[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
SHRINKING WORKFORCE ENDANGERS AMERICA'S SMALL BUSINESSES: EXAMINING THE
NEED FOR THE SKILLED WORKFORCE ENHANCEMENT ACT
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
WASHINGTON, DC, FEBRUARY 9, 2000
__________
Serial No. 106-42
__________
Printed for the use of the Committee on Small Business
U.S. GOVERNMENT PRINTING OFFICE
65-505 WASHINGTON : 2000
COMMITTEE ON SMALL BUSINESS
JAMES M. TALENT, Missouri, Chairman
LARRY COMBEST, Texas NYDIA M. VELAZQUEZ, New York
JOEL HEFLEY, Colorado JUANITA MILLENDER-McDONALD,
DONALD A. MANZULLO, Illinois California
ROSCOE G. BARTLETT, Maryland DANNY K. DAVIS, Illinois
FRANK A. LoBIONDO, New Jersey CAROLYN McCARTHY, New York
SUE W. KELLY, New York BILL PASCRELL, New Jersey
STEVEN J. CHABOT, Ohio RUBEN HINOJOSA, Texas
PHIL ENGLISH, Pennsylvania DONNA M. CHRISTIAN-CHRISTENSEN,
DAVID M. McINTOSH, Indiana Virgin Islands
RICK HILL, Montana ROBERT A. BRADY, Pennsylvania
JOSEPH R. PITTS, Pennsylvania TOM UDALL, New Mexico
JOHN E. SWEENEY, New York DENNIS MOORE, Kansas
PATRICK J. TOOMEY, Pennsylvania STEPHANIE TUBBS JONES, Ohio
JIM DeMINT, South Carolina CHARLES A. GONZALEZ, Texas
EDWARD PEASE, Indiana DAVID D. PHELPS, Illinois
JOHN THUNE, South Dakota GRACE F. NAPOLITANO, California
MARY BONO, California BRIAN BAIRD, Washington
MARK UDALL, Colorado
SHELLEY BERKLEY, Nevada
Harry Katrichis, Chief Counsel
Michael Day, Minority Staff Director
C O N T E N T S
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Page
Hearing held on February 9, 2000................................. 1
Witnesses
DeWine, Hon. Mike, Ohio, United States Senate.................... 4
Bachman, William G., National Tooling and Machining Association.. 7
Bettcher, Thomas, President & CEO, Copeland Global/Copeland
Corporation.................................................... 8
Leto, Chris, Vice President, Tampa Brass & Aluminum.............. 10
Gooding, John, Chairman & Chief Operating Officer, Gooding,
Simpson & Mackes, Inc.......................................... 27
Holdsworth, Thomas W., Director, Skillsusa-Vica, Leesburg,
Virginia....................................................... 29
Murphy, Patrick, President, Crest Electrical Company............. 31
Pence, Randall G., Capitol Hill Advocates, Inc................... 33
Appendix
Opening statements:
Talent, Hon. James........................................... 51
Christian-Christensen, Hon. Donna............................ 56
Prepared statements:
DeWine, Hon. Mike............................................ 57
Bachman, William G........................................... 62
Bettcher, Thomas............................................. 67
Leto, Chris.................................................. 73
Gooding, John................................................ 80
Holdsworth, Thomas W......................................... 86
Murphy, Patrick.............................................. 94
Pence, Randall G............................................. 101
SHRINKING WORKFORCE ENDANGERS AMERICA'S SMALL BUSINESSES: EXAMINING THE
NEED FOR THE SKILLED WORKFORCE ENHANCEMENT ACT
----------
WEDNESDAY, FEBRUARY 9, 2000
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:02 a.m., in room
2360, Rayburn House Office Building, Hon. Jim Talent (chair of
the committee) presiding.
Chairman Talent. Good morning. If we can convene the
hearing.
As we convene our hearing today, I am glad to report that
the U.S. economy continues to perform extremely well. The
growth is steady. Unemployment is low. Inflation remains
relatively low. In fact, last Friday the Department of Labor
announced that the unemployment rate for January was 4 percent,
the lowest it has been since January of 1970.
Despite this growing prosperity, in fact, to some extent
because of it, we are faced with a severe shortage of skilled
workers in trades and manufacturing. According to the results
of a study conducted in 1999 by the National Association of
Counties, 75 percent of the largest counties in America report
that they face a shortage of skilled workers; 85 percent said
that the shortage has increased over the last 5 years; and 97
percent characterize the shortage as serious to very serious.
Officials stated that the sectors of the economy most affected
by the shortage of skilled workers include manufacturing and
construction.
This hearing will explore the growing shortage of highly
skilled workers. Our witnesses from various trades will testify
on the shortage of skilled workers, the effects on small
business, the aging population of workers, and the high cost
small employers incur in training highly skilled workers in
their industries.
Small business owners in particular cannot find workers to
fill their current vacancies. Many companies provide
competitive wages and benefits, but they still cannot find
enough workers.
In addition, the current workforce in these trades is
aging. Most of the highly skilled trades find the average
worker to be in their late 40s to early 50s. With this
generation expected to begin retiring within the next 10 years,
the shortage of workers will grow.
Small employers must invest substantial time and money to
provide training. On average, the annual cost of training in
the highly skilled trades is $25,000 to $50,000 per trainee.
This is an investment worth encouraging and worth making.
Recent press articles reveal when small businesses take the
time to provide training programs, they often find employees
become skilled, committed and loyal to the companies.
Accordingly, it is in our best interest to help small business
who are dedicated to their trades train more employees.
The purpose of this hearing is to examine H.R. 1824, the
Skilled Workforce Enhancement Act, which I introduced on May
14, 1999, and which has received strong bipartisan support from
49 cosponsors. The Skilled Workforce Enhancement Act amends the
Tax Code to allow small employers with 250 employees or less to
take the $15,000 tax credit to offset job training costs in
highly skilled trades.
To assure training is effective, eligible employers must
provide an employee with 2,000 hours of on-the-job training and
necessary classroom training each year. In exchange, the
employers are allowed to claim a $15,000 tax credit per trainee
each year for up to 4 years. That is the provision of the bill
as written. We will have different witnesses comment on various
aspects of that as the hearing progresses.
Under the Skilled Workforce Enhancement Act, the highly
skilled trades include precision machinists, dye makers, tool
and dye designers, roofing, masonry, heating, ventilating, air
conditioning and refrigeration, plumbing, electrical
contracting and foundry technicians. Originally limited to the
tooling and machining industry, we have expanded the bill to
include other trades for which highly skilled workers are in
short and shrinking supply.
We are pleased to have Senator Mike DeWine testify before
the Committee this morning. Senator DeWine introduced companion
legislation in the Senate last year. He and I and our
cosponsors believe SWEA will assist small business owners in
training much-needed workers and in keeping their shops open.
The concept for the bill came to me from a constituent and
friend in my district who will also testify today. As past
president and owner of a machine company, Bill Bachman
approached me with a severe shortage of skilled workers his
industry faced and with an idea of a tax incentive to help
remedy this growing problem.
Bill, I want to thank you for bringing this idea to my
attention and for continuing to push it. Indeed, I thank all
the representatives of small business and labor here today who
have been bringing this need to the attention of Congressmen. I
believe the other witnesses will also thank you, since the
growing shortage has affected so many skilled trades.
A few years ago a friend who runs a small manufacturing
business told me that if we don't do something within a few
years there is not going to be a manufacturing sector in the
United States because we are not going to have the workers that
we need to work in the businesses. I am sure the construction
industry representatives here will agree that that is a serious
problem in their segment of the economy as well.
The Skilled Workforce Enhancement Act will provide relief
to small businesses with costly and surprisingly complicated
training regimens. The bill allows employers to ensure
themselves a continuing, capable workforce.
I look forward to working with Senator DeWine, our
distinguished Ranking Member Ms. Velazquez, our other witnesses
and unions represented here today to help small business owners
hire and train new highly skilled workers. We should do
something now while today's generation of workers can train the
next generation of skilled labor.
I am pleased to recognize the gentlelady from New York for
any comments she may wish to make.
Ms. Velazquez. Thank you, Mr. Chairman.
I would like to welcome today's witnesses, especially
Senator Mike DeWine. Senator, I would like to thank you for all
your hard work and leadership in the Senate in the area of
worker training.
Mr. Chairman, the United States is experiencing
unprecedented prosperity as we continue to enjoy the greatest
economic expansion in our Nation's history. It is important
that we in Congress acknowledge that this expansion increases
the demand for skilled workers.
As the economy grows and more jobs become available, it is
vital that we have a trained workforce able to fill newly
created jobs. In fact, according to the U.S. Department of
Labor, the United States is currently experiencing a shortage
of service industry workers. This shortage is expected to last
into the foreseeable future as the service industry continues
to be the fastest growing sector of our economy. This is
important for small business owners in the service industry who
depend on highly skilled workers because they must expand
effort and resources to locate pools of potential workers,
recruit them, and then pay the additional costs associated with
apprenticeship training. This has become so difficult that
contractors at times have turned down work due to the lack of
trained employees.
I applaud Chairman Talent for recognizing this situation
and introducing legislation that will give small businesses a
tax credit for training workers in highly skilled trades.
As a co-sponsor of this legislation, I believe it serves
several important goals. First, it allows small businesses to
recoup part of their investment spent training workers. This
will serve as an incentive for businesses to hire unskilled and
underskilled workers and train them.
This leads to the second important goal, the investment in
a skilled workforce.
Finally, this tax credit will benefit the workers. The
credit will provide an incentive for businesses to teach
unskilled and underskilled workers a trade that will remain
with them for life.
It is important to make sure we continue to have the
economic security our country has worked so hard to achieve. In
doing so, we need to make sure we have the trained workers we
need to keep up with our economy evolution in this millennium.
By preparing today we can remedy what could be a larger problem
for tomorrow.
I support this legislation and look forward to hearing from
our witnesses and in working with you, Mr. Chairman, to improve
opportunities for this Nation's small businesses and their
employees. Thank you.
Chairman Talent. I thank the gentlelady and am grateful for
her support for the bill and her advocacy in this area.
We will go right to the first panel. Our first witness on
it, the Committee is very pleased to have before us I think for
the first time the Honorable Mike DeWine, the United States
Senator from Ohio. Senator DeWine.
STATEMENT OF THE HON. MIKE DEWINE, A U.S. SENATOR FROM THE
STATE OF OHIO
Senator DeWine. Mr. Chairman, thank you very much and thank
you to the distinguished ranking minority member for your
articulation of the need for this legislation.
As you have pointed out, I have introduced companion
legislation in the Senate. It has been a pleasure working with
you on this bill, and I look forward to continuing in the weeks
and months ahead as we push for passage of this much-needed
piece of legislation.
You both have outlined very well the need for this
legislation. Let me just add a few comments.
During the 105th Congress, we spent considerable time and
effort getting the Workforce Investment Partnership Act that I
sponsored in the Senate enacted into law. This law brings a
flexible, locally driven, business-oriented solution to our
Nation's system of Federal job training programs. But, Mr.
Chairman, in spite of this law, our work is obviously still not
done. We have a lot of work to do, and we need to follow up.
This piece of legislation that we have introduced is a
natural follow-up to that.
As you have pointed out, our Nation is suffering from a
dangerous shortage of skilled workers. For example, in 1999,
the National Association of Counties conducted a survey of its
large urban caucus, a caucus which in my home State of Ohio
includes counties such as Cuyahoga--Stephanie Tubbs Jones' home
area which she knows so well--Franklin County, Hamilton County,
Summit County. And in this survey, 85 percent of the local
officials responding said that there was a shortage of highly
skilled workers in their own regions.
Moreover, Mr. Chairman, 96 percent of these individuals
characterize this shortage as serious or as very serious. And a
majority indicated that this shortage was negatively affecting
their county's ability to attract and retain business.
In another study, Mr. Chairman, the National Institute of
Metalworking Skills, an organization of which one of today's
witnesses, Bill Bachman, is a board member, estimates there is
a need for over 22,000 skilled workers in five regions of the
country alone.
In my home State of Ohio, the December 1, 1997, edition of
the Cleveland Plain Dealer featured an article on the shortage
of workers in just one county in Northeast Ohio, Lake County.
This article featured an interview with Christopher Burton, a
machine shop owner in Mentor, Ohio. He noted in this article
that even with increased benefits he is still having problems
finding new workers. This is what Mr. Burton said, ``we can't
find experienced machinists at all.'' .
Mr. Burton is not alone. This is a problem across this
country. The same thing is happening all over our country. I am
sure that our witnesses today on both panels will have similar
stories.
Mr. Chairman, as you have pointed out, this legislation
would reward employers who provide training to workers such as
precision machinists, dye makers, mold makers, tool and dye
designers, heating and cooling contractors, plumbing
contractors, pipe fitting contractors, roofers, masons, and
others. These highly skilled trades are an essential part of
our economy. They provide the parts used in manufacturing. They
provide the services that allow our Nation's business to grow
and expand. And they are truly the motor driving our Nation's
unprecedented economic expansion. By giving a limited tax
credit to provide training for these highly skilled workers,
this bill would help keep this motor running.
Mr. Chairman, I hope with your strong leadership, the help
of this Committee, we can ensure the passage of this
legislation. I very much appreciate you giving me the
opportunity to come over from the Senate and appear before your
distinguished Committee.
Thank you.
[Senator DeWine's statement may be found in appendix:]
Chairman Talent. We thank you for coming, Mr. DeWine. The
Committee understands you are on a tight schedule. We would
love it if you could stay.
Senator DeWine. I do appreciate that. We are in a
conference talking about the budget.
Chairman Talent. If you need to go----
Senator DeWine. I would like to stay, actually.
Chairman Talent. We understand.
I will recognize the gentleman from New Jersey. Senator, if
you could, the gentleman from New Jersey has one quick point he
wants to make. If you could just wait for a second.
Mr. Pascrell. Good morning, Senator. How are you?
Senator DeWine. Good morning.
Mr. Pascrell. What I find fascinating about this
legislation is that it is--we are going in avery different
direction, and we are talking about the last 3 or 4 years rather than
talking about selective immigration. We need to understand that there
are workers in the workforce that need to be trained for new jobs, and
you are tying this in with I think something very, very important, Mr.
Chairman, and that is the question of holding on to our manufacturing
apparatus where we have no manufacturing or productive policies in many
States and certainly on a national level. That is the first thing.
I want to get into some trade difficulties that we have.
On the example that you just brought out, on machinists
jobs, we are beginning to do to that industry what we did to
the textile industry and that is trade it away and export the
jobs. I am glad that we are going to spend some time and
provide some tax credits within the industry to train our own
people to do these jobs. They are educable. We recognize that,
and we don't need to go offshore to bring these people here to
do these technical jobs, no matter how technical they may be.
