April 6, 1983
Well, I thank you, Governor Thornburgh. Senators and Representatives, the distinguished guests here at the head table, our Secretary of Labor, and you ladies and gentlemen, I thank you all for a very warm welcome. And I want to thank the National Alliance of Business for inviting me to this important conference on the dislocated worker. I come not only as a speaker but as a possible victim. [Laughter] I know this is a bipartisan gathering, but -- [laughter] -- I assume there are a number of Democrats who would just love to dislocate me. [Laughter]
But it's nice to be in the hometown of two very fine teams -- the Pirates and the Steelers -- and not to mention, the hometown of Governor Thornburgh and Senator Heinz.
But I came here today to talk to you about our unemployed citizens. First, I want to say how instrumental you are to this effort of helping displaced workers find jobs. You -- the business leaders, union officials, agency heads, educators, and members of various councils -- are great resources, and I'm so glad to see you joining together to exchange ideas. You can help those frustrated steelworkers, some of whom are across the street venting their confusion and anger as we meet. And it's no wonder they're confused. The economy is getting better, but they don't see their prospects improving.
You might have noticed that I always seem to attract attention when I pull out the want ads and talk about unemployment. I'm usually criticized and very often misunderstood or, perhaps I should say misinterpreted. I don't use the help wanted ads to suggest people are not seriously looking for work. My purpose is to point out that in this time of great unemployment, there are jobs going unfilled for a very definite reason. A couple of Sundays ago I read through the help wanted ads in the Pittsburgh Press, and it's obvious why so many unemployed are frustrated when they see jobs are available. Like this ad that's for something called a medical records coder: ``Position requires an A-R-T or equivalent experience and knowledge of medical terminology and ICD - 9 - CM coding.'' [Laughter] Or this one that seeks ``an achiever in the structured COBOL and/or RPG II.''
But this one from a personnel agency dealing only with computer people illustrates perfectly the point I want to make, so I'll read you the entire ad: ``Systems Programmer -- Large Scale IBM, VTAM, TSO/SPF, ACFII, CICS, OS/MVS.'' The point is that we're in a new age. [Laughter] No longer do the ads simply offer jobs with good hours and no heavy lifting. [Laughter] You have to be a specialist to know what the ad is even about. [Laughter]
Yes, there are lots of jobs in this paper and in papers all across the country. But the skills needed for the jobs don't always match the skills of those who need the work. The permanently laid-off steelworker has never had the training even to understand what these want ads mean, let alone to apply for the position. And I can tell you right now, I don't know what they mean.
And many of the jobs are not around here but in Florida or Virginia or beyond. I could have brought more newspapers with more ads, but they're in areas far from the homes of Pennsylvania's unemployed. And it's this mismatching of skills and geography that has brought all of you together.
Let me tell you how we intend to deal with this ``structural unemployment,'' as you experts call it. But first, I'd like to say a few words about cyclical unemployment, which seems to get most of the media attention.
As you know, cyclical unemployment results from changes in the business cycle, the ups and downs of the overall economy. About half of our current unemployment is the direct result of the recession. Now, the best cure for this is to get the economy moving, and we're doing just that.
The leading economic indicators, and you probably know, are positive, and I can tell you, so am I. January's surge was the largest in 33 years. The indicators are up for February as well. The double-digit inflation of 1980 has been knocked down to 0.4 percent in the last 6 months, the lowest 6-month rate in nearly 22 years. And the prime interest rate, which was 21\1/2\ percent when we took office, is down to 10\1/2\ percent today, and we're not finished with it yet.
Housing starts and permits are at the highest level since September of 1979. Unemployment, while still painfully high, has decreased to 10.3 percent from a 10.8-percent peak in December. And if you count our men and women in uniform as employed, and they should be, the rate is 10.1 percent. I just found out recently that we haven't been counting them, but when they leave the service, we count them as unemployed. So, there's 2 million of them or so that are in uniform, and most of them seem to like their jobs very well.
But with the help of Senators Heinz and Specter and Congressmen Clinger and Ridge here, we've tried to ease the transition for some of the unemployed with a $4.6 billion jobs and humanitarian relief package. This legislation will increase job opportunities by speeding up public works and construction projects that were already on the books but were scheduled for later implementation. And it also provides extra funds for social service and health assistance. But, to be honest, this aid will help only to a limited extent. An improving economy is the quickest, best, and most potent antidote for those citizens who were laid off because of the recession.
We've fought hard for this recovery, and we're not going to see it shattered. The so-called alternative budget recently passed by the House of Representatives, on the other hand, calls for a $315 billion tax increase over the next 5 years and an almost $200 billion increase in domestic spending. It provides for recovery all right -- the Congress' recovery of money that belongs to America's wage earners and taxpayers. It's a reversion to politics as usual, taxing and spending more and more of your money. It would cancel both the third year of the tax cut and indexing, which protects the wage earner from being kicked into higher and higher tax brackets. And more than three-fourths of the tax relief and indexing will go to lower and middle-income earners. To those who would consider changing those tax laws, I'm sleeping with a pen under my pillow, ready for veto.
I have two direct and moral questions for every Congressman who voted for this alternative budget. How can you justify hitting the median American family with a $3,550 tax increase over the next 5 years? And how can you support a budget that would threaten the recovery just as it's getting underway? I've never seen a budget proposal with a more flagrant disregard for its consequences. And those consequences would be more unemployed Americans, higher interest rates, more government spending, and a recession worse than the one we're just emerging from. The American people have suffered long enough because of the economic mistakes of the past, and I'm not about to let them be plunged into that same mess again.
There's been a lot of talk on Capitol Hill about multibillion dollar make-work programs as an answer to recession. Those responsible for the alternative budget support this idea. It's not a cost-effective idea, and it certainly is no road to permanent economic recovery.
