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Secretary of Labor Thomas E. Perez
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Acting Secretary of Labor Seth D. Harris

Prepared Remarks by
Acting Secretary of Labor Seth D. Harris,
American University School of International Service,
One Hundred Years of U.S. Labor and Employment Relations:
A Look Back, A Look Forward, and A View From A Comparative Perspective,
American University,
Washington, DC
April 26, 2013

Introduction

Thank you, Dean Goldgeier, for that for that generous introduction. I also want to thank American University and its School of International Service for inviting me to participate today.

As a former labor law professor who misses the classroom dearly, you should know that old habits die hard — put me in front of a room full of faculty and students talking about labor policy and I'm programmed to keep talking until the bell rings. So make yourselves comfortable.

Let me also say: I am delighted to participate in symposium entitled "One Hundred Years of U.S. Labor and Employment Relations." Apart from the fact that I am a student of labor history and the child of a historian, the timing for this event could not be more appropriate.

Centennial

Earlier this year, the Labor Department marked its 100th anniversary. In March of 1913, the Department first opened its doors to — in the words of its charter — "foster, promote and develop the welfare of working people, to improve their working conditions, and to enhance their opportunities for profitable employment." Through World Wars, a Great Depression and a Great Recession, natural disasters, 9/11 and numerous other crises, the Department has been responsive and resolute — adapting to new conditions and adopting new tools to continue upholding the dignity of work.

After a century, much has changed, as we would expect. An industrial revolution has been replaced by a technological revolution. Information has become as important as raw materials. Women are working outside the home at the same rate as men, while earning college degrees at a higher rate. The workforce has become vastly more diverse; the economy more global and integrated; communications both instantaneous and ubiquitous.

Yes, the economy has changed. Yet, the Labor Department's mission remains the same. And its work has never been more relevant and indispensable to opportunity, prosperity, and the future of America's middle class.

More than ever before, Americans are depending on the Department to "foster, promote, and develop the welfare of working people." And that means advocating not just for wage-earners, but also job-seekers and retirees. It means assuring opportunity to every worker — young and old, men and women of all races, persons with disabilities, veterans and returning servicemembers, and more.

It also means continuing "to improve their working conditions," doing everything possible to ensure workers come home to their families healthy, safe and sound after a day on the job. This simple, perhaps trite, goal is in no way incompatible with job creation -- we don't have to choose between job safety and job growth.

And as we continue our recovery from the worst economic crisis in 70 years, it is a matter of the greatest national urgency to help Americans "enhance opportunities for profitable employment" -- providing a pathway to the middle class; making sure ladders of opportunity have strong, sturdy rungs; and ensuring that businesses can find the skilled workers they need to accelerate economic growth.

So, although much has changed in our economy over the last 100 years, our core mission continues.

In a way, the constancy of the Labor Department's mission is a mirror image of the last century of America's broader history. From suffrage to civil rights to the nature and strength of our economy, much has changed in the United States. But at its core, America has remained the same: a beacon of freedom; a democratic pillar; a place where anyone, if they're willing to work hard enough, can make it if they try.

For these reasons and countless others, America has remained a magnet for people for the last 100 years and even longer.

I want to explore that idea with you today — America as a magnet — and discuss what it means for the future of America's workforce.

Magnet

America is a nation of immigrants, and the last century offers millions of illustrations. For a variety of reasons, people from all corners of the globe have been drawn to our shores.

My grandparents fled the Czar's tyranny and deadly anti-Semitism abroad, among other things. For them, America offered the religious freedom and expansive personal liberty codified in our Constitution and blazed by our founding story.

For many others, the calculus was and remains economic. America is, after all, the land of opportunity. We are the purveyors of the American Dream — the idea that anyone can find a place in our middle class through initiative and hard work. You never hear about a French Dream or a Russian Dream. It speaks to our immigrant aspirations that the American Dream lives on.

For others, America offers the opportunity to reunite with family and, in the evocative Yiddish phrase of my grandparents' generation, "lansmen" — that is, neighbors from the same land — your home community transplanted to the New World. Because in America, you can celebrate your heritage and still be accepted as an American with the same rights, privileges, and responsibilities as the Mayflower families or the Daughters of the American Revolution.

