THE WHITE HOUSE
Office of the Press Secretary (Atlanta, Georgia) ________________________________________________________________________ For Immediate Release March 29, 1995
SOUTHERN REGIONAL ECONOMIC CONFERENCE SESSION ONE: REVIEW OF THE REGIONAL ECONOMY
Emory University Atlanta, Georgia
8:45 A.M. EST
DR. CHACE: Ladies and gentlemen, good morning. On behalf of the entire Emory community, its faculty, its students, its staff, its loyal alumni, we warmly welcome President Clinton, Vice President Gore, the respective members of the Cabinet and every one of the conference participants to this campus. We are honored greatly to see all of you here, and we hope this conference today will be a stunning success.
As Emory's President, but also as a citizen of this region deeply interested in its prosperity and sense of well- being, I trust that my welcome will inform you of just how fully involved this institution has been in the hopes and the dreams of all who live in this area.
Our institutional success is made possible by the economic and cultural success of our fellow citizens and fellow institutions. In turn, our success and vitality contribute dramatically to those who surround us.
Emory University, along with all of its sister colleges and universities in the southeastern part of the United States, has power and delivers impact on the way people live here. The power and the impact coming from one institution are multiplied by the power and the impact of the other institutions of higher learning in this area. How to measure our power impact? Emory employs more than 13,000 full- and part-time employees. In this area, only Delta Airlines, AT&T and Bell South employ a greater number. Within greater Atlanta, we spent more than $910 million in the last fiscal year. Our students put more than $56 million into the economy during the same time. And we constructed more than $96 million worth of buildings.
Economists tell us that the multiplier effect of our impact on the regional economy comes to a figure of more than $2 billion. We hope to generate almost 40,000 jobs. And household income was boosted by more than $935 million as a result of Emory's presence.
Higher education then at Emory and at its sister institutions in this region and elsewhere in the United States is not simply an academic or abstract undertaking. Good cities are made better, more prosperous and more vital by the presence of good universities. No cities can become great without them.
Indeed, the nation's universities are founded on the premise that intellect is to make a difference to civic life. Civic life now draws its strength from the vitality of our economy. Education is thus married to stability and prosperity.
In recognition of that partnership, the federal government invests in us. It expended almost $11 billion in university-based research in the United States is Fiscal Year '92. Emory is proud to have received about $100 million of that amount. And as another sign of the trust the federal government places in what we and other universities and colleges do in this country, it has allocated more than $31 billion to student financial aid this year. Emory received some $42 million of that.
That is a dramatic and persuasive example on the part of Uncle Sam of how to invest wisely in the future. Our students are a good and valuable part of that future. And those students, the ones at Emory, are being educated in a part of the country in which by the year 2000, 35 percent of the population will be living. The southeastern region, plus Texas and Oklahoma, will also be the place where, during the next two decades, more than half of the growth in population in the U.S. will take place.
Thus, those students will be present at the creation of a dramatic demographic and economic shift in the continuing formation of this country. They will remember where they have been, what they saw as they grew a bit older, and how that change in their environment was accomplished. They will want to have known progress and to have felt success.
Our duty is, in whatever ways we can, to show them such things. Hence, we will want, and certainly all of you will want, the next few years to have demonstrated smooth acceleration in growth, stability in the culture, a sense of opportunity for everyone, and the perception that government is here to help and not to retard, while education is here to enlarge the sense of American possibility for all our students and all those whom they will influence in the years to come.
"The youth of a nation," said Benjamin Disraeli, "are the trustees of posterity." As all of you are the trustees of the present, those on this campus and a thousand other campuses are the trustees of tomorrow. They welcome you here, as do I. And we collectively wish you well in your deliberations.
It's now my pleasure to introduce the Secretary of Commerce, the Honorable Ronald H. Brown. We all recognize the special skills and the special passion that Secretary Brown brings to the issue of building a strong partnership between the private sectors on which we all depend and on the public support on which entrepreneurial energies rely.
He serves on the President's National Economic Council, the Domestic Policy Council, and the Task Force on National Health Care Reform. He's is cochair of the U.S.-China Joint Commission on Commerce and Trade, the U.S.-Russia Business Development Committee, and the U.S.-Israel Science and Technology Commission. A lawyer and the father of two lawyers, a native of New York, and a graduate of Middlebury College and St. Johns University, he serves on the board of trustees at Middlebury and, therefore, he knows just how important higher education is to the success of the culture and the economy of the country.
Secretary Brown. (Applause.)
SECRETARY BROWN: Good morning, and thank you very much to our host, the Emory University President, Bill Chace. Thank you for your warm introduction, Bill, and for your gracious hospitality, and for your hard work in setting the scene for this Southern Regional Economic Conference. It is indeed an honor to welcome so many distinguished participants to such an important event.
Two years ago, then President-elect Bill Clinton invited a number of academics, administration officials-to-be and private sector leaders to Little Rock for an economic summit. That meeting was the beginning of an unprecedented dialogue between our public and private sectors that continues every day in every way throughout this administration.
That first summit was the beginning of something else as well -- 26 months of exceptional, in fact, unprecedented economic performance. As Vice President Gore often says, what ought to be up is up, and what ought to be down is down.
Building on what we learned from the first summit, the Clinton administration crafted a bottom-line, pragmatic economic strategy that wove ideas from across the economic spectrum into a coherent policy approach, which has achieved impressive results for our economy.
I was last on the Emory campus a few months ago to describe the administration's national export strategy, an administration-wide venture anchored in the economic principles that emerged from that Little Rock summit -- shrinking government and making it more efficient and user-friendly; coordinating federal efforts to promote economic growth and creation of jobs; and working in close and productive partnership with America's private sector, while serving as strong and, hopefully, effective advocates for America's commercial interests.
The Clinton administration fully understands that it is the private sector that fuels the engine that pulls the train of economic growth and job creation. But we in government have a special responsibility. We can, and we must, clear the tracks. We clear the tracks by attacking trade barriers, by providing access to economic tools, and by encouraging and supporting the technological innovation that drives economic growth.
I am extremely proud to serve in an administration that has accomplished so much in two short years. But it is now time to renew our dialogue and to move to the next level. Information and knowledge is becoming our most important economic input, and the knowledge and experience in this room provides us a unique opportunity to prepare for and, in fact, shape and create our future.
Our discussions today can be tremendously important to tomorrow's American economy. There is one person with the demonstrated capacity and the demonstrated ability to absorb the information that this conference will generate and transform it into effective, common-sense economic strategy -- one person who, time and time again, has stood up for what's right for the American people -- one person who has insisted on the coordination of policy across agency and sector lines -- one person who never loses sight of the families and the individuals and the businesses who are at the very heart of our efforts --one person who I am very proud to call our President, and honored to introduce to you today: Ladies and gentlemen, the President of the United States, accompanied by his great partner, Vice President Al Gore. (Applause.)
THE PRESIDENT: Thank you very much. Thank you, Secretary Brown, for that introduction, and thank you for the magnificent job you have done as Secretary of Commerce, promoting the interest of American businesses and American workers throughout the United States and all across the world. As far as I know, there is no precedent for the efforts that you have made, or the results you have achieved.
President Chace, thank you for your remarks this morning, and thank you for hosting us. Governor Miller, as always, thank you for bringing us back to Atlanta and to Georgia. Thank you for giving me such a nice place to sleep last night.
You heard Secretary Brown talk about this economic conference in the context of the one we did two years ago in Little Rock. Let me say that conference, I believe, was very successful and did play a major role in helping us to finalize the economic strategy that we have pursued for the last two years.
We wanted to come back now to the country and do some regional economic conferences for some reasons I will explain in a moment. We thought we should begin in the South, and we should begin here in Atlanta. This city and this university are remarkable examples of where we ought to be going as a people. This is a place of opportunity and responsibility where people are working together. And I can say, I think, for all Americans we can hardly wait for another 479 days to pass so the Olympics will begin here.
As the Industrial Age gives way to the Information Age, and all of our economies are linked as never before, the South has really done a remarkable job of tapping in to all the opportunities that are presented. Atlanta has become a magnet for worldwide corporate headquarters. Miami has become a financial center for all of the Caribbean and Latin America. South Carolina and Tennessee have become new homes for manufacturing operations from all around the world. Charlotte has become a new national home for banking. And, obviously, three letters -- CNN -- prove that this part of our country is the center of a global information network.
This conference, as I said, is designed to be the first of several regional conferences to follow up on what has happened in the last two years. The remarkable group of people that came to Little Rock in 1992, some of whom are here today and are participating in this second round of conferences, really gave us a lot of ideas to take to Washington that were consistent with the things I had advocated in my campaign, but in some ways went beyond them.
The strategy that we brought to Washington was fairly straightforward. We wanted to reverse the trickle-down economics and reverse the idea that the government had no affirmative responsibility to be a partner in growing the economy, increasing the number of entrepreneurs, expanding the middle class and shrinking the underclass.
We did that with a strategy that was designed to reduce the deficit, expand trade, increase our investment in the education and training of our people in the technologies of the future, to help the areas that were left behind, or that were subject to sweeping changes because of defense downsizing, for example, and to reform the government, to make it cost less and do better.
The results, I think, are clear: We've had $600 billion in deficit reduction. We have already cut or eliminated 300 programs with 400 more on the way for our new budget. The federal government is at its smallest size in a long time. We have already reduced it by 100,000. And for the budget already adopted, over a six-year period it will go down by 272,000, which will make it the smallest it's been since President Kennedy was in office.
Our economic plan changed the tax structure in ways that made it, I think, more fair and more conducive for economic growth, while income taxes were raised on corporations with incomes of over $10 million in 1.5 percent of our people. Working families with modest incomes received a significant tax cut. This year, the average family of four with an income of $25,000 a year or less will pay about $1,000 less in income taxes. That's 6 million families in the southern states alone.
Ninety percent of the small businesses, the engine of economic growth, were made eligible for tax cuts by increasing the expensing provisions by 70 percent. We created empowerment zones and enterprise communities to give incentives for people to invest in areas that had been left behind. Four of the nine major empowerment zones, which got big tax incentives for private enterprise to invest in them, are located in the southern region, including Atlanta, the Kentucky Highlands, the Mississippi Delta and the Rio Grande Valley of Texas.
