(00:00:00) I as Frank noted had a lot of fun and he four years for 30 years. I had his United States trade representative. There are few areas more contentious than International Trade right now the challenge in the excitement the fun of that job was pretty spectacular. And I will admit that when the president suggested I move over to the Department of Labor. I am I viewed the invitation with something. Close to mixed emotions. but the more I thought about it the more excited I got The department is an interesting place. Most of the agencies of government have to do (00:00:51) with (00:00:54) pretty specific issues productivity or education or agriculture the Department of Labor has In some ways a more encompassing responsibility. We're more in the people business of government to try to see that whatever we do economically socially politically That we keep people involved and part of the process. When you look at the range of responsibilities, it's a bit. Awesome. I'm responsible as most of you know for administering the occupational health and safety act. That act was written by my best friend in congress bill Steiger Wisconsin back in the actually introduced it in the late (00:01:52) 60s. (00:01:55) And Bill and I had some fairly heavy disagreement on whether or not the federal government could do that job? I think in some ways I was right in suggesting that it was virtually beyond the Ken and competence of the federal establishment. He was right in the fundamental National urgency of establishing a safer and healthier workplace for the people of this (00:02:20) country. (00:02:24) And I guess if I have an objective in this area. It can be stated succinctly. It is to convince. This economic community of ours that it is good business to operate a safe and healthy workplace. To do so to the extent that is humanly possible by education by cooperation by communication. Not by confrontation, but I should say that accepting the fact that 99% of us in this country stop at stop signs because they are there and because we're law-abiding people and we don't have to have a policeman at every corner. There are others who will go through a stop sign or red light in there are others who will violate any and every law just because they have that perverse nature. People do violate the (00:03:19) law. We will enforce it. (00:03:26) We have the responsibility of overseeing the pensions the private pensions of this country. And I really just had no idea. What an enormous responsibility that (00:03:43) was? (00:03:46) When I was told I guess in the first two weeks of my tenure and in the department that we were supposed to regulate one trillion trillion not billion trillion dollars worth of (00:04:00) assets. (00:04:03) It was a bit of a shock for a Tennessee (00:04:06) hillbilly. (00:04:12) 25% of all, the corporate stock in the United States is held by these pension plans 50% of the corporate debt. It is the largest single source of private Savings in the United States. It is the largest single source of venture capital. and While it's one trillion now, it's doubling almost every 10 years certainly before the end of the century. It'll be two trillion could be three or (00:04:42) four. (00:04:45) But more than that before the end of the century. Private pension pound plans will have over fifty percent of the common stock to this (00:04:56) country. (00:04:59) in one of my conversations with some of our (00:05:03) labor (00:05:04) leaders I suggested to them that. Karl Marx would be a would be astonished that we have achieved the worker's Paradise before the Soviet Union because this country will be owned by the workers of the United States before the end of the century. Over half of all of our assets that's a phenomenal come in. On the instinctive creativity of this remarkable country of ours. Say something very nice about us and about what we're doing. I'm supposed to have the responsibility of trying to keep our skills upgraded in the country through training and retraining. We administer the job training Partnership Act million people 95% of them (00:05:58) disadvantaged (00:06:01) 46 percent of them are minorities 42% of them have come from a welfare dependence. And with that vase we're still placing 68% of them in jobs real jobs at a dollar and twenty cents above the minimum wage and I think the reason this program is successful. In contrast to the old program that we had originated in the 70s. The Ceta program is because it's run at the community level by Private Industry councils 68,000 people like you are serving on those councils across this country voluntarily without compensation. So that the people that are being trained are being trained for jobs that exist. Rather than jobs that don't exist. I think that the real tragedy of the old program was it not only we're wasting a lot of money which we were only 18 percent of the funds were going for training today. We're spending seventy percent of the funds for training. The real tragedy was in training somebody as a human being for something that wasn't there. And what that has to do to human motivation? You come out and you put yourself into a training program. You tried you've been taught and then you found that there is no place to go no (00:07:26) job. (00:07:29) I think is both economically and ethically wrong. Maybe the most important responsibilities we have in the department is to try to increase our national ability to compete our productivity by removing those barriers. Which inhibit Productivity today and they cover a lot of territory. They may be about educational system or an inadequate one. They may be a pension plan. That doesn't allow Mobility. They may include no or inadequate training (00:08:10) opportunities. (00:08:14) But those are things we have to deal with because we are in the middle of the fastest changing economy in the history of (00:08:20) mankind (00:08:22) is going to stop we are living what Toffler called Future Shock. The second book the third wave we're beginning to learn what Tom Peters cause the necessity for the pursuit of (00:08:40) Excellence. Again, (00:08:44) and we really don't have any choice. I think the thing that frustrates me about the conversation particularly in Washington these days is that all you hear about change is the need to stop it? The price for protectionism in Washington is