Testimony of Secretary of Labor Thomas E. Perez Before the Committee on Education and the Workforce, U.S. House of Representatives, March 26, 2014
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Chairman Kline, Ranking Member Miller, Members of the Committee, thank you for inviting me to testify this morning. I have had the pleasure of meeting and speaking with many of you individually, but today is my first appearance before this Committee. I have been Labor Secretary for eight months now, and I consider it one of the privileges of my job to keep all of our constituents -- stakeholders,
In his State of the Union address two months ago,
The core principle is as American as they come: the notion that if you work hard and play by the rules, you should have the opportunity to succeed. In America, your ability to get ahead should be determined by hard work and personal responsibility -- not by the circumstances of your birth.
Making good on that promise of opportunity is central to the
And to execute that agenda, the President has submitted to
I feel extremely fortunate to be a product of a nation that believes in opportunity. My parents were born in the
But like so many American communities,
I have spent most of my career in public service at just about every level of government. Each of those experiences has given me a profound appreciation for the impact of partnerships and consensus-building. I had the honor of serving on the
When I served as
My time serving at the federal level has only reaffirmed my belief in the power of such partnerships. Two of the first people I engaged when I set foot in the
I had the honor of working for the late Senator
I have instituted that philosophy at the
Through collaboration, consensus building, and pragmatic problem solving, the
Our engagement with the business community did not end with the conclusion of the rulemaking process. Over the past six months we have spoken with thousands of contractors at nearly two dozen trainings, roundtables, and listening sessions where we have continued to solicit feedback on how to implement these rules in a way that facilitates the success of both workers and employers. This consultation and outreach is critical to making sure we can attract the best companies to do business with the
This type of consultation and outreach is critical for rules pertaining to federal contracting, where we strive to make sure we can attract the best companies to do business with the
I will bring this same level of collaboration and honest dialogue to our work together. So please know that I deeply value your input and I hope to continue to have an open dialogue with the Members of this Committee as we move forward on the critical issues facing our nation.
In his State of the Union address
In the final quarter of 2013, GDP grew at 2.4 percent -- despite the drag placed on the economy by sequestration and a government shutdown -- and the fourth quarter of last year marked the 11th consecutive quarter of GDP growth. Private investment again grew faster in 2013 than in the previous year, and American businesses have added 8.7 million new jobs over 48 months of consecutive job growth.
By those measures, we are well on our way to a full recovery. But they do not tell the whole story. They do not mean much to the construction worker who continues to be laid off between sporadic jobs. They do not tell the story of the underemployed, or the factory worker whose application never gets a second look after the human resources department sees she has been unemployed for six months. They do not tell the story of the waitress and mother of three who works full-time but has to depend on public assistance to make ends meet.
That is why one of
That diminishing value is undermining the economic security of millions of families. It has contributed to deepening inequality, a lack of upward mobility, and shrinking opportunity in America. Minimum wage workers are not just teenagers looking to earn a little extra to supplement their allowances. In fact, only 12 percent of those who would benefit from an increase to
I have visited with these hard-working Americans and heard heartbreaking stories about what it is like to live at or near the minimum wage. The wrenching decisions that these folks have to make. The daily grind and struggle, the apprehension and anxiety, and the exhaustion and sense of futility. But these are also people with immense pride, dignity, and self-respect. They do not want a handout; they just want a fair day's pay for a fair day's work. I met recently with a man in
Until we acted last year, nearly two million direct care workers in our country did not have the protection of our minimum wage laws. Roughly nine out of ten are women. Nearly half are minorities. And yet, for almost 40 years, direct care workers have been denied the basic employment rights too many of us take for granted -- rights like minimum wage and overtime -- with many direct care workers forced to rely on public assistance despite long hours of challenging, often heroic, work. The Department has corrected that, announcing a final rule that gives these nearly two million workers the same basic protections already provided to most U.S. workers -- including those who perform the same jobs in nursing homes.
