ARKANSAS Gov. Bill Clinton is canvassing manufacturing plants and urban-area schools, talking about "human capital" - the personal dimension of the nation's economy.
The Clinton strategy for robust growth is to invest more in education and training for a work force now trailing far behind America's major competitors. The Democratic front-runner attacks the Bush administration for failing to plan over the long-term for higher wages and faster growth.
The message, say Mr. Clinton's strategists, is designed to strike a chord among United States workers who see their jobs going to cheaper, better-quality overseas labor markets. Clinton's target is wide, ranging from students looking for employment to defense plant workers who may soon be out of work.
"The basic thrust of our goals and principles is that the driving force of productivity and income growth depends on the flexibility of companies and the skill of workers, not the cost of capital," says Robert Shapiro, a Clinton advisor who is vice president of the Progressive Policy Institute, the economic policy arm of the Democratic Leadership Council.
After two decades of eroding personal incomes, and almost two years of a sluggish economy that has fueled workers' fears about the future, jobs and long-term security are paramount voter concerns. In February, the unemployment rate climbed to 7.3 percent, representing 9.2 million jobless Americans. Need for job-creation cited
Janet Norwood, who analyzed unemployment statistics before she left her post as commissioner of the Labor Department in December, says: "We've got to create more jobs and better prepare the workers who will meet employers' needs.
"Clinton's rhetoric seems to emphasize education and long-term planning. Clearly we have to do something about consumer confidence," says Ms. Norwood, now at the Urban Institute in Washington.
Business advocates say the best way to buoy confidence is with a better employment picture, and that can only develop from a more favorable climate for commercial growth. Today, cash-strapped firms shun taking on more debt and risking ultimate failure by expanding their operations. The trend in larger companies is down-sizing. Most small and medium-sized firms can't afford to borrow money.
"No one would disagree with the need to better prepare workers," says Roderick Hills, a former chairman of the Securities and Exchange Commission, now a lawyer active in international finance. But Clinton and other presidential hopefuls fail to address fluctuating business regulations and forbiddingly-high capital costs. These present the real hurdles to economic growth, says Mr. Hills. Lacking a cogent government economic policy, business strategic planning is imperiled, he says.
Deficit reduction must occur before any spending programs, such as increased education and training programs, are piled onto the burgeoning budget deficit, says Nathaniel Semple, director of government relations at the Committee for Economic Development (CED), a business-oriented, nonpartisan public policy research group. Reducing the government debt burden pushes down interest rates, encourages individuals and businesses to spend, and creates economic activity. All that means more American jobs, Mr. Sem ple says.
David Hale, chief economist with the Chicago-based Kemper Financial Group, says, "Clinton talks around the deficit. For black and union voters, he has to sound optimistic," and that includes promising back-to-work programs and bigger spending on job training and education. State income tax increased
As to the financing of Clinton's "empowerment of workers," the governor's record in Arkansas may reflect ways he might seek to come up with funds. With Arkansas workers in mind, "Clinton supported an increase in our state income tax during the last session of the state legislature in 1991," says Cecil Cupp, Jr., who chairs the Arkansas State Chamber of Commerce and the Arkansas Bank and Trust. "Our business community saw the need, too. Never before had we supported a higher tax rate," Mr. Cupp says.
Clinton argued that the cash-strapped state had to diversify the economy and build an industrial base that provides more payroll and better-paying jobs.
Mr. Cupp praises Clinton's role. "He's sensitive to industrial development and worker education so that our work force can be more competitive with Japan and Europe." In Arkansas' largely agriculture-based economy, which is by nature low-skill and low-wage, that meant offering incentives to investors who later formed a solid tax base. Another unofficial endorsement comes from Del Boyette, the director of the Arkansas Industrial Development Commission (AIDC), who says he's volunteered for the Clinton camp aign. Employment up by 19 percent
AIDC has prepared a fact sheet on the state's economic history over the past 10 years, during Clinton's governance. Employment grew by more than 14 percent from 1982 to 1990, and the manufacturing job base has expanded 19 percent since 1982. Much of the growth has occurred in export-oriented companies. Since 1979, the number of exporting firms more than doubled, to 776 last year.
US exports have been the most significant factor in American economic growth during the past several years.