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Remarks prepared for
U.S. Secretary of Labor Elaine L. Chao
"Developing Minnesota's 21st Century Workforce" Event
St. Paul, MN
Monday, May 14, 2007
Thank you, Senator [Norm Coleman (R-MN)] It's great to be here with you at Starkey Laboratories. And I want to recognize our host, Mr. Jerry Ruzicka President of Starkey Laboratories, Mr. Eric Ajax, of EJ Ajax Metal Stamping, and Mr. Steve Rothschild, founder and chairman of the board of Twin Cities RISE! I also want to recognize Chancellor James McCormick, of the Minnesota State Colleges and Universities System.
The tour was very impressive and the technology is amazing.
This morning, I'd like to talk with you a bit about the strength of the economy and what the Department of Labor is doing to increase the competitiveness of America's workforce.
Today, America's economy is healthy and resilient. Despite rising energy prices and a slowdown in the housing market, the fundamentals of our economy remain positive. Job growth is healthy and wages are rising.
Our country's unemployment rate remains low at 4.5 percent. That's more than a full percentage point lower than the average 5.7 percent unemployment rate of the 1990s. You can contrast this with Europe. Let's just pick two countries. Let's say, France and Germany. These two nations have unemployment rates double that of ours. And their long-term unemployment is three times higher than the United States.
Our economy has created 7.9 million net new jobs since August 2003. That's more jobs than Eurozone countries and Japan combined have created.
America's workers are among the most productive of any major industrialized economy. And productivity growth in recent years is translating into higher wages and a higher standard of living. By most any measure, people today have more money in their pockets. Real per capita disposable income since January 2001 has risen 10.4 percent. And earnings for workers grew 3.7 percent over the 12 months ending in March. This translates into an extra $2,179 for a typical family of four with two wage earners.
This expansion would not have taken place without passage of President Bush's economic policies. And this would not have been possible without the support of Minnesota's own Senator Norm Coleman. The Senator is a student of history, and knows that putting more money in the pockets of workers creates jobs. Senator Coleman had the courage to stand firm for Minnesota's workers. He was one of 50 Senators who supported the initial tax relief package presented by President Bush. Our country's economic performance during some of the most challenging years our country has faced proves that Senator Coleman was right.
Tax relief has also reduced the deficit. The non-partisan Congressional Budget Office said that the 2007 deficit will be $172 billion, or $100 billion lower than it predicted one year ago. And, the CBO reports, if we stay on track, America will have a budget surplus by 2012!
But there are challenges. Our economy is evolving into a knowledge based-economy. Reflecting this transformation, two-thirds of all the new jobs being created require post-secondary education. These jobs require more creativity and critical thinking. And workers with more knowledge, skills, and creativity are in much greater demand. And, so their wages are rising much more quickly than those of less skilled workers.
Over the next decade, our country will need 3.4 million healthcare professionals, including physicians, therapists, and over 1.2 million registered nurses. We also need workers in other high growth industries including nanotechnology, geospatial technology, and the life sciences.
The Labor Department recognizes the need for skilled workers in our economy. It administers about $9.5 billion of your tax dollars each year to help fund training programs. And the private sector spends much, much more.
Senator Coleman is a strong advocate for investment in worker training. And he has won respect for his advocacy on behalf of workers on both sides of the aisle. He is a consistent champion of education at the primary, secondary and postsecondary level.
The Department of Labor shares Senator Coleman's commitment to education and training. The Department is implementing President Bush's High Growth Job Training Initiative, which seeks to increase access to education and training for skills that are in demand by growing industries. To date, over 150 grants totaling over $285 million have been awarded nationwide. These projects are demonstrating how to put employers, along with educators and the workforce investment system, in charge of talent development.
The Department also administers President Bush's Community Based Job Training Grant Initiative, which enhances the training capacity of community colleges to meet local and regional job needs. The Department has awarded $250 million in grants to 142 community college partnerships in 2005 and 2006. Senator Coleman has been an advocate in Congress to secure funding for this important initiative and will be considering the President's request for another $150 million.
This investment in education helps to create jobs. Surveys confirm that the availability of skilled workers is the most important factor for companies in determining where to locate their operations. Other factors, such as buildings, roads, tax rebates and credits are not nearly as important as skilled workers.
At the same time, economic development strategies have emerged on a regional level. Once, competitors were located across the street or in the next county. Today they operate across the ocean. By identifying and leveraging resources from several different towns and communities, regions have positioned themselves to better compete in a global economy.
That's why the Department launched the Workforce Innovation in Regional Economic Development (WIRED). This initiative brings together local employers, employees, educators, community and non-profit leaders, unions and others in a collaborative effort develop the skilled workforce that attracts jobs. The Department has selected 26 regions to participate through a competitive process. It has provided awards totaling $260 million and is currently vetting proposals for a third round of grants. This funding is acting as seed money, and is spurring additional investment from federal agencies, foundations, regional partners and the states.
All of these proposals rest on a simple idea: the government does not create jobs, but it can foster an environment that encourages job creation. Individual initiative, freedom and a skilled and productive workforce have built America's economy. Starkey Laboratories is a wonderful example of what can happen when talented entrepreneurs and skilled workers come together to produce high quality products that are in demand.
I am honored to join you today, along with the other participants on this panel. I look forward to hearing their comments and to taking your questions later on.
Thank you.
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