The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Friday, the nation's unemployment rate hit 6.8 percent, the highest in four years. Pres. Bush ordered a U.S. airlift of humanitarian aid to the Kurdish refugees, former Sen. John Tower was killed in a plane crash today. We'll have details in our News Summary in a moment. Jim.

MR. LEHRER: After the News Summary, we have a major look at the unemployed in this country and how and why they got that way, the Friday night analysis of David Gergen & Mark Shields, and a Roger Rosenblatt essay about some demons. NEWS SUMMARY

MR. MacNeil: There was stark new evidence today that the economy is sinking deeper into recession. The government reported the nation's unemployment rate shot up to 6.8 percent last month, the fifth straight increase, and the worst rate in more than four years. The .3 percent increase translated into more than 400,000 layoffs, bringing the total number of unemployed Americans to 8.6 million. Few areas of the economy were spared, but once again manufacturing and construction were hardest hit. There were also large cuts in the once robust service producing industries. We'll have much more on the unemployment story later in the program. Jim.

MR. LEHRER: Pres. Bush today ordered an airlift of humanitarian aid for Kurdish refugees in Iraq. The President said the human tragedy unfolding in and around Iraq demands immediate attention on a massive scale. He said supplies will be dropped over Northern Iraq from U.S. Air Force transport planes. The airlift will begin Sunday. Up to $10 million in supplies will be sent. But United Nations relief officials in Geneva said more was needed. They appealed for $137 million to help the estimated 1 million refugees massed on Iraq's borders with Turkey and Iran. Turkey's border remained officially closed today, but Turkish officials said more than 1/4 million had entered the country anyhow. We have a report narrated by Louise Bates of Worldwide Television News.

MS. BATES: For tens of thousands of Kurdish refugees, these rugged mountains on the Turkish-Iraqi border have become home. It's a grim existence, every hour a struggle for life. But these defeated people are hoping that if they wait long enough Turkey will let them in. While not officially opening the border, the Turks are helping those who crossed illegally. For those who haven't, the Turkish people have responded to appeals for aid and food and other provisions are now on their way to the mountains. But while thousands of refugees continue their trudge towards snowy highlands, other Kurds are heading back home. These refugees are returning to government held Sulimunia, apparently responding to an amnesty granted by Saddam Hussein. They mingle with the Iraqi troops from whom they fled just days ago. Overhead a helicopter megaphone booms out the amnesty details. These Kurds say it's better to return to Iraq than watch their children die of cold and starvation. In Baghdad, Saddam Hussein has again been meeting Revolution Command Council. His amnesty covers all Kurds in the North, even pardoning Kurdish deserters from the army. He says that those who return to Iraq will have their rights protected, but Kurdish leaders doubt him. They say they've heard such promises before.

MR. LEHRER: Two anti-Iraq protesters were killed outside Iraqi's consulate in Istanbul, Turkey, today. They were among a group of about 40 people protesting Iraq's treatment of the Kurds. Shots were fired from inside the building when demonstrators stoned it. Police said it was unclear who fired them. Kurdish protesters in Bonn, Germany stormed Iraq's embassy there. They briefly occupied the building before being ejected by police. Kurdish protesters also took over Iraq's embassy in London. They destroyed pictures of Saddam Hussein and threw files from the building. They later surrendered peacefully to police.

MR. MacNeil: Pres. Bush is sending Sec. of State James Baker to assess the refugee situation along the Turkish border next week. The visit will be part of a week long tip to the Middle East. Baker's main focus will be to try to revitalize the Arab-Israeli peace process. State Department Spokeswoman Margaret Tutwiler said Baker would discuss construction of new settlements on the occupied West Bank with Israeli officials. She said that was one obstacle to the current peace efforts. Baker will also visit Egypt. Iran's foreign minister said today that efforts to free Western hostages in Lebanon had reached a dead end. He blamed the United States for not making any good will gestures in response to previous hostage releases.

MR. LEHRER: Former Sen. John Tower was killed today in a commuter plane crash near the airport at Brunswick, Georgia. His 34 year old daughter, Marian, was also among at least 19 people killed. Witnesses said the Turbo prop plane caught fire when it crashed. It was operated by Atlantic Southeast Airlines and was en route from Atlanta to Brunswick when it went down in a wooded area about three miles from the airport. Tower served 24 years as a U.S. Senator from Texas. He was a Republican who was later rejected by the Senate after his nomination by Pres. Bush to be Secretary of Defense. He was 65 years old.

MR. MacNeil: Pres. Bush's new drug policy director, Bob Martinez, criticized the nation's colleges and universities today for not being sufficiently aggressive in fighting drug abuse. He told representatives of fraternity and sorority organizations that schools receiving federal funds must implement drug prevention programs and said compliance with the law of the land isn't too stringent a requirement for American students. He spoke in Washington.

MR. MARTINEZ: You will often hear it said that the so-called real drug problem isn't on our college campuses, college campuses used in this case as a misleading shorthand for middle class white kids. The real drug problem is addiction, this argument goes, and addiction is in the ghetto, nowhere else. Here's my view of that argument. It is arrogant nonsense. Drug addiction, the so-called real drug problem doesn't attach itself only to people whose skin is a certain color, or whose bank accounts are a certain size. Addiction attaches itself to people who use drugs, period.

MR. LEHRER: Nearly half of the FBI's 474 black agents were called to Washington today for a meeting with Director William Sessions and other top agency officials. The purpose was to avert a class action suit charging the Bureau with racial discrimination. Some of the agents have already filed individual suits. The Veterans Affairs Department said today six men died at a VA hospital in suburban Chicago because of bad care. Sec. Edward Durwinski said an investigation of 120 patient deaths between June 1989 and March 1990 showed errors in medical judgment and medical procedure in six of those cases. He called it extremely upsetting and said the VA would not tolerate it.

