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Remarks Prepared for Delivery by
U.S. Secretary of Labor Elaine L. Chao
International Franchise Association Convention
Las Vegas, NV
Tuesday, February 27, 2007
Good morning! Thank you for inviting me to your convention.
I'm pleased to be here to share some thoughts with you about the state of our economy. And I'd also like to discuss several challenges that impact our workforce and how we can work together to help workers thrive in the 21st century economy.
Today, our economy is one of the fastest growing and most robust among large industrialized nations, with GDP growth over 3 percent in 2006. The national unemployment rate remains a low 4.6 percent. That's more than a full percentage point lower than the 5.7 percent unemployment rate of the 1990s. You can contrast this with Europe, where 2 countries, France and Germany, have unemployment rates near 9 percent. And long term unemployment in France is 3 times higher than the United States.
Our country has created 7.4 million new jobs since August 2003. That's more jobs than the entire European Union and Japan combined have created. In fact, the last Bureau of Labor Statistics job report shows one million more jobs were created in the past two years than had previously been reported.
America's workers are the most productive of any major industrialized economy. And strong productivity translates into higher wages and higher standards of living. The 12 month gain in real hourly earnings is now 2.1 percent. That's an extra $1,244 of new purchasing power for the typical family of four with two wage earners.
There is also a strong spirit of entrepreneurship in the U.S. In the last decade, small and medium size businesses in the U.S. have generated close to two thirds of net job growth. In fact, over 99 percent of U.S. firms have fewer than 500 employees, and over half of all private sector jobs are in these small and medium firms. They are the foundation of our country's future economic growth.
But our country today does face a skills gap. Our economy is evolving into a knowledge-based economy. This means that workers with higher skills and educational levels are more in demand. Therefore the wages of these higher skilled workers are bid up higher and lower skilled and educated workers don't see their wages rise as fast as high skilled workers. But it's important to remember that during approximately the last two and a half decades, the real average hourly earnings of all workers have increased.
More than ever before, education, training, and retraining are the keys to future earnings.
Here are just a few examples of the link between education, employment, and earnings:
- Workers who drop out of high school make on average $494 per week and this group of workers has an unemployment rate of about 6.8 percent.
- Workers with a high school diploma average $726 weekly and this group of workers has a 4.2 percent unemployment rate.
- Workers with an associate's degree average $826 per week, and this group of workers has an unemployment rate of 3.8 percent.
- But workers with a bachelor's degree or higher average $1,344 per week for full-time work, and this group of workers has a 2.1 percent unemployment rate.
So higher education does pay off! There's a real difference.
Another challenge is the 11 to 12 million people living in the shadows, who are here illegally. In his State of the Union Address in January, President Bush again called upon our nation to engage in a thoughtful debate on comprehensive immigration reform. The President's plan would secure our nation's borders and recognize the economic realities of our economy. His plan includes a temporary worker program that would address the needs and realities of our growing economy. Hopefully, there will be action in Congress this year.
Another issue that I know is important to all of you as employers is access to quality affordable health insurance for your employees.
In his State of the Union Address, the President announced his plan to help make health insurance affordable to more Americans. And included in the plan is his proposal for Association Health Plans.
These AHPs would allow small employers, like yours, as well as civic and community groups to band together to provide access to quality affordable health care for your workers. AHPs would enable small businesses to get the same discounts that big companies and unions receive. And AHPs will help lower overall health care costs by promoting greater competition and choice in the health care insurance industry.
Lastly, there's a bill that will be voted upon on the floor of the U.S. House of Representatives this Thursday that I'm sure you're aware of. It is called the "Employee Free Choice Act." HR 800 otherwise known as "card check".
Although the title — Employee Free Choice Act — sounds benevolent, the bill is just the opposite. It would take away a worker's choice by doing away with the right to private ballot election.
We are a country that supports the rights of men and women to work and organize within law. The proposed bill would effectively deny a worker the right to have a private ballot election 0 without outside pressures or public discourse — when deciding whether or not to be represented by a union. The bill would severely restrict worker's rights to freely bargain over their working terms and conditions of employment. Plus, substantial penalties for violations of the new law would be levied on employers, but not on unions.
Under current law, the most frequent form of union organizing is a private ballot election certified by the National Labor Relations Board. Unions organize a work site by collecting the dated signatures of at least 30 percent of the workers to demonstrate interest in union representation. By the way, to ensure success, unions usually get more than 30 percent of workers signatures.
The petition is filed, the signatures are verified and then, the NLRB conducts a federally supervised election under formal and solemn surroundings in which every worker is given the opportunity to vote in a private ballot election.
But under the proposed card check bill, unions would be able to organize by merely distributing cards to workers who are asked to disclose their preference publicly. If a simple majority of workers sign and return these cards — instead of indicating interest in union representation — the union is automatically certified.
Interestingly enough, under this bill, decertification of a union can only take place by a private ballot election.
The right of a worker to a private ballot election is an intrinsic right in our democracy that should not be negotiated away by either management or Labor. Nor should this right be legislated away at the behest of special interest groups.
This card check bill will likely to pass the House. The action then moves to the Senate. This Administration rejects any attempts to short-circuit the rights of workers. We will defend their right to vote private ballot — yes or no — and workers' right to fair bargaining. If this bill is sent to the President, he will veto the bill.
Whether it's through education, training, greater access to health care or protecting the rights of workers, empowering the individual is key to maintaining the strength of our nation's workforce. That's what all these proposals have in common. They empower the individual worker so he or she can thrive in the 21st century economy. Our nation's economy is strong and it is growing. We need to keep it strong and growing to continue to provide opportunity that makes America the beacon of hope in the world.
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