Secretary of Labor Thomas E. Perez

G20 Labor and Employment Ministerial — Second Plenary Session, Boosting Participation and Reducing Structural Unemployment, Melbourne, Australia, September 11, 2014

[as prepared for delivery]

Thank you Minister Abetz and our Australian hosts -- for your hospitality and your leadership of the G20 process this year. I also look forward to working with our colleagues from Turkey as their nation prepares to assume the presidency of the G20. I'm excited to address this session because I believe bringing more people into the labor force — for meaningful work that gives them economic security and a family-sustaining wage — is absolutely essential to the future prosperity of all our nations.

I salute the Australian presidency's focus on these themes, which are at the very top of President Obama's domestic agenda and at the core of my Department of Labor's mission. We believe inclusion is not just the right thing to do; it's one of the keys to maximizing our economic potential. We can't leave anyone on the sidelines. We can't afford to waste any human capital.

Guided in part by this philosophy, over the last five and a half years the United States has worked to dig out from the Great Recession and is enjoying a strong economic resurgence.

U.S. businesses have now created more than 10 million private sector jobs since early 2010, thanks to 54 straight months of private sector employment growth — the longest such streak on record. There were more job openings in June than at any time since February 2001. Just over a year ago, our unemployment rate was 7.5 percent; now it's down to 6.1 percent.

Manufacturing in the U.S. is coming back, growing faster than at any point in the last 15 years. The U.S. auto industry was brought to its knees in the Great Recession, but today we're building more cars than at any time in the last decade.

Consumer confidence is at a nearly seven-year high. Our businesses are exporting more goods than ever before. And for the first time in 20 years, the U.S. is producing more oil at home than it imports from abroad.

We climbed out of the hole left by the Great Recession in part through expansionary fiscal policies, an effort to increase aggregate demand and spur greater consumption throughout the economy. A few months into President Obama's first term, he signed the American Recovery and Reinvestment Act, an $800 billion combination of tax cuts and spending increases, which alone saved or created an estimated 6 million jobs while raising GDP as much as 3 percent. We continue to advocate for greater investments in education, training, infrastructure and research and development to support growth and fiscal sustainability.

But despite the recovery, we're still facing formidable challenges. We're still not unleashing our full economic potential. Prosperity is not being enjoyed by everyone. Too many people remain unemployed. We're still held back by stagnant wages, opportunity gaps and economic inequality — all of which create tremendous hardship for individual Americans, but also stifle economic growth that would benefit all Americans.

Ensuring shared prosperity and building an economy that works for everyone — that's our remaining challenge. And to meet it successfully, we can learn from the expertise and experience of our fellow G20 nations.

The recent OECD report, for example, documented that the United States has one of the lowest minimum wages among industrialized countries. The purchasing power of the U.S. minimum wage has declined 20 percent since the 1980s because we do not index it. President Obama has fought hard for an increase to $10.10 per hour, and even that would only put us in the middle of the pack globally. We believe, as one of our core values, that no one who works full time should have to live in poverty. And we also believe that in an economy driven by consumer demand, raising the pay of low-income workers is a pragmatic growth and job creation strategy as well.

One employer I met several months ago told me we have a "consumption-deprived recovery". What he and other businesses need more than anything else is customers — customers with money in their pockets to spend. And those customers have to come not just from the elite, but from everyone. Right now, our recovery is too reliant on high-end consumers. Since the end of the recession, inflation-adjusted spending by the wealthiest 5 percent of Americans has increased 17 percent. For everyone else, it's barely budged — up just 1 percent.

Rising income inequality isn't just unfair; it's limiting our overall economic output. It doesn't just leave too many people with a small slice of the pie; it keeps the pie from expanding. Standard & Poor's released a study last month concluding that sustainable growth depends a great deal on reducing poverty. "A rising tide lifts all boats," their report says, "but a lifeboat carrying a few, surrounded by many treading water, risks capsizing." We also know from the IMF that lower inequality is associated with faster growth.

There are other steps we can take to increase demand and spur consumption. A sturdy safety net is critical. We see in a range of G20 countries how increased spending on social protection can act as a buffer against crises and support demand in local economies.

Also critical are the rights of workers to bargain collectively for better wages, benefits and working conditions. On average in the United States, the median wage of workers in a union is about $200 higher than similarly situated non-union workers. On average, benefits for union members are higher than for non-union members. Declining labor union density in the United States remains an impediment to consumption-driven economic growth, as it does in many of our countries. We need to help reverse this trend and ensure that workers have the right to organize.

We need to continue to increase our investments in education today, and in tomorrow's workforce. To meet that challenge, the Obama administration has an ambitious skills agenda designed to connect ready-to-work-Americans with ready-to-be-filled jobs. The key is a demand-driven approach, engaging employers directly about what credentials they're looking for when recruiting and hiring, and ensuring that workers are equipped with the skills to compete for today's and tomorrow's jobs.

