Secretary of Labor Thomas E. Perez

Remarks at the Greater Baltimore Committee, March 16, 2015

[as prepared for delivery]

Thank you, Don (Fry). It's always a pleasure to be in Maryland, and to see so many familiar faces.

The first Friday of every month is Numbers Day at the Department of Labor, when we release the latest jobs figures. And I have to confess that Numbers Day has been pretty exciting these last few months. Because the news has been very good.

We've seen 60 consecutive months of private sector job growth — five uninterrupted years of gains — with more than 12 million new jobs created. In the last couple of years, more and more of those have been middle and high wage positions. The unemployment rate is the lowest it's been since the spring of 2008. Last year, unemployment fell in every single state — the first time that's happened in 30 years. There are 5 million job openings nationwide — the most since January of 2001.

And the good news isn't just about jobs. Exports are at an all-time high. 1.8 million new export-related jobs have been created since 2009, and these jobs pay, on average, up to 18 percent more than jobs in non-exporting firms and industries. Consumer confidence is at a seven year high. High school graduation rates are up nationwide. Crime and incarceration rates are both down — the first time they've declined together in 40 years. Millions of previously uninsured Americans now have health coverage. Our economy is thriving; the wind is at our backs.

We all succeed only when we all succeed

But we're not about to spike the football and call the game over, because there are a lot of people who haven't yet been lifted by this rising tide. By so many metrics, we're better off than we were six years ago. But "so many" isn't good enough.

It's not good enough for Austraberta, the 71-year-old woman I met in Houston who has been a janitor for more than 30 years and struggles every day to keep her head above water. She helped organize her co-workers for higher wages, but she still only makes $8.85 an hour.

"So many" isn't quite good enough for Kate, a social worker from Prince George's County who had to take unpaid leave to care for her newborn and recover from a C-section. She wrote to us at DOL, saying "I'm not sure if America is punishing me for choosing a career or choosing to be a mother."

So many isn't good enough for Carlos, a former Army officer in Severna Park whose military experience and master's degree in industrial engineering weren't enough to insulate him from the effects of the recession. Carlos lost his job and has been out of work for well over a year. He exhausted his unemployment benefits and now struggles to make ends meet.

Too many people are still on the sidelines. And of those who are working, far too many are barely getting by. Productivity has increased more than 90 percent since 1979, but real wages have climbed only 2 percent. That means more and more workers are putting in 40 hours a week — or more — but they still need food stamps to feed their families. That's not the best America.

And here in Maryland, our own "America in miniature" as they say, we see our own great progress tempered by persistent challenges. Maryland weathered the Great Recession better than a lot of other states, in part because of the tough choices made by Governor O'Malley and other leaders and policymakers. But just as there's more work to do nationwide, there's more work to do here.

Our state has the nation's highest median household income, but more than half a million Marylanders live below the poverty line. Maryland has had some of the best job growth in the region since the depths of the recession, but just as there are across the nation, there are too many unemployed Marylanders looking for work, and the federal workforce no longer promises the stability it once did. The state's schools are consistently ranked among the best in the country, and we should take great pride in that. But while more than half of white high school graduates have taken an AP exam, only about one in five black students have done the same, and fewer than one in ten Latino students. We still have schools that are underperforming. That's not the best Maryland.

The late Senator Ted Kennedy said "America means very little if it doesn't mean opportunity for all its people." We do, indeed, hold ourselves up as a nation of opportunity — we have to make sure that opportunity extends to all.

Now, you'd expect to hear that from Tom Perez, Labor Secretary. But don't take my word for it. I didn't tell "CBS This Morning" last year that income inequality is destabilizing, and that, quote: "too much of the GDP over the last generation has gone to too few of the people." That was Goldman Sachs CEO Lloyd Blankfein.

I didn't say "A rising tide lifts all boats, but a lifeboat carrying a few, surrounded by many treading water, risks capsizing." That was Standard and Poor's last summer in a report explaining that income inequality is stifling GDP growth.

Last week, we learned that in 2014, the Wall Street bonus pool was $28.5 billion. That's roughly twice as much as the total earnings of all full time minimum wage workers in America.

There is a growing consensus that this kind of inequality will stifle growth, and will hurt us in the long run.

So how do we address this challenge? How do we build the best America? How do we build a stronger, more sustainable middle class so that more people can share in the prosperity being created? How do we build a stairway to shared prosperity?

There are a number of critical steps on this stairway, but today I want to focus on two: jobs and leadership.

