Speeches by Secretary Elaine L. Chao

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Remarks Delivered by
U.S. Secretary of Labor Elaine L. Chao
FMCS 13th National Labor-Management Conference
Chicago, Illinois
Wednesday, August 16, 2006

Thank you, Arthur [Rosenfeld, Director of the Federal Mediation and Conciliation Service.]

I am delighted to be here for the 13th National Labor-Management Conference sponsored by the Federal Mediation and Conciliation Service. This is a great forum for labor, management and others to come together in a collaborative spirit to address the challenges facing our nation's economy and workforce.

The topic of this conference, "Confronting Changing Times: Paths to Partnership," couldn't be more timely.

Our nation is part of an increasingly worldwide economy. Some countries are in a race to the bottom, competing fiercely to secure the lowest skilled, lowest paid jobs in the world for their citizens. That is not where our country's economic future lies. We want to attract and create the highest skilled, highest paid jobs in the world for America's workers.

But to realize this goal, we must ensure that our nation's workers remain among the most productive and skilled in the world. And we must ensure that our nation remains a leader in innovation, which creates the new products and services that create new jobs.

So this afternoon, let me share with you some thoughts about these challenges, and why it is critical for employers and workers to join together to strengthen our nation's competitiveness.

Let me start with a brief snapshot of our country's economic progress. The national unemployment rate for July was a low 4.8 percent. To put that in historical perspective, that's lower than the average 5.7 percent unemployment rate of the 1990s.

Our economy is one of the most vibrant of all industrialized nations. Real GDP grew at a healthy 3.5 percent over the past four quarters. Our economy continued to post solid gains in July, which was the 35th consecutive month of net job growth. In fact, 5.5 million net new jobs have been created since August 2003. Contrast this with Europe where job growth has been half that of the United States and where two major economies — Germany and France — have unemployment rates nearly double that of the U.S.

The flexibility and productivity of our nation's workforce are major contributors to our nation's economic strength. And our nation's ability to adapt, innovate and create new products and services are key factors, as well.

But new worldwide trends are emerging that require us to draw upon and reinforce these strengths even more. Our country is transitioning to a knowledge-based economy. This transition has created millions of new jobs in industries that did not even exist a generation ago. These industries provide high-value, high-paying jobs and demand workers with higher skills and more education.

Nearly two-thirds of the estimated 18 million new jobs created in the next 10 years will be in occupations that require some kind of higher education. Now this doesn't necessarily mean a 4-year college degree. It can be a 2-year degree from a community college or specialized training. That includes apprenticeships, which combine classroom and on-the-job training. In fact, apprenticeship programs are wonderful opportunities for workers to get highly marketable skills and invest in their futures.

In addition, some of the strongest demand is for workers with 2-year degrees or professional certificates from community colleges. But it is clear that completing some form of higher education is critical to building solid, sustainable career paths for our nation's workers.

At the same time that our economy is transitioning to a knowledge-based economy, a skills gap is emerging. That is the mismatch between the skills required for the new, high value jobs being created and the skills of many in our workforce. That's because technology has changed the way everyone works.

Today, for example, the skilled trades require the ability to understand and operate complex equipment and processes controlled by technology. Stationary engineers, for example, need to know about computerized systems and controls in order to operate and maintain the heating and cooling machinery of a modern office building.

In the past, investment in infrastructure or capital largely determined the success of an enterprise and its workforce. But in the 21st century, investment in knowledge and people are just as important.

In many areas of knowledge, our nation remains at the forefront. By nearly every metric, the U.S. leads the world in science and technology. The U.S. employs nearly one-third of all scientists and engineers. And the U.S. spends as much on research and development as the rest of the major industrialized nations combined.

But more needs to be done. That's why President George W. Bush announced the American Competitiveness Initiative.

This initiative pledges $136 billion in additional national resources over the next decade to:

• Increase U.S. investments in research and development;
• Strengthen U.S. education in math and the sciences; and
• Encourage entrepreneurship and innovation.

Education is key because over the next 10 years, there will be more than 6 million new and replacement job openings that require strong math and science skills. And it is these jobs that drive innovation and, in turn, create millions of additional jobs.

