Speeches by Secretary Elaine L. Chao
Archived Speech — Caution: Information may be out of date.
Remarks Prepared for
U.S. Secretary of Labor Elaine L. Chao
National Center for Policy Analysis
Washington, D.C.
Wednesday, September 19, 2007
Thank you, John.
It’s a pleasure to be here. I also want to thank Jeanette for her hard work in bringing this conference together.
And thank you Governor du Pont for your ongoing efforts to support pro-growth policies that strengthen our free enterprise system.
In that spirit, I’d like to share some thoughts on the state of our economy and how we can work together to strengthen the competitiveness of America’s workforce and America’s economy.
Despite challenges in the housing and financial credit markets, the fundamentals of our nation’s economy are still healthy. Output grew by 4 percent in the 2nd Quarter, driven in part by increasing U.S. exports. And even with the numerous headwinds our economy is facing, most economists expect growth to continue. Unemployment remains a very low 4.6 percent, more than a full point lower than the average of the 1990s, which was 5.7 percent. More than 8.2 million new jobs have been created since August 2003. And productivity growth is steady, which paves the way for higher pay for workers. Since January 2001, real after-tax personal income has risen 11.9 percent.
And America’s workers are the most productive of any major industrialized economy, according to a report issued by the International Labor Organization several weeks ago.
As John mentioned, almost 6 ½ years ago, President George W. Bush described his vision of America as a country in which opportunity was plentiful and everyone who wanted to work could find a job.
Since then, our team at the Department of Labor has worked hard to make that vision a reality. First and foremost among our core principles has been the strong belief that the private sector — not government — creates jobs. The role of government is to create the conditions for economic growth.
And the Labor Department plays an important part in that mission. That’s because, as many of you know, the Labor Department is one of the largest regulatory Departments in the federal government. The Department regulates every workplace in America for health, safety, and wages and hours worked. It regulates every private employer’s pension or health plan in America. And most of the Department’s annual budget of about $50 billion is spent on worker training and assistance programs. In addition, the Department acts as the oversight agency for organized labor. So we reach into virtually every workplace in America with regulations implementing nearly 180 workplacelaws.
These regulations can be written and enforced in a way that hampers growth and job creation. Or they can be written and enforced in a way that empowers workers and employers to succeed. Our strategy in this new century has been to empower workers and employers.
Over the past six-plus years it has been our goal at the Department of Labor to accomplish more with less. By focusing on accountability and measurable results, the Department has made great progress for America’s workers without asking America’s taxpayers for additional resources.
Since 2001, discretionary spending by the Department has decreased by 3.4 percent. Yet, by every key measure — workplace safety and health, back wages recovered, and retirement assets protected — the Department has achieved record results for America’s workers. So it is possible to do more with less.
Still, there are challenges ahead. As you well know, our economy is evolving into a knowledge-based economy. So we must ensure that our nation’s workforce has the education and skills needed to remain competitive in the worldwide economy. Today, two-thirds of all the new jobs being created require post-secondary education or training. And wages in these jobs are rising more quickly than in others. And so a higher-skilled, more educated workforce is clearly the future of our country in the worldwide economy.
Over the decade ending in 2014, our country will need over 900,000 engineers, including aerospace, biomedical, civil, computer software, and environmental engineers. There will also be over three and a half million job openings in the education, training, and library occupations fields. The skills trades will need almost 1.8 million workers in the building trades alone. We will also need workers in other high growth industries including nanotechnology, geospatial technology, and the life sciences, to name a few.
And many traditional jobs require more skills than in the past. For example, over the next decade, our country will need over three million healthcare providers and technicians, including physicians, therapists, and over 1.2 million registered nurses. Nurses today do a lot of things doctors did 25 years ago. And another example — stationary engineers who are responsible for heating, ventilation, and air conditioning systems now use computers. Workers in many fields are migrating up the skills ladder. And with this evolution of skills comes a greater need for training.