We need to train, and I want to commend both of you for
recognizing that fact. This is not an addendum. This is a very
critical and essential part of building and growing the
economy.
I thank you for introducing the legislation.
Senator DeWine. Mr. Chairman, if I could just briefly
respond to the Congressman's comments, which I think are right
on point.
I think what we have all found in our home States or home
districts is that we have many people who are in a transition
period. They may be 40, they may be 45 years of age, they may
be younger, may be older who want to be trained, who want to
stay at it and clearly who have the ability and the inclination
and dedication to get that training if we could just get the
training to them, and they can then continue to be even more
productive members of society and continue to be highly well
paid workers, which is what we want.
Your comment about the industrial base in this country is
absolutely correct. We see it in our home State of Ohio.
Stephanie Tubbs Jones and I see it in the Cleveland area, so
very important. That is one of the reasons, main reasons, we
have the quality of life we have in this country, is our
industrial base, and it depends on skilled workers.
Chairman Talent. I was going to move on, but Ms. Tubbs
Jones seeks recognition and, one Ohioian to another, I think
she deserves it.
Ms. Jones. Thank you, Mr. Chairman.
Senator DeWine, thank you for coming to our Committee. I am
in support of this legislation.
I would just like to raise one issue both with the Chairman
and Senator DeWine to keep in mind as we go through this
process.
The issue of accountability for the training action--I know
we always like to believe that everybody will do the right
thing, but somehow we need to include in this the issue of how
to establish that training actually took place and that it's
appropriate.
The only example I can think of, Senator, is for several
years in Ohio and across the country, there were various
student loan programs where students took out loans which they
were responsible for paying back, but never graduated from the
program in which they had enrolled. And I am not casting
aspersions on any company that would do this training. I think
it is a great idea. But somehow we need to figure out how to
ensure accountability. I don't necessarily have an answer, but
I am prepared to work with whoever it is to see how we might
include that in our legislation.
I thank you very much for appearing and, Mr. Chairman, as
well support you on the legislation.
Chairman Talent. I appreciate the gentlelady's constructive
comments.
Mr. Chabot also had a comment.
Mr. Chabot. Thank you. I will be very brief.
Just as one Ohioian to a fellow Ohioian, I would like to
thank and commend Senator DeWine for his leadership in this
very important area.
Senator DeWine. Thank you very much, Congressman.
Chairman Talent. All right. We will go to our next witness,
whose name has been mentioned before, Mr. Bill Bachman of St.
Louis, on behalf of the National Tooling & Machining
Association.
Thank you, Bill, for coming.
STATEMENT OF WILLIAM G. BACHMAN, ST. LOUIS, MO, ON BEHALF OF
THE NATIONAL TOOLING & MACHINING ASSOCIATION, FORT WASHINGTON,
MD
Mr. Bachman. Thank you.
Good morning, Mr. Chairman, members of the Committee. Thank
you for the opportunity to testify on behalf of the 2,600
member companies of the National Tooling & Machining
Association, known as NTMA, regarding H.R. 1824, the Skilled
Workforce Enhancement Act, which we in this industry consider
absolutely critical to the successful training of highly
skilled workers.
My name is William G. Bachman, Sr., but I am just known as
Bill, Sr., in the whole industry, probably throughout the
United States. Before I retired in 1997, I was president of the
company in St. Louis, which has been in business since 1927,
and we employ 130 people, both men and women.
To start this, one day I awakened to the fact that in the
USA we are making a strategic advance to the rear when we
consider our machinists, die makers, mold makers and die and
mold designers. Only 15 percent of the members of the National
Tooling & Machining Association, NTMA, have an apprenticeship
program. Others are doing minor training as specialists, and a
specialist is usually for one machine itself.
At the time I was chairman of the NTMA National
Apprenticeship Committee which then realized the pathetic
situation we are in. After analysis of the situation, I called
about 30 of our competitors from coast to coast to find out
their overhead costs and if they were training apprentices.
When the numbers were put together, the USA average cost to
train an apprentice for 8,000 hours, which is 4 years, the cost
is $201,000. That is an average throughout the United States.
When we talked to our competitors, I asked non-trainers if they
would get half of their cost back, would they train apprentices
and without hesitation they all said, oh, sure.
Prior attempts to alleviate our shortage of skilled workers
have failed miserably. The welfare to work was presented as a
good opportunity to find people to change from that entity to
the workforce. Unfortunately, most every individual referred to
our companies in our industry lacked the basic skills needed to
begin an apprenticeship. The training conducted through the
government programs produced a number of so-called skilled
craftsmen. In reality, what those programs turned out were
merely button pushers and machine operators.
The importation of foreign workers widely used in big
business is virtually impossible for a small metal shop to do.
The requirements established by the Immigration and
Naturalization Service were numerous and confusing. The Skilled
Workforce Enhancement Act, SWEA,through a $15,000 tax credit
per apprentice per year would give small employers much-needed
incentive to train apprentices in-house. While $15,000 may sound like a
lot of money, apprentices will repay the government in full through
taxes within the 3 years of graduation.
The Joint Tax Committee may score this proposal fairly
high, but if we want to save the manufacturing infrastructure
of this country from extinction, we must give small business
this tool.
I might add, there was a question in my invitation about
whether or not as a private industry person I had any contracts
with the government. I have had none for the two years you have
requested, and I haven't had any for at least 10 years.
I thank you for this opportunity.
Chairman Talent. Thank you, Bill.
[Mr. Bachman's statement may be found in appendix:]
Chairman Talent. The next witness is Tom Bettcher, who is
the President and Chief Operating Officer of Copeland Global/
Copeland Corporation of Sidney, Ohio; and he is appearing on
behalf of the Air Conditioning and Refrigeration Institute.
Mr. Bettcher.
STATEMENT OF THOMAS BETTCHER, PRESIDENT AND CHIEF OPERATING
OFFICER, COPELAND GLOBAL/COPELAND CORPORATION, SIDNEY, OH, ON
BEHALF OF THE AIR CONDITIONING AND REFRIGERATION INSTITUTE,
ARLINGTON, VA
Mr. Bettcher. Thank you, Mr. Chairman. I, too, am honored
to be here to speak to this issue.
I have submitted written testimony, and I thought I would
just speak to some of the key issues in that testimony today.
First of all, let me describe Copeland, the company that I
am CEO of. We have about 8,000 employees and 26 facilities, and
our product is a compressor. The compressor is a key component
of air conditioning and refrigeration systems. It is basically
the engine of those systems. We are the largest manufacturers
of compressors in the world, and that product ends up in air
conditioning and equipment which must be installed by small
businessmen, contractors throughout this country. Copeland is a
subsidiary of Emerson Electric which has 120,000 workforce
throughout the world.
Today, as you mentioned, I am here representing the Air
Conditioning and Refrigeration Institute, and that is a trade
group representing 90 percent of the equipment for air
conditioning and refrigeration, both residential and
commercial, that gets installed in the United States. It
employs about 150,000 people in the manufacturing of those
products. More importantly, as you go beyond that into the
distribution channel, the wholesalers, distributors, installers
and servicing people, it is probably well over 500,000 people
in the United States. We think we are a critical industry.
Recent data has confirmed to us that the number one problem
our industry faces is hiring new technical talent to come into
the grassroots, the contractor-installer level. And, because of
this, the Air Conditioning and Refrigeration Institute
commissioned a task force; and I am the chairman of that task
force to address this.
We work with about 20 volunteers, as I am, who feel
passionately about this issue. We have been working over the
last year to come up with solutions. We have identified about
40 different things we are doing as an industry with the rest
of our trade associations to address this, and I think you
would be impressed to know that the number one priority that we
have concluded is to push and do everything we can to help this
skilled workforce act go through. We think that is by far the
most important thing that can happen to solve the problem. This
will help small employers, as has already been mentioned,
alleviate the cost of training which we agree is very
substantial.
And you might ask why am I here today. I am a big company.
None of the financial benefit would go directly to the large
companies that the Institute represents. All of it goes to the
contractors. But, in our case, our success depends completely
on the success of those contractors; and we just can't go
forward without them. So we won't benefit directly, but we
think it is important.
There is some key statistics that have come up recently
that have convinced us that this is the number one problem. One
of those statistics, and this was reported by the Department of
Labor, said that there was a 17 percent increase required in
the number of installing contractors in the United States over
the next 5 years. That means that we have to recruit new
talent, 20,000 people a year, into our contracting base in
order to get this equipment installed.
A second key factor was reported by the Department of
Education and that was that there was a 71 percent decline in
the enrollment in vocational technical training during the
periods of 1982 to 1996. So we have a huge erosion in the base.
Finally, as has been mentioned earlier, our workforce in
this area is in the 45- to 65-year-old age group. They are
retiring. There is no new talent coming into this business. So
we think this is critical.
Another factor that we uncovered recently in a small survey
was that the number one issue of our contractors is the
inability to hire technical people. And it is a number one
issue by a factor of about three times. So it is more important
to them than price competition, than inflation, than health
care. It is their number one issue. The industry needs to take
action. As I have said, it is the number one issue to us.
The negative impact to this if we don't move forward--there
are several things. Number one, we simply can't get our
equipment installed. Many of us can remember the hot summers
and unfortunate situations that occurred in Chicago and other
cities around this country. During July and August in many
parts of this country, you can't get air conditioning equipment
installed because there aren't people to put it in place.
More importantly, another key factor is, when the equipment
is installed, frequently it is done now with people who aren't
properly trained, and the result of that is the equipment isn't
efficient as it should be, which affects global warming and a
whole lot of other factors. It can save this country money if
we can get these technicians trained properly so the equipment
is correctly installed.
Another key factor is about 30 percent of the returns of
our equipment from homeowners, from installations where they
say there is a problem, are returned; and they are perfectly
good equipment. The basic problem is it is not correctly
installed. So we have a fundamental----
Chairman Talent. How much do you say is returned?
Mr. Bettcher. Thirty percent of the returns are--the
compressors come back. They are perfectly fine. The issue is
that people in this--because they haven't been able to properly
train them through a good apprenticeship program, don't install
the equipment correctly.
So that is a huge impact on our industry, on the consumer,
and the quality of our business. So I think this problem will
only get worse, and I strongly encourage everything you can do
to make this act a reality.
Thank you.
Chairman Talent. Thank you, Mr. Bettcher, for that
testimony.
[Mr. Bettcher's statement may be found in appendix.]
Chairman Talent. Our final witness on this panel is Mr.
Chris Leto, who is the Vice President of Tampa Brass & Aluminum
in Tampa, Florida, appearing on behalf of the American
Foundrymen's Society.
STATEMENT OF CHRIS LETO, VICE PRESIDENT, TAMPA BRASS &
ALUMINUM, TAMPA, FL, ON BEHALF OF THE AMERICAN FOUNDRYMEN'S
SOCIETY, DES PLAINES, IL
Mr. Leto. Chairman Talent and members of the Committee, I
appreciate the opportunity to testify before you today
regarding the impact of the shortage of skilled workers on the
foundry industry.
My name is Chris Leto. I am Vice President of Tampa Brass &
Aluminum Corporation. We are a small disadvantaged business
located in Tampa, Florida. Our foundry was founded in 1957 by
my grandfather, my father, and my uncle. The company has grown
from three to 80 full-time workers.
We produce aluminum and brass castings, machine them for
equipment in industries such as communication, defense,
electrical hardware and medical. We build such parts for
lighting fixtures, satellite component parts and wings for
missiles.
Tampa Brass is a corporate member of the American
Foundrymen's Society. Eighty percent of the 3,000 U.S.
foundry's employ fewer than a hundred workers, and many are
family-run operations.
One of the most critical challenges facing the foundry
industry is the growing skills shortage. Each day small
foundries are faced with more and more job vacancies because
there is no one qualified to fill these positions. We are
spending large sums of money to recruit and train these
employees.
We applaud the chairman's leadership in addressing this
job-skill-shortage issue and introducing the Skilled Workforce
Enhancement Act H.R. 1824. This legislation recognizes the high
cost placed on small businesses to train workers for skilled
jobs by offering a tax credit. My company and AFS strongly
support this bill.
Although metal casting is a mature industry, it has become
a refined modern-day process, and skilled craftsmen are
essential to the production of castings at several points in
the process.
The first is the pattern maker. All castings begin with a
blueprint and the skill of the craftsman to produce a precise
pattern. Normally, a pattern maker serves as an apprentice at a
foundry and must train 4 to 5 years to achieve journeyman
status.
Second is the mold maker. This is a pattern--foundry mold
maker. He forms and prepares the mold to receive the molten
metal. This can be an extremely complex task and requires
expertise of years of on-the-job training.
Third is the quality technician. He inspects the quality of
the casting. The metal technician acquires certification by
passing a series of written tests and through on-the-job
experience. We have two level 3 technicians, the highest level;
and it takes 6 years to achieve that status.
And, finally, the castings need to be machined, which
requires the skill of trained machinists. Participating in a 4-
year program along with on-the-job training is essential to
become a certified machinist.
For the past 3 months, my company has been actively
recruiting six machinists, one metal quality technician, and
one pattern maker--unsuccessfully, I might add. With the demand
for skilled workers outpacing supply, the problem of how to
meet the growing skills shortage is one of the greatest
challenges facing my company and the foundry industry today.
I would like to just share a few examples of how Tampa
Brass is addressing this challenge.
First, we offer a competitive and very generous wage and
benefit package.
Secondly, for the past 2 years, we have invested more
resources into recruiting and on-the-job training.
In 1999, we spent approximately $3,000 a month for 3
consecutive months advertising in newspapers with no success.
We only had one of 20 applicants come in that was qualified for
the machinist job. For the past 6 months, we have engaged five
different temporary agencies to help us locate 10 qualified
machinists. Over those 6 months they were able to locate us
six. However, we continue to have job openings for additional
machinists, and the use of these agencies is extremely
expensive. We pay them 55 percent over and above the employee's
salary for the first 3 months they are with us.
Tampa Brass is also investing resources to provide its
workers with training both in-house and externally through
technical colleges. In fact, we are currently sending two young
employees through a 4-year program to become certified
machinists.
These company-sponsored training programs have showed our
employees we are interested in their growth and that we value
their abilities. By encouraging them to become involved in the
training programs, these workers have more self-worth, better
attitudes and consequently become better employees.
The American Foundrymen's Society estimates this cost in
the range of 25 to $50,000 per year. Typically, these training
programs take 2 to 4 years to complete. The cost of these
programs makes it nearly impossible for many small foundry
shops to train new workers in these fields.
We also have a drug-free workplace policy. In approximately
three of 10 cases, applicants fail the drug test; and we still
pay the $35 per test. H.R. 1824 would help small foundries
offset some of the costs associated with training workers by
providing $15,000 tax credit up to 4 years. We are the
companies that need it most.