MR. MacNeil: The Russian parliament today gave final approval to a resolution granting emergency powers to Boris Yeltsin to deal with economic unrest in the Russian federation. The parliament also approved a June ballot for an elected president. The measures give Yeltsin a stronger platform from which to challenge Gorbachev's leadership. An exuberant Yeltsin today thanked the Russian parliament for approving his new powers in a 3 to 1 vote. Just a week ago, hard liners tried by failed to push through a vote of no confidence in Yeltsin.

MR. LEHRER: An earthquake killed at least 38 people in Peru. It hit late last night 400 miles North of Lima. It measured 6.9 on the Richter Scale. A jungle Highland city with a population of 50,000 was leveled. A second quake struck Southern Peru today. Many small aftershocks continued to shake the area throughout the day.

MR. MacNeil: The space shuttle Atlantis flew into space this morning from Cape Canaveral, Florida. The main purpose of the five day mission is to release a space observatory. The $600 million satellite will circle the earth for two years monitoring the most powerful radiation in the universe. On Monday, two of the astronauts will take a walk in space, the first such attempt in five years.

MR. LEHRER: And that's it for the News Summary tonight. Now it's on to a major look at unemployment in America, Gergen & Shields, and a Roger Rosenblatt essay. FOCUS - NOTICE - PINK SLIP

MR. MacNeil: Unemployment is our lead story tonight. Today's figures from the Labor Department confirm what many Americans know from personal experience, whatever hope there may be that the recession will be a short one, the unemployment picture remains gloomy. Today's news also follows a report yesterday that the number of Americans filing new unemployment claims has jumped to the highest level in eight years. In a moment we'll talk with some experts about the current problems, as well as longer-term trends in the work force, but first, our Business Correspondent Paul Solman visits the front lines of the unemployment struggle.

MR. SOLMAN: A recent Monday morning just off Flatbush Avenue in Brooklyn, the busiest unemployment office in the nation and Michael Josephson is in charge. How's business?

MICHAEL JOSEPHSON, Unemployment Center Director: Booming! The place is generally packed. Many people are losing their jobs and they just can't seem to find anything suitable and they're staying out of work a lot longer.

MR. SOLMAN: Welcome to the recession of '91. Michael Josephson and his minions try to keep up appearances, but this place is under siege. To save money, New York State has shut down four other Brooklyn offices in the past two years, shunting their case loads here. Then came the recession, increased layoffs, and even more strain on the system. In a word, the unemployment system is overwhelmed. Necessities are missing and when it comes to amenities, well, to be frank about it, the cupboard is bare. The situation is so bad that union activists are here trying to organize the unemployed in order to improve conditions and to extend benefits beyond the current maximum of 26 weeks.

SPOKESPERSON: And if we can't find work, what are we supposed to do, and when your unemployment is over, how are you supposed to live? Either they have to open up more jobs, or they have to extend the benefits.

MR. SOLMAN: This unemployed secretary is one of more than eight million Americans now out of work, 6 1/2 percent of the total work force, and that's before you add the extra million or more so discouraged they tell survey takers they're no longer even looking for work. Now you may have heard people calling this the white collar recession. We did so ourselves a few months ago. But it turns out that even though record numbers of managers are unemployed, the brunt of the downturn is still being borne by those closer to the economic bottom. What kind of things have you looked for?

UNEMPLOYED MALE: Painting jobs, construction, laborer, you know.

MR. SOLMAN: What are you doing here?

UNEMPLOYED PERSON: Well, I'm trying to get an extension on my unemployment because mine expired February 24th.

MR. SOLMAN: So you went through the 26 weeks, you mean?

UNEMPLOYED PERSON: Yeah, 26 weeks.

MR. SOLMAN: And do you think you have a shot at an extension?

UNEMPLOYED PERSON: Hope so, till I can find another job.

MR. SOLMAN: The growing number of people who've run out of checks without finding work is, in fact, a leading indicator of just how tough times are. More than 2 million Americans exhausted their benefits last year, up 16 percent form the year before. The situation was worse in New York State, where the number who used up their benefits grew by 36 percent. [EMPLOYMENT COUNSELOR TALKING TO UNEMPLOYED PERSON]

MR. SOLMAN: At this office alone, more than 15,000 people ran out of unemployment insurance. Ubaldo Williams just joined their ranks. Now he's no stranger to extended unemployment. He was out of work for a year back in the '74/'75 recession when he went to school to learn computer programming. This time he's again out of a job and a $40,000 salary supervising computer operations at a Brooklyn hospital.

UBALDO WILLIAMS, Unemployed Computer Supervisor: So, of course, I went onto unemployment because of the fact that it's not easy finding jobs as a supervisor in operations unless you decide to go back and become a regular operator at a very low scale pay.

MR. SOLMAN: Williams says it's time for yet another new career, pretty tough for a man aged 45 whose wife has just left him, seeking divorce, as his financial woes mount.

MR. WILLIAMS: I had a car. I had a Honda. I wound up selling it in order to meet my expenses. I'm not able to buy any new clothes or anything. It's affected me where I don't have a bank account either and God forbid a catastrophe should hit me; I wouldn't be able to meet it.

MR. SOLMAN: His 26th check from the Brooklyn office is his last, meaning that someone in Ubaldo Williams' position has less of an income safety net than at any time in decades. Now the U.S. hasn't reverted completely to the past, back to 1936, for example, when the very first unemployment check was issued to one Neils B. Ruud, an engraver from Wisconsin. At that time, 1/4 of America's labor force was unemployed and benefits on average were about $10 a week for 16 weeks.

PRES. ROOSEVELT: [1936] We can never insure 100 percent of the population against 100 percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty stricken old age.

MR. SOLMAN: But as the years went by, the protection went up. In a recession of the '40s and early '50s, you got about 1/3 of your paycheck for 26 weeks, and in the recessions of '58 and '61, temporary extensions of 13 more weeks were granted. By 1971, 39 weeks had become the standard. Then in '74/'75, with 8 1/2 percent of the work force unemployed, benefits were extended to 65 weeks. But beginning with Jimmy Carter, budget cutbacks sent the numbers in the opposite direction. Keith Brooks watched it happen. It's what helped make him an activist.

