Speeches by Assistant Secretary Emily Stover DeRocco
Remarks by Assistant Secretary of Labor Emily Stover DeRocco at Mississippi Manufacturers Association
October 12, 2007
Destin, FL
Good morning and thank you all for inviting me today. It always gives me great pleasure to join the men and women who represent the strength of the American economy.
Not even a generation ago, that statement would have been taken for granted by a majority of the population. Today, there seems to be an on-going competition by pundits, columnists, and others to write the most eloquent obituary for the American manufacturer.
And I suppose if you just read the headlines, it isn’t hard to understand why. The Big Three in Michigan have shed hundreds of thousands of jobs. The textile industry in North Carolina and across the South has all but disappeared. And we have no chance to compete against a billion Chinese who will soon be making everything on the planet.
Thankfully, we’re smart enough to not believe everything we hear on TV or read in the newspaper. Because if we did, we would miss one of the most extraordinary stories of creativity and innovation in the American economy.
There is no question that American manufacturing has experienced several years of upheaval. The information and communications revolution, coupled with a broad commitment to free trade, introduced nearly half the world’s population to the economy and sparked a global competition to attract jobs and opportunity.
This competition was fought nearly exclusively on labor costs, and truthfully, it was a competition we could not win and had no interest in even joining.
But simultaneous to this race to the bottom, and arguably because of the resources it freed, was a surge in innovation, fueled by the same technologies that made the global competition possible. Manufacturing was no longer dirty or dumb but high-tech and precise, transformed through computers and robotics.
There are two examples that I always like to cite. The first is one that has particular meaning to the State of Mississippi – Toyota Motor Manufacturing. I have had the opportunity to tour the plants in Huntsville, Alabama and Princeton, Indiana, and they are both as far from the manufacturing stereotype as you can get. Thousands of highly educated individuals are working the computers and operating the robotics that make their ultra-modern assembly lines run.
And just a few months ago, Governor Barbour had the great pleasure of announcing Toyota’s newest plant in Tupelo, Mississippi. Toyota is now the biggest car company in the world and I believe it is safe to say that they would not be investing billions of dollars in the United States if they believed that manufacturing in this country was dying.
The other example that I use is that of Boeing Aircraft and its 787 Dreamliner. As many of you know, the plane is manufactured separately in Kansas, South Carolina, Japan, and Italy and then brought by sea, air, and land to the Boeing plant in Seattle for assembly.
This globally integrated supply chain, along with innovations in material science and aerodynamics, has allowed Boeing to leap-frog their competitors from across the pond and book hundreds of new orders for the plane. This, of course, creates thousands of highly skilled and highly paid jobs in Kansas, South Carolina, and Washington.
But within this success story lie the seeds of a challenge that all of us must confront. Boeing is now facing a delay in delivering its first 787 next spring not because of some complex engineering issues, but rather because the supply-chain of fasteners did not have the capacity or the workforce to meet current demand.
Now supply-chain issues I’m sure are nothing new for many of you, but I suspect that workforce issues are a relatively new problem. Working with the titanium and composites for the 787 is a microcosm of what many manufacturers are now facing as their processes require ever greater skills while the availability of individuals with those skills is unable to keep pace.
In fact, it isn’t just manufacturers that need workers with greater skills. The projections for the U.S. economy as a whole show that 90 percent of the fastest growing jobs and 63 percent of all new jobs will require a post secondary education. A closer look at the numbers reveals that three-quarters of those fastest growing jobs require not just post-secondary education, but a college degree. And two-thirds of the high-wage, high-growth jobs will require a full Bachelor’s Degree.
It does not require looking at projections though to understand the importance of education in today’s economy. Figures from last year show that individuals with a 4-year college degree have half the unemployment rate and earn nearly double the wages of workers with only a high school education.
This is, of course, a dramatic shift from the 20th century. Many industries and traditional manufacturing in particular used to offer Americans with a high school diploma strong, secure jobs with wages enough to raise a family, own a home, and save for retirement. As those jobs have disappeared or moved overseas, advanced manufacturing has emerged as the core of American production.
Though there are other obvious challenges such as health care costs, regulatory burdens, and infrastructure limits, the supply of skilled workers has proved to be a new and central challenge to the success of manufacturing. Whether foreign or domestic, manufacturers in the United States are only as innovative and productive as the workers that they employ. That has thrust my agency, the Employment & Training Administration, into a lead role in addressing the transformation in manufacturing.