More than half of the small foundries surveyed last year
indicated they would take advantage of the tax credit set forth
in H.R. 1824. This tax incentive would help alleviate the
burden that the job shortage and high costs of training that
are being placed on small businesses.
In conclusion, foundries are working hard to recruit,
train, and retain qualified skilled workers. In order for the
foundry industry and other industries to compete in the global
marketplace, we must work together to reverse this skills gap.
No one sector can face these challenges alone, and the time to
act is now.
The Skilled Workforce Enhancement Act would serve to assist
small businesses already providing formal training for good-
paying jobs but would also provide an incentive to those
companies who have not yet implemented training. We urge those
Committee members who have not sponsored H.R. 1824 to do so.
I would be pleased to respond to any questions. Thank you.
Chairman Talent. Thank you, Mr. Leto, for your very
effective testimony.
[Mr. Leto's statement may be found in appendix:]
Chairman Talent. We have a lot of members here, so I am
going to ask just a couple of questions, and then I will defer
to the Ranking Member.
Mr. Leto, would you just go over briefly for the Committee
the facts you gave us about how you have been trying to recruit
machinists, like how long have you been trying to recruit extra
people, the kind of money you have been spending to get them?
Would you just briefly recount that testimony again?
Mr. Leto. Yes, sir. For a while, we went through the
newspapers, the local newspapers, the Tampa Times, St. Pete
Times. Those ads would cost us about $3,000 a month to run. And
we received--out of 4 months, we had 20 guys come in, 20
employees, prospective employees come in; and we only hired
one. It just wasn't cost effective.
Then we moved over to the temporary agencies, that they do
all the work for you in locating the potential employees. But
then you have to pay them a 55 percent percentage on top of
what they pay--we pay the employee. So if he makes $10 an hour,
then we pay the temp agency $15.50 for the first 3 months.
Chairman Talent. A journeyman, like you mentioned your
level 3 people, you have two of them.
Mr. Leto. Yes, sir.
Chairman Talent. What kind of money can you make working a
year in your company at that level?
Mr. Leto. Between $35,000 and $45,000 a year.
Chairman Talent. Plus all the benefits.
Mr. Leto. Yes, sir, correct.
Chairman Talent. Just one more question for the panel, to
try and establish the overview. Because, of course, one of the
issues we are going to have here is how much this bill, quote,
unquote, costs in terms of loss revenue.
Now, my guess is that business people in your position--
and, Mr. Bettcher, you work for a very big company, but you
have made some very compelling testimony on how this affects
you because you make compressors for air conditioning that
can't be installed. When you are thinking about capital
investments as small companies or big companies, when you are
thinking about how aggressively you are going to go after
business opportunities here or abroad, is it true that in the
back of your mind is this training issue? Look, there is no
point in making the capital investment if we don't have the
people to work the machines.
What I am getting at--and discuss this a little bit--is
how--I believe this is going to be the brake on this prosperity
if we don't do something about it. Because you are all sitting
there thinking there is no way we can continue expanding if we
don't get the skilled help. Is that true?
Mr. Leto. Yes, it is very much true. I do a lot of the
sales and marketing for my company as well.
One job that we are looking at right now that we just have
an order for is going to add $2 million to our bottom line, our
revenue. We are a $5.2 million company now. Where am I going to
get the employees? This is part of a plan that we have got to
start thinking about. That is why we started with the temporary
agents 6 months ago. So it is very important.
And one of the other costs that we have had to take care of
is the overtime, because that is what is happening. These
employees last year, our machinists, and there were 40 of them
total, they worked between 45 and 50 hours a week for the
entire year. It is good overtime money. It is not good for our
bottom line, and it causes employee burnout.
Chairman Talent. My guess is they probably would rather
have a little less overtime. When these guys and gals retire, I
am guessing--but they are probably not all spring chickens
either, are they?
Mr. Leto. That is correct. The average age of our employees
is 40 years old. We have a few young guys. Those are the guys
we are sending to the trade school, but we still do on-the-job
training, classroom situation as it is for an hour a week
possibly and sometimes we do Saturday classes, but, again, we
pay them for the Saturdays they come in.
Chairman Talent. I couldn't agree more with what Mr.
Pascrell said. You all are competing abroad with companies that
are getting directly subsidized by their governments; and this
is a way, without getting into that whole issue, that we could
help you all in competing with them in addition to all the
other benefits.
Mr. Bettcher. To your question, I would comment two things.
One, I would make a rough estimate that in the peak season
for air conditioning, let's say July and August, probably 5 to
10 percent of what needs to get installed is not installed
because of the lack of trained workers. So that is one thing
that really affects all of that whole group of companies.
The second thing I would comment on is that the training of
these people is so inadequate at this point because of the
quality of people coming in and the ability to train them well.
My guess is 2 to 3 percent of the average company's cost is
tied up in these warranty returns that don't need to exist. So
our competitiveness as an industry is severely impacted by
this. One of the number one variable or key costs that we work
on is reducing the warranty cost, and it is tied up in this
issue of training.
Chairman Talent. Mr. Leto, if you advertised for, say, a
human resources person or bookkeeper, do you think it would
have been as difficult to get applicants?
Mr. Leto. No, sir.
Chairman Talent. And those are great fields.
I will recognize the distinguished gentlelady from New
York.
Ms. Velazquez. Thank you, Mr. Chairman.
Mr. Bachman, I would like to start with the concern that
was raised by the gentlelady from Ohio, Ms. Tubbs Jones. As
drafted, H.R. 1824 does not provide specific standards for the
training provided by the employer. Therefore, it is conceivable
that any activity labeled an apprenticeship or training will
make the employer eligible for the tax credit. Part of the
reasoning behind this legislation is to make sure that we have
a highly trained workforce, so we don't want employers getting
tax credits for training that will not translate into a skill
for the worker. In your opinion, should the legislation follow
the definition of the qualified training program as established
by the Labor Department's Bureau of Apprenticeship and Training
or should the bill adopt another standard?
Mr. Bachman. Thank you.
I think the bill should take the existing standards. I was
one of about 15 men 25, 30 years ago that went to the
Department of Labor Bureau of Apprenticeship and Training. We
have an apprenticeship training system, and it is signed by the
Bureau of Apprenticeship and Training and by the people that we
are working within the NTMA to do this.
Now, we--those that are training are training by these
rules, and you can't have the exactnames of the rules, but you
should have rules that these people should train by and then they would
then inform the proper people when they get through. Neither one of
these gentlemen can use the same contract we have. However, all of our
chapter members throughout the United States do, but we are training
machinists, tool and die makers, computer designers. It is different
from what they want. So you are going to have half a dozen or a dozen
maybe different regulations so that these people do this properly.
I agree with you. I think, without any regulation, people
say, yeah, I have trained them. Off they go, and they really do
nothing. All they want is the $15,000 tax credit.
Ms. Velazquez. Thank you very much.
Mr. Bettcher, would you please give the Committee an
overview of what the apprenticeship in the air conditioning and
refrigeration field entails, how trainee progress is monitored
and how the program itself is monitored? In other words, who
makes sure that the apprentices are being properly instructed?
Mr. Bettcher. I think in our industry that is a program
that needs to be more fully defined. We currently initiated
what is called a North American Technician Excellence Program
over the last 2 years, which is a certification program in our
industry. That is just now rolling out across all of this
contractor base. So the framework is there, but the
implementation of that system is still in the beginning stages
of that. But we do have a system of certification, and we do
have training.
Ms. Velazquez. You have a system--I am sorry?
Mr. Bettcher. We do have a system defined of certification.
We have training programs defined for the voc tech schools and
tests that are--we administer to judge the qualifications of
these people so there is a program in place. I think it would
need to be adapted to the regulation that is being discussed
today.
Ms. Velazquez. Thank you. When you say you have a system in
place, who monitors and who certifies?
Mr. Bettcher. There is an organization that runs the tests
that are run on--they run them periodically through the year
across the country at different test sites. So there is an
official testing program that goes on by the group that is
sponsored by our trade association as well as some other trade
associations. And that is called NATE, the North American
Technician Excellence Program.
Ms. Velazquez. But you agree with me that accountability is
very important?
Mr. Bettcher. Absolutely. I very much agree with that.
Ms. Velazquez. Thank you.
Mr. Leto, many in the construction industry believe that
multiemployer training systems are the most cost-effective way
for construction firms of any size to offer comprehensive
training to their employees. By allowing businesses to pool
their resources to provide a quality combination of classroom
and on-the-job training, a multiemployer training system
provides something individual employers would not be able to
provide alone. Mr. Leto, does your company take part in
multiemployer training and why or why not?
Mr. Leto. We do not take part in that. I don't know that is
available in our area for multiemployer training. What we do do
in the quality technician part of it, the level 3 that I
alluded to earlier, there is a level 1, a level 2, and level 3.
Each person has to pass a series of tests and be on the job for
2 years for a level 1, 2 years for level 2, and 2 more years
for a level 3. If he doesn't pass the test, then he won't get
to the level 3.
However, in the level three, there is also an outside
certification by a company in Florida that confirms what we
have tested this employee for. For the machinists, we send them
to a technical educational college across the bay, and they get
a report card on a quarterly basis. That is a 4-year program,
so we monitor their progress based on the report card.
In addition to that, we sponsor them where--if they are
working on--let's say they are working on blueprint reading
this particular quarter. We as an employer will give them more
jobs that would involve blueprint reading. So we kind of go
along with the curriculum with the college. That is how we
monitor.
Ms. Velazquez. Thank you.
Thank you, Mr. Chairman.
Chairman Talent. My understanding of your business, Mr.
Leto, is that more of the training is custom, more specific to
the particular shop. There are basic skills you learn in these
programs, but really it is the on the job in your particular
shop where you get exactly what you want from the employees. Is
that fair?
Mr. Leto. Not necessarily. If we teach an employee, a
machinist how to program, he can go just about to any machine
shop and program if he learns how to program. It is the same
with setup. It is the same with tool making. So I think, to
answer your question, they can be used in any other shop.
Chairman Talent. Sure. You learn the basic skills at one of
these programs, and then you come in and do the on-the-job work
in your shop.
Mr. Leto. That is correct.
Chairman Talent. I have Mr. Pitts next. I recognize him.
Mr. Pitts. Thank you, Mr. Chairman.
You each noted the high cost of training of new employees.
What is the retention level of these new employees after you
have spent money training them? Can you give us a ballpark
figure?
Mr. Bachman. A lot depends--on the retention, it depends on
how you treat your employees. If you pay them the going wage
relative to your area, if you are giving them the reasonable
benies and you go with them and work with them, rather than
just push them aside, they will stay.
We had one fellow that left 2 years ago right after his
apprenticeship was completed; and I thought, gee, that was
fast. I walked in the shop about 2 months ago. There he was. He
said, well, he knew the grass was greener on the other side of
the street, but then after 2 years he found out it wasn't, so
he is back again. So you retain your own people by the way you
treat them, both economically and personally. We do not have a
problem at our plant.
Mr. Bettcher. In my case, I have a large company. I am not
sure that is the question. The question is for the small
businesses. I don't have the statistics for the contractors
because they are separate from my company, but we can certainly
research that and get information back to you to answer that
question for the air conditioning group.
Mr. Leto. Mr. Pitts, I don't know the exact percentage, but
I can say that our training involves a little bit more than
just a skill. We involve personal growth and family values
since we are a family-owned business, and I agree with the
first gentleman that it depends on how you treat the employees.
But since we have put this program in, I bet our retention is
above 80, 90 percent. It is that high.
Mr. Pitts. I believe you noted that many potential trainees
don't have the academic preparation in some areas like math and
science. What is the average academic level of yourtrainees?
Would a tax credit allow you to help train them in some of these?
Mr. Leto. I think it would. I would say the average
educational accomplishment of our machinists or the operators
is maybe 2 or 3 years of high school.
Mr. Bachman. As far as the machinists are concerned, we
have--the shop work that you do, we call it lab work. Then we
have 144 hours per year to take up and pick up anything that
they are short on. Mostly we hire people who are graduates of a
junior college, and they have had the blueprint reading, they
have had trigonometry, plain trig but not special trig. That is
one thing we add to it. They have a very small entree into
metallurgy. We make them take a better metallurgy course.
And die design, we do that inhouse because we have never
found anybody in the academic world that knew enough about die
design or mold design that could do them any real good. So we
teach that within our own people. We pay our employees to stay
at night and do this.
It does vary a little bit per person, per apprentice, but
basically we have to have all of these things, and we will get
them one way or another, and we pay for all of their outside
education when they have come to work for us.
Mr. Pitts. Mr. Bettcher?
Mr. Bettcher. I think, in our industry, the real targets
are high school graduates or people with 1 or 2 years of voc
tech training that we try to get into the contractor base.
Mr. Pitts. Thank you, Mr. Chairman.
Chairman Talent. Ms. McCarthy is next.
Mrs. McCarthy. Thank you, Mr. Chairman.
I thank you for your testimony.
I come from Long Island, New York, and we have a lot of
small businesses that are working in the areas that you are all
talking about. And I have spent January meeting with all these
business people, and they are talking about the same thing--
they can't find skilled workers.
What we have done on the Island is work with the business
people, having them come into the high schools, especially
through the BOCEs programs, and tell these young people this is
what, you know, we can offer you. This is the kind of education
and training we can offer you.
So far, it is working, but the problem that we are all
going to be facing is, as the years go on, we are not going to
have enough young people, and that is a fact of life right now.
So we have to do whatever we can to help you.
One of the things that I would like to talk about, and some
of my colleagues brought that up, as we go into this global
economy, there are going to be, unfortunately, certain jobs in
this country that are not going to be available to the people
that are already working there. And I am hoping, without making
it really tough or anything else like that, that with the
possibility of those that have been working in some of these
factories that they might have first chance to come and work
and be trained with companies like yours.
And my concern was, obviously, those workers that are 45,
50 even--because I look further down the road. These are good
people that have worked all their lives and all of a sudden
where they are supposed to be on the top end of their
employment and they have to start all over again, it is going
to really hurt their Social Security. People I don't think
really start to think about this.
So I happen to support this bill. I think it is a good
bill. And, hopefully, you will work with us to clarify it even
more, especially with the responsibility, because I think you
can probably put more input. Sometimes when we do things here,
we mess things up a little bit. So it is going to be important
to hear all of your input and to have this go forward. I
appreciate it.
Mr. Bachman. The St. Louis chapter of NTMA sponsors one
place in the job placement or job fair, and this job fair is in
the greater St. Louis area, and we had 11,000 eighth graders.
