Okay, so the obvious question is why is a government official, and worse, a Nittany Lion, here at Purdue to talk to the College of Technology? Well, this past year, I have had the benefit of working with your University on an initiative designed to improve economic opportunities here in West Lafayette and across the entire North Central Indiana region. I quickly became friends with Dean O’Hair and other members of the faculty.

They asked me to come speak to you today because in a few short months or years, you’re going to find yourselves in the real world of work. Hopefully I can provide you with some thoughts and some ways to avoid the inglorious fate of returning home and living in your parents’ basement.

As the Assistant Secretary for Employment and Training, I am responsible for a $15 billion system that helps people find the jobs and companies find the skilled workers they both need to succeed. This requires us to pay particularly close attention to the economy and trends in the labor market, both of which I will discuss with you this afternoon.

I believe that we are in the middle of what history will call the second great economic revolution of the modern age. It began roughly in 1980 with the introduction of the personal computer, and proceeded rapidly with the creation of the internet and mobile technologies. To gain some perspective on this time and how it is affecting our world, it helps to look to history and the first great economic upheaval, the industrial revolution of the 19th century.

The world in 1800 looked much like the world in 1700 or even 700. Most people, well, most men, were either farmers or craftsmen, working with their hands and simple tools to produce goods and commodities. They traveled over land by horse and buggy and goods purchased through international trade were a luxury.

By 1900, the population had moved from the countryside to the cities. Men now worked with machines in factories and on assembly lines, for companies many today would recognize: General Electric, Westinghouse, U.S. Steel. Trains stretched from sea to shining sea while Henry Ford and the Wright Brothers were just three years from completing the revolution that facilitated travel and trade.

This entire century had a profound effect on the jobs and lives of ordinary Americans. Imagine what it must have been like to move from a 5,000-year history of agriculture to manufacturing and industry in only three or four generations. Everything your father and grandfather knew and you grew up with quickly became obsolete. Life required new skills and brought with it great uncertainty.

But it also brought opportunity and prosperity. Over that one hundred year period, wages increased an average of 500%. In no other hundred year period had wages so much as doubled. This was made possible by the tremendous leaps in productivity provided by the industrial revolution and the concurring inventions and innovations that were spurred by new technology.

Purdue University was founded right in the middle of this period and was not merely an observer of this history but a participant. As with the other land grant colleges, Purdue’s was a mission of economic development in both agriculture and manufacturing, driving innovation in the market and creating the skilled labor force that would build the machines. This history is still recognized today as the engineers and craftsmen from Lafayette’s Monon Railroad are symbolized on every Purdue uniform as the Boilermakers.

Through most of the 20th century, we saw an evolution of the economy. Manufacturing grew incrementally more efficient and the wealth created from the industry spurred the development of a growing services sector. To preview a theme I’ll return to later, we reached the maturity phase of the industrial economy.

Then, at the end of the 20th century, we experienced another great leap forward. Not in the way that Mao and the Chinese defined leap, but closer to how Purdue’s most famous alum used the term as he stepped onto the surface of the moon.

The mainstream press and others have referred to this as the technology revolution, but that term fails to capture what has actually happened over the past twenty years. It is closer to an information and communication revolution, where limitless amounts of data can move to any point on the map in seconds. Technology is simply the enabler, as it has been in every great transformation from the Bronze Age to the Industrial Revolution.

It is difficult to overstate the effects that this has had on our economy. Let’s start simply at the highest macro-economic level with inflation and unemployment. Economic theory had always taught us that inflation and unemployment were inversely proportional. As one went up, the other went down. Occasionally, in the worst of times, they both went up, such as in the mid ‘30s and late ‘70s.

Today, the rules seemed to have changed. Unemployment is at 4.5%, below what economists used to call full employment, and the Federal Reserve has an unofficial inflation target of 2%. If I had uttered that sentence a generation ago, I would have been laughed out of the room.

What this has brought is stability to the U.S. economy, virtually removing both the risk that your money will be worth significantly less tomorrow than it is today, and the risk that you won’t be able to earn money through employment.

There are obviously a number of factors contributing to this stability, not the least of which is the astounding improvement in productivity of American workers and American businesses through information technology. Computers are now a staple of nearly every occupation, from construction and engineering to manufacturing and logistics. The improvements in information have allowed all of us to do our jobs better, faster, and cheaper than we have ever done them before.

But there is another factor that I would like to highlight this afternoon, and that is the broad commitment of this country to free trade. Nearly 250 years ago when Adam Smith wrote The Wealth of Nations, the defining work on economics, he coined the term comparative advantage. If each nation focused on the things that they do best, and nations were free to trade with each other, then the collective wealth of all nations and their citizens would improve.

That theory always held true in the abstract, but was difficult to prove in reality because of the challenges of time and distance between countries. The information and communication revolution has now allowed us to overcome those challenges.