the strongest. I have experienced in 22 years in that town. And ladies and gentlemen, that's that is a terrifying Prospect. This country has never been afraid of competition. This country has never wanted to pull down the shades and tell the world to go away and that's exactly what we're being asked to do today. And I am deeply grateful that we've got a president that says no. We had to learn. When we pass a smoot-hawley tariff back in 1930 (00:09:35) that it doesn't work. (00:09:38) Took us 10 years and World War II to get out of that depression. And we do not intend to make that mistake again, but if we're going to live in a country that is changing as fast as we have to change to compete. Then we've got to remember that there are a lot of human beings out there that we have to be concerned about and we have to improve ourselves. So as to be adaptable and flexible and allow that change to take place we have finally after 20 years begun to face up to the crisis in our schools. (00:10:12) It's too late. (00:10:15) But it's got to be done more effectively and more quickly. I can't believe that you and I as parents allowed the Reading Writing math verbal communication skills of our children to decline every year for 20 consecutive years and nobody got fired. But we did. And today we just don't have any alternative other than to shaping up those skills restoring a sense of discipline and commitment and work habits and educational skills learning skills learning how to learn. That's part of it. Part of it is that we've got to this burden the people of this country from the inhibitions and the barriers that are imposed by by our own government. We've been trying for the four years of this Administration to deregulate to reduce paperwork to reduce taxes to reduce the bureaucratic intervention in the marketplace. and despite all of the (00:11:26) criticism that you (00:11:27) here We've had some pretty spectacular results. I wish I could remember I think it was where Ralph Waldo Emerson who was saying that numbers are important (00:11:43) without them you (00:11:44) tend to Create an unreal world of something that effect. But the essence of it is (00:11:50) that (00:11:52) the numbers are really phenomenal in this country today. We went through the 1970s energy crisis 21 percent in interest rates 14 percent inflation. The Advent of the baby boom the Advent of women into the workforce to a degree that we have never experienced before spectacularly to our benefit the Advent of the largest wave of immigration legal and illegal we have ever experienced. (00:12:22) and (00:12:26) in the process had begun to regenerate a creative society today. There are a hundred nine million Americans working. That is the highest number of working Americans in our history. But more than that. It is the highest percentage of adult Americans at work that we have ever had. It is the highest percentage of all Americans working we have ever had in our history. The last two and a half years. We've created nine million jobs that 300,000 jobs a month. We have reduced the rate of inflation. Not completely because the battle is never won. But on the Consumer Price Index to the lowest, it's been in 18 years. We reduce the producer price index rate of inflation to the lowest since 1964. Maybe the most spectacular comment on the Regeneration of America is the fact that we're creating 50,000 new businesses a month 640,000 new businesses in the last year and the importance of that. Is that one half of all the jobs in the last 10 years? Have come from businesses that are less than 4 years old. It's fascinating to me because we are always talking particularly when Frank and I were talking trade issues back over the last few years. About we ought to go to govern to Japan and see the quality circles and and all the things that they're doing in Japan. What do you think the Japanese (00:14:03) are there here? (00:14:07) Every management technique they've gotten out of American textbook we ought to start reading our books. But the Japanese in here and not from production management techniques, they're here for (00:14:21) entrepreneurial (00:14:23) understanding and knowledge. They have never seen no country in the world has ever seen what's happening in this country. Europeans are here south Americans here Asians are here Japanese here looking at what causes this incredible entrepreneurial activity on the part of the United States and its (00:14:39) people it's phenomenal. (00:14:44) I've never seen it and we haven't either. the results well 1 million eight hundred thousand people came out of poverty last year 500,000 people came 500,000 children left the poverty category last year. That's the largest number of children out of poverty and the history of the of the statistics below us number of our elderly and are in poverty in the history of the United States. One out of every six of those new jobs went to blacks black poverty reduction 21 percent. Our unemployment reduction and that's the largest reduction in Black unemployment since 1969. So we're doing pretty well. We're the most productive creative entrepreneurial country in the history of mankind. And here we are. We'll all those assets will all those nice things. And we got a hundred and twenty-three billion dollar trade deficit last year. And you say oh wait a minute that the two don't mix what in the world. Are we doing? Well, the fact is that we're not doing everything we got to do. I mentioned our educational system, but let me mention a couple of other things today. The federal deficit is 200 billion dollars a year in going. That's over eighty percent of the net Savings of the American people in a given year that leaves eighteenth's in the net savings and the American people for the investment and jobs new plant new equipment new technology R&D investment in the future for the planning of seed corn for next year's crop of growth. And we cannot sustain that deficit at this level. Without it cramping our capacity for growth. It cannot be done. It has to be dealt with And while I appreciate the progress that has been made in the Congress. It's going to take a lot more for a lot longer period of time than just one year to pull that number down. (00:16:49) Secondly, (00:16:51) we have a tax system that was designed about 60 or 70 years ago. with no thought whatsoever of