Now, there is nothing we can do with a junior or senior in high
school other than go to a junior college and start taking some
technical training, but they can get good technical training if
they start in ninth grade because you have to start with your
mathematics to get through even plain trig. And we have to have
this sort of thing.
What we did is we--one of the gentlemen from the companies
made up a great wage chart, and this started from $7,000 for a
flapjack flipper to $53,000 average throughout the country for
a machinist. They didn't take into account die makers, mold
makers, designers and so forth, the people who are higher paid.
I went and stopped some of these teachers and the people
who were doing the counseling for the ninth grade, and those
are the people that really start the young people. Somebody has
to explain to them that you have to start now. And I handed
this chart out, and I thought it wasn't quite enough, so what I
did is I took the W-2s from some of our people--of course, took
the Social Security and their name off of it.
Mrs. McCarthy. That is good.
Mr. Bachman. All I did add took the classification. I
couldn't do the other. But I handed it to the teachers and the
people who were recommending all of these things, and they
looked at these numbers, and they went from 40 to 75,000 a
year. Now, St. Louis is a fairly high wage area, and there is
maybe a dozen of them in the country, but they--the first thing
they said, well, can I be a machinist or could I be a tool
maker? I handed them my card. I said, if you want to, fine.
They all backed off, of course; but I let them have the
card. And I said, if you want to do something, go ahead and
send them--call me and we will get a tour of the company.
Because most of the counselors--not observers, the people who
are teaching, are routing the customers, routing the whole
curriculum, they have never been in a machine shop or a
manufacturing plant period. They don't know anything about it,
and this is where we are really hurting.
I had one school, one--no, it is a high school--high school
group. I went down about 60 miles south of St. Louis and went
through there, told them what we are doing. The counselor who
was in charge said, can we bring 25 people through your plant?
Sure, I said. So we made arrangements, and she made a time.
Two weeks before she was coming she said, how about 45 or
50? And we ended up with three educators and the rest of them
were students, first and second year, the junior and senior
year of high school; and they went through this. None of the
teachers had really been in a modern machine shop. They didn't
realize. They thought it was a greasy old place. Everything is
dirty. We showed them whereby we are measuring things by light
to the accuracy of 20 millionths per year--I mean per inch. And
they had no idea what this is all about.
Mrs. McCarthy. I think also what we have to do is kind of
reeducate people. I am on the Educational Committee, and I know
I happen to believe in college education, but I also know with
an awful lot of young people, they certainly are smart, and I
will give you an example. My son did go to college, and he is a
white collar worker. His two friends that are actually brighter
than my son went into other fields of endeavor. Now, Kevin was
an 85 percent student. These two young men were 95. My son is a
bright young man, believe me. But what I am saying is, they
went into your line of work; and they are making the $75,000 a
year.
So when I go and speak to my students, I say, certainly
continue education, especially in themath and the sciences.
But, you know, some people, like my son, doesn't like to get his hands
dirty. There are others that love it, and that is where they should be
encouraged to go.
We have put such an emphasis on college, which is really
terrific for a lot of people, but some people are just happier
working with their hands. And we have taken away the pride, in
my opinion, of those that want to work in the trades. I think
that is a shame. Because when you go to other countries, there
is a pride of working as an apprentice; and I think we in this
country have to reinforce that with men like you going out and
talking to people in school. There is nothing wrong with
working in the trades. It can be an absolutely wonderful life.
Mr. Bachman. To show you how clean it is, we have one man
who comes in with a white coat and a tie. He tucks his tie in,
takes the coat off--and white shirt. Works all day. Just rolls
up his sleeves to his elbows. Works all day. Doesn't get dirty.
Puts them back on. Off he goes. He is one of the top mold
makers.
It is not the dirty, cruddy job it is thought to be. Like
you said, we open our doors. I have had as many as 80 people,
students, come through the shop in one day.
Mrs. McCarthy. My uncle owned a machine shop on Long Island
many years ago so----
Mr. Bachman. You know it.
Mrs. McCarthy. I know it. Thank you.
Mr. Bachman. Incidentally, I happen to be a registered
professional engineer. I went to the engineering school after I
got out of the Army Air Corps in WWII, and I went through in 3
years. And some of the advisors, they take the top half, and
they go to college; and, frankly, the bottom half, they just go
to pot. They don't worry about them. And what they don't
understand, that we don't want the bottom of the pile, we need
people that can think. Just what you said. They are the ones
that are going to come in and really do a good job and make
good money. You can't take somebody that is illiterate and try
to put him on an apprenticeship. It doesn't happen.
Chairman Talent. I thank the gentlelady.
This Committee in part is about people who, in many cases,
didn't have the money or the inclination to go to college--but
were people who hustled and worked and were risk takers and
started businesses. The kinds of training that we are talking
about with this bill is ideal for people who work in a company
for a few years and then start their own. I haven't checked
this, but my guess is we probably--some of the witnesses today
are in that position. So this is--these kind of jobs, if they
ever were jobs that were the ladder, you know, ended after a
few rungs, and that is not the case anymore, and I thank the
gentlelady for bringing that out.
The next member to be recognized is the gentlelady from New
York, Ms. Kelly.
Mrs. Kelly. I am glad to see you all here. I happen to have
a lot of fun in my district going through the various
manufacturing places and walking and talking with the people
who are on the lines doing that manufacture. I am just
fascinated with the way things are made.
I am also interested, Mr. Bachman, in the fact that you
were talking about--in your testimony here, you were saying
almost every welfare-to-work person that was referred to your
company lacked that basic education. You were just talking
about that a minute ago with my colleague. Would this tax
credit we are talking about help you or do we have to do two
parts to this? Do we have to try to also add something to bring
those people that go to you, get them up to a basic skills
level? Is that what I heard you say?
Mr. Bachman. Partially, yes. The people that we take have
had in either high school or junior college some machine shop
and they have had some mathematics, like--they have to have
something that they understand what they are looking at. It is
a dangerous place to be if you don't know what is going on.
Mrs. Kelly. What level math--I am really kind of throwing
this out to all of you. What level of math are you talking
about if you are in a machine shop would you need? What level
is that going to be?
Mr. Bachman. Plain trigonometry, not spherical. That is one
level. If you have to get from here to here in a machine, it
goes by rectangular coordinates. So you have to be able to
calculate how far you go left and how far you go up to get
there. Somebody has to calculate this thing.
Now, they are done by computers. They are much faster, and
the machine tools themselves can do it, but you have to know
what is going on, why and how that gets there.
Mrs. Kelly. What programs do you think that we need to put
in place? What programs are out there that you--or what
programs can we do to put in place to help you?
Mr. Bachman. A fellow from Los Angeles and myself jointly
made the training syllabus for mechanics--I keep saying
mechanics--machinists, die makers, mold makers, and this will
give you the whole rundown of what they have to have. We wrote
this some 20 years ago. Personally, I think it needs upgrading
again. Because this past year we just upgraded the apprentice
standards, what you had to do, and that was done. But this
syllabus to lead the people in training I think by now needs an
upgrading.
Mrs. Kelly. I have got three sons and a daughter. I was
fascinated when my oldest two sons were in high school--rather
in junior high--they had to take shop. They had a blast. They
had a wonderful time making things. But all of that then was
changed because they got slid into the college prep program and
they never once looked back at that fun that they had.
I think that the manufacture of things is a lot of fun, but
it is tough, hard, dirty work, and it also requires a brain, as
you pointed out. I am concerned that we are trying to give you
a tax credit here in a way that it is going to be really
effective as reaching those kids. I want to make sure that if
we are going to do this, we are going to do it right. So I just
want to say that you can all talk to me later about that.
Mr. Bettcher, you talked about takeback. I have only got a
little second here to talk for a minute. I am interested in
that because I recognize also that major industries are
beginning to do service in a way where they are not only
servicing the things that they manufacture but they are
servicing other manufacturers' things. I am wondering if they
are putting that force in position because of exactly what you
have talked about in your testimony and that is they have got
to protect their own product and not--they are trying to reduce
that takeback. Is that true?
Mr. Bettcher. I think clearly that is a trend in the
industry, to do a more aggressive job at controlling your own
product. And so they can train people better and control that
better if they do it themselves and then have a trained
workforce. But it is just a fact of life----
Mrs. Kelly. But they are going for other people's things,
too. Is that just to keep those workers working?
Mr. Bettcher. I think they are trying to grow and they are
trying to expand their scope and have a bigger impact, let's
say, on a homeowner so they can service all the appliances in a
home, including the air conditioner.
That is fine with us as long as those people are trained
across that broader product line, and this bill would really
help us ensure that those people get the broad training, that
they can service the hot water heater and the air conditioner
and the stove and the range. That is not simple, to know the
ins and outs of all those pieces of equipment. So I think this
bill will help in that regard.
I wanted to make one comment about the training level
coming into this program, and that isthat we are talking about
a very broad range of trades here, from the very highly trained
requirements that Mr. Bachman talked about. I would say that there is--
they are not all requiring that level of training. In our case, it is a
technical product but not nearly the requirements of a machine and dye
shop. A basic high school graduate with an interest in mechanical
things and electricity and some good hands-on experience can be trained
to do our service work very adequately.
Mrs. Kelly. Mr. Leto, did you want to add anything to this?
Mr. Leto. Only in the foundry aspect of it. The mold maker,
probably more than anybody else, really doesn't need to have a
high school education. He can learn. We have to train him on
the job. We can train him, and that is what we do. It takes
about 2 years. He can be a good mold maker.
The pattern maker needs to have that trigonometry because
he has to--he doesn't have the luxury of a program to help him
go from point to point. He has to lay that out by hand.
And the quality technician, he needs to have a basic
understanding of metallurgy, so there is a higher education and
skill there.
But the levels, level 1, level 2, and level 3, what he
needs to acquire can only be done on the job.
Mrs. Kelly. Thank you very much.
Mr. Bachman. Are you talking about sand molds?
Mr. Leto. Yes.
Mr. Bachman. We have two different kind of molds, as long
as you understand that. We are making them out of tool steel,
hardening them and polishing, all this sort of thing. So it is
a completely different animal. And when I originally wrote this
thing, all I had in mind was the machining and the manufacture
areas.
And I beg to differ with you, that the shops aren't as
dirty--when I went to work for my dad and got out of college,
he just threw my scholarship and stuff away and said, hey, go
to work--and he handed me a couple of aprons--and learn. That
is the way I had to do it, without this kind of training. You
can have any kind of education that you can get, and you still
have to start doing something with your hands before you are
going to be good at this area.
Mrs. Kelly. Mr. Bachman, my husband started with a hammer.
I know all about how you start at the bottom, and I want to
tell you----
Mr. Bachman. But everybody else here doesn't.
Mrs. Kelly. I want to tell you, I did, too. Not with a
hammer, but I started with other tools. And I have to say that
the concept, the problem is that people think that doing these
jobs with their hands are just dirty jobs. They are not. They
are not. They are really interesting jobs. It is just a matter,
I think, a lot of it letting us do what you need to do, which
is go out there and do it.
Carolyn was talking about--I am sorry, my colleague was
talking about inspiring these people, this workforce that is
out there. A lot of people are in jobs that they are not happy
about, and they should be looking, sometimes, I think at the
jobs you are talking about.
Thank you very much.
Chairman Talent. Next on the Democratic side is Mr. Davis.
Mr. Davis. Thank you very much, Mr. Chairman.
And let me just say, gentlemen, at the offset that I
appreciate all of your testimony and have found the discussion
to be somewhat intriguing. I think all of us come from
different experiences, and I come from the experience of a
district that has lost more than 120,000 manufacturing jobs
over the last 30 years.
I also come from an area where the problem isn't what
happens once you get into skilled work opportunities. It is the
problem of some people not being able to get in. I am seeing
many people not being able to get in because there seem to be,
in many instances, especially with trade unions--and I am a
trade unionist--there seem to be a family network. There seems
to be an old boys' network. There seem to be a cousins',
uncles' network. And so people can't get in unless they come
with certain kinds of recommendations or they come from certain
groups.
And while I think the legislation has a tremendous amount
of potential, I think my question becomes--one of my questions
becomes, how can we assure that we are going to actually bring
new people into the skilled workforce, I mean, new people who,
for all practical purposes, have been actually shut out?
I recall in my city where the unions decided to move a
trades school out of town, Washburn Trade School, which had a
reputation of being one of the best in the business, but once
some requirements were put--that they had to let other people
in who had not been getting in, they decided that it was in
their interest to just move out of town, leave Dodge City. So I
want to know, how can we assure that we are going to bring new
people into the skilled workforce and then, Mr. Chairman,
whether or not there might not be some ways that we can tie
this legislation into some of the other things, like
empowerment zones, like disadvantaged areas, disadvantaged
businesses, or businesses located in certain areas and making
sure that they get the assistance that they need through these
tax credits. And so anybody can----
Mr. Bachman. Our plant is in the middle--not in the middle
of St. Louis, but it is downtown. St. Louis went from almost
900,000 people down to 300 and some thousand people. They just
all disappeared. We have several problems, and you can start
naming them if you want, but they do not--there is nothing we
can do about it as far as a small company.
Now, we take and work with a junior college, a private
junior college in St. Louis right in the middle of the area
that was--looks like it was bombed out. They have many trades
that they teach, and the area--if a person comes in and wants
to go to the junior college and they don't really have the
money--when I was retired from my business, whatever you want
to call it, they gave an apprenticeship--I mean a scholarship
to a person per year to go there.
Now, they have--if you take a test and you have to have
some ability--like in our case, the mechanical trades, you have
to know, you know, your left hand from your right hand. Most of
these young people have played with automobiles or something.
That is usually the most common thing for young men. If they do
this, the school now will take and give a catch-up course, so
to speak, for a year free. All you have to do is go.
And this has happened about 5 years ago, and I think they
are doing real well. They bring a lot of people in there that
could not afford to go to the school; and then, after that,
then they take them and they look for people. Like Emerson,
they give them $150,000 a year to help these people go through
the school. And this is the way that we try to help those
people that can't just walk in, plunk down $3,500 and say, hey,
I want to go. It is happening in St. Louis, but a lot of it was
lost before we got started.
Mr. Bettcher. Mr. Davis, I make two comments about the air
conditioning refrigeration business. Part of our program--we
have got several things going on to try to get people into the
industry. But to your question, we have identified the inner
cities and the zip codes of this country where there is not
this infatuation with 4 years of college for every person.
Those are very, very key target areas for us because we think
those are people that are very good candidatesfor our industry.
So we plan to target those types of areas in the country.
And the second thing that was commented on was the
reduction in manufacturing. The other initiative we have taken
is to say we want a package of material put together so that
when a company announces a downsizing or a merger and they are
going to lay off a lot of people, we want to be there the
second day with a package that talks about our industry, the
opportunity for training, and this kind of funding would be a
perfect fit with that kind of an initiative to bring these
people into a new trade.
