Remarks to the Conference on the Future of the American Workplace in Chicago, Illinois

The President. Thank you very much. Senator Simon, Senator Moseley-Braun, Mayor Daley, President Gross, and my friends and colleagues Secretaries Brown and Reich, and to all of you in the audience, my old colleague Governor Caperton and the distinguished business and labor leaders from all across America.

This has already been a little bit of fun for me. I never thought I'd see Carol Moseley-Braun blush. [Laughter] But I will say this: You can call me anything you want as long as you don't take out after me like you did Jesse Helms the other day. [Laughter]

I want to say a special word of appreciation to Mayor Daley for talking about the Chicago Laboratory for Change, because it really is sort of symbolic of what we're trying to do all across the country, the kind of partnership between government and business and labor and social service agencies to try to put low income people into the work force, into independence, and away from dependence. And I'm very excited about that.

I talked to President Gross before we crone in about the history of Roosevelt University, a very appropriate place to be cosponsoring this event. I'd also be remiss if I didn't thank Adele Simmons, the president of McArthur Foundation, for that foundation's support for this conference and the Joyce Foundation for supporting the conference. I'd like to acknowledge in the audience—I believe she's here—the Reverend Willie Barrow, the chairwoman of Operation Push. They held a conference on economic empowerment this week here, and I want to talk a little more about that later, but until we find a way to reward the working poor and to move people from welfare to work and to make it attractive for people to invest in distressed areas of this country, our economic recovery is going to be limited. Finally, let me say a special word of appreciation to Secretaries Brown and Reich for their work on this conference.

And there's one group of American workers I really want to acknowledge today. This is the third anniversary of one of our most important civil rights laws, the Americans with Disabilities Act. For more than 40 million people, this law is clearing the barriers to full participation in American life, making real the whole pledge that we often say that we don't have a person to waste. This morning in Washington I ran a 5K race with a group of astonishingly able disabled Americans: two who raced in their chairs who had raced all over the world; one marathon runner who happened to be blind; one woman who had MS and made a terrific race around the 5K track, kept the pace all the way; one amputee who had once run a 62-mile race in one day on a prosthesis and today made the 5K around on his crutches just to prove he could do that, too. The kinds of achievements that these people have demonstrated athletically are demonstrated even more profoundly in the work force every day. We need them, and I am proud of that law.

I am glad to be here in Chicago to discuss this subject today—the city that works, the city of big shoulders, all that. You need to know why I'm glad to be here, because in a very real way, I would not be here as President if it weren't for Chicago. And the economic forces that bring us here to discuss this subject today help to explain that.

I was once at a meeting here in 1988 over at the South Shore Development Bank, and I discovered that three city councilmen, two or three Democratic ward chairs, and a significant portion of the business community in this city came from Arkansas, and it was no accident. If you've ever read Al Hawkis—you ought to read John Johnson's autobiography here, which might be subtitled, "How I Escaped the Abject Poverty of Arkansas City and Came to Chicago and Became a Big Cheese." [Laughter] It is a story that has millions of replications: people in the South who couldn't make a living in the Great Depression leaving in massive numbers from the farms and small towns; coming to Chicago, coming to Detroit; finding a way to get into the factories or start a business, at the least; becoming middle class Americans; earning a decent wage with a rising paycheck and a good retirement and health care benefits and enough to buy a home and take a vacation and send your kids to college.

It was the American dream. And when I began running for President I found myself deluged with people in Chicago who had roots in my hometown, in my home State. We had two delegates here, two who were born in the same little town in Arkansas that my Chief of Staff and I were born in, in the Chicago delegation. There's a whole town in Michigan where 90 percent of the people who live in this little town were born in my State. They all came looking for a different life. And that's what basically worked for us. Then eventually, the industrialization which bloomed first here spread back to the South.

In the year I was born, my home State's per capita income was only 56 percent of the national average. Mississippi's was only 48 percent. The postwar economic boom of America by the late seventies had taken the entire South to about 87 percent of the national average in per capita income. And it was projected that the region would equal or exceed the national average of per capita income by the turn of the century. But then the economic slowdown of the last 20 years hit everywhere and hit those who were less well-educated, more rural, less able to compete in the global economy, even harder.