Our Congress just passed — and President Obama signed -- a bipartisan bill, the Workforce Innovation and Opportunity Act, that will modernize our workforce system and strengthen the partnerships that sustain it. We are doing more to get timely labor market information in people's hands, through better proliferation of data and online tools.

This year, we're investing $1 billion in grant money to help more people get the tools they need to succeed in 21st century jobs. That includes $450 million that we'll award in a few weeks to build up the capacity of our community colleges, which provide critical education and training to our workforce.

We're also putting apprenticeship front and center as never before, expanding them to give more young people more promising career pathways. President Obama has put forth an ambitious but realistic goal of doubling the number of registered apprentices in coming years. And in so doing, we're looking to some of our G20 partners for inspiration. Germany stands out for its success with this "learn while you earn" training model. I believe in learning from others' best practices, so I'm look forward to traveling to Germany soon to learn about their innovative approach to apprenticeship.

We want to be sure that apprenticeship opportunities are open to everyone. Historically, in the United States, women and minorities have been underrepresented in apprenticeship. We intend to reverse this longstanding trend. We are beginning to make progress, but considerable work lies ahead. We also want to extend the apprenticeship model beyond the traditional skilled trades, and include occupations like health, IT, cybersecurity and other growth areas.

We must also do more in the United States to increase female labor force participation, which measures 12 percentage points less than the male rate. This doesn't just hurt women; it hurts all of us. It's a drag on future growth. To reduce this gap, we are working to strengthen our efforts on paid leave, child care, work-life balance and family-friendly workplaces. We're also pushing to expand and make permanent tax cuts for working families, in addition to stepping up efforts to enforce anti-discrimination laws.

The United States hasn't always led in this area, and we have a lot to learn from many of you in this room. We're one of the few nations on earth that has no national paid parental leave law. Brazil, to cite just one example, grants new mothers 120 days at 100 percent pay. According to 2012 figures, the net cost of child care in the United States is more than twice what it is in OECD nations as a whole.

I enthusiastically support a collective commitment by each of our countries to strive for a 25 percent reduction in the labor force participation gender gap by 2025. It will be a challenge for the United States to reach this target, as I am sure it will be for many of you. But I believe this ambitious goal will help galvanize action in each of our economies, giving this issue the urgency and attention it deserves.

We're also making every effort to expand employment opportunities for people with disabilities and bring them fully into the economic mainstream. In the United States, the labor force participation rate for workers with disabilities stands at 19.4 percent as of July 2014. In other words, for every person with a disability who's in the workforce, four more are not. Many people with disabilities want nothing more than the dignity of work. It's not often that you hear someone say: I want to be a taxpayer. But that's what I hear from this community all the time. We have done a considerable amount of work in this area, and I look forward to brainstorming with you about how to expand employment of people with disabilities.

Finally, all of us must tackle the long-term unemployment challenge. I'm certain that, like me, you have moving stories of people in your countries still struggling to find a job, after months or even years, despite their most diligent efforts. Normally at this point in a recovery, long-term unemployment has returned to pre-recession levels. But right now in the U.S. we have nearly 3 million people who've been out of work for at least 27 weeks, and they account for nearly one-third of the total number of unemployed.

It's not just that the long-term unemployed need our help; it's that we need them back on the job and contributing to the economy. Same goes for women, minorities, youth, people with disabilities and others more likely to be living on the economic margins. Empowering them and boosting their participation isn't just a matter of fundamental fairness, or a question of compassion or conscience; it's a common-sense approach to economic policy. Any nation is stronger when it fields a full team.


At the end of the day, what we seek is not just boosting participation, but ensuring full inclusion and dignity at work. It's not just about increasing the quantity of participants but enhancing the quality of their participation. One of the most important family values is time spent with family. Too many people in America are working two or three jobs just to make ends meet.

We want people not just to participate but also to prosper... not just to have a job, but to have access to ladders of opportunity... not just to get by, but to get ahead... not just to live paycheck to paycheck, but to earn a decent wage and live out their highest and best dreams... not just to punch a clock, but to punch their ticket to the middle class.

That's the challenge we face together — for the long-term health and stability of our individual economies, and the global economy that we share.

Our challenge is great. Our goals are ambitious. Success will require sustained dialogue and partnership. That's why we need an Employment Working Group that can serve the G20 in the same way similar working groups address financial, developmental, and economic issues.

I look forward to working with all of you -- collectively and through our bilateral relationships -- to share information, experiences, and solutions in a way that benefits the working people of all our nations.

Thank you very much.