Reich May Become New Kind of Labor Secretary : Transition: Clinton’s nominee champions some controversial ideas about workers, infrastructure.

Robert B. Reich hardly fits the conventional mold of secretary of labor.

Traditionally the post goes to someone who views the job as the Administration’s liaison both to organized labor and management, and focuses largely on labor-related regulatory issues.

But, if Reich attempts to put into practice the theories he has preached in his published work and as a lecturer at the Kennedy School of Government at Harvard University, the post might be more properly named secretary of the workplace.

By picking the 46-year-old Reich--whose views on trade and industrial policy are highly controversial with both union and corporate leaders--President-elect Bill Clinton has signaled that he hopes to break free from the traditional Democratic approach to labor issues.

And by putting Reich--chief economic adviser during the transition and one of Clinton’s oldest friends--at the head of the Labor Department, Clinton also seems to be sending a message that the agency will no longer be a policy backwater, as it was throughout the Reagan-Bush era.

Yet Reich’s move to the Labor Department still came as a surprise to some observers, who had expected him to assume a front-line economic policy post in the Clinton Administration. After all, Reich’s ideas formed the basis for many of the economic proposals Clinton made in the presidential campaign, and during the transition he has been in charge of the team that is shaping Clinton’s campaign promises into a concrete agenda for governing.

Over the past few weeks, however, the notion of a liberal like Reich orchestrating broad economic policy had sent shivers through the financial markets.

What’s more, his lack of professional training in economics and his inexperience in dealing with the details of tax and budget issues effectively took him out of the running for the jobs he was rumored to be interested in: director of the Office of Management and Budget or chairman of the Council of Economic Advisers.

Meanwhile, he repeatedly rejected the idea that the job of running Clinton’s new Economic Security Council was tailor-made for him. He said he doubted that the council would play an important role in formulating policy and so had no interest in it.

The result was that while Clinton turned to moderates to fill his senior economic posts, Reich’s role in the Administration seemed up in the air for a time.

Still, Clinton stressed Friday that Reich will be an important Administration player.

“The position of secretary of labor is a vital part of my economic team because investing in the skills and training of our work force is central to our strategy for economic growth,” Clinton said in Little Rock, Ark., on Friday.

“I named my economic plan ‘Putting People First’ to highlight my belief that our nation can only become a high-wage, high-growth economy if we make a commitment to invest in the American people. . . . That is why I am naming today one of my most trusted advisers and closest friends to the position of secretary of labor.”

The central theme that runs through much of Reich’s work is an argument organized labor finds hard to swallow: That in the modern economy, there is little government can do to stop international corporations from moving their investments and factories from one country to another.

Global, multinational corporations, Reich argues, are essentially stateless entities always searching for the most productive environment in which to operate. And national trade barriers do little to interrupt that flow of jobs and production from one place to another.

In the future, Reich wrote in his new book, “The Work of Nations,” there “will be no national products or technologies, no national corporations, no national industries. There will no longer be national economies, at least as we have come to understand the concept. All that will remain rooted within national borders are the people who comprise a nation.”

Given that rather cold analysis, Reich has a surprisingly optimistic, liberal prescription for the problem. He believes government should take the lead role in making the United States a more attractive place for those corporations to locate, both by improving the skills of American workers and enhancing the nation’s infrastructure.

Critics have called Reich’s theories “Field of Dreams” economics--if you build a better country, corporations will come. Many economists believe that he has far oversold the importance of both training and public-works spending in shaping a nation’s international competitiveness.

Yet few can argue with Reich’s bottom line: America needs to devote far more resources to improving the job and educational skills of its work force if it hopes to keep up with countries like Japan and Germany.

And Reich made it clear that he sees his mission at the Labor Department as a broadly defined one: to make America work smarter.

“I’m excited about this job because there is the possibility of working with a President who understands the importance of investing in people as a means of achieving economic growth, who understands and knows that the only way we can achieve . . . a higher standard of living is if we, as workers, are more productive, every one of us.

Reich’s posting to the Labor Department seems to offer yet another glimpse into Clinton’s overall strategy as he puts together his Administration. After selecting moderates from Congress and Wall Street to fill his most visible economic policy posts, reassuring the financial markets about the direction of his policies, Clinton now apparently feels free to appoint liberals like Reich to posts in which they will not send off alarm bells in the business and political Establishment.

Organized labor, while fearful of many of Reich’s ideas, still found comfort Friday in Clinton’s having placed a close confidant in the job.

“He’s going to be a full partner in the economic policy-making apparatus,” said a spokesman for the AFL-CIO in Washington. “We think it is important someone of that status be in (the Labor Department.)”