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Statement of Alexis M. Herman
Secretary of Labor



Before the Subcommittee on Labor, HHS, Education
Committee on Appropriations
United States House of Representatives
February 12, 1998


Mr. Chairman and Distinguished Members of the Sub-Committee:

I am pleased to be here today to discuss the work of the Labor Department and our 1999 Fiscal Year budget request.

Managing Change in the 21st Century

We have made great progress in helping America’s working families build a better future for themselves. The President’s budget is a truly historic document. It gives the American people the first balanced budget in 30 years. Because of tough choices and fiscal discipline, our deficit has gone from over $350 billion 5 years ago, to about $10 billion today, and with this plan it will be zero in the next fiscal year.

And these are also historic times. Thanks to the hard work of the American people, we have the healthiest economy in a generation. The misery index--the combination of the unemployment rate and the inflation rate--is at a 31 year-low. And we have created over 14.7 million new jobs. We are entering the 21st century with opportunity on our side.

But where there is opportunity, there is also challenge. The workplace and the workforce are changing before our eyes. In the 1950's, the workforce was 20% professional, 60% unskilled and 20% skilled. By 1996 it was 20% professional, 60% skilled and 20% unskilled. Education and training matter as never before.

The workforce of the future is changing in other ways. It will be older--there will be as many Americans of retirement age as 25-34 year olds. And it will be more diverse--for example, women will account for nearly 60% of the growth in the workforce.

Our workplace is also changing. We are utilizing more technology, and more of us are using that technology. The fraction of workers using computers has more than doubled in the past ten years alone. And every day we are becoming more globally integrated--in the next 10 years up to half of all manufacturing jobs will be export-related.

Our task is to help prepare every American worker for this changing world. And our challenge is to help every American manage change for the better. I know confronting change is never easy. I’ve faced a lot of change in my life. I’ve had many different jobs. I’ve lived in a number of cities. I’ve had a lot of obstacles thrown my way. But I also had something else--a solid foundation from which to draw strength--my faith, family, values.

Just as that kind of support structure is integral to managing change in our own lives, it is also critical in our national life. Because it’s that kind of support structure that transforms change from an obstacle to avoid to an opportunity to embrace.

I see my job as making sure the Department of Labor is an effective, efficient partner in helping Americans manage the change that is inherent in today’s global economy. And as we do that, I want to make sure our initiatives are bottom-line and results-oriented.

The Department of Labor has made a lot of progress since our team started 8 months ago. We helped play a role in bringing labor and management together to settle the UPS Strike.

We attacked fraud and abuse in pension and health plans and recovered over $380 million for hard working Americans.

We were proud to report that the fatality rate for coal mining injuries for 1997 was the lowest ever recorded. Similarly, the injury and illness rate in general industry for 1996, the latest year in which data are available, were the lowest since the Bureau of Labor Statistics started collecting that information 23 years ago.

And because we know a paycheck is the passport to dignity, we have worked diligently to make sure that welfare recipients are integrated into the workforce development system. As a result, we now have $3 billion in grants to help long-term welfare recipients secure lasting unsubsidized employment.

We want to build on our record and our progress in helping American workers manage change for the better. And that’s why the President is now proposing this year to do things such as raise the minimum wage, expand the Family and Medical Leave Act, and work closely with Congress to pass legislation to enact a GI Bill for workers that will reform the entire job training system so anyone looking for work will be able to get the service and assistance they need to find and keep good jobs.

This is all a part of fulfilling the Department of Labor’s fundamental mission--to assist workers in their efforts to achieve economic security, with rising wages, pensions, health benefits and opportunities--and to improve their skills in safe and healthful workplaces free of discrimination. I am heartened by the House’s overwhelming bipartisan vote last year in support of legislation to reform our workforce development system.

In order to succeed in this mission, the Department has developed an effective strategy for improving the lives of America’s working families. It has been developed within the context of the Government Performance and Results Act (GPRA) and is reflected in the Department’s FY 1999 Annual Performance Plan which is tied directly to our budget request. This Performance Plan reflects a substantial revision and improvement on the Department’s September Strategic Plan which was largely developed prior to my arrival. In working to establish a unified Department of Labor, I have established three strategic goals which bridge the Department’s many agencies and programs that serve the common purpose of helping America’s workers meet the challenges they face today and in the future. Those three strategic goals are: A Prepared Workforce--to enhance opportunities for America’s workforce; A Secure Workforce--to promote the economic security of workers and families; and, Quality Workplaces--to foster quality workplaces that are safe, healthy and fair.