international (00:17:00) competition, (00:17:02) if you're producing a product in the United States, you pay property taxes sales taxes state taxes income taxes payroll taxes UI taxes everything else you can think of and then you try to sell your product overseas. if you're operating in England Or France or Germany, you pay a 15 16 18 percent business transfer tax on hang you sell in that country. But if you sell it to the United States, you don't pay any tax at all because the taxes rebated the (00:17:35) Border. (00:17:41) Now there's a limit to how productive we are in terms of being able to carry our competitive needs in the federal government at the same time the state government on top of (00:17:49) that. (00:17:51) We really do have to take a look at this tax system and there is an urgent need for us to deal. with what I think should be a radical reshaping of the tax system so that we can increase the rate of savings increase the rate of investment increase the rate of job creation increase the rate of seed corn planning for next year's growth and that requires a major action by the Congress of the United States. There's one specific thing. I'd like to conclude with and that is the particular problem that we have with the employment of young people in this country. Until the unemployment came numbers came out in August. The rate of unemployment for all of our young people was about 19 percent the rate of unemployment for Hispanics was 24% And these are teenagers the rate of unemployment for black teenagers. The United States was 43% Now ladies and gentlemen, those are insane numbers. I met with the national chairman of the NAACP Leon. And he told me something that I think. I agree with but it stuck in my mind. He said, you know, if a kid drops out of school when they're 16 17 years old and a lot of them do about 44 percent. They don't drop out to drop out the drop out because they want a job and they go out there and they find out they can't get a job to cutting this horrible Catch-22. They haven't got any experience to get a job and they can't get a job because I'm going to experience. You know, what do they do and they may try for a while but by the time and here's his words by the time they're 22 or 23 years old. They're gone. And we have lost an enormously valuable National resource. We're going to have to do a better job of Education. We're going to have to do a better job of training and retraining and Remediation. We're also going to have to give them that first job. We proposed the president has proposed for some time. Now What's called the Youth Opportunity wage and allows people to hire those young people at the rate of 85 percent of the minimum wage for the summer months from May through September. The economic projections are that that would create four hundred thousand net new jobs on top of all of those. We now have for this particular population (00:20:27) group, (00:20:29) and I'm not suggesting to you that that's going to solve the problem. That's I'm not suggesting to you that that two dollars and a half an hour is going to be the end of the road. What I am suggesting to you. Is it unless those young people acquire work habits at this age. They may never get them. Unless they Acquire The Pride and self-respect. It comes from gainful employment from being personally productive and able to take care of themselves. They're not going to be contributing members of society or their prospects are very diminished. I don't think we have any choice other than to do whatever we can do in any and all of these areas to give them a chance that they have not had that's why things like the jobs Fair are so important because you're bringing together people that really have no opportunity to meet And if we can do more of that as Republicans we can contribute to the solution of our national ills and I think serve ourselves. Well politically at the same time. I've been asked a lot that's from the press conference this morning as a matter of fact. about our prospects in 1986 and (00:21:35) 88 (00:21:39) But ask the question that I know Evie was asked and I'm surely unto after the 80 election was that a watershed was 82 or 84 a watershed has the country fundamentally shifted to the different majority party status. And when I look at the numbers on Minnesota and I say wow, it's unbelievable. You've cracked over into a plurality here with what is it? 43 241 Frank (00:22:07) that's phenomenal but (00:22:10) we're going to be judged not on poles not on hopes not on projections, but on (00:22:17) performance (00:22:19) we have got to broaden this party on we have got to extend its reach to human beings that have not felt comfortable for or were insecure about the possibility of joining. We've got to make people feel welcome and bring them in and invite them not only their bodies and their and their votes but their ideas and their participation are active contribution if we do that, Then I honestly believe this country is in for some fundamentally exciting and challenging years ahead the fact that we got over two to one of the under-18 the under 24 and the under 30 vote in the election night in 1984 says something important the fact that we have a majority of those votes identifying with the Republican party for the first time in my lifetime at least says something really nice about our future. We've got to produce results and it is here in this community in this state party, but the results are going to count so I commend you for for that and I'm excited about your (00:23:17) prospects. (00:23:19) I just wish you will let me stop and see if you'd like to go with any questions for a couple couple minutes. I'm a little reluctant to get into managing (00:23:29) plans. the (00:23:36) voting right that you mentioned is resides with the company almost has to because they're the ones that are putting the money into it. The beneficiaries are the workers and that's where the residual return from that investment will go in terms of their retirement. We are taking a very careful look at the whole arrested question. We're looking at plan terminations. We're looking at issues like the use of plans for corporate takeovers things like that. I'm not wise enough to tell you what the right answer is right now. I don't know but I have brought into the department some of the brightest people I have