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Remarks Prepared for Delivery By
U.S. Secretary of Labor Elaine L. Chao
Senator Wayne Allard Capital Conference
Washington, D.C.
Thursday, June 7, 2007
Thank you, Senator Allard [Wayne Allard], for that kind introduction. It is a pleasure to be back to speak at the 10th of these annual meetings that you have been hosting. This year's cosponsors, the University of Colorado and Fort Lewis College, are to be congratulated for encouraging this civic involvement. In fact, much of what I have to say reflects on the relationship between post-secondary education and individual economic achievement.
This morning, I'd like to share some thoughts on the state of our nation's economy and the competitiveness of America's workforce.
The strength of the job market is a reflection of the health and resilience of our economy. Despite rising energy prices and a bumpy housing market, the fundamentals of our economy remain positive. Job growth is healthy and wages are rising.
The U.S. national 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 — Germany's unemployment rate is one and a half times higher, and France's is nearly double that of the U.S. And, their rate of long-term unemployment is three and a half times higher than in the United States.
Our economy has created 8 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 10.2 percent. And earnings for workers grew 1.1 percent over the 12 months ending in April. This translates into an extra $672 for a typical family of four with two wage earners.
Not only are wages increasing but so are benefits. For every dollar increase in employee compensation over the past decade and a half, 67 cents represented wages and salaries, while 33 cents represented bonuses, paid leave, and employers' health insurance, Social Security, Medicare, and retirement contributions.
America has a workforce of over 150 million. And every year over 50 million jobs change hands — usually because workers are seeking better opportunities. By the age of 40, the average American worker will have had 10 jobs. America's workforce is characterized by its flexibility and mobility.
This level of change astonishes my European colleagues, because their countries have rigid regulations that limit the ability to create new jobs and discourage workers from taking new opportunities.
But there are challenges. Our country is evolving into a knowledge based-economy. 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 greater demand. So their wages are rising much more quickly than others.
More than ever before, education, training, and re-training are the keys to future earnings. In fact, here are just a few examples of the link between education, employment, and earnings:
Today, high school drop outs make about $519 per week for full-time work and their unemployment rate is about 6.7 percent. Workers with a high school diploma average $725 weekly and this group has a 4.5 percent unemployment rate. Workers with associate's degrees average about $856 per week and this group's unemployment rate is 3.4 percent. But workers with a bachelor's degree or higher average $1,408 per week and have an unemployment rate of 2.0 percent.
Higher education really pays off!
In the decade ending 2014, Colorado will see the number of software engineers increase by 66 percent statewide. The number of registered nurses will climb by over 45 percent. The number of school teachers will rise by one-third. And the number of financial managers is projected to increase by nearly 30 percent — just to single out some of many growing occupations.
Higher skilled jobs that require more education are clearly the future of our country in the worldwide economy. And the worldwide economy is nothing to be afraid of! Our free society rewards hard work, creativity, risk taking, and individual initiative. Those are unique qualities. In fact, they comprise our country's strongest competitive advantage in the world.
The Labor Department recognizes this. We administer about $9.5 billion of your tax dollars to help fund worker training and education programs. And the private sector spends much more. Everyone recognizes that training is a must if our nation's workforce is to remain competitive in the growing, worldwide economy.
The Administration has created a series of initiatives to strengthen the publicly funded Workforce Investment System. Our goal is to improve the competitiveness of the American workforce. The new approach to talent development brings worker education and training into the 21st century economy.
To be competitive, employers need talented workers. That's why businesses make the availability of skilled labor the most important factor in determining where to locate. If regional assets and resources, including education, are combined at the local level, workers would have opportunities and the skills to access them. Economies would develop regionally.
The Department of Labor has promoted this regional development strategy through an initiative called Workforce Innovation in Regional Economic Development (WIRED). Through a rigorous competition, the Department has selected 26 regional economies to integrate the assets of entrepreneurs, higher education, governments, employers, and foundations to create partnerships that nurture the talent to attract new jobs. Thirteen more regions will be added shortly.
The greater Denver area was among the first regions selected for WIRED. Colorado's high tech and other growth industries, plus its natural beauty, have attracted talent from throughout the nation and the world. WIRED acts as a catalyst and encourages a better fit between local educational institutions and the strengths of Colorado's economy.
In Colorado and across the country, the WIRED approach is spurring investment from an array of other groups including other federal agencies, foundations, investors and states.
The Department also recognizes America's obligations to its military, once members leave the service. Colorado is home to Fort Carson, Peterson Air Force Base, and the U.S. Air Force Academy. At the Department of Labor, we not only honor our service members in our thoughts, as on Memorial Day and yesterday's anniversary of D-Day, but also in our actions. In just the past fiscal year alone, the Department provided direct employment services to more than 1.4 million veterans and service members.
The Department aids service members and veterans through numerous programs. The Transition Assistance Program helps prepare them for civilian jobs — perhaps the first they've ever held. The Hire Vets First Program helps employers find and hire veterans. The REALifelines program provides employment assistance to severely wounded and injured service members and their families. The Homeless Veterans' Reintegration Program shows the path to self-sufficiency. And the Department's first ever regulations for the Uniformed Services Employment and Reemployment Rights Act were a major step forward in protecting the reemployment rights of our returning veterans and citizen soldiers.
These programs provide opportunity and hope. They are part of the roadmap that the President calls the ownership society. When workers have ownership over their skills, education, pensions, and health insurance, they are empowered. They can face the future with greater confidence. That's the overarching principle behind nearly every major proposal and reform put forward by the Department of Labor in this Administration. These include pension reform, job training reforms, Association Health Plans, updating workplace rules and regulations, union transparency reforms, and many others.
Whether it's creating the climate for growth, ensuring the competitiveness of our nation's workforce, or balancing work and family needs, this Administration believes that the best way to build a brighter future is not through bigger, more expensive government programs but by empowering the individual.
By working together, we can continue to ensure that our nation's economy remains strong and creates prosperity that is shared by all. Thank you!
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