The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. I'm Robert MacNeil in New York.

MS. WOODRUFF: And I'm Judy Woodruff in Washington. After our summary of the day's news, we go first again to Los Angeles, while President Bush makes a damage assessment tour. Correspondent Jeffrey Kaye assesses the local economy in South Central LA. Paul Solman raises the question of inner city job opportunities and four experts join us to discuss the overall economic picture for blacks. Finally, Charles Krause has a Newsmaker interview with the President of Ukraine. NEWS SUMMARY

MR. MacNeil: President Bush toured riot-scarred areas of Los Angeles today. He said his mission was to listen to community leaders and victims in an effort to develop long range solutions. As he visited the hardest hit areas of South Central LA, Mr. Bush decried what he called "wanton lawlessness." At one step, a grocery store manager told the President that he'd witnessed one of his employees looting the store. Mr. Bush was surrounded by especially tight security and his reception was mixed. At various points, he was booed and jeered by crowds who shouted insults at him. We'll have more on the President's day later in the program.

MS. WOODRUFF: A federal grand jury in Los Angeles was expected to hear testimony today on a possible civil rights case against the four police officers who beat Rodney King. The Los Angeles Times reported the investigation may also examine the actions of the nearly two dozen other officers at the scene. In Washington, Assistant Attorney General John Dunn, who heads the civil rights division, was questioned about the department's efforts to prosecute police brutality cases. Members of the House Judiciary Committee criticized the department for not acting more quickly in cases like Rodney King.

REP. MIKE KOPETSKI, [D] Oregon: The Department of Justice will take a front end approach in terms of it's a bank robbery, if it's drug deals, or gun crimes, and gambling charges, but when you come here, you say, no, we're the back stop.

JOHN DUNNE, Assistant Attorney General: The constitution of the State of California says if there is a federal prosecution, there can be no state prosecution for the same acts. If we jumped in in March of 1991, and if we had lost that case, we would have stripped any authority away from the local officials to prosecute anybody in that incident. Now, I think that's about as good an example of justification for our policy. We know where the problems are. And we're vigilant on it. We're not waiting for things to happen.

REP. MIKE KOPETSKI: Well, I guess 9,835 complaints received, 62 cases taken to the grand jury, that's the bottom line.

MS. WOODRUFF: Dunne also said it was very difficult to win convictions in police brutality cases. He said the average American respected police and is reluctant to send an officer to jail.

MR. MacNeil: It took 203 years to do it, but today the necessary votes were cast for a constitutional amendment to prevent Congress from giving itself a mid-term pay raise. The Michigan legislature voted unanimously to become the key 38th state to ratify it. Three- quarters of the states are required to approve constitutional amendments. James Madison proposed the pay limitation plan in 1789. The drive to ratify picked up steam last year after the Senate voted itself a raise. There is some doubt as to whether the amendment is valid since it's so old. The issue could end up in the Supreme Court. A congressional report out today said fraud and abuse may account for up to 10 percent, or $70 billion of health care spending in this country. The General Accounting Office said abuse afflicts private health insurers, as well as Medicare and Medicaid. The FBI has stepped up investigations of health fraud, focusing on 12 cities.

MS. WOODRUFF: Ukrainian President Leonid Kravchuk today confirmed to the NewsHour that all tactical nuclear weapons under Ukrainian control had been removed from his country. In an interview with Correspondent Charles Krause, Kravchuk reversed a statement he made yesterday in which he said only about 50 percent of the weapons were out. The weapons have been turned over to Russia. Kravchuk said the only short-range nuclear weapons left in Ukraine were on ships of the Black Sea fleet. Russia and Ukraine have been involved in an often tense dispute over control of the fleet. We'll have an interview with the Ukrainian President later in the program. Russian President Boris Yeltsin reportedly signed a decree today creating a separate Russian army. Itar Tass News Agency said Yeltsin made himself the commander in chief. The move was partly the result of Russia's dispute with Ukraine. Yeltsin originally pledged to incorporate Russia into a commonwealth military force, but Ukraine and other republics refused to do the same. The President of Tadjikistan reportedly fled the capital today. Opposition officials said they had taken control of the former Soviet republic. It several days after several days of clashes between government troops and Islamic forces. The opposition has been demanding the removal of the president, who was the former chief of the Communist Party.

MR. MacNeil: In Bangkok, tens of thousands of protesters today ignored military orders to end an anti-government rally. The protesters surrounded the parliament building, raising fears of a violent confrontation. We have more in this report narrated by Vera Frankel of Worldwide Television News.

MS. FRANKEL: This crowd has been here for several days demanding the resignation of Prime Minister Su Chinda. But now they're protesters in direct defiance of the government. As the crowd toasted its heroes, Thai television broadcast warnings from the military authorities for demonstrators to disperse, but to no avail. They would do no more than move to a nearby park with their leaders. So far, cool heads have prevailed, the battle waged almost entirely with words. But this popular opposition leader, Cham Long Swinwung, says he'll fast to death unless the government quits. And if that happens, the picture could change rapidly. Cham Long is also driving his point home with silence. The nights in Bangkok are testing nerves on both sides. Democracy clearly sank deeper roots in Thailand than the government realized. The message from the activists is they won't be the ones to back down, no matter how many nights pass.

MR. MacNeil: In Germany, public sector workers ended their 11- day-old strike today. Union leaders accepted a government pay raise offer that exceeds the rate of inflation, but is below the workers' original demands. The strike grounded most air traffic and disrupted transit service and garbage collection across Western Germany.

