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Remarks Delivered by
U.S. Secretary of Labor Elaine L. Chao
Senate Leadership Forum for Young Professionals
Washington, D.C.
Wednesday, September 20, 2006
Thank you for your warm introduction, Senator [Kay Bailey] Hutchison.
I am so pleased to join you today, because the theme of the forum is so important: ensuring America remains competitive in the worldwide economy.
So this afternoon, let me share with you some thoughts about how well our country is doing, and how we can help America remain competitive in the worldwide economy.
Our country is now part of a worldwide economy and is transitioning to a knowledge-based economy. To remain strong, we must ensure that our nation's workforce have the skills and education they need to remain competitive.
Let me begin with a brief snapshot of our country's economic progress. The national unemployment rate now stands at a low 4.7 percent. To put that in historical perspective, that's a full point lower than the average 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 August, which was the 36th consecutive month of net job growth. In fact, 5.7 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., and gasoline prices that top $6 per gallon.
The U.S. economy is strong because the President's pro-growth economic agenda has created an innovation-friendly environment that encourages entrepreneurship, talent development and job creation.
Taxes are low, but much of President Bush's tax relief is scheduled to sunset after 2011, which is five short years away. The last thing we need is to do is raise taxes on businesses, on employers, and on hard-working people. They should be made permanent.
The Administration has worked hard to encourage an innovation-friendly environment by ensuring that:
- The regulatory climate is responsible and reasonable;
- Entrepreneurship isn't sabotaged by frivolous lawsuits;
- Innovation is protected; and
- The economy is open to the global market.
The net impact of these changes has been to unleash the productivity and flexibility of our workforce, and allow the private sector to do what it does best: adapt, innovate and create new products, services and jobs.
As a result, millions work in industries that did not even exist a generation ago. These new jobs created by the emerging knowledge-based economy not only pay better than the old, they also demand workers with higher skills and more education.
President Bush's American Competitiveness Initiative is directly aimed at developing the talent and technology that will keep us on the leading edge of this new knowledge-based economy.
The initiative pledges $136 billion over the next decade to:
- Strengthen U.S. education in math and the sciences;
- Invest in worker skills and education;
- Encourage entrepreneurship and innovation; and
- Boost research and development.
By enhancing education, America will ensure that our children have the right foundation to acquire the knowledge and skills they need to succeed in the knowledge-based economy.
Ensuring America's workers remain the most productive in the world requires investment in their education, as well. An innovative way to enhance worker skills is found in the President's Career Advancement Accounts proposal. These accounts will empower workers by providing them with resources to purchase the education and training that suits them best at community colleges or technical institutes.
The Department of Labor is doing its part to enhance competitiveness. It has awarded over $260 million to support programs that prepare workers for new job opportunities in high growth sectors of the economy. And by year's end, it will have awarded $250 million in grants to expand the training capacity of community colleges.
The next major component of the President's Competitiveness Initiative is to bolster research and development. The private sector accounts for two-thirds of all R&D spending in America. To encourage this level of investment in America's future, President Bush is proposing that the R&D tax credit be made permanent.
The President also wants to double the federal commitment to critical basic research programs in physical sciences over the next ten years.
This is important because R&D creates the new products and services which in turn lead to the creation of new industries and good-paying new jobs. In the United States, knowledge-intensive industries — such as aerospace, information technology and biotechnology — account for over half of all U.S. exports. These industries represent 40 percent of our economic growth, and employ 18 million Americans whose wages are 40 percent higher than the U.S. average.
Technology is not the only factor changing the job market. We are finding that job creation is increasingly taking place in regional, rather than local economies.
The Department's newest competitiveness initiative is the Workforce Innovations in Regional Economic Development, or WIRED. It brings together key regional players — public officials, academics, employers, workers, non-profit organizations and organized labor — to build effective regional economic development strategies.
WIRED is targeted at regional economies experiencing difficult economic transitions. The Department has already empowered 13 regional organizations with $200 million in grants. It is also providing technical and other assistance to 13 additional regional groups that are participating as WIRED Virtual Regions.
Let me also touch on another important competitiveness issue, which is the high cost of healthcare and how to close the coverage gap for workers.
I know that Senator Lisa Murkowski of Alaska will be moderating a panel of experts on this topic right after we are finished here. But I do want to mention Association Health Plans, which can help make healthcare more affordable.
Small employers currently pay as much as 30 percent more than large employers for similar health benefits. By allowing small- and medium-sized employers to pool their buying power and spread their risk, AHPs will put them on an equal footing with large corporations and unions. This will help reduce the cost of affordable, quality health care and help to close the coverage gap for America's workers and small employers.
Let me close by noting that all of us should have confidence in the future of our country. Our nation's economy is the envy of the world. Despite the challenges of the past 5 years — a recession, the horrific terrorist attacks of September 11th, devastating hurricanes and rising energy prices — our economy continues to grow and create new jobs. Our challenge today is to ensure that our workers have the skills they need to ensure that our nation remains among the most productive and skilled in the world.
Thank you.
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