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Iowa Press #2852
September 2, 2001

Borg: THE LABOR DAY WEEKEND PROVIDES AN OPPORTUNITY TO REFLECT ON WHERE IOWA'S LABOR FORCE HAS BEEN AND WHERE IT'S HEADED. WE GET A STATUS REPORT FROM MARK SMITH, OF THE IOWA FEDERATION OF LABOR; AND FROM MICHAEL BLOUIN, OF THE GREATER DES MOINES PARTNERSHIP, ON THIS EDITION OF "IOWA PRESS."

Narrator: FUNDING FOR "IOWA PRESS" WAS PROVIDED BY FRIENDS OF IOWA PUBLIC TELEVISION; AND BY THE IOWA BANKERS ASSOCIATION... FOR PERSONAL, BUSINESS, AND COMMERCIAL NEEDS, IOWA BANKS HELP IOWANS REACH THEIR FINANCIAL GOALS.

THIS IS THE SUNDAY, SEPTEMBER 2 EDITION OF "IOWA PRESS." HERE IS DEAN BORG.

Borg: DEPENDING ON YOUR POINT OF VIEW, IOWA'S LABOR FORCE IS READY TO MEET THE CHALLENGES OF THE 21ST CENTURY. OTHERS SAY THERE ARE SHORTAGES IN BOTH QUANTITY AND QUALITY OF SKILLED AND UNSKILLED WORKERS IN THIS STATE, AND BUSINESS LEADERS AND ELECTED OFFICIALS SEE SOME DARK DAYS AHEAD. IN FACT, SOME SAY THE DARK DAYS ARE HERE RIGHT NOW. WE DO KNOW THAT IOWA'S WORK FORCE IS AGING RAPIDLY AND THAT TOO MANY POTENTIAL REPLACEMENTS, HIGH SCHOOL AND COLLEGE GRADUATES, SEEK WORK OUTSIDE THE STATE. THAT PROMPTS SOME TO SAY THAT IOWA HAS A WAGE, NOT A WORKER, PROBLEM. THE SOLUTIONS ARE ELUSIVE. WHAT IS CLEAR IS THAT IF IOWA'S WORK FORCE IS DEFICIENT, IT MAY TAKE YEARS TO CHANGE IT. WELL, TODAY WE GATHER AT THE "IOWA PRESS" TABLE FOR PERSPECTIVE. AND JOINING US ARE: MICHAEL BLOUIN, FORMER CONGRESSMAN, NOW PRESIDENT OF THE GREATER DES MOINES PARTNERSHIP; AND MARK SMITH, WHO IS PRESIDENT OF THE IOWA FEDERATION OF LABOR. GENTLEMEN, WELCOME TO "IOWA PRESS."

THANK YOU.

Borg: ACROSS THE TABLE: STATEHOUSE REPORTERS DAVID YEPSEN OF "THE DES MOINES REGISTER" AND MIKE GLOVER OF "THE ASSOCIATED PRESS."

Glover: MR. SMITH, THIS IS THE WEEKEND SET ASIDE FOR THE CELEBRATION OF THE AMERICAN WORKER. GIVE US A HEALTH REPORT. WHAT'S THE HEALTH OF THE IOWA LABOR MOVEMENT?

Smith: THE FIRST LABOR DAY WAS 119 YEARS AGO, MIKE, AND WHAT WE HAVE TODAY IS CERTAINLY A BIG IMPROVEMENT FROM 119 YEARS AGO. BUT STILL WE'VE GOT SOME SERIOUS PROBLEMS. WHEN YOU LOOK AT THIS STATE AND FIND OUT THAT 48 PERCENT OF THE PEOPLE THAT GO TO WORK EVERY DAY, 48 PERCENT OF THEM DO IT FOR LESS THAN $10 AN HOUR, THAT'S AN INDICATION THAT WE'VE GOT A PROBLEM. WHEN WE'VE GOT A QUARTER MILLION IOWANS WHO DON'T HAVE ANY HEALTH CARE, WE'VE GOT A PROBLEM. JUST THOSE TWO EXAMPLES CERTAINLY INDICATES WE'VE GOT A WAYS TO GO.

Yepsen: MR. BLOUIN, WHAT'S THE CONDITION OF LABOR MANAGEMENT RELATIONS IN THIS STATE? WE HEAR A LOT ABOUT THINGS LIKE TITAN TIRE. GOOD? BAD?

Blouin: I THINK IT'S MUCH BETTER THAN CERTAIN SELECT SCENARIOS WOULD ALLOW YOU TO BELIEVE. I THINK THE TITAN TIRE SCENARIO IS AN ABERRATION. OVERALL, I THINK RELATIONS ARE PRETTY GOOD.

Glover: MR. BLOUIN, YOU REPRESENT A COALITION OF BUSINESS GROUPS. THERE'S A LOT OF TALK ABOUT THE CONDITION OF IOWA'S ECONOMY. RATE THE ECONOMY. IS IT GOOD? IS IT BAD? IS IT SLOW, AS EVERYONE SEEMS TO INDICATE? WHERE ARE WE?

Blouin: WELL, THERE ARE REALLY TWO IOWAS WHEN IT COMES TO THE ECONOMICS OF THIS STATE. IOWA OVERALL IS PROBABLY NOT REAL HEALTHY. BUT THE NEW IOWA, IF YOU CAN CALL IT THAT, THE METRO IOWA, IS VERY HEALTHY. THE METROPOLITAN AREA OF DES MOINES IS EXTREMELY HEALTHY; GROWING; DIVERSIFYING; HAS A FAR LARGER BASE; MUCH HIGHER PERCENTAGE OF COLLEGE GRADUATES THAN THIS STATE AS A WHOLE; AND IN THE NATION AS A WHOLE, A HIGHER WAGE BASE, LOWER UNEMPLOYMENT RATE; A FASTER GROWTH RATE THAN THE NATION AS A WHOLE. WE'RE DOING PRETTY WELL.

