Emily Stover DeRocco Speech
Florida Workforce Summit
8:55 am, October 7, 2003
Lake Buena Vista, FL
Thank you, Toni, for that introduction. And I want to thank you especially for your superlative efforts supporting the workforce investment system here in Florida. You're putting people to work, and that's good for everyone.
Two years ago, on a bright September morning, our nation awoke to a hateful act of war in a time of peace. As a people, we continue to grieve for the lives that were lost, and the loved ones left behind. And as a nation, we struggle still today with the aftershocks. The world changed on September 11, and we changed with it.
The economy was dealt an immediate blow -- the stock market was closed, the airlines were grounded, communications disrupted, and travel and tourism were put on hold. The Administration estimated the immediate economic impact of the September 11 attacks at $80 billion, which is nearly equivalent to wiping out the economy of Kansas for an entire year. But even more devastating to the economy was the uncertainty the attacks created - which led to decisions deferred, investments not made, jobs not created or filled, work left undone.
A Trio of Challenges
The crisis of September 11, and the subsequent worldwide war on terror that continues today, would have been enough to tip even the strongest economy into recession. Yet it was only the second of three severe challenges to our nation's economic strength - a trio of conditions virtually without precedent in American history.
The first challenge came from a stock market decline that began in March 2000 in response to a weak and unhealthy economy. As the decline picked up steam, businesses reduced their spending and investment. By early 2001, we already were in a recession.
The shock of September 11 was quickly followed by the discovery of a massive fraud triggered by the irresponsibility of the top executives of some major American businesses. This betrayal of the public trust shattered investor confidence, as countless people saw their savings, and the dreams they hoped to finance, evaporate. Thousands of innocent workers lost their jobs.
Any one of these three crises would be enough to hobble an economy and cause a recession. Yet in each case, the President and his Administration responded with responsibility and resolve to turn the situation around.
An Aggressive and Comprehensive Response
The President signed tough new laws against corporate misconduct and fraud to restore the confidence of investors.
The President led a coalition of the willing to fight terror at home and abroad. America is safer, and the world more secure, than it was two years ago.
And the President led the fight to spur entrepreneurship, job creation, and economic growth. His package of tax cuts put more money in the pocket of every single taxpayer. The increase in the child tax credit alone put $13 billion into the hands of parents. The marriage penalty decreased. Incentives for investment and savings were put in place.
The Bush tax cuts weren't just a one-time jolt - they are more like a gift that keeps on giving, as they are phased in over a 10-year period. The tax cuts put in place so far have pushed real disposable income up 3.4 percent since President Bush took office - a faster pace than that set in the 1990s.
An Economic Turnaround
The President's action kept a shallow recession from deepening, and paved the way for today's expanding recovery. The evidence is very clear:
- Production and new orders are up for industrial firms.
- Retail sales are rising.
- Consumer spending is up.
- Housing, a bulwark of strength during the recession, is booming.
- Homeownership is at an all time high of 68 percent.
- Interest rates are historically low, spurring investment and refinancing of high cost debt.
- Proprietors' income - an indicator of small business strength - is up 16 percent annually over the last three months, and
- Americans are starting new sole proprietorships at a faster rate than in the 1990s.
One of the most important aspects fueling the momentum of the current recovery is a sharp rise in productivity. Productivity rose at an annual rate of nearly 7 percent in the second quarter of this year and is growing at a faster pace than it has in 50 years. These gains translate into increased wages for American workers, more affordable goods and services, more profits to reinvest in business growth, a better competitive climate for our nation's exports, and a better standard of living for all of us.
Today's economic rebound also owes itself in part to the President's strong policy of free and fair trade. Open trade creates jobs - exports were directly responsible for a quarter of the economy's growth in the 1990s. Jobs tied to exports pay higher wages - almost 20 percent higher in some instances. The President is committed to expanding trading opportunities for American goods and services. When the playing field is fair and level, "made in America" leaves the competition behind.
A Jobless Recovery?
But what about jobs?
More than 2.7 million jobs have been lost since the recession began in 2001. The manufacturing sector and regions like the Pacific Northwest and parts of the Midwest have been especially hurt. It's hard to be encouraged by the signs of economic recovery if your family is still going without a regular paycheck from a stable job.
As in most periods of recession and recovery, job creation lags behind other improvements in the economic outlook. Jobs are often the first thing to go, and the last thing to come back.
And, some jobs, including high-tech and white collar jobs, have disappeared as work has been sent overseas, or "outsourced," to lower cost places. And the rapid increase in productivity has created a hiring trough, because it means that firms don't hire new people to meet rising demand. Economic growth has to outpace productivity gains so that people who are looking for work can find a job.
We need to do everything in our power, as the President has said, to "help individuals get through the tough times and prepare for better times." His agenda does just that, and I'll describe it in detail in just a moment. But at the same time, we must be clear that outsourcing jobs, and the productivity boost it creates, isn't a new phenomenon; rather, it's part of the genius of America's strength and prosperity. Sending work to places where it can be done more cheaply opens up opportunities for American innovation and ingenuity to build cutting edge industries and create higher skilled, higher paying jobs.
Economist Michael Mandel describes the phenomenon well when he calls the world economy a "ladder," and says it is America's job to build the next rung upward. We're well qualified to do so - we have the best-educated workforce, the largest and most diverse economy, the technological capability, the financial sophistication, and a spirit of innovation and entrepreneurship. When we succeed in reaching the next rung - as we have countless times in the past, most recently with the high-tech revolution, we reap enormous rewards in terms of economic growth and job creation.
