Speeches by Secretary Elaine L. Chao

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Remarks Delivered by
U.S. Secretary of Labor Elaine L. Chao
National Retail Federation
Human Resources Executives Summit
Chicago, Illinois
Thursday, October 18, 2007

Thank you Sheryl. It's great to be here in Chicago, a major retail center.

The retail industry is a very important part of America's economy. It provides great job opportunities for America's workers and great service and value for America's consumers.

This afternoon, let me share some thoughts on how this Administration is helping to increase the competitiveness of our nation's workforce — including workers in the retail sector. Then let me update you on a few regulatory issues that may be of interest to you.

As we all know, our country is increasingly becoming part of the worldwide economy. At the same time, it is transitioning to a knowledge-based economy. Two-thirds of the new jobs created over the decade will require some kind of post-secondary education or training. By definition, these jobs pay above average wages. So education and training are increasingly the keys to a brighter future for workers.

But at the same time that education is becoming more important, our country is facing a skills gap. While unemployment rates remain significantly lower than rates of the 1990s, there is a mismatch between the skills of some in our workforce and the skills needed for jobs in growing sectors of the economy. And certain occupations lack needed workers. That's primarily because technology is transforming the workplace. It has raised the level of technical proficiency that workers need in every sector — including retail. So if our country is to remain competitive, we must ensure that workers have access to the education and training they need to continually update their skills.

The competitiveness of our workforce is a major priority of this Administration and the Labor Department. That's why President George W. Bush, launched a series of initiatives at the Labor Department to expand workers' access to post-secondary education and training.

The first initiative identifies the sectors of the economy that are growing and the skills needed to access these opportunities. This initiative has identified retail as a high growth industry. Retail trade is projected to add over 1.6 million jobs in the decade ending 2014 — an increase of 11 percent over 10 years.

By partnering with retail employers, who identify needed skills, and the workforce investment system, which has access to a pipeline of workers, we are linking with educational institutions to ensure that job training is relevant. So far, the Department has invested over $288 million in 156 training partnerships that include employers, educators and the workforce investment system.

Here are two examples:

The Department of Labor awarded $2.8 million to the National Retail Federation Foundation to expand the number and scope of its retail skills centers. These centers, located in shopping malls, help retail employers recruit, retain and advance workers.

In addition, the Department provided $2.25 million for a pilot program to establish a career ladder for the retail industry — from sales associate through senior management. The model was created through a partnership with retail employers together with the NRF Foundation. It's important for workers to know that retail provides more than entry level jobs. It also provides a career path for advancement.

The second training initiative expands the capacity of community colleges and other education providers to offer relevant job training to workers. These initiatives were specifically designed to solicit the input of employers so that worker training and education prepares workers for real jobs in the real world. And community colleges were chosen 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. So far, the Department has awarded $250 million in grants throughout the nation to fund 142 education and training partnerships with community colleges.

The third initiative is especially important for regional economies and America's competitiveness. Over the last several years it has become clear that for economic development to be successful, it must be centered at the regional level and focus on talent development. This is important for retail employers, who need to attract and retain high quality employees who are able to move up the career ladder.

To address this challenge, the Department launched Workforce Innovation in Regional Economic Development, or WIRED. The WIRED initiative provides the seed capital to bring together all the key players at the local and regional level to develop an economic development strategy centered around talent and skills development. That's key because employers, including retail employers, are telling us that the availability of a skilled workforce is a critical factor in the decision to locate in a community.

In February 2006, the Department of Labor announced the first WIRED investment of $195 million in 13 regional economies. In January 2007, the Department added another 13 regions and an additional $65 million in WIRED investments. And recently, I announced the Third Generation of WIRED investments totaling another $65 million for 13 regions. So the Department's total investment to date is $326.3 million in 39 regions.

As you can see, training has been, and will continue to be, a key priority for the Department of Labor. But let me also update you on some important regulatory issues that I know you are concerned about.

With the help of many of you, the Department succeeded in clarifying the nation's outdated white-collar overtime regulations, which had not been updated since Elvis was a teenager. The ambiguity in government regulations led to the largest number of class action lawsuits under employment law. The Labor Department issued new rules in 2004 updating overtime rights for America's workers. Over 6.7 million workers have strengthened overtime protection rights. Employers and trial attorneys are that much poorer on this issue.