With the strategic goal of a Prepared Workforce, the Department is committed to creating an environment where those new to the labor force, or those wishing to improve their potential, are provided the assistance and tools needed to achieve success in today’s job market. And where policy and decision-makers, and those seeking employment have access to information for making sound economic decisions.

With the strategic goal of a Secure Workforce, we seek to promote the economic security of workers and families by protecting workers’ hours, wages and other conditions when on the job, providing unemployment and compensation benefits when workers are unable to work, retraining and adjustment services for workers who are permanently laid off from their jobs to help them return to work as quickly as possible, and expanding, enhancing, and protecting workers’ pension, health care, and other benefits.

With the strategic goal of Quality Workplaces, we will direct attention toward fostering workplaces that are safe, healthy, and fair. Today’s workplace is increasingly affected by global markets so we will continue to address core international labor standards and child labor issues as they affect American workers. The Department is committed to working with employers to help them maintain safe and healthy workplaces. However, we will maintain a credible, targeted enforcement program to catch and punish the bad actors.

This vision cannot be accomplished overnight. To accomplish these goals, we must make critical investments over a period of years that will promote programs to support the President’s goals and accomplish this vision. Investments that begin with this FY 1999 budget will move the Department toward accomplishing these goals for American workers, retirees and their families. Investments will continue over many years, but this budget request takes the first step on that journey.

Our Fiscal Year 1999 budget--which amounts to $38.1 billion--will allow us to build on what we are already doing and begin new initiatives to meet these goals. The amount before the committee includes $12.7 billion and 17,012 full-time equivalent (FTE) staff. Each of the initiatives in our budget was developed to achieve my strategic goals that cross-cut the Department’s agencies, programs and activities to serve the common purpose of helping American workers manage change for the better.

I would like to discuss my initiatives arrayed by the goal they support.

A PREPARED WORKFORCE - Enhance Opportunities for America’s Workforce

The FY 1999 request includes a continuation of a $250 million advance appropriation for the Opportunity Areas for Out-of-School Youth program for Program Year 2000. With the support from this Sub-Committee, the FY 1998 appropriation provided a $250 million advance appropriation for the program for use in FY 1999, contingent upon enactment of authorizing legislation. The Administration is working closely with Congress to enact job training legislation containing this authorization in early 1998. These resources will be used to provide competitive, matching grants to 15 to 20 high poverty urban and rural communities including Empowerment Zones and Enterprise Communities, to train an estimated 50,000 youth for jobs, as an alternative to welfare and crime.

This is a high priority for me and a challenge that I have devoted a good part of my life to addressing. Almost thirty years ago, I worked for Catholic Charities in my hometown of Mobile, Alabama. I helped young men from the housing projects find apprenticeships and job opportunities in the shipyards near Pascagoula, Mississippi.

There is one statistic that really sticks in my mind from twenty years ago when I was working at the Department of Labor. At that time, the unemployment rate for African-American teenagers was over 30 percent. Two decades later, I am back at the Labor Department, and the unemployment rate for African-American teens is at 30 percent. This Department is about the work of moving a fact like this from the statistics books to the history books.

What is the out-of-school youth initiative all about? Let me tell you about Hector Hernandez.

Hector is from Bellflower, California, one of the barrios of Los Angeles. He grew up in one of the toughest neighborhoods in the country. His mom was a high school drop-out and survived on welfare. His dad--who he hardly ever saw--sold drugs.

To Hector, school never really seemed important. And so he dropped out and joined a gang. One thing led to another, he committed a crime, got arrested, and served three years before he was paroled. As a condition of his parole, Hector was required to attend the Community Youth Corps program in Norwalk, California. This is a Job Training and Partnership Act (JTPA) initiative that provides education, training and job placement services to out-of-school youth.