KEITH BROOKS, National Unemployment Network: Well, there's two significant facts that stand out in terms of what's happened to the unemployment insurance system as a cushion for people out of work. 1975 to 1977, there were 65 weeks of unemployment benefits, contrast that to 26 weeks today. Six months now for people that are out of work, back then over a year. That's Point No. 1. The second point is that back in 1975 to '77, over 70 to 75 percent of everybody who was out of work was able to collect unemployment insurance as a buffer. Right now that statistic is about 37 percent and for the last two years has actually been around 1/3, which means that 2/3 of all people who are out of work have not been able to collect unemployment insurance.

MR. SOLMAN: Why?

MR. BROOKS: Well, for a variety of reasons, one of the most significant of which is obvious to us is that with fewer weeks of unemployment benefits, people run out of benefits quicker.

MR. SOLMAN: There are other reasons why fewer people are receiving benefits. Yvonne Woods is in film and video production. She's here for the first time.

MS. WOODS: It feels funny.

MR. SOLMAN: Embarrassing?

MS. WOODS: A little bit I guess, yeah, that would be a good word. Just all around uncomfortable.

MR. SOLMAN: Labor Economist Richard Freeman.

RICHARD FREEMAN, Labor Economist: People, particularly people who are unemployed for the first time, feel ashamed. They don't realize that they've paid taxes for this insurance and instead, they feel they're getting a handout or something like that. Two, if you think you're unemployed for only a short period of time, the bureaucratic hassle may just not be worth it for you. And I think the decline of unions in the U.S. has a role, because as more and more workplaces become non-union, you kind of ask, you're laid off in the workplace, who is there to tell you where to go, what to do, maybe to help you fill out forms, or whatever it happens to be?

SPOKESPERSON: The maximum benefit rate at the present time is $260 per week.

MR. SOLMAN: And if it weren't bad enough that it's now harder for some people to sign up for benefits, for the first time ever, those benefits are considered taxable income, so what's the bottom line? Well, people now get fewer weeks of unemployment than in any recession since Dwight Eisenhower was in office at the same time that they're out of work longer. Leanetta Hartwell spent 16 years in the Navy, then came to New York just as the economy sank.

LEANETTA HARTWELL: I was willing to wash cars in a car wash. I walked up and down the streets, stores, I mean, I tried everything. I couldn't find anything.

MR. SOLMAN: After 16 years in the Navy?

MS. HARTWELL: That's right.

MR. SOLMAN: Were you surprised?

MS. HARTWELL: Totally surprised, extremely surprised. Had I known, I would have not left the Navy, but it's very, very hard out here.

MR. SOLMAN: So hard she was on the brink of homelessness. Hard too for Pauline Ecleston, who couldn't find work seven months after being laid off from an accounting firm, but we're ending with a success story, because both these women finally found jobs in one of the few growth sectors of the New York economy, unemployment insurance. You see, they now process claims here in Brooklyn.

PAULINE ECLESTON: I'm glad for my job. I know how it is to be on the other side of the road not working.

MS. HARTWELL: Having the knowledge of what they're going through makes it so much easier to deal with people because you know what they're going through. It's frustration. It's anger. It's -- you know, what am I going to do -- it's rough. It is rough.

MR. MacNeil: We're joined now by Thomas Hartnett, the Commissioner of Labor for New York State, Lenore Miller, president of the Retail, Wholesale & Department Store Union which represents 125,000 workers in the U.S. and Canada, and Mitchell Fromstein, Chief Executive Officer of Manpower Incorporated, the largest temporary employment agency in the world. And he joins us from Milwaukee. Mr. Hartnett, Paul Solman said the unemployment system is overwhelmed at present. Would you agree with that?

MR. HARTNETT: I think that's a fair statement. We've got an extraordinary increase in claims, not only in New York, but as part of this national recession in many states. The federal government, and this is a federal program, has been slow in providing us with the resources. You saw some of the lines in some of the clips that you saw already. It's very difficult, very dedicated staff. We've laid off a number of, several thousand employees over the last several years as a result of cutbacks and federal support for the program.

MR. MacNeil: What happens to the people whose benefits run out? How do they live if they can't find work? Do they go on welfare, what?

MR. HARTNETT: Well, welfare is certainly one possibility. Some have to sell virtually everything they own, take children out of school, become homeless, a number of alternatives none of which are particularly appealing.

MR. MacNeil: What -- how bad does the unemployment rate have to get in New York State before the law kicks in and allows you to extend the benefits here?

MR. HARTNETT: Extended benefits is a very vital program, that is to say when you exhaust your 26 weeks, you're eligible for additional benefits. There is currently a trust fund right now in Washington that has $8 1/2 billion in it for the purposes of extended benefits. We would have to virtually increase the unemployment rate by 50 percent in order to be eligible for those - -

MR. MacNeil: You just can't ring up Washington, ask for money from that? Your unemployment rate has got to rise to a certain point to trigger that?

MR. HARTNETT: That's right. There's a trigger mechanism, without getting into the nuances of the formula, is somewhere around 10 1/2 or 11 percent, which would be a total and complete disaster. So extended benefits, as it is currently constructed as a program, is really irrelevant for the men and women that are suffering right now in our offices.

MR. MacNeil: Who are the people who are being laid off now in New York State chiefly?

MR. HARTNETT: I don't think New York State is different than many other states. It's not a blue collar recession; it's not a white collar, it's an all collar recession. We see every type of worker in the unemployment lines now, certainly blue collar, construction, and the like, factory workers and the like, certainly white collar. That was hit quite heavy sometime ago in New York with finance and banking and insurance and the like, so we see a lot of different people in the line. The important factor about New York, and again, this is a national phenomena, is that the average age of the person that's standing in line in New York is 37 years old. These people have 30 years left in the work force and we need to do the right thing by them right now.