Glover: MR. SMITH, DO YOU AGREE WITH THAT ASSESSMENT? ARE THERE TWO IOWAS... A RURAL, DYING ECONOMY AND AN URBAN, GROWING ECONOMY?

Smith: I'M NOT SURE I'D CHARACTERIZE IT AS RURAL, DYING. THERE ARE PLACES IN RURAL IOWA THAT ARE THRIVING AS WELL AS HAVE THE POTENTIAL TO DO THAT. I DON'T THINK WE DARE WRITE THAT OFF. THE HISTORY OF THE STATE HAS BEEN THAT A LOT OF BUSINESSES HAVE GONE TO RURAL IOWA, SO THERE'S SOME POSSIBILITY. BUT OVERALL, YEAH, IT SEEMS TO BE BETTER HERE. IN CENTRAL IOWA, FOR EXAMPLE, OR THE CORRIDOR -- CEDAR RAPIDS, QUAD CITIES -- THAN IT IS IN RURAL IOWA. I DON'T THINK THAT MEANS WE WRITE IT OFF.

Yepsen: WELL LET'S TALK -- GO AHEAD. LET'S TALK A LITTLE BIT ABOUT WHAT WE DO TO MAKE IT BETTER. MR. SMITH, YOU'VE GOT A BACKGROUND IN ECONOMICS. WRITE US A PRESCRIPTION FOR HOW WE MAKE IOWA'S ECONOMY BETTER. WHAT DO WE DO ABOUT THOSE 48 PERCENT OF IOWANS WHO ARE EARNING LESS THAN $10 AN HOUR.

Smith: WE START OFF BY PASSING LEGISLATION THAT SAYS WE'RE GOING TO RAISE THE MINIMUM WAGE, JUST AT A VERY BASIC LEVEL. IT'S MORAL OUTRAGE TO HAVE MINIMUM WAGE AT $5.15. WE START TALKING ABOUT LIVING WAGE BECAUSE A MINIMUM WAGE DOESN'T MAKE IT. WE START TALKING ABOUT A LIVING WAGE, A WAGE THAT WORKERS CAN FEED THEIR FAMILY ON. SO THOSE ARE TWO THINGS.

Yepsen: DO WE DO THAT AT THE STATE LEVEL OR THE FEDERAL LEVEL?

Smith: GIVEN THE ADMINISTRATION IN WASHINGTON, STATE LEVEL.

Yepsen: ANYTHING ELSE?

Smith: WE CAN START TALKING ABOUT PROVIDING HEALTH CARE. WE CAN START -- AND THEN THE WHOLE THING ABOUT THE WORKER QUESTION THAT DEAN RAISED EARLY ON AND WHETHER THEY'RE SKILLED OR NOT. YOU START DEVELOPING AN EDUCA-- PUT MORE RESOURCES INTO EDUCATION. PROVIDE THAT WORKER THAT'S EDUCATED IN A MANNER THAT CAN TAKE CARE OF IT, BUT WE START EARLY. WE START WITH HEAD START. I THINK I SAW A STATISTIC YESTERDAY THAT INDICATED 7,500 CHILDREN IN IOWA ARE INVOLVED IN HEAD START. THERE'S FEDERAL LEGISLATION THAT, IF THEY PASS THAT LEGISLATION, IOWA'S SHARE WOULD LET THAT NUMBER DOUBLE. WE KNOW HEAD START WORKS. WE KNOW IT WORKS. IT'S GOT A LONG HISTORY OF WORKING, AND YET WE UNDERFUND IT HORRIBLY IN THIS STATE AND THEN WONDER WHY KIDS AREN'T EDUCATED. IT STARTS THAT LOW.

Yepsen: MR. SMITH, WHAT DO YOU SAY TO THE ARGUMENT THAT'S MADE BY THE BUSINESS COMMUNITY THAT - BY SOME IN THE BUSINESS COMMUNITY - THAT IF YOU RAISE THE MINIMUM WAGE, YOU'RE GOING TO KILL JOBS FOR ENTRY LEVEL WORKERS AND THAT FIRST JOB FOR TEENAGERS?

Smith: IN A WORD, IT'S BOGUS. THE EVIDENCE THROUGHOUT THE '90S ON THE MINIMUM WAGE, THEIR ARGUMENT IS BOGUS. THROUGHOUT THE '90S, WHERE IT'S RAISED, THERE HASN'T BEEN AN EMPLOYMENT EFFECT.

Yepsen: MR. BLOUIN, SAME QUESTION. WHAT DO WE DO TO IMPROVE THE ECONOMY IN THIS STATE?

Blouin: I DON'T THINK WE WRITE OFF RURAL IOWA EITHER, BUT I THINK WE LOOK AT IT DIFFERENTLY, NOR DO I THINK WE RUN FROM OUR AGRICULTURAL HERITAGE. IT'S WHAT'S GIVEN US THE ETHIC OF LIFE, THE WORK ETHIC THAT WE HAVE, BUT I THINK WE RECOGNIZE CERTAIN REALITIES. WE HAVE 1 PERCENT OF THE POPULATION OF THE COUNTRY WITH OVER 6 PERCENT OF THE LOCAL GOVERNMENTS. THOSE GOVERNMENTS, FOR THE MOST PART, WERE DESIGNED TO BE SHOPPING CENTERS, IF YOU WILL, FOR THE RURAL POPULATION THAT GREW UP AROUND THEM. THE POPULATION ISN'T THERE ANYMORE. AND IN THE WAKE OF THE DECLINE OF THAT POPULATION, WHICH INCIDENTALLY IS GOING ON IN EVERY RURAL PART OF EVERY STATE THE UNITED STATES AND HAS BEEN FOR A NUMBER OF DECADES, THAT RURAL POPULATION ISN'T LARGE ENOUGH TO SUPPORT THE SHOPPING CENTERS THAT ARE THERE ANYMORE. WE'VE GOT TO STOP LOOKING AT IT IN TERMS OF 950 CITIES. WE HAVE TO START LOOKING AT IT IN TERMS OF REGIONS AND MAYBE BEGIN WITH COUNTYWIDE UNITS. WE'VE GOT TO STOP LOOKING AT SCHOOLS IN TERMS OF THE COMPETITIVENESS OF ONE CITY AGAINST ANOTHER AND START LOOKING AT IT IN TERMS OF A MATRIX OF EDUCATIONAL DELIVERY SYSTEMS.