In January of 1997, he began courses for a GED. Hector worked hard--and earned his GED last May. Today he works full-time as a security guard at a local Nissan plant--and part- time at UPS. Last month, he enrolled in Cerritos Community College and hopes one day soon to work with youth in the California prison system.

This story is one of many that demonstrates the kind of success we are having by investing in opportunity for our young people. The resources that the President’s FY 99 budget contains for out-of-school youth funding will allow us to build on that kind of success, reduce unemployment levels for the youth of our country, and make a real difference in the lives of young people and the life of our nation.

The Summer Jobs Program gives hundreds of thousands of urban and rural disadvantaged youth their first work experience. The budget proposes $871 million which is sufficient to finance as many as 530,000 job opportunities for the summer of 1999 if local areas use all of these resources for summer jobs. The budget also includes $130 million for the year-round program to help low-income youth, many of them in families on public assistance, who have dropped out of school or are at risk of doing so. The proposed budget would continue to permit local service delivery areas that receive both types of these funds to shift resources between the summer and year-round program, as local needs dictate.

Another of our important programs for youth is the Job Corps, which will provide intensive skill training, academic and social education, and support to an estimated 69,700 seriously disadvantaged participants at 118 centers in FY 1999. An increase of $61.4 million for FY 1999, brings the total for the program to $1.3 billion. This increase includes funds to complete five new centers and to maintain the current program. Funds are also requested to continue the multi-year quality improvement initiatives to enhance Job Corps performance.

The Welfare-to-Work Jobs initiative is already funded at $1.5 billion in mandatory funding in each of FY 1998 and FY 1999. This initiative was enacted with bipartisan support in the Balanced Budget Act of 1997. The program provides formula grants to States; and Federally- administered competitive grants to Private Industry Councils, political subdivisions of States, and private entities to assist hard-to-employ welfare recipients to secure lasting, unsubsidized employment. Its success, however, depends on the formation of partnerships to allow leveraging of additional resources at the local level.

I am currently in the midst of a national fact-finding welfare-to-work tour to put a human face on the framework we have developed to move people from welfare to work. I will be reporting my findings to the President later this month.

I have seen a number of innovative programs out in the field that are making a real difference. Let me tell you about one.

ColorMatrix Corporation is a downtown Cleveland firm that produces liquids used to color plastics. This small business has hired 12 welfare recipients through the Cleveland Works program which is a non-profit employment program that enrolls economically disadvantaged people in pre-employment job readiness classes and then links job-ready employees with local companies. Most of ColorMatrix’s job applicants have little or no experience working in a manufacturing plant. Many of their employees come with legal problems, histories of substance abuse or other issues that inhibit their capacity to be reliable employees. ColorMatrix looks to Cleveland Works for qualified applicants and has a 91 percent retention rate with Cleveland Works referred applicants-- much higher than the company’s overall rate.

Once hired, ColorMatrix does its part in helping employees stay on the job and move up the career ladder. Employees receive 200 hours of on-the-job training for the three full-time entry-level positions: clerical, general labor, and packaging. ColorMatrix has also implemented several programs to address the challenge of cultural conflicts in the workplace. This includes Shared Values, a training workshop facilitated by Andre Thorton, a former Cleveland Indians baseball player who serves as a positive role model, and a fifteen week (30-hour) motivational program, during which employees interact with senior management and begin to develop a sense of ownership of the company. The company also retains a private referral service which provides support services, counseling on financial and domestic issues, and other resources at no charge to employees.

While visiting ColorMatrix, I held a welfare-to-work roundtable where new workers and employers shared their experiences with me. One women told me while she was in training, each day she would look in the bathroom mirror to practice job interviewing and then imagine what it would be like to talk to co-workers. She is now contributing in positive ways to her family, her company and community.

I have also visited programs in Florida and Milwaukee where there are similar and innovative approaches to assisting people in moving from welfare-to-work. It is the dignity of work, as we move people from the welfare rolls to the payrolls, and the efforts of companies like ColorMatrix, that will help to make the Welfare-to-Work initiative a success.

