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Remarks Prepared for Delivery by
U.S. Secretary of Labor Elaine L. Chao
Food Marketing Institute
Scottsdale, Arizona
Sunday, January 22, 2006
Thank you, Jeff. [FMI Conference Chair Jeff Noddle, Chairman and CEO, Supervalu.]
It's great to be back! It seems like a lifetime ago, but I attended the Midwinter Executive Conference with my husband, Senate Majority Whip Mitch McConnell, back in 1998 in Boca. I am pleased to be here again. I would like to acknowledge Tim Hammonds, the President and CEO of the Food Marketing Institute. The FMI staff is known to be among the most effective organizations in Washington. And I also want to acknowledge Jack Block, who I was delighted to see recently in Washington, D.C.
Today I'd like to share with you some thoughts on how our economy is doing, and what our nation needs to do to remain competitive in the 21st century.
The past five years have been remarkable and historic ones for our country. We have faced many challenges that few could have predicted in the summer of 2000. The stock market peaked in February 2000. The economy hit the doldrums in 2000. Then came the recession, the terrorist attacks of 9/11, corporate scandals, the war on terror, rising oil prices and most recently, devastating hurricanes. These are just a few of the challenges our nation has faced. Yet none of these has been enough to throw our economy off its path of long term growth. GDP grew at a strong 4.1 percent in the 3rd quarter of 2005. The core inflation rate has dropped to 2.2 percent. 413,000 new jobs were created in the last two months, for a total of two million net new jobs in 2005. We've seen 31 straight months of job growth. That's 4.6 million new jobs created since May 2003.
Today's unemployment rate is 4.9 percent — a half point lower than one year ago. Only 7 times in the past 35 years has it been lower than that! Along with our low unemployment rate, more Americans are working than ever before — more than 142 million people!
Our workforce is becoming increasingly productive. Productivity growth was a strong 4.7 percent in the third quarter. It has grown an average of 3.4 percent a year since the end of 2000. That's an astounding figure for a mature economy. It means higher wages for American workers. And it is one of the reasons why American workers have the highest standard of living in the world.
The economic path charted by President George W. Bush over the past five years has encouraged this growth. It is based on the fundamental premise that the government doesn't create jobs — the private sector does. The role of the government is to create the conditions for economic growth. So this Administration is committed to reducing the excessive taxation, over regulation and abusive litigation that hampers growth and job creation. A look at international comparisons shows the difference that his principled leadership has made.
Last March, I attended a gathering of Labor ministers of major industrialized nations, known as the G-7. The United States had the highest growth rate among these major industrialized nations. Compare our low unemployment with that of Germany and France, which are over 10 percent, double that of the U.S. And long term unemployment is three, four and five times higher in Japan, France, Germany, and Italy. So clearly, America's dynamic rate of job creation provides significant advantages to our workers.
This Administration understands that as the economy strengthens, the pace of change is also accelerating — not only in our country but in the world. The typical, 40-year old American worker today has held 10 jobs between the ages of 18 and 38. So it is more important than ever before to empower workers by giving them greater control over all aspects of their working lives.
One of the most important workforce issues facing our nation today is the skills gap. Workers are finding that many of the new jobs being created require more education and higher skills than in the past. I often hear from employers, like you, who say they cannot find workers with the right skills for the jobs they have available. So this Administration has launched a comprehensive strategy to address the skills gap and help workers thrive in the 21st century.
First, the President introduced No Child Left Behind, the most comprehensive reform of the nation's public education system in 50 years. The goal is to ensure that each and every child has a strong foundation of basic knowledge and skills — that there's accountability, and performance measurements. It's impossible to overstate how critically important this is to our nation's workers, especially extending these reforms to high school.
Second, the President has proposed comprehensive reforms to improve the $10.5 billion, publicly funded workforce training system in the 21st century. This system needs to be better connected with the economy and the workers it is supposed to serve. We want to enhance individual choice, eliminate complicated rules, and connect employers to the job training system. With the President's reforms, the workforce training system will become a more effective tool for economic development in your communities.
And third, the President's High Growth Job Training Initiative identifies sectors of the economy that are growing rapidly. And it connects workers with the training required to access these new opportunities. The President also launched a $250 million Community College Initiative, to expand the ability of communities to train workers with skills in demand right now.
The goal of these initiatives is to train workers for jobs that exist in the real world. By closing the skills gap we will create a more competitive and flexible workforce and fuel future economic growth.
The President also believes that workers feel more secure when they have more ownership and control of their health care and pensions. That's why the President supports the greater use of Health Savings Accounts. As senior leaders in the food industry, you know the important role competition plays in controlling prices. With workers in control of their health care dollars, we can create more competition in our health care system.
You also understand the value of pooling resources and buying bulk quantities. That's why the President wants to give small businesses access to affordable, quality health care through Association Health Plans.
And let me say a few words about another key issue — the retirement security of our nation's workers. As the President has said, the promises made to workers must be kept. Under current law, labor and management make pension promises they can't fully pay for. Workers often don't know the financial health of pension plans. It is critical to enact a strong pension reform bill that includes the President's proposals to strengthen traditional defined benefit pension plans. Thirty-four million Americans depend upon them!
The administration is also doing its part to foster a climate for growth and job creation by updating workplace regulations. Many of you are familiar with some of the major regulatory reforms completed by the Labor Department.
They include:
- Updating the white-collar overtime rules, which haven't been updated since Elvis was a teenager;
- Updating the financial reporting requirements for labor unions, which haven't been updated since 1959, to empower rank-and-file union members; and
- Publishing the first-ever regulations explaining the re-employment rights and protections for our citizen soldiers, and other uniformed service members, serving in the war on terror and elsewhere around the world.
These are part of a broader policy agenda designed to protect workers and to enhance the conditions for growth and job creation. As I mentioned earlier, the economic achievements of the past five years are truly remarkable, considering the challenges our nation has faced. We should be proud of the fact that our nation is second to none in creating opportunity. And one of the best ways to ensure this growth continues, is to make the President's tax cuts permanent. Then workers can keep more of their hard-earned wages. And employers will have more to invest in creating new jobs.
Opportunity, ownership, and the free enterprise system are the hallmarks of our nation's economy. It is a strong foundation, which flourishes on innovation and can adapt to any change. When this nation was founded nearly our entire workforce was employed in agriculture. Today, only about 2 percent of American workers are in agriculture. Yet, as you know, we produce enough food to feed much of the world. Our nation has never been afraid of change and must never lose that spirit of optimism. To remain competitive in the 21st century, we must continue to embrace change and prepare for the challenges of a rapidly evolving global economy.
So thank you for your support as this administration continues to pursue policies that strengthen economic growth. By working together to nurture the job creating capacity of our free enterprise system, we can continue to ensure a bright future for America's workers.
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