Yepsen: WHERE DO YOU COME DOWN ON THIS MINIMUM-AGE QUESTION, MR. BLOUIN? YOU'VE BEEN A GOOD DEMOCRAT EARLIER IN YOUR CAREER. NOW YOU REPRESENT THE BUSINESS COMMUNITY. WHERE DO YOU COME DOWN ON THIS ISSUE OF MINIMUM WAGE?

Blouin: IT'S REALLY MEANINGLESS IN MOST OF THE STATE, AND IT'S MEANINGLESS, CLEARLY, IN THE METRO AREA. OUR AVERAGE WAGES IN THE DES MOINES METRO ARE OVER $15 AN HOUR.

Glover: WELL, WHAT DO YOU SAY TO THE ARGUMENT THAT RAISING THE MINIMUM WAGE HAS THE EFFECT OF RATCHETING UP WAGES --

Blouin: NOBODY IS PAYING MINIMUM WAGE, TO SPEAK OF, IN THE METRO... $8 AN HOUR TO WORK AT MCDONALDS, FOR PETE'S SAKES. IT'S AN IRRELEVANT ISSUE THAT THE ECONOMY HAS TAKEN CARE OF. IN TOUGHER ECONOMIC TIMES, YOU MIGHT FIND -- YOU MIGHT FIND THE ISSUE FAR MORE SUBSTANTIVE. BUT RIGHT NOW IT IS NOT SOMETHING THAT'S GOING TO DAMAGE MUCH OF ANYTHING.

Glover: MR. SMITH, WHAT DO YOU SAY TO A FORMER DEMOCRATIC CONGRESSMAN THAT SAYS RAISING THE MINIMUM WAGE IS IRRELEVANT?

Smith: WELL, HE SAYS IT'S IRRELEVANT BECAUSE PEOPLE ARE MAKING MORE THAN THAT. THAT'S WHAT HE'S SAYING, SO WHAT I'D HOPE IS THAT HE'D JOIN WITH US, THAT HE'D BRING THE ABI TO GO UP TO THAT LEGISLATURE AND SAY THE BUSINESS FOLKS SAY IT'S IRRELEVANT. I LOOK AT THE 60-, 70,000 PEOPLE THAT ARE DOCUMENTED THAT EARN BETWEEN $5.15 AND $6.14 AN HOUR THROUGHOUT THE STATE, MOST OF THEM NOT IN THE METRO AREA, AND SAY, "GREAT, LET'S RAISE THAT UP." AND I GUESS I WOULD MAKE THE ARGUMENT THAT IF, IN FACT, SOME CAN'T AFFORD TO PAY $5.15 -- AND THEY'RE TALKING -- FEDERALLY IT'S A JOKE, BUT TO RAISE IT TO $5.65 IN THE FIRST YEAR. IF YOU CAN'T PAY $5.65 AND YOU'RE GOING TO MOVE THE OPERATION TO MEXICO IF IT RAISES FROM $5.15, I'M GOING TO INVEST IN HERTZ RENT-A-TRUCK.

Borg: I'M GOING TO TALK ABOUT NOT MOVING JOBS TO MEXICO BUT, INSTEAD, INVITING PEOPLE FROM OTHER COUNTRIES TO COME TO IOWA. YOU KNOW THAT, AS I SAID EARLIER, SOME CONTEND THAT WE DON'T HAVE ENOUGH WORKERS TO STIMULATE IOWA'S ECONOMY. IS IMMIGRATION A VIABLE SOLUTION? NOW, I UNDERSTAND THERE ARE DIFFERENT GRADES OF WHAT IS MEANT BY IMMIGRATION. THE GOVERNOR SORT OF BACKED AWAY AND SAID, "WELL, WE JUST WANT TO BE AN INVITING ENVIRONMENT." OTHERS SAY WE NEED TO INVITE IMMIGRANTS AND FACILITATE THEIR COMING HERE. WHERE DO YOU COME DOWN ON IMMIGRATION AS A MEANS OF SOLVING THE WORKER NUMBERS?

Blouin: YOU'VE FIRST GOT TO ACCEPT THE REALITY OF THE DEMOGRAPHICS. WE HAVE A SERIOUS BUBBLE OF RETIREMENT COMING ALONG IN OUR WORK FORCE, THE EXISTING POPULATION OF WHICH CANNOT SOLVE THE DILEMMA. WE HAVE TO GROW THE STATE. WE HAVE NO OPTION, NO ARGUMENT IN THAT RESPECT. WE HAVE TO GROW THE POPULATION OF THIS STATE. IMMIGRATION IS A COMPONENT PART OF THAT. PEOPLE OF DIVERSITY, MORE PROPERLY, IS A COMPONENT PART OF THAT.

Borg: HOW AGGRESSIVE IMMIGRATION?

Blouin: WELL, WE'RE DOING A VERY AGGRESSIVE EFFORT HERE IN DES MOINES, UP AND DOWN THE LINE. IF IMMIGRATION RECRUITMENT IS DESIGNED FOR ENTRY LEVEL, I THINK IT'S A BIG MISTAKE. IF IT'S DESIGNED TO FIND PEOPLE OF DIVERSITY WHO CAN FIT INTO EVERY LEVEL OF THE WORK FORCE FROM TOP MANAGEMENT TO ENTRY LEVEL, THEN I THINK IT'S A MAJOR STEP FORWARD. BUT IT'S GOT TO BEGIN BY DEALING WITH THE PEOPLE OF DIVERSITY WHO ALREADY LIVE IN THE COMMUNITY, CREATING AN ATMOSPHERE -- EMPLOYMENT ATMOSPHERE, EDUCATIONAL ATMOSPHERE, QUALITY-OF-LIFE ATMOSPHERE -- WHERE THEY HAVE THE CHANCE TO SUCCEED. THEY'LL BE OUR BEST RECRUITS IF WE CAN ACCOMPLISH THAT, AND WE'RE DOING A HECK OF A LOT TO TRY TO DO THAT.