MR. MacNeil: Ms. Miller, who in your union membership is being hit hardest right now, and where in the country?

MS. MILLER: I think Tom has indicated to you that New York State is no different than the rest of the country and we've seen this going on for some period of time. This is not a new phenomenon. We've seen it first in the Midwest. It's come further East for us to members that are more affected, and it runs right across every industry we represent.

MR. MacNeil: Just go through -- you represent department store workers, checkout workers in supermarkets, tell me some of the other things.

MS. MILLER: Food processing workers, health care workers, service employees, public employees. We represent the whole range of working people.

MR. MacNeil: And right now, where are the new layoffs? What kind of your workers would be in these new statistics this last month?

MS. MILLER: Well, let me say to you that some of our industries have gone totally so that they were laid off or out of work many, many, many months ago, and some years ago. They've moved into other industries. They've moved into jobs they thought were safe, white collar jobs and so on. They are now being laid off. Our retail people are being hit very heavily even in the supermarket industry where you think they would be relatively safe.

MR. MacNeil: What is the possibility in your, in the industries you represent of finding employment in the same industries now?

MS. MILLER: Very difficult, almost impossible, almost impossible, and we are seeing discouraged people, people taking part-time work. That's happening to a lot of our workers that we represent.

MR. MacNeil: Mr. Fromstein in Milwaukee, I understand you regularly survey 15,000 companies who know what they're planning to do. What businesses are still laying people off chiefly?

MR. FROMSTEIN: Well, I think as has been said by everybody who's spoken so far, the down sizing or the reduction of work forces is really taking place right across the nation pretty much in all of the industries and pretty much in all skills.

MR. MacNeil: Are any businesses hiring now in significant numbers?

MR. FROMSTEIN: Yes. Significant numbers is a difficult thing to define, but if you take the 15,000 firms that we survey each quarter, the last quarter our survey showed that 18 percent of the companies intended to increase their work force in the quarter that we're right now, and 13 percent intended to reduce their work force. 67 percent were going to maintain the work force at the size it was at.

MR. MacNeil: Is that 18 percent a sign of hope that a turn is coming, or how do you read that -- 18 percent who plan to increase their work force?

MR. FROMSTEIN: I think as a practical matter that's probably half of the normal percentage in good times, so -- and the 13 percent that are going to reduce is probably twice the percentage that we see in normal times, so I think there's no question about it.

MR. MacNeil: You don't see any turning around yet?

MR. FROMSTEIN: Not at the moment. We're out surveying currently for the summer quarter, and that may show something different, but certainly the last four quarters that we surveyed really were indicating that things were going to get progressively worse, and they did.

MR. MacNeil: Commissioner Hartnett, if yesterday's figures showed that new applications for unemployment insurance are the highest in eight years, does that signal that a month from today when the new unemployment figures come out they'll be even higher? Does that indicate they probably will be even higher?

MR. HARTNETT: I think you're going to see them higher. I don't think we've seen the bottom of this as yet. There are some optimistic signs occasionally that you see but none in these particular figures right now, so I think we're in for a little, a little bit longer before we start to see anything turn around.

MR. MacNeil: Do you see any signs of a turnaround in the industries you represent?

MS. MILLER: No, not at all. As a matter of fact, I think they're probably going to become somewhat worse, if not a lot worse, before there's a turnaround.

MR. MacNeil: Mr. Fromstein, the administration has been saying they expected the recession to bottom out by mid summer, the end of the second quarter. Does it look that way to you?

MR. FROMSTEIN: Well, there really isn't any evidence that you could hang your hat on at this point. It's certainly possible because it's almost impossible to identify in advance when that turning point is going to come, so I think what the -- customarily what happens is you put it out far enough so that you're not stuck with tomorrow's figures, but certainly it could come in the second quarter or at the end of the second quarter. I'm not sure that that in and of itself, that turn, is going to produce the jobs to reduce the unemployment rate immediately.

MR. MacNeil: Explain that. Just spell that out a little bit more.

MR. FROMSTEIN: Well, you can get a turn in the economy where things come off the bottom or they reach a bottom, and there's at least a six through seven month period following that where all of that translates into the hiring process which really has to take place in order to reduce the unemployment rate.

MR. MacNeil: Do you agree with that, that it could be six or eight months after the recession began to turn around before you saw a real improvement in unemployment?

MR. FROMSTEIN: I see clearly there's a lag there between the time a decision is made on the part of a business that is going to start hiring and tooling up and doing whatever has to be done and then bringing people back on. I think that's true.

MS. MILLER: I have to disagree.

MR. MacNeil: You disagree?

MS. MILLER: I would certainly disagree. History has shown us that after the last two recessions it's taken at least four years or five years --

MR. MacNeil: Four years?

MS. MILLER: -- to come back to a figure that was in effect before that recession.

MR. MacNeil: Mr. Fromstein.

MR. FROMSTEIN: Yes. I wasn't describing how long it takes to get back to the prior levels. I was really describing where we would begin to feel it in terms of reduction of unemployment.

MR. MacNeil: Well, speaking of getting back to higher levels, let's bring in now two people who look at the longer-term trends in the labor force. Robert Reich is a political economist at Harvard's John F. Kennedy School of Government, author of the recently published book, "The Work of Nations". He joins us from Boston. And Gary Becker is an economist at the University of Chicago, and a columnist for Businessweek Magazine, he joins us from Chicago. Robert Reich, how much of this unemployment is due to the present recession and how much to longer trends in the work force?