ever met on this subject. I am very excited about some of the people who will be going before the senate for confirmation in the next two weeks and we are going to try to put together some people in management and labor to look at that kind of question and see if we can improve We are very cautious George about getting into telling plans to do this or to do that or how to manage because I don't think we have any particular confidence. Neither. Do I think many of the plan managers have any great confidence, but that's a different issue. I'm not sure how to answer that question fundamentally. We need to rethink what we mean by the word education in this country American Business now spends 40 to 50 billion dollars a year on training. That's an awesome amount of money in the GM contract that they signed with the UAW last year. They put a nickel an hour doesn't sound like much but a nickel an hour's fifty million dollars a year in the retraining just of their own employees and I think that's a pretty exciting step (00:25:29) really we've got to (00:25:30) decide that education is a lifelong process and it never stops there ought to be constant efforts in every business to train retrain and upgrade unless we decide as a country to do that. It really is going to be too spotty and not effective and where I think we can play a role in government. Is through initiatives like jtpa that have private sector councils out there where people learn how exciting is how much and how good it is for business because this good business, but I think we ought to take a look at our tax system and see for example if we can crank in more and sunnis for that kind of thing. I think we ought to look at our regulatory policies to see if we are by regulation making it tough to do and we could remove some of those barriers what I would like to do I had lunch I guess the first month. I was in with Peggy Heckler and and they'll been it Pega being Health and Human Services Bill Bennett being the Secretary of Education and I said, you know I said bill. I'll tell you before I say it that I'm being facetious but not entirely I'm tired of cleaning up your (00:26:34) mess. (00:26:39) It isn't quite fair. But the fact is that we're trying in business to clean up what did not happen in the school system. We're trying to government to clean up what did not happen in the school system. I think we got to start looking back at fundamentals of committee the committee for economic development just published a report. I just got this weekend. I don't know when it came out sometime very recently talking about our national school system in the need for American Business involvement. Why not use schools when they're not being used why not use businesses when when the shift is out. I just think we as a country have to look at ways to sit down and wrestle these things to grab far more effectively than we have in the past in the extension of human labor by mechanical and physical devices. We've got any Already rate of savings in this country in order to be able to afford to do that. Our rate of savings is less than one-half of Japan's less than one half of Europe's for that matter right at one half of Europe's and you can't afford to do that. That's why the deficit so important but it does take a different understanding of the need for all of us to contribute to a constant upgrading of skills in a teaching of flexible skills. We ought not to worry so much about vocation as we do learning how to learn learning how to think how to have interpersonal relationships that are constructive rather than destructive and house had to have some discipline and some work habits. I found some in labor very thoughtful. And some in management very thoughtful. And some that are not in both (00:28:16) categories. (00:28:20) I wasn't one of the nice things I want to tell you though coming out of that trade job you you have to be an optimist or you're crazy. I saw in (00:28:31) Europe (00:28:33) the one Union after another demanding that they not install labor saving equipment in the plant because they said it would cost jobs. I saw in Europe major strike for 35-hour week at the same pay as the 40-hour week in order to spread employment out. And I mean that those are insane things in Europe. There is one barrier after another to hiring and one barrier to another delaying off referring and they are the most rigid inflexible economy existing in the world today. And that's why they got a problem. We created twenty eight million jobs in the last 15 years. They create none not one net new job has been created in in Europe in 15 years in those ten countries put together and it says something important about the difference between the two approaches. So I am You know, I can get irritated at our management or our labor for what I think are reactionary attitudes on occasion. But we are so much better off than anybody else. And if you look at the Labor Management agreements that are being cracked into the system today. Look at that Saturn contract. That's a fascinating contract on both sides. If you look at the fact that FLC, oh just published a self-analysis that really was pretty (00:29:50) honest and (00:29:52) very thoughtful about the need for labor to change and one of the central points was to remove the confrontational component remove the adversary relationship and get the cooperation when I hear labor leaders talking about reducing the rate of in absenteeism and increasing rate of productivity. This country has got to be done something right that's not true of all but certainly in true of all in my judgment either. I think the country is in a learning curve is very Steep and that's healthy. I think it's exciting and I are you know, if we can get the government out of our way. In terms of changing the Congressional attitude on spending on deficits and on taxes. I too have no doubt about this country's ability to compete with anybody any day any time any place if we do that, it's going to be a fun place to live. What's your well, thank you very much. Thanks, Julie. In terms of changing the Congressional attitude on spending on deficits and on taxes. I too have no doubt about this country's ability to compete with anybody any day any time any place if we do that, it's going to be a fun place to live. What's your well, thank you very much. Thanks, Julie.