ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, February 7, 1996 TAG: 9602070027
SECTION: BUSINESS PAGE: C-8 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
Businesses that improve the skills of their employees and help retrain laid-off workers should be rewarded with tax breaks, Labor Secretary Robert Reich proposed Tuesday.
While the ``new economy'' is exploding with technological change and global competition, millions of Americans are trapped in the ``old economy'' of mass-production jobs, Reich contended.
``They are laid off - cast off - and jobless, or in new jobs with worse wages and benefits,'' he said in a speech at the George Washington University School of Business and Public Administration.
``They cannot easily acquire on their own the education and training needed to succeed in the new economy.''
``One possibility,'' Reich said, ``would be to reduce or eliminate corporate income taxes only for companies that achieve certain minimum requirements along these dimensions.''
A Labor Department official, speaking on condition of anonymity, said Reich had discussed the tax break proposal tentatively with President Clinton. The official said Clinton hoped to discuss corporate responsibility with business executives, perhaps at the White House, before making to any decision.
Reich said many executives appear more concerned with profits and shareholder dividends than the needs of their employees.
At the same time, governments are cutting budgets and are unable to provide many necessary services, he noted.
``If we want business to take more responsibility for the American work force and its transformation to the new global economy, we will have to ... provide the proper incentives,'' Reich said.
``If we want companies to do things which do not necessarily improve the returns to shareholders but which are beneficial for the economy and society as a whole - actions such as upgrading the general skills of employees, providing them with decent pension and health care protections, sharing more of the profits with them and, when laying them off, retraining them and placing them in new jobs - we have to give business an economic reason to do so.''
Reich did express sympathy for executives involved in downsizing and paring wages and benefits.
``Corporate executives protest, with some justification, that they have no choice,'' he said.
``Managers who balk at executing the judgments of the market fear, with reason, that they will quickly face their own day of reckoning.''
Still, he contended, corporate leaders must reconsider their options, saying ``government downsizing is also a time for corporations to size up their responsibilities to America. It is time for a new corporate citizenship.''
LENGTH: Medium: 58 linesby CNB