of workers in plants owned by the four large can companies—the so-called “core” compa nies—may not be substantially higher than those paid in self-manufacturing plants. Benefits, however, are more comprehensive. For instance, short week benefits and supplementary unemployment benefits are available to nearly all core company workers; comparatively few workers in the self-manufacturing sector are shielded by such provisions. Demography also plays an impor tant role in the relative costs of the two sectors. The average age of the core company worker is more than 40, and many workers have years of seniority. In con trast, the newer companies generally employ a younger age group which reduces pension, severance, and SUB liabilities substantially. It is believed that the high unit labor costs of the core companies are a contributing cause to their loss of market share to the self-manufacturers. Retraining rights are a provision of some union con tracts. One example in a contract for a large bargaining unit specifies that employees (in this case, the clerical work force) whose jobs are or will be displaced because of automation or economic conditions may qualify for training expenses to enable them to qualify for other jobs in the bargaining unit.10 Provisions are also included in the same contract for advance notice of actions affecting clerical workers—“When mechanical or electrical office equip ment will have effect on the job status of employees ... where possible, management will notify the Local Grievance Committee one year in advance of such in stallation.”11A second major agreement specifies, with out reference to technological change, that the union will be notified of any layoffs as far in advance as is practical.12 Strengthening income protection and job security has for some years been an important objective of union negotiations because of employment shrinkage. Income protection plans specified in two master contracts en title a worker to supplemental benefits if, for any cal endar quarter, average (straight time hourly) earnings fall below 95 percent of the average (straight time hourly) earnings during a previous base year.13 Also, SUB payments are available to a large number of workers. 9 Collective Bargaining Agreement between Campbell Soup Com pany and the Food and Allied Service Workers, p. 77. 10USW Master Agreement-Continental Can, February 16, 1981, to February 19, 1984, pp. 134-35. 11 Ibid., p. 135. 12 Master Agreement-IAM and CCC, p. 28. 13 Ibid., pp. 30-31; and USW and CCC, pp. 32-33. SELECTED REFERENCES American Can Company. “Reshaping the Can Business—A Proud Industry Looks Ahead.” Address by Alan W. Larson, May 1981. “Food Processors Benefit From 2-Piece vs 3-Piece Can Technology Race,” Food Processing, June 1981, pp. 124-26. “Cans: Dynamic Technology Continues,” Beverage World, July 1976, p. 23. Hanlon, Joseph F. Handbook o f Package Engineering. N ew York, McGraw Hill, 1971. Carey, John L. “Productivity in the Metal Cans Industry,” Monthly Labor Review, July 1972, pp. 28-31. “A Hardline on ‘Lifetime Security’,” Business Week, October 31,1977, pp. 33-34. 29 “How Metal Containers Are Made,” American Machinist, April, 1980, pp. 155-65. ‘N ow Canmakers Want the USW to Bend,” Business Week, Febru ary 21, 1983, p. 43. “Metal Box CEO Foresees Changes in Can Making,” Beverage In dustry, July 18, 1980, pp. 35-36. 30 “Steel for Cans: Where It Stands, Where It’s Going,” Beverage In dustry, November 7, 1980, p. 176. Chapter 4„ Laundry SEnidl Cleaning hour of all persons) increased at an annual rate of 0.5 percent between 1960-82. During 1973-82, however, productivity declined at an average annual rate of 1.7 percent, as output fell at a faster pace than employee hours. Employment in the laundry and cleaning industry fell by one-third between 1960-82, from 523,000 to 347,300 workers, as demand slackened and improved technology was introduced. Employment declines have been greatest in the laundry and services sector; in con trast, employment in industrial laundry and linen supply establishments has been increasing, reflecting changes in industry structure. The outlook is for total industry employment to continue downward to 1990. Operatives, who make up nearly one-half of the work force, are pro jected to decline by more than one-third because of technological and other changes. Technological changes associated with the laundry and cleaning industry (sic 721) are achieving produc tivity gains in selected production operations, but the impact during the 1980’s is expected to be moderate and confined mainly to the larger industrial launderers and linen supply firms. The small, owner-operated firms, which constitute a large segment of the industry, gen erally do not have the volume and capital to adopt new technology extensively. New technologies in this major service industry share some similarity to those associated with manufacturing and include more automatic equipment and improved conveyors and related devices which transport items through cleaning, drying, and finishing operations. Ma jor innovations in this industry include increased mecha nization of washing equipment and related conveyor systems; mechanized steam tunnel finishing, and auto mated systems to hang, sort, and transport cleaned gar ments. In addition, improvements in other industries, such as improved detergents that save energy and time, and continued use of blended polyester/cotton fabrics which require less processing, are affecting operations in the laundry industry. Output in the laundry and cleaning industry has been declining since the mid-1960’s—particularly in the laun dry services sector of the industry. Consumer expendi tures for laundry and cleaning services have been fall ing as fabrics which are easier to clean and improved home laundry systems are used more extensively. In contrast, output in the industrial laundry and linen sup ply sector of the industry, which is highly mechanized, has been rising. For the two decades covering 1960-82, the Bureau of Labor Statistics measure of output in the laundry and cleaning industry declined at an average annual rate of 2.9 percent.1 The pace and direction of output change over this period were uneven: Dur ing the early period 1960-67, output increased at an average annual rate of 2.3 percent; between 1967 and 1973, however, output