The MacNeil/Lehrer NewsHour

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

MS. WARNER: And I'm Margaret Warner in Washington. After the News Summary, we have four congressional views of the fight over NAFTA. Paul Solman reports on keeping jobs in America, and Charlayne Hunter-Gault looks at protests over rap music. NEWS SUMMARY

MR. MacNeil: Republican lawmakers got the jump on President Clinton today by unveiling their own health care reform proposals. The President is scheduled to announce his plan before a joint session of Congress next Monday. Drafts of the President's proposal have been circulating in Washington for some time. Senate Republican leaders said they disagreed with some points, like requirements that employers pay at least 80 percent of workers' health insurance costs, but said they were ready to work with Democrats to find a compromise. They talked about their plan at a Capitol Hill news conference.

SEN. CHRISTOPHER BOND, [R] Missouri: We would guarantee universal coverage to every American. We would guarantee that Americans would not lose their coverage if they get sick, or if someone in their family gets sick, or if they move from job to job.

SEN. ROBERT DOLE, Minority Leader: Our proposal is dramatically different than the administration's in a variety of ways. Let me just tell you where. Most notably, we do not mandate employers to pay for health care. We do not create mandatory health alliances that are monopolies. We do not create global budgets with the use of premium caps. We do not create a variety of new costly benefits and new entitlement programs.

MR. MacNeil: Hillary Rodham Clinton talked about one aspect of the President's plan today. She said it will promote mergers and joint ventures to keep costs down. She joined Justice Department and Federal Trade Commission officials in announcing guidelines to ensure such collaboration was possible without violating antitrust laws.

HILLARY RODHAM CLINTON: Instead of requiring every hospital or doctor's office to buy the same expensive piece of equipment, these guidelines will allow them to share that equipment. They allow physicians to get together to control costs, and they allow mergers that are competitive and save consumers money. The results over time will achieve the following positive results: Consumers will pay less; equipment will not stand idle, it will be used more frequently; hospitals will save money; the pressure on physicians to order tests to pay for the machinery that they bought in order to be competitive will stop; and the highest quality tests and the latest technology will still be available, and I would argue more readily available to those who need them.

MR. MacNeil: The Department of Health & Human Services released its annual report card on the nation's health today. It said average life expectancy had reached a record high, 75 1/2 years. It showed that Americans have cut back on smoking and cholesterol, and that chronic diseases and premature deaths have been reduced. It also said infant mortality was at an all time low, but the rate among African-American babies was still double that of whites. Sec. Donna Shalala said there were troubling health disparities among people of different races and education levels. Margaret.

MS. WARNER: President Clinton took his campaign for the North American Free Trade Agreement to New Orleans today. He visited the city's ports to stress what he said were the advantages of expanded trade with Mexico. He told workers and business people there that the free trade agreement with Mexico could be expanded later to cover other countries in Latin America. Opponents, meanwhile, were busy on Capitol Hill today, arguing that NAFTA would cost American jobs. Sen. Carl Levin, a Michigan Democrat, said the U.S. auto industry would be particularly hard hit. We will have more on this story later in the program. Angry French farmers threw up dozens of roadblocks around Paris today. They want the French government to veto a recent farm trade agreement between the U.S. and the European Community. The deal, cutting subsidies to EC farmers, is considered the key to completing the GATT world trade talks. The new center right French government has called the agreement unfair but hasn't said it would veto it.

MR. MacNeil: PLO Chairman Yasser Arafat returned to Tunis today. He said he hoped to go to the West Bank within 10 weeks to begin setting up an autonomous Palestinian administration for Jericho and the Gaza Strip. The Israeli prime minister also returned home today. We have a report narrated by Richard Vaughan of Worldwide Television News.

RICHARD VAUGHAN: Rabin has made history over the last few days, but he faces a stern test of his policy back at home. Having alienated many Israelis by recognizing the old enemy, his task is now to show them he was right. In the well-stocked markets of Jerusalem, Israelis were shopping for the Jewish New Year Holiday. For some, ancient hostilities cannot be signed away.

WOMAN: I think that what we did was a big, dangerous thing to do, and I don't think it's going to help. I don't think it's going to bring peace.

MR. VAUGHAN: But unusual times have created unusual expectations which Rabin must now fulfill.

MAN: I hope the New Year brings peace.

MR. VAUGHAN: Gaza has been sealed off during the New Year Holiday, but the violence continues. In the worst incident, four Israeli soldiers were injured, but the government always predicted this up surge, hoping it will prove a temporary threat to the peace process.

MR. MacNeil: In Somalia today, there were more clashes between Somali gunmen and U.N. forces. Two Italian peacekeepers were killed in fighting at the port of Mogadishu. Eleven people inside the U.N. peacekeeping compound were slightly wounded in a mortar attack. It was the first daylight attack on the compound. And U.N. helicopters fired on and killed two armed Somali militia men when it appeared one was about to shoot at the aircraft.

MS. WARNER: Three Islamic militants armed with grenades and explosives hijacked a Russian jetliner today and forced it to fly to Norway. The Aeroflot plane with at least 50 people on board was flying from Azerbaijan to the Ural Mountains in Russia when it was seized. The hijackers forced the plane to go to Kiev, the capital of Ukraine, for refueling before flying on to an airport near Oslo, where it landed earlier this evening. Ukrainian security officials said the hijackers were Iranians and were longtime supporters of the Muslim fundamentalist group Hezbollah. They reportedly released some of the passengers in Oslo and have asked for political asylum in Norway. Eduard Shevardnadze will remain for now as president of the former Soviet Republic of Georgia. He agreed to stay on after Georgia's parliament said he could rule by decree for two months. Parliament has suspended in the interim. Shevardnadze quit his post yesterday when parliament refused to impose emergency rule. He said he needed special powers to combat civil and ethnic unrest in Jerusalem.

