Speeches by Secretary Elaine L. Chao

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Remarks as prepared

Secretary of Labor Elaine L. Chao
Closing Remarks
American Enterprise Institute—U.S. Department of Labor Conference on Productivity
American Enterprise Institute
Washington, D.C.
October 23, 2002

First of all, I want to thank all the distinguished panelists from academia, government, business and public policy organizations who have participated in this important conference.

I particularly want to thank the Chairman of the President’s Council of Economic Advisers, Dr. Glen Hubbard, and the Chairman of the Federal Reserve Board of Governors, Dr. Alan Greenspan, for taking time out of their busy schedules to be here today.

I also want to recognize our distinguished moderators—Kevin Hassett, Ben Wattenberg and Jim Glassman. You did a great job, gentlemen, in leading our discussions.

I think this conference has demonstrated just how important productivity growth is to maintaining a healthy economy and a high standard of living for America’s workers.

Not only is there a strong correlation between productivity growth, higher wages and lower prices. But a one percent increase in the productivity growth rate has the power to cut the federal deficit by $2 trillion over ten years and trim the social security shortfall by one-quarter to one-half over 75 years.

These benefits are too important to ignore. That’s why I believe that productivity growth—how to achieve it and how to temper its short-term effects on workers—should be a part of every public policy discussion in government.

I think we’ve made a great start today in focusing public policy attention on this important issue.

As Secretary of Labor, my focus is on the “human side” of the productivity equation—that is, its impact on jobs and workers. Many of the programs and policies of the Labor Department are specifically designed to mitigate the short-term dislocations that occur in our dynamic, fluid economy.

I am reminded of just how incredibly dynamic our economy is every month, when the BLS reports the rise and fall of employment in our country. According to the most recent data, nearly 40% of unemployed job seekers find a new job in five weeks or less. Our economy is churning all the time. Our mission is to do everything in our power to ensure that one group of workers does not bear the brunt of the inevitable shifts that occur.

To better target our programs, we need the most accurate information. That’s why I’ll be working with Commissioner Utgoff to expand the number of business sectors in which the BLS measures productivity. In 1995 BLS productivity surveys covered only 40% of the non-farm sector. This year we’re up to 60%. Our goal is to cover the entire non-farm business sector. That’s the best way to ensure this tool will remain a relevant measurement to the 21^st century workforce.

So thank you, everyone, for coming today. I know it is difficult to set aside an entire day for a policy conference. But I’m sure you’ll agree that this one was worth it. Productivity growth is the key to our economic future. How we encourage and manage this important asset will determine the standard of living for the next generation of American workers. For that reason alone, I can think of no subject more worthy of our time and deliberation.

Thank you.

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