declined at an annual rate of 5.0 percent and continued to decline at a rate of 3.7 per cent between 1973 and 1982. Productivity (output per Industry Straetyr® The laundry and cleaning industry consists of over 75,000 establishments which employ 347,300 employ ees.2 About half of the work force is located in estab lishments that launder and clean customer-owned items; most of the remainder work for the generally larger establishments which rent and clean uniforms, towels, diapers, and linens. Most establishments in the laundry and cleaning in dustry are small, owner-operated enterprises. There is a trend toward some consolidation, as some larger firms purchase small, previously independent establishments. Only 1 out of 4 laundry and cleaning establishments are incorporated. They generally are larger and more highly mechanized, and they account for two-thirds of indus try receipts, and employ a large segment of the work force.3 1 Rates o f change for historical data are based on the least squares trends method. 31 2Number of establishments, Bureau o f the Census, 1977 Census o f Service Industries, Subject Series—Establishment and Firm Size; em ployment, Bureau o f Labor Statistics, Supplement to Employment and Earnings, July 1983. 3Bureau o f the Census, 1977 Census o f Service Industries, Subject Se ries—Establishment and Firm Size. ment investments. Also, the large quantities of identi cal items processed by these establishments (bedsheets, towels, rental uniforms, etc.) can be automated more readily than the wide variety of products handled by other industry sectors. Major types of enterprises include laundries and drycleaning plants, (which serve many enterprises re tail, commercial, and industrial), linen suppliers, and in dustrial launderers. The drycleaning sector has the largest number of establishments with paid employees (47 percent) and accounts for just under one-third of the industry’s receipts and annual payroll. But dryclean ing plants—which cater primarily to retail cus tomers—average only six employees per establishment, and few have the capital or volume of business to in troduce significant new technology. Most new technology is being installed by industrial laundering and linen supply establishments. Together, these establishments constitute only 3 percent of the total number of establishments within the industry; but they account for 30 percent of employment, 38 percent of receipts, and 40 percent of the industry’s payroll. Moreover, employment per establishment averages 46 employees—well above the average in retail dryclean ing plants. Industrial launderers (whose operations in clude drycleaning as well as laundering) and linen sup pliers have the volume of work to justify large equip Ts©iiBi®0©i^ in ths 19©©’s Technological changes in equipment, fabrics, and de tergents and solvents are being introduced in the laun dry and cleaning industry. Innovations such as polyester/cotton fabrics have been available for some time and are widely used; however, other developments, in cluding electronic systems to mark and sort clothes, are in limited use and may be adopted more widely in the 1980’s. Although the pace of change has been moder ate, the technologies described below and summarized in table 3 have nonetheless had an impact on produc tivity and employment in a number of operations. Improved washing equipment The latest technology for washing and cleaning gar ments and other merchandise incorporates several fea tures that reduce labor requirements for operators. Some Table 3. Major technology changes in laundry, cleaning, and garment services T e c h n o lo g y D e s c rip tio n D iffu s io n L a b o r im p lic a tio n s M e c h a n iz a tio n o f th e w a s h in g a n d c le a n in g p ro c e s s e s W a s h in g a n d d ry c le a n in g m a c h in e s A u to m a tic lo a d in g a n d u n lo a d in g th a t tilt b a c k w a rd to a llo w a u to m a tic lo a d in g fro m o v e rh e a d s lin g s o r c h u te s . A fe w w a s h in g fo r o p e ra to rs a n d ra is e p ro d u c tiv ity . m a c h in e s a ls o c a n b e u n lo a d e d a u to m a tic a lly . L e s s m a n u a l h a n d lin g o f g a rm e n ts a n d line n s ; s k ill re q u ire m e n ts a n d a u to m a tic w a s h a n d c le a n in g s y s te m s re d u c e la b o r re q u ire m e n ts T ilt m a c h in e s u s e d b y 3 0 to 3 5 p e rc e n t o f in d u s tria l la u n d e re rs a n d lin e n s u p p lie rs . O v e rh e a d lo a d in g b y s lin g s a n d c h u te s is d e p lo y e d w idely.- la rg e ly u n c h a n g e d . A u to m a tic s y s te m s th a t lo a d , w a s h , A u to m a tic w a s h s y s te m s a re u s e d a n d tra n s p o rt ite m s w ith m in im u m h an d ling . A u to m a tic a n d s e m i-a u to m a tic c o n tro l o f w a s h in g c y c le s a n d A u to m a tic c o n tro ls re d u c e la b o r in je c tio n o f c h e m ic a l s u p p lie s — u s u a lly by e le c tro -m e c h a n ic a l c o n tro ls , b u t re c e n tly b y s o lid -s ta te c o n tro ls in s o m e e s ta b lis h m e n ts . S o m e fu lly a u to m a tic , c o n tin u o u s Im p ro v e d d e te rg e n ts by a b o u t 10 p e rc e n t o f in d u s tria l la u n d e re rs a n d lin e n s u p p lie rs w ith fu rth e r d iffu s io n a n tic ip a te d . re q u ire m e n ts fo r o p e ra to rs . D e te rg e n ts a n d s u p p lie s a d d e d a u to m a tic a lly ra th e r th a n b y h an d . In c re a s e d re q u ire m e n ts fo r m a in te n a n c e sk ills . A b o u t 9 0 p e rc e n t o f in d u s tria l la u n d e re rs a n d lin e n s u p p lie rs u se s o m e fo rm o f a u to m a tic c o n tr o ls on w a s h in g e q u ip m e n t. E le c tro n ic c o n tro l d e v ic e s to b e u s e d m o re b a tc h w a s h e rs u s e c o m p u te r e x te n s iv e ly . C o n tin u o u s b a tc h a u to m a tic w a s h e rs a re in o n ly lim ite d u s e a t p re s e n t, d u e to h ig h c o n tro ls . c o s ts . N e w a n d im p ro v e d d e te rg e n ts a llo w R e d u c e d rin s in g a llo w s m o re la u n d ry to be w a s h e d a t lo w e r w a s h in g lo a d s p e r sh ift, in c re a s in g w a te r te m p e ra tu re s a n d w ith a s h o rte r rin s e c y c le . o u tp u t p e r o p e ra to r. W id e ly u sed. B le n d e d p o ly e s te r-c o tto n fa b ric s fo r u n ifo rm s a n d line n s; a n d s te a m tu n n e l fin is h in g B le n d e d fa b ric s a re u s e d fo r m o s t E lim in a tio n o f th e n e e d to p re s s A b o u t 3 o u t o f 4 in d u s tria l in d u s tria l u n ifo rm s a n d line n s . m o s t in d u s tria l u n ifo rm s a n d lin e n s la u n d e re rs a n d lin e n s u p p lie rs u se S te a m tu n n e ls a re b e in g u s e d to h a s in c re a s e d p ro d u c tiv ity a n d d ry a nd re m o v e w rin k le s fro m re d u c e d e m p lo y m e n t o f p re s s e rs . b le n d e d fa b ric s a n d s te a m tu n n e l fin is h in g . u n ifo rm s . T h is g e n e ra lly e lim in a te s p re s s in g . S k ill c h a n g e s in v o lv e a s h ift fro m p re s s in g a c tiv itie s to ta s k s re la te d to th e lo a d in g a n d tra n s p o rt o f ite m s th ro u g h th e tu n n e l fo r fin is h in g . R e tra in in g m in im a l a n d o n th e jo b . 