Last year, there were twice as many loans to small businesses in the SBA under the then-leadership of Erskine Bowles from North Carolina, and now under the leadership of Phil Lader from South Carolina, there were twice as many loans in the South from the SBA than in any succeeding year ever -- including the year before I took office. That includes over 11,000 businesses in loans worth over $2 billion.
So that strategy was our economic strategy. It went with our strategy to expand trade -- NAFTA, GATT, the Asian Pacific region, the Summit of the Americas in Miami, the National Export Strategy that Secretary Brown has worked so hard on to sell more of our products and services around the world.
We increased investment in education from Head Start to making more college loans available to people. And we certainly began not only to shrink the size of government, but to change the nature of government -- to let states have more say over welfare reform and health care reform; to move toward what we have now done in this year, reducing the unfunded mandates on state and local governments; and to change the nature of regulation under the Vice President's reinventing government effort.
We have, for example, just announced that small businesses will be allowed when they're first fined, not to pay the fine, but instead to put the fine into correcting whatever the problem is with a government agency; that government agencies will be given the authority not even to impose a fine in the first instance, to waive it, on small businesses. The Environmental Protection Agency is reducing the paperwork burden by 25 percent. It will save 20 million hours of work for American citizens in the private sector this year.
So these are the things that we have worked so hard to do. What have been the results? Well, you heard them already, but I'd like to say again. We've had over 6 million new jobs in this economy. And 1993 was the best year in American history for small businesses and start-ups. The combined rate of unemployment and inflation is at a 25-year low. We have the African American unemployment rate in the United States below 10 percent for the first time in 20 years. Unemployment in the South has dropped even more than in the country as a whole. The South has 30 percent of the population, but has generated 40 percent of the new jobs that have come into this economy in the last two years.
Now, that is the good news. Why are we having this economic conference? Because the news is not all good, and because we are under a great responsibility to try to keep this economic recovery going of high growth and low inflation.
Let me talk first about the news that's not all good. You may wonder with these numbers, which are better than we've had in decades, why poll and after poll after poll says that people think the country is not going in the right direction. One reason is that over half the American people, in spite of this recovery, are working longer work weeks for the same or lower wages than they were making 15 years ago. This is a new phenomenon in the global economy -- that wages are stagnant.
The other thing is that nearly everybody knows someone who's been part of a restructuring, a downsizing, some market change in a larger economic unit, which means that even when times are good, people think things are changing so fast that their level of security, their sense of stability, of rootedness, of reward for work is more fragile than it has been in the past.
It's funny, you know, this economic strategy that I've tried to pursue basically grew out of my experience as a southern governor, when the real southern strategy of the '70s and '80s in the south was better education, more jobs, and a closer partnership between the public and private sectors, and between people of all races and backgrounds. That's the strategy, the real southern strategy that lifted the South from the '60s forward. And it's ironic that in the country now with this problem of wage stagnation and the splitting apart of the middle class, the challenge we have, in a funny way, is a lot like the challenge that I faced when I first became a governor.
You know, most of us who were born in the South remember when nearly everybody was poor. Zell Miller gave that magnificent speech at the Democratic Convention about living in the house his mother built herself. When I was born in Arkansas, the per capita income of my state was 56 percent of the national average. And most of us who are natives to this region thought that a major part of our life's mission would be getting the American Dream to all the people who lived in our region, without regard to their race or condition of birth.
Now, the challenge for America is whether or not, even in the midst of all of our economic triumphs, and when we are the world's only military superpower, we can preserve the American Dream for all of our people. Can we avoid this wage stagnation? Can we avoid this increasing inequality in the United States that is gripping every advanced economy in the world as we become more globalized, as we become more dependent on technologies, as things change faster and education determines income more than ever before? That is the great challenge.
And that's why we are working now in Washington to continue what we've been doing for the last two years, but also to focus on things like the Middle Class Bill of Rights, the education tax deduction, more training for workers who are unemployed or underemployed, raising the minimum wage, working on welfare reform -- things we think will raise incomes and bring people together again.
So let me close with this. I hope that all of you think that this will be a day well spent. From my point of view, I think we should be focused intensely on three questions. One is: Even though all 50 states are growing now -- it's the first time in a long time that's happened -- what are the differences in the economies of the various states in this region, in this region, and the rest of the country? Are there specific things that ought to be done in the southern region or within the southern states that are different from what we might be doing as a whole? -- Question one. Question two: What is the proper role of the national government in working with you to build this economy and to make it better?
That's the great debate in Washington we're having today. It used to be the prevailing theory was there was a big- government solution for every big problem. Now, the prevailing theory is the government would mess up a one-car parade and if it didn't exist, America wouldn't have any problems. Both theories are wrong, and are contradicted by all experience everywhere in the world. Not Japan, not Germany, or any country ever became a great industrial power without trying to develop the capacities of the people and having a coordinated economic strategy, and having a framework within which markets could succeed.
So, what should we be doing? What should we be doing? What have we done that's right? What have we done that's wrong? What should we stop doing? What should we start doing? That's the second question.
The third great question is the one that I mentioned earlier, and it's the national question. And it is at the core of what we will have to be concerned about, I predict to you, for decades: How do you preserve the American idea that if you work hard and play by the rules, you can do better; that we will always be able to grow the middle class and shrink the underclass and spark an unprecedented number of entrepreneurs? How do you preserve that American idea in the global economy? That is the great challenge of this era.
When this day is over, if we honestly address those three questions -- are there still differences in the South or within the South that we need to be sensitive to; what's the role of the federal government; what can we do to raise incomes and increase stability for people who are working hard and playing by the rules -- then I think you will believe your day was well spent.
In 1986, I was the Chairman of the Southern Growth Policies Board, and I asked the former Governor of Mississippi, Bill Winter, to be the chairman of our project on the future of the South. Every six years, there's a report on the future of the South. The Secretary of Education Dick Riley issued one in 1980. We've been at this a long time.
We called our report in 1986 "Halfway Home And A Long Way To Go," which captured the fact that the South was moving rapidly to the rest of the country, but wasn't there yet. Now, we're in one of the two southern states that has a per capita income above the national average. We know the South is growing more rapidly than the rest of the country and moving quickly. But there are still differences, and there are profound challenges facing the United States.
So I would say to you, we're more than halfway home. The southern strategy has found its finest expression, perhaps, here in Georgia and with the administration of this governor. I noticed -- one thing I have to brag on him for -- these HOPE Scholarships so that any young person in Georgia who has a certain grade-point average gets a full tuition scholarship for four years to any institution in the state, public institution in the state -- anybody. That's the kind of strategy and the kind of programs that we ought to be supporting everywhere in the United States.
So we've done very well, but these three great questions still have to be asked and answered. We're going to ask these questions all across the country, but I think we did the right thing to start here.
Let me close with this. In two weeks, on April 12th, we will honor the 50th anniversary of President Roosevelt's death in Warm Springs, Georgia, about 60 miles from here. On the day he died, Roosevelt was drafting a speech for Thomas Jefferson's birthday, a speech he obviously never got to deliver. The last words written in his own hands were these: "The only limit to our realization of tomorrow will be our doubts of today. Let us move forward with strong and active purpose."
One final problem we have are the doubts the American people have about today. If you look at what has been achieved in this state, in this region in the last 10 years, there is a lot more room for hope than for doubt.
Thank you very much. (Applause.)
Now, to provide an economic overview, I would like to call on the Secretary of the Treasury Bob Rubin. As most of you know, he was, until he became the Secretary of the Treasury, succeeding Lloyd Bentsen, he was the President's National Economic Adviser and the head of the National Economic Council, a position now occupied by Laura Tyson, who was the Chairman of the Council of Economic Advisors.
One of the important things we did in our economic strategy, which has received virtually no attention, but which I predict historians will credit for a long time to come, was to establish a National Economic Council like the National Security Council -- that met on a regular basis, included all the various actors in the federal government, and forced us to coordinate our economic policy in ways that had never been done before. It is obvious that a big part of our national security in a global economy depends upon our national economic strength.
I am convinced that that institution now will endure through future presidencies of both parties and unforeseen developments. And I think one of the reasons it will endure is because Bob Rubin is the first person to head the Economic Council, did such a good job in bringing people together and making it work. So I'd like to call on Secretary Rubin for a brief overview of the economy as we see it today.
SECRETARY RUBIN: Thank you, Mr. President.
I was asked to frame this conference, but I should have known that was a superfluous assignment. I think the President framed it as well as anybody possibly could have. So let me do this. I will add a little bit to comments that he made and try to fill out a little bit where it seems like filling out would be useful.
The absolutely key when thinking about this President and this administration with respect to economic policy is that from the very beginning, this President and this administration have had a consistent economic policy that the President just referred to as a coordinated economic strategy, grounded in his years of thinking about these issues. And that strategy continues to guide us as we go forward.
The objectives have been to create and then sustain the current economic recovery; to prepare our economy for the long term, as the President said, for the new global economy with all of its problems and issues; and to increase the incomes of working Americans.
That means deficit reduction, public investment in education, training, the other areas so critical to future productivity -- technology, opening markets, environmental reform, reforming government regulations, health care and welfare reform -- and, finally, dealing with the complicated problems posed by the global economy.
During the 26 years I spent on Wall Street, I saw a lot of economic programs come and go, almost all based on unrealistic assumptions and unrealistic numbers. From the very beginning, this President has insisted on real, solid, conservative numbers. And I well remember his saying at the first meeting the economic team had at the Governor's Mansion in Little Rock that he was happy to debate policy all day long, but he never wanted everybody to question his numbers. And so it has been.
At this point, I think it is worth pausing a moment to look what's happened to the economy since President Clinton took office. I think we sometimes forget how stark the difference is between the last two years and the four years preceding. Growth has averaged roughly 3.5 percent per year for the last two years, versus 1.4 percent for the prior four years. Inflation has averaged slightly under 3 percent, which is something over 4 percent for the prior four years.
As the President said, 6 million new jobs have been created, almost entirely in the private sector, and two years, versus 4.2 million jobs created in the prior four years, mostly in the public sector. Unemployment has fallen from 7.1 percent to 5.4 percent. The deficit, as a share of the total economy, has fallen from 4.9 percent, as projected based on the last numbers issued by the last administration, to 2.7 percent in 1995, and under the President's budget, projected to be 2.1 percent in the year 2000 and 1.6 percent of GDP in the year 2005. There's a chart there someplace -- there it is.