And I say that's what's important to bring us here today because I got to this job by being a Governor for 12 years in a State where I focused almost exclusively on the subjects and the triumphs and the tribulations that will be discussed here today, on jobs and education and partnerships and productivity. And when I became Governor for my second term in 1983, my State's unemployment rate was almost 3 points higher than the national average. In every month but one until 1992, we were above the national average in unemployment. Then in 1992, we were first or second in job creation. And in 1993, the State enjoys an unemployment rate that I think is still too high but is well below the national average.

The point I want to make is this: The issues we are discussing today in terms of the big, sweeping developments in America have been of at least 20 years in building. The policies we need to change have been in place for a good long while nationally. You know what works in the workplace. You know that partnership works. You know that investment in new technology works. You know that flexibility works. You know that being competitive works. You know that treating people like assets instead of something that is expendable is very important. We need to figure out how to write that large in national policy and then be better partners with you in what you do.

And one of the things that I understand very clearly because I have been a Governor is that nothing I do as President can be fully successful unless it makes sense and works with what all of you are doing. And what I want to talk to you about today is how we can be better partners and what we can do to meet the challenges of this time, because it's much more complex than it was after the Great Depression and after the Second War, when people at least, even though it pained them to do so, could leave their little farms in Texas and Arkansas and Alabama and Mississippi and come to Chicago or come to Detroit or go to Pittsburgh or go out to California, and know they could get a job and hope that when they retire they could come home.

Now the whole country is caught up in a global economy which, to be sure, is always affecting different States and communities in different ways, but essentially has some broad, sweeping characterizations that we have to work to reverse. And to make it more complicated, all over the world the wealthiest countries are having many of the same problems we are. I just returned from Tokyo from a meeting of the great industrial powers of the word. And we find that all of them are having trouble promoting economic growth, all of them are having trouble generating new jobs, and in the 1980's, all of them found an increase in inequality of income and greater difficulty in creating new jobs, even when their economies were growing. So that it is clear that we are dealing with a very complicated issue and that no one has all the answers.

Still it is clear that some things have to be faced. We know that every nation competes in a global marketplace where money management and technology are increasingly mobile. We know that increased productivity and new technologies often mean that more output can be produced with fewer people and that not always now, as was in the case for the last four decades-when that happened before, it was always new and different jobs waiting for those people, so that technology was always a winner. Productivity was always a winner. It always was a net expansionary force. We've always had changes. People have always been moving in and out of jobs. No one can freeze-frame any form of human work and make sure it will always be there in just that way forever. But we know now that for the last 20 years we have seen a steady erosion of the security of average middle class people who work hard and play by the rules, because we have not been able to make the adjustments necessary in this new and different global economy.

We know that we can only meet the challenge if we begin with a very basic fact, the one that you are here to celebrate today and to elucidate: The most precious asset any nation has is the people who live there and that as long as the people who live there are willing to do what it takes to learn more, to do better, to be smarter, to stay ahead of the curve, there are going to be opportunities. We also know that most jobs in every society now are going to be created by the private sector and by what people do or do not do to be more productive, to reach out to new markets, to develop new products and services. And the third thing we know is that Government policy makes a difference at home and abroad. It does make a difference.

For more than two centuries our country has built prosperity by investing in our people and our technology and our future. We have, in other words, followed the policy that I have called putting people first. We invested in our skills through a public school system, through the land grant colleges, through expanding opportunities through the GI bill after the war, our investments in canals and in railroads and highway systems and mass transit, all of these things have helped to make us more productive. We've developed cutting-edge technologies through national defense; through the space program; and to a lesser extent in the past, but it must be more in the future, toward civilian partnerships for new technologies.

But for 20 years we still have seen most Americans working harder for less money. And we have not developed an adequate response to the new global economy. For at least a dozen years, our country has pursued policies that are popular in the short run but very limiting in the long run. We have, to be popular in the short run, reduced taxes and increased the deficit in a way that has taken our national debt in 12 years from $1 to $4 trillion and our annual deficit from about $73 to a projected $311 when I took office.