The Stairway to Shared Prosperity: Jobs

Good jobs are the first step on the stairway. Good jobs are the essence of middle class economics. A good job is the foundation of the American Dream. A good job can give a person a sense of dignity and purpose while enabling them to get a decent place to live and put a hot meal on the table. And it gives them money in their pocket to pump back into the economy. In the best America, every person has access to a good job.

The key to getting people into good jobs is making sure they have the skills to do those jobs. We have to address the persistent challenge that I hear about so often from employers here and around the country: they're ready to grow and they have positions to fill, but they can't find skilled workers to hire.

With five million jobs open right now, there is abundant opportunity across the country. We have to make sure every person can access that opportunity.

This is an Eisenhower moment — President Eisenhower knew that we had to invest in our nation's physical infrastructure in order to compete in the 20th century, and so he built the interstate highway system. Today, to compete in the 21st century, we're investing in our human infrastructure. We're building a modernized skills superhighway with a number of on-ramps and off-ramps that lead to good jobs and the middle class. The new Workforce Innovation and Opportunity Act, enacted last summer thanks to strong bipartisan support, will help us continue this transformation.

There are four basic principles driving this transformation.

First, we're making the system demand-driven — we've done away with the old train-and-pray model, where you train people to make widgets and then pray that some company is hiring widget makers.

The state's investment in EARN Maryland, an initiative by Governor O'Malley, is a great example of the demand-driven principle. By engaging the business community and then investing in industry strategies identified through that engagement, Maryland did something that a lot of other states haven't done. And the results have been encouraging. More than 4,000 people across the state will participate in training programs funded by the initiative, which targets high growth industries like cybersecurity, advanced manufacturing and biotech. One of the grantees, the Maryland Manufacturing Boot Camp, reported that 92 percent of program graduates had been offered jobs. EARN responds to the workforce needs that exist today.

Investing in demand-driven training is a top priority for the Obama Administration. Those investments will make sure there's a wide open road, no matter which route a person chooses.

The second principle of the skills transformation is that there are a number of pathways that lead to opportunity and prosperity. A four year degree has always been, and continues to be, one proven route to a successful career. But it's not the only one.

Community colleges are another. That's why the Administration has been so committed to investing in them.

I've seen firsthand how those investments are paying off. Last fall, at an event at Anne Arundel Community College, I met Ginny. In her struggle to get a firm grip on a ladder of opportunity, Ginny faced significant hurdles, like childhood abuse, involvement with drugs, and an arrest and conviction. She was a single mother working as a payroll and HR manager when she got laid off. But she enrolled at Anne Arundel and finished in May with an Information Assurance and Security certificate. Now she earns $52,000 a year in a job she loves.

When we invest in people, we not only provide them with opportunities to succeed, we also get a solid ROI. And community colleges can also offer pathways to four year degrees. Maryland, under the leadership of Brit Kirwan, has been a model for creating seamless connections between community colleges and four-year institutions — expanding educational opportunities for more people.

The president understands the inherent value of our nation's community colleges — that's why he has proposed making community college free for everyone willing to work it.

A century ago, when advocates were pushing for free K-12 education, skeptics said it was wasteful, that people didn't need a high-school education to succeed in America. The advocates won, of course, and education was one of the driving forces behind our emergence as a global superpower. But high school is no longer enough. So just as they did 100 years ago, we need to have the foresight to think long-term.

Apprenticeship is another proven route to the middle class — it's like the other four year degree, but without the debt.

Unfortunately, apprenticeship is the road far less traveled. I've been to Germany and other countries to see firsthand how they use apprenticeship as a launching pad to middle-class careers in a whole host of industries. If you look at their youth unemployment rate, you'll see that this approach has paid off.

But here in the U.S., when people hear apprenticeship, they often think exclusively of jobs like construction worker or plumber. Those apprenticeship programs are still important. But we also need to look at how we can apply the apprenticeship model to other career pathways. The mom or dad who apprenticed at Bethlehem Steel and built a solid-middle class career, they need to know that their son or daughter can take a similar path to success. It may or may not be in the skilled trades, but it will certainly lead to the middle class.

And for employers, apprenticeships are an efficient way to hire and train workers. CVS uses apprenticeship to train its pharmacy technicians. Blue Cross/Blue Shield uses them for its IT workforce. At its training center in Landover, UPS trains apprentices as delivery drivers and plans to expand their apprenticeship program to logistics, operations and automotive repair.

I've had the opportunity to see some innovative programs in action. At the Urban Technology Project in Philadelphia, for example, students receive hands-on-training and industry- recognized credentials through a computer support specialist apprenticeship program. I met one student, Jessica, who is now the director of operations at a software development firm. She said she feels just as qualified as her colleagues who earned four year degrees, and she likened it to a board game, where she got to "skip ahead four spaces to payday."