To help workers get the skills required for these and other growing opportunities, this Administration is aggressively supporting our nation's community college system. Community colleges are the heart of the higher education system serving today's workforce. They have 1,200 locations nationwide, hold evening and weekend classes and are accessible to all Americans.

Whether it is through apprenticeship programs, employer-provided training, community colleges, universities or some other education provider, we must provide working Americans with the resources to further their education and maintain their own competitiveness. That is why a major component of the President's Competitiveness Initiative is the proposal for Career Advancement Accounts.

Full-time students and young Americans have Pell grants and a host of other resources to help them obtain an education. But for the working American, the one who must support a family, make house and car payments, and contribute to a 401(k), there was very little. Career Advancement Accounts offer a new way for those Americans to afford continuing education. They would provide eligible workers with up to $3,000 to purchase the education and training that suits them best. It would give many workers a chance to take the next step up the career ladder.

While helping workers access higher education is critical to our nation's future, it is important to recognize another changing dynamic. Regional, rather than local, economies are increasingly becoming the key players in our nation's economic development.

This is the framework for the Department's newest initiative, Workforce Innovations in Regional Economic Development, or WIRED. As part of this initiative, I recently announced the investment of nearly $200 million in 13 regional economies across the country. WIRED brings employers, labor organizations, education providers, researchers, entrepreneurs and others together to develop a consensus on a regional economic strategy. These partners then work together to implement education and training programs that provide workers with the skills needed for the industries targeted in the strategy. A key goal of this initiative is to assist economies and workers that are experiencing difficult transitions.

This Administration has launched other initiatives to strengthen our nation's investment in worker training. One is the President's High Growth Job Training Initiative. It supports education and training programs that prepare workers for new job opportunities in high growth sectors of the economy. As part of this initiative, the Department has awarded over $260 million to support over 130 training and education partnerships.

Another is the President's Community Based Job Training Initiative. It expands the capacity of community and technical colleges to train workers in the skills required for growing industries. The Department has awarded $125 million to 70 community college partnerships under this program. And a second $125 million grant competition is underway.

Both of these initiatives rely on partnerships between employers, labor organizations, education providers, public and non-profit institutions, and others to help workers access higher education and skills training. You can learn more about these and other training initiatives at www.doleta.gov.

There are many, many other examples of collaborative training partnerships sponsored by this Department. For example, the Labor Department has the highest number of health and safety partnerships with organized labor in its history. The Department recently signed a Drug-Free Workplace Alliance, which includes eight labor organizations and five contractor organizations representing 45,200 employers. They are working together on a key issue of workplace safety, covering 2.4 million workers.

And the White House Task Force on a Skilled Workforce in the Gulf Coast includes both employers and unions. That's because it is only through collaboration from both labor and management that the Gulf Coast will be rebuilt.

Finally, let me commend this conference for featuring another important collaboration on its program — Helmets to Hardhats. This partnership between the federal government, the building trades unions, and approximately 82,000 contractors helps train and match our returning veterans with good jobs in the building trades. They were there for us. Now it's our turn to be there for them!

All of these initiatives have the same goal: to ensure that our nation's workers have access to the education and training they need to remain safe, skilled and competitive.

As our nation becomes part of an increasingly worldwide economy, it is more important than ever for labor and management to work together to help strengthen America's economic security. Our future competitiveness rests on the strength and skills of our workforce. If we fail to make the investments necessary to sustain a competitive workforce, our nation's economic security will suffer.

Workers are best served when employers, labor organizations, education providers, community organizations and local, state and federal governments work together to identify and meet common challenges.

Another important workforce challenge — pension reform — is on the agenda of this conference. A strong pension reform bill, which includes the reforms proposed by President Bush in January 2005, recently passed the Congress and will be signed by the President tomorrow. This bill will ensure that workers will be given expanded opportunities to save in defined contribution plans. And it will help ensure that the promises made to the 44 million American workers who depend on defined benefit pension plans will be kept.

By working together on these and other initiatives, we can ensure that our nation's workers remain the safest, most skilled and among the most productive in the world. And by strengthening the competitiveness of our nation's workforce, we can make a lasting, significant contribution to the economic security of the American workforce and our nation.

So thank you for inviting me here today. And thank you for everything you are doing to help our country remain strong.

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