While angry unemployed steelworkers stood outside a Pittsburgh hotel 12 days ago telling President Reagan to go back to Hollywood, he was saying inside that job losses were not due to his policies but were the result of "structural unemployment . . . caused by changes in science, technology."
This explantation of a 10.2 percent unemployment rate, Reagan's greatest domestic problem, reflects an evolving White House policy that still anticipates economic recovery but no longer holds much hope for older U.S. industries.
Instead, the White House is looking to new high-technology industries to replace the smokestacks and is cheering them on with money. While trying to cut spending on social and jobs programs, the administration is increasing support for scientific research development by 25 percent.
The new administration interest in high tech can be traced to Edwin L. Harper, who last year replaced Martin Anderson as senior White House staff official in charge of domestic policy alternatives. Anderson had concentrated on the administration's first priority of cutting federal spending by dismantling jobs and welfare projects left from the Democrats' Great Society programs.
Now Harper is seeking to mold a Reagan social policy that continues the emphasis on cutting social spending but also accepts high unemployment as a natural byproduct of shifting from smokestack industries to high tech.
"As you hear the president talking more and more about high technology, that is Ed Harper talking," said George A. Keyworth II, director of the White House Office of Science and Technology Policy.
"There is no need to convince Ronald Reagan of the value of high technology," Keyworth added, "but Ed is absolutely critical in bringing it to the forefront. When the president sits down now to hear ideas and perspectives on policy, he is hearing from Ed Harper that this administration and high-technological advancement can take America into the future . . . . The administration can leave its mark there."
"As policy ideas come from around the government and the White House," said an official in the policy development office, "they go through Ed Harper's looking glass and take on computer chips, flashing lights . . . the high-tech look. The president loves it."
Harper has turned some of Reagan's Monday afternoon "issues lunches" into high-tech science fairs by showing a movie on automation in Japan or bringing the latest in computer micro-circuitry for the president to examine. He has argued that high technology can not only revive the economy but also can help the poor out of poverty, remove the need for government welfare and jobs programs and even lower taxes.
During his 1980 campaign, Reagan promised Pittsburgh's steelworkers that he would rebuild older industries and lower unemployment with new economic policies. At the start of his administration, he frequently cited columns of newspaper help-wanted advertisements as proof that there were jobs for those who wanted to work.
Reagan continues to mention the ads, but now he says many of them ask for people with high-tech skills. The change in Reagan's thinking came after Harper led a mid-term policy review with all government agencies late last year.
The results first appeared in the State of the Union address when Reagan said:
"To many of us now, computers, silicon chips, data processing, cybernetics and all the other innovations of the dawning high-technology age are as mystifying as the workings of the combustion engine must have been when that first Model T rattled down Main Street, U.S.A.
"But as surely as America's pioneer spirit made us the industrial giant of the 20th Century, the same pioneer spirit today is opening up on another vast front of opportunity, the frontier of high technology."
Policy initiatives the administration is taking are intended to work this way: high-technology research results in scientific discoveries, which in turn spur industry into new fields. This prompts more hiring, eliminates structural unemployment due to declining industries, such as the steel industry in Pittsburgh, and eliminates the need for government-sponsored social programs for all but the helpless poor.
Administration officials point to the rebirth of industry and employment that high technology already has brought to northeastern states in the form of companies such as Digital Equipment in Massaschusetts and Control Data in Pennsylvania.
"Look at the numbers," Harper said in his White House office, as he showed a small metal wafer holding about 50 micro-computer chips to a visitor.
"Quality of life for the poor improved the most during the period of rapid real growth in the economy after World War II. Supporting research and development of high technology that will help us be competitive in world markets is the road to real growth. Those numbers can't be argued . . . . The effect of the Great Society programs is at best arguable.
