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Remarks Prepared for Delivery by
U.S. Secretary of
Labor Elaine L. Chao
G-8 Labor and Employment Ministers
Conference
Stuttgart, Germany
December 15,
2003
“Globalization and Structural Change”
Thank you Minister Clement.
I am pleased to speak today on Globalization and Structural Change, a
topic that is important to developed and developing nations alike. How we deal
with change and how we prepare workers for change is one of the key challenges
of the 21st century.
That’s why, when I became U.S. Secretary of Labor, one of my first
actions was to create an office of the 21st century workforce.
President George W. Bush also appointed a Council on the 21st
Century Workforce—comprised of leaders from business, academia, nonprofits
and labor—to make recommendations on how our workforce can remain safe,
skilled and competitive in a rapidly changing world economy.
The United States believes that flexible labor markets have
been—and will remain—critical to raising the standard of living for
our workers and keeping our economy strong. Flexible labor markets that react
quickly to change are the reason why the United States’ economy is so
resilient. It’s the reason why we have been able to offer unprecedented
opportunities to so many, especially women, minorities, the disabled and
immigrants. And it’s the reason why last year approximately 50 million
Americans left their jobs—either voluntarily or involuntarily out of a
workforce of 146 million—and approximately 50 million found new jobs.
I would like to commend Minister Clement for your government’s
reform efforts here in Germany. Modernizing your employment services and
benefits will help workers adapt to change more quickly and learn the new
skills that are in demand today. We have had some success in the United States
in modernizing our employment services system, which I will touch on later on
in these remarks.
Before I do, I want to comment on the upcoming G-8 Summit that the
United States will host next year. All of us have a stake in increasing
international economic growth, so we can create more jobs and improve the
standard of living for workers. Since the relationship between economic growth
and employment growth varies across countries, it is beneficial to share our
experiences. I look forward to this exchange later on in this discussion.
As all of you know, the United States supports free and fair trade as a
foundation for sustainable economic growth. But we must ensure that the
benefits of trade are widely shared. Internationally recognized core labor
standards can help developing countries achieve this goal. Our governments can
help developing countries strengthen the rule of law and enhance the capacity
of their Labor Ministries. In fact, after this meeting I will be traveling to
West Africa, where I will launch cooperative projects with governments there to
combat some of the worst forms of child labor and to launch workplace education
and prevention programs related to the HIV/AIDS pandemic.
The importance of being proactive in addressing these and other
challenges of the 21st century workforce cannot be overestimated.
Recently, I added a new goal to the Labor Department’s Strategic Plan. In
addition to our emphasis on a prepared work force, a secure workforce and safe
workplaces, we have added “a competitive workforce” to our
priorities. That means doing everything possible to help workers gain the
skills and training they need to prepare for change.
President George W. Bush is deeply committed to the task of helping
workers gain the skills they need to find new jobs. He has spoken out
forcefully on this issue many times and strongly supports Labor Department
efforts to reform the public workforce training system in the United States. We
are transforming this system into a demand-driven, proactive one that
identifies where new jobs are being created, which skills are in demand and
then provides workers with access to training programs to acquire these
skills.
A key part of this effort is working closely with private sector
employers experiencing job growth, so we can connect workers with these
opportunities. In each phase of our country's economic history, different
growth industries have led the way. This decade's prospective job-growth
leaders include biotechnology, which is forecast to add 3 million jobs; health
services, which is forecast to add 1.3 million jobs; and high-tech
manufacturing, which is projected to grow by more than 800,000 jobs. Our goal
is to create a job training system that is responsive to changing economic
conditions, especially at the local level, so we can successfully match
available job candidates with available jobs. To do this, the Labor Department
is building collaborations between employers, business associations and
training providers—including community colleges, the skilled trades
programs sponsored by organized labor and others.
In addition, the United States believes that workers deserve help in
managing the uncertainties that accompany change. That’s why we have
developed a special program, called Trade Adjustment Assistance, which provides
workers dislocated by trade with up to 104 weeks of income support, job
training, supportive services such as childcare and transportation expenses to
workers adversely impacted by trade. In addition, for workers over 50, if their
new jobs pay below his or her previous salary, the government will pay up to
50% of the wage differential. This is one of the many job-training programs
administered through the Labor Department’s nationwide network of more
than 3,800 One-Stop Career Centers.