At the same time, we have miraculously managed to reduce our national investment in the education skills and technology that our people need to grow in the future, a mathematical sleight of hand that is almost inconceivable when I tell people about it, but it's true. Why? Because we keep spending more on the same health care and more on interest on the debt. So that the people you think of in Washington as being to blame for big spending and big deficits because they're spending more on programs are, in fact, by and large, spending less on programs that would help you to do your job better. But because there has not been a disciplined effort to bring down the deficit, a disciplined effort to bring health care costs in line with inflation, which would bring interest rates down there and then reduce what we have to spend servicing the debt, we are actually spending more and getting less for it, the worst of all worlds.

This has continued the downward pressure on wages and job growth. And every working family in America has felt its impact. Between 1972 and 1992, while the work year got longer for Americans, average hourly wages actually dropped by 10 percent. The 75 percent of our workers who don't have 4-year college degrees felt it most profoundly. For those who began but didn't complete college, wages fell 10 percent from 1979 through 1991; for those who didn't go on to college, wages fell 17 percent; for those who left high school, wages dropped 24 percent.

It is, of course, perhaps enough to say to explain this, that as we move into a global economy where what you earn depends on what you can learn, many of those people could not command more in a global labor marketplace. But that is an insufficient response if you want to keep the American dream alive, you want to keep the morale and the spirit of America moving forward, and those of you who are employers want to be in a workplace where people are productive because they are happy and constructive and an important part of a team. In other words, it is not enough just to say that we're in this terribly difficult period that it took 20 years to build and that no one knows exactly what caused it. We simply cannot go gently into a good night of limited economic expectations, slow growth, no growth in living standards, and a lesser future for our children. It is not the American way.

We know that it may take us a good deal of time to work out of this, and we know there may be no simple answers or silver bullets, but we have got to do better at building a future for ourselves. Of course, we have a rare opportunity to do it because the cold war is over; because democracy and free markets are in favor and flower throughout the world; because a global economy creates opportunities as well as challenges and hazards for us because there are new things which have to be done. We have to find a way, for example, to make money out of the global environmental crisis and make jobs out of it, and I believe we can. And in many ways, the challenges we face today are ready-made for Americans, with our love of learning, our proven genius at innovation, our far greater flexibility than any of our competitors, and our capacity for communicating with people among different cultures. After all, we have at least one county in this country with people from 150 different racial and ethnic groups. It need not be a weakness; it can be an enormous asset for us as we move into a global society.

But we know we have to stop doing some things and to start doing some other things. Put simply, we have to stop borrowing so much from our future and start investing more to build it again. We need fundamental changes, and we have to do a lot of things at once. And therefore, our administration is trying to do a number of things in a short time: to reduce the deficit, to improve education through our schools, through opening the doors of college, through reforming the system by which we support those of you who want to train your own workers. We need to reward work and reform welfare. We cannot continue to spend 30 percent more than any other country in the world of our income on health care.

Many of you today here work in companies or represent workers who do not have jobs who would have jobs if we simply had been able for the last 12 years to keep health care costs in line with inflation plus population growth. Many of you do. So all these things are related. When people say to me, well, you know, why don't you just reduce the deficit and forget about the rest of it? I'll tell you why. Because 5 years from now, no matter who does what with the deficit, it goes up again if you don't bring health costs in line with inflation plus population growth. They say, well, why don't you just not spend a nickel on anything? I'll tell you why. Because look at California if you want to see the consequences of 6 long years of cutting the defense budget and letting the people who won the cold war go out in the cold and giving no thought to what we're going to do with the scientific and technological base and the workers there and whether there is not some new partnership that would give them something to do.

So we have to do things in order, and we have to begin by bringing the deficit down and putting our financial house in order. But we also have to think anew. All these partnerships you've got going in your businesses, if somebody came to work one day and said, "OK, we're going to forget about these 12 things and just do this one," a lot of you would go broke if you did that. You do not have the luxury of ignoring some problems if you have the means at all to deal with them. And I would argue that we don't either. But there needs to be one overriding purpose for this country, and that is returning us to a path in which we can build a high-skill, high-wage, high-growth society in which people who work hard and play by the rules will be rewarded with decent work and an opportunity to raise a strong family in a safe neighborhood.