MR. MacNeil: The Clinton administration today launched an effort to develop a nationwide information super highway. It would enable schools, businesses, governments, and individuals to tap into vast computer and telecommunications networks. The administration initiative would coordinate the efforts of private industry and help fund research and development projects. Vice President Gore spoke at a Washington news conference.

VICE PRESIDENT GORE: The very high capacity information networks of the future will give rise to new forms of communication and new information services that are just as far outside our imagination today as E-Mail was outside of the boundaries of our imagination 20 years ago.

MR. MacNeil: Negotiations between the United Auto Workers and the Ford Motor Company continued today, despite a strike deadline which expired at midnight. The UAW has authorized a strike against Ford but told workers to stay on the job while around-the-clock talks continued. The UAW has indicated it will use its agreement with Ford as a model in upcoming negotiations with GM and Chrysler. That's our summary of the news. Now it's on to the NAFTA debate, a firm that keeps jobs at home, and a report on Rap music. FOCUS - STRATEGY SESSION

MS. WARNER: We turn first tonight to the selling of NAFTA, the North American Free Trade Agreement. The campaign began with a White House sales pitch yesterday, and today President Clinton was on the road, seeking support for the treaty in New Orleans. But the administration faces a tough battle. 36 percent of those surveyed in an NBC/Wall Street Journal Poll released today said they oppose the treaty, 25 percent favor it, and 34 percent remain undecided. Meanwhile, a CNN/USA Today Poll, also published today, indicates that the public tends to believe the arguments made by NAFTA critics: 67 percent of the public said they thought NAFTA would cost the U.S. jobs because firms would be attracted by Mexico's lower wages. Only 22 percent said they thought the treaty would create jobs because Mexico would buy more U.S. exports. Wages and jobs were main topics at a Senate Finance Committee hearing today.

SEN. WILLIAM ROTH, [R] Delaware: I have two huge assembly plants at home, auto assembly. And they're very concerned. These are good, hard working people. They're very concerned about what's happening, and they see them losing jobs, jobs to Mexico. Now, let me ask you, the auto management, of course, are very enthusiastic about the agreement. Have they given you any kind of assurance, or have you met with them, that they won't begin moving facilities down to Mexico? Because, it seems to me, a lot of your opposition stems from these very people.

MICKEY KANTOR, U.S. Trade Representative: As you know, Senator, General Motors just moved a thousand jobs from Mexico back to the United States. The three automakers have assured the administration that NAFTA is an agreement that not only they support but will allow for the exporting of cars to Mexico, not jobs.

SEN. DONALD RIEGLE, [D] Michigan: Mr. Kantor, do you have the figure of the disposable income of the average Mexican worker? MICKEY KANTOR: I think the disposable income is around 3,300 -- in U.S. dollars $3,300 a year, something like that.

SEN. DONALD RIEGLE: What I'm trying to get out, and you may not have this -- I'd like you to get it for me, if you would -- the issue of how much money is left at the end of the pay period by a Mexican worker, on average, to even think about buying, you know, a $10 wall clock or a $90 black and white, color TV set, let alone an automobile. Everything I've been able to see tells me that for the great mass of Mexican workers and people that their disposable incomes are so small that the notion that somehow or another there's going to be all this buying power unleashed to buy goods made by Americans really just is, it's just implausible and fanciful. They don't have the money, frankly, to do that.

MICKEY KANTOR: If I might, I can give you a very tight answer. No. 1, the fastest growing item of exports to Mexico is consumer goods. No. 2, the Mexican, the average wage --

SEN. DONALD RIEGLE: Well --

MICKEY KANTOR: If I might just finish, Senator, the average Mexican wages per employee have risen each time in the last five years, and 21 percent last year. And, No. 3, President Salinas has now pledged himself, which is not part of even our law, to pass a law in Mexico with a national wage board which would tie real minimum wage increase to productivity. Of course, as we know, Mexican, all other Mexican wages are tied to the minimum wage. And of course, that will raise these wages even further.

MS. WARNER: We have four congressional views now. Lining up in support of the treaty are: Rep. Robert Matsui, a California Democrat, and Rep. Jim Kolbe, an Arizona Republican. Against NAFTA are: Rep. David Bonior, a Michigan Democrat and the Majority Whip, and Rep. Helen Bentley, a Maryland Republican. Welcome to all of you. Congressman Matsui, let me start with you. For two days now we've been hearing arguments and counter arguments, statistics and predictions about what NAFTA will mean for jobs. How is the public, which is a lot less educated than all of you are about this, supposed to know whom to believe?

REP. MATSUI: Well, we have 293 economists that have said that this will create U.S. jobs. We have 12 Nobel winners in economics that say this will create U.S. jobs. What this basically is, is an agreement to reduce tariffs on both sides of the border. For every $1 of tariffs on the U.S. side, there's $2.50 of Mexican tariffs. And as a result of that, there is no question that the economists are correct. This will create significant jobs for the United States.

MS. WARNER: Are the economists all correct, Congressman Bonior?

REP. BONIOR: Well, economists on our side, Prof. Shaik at the University of California has, I think, blown apart some of the myths about the Mexicans being able, Mexican workers being able to afford these products. And I think the Mexican government, themselves, have produced evident evidence to indicate that they pay a low wage and that many of these jobs will be coming from Mexico. I have an ad right here that's appeared in major publications throughout the United States. It's a beleaguered- looking businessman that says, "I can't find a good, loyal worker for $1 an hour within a thousand miles from here. Yes, you can, in Yucatan." It's an ad by the government of Mexico. It says, labor costs average under $1 an hour, including benefits. It also says in this ad you can save over $15,000 a year per worker. So, you know, people understand clearly that when you have those types of statistics that it's going to be very easy for corporations to move South, and they will move South.

