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Remarks Prepared for Delivery by
U.S. Secretary of Labor Elaine L. Chao
“Workforce Empowerment Strategies for
the 21st Century”
Neil D. Levin Graduate
Institute
New York, New York
Friday, June 17, 2005
Thank you, Paul [Tagliabue]. I want to commend you for your leadership
as Chair of the Board of Directors of the Levin Institute. I'd like to introduce
my father, Dr. James S.C. Chao, who is here with me today. I would like to
recognize Dr. Joseph Jen, Undersecretary for Research, Education and Economics
at the Department of Agriculture. And I also want to recognize Christy Ferrer
and commend Governor [George] Pataki for his vision in establishing
this Institute to honor the memory of her beloved husband, Neil Levin.
The topic of this conference, the Global Talent Pool, is indeed timely. As
we embark on the 21st century, technology and political revolutions have allowed
more nations to pursue the benefits of open markets and free trade. Fostering
a skilled workforce has become a critical driver of growthas many of your
panelists have discussed.
As Secretary of Labor, the safety, skill level, retirement security and competitiveness
of the U.S. workforce are my prime concerns. So, I welcome the opportunity
to discuss the challenges in attracting, developing and employing the talent
necessary to foster innovation and growth.
Today, the world is much different than even a decade ago. Global competition
and information technology have increased both the rate and intensity of change.
The economic strategies of the past, which have tended to emphasize building
a competitive advantage in one specific area, are obsolete. A single, static
advantagesuch as cheap labor or competency in one sectoris no longer enough
to sustain growth. Successful economic strategies of the 21st century will
focus on the ability to constantly evolve and adapt
to change.
Throughout its history, that has been a singular strength of the American
experience. As one columnist has observed, Americans have always shown a willingness
to adapt to change, even when it is unpleasant.
When the United States was founded, for example, nearly our entire workforce
was employed in agriculture. Today, only about 2 percent of American workers
are in agriculture. Yet, America produces enough food to feed much of the world.
This positive correlation between change and increased productivity has been
a powerful historical advantage. And it is critical, not only to our success
as a nation, but to the higher incomes and standards of living that American
workers enjoy today.
To give you an idea of the dynamism and flexibility of the American economy,
consider this. Last year, 50 million Americans left their jobs and found new
jobs. That means about one-third of our entire workforce of 149 million persons
turned over. The fact that our society can generate this level and pace of
change is a tribute to America 's unique characteristics, which are part economic
and part culturally driven.
It is remarkable that despite high oil prices, the war on terrorism and the
economic weakness of many trading partners, the American economy continues
to strengthen and create new jobs. We've seen 24 straight months of job growth,
for a total of 3.5 million new jobs created since May 2003. Real wagesincluding
total compensationhave outpaced inflation. And the majority of new jobs being
created, according to the Bureau of Labor Statistics, pay above average wages.
In fact, it is interesting to note that real earningsadjusted for inflationhave
gone up since the recession that began in March of 2001. If the majority of
new jobs created were low wage, then real wages would be falling.
This Administration is committed to reducing the over taxation, excessive
regulation and abusive litigation that hamper growth, innovation and job creation.
The goal is not to imitate the go-go growth of the 1990s. That growth spurt,
built around a single industry, spiked quickly. When the bubble burst, it left
many people hurting who have still not recovered.
Instead, President Bush has favored economic policies that support steady,
consistent economic growth. As a result, today's unemployment rate of 5.1 percent
is lower than the average of the 1970s, 1980s and 1990s. In fact, the average
unemployment rate of the 1990s was 5.7 percent. And, more Americans are working
than ever before. And last year, the United States had the highest growth rate
of any major industrialized nationaveraging more than 4 percentthe best in
25 years. But the most telling facts are the long-term trends: population growth
is declining in old Europe at the same time that unemployment is rising. But
the United States is going in the opposite direction: employment continues
to outpace population growth.
A major factor is the favorable balance the United States has achieved between
worker protections and labor market flexibility. Preserving this balance is
critical to our long-term future. The longer a worker remains out of the workforce,
the more difficult it is for him or her to find a new job. That's especially
true today, given the rapid changes in technology. The balance and flexibility
our country has achieved means that displaced American workers can find new
jobs faster. About 12 percent of unemployed Americans remain jobless for a
year or longer. That's compared with 34 percent in France and 50 percent in
Germany, where incentives are skewed in the opposite direction.
There is still unease, however, in some sectors of the U.S. economy and the
American workforce. Many factors, especially outsourcing, contribute to this.
