Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, April 8, 1994                   TAG: 9404080214
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: SAN FRANCISCO                                LENGTH: Medium

WIDENING GAP IN INCOMES HAS FED CHAIRMAN WORRIED

The head of the nation's central bank avoided any discussion of interest rates or the stock market's recent gyrations in his address to the annual conference of the six-state Federal Reserve district based in San Francisco.

Instead, he gave a long-range and generally upbeat assessment of the U.S. economy - but said polling data show the public doesn't share his optimism.

``There seemingly inexplicably remains an extraordinarily deep-rooted foreboding'' about the future, Greenspan said. ``Half those polled expect the next generation will face lower living standards.''

The basis for the gloomy outlook appears to be the increasing income gap between rich and poor Americans, which has widened in the past 20 years after narrowing for several decades before that, he said.

``Income distribution has begun to disperse in the United States,'' with the wages of production workers dropping in real terms.

High-tech developments such as the growing role of computers have put a premium on education, widening the income gap; but the same technology eventually should begin closing it, he said.

Increasingly sophisticated software will allow even illiterate workers and consumers to operate computers simply by pressing buttons with pictures above them, Greenspan said.

Sophisticated computer analyses that took weeks to prepare a decade ago now can be performed by a clerk in an hour or two, he noted. That trend should raise the productive power of the less educated.

``Are we doomed into a much more dispersed income with all of the difficulties one would consider that that would create? Probably not,'' the Fed chairman said.