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Remarks Prepared for Delivery by
U.S. Secretary of Labor Elaine L. Chao
Young America's Foundation
Washington, D.C.
Thursday, August 7, 2008
Thank you. It's great to be here!
As Andrew [Andrew McIndoe, Intern, Young America's Foundation] mentioned, I've had the great privilege to serve as the very first U.S. Secretary of Labor in the 21st century. And one of my highest priorities has been to help ensure that the programs and policies of the Department more closely reflect the realities that our country faces in the 21st century global economy.
We've pursued a principled agenda based on individual empowerment and a belief in the free enterprise system and its ability to create jobs and opportunity. First and foremost among our core principles has been the strong belief that the private sector — not government — creates jobs. The role of government is to create the environment and the conditions through which economic growth and job creation can occur.
And the Labor Department plays an important part in that mission. That's because, as many of you know, the Labor Department is one of the largest regulatory agencies in the federal government. The Department regulates nearly every workplace in America for health, safety, and wages and hours worked. We also regulate every private employer pension plan in America. And most of the Department's annual budget of about $50 billion is spent on worker training and assistance programs. In addition, the Department of Labor acts as the oversight agency for organized labor. So we reach into virtually every workplace in America with regulations implementing nearly 180 workplace laws.
These regulations can be written and enforced in a way that hampers growth and job creation. Or, they can be written and enforced in a way that empowers workers and employers to succeed in the 21st century economy. Our strategy in this new century has been to empower workers and employers. We set out an ambitious reform agenda that reflected the realities of the 21st century global economy. And we have produced real, measurable results for workers and our economy. So today, I wanted to share with you some of the challenges we faced and how to be an effective conservative leader.
Since the start of this Administration, we've focused on empowering workers by giving them more choice, control, and ownership over their own skills, education, pensions, and workplace arrangements. We have tried to offer workers as many opportunities as possible to update and advance their skills and knowledge so they can better succeed in the worldwide economy. And, because of the need to reform the way the Department operates to reflect the realities of the modern workplace, I made competitiveness part of our mission.
Now, let me mention a few of the milestones that have been achieved over the past seven-plus years by putting into action principles based on individual empowerment.
From the original agenda, an important issue jumped out: the need to reform our nation's outdated white-collar overtime regulations to make them more relevant to the 21st century workforce. The regulations regarding white-collar exemptions under Section 541 of the Fair Labor Standards Act had not been changed since 1949, when Elvis was a teenager! And as a result, there was widespread confusion and uncertainty for both workers and employers about who qualified for overtime. In fact, overtime-related complaints had generated more federal class action lawsuits in the workplace than discrimination class actions. And often, workers who filed suit had to wait up to two years or longer for a legal decision.
Today, under the revised rules, workers clearly know their rights and employers know their responsibilities. With the updated regulations in place, more than 6 million workers have had their overtime rights strengthened.
Through the second half of the 20th century and into the 21st, we have also witnessed a shift in the role of unions in the U.S. workforce. Membership in organized labor has gone from nearly 35 percent in the 1950s to 12.1 percent of all wage and salary workers in 2007, and just 7.5 percent in the private sector.
But no matter what the numbers are, organized workers need to be protected and are entitled to know how their hard earned dues are being spent. Our approach was to rebuild the Labor Department's Office of Labor-Management Standards (called OLMS) after years of neglect. As many of you know, OLMS is the only federal agency with the responsibility to oversee organized labor. But by 2001, the agency had been so starved of resources that it was barely able to do its job. In fact, the number of audits of large national unions in the U.S. had fallen to zero in 1998 and 1999. Not approximately zero — absolute zero — as compared to 22 such audits 10 years prior.
Also, the financial disclosure reports filed by large unions for nearly 45 years have been so vague as to be practically meaningless. We discovered expenditures as large as $68 million lumped together in categories such as “grants,” with no itemization or explanation. As a result, union members, who are required to pay dues, had no idea how their hard-earned dollars were being spent.
So the Department reviewed these forms and issued new financial disclosure forms in 2004. Despite resistance, we persevered with the disclosure forms, and the first detailed financial disclosure reports were filed in March 2006. And today, union members can access these financial reports and other documents by visiting www.unionreports.gov.
As I mentioned earlier, the Department enforces more than 180 workplace laws. But the Department's enforcement strategy was still oriented towards an era of labor-management tension and conflict. It was focused on a reactive, adversarial strategy.
We predicted we could achieve better results in protecting workers by implementing a new strategy that emphasized education, outreach, and communications. So a proactive strategy of trying to prevent workplace hazards and violations from happening in the first place was expanded. The key to this strategy is helping workers and employers understand exactly what the many laws and regulations require of them. We call this preventative approach compliance assistance. It is important to note that our compliance assistance efforts are not intended to replace enforcement programs. We have found that the best way to protect workers is through a combined approach that also makes sure workers and employers know and understand what they need to do to comply with the law.
As a result of these efforts, together with aggressive, targeted enforcement, the Department has been able to achieve record results in worker protection without imposing significant new costs that hamper job growth. For example, the Occupational Safety & Health Administration (OSHA) has helped bring injury and illness rates down to record low levels — down 17 percent since 2001. In another example, the Department's Wage and Hour division has recovered record back wages for workers — more than $1.2 billion for nearly two million workers since the start of this Administration. The Employee Benefits Security Administration (known as EBSA) has achieved record monetary results in protecting workers' pensions and health plans. Its investigations have achieved monetary results of $10 billion since 2001. So don't ever let anyone tell you that conservative principles cannot produce real results for workers.
By focusing on accountability and measurable results, the Department has made great progress for America's workers without asking America's taxpayers for additional resources. The Department's budget is roughly that same as it has been since we took office in 2001. Yet, by every key measure — workplace safety and health, back wages recovered, retirement assets protected — the Department has achieved record results for America's workers. So it is possible to do more with less!
Still, there are challenges ahead. First and foremost, we've got to ensure that our nation's workforce — America's workforce — has the education and skills necessary to remain competitive in a worldwide economy. Our country is evolving into a knowledge based-economy. Today, two-thirds of all the new jobs being created require post-secondary education or considerable on-the-job training. And so a higher-skilled, more educated workforce is clearly the future of our country in the worldwide economy.
Over the past seven and a half years I have watched America's economy rebound from challenge after challenge with remarkable resiliency and consistency. I know that America's future holds great promise! And, that America's workforce is the most creative, innovative, and productive in the world. I also want to say that participation in the increasingly global economy is nothing to be afraid of. America is a very special and unique place in the world because our system is based on the rule of law, transparency, and accountability. Our free society rewards hard work, risk-taking, creativity, and individual initiative. These attributes make up our country's strongest competitive advantage.
To ensure America's future prosperity, we must preserve the principles of our free enterprise system: limited government, low taxation, and individual empowerment. These ideas are critical to maintaining the competitiveness that is so vital to our success in the 21st century global economy.
So I urge you to stay involved in public policy and to stay true to your principles. Working together, we can continue building a stronger, more competitive America that is fully prepared for the challenges and opportunities ahead.
Thank you, and God Bless America!
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