MS. WARNER: Well, Congressman Kolbe, aren't there statistics on both sides? I mean, Congressman Matsui just gave me some to support his view. How is the public supposed to figure out what to think?

REP. KOLBE: There are statistics on both sides. I think what one has to try to understand is just use some common sense here. As Congressman Matsui said, if they have a tariff barrier that's two and a half times ours, and both of them come down to zero, it stands to reason that we've made a two and a half times greater advantage in penetrating that market. We have since 1987, these statistics speak for themselves, we've increased our sales to Mexico from 16 billion to 43 billion dollars. We've added about 700,000 jobs in the United States, because of those additional sales to Mexico.

MS. WARNER: Well, Mrs. Bentley, what about this argument that whatever jobs are lost from the United States will be more than made up by increased exports to Mexico?

REP. BENTLEY: First of all, I don't believe it. The increased figures that Mr. Kolbe used have to -- are -- concern capital goods that went to Mexico. These are capital goods to build 2100 plants that moved from the United States down to Mexico. And he's talking about 7,000 jobs supposedly increased up here because of this. Forty-seven thousand jobs have been lost in the Chicago area alone from the plants that left Chicago and went down to Mexico, so, no, I don't agree with those figures at all. I'm with Mr. Bonior. We are going to lose many more jobs.

REP. KOLBE: But what's wrong with the person who works at the Caterpillar factory in Decatur or Peoria's making capital goods, making earth moving equipment? I mean, is his job not a good job, we shouldn't be having those kinds of jobs?

REP. BONIOR: It's a good job, but your premise here is based upon the fact that the Mexican worker is going to be able to afford to purchase products from the United States. The figures you are using -- if I could just finish this one point, because I think it's very critical to the whole discussion -- the figures you are using about increasing of American exports. As Mrs. Bentley has indicated, 24 percent of that has been met -- is in goods to construct factories and equipment in factories. 64 percent of that is in parts that are made here, assembled across the border by slave wages in Mexico and brought right back here without the Mexican consumer having any effect in all of this. 15 percent is in consumer goods. So those figures have to be looked at very closely.

MS. WARNER: Let me ask you about President Clinton's definition of this debate because we have a very interesting alignment here, a Republican and Democrat on each side of this issue. He said really that what this is about is a debate between those who look at the risks of a new global economy but are willing to embrace it, and those who are so afraid of the new global economy that, in fact, they're trying to cling to the old. Is that, is that a good definition of what this debate is about, Congressman Matsui?

REP. MATSUI: I don't think there's any question. You know, we've had over the last decade 20 million jobs that either were limited or created, and we expect that number to continue on in the future. In fact, Bob Reich testified before our committee yesterday and indicated that in order to have a progressive economy, an economy that's dynamic. We have to have a continuation of job changes. For example, in 1910, the blacksmith and the carriage maker went out of business. We lost a lot of jobs when we created an automobile industry, and I hope that in the next 20 years that my son and grandchild will be involved in another kind of industry. We had a phonograph, we had tape cassettes, and now we have CDs. And we're going to have something else in the future. We depend upon a progressive, changing economy. And that's what's happening now. We have insecurity in the workforce, and so people want to preserve what they have. But in the meantime, the world's changing. Technology changes. Buying pattern changes. And as a result of that, we're going to be left behind unless we approve of things like NAFTA and keep free trade as a concept in the United States.

MS. WARNER: So Congressman Bonior, is part of the problem that you opponents represent a lot of -- if you'll forgive the phrase - - the carriage makers and blacksmiths of today, and that your own constituents are immediately threatened now and really can't anticipate the new jobs of the future?

REP. BONIOR: Not at all. If I could shed a little bit of light on this, we've lost about 1/2 million jobs in the last decade to Mexico. We could lose at least a million more in the near future if this agreement goes through. And if you look at the people who have lost the work, they found jobs for the most part. But what kind of jobs have they found? The average pay for those jobs is about 50 percent of what they had. Now, is that looking to the future? Is that what we want to go, is to a future where we've receded in wages, we've receded in consumer benefits, we've receded in health care and safety? And look at the other end of it, the Mexican end of it. Mexico, I believe, in my heart is a correct, political, social, economic system right there. There are people in Mexico who are looking to the future, who want to change Mexico, who want to make sure there are free labor unions who can move and help people improve their wage scale and their health benefits. There are people in Mexico who want to break the corrupt judiciary system over there, want to reform the fraudulent system. There have been 48 political opposition people assassinated in Mexico in the last four years. This agreement will lock in that corruption, and what we need is to give those new people a chance to create a new Mexico.

MS. WARNER: Now, let me get back to jobs for a minute, if I could, with Congressman Kolbe. Now, what do you say to critics who say, as Congressman Bonior did, that a lot of these jobs have been lost, people aren't getting new, high wage jobs, and, in fact, are having to go to low paying jobs? Doesn't that argue with the argument that you and the President have been making?

REP. KOLBE: No, the President is right. What we have to do is focus on the kinds of jobs that are going to be the future for the 21st century here, the kinds of new industries that are emerging, whether it's in telecommunications and computer and software. Just the other day, I visited a whole series of plants and factories and research and development countries in my district that are in the area of optics, a growing industry in Tucson because of the optics research done at the University of Arizona. These are the kinds of jobs, very high paying, very high level, skilled jobs, these are the kinds of jobs that we want to focus on. That's what we have to do. That's hard to do. It's not easy to do, to make that transformation, but it's going to happen anyhow. The low paying job may end up going to Mexico, but if it isn't going to Mexico, by the way, it's going to Malaysia, it's going to China. If we keep it in Mexico, we can have many of those jobs in the United States that provide the plastic or whatever it is that goes down to Mexico.

