TIME: Almanac 1993/TIME Almanac 1993.iso/time/072390/0723510.000

Text File | 1992-08-28 | 7.9 KB | 179 lines

                                                                                INTERVIEW, Page 12

Will Americans Work For $5 a Day?


Former Labor Secretary WILLIAM BROCK warns that we must either
provide better training for our workers or risk paying Third
World wages


By GISELA BOLTE and William Brock


    Q. Do we have a work-force crisis?

    A. Yes, but it pales in comparison with the management
crisis. Workers work with the tools they are given. Workers do
not reorganize the workplace. Managers do. It has to tell us
something if Japanese and German and Swiss firms come to the
U.S., put up a plant, hire American workers and produce a
competitive product that is better than one produced in an
American plant. It happens too often.

    We can make our workplace so much more fun, and we can get
rid of so much overhead. We have as much bureaucracy in some
of our businesses as we have in Washington, because by
de-emphasizing the quality of workers, we have to increase the
number of supervisors. What a waste.


    Q. What kind of labor force does America need?

    A. All my life people have talked about the global economy
in prospect. Suddenly it is here. We are moving in the most
fundamentally different world in history, a world in which
individual nations are increasingly vulnerable. Governments are
going to be faced with increasing pressures to deal with issues
like global growth or the environment or drugs that are almost
invariably subject only to an international solution.

    In economic terms, the world is moving beyond multinationals
to firms that are truly transnational. The successful firm will
be one that is very fast on its feet, capable of short
production runs, short product life cycles, very creative, very
flexible. That will drive them to have a work force that is
equally flexible and responsive and that can adapt to rapidly
and even radically changing economic demands.


    Q. We have had economic growth for seven years. Why worry?

    A. We increased our production significantly. We did it in
part by investing in more productive equipment. But the biggest
single source of growth came from the surge of women, young
people and immigrants into the work force. That pool of
low-skill, low-wage labor is going to dry up. If we are going
to have growth, it has to come from greater human productivity.


    Q. And what has happened to productivity?

    A. The rate of improvement is half of what it was 20 years
ago. The only reason family income is up is because we've got
two-earner families. Wages in real terms are lower today than
in 1973. Business tried to pull wages down and put in
laborsaving machinery because so many workers who are coming
in from our educational system cannot read and write. The easy
answer is to buy the most idiot-proof machinery so business can
continue to compete.

    Today every country in the world can buy the same machinery.
If there are people in other parts of the world who will work
for $5 a day and they have the same equipment as Americans who
want $10 or $15 an hour, either we have to change the way
people work here -- not only work harder but smarter, more
effectively -- or we have to compete on the basis of wages. The
choice is between high skills and low wages. We seem to be
continuing to compete on the basis of wages, which means that
the effort will constantly be to pull wages down instead of
building skills up. We are making the wrong choice.


    Q. What is the consequence of going the low-wage route?

    A. We take on the characteristics of a Third World country
after a while. We will gradually have less and less net real
income in the U.S. Our savings will continue to be inadequate,
and businesses will have to either shut down because Americans
won't work for Third World wages or go overseas for their
production. The net effect is an economy that goes downhill
very fast.


    Q. What are businesses doing about upgrading the skills of
their workers?

    A. Less than 1% of our businesses are spending 95% of the
training money. Most are doing very little, and the ones that
are doing very much are using their funds to train management.
There is almost nothing in most companies for the great
majority of workers, but the workplace is changing underneath
their feet. The average young person coming out of high school
today will have at least four to six jobs in his working life,
two to three different careers. If workers are given continuing
training and education by the firms they work for, that is not
going to be a problem. If they are not, we are going to leave
15% to 30% off to the side of the road every year. We proposed
in our Commission on the Skills of the American Workforce that
those firms that do not train their workers pay a 1% tax so
that we as a country can train them and that those employees
are not disadvantaged by working for those companies.


    Q. Is this the fault of the public schools?

    A. We have put our emphasis on the college bound, who are
30% of our young people. We have the finest university system.
We have public education at the elementary and secondary level
that ranks below every industrial competitor we have in the
world. Everybody knows what it takes to get into college. Has
anybody ever told a teacher what it takes to be productive if
you don't go to college? The answer is no. We have not
dignified alternatives to college. We are the only country in
the industrial world that says to 1 out of every 4 of its young
people, We are going to let you drop out of sight; we are not
going to give you the tools to be productive. No wonder they
drop out, because the market signal says to them, We don't care
about you, so leave school. If you haven't got anything, $4
an hour sounds like a lot of money. The trouble is that they
are still making $4 an hour when they are 30, and then they
cannot feed and clothe their own children.


    Q. Why haven't the schools made better use of the money they
have received?

    A. Education is the most backward single institution in all
the U.S. I don't know of an industry that spends less money on
research and development. It is not for lack of money. It is
a lack of intelligence and will and competence. It is a
bureaucratic inertia that is unbelievable and inexcusable.
Between 38 cents and 41 cents of our education dollar gets to
the classroom. That is an act of irrationality. We are not
putting our resources where the kids are. In the city of New
York there are more school administrators than there are in all
of France. In the state of New York there are more
administrators than there are in all of the European Community,
and the E.C. has 12 countries and 320 million people.


    Q. You don't sound very optimistic.

    A. It is way too early to condemn the U.S. to doom. We are
dealing from strength, not weakness. We are still the most
productive country in the whole world, in part because we are
efficient in other things like distribution, marketing and all
the services we have that are world class. We invested more in
the past, and we are still living off those investments. We
have the capacity to change, but it takes a conscious decision,
and change is painful. The storm clouds are out there.

    One of the nice things that has happened is that we have got
international competition, and it is sending us urgent signals
to get with it. The good companies have heard the message. Look
at Xerox, Motorola. You can just see the surging excitement of
those companies. They don't take any garbage. They are not
going to take any unfair competition from overseas. They are
willing to fight for their rights. But they have no fear about
competing on any playing field anywhere with anybody, because
they think they and their people are that good and they are
willing to commit resources to research and development. But
they are the minority, and that's the concern.