Let me say very briefly that the essentials of the economic plan that the Congress is wrestling with—and I mean that literally, "wrestling with." I feel since I'm here in Chicago I have to say this. Chairman Rostenkowski and Senator Moynihan from New York are obviously the lead conferees on our budget, and they're working through some very difficult and complex issues today, and I compliment them for their enormous labors and for what they're doing. But the elements of the plan are clear: We want to bring the deficit down by $500 billion over 5 years. We want to make at least as many cuts as we raise taxes, if not more. There are 200 cuts with more than $250 billion in them if the Congress will adopt them. We want to restore some fairness to hard-working middle class families, and we want to reward work over welfare.

For every $10 in the plan I presented to the Congress, and this is true in both the House and Senate version, $5 comes from spending cuts, $4 from new revenues from people in the upper 6 percent of earning brackets, $1 from the middle class. Families with incomes under $30,000 are held harmless. The working poor for the first time are lifted out of poverty by not taxing them into poverty if they work hard. This is a very big deal in America. Eighteen percent of the people who work full-time in this country are living below the Federal poverty line. It is hard to lecture people, to say, "Well, don't be on welfare; go to work," if you don't reward work. That is something the Government can do that I think all Americans should support.

Now, I want to say something else today, because we're celebrating partnerships here. The tax part of this program does not impose 70 percent of its burden on people with incomes above $200,000 to soak the rich or promote class warfare. I want to reward success. The tax burden is the way it is because we seek to reverse what happened in the 1980's, where taxes went up on the middle class and down on the wealthiest Americans. Payroll taxes went up, and the Government shoved more and more off on the State and local government, and almost all the revenues they adopted hit the middle class disproportionately. This has nothing to do with class warfare. It has to do with opportunity and fairness. And I think it will rebuild a sense of teamwork and a spirit of partnership and cooperation.

I also want to point out that if we can continue to bring this deficit down, you will see the continuation of the last 5 months of a big drop in long-term interest rates, which is causing millions of people to refinance their home loans or their business loans or take out other forms of credit in ways that will save them far more money than they will pay in new revenues. If we can keep interest rates down for over a year at this level, it is estimated from a low side of $50 to a high side of $100 billion will be released to be reinvested back into this economy to jumpstart the economy again. I think it is terribly important.

The second element of this plan, in addition to deficit reduction, is incentives for people and companies to invest more. That is, nothing would please me more than if people who would be pushed in the higher income brackets by this plan would lower their tax burden by turning around and reinvesting the money in creating jobs here at home. And this plan gives the opportunity to do that. We double the small business expensing provision. We have a new business capital gains that anybody that invests in a company capitalized at $50 million or less and holds the investment for 5 years or more will cut their tax burden in half. We extend the research and development tax credit. We do some other things to revitalize the home building industry and the real estate sectors of our economy. All these things will give opportunities for people who have funds to invest and to create jobs as they do. I think that is very important.

I want to say I'm very grateful for the fact that at least 50 of the 100 biggest companies in the country have endorsed this program, partly because the changes in the alternative minimum tax lets them invest in new plant and equipment, to mitigate the impact of the taxes, and to create more jobs and productivity. I'm grateful for the support we've received from the high-tech community, and I'm grateful that finally we're getting out the facts that 90 percent plus, that's right, over 90 percent of the small businesses in America actually get a tax cut under this plan if they simply invest more money in their business because the expensing provision has been doubled, and their income taxes don't go up, something that you haven't been reading a lot about in the press. But it is true, and I am glad to see it coming out. And it's very important, because most of our jobs are created by smaller firms, and that needs to be emphasized.

The third element of this plan is investments to empower people to compete and win. Every child born in this country should be able to grow up to be successful. But you and I know that we have a far higher percentage of people living in unhealthy, disadvantageous environments than most of our wealthy competitors. We have proof; we have evidence. No one disputes it that if you invest in child nutrition, immunization, and preschool education, and they're good programs, the programs pay for themselves many times over: The taxpayers win, productivity goes up, and you have people who can learn when they get into school. So yes, we do spend some more money on that. We also have a program of modest cost but enormous impact called Goals 2000 coming out of the Department of Education, designed to set national standards by which all schools and students can be evaluated. And that is important in a global economy. And we have, as has already been said by Senator Simon and others, a really ambitious and I think quite wonderful program to open the doors of college education to all Americans by lowering the costs of loans, making their terms of repayments better, and giving thousands of them the opportunity to pay back their college loans through service to their communities, rebuilding them. And I might say some of those young people in our experimental program for the summer have helped people to try to deal with the aftermath of this terrible flood in the Midwest. That is just one example of what we can do if we have the right kind of incentives.