Mr. Leto. We do the same thing. We are a member of the
greater Tampa Chamber of Commerce, so we are aware of companies
that are relocating to our area.
I agree with what you said. I think, if I understood it
correctly, we are talking about diversity and race. Us being an
8a contractor for the defense business, we are of Hispanic
origin, and we have a mix of African Americans, Caucasians,
Hispanics and women that work in the business. It is very
difficult to find a lady that wants to work in the foundry
business, because it is quite dirty, as opposed to the machine
shop, where it needs to be temperature controlled.
But there are also hub zones preferential that are
involved. We are not in a hub zone, but we really don't have
that luxury, to be that particular of who we hire. We need to
hire the best person qualified for that job. And if it is a
mold maker and we need to train that person, it really doesn't
matter. If you came to our facility, you will see a very even
distribution of African Americans, Caucasians, women, and
Hispanics.
Mr. Davis. And I think it is important that we look at
different requirements, different entities. In some instances,
obviously, the technical requirements are different. In the
other instances, it becomes a matter of a willingness to invest
in individuals. And what I hear you saying is there are some
instances where you have the opportunity to do that, and a tax
credit would certainly go a long way where it is helping your
company to be able to make that investment, and it is a concept
that I like and have a great deal of appreciation for.
I think I am going to like this legislation. I think I am
going to try and look for ways to make sure that it is targeted
and focused in such a way that we can get the most mileage from
it.
I agree with all of those in terms of voc training and voc
ed. I think all of us have had those experiences and we have
all had the conceptualization of what people thought existed.
Personally, I wish that I had more of it than just simply
growing up that I knew how to handle a hammer a little bit
better without hitting my finger.
And I think we do need as my colleague from New York,
Representative Kelly, suggested. Sure, we can help with young
people from an overall vantage point, but in terms of the nitty
gritty of what goes on in the industry, if these tax credits
are going to be given, I want to make sure that they are given
in such a way that we help to bring into the mainstream some of
those many individuals who have been left behind, who have been
cut out, and for all of the reasons that we already know are
not there.
When we talk about skilled tradesmen in many areas in my
city where there is over a million African Americans and we
talk about there being 25, 30 blacks in a skilled trade in the
whole town, I mean, that is appalling. That is incredible. That
is unbelievable. And we can just talk about things like tool
and die makers. We can talk about things like plumbers. We can
talk about almost any of the skilled trades, and I want to see
us be able to function differently than what some of the trade
unions have done in terms of who gets in and who does not.
Mr. Bachman. Actually, aptitude tests which we desire
before we hire somebody, because they are the people that
know--not have the knowledge of education, but they know how to
put things together, and it really doesn't make any difference.
You can take a person out of ninth grade and have an aptitude
test and they will--they can become a machinist or a die maker.
Now, if they goof off for the next 4 years, then they are going
to have to go back and do it over again. But their aptitude is
there and they want to do it, they can do it. But aptitude is
different than knowledge.
Mr. Davis. And they can make a lot of money doing it, a
decent life.
Mr. Bachman. That is right.
Chairman Talent. I thank the gentleman.
I am going to recognize Mr. Toomey.
Before I do, I want to remind the members we have another
panel which we want to get on and testify, although I certainly
don't want to restrict these lines of questioning. They are
very constructive.
Mr. Toomey?
Ms. Napolitano?
Ms. Napolitano. Thank you, Mr. Chair.
I did read your testimony, and I was quite impressed.
Because we long believed that we need to focus on stressing in
the schools the math and sciences for our young people, which
is one of the focuses that we are trying to revive in certain
areas, especially those areas that are low income. Because we
are finding out that a lot of our students, a lot of our young
people, they have the ability, they have the mentality, but
they don't have the opportunity.
Now, in listening to some of the dialogue and reading some
of the material, it brings to mind that somehow we need to
probably get everybody to start focusing on the low area income
schools, to provide speakers that have been successful, some of
you are machinists, some of you are mold makers, some of those
individuals to attract the eye and the ear of the youngster who
will not be going to college, who might have the capability of
doing well in your test, that might be the identified young
person who might be going into the industry. But he needs to
know where to go, who to talk to, and how to become--be put on
that road, that path to be able to become the machinist or the
mold maker or the engineer in your area.
Have you done or has anybody come up with a video to be
able to show schools the young machine shops or the ninth
graders, tenth graders that might have an idea that they might
be interested in that particular field, to show them what areas
they may be able to fit into, what they will need, what kind of
math they are going to need to fit into this particular
industry? Does anybody have any idea----
Mr. Bachman. How many of them do you want?
Ms. Napolitano. I am sorry?
Mr. Bachman. How many of them do you want?
Ms. Napolitano. I would like to have some to be able to
show in some of my schools, to give to the counselors.
Mr. Bachman. The NTMA has I think three different ones, and
we can take a choice.
Ms. Napolitano. Are they geared to high schools?
Mr. Bachman. They are geared to junior high school going
into high school.
Ms. Napolitano. Are any of those good material to put on
cable, to be able to instruct the general public?
Mr. Bachman. I think it would be, if the public will sit
still long enough and really listen to it.
Ms. Napolitano. Well, that is how we form public opinion,
is to be able to inform and educate the general public first
that you are having a lot of your current workers retire or
leave the industry, that you need people who are successful in
the math and sciences that will be able to enter this field and
attract young people into the industry to fill in those slots.
Mr. Bachman. I would be glad to get some for you.
Afterwards, I will get your name and address and where to send
them.
Ms. Napolitano. Certainly. Ms. Krause over there will see
you, because I will be leaving. I have another Committee
meeting going on, but I needed to come here and talk to you.
The welfare work is very intriguing to me, especially since
I come from California and we now have a max of 5 years for an
individual. How can we become more in tune with providing
access to the welfare recipients, even women who might be
willing to become the students and be able to be successful in
entering machine shop? And there are women that I know who work
in machine shops. They may not work in the foundries, but they
do work in the machine shops. How can we begin not only to make
them the entrepreneurs but be able to assist them because these
are good-paying jobs, that they can provide income for their
families?
Mr. Bachman. Well, we have a school called the Cornerstone
something, and it is--all government funds. And they are taught
only how to run a machine, and those are what they call
numerically controlled machines. They make the part, you put
the part in, you press the button, it machines it, you take it
out and put another part in. That is fine, but it is not
making--it will be--that is a machine operator, we call it. And
it does get something done. If you have that--if you need that
kind of work.
But now they--last year, they started taking additional
courses. This was, I think, 3 months that they taught this
person to operate this type of machine. Now, that doesn't take
into account numerical controlled equipment. Now they have gone
back and said, we will teach computer working, we will teach
some mathematics, blueprint reading, the basics they need. And
they take this into a 12-month session, and they allow them to
do this.
Now, these people, when they come out, they are probably
apprenticeable, and if they want to go on or they can be a good
machinist that way. So it is helping.
All I am speaking for is St. Louis. That is mostly all I
know. But they have decided and they have gotten the go-ahead
to expand this thing. I think it is great because these people,
who were pushed out into the industry with actually no
information except to push the gold button and if something
happened push the red button, they just don't have any real
knowledge, and unless somebody is willing to take them under
their arm and say, okay, here, we will teach you more. But they
can through the government in that particular case, continue,
but this is only started up really this year.
Ms. Napolitano. So it is new. You don't really have any
stats as to how it is working or it is being accepted?
Mr. Bachman. No, but I bet my bottom dollar it will. I went
through the classes. I saw what they are teaching. And if they
require certain grades, fine, everything will work.
Chairman Talent. Thank you.
I thank the gentlelady and all the members for their
interest and the witnesses in the first panel for their
patience and their answers. It has been very constructive, and
I will let them leave, and then ask the second panel to come
forward, please. Thank you again.
I have a hearing in the Armed Services Committee going on
now that I have got to go over to, so I just want the members
of the second panel to know it is not for lack of interest that
I am going to have to leave for a while. I will ask Mrs. Kelly
to take the chair.
Mrs. Kelly [presiding]. I want to thank all of you for
coming and being willing to testify here today.
And, Mr. Gooding, I want you to know that Mr. Pitts was
very anxious to be here to welcome you and to introduce you,
and we are glad to have you here. I am sorry this is a very
busy morning. Most of us--as you can see, most of us have many
hearings and other things that we are really mandated to go to,
so I apologize for the fact that I know he was trying--wanting
to be here and tried to be here during the time when you would
be here to be introduced. But we welcome all of you, and we
look forward to your testimony.
And this panel we have Mr. Gooding. We have Mr. Holdsworth,
who is the Director of Communications from Leesburg, Virginia.
Mr. Gooding, I am going to back up for a minute, because I
didn't say that you are Chairman and CEO of Gooding, Simpson
and Mackes, National Roofing Contractors Association. He is a
member of the board of directors.
Then we have Mr. Holdsworth, whom I have introduced.
Mr. Murphy is here with the Crest Electrical Company. He is
here on behalf of the Mechanical-Electrical-Sheet Metal
Alliance in Washington.
And Mr. Pence, Capitol Hill Advocates. He is here for the
National Concrete Masonry Association of Herndon, Virginia.
We welcome all of you. Thank you very much.
Mrs. Kelly. I believe we will start with you, Mr. Gooding.
STATEMENT OF JOHN GOODING, CHAIRMAN AND CHIEF OPERATING
OFFICER, GOODING, SIMPSON & MACKES, INC., EPHRATA, PA, MEMBER
OF THE BOARD OF DIRECTORS OF THE NATIONAL ROOFING CONTRACTORS
ASSOCIATION, WASHINGTON, DC, AND CHAIRMAN OF THE NATIONAL
ROOFING FOUNDATION'S ROOFING INDUSTRY ALLIANCE FOR PROGRESS
Mr. Gooding. Chairman Talent and members of the Committee,
my name is John Gooding; and I am chairman and CEO of Gooding,
Simpson and Mackes, which performs commercial and industrial
roofing work. I am also a board member of the National Roofing
Contractors Association, NRCA, and chairman of the Roofing
Industry Alliance for Progress, an industry-wide partnership
established to analyze, select, recommend and provide oversight
for projects addressing critical industry issues, including
this shortage of skilled workers.
We thank the Committee for holding this hearing; and I
commend you in particular, Mr. Chairman, for introducing the
Skilled Workforce Enhancement Act, SWEA. SWEA recognizes and
addresses a serious lack of trained employees in the roofing
industry. This has become so difficult at times contractors
must turn down work.
In response to the shortage of labor, NRCA and the Alliance
for Progress have been pursuing numerous initiatives to help
our members find, recruit, and train skilled roofers. These are
described in my written statement and include a 31-module
training program.
Mr. Chairman, I would like to submit my written statement
for the hearing record and summarize my remarks beginning at
the bottom of page 4.
For over 50 years Gooding, Simpson and Mackes has struggled
with trying to recruit, train, andretain good employees. In our
Pennsylvania location, we have been involved with the ABC, Associated
Builders and Contractors, Apprenticeship Program for sheet metal
workers for the last 30 years. This program involves 4 years of on-the-
job training and in-house training 6 hours per week throughout the
normal school year. This program is dependent upon other contractors
recruiting students interested in learning to become sheet metal
journeymen and willing to give up two evenings a week without pay
during the school year.
SWEA might give us the financial freedom to pay students a
small stipend for taking night school classes, thus recruiting
more workers.
In 1998, our company started a 2-year roofing
apprenticeship program, supplying both our facility and
instructor for the local ABC chapter. Our instructor used both
the ABC Apprenticeship Training Program and a new NRCA training
module to provide a very good classroom experience.
Besides the classroom training, our employees are working
approximately 2,000 hours on the job as well as attending
monthly safety training and special programs put on by our
insurance carrier and trainers during inclement weather.
In addition, our Pennsylvania company has spent over
$100,000 on a large training room that can hold 100 employees.
We are now looking into building another facility for hands-on
training in a classroom environment.
In 1998, I also approached the New Castle County Delaware
Vocational Technical Schools and asked if they would consider
establishing a training program for roofing mechanics if I
could help provide employment opportunities. They agreed to
this proposal and sent their instructor to an NRCA training
program. I then employed him during the summer to give him a
better understanding of what is expected of his students and
familiarize him with the tools, the equipment, and the
products. Our Delaware company purchased and will continue to
buy all the training modules produced by NRCA, and I personally
plan to monitor this program as it unfolds.
My long-term goal would be to hire students from the voc
tech schools and also continue their training as well as
educating unskilled employees by using the voc tech night
classes and/or in-house training. The tax credit for training
costs under SWEA would allow me to buy a van and go into
Wilmington, Delaware, and Lancaster, Pennsylvania, to hire
people who don't have transportation to get to our business
location or our job sites, thus providing good jobs and
excellent wages and benefits.
Our employees typically work 45 hours a week throughout the
year except on days of high wind, rain, and snow. Our average
employee works 2,000 hours a year, but other companies'
employees may work fewer hours per year depending on their
geographic location.
In closing, the shortage of skilled workers in the roofing
industry is real and shows no sign of abating. For example, we
purchased land and built our facility in Newark, Delaware, in
1989. We anticipated having 100 employees on the payroll within
10 years. Today, 11 years later, our workforce is only 35.
Something must be done to encourage people to continue to come
into our trade.
Mr. Chairman, SWEA is a very important step in helping
small roofing contractors attract the labor they need by giving
them the incentive to train their employees in a formal program
instead of continuing to complain and not achieve the results
they want. NRCA urges every member of the Small Business
Committee who is not already on SWEA to co-sponsor this
legislation.
I thank you for this opportunity to testify before you and
would be happy to answer any questions.
Mrs. Kelly. Thank you very much, Mr. Gooding.
[Mr. Gooding's statement may be found in appendix:]
Mrs. Kelly. Next, we have Mr. Holdsworth.
STATEMENT OF THOMAS W. HOLDSWORTH, DIRECTOR OF COMMUNICATIONS
AND PUBLIC AFFAIRS AND DIRECTOR OF COLLEGE AND TECHNICAL
PROGRAMS, SKILLSUSA-VICA, LEESBURG, VA
Mr. Holdsworth. Thank you. I make an observation. We could
use a carpenter for this door over here.
Thank you, Mr. Chairman; and thank you to this Committee
for inviting me here this morning.
I am Tom Holdsworth, Director of Communications and Public
Affairs for SkillsUSA-VICA, a nationwide education association.
SkillsUSA-VICA is one of America's largest public-private
partnerships with nearly one quarter of a million student and
teacher members annually. We enjoy the active support of over a
thousand corporations, trade associations, labor unions and
businesses at the national level alone.