Innovation Creates Jobs
Our challenge, then, isn't overseas competition: Rather, our challenge is to understand the enterprises that create jobs and prepare American workers to be successful at those jobs. And tomorrow, some new industries are growing rapidly.
One of these industries is the geospatial technology industry. The market is projected to have annual revenues of $30 billion by 2005. A survey of geospatial product and service providers revealed that 87% of respondents said they had difficulty filling positions requiring geospatial technology skills.
Another industry experiencing rapid growth is biotechnology. Between 1992 and 2001, the number of jobs in biotechnology doubled; biotech jobs will grow by 3 million between 2000 and 2010, with double-digit increases in jobs such as pharmaceutical manufacturing, biological technicians, and scientists.
These are cutting edge industries, but even more mature industries are experiencing tremendous job growth. The most dramatic growth is occurring in the health care field. Today it accounts for about 13 percent, or $1 trillion, of our annual GDP, and provides more than 11 million jobs. With the baby boomers approaching retirement, the need for skilled workers to provide medical care will increase substantially. Nine of the top 20 fastest growing occupations this decade are concentrated in health care and millions of workers will be required over the next generation to meet our nation's health care needs.
The information technology field is another field that is rapidly growing, and changing. The "hardware" side of the IT industry overlaps many sectors, and accounts for nearly 7 percent of GDP. The "software" side makes up nearly 6 percent of GDP. Interestingly, 92 percent of all workers in the IT field do not work in the IT industry; rather, they fulfill IT functions in non-IT industries. The IT field attracts a young workforce, with nearly 40 percent of workers being between the ages of 25 and 34; earnings in the field are expected to grow by 86 percent between 2000 and 2010.
The Challenge: Matching Jobs with Workers
It's clear that there are jobs out there. The challenge is matching up the employers who need workers with the people and places that need jobs. The 21st century economy requires a new set of skills and capabilities from its workers; we need to educate and train workers to fill those jobs.
The taxpayers invest over $15 billion annually in education, employment, and training programs delivered by the public workforce investment system. Our goal is to ensure that every available worker has the education, training, and skills to fill the gap, and that no worker is left behind.
When the workforce investment system appeared, Florida did an early implementation, setting up One Stop centers and matching jobs with workers as soon as it could be done. I also want to acknowledge your outstanding work supporting welfare reform by integrating the needs of recipients and former recipients with the resources of the One Stop centers. This is the kind of connection that only happens when there is local control, with people on the ground who know what is needed, being empowered to get those needs filled.
Florida is a model for the rest of the states, and your success is especially notable because of the state's diverse environment. In terms of economy, culture, and even climate, Florida is at times almost two different states. That's a rare challenge.
And I would be remiss if I didn't acknowledge the great results of Operation Paycheck. In the wake of 9/11, you provided quick support to get displaced workers back in the workforce, matching the needs of employers with the skills of those who need jobs.
For this and on all your successes, you have our appreciation and admiration for a job being done very well.
As you have shown, the system is supposed to link education, employment and economic development-what we call the "power of e-three." By leveraging this power, we are building a demand-driven workforce investment system that will better serve the employers and employees of the future, effectively respond to the global and national trends that are shaping the workforce and the economy, and make a greater contribution than ever before to our nation's economic growth and prosperity.
Our agenda has three key components.
First, we have created a High-Growth Job Training initiative to identify high-growth businesses and industries, evaluate their skill needs, and use the nation's workforce investment system to ensure that people are being trained with the skills these rapidly-expanding businesses require. Geospatial, Biotech, health care, IT, construction, transportation, financial services, and other high-growth sectors of the economy need more trained and skilled workers if they are to grow and be competitive in the years ahead. We're working with community colleges and other post-secondary schools to prepare workers for the jobs of the future. The fact that America's workforce is better educated than any other is a key competitive advantage for us in the world economy. Most of the new jobs created today require at least some post-secondary training whether it be vocational, apprenticeship or college, and people who have that training typically experience less unemployment and higher wages than those who don't.
Second, we're reaching out to the unemployed to help them get the training and supportive services they need to help them get back in the workforce. The President has asked Congress to create Personal Reemployment Accounts, which would provide job seekers with up to $3000 to pay for training, child care, transportation, relocation - whatever they need to make the transition back into the working world. If they find a job before they spend the $3000, they keep it as a reemployment bonus. These innovative accounts would help more than 1 million Americans train for the new jobs of the 21st century.
Third, we're proposing legislative changes to the Workforce Investment Act to make the workforce system more effective and flexible. When first enacted, the WIA was a groundbreaking piece of legislation that sparked dramatic improvements in the delivery of employment and training services nationwide. Now we need to get this $15 billion dollar system reauthorized as a demand-driven system that is effective and responsive to the needs of local labor markets in the 21st century.
In his speech on Labor Day, President Bush expressed his optimism in America's future - an optimism he says stems from what he has seen of the American spirit -- "the determination and the will, the willingness to work hard, the willingness to place family above self, and the willingness to serve something greater than your self." These aspects of the American spirit have fostered the creativity, the ideas, the innovations and inventions that have historically made our economy prosperous and our jobs secure. What will tomorrow's innovations be? No one knows for sure. But if we invest wisely in America's workforce, we'll be prepared for every opportunity to build the next rung on the ladder of economic growth, job creation, and national strength.
Florida can lead the way. I trust you will. Thank you very much.
