DALLAS – A colleague’s advice and a willingness to learn new skills saved Valerie Vedda’s job.

Even as Verizon Communications Inc. let go three secretaries in her department, Vedda kept her job because she took a co-worker’s counsel six years ago and studied HTML, the Internet language. Today she spends her days coding and posting news releases to the phone company’s Web site, not answering phones.

“I have been on the chopping block many a time when they were cutting the administrative staff,” Vedda, 47, said.

“The senior vice president was critically aware of what I brought to the table. He said, “No, no, she is not just an admin. She does a lot more than that.’ That skill is what saved my job.”

Her foresight might have spared Vedda from becoming one of 1.4 million U.S. secretaries who lost or left their jobs from 1992 to 2002. That occupation, along with hundreds of others, has undergone sizable cuts as businesses replace people with computers and other technology for repetitive and routine tasks.

Automation and the resulting job reductions, some in layoffs and others through attrition, have boosted America’s productivity to an unprecedented level in recent years. They have also reshaped the workplace.

This surge may be a central reason for the anemic job growth during this economic recovery, economists say. Businesses can be reluctant to hire when they can get more work done with as many or fewer workers.

Measured by dividing the nation’s total output by each hour of work, productivity has grown at an annual average rate of 3.55 percent from 2000 to 2003. That is a full percentage point higher than the average from 1948 to 2003. It is also greater than the average for any decade in the last 50 years.

“It’s a fundamental transformation of the economy,” said W. Michael Cox, chief economist and senior vice president at the Federal Reserve Bank of Dallas.

“It may not be quite as profound as the Industrial Revolution, but I think that we have invested in technology to the point that we are finally realizing some very tangible, meaningful, dramatic benefits,” said Gary Kelly, chief executive of Southwest Airlines Co.

Cox credits the Internet and related technologies with remaking the American economy, just as the railroads did in the 1800s by allowing the free flow of goods.

“The Internet is like the train – it’s the world’s first experience with free trade of information,” he said.

History is replete with examples of technology disrupting jobs. Buggy whip makers were sidelined by the automobile industry, the steam engine reduced the need for brute strength and so forth. But economists say the Internet and other computing tools have accelerated the pace of change.

In this new world order, workers will be under greater pressure to learn new skills as Vedda did, lest they lose their jobs and face the prospect of taking lower-paying ones.

That is cold comfort to the 478,000 textile and apparel machine operators and 247,000 bookkeepers whose jobs no longer exist.

The economy is still creating good jobs. Even with the tech downturn of the last few years, America minted 1 million new computer systems analysts and scientists between 1992 and 2002. Elementary schools added 707,000 teachers, and 332,000 accountants and auditors joined the work force.

But for many Americans, those new jobs are proving harder to get, labor experts say.

“They are all jobs that require post-secondary education, and it’s becoming increasingly difficult for families – middle- and lower-middle-class families and certainly poor families – to be able to afford to send their kids to college,” said Robert Reich, labor secretary in the Clinton administration and now a professor at Brandeis University. “The wage gap between college and noncollege educated workers continues to widen.”

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Businesses that have reaped productivity benefits say they must move forward and adopt the technology.

Southwest Airlines has closed three call centers, laying off 1,100 agents who didn’t want to relocate and moving 800 others to different offices. Its telephone reservations centers are handling almost half as many calls today as they did seven years ago because 60 percent of its customers reserve flights on the company’s Web site.

The airline, one of the few that’s still profitable, is adding pilots, flight attendants and other workers because it is adding planes and routes. Southwest’s total staff is unchanged, even with a 7 percent growth in business this year.

Kelly said technology has allowed the company to fare well despite intense competition and rising fuel prices. New technologies are also improving customers’ experiences. About 25 percent to 30 percent of them now check in for flights at kiosks or online.

“Any way you look at it, you want companies to be viable, to be competitive and be profitable,” he said. “And that is the best way to provide jobs, not to force jobs in where you could do things more efficiently.”

Atmos Energy, the Dallas-based gas company, is on track to reduce its staff by 225 in five years. By employing wireless technologies, Atmos won’t need as many technicians and meter readers. Executives said they haven’t resorted to layoffs, thanks to attrition.

In West Texas, the company has started outfitting gas meters in the middle of irrigation fields with wireless transmitters that beam up readings to a receiver aboard a light plane that flies over once a month. It has already outfitted 3,500 of 13,000 meters in the area and plans to install 5,000 more in the next year.

The pilot “will take an average route that, say, took a person 10 hours to drive out and do, and he’ll do it in about an hour by airplane,” said Russell Campbell, an information technology manager for Atmos in Lubbock, Texas.

With rail shipments growing at an unprecedented pace, Burlington Northern Santa Fe is hiring locomotive engineers and conductors. But at the same time, the railroad is implementing wireless, computer and voice technologies to reduce paperwork and clerical jobs.

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Clearly, businesses are investing in information technology as never before. Software and computing hardware now account for 58 percent of corporate capital spending, up from 35 percent in 1995, according to Stephen Roach, chief economist at Morgan Stanley.

“America is riding the crest of eight years of spectacular productivity growth – an outcome that most believe has now become a permanent feature of the U.S. economic landscape,” Roach wrote in a recent report.

But unlike Cox and other champions of the new order, Roach doesn’t believe the economy can continue on cruise control. He says businesses have squeezed about as much as they can from workers and technology. Companies will soon have to ease staffing limits and wage controls.

“The productivity miracles of the past eight years may simply not be sustainable,” he wrote.

His is not a popular opinion among business executives and economists.

“We’ve only scratched the surface,” said Paul Strassmann, a former chief information officer for Xerox and the Pentagon. “The first 50 years of computerization was spent automating increasingly complex tasks, but we really did not help people be much smarter, and in the process we have accumulated enormous administrative costs.”

Strassmann says the U.S. economy still has enormous inefficiencies, including high labor, health care and overhead costs. Technology can still do much more to help reduce those expenses.

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Burlington Northern executives concur.

In October, the railroad is beginning a test of technology that can detect whether a train has strayed onto portions of track that it’s not authorized to be on. Dispatchers at the company’s Fort Worth, Texas, headquarters could even stop the train if the engineer on board is unable to do so.

“We have a voracious appetite for technology,” said Gregory W. Stengem, vice president for safety, training and operations support. “I bet we could have had analysts say that (productivity growth was ending) when we retired the steam engine.”

Back at Verizon’s offices in Irving, Texas, managers and secretaries are settling into their new roles and relationships.

Now that Vedda is no longer answering the phones in the media relations department, the phone company’s representatives have turned to a new Verizon service to manage office and cell phone calls.

They can control how and which callers reach them. Spread from New York to Washington state, the company’s public relations staff can also work together more easily.

“With one touch of a button, we can establish a conference call that in the past an administrative assistant had to set up,” said Bill Kula, a director of media relations.

They are also doing their own filing, travel reservations and expense reports.

“I had to adjust,” said Bobbi Henson, a director of media relations. “But now I like it, because I like playing around with my travel reservations. I can see all the options for flights and hotels.

“As you can see, I am still figuring out my own filing system,” she said, pointing to bright yellow folders sprawled across her desk.

Vedda bubbles with excitement as she listens to Kula and Henson. She takes pride in their newfound independence.

“I am a lot more productive,” Vedda said. “My time is not spent running a message. … Change is good.”

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(c) 2004, The Dallas Morning News.

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AP-NY-10-19-04 1245EDT