Our industry partners are very concerned about our Nation's
shortage of both experienced and entry-level workers. According
to the U.S. Bureau of Labor statistics, the demand for skilled
workers has gone from 20 percent in 1950 to 65 percent of the
labor force today. This increased demand results in a shortage
of skilled workers and is even more difficult for small
business.
According to the Bureau of Labor statistics, construction
trade jobs will increase by 8 percent from 1996 to 2006. That
translates to 1,127,000 job openings due to growth or net
replacements.
A Harvard study shows the construction industry needs to
replace 18,000 carpenters a year. Apprenticeship programs
produce only 5,000 new carpenters annually.
The demand for heating, air conditioning and refrigeration
mechanics and installers will go up by 17 percent, or 104,000
openings.
Concerns from the machining sector have as much or more to
do with quality as with quantity. While the overall number of
employees will trend down slightly, tomorrow's metal workers
must be more skilled to run increasingly sophisticated and
efficient equipment.
Small businesses have traditionally counted on vocational
technical education as its largest provider of formal training
for its workers. So the logical question is, how many students
are in the education pipeline for these occupations? The answer
is, not enough.
Department of Education figures from the eighties and into
the nineties show masonry enrollments declined by two-thirds,
air conditioning refrigeration and heating by two-thirds, and
metal trades by 60 percent. Carpentry enrollments also dropped.
There are several reasons for these declines. Three of the
most important are population, policy and perception.
First is the simple matter of demographics. We have been
going through the baby bust. There have been fewer high school
students and young adults. The good news is that with the echo
baby boom we are about to see that 16 to 24 age cohort
increase.
Second, young people are not encouraged to enter these
professions. Since the early 1980s, and for some very good
reasons, secondary public education has focused on academics
and increased core graduation requirements. This shift in
emphasis, however, has often changed theobjectives of
vocational programs. Instead of teaching skilled proficiency for job
entry, some vocational programs focus more on teaching applied
academics. Cutbacks on time in class has meant students are taught
about an occupation rather than developing skill proficiency. Because
vocational courses are electives, if their enrollments decline, the
program is closed. That effectively closes the door to an occupation in
that school or college.
Third is a public misperception of these occupations as
careers. The second-class stereotype of blue collar workers is
alive and doing damage. Too often, the public does not see the
financial rewards of these occupations, nor do they see the
career paths that lead from them. Vocational students that come
from good vocational programs have career plans, and they have
the skills when they graduate.
By default, specific skilled training is being pushed to
the postsecondary level. Here the average age of a student is
28 or older. Their responsibilities are higher, and their
budgets are tight. Postsecondary students are motivated and
looking for ways to either start or change their careers.
Now for some good news about training. The automotive
industry saw a shortage of service technicians in their future,
and they took action. This Committee would do well to study the
AYES or Automotive Youth Education System. It is based on
industry standards, manufacturer created, supported by the
dealers--which are small businesses--and delivered through the
schools. AYES puts 2 years of high school together with 2 more
years at the postsecondary level and couples that with ongoing
training and certification on the job. In short, they have a
training system beginning with the recruitment and leading to
continual professional development.
Caterpillar has also created an intensive 2-year training
program providing college instruction and on-the-job training
for Cat dealer technicians. The point is, of course,
Caterpillar was looking for a way to help small businesses, its
dealerships who were facing technician shortages. The dealer
service technician program is set to world-class standards and
delivered through community colleges.
In conclusion, I would like to tell you that SkillsUSA is
conducting a nationwide awareness campaign this year called
Building Skills for America. Our students are collecting 1
million signatures from employers, employees and union members
voicing their support for America's highly skilled workforce,
also voicing their concern about the shortage thereof. We will
be bringing those signatures to Washington in September, 2000.
I hope we can count upon this Committee to recognize our
students' work and the need of business and industry for a
skilled workforce.
Mr. Chairman and members of the Committee, I hope this bill
will help small business, apprenticeships, colleges and, most
of all, workers. Thank you for inviting me to appear before you
this morning.
Mrs. Kelly. Thank you very much, Mr. Holdsworth. I think it
is really admirable that you are out there working right now in
the schools with the students. That is where we have got to get
them.
[Mr. Holdsworth's statement may be found in appendix:]
Mrs. Kelly. Mr. Murphy.
STATEMENT OF PATRICK MURPHY, PRESIDENT, CREST ELECTRICAL
COMPANY, ST. LOUIS, MO, ON BEHALF OF THE MECHANICAL-ELECTRICAL-
SHEET METAL ALLIANCE, WASHINGTON, DC
Mr. Murphy. Thank you.
Mr. Chairman, members of the Committee, Ms. Kelly, Ms.
Velazquez, my name is Patrick Murphy. I am the owner of Crest
Electrical Company in St. Louis, Missouri. Crest Electrical is
a family-owned business that has been operated since 1953. I
have been the owner for 21 years, and I currently employ about
220 electricians in the St. Louis area.
I am a member of the National Electrical Contractors
Association, NECA, and I am pleased to be here today on behalf
of the Mechanical-Electrical-Sheet Metal Alliance to discuss
the Skilled Workforce Enhancement Act.
As a former member of our joint apprenticeship and training
committee, I know firsthand the benefits of training excellence
in the construction industry. I feel the quality of
apprenticeship and training is important for my employees
because it increases the speed and quality of their work,
improves our customer relations, creates loyalty within our
workforce and creates a pool of skilled labor to replace
retired journeymen.
Alliance contractors in my area have chosen to make a
significant investment in the future of our industry. The three
organizations of the Alliance are currently training 890
apprentices and providing continuing education to nearly 3,000
journeymen in the St. Louis area alone. The construction
industry is currently facing a serious skilled worker shortage.
The Alliance applauds Chairman Talent's initiative in
attempting to promote and reward training programs in the
skilled trades through SWEA. However, while we support the
Committee's objective of helping small business develop an
adequate, competent workforce, the proposal, as currently
written, raises a number of issues and potential problems for
Alliance employers, problems which could be resolved easily
through some modifications in the legislative language.
The multi-employer training system is the most cost-
effective way for construction firms of any size to offer
extensive and comprehensive training to their employees. Multi-
employer training programs allow all construction employers,
especially small businesses, to pool their resources to provide
a quality combination classroom and on-the-job training
utilizing resources that they, as individual employers, would
not be able to afford alone.
It is our understanding that businesses participating in
collectively bargained multi-employer programs will be able to
take advantage of the tax credit created by SWEA. However, this
is not directly stated in the text of the legislation. We have
been led to understand that this potential ambiguity will be
clarified through report language, but we believe specific
language in the bill itself is necessary in order to prevent
any possible misunderstandings.
Due to the critical level of skilled workforce shortage and
to maintain consistency with the 1958 revenue ruling on
deductible training expenses, we suggest allowing all employers
who are party to an accredited joint multi-employer
apprenticeship and training program to be considered eligible
for the SWEA credit. This is particularly appropriate for an
industry where the vast majority of the workforce may be
working for one employer one day and another employer the next.
SWEA already covers nearly all employers in the
construction industry. According to the 1997 construction
census, there were over 175,000 construction firms in the
plumbing, heating, air conditioning, electrical and sheet metal
trades. Of this number, only 339 businesses would not qualify
for the SWEA tax credit.
Simply because an activity is labeled apprenticeship or
training program does not automaticallymake it so. Real
training, especially in highly skilled trades, requires real effort and
real commitment. SWEA uses Labor Department definitions for qualified,
highly skilled trades. But it is unclear whether the measure fully
adopts the equally important Bureau of Apprenticeship and Training
definition of a qualified training program.
This would not skew the program to only contractors using
organized labor. Missouri, for example, has Bureau
Apprenticeship Training certification for both union and non-
union training programs. St. Louis County has plans to require
BAT-certified apprenticeship as part of its mechanical code
requirements.
Compliance with BAT certification is easy and
uncomplicated. The Alliance suggests that in order to
standardize definitions for training, compliance with BAT
standards become a requirement for receiving the SWEA tax
credit and appropriate industries.
Alliance training programs which are exclusively multi-
employer in nature and which all are accredited through the BAT
graduate an average of 80 percent of their enrolled
apprentices. By comparison, other programs which use mixed
methods for training graduate an average of only 20 percent of
enrolled apprentices.
SWEA limits the tax credit to programs that are a maximum
of 4 years in length, denying the full benefit advantage to 5-
year programs. The Alliance feels this fails to address the
very workforce development aspects intended by SWEA as rapidly
advancing technology systems and facilities require more
ongoing training. The Alliance strongly urges that 5-year
programs qualify for the SWEA tax credit.
Mr. Chairman, each of our organizations has invited you to
tour our training facilities in your area. Thus far, your
schedule has not allowed you to take advantage of this
opportunity; and at this time we would like to renew our
invitation and urge you to take advantage of it so you may see
firsthand the type of instruction that is going on. Alliance
firms have contributed to quality training in the mechanical,
electrical, and sheet metal trades for over 50 years. The
proposed SWEA tax credit would allow us to continue to enhance
these quality training programs and to produce those
desperately needed, highly skilled workers in response to the
current workforce shortage.
Thank you for the opportunity to testify, and I would be
happy to answer any questions.
Mrs. Kelly. Thank you very much, Mr. Murphy.
[Mr. Murphy's statement may be found in appendix:]
Mrs. Kelly. Mr. Pence.
STATEMENT OF RANDALL G. PENCE, CAPITOL HILL ADVOCATES, INC., ON
BEHALF OF THE NATIONAL CONCRETE MASONRY ASSOCIATION, HERNDON,
VA
Mr. Pence. Thank you, Mr. Chairman and members of the
Committee.
My name is Randall Pence. Thank you for your invitation to
testify this morning on behalf of my client, the National
Concrete Masonry Association regarding the Skilled Workforce
Enhancement Act.
NCMA is, frankly, in the same position as the ARI witness
was in a few minutes ago. We don't really represent the people
who install concrete masonry, but we do represent the people
who produce it. So the financial interests examined here for
NCMA are really tangential to what is happening here today, but
we do have an intense interest in seeing that the products are
installed competently in the future.
The highly skilled workforce in America is indeed in
jeopardy. You have heard that to a great extent today.
Workforce recruitment is a prime topic in nearly every business
confab in the industry. It casts a shadow on Main Street. Its
impacts are being talked about on Wall Street. It is destined,
we hope, to become an issue at both ends of Pennsylvania Avenue
quite soon.
Employers in every district in America share this key
concern for the future of their businesses. They know that
without skilled workers there is no skilled work. They are
focused on our action here today.
There is already major support for H.R. 1824, and that
support grows with every industry executive who hears about it.
Without question, the need to increase the number of new
masons is the foremost issue confronting the masonry issue
today. A highly skilled, qualified mason is essential to
competently erect a structure using masonry. Without a mason,
there is no masonry structure. Period. The trade of masonry, of
course, is feeling the pinch as much as any other industry
dependent on highly skilled workers.
Let me offer some facts and figures important to the
masonry industry. According to the masonry industry's most
recent study, the U.S. suffered a shortfall of at least 6300
workers in skilled masons in 1995 and perhaps up to as many as
13,000. Further, the shortfall has been growing steadily since
that time. At the same time, the average age of masons and the
average age of new mason apprentices are both rising rapidly.
In one recent 5-year span, census figures and industry data
showed the average age of masons rose from 37.7 years of age
into the low 40s.
Now, what is most disturbing about these numbers is that
the industry may actually be underestimating the speed of the
growing problem. There is clear evidence of upward age
concentration in the industry. This signals an upcoming cluster
of retirements. The acute impact on the industry could be
enormous at that time.
Studies also show that the average age of new apprentices
entering the trade is rising as well. The masonry trade is
missing the high quality high school students in that critical
period immediately following graduation when career paths are
traditionally chosen.
Costs, of course, are also a key limiting factor for
training among masonry and small businesses. NCMA estimates a
cost in the range of 25,000 to $40,000 per year to train a new
mason. Survey data shows that H.R. 1824 could indeed have a
strong positive impact on the cost equation. Respondents say
that this bill would allow them to take on an additional three
to four apprentices per company on average.
Now, spread across the entire country, this bill could go a
long way toward reversing the disturbing trends we have been
talking about this morning.
Regarding some key issues in the bill, some may suggest
that H.R. 1824 be limited solely to BAT certified programs or
that a similar restriction be added. NCMA respectively does not
support such a provision at this time. We recognize that BAT
certified union programs do a fine job of training masons.
However, there are also many training programs run by industry
without BAT involvement oversight or standards. These programs
produce fine masons as well and should be fully eligible for
the H.R. 1824 tax credit.
Both industry and labor programs have strong support in
NCMA. The only problem is that both are not producing enough
masons to satisfy demand. It is that problem that H.R. 1824
attacks in a comprehensive and inclusive manner.
At this time H.R. 1824 does not discriminate. It is labor/
industry neutral and that is a key point to solidifying and
maintaining the growing support for H.R. 1824 outside the
Beltway. NCMA sees a great deal of wisdom in that approach and
we hope to see it retained.
Further, on an issue that I know was brought up before to
the previous panel regarding multi-employer training facilities
being eligible, let me say for the record that NCMA supports
the proposal to ensure that multi-employer training facilities
will indeed be eligible for the act.
Mr. Chairman, before closing, as a former Senate staffer, I
think it is important to recognize those who suffer for our
benefit. Over the last several months I have had the pleasure
of working with Ligia McWilliams and Melissa Decker. Their
strong support, their professionalism and hard work has been
instrumental in propelling this bill forward. We all appreciate
their skillful work.
In conclusion I would like to urge the Congress to consider
the skilled workforce in America as an important national human
resource that needs maintenance. We ask that Congress pass H.R.
1824 this year and start rebuilding the skilled workforce as
quickly as possible.
Once again I applaud your strong action and foresight on
this issue and I appreciate this opportunity to share my views
for the National Concrete Masonry Association on H.R. 1824.
[Mr. Pence's statement may be found in appendix:]
Mrs. Kelly. Thank you very much, Mr. Pence.
I am going to hold my questions and go to Ms. Velazquez.
Ms. Velazquez. Thank you. Mr. Gooding, in your testimony,
you mentioned that you like to see the minimum number of
training hours required for the tax credit under this bill
reduced from 2,000 to 1,500 hours to be more reasonable for
your industry. Could you please explain why this request would
be more reasonable and then whether you want a change be made
across the board or just specifically for the roofing industry?
Mr. Gooding. The reason I would like to see this change is
because many of the contractors, particularly members of NRCA,
work in northern climates and unfortunately they just cannot
get the hours in. When you get north of the Mason-Dixon line--
we are fortunate. We are in southeastern Pennsylvania and we
have no problem getting the 2,000 hours but even in the
northern part of our State, it becomes almost impossible
because of the cold weather to contend with. But that also
involves the other trades such as masons and sheet metal
mechanics and anybody who is working outside, they are going to
be limited with bad weather. You even go out in the
northwestern States, they have the same identical problem.