This Administration recognizes the importance of investing in worker education and training. Each year, it spends nearly $15 billion on worker training and employment services through a public workforce investment system. The Labor Department administers nearly $10 billion of this amount. And the private sector spends much more.
But there is a growing recognition that our publicly funded workforce training systems must do more to prepare workers for the 21st century. Historically, the workforce investment system has consisted of a number of independent parts. It was originally designed for an economy characterized by interchangeable labor, seasonal layoffs, and workers with a high school diploma.
Today’s economy is markedly different. It demands a workforce with postsecondary education credentials. It demands workers who are comfortable in a rapidly evolving, high-technology environment that can respond quickly to changing economic conditions. And it demands a workforce investment system that can meet the challenges of a knowledge-based economy. So the Department has worked with many outside stakeholders to strengthen the publicly funded system’s capacity to link workers with real jobs in the real world, not just process them through a bureaucratic system.
First, employers needed to become engaged in the public workforce investment system. Employers in the high-growth, high-demand sectors of the economy offer jobs and solid career paths for workers. But one of the challenges they face is a shortage of workers with the education and skills required for these good paying jobs.
So in 2003, President George W. Bush announced the High-Growth Job Training Initiative. The aim of the initiative was to expand the workforce investment system’s capacity to respond to local employers and local economic needs. And by partnering with industry leaders, educators, and economic development officials, the initiative has helped provide a pipeline of workers trained for these great opportunities.
The next step was to engage educators and educational institutions. Today’s jobs require more specialized skills and higher levels of education. So in 2005, President George W. Bush announced the Community-Based Job Training Grants to strengthen the role of community colleges in developing the full potential of the U.S. workforce. We chose community colleges because they are affordable, accessible, and have close connections to local labor markets. They are perfectly positioned to prepare workers for high-growth occupations. Yesterday I attended the National Competitiveness Summit and Governor Haley Barbour of Mississippi was on my panel. He has generated tremendous economic growth in his state by concentrating on workforce training and ramping up the community college system. Under his leadership Mississippi has seen a 20 percent rise in income for workers, and more people working than at any time in the state’s history. So workforce training really pays off.
Finally, over the last several years, it has become clear that for economic development to be successful, it must be centered at the regional level. Regions are increasingly where the action is — where employers, workers, researchers, entrepreneurs, and governments come together to create a competitive advantage in the global marketplace.
And so, a third initiative was launched, Workforce Innovation in Regional Economic Development or WIRED. This encourages states and localities to integrate their different economic and talent development activities into a single regional approach. This approach calls for strategic partnerships between various regional stakeholders. These include philanthropists, foundations, capital investors, research and R&D institutions, education partners, employers and industry representatives, regional infrastructure stakeholders, community leaders, and others. So, as you can see, the private sector has been a key part in these regional efforts to grow our economy.
Jobs for America’s Graduates, started by Governor du Pont, is an outstanding example of what can be done through private-public partnerships. The program has made real progress, helping put 500,000 young people on the path to learning and achievement.
After all, human capital is our most precious resource. And talent development is a critical component of regional competitiveness. It is important to have all stakeholders work together, so that there is a clear understanding of the education and skills necessary to attract and sustain investments that create jobs.
America’s economy is strong because America’s workforce is among the most innovative and productive in the world. As I’ve said many times before — America is a beacon of hope and opportunity throughout the world and we shouldn’t fear the worldwide economy. America’s greatest strengths lie in our democratic institutions, respect for the rule of law, transparency, accountability, and the most creative and compassionate workforce in the world. These unique qualities comprise our country’s strongest competitive advantage.
So looking ahead, there is great reason for optimism as our country faces new challenges and opportunities. By continuing to emphasize education, we can empower workers and increase access to opportunity. By working together, we can ensure that our nation’s job creating, free enterprise system remains the envy of the world.
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Archived Speech — Caution: Information may be out of date.