Certainly, immigrants' individual motivations differ greatly. We may not be able to categorize or even understand them all. But whatever their motives, America has always been a magnet for people.

President Obama's passionate advocacy for comprehensive immigration reform acknowledges the strength of the American magnet. Certainly, he wants to continue strengthening border security and crack down on employers who hire undocumented workers. But he also wants to bring 11 million undocumenteds out of the shadows and ensure them an earned path to citizenship. And he wants to fix our legal immigration system, so that this generation's versions of my grandparents will be welcomed to our country.

Yes, we are a magnet for people, and President Obama reminds us that this is an important part of America's greatness.

America has not, however, always been a magnet for jobs.

Following World War II, and perhaps beginning in the years immediately following World War I, with the global economic system disrupted by bombs and bullets, America's status as the unchallenged economic superpower meant we were the richest consumer market in the world. American employers faced competition, in essence, only from one another for shares of the most lucrative economic prize available.

Add on top of that substantial natural and legal barriers to international trade, and it made sense for companies to create jobs here in the United States. America was a magnet for jobs, many of them good-paying, middle-class jobs, in the 1950s, 1960s, and early 1970s.

But the global economy caught up with us. As globalization spread during the late '70s, '80s, and '90s, we began to lose pieces of our basic industries to outsourcing and foreign competition. Jobs in Detroit — Ford, GM, Chrysler and their supply chains — left for foreign locales — and American manufacturers faced growing competition from Japan, Taiwan, Korea, and eventually China, Peru, and others.

The steel, tire, and rubber jobs of the industrial South and Midwest reappeared in a liberalizing Chinese economy, leaving American communities without major employers they could depend on. And manufacturing jobs that had once built America's middle class instead built factories south of the border.

America not only stopped being a magnet for jobs. Americans watched as jobs they felt could never disappear did exactly that.

But now, perhaps tentatively, it appears we're reversing course. After decades of multinational and American companies moving jobs to other countries, we're beginning to see entrepreneurs and manufacturers make the decision to site factories and production facilities here in the United States — or even bring jobs back to the U.S. from overseas.

Large manufacturers like Ford and Caterpillar, who previously expanded facilities in Mexico, China, or Japan, have announced large investments in U.S. facilities.

In 2010, KEEN, the footwear designer, opened a 15,000-square-foot facility to manufacture boots in Portland, Oregon, moving their production line out of China and back to a U.S. location just five miles from its corporate headquarters.

After watching costs rise in its Chinese factories, MasterLock began bringing production back to Milwaukee, Wisconsin — to the exact same community where the company was founded in 1921.

America has added more than 500,000 manufacturing jobs since the end of the Great Recession and more than 6.5 million private-sector jobs over the last 37 months.

It's not just manufacturers. Service firms — from customer support centers to software developers to engineers — are bringing their operations to our shores. Foreign firms are making the decision to take advantage of American productivity and innovation.

Siemens, for example, spends nearly $50 million each year training its U.S. workforce, and ThyssenKrupp spent nearly $5 billion on its new steel and stainless steel manufacturing and processing plant in Alabama. Even Volkswagen, a venerable German brand, is building cars in Chattanooga, Tennessee.

A Choice

So the question is, why? Why is America a magnet for jobs again? If America will always be a magnet for people, how can we ensure we'll remain a magnet for jobs, too?

We know employers make siting decisions — decisions about where they are going to locate their facilities — based on many factors. Some of those factors have nothing to do with workers. For example, the massive natural gas reserves discovered in Pennsylvania, North Dakota, and other states have made America a ready source of cheap energy. Also, we have a reliable and reasonably predictable political system — even if it is sometimes hard to explain or even understand.

But companies' siting decisions also relate to workers. In fact, I would argue that these reasons are critical to employers' decision making. We can organize these reasons into two buckets. For simplicity's sake, and to help me further drive home my point, I'm going to call these two buckets: "bad reasons" and "good reasons."

