Statement of Alexis M. Herman
Secretary of Labor

Mr. Chairman, and distinguished Members of the Subcommittee, thank you for the opportunity to appear today to present the Department of Labor's Fiscal Year 2001 Budget. I am particularly pleased to join my colleagues, Secretary Riley and Secretary Shalala, to discuss key Administration priorities.

Mr. Chairman, I am especially pleased to be here with you today because the proposals in DOL's Fiscal Year 2001 budget request are exciting and innovative and build on seven years of solid accomplishments.

The President's request for FY 2001 reflects the Department's goal that all workers have the opportunity to find and hold jobs, with safe and healthful working conditions, good wages, secure pensions and health benefits; and that they have opportunities to improve their skills over their lifetime.

To meet this goal, the overall budget for the Department in FY 2001 provides a total of $39.8 billion in budget authority. DOL's request for discretionary programs is $12.4 billion, $1.2 billion above the FY 2000 level. Since 1993, President Clinton has committed to investing in today's workers in order to keep America strong in the years ahead. This budget is faithful to that commitment.

President Clinton, in his State of the Union Message, spoke of the extraordinary state of our economy - the more than 20 million jobs created over the past 7 years, the lowest unemployment rate in 30 years, and low inflation. America's workers are more productive, and real wages have increased as well.

The President also recognized that our prosperity is not universally shared among all Americans. The President called for a 21^st Century revolution of opportunity, responsibility, and community. This vision includes steps to reward work, strengthen families, and expand opportunities to all our citizens. DOL has an important role to play in meeting those challenges.

I believe that the Department's programs are part of those all-important investments in the workforce and workplace of the future. Our bottom line is about helping people obtain skills, jobs and opportunity. It is about ensuring that, as our Nation moves forward, no one is left behind. We acknowledge that the Government cannot accomplish this alone; we need to enter into appropriate partnerships with others who share our commitment for a better America.

HELPING WORKING FAMILIES AT A TIME OF UNPRECEDENTED PROSPERITY

The dynamic forces of technology and globalization, while providing prosperity for many, continue to change the workplace in ways that may not benefit some Americans. Those who work hard should be able to realize the American dream for their families. DOL's budget takes account of the dramatic changes that are sweeping through the Nation and the world economy, and proposes significant, realistic policies and programs to help America's working families manage change and succeed in this new century.

Today we face two major workforce challenges: one new and one old. Many businesses report difficulty in filling vacancies. At the same time, millions of Americans, including many youth, dislocated workers and people with disabilities, are having a difficult time getting jobs, even during this period of unprecedented economic expansion. As I have often said, we do not have a worker shortage, but a skills shortage. Through the initiatives in the FY 2001 Budget Request, we can help provide the business community with the skilled workforce it needs while bringing prosperity to individuals and communities that have been left behind.

THREE STRATEGIC GOALS

DOL's FY2001 Budget Request provides the resources we need to continue to make substantial progress toward DOL's three strategic goals: a prepared workforce, a secure workforce, and quality workplaces. I will first briefly describe our three goals and then describe the initiatives and programs in the FY 2001 Budget Request that will help us to achieve these goals.

A Prepared Workforce -- DOL's budget request reflects one of the President's top priorities: investing in education and training to help ensure that every American has the education and the skills to succeed in the increasingly competitive global economy. Among other things, we must help young people make a successful transition to the world of work and family responsibility. Because a changing economy often requires our Nation's workers - of all ages - to acquire new skills, we must also serve dislocated workers in need of assistance as the labor market changes.

A Secure Workforce -- We must ensure that all Americans are economically secure both while in the workforce and after they retire. Employment-based pension and health benefits are the foundation of family security. Yet only about one-half of all full-time workers in the private sector have pension coverage today. Three-quarters of the workers in small businesses are not covered by a pension plan at all. Increasing access to our private pension system and assuring that private pensions, health care, and other employee benefits are secure and properly administered are some of DOL's most critical priorities addressed in this budget.