If you look at the aggregate deficit of all levels of government -- and I think this is an exceedingly interesting number -- at the aggregate deficit of all levels of government, state, local and federal, our deficit is at 2 percent of the total economy of GDP, tied with Japan for the lowest amongst the major industrialized nations.
Another way to look at this is that without the interest the federal government pays on the national debt -- and that national debt, as you know, was incurred primarily during the 1980s and early 1990s -- the federal budget would now be running a small surplus. Private investment is at an historic high as a percentage of the total economy. And, as the President said, government is being reduced under the program the Vice President is managing -- the Reinventing Government Program -- to bring the number of civilian employees down to the lowest level since the days that John F. Kennedy was President.
This is truly a remarkable change in economic conditions, compared to when this President took office just a little over two years ago. But while a great deal has been accomplished, a great deal remains to be done. An area of special concern is our country's increased income inequality, affecting middle and lower income Americans.
We have two charts, and I think they show that point quite graphically. In the 1950s, the 1960s and most of the '70s, every segment of our society, from the poor to the rich, saw their incomes rise in roughly the same proportions as the economy grew.
But for the past 14 years, the exact opposite has occurred. Over that time, the bottom 60 percent of families have seen their inflation adjusted incomes fall, not rise. The only Americans seeing their incomes rise have been the top 40 percent.
In our view, this is critically important for three reasons. First, our society is based on the fundamental view that the economy should work for all of the people, not just a small, or relatively small upper tier.
Second, ever-increasing income inequality is a real threat to our social fabric. And, third, public support for the times of forward-looking economic strategies that the President talked about to deal with the changing global economy, require broad-based participation in the benefits of those policies.
The President's 1996 Budget continues the powerful deficit reduction program begun with the 1993 plan, by providing $81 billion of additional deficit reduction. But that powerful deficit reduction program is combined with middle class tax cuts and public investment designed to better enable lower- and middle-income Americans to benefit fully from the growth of our economy.
More specifically, the President's 1996 budget proposes a Middle Class Bill of Rights with four elements, including three middle class tax cuts that improve middle-income standards of living by reducing taxes and, very importantly, by providing the incentive for people to invest in themselves, and so to improve their own and the nation's future productivity.
These three tax cuts are a child tax credit to enable families to invest in their young children, a post- secondary school education deduction to better enable Americans to invest in education and training, and increased flexibility and availability of individual and retirement accounts to increase incentives for saving and increase the nation's saving rate.
The fourth element is a consolidation of 70 training programs into a skills voucher program as part of the President's public investment program.
Let me add one comment on public investment, if I may. I think it is exceedingly important when you look at public investment, Head Start, summer jobs, the new skills program, education, that while these in one sense are social programs, if you put social considerations aside -- and this is the way I look at them -- from a purely hardheaded business point of view, these are economic programs that are investments in areas that are absolutely critical to the future productivity and competitiveness of our economy in the global economy. That is why the efforts to reduce these programs are so shortsighted, from a purely economic, hardheaded business-like point of view.
It should be obvious from this brief discussion that in our complex economy there are no simple bumper-sticker answers, but instead, complicated judgments as to tradeoffs amongst competing policies. The President and this administration have spent an enormous amount of time thinking through and making these difficult judgments -- all in the context of thinking about the new and difficult issues presented by the global economy.
This conference, as the President said, gives us all, all of us in the administration, the opportunity to see how you react to the same issues and the same tradeoffs that we have pondered at such length.
The President firmly believes that good policy requires discussing ideas, testing your thoughts, and good listening. That was the underlying rationale for the economic conference in Little Rock in December 1992, and that is the reason he and we are here today. The best source of information about the problems and opportunities of our economy are the people who are involved in the nation's day-to-day economic activity. This conference also provides, as the President said, the opportunity to consider regional differences, and the impact that those differences should have on national economic policy.
So, for the vast preponderance of the time today, we will be hearing from you. Before our discussion begins, however, I would like to introduce Donald Ratajczak of Georgia State University, an economist who is widely respected not just in the South, but in the rest of the country, to comment on the southern regional economy.
Thank you. (Applause.)
MR. RATAJCZAK: I know those of you from Atlanta are surprised that I'm using charts, but nevertheless, we have to get up to the modern age here. I also apologize to the President for presenting a talk on the South with my Philadelphia accent. But anyway, what I do want to talk about the South is, it's absolutely true that the South has become a dynamic region of the country, that if you take a look at this first chart here, that not only has the South been growing faster, creating more than 40 percent of the jobs created in the nation in the past two years, but in fact, we are finally starting to close the gap on per capita incomes.
We have been growing faster in per capita income development than the rest of the nation, although there is no question we're still behind, although there's no question that the lowest per capita income states in the nation still reside in the South.
One of the reasons for this significant improvement in economic growth is the result of significant growth in employment. This chart, of course, starts in 1985 and, therefore, biases our energy-producing states and, therefore, also gives an idea that there is diversity in the South. I will point out, however, that Texas which, from '85 on looks like it's a little bit behind the nation, actually had the strongest employment growth of all states in the nation in 1994. Except for Louisiana, every other state in the South has been generating jobs at a much faster clip than the nation as a whole.
This also is a picture of significant diversity in the type of jobs that are created. While it is true if you look at the bottom line and the top line that the average of the region is very close to the nation in terms of manufacturing activity, trade and service and government and other activity, but there is a dramatic degree of diversity among the states. Florida, very much a service-oriented, tourist-based economy and then we have significant manufacturing economies -- the Carolinas, Mississippi, Alabama, Arkansas -- all with very high above -- significantly above national average concentrating of manufacturing activity.
And this is basically what the states, by themselves are doing. The two states that have not been generating manufacturing jobs -- remember, those are states that aren't heavily into manufacturing, and the manufacturing they have been in, which is one of the areas that we have been suffering, the manufacturing they have been in, has, to some extent, been defense-related. And, of course, there has been cutbacks in the defense activity, and so you would anticipate seeing some drops there.
But most of the other states have shown significant improvement in manufacturing, despite the fact that the nation as a whole has not been able to improve manufacturing. This manufacturing gain is in several various areas -- some of them in traditional industries, such as furniture in North Carolina and Virginia; the appliance industry, Tennessee and Arkansas; the upholstered furniture industry around Tupelo, Mississippi. Some of them, in fact, in new industry, as the President talked about, with new investments in the automobile industry, in Kentucky, Tennessee, South Carolina and, of course, the Mercedes plant that is under development in Alabama. Some of them in machinery and electronics. In fact, electronics and machinery jobs are growing dramatically throughout the South at the present time, and some of them also in relatively traditional industries, such as the printing industry, which has always been an important part of the South and is remaining a continuing source of job growth in the South.
I don't want to overdo the manufacturing activity, because if you look at the other chart, 75 percent is, indeed, nonmanufacturing in even the heaviest concentrated states, and significant growth has been in the distribution industries, we've seen Federal Express, UPS making significant distribution activities within the South. The finance has been discussed, with Charlotte now approaching the second most intense city in the nation for asset management by commercial banks, and, therefore, there has been dramatic development in all of those particular areas.
The growth rates, however, are going to slow, and this next chart gives you an idea of what's going to cause them to slow. Some of this growth has been very satisfying. The unemployment rates in the region are at 5.2 percent, about a half percentage point lower than the nation. But a lot of our cities now have very low unemployment rates. Raleigh-Durham, below 3 percent; Nashville at 3 percent. In fact, the Opryland expansion, when they needed the extra employees, they had to buy another hotel and actually use that as a residence for employees to be brought into the area because they could not find qualified employees in their particular area.
In Atlanta, that 3.9 percent -- these are January numbers -- that occurred in January as it declined, the first time in 17 years that there was a decline in the unemployment rate in January. Remember, in January, that's the layoffs from all of the Christmas seasonal work. And to continue to decline at a time where there's a natural tendency to rise is truly remarkable.
We are now facing a relatively tight labor market. Obviously, the jobs themselves -- the jobs themselves have stimulated population growth, which is natural. And right now, in the South, this has been a problem in the past, we've been migrating out, a lot of people. This is no longer true. Only one state in the last year has had more people choosing to leave than to come. All the other states now have people generally recognizing that there is significant opportunities in the South.
However, I did put in this other line which is a little bit surprising, that while the rest of America has now discovered that the South has opportunities with the exception of the people coming from the Caribbean to Florida and the people coming from Latin America to Texas, the rest of the world does not know that the South has significant opportunities.
Now, that's a broad overstatement. Clearly, there's a lot of direct foreign investment coming into the South. Some of those auto assembly plants have been, in fact, financed by foreign investors. But, indeed, what you're looking at is, still, a very low migration of foreign people. This is one of the reasons why we are looking so hopefully at the Olympics, that the Olympics will show the world that, indeed, the South is a dynamic area.
However, the South does have problems. As I said, there are some good problems, which means that we have relatively low unemployment rates in our cities -- I should point out, the unemployment rates in the rural areas are higher, and we do have, even with that good performance in manufacturing, we undoubtedly have mills being closed because the new global competition and the new technology is exposing them to significant investments to upgrade their capabilities, and many people have chosen not to do that.
And in the absence of upgrading, the alternative is to close down, and we do have a lot of mill towns today in the South where the major employer no longer exists. And, therefore, there is significant pockets of significant increasing and high unemployment rates, with people who had worked a long time, but now do not have the skills necessary to be incorporated into new southern economic development.
And I will also point out that the South, despite all of its significant improvement in generating jobs, in attracting more Americans to come to the South to find opportunities or to retire, we still have a significant poverty level. We, in fact, have among the higher poverty concentrations of all the states in the nation. The only significant lower one is Virginia, and, of course, that was done before we assessed the impact on the Virginia suburbs of Washington from the last election. I was waiting. (Laughter.)
The poverty levels are still high. These are percentage of households below the poverty. And what we are seeing in the South is that there is a dynamic area, and there is an area that is being passed by. There are urban areas showing significant development, and there are rural areas where, indeed, a lot of the people are now leaving and coming into the urban areas, and there are no jobs for them there. There are no longer jobs that require hands; the jobs require minds to handle the technology that is being developed.
