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Take Advantage of Change, Clinton Urges G-7 Nations

March 15, 1994|JAMES GERSTENZANG | TIMES STAFF WRITER

DETROIT — Opening an international conference on unemployment at a "historic, important and long-overdue moment," President Clinton on Monday called on the world's leading industrial democracies to embrace the technological changes that are shaking their economies.

At the same time, the President tried to counter growing concerns that the improvement in workplace productivity fueled by those technological advances must lead to layoffs.

Equating the momentousness of the economic decisions facing the Group of Seven nations to the choices made in Europe and the United States after the two world wars, Clinton said, "We've got to prove to our people that change can work for them and that increasing productivity is still the key to jobs and growth."

The President's speech--a long, dispassionate discussion of the most developed nations' economic problems and promises--was delivered to senior government officials from Britain, Canada, France, Germany, Italy, Japan and the United States in the Fox Theatre, an ornate, restored 1920s building situated in an otherwise bleak stretch of boarded-up or mostly vacant buildings in downtown Detroit.

The government ministers, minus the President, then retreated to a private room in the Cobo Hall convention center overlooking the Detroit River and Windsor, Canada. There, on Monday and again this morning, they are seeking common ground on which they can pull their nations out of recession, take advantage of technological advances and meet their citizens' needs for a social safety net without overburdening their businesses and individual taxpayers.

At issue is a phenomenon known as the "jobless recovery," the post-recession economic rebound that has not brought with it the customary growth in employment because technological advances are wiping out jobs. This trend has been particularly severe in Europe.

But Americans also have been forced to adjust to a new age at work.

The President told stories of a machine operator whose advanced training led to a job as a quality-control officer in Illinois; of a woman on welfare who learned new skills and found work as a programmer-analyst in Chicago, and of a janitor who became a plant manager in Missouri.

But he also noted that in the United States, wages of hourly workers "have remained virtually stagnant" for 20 years; the number of jobs has grown steadily, with 2.1 million jobs created in the past 13 months, he said.

"We are in the midst of a technological revolution. It's moving very fast and it requires a rethink of fundamental policies," said Laura D'Andrea Tyson, chairwoman of the President's Council of Economic Advisers.

At the most recent summit conference of the seven nations, in Tokyo last July, Clinton proposed that the ministers of finance, labor, commerce and economics get together for a discussion focused on employment issues.

In the Administration's view, the United States--facing a growing gap in wages between low- and high-skilled workers--must learn from Europe's experience in preparing potential blue-collar workers for the evolving workplace. At the same time, Administration officials say, Europe must relax some of its labor traditions, built up over several generations, that provide greater protection for workers than is available in most U.S. industries.

In Europe, said Robert Rubin, chairman of the President's National Economic Council, there is a "raging debate about prohibiting layoffs and prohibiting moving plants."

"A large body in Europe recognizes the labor market has to adjust and become more fluid, and at the same time we need to understand the Europeans have done a better job of training and educating people," Rubin said. "You have to put the two together."

The issues surrounding the growth in productivity, which Clinton made the centerpiece of his address, are multifaceted.

They reflect the progress made possible by technological advances. But such progress also can mean that fewer people are needed to accomplish a given task, a situation giving rise to increased unemployment--if the new technology does not also help create new jobs manufacturing new products or create new wealth leading to greater two-way trade.

Productivity--and wages--in the United States grew at a rate of 3% a year from 1947 to 1973, Clinton said; both have slowed since. But he said that in the aftermath of the 1991 recession, productivity is bouncing back and so too will wages and employment.

"The trick is for us in government and people in the private sector to keep finding new areas in which productivity can succeed," Clinton said. "We've got to prove to our people that change can work for them and that increasing productivity is still the key to jobs and growth.

"If we forget that, if we allow our fears to blind us to the fact that we must always be on the side of productivity, we're going to be in real trouble," the President said, speaking as much to Detroiters and Americans as to the gathered foreign visitors.

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