32 TabSe 3. major technology changes in laundry, cleaning,, and garment services—-Continued T e c h n o lo g y T u n n e l w a s h in g a nd fin is h in g D e s c rip tio n T h e s e s y s te m s a re e x p e n s iv e a n d L a rg e p o te n tia l fo r re d u c in g la b o r o n ly fo u r a re in c o m m e rc ia l use. re q u ire m e n ts o f o p e ra to rs a nd p re s s e rs b y c o m b in in g w a s h in g a n d O u tlo o k fo r m o re w id e s p re a d d iffu s io n is u n c e rta in . tu n n e l fin is h in g in to o n e o p e ra tio n . N e w s te a m tu n n e l s y s te m s re c e iv e s o ile d g a r m e n ts o n h a n g e r s a n d w a s h , dry, a n d s te a m fin is h th e m a u to m a tic a lly . A u to m a tic d e v ic e s to h a n g c lo th e s D iffu s io n L a b o r im p lic a tio n s M a c h in e s th a t a u to m a tic a lly d is p e n s e h a n g e r s o n a c lo t h in g In s o m e a p p lic a tio n s , o p e ra to rs o f In lim ite d c o m m e rc ia l use. a u to m a tic e q u ip m e n t h a n g m o re fo rm re a d y fo r s h irts , c o a ts , or g a rm e n ts p e r h our. In o n e te s t, o u tp u t p e r o p e ra to r w a s h ig h e r by p a n ts to b e h u n g o v e r th e m . 3 9 p e rc e n t. H o w e v e r, s k ille d o p e ra to rs in w e ll la id -o u t fa c ilitie s c a n e q u a l o u tp u t o f th e s e s y s te m s . A u to m a tic s y s te m s to s o rt a n d c o u n t c lo th e s A n u m b e r o f s o rtin g s y s te m s a re A d v a n c e d s y s te m s in v o lv e le s s m a n u a l ta s k s fo r o p e ra to rs a nd b ein g u s e d to g e t a s p e c ific g a rm e n t to th e p ro p e r c u s to m e r. A ll s y s te m s in c o rp o ra te c o n v e y o rs a nd s e n s in g a n d la b e l-re a d in g d e v ic e s . A d v a n c e d s y s te m s u s e c o m p u te r m o re in v o lv e m e n t w ith e q u ip m e n t. O u tp u t p e r o p e ra to r is h ig h er. M e c h a n iz e d s o rtin g s y s te m s a re in g e n e ra l use; s o p h is tic a te d c o m p u te r s o rtin g s y s te m s , n o w u n d e r d e v e lo p m e n t, w ill b e p la c e d in c o m m e rc ia l use. a n d e le c tro n ic c o d e s to k e e p tra c k o f g a rm e n ts . T h e r e a re a ls o s o m e m e c h a n iz e d s y s te m s th a t s o rt a nd c o u n t s o ile d g a rm e n ts a n d lin e n c o m in g in to a c le a n in g e s ta b lis h m e n t. F ia tw o rk fin is h in g B le n d e d fa b ric s n o w u s e d b y m a n y M a n u a l h a n d lin g o f lin e n s h a s b e e n lin e n s u p p lie rs . M e c h a n ic a l s p re a d in g a n d fo ld in g e q u ip m e n t is in use. W id e ly u s e d in lin e n s u p p ly firm s . re d u c e d by th e s p re a d e rs a n d fo ld e rs . M is c e lla n e o u s te c h n o lo g ic a l c h a n g e s : B u s in e s s c o m p u te rs S m a ll c o m p u te rs u s ed fo r b u s in e s s p u rp o s e s b y s m a ll o w n e r-o p e ra te d e s ta b lis h m e n ts . L ittle im p a c t o n e m p lo y e e s . W a te r re use R e u s e o f p re v io u s ly u s e d w a s h w a te r, to re d u c e c o n s u m p tio n o f w a te r, e n e rg y , a n d c h e m ic a ls . S o m e in c re a s e in p la n t m a in te n a n c e U s e d be le s s th a n 10 p e rc e n t o f in d u s try p la n ts ; b u t d iffu s io n a n d e n g in e e rin g re q u ire m e n ts . e x p e c te d to in c re a s e . S p e c ia l p u rp o s e e q u ip m e n t C le a n in g e q u ip m e n t fo r flo o rm a ts a n d ro il to w e ls . R e d u c tio n in d ire c t la b o r re q u ire m e n ts , s m a ll in c re a s e s in m a in te n a n c e re q u ire m e n ts . In lim ite d use. M ic ro p ro c e s s o rs E le c tro n ic c o n tro ls fo r m a c h in e o p e ra tio n s , p la n t e le c tric a l e n e rg y n ee d s . In c re a s e d s kill re q u ire m e n ts fo r m a in te n a n c e w o rk e rs . L im ite d , b u t g ro w in g use. a large quantity of soiled merchandise is loaded into the chutes, machine operators release part or all of the contents of a chute into the machine—again, a process that is faster and less labor intensive than placing each separate load into the machines by hand. Overhead loading chutes are used extensively. Some washing machines also can be unloaded auto matically, although this capability is less common than automatic loading. Some front-loading machines tilt for ward to unload clean garments into slings that are car ried by overhead conveyor to the finishing area. Al though not in widespread use, automatic unloading processes reduce labor requirements of operators and raise productivity. Applications of automatic unloading are expected to increase. Once the machines are loaded, washing and cleaning cycles can be controlled automatically. Some control front-loading machines being introduced, for example, tilt backwards to permit automatic loading of soiled garments from overhead slings or chutes. This feature is used primarily with sling loading—a process in which the merchandise is loaded by hand or machine into slings and transported by overhead conveyors to the washing machines. This process is faster and requires less labor than does the older process of loading soiled garments into carts by hand and pushing the carts to the machines for manual loading. About one-third of all industrial launderers and linen suppliers use washing machines that tilt for loading and unloading. Machines also can be loaded from chutes located di rectly