It may interest you to know that the number of U.S. jobs outsourced to foreign
countries is about several hundred thousand. But we can't talk about outsourcing
without talking about insourcing. So during this same time, between 22 to 27
million Americans work for foreign companies here in the United States or have
jobs that depend upon foreign trade.
The heart of the outsourcing debate, however, is not about numbers. It's about
people and their legitimate concerns. America is a compassionate nation. And
nowhere is this more apparent than in the generous assistance offered to workers
whose jobs have been displaced by trade. The government will provide the following
benefits for these dislocated workers:
- 104 weeks of income support;
- 104 weeks of job training;
- 104 weeks of assistance in paying for child
care and other support services including transportation, training related
tools and moving expenses;
- Help in paying 65% of qualified health insurance
premiums; and
- If a worker is over the age of 55 and they get a new job
that pays less than their old one, the government will pay 50% of the difference.
As compassionate as these assistance programs are, THE most important assistance
a displaced worker can receive is a solid pathway to a new career. That's why
this Administration has made job training a centerpiece of its pro-growth policies.
And that's why the Labor Department has proposed a comprehensive overhaul of
the $15 billion, federally funded job training system.
Everywhere I go, employers tell me they cannot find workers with the right
skills for the jobs they have available. The strategy behind this Administration's
workforce training reform, therefore, is to link employers, education institutions
and workers together in a powerful partnership. The goal is to help workers
gain the skills that are in demand by employers right now.
Many of the more than 3.5 million jobs that are currently unfilled require
higher education and upgraded skills. Advanced manufacturing is a good example.
Recently, I announced a multi-million dollar grant to help manufacturing workers
in Pennsylvania upgrade their skills so they can access the new high-tech jobs
being created in the plastics industry. Although U.S. manufacturing employment
has been steadily declining since the 1950s, U.S. manufacturing output has
actually increased because of productivity gains. So, it's critical to build
a pipeline of talent to access these, and other good paying, value-added jobs.
Increasingly, that's where the future lies for the U.S. workforce.
That's why education will continue to be one of the critical drivers of competitiveness.
The President recognized this when he introduced the most comprehensive education
reform in 50 years, No Child Left Behind. By requiring local schools
to be accountable and results-oriented, he jump-started efforts to close the
achievement gap in our society. But there is still more to be done. It is critical
to extend this achievement-oriented program to grades 9 through 12.
Beyond that, this Administration is working to streamline the process that
allows highly skilled foreign workers to fill jobs for which sufficient U.S.
candidates are not available. As you know, Congress has put caps on the number
of visas that can be issued in any given year for H-1B, or temporary high-skilled
workers, and H-2B, for temporary non-agricultural workers. In recent years,
Congress has attempted to adjust these caps to meet the demand for temporary
workers. But in some cases, the annual caps have been reached in the first
few months of the year. It is clear that the system is in need of a major overhaul.
Recognizing these challenges, the President has proposed reforming our current
system for admitting and employing temporary foreign workers.
The President's proposal is based on five basic principles:
- Controlling our borders;
- Matching a willing worker with a willing employer.
This means providing U.S. employers with the opportunity to fill job vacancies
through a streamlined, efficient and timely process when temporary foreign
workers are needed.
- Protecting the rights of legal immigrants;
- Promoting compassion to prevent
exploitation; and
- Providing incentives for temporary workers to return home.
The key to a competitive workforce in the 21st century lies in successfully
meeting all the challenges I have touched upon. They include:
- Maintaining a skilled and flexible workforce;
- Ensuring a strong education
system;
- Remaining open to talent from all over the world; and
- Reducing the regulatory
and economic barriers to risk taking and innovation, including tort reform.
But it is also important to recognize that, when it comes to leveraging the
global talent pool, economics is not the only force at work. Culture and political
factors are also important. Open societies that reward individual initiative,
foster transparency and accountability, and protect individual rights will
continue to have an advantage over those that do not. That is the most important
competitive advantage of the United States. When you combine our nation's
cultural bias in favor of individual achievement with freedom, transparent
institutions and the rule of law, the result is a powerful magnet for the world's
talent.
So, as we address the challenges of the 21st century, it's time to get rid
of the old paradigms about the workforce. For the last two centuries, the world
was viewed as a zero-sum universe in which some prospered at the expense of
others. The world of the 21st century, however, is a place where revolutionary
advances in technology have empowered more people than ever before. They can
reach beyond the confines of their birthplace and realize their dreams. This
is not a threat. It is an opportunity for more people to share in the prosperity
that was once available to only a few. And the best way to make this a reality
is to promote the elements necessary for this powerful expansion in human progress.
Those elements are freedomincluding free marketsthe rule of law and values
that affirm the dignity of the individual human person.
Thank you.
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