Quality Workplaces -- My third goal is to help guarantee every working American a safe and healthful workplace with equal opportunity for all. I believe tough enforcement is necessary when an employer's practices threaten workers' safety and health, discriminate on the basis of gender, race, religion, color, national origin, veterans' status, or disability, endanger children, or deprive workers of fair wages. DOL's ultimate goal, however, is compliance with employment laws. There must be an appropriate balance of fair and consistent enforcement, cooperative partnerships, and compliance assistance and training. Within the context of our global economy, I am also firmly committed to improving workplaces internationally, such as by improving implementation of core labor standards internationally and by eliminating abusive child labor practices abroad.

We must ensure that every American has the skills, the education and the training to be ready for the challenges and opportunities of the 21^st century. The funds in DOL's budget will support programs to provide skills to young Americans, to work toward the goal of Universal Reemployment, and to reach out to untapped pools of workers, such as homeless veterans and Americans with disabilities, and bring them into the mainstream of our economy.

The FY 2001 Budget Request puts a special focus on helping young people gain the skills they need to start up the career ladder. Even in today's booming economy, in some areas, unemployment among young people reaches 30 percent or more, and that is simply unacceptable. We cannot afford to lose even one of these young people. There has never been a better time to invest in workforce development initiatives. That is why we have launched our Youth Opportunity Movement to give young people skills, jobs and hope.

Youth Opportunity Movement

I am proposing several programs under the Youth Opportunity Movement umbrella to address the opportunity gaps and reach untapped labor markets in order to advance the goal to promote a prepared workforce.

I am very pleased that President Clinton helped launch our Youth Opportunity Movement as part of his New Markets tour last July. This is the most intensive effort to reach young people in our Department's history, and it is no secret that it is a personal priority of mine. Our Labor Day 1999 report entitled "Future Work: Trends and Challenges for Work in the 21^st Century" points out that there are almost 11 million young people who are not in school and have a high school diploma or less. The four million high school dropouts are at a particular risk of being permanently disconnected and disenfranchised from our society. There are warning signs when this is about to happen -- the absence of supportive and caring individuals in their lives; low academic success which often leads to diminished self-esteem and leaving school; use and abuse of drugs and alcohol; out-of-wedlock births; and contact with the criminal justice system.

Youth Opportunity Grants

The Department's FY 2001 budget includes $375 million for Youth Opportunity Grants, an increase of $125 million above FY 2000. This program is intended to provide comprehensive, longer term intervention, primarily in the lives of out-of-school youth living in inner cities and high poverty areas, to help them graduate from high school, get jobs, and progress in the workforce. On February 19, the President announced the first round of grants to 36 communities across the country -- from Philadelphia to the Pine Ridge Indian Reservation. The FY 2001 request includes $250 million to provide for the third year of funding of these five-year grants. An additional $125 million is requested in FY 2001 to fund the first year of 12 to 15 new competitive grants to high poverty areas. The program will serve an estimated 85,000 young people next year. These grants will focus on raising the high school graduation rates and long-term employment prospects of young people living in these poor areas.

Responsible Reintegration for Young Offenders

As you know, we have shockingly high rates of incarceration in our Nation today -- and many of those in jail are young people. Too many out-of-work young people get into trouble and wind up in jail, and that is a tragic waste. We need to provide positive alternatives and second chances.

That is why our budget includes $75 million to bring young offenders into the workplace through job training, placement, and support services, and by creating new partnerships between the criminal justice system and our workforce development system. When we get young people out of trouble and into jobs, we are not just helping individuals, we are strengthening the future of our communities. Each year, approximately 500,000 people leave prison. We must do more than lock people in jail. We must lead them into hope for the future.

This initiative will build on our experience with the Youth Offenders projects begun under your leadership, Mr. Chairman. This large scale Workforce Investment Act (WIA) Pilot and Demonstration initiative will link offenders under age 35 with essential services that can help make the difference in their choices in the future, such as education, training, job placement, drug counseling, and mentoring, which are the primary tools for reintegrating this population into the mainstream economy. Through local competitive grants, this program would establish partnerships between the criminal justice system and local workforce investment systems, and will complement a related program in the Department of Justice. An estimated 19,000 offenders will be served by this initiative.

Safe Schools / Healthy Students

When we think about the problems young people have today, we also think of the tragic outbreaks of school violence that have shocked the Nation. We must ask what we can do to reduce violence and drug abuse, and help move young people in the right direction.