overhead. These chutes are most often used with machines that load from the top—including washingwheels that have three or four pockets that wash sev eral loads of similiar merchandise simultaneously. After L im ite d , b u t g ro w in g use. 33 Operator loading cleaned linens ante a modem centrifugal extractor to remove water systems add soap, bleach, or other supplies automati cally, while others alert the machine operator to add these supplies. Although most control systems are me chanical, solid state controls are being used on some of the newer equipment. About 90 percent of industrial launderers and linen suppliers use some form of auto matic controls on washers. Several manufacturers market continuous batch au tomatic systems that combine technologies described above. One washing system in commercial use, for ex ample, incorporates overhead loading chutes, tilting washers with automatic control of the wash cycle and supply of soiled garments, and belt conveyors that re move cleaned garments. The process is automatic from loading soiled garments into the chute, to delivery of clean garments to the finishing area. Only about 10 per cent of industrial launderers and linen suppliers use au tomatic washing systems, due to high costs, but more widespread diffusion is anticipated. W@w detergents New detergents that clean at lower water tempera tures are being introduced. These improved products lower utility costs since water temperature in washing machines can be lowered from 180 F, to a range of 140 to 160 F. Thus, the amount of energy required to heat the water is less. Also, clothes washed at lower tem perature with less detergents and other supplies require less rinsing, and, therefore, less water is used. The re duction in rinse cycles also increases output per opera tor since additional wash loads are carried out with no increase in labor requirements. Blended fsibries sind ileam tunnel finishing A significant change in industrial laundries and linen suppliers resulted from two innovations: The availabil ity of blended polyester/cotton fabrics for industrial uniforms and commercially supplied linens; and the de velopment of steam tunnels for finishing work on uni 34 much larger number of pressers would be required to maintain the same output. Moreover, in conventional finishing, pressing garments and putting them on forms require considerable skill to ensure that wrinkles are not pressed in, creases occur in the correct places, and collars and cuffs look right. In tunnel finishing, less skill and effort are necessary to shake out wet garments, put them on hangers, and hang them on conveyors that carry the garments into the steam tunnel. An example of the impact of polyester/cotton fabrics and tunnel finishing on productivity and labor was pro vided by an industrial launderer that changed from cot ton to 65/35 fabrics for rental uniforms. Prior to the change, 35,000 to 40,000 cotton garments were laun dered a week with pressing and repair work accom plished by a staff of 25. Over a period of several years, this firm installed three steam tunnels and switched from cotton uniforms to 65/35 fabric uniforms. As the steam tunnels were brought in, pressers were retrained on the job to oper ate them. As the pressers became more skillful in op erating the tunnels, labor requirements declined, and the number of people manning the steam tunnels was lowered through attrition. During the period that new technology was intro duced, the workload about doubled to 70,000 garments a week—but the number of people needed to operate steam tunnels and make repairs to damaged rental gar ments remained at 25. The mix of job tasks changed, however. Fewer people operate steam tunnels than did pressing work when cotton garments were used, but the number of workers who do repair work has grown to meet the needs of the 70,000 garment workload. The total volume of repairs has increased even though there are fewer repairs per 100 garments processed with 65/35 fabric than with cotton fabric. forms and linens. These innovations in combination al most entirely eliminate the need to press merchandise items after thay are washed, thereby reducing labor re quirements for pressers. Blended fabrics. Fabrics which are made from a blend of polyester and cotton are being used for rental uni forms and linens by over 75 percent of all industrial launderers and linen suppliers. Most of these fabrics are blended of 65-percent polyester and 35-percent cotton, although 80/20 blends and 100-percent polyester fab rics are also in use. Garments made from these fabrics emerge from wash ing machines and drycleaning machines in wrinkled condition, but the polyester fabric smooths out when exposed to steam, and most wrinkles disappear. How ever, these fabrics must be pressed if a completely wrin kle-free finished is desired. Prior to the availability of the blended fabrics, most rental uniforms and linens were made of cotton, a fabric that did require press ing—which was very labor intensive. Blended 65/35 fabrics became available in the mid1960’s, a period in which industrial launderers and linen suppliers were experiencing difficulty in finding expe rienced pressers. Pressing is not a particularly desirable job, and salary levels are low. During this period, when business activity was strong and labor mobility high, many people left pressing jobs. Thus, 65/35 fabrics were well received and the problems associated with labor shortages were eased. The industry also is examining the characteristics of an 80/20 blend of polyester/cotton fabric and 100-per cent polyester fabric developed by the textile industry for use in mills where cotton dust is a problem. Use of these fabrics for rental uniforms is growing, but is not yet widespead. Steam tunnelfinishing. Development of steam cabinets or tunnels provides the technology to economically clean blended fabrics. In steam tunnel finishing, gar ments that emerge from the wash cycle are shaken out by hand and placed on hangers. The hangered garments are placed on a conveyor and transported through the steam tunnel. In the steam chamber, steam relaxes the garment’s fibers, and most wrinkles are removed. After the garments are dried by hot air in the second cham ber, they leave the steam tunnel and are sorted for delivery. Labor and skill requirements are both reduced