Related to our Welfare-to-Work program, the budget proposes to extend, for one year through April 30, 2000, the Welfare-to-Work Tax Credit, which the President and Congress created as part of the Taxpayer Relief Act of 1997. It focuses on long-term welfare recipients by allowing employers to claim a tax credit of 35 percent on the first $10,000 of eligible wages in the first year of employment and 50% of the first $10,000 in the second year of employment for workers they hire who were long-term welfare recipients. The budget also includes an extension of the Work Opportunity Tax Credit through April 30, 2000, which provides a credit of 40 percent on the first $6,000 of wages paid to members of eight target groups.

Adult Training Grants provide formula grants to communities under authority of Job Training Partnership Act (JTPA) Title II-A for employment and training assistance to economically disadvantaged adults. This program also aids in our welfare-to-work efforts since two of every five participants is a welfare recipient. An increase of $45 million, or nearly 5% above the FY 1998 level, is proposed for FY 1999 bringing the program’s funding up to $1 billion to support an estimated 401,100 participants.

Legislation will be proposed in conjunction with the President’s Budget that would authorize the Department of Veterans Affairs to transfer to the Department of Labor $100 million for the JTPA Veterans Employment program to finance activities designed to train, retrain, and provide employment assistance for dislocated veterans. The program will provide outreach, assessment, counseling, on-the-job or classroom training, placement assistance and supportive services to help these veterans rejoin the American workforce.

The Learning Anytime, Anywhere initiative is a joint Department of Education and Department of Labor program to emphasize the use of new technologies to enhance post- secondary learning by increasing access to and improving the quality of education and training delivery. The Department’s $10 million request for FY 1999 will allow the Department to explore removing some barriers faced by learning in non-traditional settings, such as uncertainty as to quality, the value of certificates or degrees, and the limited availability of some training. The Department will provide an Internet based system (America’s Learning Exchange) linking providers of and customers for training and education and including: a library of courseware, a database of education/training opportunities, and a directory of learning opportunities.

A net increase of $18.3 million is proposed to support and improve economic indicators. New this year is a proposal for $3.3 million to start the National Job Opening and Labor Turnover Survey. Currently there is no economic indicator of the demand for labor with which to estimate labor shortages in the U.S. labor market. Information on labor shortages can only be inferred indirectly using labor supply information, such as the unemployment rate. Developing a demand-side indicator of labor shortages at the National level would greatly enhance policy makers’ understanding of imbalances between the demand and supply of labor.

As part of this increase, the Department also proposes an additional $9.1 million for the second year of the multi-year Consumer Price Index Improvement initiative. Last year this Subcommittee supported the launching of this effort, for which I am grateful. This initiative allows the Department to continue undertaking a series of steps to improve the CPI’s timeliness and accuracy by strengthening the statistical and methodological infrastructures supporting the current CPI program.

The Department proposes $1 million to continue the work of a Presidential Commission on Workers and Economic Change in the New Economy. This initiative is an important component of a comprehensive set of initiatives announced by the President last Fall to help ensure that all Americans share the benefits of free and open trade. As the new economic forces change the standards for economic competition, they also affect organizational structures, skill requirements, and jobs. As part of the Administration’s effort to help workers and those not in the job market to take advantage of the opportunities of expanded trade, this Commission will explore a variety of strategies for upgrading the skills of existing and future workers.

The Department is requesting $2.4 million to establish a National Task Force on the Employment of Adults with Disabilities. According to the Census Bureau 74 % of persons with severe disabilities 21 to 64 years of age were not employed as of the last year surveyed (1994). The Task Force would be charged with the development of a national policy to bring adults with disabilities into gainful employment at a rate that is as close as possible to that of the general population. The Task Force will study the barriers to employment faced by disabled individuals and report its findings and policy recommendations to the President on a periodic basis over its four-year life.

A SECURE WORKFORCE - Promote Economic Security of Workers and Families

In the area of worker retraining, our budget includes an increase of $100 million, or 7% above last year’s level, for a total of $1.45 billion to support an estimated 685,800 participants in the Dislocated Worker Assistance Program.

With the support of this Committee, the funding for this program has doubled since the President took office. The President is committed to tripling it over the next five years. This is a high priority because we know a fundamental element of a secure workforce--and helping workers manage change--is providing access to training and assistance to those workers when they need it. We want to build on the success we’ve had with our rapid response teams to move this goal forward.

