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Mr. Chairman and Distinguished Members of the Subcommittee:
Thank you for this opportunity to discuss the operations and programs of the
Department of Labor. I welcome the chance to engage in bipartisan dialogue on
the critical choices facing us in ensuring the best uses of limited public
resources.
Your review could not be more timely. The Department has already embarked
on an extensive examination and reorganization of our programs and operations.
We have made significant changes to ensure greater accountability and efficiency
in what we do and how we do it.
And we have made a commitment: to fund what works, to fix or eliminate what
does not, to improve workers' prospects and, with them, the prospects for our
country's future.
Background
However, we cannot examine the Department's programs and operations in a
vacuum -- they must be examined in the context of the larger forces that are
reshaping our economy. Five years from the turn of the century, America is
facing enormous challenges. We won the Cold War, but now struggle to find a
common purpose during peacetime. We hurtled into the age of information, but
now wonder whether the communications revolution will bring us together or only
deepen our divisions. We saw our fundamental principles -- democracy and free
markets -- affirmed throughout the world, yet we are anxious about the
resiliency of American values here at home.
The backdrop -- and indeed the root cause -- of these challenges and
anxieties can be located, I believe, in the fundamental shifts now taking place
in the global economy. We have entered an era in which, increasingly, skilled
and well-educated workers are the ones who can expect to capture a growing
portion of the economic gains. New technologies and global competition have
rewritten the rules that govern our economic futures. Now more than ever, what
you earn will depend on what you learn. For those with the right education and
skills, this new economy means rising wages and widening prospects. But the
wages of the rest of the workforce are stagnating or sinking, and their
opportunities are shrinking.
The operations and programs of the Department of Labor must be scrutinized
in the light of the central challenge our country now faces: to restore
America's middle class. If we are to restore our heritage of shared prosperity,
American workers need protection in the workplace and every bit of assistance we
can give them in adapting to the new economy. And let me assure you that I
agree with those of you who also say that Americans are rightly demanding that
we provide for these needs as efficiently and creatively as possible.
But only some Americans stand ready to prosper in this new economy. These
divisions aren't simply a threat to the incomes of working Americans; they also
undermine our nation's economic competitiveness. Companies are discovering that
their global competitors can replicate nearly every element of their operation,
including machinery, technology, and state of the art processes. The only thing
that can't be duplicated are American workers -- their skills, abilities, and
capacity to work together. For corporations and for nations, a skilled
workforce is the only enduring competitive advantage.
Reaping the dividends
Our investment in America's workforce over the past two years is already
paying dividends. We are experiencing an unprecedented economic recovery which
has created 5.7 million new jobs, the vast majority in the private sector. At
the same time, the deficit has been reduced from $290 billion in 1992 to $203
billion in 1994, to a projected $193 billion this year. It is expected that by
1999, the deficit will fall to its lowest level as a percentage of GDP since
1979. These indicators demonstrate, I believe, the continued wisdom of reducing
the deficit without haphazardly cutting programs which have proven to be
effective in helping all Americans find new and better jobs -- including
disadvantaged youth, dislocated workers, and other groups in need of job
training assistance.
These investments have traditionally been bipartisan. Recognizing the need
to invest resources to promote lifelong learning, the 103rd Congress enacted,
with bipartisan support, systems to enhance job opportunities for those entering
the workforce and those seeking new jobs. The School-to-Work Opportunities Act
promotes nationwide innovations in youth apprenticeships, which are especially
important to low-income kids who frequently have little contact with the job
market and often drop out of school. The creation of One-Stop Career Centers is
transforming the unemployment system into a customer-driven reemployment system
where state and local institutions are customizing the design and operation of
these operations to meet their needs.
Transforming Job Training
The next step along the path to reform the existing array of job training
programs -- with their confusing requirements and bureaucratic barriers -- is
contained in the Administration's Middle Class Bill of Rights proposal. This
proposal offers every American a chance to learn the skills needed to build a
better future by putting resources directly into workers' hands so they can gain
skills at the time, place and in the manner which makes sense to them -- a plan
very similar to the operation of the original G.I. Bill. The proposed new
system focuses on workers, job seekers, labor market information, state and
local flexibility, private sector partnerships and accountability. The G.I.