MS. WOODRUFF: The global environment is worse today than it was 20 years ago. That was the finding in a United Nations report released today. The report found that the deterioration in the environment came despite gains in pollution control by industrialized nations. The report projected a continued depletion of the ozone layer that could produce a 26 percent increase in skin cancer by the year 2000. The report also found that 900 million people in cities are currently exposed to unhealthy levels of sulfur dioxide. The UN is holding a summit next month in Brazil which is intended to produce an agreement on controlling global warming. NASA's newest space shuttle called "Endeavor" was fueled up for an evening launch tonight, though NASA officials said it might be delayed by bad weather. The $2 billion spacecraft was built to replace the Challenger after its fatal explosion in 1986. The Endeavor will carry seven astronauts on a five-day mission to retrieve a communications satellite stranded in space. That's our News Summary for this Thursday. Now it's on to two tours of LA's riot-ravaged streets, the question of equal opportunity, and a Newsmaker interview with the President of Ukraine. FOCUS - MEAN STREETS

MR. MacNeil: Our major focus tonight in the aftermath of the Los Angelesriots is on what needs to be done to repair the human and economic devastation in America's inner cities. Correspondent Jeffrey Kaye has a report from the riot area and then following a Paul Solman backgrounder on the job situation in Harlem, we examine the economic gap between blacks and whites in America. We begin with a look at the President's day in South Central Los Angeles. Correspondent Kwame Holman has our report.

MR. HOLMAN: Security was extraordinarily tight. Few onlookers could be seen along the route. The White House reportedly got agreements, but no live TV pictures of the Presidential motorcade would be broadcast so its exact location would not be widely known. The President left his limousine in a burned out shopping center in the predominantly black Crenshaw neighborhood. The center was virtually gutted, some of the 10,000 businesses damaged or destroyed in the outbreak. Flanked by local business and community leaders, as well as cabinet secretaries Louis Sullivan and Jack Kemp, the President could be heard joining in praise of those citizens who spontaneously took up the cleanup effort in the wake of the rioting a week ago. Later, at a police station in Southwest Los Angeles, a somber looking President Bush described his reaction.

PRES. BUSH: Horror and dismay and sharing the sense of outrage that the people, honest people in the community feel.

MR. HOLMAN: Housing Sec. Jack Kemp was more pointed.

JACK KEMP, Secretary, Housing & Urban Development: The President said he wants to address the fundamental underlying root causes, and that's what I'm talking about. The root cause is hopelessness.

MR. HOLMAN: President Bush said he came mostly to listen, his long range plan for Los Angeles and other urban areas to follow. The President's only extended remarks came at a church before a largely black congregation.

PRES. BUSH: We need our family. We need our own family. We need our church family and we must find ways to strengthen America as a family. Back to what the Cardinal said; we are embarrassed by interracial violence and prejudice. We're ashamed. We should take nothing but sorrow out of all of that and do our level best to see that it's eliminated from the American dream.

MR. HOLMAN: The President already had promised short-term aid for the city, a $600 million package, including loans to rebuild businesses and emergency food and shelter. At a meeting of business leaders, he heard an appeal for some of that aid.

BUSINESSMAN: I spent nine years building a small business in South Central Los Angeles. My family and I gave it everything we had. We are now totally burned out. I don't know what resources I have available to rebuild. So I'm just here today thanking you for coming and asking that the help will come forward. We would like to stay in South Central Los Angeles. We have an investment in the community, but now it's time that someone has to come to my aid.

MR. HOLMAN: An estimated 14,000 jobs were lost as a result of the riots. California Gov. Pete Wilson has promised $20 million in state job training funds and asked President Bush to match that amount. Those subjects will be on the agenda this evening, when the President meets with members of the Hispanic an Korean-American community.

MR. MacNeil: The President's visit highlights the immense effort and resources it will take to restore the housing, the shops and the small businesses of that area. Correspondent Jeffrey Kaye of Public Station KCET-Los Angeles takes a look at the devastated economy of South Central LA.

WOMAN: We get to see the President of the United States here in our community where we live, where we work and where we play.

MR. KAYE: The people who saw President Bush this morning at a burned out shopping center included the excited and the surprised. Bush has visited this city nine times as President but the White House could find no record of his ever coming to South Central Los Angeles.

WOMAN ON STREET: It's sad to say that he came after the community has been destroyed, but I was very well impressed with him comin' out.

MR. KAYE: The area was cordoned off under particularly tight security and access to the President was severely restricted.

OTHER WOMAN: He was protected, nobody goin' to bother him. Why can't we talk to him and ask questions like everybody else do?

MR. KAYE: While President Bush paid a visit to South LA, we took a tour of our own.

JUANITA TATE, Community Activist: You see these buildings all along here. These used to be viable businesses at one time. Now, they're all closed up because the dollars have dried up in the community.

MR. KAYE: Our guide was community activist Juanita Tate, executive director of Concerned Citizens of South Central Los Angeles, an economic development organization.

MR. KAYE: If President Bush were on this tour instead of me, what would you tell him about this?

MS. TATE: I would tell President Bush that he needs to get the right dollars in this community so that people that want to do business in this community, that want to produce citizens in this community to be profitable not only for the community but for the residents that live here, he needs to get his Small Business Administration out here to find out how we can make this a viable community.

