Assistant Secretary Emily Stover DeRocco Remarks

Independent Electrical Contractors (IEC)
Legislative Conference
Washington, DC
May 19, 2003

Well first of all, I want to thank you for the invitation. I really appreciate the opportunity to be here. I have enjoyed my relationship with your organization. I know you also are appreciated by our Secretary Elaine Chao and also our Deputy Secretary Cam Findlay who spoke to you last year.

Cam talked about the new Department of Labor…so new, I believe we should change the name to the Department of Workforce Services. We have important roles to play in preparing America's workforce for the 21st century economy and ensuring America's businesses have the skilled workforce they need to compete in the 21st century economy.

The issues and trends your industry is facing are not too different than those facing much of America.

1. First, we have to pass the president's Jobs and Growth package to get this economy back on track and creating jobs for America's workers.

2. Second, we need to understand the trends impacting America's businesses and workers.

The first trend is globalization. It has become a bit of a cliché to say that businesses must now compete in a global economy. Information, money, goods and services flow easily across national borders, and longstanding barriers to trade and commerce are, in many places, crumbling.

Some people wonder if this trend is a good one for American business, and especially for American workers. There's no question that we face increased competition from corporations based in foreign countries. But they face unprecedented competition from us, as well. Today 10 percent of the US gross domestic product is directly tied to exports, and more than 13 million jobs depend on our ability to freely trade with other nations, and those numbers are projected to grow in the decades ahead. Regardless of your view, globalization is a trend that is here to stay.

Among our many advantages in the global marketplace is our educated, skilled, and well-trained workforce. Maintaining and strengthening this advantage is critical to our nation's future prosperity. This is especially important because the second key trend I want to focus on is the rapidly growing demand for skilled "knowledge" workers.

99 percent of the 16 million net new jobs created in the American economy between 1992 and 2002 were filled by people who had at least some post-secondary training. Even people who hold traditionally blue-collar jobs in manufacturing now often need specialized training to work with advanced robotics and computerized production lines.

The long-term shift from goods-producing to service-producing employment has spurred a huge demand for workers who have advanced training and formal schooling. The question is whether we can keep up. Some economists fear that we're heading toward a "skills gap," a situation in which the demand by employers for skilled workers would outpace the supply. Already we have seen reports that companies are having difficulty filling jobs with workers who have the skills they require. I'm sure many of you would agree that this is a problem. A top priority for this nation must be to ensure that we have the skilled workforce we need to spur economic growth and productivity.

The importance of this priority is underscored by the third major trend, which is the aging of the American workforce. The youngest Baby Boomers are about to turn 40. The oldest are closing in on 60. As those of us who fall in between approach retirement, we will leave behind us a huge number of jobs to be filled. The fields of nursing, teaching, construction, and manufacturing will all be hard-hit. Nearly 7 million people who currently hold key managerial, professional and technical jobs may retire over the next ten years.

Unfortunately, the Baby Boom was followed by the Baby Bust. The implications of lower-than-replacement rate birthrates are profound. The Bureau of Labor Statistics projects that the number of available jobs will increase by more than 22 million by 2010, but the civilian labor force will increase by only 17 million.

Demographic realities also play a key role in the fourth major trend, which is the increasing diversity of the American workforce. Minorities - Black, Hispanic, and Asian -- are the fastest growing part of the labor force. This reflects the role immigration is playing in US population growth; in fact, in recent years, immigrants have accounted for about one-quarter of household growth.

The rising number of foreign-born workers presents significant challenges to employers who have to address issues beyond language barriers. And although nearly 40 percent of immigrants between the ages of 25 and 34 have a bachelor's degree or higher, fully 26 percent lack even a high school diploma, which puts them at a distinct disadvantage in the job market.

The final trend in the 21st century workplace is technology. Just twenty years ago, businesses were run without the benefit of personal computers, laptops, cell phones, palm pilots, Blackberrys, or the Internet. These technologies have led to huge gains in productivity and efficiency. But they also have increased demand for highly skilled and well-trained workers.

So what does that tell us we must do?

• If we are going to compete in the 21st century economy, we need a highly-trained workforce.
• We need to develop skilled knowledge workers,
• We need to be engaging young people in the workforce and developing their skills and knowledge so when we baby boomers retire we have a new generation of leaders ready to take over.
• We must find a way to build the skills of immigrants and get them into the workforce.
• And, we must find ways to raise the technological skills of the workforce.