Back in August, the Fruit-of-the-Loom company announced that about 4,800 workers in plants in Louisiana, Texas, and Kentucky would face layoffs in 60 days. Our Dislocated Worker Unit Rapid Response teams immediately contacted the plants in their States--and within 48 hours made arrangements for on-site strategy meetings--in partnership with state and local economic development, workforce development, and elected officials--to begin the full range of rapid response assistance.

The layoffs were announced on August 7, by August 11 meetings were held in Louisiana with all the various players--and the next day our dislocated worker staff was meeting with the workers.

Layoffs are always painful. But the rapid response team mobilized quickly, got in place, and helped workers look ahead and plan for their future. They set up worker assistance workshops that covered everything from resume writing to interviewing skills. They set up job fairs, training (including community college courses), direct placement, and related skills and remedial assistance.

This year’s budget increase will not only allow the Department to continue to provide this type of rapid response but it will also increase the number of people to be served (40,000 or more) and allow us to provide training and income support for laid-off workers in secondary industries doing business with primary firms affected by trade.

As the President said in his State of the Union address, we should provide the same response when a factory closes as we do when a military base closes. This Department is at the forefront of making that happen. And I am absolutely committed to increasing job placement and wage replacement for workers who permanently lose their jobs in a plant closing or mass layoff.

In the North American Free Trade (NAFTA) and Trade Adjustment Assistance (TAA) programs, legislation will be proposed to extend the programs for 5 years; expand eligibility for TAA to those who lose their jobs due to a shift in production abroad, similar to shifts in production to Mexico and Canada covered under NAFTA-TAA; increase the training cap; make the requirements linking training and income support more consistent across both programs; and finally, create a contingency funding provision to assure that resources are available to pay for any unexpected increase in benefit costs to eligible workers. The FY 1999 request, including the legislative proposal, is a $168 million increase over the FY 1998 appropriation.

The Unemployment Insurance (UI) System also needs to be reformed in order to meet the challenges of a new economy. The President’s Budget anticipates UI Safety Net legislation for a UI Safety Net to assure the availability of benefits for more of America’s workers in the event of a recession, to make the program more accessible to low-wage and unemployed workers, to improve the solvency of the State Trust Funds, and to improve State administrative operations.

In addition to this legislative proposal, the FY 1999 budget includes a request for $91 million to strengthen the integrity of the Unemployment Insurance System, as authorized in the Balanced Budget Act of 1997. Tight budgets for unemployment insurance administration over the past several years have caused State agencies to cut back their investments in program integrity activities which affect benefit payment accuracy, detection of overpayments, collection of overpayments, and collection of under-reported taxes. Funding this proposal will reduce unemployment insurance errors and overpayments, improve State tax collections, and result in anticipated savings of well over $100 million to the Unemployment Trust Fund in 1999 alone.

The FY 1999 Unemployment Insurance budget also proposes $8 million for the one time cost of transition to the North American Industrial Classification System. This will allow the exchange of data among North American countries as well as provide for increased precision in identifying industries as a result of utilizing six rather than four digit codes. Similar investments were made in BLS for this project in FY 1997 and FY 1998.

Another important part of promoting economic security for workers is to provide pensions. I can’t overemphasize the importance of retirement security. Today Americans are living longer and are more concerned about saving enough money to maintain their standard of living throughout retirement. One of the basic problems is information and education.

Many workers do not have access to basic retirement and savings information that can help improve their understanding of steps they can take for long-term financial security. We want to change that. That’s why, working with the public-private American Savings Education Council, we have launched a Retirement Savings Education Campaign to inform Americans about the importance of saving for retirement and to encourage employers to establish pension plans for their workers. We already have over 250 campaign partners representing federal agencies, trade and professional associations, labor unions, community groups, financial entities, and private sector employers.

I have held a series of roundtable discussions with owners of small business around the country to discuss barriers and the options available in offering retirement plans to workers. In Dallas, I met with women small business owners. There is no doubt that small business has a big role to play in improving the retirement security of workers. Our nation’s small businesses employ 40% of the workforce--and 32 million workers in small businesses do not have an employer-sponsored pension plan.