MS. WARNER: Do you think there's anything the President can do to try to persuade Americans that, in fact, he does have a plan for making up the difference? I mean, today he announced an environmental cleanup fund for the border. Is there anything he can do to reassure people who are afraid they're going to lose their jobs immediately?

REP. MATSUI: Sec. of Labor Reich in the next two or three weeks will be announcing a major job restructuring program. He has a program for job retraining, job education, in addition to that an interim support program. Now, that's not only for NAFTA. That's also for military conversion, for the spotted owl problem, and a number of others as well. That may not satisfy organized labor, but at the same time, we are trying to address the problems that restructuring of an economy -- it goes on constantly -- will create.

MS. WARNER: Well, Congresswoman Bentley, would that reassure any of your constituents --

REP. BENTLEY: No.

MS. WARNER: -- this kind of a program?

REP. BENTLEY: I mean, we're talking about retraining, but where are the jobs that these people can go to when they are retrained? I can -- I have constituent after constituent coming to me, particularly those over 40 years of age who have lost their jobs because a plant has closed down and moved somewhere else. They can't get a job because they are "too old," over 40. There aren't the jobs out there in the market.

MS. WARNER: It's frightening.

REP. BENTLEY: You bet it's frightening. And what Mr. Bonior said about corruption in Mexico, that really has to be thought out very carefully. When the European Community was going to bring in Greece, Spain, and Portugal, into that community, they set out a 15-year plan. And each of those three countries had to reach, achieve a goal at the end of each year before they could move on, and before they were accepted. We have not requested Mexico to clean up its act. Greece had to get rid of its dictator. It had to change its government. And the others had to fall into a democracy. Now, we're wrong in the way we're going at this. We're not saying that there shouldn't be an agreement down the road.

MS. WARNER: That was my question to you.

REP. BENTLEY: This is a wrong agreement.

MS. WARNER: If this were to go down, would you then support --

REP. BENTLEY: This is the wrong agreement.

MS. WARNER: -- would you then support an agreement --

REP. BENTLEY: If it was a right agreement. If it didn't destroy the sovereignty of the United States, if the United States was able to in its courts -- our courts are going to be shut of this process altogether.

MS. WARNER: Let me get back to wages and jobs for a minute, Congressman Bonior. A powerful argument being used by the supporters and by President Clinton yesterday, or a strong argument that he uses, is that this is happening anyway, as he will testify to. These jobs are going, and that not passing NAFTA isn't going to save these jobs. What is your strategy for saving these jobs if NAFTA isn't passed?

REP. BONIOR: Well, first of all, let's look at the cost here. We're talking about $40 billion in cleanup costs along the border, in infrastructure costs, 10 billion alone in Texas. We're talking about retraining costs, education costs. Those are dollars we should be devoting within our own economy right now to retrain ourselves, to redo our own infrastructure, to redo our own plants so that we can be productive. And who's going to pay for that? I mean, a lot of people who are for this trade agreement were against extending unemployment compensation for people. They were against the retraining in the past. And all of a sudden they're going to come on board and say, by God, we've got to do these things now. They weren't there then. They're not going to be there for the future in these retraining programs, and I think that has to be looked at.

REP. KOLBE: I really find that offensive. I live along the border, and Congressman Bonior and the other people on the other side have defeated every dollar that's been proposed by former President Bush and by this administration to help do some of that cleanup along the border. We have problems along the border. They're not just Mexican problems. They're U.S. problems. They're Mexican problems. They're international problems, and we have to deal with those. And I would ask a very simple question: Are we going to have a better opportunity to cooperate on the environmental cleanup if we have NAFTA or if we don't have NAFTA? Of course, it's if we have NAFTA, not if we defeat NAFTA, not if we turn our back on trade with NAFTA.

MS. WARNER: Well, this, of course, this debate is pointing up the geographical split we're seeing in all of this. Analyze for me, Congressman Kolbe, very briefly where the Republicans are on this, which kind of Republicans you've got with you, and which ones are going to go with Mrs. Bentley, very briefly.

REP. KOLBE: I don't think you can put it strictly on geography. You certainly can't put it just on ideology. It is bipartisan. It is Republican and Democrat. I think that the battle is going to fall on the lines of those who really do have a vision of a future, that believe, I really believe that, that believe it. You know, I say not only can but must compete in the 21st century, and we've got to make changes. A vote against NAFTA is a vote for the status quo to keep everything exactly the way it is today and not to make any changein the way the economy of our country is directed.

MS. WARNER: And give me a brief analysis of the Democrats. Is this a new Democrats versus old Democrats split?

REP. MATSUI: I think it is. President Clinton campaigned on the basis of change. He wanted to make sure that we had a dynamic economy. He wanted to make sure that free trade was part of his agenda, and at the same time, he wanted to make sure he took care of the displaced workers by job retraining programs. And the members that support the NAFTA are those that are not afraid of the future, not afraid of competition.

MS. WARNER: Is that because their constituents aren't afraid because they're doing well in this global economy?

REP. MATSUI: Oh, no. I think you find members of all shapes and sizes that are involved in this issue, and certainly the real issue to this is that are we afraid of an economy that's about 2 1/2 percent of the economy of the United States? And if we are, if NAFTA goes down, this would show that America feels like we're a nation of defeatists, rather than a nation of people that believe in opportunity.

REP. KOLBE: And 41 of the governors are for the agreement.

MS. WARNER: I can't let this close without asking about the Ross Perot factor. How much of a help is he to your side, Congressman Bonior?

REP. BONIOR: I don't know. I can't guesstimate how much of a help he is, but I know who is the help. The help is the auto worker, the steel worker, electronic worker, the person who builds factories, the person in this country who works for a living. That's the grassroots of our movement. Those are the people who are concerned about this issue.

