Reich Cites Falling Wages as Administration Failure : Economy: He points to data showing declining pay levels amid rising business productivity.

Labor Secretary Robert B. Reich suggested Thursday that the Administration is failing to achieve its original economic objective of providing better wages and jobs.

Citing new government data released Thursday showing that wages are falling sharply even as business productivity is surging, Reich said that many American workers have not benefited from the nation’s economic recovery and are struggling to make ends meet.

The new data is a sharp warning to the nation that “trickle-down” economics is still at work, he said. And, using populist rhetoric at odds with Clinton’s efforts to persuade the financial markets that he is a fiscal conservative, Reich attacked Wall Street for greedily cashing in, rushing to record highs in the Dow Jones industrial average on the backs of American workers.

“Since the beginning of the recovery, employers have done everything they could to prevent” workers from achieving higher wages, Reich said in an interview.

“Employers have been able to do so because of new technologies coming on quickly, and because of the continued loss of bargaining power by organized labor. Combined with a relentless determination by Wall Street to demand short-term profits, all of this has conspired to force wages down.

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“No wonder [the stock market] is setting new records,” Reich said. “The consequence is that we have seen a substantial redistribution of income from people who work to people who own the financial assets of this country, most of whom are quite wealthy.”

Reich’s comments came in response to Bureau of Labor Statistics data showing that average U.S. wages suffered their largest decline in eight years. That report came as the government released separately new statistics showing that the productivity of American businesses had surged 2.1% during the same period. And, in the first quarter of 1995 alone, productivity rose 2.7%. Productivity has now outstripped wage growth for two straight years.

Traditionally, wage growth moves in step with productivity gains. Because productivity stems from efficient work forces, productive businesses are more profitable and have more money to pass back to their workers.

But average compensation costs for all U.S. workers fell 3% between March, 1994, and March, 1995--the largest decline since the Labor Department began keeping track of the data in 1988. What’s more, average wages and salaries fell 2.3% during the same period. The Labor Department said the fall in overall compensation was caused in part by plunging health care benefits for U.S. workers.

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Reich said the new reports raise serious questions about the direction of economic policy. “This data sharply reveals what’s happening to the middle class,” he said.

Reich said the new figures make it clear there is no need for a capital-gains tax cut because affluent owners of stocks and other assets don’t need any more breaks.

“This is the clearest evidence yet of the effects of trickle-down economics. How can anyone with a straight face propose a capital-gains tax cut, when owners of capital are running off with these gains from workers?” he asked.