when tunnel finishing procedures replace pressing operations. Steam tunnels finish 200 to 1,000 garments an hour (de pending upon the particular machine and the amount of water still in the garment). Operators put garments on hangers, feed them into the tunnel, and operate the controls for the steam tunnel to maintain this produc tion rate. If each item had to be pressed separately, a Tunnel washing sod finishing Tunnel-type machines have been developed to wash, dry, and steam finish clothes in one continuous opera tion. This process has potential to reduce labor by com bining the two basic production steps—washing and steam tunnel finishing—into a single operation. The process is labor intensive only at the first stage, where soiled garments are manually put on hangers and placed on a conveyor that goes into the washing tunnel. Gar ments are washed in the first part of the tunnel, then dried and steamed in the following section, in a man ner similar to conventional steam tunnel finishing. The outlook for diffusion of tunnel washing and fin ishing is uncertain. This system is expensive to install and must be used properly to be cost effective. The technology is considered experimental by most indus trial launderers, and only four installations are currently in use in this sector of the industry. 35 operators, who read the coded labels, and use the in formation to hang the garments on the proper level of hooks. Mechanized sorting systems of this type are used widely; and, without such a system, labor costs in large laundries would be prohibitively expensive. Development work on more advanced sorting sys tems is underway. These systems feature computers, sophisticated marking and recognition devices, and cod ing systems similar to the universal product codes used in retail trade. With this technology, electronic reading wands and scanning devices read coded labels on uni forms and other customer items. These labels can be printed on high-speed, computer-controlled marking machines. Computer systems also track items and assist in inventory control. Computer-controlled sorting sys tems reduce the number of sorters and lower skill re quirements. At present, however, this technology is ex perimental, and is being used on a large scale in only one plant. There are also mechanized systems in use to count and i sort soiled uniforms, linens, and other such merchandise that come into a plant for laundering and cleaning. These systems utilize operator work stations, conveyors, and electronic counting devices. The more advanced systems can be tied into computers which keep track of the merchandise and provide data for customer billings and deliveries. Sorting operations are very labor intensive, and the skill requirements are low. Mechanized sorting and counting systems do reduce labor requirements; but this equipment is used primarily in the larger commercial establishments, so present diffusion is limited. Automatic hangering devices The more widespread use of tunnel finishing and the potential use of tunnel washing have focused attention on the most labor-intensive aspect of garment launder ing: Placing items of clothing on hangers,then placing the hangers onto conveyors that feed into the finishing tunnels. Automatic devices to hang garments have been de veloped by several manufacturers but are in limited commercial use. Under some conditions, the speed at which garments can be placed on hangers is increased. Central to the success of this equipment is some method (which varies by manufacturer) to dispense hangers au tomatically and in a way that the operator need only reach out to hang a garment. In conventional methods, the operator picks up a hanger, places it on a form, and hangs a garment on it. The hangered garment is placed on a conveyor that feeds into the steam tunnel. An operator can place from 200 to 300 garments an hour on hangers. Operator skill and motivation affect speed. Location of hangers, gar ments, and conveyors also affect output. In tests where automatic hangering devices were compared to manual hangering of shirts, operators working with automatic devices usually increased the number of shirts placed on hangers per hour. In one test, operators using automatic equipment averaged 278 shirts per hour, compared to an average of 200 shirts an hour when they were placed on hangers entirely by hand—a productivity gain of 39 percent. In several plants, 300 shirts an hour were handled with automatic equipment. There were, however, a few instances where operators hung shirts by hand at a rate of 300 shirts an hour. These people were described as being particularly agile, and they worked on an incentive pay basis, in areas that were unusually well organized.4 Flatwork finishing Changes in fabrics and equipment technology have affected operations in flatwork finishing (which consists primarily of bedsheets and table linen, hospital operat ing room linen, aprons, and towels). The introduction of blended polyester-cotton fabrics may reduce the amount of ironing required for flatwork after the wash ing cycle. There have been improvements in materials handling technology that reduce manual handling of flatwork items to an extent: Mechanical spreaders and folders, for example. Automated sorting systems The laundry and cleaning industry makes extensive use of conveyor systems to sort garments. Some uni forms are rented to specific customers, and after wash ing, must be sorted in such a way that the proper uni form is returned to the customer. This also is required, on a smaller scale, for retail washing and drycleaning of garments. Conveyor systems are becoming more mechanized, and, in some systems, hooks for the hangered garments are located at different levels. Operators read codes on labels attached to the garments and hang the garments on hooks at a particular level. As the garments are car ried along the conveyor, each level of hooks feeds into branching conveyors that sort the garments into proper delivery areas. Skill and concentration are required by Miscellaneous technological changes Business computers. Small computers are being used by a growing number of smaller, owner-operated firms—primarily retail drycleaning and commercial laundries—for business operations such as payroll, and for customer inventory and billing. Computer opera tions are most likely to be handled by the owner of the firm, so labor implications will probably be limited. Water reuse. Systems for reusing portions of previ ously used wash water have been developed for the ‘“ Garment Hangering for Tunnel Finishing,” Industrial Launderer, July 1980, pp. 35-37. 