MS. WARNER: But non-government workers, only 11 percent, I think it is, of Americans are now union members, are union members any longer. So it can't just be that?

REP. BONIOR: This is much broader than a union. There are farmers in Florida, in the Dakotas, that are opposed to this. There are people who are concerned about human rights in churches all across America who are opposed to this agreement. To assume that this is a union issue is to entirely read this wrong. Europe spent 40 years to put the Economic Community together.

REP. BENTLEY: Right.

REP. BONIOR: They spent over $100 billion to do it, and they're still not there yet. We're going to do this in three years with an economy in Mexico that's got a disparity in wages that's seven to one? It doesn't make sense. The American people know that.

MS. WARNER: And gentlemen, do you think Perot's a big factor here?

REP. KOLBE: Well, speaking from the Republican side, he's more of a factor on that side, there's no question about it. We got a 150-year relationship with Mexico, and now is the time to move to a new era in that relationship. And I think that's what this agreement is all about. But Perot's going to be a factor, there's no question about it.

MS. WARNER: Sadly, we're going to have to end in a minute. I'm going to ask for quick predictions.

REP. MATSUI: NAFTA passes. It's going to be very, very close, but I think with the President involved in this now we're going to pass it because we're going to change this debate. It'll be a job growth, job increase in the economy debate.

MS. WARNER: Congressman Bonior.

REP. BONIOR: It loses. We look to a brighter future with a new agreement, and we look to give the Mexicans a better future, so that we can do a better agreement with them.

MS. WARNER: So Congresswoman Bentley, you don't think the President can pull this off?

REP. BENTLEY: No, I don't.

MS. WARNER: No matter how much he does?

REP. BENTLEY: It's going to be close. It's going to be a close vote, but we're going to win.

MS. WARNER: Well, thank you very much, gentlemen. Mrs. Bentley. Back to you, Robin.

MR. MacNeil: Still ahead on the NewsHour, Paul Solman on keeping jobs in America, and Charlayne Hunter-Gault on protests over rap music. FOCUS - RESHAPING BUSINESS

MR. MacNeil: Next tonight, we look at the way some companies and their workers are trying to keep American jobs in America. Business Correspondent Paul Solman reports.

MR. SOLMAN: Like his father and grandfather before him, Fred Levine is the girdle business. But with changing fashions and the coming of control top pantyhose, the girdle market is shrinking, Levine's family business hanging by a thread.

FRED LEVINE, Girdle Manufacturer: Today we really feel like we're just trying to save our own back sides, really trying hard to hold it up.

MR. SOLMAN: Now, you could say that as girdles go so goes the garment industry. And, in fact, it has been going for years to other countries. Since 1973, the U.S. apparel industry has lost one job in three, nearly 1/2 million in all. And that makes for a lot of spare factory space.

FRED LEVINE: Most of the building is like this now, and occasionally, I'll hold a meeting with my staff in here?

MR. SOLMAN: Really?

FRED LEVINE: Oh, yeah. For the impact, for the feeling, for the understanding of what we're really up against, and there just are no jobs left. There are very few people coming into the needle trades. And there's a sense of hopelessness.

MR. SOLMAN: Levine's company, Marcus & Wiesen, is the last one left in this Long Island City building. A group of nine other companies still on the directory [Nina Shoes; SKC Fashions Factory; Ideal Co.; United Togs Inc.; Glenora & Pinnacle; Junior Way Ltd.; York Factors; Robert Orsini; Greenbriar Fashions] went bust in a month before our visit. Levine's job is to keep Marcus & Wiesen from becoming yet another ghost of business past. One obvious problem, too much inventory piling up due to uneven work flows along the traditional assembly line.

FRED LEVINE: These are bundles of work in process.

MR. SOLMAN: And it's all the way down.

FRED LEVINE: All the way down, thousands of dollars.

MR. SOLMAN: Thousands of dollars.

FRED LEVINE: Thousands of dollars, and this bundle may have been worked on a week or two ago. To get to the point, so we may have paid the labor and the materials a week or two ago, and it's sitting here not paying interest.

MR. SOLMAN: In other words, a major problem is that Levine's money is tied up in pieces of girdle, money he can't get back until they are stitched together into the final product. Time is money, and both are running out here. And if they do, you can kiss another 40 American jobs good-bye. And so to the rescue, Peter Lazes, job saver. Lazes, who's with Cornell University's School of Industrial & Labor Relations, helps keep U.S. factories open by getting workers to make their own jobs more efficient. At Marcus & Wiesen, they're experimenting with team manufacturing to solve the inventory problem.

EMPLOYEE: Once you finish here, like I finish here, if she's got work for me, I go over there and put the bottoms in. Then I come back here.

MR. SOLMAN: These women have left the assembly line where they used to perform the same task over and over again on girdle after girdle. On the team, however, they all pitch in, doing whatever it takes to turn out one small batch at a time. From first stitch to last snip, a very fast 30 minutes.

MR. SOLMAN: Isn'tit perfectly obvious that it's better to do it that way than this way? And this company's been in business for the whole century, right?

FRED LEVINE: Yes.

MR. SOLMAN: So I mean nobody ever thought of this before?

FRED LEVINE: No.

MR. SOLMAN: Well, why not?

FRED LEVINE: I don't know, Paul. A lot of work rules. There's a lot of things in American industry that are done because they were always done that way, and a lot of times we struggle with finding a fresh look, and sometimes we're so caught up in that tunnel we just don't see it. And the other part of it is to get a worker to accept a new way of working is probably the hardest thing that I've ever faced in my life.