In addition, the South still needs to improve its education structure. Our colleges and universities are advancing, and we are starting to attract people from the rest of the world. But our elementary and secondary schools, quite frankly, are not creating the product necessary to meet the employment needs of the jobs we are currently creating. And without the migration that we currently have coming into the South, we would be in very difficult straits to sustain the current rate of economic growth that we are currently preserving. And I think that's the big challenge for the South -- that we need to upgrade those educational facilities, and we need to find a way to bring in these people who continue to be outside the market system.
Thank you. (Applause.)
THE PRESIDENT: Thank you very much. Thank you very much. Now, we're going to -- the rest of the day will be presentations, comments from people on the panel and comments from people in the audience. The only chance we have to respect the opportunity of everyone to contribute is if everyone's who's got a slot already stays within the allocated time. So we have five minutes allocated for the presentations, and then we'll go back and get some comments.
There will be four presentations on issues in the regional economy. The first, "working together for growth," we'll call on our host Governor, Governor Zell Miller.
GOVERNOR MILLER: Thank you, Mr. President. And let me just say -- and I'll stay in my five minutes -- how pleased and honored we are to welcome you and the Vice President and the members of your Cabinet back to the South. And we are also delighted to welcome everyone to Atlanta and to the state of Georgia.
It's a privilege to be chosen for your first regional economic summit. And I want to also thank this great university where I once taught a few courses, and may be looking for a job again, for hosting this event. (Laughter.)
In 1991 when I became Governor, there as a national recession deepening all around us. And Georgia, like every other state, was faced with very difficult times. Today that has all changed. The economy has turned around and grown stronger, especially here in the South.
You may have seen that article last December in the magazine, "The Economist," which featured a profile of the South. And it concluded that in many respects the South is now poised to lead the way for the rest of America. Georgia, for example, is the fastest growing state east of the Rocky Mountains. We lead most of the nation in job creation. Georgia is one of the few states that did not raise taxes during the recent national recession. In fact, in the past five years, we have cut taxes three different times for a total of more than $400 million, while maintaining a balanced budget.
Most importantly, Georgia is using this time of growth and this time of economic success to invest in the future. We understand, like Dr. Ratajczak just said, that a skilled and a literate work force will be critical for the 21st century. And we are making that investment.
Georgia's pre-kindergarten program for four-year- olds right now is serving a higher proportion of our at-risk four-year-olds than any other state in the nation. And we are now expanding it to include every four-year-old at risk or not whose parents want to participate in it.
We also have the most far-reaching scholarship program in the nation. The President mentioned it awhile ago -- we call it HOPE, Helping Outstanding Pupils Educationally. And it gives high school graduates with a B average free college tuition, a book allowance every quarter, as long as they keep that B average.
Students who do not have a B average when they graduate from high school, or who do not want to go to college, can take a diploma-granting program at one of our many technical institutes with the same deal -- no tuition and a book allowance. This year, this school year, HOPE is assisting more than 80 -- that's 80,000 Georgia students at our colleges and at our technical institutes.
At the University of Georgia, for example, 70 percent of the freshman class have HOPE scholarships. This state is also investing millions of dollars in a public-private partnership that we call the Georgia Research Alliance. Emory is part of it. We're spending those millions of dollars to build and equip sophisticated labs and to recruit and attract imminent scholars in high-tech fields that will drive our economy forward.
These things are Georgia's real incentives for economic development. And then we also use tax incentives, not only to help attract new industries, but also to support our existing Georgia industries in their efforts to expand or to invest in technology, or to educate or retrain their employees. Last year, Georgia increased our international trade by 23 percent. And we do look forward to the 1996 Olympics as an unprecedented opportunity to build long-term international business ties.
I mention all of these things to brag, as governors are prone to brag, but more importantly, to illustrate some of the challenges that face the entire region as we seek to redefine our economic assets, because our goals in Georgia and in the South must be to offer quality education instead of cheap labor; to develop the cutting edge technology and build the modern infrastructure required to function in a global society.
That article in "The Economist" also pointed out that one of the strengths of the South is that here state and local governments work with business and industry and not against them. And I think that is a very important key. And that's why this kind of meeting and those present are so very important.
So, Mr. President, we thank you for your interest in the economic future of the South. And we welcome this opportunity to discuss it.
THE PRESIDENT: Thank you, Governor. (Applause.) Thank you. (Applause.)
Thank you very much. Now I'd like to call on Maria Elena Torano, who is the Chairman and Chief Executive Officer of META, a full-service consulting firm headquartered in Miami, with major practices in environmental engineering and services information technology and management support.
Maria Elena I've had the privilege of knowing for the last few years. She has done remarkable work in several other countries. And her company has achieved extraordinary growth in the last five years. So I'd like for her to talk about the relationship of what we're doing here to the international economy.
MS. TORANO: Thank you, Mr. President, for giving me the opportunity to follow up to the economic summit in Arkansas in which we participated with both of you.
I guess the message I want to deliver today is very simple, it springs directly from my personal experience, that the President has referred to. This message has three parts. First, expanding trade is critically important to hundreds of small- and medium-sized businesses like mine across the South. Second, government and business must work even more closely together if we are to continue to be successful. And third, as we expand trade, we must not forget the human element that underlied our successes and can form the foundation for even greater future achievements.
Let me say a few words about my personal experience, which the President has talked about. I run a small, full- service consulting firm headquartered in Miami, with offices in five other locations around the nation. We now have 300 employees, up from 14 in 1986. We have grown very rapidly, reaching over $23 million in sales last year and a very profitable bottom-line.
International work is a considerable part of our business. We have major contracts in Central and South America. And for the last three years, we have moved into Southeast Asia and have contracts in Indonesia and Malaysia. We literally could not have growth the way we have or have created the American jobs which we did without a major focus on international work, which now represents 30 percent of our business.
In fact, trade is a critical, if not the critical source of economic growth and job creation for hundreds of businesses throughout the region. In fact, for the 13 southern states, manufacturing exports supported anywhere from 13 to 25 percent of all manufacturing jobs in 1991. And those are the last figures we have and have been increasing ever since. And among all 50 states, many of the southern states rank in the top 10 in number of export support jobs and growth rates of export- related jobs.
While international work has been rewarding, it has not been without obstacles. It's important that companies our size receive the guidance and support from government as well as large, private sector, Fortune 500 industries as we enter into new markets; that we get the export financing we may need and get critical government-to-government advocacy when we're competing against foreign firms.
In this regard, several fellow agencies have acted as mentors for us. Most notably, OPIC, the Overseas Private Investment Corporation, the Agency for International Develop, CDA, the Small Business Administration, and, of course, Secretary Ron Brown's Commerce Department who have done an outstanding job.
Without this kind of focused assistance, which can only be provided through government action, we simply could not compete with firms from around the world, and we could not have added the jobs that we have added to our company.
Finally, I want to talk about the human element in all of this. I believe that this is one of the most important and critical factors in trade development. U.S. business is become more diverse, more multicultural, more multilingual than it was 10, 15 years ago. We're savvier businesspeople as we move into the global economy.
Furthermore, all -- changes and other existing programs, such as those, both publicly or privately funded, have allowed whole new generations of business and government leaders to learn American ideas, American values, and importance of free markets. And I'd like to cite as an example, former President de Klerk of South Africa, who could not have facilitated with President Mandela what -- the miracle that took place in that country had he not been exposed for many years to our system.
This is a critical factor in our success and one that we must do everything to nurture and expand, not consolidate, eliminate, or perhaps even downsize during reorganization.
Finally, the Summit of the Americas, Mr. President, which you hosted last December, gave us a chance to take a fresh look at the emerging democracies in the hemisphere. And I remember the times when we used to have -- medals and ribbons, and this time we've got leaders, hemispheric leaders, who are very well educated, that were savvy and that knew what economic -- fostering economic gains was for their countries.
These relationships are now based on mutual respect among all of us as neighbors. If we build on this foundation we can continue to break down the barriers that have -- for meeting many more companies like mine to continue to grow and prosper.
Thank you very much, Mr. President.
THE PRESIDENT: Thank you. (Applause.)
Our third presenter to discuss the success of businesses in the South is the distinguished Chairman of NationsBank, Hugh McColl.
MR. MCCOLL: Thank you, Mr. President. I'm very glad to be here today. I think that what I had wanted to say has been said much better by others. I'd like to make two or three comments about the region and why and what the differences are.
The first, that you alluded to, Mr. President, is that we've been poor a long time, and we got tired of it. And about 25 or 30 years ago, we started doing something about it. And that first thing we started to do was to try to educate all of our people. And the Governor Miller has already indicated how aggressive we have been in the South at doing that.
Having said that, I agree with Dr. Ratajczak that we are at a breaking point in the South. We are out of trained labor. And we are approaching a crisis in terms of meeting -- we have reached our human capacity to go forward unless we aggressively expend funds to educate the adults who have been left behind, as we pointed out in other -- in some of our cities or small towns.
Now, we believe that -- my personal view is the role of government is to do the things that Dr. Chace talked about in the first instance, which is to fuel ideas through research and to fuel the labor force through scholarships and through incentives for people to go to school. And so I think that is a legitimate role of government to invest in its people so that they can lift themselves.
I wrote down a formula here that ideas, plus capital, plus educated labor equal jobs, which means profits and capital, homeownership, a greater GDP for our country, and then a circular --this continues to circulate and it brings everybody to the table.
Now, the second thing I'd like to say about the South very quickly is that we have had very enlightened governments at every state level. And we do balance our budgets. We have high bond ratings in the South. And we are proud of it and we're going to hold onto it. But that's come at a cost. That's come at a cost. And that cost is becoming more clear today that we are starting to invest less in education in many of our states, both at the elementary level and at the university level, as we cut back our budgets to stay inside of our tax base. We have in fact started to cheat on that a little bit.
Lastly, on the education front, I just make this point, that the South, whether we like it or not, because of our legacy of let's say the factory worker and the agricultural worker, we set our standards to low. And the only chance the South has to continue to lead the nation is to raise our standards at every level of our education. In other words, no social promotion, no looking after everybody in putting an arm around them, but give them tough standards and make them meet them. And that's what the South has to do.