Glover: MR. SMITH, YOUR BODY LANGUAGE TELLS ME YOU'RE SUSPICIOUS.

Smith: WELL, FIRST OF ALL, IT'S NOT WITHOUT DEBATE HOW MANY. IF YOU LOOK AT THE 2010 REPORT THAT THE GOVERNOR PUT OUT, THEY CAME UP WITH A NUMBER THAT WE'RE GOING TO BE SHORT IN THE NEXT DECADE 310,000 WORKERS. IOWA POLICY PROJECT REEVALUATES ALL THAT STUFF AND SAYS WE'RE GOING TO BE SHORT BETWEEN 90- AND 150,000 WORKERS. CLEARLY WE'RE GOING TO BE SHORT, BUT THE MAGNITUDE OF THE PROBLEM, I THINK, HAS BEEN MISDEFINED. WHEN YOU LOOK AT THAT 2010 REPORT, WHAT THEY DID WAS THEY COUNTED THE PEOPLE THAT WERE GOING TO RETIRE BUT INADVERTENTLY LEFT OFF THE NEW ONES THAT WOULD COME IN, LIKE COMING OUT OF HIGH SCHOOL. THEY ALSO WERE PRESSED BECAUSE THEY WERE USING CENSUS DATA THAT WASN'T CURRENT. YOU TAKE A LOOK AT THE NEW NUMBERS AND WHAT YOU FIND OUT, IT'S A PROBLEM. BUT IT'S NOT OF THE MAGNITUDE THAT PEOPLE SAID IT WAS; THEREFORE, IT GIVES YOU A LITTLE BIT OF ROOM. DO I THINK THAT WE SHOULD BRING IMMIGRANTS TO IOWA, OR SHOULD IMMIGRANTS BE PART OF THE SOLUTION? I HAVEN'T GOT A PROBLEM WITH THAT IF IN FACT WHAT YOU'RE DOING IS BRINGING PEOPLE IN HERE FOR JOBS, WHETHER THAT'S AN IMMIGRANT OR WHETHER YOU'RE GOING AFTER ONE OF MY THREE KIDS WHO'S LEFT THE STATE. IF YOU'RE GOING TO TRY AND BRING THEM BACK, THERE'S GOT TO BE A JOB THAT PAYS A DECENT WAGE. THEN THEY WILL COME.

Glover: A LOT OF PEOPLE IN THE LABOR MOVEMENT WILL ARGUE THAT THIS DRIVE FOR IMMIGRATION IS TO BRING A BUNCH OF PEOPLE IN FROM OUT OF THE COUNTRY WHO ARE WILLING TO WORK IN LOW-WAGE JOBS THAT PEOPLE WHO LIVE HERE WON'T DO. DO YOU HAVE THAT CONCERN THAT THAT'S WHAT'S GOING TO HAPPEN?

Smith: SURE THAT'S A CONCERN BECAUSE IF WHAT YOU'RE GOING TO DO WITH ANYBODY THAT YOU BRING IN, WHETHER THEY'RE AN IMMIGRANT FROM OUT OF THE COUNTRY OR FROM IN THE COUNTRY, IF WHAT YOU'RE GOING TO DO IS BRING THEM IN TO FLOOD THE LOW END OF THE LABOR MARKET TO HOLD WAGES DOWN, ABSOLUTELY NOT A GOOD IDEA. I THINK PART OF THE GOVERNOR'S -- THE BAD PRESS THAT THE GOVERNOR STARTED DOING IS WHEN HE STARTED TALKING ABOUT IMMIGRATION, HE WAS ALSO TALKING ABOUT BUILDING A NEW PACKING HOUSE, AND PEOPLE GOT THAT LINKED IN THEIR MIND.

Borg: ISN'T IT ALSO A METHOD, THOUGH, OF KEEPING JOBS IN IOWA; IF YOU HAVE AN ADEQUATE WORK FORCE, YOU ALSO KEEP INDUSTRY HERE?

Smith: I DON'T WANT TO KEEP INDUSTRY HERE THAT PAYS $6 AN HOUR. THAT'S NOT IN OUR INTERESTS. IT'S NOT IN THE STATE'S BEST INTERESTS. THAT INDUSTRY, IF THERE'S NOBODY HERE THAT WILL WORK THOSE JOBS AND SO WE'RE GOING TO SEARCH THE WORLD TO FIND SOMEBODY THAT'S WILLING TO WORK AT A LOW WAGE SO THAT WE CAN SAY, "AH, WE'VE GOT MORE JOBS," WE DON'T NEED THOSE KIND OF JOBS. THE OTHER ISSUE, THOUGH, THAT'S RELATED TO THIS THAT NEEDS TO BE HIT IS THAT WE NEED -- AND WE CAN'T DO IT IN IOWA -- BUT WE NEED FEDERAL POLICY TO TAKE CARE OF UNDOCUMENTED WORKERS -- AND WE'VE GOT PLENTY OF THEM HERE -- BECAUSE IN IOWA, THE UNDOCUMENTED WORKER THAT GETS BROUGHT IN HERE ENDS UP GETTING VICTIMIZED BY COMPANIES BECAUSE OF THEIR CITIZENSHIP OR LACK OF CITIZENSHIP STATUS. AND WE NEED LEGISLATION THAT IS GOING TO MAKE UNDOCUMENTED WORKERS WHO WORK, WHO PAY TAXES, A PERMANENT RESIDENT ALIEN WHICH CAN LEAD TO CITIZENSHIP SO THEY'RE NOT VICTIMIZED BY EMPLOYERS LIKE THEY ARE NOW.

Yepsen: MR. BLOUIN, IS THERE A WORKER SHORTAGE OR IS, AS MR. SMITH SAYS, THERE'S A CHEAP-LABOR SHORTAGE?

Blouin: BOTH.

Yepsen: I MEAN -- ALL RIGHT.

