U.S. Department of Labor

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Remarks to the World Economic Forum
Washington, D.C.
April 4, 2001

Thanks for that warm welcome; it’s a privilege to address this distinguished body.

I’m very pleased to have this opportunity to share my vision for the Department of Labor in this new century, and how I expect the Department to help employers, employees, unions and other groups meet the economic challenges of the New Economy.

I think it is particularly appropriate for me to address the World Economic Forum about new economic challenges. For thirty years, this organization has been bringing together leaders in business, government and civil society to discuss the great economic issues of the day.

One of those challenging issues was trade. Back in 1982, the World Economic Forum organized a special Informal Gathering of Trade Ministers from seventeen countries. This meeting ultimately led to the Uruguay Round, which has helped make world trade freer and fairer, thereby creating prosperity for all.

There is still much work ahead in making international trade more free. In fact, as Secretary of Labor, I am working on regulations to comply with NAFTA’s requirement that Mexican truckers be allowed to operate in our country.

My Department also administers a number of important programs that help American workers when their industries or jobs are impacted by foreign trade. As such, I think of our Department as a crucial partner in advancing the international trade agenda, by handling some of the political, as well as personal, implications of trade policy.

A second economic challenge that the World Economic Forum has been in the forefront on is the explosive growth of technology. Recognizing the vast significance of this development, seven years ago the World Economic Forum held a Summit in Palo Alto that brought cutting-edge technology research and knowledge-oriented input into the activities of the foundation.

The two developments I have mentioned—the spread of free trade and the growth of technology—have reshaped the global economy. We may face some difficult economic times in the years ahead, but these two economic developments have formed a solid foundation for future growth and prosperity. However, the world economy is facing a new challenge, one that we at the Department of Labor are working to address, and one that will require the vision and intellectual capital of the World Economic Forum. Our new challenge is a scarcity in the one fundamental resource that drives every economy in the world: the workforce.

The 21^st century economy presents unprecedented opportunities: brand-new, well-paying, exciting jobs, in safe working conditions, with limitless potential for advancement. The problem is: employers can’t find workers qualified to fill them.

At the same time, thousands, if not millions, of workers desperately want to fill those jobs, but they lack the training and new skills needed to do so.

This issue will only become more acute in the future. In the coming years, the generation we call the Baby Boomers will start heading into retirement. The workforce will shrink considerably, as the number of people drawing on federal entitlement programs like Social Security and Medicare reaches record heights.

If the coming worker shortage in the next several years is not addressed, the federal budget, the economy, and working taxpayers will pay a huge price. Our economy will no longer be able to sustain current levels of services. We will have trouble meeting our obligations to the large waves of retirees. And taxpayers may face unsustainable increases in their tax burdens, just to keep our entitlement programs solvent.

Fortunately, we still have time to meet this challenge. But that will require foresight and cooperation among a broad range of interests, many of which are not used to working on the same side of most issues. However, that cooperation is already beginning to form, as old antagonisms give way to the recognition of mutual self-interest. For example, agricultural employers and farm-workers unions—historically at odds over issues of pay and working conditions—are joining together to deal realistically with the long-term labor shortages facing our rural economy.

I believe that the Department of Labor must address these critical workforce issues. And, as Secretary of Labor, I want us to do something that doesn’t come very naturally to any large organization: I want us to think outside the box. I want us to solve problems, not just study them. And I want us to be able to say, at the end of the day, that we really helped people, instead of just referring to programs and dollars spent. Interestingly, after I was nominated I learned that the Departments of Labor and Commerce used to be one single agency, created by President Theodore Roosevelt in 1903. He believed that America needed to pursue the interests of commerce and labor simultaneously—and that what was good for one ought to be good for the other.

Ultimately, that agency was divided into two separate Cabinet posts—Commerce and Labor—so that different people would be responsible for each of those interests. That was probably wise in most respects. But it also allowed us to forget how much these two interests are, in fact, closely related.

There’s no question in my mind that the Department of Labor needs to vigorously champion the rights and interests of workers—to ensure their safety and health, their right to organize, their right to be free from discrimination of any kind.

But at the same time, I believe we can rediscover and renew the Labor Department’s crucial role in promoting economic growth, by developing America’s 21^st century workforce.