I wanted to hear from these women about the obstacles they thought they faced to offering plans and to listen to some of the tips they picked up and lessons they have learned as small business owners. The goal of our education campaign is to change the way the American public thinks and acts about retirement needs. Americans need to reconsider how their personal finances are managed, begin saving early for retirement, save more and select retirement savings options that offer them the fullest advantage.

With the funding provided in the President’s FY 1999 Budget, the Department will develop new public service announcements for our targeted audiences, produce a video for small businesses to identify pension plan options and encourage them to establish a employer- sponsored plan and, of course, we will work in partnership with the President, members of Congress, and our private and public sector partners to conduct a National Summit on Retirement Savings this summer.

All of this will help expand pension coverage to many of the 50 million workers not covered by pension plans and enhance the security of pension plans already in existence. We must protect pensions and make them more portable.

The Administration will be proposing legislation to expand pension coverage to some of the more than 50 million American workers who are not earning these benefits on their job by making payroll deduction arrangements more widely available, offering a tax credit for small businesses to defray the costs of starting a new plan, creating a new and simpler defined benefit plan for small businesses and requiring that workers more rapidly be vested in their employer contributions to 401(k) accounts. These proposals will also enhance the security of pensions by requiring that better information be provided to workers about their benefits, improving the audit of plans, and extending the Federal government guarantee for certain types of plans.

The Department’s FY 1999 request includes an increase of $7 million for pension plan protection activities. This includes an increase of $4.5 million to support the operation of the Form 5500 ERISA Filing Acceptance system (EFAST). For the past 2 years, this Committee has supported the Department’s efforts to develop this new system and next year will be the first year of operation. Securing pension benefits, in part, occurs when plan officials and service providers understand the requirements of the Employment Retirement Income Security Act (ERISA) and meet their responsibilities under the statute, including their responsibility to file annual reports with the Department. With these funds, the Department will monitor and operate the new Form 5500 processing system; establish a “help desk” operation and develop a program for direct filing entities. The new system will improve the quality and accuracy of processed data and speed their use in safeguarding pensions. The investment in the new system will yield a projected net savings to the Federal government of approximately $57 million over the 5-year life cycle of the system.

The Department also proposes an increase of $1.6 million for the Pension Plan Service Provider Investigative Probe to be conducted by the Office of Inspector General. This initiative will enhance retirement security by identifying and investigating racketeers and criminal enterprises who manipulate the investment of pension fund assets for their own benefit.

The Department also has a role in private health care regulation. The FY 1999 budget proposes $4.6 million to administer the Department’s responsibilities related to implementation of health care reforms in the new health care laws. The Health Insurance Portability and Accountability Act of 1996, the Newborns’ and Mothers’ Health Protection Act of 1996, and the Mental Health Parity Act of 1996 establish many new protections for employee health benefits. These laws added new provisions to the Employment Retirement Income Security Act (ERISA) and demand additional regulatory, interpretative, enforcement, and disclosure efforts. The Department is working in conjunction with the Departments of Health and Human Services and Treasury on the implementation of these new laws.

The President has proposed legislation to allow early retirees to buy into Medicare. The Administration is concerned about the plight of older workers who unexpectedly lose their health benefits when they lose their jobs or retirees whose benefits are eliminated. Too many Americans who have worked hard all their lives suddenly find themselves losing their health coverage just at the time when they need it most and can afford it least. The President’s proposal would provide dislocated workers with an option to continue coverage under Medicare by buying into the program for as long as they need it, or until standard Medicare coverage becomes available. Retirees who lose their benefits will also be able to extend COBRA benefits in order to maintain access to the health care that is essential for them.

There are several new proposals, totaling $17.2 million, in the Department’s Workers’ Compensation Programs in FY 1999 to be drawn from the benefit funds established for these programs. One proposal is for an expansion of $3.2 million in the Periodic Roll Management (PRM) program that supports the Federal Employees’ Compensation Act (FECA) program. This proposal is designed to reduce the costs of the Federal government’s workers’ compensation program by re-evaluating long-term disability cases. Also, there is a proposed financing shift of $3.5 million from general revenues to the fair share collections in the Special Benefits account. Funding the PRM from these employer-supplied “Fair Share” funds in the Special Benefits account properly ties these staff investments directly to the account which will accrue the resulting savings. With the expansion of the PRM project, the total estimated savings in benefit payments by the Federal government from FY 1992 through FY 2002 will be approximately $672 million. The Office of Workers’ Compensation Programs has also proposed an additional $3.3 million for the Black Lung program to facilitate Year 2000 conversion.

