WASHINGTON : Presidential Report Prompts Bill on Raising Workers’ Skills and Wages

One year ago the President’s Commission on Skills of the American Workplace issued a report calling for sweeping changes in how the nation educates and trains workers.

Challenging lawmakers, the business community and educators, the report said, “The status quo is not an option. The choice we have is to become a nation of high skills or one of low wages.”

Inspired by those words, Sens. Edward M. Kennedy (D-Mass.) and Mark O. Hatfield (R-Ore.) have joined House Majority Leader Richard A. Gephardt (D-Mo.) and Rep. Ralph Regula (R-Ohio) in introducing the High Skills, Competitive Workforce Act.

The bill is designed to stimulate cooperation by business, labor, schools, colleges and state and local governments in improving the global competitiveness of American business and industry.

“All of our major economic competitors invest more in training,” Kennedy said in introducing the bill last week. “A newly hired Japanese auto worker gets over 300 hours of training in the first six months of work. In contrast, American workers get less than 50 hours.”

The United States ranks ninth among industrialized nations in the percentage of gross national product spent on worker training, according to figures compiled by the Office for Economic Cooperation and Development. For example, Sweden spends 1.7%; Ireland, 1.4%; Italy, 0.8%, and the United States, 0.2%.

Not surprisingly, other nations’ wages are rising faster than those in the United States. According to the Bureau of Labor Statistics, between 1975 and 1990 wages rose 302% in Japan, 260% in Britain, 190% in Denmark and 122% in the United States.

In a speech before the American Federation of Teachers here recently, Ira Magaziner, chairman of the President’s commission, warned that the country’s economy is still modeled on the system of mass manufacturing pioneered in the early 1900s. The premise that worked well then--breaking each job into simple rote tasks performed by largely unskilled workers--no longer serves, he said.

The key to improved productivity is to revamp business and industry with high-performance work organizations, said Magaziner. To do so will require, he said, “more educated and skilled front-line workers, not just a small elite.”

The bill calls for developing educational and occupational standards to assess student performance and provide meaningful information on worker skills. It would also create a school-to-work transition program, including job placement help and second-chance programs for dropouts.

Additional work force training and education would be required, with employers either providing the help themselves or contributing 1% of their payroll to state-administered programs. Small businesses, however, would be exempt from this requirement.

Although the bill’s sponsorship is bipartisan, the measure will be controversial. But no one seems to argue that some solution is necessary.

“Even though the President and Congress have not stood up and said, ‘OK, we will make a choice. Let’s go for low wages,’ gradually and silent, that is the choice we are taking,” Magaziner told the teachers. “You can see the result. Ten years ago, America paid the highest wages in the world. Today, there are 11 other countries that pay higher wages. Put the picture of the hamburger on the cash register instead of assuming that the worker you hire can read.”

Commercializing Federal Research

It’s the scientific version of “all dressed up with no place to go.” Most basic scientific research is federally funded. But establishing links between the government and the private sector and putting that research to work in the private sector is not always easy.

The Small Business Innovation Research Program attempts to do just that. And during oversight hearings last week, the General Accounting Office and the Small Business Administration reported to the House Small Business Committee that the SBIR is the fastest formula for commercializing cutting-edge technology.

The program, which was introduced in 1981 by the chairman of the Small Business Committee, Rep. John J. LaFalce (D-N.Y.), was designed to give small firms access to federal research and development contracts and to increase the commercial applications of federally funded research. It requires the 11 federal agencies with outside research budgets of $100 million or more to set aside 1.25% of their budgets for small firms working on projects with commercial potential. In the fiscal year 1990, $461 million was invested in SBIR by these 11 agencies. The SBIR will be up for reauthorization in 1992.

Another of LaFalce’s programs that provides a link between the public and private sectors is the Technical Assistance Program. TAP provides technical assistance to small business through government-sponsored databases.

Bill Targets Write-Off for Moving Expenses

The Treasury would get a lot of mileage out of a new bill (H.R. 562) introduced by Rep. Brian Donnelly (D-Mass.) that would make it harder to deduct moving expenses, saving the government more than $2 billion in the next five years.

Under current law, a taxpayer can generally deduct moving expenses if the move is related to work at a new location. The new workplace must be at least 35 miles farther from the former residence than the former workplace was from the former residence. Donnelly proposes raising that distance to 200 miles.

Business interests are concerned that the bill could hurt labor mobility.