We administer a $15 billion system of employment and job training programs that are intended to help individuals gain new skills and find new jobs. This system was created back in 1933 as one of the many New Deal programs and expanded continuously from the 1960s on. Most of the programs under this system were designed for the era when a high school education was all the economy required, and as a result, our programs were oriented more towards social services rather than education and training.
Now that the economy, and particularly manufacturing, has transformed, it is incumbent upon us to keep pace. Many of the workers that were laid-off during the transition from traditional to advanced manufacturing look to us to provide them with new employment opportunities. This is only possible though, if they possess skills that are in demand.
So to better connect our system with jobs and education opportunities, the Administration created a series of initiatives designed to engage both employers and education institutions. The first is the High Growth Job Training Initiative. By partnering with employers and engaging educational institutions, the High Growth Initiative hopes to demonstrate how to put employers back in charge of talent development.
Through projects under the High Growth Initiative, we recognized that many of the job opportunities available in the 21st century economy are begun with an associate’s degree. That is why President Bush created the Community-Based Job Training Grants.
These grants, which we call the Community College Initiative, are designed to improve the training available at community colleges by connecting employers with the schools to provide more and better teachers, state of the art equipment, and a greater capacity to teach more students. In short, they will improve the ability of our Community Colleges to develop talent.
While the role that community colleges play certainly impacts individuals and the companies at which they are hired, it also affects the entire region in which they’re located because community colleges are developing the talent base needed in today’s economy. Indeed, talent development has never been as important to economic development as it is right now.
For most of its existence, economic development has been synonymous with infrastructure development like buildings and roads and incentives like tax rebates and credits. But globalization has changed the economic development equation.
Today, economic development also includes access to broadband and the technological infrastructure to support innovation. But the single most important factor companies consider when deciding where to open or expand a business is the availability of skilled labor. If the workforce is not present to produce high value goods or deliver just-in-time services, then all the tax breaks and highway extensions are irrelevant. This creates an opportunity for talent development organizations to not simply respond to economic events, but to anticipate and even shape a regional economy.
It was this realization that led the Employment and Training Administration to create Workforce Innovations in Regional Economic Development, our WIRED Initiative. WIRED is built on the belief that the critical geography in today’s economy is not towns or states but regions, and that an integrated economic and talent development strategy at the regional level can drive transformation.
We actually are in one of our WIRED regions right now. Northwest Florida recognized that they needed to expand their economic base beyond tourism and a perfect opportunity arose with the expansion of nearby Eglin Air Force Base. But for them to capitalize on that opportunity required a much greater focus on the engineering skills to support the defense industry and on entrepreneurial skills to create a network of small businesses and manufacturers.
Of much greater interest to you though is probably the new WIRED project in southeast Mississippi. As I hope many of you are aware, Governor Barbour has launched a plan to create Centers for Excellence in the Metal Trades and Construction to support the energy, ship-building, and defense industries in Mississippi. This effort is focused on the community colleges but ties in the state’s high schools and universities to create a much greater focus on and commitment to vocational skills.
The Mississippi Manufacturing Association is a key partner in Momentum, Mississppi. You have the opportunity to become a national model to illustrate solutions to continuing and widespread manufacturing talent development challenges:
- Convincing young people to consider manufacturing careers.
- Re-creating career and technical education in our secondary schools.
- Ensuring the entire continuum of education provides training to manufacturing-identified competencies and skills.
There is also a second WIRED project in Mississippi that straddles the border with Alabama that is looking to expand the community colleges’ ability to prepare a skilled workforce. The two projects represent a combined $20 million investment by the Labor Department in the future of Mississippi’s workforce and is above and beyond the $175 million that we send to the state every year for employment and training programs.
Now these may sound like just another set of government programs, but they are much more than simply throwing more money at the same old solutions. They are government’s attempt to bring innovation into some old, tired programs. And others in Washington are taking notice. Agencies with a lot more money than mine are signing up to invest in these regions and align their programs with the goals and strategies set forth by the regions.
All of you have an important role to play in this as well. We can put a lot of systems and support structures in place to make this possible, but only you can tell us exactly what type of skills individuals need to work in your industry. So whether that means helping design curriculum, offering internship or apprenticeship programs, or loaning employees to be faculty, the Governor, the state, and the region are going to need your help if this plan is to be successful.
Of course, you also benefit as well, by having confidence in the pipeline of skilled workers coming from the high schools, colleges, and universities looking for opportunities to build a career in today’s advanced manufacturing.
I am excited about what the future holds for the manufacturers of Mississippi and the impact that your industry will have on the growth and prosperity of your region, your state, and this country.
Thank you very much for the chance to speak with you today. I look forward to working with you in the months ahead.
Thank you.