PETER LAZES, Consultant: I think what their expectations were is that you come to work, you're given a set of materials to sew, to cut in the shop, and that's all you did. As long as you got that out, that was fine. Now we're seeing that if we're really serious about getting the shop more competitive, they need to be concerned about the quality of how the piece is put together, not just what their one operation is.

MR. SOLMAN: It takes time for both the workers and the company to make changes like these, but Lazes' methods seem to work and have saved jobs in the U.S. from Xerox to General Motors. But can U.S. workers, even team workers, really compete with cheap foreign labor, especially in the low-tech garment industry?

MR. SOLMAN: That woman over your should there, the one in yellow, or sort of gold-colored dress, roughly speaking, what does she make an hour, I mean, just the wildest guess?

PETER LAZES: Probably around $7 an hour.

MR. SOLMAN: Seven bucks an hour?

PETER LAZES: Right.

MR. SOLMAN: And there are people in China who do that same work for 25 cents an hour. How can she possibly compete?

PETER LAZES: The labor rates are not the whole part of the equation. The question is: Can we set up in this company a way in which they manufacture products in a short of period of time so Freddy Levine, the president of his company, can get that out to his customers quicker than air freighting it from a manufacturing environment in, you know, China, or the Pacific Rim? And that's what he's doing here.

MR. SOLMAN: Peter Lazes isn't just thinking wishfully. Across the 59th Street Bridge in Manhattan, Bud Konheim has brought jobs back to America. Konheim is a fourth generation garment maker who once manufactured in Hong Kong. He now does it at home because he says if he makes it in the USA, he can respond more quickly to the fickle market place. He says a shorter lead time saves him more money in lower inventory, for example, than cheap labor does.

BUD KONHEIM, Garment Manufacturer: By the time we had the customs and the freight and the handling and the agent's commission and bring it in here and then we factor in how much more we have to make to anticipate our needs here, and we're wrong a lot of the time, then we have to take that product and sell it for less and lose the profit. We're much better off dealing with labor right here, making exactly what we need, making a small profit on what we make, and just selling it out.

MR. SOLMAN: Konheim is president of one of New York's trendier fashion companies, Nicole Miller. That's Miller, herself, showing the company's wares to visiting French buyers. These are not garments for the faint of heart of short of change, a $60 tie, $35 for a G-string, a $105 corset, compared to $14.99 for Fred Levine's most popular girdle, model 1820. But both firms need to keep inventories low, delivery quick. Unlike FredLevine, Bud Konheim doesn't own a factory. He contracts the work out. But on a visit to one of the shops that sews Nicole Miller clothes, we noticed a striking similarity to the girdle factory. In our admittedly limited survey, nearly every worker was an immigrant. Julie Lee, who came from Taiwan as a young girl, owns this factory with her husband.

MR. SOLMAN: Where are the people from who you employ?

JULIE LEE, Factory Owner: Oh, they are all different places. From Taiwan, Hong Kong, China, Mainland China.

MR. SOLMAN: And what's the difference between them and native born American workers of the same age?

JULIE LEE: They are harder workers. They are much harder workers. And they don't mind working a little overtime, and they are more skilled.

MR. SOLMAN: We asked Lee what her employees earned.

JULIE LEE: They make about 10 to 20 dollars an hour.

MR. SOLMAN: Ten to twenty?

JULIE LEE: Yes.

MR. SOLMAN: This figure was somewhat contradicted, however, by Ngai Lai Zhen, a former math teacher from Mainland China. We asked her how much she made.

NGAI LAI ZHEN, Garment Worker: More than a thousand.

MR. SOLMAN: A thousand a month, more than a thousand a month.

MR. SOLMAN: Now, I suppose we might have a mini exposer on our hands here. A thousand a month comes out to more like five dollars an hour than ten or twenty. And that's assuming the total doesn't include overtime, which it well may. On the other hand, this is how capitalism has always worked in America, the way that people at the bottom have made their way up. The workers here are convincing when they say they're happier than they were in China, where 25 cents an hour can be a competitive wage. And you need look no further than the news footage of illegal Chinese aliens desperately trying to reach our shores to imagine what an opportunity factories like Julie Lee's represent compared to the alternative. So with regard to Peter Lazes and the whole "made in the USA" issue, one question is: Are we saving jobs that only immigrants will take? In other words, are we importing people to fill the jobs we're saving to avoid losing them to those same people overseas? In which case, what's the difference? On our way back to the Nicole Miller office, we ran into further evidence of the difference in job expectations between those born in America and those from abroad. Ruben Fraiburg is a person you could only meet in New York, an Argentinean cab driver of Polish descent.

MR. SOLMAN: What percentage of cab drivers are immigrants, as opposed to native born?

RUBEN FRAIBURG, Cab Driver: 99 percent.

MR. SOLMAN: 99?

RUBEN FRAIBURG: Yes.

MR. SOLMAN: Why?

RUBEN FRAIBURG: Why? Why is because no American is going to try to work 16 hours a day. It's very hard work, you know. It's like any other minority work in the city here.

MR. SOLMAN: But explain to me a little more why it is that native born Americans won't take those jobs, even if they're unemployed.

RUBEN FRAIBURG: Because it's degraded, you know.

MR. SOLMAN: Degrading?

RUBEN FRAIBURG: Right. It's not the kind of job that sends you to the top. You understand?

MR. SOLMAN: Bob Konheim says he can't remember the last time a U.S. born American applied for a sewing or other entry level job.

BUD KONHEIM: The idea that you should hit the top within 20 minutes is an American perception, and it comes from the "Picnic," the movie "Picnic." William Holden comes to his old college friend. He's a bum on a train, comes to his old college friend who's running a business someplace, and he says to the guy, I'd like you to give me a job. And the guy says, well, what can you do? He says, you know, like you, I could put my feet on a desk and talk on the telephone. That is the perception of what work should be.