One of the Administration's responses to this challenge is the Safe Schools / Healthy Students Initiative, begun in FY 1999 by the Departments of Justice, Education, and Health and Human Services. DOL's budget for FY 2001 includes $40 million to enable DOL to join this partnership in supporting community-wide programs to prevent youth violence and drug abuse. With DOL's participation, the activities for the next round of grants can be expanded to provide services to out-of-school youth, including connections among high schools, post-secondary schools, alternative schools, and work-based learning programs, in an effort to reduce violent behaviors.

The White House Council on Youth Violence -- of which I am a member -- will play an important role in coordinating both the Safe Schools / Healthy Students and young offenders initiatives.

Job Corps

The Job Corps continues to be America's biggest and most successful residential job training program for at-risk youth. The Job Corps provides intensive skills training and academic and social education for these youth. I am requesting $1.4 billion for the Job Corps in FY 2001 to allow us to serve more than 73,000 young people at 122 centers in almost every State. This request includes a net increase of $35 million above FY 2000 for the Job Corps to support efforts to attract and retain top-quality staff, and for the operating costs of new centers.

Universal Reemployment

For all our focus on young people, they are not and cannot be our only concern. Many other Americans need help gaining the skills demanded by today's economy. Sometimes the challenge is not first-time employment but reemployment for those who have lost jobs and need new skills. Two years ago the President set an ambitious goal for our Nation called "Universal Reemployment." We are on the path to meet the goal of providing assistance to all dislocated workers who lose a job through no fault of their own. The initiative will: provide all dislocated workers who want and need assistance the resources to train for or find new jobs; expand and improve the quality of employment services now available to all job seekers and enhance services for individuals receiving unemployment compensation; and ensure access to the One Stop System, either in person or electronically, to help workers find jobs and training.

The Department's FY 2001 request includes $1.975 billion, an increase of $275 million above

FY 2000, for Universal Reemployment. Of this amount, $1.8 billion, an increase of $181 million, will support dislocated worker retraining and adjustment assistance activities under Workforce Investment Act. This initiative will provide State formula grants, as well as a national emergency grant account, to help 984,000 laid off workers return to work quickly. These resources are part of a phased in effort to assist all dislocated workers in need of these services.

We are requesting $154 million for new and better ways of providing employment and related information through One Stop Career Centers and America's Labor Market Information System (ALMIS) -- an increase of $44 million above FY 2000. ALMIS services include America's Job Bank which now lists about 1.5 million jobs, and America's Talent Bank, which lists more than 500,000 resumes. Also included in DOL's request for the Universal Reemployment initiative is an additional $50 million for the One Stop Employment Service for reemployment services grants that will provide targeted, staff-assisted services to unemployment insurance claimants identified as having a high probability of exhausting their benefits. This will speed their reentry into employment and reduce benefit duration. Finally, the request includes $10 million to implement AgNet nationally, a system that will match agricultural workers with employers.

We are also concerned about the skill levels of currently employed workers. DOL's budget proposes $30 million for a new program of employment and training assistance to incumbent workers under WIA Pilot and Demonstration authority. This effort is intended primarily to address the major job losses in the manufacturing industry where one half million jobs have been lost since March, 1998. Complementing the activities under the Universal Reemployment proposal, this initiative will boost skills and wages of non-management U.S. workers through competitive grants to States to train and upgrade the skills of about 20,000 incumbent workers and, through local partnerships, to help firms with training in order to prevent displacements.

Fathers Work/Families Win

The Department's budget includes $255 million for Fathers Work / Families Win, a new two-part initiative that builds on the Welfare-to-Work program. Fathers Work / Families Win promotes responsible fatherhood and supports working families.

We have all heard about deadbeat dads. Well, Fathers Work is about upbeat dads. It will provide jobs for noncustodial parents -- mostly fathers -- who owe child support. Most of these fathers are young and unemployed. Most want to meet their obligations, and Fathers Work will help make that possible. You cannot pay child support if you do not have a job.