I might add, that's a national problem. That's not a southern problem. That's a national problem. I want to move to the second issue very quickly, and that is capital. The one thing this administration should try to avoid is to appear that it is disinterested in the formation of capital or that there's something wrong with capitalists, because without capital we don't get any jobs. And whether that capital is in small business or large business, it doesn't matter. The capital is what we need to go with the educated work force.
And so everything we do at the administration level, it seems to me, it ought to be to help incent the creation of capital. And that can be good tax policy -- and I won't try to tell you what that is. You already know that. But creation of capital is important, and we should not pit the capitalists against the work force. They are partners if we're to have success. They must be partners.
Lastly, regulation. One of the reasons the South has succeeded and one of the reasons you hear that Charlotte, North Carolina, is now becoming one of the most important capital centers of the United States is the lack of regulation. That is, we did not have laws that got in the way of our amalgamating our banks and building up capital bases that could fuel the engines of the South. So it is very important that we remember that regulation gets in the way of big business, small business, any business. And we should think clearly about that. I applaud the administration for the efforts that it has taken in deregulating the banking industry, in creating competition, and the most recent efforts by the Secretary on the glass deal, I applaud.
We need to do that up and down the line -- is to look at regulation and see if it makes sense. And I applaud the Vice President for that.
I thought of an analogy -- the University of Arkansas' well-coached basketball team with a lot of young Americans and perhaps one European on it is going to meet the basketball team of the University of North Carolina, also well- coached with a lot of -- young Americans -- on it. And what's going to happen Saturday night is a referee's going to throw that ball up and get the hell out of the way. (Laughter.) And in some respects, that's what government needs to do, is give us a level playing field, throw the ball up, and get the hell out of the way, and Americans will make it happen. That's really what I think.
But we've got a lot going for us. (Applause.)
THE PRESIDENT: I have something to say about --what everybody said, but I -- on the basketball analogy --(laughter) - - I think it's very -- it's very interesting that --you'd be amazed the kind of requests Maria Elena talked about in how other governments are following our democratic examples, our institutions. We get a lot of requests, now that communism has collapsed and everybody knows that the regulatory state is not as good as the market for free people, to help us set up referees in other countries, which -- but there are basically two things: One is the level playing field.
The other is ordering the competition so that -- we overdid it, which is why we had to sign bank reform, but other people wanted to -- they want to know, how does your central bank work; how does your FDIC work; how does your Securities and Exchange Commission work; how does your Commodities Trading Commission work? So I think that the referee analogy may be pretty good -- get out of the way. Don't interfere with the competition. But make sure there are rules that make it fair to everybody, and don't let the competition in the short run devour the ultimate game, which requires a long run perspective.
The fourth presenter here is Larry Farmer, from Mississippi, from the Diversified Rural Development Services. And he's going to talk to us about an issue that is very close to my heart, which are rural challenges in the South.
MR. FARMER: Thank you, Mr. President. I, too, am grateful for this opportunity to be here. And I couldn't help but think as I watched Secretary Rubin and Mr. -- do their charts -- I had a flashback to a speech a decade and a half ago that Ray Marshall gave when he talked about the new South he was afraid was going to become a reincarnation of the old North, and that the Sun Belt had a lot of shady spots.
The numbers I saw, what I saw, reflected Ray Marshall's view of the South. Where I live in the Delta region Mississippi, which is, Mr. McColl, right across from those Hogs who are going to beat North Carolina come Saturday night -- (laughter) -- but we live in an area that's very much like a Third World country. Anyone who has spent any real time there knows this as well as I. But we have a lot of problems.
I think we have too much disinvestment, if you will, in our communities by everybody from lenders to insurance agents who won't insure us. We've devalued people. We have what in urban centers would be classified and described as the underclass. People have been devalued or not counted because they don't count. Too often they don't vote. They lack fiscal capital.
Our governments will rush to invest in our capital, which they should -- in our capital industries. We rave about gaming and gambling and increasing jobs in Mississippi if the boat cranks up -- our jobs are gone. Nobody is taking a look at the social ills that's been left in the wake of gaming and what that does with everyone with a get-rich scheme.
We lack institutional capacities and capabilities within our communities, within the African-American community. If I were in Appalachia, I would be talking about rural whites. We support subsidized research for agriculture. We don't for people in communities in our region.
Unfortunately, race and racism is still a major problem confronting our people. And southerners are nice folks for the most part, except the city slickers. We deny, we defer, we pretend we don't have problems. Race and racism is still a very major problem in the rural South. If I'm talking about the Black Belt regions of Alabama, Georgia, or the Delta regions of the Arka-Miss, as we referred to it, it's there, it's real.
I'm pleased that in many instances we have recognized that as a problem and we've started to try and deal with it somewhat. But it still exists.
We see regional and national intermediaries who come and do things for us, but don't necessarily come to help us do things for ourselves. And, Mr. McColl, my granddad said -- he did, asked a test once. He wanted to determine whether I was stupid or not. I was about 10 years old. He said, "Son, if you saw two men standing, preparing for an ass-kicking contest, and one had one leg, which one would you bet on?" And he was relieved when I said I wouldn't bet on the one-legged man.
We don't have the capacity in many ways in the South, in the rural South. We look -- like the Atlanta metro area and others, and we should learn from those. But we, in doing so, should place an emphasis and revalue institutional capacities and capabilities.
President Clinton, you asked earlier, what role the government -- what role is there for government to play. I believe it was an 18th century economist, Adam Smith -- he said a premier resource and primary responsibility of any government is its people. We have in our rush to capital formation -- we've forgotten people. We need to redo that. We need to build institutional capabilities to allow us to do things for ourselves.
The rest of the nation and the region are talking about high-tech. We can't master low-tech in Mississippi. The government has yet to find a will to invest in our institutions, in our young people. In Mississippi, we just approved earlier this year, last year, $76 million -- we're going to build more prisons. And we don't have a job-training program and people are still living in shotgun shacks with outdoor toilets. These are things that people can do for themselves. Hands can build, minds can learn. We need streets, we need drainage. We need basics.
There are organizations like the Delta Foundation, like MACE, like the Foundation for the Mid-South, the Enterprise Corporation of the Delta. The Delta Foundation and other loan funds -- I bet their biggest problem is not money, but having someone to lend to. They need to borrow, but they can't. We have black ranch governments who don't have the resources to govern. They want to do good and they don't know how to do good.
Thank you. (Applause.)
THE PRESIDENT: Thank you very much. I have a lot of thoughts and I want to come back to it. But I'd like to go back now and get some comments from some of our other panelists in the order in which we discussed these issues.
First of all, Governor Miller's remarks sort of encompassed under this idea of working together for growth. And one of the things that occurred to me was that the country may be about to get in the same fix in some ways the South was in for a long time with our -- a conflict between what works in politics and what works in real life.
What works in real life is when people work together and make the most of everybody's potential. What works in politics in 30-second ads and images fleeting across the screen is when you demonize your opponent and divide people. And it's -- one of the central problems of democracy as we move toward the 21st century is what works in real life is different from what people in real life reward in politics.
And the reason Atlanta is where it is today is because in the 1950s it became known as the city that was too busy to hate. When Little Rock Central High School was ruining my state's image for decades, Atlanta took a different path. And so I think we have to be very up-front about that because we still do have racial tensions in the South; we still do have other tensions. And we have to -- we've got to be honest about this. What very often we hate in our normal lives as citizens, we reward in our voting lives as political actors.
But since the two are so closely connected we can't avoid having the consequences of one bleed over into the other. But this working together for growth is a very important theory. I'd like to call on two people to discuss this. One is Jesse Helms -- excuse me -- (laughter) -- Jesse Hill. I started to say "hell," but I didn't want to say that -- (laughter) -- who is the Chairman of the Board of Directors of Atlanta Life Insurance, who has been a real leader in both civil rights and economic development, and how the two go together.
After that, I'd like to go right into asking Jack Stahl, who is the President of Coca Cola U.S.A. to talk, because Coca Cola has been very active in this whole area. So I'd like to ask both Jesse and Jack to speak.
MR. STAHL: Thank you, Mr. President. First, let me just say this -- as I reflect on this conference, I can't miss the opportunity to say that the civil right struggle, led by Dr. King, has really benefitted greatly the economic growth we refer to today here in Atlanta at this conference. Whereas, Dr. King and his leadership during the movement, during the '60s, Ernie would agree with me that we have focused on human dignity, but I think Ambassador Young would tell us that Dr. King, high on his priority, the next two things was his war on poverty and economic development.
And I say to you this morning, I think, in reflecting on the earlier comments, that minority economic development opportunity and economic development opportunity for women are very vital to our nation. The effort to suggest that, yes, we've made progress, but there's a great deal and a great path that we have to cover. Equal opportunity for blacks, other minorities and women is still vital to us, lest we forget that, today -- in Alabama, in Georgia, in Florida, Tennessee, North Carolina, South Carolina, Virginia, there are Americans whose life and their lives are out of tune with the great prosperity we celebrate here today.
For some 20 years, I was a chief executive -- sort of the chief executive of, I guess, the largest minority-owned financial institution from the standpoint of net worth, the Atlanta Life Insurance Company. And today, I'm sorry to tell you that less than two percent of insurance premiums spent by minorities, African Americans, are collected by black-controlled life insurance companies.
So I think that as we celebrate the progress, as we celebrate the low unemployment rate, it's important I remind ourselves that the unemployment rate among minorities is still twice the numbers that were given here today, and among -- in some communities, in some cities among young black males, it's three times that rate of four.
So I think we are making progress, I think we have to continue to recognize that our real challenge is coming from abroad. And I think what we can do as we move forward is to remember that whereas the Cold War is over, as Americans, there are some common goals and some common ground that we need to unite around and be supportive of each other. And I think we still need a more level playing field if we're going to have more stories like the ones Maria has outlined for us. And I think this conference will be very helpful to us in that regard.
Q Mr. President, your challenge and the challenge of your government -- our government -- is really a very complicated one relative to the Coca Cola Company. Our challenge is simple in that we're trying to meet the refreshment needs for people in the South and in Georgia and, really, all around the world. But there probably are some parallels in that just as you started by analyzing where your constituents are and where they hopefully can be over a period of time, that's what we try to do with consumers in trying to meet their refreshment needs.