MR. SOLMAN: When did that picture start?

BUD KONHEIM: It probably was part of the American overindulgence of the '50s after the war, where things got to be real easy here because there was a lot of money that was pumped into the society. We had a lot of needs which we don't have right now. And now we have to create wants. And that was a totally different picture than what exists today.

MR. SOLMAN: So for many U.S.-born Americans, expectations may simply be too high. Our post war "Picnic" may have been the economic exception, not the rule, and expectations of a return to the whopping growth rate we enjoyed between 1945 and 1973 may be keeping many U.S. born Americans, young and old, from taking lower end jobs. This suggests that the challenge is to upgrade jobs not just create them.

PETER LAZES: The question is how you maximize the skills of people that are competitive in a global economy, and this is the kind of thing that we're doing right here in this shop.

MR. SOLMAN: But what do you mean by high skill in a place like this?

PETER LAZES: Higher skill, I guess, maybe in a place like this in which the women in this shop are not only just sewing but they're making decisions about how the product goes together. That's a higher skill than what they did two years ago.

MR. SOLMAN: And a skill that is actually more and more valuable as they work it out in this particular place?

PETER LAZES: Absolutely. And I think if we don't tackle the issue of how we transform our work environments to deal with wages that have more value, I think there'll be a crisis on our society.

MR. SOLMAN: To sum up them, Peter Lazes and those who agree with him are not just trying to save jobs but to upgrade them. If workers have more valuable skills, they'll presumably be paid more, maybe even make up some of the economic ground they've lost. But given increasing competition from cheap labor and automation, can it really be done? We have one last question for Peter Lazes. If you and I are entrepreneurs, what's to stop us from applying what you're doing here to a factory in China that we've set up with new equipment and workers working at 25 cents an hour?

PETER LAZES: This is not transporting a piece of equipment. This is transporting an educational system. It's transporting a style of management.

MR. SOLMAN: In other words, Lazes is trying to create a new system with higher skilled jobs. But even he isn't sure you can transport this system abroad. Lazes, himself, has been trying to do just that in Eastern Europe. And his client here, Fred Levine, has already sent about 10 percent of his work down to Haiti where the finished products he says are gorgeous and much cheaper, all of which makes you wonder. Can we ever really make these into good American jobs at good American wages? Or instead of sending these jobs abroad, is the only alternative to use low paid immigrants with low expectations -- exactly what's been happening of late. FINALLY RAPPING RAP

MS. WARNER: Finally tonight, protests over rap music. Some of the most popular rap artists use rhythms and lyrics that seem to promote violence and sexual and racial stereotypes. Now, some critics are fighting back. Charlayne Hunter-Gault has more.

RAPPER: When I die, they'll be bullets and gun smoke. If you don't like my lifestyle -- [bleeped out] -- and I'm a hustler.

MS. HUNTER-GAULT: That's what's called gangster rap, hard core, street tough lyrics of Los Angeles-based groups like Ice-T and Niggers With Attitude, or NWA. Their angry style with their racial slurs, deliberately shocking lyrics, and brutal images of life in South Central LA have stirred controversy even as they have sent rap sales soaring.

RAPPER: I'm a nigger in America, and that much I flunk. When I see what I like, I takes what I want. I'm not the only one. That's why I'm not bitter because everybody is a nigger to a nigger.

MR. SOLMAN: Ice-T's single "Cop Killer" even sparked a national protest. But cops were not the only objects of derision. Women were too. More controversy was caused by the frequent use of words like "bitch" and "whore." Still, gangster rap continues to sell. This song by Dr. Dray currently ranks among the top selling albums. To its supporters, gangster rap is a form of social protest, a kind of street theater, the heartbeat of urban America. But to its critics, it is simply an attempt to manipulate racist stereotypes for profit, to sell records.

SPOKESMAN: [speaking to group] We strongly believe that it is our Christian, moral, and social responsibility to speak out against evil forces --

MS. HUNTER-GAULT: It is that opposition that is creating the first real back lash to the music, a back lash born in the same place that gave birth to rap, the black community. Recently, opponents of hard core rap gathered at New York City's Abyssinian Baptist Church in Harlem to say enough is enough.

TANYETTE DEWEESE: It is not all right for our black, male children to grow up and be drug dealers, gang bashers, or stick-up kids. But your negative lyrics and videos are telling them that it's all right.

MS. HUNTER-GAULT: Many of those who came to protest were primarily middle class adults, educated working people and parents who were insulted by the negative stereotypes of blacks portrayed in the rap lyrics.

TANYETTE DEWEESE: But negative rap is a slap in our faces. It let's everybody know to a certain extent that we as black people must have low self-esteem, no respect for ourselves, or anyone else, and we just don't care who we hurt as long as we are making the dollar.

REV. RAPHAEL WARNOCK, Abyssinian Baptist Church: I've had to endure that ugly "n" word for some 400 years now, and enough is enough! [applause] Black women, black women have been the objects of too much violence. They've been the objects of too much abuse and too much misuse, and enough is enough.

MS. HUNTER-GAULT: The protest was organized by Abyssinian Baptist Pastor Rev. Calvin Butts. Rev. Butts argues that he is not against all rap, just that which denigrates blacks through words and images. That rap, he says, casts a shadow on all blacks.

REV. CALVIN BUTTS, Abyssinian Baptist Church: This is not a place, as one young woman stood up and said, where I hear people being called bitches and whores around every corner, and it is not. It is not. It is not like that in Oakland. It's not like that in LA. There is some of it that the world must not understand that that is who we are. We are not that.

MS. HUNTER-GAULT: Until now, most blacks in leadership positions have refrained from criticizing such a popular form of black expression and protest. When Rev. Butts finally spoke out, it was clear outside the church that he had struck a nerve. The streets of Harlem came alive with debate a way not heard since the protest era of the '60s. No minds were changed, but the issue was now out in the open, and people were debating it as never before.