Finally, we very much want to create a program of training for people who don't get 4-year college degrees, that merge the partnership and efforts of the private sector, the education system, and the Government. Everybody in this country who doesn't go on to a 4-year college needs to finish high school and get at least 2 years of further training, either in a school, on the workplace, or in the service. Everybody. All the demographic figures are clear now from the '90 census. All the people in this country who have high school plus 2 years, if it's good, are highly likely to get jobs with growing incomes. Those who have less are highly likely to get jobs with shrinking incomes. You know, you don't have to be Einstein to figure out we should do what is likely to give people jobs with growing incomes and that, in the aggregate, it's better for you in the workplace and better for the country as a whole. So we're trying to do that.

And lastly, let me say, we've got to provide markets for all these people's labor in products or services. We simply have to continue to expand the frontiers of the global economy. A wealthy country cannot grow richer unless there is a higher rate of global growth. We cannot do it by simply drawing within. And perhaps the most important thing that happened at the G-7 meeting in Tokyo was that the seven industrial powers agreed among themselves to a dramatic reduction, in many cases, to outright elimination of tariffs, that every analyst says will dramatically increase the number of manufacturing jobs in the United States of America between now and the end of the decade if we, the larger countries, can get the other countries to agree to it by the end of the year in a world trade agreement. No analyst has disputed this. It has the potential of being the most important thing we've done in a long time to revitalize manufacturing in America. And of course, when you rebuild manufacturing, you get more service jobs, you get a lot of other support jobs. It is very, very important.

Let me also say that I think it's important that we not forget about the Americans who are working hard and are struggling along. I mentioned this earlier. The most revolutionary social aspect of this economic plan is that instead of spending a lot of money to hire people to work for the Government to go out and help people who are in trouble, we invest a lot of money in this program in lowering the taxes of people who work 40 hours a week and are still in poverty. What better thing could we do to reward work and family than to be able to say for the first time that in this country if you work 40 hours a week and you've got a child in your house, you're going to be lifted out of poverty, not by something the Government does but by your own labor. We'll just change the tax system to take you out of poverty. It is a profoundly significant thing, and it should not be watered down in this conference. We ought to do enough to be able to say that to all Americans.

Let me just say that the one thing that's happened in the last 4 1/2, 5 months is that interest rates have started coming down as it became serious that we were trying to bring the deficit down. And there has been a beginning of reinvestment. A lot of that is coming out of the private sector. Last year, in the last quarter, we had the biggest increase in productivity in 20 years in America, thanks to a lot of you in this room. Those two things together mean that in this economy we have seen in the first part of the year about 150,000 new private sector jobs a month being created—that is as compared with 20,000 a month in the previous 4 years—so that we are moving in the right direction. But that's all we're doing, is moving in the right direction. That is nowhere near enough, and there is still a great cloud of uncertainty out there.

So I think today we need to have three challenges. One is, the Government needs to pass this budget and get on with the rest of the business. Hanging out there, debating it, dragging it out for weeks and weeks, will only make it worse. There comes a time when delay to get a slightly better decision is worse than action to get a pretty good decision. We have reached that time. We don't need to do that. We've got other things to do. And you need to know what the rules are going to be, what the deal is, and we need to go on with our lives.

The second challenge is to you in business. If we can get the cost of capital low, if we are doing our part, then the savings must be used to put more people first, to create jobs, to train employees, not just the executives but the workers as well, to have other companies in this country learn from those of you in this room that you can grow and prosper by treating workers like indispensable partners. Companies like Motorola outside Chicago, which Secretary Brown visited recently, and L. S. Electro Galvanizing in Cleveland, which Secretary Reich visited recently, and all the many that I have had the privilege to visit over the last several years can show that.