Now, to do that, we have to back up from there and say what products and packages are important to meeting the soft drink needs of Coca Cola consumers around the world, and then develop strategies to make that happen.
But for us, those strategies are only executed by the people of the Coca Cola system around the world, and that requires skills, that requires training, that requires education. And our agenda within the Coca Cola Company, in terms of building the skills and capabilities of our people around the world to deliver on those refreshment needs is probably very similar.
If we can go out and have those skills and have those trained people to help sell more Coca Cola products, there's a multiplier effect in our business where a job created to sell soft drinks around the world can have the impact of having somewhere between five and 10 jobs, to create the bottling infrastructure and the packaging and the advertising -- all that goes into Coca Cola.
But to make that happen, it comes back to skills and training and capabilities. So we would simply want to be in a position of supporting education and commitment to skill bases among adults and teenagers and children, and we've made a commitment to do that at Coca Cola, by committing more than $50 million to education over the next 10 years. And we would simply want to applaud your efforts as well, in terms of building the educational and skill capability of those in this country. We think it's important to generate jobs at Coca Cola here in the South and around the world.
THE PRESIDENT: Thank you. Related to what Hugh McColl said about older -- raising the skill levels of the adult population. I think at this particular moment in our history, the community college may be the most important institution in the country. And a lot of four-year schools are, in effect, becoming community colleges. The average college student today is 26 years of age, with many quite a lot older than that. And I agree with both of you -- I think that's going to be a big challenge for us -- working out the system that permits that to occur over and over and over again, so that people aren't left behind and that the economy isn't, as well.
I'd like to call on some other folks to talk about the second topic we discussed, the international opportunities we have in the international economy. I'd like to begin with Phyllis Jackson who, with her husband are partners and founders of the World African Network, a new premium cable channel aimed primarily at urban blacks, as well as being broadcast in Africa -- clearly a product of the global economy.
MS. JACKSON: Thank you, Mr. President. And I want to take a moment to thank you for caring about people and taking the time to listen to us talk -- talk to you directly. As you said, the World African Network is a new cable service that is targeted toward people of African descent. For many years, we've been portrayed negatively in the media, and we are often portrayed in comedies and sports and news, and the news is often negative.
It is the goal of our network to acquire product from around the world that will show African people in a positive life. We believe that African people, it is our responsibility to uplift our own community and not really rely on others. We know that African American children and African people, all of us watch television, and media is very important and very influential. What other way than providing programs that show our history and our contribution to the world to begin to provide role models for our children.
On an international level, many of the ministers of various African countries, because their priorities are involved in housing and the infrastructure of their country, have asked us to get involved and help them provide programming that will provide positive role models and information for their young people who are watching television.
As an African American entrepreneur, one of the obstacles that we face is capital. And it's been talked about here today. African Americans in this country put over $200 billion between bank savings, life insurance policies and, as Jesse Hill just said, only two percent of those are in African American institutions. And one of the major obstacles we have as an entrepreneur is access to capital. And what we would like to see is a summit convened between the African American entrepreneurs, Wall Street and banking institutions and insurances to talk about access to our own money. We're not talking about preferences, we're talking about money that African Americans -- hard-working, regular people, have put into institutions that we cannot get access to.
If you travel around this country, from Atlanta to Los Angeles to New York, you will see no major development in our community. If you travel outside of this city and go north, the suburbs are beautiful. There's not that kind of development here in the City of Atlanta. And as an international entrepreneur, the base of our company is here in Atlanta, and the cable network is going to launch here domestically, but the long-term goal is to satellite to the other parts of Africa.
Africa could also be the beginning of international opportunity for America with African Americans carrying the American Flag to Africa. There is no other country outside of Africa that there are more well-trained, well-educated individuals who of African descent, and we'd be happy to do that here in the United States, and I think that's something that we should look at very seriously.
We believe that if you teach a man -- if you give a man a fish to eat, he will eat for a day, and if you teach a man to fish, he will eat forever.
THE PRESIDENT: Let me just make one brief observation here, apropos of what you said and what Jesse Hill said. You know, we spend mass amounts of time, effort and energy trying to expand America's reach into markets beyond our borders. And if you look at -- and it goes back to what Larry Farmer said, too -- if you look at the untapped capacity of basically poor Americans, a lot of whom are African Americans, a lot of whom aren't -- and how the whole free enterprise revolution has passed them by, that is the single biggest untapped market, not only for the work force that Hugh and Jack talked about, but also for the growth of the free enterprise system in the country. It's a single -- if we looked at it as a market the way we would if we gather up all these folks and put them 50 miles offshore, we'd be falling all over ourselves to try to figure out how to make this work better.
I'd like to ask Joe Kiker to talk now. He's the regional director of the steel workers based in Atlanta, and his region includes the Newport News shipbuilding locals, and I'd like to ask him to talk a little bit about what labor and management have been doing together in his companies to provide both jobs and some sense of security in this global economy.
MR. KIKER: Thank you, Mr. President. When the country started cutting back on the defense budget, Newport News was hit very hard, as its only customer is the U.S. government and the Defense Department. We had a ship, the CVN 76 that was being put on the block, actually I think that there was some sentiment not to build that ship, and as a result, the international union, as well as the company, combined its resources and went to Congress and lobbied hard to get that ship built. One, it was very difficult for the international union; where we preached for years and years butter, not guns, and going to the senators who we've had a light sentiment and talked those people into voting to fund that ship.
As a net result, we got the ship funded, it's going to be built, and it provides five years' work for about 5,000 people at one time or other works on that ship. It's provided, not the time, to help the company to convert to a commercial type shipping. We haven't reached that goal yet, the company has made a couple of commercial ships, but they've lost money on it because they're not competitive with non-union companies. We've got to get the efficiency and the efficiency in the yard down to a point where we can compete with foreign business, as well as business in the United States making commercial ships.
THE PRESIDENT: I'd like to call on Elizabeth Coleman now, who is the Chairman of the Board of Maidenform, and the Vice Chair of the President's Exports Council to talk a little about trade.
MS. COLEMAN: Thank you, Mr. President. As a company, we export to 55 countries. And in our experience, we manufacture -- we sew in the Caribbean Basin and Mexico. But every job in the Caribbean Basin and Mexico yields a production job in the United States. And, in fact, a production job in the states in the Southeast, in Fayetteville, North Carolina and in Jacksonville, Florida we have 1,000 production workers in high- tech facilities in those states and cities.
For every bit of export that we increase, we create jobs in the United States. There is a direct proportion between our export and our jobs in the United States. And because the United States is a mature market, much of the development and opportunity is abroad. So it's very significant for the creation of jobs in the United States to be able to export.
In addition, export creates markets where, if there is an economic downturn in the United States, you can have a healthy consumer economy elsewhere, so it can be a buffer in hard times here; other economies elsewhere that are good, or are in a different cycle from what our cycle is, so it's very significant.
In addition, an item like ours, which is a relatively low-cost item, is one that has been recession-proof in the United States, and we anticipate an experience of being recession-proof abroad, so that we can say with assurance that every time, for every $1 million we add in export, we add eight jobs in the United States, foreign production, foreign nonproduction, sales or management jobs. So there's a very strong correlation.
I think in terms of the relationship with government there, I have been just dazzled by the performance of the Commerce Department in terms of your counsel and in terms of its advocacy for companies abroad. I had the honor of traveling with Secretary Brown to Poland and experience his advocacy. And it really is remarkable. And it was true at every level of the Commerce Department, not just Secretary Brown. So I think what I'd like to say about government there is for government to keep on doing what it's doing, because it's doing a phenomenal job.
In terms of here where we do have, as I said, high- tech facilities in the South that are supported by our exports, it's very -- when we have converted to high-tech jobs, we have trained our employees. In other words, we went from a lot-tech cutting process to a high-tech process. It took as many employees, but it was much more efficient.
We trained all the same employees so that they could take these new jobs. And, similarly, when we have gone from jobs that -- to high-tech situations that required fewer employees, we've made sure that employees were not laid off and found jobs elsewhere in our facilities. And so I applaud the government in its training tax credits, and would say that that's something that is very, very important, I think, to converting our local economies to a high-tech kind of economy, because those are the jobs that we see in our experience being the jobs of the future. And I think there's real opportunity for current workers to have those jobs in production.
THE PRESIDENT: That raises an important question that we don't have time explore fully here, but maybe we can before the end of the day, which is, what, if anything, can we do to encourage the best practices of businesses that are going through changes toward their employees. For example, we're downsizing the federal government rather dramatically, but we're doing it, we believe, in a pretty humane fashion, because we're doing it in a planned fashion over years, and we have an employee buyout package that I think the Vice President and I fought very hard for; some in Congress were not for it, but it just didn't seem to us to be right just to say, well, thank you very much for 20 years, good-bye.
So I think the idea of retraining all the workers that can be retrained and then having some sort of transition plan for those that have to find work elsewhere, that's going to be a much bigger deal from now on into the future than it ever has been before. And I'm convinced that one of the things that keeps showing up in all of these surveys about people's anxiety about the future is that they don't think they're going to be treated fairly when push comes to shove. So I appreciate the point you've made there.
I'd like to call on Junior Davis now, who is a product specialist and a 30-year veteran of the Atlanta assembly plant here for Ford. And they now produce the Ford Taurus, which has been a modestly successful global enterprise. They changed their production systems rather substantially, and Mr. Davis has worked under both the old and new systems. So I thought it would be helpful for us to get sort of his perspective on some things that are going on purely in the private sector here.
MR. DAVIS: Thank you, Mr. President, Governor Miller, and ladies and gentlemen. I am an employee of Ford Motor Company, a local assembly plant here in Atlanta, and a member of the United Auto Workers Union.
I want to do a little comparing, like 30 years ago when assembly operations were more like a manual type operation. A variety of the vehicles produced there over the years goes back into trucks, passenger cars, and most of the operations in the '60s included trucks.
Today, the plant is utilized in high-tech concept and uses many robots and sheet metal assemblies. During the late '70s and early '80s, the number of employees at the plant experienced some bad times. They lost their jobs and that was vital support for their families.