MR. REICH: Well, Robin, obviously, much of it, most of it is recessionary, but there are some longer trends at work here. We see, for example, like over the 1980s, really since the 1970s, a gradual loss of your production worker in the United States, your blue collar worker, and a lot of your pink collar workers, that is your data processors, a lot of that's being done in places like Barbados and the Philippines. A lot of those people have had a difficult time getting jobs. Many of them have ended up in the local service economy, but the local service economy is subject to a lot of automation, automated checkout counters, automated gas station attendants, and so that you have over time a structural problem with regard to a lot of the unskilled workers in the United States, that is definitely part of the problem even if we get beyond the recession, there is going to be that problem remaining with us.

MR. MacNeil: Are you suggesting that far from coming back to where the unemployment level was, that some of these jobs that are being lost right now will be permanently lost?

MR. REICH: Well, we've seen that every time we've gone into a recession really over the last fifteen or twenty years, Robin, that a lot of our blue collar work, a lot of our so-called pink collar, data processing type work, never comes back. The jobs that come back tend to be of lower quality. They tend to be in the local service economy, paying oh, anywhere from ten or fifteen dollars an hour less than many of those blue collar jobs. So we need to be concerned not only about the level of employment, but also about the quality of employment, and over the long-term it may be that the quality of employment becomes our biggest problem and the United States will have an elite of about 20 percent of the work force, highly trained, college educated, managerial, professional, and technical, that keeps on going upward in terms of their real incomes, but the great majority of American workers lacking such training facing a new world economy in which they are competing with a lot of untrained people around the world eager to work for a small fraction of their wages find that they just simply have low quality jobs that are paying a little more than the minimum wage.

MR. MacNeil: And do you see that trend the same way, Gary Becker?

MR. BECKER: Well, surprisingly enough, I agree with much of what Dr. Reich said. I think what we've seen since the early 1970s is a decline in the wage rates of the earnings of low skilled workers compared to the high skilled. It's a 20 year trend now. In fact, if you look at young high school dropouts, young high school dropouts in the early '70s were earning about 40 percent more than what young high school dropouts are earning today. So that it's a major trend not simply or mainly in unemployment. Unemployment rates came down, as we all know, to a little over 5 percent a year or so ago. It's in earnings of those who are actually employed, and there we've had a big increase in the gap between skilled workers and the unskilled workers. It's much harder for unskilled workers not to find jobs -- they've been finding jobs -- but to get paid anywhere what they were getting paid 20 years ago, and I think that's the major trend that's been going on. The current period is a recession thrown on top of that trend. I think far more important for the low skilled workers is this 20 year trend that shows no sign of being altered now.

MR. MacNeil: Well, if you were looking at, for instance, Ms. Miller's industry, people who work in retail sales and so on -- you heard her describe it -- would you say that a lot of the jobs that are being lost in this recession are not going to come back?

MR. BECKER: Well, I think in general jobs will come back. I think we've noticed in all recessions jobs eventually come back. As some of the speaker said earlier, it takes a while for jobs to come back. We hit a 10 percent unemployment rate in the early '80s. It came back to a little over 5 percent, a major change in the course of the '80s. Now we're back up to 6.8 percent, which, of course, is lamentable. We'd like to be lower than that. I think once the recession is over -- and I agree with some of the previous speakers -- that nobody really knows when these recessions end -- but it will end and probably within six months or so -- then gradually jobs will come back, and I think in her industry as well as in others.

MR. MacNeil: Prof. Reich, if the economy is creating a larger gap between the very skilled 20 percent and the others, as you describe, who are being squeezed out of jobs where they can earn the kind of money they used to, what happens to them and who replaces them and just what happens over the next 10 years or so?

MR. REICH: Well, essentially, Robin, a lot of these old middle class jobs, a lot of the production worker jobs, blue collar, pink collar jobs, they, they vanish, they go to other places around the world where people are willing to do them much more cheaply. The average American manufacturing firm has been creating over the 1980s, even beginning in the mid 1970s, more jobs outside the United States than inside of the United States.

MR. MacNeil: But you're painting -- and I may be putting it too extremely -- but you're painting a very gloomy picture of 20 percent of people very well off and 80 percent of the people poor or unemployed in this country.

MR. REICH: Well, Robin, I certainly don't want to be apocalyptic about it, and there's nothing preordained, it doesn't mean we have to go in that direction. If we as a nation decided to invest substantially in training -- you know, over the 1980s, the federal government slashed training funds by 50 percent -- if we got serious about education, particularly in our inner cities, and our poor rural areas, if we got serious about Head Start and a lot of other programs that have been proven to work and help people, even very little people prepare for education and the lives of productive work, we as a nation could actually generate a lot of highly productive, highly skilled jobs in the future. I think the problem is that we have not gotten serious about human capital, a term of art having to do with really the skills and the insights of our work force, and as a result, the fortunate fifth is on a very different track than the bottom 80 percent. One escalator is going upward, another escalator is going back downward.

MR. MacNeil: Gary Becker, do you agree with that, that the country could pull it around, turn it around if it made a major investment in human capital?

MR. BECKER: Well, I like the term "human capital" and I think it is a bit of an exaggeration. I don't think it's 20 versus 80. I think what we really have is something like the bottom third of the working population has suffered enormously in the last 20 years. I think it's possible to pull it around. I think it's possible without increasing our spending that much. We have, as we all know, tight budgetary situations now, and we want to look for solutions that do not involve huge increases in spending, because we won't get such increases in spending. I would suggest two things also concerned with the training of workers, one that we in our educational system, we provide for greater choice, private as well as public schools. I think we can do that and probably save money. And two, and I think a very crucial area, is to provide better training for young workers just entering into the labor force, to combine their school training with on-the-job training and apprenticeship training the way Germany, Sweden, Switzerland, Japan, and several other countries in the world are doing very successfully. Again, we can do that I think with not a huge investment in money. It wouldn't cost a great deal, but I think it would be enormously important for those young workers now who need it, particularly strongly in light of the current situation in the world, and I think we can do that and do it successfully.