"That's not to say we are abandoning the poor," he insisted. "The president is very sensitive to the fairness issue . . . . We are going to provide for the needy. But when the government starts helping people as much as 180 percent above the poverty line, in some programs we are getting into middle-class subsidies. It is better to get the economy moving . . . that's the best social program."
Harper has support from science officials in the administration.
"Ed and the president are not looking for quick-fix, immediate payoffs from research," said Frederick N. Khedouri, associate director of the Office of Management and Budget for natural resources, energy and science. "It is a kind of speculative investment in scientific development that history tells us is a good thing to do."
An emerging high-tech policy can be seen in the administration's fiscal 1984 budget request. In contrast to proposed cuts in social programs, federal funding for research and development is to be increased by $6.9 billion, a 17 percent increase over the 1983 budget. Basic research grants to scientists would be increased by 10 percent and the budget for the National Science Foundation by 18 percent.
The only other government intervention necessary would be to retrain workers by teaching them high-tech skills and possibly relocating them to areas with thriving economies. The administration's Job Training Partnership Act of 1982 and the Employment Act of 1983 are supposed to help do this.
To ensure that there are enough young mathematicians and scientists in the future, the administration has proposed funding for programs to encourage teaching of math and science in elementary and high schools because, Harper estimates, there is a shortage of 30,000 science and math teachers nationally.
The administration also has started awarding about 200 Presidential Young Investigators Awards annually to research scientists and mathematicians in universities. Each award is for about $100,000 for five years, and the purpose is to keep them involved in research instead of going to work in private industry.
Harper also wants to enable more U.S. companies, like their Japanese counterparts, to form joint research and development ventures without fear of government allegations of violating the antitrust and price-fixing laws.
"One of the things we have set as policy is that we ought to be supporting research and development that is not immediately commercially utilizable," Harper said. " . . . If somebody can make a profit from research, they ought to be doing it, not the taxpayer . . . . Companies are making money from solar power . . . . We want to do research and development on handling nuclear waste.
"Right now there is no one who can capture the benefit from research and developmental activities in terms of what we do with nuclear wastes . . . ."
Harper's aims are criticized from both ends of the political spectrum. Conservatives grumble that he is forgetting the Reagan campaign agenda of an anti-abortion constitutional amendment, tuition tax credits and a crime bill.
Liberals criticize the shifting of federal dollars and concern from urban decay and unemployed black teen-agers to computer chips that they fear will replace still more working people.
"I can't say I know what they are talking about with high technology," said Stuart Eizenstat, who headed the White House domestic policy office in the Carter administration. "It sounds nice, but it is no answer to serious social problems like poverty. You can't abolish social programs and then say high technology will save us all."
Harper was deputy director of the Office of Managment and Budget when the administration took office. He left to become the senior White House staff official for policy development.
A former assistant director of the Domestic Council in the Nixon administration, Harper has spent much of his career in private industry working with high technology. He was president of Cigna Corp., vice president of Emerson Electric Co. and chief administrative officer of the Certainteed Corp.
He visited Japan in September for two weeks and recalls seeing a totally automated plant. "The Yamazaki machine tool manufacturing facility runs 365 days a year, three shifts a day," he said. "It is so automated that the midnight-to-8 a.m. shift is manned by a night watchman, and they turn the lights off."
Harper said he sees increasing acceptance by U.S. unions of automation as automobile workers and others realize that they must compete in the world market with products that can be made better and cheaper by robots. There is no need to fear for loss of jobs, he argued, because technology will lead to new industries.
"My favorite example of that is how AT&T used to buy 5 percent of the copper in the nation," he said. "By one estimate, they won't have to buy any more copper for the rest of the century.
"That's a structural change when 5 percent of the market disappears. Instead of using copper wires, now they are using fiber optics, glass wires if you will . . . . Okay, guys who now mine copper and refine copper from raw ore, those jobs are in jeopardy when something like that happens.
"On the other hand . . . the miner may find a job driving a truck from one who is carrying sand to a glass fiber manufacturing plant."