Today, the assembly plant operation is more efficiency, more productive, better relations between the management and the union. Assembly operators have more input on how to perform operations, techniques to produce a better product. The plan also involves the assembly operators in the new model programs, with inputs for continuous improvement.
Other changes that I have noticed over the years is mandatory health and safety training, ergonomics, actions to reduce work-related injuries. And new-hire training classes, with on-hand experiences before actual production jobs.
Today, the assembly plant currently houses 52 acres, including office and warehouse spaces, with a total of like 2.3 million square feet. The plant new design, the car line, the '96 model, is currently beginning an agreed launch program, and will be production model in the middle of the year.
I am currently the product specialist in the trim department, assisting with the product improvements, training employees. Plus, this will provide new jobs over the next few months.
With education mentioned, I'd like to thank Governor Miller for training, through the Georgia Department of Education, Quick Start program -- completing a training program to train the employees for our new model launch program.
And thank you.
THE PRESIDENT: Thank you.
I think we ought to point out, just hearing Mr. Davis's story, that Ford Motor Company -- and I say this not to criticize any decision anybody else made, but they made an interesting decision when they decided to produce the Taurus, and they decided it was going to be a big, new different kind of car. And they decided they would do it in their existing production facilities. They would modify their existing facilities; they would retrain their existing workers. It was an interesting corporate decision. So that even though the company was having to downsize and there was a lot of anxiety about it, at least they could say, we're going to make this new car and we're going to do it with you, and we're going to go into the future together. And I think -- you just heard him talk -- it had a very positive impact on the overall morale within the company.
I'd like to call on now -- going back to the third topic of success in business, I'd like to ask Fred Smith to comment. Most of you know that Fred is the Chairman and President of Federal Express, which he founded in 1971, I believe with the help of a loan from the Small Business Administration. I don't think he needs that anymore, and probably wouldn't qualify. (Laughter.) And he has taken a remarkable idea to remarkable heights all over the world. And still is headquartered in Memphis, Tennessee, and we're glad to see him here.
MR. SMITH: Thank you, Mr. President. You're exactly right, the SBA and SBIC program was very important to Federal Express in its early days.
I think that in commenting on how to keep the American Dream alive, you made a comment last night at the Governor's reception, which I thought was extremely perceptive, when you said that the United States had experienced an awful lot of the bad effects of an increasingly globalized economy and now it was time to reap some of the benefits.
And the Governor mentioned in his remarks that exports from the State of Georgia were up 23 percent, I think, year over year. And the facts of the matter are that the opportunity to improve the United States standard of living is directly related to our ability to successfully compete internationally and to export high value-added goods and services.
And the proper role, it seems to me, that has been brought out here several times is that government has to invest in the appropriate infrastructure and the appropriate educational levels to allow us to compete there. And most importantly, it has to be, as Mr. McColl said, a good referee.
In that regard, I think that your administration, and in particular the efforts of Secretary Brown, as was commented on by Ms. Coleman, had been, as you commented, unprecedented an Herculean. And Ambassador Kantor has done the finest job in the trade area I think in the post-World War II area.
And the only thing I can say is that we need to do more of it. Because whether you're talking about Delta Airlines here, which I think is now the largest passenger carrier across the Atlantic or Fed Ex and UPS, they're transporting these items abroad, there are still massive barriers around the world to U.S. exports. Whether it's intellectual property in China just solved or the intellectual property dispute in France, or the issues that are going on in Japan, where they consistently have a large merchandise trade effort with us. I think the coordination of the -- at the federal level -- of efforts to keep an open trading regime are the most important things we can do to improve the economy.
The U.S. economy in 1970, I think, was 10 percent involved in international trade. Half of that was agricultural product and petroleum. Petroleum still a big problem in terms of our balance of trade, but overall, the U.S. economy today, I think, is about 23 percent import-export. There are 5.5 billion people around the world, 250 million people in the United States -- even a liberal arts major like me can figure out a lot more people out there to buy things than there are just in the United States. (Laughter.)
So I think that the record of the administration is terrific. I think it came out of -- a lot of it came out of the Little Rock economic conference. Again I want to emphasize what a terrific job I think Secretary Brown and Ambassador Kantor have done, in particular. And that needs to be a real cornerstone of economic policy in the United States in order to create those economic opportunities, because that's where those high value- added, high-paying jobs are going to come from, whether the Mississippi Delta right down the road from us or elsewhere. That's where the market is.
THE PRESIDENT: Thank you.
I'd like to call on Letitia Chambers for some comments. She is the president and founder of Chambers Associates, a consulting firm. And she has done a lot of strategic planning in areas related to government policy and how it relates to the business community and the ability to generate jobs.
MS. CHAMBERS: Mr. President and Mr. Vice President, the clients of my firm are primarily large businesses. And your economic policies and your economic plan, in particular, has allowed those firms to have record profits in the past year. And those profits are enabling them to invest in their own future growth.
I think one of the major aspects of that growth has been due to the fact that interest rates dropped so significantly from the time you were elected. And even the recent increases in interest rates have still left them below the point that they were in the late '80s and the early '90s, before your election.
So I think the economic policies have fueled both current growth and will allow future economic growth in the corporate sector. And as you look at future budget policies and fiscal policies, I think one of the most important areas to address, and it's certainly one that you've given some priority to, is government investment in the future. If we expect companies to invest their profits in their own future growth, then the government should look at distinguishing in its own spending between spending for consumption and for spending for future investment, and whether that's investment in human capital or investment in physical capital and in our nation's infrastructure. I think that as you look forward in developing future policies, that continuing to focus in giving greater priority to investment is a real key.
THE PRESIDENT: For those of you who aren't all that familiar with the details of the way the federal government does its budgeting, she has just said something that I think is of very great importance. Alice Rivlin is here, who is our Director of OMB, and may get into this in greater detail later. But let me just say so you can cogitate on it -- when we fool with the budget up there, which is one of the reasons I wanted the line- item veto for a long time, and I'm pleased we seem to be getting it -- the old language is all about is this spending out of an entitlement or a nonentitlement. What income group is being helped by this spending item.
We look at it in basically static and categorical terms -- instead of really what I think is the most important thing is, is this a spending item necessary just to get people through the day? Is this a consumption item, or is this an investment item? Is this something that's going to grow the economy, increase our competitiveness, increase the capacity of people in the future?
We have worried -- and Laura Tyson has torn her hair out on this for two years -- we've really thought about whether we could create an investment budget for the federal government, and if so, what form it would take. And we haven't succeeded in dealing with it. But I appreciate you putting that issue on the table, because it's not just how much you spend, it's what you spend it on. And it's not just whether you borrow, it is for what purpose you borrow. There's a lot of difference between borrowing money for a home mortgage and borrowing money to go to dinner tonight.
And we all make those distinctions in the rest of our lives, but the government really doesn't make those distinctions in the way it works today. So that's a very, very important issue that has been raised here.
Let's go on a little more to the regional issues. We haven't said anything about farming yet, and as the Agriculture Commissioner of Georgia reminded me last night, when the farmers are doing well the rest of us normally do all right. And he said, you ought to mention it now and then. And I mentioned it then, and this is now. So I've now complied with my responsibilities. (Laughter.) It also happens to be true.
And I want to come back and pick up some of the people I haven't called on in a moment. But I would like to now ask Jerry Newby, who is a family farmer in Alabama and Tennessee, who grows cotton, soybeans, wheat and corn, to talk about a little bit about the rural economy as it applies to agriculture.
MR. NEWBY: Thank you, Mr. President. I certainly appreciate this opportunity to be here today. I want to thank you for your support in the past for agriculture. We feel like you are a president in tune with the needs of agriculture. We appreciate what the Department of Agriculture is doing and how they are working under your leadership. We're looking forward to our new Secretary coming on board.
Mr. President, I think our story in agriculture is a lot like your story about the economy: It's not getting told. The American farmer, which makes up only 1.5 percent of our population, is growing enough food and fiber for all the people in the United States and many people overseas. Not only are we growing food and fiber, we're growing it cheaper than any other place in the world. Our consumers in this country only spend 10 percent of their income on farm food. And I think that's great and I hope it can always be that way. We also have the best quality of food in the world. And we also have some of the safest food in the world.
And part of the reason why this can come about, Mr. President, is because of the farm programs of the past and the present, and hopefully, the farm programs of the future. As you know, our farm programs are safety nets for farmers. They allow us to be able to operate, to have capital to expand our operations, buy our inputs, and they also allow us to plan for the future -- what we're going to do in the future about growth.
We do have some problems in agriculture, and one of those problems are some of the regulations. Some of our problems are environmental problems. The endangered species have given farmers quite a hard time. In places it has caused farmers to lose an opportunity to make a profit on their property, and it has also left a lot of doubt in people's minds about what the future holds for them.
What we would like for you to do with the Endangered Species Act is to make sure that it is founded on sound scientific basis and that it is also economically feasible for those that are involved in it. And we know that you will do that, and we appreciate that.
THE PRESIDENT: Let me say a brief word about agriculture. This is going to be a very important issue this year, not only because -- two things are happening at once. There is a renewed effort to find new ways to reduce the deficit further, which is a good thing. And there is also -- we have -- our Acting Secretary has done a wonderful job, Mr. Rominger here, who is a California farmer himself. He has got a diversified farming operation, as you do. We also are in the midst of writing a new farm bill, which we do every five years. And I just want to put two things on the table for all the non-farmers here, and also because it's going to be a hot issue.
There have been excesses in the farm support programs in the past, and there doubtless are some today. But it is important that you realize one or two things. Number one, we have reduced agriculture subsidies substantially in the last few years in Washington. Sixty percent in real dollar terms in the last eight years.
Number two, the farm support system serves two larger purposes, and you have to decide whether you think it's worth serving those purposes, but I think it's important. Number one is it, as Jerry says, is a safety net. So we have a higher percentage of farmers that are family farmers than we otherwise would without a farm program. Otherwise, they'd all have to be bigger, integrated corporate farms because they could ride out the bad years, because they'd have their own safety net.
Secondly, we have the most competitive agriculture in the world, and we reduced -- this administration sent a budget which further substantially reduced farm subsidies because we made a deal on the GATT world trade agreement to get the Europeans and others to quit subsidizing their farmers so much. We could quit and walk away tomorrow if we had a fair global market. If we walk away alone -- if all of you are right that we need to keep trying to win everyplace we can win in a fair fight, then we have to ask ourselves is it worth the cost to the taxpayers of the subsidies as long as we're bringing them down every year to keep ourselves competitive in a global market. But if there were no subsidies anywhere, we would do even better than we are doing.