A complementary part of this initiative, Families Win, will help low-income parents who are struggling to make ends meet by helping them find work, obtain better access to community services and upgrade their skills so they can move up career ladders. Together, these two initiatives are an important, exciting new way to put America to work. The strong working relationship we have forged with the Department of Health and Human Services in administering the job training, Welfare-to-Work, and Temporary Assistance to Needy Families programs will serve our Fathers Work / Families Win initiative. For example, our grants will go only to entities that have established relationships with child support enforcement agencies, reinforcing linkages that have been developed under Welfare-to-Work.

These competitive grants will be awarded to State and local Workforce Investment Boards, enabling States and local communities to complement welfare reform efforts by focusing on work connections, post-employment work support activities, and skills training. The initiative helps families with incomes up to 200 percent of the poverty level.

Disability Initiatives

We are also reaching out to another untapped pool of talent. Last December, the President signed the bipartisan Work Incentives Improvement Act, which makes it possible for millions of people with disabilities to take jobs without losing their health care. At a time when our economy is booming, 26 percent of persons with a severe disability are working, as compared to over 80 percent of those persons without a disability. We cannot afford to waste the talents of millions of Americans.

DOL's budget includes funds to establish an Office of Disability Policy, Evaluation, and Technical Assistance headed by an Assistant Secretary. This new office will provide leadership within the Department of Labor in helping people with disabilities enter, re-enter, and remain in the workforce. With the recent passage of the Work Incentives Improvement Act and the Workforce Investment Act, the stage is set to achieve real change in the unemployment rate of people with disabilities. In addition, DOL's budget continues the competitive grants enacted in FY 2000, totaling $20 million to be awarded each year by the Department to partnerships of organizations to provide incentives for broader systems -- building on efforts to coordinate service delivery through, and linkages across, the One Stop Career Center system established by the Workforce Investment Act.

Homeless Veterans Programs

Homeless veterans represent another group with untapped promise. The Department's request for FY 2001 includes $15 million -- a 50% increase over the FY 2000 level -- to provide employment and training services to help about 15,000 homeless veterans obtain employment and progress toward self-sufficiency. We expect about 8,700 homeless veterans to find jobs as a result of the services we provide.

Economic Indicators

The Department is also requesting $20 million for the Bureau of Labor Statistics, $12 million of which is for new initiatives to improve major economic indicators, which are critical for monitoring the state of the economy and implementing Federal legislation. In its Producer Price Index program, BLS will extend coverage for the first time to the construction sector of the U.S. economy, and will continue its ongoing expansion of coverage in the service sector. This budget request includes $4.3 million to develop a new time-use survey that will provide nationally representative estimates of how Americans spend their time in an average week, weekday, and weekend. This will provide important and meaningful data in many areas such as the amount of time invested in the care of the young and the elderly in our society, variations between single and two-parent families, and time invested in skills acquisition.

The second strategic goal is a secure workforce. It is not enough simply to have a job. The goal of a secure workforce helps attain important values, such as dignity, family and community. A job should pay a decent wage, should provide health care benefits and should lead to a quality retirement.

You cannot have security, or strong families and strong communities, if people work hard and still cannot pay their bills. That is why the President has proposed to increase the minimum wage by one dollar an hour over the next two years. This increase would help more than ten million workers - almost 70 percent of them adults and 60 percent of them women. For a minimum wage worker, a $2000 raise is enough for a family of four to pay its rent for five months or to buy groceries for seven months. Raising the minimum wage is simple economic justice.

Too many workers are also insecure because they are afraid their jobs will be sent overseas. That is why the President again proposes legislation to consolidate, reform and extend the Trade Adjustment Assistance and NAFTA Transitional Adjustment Assistance programs for workers who lose their jobs due to trade. The proposals would expand eligibility for benefits to workers who lose jobs when production shifts abroad, increase training opportunities for trade-affected workers, link training and income support, and provide needed support services.

Pension, health and other employee benefits are vital to the economic security of hard-working Americans and their families. As Secretary of Labor, I have the responsibility for protecting these job-based benefits for more than 150 million Americans.