Bill for America's Workers will replace the outmoded and confusing maze of
federal job training programs by consolidating 70 job training programs. Many
of these existing programs were designed to address a specific concern at a
specific time but were never aligned with other programs.
For adults, skill grants of up to $2,620 will be offered to low-income and
dislocated workers. Services will be provided through One-Stop Career Centers
offering easy access to reliable, up-to-date information on where jobs exist,
what skills are in demand, and the performance records of training institutions.
For youth, reforms started under the School-to Work Opportunities Act will
intensify. Work-based learning will be integrated with school-based learning
for high-risk youth. Second Chance grants will empower local institutions to
manage resources to assist youth likely to have the most difficulties in making
a successful transition into stable employment and a career path. Disadvantaged
youth need practical, effective opportunities through access to a learning
framework offering the prospects of solid returns in the form of jobs and higher
earnings.
False economies
However, I believe the recent rescission of $2.3 billion by the House
Subcommittee on Appropriations exhibits a disregard for the need to maintain
this successful investment strategy. The severe cuts being proposed in programs
that serve disadvantaged youth and additional reductions in training programs
for adults and dislocated workers will eliminate or seriously undermine our
ability to provide for Americans most in need of job training and job search
assistance. The proposed rescissions will also damage our ability to enforce
the laws that ensure worker protection in the areas of safety and health and
labor standards.
We must recognize reality -- beginning with the fact that all Americans are
not equally well-poised to take advantage of the opportunities in today's
economy. The unemployment rate among this nation's young people, particularly
minorities, looms high above the overall unemployment rate. The proposed
rescission of summer job funding will have devastating effects on the 1.2
million disadvantaged young people, who will be denied summer employment work
experiences and desperately needed income. At a time when we are extolling the
benefits of work over welfare, these priorities must seem incomprehensible to
young people and their communities. States and municipalities will not only
lose over $800 million in direct funding; they will also suffer a commensurate
loss in consumer purchasing power.
Such decisions are not only false economies, they run directly contrary to
mainstream American concerns, which evince a strong national commitment to
assuring access for Americans to the skills and job protection that are
increasingly required for a place in the middle-class.
Some suggest that education and job training are not federal
responsibilities, and the solution is to provide block grants to states so they
may determine how to invest in worker training programs. But the American
people are not clamoring for public resources to be diverted from one
bureaucratic structure to another. They are asking for less bureaucracy and
more accountability.
Reinventing Health and Safety
Just as Americans who are ready to take responsibility to improve their own
prospects can expect the government to support their efforts, so too can workers
legitimately expect us to ensure that their workplaces are healthy, safe, and
free from discrimination. Many critics have targeted the programs and
regulations of the Occupational Safety and Health Administration as an example
of a program gone awry -- too many complicated, nonsensical, and overly
intrusive regulations, as well as incompetent and confrontational inspectors who
focus on fines rather than job safety and compliance assistance. Many horror
stories are being cited to support this position. But they do not accord with
the facts.
Since its creation in 1970, OSHA's standards and enforcement programs have
helped to reduce the workplace fatality rate by over 50% percent and made
significant inroads in reducing workplace injuries, particularly in high-risk
industries like construction and manufacturing. The record is clear: sensible
standards have made a difference between life and death for many American
workers. For example:
- Strengthened trenching protections have reduced fatalities by 35%;
- Grain handling standards have helped cut fatalities by 58% and injuries by
41%; and
- Cotton dust standards in the textile industry have dramatically reduced "brown
lung" cases from 40,000 cases to a few hundred.
In addition, OSHA inspections have helped make over 40,000 workplaces safer
for nearly two million working Americans.
Every year, work-related accidents and illnesses take an estimated 56,000
lives and cost our economy over $100 billion. We have made significant progress
in reinventing the way that OSHA
does business, and we are committed to continuing to make the necessary
changes to maximize the impact on worker safety. These efforts include:
- measuring performance by real improvement in worker safety and health, not
the number of inspections conducted;
- simplifying or eliminating outdated, vague, conflicting or duplicative
regulations;
- helping businesses identify and abate hazards, through technical
assistance free of citations or fines;
- targeting the most dangerous workplaces and hazards; and
- recognizing employers who have excellent safety and health records,
exempting them from general inspections.