MR. KAYE: Tate has learned to use the system to help make her community more viable. She's been able to package financing to build low income housing, but she feels these projects are a drop in the bucket. The economic problems of South Central Los Angeles are longstanding. They worsened after the 1965 Watts riots as many businesses started to abandon the area. Now, according to Tate, unemployment among black men has reached 40 percent.

MS. TATE: It's disinvestment in the community. Look at these boarded up buildings. There is no reason for these buildings to be boarded up, when they're viable, when there's no place for people to shop. You have to go three to five miles to a grocery store. Why shouldn't we have viable places in this community that people can buy things and do things? But it takes money to make that happen.

MR. KAYE: And money also left the community, according to Tate, when many bank branches pulled out. Further down Central Avenue, a former bank building is now a market.

MS. TATE: This was Bank of America. This is the last bank that left the South Central -- Southeast end of this community and --

MR. KAYE: When?

MS. TATE: Three years ago. We don't have a bank from where you stand within a five mile radius. We were not able to save the bank from closing.

MR. KAYE: Bank of America says they closed branch offices because the local economy deteriorated. Tate says the banks were in part responsible for the deterioration and that not only did they close their doors, they turned their backs on small community businesses.

MS. TATE: What we need is for SBA to come down here.

MR. KAYE: She took us to one such enterprise, the 27th Street Bakery, at 27th Street and Central. Gregory Spann's family-owned business bakes and distributes sweet potato pies all over the Los Angeles area. The company takes in about $30,000 a month selling goods baked in 40-year-old ovens. Spann needed capital to meet an increasing demand.

GREGORY SPANN, Bakery Owner: About five years ago, in '87, I experienced a tremendous growth in my business to the capacity with the existing equipment that I have now and working 18 hours with two shifts, with 15 employees, I wasn't meeting the demand for my particular product. So in 1987, I went out into the market area to try to attain loans.

MR. KAYE: Spann says he was turned down by the government and by banks because of insufficient cash flow. Tate faults the institutions for insensitivity to the firm's potential.

MR. KAYE: So you've been denied by the banks. You've been denied by federal agencies. You've been turned down by the city agencies and you have a business --

MS. TATE: Look at the people putting pies in the car! I mean, it's not like people don't buy these pies. They're in 7-Eleven Stores. They're in all of the stores and we have to say, we have to keep Gregory out there until everyone realizes that they will be shamed into giving him that money.

DONALD MULLANE, Bank of America: In fairness, we're in the business to make loans.

MR. KAYE: Donald Mullane is executive vice president at Bank of America, one of the institutions that turned down Spann's loan applications.

MR. MULLANE: That's how we make money is that we make loans. We didn't build this bank to be the size that it is turning down loans. We made loans -- this is the same institution that started the Walt Disney Corporation in its garage with a hundred dollar loan. This is the same corporation which started Mattel Toy with a hundred dollar loan. So it's not an organization that doesn't take chances.

MR. KAYE: Juanita Tate would like to see more chances taken in South Central Los Angeles. She says the abandonment of the area by banks has spurred a growth in check cashing businesses. They provide no loans and charge high interest on what they do offer.

MS. TATE: See what happens when these banks leave our community, the only thing we have left is check cashing places. Check cashing places charge us up to 26 percent to cash a check.

MR. KAYE: Many check cashing places were targeted by arsonists last week and because so many Korean-owned grocery stores were also burned down, business at Tommy Peters' convenience store tripled after the riots. Peters would like a new refrigerator to keep pace with expanding business. He was hopeful when he got a call from city hall.

MR. KAYE: What did they say?

TOMMY PETERS, Convenience Store Owner: They asked me had I been burned out and I told 'em no and he asked me if I knew anybody that had been burned out. They were helping the people that were burned out.

MR. KAYE: So you couldn't get a loan?

MR. PETERS: It looks that way.

MR. KAYE: Because you weren't burned out?

MR. PETERS: Yeah.

MR. KAYE: We put Tommy Peters' dilemma to Oscar Wright, Western regional director of the U.S. Small Business Administration, the SBA.

MR. KAYE: He needs money. He needs a loan to expand so he can help the neighborhood. Isn't that typical -- some say it is -- of much more longstanding problems?

OSCAR WRIGHT, Small Business Administration: What is typical of miscommunication. You see, you just gave me an example of someone who could possibly be eligible for a loan because of economic injury. I can't make that determination here as we speak, but I would suggest that that individual call the local disaster area center to sit down to see whether he qualifies for an economic injury loan which was not directly fire damaged.

MR. KAYE: According to Wright, the SBA is stepping up efforts to support minority-owned enterprises, not just those affected by the LA disturbances. In the meantime, the SBA is planning on spending as much as $300 million to assist victims of the riots. Wright says checks may be issued within the month. Bank of America also will have a loan program to help businesses get back on their feet.

MR. KAYE: Are you worried that these aid packages that are being put together will only deal -- will only be a band-aid -- will only deal superficially --

MS. TATE: They're not even going to be a band-aid if they're not for real. And if they don't come and release the true dollars to make a different, there ain't no sense in nobody comin' here for no band-aid. See, when they burnt down Watts, there was nobody out there stompin' the streets for the people at Watts. It's a different story now and if they don't do somethin' to tell the truth, we're going to tell the truth on 'em. We're going to tell it!

MR. KAYE: You don't want things to go back to normal?

MS. TATE: No! It's got to -- we're already at the bottom and there ain't nowhere to go!

MR. KAYE: During the Bush tour, other South Central Los Angeles residents expressed similar frustrations. A member of the Bush entourage, Housing Sec. Jack Kemp, wanted to hear what they had to say.

