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Remarks Prepared for
U.S. Secretary of Labor Elaine L. Chao
National Summit on American Competitiveness
Washington, D.C.
Tuesday, September 18, 2007
Thank you, Sandy [Baruah, Assistant Secretary of Commerce for Economic Development].
Welcome, everyone. It is great to be a part of this summit on America’s competitiveness. As we move forward into the 21st century, there is no issue more important for our country’s future economic strength than the competitiveness of our workforce.
Before we begin, let me share some thoughts on the state of our nation’s economy and our workforce.
Today, despite challenges in the housing and financial credit markets, the fundamentals of our nation’s economy are still healthy. Output grew by 4 percent in the 2nd Quarter, driven in part by increasing U.S. exports. And even with the numerous headwinds our economy is facing, most economists expect growth to continue. Unemployment remains a very low 4.6 percent, more than a full point lower than the average of the 1990s, which was 5.7 percent. More than 8.2 million new jobs have been created since August 2003. And productivity growth is steady, which paves the way for higher pay for workers. In fact, the ILO recently issued a report that found that America’s workers are the most productive workers in the world. And that productivity is reflected in the high and growing standard of living for our workers: since January 2001, real after-tax personal income has risen 11.9 percent.
Still, there are challenges ahead. As you well know, our economy is increasingly part of the worldwide economy. And our nation is transitioning to a knowledge-based economy, as well. Two-thirds of the new jobs being created over the decade ending 2014 will require some kind of post-secondary education or training. By definition, these jobs pay above average wages because employers are paying a premium for workers with skills that are in demand.
So more than ever before, education, training, and re-training are the keys to future employment and earnings. Let me share with you a few examples of how education impacts wages:
Today, high school dropouts average about $522 per week for full-time work and their unemployment rate is about 6.7 percent.
Workers with a high school diploma average $704 weekly and have a 4.3 percent unemployment rate.
And workers with some college or an associate’s degrees average about $846 per week and their unemployment rate is 3.7 percent.
But workers with a bachelor’s degree or higher average $1,393 per week and have an unemployment rate of 2.0 percent.
So post-secondary education really pays off!
But employers are telling us that there is a shortage of workers with the education and skills required for emerging sectors. There is a skills gap — that’s the gap between the skills of some in our workforce and the skills needed for jobs in growing sectors of the economy. The shortage of skilled workers is found in nearly every sector, including the skilled trades, which offers great opportunities.
So in 2003, President George W. Bush launched a series of initiatives at the Labor Department to expand access to worker training and post secondary education. These initiatives were designed to ensure that the resources of the $15 billion public workforce investment system are relevant and prepare individuals for the jobs and careers of today’s global economy.
The President chose community colleges as a centerpiece of these initiatives because they are affordable, accessible, and have close connections to local labor markets. They are perfectly positioned to prepare workers for high-growth occupations.
Of course, in order to benefit from post secondary education, students and workers must be thoroughly grounded in the basics. That’s why the President introduced the first major reform of our nation’s school system in fifty years — No Child Left Behind. This landmark legislation is helping to close the achievement gap in our schools. And implementation of this Act is critical to ensuring that all children, especially at-risk youth, have the tools they need to succeed in the 21st century economy.
Let me mention one more thing before I turn this discussion over to our panelists. Over the last several years, it has also become clear that for economic development to be successful, it must be centered at the regional level. Regions are increasingly where the action is — where employers, workers, researchers, entrepreneurs, workforce and economic development organizations, and governments are partnering together to create a competitive advantage in the global marketplace.
So this Administration launched a new initiative, called WIRED, to provide seed capitol ($325 million) to support these partnerships and drive talent development strategies across the region. In addition to seed funding made available through the Department of Labor, WIRED regions have received funding and assistance from over a dozen other federal agencies, including the Department of Commerce. Today, 39 self-defined regions are participating in the WIRED initiative as the result of rigorous competitions among governors.
So with that framework, let me now turn to our panelists for a discussion of what they are doing to strengthen the competitiveness of our nation’s workforce.
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