Ms. Velazquez. Well, reducing----
Mr. Gooding. So I think it should be reduced not
necessarily just for our trade but for all trades.
Ms. Velazquez. But don't you agree with me that we will be
cheating the workers of valuable training? Would you feel
comfortable the 1,500 hours will be enough to really have the
workers trained in that field?
Mr. Gooding. I think the 1,500 hours may be enough but then
the program, in particular our case, the roofing, we have 2
years. Maybe that would have to be extended to 3 years to get
the hours, get the training involved. Instead of limiting it to
a 2-year program, possibly a 3-year program in that particular
case.
Ms. Velazquez. Do you feel comfortable that 1,500 hours
will provide----
Mr. Gooding. I view in our particular case in our trade.
Ms. Velazquez. What about the other fields?
Mr. Gooding. I can't honestly speak for the other fields.
Ms. Velazquez. What you are telling me you don't feel sure
that this should be made across the board?
Mr. Gooding. I guess you are correct in that statement.
Ms. Velazquez. Thank you.
Mr. Holdsworth, it is my understanding that under current
tax law, businesses may deduct costs for training if they are,
quote, ordinary and necessary expenses paid or incurred in
carrying on any trade or business. The Tax Code includes as the
cost of doing business employee salaries and training costs if
they qualify as ordinary and necessary. Would you please
explain to the Committee why the current law falls short in
providing the necessary incentive for businesses to train
unskilled workers?
Mr. Holdsworth. Representative, I am afraid you have asked
me a question I am wholly unqualified to answer. I know nothing
about the tax law relative to this education. I came to speak
strictly to the need in education and the supply of people
coming through the system, but as to this customary and
ordinary, I do not know anything about it.
Ms. Velazquez. Okay. Thank you.
Mr. Murphy, in terms of years, how long are the
apprenticeship programs in the industry groups you are
representing here today?
Mr. Murphy. I can speak specifically for the electricians
is a 5-year program and I believe that the sheet metal and
pipefitters, plumbers, they are all 5-year programs.
Ms. Velazquez. Can you please estimate the graduation rate
for the apprenticeship program for the industry groups that you
represent?
Mr. Murphy. As I said in my testimony, in the multi-
employer plans which I represent, overall is greater than 80
percent. I know in our area in St. Louis, our rate is probably
over 90 percent.
Ms. Velazquez. How is the graduation rate monitored?
Mr. Murphy. It is monitored by the Department of Labor.
They are a regular participant in our plan but through the
number of people that come into the plan, those that graduate,
we follow and keep statistics on them.
Ms. Velazquez. Thank you.
Mr. Pence, you already answered my question in your
testimony. Thank you.
Mrs. Kelly. Thank you very much, Ms. Velazquez. I am going
to go--I would like to go back to the issue that Ms. Velazquez
raised, Mr. Gooding, about the number of hours, cheating
workers. Since I live in the Northeast and since my husband is
in--as you heard earlier started with a hammer in his hand, I
know that there are a lot of workers that can't get out there
on the roofs, that can't get out there doing a lot of things in
bad weather. And you can't train them on the job in bad weather
because it is a hazard. So my question to you is, do you think
that this bill, we might want to try and tweak this bill a
little bit to allow some flexibility in there somehow so that--
because right now you can get credit up to 4 years. If you can
get credit for up to 4 years, should we perhaps think about
helping folks who are affected by certain things like weather
conditions or suppose a major flood in a river somewhere else
in the Nation, if they can't get it in in 1 year or 2 years,
then they could extend 3 years or 4 years. So I don't see how
workers are being cheated here if we have it in the bill at 4
years and I am asking you really do we need to tweak this bill
or is it okay as it is?
Mr. Gooding. I would like to see it tweaked. I really
would. I feel right now when we havebad weather, we are
training some of our individuals but here again, we are very fortunate
in our particular area. I think by tweaking the bill, giving the
contractors the ability to stretch that program out to the 4 years, you
will end up with skilled mechanics.
Mrs. Kelly. That is really what we are after.
Mr. Gooding. That is all we are after. We are looking for
people to fill those spots.
Mrs. Kelly. I just wanted to make sure that that was
sensible.
Ms. Velaquez. I would just like to, if you allow me to
follow up with another question that is related to the one that
you just asked. Mr. Murphy, don't you agree with me that we
should change the bill to include those 5-year programs?
Mr. Murphy. Absolutely. Our programs are a major investment
on our part for all 5 years and we certainly feel as though it
would be appropriate if your program is 5 years to have the
credit available for all years that you do spend training.
Mrs. Kelly. Thank you.
Mr. Murphy, since we are at you at this point, I am going
to skip over and just--Mr. Holdsworth, I am coming back to you.
Right now I just want to ask Mr. Murphy a couple of questions.
I have got to get to your testimony here because there are a
couple of things I wrote myself notes on. You represent the
Mechanical-Electrical-Sheet Metal Alliance people, right?
Mr. Murphy. Correct.
Mrs. Kelly. I actually have seen some of the--union
training programs in my area; they have been for other trades
but I think they are just great programs. They are very good.
My question is really about the BAT standards. What makes the
BAT program the--I am interested in why the BAT program is the
one set that you recommend rather than having a lot of people
have an input? I think that we are finding that the training
itself benefits from having a lot of people involved and
certainly the union programs benefit from having a lot of
people working in and out of the training programs, having the
trainees go out to a lot of different people. And I am
interested in why you think that this--we should have
everything fall under the BAT. It is one of those things that I
think--I am trying to grab my question here. It is really--it
really is a question of industry standards and I am worried
about there being a national standard versus the industry
standard.
What I am trying to drive at, in various parts of the
country standards are different. If we have something that is
imposed from the top, it gives no ability for those folks down
below to have a say in what their people are being trained at.
That is really what I am after.
Mr. Murphy. I think I understand where you are going.
Certainly we are looking for real training to take place and
not just the term of a trainee or an apprentice. We feel it is
very critical if this tax credit is going to be available that
companies that receive the credit are in fact doing the job
that they should be doing and doing real training. The BAT
standards do recognize, I believe, somewhere in the
neighborhood of 800 different training programs in the country,
trade programs and if someone has a program and wants to take
it to the Department of Labor, the Bureau of Apprenticeship and
Training for certification, they can certainly do that and that
is an open process. Our concern is simply that we don't want
people that are not doing a good job and are not doing an
adequate job of training to receive credits for very minor
amounts of training. It is very easy to call someone a trainee
and provide very limited training--in other words in our
program, I pay out of our company funds for our people that
attend school one day a week during the day. It is a full-day
program and I pay their salary as if they are at work so that--
I am getting four days of work out of a five-day week with our
apprentices and we also contribute 30 cents per man-hour. Our
company is spending over $200,000 a year direct out of pocket
on training for our employees. And it is a very large expense
and I want to be certain that, you know, we are held to certain
standards by the Department of Labor in our program. I want to
be sure that anyone receiving this credit, we all do, we want
to see them--be sure that they are doing the job that you want
done.
Mrs. Kelly. Mr. Murphy, I have a real hard time grasping
the concept that anybody with a training program would be
training at a lesser level. That just doesn't make sense to me.
They need highly skilled workers. Why would they train at a
lower level. I want to ask Mr. Pence and Mr. Gooding really the
same question that I asked Mr. Murphy if you can figure out
what that question was. I know it was long.
Mr. Pence. I think we would find--we have talked today
about one specific program, the BAT certification program,
under the Department of Labor. I think if you keep the record
open for the next 10 days or so, you are going to be flooded
with letters from other entities, industry entities out there
who will say--hold their hands up and say, ``we have the best
program'' or ``we have a very good program and we should not be
cut out''.
I think everyone here in the room today is in agreement.
Nobody is interested in funding or supporting sham programs or
programs that are not doing a very good job of training people
for any specific skilled occupation. For example, in the
masonry trade, if you have somebody who doesn't know what he is
doing building a wall, you can imagine it is not going to be a
very good showcase for the industry. That wall may come down.
After the mortar is dried, you have a mess. So it is something
you strive very hard to avoid in the industry for cost and
other reasons. So I think we are all in agreement we are
talking about good training. I think also to the issue of the
1,500 hours which I think we need to flesh out further before
we leave today, that we are talking about serious high-quality
training programs. The question is who has the best program. We
would submit that nobody really has the single best program.
Going through your press clips in the packet that staff has
provided you, you will notice some programs that actually go
beyond the BAT standards in some cases. I recall reading one
article about a program that required I believe 200 hours of
training instead of 144 as required under BAT. Under the flimsy
rationale that more is always better, perhaps that should be
the standard we should adopt. Rather than institute this
automatic friction between labor versus non-labor programs,
there might be a middle ground here talking about a certain
baseline of criteria that people should follow to ensure, if
that is the major concern of the Committee, to ensure that we
are not talking about sham programs. We are talking about bona
fide serious skilled workforce training programs that should be
deserving of this tax credit. I think there could be some work
we could do there. But I think to avoid the issue that cleaves
between the labor and non-labor world, we might be able to stay
away from a specific industry standard or specific BAT standard
with all the problems that comes with that kind of delineation.
Mrs. Kelly. Thanks very much, Mr. Pence.
Mr. Gooding?
Mr. Gooding. I also agree with Mr. Pence. I think it is
incumbent upon the industries themselves to develop this
curriculum. We are out there. We are not interested in the sham
program at all. We need to train skilled workers and we are
going to do everything within our power to make sure it is done
properly. Similarly, he has a problem, if he builds a wall and
it falls down, he has got a major problem. If my people don't
install a roof properly, we have a lot of problems, a lot of
interior damage which is very costly to me. So it is really
incumbent uponme to give them the best training possible and we
are constantly doing that and we just want the ability through this act
to be able to take unskilled people and work with them and give them
that opportunity to become skilled craftsmen.
Mrs. Kelly. Thank you very much, Mr. Gooding.
Mr. Pence. Could I bring up one other issue very quickly
while we are still on this. Another issue that was brought up
with the last panel was the issue of accountability. And
obviously accountability is always something we want to make
sure how you fulfill missions and so forth. It raises for me,
just looking at the proposals we are talking about today, who
we would be accountable to in this particular case. I think
that is going to also require some serious thought because that
is another area where you have this natural cleavage between
the labor union versus non-labor world, which is what I would
suggest we all try to avoid for the betterment of everybody
here. Everybody at the table is going to benefit from passage
of H.R. 1824 with the amendments we are talking about today and
we should try to avoid these other issues. So I think in terms
of determining a body to whom to be accountable, that is going
to take some work as well.
Mrs. Kelly. Thanks, Mr. Pence.
Mr. Gooding, just one quick question. Is this program that
you run certified by BAT?
Mr. Gooding. The one we are running in Pennsylvania is
certified by BAT but we are also intermixing the NRCA modules
as well. We are trying to pick and choose what is best for our
locale. Our roofing practices that are done in Pennsylvania may
be completely different in some aspects to what is done in
southern California. So we have 31 modules to choose from. We
may only as a contractor in Pennsylvania use 25 of those
modules and they may use a different 25 somewhere else in the
United States.
Mrs. Kelly. You are finding a certain flexibility works for
you.
Mr. Gooding. Absolutely. We need to have flexibility.
Mrs. Kelly. Mr. Murphy, would your number of workers, do
you think, increase if we were able to give this tax credit?
Mr. Murphy. I certainly think there would be more incentive
for the businesses to employ additional apprentices. We have
unfortunately some businesses within our contractor group, some
companies that don't like to hire apprentices and bring them in
because they feel I am paying for the school time and I am not
getting work all the time so I will let somebody else do the
training and I will get them after they are already through the
program. So I think this would encourage more companies to
participate in the program and hopefully expand the
opportunities for the apprentices.
I want to go back just a second on the BAT thing. For
instance, in Missouri there are both union and non-union BAT
certified programs. Just so you understand, BAT operates in all
50 States. There are offices in every State and they are out
there and this is a program that is already in place and it is
working and they are certifying people so we don't have to
create anything to certify.
Mrs. Kelly. Yet Mr. Gooding is finding it better to have a
little flexibility drawn into there. That is probably worth our
looking at. Do you have a shortage right now, Mr. Murphy, of
workers in your business?
Mr. Murphy. We certainly do. It is limiting our abilities
currently to take on additional work. There are jobs in St.
Louis that are having very few bidders and sometimes no bidders
simply because everybody is busy. We have--out of our workforce
right now we have 20 workers that are from out of State that
have come, travelers as they are called, that are in St. Louis
right now working from all across the country are coming in and
taking jobs in St. Louis simply because their areas are slow at
the time.
Mrs. Kelly. I want to ask you a minute about the business
of the tax credit versus tax deduction. And that is what I was
digging in my notes here as I was reading your testimony, I had
written this note last night. I want to know, I know because of
my experience in the field within my own family that not all
businesses take this tax deduction and I wonder if you can tell
me what you think is the reason.
Mr. Murphy. They do not take----
Mrs. Kelly. In your testimony, you say that simply put, all
businesses may deduct their costs of training under current tax
law. I am quoting from your testimony. But all businesses don't
do that and I am wondering if you can tell me why you think
they don't.
Mr. Murphy. I would have no idea why you wouldn't. For
instance, in our case, the wages that we pay the apprentices
while they are in school and the funding that we put into the
apprenticeship program on a cents per hour basis, those are all
deductible as part of our labor costs on the jobs. And then
beyond that, our safety training programs we do and other extra
classes and things that we send people to, those are all
deductible items for us. Frankly, I can't imagine why a
business wouldn't unless they are just sloppy and not taking
advantage of what is out there.
Mrs. Kelly. Could I throw that out to the rest of the panel
here. I have my own supposition here but perhaps somebody here
would like to answer that.
Mr. Pence. Sometimes you don't take a deduction because you
are not making money against which to deduct it, which is not a
good situation. Section 162 is available to anybody, multi-
employer or non-multi-employer for all training costs. One
thing I would say is that with section 162, the above-the-line
deduction for employment costs and training costs does apply
across the board. That is one of the issues I discussed with
staff previously. If you choose to allow a BAT only standard
for the tax credit, we think it would be something in the
nature of setting a precedent or dividing up the benefits
whereas above the line on section 162, labor union and industry
training programs today can all deduct those costs. By changing
H.R. 1824 to a situation whereby only BAT-certified qualifies,
I think it is a substantial difference from the existing law it
is today.
Mrs. Kelly. Mr. Pence, have you any idea what the average
amount of tax deduction is that businesses currently take on
these training programs?