QUALITY WORKPLACES - Foster Quality Workplaces that are Safe, Healthy and Fair

The Administration proposes $37 million for a multi-faceted initiative to fight abusive child labor, both internationally and domestically.

As America takes its place in the global economy, international labor standards, particularly prohibitions on forced labor and exploitative child labor, benefit all economies. To provide additional support for the International Labor Organization’s International Programme for the Elimination of Child Labor (IPEC), the Department requests $27 million, increasing the total amount available in grants to $30 million. This increase would ensure continuity, expansion and sustainability of existing IPEC programs. This increased funding would allow the ILO to include approximately 10 more countries in their technical assistance programs, and conduct more detailed analyses of issues of child labor and exploitative labor practices worldwide. These additional funds would expand the program in a way that is consistent with the lead role the United States plays in the fight against child labor exploitation worldwide.

We can’t lead internationally unless we do all we can at home. Domestically, there has been considerable progress in reducing illegal child labor. However, problems persist-- particularly in agriculture where working families face additional problems resulting from inadequate child care and illiteracy. An increase of $5 million in Job Training Partnership Act Pilots and Demonstrations is proposed to develop new models for work and learning opportunities, including mentoring, for young migrant farmworkers so that they may qualify for other job opportunities with career potential.

The Department also proposes $4.1 million to increase compliance in targeted industries, including garment manufacturing, agriculture, health care and other low-wage industries. While maintaining planned education and outreach among agricultural employers and a near term focus on “salad bowl” commodities, these additional resources will enable the Department to double its current level of effort and specifically target those crops and regions where the data and experience suggest the prevalence of child labor violations. Also included in this amount is an additional $800 thousand for expansion of the National Agricultural Workers survey to include significant data on child labor.

In another area of child labor enforcement, the Department proposes a $1 million increase for a review and update of child labor hazardous occupational orders, which pertain to child safety in the workplace. These hazardous orders, the last of which were issued in the early 1960s, will be updated to take into account new industries and technologies and address the needs and dangers of today’s workplaces as they relate to young workers.

Worker safety and health is essential to a quality workplace. The budget proposes $355 million, an increase of $18 million, for workplace safety and health programs. An increase of $2.8 million is proposed to support workplace safety and health enforcement in FY 1999. This initiative builds upon the Department’s commitment to implement Cooperative Compliance Programs nationwide and address the need for expanded scope inspections at worksites with the highest lost work day injury and illness rates. Proposed funding will support front-line compliance officer penetration and expand the level of compliance assistance offered to employers choosing to partner with the Department. The Department also will highlight the construction trade in an effort to focus on the leading causes of fatalities in that industry. An increase of $1.3 million is included to enable State partners to meet new challenges and complement Federal program strategies. The budget proposals also include $4 million to enhance training capabilities offered by the Department and to direct outreach materials towards specific industries, work processes and localized safety and health issues. These funds also will allow for augmentation of state consultation programs which provide free on-site consultations to employers upon request.

Continuing the work of the New OSHA which emphasizes a cooperative approach, balancing enforcement with compliance, is already making a big difference. You can talk with the owners and workers of EZ Paintr in Milwaukee, Wisconsin about that. Through its cooperation with OSHA in Wisconsin, EZ Paintr, a paint roller manufacturer, reduced its workplace injuries and illnesses by nearly 60 percent and cut its workers’ compensation costs by more that 80 percent (from 1991 to 1994).

When OSHA inspected EZ Paintr in 1992, the company had a lost workday injury rate of 13.9; by 1996, it had dropped to 5.1. As the owners of EZ Paintr have noted, “working together with our employees to provide a safe workplace makes monetary sense.” Throughout the process, the company also worked closely with the United Steelworkers Union. Continuing on this common sense, cooperative approach will truly help us achieve my goal of reducing accidents, injuries and illnesses in the workplace.