MAN ON STREET: You guys look at this.

SEC. KEMP: We are. That's why we're here.

MAN ON STREET: This is a symptom of putting a band-aid on cancer. I'm a contractor here. I'm an electrician. I'm just getting my license. I want to put together some programs --

SEC. KEMP: Good.

MAN ON STREET: -- to try to take some of these youngsters out of these jail facilities --

SEC. KEMP: As soon as you get it on paper, you give it to Jack Kemp.

MAN ON STREET: I'll send it to you personally. It's on the record, sir. Don't forget it now.

SEC. KEMP: I won't.

MR. KAYE: Tomorrow, President Bush plans to visit firefighters and law enforcement officials before leaving Los Angeles in the mid morning. FOCUS - FACT-FINDING

MS. WOODRUFF: Like the riots last week, the economic troubles of the inner city are not limited to Los Angeles. In New York City, the unemployment rate for black teenagers ran 30 percent last year. Business Correspondent Paul Solman of WGBH has this report about the tough job of looking for a job in Harlem.

MR. SOLMAN: Are there jobs out there?

MAN: No.

MAN: No, there's not a lot, not enough. There ain't enough jobs.

MR. SOLMAN: Do you work?

MAN: No. Tryin' to find work now.

MR. SOLMAN: Do you work?

OTHER MAN: Tryin' to find work now. We're in the same situation.

MAN ON STREET: I'm in the process of looking for a job now myself. I'm barely makin' it through.

MR. SOLMAN: Harlem, New York, where for years the economic lot of people improved on average as the U.S. economy grew and blacks and Hispanics were closing at least somewhat the economic gap with whites. But in the early 1970s, progress slowed. In the 20 years since, the bottom half of the economy has been losing ground to the top half and especially in the '80s, blacks have lost ground to whites. Now, there are programs to help Harlem residents get jobs, such as the Tap Center a few blocks from here.

MR. SOLMAN: Have any of you guys been to the Tap Center up on 120th?

MIKE SAMPSON: I went over there one time and all they want, they was goin' to give you a job, security job, out somewhere in Brooklyn or somethin' for $3.35 an hour, which I wouldn't take, because first of all, I'm not goin' all the way out to Brooklyn.Nobody's goin' to crack me over my head for no $3.35 an hour job. Straight out. I'm bein' honest.

MR. SOLMAN: We went to the Tap Center to check out the story. Sergio Valentin, a life long East Harlem resident, is in charge.

SERGIO VALENTIN, Director, Employment Center: The problem that exists is that the majority of the individuals who come to centers like ours are looking for jobs that are paying 9, 10, $11 an hour, and the majority of the jobs that are available are entry level positions which will pay you 6.25, $5 an hour.

MR. SOLMAN: They're training here for accounting jobs, clerical positions. But the demand is for maintenance work, sales help, and more and more for security guards.

MR. VALENTIN: The Department of Employment has even stressed to us that we should be looking to employ and prepare a curriculum for security because that is a growing field right now.

MR. SOLMAN: Is it the fastest growing part of the labor market?

MR. VALENTIN: I would think so, yes.

MR. SOLMAN: They work the phones constantly here, developing jobs leads, because with the recession, the job market is tighter than ever, though there are some jobs to be found.

MR. VALENTIN: I've got 225 positions available, entry level, as well as management positions.

MR. SOLMAN: Management positions paying 20,000 a year, or so?

MR. VALENTIN: 20,000 a year or so.

MR. SOLMAN: How many jobs did you have here, I don't know, a few years ago, before the recession?

MR. VALENTIN: I would say that we could have had a job bank of close to maybe 400 jobs.

MR. SOLMAN: So it's gone down?

MR. VALENTIN: It's gone down substantially.

MR. SOLMAN: And salaries and wages have gone down too?

MR. VALENTIN: Absolutely. They have gone down drastically. I would say that entry level positions for a clerk typist was saying something like $7 an hour. It's now paying $5.50, $5 an hour.

MR. SOLMAN: So for people coming here to register, be tested, and look for work, there are fewer good jobs out there, fewer jobs in general, and lower pay everywhere you look. They claim to place 80 percent of the people who come in here. Unfortunately, not many stay in their jobs for more than 90 days. New recruit Lisa Acosta says that it's not just lousy economics that discourages minority males, but the often demeaning experience of asking for low paying work.

LISA ACOSTA: Sometimes you tell them, why you don't go look for a job, and they're saying, ah, you crazy, I'm not going to look stupid lookin' for a job. You know, so they try to act tough in front of their friends and then when it's time for them to go look for a job, they just feel it's a waste of time.

MR. SOLMAN: They don't really feel it's a waste of time; they feel like they're going to be very vulnerable.

LISA ACOSTA: Yeah. If they say no, they feel they're going to be stupid.

MR. SOLMAN: Out on the sidewalks of New York, fear of rejection may be a factor, but overshadowing it is the deteriorating economics of the job market for young black males.

MR. SOLMAN: $5 an hour, you can't live on that?

BLACK MALE: $5 an hour?

OTHER BLACK MALE: Can you live on $5 an hour?

MR. SOLMAN: Of course, I have no intention of living on anything like $5 an hour and neither, it seems, do they.

MALE ON STREET: Your food is $100 a month, your clothing. You've got to pay $2.50 every day to get to work. Now tell me how you gonna survive on $5 an hour?