36 dining from 46 percent of total industry receipts in 1972, to 40 percent in 1977 (the latest year available). Individually, receipts for laundries declined in dollar terms as well as percentage terms; while receipts for retail drycleaners increased slightly in dollar amounts, but declined as a percentage of industry receipts (from 33 percent to 30 percent). Firms that provide dry clean ing, garment pressing, and diaper services also have lost market shares.6 These shifts result from the accept ance—in homes as well as working places—of the new, more easily cleaned polyester and knit frabrics, and the development of disposable diapers. In contrast, industrial laundry and linen supply es tablishments, which provide rental and cleaning serv ices to businesses and institutions, increased their share of total industry receipts from 32 percent in 1972, to 38 percent in 1977. Coin-operated laundry and dryclean ing facilities accounted for 13 percent of industry re ceipts in both 1977 and 1972. purpose of reducing consumption of water, energy, and some chemicals. These systems increase requirements for maintenance workers and plant engineers, but should have little or no impact on other plant occupations. Less than 10 percent of industry plants have installed water reuse systems, but diffusion is expected to increase. Special-purpose equipment. Equipment designed spe cifically for washing floormats, and a continuous proc essing system for cleaning roll towels (unrolling, wash ing, ironing, rerolling) are available. These special-pur pose systems substantially reduce the amount of direct labor required for cleaning, while increasing—to a smaller extent—maintenance requirements. Special-pur pose equipment of this nature is in limited use, as it is practical to use only in plants that process large vol umes of the specialized merchandise. Microprocessors. These electronic devices are in lim ited, but growing, use for controlling a variety of plant functions, such as control of machine operations and plant electrical energy demand. This sophisticated equipment increases the skill requirements for mainte nance workers, but has little impact on other employees. Productivity Productivity (B L S output per hour of all persons) has grown at an average annual rate of 0.5 percent dur ing 1960-82 (chart 7). The annual growth rate was high est—averaging 2.1 percent a year—between 1960 and 1967; and it continued to grow at an annual rate of 0.4 percent during 1967-73. Between 1973 and 1982, how ever, productivity declined at an annual rate of 1.7 per cent a year. During 1960-67, the growth of productivity reflected output increasing more rapidly than hours of all per sons. However, both output and employee hours de clined after 1967. Between 1967 and 1973, the reduc tion in hours was slightly greater than the decline in output, thus output per hour of all persons rose. After 1973, however, output fell more rapidly than hours, causing productivity to decline between 1973 and 1982. ©ytpyf and Productivity ©utiput Output (as defined by deflated value receipts) in the laundry and cleaning industry is down significantly (chart 7).5Between 1960 and 1982, the b l s measure of output declined at an average annual rate of 2.9 per cent, with substantial variation in direction and rate of change over this period. Output grew during the early 1960’s, reaching a peak in 1967, but has since declined fairly steadily. The average annual growth rate in out put between 1960-67 was 2.3 percent a year. Between 1967 and 1973, however, output declined at an average annual rate of 5.0 percent, and continued to fall at a lower average annual rate of 3.7 percent between 1973 and 1982. Shifts in demand for the various types of laundry and cleaning services have taken place over the period. Re ceipts from personal cleaning services have been de clining, while those associated with commercial and in dustrial activities have been moving upward. According to the U.S. Department of Commerce, re ceipts generated from traditional family laundry and drycleaning services continued a long-term trend, de 5 BLS measures o f output, output per hour o f all persons, and hours o f all persons, discussed in this section, are based on data from BLS; U.S. Department of Commerce, Bureau of the Census and the Bu reau of Economic Analysis; and U.S. Department o f the Treasury, the Internal Revenue Service. For additional detail, see Productivity Measures f o r Selected Industries, 1954-81, BLS Bulletin 2155 (1982). Employment and ©eeupational Trends Employment Employment in the laundry and cleaning industry ( BLS data) has declined as demand for services slack ened and new technology achieved labor savings (chart 8). There were 347,300 people employed in the indus try in 1982—a decline of 34 percent from the 1960 em ployment level of 522,700, and 38 percent below the 1966 peak employment of 559,300 people. Employment changes within the various sectors of the industry fol low the pattern of output described earlier—declining in personal cleaning services, and increasing in the com mercial and industrial sector.7 With the exception of 2 years (1978 and 1979), employment declined steadily since 1966. 61977 Census o f Service Industries. 11977 Census o f Service Industries. Bureau o f the Census. BLS data for subsectors o f the laundry and cleaning industry are not available. 37 Chart 7. © ytpyt par h@yr ©f all persons and related data; flayndrf, ©learn" Sing, and garment services, 1©80-82 I nd©x„ 1 9 7 7 = 1 0 0 (R a ti© s c a le ) SOURCE: Bureau of Labor Statistics. 