We want to take models like these to scale. The best America should maximize the best training models. We want to transform apprenticeship for the 21st century — to expand its use in high-demand industries. We're making investments to accomplish the president's goal of doubling the number of apprenticeships. In December we announced the availability of $100 million for the American Apprenticeship Grant competition — to reward public-private partnerships that help more workers participate in apprenticeships. Applications are due in late April — I hope many of you will consider applying.

I was heartened to see that leaders in Annapolis have introduced legislation in response to the Augustine report's recommendation to expand the use of apprenticeships in Maryland. Our state can learn a lot from others that have stepped up to the plate. South Carolina, for example, has increased apprenticeships by 650 percent through a tax credit and by making it easier for companies to start programs in collaboration with the technical college system.

The K-12 system should also be a reliable pathway to middle class careers. I had the opportunity to visit the Sarah E. Goode STEM Academy on the South Side of Chicago, where the students — 98 percent of them students of color — graduate not only with a high school diploma, but with an industry certification and an associate's degree. And they're first in line for a shot at entry-level positions with IBM.

Public-private partnerships like the one at Sarah Goode are popping up all over the country. Last spring President Obama visited Bladensburg High School, which is part of a program in Prince George's County that won a $7 million grant to prepare students for high-demand jobs. The grant was part of a nationwide investment of $100 million to help schools and their partners re-design the high school experience so that students can earn college credit and on-the-job experience. We're working closely with the Department of Education on this initiative, with an eye toward aligning education with workforce realities.

Prince George's County will use the grant to expand the Health & Biosciences career academy, which enables student to earn industry-recognized certifications and college credit. Students also have access to paid work experiences with employer partners like Lockheed Martin.

Programs like these create real career pathways for students — students who, in many cases, haven't been given a whole lot of chances for success in the past.

The third principle of our skills transformation is that we take the job seeker where we find them. That's why the skills superhighway has dedicated lanes for veterans, who often need help transitioning back to civilian life and translating the valuable skills acquired during their service into jobs. It has dedicated lanes for people with disabilities, for whom the unemployment rate is 11.2 percent.

It has dedicated lanes for immigrants. It has dedicated lanes for former offenders.

There's a great example down the road in Montgomery County. The jail there is one of the few correctional facilities in the nation that has an American Job Center on site, where inmates can access job services before they are released. In America, we don't kick people to the curb. It's in their interest, and in all of our interests, to help them succeed after they've served their time.

I know Ron Peterson from Johns Hopkins Medicine is here. He's a leader in giving people second chances. He'll tell you that he hires ex-offenders because it's in his enlightened self-interest…they're some of the most motivated and passionate employees he has.

We want to help more people follow Ron's lead, and we recently announced the availability of $5 million in grants to help other communities bring employment services "behind the fence."

There are dedicated lanes for out of school youth — for whom the unemployment rate is far higher than for the rest of the nation. And that's particularly true for young men of color.

One great model for setting young people up for success, and one I know Don Fry holds near and dear, is summer jobs. Particularly for kids in our nation's cities, these opportunities are far more than a way to earn a little extra spending money. They lead to higher graduation rates, better future job prospects, increased lifetime earnings.

That's why the GBC, under Don's leadership, has worked to encourage business support of the mayor's "Hire One Youth" initiative for four years running. I applaud Mayor Rawlings-Blake, the GBC, and all of the participating employers for recognizing the value of summer jobs for the workers, the employers and the entire city.

And there's one final principle of our skills transformation -- one that I think everyone in this room will intuitively understand. We cannot create an innovative, flexible, effective workforce system without partnership. Let me give you an outstanding example right here in Maryland. Last year, 14 community colleges banded together with employer partners like IBM, Lockheed Martin and Medstar to form the Maryland Cyber-Technology Pathways Consortium, to train low-income workers for jobs in IT and cybersecurity. The consortium won a $15 million dollar DOL grant last fall to support their efforts.

And last week, President Obama announced the TechHire Initiative, which brings the public and private sectors together to fill over half a million technology-related jobs by giving more people access to the skills necessary to compete for those jobs. As part of the initiative, 20 forward-thinking communities have brought stakeholders together and formed partnerships that will work to train more workers, particularly from underrepresented communities, for IT and cybersecurity jobs. More than 300 employers are signed up.