MR. SOLMAN: Now,you can take what we heard here today two ways: As evidence that minority males don't really want to work, or that they're victims of an economy that continues to lose jobs that once provided people at the bottom of the job ladder with hope. FOCUS - EQUAL OPPORTUNITY

MS. WOODRUFF: Now, four views on these economic problems and potential solutions. They come from Walter Williams, a professor of economics at George Mason University; William Sprigs is an economist who specializes in labor issues at the Economic Policy Institute, a non-profit think tank in Washington; Roger Wilkins teaches history at George Mason University, he worked on inner city problems in the 1960s as assistant director of the community relations service and assistant attorney general in the Johnson Administration; and Robert Woodson is the president of the National Center for Neighborhood Enterprise, a non-profit economic community development organization, he joins us from a studio on Capitol Hill. I want to start with our two economists here, Mr. Spriggs and Mr. Williams, and ask you, is the picture that we just saw painted in Los Angeles and New York City, are those accurate pictures of what it's like in the inner city for black Americans who are looking for work, who have jobs, or whatever? Mr. Spriggs.

MR. SPRIGGS: Well, actually it's broader than just blacks in the inner city. It's actually a pretty accurate characterization of the labor market for African Americans and for white males as well, if you have a high school education. From 1979 to 1991, the most recent year that we have any sort of data on wages, the real wage for high school students five years out of high school has declined by 20 percent for males.

MS. WOODRUFF: This is white males and black males?

MR. SPRIGGS: And black whites. Slightly more dramatically for black males. But the dimension is the same. To illustrate, in 1979, 75 percent of black males who were just out of high school could earn a wage that would allow them a full-time job to support a family of four. So well over half could do that. 1991 only about 40 percent earned a wage that could that, well under half. So the labor market has deteriorated greatly for those with high school education, and is beginning to decline for those with college educations.

MS. WOODRUFF: With college educations. Walter Williams, is that a picture that you see?

MR. WILLIAMS: Well, surely, I would agree that the labor market deteriorated, but it was not an act of God. We can look at a lot of the labor market's deterioration as being a result of what happened as a result of congressional budget deals in 1990. But a missing part of the picture that we did not pay much attention to is in Los Angeles the devastating effect of crime in the black community, crime on the ability for people to form businesses, the effect of crime having to do with the attractiveness of businesses to get loans, to be able to get insurance rates, and indeed, the thugs, the minority of thugs who are preying on businessmen, they're equal opportunity thugs, that is, they'll rip off a black firm just as well as they rip of a white firm. So what we have to do, we have to deal with the crime element as well as dealing with the start up businesses there.

MS. WOODRUFF: But Mr. Spriggs, crime isn't part of what you're talking about, just to be clear about this, right?

MR. SPRIGGS: No. The policies that have hurt us the most during the 1980s are policies that also speak to what we saw in Los Angeles, a disinvestment in the American economy. We have cut almost by 40 percent our share of federal expenditures as a share of our Gross National Product.

MS. WOODRUFF: "Our" meaning the government.

MR. SPRIGGS: The government, right.

MS. WOODRUFF: The people.

MR. SPRIGGS: The people. And physical infrastructure, the type of thing that helps make cities competitive places for businesses to locate. Chicago knows today that public infrastructure makes a difference in making the city competitive. We cut by 20 percent the amount that we spent -- that's a share of GDP -- in investment in children. We've cut by 40 percent the amount that we spend on investment in training. So we have deinvested. And that sort of thing makes our economy less competitive. We have missed out on the opportunities in the area of trade as well and so there are a number of policies pursued by the Bush administration --

MS. WOODRUFF: Forces at work.

MR. SPRIGGS: -- that have put forces at work to lower the wages for high school and college-educated Americans.

MS. WOODRUFF: Bob Woodson, is that an assessment that you share about what's happened?

MR. WOODSON: No. The assumption is that when the dollars were flowing from 1965 that those moneys were really going from the governance into those low income communities. The fact of the matter is that we use the conditions of the riot point areas to make demands that federal expenditures increase, which they did in the '60s forward. 80 percent of all of the federal development dollars went not to those communities but to downtown development. Even in the past 10 years in Washington, D.C., where I am now, we have had five major urban development projects that placed expensive bricks across Connecticut Avenue, while we don't have pavements paved in Southeast area. We have the government providing millions of dollars to developments to subsidize developers downtown, while the low income communities have been virtually ignored, 70 cents of all those social service dollars, child care, foster care, all of those dollars referred to, 70 cents of those go to providers who don't live in the community, not to those communities, so that there has been a tremendous disinvestment in those communities even when the dollars were flowing. To suggest that somehow it was the cuts that explained the conditions in those communities is ludicrous. Ask the people there if 20 years ago when presumably things were fine, whether they saw the money.

MS. WOODRUFF: Well, Roger Wilkins, you want to pick up on that point? I mean, he's saying that the money didn't go to the people who needed it then anyway, so it doesn't make any difference when the money was cut later.

MR. WILKINS: Well, I disagree with Bob, as I always do. The great society achieved some things and it failed in others. But the great society was conceived at a time when we had a growing economy. Everybody expected that you would get justice out of growth and that the great society programs were not designed to take people out of poverty and move them up. The great society programs were designed to take them out of poverty and move them into a growing economy, which would move them out of poverty. And, in fact, the poverty rate between the mid '60s and the early '70s did decline significantly. But the great society can't claim that as a great achievement. We had a growing economy and we had a war and so we had a tight economy. Then what happened essentially was the economy hit a wall in '73. Wages stopped climbing and for men started to decline. The declines that you're talking about, Mr. Spriggs, began to happen in '73.

