Reich will urge firms to increase worker training

September 25, 1994|By New York Times News Service

WASHINGTON -- Elaborating on his theory that America's middle class is being rapidly transformed into an "anxious class" squeezed between the wealthy and chronically poor, Labor Secretary Robert B. Reich will urge business leaders in Dallas on Tuesday to develop ways to help workers increase their skills and add to their sense of security.

He calls for a broad commitment by private business to help train and educate workers and even raises a veiled threat of federal intervention in the form of required contributions to such training if they do not do so.

His comments, prepared for a speech he will give before a conference of the National Alliance of Business but made public here yesterday, describe the nation as moving rapidly ahead in a period of economic expansion, but at the expense of the workers propelling it.

He illustrates this by pointing to widening gaps in wages of educated and uneducated workers and to a tendency among many business leaders to focus on competition overseas while ignoring the lives and welfare of workers at home.

"Ominous" forces handling American labor issues, he says, have physically divided the country, leaving an "overclass" in the safety of elite suburbs, an "underclass quarantined in surroundings that are unspeakably bleak and often violent," and a new "anxious class" trapped in "the frenzy of effort it takes to preserve their standing," as more and more families try to patch together two and sometimes more paychecks to meet their basic needs.

He also points to widening income, health care and pension gaps spurring the "disintegration" of the middle class as it has historically been defined.

In 1979, a male college graduate earned 49 percent more than a man with only a high school degree, but today the gap is 83 percent, the labor secretary says.

The gap in health care and retirement benefits is also wide, he says. Employer-based health care provided to workers with college degrees is roughly the same today as it was in 1976. But about 60 percent of high school graduates are covered by their employers, as opposed to 68 percent in 1976.

High school dropouts have suffered the worst rending of their safety nets. In 1972, 52 percent of all dropouts had some health care provided by their employers. Last year, only 36 percent of them did. Retirement heightens that disparity. Two-thirds of college-educated workers have pensions. Three-fourths of all high school dropouts do not.

Mr. Reich has often spoken about the chasm that is dividing the nation's educated and uneducated workers in these times. But this speech, which is one of three he will give to elaborate on

themes he first introduced on Labor Day, calls on private businesses to intervene aggressively.

"One means of committing American business to work force investment would be through a simple requirement that firms spend a small portion of their payrolls upgrading the skills of all employees," Mr. Reich proposes.

The solution, he posits, is for business to transform its vision of workers from expendable costs to ever more sophisticated assets.

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