Blouin: I THINK IT'S BOTH. I DON'T DISAGREE WITH MARK.

Yepsen: WELL, WHY DO WE NEED CHEAP LABOR? WHY DO WE WANT TO ATTRACT $6-AN-HOUR JOBS?

Blouin: WELL, I DON'T KNOW ANYBODY WHO'S TRYING TO UNDER CURRENT POLICIES. THE AVERAGE COMMUNITY ECONOMIC BETTERMENT ACCOUNT GRANT OR LOAN THAT THE STATE PUT OUT TO NEW COMPANY EXPANSIONS IN THE PAST YEAR, THE YEAR THAT JUST ENDED, WAS OVER $18 AN HOUR. THAT'S A NICE TREND. OUR RATE HERE IN DES MOINES WAS EVEN HIGHER THAN THAT. WE'RE NOT LOOKING FOR LARGE VOLUMES OF LOW-PAY JOBS. THOSE DAYS ARE LONG GONE. WE'RE LOOKING FOR COMPACT NUMBERS OF CURRENT WELL-PAYING JOBS THAT GIVE US THE OPPORTUNITY TO GROW THE DIVERSITY OF THIS ECONOMY AND GET OURSELVES POSITIONED IN A MUCH BETTER WAY FOR THE YEARS TO COME.

Yepsen: BUT AREN'T YOUR EMPLOYERS BEING CHEAP ABOUT THIS? IN OTHER WORDS, IF YOU PUT -- IF YOU PUT OUT -- IN ANY IOWA TOWN, IF YOU HANG OUT A SHINGLE AND SAY "WE'RE HIRING PEOPLE AT $15 AN HOUR PLUS BENEFITS," THERE'S A LONG LINE, AND THAT'S EVEN IN CENTRAL IOWA. SO AREN'T YOU REALLY LOOKING FOR CHEAP WORKERS AS OPPOSED TO WELL-PAID WORKERS WITH BENEFITS?

Blouin: AGAIN, NO, NOT EXCLUSIVELY. COMPANIES ARE LOOKING FOR WORKERS ALL UP AND DOWN THE LINE, AND WAGES ARE A COMPONENT PART OF IT. NO QUESTION ABOUT A COUPLE DOLLARS AN HOUR, IF A COMPANY COULD AFFORD IT, WOULD CHANGE THE LINE OUT IN FRONT OF THEIR BUILDING DRAMATICALLY. BUT WE'VE GOT, IN DES MOINES ALONE, OVER A THOUSAND VACANCIES AT JUST TWO HOSPITAL SYSTEMS AND NOT JUST AT THE ENTRY LEVEL.

Yepsen: IF YOU PAY THEM, THEY WILL COME. WHY DON'T THOSE HOSPITALS PAY THOSE PEOPLE MORE?

Blouin: BECAUSE THEY'VE GOT SOME REAL FUNDING PROBLEMS ALL TIED INTO THE MEDICARE LAW THAT REALLY CRIPPLES THE ABILITY OF A RURAL STATE TO ACCESS A FAIR SHARE OF THOSE DOLLARS. THEY'RE PROBABLY A GOOD EXAMPLE OF VACANCY DILEMMAS, NOT A GOOD EXAMPLE OF ABILITY TO PAY FOR IT IN AN IMMEDIATE REACTION. BUT OUR EFFORTS IN THE GREATER DES MOINES PARTNERSHIP ARE DIRECTED TOWARD GETTING HIGH-PAY, HIGH-QUALITY, HIGH-INVESTMENT KINDS OF JOBS INTO THE AREA; AND SO FAR IT'S BEEN WORKING IN JUST THE TWO YEARS WE'VE BEEN DOING IT.

Glover: MR. SMITH, YOU MENTIONED EARLIER THE GOVERNOR'S 2010 REPORT, WITH A NUMBER OF RECOMMENDATIONS INCLUDED IN THERE. YOU SUPPORTED THIS GOVERNOR DURING HIS ELECTION CAMPAIGN. YOU'VE CONTINUED TO SUPPORT HIM SINCE THEN. DO YOU SUPPORT THAT REPORT AND ITS RECOMMENDATIONS?

Smith: OH, SOME OF THEM. I DON'T HAVE IT IN FRONT OF ME, SO I DON'T KNOW -- THERE WERE A LOT OF GOOD RECOMMENDATIONS IN THE SECTION ON THE ECONOMY THAT WE SUPPORT, ON TAXES THAT WE SUPPORT. AND THEN TO COME BACK TO THIS THING ABOUT PAY, IT ISN'T JUST THE KIND OF JOBS THAT MIKE'S TALKING ABOUT GETTING IN HERE. I SEE THIS REPORT -- WE ALL KNOW IT'S IN THE PAPER: TEACHERS ARE 35TH, 36TH IN THE COUNTRY. MY KID IS ONE OF THEM. HE DOESN'T TEACH HERE. HE GOES TO ILLINOIS TO TEACH. WHY? I KNEW HE'D GO BECAUSE, AS SOON AS HE PASSED THIRD GRADE MATH, I KNEW HE'D BE ABLE TO FIGURE OUT WHEN HE GOT TO BE THROUGH COLLEGE AND WANTED TO TEACH THAT IF YOU COULD DO THE SAME JOB FOR $5,000 MORE SOMEPLACE ELSE, YOU'D GO. BUT IT'S THE NURSES, FOR EXAMPLE -- THERE'S ANOTHER AREA. NURSES IN THIS STATE, 50TH, 50TH IN THE COUNTRY IN TERMS OF THEIR WAGES. THAT'S WHY THEY'VE GOT THE SHORTAGES THAT THEY'VE GOT THERE.

Glover: WELL, WHAT IS IT IN THE CULTURE OF THIS STATE THAT PERMITS AND ENCOURAGES THAT?