We work diligently to make sure workers feel secure in their promised benefits. We make certain that the assets held by pension and health plans are secure and available to pay promised benefits. The Department operates a nationwide program of educational outreach and technical assistance that serves to protect the rights of workers and their families entitled to benefits under their job-based benefit plans. We provide broad-based outreach to employers, especially small employers, to assist them with their questions about the plans they sponsor for their employees and to encourage those employers who do not sponsor a plan to consider setting one up. The Department also recognizes the importance of partnerships - we work with the employee benefits community to find innovative solutions that enhance our nation's system of employee benefits.

That is why our budget request of $108 million for the Pension and Welfare Benefits Administration includes additional resources to expand our efforts to provide protection to the health care and pensions of workers and their families. These new protections will include implementing a new program (the Rapid ERISA Action Compliance Team) to better protect the rights and benefits of American workers and their families if their employer faces financial hardship and their pension and health benefits are in jeopardy. In addition, the budget request will expand the Department's Health Benefits Education Campaign and enhance our customer service efforts by developing new publications, multimedia educational products and the creation of a toll-free interactive system to provide individuals with maximum direct access to the customer service staff trained to answer their health care and pension related questions. These initiatives will build on our ongoing efforts and allow us to respond to the increasing demand from workers and their families for assistance - last year we responded to over 153,000 inquiries from workers and their families and obtained benefit recoveries of over 62 million dollars.

The Pension Benefit Guaranty Corporation (PBGC) also helps achieve the goal of a secure workforce by guaranteeing pension benefits for 42 million workers and retirees in private-sector defined benefit plans. The budget request provides increases for enhanced computer security and to speed final benefit determinations.

Our third strategic goal is quality workplaces. By quality workplaces, we mean those that reflect such basic values as health, safety and fair play. Globalization means we must be concerned about the quality of workplaces overseas as well as at home. That is why the President has challenged us to put a human face on the global economy.

International Child Labor

According to the International Labor Organization, an estimated 250 million children between the ages of 5 and 14 are working in developing countries, 120 million of them full time, and tens of millions under abusive or dangerous conditions. We are committed to improving the lives of children both at home and abroad by opposing abusive child labor wherever it exists and by providing the necessary resources for its elimination. Building on our past funding of the ILO's international child labor program, and the recent ILO convention on banning the worst forms of child labor that was unanimously approved by the U. S. Senate in November and signed by the President in December, the Administration proposes $100 million to support international efforts to eliminate abusive child labor. These funds would not only permit us to increase the global efforts to remove children from abusive and dangerous conditions, but would also allow us to increase our efforts to support the educational infrastructure in areas where oppressive child labor is a pervasive and systemic problem. Education, not hard labor provides children with real opportunities and hope for a better future. I would like to thank Senator Harkin for his impressive leadership on this issue over the past several years.

International Labor Standards

Additionally, our budget includes $40 million for international core labor standards initiatives. The Department proposes to expand the efforts begun last year to achieve internationally-recognized core labor standards, and to build social safety nets, so American workers can be more confident that we are building a global economy with the "human face" that President Clinton has called for. This should be a race to the top - not to the bottom. In all these ways, we are working to make globalization empower workers and improve their lives, not accept a lowering of standards at a time when so much progress is possible.

When we consider quality in the international workplace, we must also consider the terrible harm being done by HIV/AIDS. When I was in Africa last year, I saw that AIDS is not only a vast human tragedy but a major economic disaster. When workers die, their skills and experience die with them. Production is down in many countries. This disease threatens not only development and progress in Africa but peace and stability.

That is why our budget includes $10 million as part of a larger, government-wide Global HIV/AIDS Initiative that will work with African leaders to use the workplace as a forum for providing health education programs to prevent the spread of AIDS. The workplace has a great, potential for providing millions of workers with information that can literally save their lives.

Domestic Child Labor

To continue our commitment towards reducing the more than 200,000 workplace injuries that occur among young workers in America each year, I am requesting $13 million for the Department's domestic child labor activities, including $8 million to continue to help eliminate violations of domestic child labor laws, particularly in the agricultural sector, and $5 million for demonstration programs to provide alternatives to field work for migrant youth. This request includes additional funds to implement targeted enforcement tools, including "strike teams" in the agricultural and garment industries, and to enhance education and outreach efforts undertaken as part of the "Safe Work / Safe Kids" initiative.