For every American who’s ready and willing to work, there’s a job out there that will enable them to lead productive and fulfilling lives. The Department of Labor, working with other agencies and the private sector, ought to help them prepare for that job and fill it.

As more people head into retirement and the need for workers grows, the Department must lead the way in developing more flexible, innovative rules that allow workers and their employers to custom-design work arrangements around every individual need.

In the New Economy, lifelong training and learning are becoming the norm, and employers are increasingly responding to this need by greater investments in their human capital, their skilled workers.

Last year, American businesses spent a staggering 300 billion dollars—I repeat, 300 BILLION dollars—on training and education of their employees. That’s more than the combined budgets of all of the public and private institutions of higher education in the nation.

In the future, I expect that commitment will only grow, and we must do all we can to ensure that those resources are complemented by carefully crafted government efforts.

Far too often, I’m afraid, rather than finding new, innovative solutions for employers and their employees, the government has relied on antiquated methods for delivering workforce training and job placement services. I am committed to creating a new Department of Labor for the 21^st century—a department that is focused on the whole workforce, that is responsive to the real challenges that American workers and employers face in our globalized economy.

We have already “broken ground” on this project. Just this week, I opened the Office of the 21^st Century Workforce within the Department of Labor. During the years ahead, this office will be charged with shoring up the skills gap, finding answers for future labor shortages, and making the workplace of the 21^st century more flexible and connected to the way people really work today.

On June 20^th, the Department of Labor will host a Summit on the 21^st Century Workforce here in Washington. As we say in Kentucky, “y’all come.”

We want to hear from leaders in economics, education, business and labor. This summit will set the stage for how the Department of Labor will act on behalf of our workforce.

While reaching out for advice, the Department of Labor will also look within the federal government for new opportunities to improve our workforce’s skills. The federal government is the largest employer in the country, yet it doesn’t function even remotely like a business.

For all the talk about “reinventing government,” very little has been reinvented, and the pace of change in the economy has far outstripped the pace of reform in Washington. Now is the time for real change, changes that anticipate the needs of our workforce, rather than merely react to them.

Federal agencies rarely share ideas on how to successfully administer their employees and work together to improve our economy. That too must change.

Take, for instance, the Department of Defense—the largest training organization in the world. Last year, the Armed Forces spent a combined total of 14 billion dollars on training millions of members of the Armed Forces, providing a stunning 175,000 “student years” of training.

There may be significant ways for the Departments of Defense and Labor to work together to help separating service-people transition into private-sector jobs that match the job skills they developed while in uniform.

Many of you may know that the Department of Labor already works closely with the Department of Justice on immigration issues, processing the vitally important H1-B visas that furnish skilled workers to the high-tech industry. We may need to weigh immigration reforms that allow more foreign-born workers to enter the country as needed.

And while more skilled immigration may help us in the short-term, President Bush’s educational reforms—insisting on higher standards and greater accountability—will help America’s children to acquire the skills they will need for the long-term.

One of the most exciting aspects of the challenges facing the 21^st Century workforce is that we have a greater incentive than ever before to bring more people into the workforce.

Professor Michael Porter, of the Harvard Business School, has a new program, the “Initiative in Competitive Inner Cities” (ICIC), to draw on the human resources of the inner city—not treating inner-city residents as a project to be helped out, but as an asset to be developed and encouraged.

The next frontier in enlarging the workforce to meet growing demand? People with disabilities.

President Bush has committed a billion dollars to his New Freedom Initiative, in order to ensure that all Americans with disabilities have a chance to pursue the American dream—to use more of their own skills and make more of their own choices.

There are nearly 2,500 companies working to bring assistive technologies to Americans with disabilities. Many employers, however, can’t afford the capital investments necessary to hire disabled workers. President Bush’s New Freedom Initiative will help bridge the gap between disabled workers and employers who want to hire them.

All of these will help us in our project—to close the skills gap, to stop the shrinking of the labor force, and to create a dynamic, flexible new workplace that is responsive to the needs of modern workers in a modern economy.

The World Economic Forum has always stood for the principle that truth, if it is perceived early and acted upon decisively, can yield great benefits for all.

The truth I set before you today is that America—in fact, the world—has a new challenge to meet: to invest in and develop the most precious capital resource of all—our workers. Thank you.

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