JACQUES DEGRAFF: I'm here because I'm outraged at the denigration of black women and as a father, as a son, my mother, my sisters, our wives, our girlfriends have been denigrated, and these are against the values of our community.

MS. HUNTER-GAULT: Others argued that if Rev. Butts was going after anyone, it should have been the record companies, themselves, that negative rappers were merely telling it like it is.

SPOKESMAN: We know what's right. We know what's wrong. The music is not the killer. It's not the ill. The ill is the streets that we are forced to live like rats on. The ill is the projects we are forced to live in.

"PREACHER EARL": We're coming from our own community. We are not talking bad things like bang, bang, shoot 'em up, because we want to. This is what we live. I would love to talk about blue skies and apple pies, but I can't. That's not where I live. I live here. I see babies having babies. I see pregnant mothers using drugs. And this is what I'm talking about.

MS. HUNTER-GAULT: Only a few blocks away in a very different atmosphere, teen-agers were also talking about rap music.

TEEN: Come on, come all, except the Haitians with the -- though you're sailin' for your life, the question is: who really gives a - -

MS. HUNTER-GAULT: This is a rap work shop at New York's Riverside Church. Here, another minister, the Rev. Mariah Britain, is taking a different approach, trying to use rap as a positive force to develop the writing talents of these teen-agers. These young men and women don't use obscene language or condone violence in their own lyrics, but they echoed the arguments of many of those who defended rap during Rev. Butts' protest.

JEAN-JACQUES CADET: I think like the language used by rappers just pretty much reflects how people feel in life, so you pretty much are saying whatever comes to mind and how you feel, and if you feel like cursing because of the situation you see, that just happens.

ABRAH GRAHAM: Like Jean says it was just a reflection of the times, the harsh times now. So there's going to be a harsh usage, so if you don't understand, you know, you're not really understanding what today's all about.

MS. HUNTER-GAULT: To these aspiring rappers, the negative messages in some songs are no worse than in other entertainment media.

SPOKESPERSON: What about your integrity? What about you stand for as human beings? Are you swayed more by the desire to make money and sell the records, or are you led by your sense of integrity?

MALE: The bottom line is entertainment. In the same way that'd be like acting an actress or like asking Sylvester Stallone how do you really feel about the way you're portraying people in Vietnam, and just, you know, killings, and going around and shootin' people. Probably wouldn't have a second thought about that, because, you know, he doesn't really, you know, probably know the first thing about Vietnam.

MS. HUNTER-GAULT: Despite the gentle coaxing of Rev. Britain, these young people were reluctant to admit there was anything wrong with hard core rap. Mike Abbott, an independent record promoter who was invited to speak to the students, says as long as that attitude prevails, negative rap will continue to sell.

MICHAEL ABBOTT, Record Promoter: Record companies have been guilty in putting out too much of the negative rap, but, you know, those decisions are based on what they feel will sell in the marketplace. It's a catch-22. If you put out garbage and the customer responds to garbage, you keep putting it out.

MS. HUNTER-GAULT: It's been suggested that what appeals to both black and whiteteen-agers is hard core rap's anti-establishment, anti-authoritarian messages. But some psychologists suggest that the appeal for white males, the group that buys the most CDs, goes beyond teen-age rebelliousness. They argue that the appeals of that group stem from the validation of their worst stereotypes about black people. For the congregation of Abyssinian Baptist Church, that notion fuels much of the drive against gangster rap.

[SINGING AT CHURCH SERVICE]

MS. HUNTER-GAULT: Abyssinian Baptist Church has been involved in the black struggle for equality for decades. Upstairs, the Adam Clayton Powell Room plays tribute to the church's former minister turned congressman. Old press clippings chronicle important civil rights victories. Here the street language used by many rappers evokes images through words that civil rights protesters like Adam Clayton Powell fought to bury.

REV. RAPHAEL WARNOCK: I understand anger. I understand frustration, but brother, if your back is burdened by the whip of white racism, and you're taking it out on the black woman, then your anger and your frustration, though it may be legitimate, it is misguided and misdirected. [applause]

MS. HUNTER-GAULT: Rev. Butts hopes that protests like these and the media coverage they generate will eventually make an impression on the rappers and cause them to change their negative vocabulary.

REV. CALVIN BUTTS: We're not saying that they can't make it. They have every right in the world to make it. What we're saying is that we hope to create a climate in our community that we believe once existed where this kind of thing is so intolerable that people will dare not suggest that a black woman is a bitch or any woman is a female dog.

DEMONSTRATORS: Negative rap is not all right.government

MS. HUNTER-GAULT: Since Rev. Butts launched his protest this summer, many other spiritual leaders have followed in Detroit, Dallas, and Los Angeles, all challenging not rap but negative lyrics. A New York appearance by Los Angeles rapper Dr. Dray has reportedly been indefinitely postponed. It remains to be seen whether Dr. Dray, the other hard core rappers, and their record companies will, in fact, hear the protests and change their tune.

RAPPER: -- slipped and I'm slipping -- RECAP

MR. MacNeil: Again, the major stories of this Wednesday, Republican lawmakers unveiled their own health care reform proposals one week before President Clinton is scheduled to announce his. The Justice Department issued revised antitrust guidelines to accommodate health care reform. Hillary Rodham Clinton said they were part of the administration's plan to save consumers money by permitting new mergers and joint ventures in the health care industry. Good night, Margaret.

MS. WARNER: Good night, Robin. That's the NewsHour for tonight. Tomorrow we'll look at the role of U.S. troops in Somalia. I'm Margaret Warner. Thank you, and good night.