MR. REICH: If I could just interject here, I agree that models like what the former West German apprenticeship system looks like are possibly quite relevant to us. In the former West Germany, the non-college bound, something like 90 percent of non-college bound youth had an opportunity to train for skills, highly technical skills, that guaranteed them goods at the end. But to assume that that's not going to require very much money I think is absolutely naive. It does require money. It may not require 25 or 30 billion dollars. It's certainly going to require 10 or 15 billion dollars. With regard to education, yes, some choice might help wherever choice works, but there are a lot of places that need, desperately need money.

MR. MacNeil: Isn't that apprenticeship system in Germany paid for by the firms, themselves?

MR. BECKER: A good part of it is paid for by the firms, themselves, some part by the government, but the firms contribute a good share of it. I disagree. I don't think a lot of spending is involved. The problem with our approach to education and training during the last 20 years is the belief that we by throwing in a lot more money, we could get big results. We have thrown in a lot more money. We spend a larger fraction of our income on education in Germany and Japan and almost every other country in the world.

MR. REICH: But if you look at K through 12 education -- if you look at K through 12 -- not college education -- we do a terrific job at college education. We do a terrific job at the wealthy suburban schools. Just look at K through 12 and look at our urban schools and our poor rural schools, no, there is not adequate money.

MR. MacNeil: Gentlemen --

MR. REICH: If I could just --

MR. MacNeil: Gentlemen, if I could just squeeze in here a moment, everything we do these days seems to come back to education, but we just want to bring the others back in before we go. Do you, Commissioner Hartnett, do you see the long-term picture the way they're describing it?

MR. HARTNETT: I see the essential nature of work changing and what an employer looked for in the manufacturing job several years ago. He's very different now. He's looking for someone who can be innovative, who can solve problems, who doesn't need supervision, the high performance work teams that we see so much about and the best companies in this country, and we're going to have to start training our workers for that. I think what is needed -- I mean, apropos, some of the comments that are made already, I think resources are needed, there's no question -- but what is really needed is a national vision of what our work force and human resource development policy is all about, and I frankly don't see that. I think --

MR. MacNeil: You don't think that the marketplace needs of American firms is going to provide the incentive to do what these gentlemen are describing?

MR. HARTNETT: I think --

MR. MacNeil: You think that it will need some huge sort of kick in the pants from the federal government, is that what you're talking about?

MR. HARTNETT: No. I think if we just allowed that to happen, I think we'll be behind the curb. I think we need to get out in front of that. We recognize what some of the dynamics are. We recognize what some of the changes are. We need to start doing things now. Apprenticeship programs is a prime example. In Europe, the average age of someone that's in an apprentice program is I think about 18. In the United States here, it's about 29. We need to get those programs back closer to people coming out of school, but we need resources to do it too.

MR. MacNeil: How does your union see it, Ms. Miller, the trends?

MS. MILLER: I must tell you this, that I'm not an economist, but it seems to me that you can't pick and choose from foreign countries. You're talking about countries that have national health care, that have parental leave, that have child care that is paid for through government programs, and then you're trying to compare them to the United States where we have none of those. You're talking about multinationals who are answerable to certain standards within their own countries and we allow them to come here and not live up to those standards. You're talking about worker availability right now with the Mexican possibility of a Mexican free trade agreement which will cost us more jobs. So unless the economists stop picking and choosing bits and pieces that fall into the pattern, I think that we're not making any progress. I think that we have to retrain certainly. I think that we have to gear up the plants. I think they have to be brought into the 21st century. I think we have to spend money on that. I think we have to be innovative in programs that provide services for workers, and I think that all of that needs to be done, possibly with the cooperation of the employer, but certainly with a governmental initiative.

MR. MacNeil: Mr. Fromstein, how do you see long-term, and do you see the marketplace forces, the incentives of industries needing more highly trained workers providing what's needed?

MR. FROMSTEIN: Robin, this debate or this discussion reminds me of 1987 when we had the lowest unemployment rate, when we were at the top of the boom, the same arguments were being made, and I think they probably will be made for a long, long time. If you look at what we're facing today, it's a recession. The recession has exacerbated the unemployment problem, and there is an unemployment compensation problem, and you put all those together. I think what we really have to do today practically is to look to get people back to work and that's going to come with a reverse in the economy. From there forward and in better times, I think we can talk about spending and training. I'm sure that business is going to address itself to the training issue, because we're in a global work force mode today and they have to and they will.

MR. MacNeil: Well, Mr. Fromstein, Ms. Miller, Commissioner Hartnett, Robert Reich, and Gary Becker, thank you all for joining us. FOCUS - GERGEN & SHIELDS

MR. LEHRER: Now to our Friday night conversation with Gergen & Shields, David Gergen, editor at large of U.S. News & World Report, Mark Shields, syndicated columnist for the Washington Post. On unemployment, David, does the rise in the unemployment rate today have any political tentacles on or around it?

MR. GERGEN: Sure, absolutely. It's bad news for Americans, but for Democrats it does obviously -- if the unemployment rate were to continue to be up in high numbers like this and to rise some more, it will open the door to Democratic candidates becoming serious again about the Presidential nomination. It will change the cast of people running for President, but more importantly, I think it gives the Democrats for the first time a chance to come before the country and talk seriously about the domestic needs of the country, and the party's been fairly quiet in the last few weeks and the last few months, actually, and I think that the silver lining to this unemployment number is that it will refocus attention on the needs at home, long-term needs at home.

MR. LEHRER: Not just for the Democrats but of everyone, do you think?

MR. GERGEN: I think that's right. Of course, we're in a situation, as your previous guests were discussing, where we've spent so much money that it's hard -- and the federal budget is so far out of whack, it is very difficult now to bring these programs on line to help bring us out of this recession quickly. But you can -- you do have the opportunity to be building for the long haul, and that's really the most important challenge for the country is to prepare for the next 10 years, because after this recession is over, there are a lot of people predicting an anemic recovery. We may out of the recession in a matter of months, but if the economy grows at a very slow rate during the recovery, that's going to mean a lot of unemployment for a long time to come.

