Reagan turns attention to structurally unemployed
The United States was given a change of rhetorical fare at midweek as President Reagan put arms control and defense back on the shelf for a moment and returned to what remains topic No. 1 for most Americans - unemployment.
More specifically, the President dealt with the millions of ''structurally'' unemployed - those who may never return to their former jobs because of basic shifts in American industry - as well as those who have lost jobs temporarily in the recent recessionary cycle.
After a quick noon hour flight to Pittsburgh Wednesday, Mr. Reagan addressed the National Conference on the Dislocated Worker. He plugged his administration's stress on vouchers and tax incentives to help retrain and relocate workers once employed in shrinking industries like steel.Later, he paid a visit to a computer training center in Pittsburgh.
On Capitol Hill, meanwhile, the Democrats seem to be moving toward a middle ground on jobs - away from massive New Deal-style jobs programs toward using government leverage in the form of seed money for new technologies and industries. Sen. Alan Cranston (D) of California, one of the Democrats' presidential contenders, said Wednesday that he wants to revive ''full employment'' as a national goal, meaning a 5 percent jobless level instead of today's 10.3 percent.
The politics of jobs is of course never far away from official Washington's thinking. By a wide margin, unemployment beats every other national issue - including inflation, arms control, and the dangers of war - as a concern among voters.
In last fall's elections, the unemployed voted 3 to 1 for the Democrats. The working-class, union vote, which Reagan sliced into in 1980, came back strongly for the Democrats in '82 House races, mainly in the industrial Midwest.
Reagan aides admit the President must work hard on the unemployment issue, even as his economic policy encourages a moderately paced recovery and a gradual drop in jobless statistics. In his Pittsburgh speech, Reagan attempted to do several things for his cause.
First, he sought to draw a distinction between structural and cyclical unemployment, adding political flourishes. He asserted that ''about half of our current unemployment is the direct result of the recession. The best cure for this is to get the economy moving, and we're doing just that.
''Structural unemployment is not the result of temporary slumps in the economy,'' he added. ''It's caused by deep and lasting changes in science, technology, competitiveness, and skills. And you just can't cure that with a quick-fix solution.'' Generally, in political discourse, the term ''structural'' implies something the current administration is not responsible for.
Reagan also took the opportunity to belabor the Democrats for their alternative budget recently passed in the House. And he recited his administration's economic gains to date, a refrain that will be repeated more and more this spring and summer as the White House gets ready for another presidential election campaign, which could be officially announced around Labor Day.
The President's upbeat economic summary: a January surge in leading economic indicators, the largest in 33 years; 1980's double-digit inflation knocked down to the lowest six-month rate in nearly 22 years; the prime rate, cut in half to 10.5 percent, ''and we're not finished with it yet;'' housing starts and permits up to their highest level since September 1979; and unemployment, ''while still painfully high,'' down to 10.3 percent from last December's 10.8 percent peak.
However, this summary skirted many economists' concerns about future jobs prospects.
''He hit the high points - but only the high points - of the economy,'' observed Robert Gough, senior vice-president of Data Resources Inc., the Massachusetts-based economic forecasting firm. Mr. Gough listed recent improvements in the housing market, in industrial production, and in consumer confidence as the economy's good news.
He warned, however, that the administration's forecasts for a downward trend in joblessness by the fall of '84 could be thwarted by pressures on interest rates.
Data Resources expects unemployment to slip to 9.5 percent in the fall of '83 , and to 9.0 percent or lower by next year's election.
But those projections assume a recovery that picks up momentum and is sustainable, Gough says.
''When Reagan said the prime rate 'is 10.5 percent today, and we're not finished with it yet,' that troubles me,'' Gough said. ''A 10.5 percent rate is a high rate of interest at the beginning of a recovery.''
Reagan's charge that the Democrats' alternative budget ''calls for a $315 billion tax increase over the next five years, and an almost $200 billion increase in domestic spending,'' was misleading, Gough said. The so-called ''$ 315 billion tax increase'' was Reagan's way of phrasing the effect of rescinding the third year of his tax cut plan, as the Democrats propose, Gough added. And the ''$200 billion increase in domestic spending'' would chiefly result from extrapolating, over five years, the $16 billion difference between Democrats' $ 863 billion fiscal '84 budget and Reagan's $848 billion target.