Family Leave

Today, the Family and Medical Leave Act (FMLA) allows covered and eligible workers to take up to 12 weeks of job-protected, unpaid leave to care for a newborn or adopted child, attend to their own serious health needs, or care for a seriously ill parent, child, or spouse - making it less likely that employees will have to choose between work and family. The President has again proposed to expand the FMLA to reach workers in firms with 25 or more employees, extending coverage to 12 million more workers.

For lack of money and other reasons many workers are unable to take advantage of unpaid leave. The Department is requesting $20 million to fund competitive planning grants for States and other interested entities to explore ways to make parental leave and other forms of family leave more affordable and accessible for American workers. This initiative will help identify in more detail the workers in need of financial assistance to take parental/family leave and to develop and evaluate options to aid these workers.

Equal Pay

We cannot talk seriously about a quality workplace unless we also talk of equal pay for equal work. Today, the average woman who works full-time earns approximately 75 cents for each dollar that an average man earns. This gap, in part, is attributable to differing levels of experience, education and skills. However, even after accounting for these factors, a significant pay gap remains between men and women. When women are not fairly paid, their whole family suffers. We need to rid ourselves of this stubborn, lingering pay discrimination.

That is why the President has proposed an Equal Pay Initiative to expand opportunities for women and help end wage discrimination. His proposal includes $17 million for the Department to support initiatives on behalf of equal pay. The Equal Pay Initiative dedicates $10 million from the current H-1B nonimmigrant fee for DOL to train women in nontraditional occupations such as those in high-tech industries and also provides $7 million to help employers assess and improve their pay policies, to provide nontraditional apprenticeships, and to support public education efforts. The President supports the Paycheck Fairness Act, which would strengthen wage discrimination laws and provide for additional research, training, and public education efforts on this important subject.

Workplace Safety

Finally, safety and health are absolutely basic to a quality workplace. We are proud that for the sixth consecutive year, workplace injury rates have come down and are now at the lowest level since we began keeping records in the 1970s. But we can still do better. Even one workplace death is too many.

Our budget includes $668 million to promote health and safety for more than one hundred million workers through programs of the Occupational Safety and Health Administration and the Mine Safety and Health Administration. Through a combination of targeted enforcement, compliance assistance and partnerships, these agencies work hard to protect workers from illness, injury and needless death.

The Department's request includes a $44 million increase for OSHA which will enable OSHA to achieve better balance between its outreach activities, such as compliance assistance and training, and its enforcement activities, which in recent years have been targeted to high hazard worksites. The increase will improve our ability to provide expertise and services to both employers and employees.

Among OSHA's efforts to provide safe and healthful workplaces is its ergonomics rulemaking. Workers suffer roughly 600,000 musculoskeletal disorders each year. The proposed standard can protect 27 million workers from the risk of incurring such injuries and illnesses. I remain committed to completing the standard this year.

The Department is requesting an increase of $14.2 million for the Mine Safety and Health Administration's (MSHA's) programs to enhance protection of miners, by providing necessary training to miners and for better auditing of accident and injury reporting. Approximately $3.2 million of this increase will augment MSHA's enforcement activities in the metal/nonmetal industries. DOL's budget also includes a request for additional funds for the State grant program to provide training assistance to miners and mine operators.

Information Technology Initiative

The Department's FY 2001 budget establishes a permanent, centralized IT investment fund for DOL managed by the Chief Information Officer (CIO). In the past, DOL agencies have separately budgeted for and managed their own IT investments. While the investments met the immediate needs of the individual agency, a unified approach will provide more efficient and effective services.

For FY 2001, the Department's request includes $60 million to fund IT investments within three crosscutting areas: (1) Information Technology Architecture and Web Services; (2) Common Office Automation Implementation; and (3) Security-Critical Infrastructure Protection. These investments will enable the Department to implement a sound information technology investment strategy, and expand our Internet capacity for the elaws program which provides the public with additional access to information on labor laws.

CONCLUSION

These are some of the ways we will work in FY 2001 to achieve our Department's strategic goals. These are important, exciting initiatives, because they are not just numbers or words on paper -- they are about helping real people, with real talents to develop and real challenges to overcome.

I will be happy to answer to any questions you may have about the FY 2001 President's Budget for the Department of Labor.