Smith: WELL, PART OF IT IN THE CULTURE -- I DON'T KNOW WHETHER IT'S THE CULTURE OR NOT, BUT WHAT'S GOING ON HERE -- AND IT'S GOING ON IN OTHER PLACES -- WE DON'T RESIST IT VERY WELL. WE HAVE THIS CONSTANT CALL FOR TAX CUTS, SO WHEN YOU START TALKING ABOUT PUBLIC SERVICES AND FUNDING PUBLIC SERVICES, AND YET OVER THE LAST SIX FISCAL YEARS WE'VE CUT TAXES FIFTY SOME TIMES TO THE TUNE -- IN TOTAL OF OVER $3 BILLION, AND THEN WE TURN AROUND AND SAY "BUT WE WANT GOVERNMENT TO BE MORE RESPONSIVE AND TO DO THIS KIND OF A THING AND THAT KIND OF A THING." AND IT DOESN'T WORK. YOU WANT VENTURE CAPITAL? PEOPLE SAY WE NEED VENTURE CAPITAL IN THIS STATE AND THAT WOULD HELP -- AND WE'RE REAL LOW IN TERMS OF VENTURE CAPITAL AND WHAT GETS SPENT. YET THE SAME PEOPLE THAT SAY WE NEED VENTURE CAPITAL ARE ALSO THE SAME ONES SAYING GOVERNMENT HAS GOT TOO MUCH MONEY. YOU CAN'T HAVE --

Yepsen: SHOULD WE RAISE TAXES, MR. SMITH?

Smith: OH, ABSOLUTELY. WE SHOULD PUT THEM BACK WHERE THEY WERE. IN OTHER WORDS, YOU CAN'T GO OUT -- YOU GO OUT AND CUT -- THE BIGGEST CUT AND A GOOD EXAMPLE WAS IN 1997. AS YOU KNOW, WE CUT INCOME TAXES 10 PERCENT ACROSS THE BOARD. IT COST $200 MILLION THEN AND $200 MILLION EVERY YEAR SINCE, AND NOW THAT NUMBER IS INFLATED UP TO AROUND 220, 230. WHAT HAPPENS, THOUGH, WHEN YOU DO THAT, IS THAT YOU DON'T HAVE THE RESOURCES TO PUT BACK IN. YOU GAVE THE AVERAGE WORKER MAKING $40,000 A YEAR $3 A WEEK. IT DIDN'T MAKE ANY DIFFERENCE TO HIM AT ALL, AND YET WHAT YOU'VE DONE IS CRIPPLE THE STATE IN TERMS OF ITS ABILITY TO BE RESPONSIVE TO THE LEGITIMATE NEEDS OF THE CITIZENS.

Yepsen: MR. BLOUIN, SHOULD OUR TAX INCREASE AS A WAY TO IMPROVE IOWA'S ECONOMY, AS MR. SMITH SUGGESTS?

Blouin: THE TAX CUTS THAT WE'VE EXPERIENCED IN THE STATE HAVE REALLY LIMITED THE ABILITY OF GOVERNMENT TO BE OF ANY VALUE TO ANYONE, FRANKLY, AND IT'S BEEN DAMAGING.

Yepsen: SO DO WE RAISE TAXES?

Blouin: I THINK YOU STOP THE EFFECT OF THE CUTS. FEDERALLY I THINK YOU STOP -- PERSONALLY HE CAN HAVE MY $600 BACK, MY WIFE'S AND MY $600 BACK. I DID NOT LIKE THAT APPROACH TO BEGIN WITH ON THE INDIVIDUAL TAX SIDE. I THINK THERE WERE SOME THINGS DONE ON THE REST OF IT THAT WERE PROBABLY FAIRLY POSITIVE AND WILL HAVE LONG-TERM EFFECTS THAT ARE GOOD. I DON'T THINK YOU HAVE TO TAKE IT BACK, BECAUSE POLITICALLY, IT'S NOT GOING TO COME BACK, BUT YOU CAN STOP IT FROM GETTING ANY FURTHER. YOU CAN SAY WE'RE GOING TO POSTPONE THE FUTURES YEARS AND WE'RE GOING TO UNDO THE STATE'S -- WHAT I THOUGHT WAS RATHER A SILLY STEP OF NEGATING THE POSITIVE EFFECT ON THE STATE TREASURY OF THE FEDERAL TAX CUT. UNTIL WE CONFRONT THE ISSUE OF TOO MUCH LOCAL GOVERNMENT IN THIS STATE AND THE POLITICAL DILEMMA OF HAVING TO SAVE 950 CITIES, 300 SCHOOL DISTRICTS IN 99 COUNTIES, WE WILL NEVER HAVE ENOUGH TAX RESOURCE. SO IN THE SHORT TERM, WE NEED A FEW MORE DOLLARS IN THAT POT. IN THE LONG TERM, WE NEED COMPLETE RESTRUCTURING OF THE WAY IOWA DOES ITS BUSINESS SO THAT MORE DOLLARS AREN'T SPENT ON TRYING TO PROP UP A SYSTEM THAT WE CAN NO LONGER AFFORD, PROBABLY NEVER COULD AFFORD.

Glover: MR. SMITH, I'D LIKE YOU TO PUT ON YOUR PRAGMATIC POLITICAL HAT FOR A SECOND. LOOK AROUND AT THE FEDERAL GOVERNMENT THAT WAS ELECTED LAST TIME AND THE STATE GOVERNMENT THAT WAS ELECTED LAST TIME AND GIVE ME YOUR LEGISLATIVE AGENDA. WHAT CAN YOU ACCOMPLISH AND WHAT DO YOU HOPE TO ACCOMPLISH?

Smith: WELL, WHAT YOU HOPE TO ACCOMPLISH -- HOPE SPRINGS ETERNAL -- IS THAT YOU'RE GOING TO CHANGE ENOUGH VOTES AROUND TO GET SOMETHING POSITIVE DONE FOR A WORKING FAMILY AGENDA.

Glover: SUCH AS?