These two sets of reasons represent a business choice. But so too do they represent a choice between two very different futures for American workers — and, in turn, the future of American competitiveness.
So first, the bad reasons: low union density rates; labor-management laws that tip towards management; limited worker protection and social insurance laws; and an environment that seems to favor lower personal and corporate taxes over public investments in workers and communities.

Union density has declined to only 7% in the private sector. It is the rare workplace in America that is governed through a private system of collective bargaining. Litigation has too often replaced private workplace conflict resolution, and our labor-management relations system that has turned worker organizing into an invitation for angry conflict between workers and their employers.

So, understandably, without effective private means to resolve their workplace problems, workers have increasingly turned to their government. Over the past 40 years, because of irresistible public demands for action, Congress has stepped in to regulate workplace safety and health; health care and pensions; family and medical leave; civil rights for workers of color, women workers, and workers with disabilities; and a host of other workplace issues. And when Congress legislates, the Department of Labor is often tasked with the enforcement and administration of the laws.

The decline of a private workplace governance system means that the demands on the Labor Department have outgrown our capacity — a few thousand inspectors now struggle to enforce dozens of employment laws protecting 140 million workers in some 7 and one-half million workplaces.

Our inspectors cannot be in every part of every workplace every day. It isn't possible, and a stretched-thin enforcement mechanism means we have less enforcement of workplace safety and health regulations, anti-discrimination laws, pension and health care protection statutes, and wage and hour laws than we need.

Second, the "good reasons" a company makes a siting decision: a robust, local workforce development system, a stream of skilled, well-trained workers, and direct access to large consumer markets with consumers who can afford to the buy the products being produced, to name a few.

When multinational corporations make siting decisions, I believe firmly that the skills of the local workforce, and the ability of a local community's education and training institutions to generate a pipeline of highly skilled workers ready to produce 21st century goods and services, are among the most important bases for their decisions.

I have seen it in community after community — employers working in partnership with community colleges and Labor Department-funded workforce investment boards to create training programs for jobs that are available now and will remain into the future.

I've spoken with foreign-based employers who chose a U.S. community for their plant because the local schools and community colleges worked with them to design the training programs workers will need to succeed. I've spoken with entrepreneurs who started new businesses and grew their businesses by relying on workers trained in local community colleges and training programs.

Skills are the leading edge of economic development for communities across the country, and globalization and technological innovation are making skills and training even more imperative than ever. So if a siting decision for "bad" reasons comes at the expense of the workforce, a siting decision for "good" reasons is the direct result of investments in the workforce. Just as companies need roads, rails, and runways, so too does the 21st century economy require a skills infrastructure. In fact, I would argue, it's even more imperative.

This path — investing in the skills and training to ensure America's workers remain the best-trained, highest-skilled in the world — is the path President Obama has chosen.

As one example, the President recently proposed a new $8 billion Community College to Career Fund — an investment that will be jointly managed by the Departments of Labor and Education to provide funding for community colleges, states, and the public workforce system to partner with businesses to train workers in a range of growth occupations requiring postsecondary education and training in expanding industry sectors: advanced manufacturing, health care, transportation, clean energy, biosciences, logistics, and others.

The Community College to Career Fund builds upon the success of the Labor Department's Trade Adjustment Assistance Community College and Career Training — or TAACCCT — grant program. TAACCCT catalyzed innovative partnerships between community colleges and businesses to train workers with the skills employers in their communities need. It will support promising community college-based training programs, while building evidence of their effectiveness and expanding on proven models.

The President is serious about building a comprehensive and sturdy skills infrastructure, one that has as its foundation the kind of employer-based training that not only works, but is capable of attracting jobs to our shore.

Conclusion

In his State of the Union address a little over two months ago, the President asked us all to consider three questions in all of the decisions we make: First, how do we make America a magnet for jobs? Second, how do we equip our people with the skills they need to succeed in those jobs? And third, how do we ensure that an honest day's work leads to a decent living?

For 100 years and more, America has been a magnet for people; nothing about that is going to change — it's embedded in who we are as a country and the principles that make us great. But our answers to those three questions will determine whether or not we can similarly remain — consistently and continually — a magnet for jobs, too.

Thank you for your invitation to speak with you today. And thank you for helping the Labor Department to celebrate its 100th Anniversary.