New Democrats strongly believe that we must find ways to overcome zero-sum battles between people who are "winning" or "losing" in the New Economy, and begin to "expand the winner's circle" of Americans who are prospering. That means most obviously that every citizen should have access to lifelong skills training to take advantage of the new jobs and careers made possible by the New Economy. But it also means all Americans should have opportunities to be rewarded not only for hard work but for innovating: for finding better ways to do their jobs, contributing to higher productivity for their employers, their industries, and their country.

Federal and state governments have an important role to play in skills training, and the new training reform legislation awaiting final action in a House-Senate conference committee is a critical step toward making publicly-financed training more readily available, more relevant to actual labor market trends, and more flexible and decentralized. But by far the most important resource for skills training is by private employers, who best know what skills they will need in the immediate future, and who provide the actual jobs workers are training to fill.

Private employers are an even more dominant provider of incentives for work-place innovations, although the nation as a whole has a huge stake in the ability of everyone in the economy to innovate in big and small ways each day.

Some employers offer both training and innovation incentives to all or most employees. But more typically, they limit both to higher-echelon management employees. Should Americans care? Absolutely. We all subsidize training and innovation incentives because employers are allowed to write them off their taxes. Once upon a time, employers could write off health insurance and pension benefits offered only to executives, until Congress said, "offer it to all your employees or pay for it yourself." That's why so many employees have health insurance and pension benefits today.

A couple of years ago Progressive Policy Institute Vice President Robert Shapiro (now Undersecretary of Commerce for Economic Affairs) proposed that the "non-discrimination" rule for tax-preferred employee benefits be extended to training and innovation incentives. This idea makes more sense every day. With innovation and worker skills now typically ranked by economists as the number one and number two factors influencing economic growth (with capital investment in plant and equipment number three) U.S. economic policy should promote them as widely as possible throughout the work force.

Employers would profit from such policies far more than from the current non- discrimination rules on health and pension benefits, since it would directly improve the productivity of their own work force. As Shapiro suggested, any non-discrimination rule on training should address one major reason companies do not already broadly offer such benefits: the fear that it will equip workers to take jobs elsewhere. Employers should be authorized to make training contingent on agreements to stay employed for a limited period of time, so that companies can reap at least some fixed portion of their investment in higher skills.

We encourage state-level New Democrats to examine state tax and economic development policies to determine if there are similar ways to encourage broad-based, non-discriminatory incentives for worker training and innovation incentives. It's also a useful issue for challenging those Republicans at every level who are forever scheming to come up with new tax incentives to promote capital investment in plant and equipment. If you're for tax breaks to help the people at the top of the income scale promote economic growth, how's about making sure an existing tax break helps everyone produce more growth and benefit from its blessings?