Smith: ANY OF THE THINGS THAT WE'VE TALKED ABOUT. BUT THE PRAGMATIC SIDE OF IT IS JUST HANG ON AND NOT GET BEAT UP TOO BAD AND PUT YOUR RESOURCES IN TO TRY AND ELECT PEOPLE THAT ARE GOING TO BE RESPONSIVE TO AN AGENDA THAT SAYS THAT IT'S IMPORTANT FOR PEOPLE TO HAVE HEALTH CARE; IT'S IMPORTANT FOR PEOPLE TO HAVE EDUCATION; IT'S IMPORTANT FOR PEOPLE NOT TO HAVE TO -- TO HAVE A PRESCRIPTION DRUG PROGRAM; IT'S IMPORTANT FOR PEOPLE TO HAVE A SECURE RETIREMENT; IT'S IMPORTANT FOR PEOPLE TO HAVE DECENT JOBS WITH DECENT BENEFITS; AND IT GOES ON AND ON. THE CURRENT, REGRETTABLY, LEGISLATIVE MAJORITY ISN'T ON TO THAT AGENDA. AND CERTAINLY THE CONGRESSIONAL MAJORITY, AT LEAST IN THE HOUSE OF REPRESENTATIVES, ISN'T, AND CERTAINLY THE PRESIDENT ISN'T. HIS MILLIONAIRE TAX CUT JEOPARDIZES ALL THOSE THINGS. MR. BLOUIN SAID IT TOO. THERE'S NOT ANY MONEY LEFT TO DO THESE OTHER THINGS UNLESS WE POSTPONE THIS DEAL THAT WENT TO THE VERY RICHEST PEOPLE.

Glover: SO YOU PLAY DEFENSE UNTIL THE NEXT ELECTION?

Smith: SURE.

Glover: MR. BLOUIN, WHAT DO YOU THINK NEEDS TO BE ACCOMPLISHED IN THE LEGISLATIVE/CONGRESSIONAL ARENA TO GET THE ECONOMY GINNED UP AGAIN?

Blouin: IOWA HAS SO LITTLE CONTROL OVER THE ABILITY TO CREATE ITS OWN ECONOMY THAT IT'S ALMOST ABSURD TO TRY TO LAY OUT A PLAN. WE ARE AFFECTED BY NATIONAL POLICY WAY BEYOND OUR ABILITY TO COUNTERACT IT. YOU HAVE TO PUT IT IN LONG-TERM CONTEXTS, AND IOWA IS NOT NOTED FOR BEING ABLE TO HOLD OUR PATIENCE TOGETHER LONG ENOUGH TO MAKE THINGS WORK. THAT'S WHY VENTURE CAPITAL HAS NEVER SUCCEEDED IN IOWA AS A LEGISLATIVE REMEDY, BECAUSE PEOPLE WANT THE RESULTS NOW AND VENTURE CAPITAL TAKES TIME. WE NEED TAX INCENTIVES FOR INVESTMENT IN THE KINDS OF PRIORITIES THAT I THINK THE GOVERNOR IS TRYING TO SET.

Yepsen: WHAT'S THE DIFFERENCE BETWEEN A TAX INCENTIVE AND A TAX CUT?

Blouin: YOU HAVE TO DO SOMETHING TO GET IT. A TAX CUT, YOU DO NOTHING BUT HAVE TO BREATHE AIR AND GET A PAYCHECK OR A MAJOR SALARY.

Yepsen: MR. SMITH, WHAT DO YOU THINK OF MR. BLOUIN'S IDEA OF -- WHAT WOULD THE PUBLIC EMPLOYEES YOU REPRESENT THINK OF MR. BLOUIN'S IDEA OF GETTING RID OF SOME COUNTIES, CITIES, SCHOOLS?

Smith: I SUPPOSE YOU'D HAVE TO TALK TO THEM. I DON'T KNOW.

Yepsen: WELL, ISN'T HE REALLY TALKING ABOUT REDUCING THE SIZE OF THE NUMBER OF PUBLIC EMPLOYEES IN THIS STATE?

Smith: I DON'T THINK SO. MAYBE, MAYBE NOT.

Yepsen: WELL, HOW DO YOU SAVE TAX MONEY IN THE PUBLIC SECTOR IF YOU DON'T FIRE PEOPLE?

Smith: WELL, ONE OF THE THINGS THAT YOU DO IS THAT YOU DON'T HAVE ALL THE BUILDING MAINTENANCE THAT'S GOING ON IN EACH ONE OF THOSE LITTLE LOCATIONS. THAT'S ONE PART OF IT. I THINK THERE'S A WAY TO WORK THAT KIND OF THING OUT IN TERMS OF -- HE'S TALKING ABOUT THE NUMBER OF GOVERNMENTS. IT STILL MAY TAKE JUST AS MANY PEOPLE TO PLOW SNOW. SO I'M NOT SURE, NECESSARILY, THIS MEANS THIS MASSIVE CUT IN TERMS OF ALL THOSE THINGS.

Yepsen: THE 2002 ELECTION IS COMING UP, MR. SMITH. WHAT WILL THE LABOR MOVEMENT BE DOING DIFFERENTLY IN THE 2002 CAMPAIGN THAN YOU HAVE DONE IN OTHER CAMPAIGNS?

Smith: ESSENTIALLY WHAT WE'LL BE TRYING TO DO IS WHAT WE'VE DONE IN THE PAST, BUT BETTER. IT'S A VERY SIMPLE AND DIRECT KIND OF A PROGRAM. IT'S LIKE WOODY HAYES... 3 YARD AND A CLOUD OF DUST. YOU TAKE A LOOK AT THOSE CANDIDATES, DETERMINE WHERE THEY'RE AT ON VARIOUS ISSUES, AND MAKE SURE THAT YOUR MEMBERSHIP KNOWS WHERE THEY ARE SO THEY CAN MAKE THEIR DECISIONS.

Glover: IN 1998 THE LABOR MOVEMENT WAS CRITICIZED BECAUSE YOU RELIED HEAVILY ON A TELEVISION ADVERTISING CAMPAIGN AND SOME SAID IGNORED YOUR GRASS-ROOTS TURNOUT. YOU TURNED THAT AROUND TO 2000. YOU PUT A LOT OF EFFORT INTO GRASS-ROOTS TURNOUT. IS THAT THE DIRECTION YOU'RE GOING TO BE GOING: TURNOUT, WALKING THE BLOCK?