MS. WOODRUFF: And how much of this -- I want to get to this anyway -- but let's get to it now -- how much of what we're talking out here is race related? How much of this was directed at the black community in this country, whether it got there or it didn't, and, therefore, how much can we blame on race, what was supposed to be a race related remedy?

MR. SPRIGGS: Well, I think what has happened is that we have reopened these gaps. We had made efforts during the '60s to ensure that there really was equal opportunity. The big story in the '60s wasn't that. There was a big gap in human capital. It was clear an easy solution presented itself before us because you could look at the high school completion rate for blacks and see it was 45 percent. For whites, you could see it was 72 percent. That meant an easy solution was there. You tell people, get education, get better education, get more education. African Americans did that and today for young people, the educational attainment is almost equal, but we have widened the gap in terms of earnings for college graduates, for high school graduates. We have reopened the difference for getting the prize. And so the problem now is, as I see it, is closing that gap because we said to everyone education would be an answer.

MS. WOODRUFF: But it hasn't worked. You're saying it hasn't worked.

MR. WILLIAMS: Well, first of all, I would disagree that there's any equality in educational attainment, that is, what a lot of people do, they look at years of education and they'll say, well, gee, blacks have as many years of education as whites and if anybody who's looked at test scores would recognize that years in education is not the same as education, itself. That means that you've gone through an institution. But more importantly than that, is that --

MS. WOODRUFF: What are you suggesting?

MR. WILLIAMS: That it's fraudulent education going on in black - - in public schools where blacks come out of high schools and many times cannot read at 8th and 9th grade levels, gross fraud. But more importantly than that, if we looked at the film there, we see that many people, many so-called "black leaders," have decried the lack of decent jobs, they call them "dead end jobs," and many young black people --

MS. WOODRUFF: Well, the $5 an hour jobs, we heard the young man - -

MR. WILLIAMS: They're not taking them, but lo and behold, you see Asians come to this country, take these damn jobs and five years, ten years, they're moving up the economic ladder because -- and if you look at statistics in 1987, the height of the economic boom in our country, only 16 percent of heads of households, poor heads of households, were full-time workers and only 52 percent altogether working part-time and full-time. So if one talks, decries about the lack of jobs now, people did not take jobs when they were available during the '80s.

MR. WILKINS: Well, I think that that's an overstatement and the University of Chicago has done some studies, their Chicago inner city life study, and one of the things they have found is that a lot of employers prefer foreign workers who can't even speak English and who require a higher wage than black workers who speak English and are willing to take a lower wage, so that when you ask, is this race or is it economics, it's both. Partly, it is race, because partly a lot of employers in the inner city and elsewhere will not take these black workers and those kids who are on the street looking --

MS. WOODRUFF: Should they be taking -- I mean, are you saying they ought to be taking security jobs that pay $5.50?

MR. WILKINS: There are plenty of black kids who are looking for jobs who would take those jobs and if they would take 'em, they ought to get 'em, but there are a lot of times when they're looking for those jobs and foreign workers are hired instead. That's what I'm saying.

MS. WOODRUFF: Before they get there.

MR. WILKINS: That's right.

MS. WOODRUFF: Bob Woodson.

MR. WOODSON: I have a question for my colleagues. And that is in the role and also in this discussion we have been generalizing about the black community as if we are an aggregate mass, and the question is: What is the income of two earner households who are black with college education? Aren't they about 80 percent or 90 percent of parity with whites? Question: And then if race were even -- it's an important factor but if it were the determining factor, the gnawing question is: Why is it that blacks have been controlling the school boards, city councils, zoning commissions, in some of our cities for almost 20 years, and yet, poor blacks are no better off in those cities than when they were controlled by whites? And if racism were the factor, why aren't we then educating our children, when, in fact, 52 percent of the public school teachers who are black send their kids to private schools? Do these factors, does that mean anything to anyone?

MS. WOODRUFF: That's two questions I hear at least there. One has to do with the black middle class, the people who are earning a good income, an income on par with what whites with their educational level would be earning. The other question has to do with blacks in leadership.

MR. WILLIAMS: Black females who are college graduates, they earn 125 percent of white females who are college graduates, that is, they earn 25 percent more. That's one of the best kept secrets since the Manhattan Project.

MR. WILKINS: And on the other hand, at every other level, black males at every educational level, starting with the Ph.D. and going right on down, make less money than equally educated whites.

MS. WOODRUFF: Whites.

MR. WILKINS: But the real point is, let me back off from this, the point we're talking about now and go back to South Central Los Angeles. Los Angeles has lost something like 70,000 industrial jobs in the last three decades. Now, in the country, God knows, the economists couldn't tell us, but the country is bleeding industrial jobs, the kind of jobs that unskilled people need to get a handhold into this economy. Now, we are not going to solve the problems of South Central Los Angeles with any package of programs that's just aimed at them. What we need in this country is an industrial policy that looks at what is happening. We are de-industrializing at a rate --

MS. WOODRUFF: What do you mean specifically?

MR. WILKINS: What I mean specifically is those 70,000 jobs went to Taiwan, some of them disappeared entirely. Some of them went to Mexico and we've got a lot of leftover workers.

MR. WILLIAMS: But because the policy that you support.

MR. WILKINS: But now many more are becoming white.