And the challenge to labor is clearly the same thing. This is an opportunity we have to seize. There is no way we can ever see wages grow and jobs increase in this country again unless there is an emphasis on education and training, flexibility in the workplace, partnership and responsibility by everybody for improving quality. But if the labor people do it, then Government ought to do fight by them and by business, and business should do right by their workers. There is no easy answer here, but we all know, I think, that if we treat each other better we're going to come out ahead, and that insofar as we drive up unemployment and run people off, we also diminish the number of customers with money in their pockets to make the American economy go. We are truly in this together.

Now, let me just say one more word about this. I don't think the fight in Washington should be about Republicans and Democrats. I think most of the arguments we have to have are about issues that don't have an easy partisan tent. The world is a very different place than it was when most of the party lines were drawn 10 and 20 and 30 years ago. This really is about growth against gridlock, decision against delay, change against the status quo. And you have got to demand that we do something.

I mean, you know, this gridlock thing is amazing. Let me just give you an example of how bad it gets sometimes with Congress. I had my nominee for Surgeon General up there in the Congress—Senator Braun was sitting with her; I appreciated that—a woman that grew up in a cotton field in Arkansas. Her brothers and sisters put her through medical school. And maybe there were people who don't agree with her and didn't want to vote for her, but through some parliamentary maneuver, they tried to put off the whole hearing. The country needs a Surgeon General. Thanks to Senator Kennedy, the chairman of the committee, they went back and had the hearing. He told them they were going to stay there 'til kingdom come, 'til they finished. But if somebody wants to vote against her, let them vote. But let's get on with it.

Let me give you another example. There is now a filibuster in the Senate against the national service plan. We have worked our hearts out with the Republicans and the Democrats. We have lots of Republican cosponsors in the House and a few in the Senate. They just want to delay it. Why? Why shouldn't we send a signal to America's young people that we want you to work in your community to make it a better place? Why shouldn't we say we want to open the doors of college education to everybody? Look at the figures from the '90 census.

Last week there was even a filibuster or a delay in the House against flood assistance to Illinois and to Iowa and to Kansas and South Dakota and North Dakota and Minnesota and Missouri. Why? Got me. There is ample precedent for emergency action here. We do not need to raise a tax to pay for flood relief; because interest rates have come down, the deficit is already going to be much lower this year than anybody thought it was. And here are these people out here up to their ears in tragedy, wondering when Congress is going to get around to passing the flood relief. There is a point at which we need to learn what we're talking to you about. We need to work together and make decisions.

How many of you could stay in business if either management or labor said when you started a new path, "Well, I think I'm going to call a filibuster and wait 3 or 4 weeks to make up my mind whether to do this?" Your bills still come in. You still have to pay the payroll. Let's vote. I don't have to win them all, but let's make decisions. This institutionalized delay and gridlock is bad for America.

In just a couple of weeks—

Q. How can you talk about a Democratically controlled Congress? The Democrats have controlled Congress—talk about gridlock. Why don't you take leadership?

The President. Now, wait a minute. Whoa!

Q. You're the one that talks about—

The President. Do you want me to answer the question?

Q. Yes. You're the one—

The President. Wait, wait, wait, wait, wait. Most people, sir—no, wait a minute. Are you going to let me answer the question?

Q. [Inaudible]—Congress and you won't—

Audience members. Quiet!

The President. Are you going to let me answer the question? This is not your meeting, sir. And most people have better manners than to interrupt somebody giving a speech. I might say that's another thing that's wrong with this country, there's not enough civility in how we treat one another.

But the answer to your question, which is good Civics 101, is that the Democrats do not control the Congress when 41 Republicans want to vote to keep anything from being voted on in the Senate. That is the answer. They do not. The filibuster rule means you have to have 60 votes to bring anything to a vote except for this budget. Everything else requires 60 votes. But it's not a party deal, it's a question of whether we should make decisions. I say, if they want to vote against me, fine; let's make a decision and go on to something else. Let's just move. I think that's the issue.

Let me just say one last thing. I believe that this works. I came here basically to highlight what you're doing and to support it and to ask you to tell me what I can do to help it be better at the national level. But in the end, if this kind of attitude that you are here to celebrate, this whole new idea of a partnership for productivity and leaving behind all the sort of labeling that has shackled us for too long, if this doesn't take over the private sector, nothing the President can do can revitalize America. You have to carry it. And I believe you will.

Thank you, and God bless you all.