Since the rule was issued, we have continued to work closely with the
In addition to raising the minimum wage for American workers and families,
Today, only 12 percent of salaried workers fall below the threshold that would guarantee them overtime and minimum wage protections (compared with 18 percent in 2004 and 65 percent in 1975). Many of the remaining 88 percent of salaried workers are ineligible for these protections because they fall within the white collar exemptions. Many recognize that these regulations are outdated;
These priorities fall squarely into the three principles
Opportunity and lasting, broad-based prosperity in this country have always been driven by a thriving middle class -- a middle class secure in good jobs, with take home pay that drives consumer spending and builds ladders of opportunity for those striving to join its ranks. But access to those middle-class jobs depends on workers' skills -- or their access to a training program that can allow them to acquire those skills. When we invest in the skills of our workers, it benefits our entire economy. Through their hard work and perseverance, American workers have the opportunity to secure their place in the middle class. American businesses have the well-trained workers that allow them to compete in the global marketplace and grow their companies here at home.
I have made it a point to speak with many CEOs in my first eight months on the job, and I have been struck by the consistency of the responses I have gotten in my conversations. Business leader after business leader, representing companies of all sizes in various sectors, has emphasized the absolute necessity of having a pipeline of skilled workers to fuel their company's growth. I have spoken to labor leaders, too, and they also want their members to get the skills they need to compete for jobs in the 21st Century. Business and labor are in agreement -- this is a good and necessary shared goal.
Late last year, I helped host a
But we also cannot afford to waste time, energy, and resources in training for the sake of training. Those investments must lead to good-paying, middle-class jobs that are available today and will be around tomorrow, and that requires giving employers a voice in the process. Under my direction, the
It is my goal to make industry- and job-driven training the new normal. Employers will engage because they want to know that training programs will deliver the skills they need in their workforce; job seekers will enroll because they know the curriculum gives them the best chance at a middle-class job. In these types of public-private partnerships, the
But here is the most important part: they do so in direct partnership with local employers, the local workforce system and other community groups. Through TAACCCT, institutions of higher education have issued over 27,400 degrees and certificates through the first 2 years of the grant program, helping adults acquire the skills, degrees, and credentials needed for high-wage, high-skill employment. Institutions of higher education have also launched over 1,200 education and training programs since the start of their grants, all released with an intellectual property license that enables the free use and continuous improvement of the materials by others. In many areas these grants have transformed the curriculum offerings of higher education to make them more accessible to working and non-traditional students, including trade-impacted workers. By helping workers get updated credentials or make career transitions to other fields, TAACCCT is one of the tools we can and must deploy to help those people who have been jobless for an extended period of time.
I suspect that the Vice President's review will underscore what programs like TAACCCT have taught us, namely that industry-driven, strategic investments can dramatically increase the competitiveness of a local workforce. We are doing our best to apply that lesson to the rest of our skills development work in the Department's
One of the distinguishing and unsettling features of this recovery has been the persistence of long-term unemployment. If the long-term unemployment rate were at a normal level, consistent with previous recoveries, the overall unemployment rate would be below 6 percent. Last month, as part of a renewed focus on meeting the challenge of long-term unemployment, we announced the availability of
But one of the most important things we can do to immediately help the long-term unemployed and their families is extend federal Emergency Unemployment Compensation. Since this lifeline expired, over two million people have lost out on the assistance they desperately need. Although the economy is slowly healing, too many people are still weathering a powerful, devastating storm they did nothing to create. Through no fault of their own and despite their most diligent efforts, so many workers have been unable to find jobs. Many face catastrophic situations, in danger of losing their homes and unable to support their families. Extended unemployment benefits, even as the economy continues to rebound, is a proud bipartisan tradition. This version of the program was first passed by a
While we need to provide the lifeline of extended unemployment benefits, we must also continue our effort to get those who have lost their jobs back to work. To have the strongest possible workforce system, we need help from
ETA is also supporting a high quality workforce investment system through our
Apprenticeships are a particularly effective way to put American workers from diverse stages, backgrounds, and walks of life, including our military service members who are transitioning to the civilian workforce, on a pathway to jobs with real career ladders and earning potential. They provide workers important rungs on that ladder of opportunity, and employers get workers trained for the specific jobs they need to fill. Last year, ETA and state apprenticeship staff across the country assisted industry and labor to create over 1,500 new apprenticeship programs. Through registered apprenticeship programs, over 52,000 workers completed an apprenticeship last year. Research suggests that today's apprentice earns an average of over