MR. WILLIAMS: But it's because of policy that you support. Laws like minimum wage laws drove those jobs out of our countries to lower wage areas and all kinds of labor laws that many liberal Americans, the civil rights leaders, support these laws that raise the cost of using U.S. labor to do low skill jobs and too also, it brought forth all kinds of automation that would not have occurred had we not raised the cost of labor relative to capital.

MR. SPRIGGS: No, the minimum wage law confuses the issue totally because in most of these traded good sectors we don't pay the minimum wage. Our problem with nations like Taiwan, like China, are that they have a managed exchange rate that allows them to have lower labor costs and we accept more imports, more imports in this country from those type of country than any other industrialized nation tends to. But I wanted to get back to --

MS. WOODRUFF: I wanted to get back to Roger Wilkins. What -- you were saying a solution is --

MR. WILKINS: We do know that the Japanese and the Germans, for example, have an industrial policy and they're playing a managed game, a keen game. We're playing ball with a bunch of individuals.

MS. WOODRUFF: So what should we do?

MR. WILKINS: We need an industrial policy in this country where we look, where labor, government, business get together and renegotiate the social contract, looking at all of the facts that we've got in front of us now, instead of behaving as if we still have an 1870 economy.

MR. SPRIGGS: Now, I wanted to amplify this. The difference between the '60s and the '80s is exactly that. In the '60s, the economy grew at a much faster rate. It was growing over that four year period from '64 to '68, it grew by 20 percent. The last four years, it's grown by 4 percent. So we're on the tail end of a decline in terms of growth and we have pursued policies that have encouraged the movement of jobs. We have given tax incentives --

MS. WOODRUFF: Overseas and other places.

MR. SPRIGGS: -- to move things overseas. Just as a quick example, since I mentioned Chicago before, we had a decline during a recovery of 1 percent in grain and bakery goods jobs here domestically, but we had a growth of 11 percent in Latin America of workers who were employed by those firms. And we --

MS. WOODRUFF: So what are you saying? Let me just move now to Bob Woodson, because you were shaking your head when Roger Wilkins was saying we need -- as I expected you might -- we talked about an industrial policy in this country.

MR. WOODSON: Well, it's fine to talk about large macro and industrial policy. You know, then Roger can avoid being specific about how that then would affect South Central. I would like to telescope this down into those neighborhoods and talk about the fact that we spend $5 billion on public housing. Half of that is spent on renovation and Davis Bacon wages -- laws, rather, that now pays a carpenter $20 an hour, which means that the moneys that are spent on public housing cannot even be used for the residents there to participate in the reconstruction of it. A lot of money flows through low income communities, but as Walter pointed out, a lot of the labor laws like Davis Bacon, prevailing wage laws that incidentally its origins were to keep blacks out of the work force are supported by black labor leaders and black civil rights leaders to the disadvantage of the poor but --

MS. WOODRUFF: These are laws that keep the wages up. These are laws that keep the wages up.

MR. WILLIAMS: The justification of the Davis Bacon Act is it was in 1931, the Congressmen -- and these are -- the Davis Bacon Act is supported by your friends and labor unions and all liberals and black politicians. The man arguing in support of the Davis Bacon Act said, see that contractor over there; he brings cheap colored labor up from the South and it's labor of that sort that's in competition with white Americans and we need the Davis Bacon Act to eliminate those people. Now, the Davis Bacon Act is still on the books. The rhetoric and justification for it has changed, but, nonetheless, every single black politician supports that and it is destructive of blacks as contractors.

MS. WOODRUFF: And you're saying we ought to do away with that kind of law?

MR. WILLIAMS: Yes. It's a super minimum wage law.

MR. SPRIGGS: I want to get back to the broader picture again. No, because --

MR. WOODSON: It keeps us from talking specifics. Go ahead.

MR. SPRIGGS: No, no, because we have to talk specifics. If you're going to talk about solutions, if you're going to talk about training individuals for jobs, what kind of job, if we are going to continue on the front path that we're on, which is to lower the wage for all workers, then what job is it that you want to train people for? You want to train them to be poor?

MR. WOODSON: I can tell you right now we spend on the average about $15,000 for every poor person in these cities and I'm saying that we have -- the National Center has -- they've set up reverse bus companies to take people from the inner city out where the jobs are. Those bus drivers make between 10 and $12 an hour. We put them to work renovating their own community, setting up small construction companies to do a lot of the work.

MS. WOODRUFF: And you're saying that there ought to be more of that around the country.

MR. WOODSON: Yes. In other words, there's a lot -- millions of dollars flowing into those low income communities, but we, our laws prevent us from losing indigenous labor and that if we just did that, it would create a tremendous amount of capital circulating there.

MS. WOODRUFF: We're going to have to leave it at that. Gentlemen, thank you all for being with us. Thank you. NEWSMAKER

MR. MacNeil: Next tonight, a Newsmaker interview with President Leonid Kravchuk of Ukraine, the second most populous and second most powerful state after Russia to emerge from the old Soviet Union. Kravchuk is in Washington this week. Yesterday he met with President Bush and signed a series of bilateral trade and technical assistance agreements. Kravchuk also promised to sign the 1991 Strategic Arms Reduction Treaty, called START, and to eliminate all remaining nuclear weapons on Ukrainian soil by the end of the decade. Earlier today in an interview with Correspondent Charles Krause, Kravchuk discussed the nuclear issue and continuing tense relations with Russia.