Our achievements in protecting American workers cannot be compromised by
slashing resources at random or imposing unworkable, rigid rule-making
requirements without regard to saving the lives of those that entrust us with
protecting their health and welfare.
Reinventing DOL
The Department's budget and program priorities, such as those I discussed
above, reflect our commitment to reinvention. It's important to recognize that
the Department's employment levels have fallen from nearly 24,000 in Fiscal Year
1980 to approximately 18,000 in Fiscal Year 1993, a drop of 25%. At the same
time, U.S. employment has grown from 90 million to approximately 125 million.
But we've made great strides, not only in downsizing the department -- with
nearly 1,000 fewer employees over two years -- but in changing the way we do
business. When we started to take a good, hard look at what we could improve,
we made some dramatic changes. For example:
- the Pension Benefit Guaranty Corporation developed a new program that
enabled them to find 12,000 missing pension beneficiaries -- people entitled to
pensions they would not have gotten otherwise.
- Out in the state of Washington, the Department of Labor joined forces
across agency and sector lines to make sure laid-off Boeing Aircraft employees
got the help they needed to find new jobs. The one-stop career shop the
partners set up on-site at Boeing was up and running even before the
company laid off 19,000 people.
- Because people and communities facing base closings and loss of employment
have enough to contend with as it is, they don't need long waits, bureaucratic
red tape, and uncertainty about where to get help. So we sent in "swat
teams" of job assistance counselors to communities where military bases
were scheduled to be closed, giving people rapid, on-the-spot response to their
reemployment needs. Last year alone, DOL helped an estimated 35,000 workers
through defense conversion and diversification efforts.
- Here at DOL, we saved $66.4 million net by reviewing the rolls of federal
employees on long-term workers' compensation. Through such "periodic roll
management," we expect to save an additional $230 million from now through
2000.
We actively initiated reinvention efforts in each of our program areas by
focusing on how we could improve existing work processes so as to more
effectively serve the American workforce. By focusing on improving customer
service, empowering employees, cutting red tape, and getting back to basics, the
Department has been able to use resources more fully while at the same time
eliminating unnecessary processes and burdens.
We have leveraged limited federal and state resources by forming
federal-state partnerships and targeting investigations. For example, the State
of Maine had incidence rates of workplace injuries and illness that were 71%
greater than the national average. Through the use of workers' compensation
data, the 200 most dangerous workplaces were identified and each was asked to
cooperate with OSHA to improve their workplace safety and health programs. The
vast majority of workplaces participated in this program and identified over
95,0000 instances of hazards, with 55,000 of these already eliminated. This
number is more than twice the number of hazards OSHA has cited during 1,316
inspections performed during the previous eight years.
The Department is already ahead of schedule in reaching the National
Performance Review targets of reducing the overall number of employees and
redirecting resources from overhead to front-line, customer service positions.
A cumulative reduction of 1,037 FTE has been achieved through FY 1996.
The Department is actively embarking on the second phase of the National
Performance Review. We are closely reviewing our operations and seeking to
improve the ways we carry out our varied missions -- as with our new and varied
approaches to ensure the safety and health of Americans in the workplace.
Similarly, the Skill Grants contained in the proposed G.I. Bill for America's
Workers would turn over decisions on job training to the customers themselves --
American workers.
To complement our reinvention efforts, we are reviewing the manner in which
we promulgate regulations with an eye to reducing or eliminating unnecessary
regulations, and adopting different models for achieving our regulatory
objectives with an emphasis on minimizing federal governmental intrusion. I
have asked each agency head to review and evaluate all existing regulations to
assess their impact on both employers and employees, and take the necessary
actions to improve the regulatory process. Our answer to allegations of "regulatory-zeal"
by enforcement agencies is to weed out overly specific and obsolete regulations,
not to prevent those charged with such workplace responsibilities as safety and
health, from issuing necessary, common sense regulations.
Is there still room for improvement? Of course. That's why the Department
of Labor is continuing to engage in a rigorous, methodical review of its mission
and operations.
This concludes my prepared remarks. I would be happy to answer any
questions.
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