Apprenticeships have been used to great effect by global competitors like
You do not have to look far to see the impact of apprenticeships and job training. Next time you are walking through the Capitol Rotunda, just look around and you will see the handiwork of
We are working to increase the use of apprenticeships not just to expand opportunity for workers, but to expand opportunity for businesses, too. Moreemployers deserve the opportunity to train workers in the specific skill sets required for open jobs, and the President and I have called onbusiness leaders, community colleges, Mayors and Governors, and labor leaders to increase the number of innovative apprenticeships in America. Through the Opportunity, Growth, and Security Initiative, the Budget proposes a
The Department supports positive youth development through a variety of competitive grants aimed at equipping youth with education and workforce training designed to get them into career pathways that lead them into employment, post-secondary education, or registered apprenticeship. The Department is highlighting Promise Zones in all of our youth-focused initiatives, including grants that target juvenile offenders and opportunity for youth who live in communities that are most in need. In addition, the Department is working closely with our federal partners to implement the recently enacted Performance Partnerships authority, which will allow the Federal Government to establish agreements with up to 10 States, regions, localities, or tribal communities to give them greater flexibility to blend funding across programs in exchange for the agreement to achieve better outcomes for disadvantaged youth.
A key part of helping our youth is working with parents. In my discussions with people all over the country, I continually emphasize that there is a bright future working with your hands. I have heard in communities that the average age of a person in the skilled trades is 59 years old and that we have a whole generation of workers in skilled trades waiting to retire in the next six to seven years, and we need to ensure that we are building a pipeline for the replenishment of the workforce in these areas. However, I talk to some parents who do not want their kids to get into the trades and only want him or her to go to college. I believe if you are earning credentials, and they are stackable credentials, they are a ticket to the middle class.
I know there has been a lot of interest in the
Due to cost-saving measures implemented in Program Year (PY) 2012 and the slower-than-anticipated enrollment of students after the enrollment suspension was lifted in the spring of 2013, expenditures by contractors throughout the program year were, in many cases, less than what was obligated to the contracts, and some of that funding remained available on those contracts at the end of PY 2012 -- allowing us to repurpose approximately
While we continue to work to improve the program, it is important to remember how
A key part of our work to expand opportunity for all Americans is focusing on helping the brave men and women who serve in America's armed forces, all of whom deserve a hero's welcome and a chance to utilize their unique skills to help rebuild our economy when they return home. "Transition GPS" (Goals, Plans, Success), is an important inter-agency effort designed to prepare separating service members and their spouses to successfully transition from the military to civilian employment.
Through Transition GPS, DOL brings to bear its extensive expertise in employment services to provide a comprehensive, three-day
Expanding opportunity and helping veterans secure their place in the middle class requires all of us working together, and transforming the Transition GPS program required unprecedented inter-agency collaboration with our federal partners to completely overhaul the
Sadly, too many veterans still face the even more difficult challenge of homelessness. Homelessness and joblessness often go hand-in-hand. The Department assists these veterans through the Homeless Veterans' Reintegration Program (HVRP), which is one of the only nation-wide federally-funded, competitive grant programs focusing exclusively on employment of homeless veterans. In PY 2012, the Department's Veterans Employment and Training Service (VETS) awarded over
The Department is also committed to ensuring female veterans have the services and support they need to succeed in the workforce. To better address the unique challenges they face, DOL created the Women Veteran Program aimed at raising the profile of women veterans, advising on research to help women veterans, and linking veteran service providers to resources like our American
While we continue to serve our veterans, we are also focused on expanding opportunity for Americans with disabilities. The unemployment rate among individuals with disabilities remains regrettably high and the labor force participation rate regrettably low. To allow people with disabilities to live on the economic margins is not only morally objectionable; it is a waste of precious human capital.
Data is critical to developing effective policies that promote the employment of individuals with disabilities. In
ODEP is also focused on improved transition outcomes and employment opportunities for youth with disabilities. ODEP co-leads the
ODEP also continues to work closely with the
During FY 2013, ODEP and ETA continued funding the Disability Employment Initiative by awarding eight more grants to state workforce agencies to ensure that individuals with disabilities have meaningful access to training, education, and employment services through the public workforce system. Currently, 23 state workforce agencies participate in the initiative.