MR. KRAUSE: President Kravchuk, thank you for joining us. Yesterday at the White House at one point you indicated that there were still some outstanding issues that would have to be resolved before Ukraine would sign the START Treaty. What were those differences, and have they now been completely resolved?

PRES. KRAVCHUK: [Speaking through Interpreter] Yes, yesterday we did resolve them. I have in mind -- we resolved by signing a legal and international resolution of these problems. In the letter that I sent to President Bush this is first and secondly, our ministers of external affairs after extended consultations came together on the main points of the protocol that needs to be signed and after the signing of the protocol, the agreement will be put before the parliament of Ukraine for classification and I'm sure that the parliament will ratify it as to the explanations that I give to the supreme rada, the parliament, on the basis of the exchange of ideas that we had here in Washington.

MR. KRAUSE: Do you have any concern at all that as you give up nuclear weapons and send them back to Russia, where they are supposed to be destroyed, do you have any concern that perhaps Russia will not destroy these weapons and could use them to threaten your own country?

PRES. KRAVCHUK: [Speaking through Interpreter] We felt this apprehension at one time, that the transfer of tactical nuclear arms from Ukraine was being conducted without appropriate control and so Ukraine stated that there is a need to destroy these nuclear arms, tactical nuclear arms, not only to transfer them, because for the world there's no importance whether nuclear arms are transferred from one territory to another, but what is important is that it be destroyed. We signed together with President Yeltsin an agreement about instituting a control and a mechanism for this control and immediately after that, nuclear tactical arms began to be again transferred from the territory of Ukraine. Now I can tell you that practically all of it has been taken out of Ukraine's territory. The only weapons are left on the ships of the Black Sea Fleet, but the issue of the Black Sea Fleet has not been resolved completely. Ukraine's position at this time has been unchanged. We will insist that the ships based in Ukrainian ports, that tactical nuclear arms be removed from these ships as well.

MR. KRAUSE: In general terms, do you view Russia as a potential threat to the security of your country?

PRES. KRAVCHUK: [Speaking through Interpreter] You know, here there is not one answer that I can give. The thing is that an empire has disintegrated. On its territory new states are being formed. And obviously problems have arisen which need to be resolved. The division of the property, the -- of the assets, of the liabilities, the servicing of the debt, these are not simple issues and there are some tense situations around them. And this sometimes is interpreted as a conflict between Russia and Ukraine and the way I understand it, Russian politicians, not all obviously, but Boris Yeltsin, set forth the idea of a peaceful resolution of the issues. There are circles in Russia, but there are also in other areas political movements, political forces, who have a radical point of view but they are not the ones that determine policy today, although there is the danger of such a radicalism, the national chauvinism of Russia does exist. Everything that happens today is being blamed on Ukraine, but this is not close to reality. Ukraine has declared that it is giving up its nuclear arms, becoming a non-nuclear state and is fulfilling its commitment it has stated, has no territorial claims towards anybody and is keeping its commitments. Ukraine has said it will respect human rights, individual rights, and national minority rights. It's fulfilling its commitments, it's fulfilling all its commitments before the international community.

MR. KRAUSE: Is peace between Ukraine and Russia dependent on Mr. Yeltsin and Democrats like him remaining i power?

PRES. KRAVCHUK: [Speaking through Interpreter] I see a danger in this if other forces came to power, but I think that democratic Russia will take the upper hand over conservative forces, although the last congress of people's deputies in Russia showed that the conservative forces are still very strong there.

MR. KRAUSE: You've said that Ukraine has no claims on Russian territory, but there are those in Russia who are claiming Crimea as part of the Russian federation. The legislature, the parliament in the Crimea recently just in the past few days passed a resolution calling for a referendum on independence for the Crimea. What is your understanding of the situation there at the moment and do you accept the idea the Crimea should, in fact, vote on its own political future?

PRES. KRAVCHUK: [Speaking through Interpreter] We say today, we talk about the legal aspects of this issue. In order to hold a referendum in the Crimea, one needs to take into account the actual situation today. The constitution of Ukraine and the laws on the referendum in Ukraine foresee certain standards.

MR. KRAUSE: Do you expect the commonwealth of independent states that was formed just within the past six months to continue, or would you expect that Ukraine, your country, will withdraw from it and end this commonwealth structure?

PRES. KRAVCHUK: [Speaking through Interpreter] The CIS was created in order to in a civilized manner separate from the former Soviet Union. A huge empire was collapsing and there could have been a lot of trouble and under this collapse many people could have died and we needed to find a formula which would allow us to peacefully in a quiet way to, to separate, to create new states without conflict. And we were able to do this, but can the CIS exist in this state for a long time? I think that it cannot.

MR. KRAUSE: President Kravchuk, thank you very much for joining us. RECAP

MS. WOODRUFF: Again, the main stories of this Thursday, President Bush toured the riot-scarred areas of Los Angeles. He said the damage was caused by wanton lawlessness and the space shuttle Endeavor was launched on its maiden voyage tonight from the Kennedy Space Center in Florida. The $2 billion spacecraft was built to replace the Challenger after its fatal explosion in 1986. Endeavor is carrying seven astronauts on a seven-day mission to retrieve a communications satellite which has been stranded in space for the past two years. Good night, Robin.

MR. MacNeil: Good night, Judy. That's the NewsHour for tonight. We'll be back tomorrow night with Senators Bradley and Danforth on political leadership in America, plus Gergen & Shields on the political week. I'm Robert MacNeil. Good night.