PERSPECTIVE ON JOB SECURITY : Government Can’t Fix It Alone : Give business the incentive to do what’s right for society as a whole, not just what’s good for shareholders.

Pat Buchanan may fade, but not the anger that fuels him. Buchanan is talking about the right issue; it’s his solutions that are irresponsible and dangerous.

Wage disparities have been widening and real wages sliding since the late 1970s. The Clinton administration has restored job growth and shrunk the deficit, and median wages have stopped falling behind. But the long-term challenge of restoring wage growth is still before us.

What’s really going on? Buchanan either doesn’t know or he’s trying to put one over on his fellow Americans. It can’t be blamed on immigrants, the World Trade Organization, NAFTA, welfare mothers, affirmative action, venal corporations or rapacious CEOs.

Look instead at two huge changes in the way our economy is organized.

Like tectonic plates colliding, the old mass-production system that used to provide good middle-class jobs has come under enormous pressure from new information technologies and from global trade and investment, causing the economic earth to crack open.

People on the new side of the divide are doing well. Those who remain trapped in the old economy are losing ground. Either they don’t know what skills are needed, can’t afford the costs of getting them, feel too old to learn or can’t easily uproot and move. As a result, most Americans who lose their jobs and find new ones never catch up with the earnings and benefits they once had.

The other big change is that the implicit social compact that used to bind corporations with their workers has come undone. Thirty years ago, if a company earned healthy profits, its employees could be assured of secure jobs with rising wages and benefits, and their communities could count on a steady tax base. When the economy turned sour, employees might be laid-off. But when the economy revived, the work would return. “Layoff� suggested a temporary separation.

Those days are over. Vast amounts of capital can now be moved at the push of a computer key, resulting in “electronic capitalism�--a worldwide system for immediately redeploying financial assets to where they can earn the highest return.

CEOs who don’t abandon their employees and communities when the bottom line requires it risk trouble, while those who do can pocket multimillion-dollar bonuses and stock options. Most layoffs are now permanent. We need a new word to describe this phenomenon. Perhaps we should call them “cast-offs� instead of layoffs.

Consider the first change in light of the second.

The modern corporation’s sole focus on maximizing shareholder returns makes it less able to ease the transition of the work force to the new economy. What may be rational for a corporation is irrational for society.

Nations as a whole are better off when employers teach their workers skills beyond what is required in their current job; national economics are more flexible and productive when employers see to it that workers who are no longer needed get retrained and placed in new jobs. Yet because shareholders don’t reap the full benefits of these sorts of investments, even the most enlightened CEO will be loath to make them to the extent that society needs.

Can government fill the breach? Only partly, and by doing three things:

* Giving people the tools to succeed in the new economy. Education and job skills are essential. That’s why this administration is fighting so hard for low-cost college loans, school-to-work apprenticeships and training vouchers for laid-off workers.

* Making work pay for people at the bottom. Work is better than welfare or unemployment. So we need to raise the minimum wage and keep the expanded tax credit for working families with incomes under $27,000.

* Easing the transition from job to job. Health insurers shouldn’t cut you off when you lose a job. Pensions should be portable. Unemployment insurance, job-search assistance and job training should be available at “one-stop� career centers.

But government can’t do it alone. How then to get the private sector to take more responsibility for helping workers make the transition?

If we want companies to do things that don’t necessarily improve the returns to shareholders but benefit society as a whole, we’ll have to offer an economic reason to do so. One possibility would be to reduce or eliminate corporate income taxes for companies that achieve minimum requirements for upgrading the general skills of employees, sharing more of the profits with them and, when laying them off, retraining and placing them in new jobs.

To make up the lost revenues, we might end the myriad subsidies and tax breaks targeted to particular companies and industries that provide no appreciable public benefits. Corporate welfare in the United States totals billions a year.

Others will have different ideas. Chief executives should contribute to this discussion, not to defend the status quo but in recognition that the trends cannot be allowed to continue.

If too many people feel excluded from the gains of a growing economy and disproportionately burdened by its risks and costs, they eventually will support policies that sacrifice growth in favor of economic security--policies such as trade protection, capital controls and inflexible employment rules.

All of us have a stake in retaining the openness and dynamism that have served our economy so well. But they must also serve our society.