MR. LEHRER: Mark, if you were, in fact, a Democrat, would you see a silver lining in this?

MR. SHIELDS: I really wish I could, but I don't, and ironically, Jim, two factors are at work. The Democrats are without a convincing or coherent economic ideology. They're still seen by American voters as a party that cares more, that's more compassionate, almost more nurturing. The Democrats get higher marks than the Republicans, David's absolutely right, on issues like who cares more about employment, who will defend Social Security, who's going to be better for Head Start, or the environment, sort of nurturing issues, almost, if you will, almost feminine issues, historically and traditionally. On the more masculine issues historically, traditionally, however you want to look at it, dealing with the outside world, running the economy, almost the whole, dealing with the whole, the Republicans, and the thing that just ought to scare the living bejesus right out of the Democrats is that by a margin of 2 to 1, the highest unemployment we've had in this country in nine years by a margin of 2 to 1, American voters still see the Republicans as better than the Democrats at getting us out of the recession, while they see the Democrats as caring more about unemployment. I think it's one of the problems of being a Congressional party. There is no voice that has emerged with a national voice for the party. Each Democratic Presidential candidate has either lost so badly or been destroyed in the process, like Michael Dukakis, lost so badly as did George McGovern or Fritz Mondale, that they disappear.

MR. LEHRER: So somebody's sitting at home anywhere in America today saying, hey, the unemployment rate went up terrifically today, and it's awful, now if the Democrats had been elected, boom, there's nobody to fill in the blank, is that what you're saying?

MR. SHIELDS: That's right. There's a sense that Democrats -- David's absolutely right -- there's a straight jacket that the traditional remedies, the historic remedies of deficit spending, of large public works, are straight-jacketed because of where we are on spending.

MR. GERGEN:But you know if the Democrats don't have a coherent, economic philosophy and they have no firm philosophy, it's hard to know why they're still a party. I mean, what is it they represent? But I think the danger here -- and there are a lot of them -- I don't want to minimize the burden on Americans who are unemployed -- it's obviously a terrific burden and a lot of people, of course, are near the unemployment line or their salaries are so low that they're living right on the fringe of this. I think the danger here is that the Democratic Party rather than using this constructively to talk about the future and put investments in education and in plant and equipment and higher savings rates will turn to protectionism and will try to defeat, for instance, the free trade agreement that they're -- that the administration is now trying to fashion with Mexico. We just heard one of your guests talk about that. That's the big issue, the big fight that's now shaping up in Washington is whether the President ought to have the authority to negotiate both with the Europeans and the Japanese at what's called GATT, the Uruguay round of GATT, as well as a free trade agreement, much less it's going to be a very close fight.

MR. SHIELDS: Let me just point out, it isn't the advantage politically that it historically has been for the out party. I mean, now the -- you can't blame Jimmy Carter anymore, because he's been gone for 10 years, so the villain in the piece, the continuing budget problems are blamed on Ronald Reagan by most people. I mean, the first part of Reagan's administration you got a sense of him driving a convertible with the top down through a car wash. Jimmy Carter would have gotten wet. I mean -- you know -- we sort of blame the predecessor and I really -- I really do feel that George Bush wants to get these troops -- there's an international implication to the Iraqi Persian Gulf -- he wants to get the troops home as David -- the good will and the exultation and the jubilation about the end of the war -- he wants to use that domestically to goose up the economy which has been floundering, and so there's really, I think both issues converge. There's a sense if they don't get the troops --

MR. LEHRER: And they have in our discussion at this very moment. Let's talk about that. The Kurds have dominated the news. The plight of the Kurds has dominated the news this week and they've certainly dominated the conversation on this program. David, there is a perception that the United States is at least partly responsible for this happening to those people on the border of Turkey and on the border of Iran, and that -- but apparently the U.S. doesn't care, the American people don't care, the government doesn't care. Is that a legitimate perception?

MR. GERGEN: I think you can take it one step farther. I think the administration was absolutely terrified that the Kurds would, in fact, rise up and have a fight and maybe even be successful in this Kurdish revolt and a desire for an autonomous fate or an independent state would spread beyond the borders of Iraq into Turkey, into Iran, into Syria, and that you'd have a real mess on your hands. That's the reason the administration has not been sympathetic to going in fighting on behalf of the Kurds. I do think one thing's happened this week though, Jim, politically. It seemed to be prior to this week there was a very strong argument on the part of the administration not to get -- not to fight to intervene militarily on behalf of rebels, to get ourselves into a war we didn't know the end of -- quagmire in the civil war -- I think this week the argument has changed that okay, if you don't want to go in and fight, that's one thing, but we cannot allow -- it's quite another thing to allow the slaughter, the genocide of these innocent civilians, and I think there's a rising chorus, one in which I happen to share, that we do have a moral responsibility to stop the slaughter, not to send the Marines in to fight on their behalf, but to ensure that these people aren't shot in the back as they try to flee from the Iraqi troops.

MR. LEHRER: Do you agree with that, Mark, that that message has gotten over and something's going to -- well, this afternoon the President announced that he's going to do an airlift beginning on Sunday to drop some supplies to these folks, is that going to do it?

MR. SHIELDS: Absolute opposite of where we were militarily. Instead of leading, instead of putting it together, this -- George Bush, as Bob Shogan of the LA Times put it, elevated network into a cosmic art assembling that coalition -- this time we're dragging. I mean, we are following the French on humanitarian aid. That's - - that's hardly a record which most countries strive for, with all due respect to the great Republic of France, and the reality is that George Bush is also getting criticism from conservatives I think with a certain consistency who believe in intervening in China, who believe in intervening in Lithuania, and Estonia. There's a sense of what are we to do, did we not, in fact, call this man Adolf Hitler, is it unthinkable that after World War II we would have had Adolf Hitler pacifying Germany? Of course, he was an Adolf Hitler, and that's how we could call him Adolf Hitler, because he couldn't light up the skies over New York or Boston the way we could light up the skies over Baghdad.