The Department's Wage and Hour Division (WHD) has been diligent in protecting workers' rights on the job and ensuring that employers who break the law do not have an unfair advantage over the vast majority of employers who play by the rules. Since 2009, WHD has returned over
WHD has stepped up enforcement efforts on behalf of at-risk populations -- such as low-wage workers, children, migrant or seasonal laborers, workers with limited English language skills, and workers who are unaware of their rights or are reluctant to file a complaint when subject to labor violations. These workers are most often employed in low-wage industries where labor violations are most prevalent. These industries include janitorial, agriculture, healthcare, hotel and motel, garment, and restaurants. In FY 2013, WHD investigations resulted in more than
WHD's work, however, is about more than the numbers. It is about the people they help every single day. For example, WHD found a veteran living in his car at a job site in
We also continue to work to end the practice of misclassifying employees as independent contractors or other non-employees. Misclassification, in my view, is nothing short of workplace fraud, and it is a practice that has spread from construction to a variety of low-wage industries, even restaurants. While legal business models and legitimate independent contractors play an important part in our economy, it is hard to imagine a restaurant server who is legitimately an independent contractor. In FY 2013, our FLSA investigations resulted in nearly
To ensure that we have the tools necessary to continue all of this important work and help workers get the wages and overtime pay that are their due, the President's FY 2015 Budget calls for an increase of
Opportunity not only means having a job and being paid fairly for your work; it also means staying safe and returning home each night to your family after a hard day's work. In the greatest nation on earth, no one should have to die for a paycheck. We all agree that good jobs should also be safe jobs. Our worker safety and health agencies -- the
Workplace tragedies not only cause grief and loss to families, but they exact an economic cost as well. One recent study estimated that work-related injuries, illnesses, and fatalities cost the nation
Not all workplace tragedies, however, generate the media attention of
Exposure to crystalline silica has long been known to cause silicosis and increase the risk of lung cancer and kidney disease. In fact, some 80 years ago, Labor Secretary
Over the past two years,
Working with mining industry stakeholders on a number of issues,
By far, the most important measure of progress is how many miners return home at the end of their shift free of injury or illness.
Protecting and expanding opportunity is not just about safety; it also means securing the hard-earned incomes and benefits of American workers and retirees. The Department's
EBSA continues its efforts to improve the overall transparency of 401(k) and other retirement plan fees so that workers' hard-earned savings are not unwittingly eroded by undisclosed fees. In 2012, EBSA finalized a rule enhancing disclosures that plan service providers must give to employers and other fiduciaries responsible for operating retirement plans about the often- complex fee arrangements used to pay plan service providers. Earlier this month, EBSA issued a proposed rule that would provide a template for service providers to summarize their fees. Fee transparency leads to lower fees, which is good for business and consumers alike. We expect this work will be especially useful to small businesses as they review their 401(k) plans and will help them understand the relative costs of the investment choices they offer their employees. In addition, under a related fee transparency rule for workers that manage their own 401(k)-type plan accounts, every year plans must give each covered worker a simple and comprehensible apples-to-apples comparative chart of the retirement investment options designated in their plan, including information on investment fees and expenses.
As a logical follow-up to the fee disclosure initiatives, EBSA began an initiative aimed at making sure that America's workers in 401(k)-type plans understand whether their current and projected savings will translate into a secure retirement. Because workers may have difficulty envisioning the lifetime monthly income that can be generated from their 401(k) or similar accounts, EBSA believes that the regular account statements that workers are required to receive should not only show them their current account balances but also translate the account balances into anticipated monthly payments for life.
In addition to these critical initiatives, EBSA has had tremendous success in protecting employee benefits through both civil and criminal enforcement actions. EBSA's efforts, which include the Voluntary Compliance Correction Program, the Abandoned Plan Program, and the participant assistance efforts, achieved total monetary results in FY 2013 of nearly
EBSA's investigation of
In 2013, our
Click here (http://www.dol.gov/_sec/media/congress/20140326_Perez.htm) to view the rest of the testimony
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