The chairman of one of America's financial giants called yesterday for legislation upgrading the importance of the service sector of the U.S. economy at home and abroad.
James D. Robinson III of American Express, in an address to the National Press Club, called for a review of current economic indicators to reflect the fact that the service industry now contributes two-thirds of the gross national product, and employs 70 percent of all workers. The service industry includes such fields as banking, securities, restaurants, data processing, advertising and real estate as well as government.
In a related development, American Express yesterday kicked off a campaign that ties use of its products and services to a funding drive for Mt. Vernon, the preserved home of George Washington. For the next three months, starting Feb. 1, each time an American Express card holder in the Washington area uses the card, the company will donate three cents to the historic monument. Five cents will be given when travelers checks are purchased, and $2 when a new card applicant is accepted.
In his press club speech, Robinson said the indicators--and therefore economic and monetary policy--rely too heavily on our industrial economy, the goods rather than the services. This renders them outmoded and inappropriate, Robinson said.
Legislation to make statistics more reflective of the service economy has been introduced by Sens. Larry Pressler (R-S.D.) and Daniel Inouye (D-Hawaii), and Rep. Pete Stark (D-Calif.).
Robinson also announced formation of a lobbying group called the Coalition of Service Industries. Its Washington counsel is Robert Strauss, former trade representative and Democratic committeeman.
Robinson said last year's tax bill, with its heavy emphasis on faster depreciation, is very needed for capital-intensive industries but does little for the service sector.
The United States is a net exporter of services, Robinson recalled. Last year these amounted to at least $60 billion. They were responsible for the first overall surplus in the balance of payments since 1976. Yet the barriers to the export of U.S. services are increasing, he said. Robinson cited discriminatory regulations and/or taxes on such industries as shipping, airlines, insurance and films.
Robinson said legislation would soon be introduced by Sens. John Chafee (R-R.I.) and William Roth (R-Del.) to give services appropriate parity with manufactured goods in U.S. trade law.
American Express Vice Chairman Louis V. Gerstner Jr. said yesterday he expects the promotional drive will result in more than $100,000 for Mt. Vernon, which is trying to raise $10 million. Other local companies are planning to join in the fund drive with their own contributions based on use of the American Express card at their establishments.
The good Samaritan promotion, which has a $300,000 advertising budget, is also good business. During a similar campaign in California last year, card use increased by 42 percent to 55 percent in the targeted cities, according to a spokeswoman. New card memberships increased 35 percent.
There are 325,000 American Express cardholders in the Washington area. According to the Nilson Report, a trade publication that covers the credit-card industry, the average annual amount charged on each travel and entertainment card in this region is more than $2,000. That would bring American Express' current business here to about $650 million a year before the promotion.
American Express' revenues in the first nine months of 1981 from its credit card and travelers check operations amounted to $1.6 billion. Its net income was $157 million. Worldwide its total revenues for the period were $5.2 billion; profits were $386 million.