MR. GERGEN: Jim, the President is active now and, Mark, I think that what he's done in the last 24 hours is going to be regarded as too little, too late. I mean, sending an extra $10 million is not going to do a lot. Sending Jim Baker over there sometime next week, if we seriously thought this was an urgent problem, there would be somebody on a plane tonight going over there. These people are going to be murdered by the thousands in days.

MR. LEHRER: We talked on this program last night -- we had our regular group of editors on it last night -- and the question was that has the message gone out that somehow the lives of Kuwaitis should be more important to us Americans than the lives of Kurds? Sure, there are geopolitical complexities here that were not involved in the Iraqi invasion of Kuwait, but just morally it's a difficult question, isn't it, David?

MR. GERGEN: I think it's easy to draw that conclusion, but I would say that there is a distinction between the Kurds and the Kuwaitis, and that is the Kuwaitis lived in another country and Iraq's invasion of Kuwait was the first time since the second world war that a member of the United Nations has tried to swallow up or murder another member of the United Nations. That's quite different from the problems of dealing with an internal population. It's the difference between how the Soviets are dealing with some of their revolts and how -- you know, what would happen if they went into Eastern Europe again. We would oppose that, but we have -- we agonize over these problems of this internal repression, but I think the general American view is we should not go into civil wars inside a country.

MR. SHIELDS: If, in fact, we treat Saddam Hussein's brutal oppression as an internal matter and say we are not going to intervene, it certainly gives a green light to the Soviets in the Baltic states, into any form of oppression. It certainly doesn't encourage the Israelis in the treatment of the Palestinians. If we say that internal -- now Kuwait was -- George Bush put Kuwait on the national agenda. I mean, Kuwait was a family owned oil company with a UN seat -- I mean, that's what it was.

MR. GERGEN: It was an independent country.

MR. SHIELDS: It is an independent country and --

MR. GERGEN: Do you think -- we should not have --

MR. SHIELDS: I'm saying that George Bush elevated to importance and he elevated this to importance and if they would act now, I think --

MR. LEHRER: If I fail to act now and say good night, I'm going to be in trouble. Good night.

MR. SHIELDS: Good night.

MR. LEHRER: See you all next week.

MR. GERGEN: Thank you. ESSAY - INNER DEMONS

MR. MacNeil: We close tonight with an essay. Roger Rosenblatt, editor at large of Life Magazine, reflects on the larger meaning of the pictures we've all seen of the beating of a man by the Los Angeles police.

MR. ROSENBLATT: Among several disturbing things about the notorious videotape of Los Angeles policemen beating up a black motorist was the fact that one was fascinated to look at the event. The fascination focused on pure brutality. As riveting as they were repellent, the pictures of police kicking and punching a helpless victim were shown again and again on television, each showing in the context of a news story. Viewers studied the tape as a too typical tale of white cops lording power over a black man. But one could also watch the tape abstracted from the particular story. Here was violence in progress, in the raw, equally alien, and recognizable. One looked at the tape and into the tape toward the hidden rooms of one's own mind. Violence, awful as it is, is also attractive. And the source of the attraction is mysterious. Why for instance did Eddie Adams' photograph of the Vietnamese prisoner caused the world to stop and look? Not because of what the photo demonstrated about the cruelty of the Vietnam War, or because it caused people to reconsider their political positions. The picture, itself, was the attraction. One was drawn not in spite of the horror, but because of it. Perhaps one identified as strongly with the shooter as with the shot, a reminder of the potential violence in everyone, which in the name of morality and civilization is usually kept under wraps. Yet, that inner potential makes itself known through the eyes. Who could help but stare over and over at the pictures of the assassination of Pres. Kennedy -- or at the assassination of Robert Kennedy -- or at the pictures in South Africa -- or in the streets of the cities -- the mob killings -- the mayhem wrought by gangs -- the victims of the concentration camps -- the dead of the Civil War -- the dead and dying of the War in the Persian Gulf -- the worst that people do to one another made vivid and even surprising, as if one did not know that violence existed without visual proof. The effectiveness of the depictions of Jesus on the cross depend as much on the pain and suffering inflicted as on the beatitude. One stares at the wounds. One wonders how people could hang a man up that way. The unthinkable is giving thought about Jesus and about one's self. Of course, there is a kind of game that people play about violence and human nature. It is not there until it is there, out in the opening, in color or black and white. Once it is there, it's undeniable. The picture is evidence not exclusively of the crimes of the LA police, but of everybody's crimes. And everybody knows it, if in private. No surer sign exists of people's unfathomable nature than the fact that one may look at those videotaped beatings and ask with total sincerity, "How can this happen?", and know at the same time, without a doubt, the answer in his heart. Somewhere in everybody there may be a desire to see the worst, to go to hell in a way, and visit the demons of the mind. These are the same demons which when loosed cause wars, assassinate leaders, commit murder, beat up on innocents and do all the destruction of which people in their civilized phases disapprove. It is like having two sets of eyes. One sees the horror of the horror and recoils. One sees the beauty of the horror and secretly, shamefully celebrates. "There never was a war that was not inward," wrote the poet, Marion Moore, "and often it comes out." I'm Roger Rosenblatt. RECAP

MR. MacNeil: Again, the main stories of this Friday, the nation's unemployment rate hit 6.8 percent, the highest level in four years. Pres. Bush ordered a U.S. airlift of humanitarian aid to the Kurdish refugees. And former Texas Sen. John Tower of Texas was among at least 23 people killed when a commuter plane crashed this afternoon near Brunswick, Georgia. Good night, Jim.

MR. LEHRER: Good night, Robin. Have a nice weekend. We'll see you on Monday night. I'm Jim Lehrer. Thank you and good night.