Smith: WELL, WHEN YOU LOOK BACK, WHAT YOU FIND OUT IF YOU COMPARE '94 TO '96 TO '98 IN TERMS OF TURNOUT AND THEN THE 2000 TURNOUT, OUR TURNOUT COUNTRYWIDE -- AND IN IOWA, WE HAVEN'T GOT REAL GOOD DATA ON THAT BUT, BASICALLY, WE DOUBLED: 13 PERCENT, UP TO 26 PERCENT OF THE VOTE IN THE 2000 ELECTION. WE REPRESENT 10 PERCENT OF THE PEOPLE. WE HAD 26 PERCENT OF THE VOTE. THAT PROGRAM GOING BACK TO THE GRASS ROOTS WORKS. YOU STILL NEED TO DO SOME STUFF ON TV TOO, THOUGH.

Yepsen: MR. SMITH, SHOULD AL GORE RUN FOR PRESIDENT AGAIN?

Smith: IT'S TOO EARLY.

Yepsen: IF HE DOES, WILL THE LABOR MOVEMENT ENDORSE HIM OR ARE YOU LOOKING FOR OTHER CANDIDATES?

Smith: WHAT PEOPLE DO IS THEY COME TOGETHER IN CONVENTION AND THEY COMPARE CANDIDATES AND THEY LOOK AT CANDIDATES IN TERMS OF WHERE THEY ARE ON THE ISSUES, WHETHER THEY'RE ELECTABLE, A WHOLE SERIES OF THINGS LIKE THAT. THOSE DECISIONS, INTERESTINGLY ENOUGH, DON'T GET MADE IN THIS STATE.

Yepsen: HOW CAN YOU SAY IT'S TOO EARLY? THIS IS IOWA. WE'VE GOT AL GORE COMING OUT HERE AT THE END OF THE MONTH.

Smith: RIGHT.

Glover: MR. BLOUIN, A LOT OF WHAT WE'RE TALKING ABOUT WILL GET RESOLVED IN THE POLITICAL ARENA. GIVE ME YOUR ASSESSMENT. YOU'VE BEEN A PRACTICING POLITICIAN IN YOUR LIFETIME. GIVE ME YOUR ASSESSMENT OF THE POLITICAL CLIMATE, THE POLITICAL ARENA THAT WE HAVE RIGHT NOW. IS IT "CONDUCIVE" TO THESE SORTS OF THINGS HAPPENING?

Blouin: HALF THE POPULATION OF IOWA LIVES IN URBAN CENTERS, HALF THE POPULATION... 55, I BELIEVE, LIVES IN 15 COUNTIES. AND YET WE STILL AND WILL FOR THE NEXT TEN YEARS CONTINUE TO HAVE A LEGISLATURE THAT IS DOMINATED BY THE NONURBAN POPULATIONS. THERE'S SOMETHING WRONG WITH THAT AND AS LONG AS THAT EQUATION CONTINUES TO EXIST, WE WILL NOT HAVE AN ELECTED BODY THAT WILL BE CONDUCIVE TO THE KINDS OF CHANGE WE NEED TO MAKE. WE HAVE TOO MUCH EMPHASIS, WHEN REDISTRICTING IS DONE EVERY TEN YEARS, ON CREATING MARGINAL DISTRICTS -- AND THAT'S A SHOW IN ITSELF -- WHERE BOTH PARTIES FEEL THEY CAN WIN THEM AND WHERE ALL OF THE PEOPLE OF IOWA LOSE AS A RESULT OF THAT KIND OF MIND-SET. THAT' EXACTLY WHERE WE'RE AT AGAIN. UNTIL THAT CHANGES, WE'RE GOING TO HAVE SOME VERY, VERY TOUGH TIMES AHEAD OF US.

Glover: WHAT'S IT GOING TO TAKE TO CHANGE THAT?

Blouin: A REALIZATION OF WHAT THE REALITIES ARE IN IOWA, A MAJOR EXPENDITURE OF PRIVATE RESOURCES, A COALITION OF LABOR AND BUSINESS AND INTEREST GROUPS AROUND THE STATE, CONSUMER GROUPS WHO UNDERSTAND --

Glover: WHAT WILL IT TAKE TO GET YOU TWO TO SIT DOWN AND WORK THIS OUT?

Blouin: YOU FOLKS JUST DID THAT AS A START. I DON'T THINK THE PROBLEMS ARE AS BIG AS YOU THINK BETWEEN MANAGEMENT AND LABOR, BETWEEN BUSINESS AND WORKERS, AS IT IS BETWEEN THE OLD IOWA AND THE NEW IOWA, THE MEETING OF THE MINDS THAT HAS TO TAKE PLACE.

Borg: MR. BLOUIN, WE'RE OUT OF TIME. THANK YOU VERY MUCH.

Blouin: AND I'M JUST STARTING.

Borg: WE'LL HAVE YOU BACK.

Smith: DO I GET A LAST WORD?

Borg: YES, GO AHEAD.

Smith: WORK UNION; LIVE BETTER. [ LAUGHTER ]

Borg: ON OUR NEXT EDITION OF "IOWA PRESS," THE FOCUS SHIFTS TO WASHINGTON D.C. AND THE U.S. CONGRESS, AND WE'RE GOING TO HAVE U.S. SENATOR CHARLES GRASSLEY WITH US NEXT WEEK. I HOPE YOU'LL JOIN US. THAT WILL BE AT NOON AND 7:00 NEXT WEEK. UNTIL THAT TIME, I'M DEAN BORG. THANKS FOR JOINING US TODAY.

Narrator: FUNDING FOR "IOWA PRESS" WAS PROVIDED BY FRIENDS OF IOWA PUBLIC TELEVISION; AND BY THE IOWA BANKERS ASSOCIATION... FOR PERSONAL, BUSINESS, AND COMMERCIAL NEEDS, IOWA BANKS HELP IOWANS REACH THEIR FINANCIAL GOALS.