Economic Report President

Administration’s initiatives to reduce class size by hiring 100,000 newteachers. The Administration has also encouraged both young peopleand adults to pursue further education and job training. The newGEAR UP program, for example, provides mentors to disadvantagedstudents preparing for college, and the new HOPE Scholarship taxcredit provides up to $1,500 for the first 2 years of college or vocationalschool. Also, in 1998 the Administration obtained an increase both intotal funding for Pell grants, to $7.7 billion, and in the maximumgrant, from $3,000 to $3,125. These grants provide financial aid toundergraduates on the basis of need.For fiscal 2000 the Administration is proposing substantial changesto America’s schools. Measures in the President’s budget will holdteachers, schools, and students more accountable for educational outcomes;will reduce class size; will provide for building and renovatingpublic schools; and will recruit outstanding new teachers. The Presidenthas asked the Congress to expand on the $1.2 billion down paymentmade last year to reduce class size in the first three grades to anational average of 18. The Administration has proposed new Federaltax credits as incentives to help States and school districts build newpublic schools and renovate existing ones. The President’s budget containsa series of new initiatives and funding increases to help recruitwell-prepared people to teach where they are most needed, in highpovertyurban and rural communities. In addition, the President isproposing to help the more than 44 million adults who perform at thelowest level of literacy to acquire reading and writing skills. His budgetwould, among other things, establish a 10 percent tax credit foremployers who provide workplace education programs for theiremployees who lack basic skills.BLACKS AND HISPANICSAfter years of decline, the real wages of black men began to increasein 1993; they have risen by 5.8 percent since 1996 alone. Black womenand Hispanic men and women have also experienced recent gains(Charts 3-5 and 3-6). Because blacks and Hispanics are disproportionatelyrepresented in the lower end of the wage distribution, the longruntrends in their wages are similar to those for low-wage workersgenerally. Both of these minority groups have less education on averagethan the rest of the work force, and Hispanics are younger on average.When the real wages of workers without a college education starteddeclining in the 1970s, the median real wages of black and Hispanicmen started declining as well. In the last few years, however, theirwages have been rising.Employment opportunities are also expanding for minorities. Theunemployment rates for blacks and Hispanics in 1998 were the lowestever recorded, and were 4.1 and 3.6 percentage points lower, respectively,than in 1993. But minority unemployment is still unacceptably107