Editing 79-02-B3 (section)

=== Transcript ===
On the last broadcast , I told of how the new prime minister of
Australia, Malcom Fraser, and a labor/ managment group called
"Enterprise Australia" turned Australia's economy around. They knocked an
inflation rate down to 5 percent from 20, cut government costs and taxes,
increased productivity and cut man-days lost in strikes to one-fourth
of what it had been.

One of the key tools was an idea brought to them by an American
troubleshooter, John Q. Jennings of New York. It was the institution
of annual reports by management to the workers with col or graphics
and illustrations. Workers learned that they took home better than 90
percent of the company's earnings. Only four and a fraction percent
went to stockholders, and 4.6 percent was reinvested in the company.
On that last commentary, I asked if it would work here. I'm
convinced it would, and I'm happy to say Dart Industries, working with
the Graduate School of Business at the University of Southern California,
is doing something of the kind.

With all of our knowledge and all of the "jillion" words of
information pumped at us each day, we still believe in a number of economic
and political fairy tales. When opinion research asked a cross section
of Americans how they thought corporate income was divided between employee
payroll and profits, the answer was 25 percent to employees, 75 percent
for profit. Students at Kings College near New York City thought the
split was 60 - 40 in favor of profits. The facts were 90.6 percent went
for employee compensation, and the rest went for profits -- which had
to be divided between stockholders and reinvestment in plants and
machinery.

It's no wonder the kids made this kind of mistake -- 52 percent
of their teachers said they believed the largest portion of national
income went to owners. The fact is, after taxes, only three-a nd-a-half
percent went to owners.

Another poll found Americans in general believed that 10 percent
net on sales after taxes would be a "fair" profit. They believed however,
that manufacturers were getting 20 percent profit.

So far "Enterprise Australia" hasn't aroused a lot of interest
in either management or labor circles in America. That's too bad. The
founder of the A.F.L., that great labor statesman, Samuel Gompers, would
have understood "Enterprise Australia". He said management and labor
were partners, and the worst sin management could commit against the
worker, was to fail to make a profit.

I would add another -- it is a sin against the worker, it is a sin
against the citizen at large, and it is truly a sin against our sons and
daughters not to do everything we can to dispel the economic mythology
so prevalent in our land. I hope enlightened employers will create
an "Enterprise America".

This is Ronald Reagan.

Thanks for listening.
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