Speeches by Secretary Elaine L.Chao
Archived Speech — Caution: Information may be out of date.
Remarks Prepared for Delivery
by U.S. Secretary of
Labor Elaine L. Chao
Southern Legislative Conference
Mobile, Alabama
Monday, August 1, 2005
Thank you, David [Williams, Kentucky Senate President and Chairman-elect, Southern Legislative Conference]. And congratulations on your election as the next Chairman of the Southern Legislative Conference. We're very proud of President Williams in Kentucky. I am confident history will record him as one of the most consequential Senate Presidents in our commonwealth.
Let me recognize Arkansas Senator Shane Broadway [Outgoing Chairman, Southern Legislative Conference].
I would also like to acknowledge Karen Czarnecki, Deputy Assistant Secretary for Intergovernmental Affairs at the Department of Labor.
I heard that next year's conference will take place in my home state of Kentucky. I hope that all of you will come because there are so many great things to see and do in Kentucky. Our state is known for its magnificent thoroughbred horse racing, world class spirits — the kind that come in a bottle labeled "bourbon" — and, pardon me if say, some of the most beautiful scenery in the South. There's so much to do in and around Louisville — the 16th largest city in our country. So Senator Williams and Kentucky are really looking forward to being your host next year!
Today, I'd like to give you an overview of where the national job situation is heading, and highlight the sectors where job growth is expected and share ways we can work together to foster growth and opportunity in your states.
Today, I'd like to give you an overview of where the national job situation is heading, and highlight the sectors where job growth is expected and share ways we can work together to foster growth and opportunity in your states.
Overall, our nation's economic growth and job creation continue to strengthen. The national unemployment rate is 5% — lower than the average of the 1990s, 5.7%. Real GDP growth in the first half of 2005 was 3.8%, outpacing forecasts. More than 3.7 million net new jobs have been created nationally since May 2003. This steady growth is all the more remarkable because oil prices are so high.
The states in the southern region represented here have gained jobs over the past 12 months. And the regional unemployment rate tracks with the national average of 5 percent. But situations do vary within regions. Some southern states are doing very well; others are struggling. That's why it's so important to come together in meetings like this one and share the strategies that foster growth and job creation.
One of the most important things I have seen over and over during four years at the Labor Department is the importance that workforce flexibility plays in economic development. Today, the world is much different than even a decade ago. Worldwide competition and information technology have increased both the rate and intensity of change. The economic strategies of the past, which have tended to emphasize a competitive advantage in one specific area, are obsolete. Successful economic strategies of the 21st century will focus on the ability to constantly evolve and adapt to change.
Fortunately, the ability to constantly evolve and change is one of the greatest strengths of our nation. Today, there are 149 million people in our nation's workforce. 52 million of them left their jobs in the 12 months ending May 2005. And during that time 55.3 million people found new jobs. That means one-third of our entire workforce turns over each year. And the average American worker has had nine jobs by the time he or she is 34 years old because of greater opportunities. The fact that our society can tolerate this level and pace of change is a tribute to the dynamism and flexibility of our workforce. And it's one of the major reasons why our nation has been able to sustain job growth.
Many of the new jobs being created, however, require more education and higher skills. Everywhere I go, employers tell me they are having a hard time finding workers with the rights skills for the jobs they have available. There are over 3 million job vacancies waiting to be filled on any given day — a sure sign of strong demand in the labor market, for those with the skills in demand.
That's why President George W. Bush has launched several initiatives to help workers upgrade their skills and access these new opportunities. The President's High Growth Job Training Initiative identifies sectors of the economy that are growing rapidly. And it helps workers get the skills required for these jobs. Some of the areas where new jobs are being created include biotechnology, nanotechnology, geospatial technology; health care; financial services; and the skilled trades. In health care alone, there is a tremendous shortage of skilled workers. For example, our country will need more than 1 million new registered nurses by 2012.
As part of the President's program, the Department has already awarded $204 million to foster public-private partnerships that will help workers train for jobs in high growth fields. And I'm pleased to note that many of these grants have gone to partnerships in your states, including Florida, North Carolina and Missouri.
Another important program is the President's $250 million Community Job Training Grant Initiative. This program can help expand the capacity of your community colleges, and other education providers, to train workers with skills in demand. It's a great economic development tool. This Administration recognizes that community colleges are on the front lines of preparing workers for the new jobs and challenges of the 21st century economy.
The President has also proposed comprehensive reforms to revitalize the publicly funded job training programs in your states. I know many of you are familiar with the more than 3,500 One Stop Career Centers, which are part of the $10.4 billion publicly funded workforce investment system. The President's reforms strengthen the flexibility and accountability of this system, so it will be more responsive to local economic conditions. The goal is to transform the workforce investment system from a social services model to an economic development tool that will help you attract new employers and jobs to your states.
Many states in your region are emphasizing economic development and have done a great job leveraging the workforce investment system to bring high quality, good paying jobs to workers. But we all recognize that growth is taking place against a backdrop of profound change, some of which can be very challenging for workers.
There's been some talk about outsourcing, so let me talk about that. In a workforce of about 149 million, about 300,000 American jobs have been moved offshore. At the same time, we can't talk about outsourcing without talking about insourcing. Nearly 22-27 million Americans work for subsidiaries of foreign corporations and other companies that depend upon trade.
I've seen the results of insourcing in my home state of Kentucky, where Toyota built a $4 billion, state of the art manufacturing complex that created 20,000 new jobs. Or in Tennessee, where a Nissan plant provides thousands of jobs for Tennesseans. Right here in Alabama, Hyundai just opened a new $1.1 billion manufacturing facility that is expected to create a total of more than 7,500 new jobs.
We all recognize, however, that workers in older industries are undergoing transitions and need our help. It's important for these workers to know that our country offers generous, compassionate assistance programs to help them get back on their feet — 31 different government assistance programs totaling $23 billion. If a worker loses his or her job because of trade, here is what is available to him or her through the Department of Labor:
- 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 over 55 and they get a new job that pays less than their old one, the government will pay 50% of the difference up to $10,000.
Our longer term challenge as policy makers, however, is to help reconnect workers to the labor force as quickly as possible. Research shows the longer workers stay out of the labor force, the harder it is to reconnect. Technology is simply changing too fast.
That's why government policies and programs must — at every level — encourage workers to continually upgrade their skills. This is key to building a successful career path in the 21st century workforce.
The Department of Labor has put forward a reauthorization proposal of WIA — a system that will enable states to have greater flexibility, and more discretion of $10.5 billion in WIA funding. We've got to train workers for relevant skills so they can get good paying jobs in these high growth industries.
As we address the challenges of the 21st century, it's important to understand and appreciate our country's true competitive advantages. As an immigrant to this country, I have a special appreciation of the combination of qualities that make America unique in the world. They include a culture that encourages risk taking, fosters innovation and entrepreneurship, and rewards individual initiative and achievement. And even more important are the freedom, transparent institutions and rule of law that form the foundations of our society. Those are the most powerful competitive advantages of all. I have great faith in America's competitiveness, and in the ingenuity and creativity of the American workforce.
So thank you for inviting me here today. And thank you for everything you are doing to bring hope and opportunity to your communities.
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Archived Speech — Caution: Information may be out of date.