Balancing work and family life is another important regulatory issue for workers and employers. Earlier this year, the Department published the responses to a Request for Information (RFI) on what's working and what's not working on the Family and Medical Leave Act (FMLA). As you man know, the Act was passed in 1992 and regulations were issued in 2003. The Department at that time took a very expansive view in drafting regulations resulting in many court challenges. In 2002, the Supreme Court remanded several issues for the Department to consider. As you know, there are many proposals in Congress today to expand sick leave and push for paid leave.

A few weeks ago, the Department brought together stakeholders for a meeting regarding one of the issues raised by the RFI comments. In the positive spirit of that meeting, the Department hopes that everyone concerned with FMLA will continue to engage in these constructive, two-way conversations. Because we know that decreasing burdensome regulation of jobs, creates an environment for job creation.

Let me update you on another important regulatory issue that's happening right now as we speak — protecting worker's rights by enforcing transparency and accountability requirements for organized labor. Today, the public is demanding higher standards of transparency and accountability for all institutions — and unions are no exception. The Labor Department has an Office of Labor-Management Standards (OLMS) that is like the SEC to labor organizations. It is the only office in the entire federal government that performs audits devoted to protecting the dues of rank and file union members, and others who are required to pay union dues; protects union financial integrity through criminal investigations; and oversees the fairness of union elections.

In 2001, the agency had been so starved of resources for most of the 1990's that it was barely able to do its job. One third of all unions do not file on time. The number of compliance audits, which are reviews of local unions, had fallen by nearly 70 percent.

Since 2001, this Administration has attempted to restore the staffing and budget of OLMS so it can carry out its mission of protecting union members.

Let me note that the Labor Department does not regulate how labor organizations or leaders spend their financial assets and resources. But we do believe that rank and file members should know how their compulsory dues are being spent. That's why we improved disclosure on the annual financial report — to improve transparency.

The results, in terms of protecting union members, have been significant. Most union leaders are law-abiding. But since 2001, OLMS has brought cases resulting in 796 convictions for criminal offenses, such as embezzlement of union dues, and restitutions of more than $101 million.

Currently, as we speak, efforts are underway in Congress to cut the budget of this little enforcement agency that protects union rank and file members rights. The Senate gave the Department $943 million more that we requested for every enforcement agency in the U.S. Department of Labor, like OSHA, except OLMS, which it cut by $11 million.

And we hear there may also be an effort to put a rider on the Labor-HHS Appropriations Bill to keep the Department from implementing the new conflict-of-interest reporting forms for union officers and employees.

Those union financial reports can be accessed by union members and the public at www.unionreports.gov.

Finally, another issue that was defeated earlier this year, but which will continue to surface is the Employee Free Choice Act, otherwise known as Card Check.

Legislation introduced in the House and Senate would eliminate workers rights to a private ballot election. Currently, workers vote in secret ballots whether they want to become union members.

Under the Employee Free Choice Act, private ballot elections are eliminated. If a simple majority of workers sign cards agreeing to union representation, the union is automatically certified. Union organizers would pass cards around. Signing of these union cards will be done in plain sight of other people. A worker's right to a private ballot is a basic fundamental right in a free society. Watch for this — it will be back.

Among the missions of the Department of Labor is increasing the competitiveness of our workforce through job training and better education and protecting workers. We remain dedicated to these goals.

Let me close by saying that our country is undergoing many transformations, and it's important to ensure that government regulations, policies, and programs keep pace with these changes.

That's why the Department has taken on some of these key regulatory challenges, and worked hard to ensure that our training programs are relevant and prepare workers for real jobs in the real world.

Human capital is our most precious resource in the increasingly competitive global economy. And the retail industry is among the most dynamic.

America's economic strength lies in America's workforce, which is among the most innovative and productive in the world. America is a beacon of hope and opportunity throughout the world and we shouldn't fear the worldwide economy. America's greatest strengths lie in our democratic institutions, respect for the rule of law, transparency, accountability, and the most creative and compassionate workforce in the world. These unique qualities comprise our country's strongest competitive advantage.

So looking ahead, there is great reason for optimism as our country faces new challenges and opportunities. By continuing to emphasize education and job training, we can empower workers and increase access to opportunity. By working together, we can ensure that our nation's job creating, free enterprise system remains the envy of the world, and increases the standard of living and quality of life for our countries residents.

Thank you, and have a great conference.

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