Editing 78-03-A7 (section)

=== Transcript ===
There are charges of dumping of steel on the United States marketed by Japan.
Dumping is the term used to describe selling at below cost with the Japanese government
making up the loss to the Japanese steel companies. Appeals were made to our
government to take retaliatory action.

Possibly there was some dumping--I don't know, but the problem of the United
States steel industry is a little more complicated than that. For example in 1976
our labor costs averaged $12.22 an hour compared to Japan's $6.31. Since then, steel
in our country agreed to a wage contract that will raise the hourly pay 30% over
the next three years. In 1977, steelworkers' pay averaged $12.75 an hour compared
to the workers in all manufacturing getting $7.79.

But, before we jump all over labor as the sole villain, let's look at some
other factors in steels dismal decline which has been almost directly proportional
to the decline in capital investment in American industry, which reduces need for
steel. Profits in steel went from 4.6¢ on each dollar of sales in 1975 to 1.4¢ in
the first half of 1977.

The truth is, Japan and some of our other competitors in the world market have
modernized plants and equipment and have thus increased their rate of production
per-man-hour. Not only have low profit rates kept us from needed modernizing,
so has government emphasis on a lot of non-productive regulations which eat up capital
without increasing productivity. OSHA descended on the industry with 67 different
rules, ranging from ladder design to noise prevention. The Enviromental Protection
agency has added costs that over the next few years will be three times as much as
the industry's normal profit margin. A host of other agencies, up to and including
the White House, have added to the harmstringing.

In all these harassments the steel union has been silent, but maybe that will
change. A former president of the Steelworkers has publicly stated --QUOTE--"Does
stepping up the efficiency of each worker mean work speedups, job eliminations? Hardly.
It does mean cutting down on excessive absenteeism, tardiness, turnover and overtime.
Let's put our brainpower to work to create more efficient manufacturing
processes, and better equipment. But then lets use them. Labor has always sought
more wages and benefits. But labor also knows that to obtain more, we must produce
more." --UNQUOTE--

If this could signal an alliance between labor and management in opposition to
unnecessary government regulation and in favor of more realistic tax policies
plus a real effort to increase per man hour productivity American steel could take
care of itself in the world market.

This is Ronald Reagan.

Thanks for listening. 
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