THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, February 26, 1996 TAG: 9602240233
SECTION: BUSINESS WEEKLY PAGE: 04 EDITION: FINAL
TYPE: Column
SOURCE: Ted Evanoff
LENGTH: Medium: 82 lines
A couple of days after Pat Buchanan won the New Hampshire primary, an interesting ad ran in The Virginian-Pilot. A big Tidewater department store put on a winter clearance sale and offered $75 women's jogging suits for $24.
It's not every day a presidential candidate gains ground by telling workers they've fallen behind. But there was Buchanan ahead of the Republican pack. And there were the $24 jogging suits.
We haven't seen such prices since Buchanan, a Georgetown graduate, was a speech writer in the Nixon White House.
If Buchanan returns to the White House and does what he says he'd like to do on the campaign trail - restrict imports, manufacture more in America - it doesn't mean the stuff in the stores will become more affordable.
Bring back the sewing plants to the Appalachians and the Mississippi Delta and you can bet prices will rise as seamstresses lose those $18-a-week jobs in Ciudad Juarez.
Truth is, we don't need Washington's help to produce more low-wage work. America already has a job engine. In Hampton Roads alone, businesses have created 134,000 new jobs since 1985.
Nor are lower prices essential. While lots of people in Tidewater remember when cotton tops and pants cost $25, they don't realize the relative price hardly has changed in a quarter of a century.
Tidewater wages currently average about $445 a week, which means a $75 jogging suit would take 17 percent of the typical worker's paycheck. Back in 1970, a $25 jogging suit represented 18 percent of the typical paycheck of $139 a week.
In his quest for the White House, Buchanan has hammered home the notion that trade accords such as NAFTA and GATT have undermined working families by moving jobs abroad.
The fact is, what Tidewater really needs are better wages. Better wages outpace the cost of living. Dismantling trade accords won't get them.
Americans tend to think of the president as a kind of chief economic officer for the country. Perhaps this was true when we built the interstate highways, went to the moon, forged a 600-ship Navy.
If the White House presides over anything today, it's the national debt and political gridlock. The people who really have their hands on the levers of economic development are the governors, and the mayors of the 300 largest cities. They are the new industrial bankers.
In 1994, for example, Gov. George Allen and the General Assembly backed a $156 million package for Disney's America, a theme park which Disney ultimately canceled. Last year, the state offered infrastructure and training assistance worth $85.6 million for Motorola's promised 3,000-employee computer chip plant near Richmond.
There's only one problem. Industrial banking works great if you land a job at Motorola. As economic development policy, it won't solve Tidewater's main economic problem: Stagnant wages.
Pay scales have soared in Tidewater. They've climbed to $445 a week on average from $318 a decade ago, a 40 percent increase. Prices have climbed, too. What cost $1 in 1985 costs roughly $1.38 today.
Wages are only keeping pace with the cost of living, but most Tidewater families haven't fallen behind.
They've overcome stagnant wages the way most American families have: Women flooded into the work force, boosting household buying power.
Women landed most of the 134,000 jobs created in Tidewater in the last decade. Now, about two of every three homes in Tidewater have two adults who earn incomes outside the house.
Certainly they're not getting rich on $445 a week, $23,000 a year. Put two workers in the house, though, one earning $23,000 and the other $17,000, and you have middle-class Virginia household income.
If families got around stagnant wages in the past because women found jobs outside the home, how do families get around stagnant wages in the future? That's the economic question of the day.
If the answer is trade barriers, it's hard to say how fewer imports will help. If the answer is industrial banking, it's hard to say how a handful of new plants will help. We're stuck with this dilemma for some time.
What commands higher wages are higher skills. Training brings the skills.
In 10 years, projections show, Virginia's two- and four-year public colleges will enroll 370,000 students, compared to 295,000 today. That's real economic development. by CNB