30 borers, and professional and technical workers are next in employment size, but, combined, account for less than 6 percent of those employed in the industry. New technology introduced into this industry has had an impact on employment in several occupations. The impact, however, cannot be specifically measured, nor isolated from factors such as changes in output. Blended polyester-cotton fabrics have probably had a greater impact on occupations and employment than any other technological change. Growing use of these fabrics since the mid-1960’s has reduced demand for people involved in traditional laundry work, and for those employed in pressing occupations. Washing operations are becoming increasingly mechanized and automated, which is reducing labor re quirements for several occupations. Automatic loading and unloading of washing machines, along with greater use of conveyor systems to move garments, linens, and related items from one wash station to another, has re duced the amount of manual handling required to move items through the various cleaning steps. Automatic control of machine-operating cycles and automatic in jection of supplies (soap, bleach, etc.) have reduced la bor requirements for equipment operators. Increasingly sophisticated and automated sorting sys tems are being introduced which reduce labor require ments in sorting operations. There also may be a re duction in skill requirements for some of the people performing marking, sorting, and assembly work. The use of these new and improved technologies will continue to grow in the laundry and cleaning indus try—but the growth will be confined primarily to the larger firms, such as industrial launderers, linen supply firms, and large general laundry and cleaning establish ments. As indicated earlier, there are many small firms in this industry that can neither afford nor make efficient use of such equipment. No significant change in occupations, attributable to technology, is expected in these smaller establishments. The rate of employment change varied over the past two decades. Between 1960-82, employment declined at an average annual rate of 2.5 percent. Within this period, however, employment grew at an annual rate of 1.2 percent from 1960 to 1967, declined at an annual rate of 4.9 percent in the 1967-73 period, then contin ued to decline at a lower annual rate of 1.6 percent from 1973 to 1982. The industry is a major employer of women. In 1982, nearly 2 out of every 3 positions were filled by women. The proportion of women to total employment declined slightly between 1960 and 1982, as the number of women in the work force fell by 35 percent, compared to a 30 percent drop for men. The outlook is for employment to decline between 1982 and 1990, according to b l s projections based on three versions of economic growth.8 The number of employees is expected to change at an average annual rate ranging from an increase of 0.2 percent to a de cline of 2.4 percent over the 1982-90 period. Nonsupervisory employees are expected to continue to make up a relatively large proportion (around 90 percent) of to tal employment. O esypations BLS projects a decline in employment, between 1980 and 1990, in each of the major occupational groups. Employment for professional and technical workers, one of the smallest occupational groups, is projected to decline by 14 percent. Declines for the remaining oc cupational groups are projected to be in the narrow range of 18.0 to 18.2 percent. In terms of employment share, two occupations—op eratives and clerical workers—account for about 4 out of 5 workers in the industry. Operatives, the largest occupational group, make up more than one-half of the total work force. Clerical workers, next in employment size, account for nearly one-fourth. The category of managers, officials, and proprietors and the category of craft workers make up 9 and 7 percent of the work force, respectively. Service workers, sales workers, la Adjustment of workers to technological change As indicated earlier, technological changes in com bination with a decline in demand for laundry and clean ing services are expected to bring about lower employ ment during the 1980’s. The majority of the work force does not belong to unions and formal measures to fa cilitate adjustment, including contract provisions that provide for advance notice, retraining, and transfer to other work, are not widespread. However, informal ar rangements that provide training and other assistance to employees affected by new technology also have fa cilitated adjustment. Improvements in technology are not expected to modify skill requirements to a significant extent, al though some changes in job requirements are evident. As laundry and cleaning activities become more mecha- 8 Projections for industry employment in 1990 are based on three alternative versions of economic growth for the overall economy, developed by the BLS . The low-trend version is based on a view of the economy marked by a decline in the rate o f expansion o f the la bor force, continued high inflation, moderate productivity gains, and modest increases in real output and employment. In the high-trend version I, the economy is buoyed by higher labor force growth, much lower unemployment rates, higher production, and greater improve ments in prices and productivity. The high-trend version II is char acterized by the high GNP growth o f high trend I, but assumes the same labor force as the low trend. Productivity gains are quite sub stantial in this alternative. On chart 8, level A is the low trend, level B is high trend I, and level C is high trend II. Greater detail on as sumptions is available in the August 1981 issue of the Monthly Labor Review. 39 Chart 8= Employment in laundry, cleaning,, and garment s@rwie®s31080=82 and projections for 1982-90 Employees (in thousands)1 1 Least squares trends method for historical data; compound interest method for projections. 2 See footnote 8 in text. 3 Data for nonsupervisory employees not available prior to 1964. SOURCE: Bureau of Labor Statistics. 40 nized, operators of washing machines and other pro duction equipment increasingly are removed from di rect involvement with machine operation. More time will be spent in loading and unloading clothes before and after processing, and monitoring equipment perfor mance. Basic laundry and drycleaning skills will con tinue to be acquired on the job in a relatively short time—under a week for many positions. However, train ing can be longer for skilled occupations such as spot ters, who must learn the characteristics of new types of fabrics and chemicals available to clean them. Slightly over one-third of plant workers in the laun dry and drycleaning industry are employed in estab lishments covered by collective bargaining agreements.9 This proportion was reported to be higher than the av erage for all service industries. Major unions in the in dustry include the Laundry and Drycleaning Inter national Union (AFL-CIO), the Amalgamated Cloth ing and Textile Workers Union (AFL-CIO) , and the Textile Processors, Service Trades, Health Care, Pro fessional and Technical Employees International Union. 