The best America can't be built by stovepipes. We need partnerships at scale. That means making sure employers are as engaged in workforce development as they are in conversations about trade and tax credits and other issues of concern. It also means working in collaboration with labor. It means coordinating with community organizations and public officials to make sure resources and investments are targeted to strategies that work. It means using public dollars to leverage investments from philanthropy.

As the President said last week in Selma, "the single most powerful word in our democracy is the word 'we'." Together, we can build a better America that lives up to its promise of opportunity.

Pillars of Shared Prosperity: Leadership

And that brings me to a second, critical step on the stairway to shared prosperity that I want to discuss: leadership.

One of the great privileges of my job is that I get to travel around the country and see leadership in action. Political leaders, business leaders, labor leaders, faith leaders, education and community leaders — they're all doing amazing things with an eye toward the future.

I see leaders who are bold — the innovators of Silicon Valley are successful not only because they have bold ideas, but because they're bold in the way they bring those ideas to fruition. They aren't afraid to, as they say, fail fast and fail often. They learn from those failures and turn the lessons into success.

I see leaders who embrace change — leaders who understand the timelessness of what John F. Kennedy said in 1960: "The world is changing…the old ways will not do." Leaders like Governor Steve Beshear and Congressman Hal Rogers who have joined hands across the aisle to launch an innovative partnership to improve the lives of people in Eastern Kentucky. They recognized that nostalgia for the old ways would only hold the region back, and that they needed to look forward.

I see leaders who are hungry — leaders who win the 50/50 balls, who punch above their weight. They know that reaching ever-higher is how we make progress. I see it in Central New York, New York's Tech Valley, where leaders had the foresight to invest in a burgeoning nanotech industry, which is translating cutting-edge research into commercialization, as well as jobs for the region. A new computer chip commercialization center is under construction at the SUNY Polytechnic Institute campus, and is expected to bring upwards of 2,000 jobs to the region.

I see leaders rejecting false choices — they know that capitalism can be inclusive, that they don't have to choose between their employees and their profits. They know they can take care of their workers, their consumers and their shareholders at the same time. I see companies like Costco, where employees earn about 40 percent more than at the company's largest competitor. Sales per employee at Costco are almost double those at their competitor, and the company hasn't had to sacrifice their commitment to low prices. Shareholders aren't suffering either. If you bought $1,000 worth of Costco stock in 1985, you'd have $15,650 in the bank today. Compare that to the ROI for the S&P 500 in the same time period, which was $8,770 on the same $1,000 investment. Since 2000, Costco has outperformed the retail industry as a whole, growing almost 25 percent faster than the industry average.

I see leaders refusing to fight yesterday's battles — they know that we move forward better together. Leaders like those at the Ford plant in Louisville, Kentucky, where a few years ago management and the union came together to save the facility — they built a culture of cooperation and together developed a viable plan that involved shared sacrifice with a goal of creating shared prosperity. Their ranks had dwindled to fewer than 1,000 employees in 2007 and the plant was in danger of shutting down — today they're up to 4,400 and growing.

I see leaders who know business climate is not defined by corporate tax rates alone — they know that cutting taxes is not a comprehensive strategy for creating jobs. When Governing Magazine looked at the Tax Foundation's annual State Business Tax Climate Index in 2013, it found no correlation between those states considered to have a positive business tax climate and those with better employment indicators. Minnesota, which the Tax Foundation ranked as having the third worst tax climate in the country, happens to be home to 28 companies in the Fortune 1000. Their unemployment rate is 3.6 percent — a full two percentage points below the national rate. The Minneapolis-St. Paul area has the lowest unemployment rate among metro areas with a million or more people.

Leaders there know what we've long known here in Maryland — that a creating a good climate for businesses to grow and thrive involves investments in public education, investments in physical infrastructure, investments in the workforce — our human infrastructure. They know that those investments are the key to long term success. They know that the choices we make today will determine our success for generations.

That's why Governor O'Malley worked so hard to freeze tuition at our state's public universities. It's why he made the income tax here more progressive, actually lowering income taxes for 86 percent of the people.

I see leaders focused on creating the best America. And the same is true right here in Maryland. Maryland is indeed a great state, and we don't have to look far for examples of tremendous leadership. One of my favorite Maryland leaders, Freeman Hrabowski, has cracked the code of increasing the number of minorities graduating with STEM degrees. UMBC is among the nation's leading producers of minority graduates in science and engineering. Educators and administrators around the country look to Freeman's leadership as an example.

Leaders like Freeman make me proud to call Maryland home. But we can always be better. We can always ask ourselves what we can do to build the best Maryland.