The budget also proposes $211 million, an increase of $8 million, for mine safety and health programs. To address concerns about the effectiveness of a major component of the Federal program to protect miners from exposure to respirable coal mine dust and quartz, the Department took steps in FY 1997 and FY 1998 to increase Federal monitoring of exposure limits to aid in restoring confidence in the Federal program. In FY 1999, an increase of $2.7 million is proposed to target sampling inspections at coal mines.

The Department is also proposing to increase resources by $1.2 million for the analysis and resolution of difficult compliance problems for targeted hazards, while taking a cooperative approach with mine operators to encourage long-range solutions for a safer and healthier work environment.

A fair workplace is also essential for a quality workplace. The Department proposes $67.8 million, an increase of $5.5 million, to implement a compliance assistance strategy in civil rights enforcement and to expand its Fair Enforcement Initiative to support the Administration’s efforts to strengthen enforcement of civil rights laws. The compliance assistance strategy will implement technical assistance and training guides for contractors; encourage Federal contractors to self evaluate their EEO performance; and develop and deliver grass root technical assistance seminars. This proposal will help contractors comply more easily with their EEO obligations. The Fair Enforcement Initiative will increase the number of contractors brought into compliance while reducing burdens on contractors, such as paperwork requirements. This proposal allows the Department to continue a Fair Enforcement strategy which includes a tiered review process, upgraded information technology capabilities, and paperwork reduction.

Finally, the Department proposes a $5 million Child Care initiative which will support the President’s proposal to greatly improve the quality of services provided by day care providers. Quality child care service goes hand in glove with having an adequate supply of competent, professional child care providers. In FY 1999, the Department proposes to expand the registered apprenticeship system using these funds to assist States in building their infrastructures and replicate--based on a nationally recognized West Virginia model--training for skilled Child Care Development Specialists in at least 10 States. This initiative provides industry-recognized certification and development of career ladders in the child care field.

Government Performance and Results Act (GPRA)

Under my leadership, since my arrival in May, the Department has taken GPRA very seriously and I believe we have made considerable progress in meeting both the legal requirements and the spirit of the Act. We realize, however, that there is more work to be done as the Department continues to refine its strategic plan to move further toward an outcomes focus. The performance plan recently submitted with the budget request reflects my budget and program priorities, arrayed by the strategic goals, to achieve the results planned for the Department in FY 1999. This Plan also responds to concerns raised by the Government Accounting Office (GAO) and Congressional staff during their review of the Department’s Strategic Plan that it did not adequately reflect the integrated and cross-cutting nature of the Department’s programs and activities. We are committed to working with the Office of the Inspector General (OIG) and GAO to improve our management systems and procedures. The OIG has agreed to work as a partner with the Department to provide the Congress and me with advice on how to attain the highest possible results from program performance.

One of the primary aims of the Department’s FY 1999 Annual Performance Plan is to advance the Department toward achieving my vision of an integrated Department, one in which component agencies work together to achieve common goals. This plan represents a major step in that direction, as capitalizing on the commonalities and linkages between DOL’s agencies is critical for successful plan accomplishment.

A major management challenge in FY 1999 will be to establish a process aimed to assure the Department’s performance and level of accountability for program results. To oversee implementation of the Department’s FY 1999 and subsequent Performance Plans, and coordinate all the Department’s programs as a unified Department of Labor, I will institutionalize a strategic management process to maintain a central focus and accountability of the Department’s many programs and activities. This is in addition to current efforts designed to better align performance-based information systems, including a unified capital planning evaluation process for information technology systems, financial management integrity to obtain a clean audit opinion of the Department’s Financial Statement on an annual basis, and human resource utilization.

I believe that the FY 1999 Annual Performance Plan, which is directly tied to my budget request, sends the American public a clear message of the purpose and mission of the Department and represents a commitment to the achievement of my strategic goals -- a prepared workforce, a secure workforce, and quality workplaces. The Plan presents the programs, activities, and achievements that DOL will strive to accomplish in FY 1999, the means by which its performance will be evaluated, and the standards to which it will be held accountable by Congress and the American public.

I look forward to working with the committee and I thank you for the opportunity to appear before you. I will be happy to respond to any questions.


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