9Industry Wage Survey: Laundry and Cleaning Services, A pril 1967 and A pril 1968, Bulletin 1645 (Bureau o f Labor Statistics, 1969). SELECTED REFERENCES Carnes, Richard B., “Laundry and Cleaning Services Pressed to Post Productivity Gains,” Monthly Labor Review, February 1978. Northey, Geoffrey A. “80/20 Blended Fabric: Fact or Fiction?” In dustrial Launderer, October 1980. “The Need to Improve Productivity,” Industrial Launderer, June 1981, pp. 28-29, 31, 33, 35, 41-43, 45. 41 Van der Giessen, Don; Herbert Deitz; and Roger K. McMillan. “ Gar ment Hangering for Tunnel Finishing,” Industrial Launderer, July 1980. Vickery, Mary L. “N ew Technology in Laundry and Cleaning Serv ices,” Monthly Labor Review, February 1972. ©eneral R@f@r@[mGeg U.S. Department of Commerce, Bureau of Industrial Economics. 1983 U.S. Industrial Outlook, January 1983. Bulletin 1312-11, 1979, and Supplement to Employ ment and Earnings, U.S. 1909-78, Revised Establish ment Data, July 1983. U.S. Department of Commerce, Bureau of the Census. 1981 Annual Survey of Manufactures, 1983. U.S. Department of Labor, Bureau of Labor Statistics. National Industry-Occupational Matrix 1970,1978, and Projected 1990, Bulletin 2086 (Volumes I and II), 1981. U.S. Department of Commerce, Bureau of the Census. 1977 Census of Manufactures, Industry Statistics, Au gust 1981. U.S. Department of Labor, Bureau of Labor Statistics. Occupational Outlook Handbook, 1982-83 Edition, Bulletin 2200, May 1982. U.S. Department of Labor, Bureau of Labor Statistics, Characteristics of Major Collective Bargaining Agree ments, January 1, 1980, Bulletin 2095, May 1981. U.S. Department of Labor, Bureau of Labor Statistics. Productivity Measures for Selected Industries, 1954-81, Bulletin 2155, December 1982. U.S. Department of Labor, Bureau of Labor Statistics. Employment and Earnings, United States, 1909-78, 42 O ther H IS PufeSseatoons ©n T@ehmol©gi©a! Chang® ergy Industries (Bulletin 2005, 1979), 64 pp. Out of print. Appraises major technological changes emerging in coal mining, oil and gas extraction, petroleum refining, petroleum pipeline transportation, and electric and gas utilities, and discusses their current and potential impact on productivity and occupations. Bulletins still in print may be purchased from the Su perintendent of Documents, Washington, D.C. 20402, or from regional offices of the Bureau of Labor Statis tics at the addresses shown on the inside back cover. Out-of-print publications are available at many public and school libraries and at Government depository li braries. Publications marked with an asterisk (*) also are available on microfiche and in paper copy from the National Technical Information Service, U.S. Depart ment of Commerce, 5285 Port Royal Road, Springfield, Va. 22161. Technological Change and Its Labor Impact in Five In dustries (Bulletin 1961, 1977), 56 pp. Out of print. Appraises major technological changes emerging in apparel, footwear, motor vehicles, railroads, and retail trade, and discusses their current and potential impact on productivity and occupations. The Impact of Technology on Labor in Five Industries (Bulletin 2137, 1982), 60 pp. Price, $5. Appraises major technological changes emerging in printing and publishing, water transportation, copper ore mining, fabricated structural metal, and intercity trucking, and discusses their current and potential im pact on productivity and occupations. Technological Change and Manpower Trends in Five In dustries* (Bulletin 1856, 1975), 58 pp. Out of print. Appraises major technological changes emerging in pulp and paper, hydraulic cement, steel, aircraft and missiles, and wholesale trade, and discusses their cur rent and potential impact on productivity and occupations. Technology and Labor in Four Industries (Bulletin 2104, 1982), 46 pp. Out of print. Appraises major technological changes emerging in meat products, foundries, metalworking machinery, and electrical and electronic equipment, and discusses their current and potential impact on productivity and occupations. Computer Manpower Outlook* (Bulletin 1826, 1974), 60 pp. Out of print. Describes current employment, education, and train ing characteristics for computer occupations, explores the impact of advancing technology on labor supply and education for computer occupations, and projects oc cupational requirements and implications for training. Technology, Productivity, and Labor in the Bituminous Coal Industry, 1950-79 (Bulletin 2072, 1981), 69 pp. Price, $5. Chartbook with tables and text; appraises some of the major structural and technological changes in the bitu minous coal industry and their impact of labor. Technological Change and Manpower Trends in Six In dustries* (Bulletin 1817, 1974), 66 pp. Out of print. Appraises major technological changes emerging in textile mill products, lumber and wood products, tires and tubes, aluminum, banking, and health services, and discusses their current and potential impact on produc tivity and occupations. Technology and Labor in Five Industries (Bulletin 2033, 1979), 50 pp. Out of print. Appraises major technological changes emerging in bakery products, concrete, air transportation, telephone communication, and insurance, and discusses their cur rent and potential impact on productivity and occupations. Outlook for Technology and Manpower in Printing and Publishing* (Bulletin 1774, 1973), 44 pp. Out of print. Describes new printing technology and discusses its impact on productivity, employment, occupational re quirements, and labor-management adjustments. Technological Change and Its Labor Impact in Five En 43 Outlook for Computer Process Control* (Bulletin 1658, 1970), 70 pp. Out of print. Describes the impact of computer process control on employment, occupations, skills, training, production and productivity, and labor-management relations. Technology and Manpower in the Textile Industry o f the 1970’s * (Bulletin 1578, 1968), 79 pp. Out of print. 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