We need to invest in our physical infrastructure, and not just because we need roads, bridges and transit systems that can keep our state and the region running smoothly. Investing in infrastructure creates jobs. Just as Eisenhower knew that building interstates would be an economic boon, leaders in Maryland knew that building the Key Bridge, digging the Fort McHenry Tunnel and deepening the channels that lead to the Port would help a lot of Maryland families put their kids through college and retire with their dignity intact.

I know I'm preaching to the choir here. Business leaders lead the charge for infrastructure investments — you know that infrastructure can make or break a region's competitiveness.

The Port of Baltimore offers a prime example. I spent a week in California to help resolve the dispute between dockworkers and shipping companies at the 29 ports on the West Coast, and I know far more about ports now than I did a month ago. The most important factor for a thriving port is location, but you can't rely on location alone. The infrastructure necessary to provide access to the port and keep it running efficiently is just as important to attract cargo from companies who have an abundance of choices when determining shipping destinations. And the places that invest in the best infrastructure will win.

That's just as true in the context of mass transit. The GBC has long been one of the most vocal supporters of the Red Line, because you know better than anyone that reliable, efficient transportation is a necessity for a prosperous economy.

Baltimore has become a desirable destination for millennials. There are thriving neighborhoods, good jobs, cultural attractions, well-regarded institutions of higher education. But if the city wants to continue to compete for talent, it needs the modern amenities that make a region stand out, and mass transit is at the top of that list.

We also need to do away with long-held regional grievances that have for too long permeated our politics in Maryland. We can invest in strengthening two regions simultaneously. We can build the Red Line and the Purple Line. It takes strong leadership to break down silos and look past artificial geographic boundaries that hold us back.

If we see everything through the lens of 410 v. 301, we're not taking advantage of the natural synergies that exist between two hubs of commerce and innovation situated so close to each other. And in fact, we're putting ourselves at a competitive disadvantage. Because Greater Baltimore is not competing with the Washington Suburbs. Maryland isn't even competing against Virginia or Pennsylvania. Today, the Baltimore-Washington corridor is competing with regions around the world.

We should be looking at ways to create stronger connections between Baltimore and Washington. If I were still working in Maryland today, I'd be advocating for high speed rail to bring us even closer together.

That's why initiatives like MPower Maryland — the effort to bring together the College Park and Baltimore campuses of the University of Maryland — are so important. They're building a strong bridge between the two institutions to maximize their assets. I hope that we can see even stronger connections created for the benefit of the entire state.

And on that note, Maryland can do more to make sure we're using our existing assets to the fullest. Maryland has world-renowned research institutions; we need to punch above our weight. One of the findings of the Augustine report was that state laws impede tech transfer. Legislative leaders have already introduced a bill to begin to address this issue. Maryland has the assets in place to lead on this front — let's use them.

Let's also recognize other areas where we have untapped potential to harness. Take Sparrows Point — a successful redevelopment of Sparrows Point will hinge on how we capitalize on its assets. It will take both the public and private sectors to maximize its potential. Around the country, we see advanced manufacturing hubs sprouting with the help of public-private partnerships. Maryland can learn from those efforts. And the generations of Bethlehem Steel workers whose fortunes were tied to the mill, and who built solid middle class careers there — their children can build even more promising futures if we invest in their skills and make sure they have a place to put them to use.


I spent last weekend in Selma, Alabama, to commemorate the 50th anniversary of Bloody Sunday. The events that transpired 50 years ago on the Edmund Pettus Bridge shocked the nation. But more remarkable than the mindless violence that occurred there was what happened after. The marchers and their leaders were not deterred by billy clubs or tear gas. They refused to allow the violence to have its intended effect. And they were back on that bridge two days later, marching again, raising their voices for the right to be heard.

They were ordinary individuals with bold ideas. They were individuals who, as President Obama noted, collectively recognized the power of "we." They refused to accept the status quo as inevitable; they knew we could do better. They knew we had work to do to continue building the best America.

We've come a long way in 50 years. The challenges we face are not the challenges of 1965. But we can learn an awful lot from those ordinary people who crossed the Edmund Pettus Bridge.

It will take bold leadership to tackle the challenges we face in 2015 — across the nation and here in Maryland. It will take bold leadership to make the choices that will set us up for a sustainable, prosperous future. And it will take the collective power of "we."

Maryland has a lot going for it. But the best Maryland is one where every person has the opportunity to punch their ticket to the middle class. The best Maryland is one where we make investments so that we can compete in 2015 in beyond. The best Maryland is one where our policies and actions reflect our values — that every person matters; that we don't kick people to the curb; that we all succeed only when we all succeed. The best Maryland is one where prosperity is broadly shared.