Now, I just wanted to --because these are the things that will shape this hot debate on the Farm Bill as we come up this year. I know it sounds like I'm a state political lobbyist for Jerry Newby, but that's the truth, and those are the facts about where we are in American agriculture, and it's something that has to shape our debate here as we go forward.
I want to call on -- I'm going to try to get everybody who hasn't talked on the panel a chance to talk, but I want to ask one more person to make a few remarks -- a longtime friend of mine, Calvin King, who is the President of the Arkansas Land Development Corporation in Brinkley, Arkansas, and who won one of the coveted MacArthur fellowships for his lifetime of dedication of trying to deal with the problems that Larry Farmer deals with and that he talks about. And I'd like to give Calvin a chance to talk a few minutes.
MR. KING: Thank you, Mr. President. One of the points mentioned is the fact that the Farm Bill is coming up. The 1995 Farm Bill -- I urged the administration that in that farm bill, to maintain and keep the segment on minority farmers, and the hope that we can have an increase in the support of the minority farm bill segment from what we had received when it initially passed in 1990 -- won the passage of the bill without the -- and then finally, some dollars have been put into it, roughly some $3.5 million to provide support type of services as based to minority and limited resource farmers, and that needs to continue.
And the increased level which was initially proposed will be at least $10 million in support that goes to the minority farm bill and the type of services that it offers to limited resource minority farmers.
The other thing with that, you know, as we all know, there's been a -- plan, two segments of the farm population. One is family farmers in general, limited resource family farmers, and the minority farmers. Some prediction has been that the minority farmers would be in nonexistence by the year 2000. I commend your administration on various programs that have been initiated to create safety nets, at least support to maintain both the family farmer and the minority farmer -- one, would allow these program initiatives that has been funded to put direct services out into the field as you did with downsizing the government, recognizing that there are issues and there is a need for support services for this segment of the farm population -- direct support services by developing loan packages and leveraging the private sector participation with the public sector on loan guarantee programs as well as direct services need as a whole.
The other area that I also congratulate you on is the support out of USDA as well, for the rural development outreach program that has also been initiated under your administration that does provide other opportunities back in the rural area for providing services to individuals in those areas to look at business expansion and other type of technical support assistance that is needed on the part of businesses. And there is continued ongoing building on what has been offered in the way of opportunities, and there is definitely a need to do more. And, of course, everyone is very familiar with the empowerment zone and the enterprise community.
I encourage you, also, in this initiative, as we look at the overall economic situation in rural areas from an agricultural side and rural development needs, that we capitalize on certain areas or direction that's been taken. And particularly what we look at -- the empowerment zone and the enterprise community approach toward development in rural areas -- that that did bring about some amazing, I guess a structured progress in creating that whole planning process. It bought boundaries that were unusual boundaries together and relationships, both on the private side, on civic leadership, as towards the public sector's concern, as well as local government.
It wasn't a matter of being a boundary line of county to county, we dealt with situations of census tracks to census tracks. And that's unusual. And, of course, the result of that is that there were enterprise communities and empowerment zones created coming out of that, that offers a real opportunity, because it does create a structure that allows administration to target areas that have seen persistent and ongoing poverty types of situations over the years and a means of investing and dealing with what I call a serious type of community illness situation that exists.
So I'm curious -- do we build on accomplishments that have been made in dealing with rural development from both agriculture, from a rural development perspective in general; and that we also take a look at what occurred in that planning process and possibly bring together some of those leaders that were a part of that planning process to further build the capacity, the fundamental capacity of rural development in general.
In my closing remarks, I want to say this: The decline of family farmers and minority farmers, one of the situations we have is we have the lack of a younger generation going into farming as a whole. And that, of course, creates the problems as far as future is concerned.
There have been some strides on initiatives to address that. We have been involved in a program called Youth Enterprise in Agriculture that have been supported both by USDA and the private sector, and has gained more support on the part of both John Deere, Dupont Corporation and others have taken a look at that concept, because it does give youth an exposure point to agriculture, the real world of agriculture and rural development ultimately from the production level with farmers, on an intern-type basis, and understanding that whole initiative and what's involved in agriculture, and the support agencies, all the support points to agriculture, as well as putting them back into the public sector and the private sector in the second year of the program, and encourage them all to go onto college and to pursue it as a career, of continuing education -- and just how diverse that whole area is in agriculture.
So, again, there are strides that are being made. There are opportunities that exist that can be built on. And we call that really investing in -- continuing to invest in building the capacity for rural development, both through the enterprise - - the empowerment zone and the enterprise communities, as well as within certain segments and areas where there are actually initiatives that offer even greater opportunities for the future.
THE PRESIDENT: Thank you.
I wonder if -- there are a couple of our panelists who have not said anything yet, and before I wrap up, I want to give them a chance to make a comment or two.
Crandall, would you like to say something?
MS. BOWLES: I represent Springs Industries, a textile manufacturer in Fort Mill, South Carolina. And I think it's appropriate for me to make a comment because we have gotten a lot of exciting new employers into this area. And BMW has gotten a lot of attention in our state. But the textile industry and related industries are still the largest employer in the area. And so certainly our future is important.
I'll make one quick comment about our industry, and then in response to some of the questions you raised. Certainly our industry, probably to a greater extent than most people realize, has made significant investments in both in capital and technology and in education. Our industry, as opposed to the apparel industry, which we're closely linked with, is very capital intensive. We've invested over $2 billion a year for the last 10 years. And most of it's been in this region. My own company invests over $100 million a year in -- just in new technology capital equipment.
We also have invested significantly in educational programs, in training of our work force. As Hugh said earlier, we have a lot of older workers, so we have to invest in on-the- job training as well as public education and hiring practices.
My own company has an extensive GED program. We have job training -- on-the-job training programs. We have partnerships with technical colleges and community colleges. We have training programs. We have extensive computer training, team training. We have -- we send people everywhere from Harvard to mobile classrooms at our plant. In fact, we even have Secretary Riley coming to our headquarters this Sunday to unveil a statue to education.
So we invest extensively in education and training of our work force. And it's not just my company -- all other textile companies, large and small, have done this. As a result we've had strong productivity growth in our industry over the last few years. We have made investments in stable and quality and higher paying. We certainly need to be able to continue this in some of the issues that we see that the government and your administration would contribute to. Certainly most important, and particularly for us as a consumer-based industry, is a strong and growing economy. And I certainly don't need to elaborate on that in this group. The ability to continue capital formation and investment in technology and education, as Hugh mentioned, is also significant.
Finally, I should certainly mention the trade issue. The textile industry has been known for a long time for being protectionist for our protectionist views. We have really come a long way beyond that. And we have worked very closely with your administration, as you know, on both NAFTA and GATT. I would say that no administration in the last 20 years has been as helpful to the textile industry as this one has. Ambassador Kantor and textile negotiator Jennifer Hillman have worked very closely with us on both of those agreements and making sure that they're positive for us and open opportunities.
I would say our industry is what economists call mature. We don't have -- we're not a high-growth industry. We need new markets for growth. And these trade agreements will give us that opportunity. So in closing, the continued cooperation along those lines will certainly enable us to continue to provide more stable, higher quality jobs in this region.
THE PRESIDENT: Thank you.
I thought that was important for everybody to know, because I think people's preconceptions about the textile industry are very different from the reality of where that industry is today. And it's still a very important part of our national economy as well the regional economy.
We've run way over time. We started a bit late, but we're going to move right into the next panel. I want to ask, before I close, if any of the other three people who are sitting around who haven't spoken would like to say anything.
Mr. Davidow, I wanted to recognize. He started a company six years ago in Smyrna, Georgia, that provides colorant to AT&T for its fiberoptic wire. And his new company just defeated a Japanese company to become a subcontract supplier of colorants for auto dashboards made by Toyota.
Having said that, maybe Ambassador Kantor ought to hire him to handle our Japanese trade negotiations. (Laughter.)
MR. DAVIDOW: Good morning, Mr. President and Mr. Vice President. I, with my wife, own Toncee, a small business that manufactures liquid colorants and coatings for the vinyl industry. We supply the automotive wiring, cable and wall covering markets. In the wire and cable industry, Toncee is the recognized standard for optical fiber inks. Toncee is also the technology leader in environmental friendly, UV curable inks and coatings for optical fiber.
We are currently supplying production quantities of environmentally friendly inks and coatings for the replacement of solvents for the automotive and wall covering industries. We are projecting a 50 percent increase in sales for 1995 predicated on these new products.
There two areas which not only affect Toncee but all other small businesses. The Federal Reserve interest rates, that we talked about before. Interest rate increases number five, six and seven had a dramatic adverse affect on Toncee customers, up to and including reduced work hours and layoffs. From March to June of '94, Toncee and its customers were extremely busy. Subsequent business slowdowns coincided with interest rates increases. It is felt that lowering of these interest rates would restimulate our industry.
The second one is capitalization. It is very difficult for small business to generate adequate cash flow to fund dramatic growth, even with the excellent margins. In order to fund our projected growth, we have shortened the payable cycles and are minimizing inventories. And hopefully that will carry it.
I want to say thank you to the SBA program, which has assisted Toncee in starting and maintaining the business thus far. Without it, we wouldn't be in business today.
THE PRESIDENT: Thank you very much.
Later on today, we ought to talk more about the whole interest rate issue. But I thank you for saying that. We are doing our best to keep the rates down. Obviously, when the economy grows very rapidly, they're going to go up some. And because we're in a global economy, we have to compete for money. So if the other countries raise their interest rates, even when we don't have inflation here, we're almost forced to do it to some extent. But we're -- the long-term rates are moderating now. We're going to do our best to keep them at a rate that will sustain growth.
We've run way over, but does anybody else want to say anything? Well, I thank you. This has been a very good panel.
We're going to not take a 15-minute break, but just as however much time it takes for the panelists to change. But let me say this next panel is very important because we've been looking at this from the top down. Now we're going to look at it form the point of view of the families in themselves.
END11:08 A.M. EST