At these centers, workers can apply for unemployment insurance benefits,
receive skills assessment assistance, access job training or retraining
programs, prepare résumés, interview with employers who are
hiring and many more services. I was delighted to visit an employment center
offering similar services in London earlier this year at the invitation of Sir
Andrew Smith, who has visited some of our One-Stop Centers in the United
States. We appreciate Sir Andrew’s interest. Our two countries also
sponsored a joint conference on employment opportunities for disabled
individuals this past Spring.
As a result of President George W. Bush’s leadership on this and
other economic development issues, we are seeing signs of positive growth in
the U.S. economy. I am pleased to report that recent indicators note the
strongest overall growth rates in the U.S. economy in 20 years! This is good
news not only for the U.S. but for all of our trading partners as well.
Real U.S. Gross Domestic Product increased at an annual rate of 8.2
percent in the third quarter of 2003—a significant increase over the
second quarter.
Productivity gains—which are essential to improving workers
standard of living—jumped again in the third quarter of 2003 to 9.4
percent. Inflation and interest rates are at a 40-year low. Productivity gains
cannot increase indefinitely and will result in job creation. Productivity
gains also allow for real increases in wages and standard of living.
President Bush’s jobs and growth plan lowered the rate of taxation
on capital, so nonresidential business investment surged at an annual rate of
14 percent in the third quarter.
This is good news for workers because average wages are
increasing and the U.S. economy is creating jobs.
The U.S. Labor Department’s Bureau of Labor Statistics keeps track
of employment data in the U.S and reported that the U.S. unemployment rate fell
to 5.9 percent in November and the economy gained 57,000 jobs. This represents
four straight months of job growth
totaling 328,000 jobs—the most robust four-month record in three years.
Other key job measures show even greater gains; regardless of the survey. The
Household Survey, for example, shows even larger increases in employment of
approximately one half million new jobs in the last month.
Total employment is now higher than at the start of the
recession.
But as President Bush has said many times—we are optimistic, but
not complacent. More needs to be done so that every American who wants a job
can find one. Employment levels are traditionally a lagging indicator and have
yet to fully rebound. That’s why President Bush has proposed specific
steps to build employer confidence and create momentum to hire new workers.
The President’s Six-Point Plan for the Economy will allow employers
and workers to plan for the future by making tax relief permanent. It will also
free up more capital for job creation by curbing abusive lawsuits, lowering
health care costs through affordable health care options and pushing additional
regulatory reform.
A survey of the U.S. labor market would not be complete without noting
some of the major forces that are influencing the workplace today.
First, our workforce is being shaped by changing demographic patterns,
resulting in a greater diversity of age, gender and ethnicity. In the United
States, as in most of your own countries, the workforce is also aging as baby
boomers near retirement age. Women, I am pleased to note, now comprise more
than half of the U.S. workforce. That’s why my government is exploring
ways of encouraging more flexible workplace policies that allow
workers—especially women with children—to balance work and family
needs.
A second factor influencing the workplace is the widespread use of
technology, which has created new industries, new occupations and
revolutionized the way we work. Technology permits non-traditional work
arrangements such as telecommuting, flexible work hours, temporary contracts
and self-employment. This is especially important for accommodating older
workers who wish to remain in the workforce, but prefer flexible work
arrangements. And it has enabled an unprecedented number of Americans to start
their own small businesses, which are a powerful engine of job creation in the
United States.
Third, globalization has significant implications for workers and labor
markets in all of our countries. That’s why the United States is committed
to furthering free and fair trade in the World Trade Organization and free and
fair trade agreements with our trading partners.
The globalization of trade also means that accountability and
transparency are more important than ever before. As we promote free trade, we
must also promote the institutions and values that support the free enterprise
system.
The free enterprise system is based upon trust. For free enterprise and
the institutions that support it to flourish, the public must have faith in the
accuracy and accountability of free market institutions, their social partners
and their leaders. That’s the U.S. government believes that the promotion
of accountability and transparency are crucial to promoting sustained economic
development that benefits everyone.
When accountability and transparency are compromised, workers
suffer—they can lose jobs, benefits and pensions. So it is up to all of us
to work even harder to promote structures that support transparency and
accountability. I am proud to note that the Labor Department played a role in
crafting President Bush’s corporate governance reforms that foster
transparency and accountability in U.S. financial institutions. These reforms
were enacted into law last year.
Let me conclude by noting that a safe, skilled and secure workforce is
the key to economic development and growth. We are living in a time of great
opportunities and challenges for our economies, for our workers, and for us as
Labor Ministers. I look forward to hearing your views on the best ways to meet
these challenges and to help workers meet the challenges of the 21st
century.
Thank you.
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