Now, structural employment is not the result of temporary slumps in the economy, as we've just been discussing. It's caused by deep and lasting changes in science, technology, competitiveness, and skills. And you just can't cure that with a quick-fix solution.
When I signed the Job Training Partnership Act last October, I pledged it wouldn't be another bureaucratic boondoggle but would provide real help. And I stand by that promise. Our aim is to train up to a million unemployed Americans each year in skills useful in the private sector. And to that end, we're requesting over $3\1/2\ billion for this program in 1984.
The vital difference between this program and the failed ones of the past is that this time, private employers will take the lead, not the Federal Government. Private employers will work with State and local officials to ensure positive results.
Too often in the past, the bulk of funds set aside for government job training programs was used to pay bureaucrats rather than to help those without jobs. In recent years under CETA, only 18 percent of the money was actually used for training the unskilled. No one knows better than private employers the skills and training needed by today's employees, and that's where we're putting our emphasis and our efforts.
Recently we sent to the Congress a package of new proposals providing incentives for businesses to hire the long-term unemployed. Under our proposal, a worker who's been unemployed for an extended period could convert his unemployment benefits into job vouchers which would entitle his new employer to a tax credit. The overwhelming majority of those who've been unemployed for long periods would gladly trade their benefits for a job, if they could only find one. Well, this voucher gives them a better chance to do just that.
We also want to more than double the money for that part of the Job Training Partnership Act that helps displaced workers. This program offers grants to the States for retraining, job search, and relocation assistance to dislocated workers. And we also propose allowing States to use up to 2 percent of their unemployment insurance tax revenues for reemployment assistance. Now, this could mean another several hundred million dollars.
The old cliche that you can't get a job until you have experience and you can't get experience until you have a job really is true for too many of our young people, especially minorities. One of the main reasons many teenagers have difficulty finding jobs, especially their first job, is the current minimum wage. Employers simply can't afford to pay this set amount to kids with no work experience. So to help young people find jobs, we've proposed a youth opportunity wage 25 percent below the regular minimum of $3.35. Young people, of course, don't have to accept this amount, and I know many of them will be able to command the regular minimum wage or more. But this new wage will allow those who don't have any experience to make a start in the workplace. What we're trying to do is get them in the door and give them some experience so they can move up the pay scale. And since the special wage applies only in the summer, there's no danger of displacing current workers with young people at a lesser wage.
Also, working in partnership with the National Alliance of Business, we've been asking employers to set aside summer jobs for kids who really need them. In fact, companies can qualify for tax credits of up to 85 percent of the wages paid to each eligible youngster certified by the Job Service.
Any lasting solution to the problems that we've been discussing today must have the support of the private sector. And here, too, the news is encouraging. Let me tell you about one displaced workers program right here in Pennsylvania. In 1980 the Crucible Steel plant in Midland, Pennsylvania, started laying off hundreds of experienced workers. Soon after, the Crucible management and Local 1212 of the United Steelworkers union joined together to help the employees. With technical assistance from Federal, State, and local governments, they formed what they called a Job Search Club. The employees learned what jobs were a logical extension of their previous work experience. And then they learned how to write a resume and interview for that job and, if need be, where to go for training. Although a relatively small group of 125 employees participated, the club worked. Many found new jobs in steel, as well as in other industries. The workers also acquired new confidence and skills that will enable them to get better jobs as the economy expands. Well, we want to duplicate the success of the Crucible Steel case across the country, and we're working with the NAB, the AFL - CIO, the Labor Department, and the private sector to do just that.
You know, I receive all kinds of letters from our unemployed citizens. Some are full of pain and a loss of self-respect. Some are determined and hopeful. Some are confused and angry. But I think the most perplexed are those letters from displaced workers. Most of these men and women have been in one industry, if not one company, for the better part of their working lives. The mill or the plant had always been open, perhaps even since their father's or their grandfather's day, and they assumed it would always be that way. Their employers represented America's strength and vitality as an economic power. How could the major employer in the town, the very lifeblood of the town, close its gates and lock its doors? This was as inconceivable as the town itself closing down.
But we know the plant can close no matter how essential it is to the employees and the townspeople. We know that America's economic strengths change and grow in different directions, sometimes without regard to the people who serve the old industries. This is called the free market, and it's what gives our children and their children an economic future.
I believe that we as a nation owe an obligation as well as a helping hand to those who pay the price of economic readjustment. Government -- Federal, State, and local -- should provide support for job training and reemployment assistance. Business and labor, working in partnership, also have a responsibility to ease this transition and prepare their employees and members for the future. Educators, as well, are challenged to tailor their curriculums to the employment needs of the future. In one way or another, we all have a positive role to play.
I came here today to tell you I support your efforts wholeheartedly, and I'm trying my hardest to make real changes in Washington that will help get our people back to work. As I've often said, we want real work for our citizens, not make-work. We want an economic future based on growth, not on fighting over smaller pieces of prosperity. I believe in what you're doing and, even more importantly, I know those that you've helped believe in it. Together, we can make America and the American dream the inspiration they were always meant to be.
I thank you for inviting me, letting me participate even in this little bit in your conference. And God bless you all.
Note: The President spoke at 1:32 p.m. in the International Ballroom at the Hilton Hotel following remarks and an introduction by Governor Richard L. Thornburgh.
The 2-day conference was sponsored by the National Alliance of Business and 12 other organizations and was attended by approximately 500 policymakers and leaders from private and public organizations with an interest in labor market transition efforts.
Prior to his participation in the conference, the President attended a Republican leadership reception at the hotel. Following his remarks at the conference, the President returned to Washington, D.C.