Mr. Pence. My understanding is it is full deductibility,
all costs for employment or training costs. Other tax experts
in the room or from JCT might be able to answer that question
but in terms of the actual dollar amounts how much companies
normally take, I would suggest they take the maximum possible
which would be the full employment cost.
Ms. Velazquez. Chairwoman, I would like to ask a question.
Mrs. Kelly. Yes.
Ms. Velazquez. Mr. Murphy, I would like you to explain or
Mr. Pence, when you say that businesses deduct employees'
salaries and training costs, why then this legislation is
necessary to provide the type of incentives to train unskilled
workers?
Mr. Murphy. I think what we are trying to do is trying to
expand the opportunities and as I said earlier, trying to
encourage people to take in additional workers. Hearing some of
the earlier testimony about people trying to hire for their
companies, I got the impression they were tryingto hire people
that were already trained by somebody else. What we are trying to do is
we are trying to encourage--rather than advertising for a skilled
position, we are trying to--in our case we take kids from high school
and college and beyond and bring them up and raise them up to the level
that we are after and so we are trying to encourage companies to do
more of that training.
Ms. Velazquez. Mr. Pence.
Mr. Pence. As a matter of the Tax Code, tax credits are
always worth a great deal more than tax deductions above the
line. The tax deduction above the line is always subject to
other provisions that may--adjustments that may reduce the
value of your tax deductions. The below the line tax credit is
a dollar for dollar reduction in your taxes. So it has a much
greater financial impact on the company to take the tax credit
as opposed to a tax deduction.
Ms. Velazquez. Thank you.
Mrs. Kelly. Thank you. I have just got a couple more
questions here. Again, I have been--I understand from Mr.
Murphy that you think that we need to explicitly state that
multi-employer programs are going to be covered in this bill. I
believe I read that in your testimony. It is my understanding
that House legislative counsel clarified that multi-employer
programs for training apprentices are going to be eligible to
receive the SWEA tax credit and so I am not sure why we need to
explicitly state this. Can you answer that?
Mr. Murphy. I think one of the issues that we had with that
was that the--we have some employer--some of our larger
employers and I talk about the quantity of these companies, out
of 175,000 companies that are in the trades that I represent,
there are only 330 or so that are above this 250-employee
level. In other words, we have a lot of very small businesses
but the larger companies as well, the few that there are, we
would like to see them included. They contribute to this
program as much as we do on a cents per hour basis and we would
like to be sure that they can also receive the credit and since
they are funding it just like any of the other members.
Mrs. Kelly. Thank you.
Mr. Holdsworth, I told you I had a question for you. As a
nonprofit educational organization, you can't lobby Congress
for this bill but you are here today to give us some
educational information and I am glad of it because I think we
really need it. Do you support the concept of this legislation
and do you think it can help alleviate the current shortage of
the highly skilled trades?
Mr. Holdsworth. Yes, I personally do. I liked what I saw
here very much. I am not as I said earlier conversant in the
Tax Code as you have got some other people up here that are
much better at that than I. But I do see the need and I do look
for solutions, and I personally see something here that is
needed. We have people who do need training and we don't get a
highly skilled workforce by simply putting them on the job or
running them through a simple high school vocational program.
We at the vocational level view ourselves to be entry level
preapprenticeship training. Apprenticeships are where the
rubber really meets the road in this country in terms of high
skilled workers. So if this legislation is something that is
going to help develop that kind of activity, I am all for it.
Mrs. Kelly. Thank you very much. One final question for
you, Mr. Pence. Is the shortage of highly skilled workers as
acute as the shortage of lesser skilled workers and how do the
costs of the training of the highly skilled workers compare
with those of the training of lesser skilled workers?
Mr. Pence. It is an interesting dynamic out there because
we see lots of news reports about skilled and unskilled workers
on the news these days. One of the issues we try to impart in
our testimony is that the issue of skilled workforce training
and the shortfalls that develop in skilled workforce training
is really a more intractable issue, and from an economic
standpoint we think a more dangerous issue, that needs
attention on a rapid basis. The reason is these are not
programs that can be solved by having a weekend job fair and
putting somebody on board. These are training programs that are
in all cases, and under this legislation before us today, last
for a period of years, at least 2 years and up to--if the bill
is changed, up to 5 years. So it is going to take a long lead
time to get people into the system and get them trained. You
are going to have to pull off skilled workers off their
profitable jobs and put them on to overseeing in many cases the
new trainees coming into the program. So it can take 2, 3, 4
years before you really see the fruits of today's recruitment,
skilled workers that you can send out on their own to work on
the most profitable jobs in the economy today.
If I could take care of one matter here before we leave
this issue. We talked earlier at the very first part of the
questions about the hours to change from 2,000 to 1,500. When
you work on legislation, you find out things you didn't know.
Our intent was to come up with a program that would benefit
full-time training programs. We operated under the assumption
that that meant 2,000 hours per year, a number which seems to
have come into the vernacular of work life these days. After
doing research with IRS and other elements of the government,
we found out there is no requirement in law for 2,000 hours as
defining full-time employment. So we had a bit of a conundrum
here. We might have had the 2,000 hours in the bill with no
real rationale or reason for it to be there.
We also talked about the issue of some of the industries,
including the masonry industry, being conducted outside and you
are subject of course to weather delays, things beyond control.
So we were searching for a mechanism or a criterion that would
keep us in the range of serious full-time employment designed
to create skilled workers that are going to be in the career
for many, many years. Serious employment. And we came up with
the idea that 1,500 hours might be the appropriate threshold
meeting with the weather delay problems that some of us face
but still being--somebody who is working for 1,500 hours is
certainly not a part-time employee and is probably working
toward a career in that particular trade. So that is the
genesis of coming up with 1,500 hours. We support that at NCMA
and would like to see something along those lines put in the
bill to take care of all the problems we just addressed.
Mrs. Kelly. I think that what you have said is very
interesting and that is really what we were talking about here
with Mr. Murphy and Mr. Gooding. I think that it would be
interesting to hear from Mr. Murphy and Mr. Gooding in light of
what you just said. Would you like to respond to that, Mr.
Gooding?
Mr. Gooding. I agree completely that the 1,500 hours would
work out perfectly in our trade, especially with some of the
contractors in the areas we talked about previously. I mean,
our problem is really just getting--we can't find skilled
workers period in our trade so we have to start with unskilled
and train them, but my problem is that I am not looking for an
awful lot. I am looking for somebody that has a desire to work,
that are not on drugs, they have a pulse and they are willing
to climb a ladder. That is all I am asking. I can't get them
but if I had this tax credit, it is going to give me the
impetus as well as other contractors to get out there and
accomplish this. We are not asking for a lot in our particular
industry but this act would be great to help get those
contractors out there and get these people off the streets that
are underemployed and get them in our workforce.
Mrs. Kelly. Mr. Murphy, do you want to address that?
Mr. Murphy. Yes, I think my only concern with the 2,000
hour limitation is I agree what we are trying to do here is
full-time programs and if I look at situations where we work 40
hours a week in our trade, we do not have makeup days for
Saturday if it rains and many of the outside trades do. It
would be very easy for someone to miss a week's time throughout
the year somewhere and if now we fell in and it became that
they worked 1,960 hours, you know, I would hate to lose the
credit over having missed a week's time over a period of a
year. In construction, it is very frequent that you will have
some lost time due to conditions beyond your control, so I do
want to be certain that we have--that we are covered for minor
missed time throughout the year and we have some flexibility
and we are not oh, gee, you only have 1,875 hours this year,
you don't get the credit and that would be a shame.
Ms. Velazquez. Can I ask another question. What is the
magic in the number of 1,500? Where do you get at that number?
Why not 1,700 or 1,600, 1,650. Why 1,500?
Mr. Pence. I think among the coalition of staff who have
been working on the issue, there was a little bit of a ballpark
guess involved in this due to talking with the members of the
associations and understanding that there is a bit of a track
record here. The idea here is not to create a tax credit that
somebody is going to lose inadvertently. The feeling is that
1,500 hours is going to at least meet the threshold of serious
employment but is not going to force you to lose the credit
because of unforeseen consequences.
Mrs. Kelly. I would like to reclaim my time for a minute.
Are you finished?
Ms. Velazquez. With your knowledge of the Department of
Labor standards, would you think that that would conform with
what they have in place?
Mr. Murphy. The 1,500 hour would conform?
Ms. Velazquez. Yes.
Mr. Murphy. Frankly, I don't know. I would have to get back
to you on that.
[The information may be found in appendix:]
Chairman Talent [presiding]. The other gentlelady from New
York.
Mrs. Kelly. I am interested in this hour situation from
another standpoint and that is if you are taking people who are
having to learn a skill and become skilled, what amount of
hours--has anybody done any studies that you know of, Mr.
Pence, that indicate the number of hours after which somebody
is going to look at that training program and say, hey, I just
cannot do it, that is too long? There is a discouragement
factor that can be built into that training I think and we have
to be cognizant of that as well.
Mr. Pence. Are you talking about the psychological or
marketing aspects to the trainees?
Mrs. Kelly. I am thinking about Mr. Holdsworth here who is
talking about going into schools and training and reaching
people and we were talking earlier about reaching out to people
in schools saying look, you can do this, you don't have to go
to college to do it. This is a good trade. You are going to
make a lot of money in this, really doing the kinds of PR that
we need to try to bring people into the trades, but if they
then are told, if you join this trade you are going to have to
go out and put in 5 years of 2,000 hours every single year, are
you talking about a lot of hours? And people may look at their
lives--I am thinking about my kids. I am thinking that they may
look at their lives and say, I am just not going to put 10,000,
20,000 hours into this job. I want the job. It is a good job
but I am not sure that that amount of training--that I want to
take that much schooling.
I don't know, Mr. Holdworth, you may want to jump in here
too.
Mr. Holdsworth. I do have this observation which is
probably not a very good one to make at this moment. There is
something about seat time and competency. Seat time doesn't
assure competency. There are some people who are going to learn
something in a hundred hours and it is going to take somebody
else 300 hours. So it seems to me that the standard that we
probably should be looking at--instead of the traditional
education model of somebody sitting in a seat for a semester--
and rather ask what are the standards that we are working
toward and has that individual achieved that competency? It
becomes a little more difficult.
It is easier within your legislation to say X number of
hours covers everybody. You don't have to get into some of that
standard stuff. But I don't like to leave it on that seat time
because you are right, there are going to be students who are
going to say, man, that is a long time. On the other hand, I
know that there are apprenticeships, National Tooling &
Machining Association for example has their apprenticeships,
the students are going to school full-time during the evening
and they are working full-time during the day. So their college
is being paid for and they are getting their apprenticeships. I
certainly hope this legislation would cover that kind of an
arrangement.
Mrs. Kelly. I just watched my husband study as a journeymen
carpenter with that hammer in his hand and it was a long time.
Mr. Murphy. Addressing your issue over the 5-year period
now, in our program, when an apprentice comes in they start out
at a base wage. Then every thousand hours as they progress
through the program they get increases until they reach their
full journeyman status after 10,000 hours of training. The
first 2\1/2\ years they spend the day a week in school and it
is not just in a chair. We have labs where there have been pipe
and pull wire and makeup control modules and do fiber-optic
work and telecommunications work and so forth. So there is a
lots of hands on and book learning. And then we have grades.
This is like regular school. You have tests and grades and you
have got to pass or you get out of the program. It is a regular
schooling program but you have one day a week for 2\1/2\ years
in school and then the rest of the time you are on-the-job
training.
Mrs. Kelly. But you are saying you also get a carrot at the
end of that stick so to speak. You get more money as you get up
in the program.
Mr. Murphy. Every thousand hours you are going to get an
increase in your wage.
Mrs. Kelly. Thank you.
Chairman Talent. I thank the gentlelady and I want to just
say I regret not being able to be here for most of this panel.
I had another hearing that was getting on. I do understand that
you covered most of the issues and I am not going to make
everybody rehash them. We will leave the record open for 10
days if people have additional questions and we will continue
working on this bill and those who want to go can.
One thing I want to get into and maybe refocus this hearing
right at the end, let me ask you all, what do you envision
happening if we don't do something effective in the government
to help you with this? What solutions are you going to be able
to develop or are you going to be able to develop? As this
problem pinches more and more, what are we going to see?
Businesses going out of business? Businesses not expanding? Let
me just--sitting here as a person who is not always in love
with government solutions, is the market going to come up with
something if we just sit tight and do nothing? Are you all
going to be able to figure out some way around this? Tell me
what is going to happen where you see the current trends taking
us unless something changes it, and whether you think something
might change it outside of some government actionand then I
will let you all go run your businesses.
Mr. Murphy. What we are seeing in St. Louis happening is
projects are taking longer to come on-line. Buildings will get
to a point and we will need iron workers, sprinkler fitters,
pipefitters, whomever, and they simply aren't available. So we
are stretching out the time on the jobs, whether it takes 2
years to finish a job instead of 18 months. There is financial
impact there on the owner and on the revenue generation from
that building.
So I think that that is one of the things that you will
see. I mean, things are just going to take longer and what we
have seen over the past 10 years is people want buildings
faster and faster and faster, and if we start going backwards
on that, they are not going to be very happy with that and
perhaps do less building and find other ways of making it
happen.
Mr. Pence. I would have to say in most cases you are going
to see it is going to be Economics 101, things we learned about
in the first year of economics in college. You are going to see
inflationary factors as we have to increase wages to attract
more people and keep people in the skilled occupations. We are
going to see--somebody mentioned earlier this morning and I
think it is absolutely correct--employee burnout because you
are going to see a lot more people, the ones who are working,
are going to be working more overtime hours. That is good for
the paycheck in the near term. In the long term I am not sure
it is best for that worker. We will see construction delays and
cost increases.
One factor I think we have to keep in mind here in
Washington, D.C., is that one of the biggest customers if not
the biggest customer out there is the taxpayer. At the local,
State, and Federal levels, government construction is one of
the major costs for the taxpayers. So anything that increases
construction delays and the appurtenant cost increases in
government construction as well as in the private sector is a
major concern to all policymakers at all levels of government.
Chairman Talent. Mr. Holdsworth, you want to comment?
Mr. Holdsworth. Of course I come at it from the education
side. I am going to add here that you are going to see issues
in terms of quality of what is produced. We have heard that
referenced in an earlier panel this morning and I concur with
that. I have heard that from industry. They say: ``Our problem
is our products are not being appropriately applied''. I am
very concerned when I see the recruitment side of things in
this country in vocational education. We are seeing students
who are not being encouraged to go into vocational education.
You talked about government a moment ago and I realize
education is not really within the purview of this Committee,
but we have education policy in this country and practice that
has tended to discourage young people from going into these
occupations. As a matter of fact, there are occasions when if
we stop and look at it, education is encouraged to keep
students within their own high schools, for example, rather
than sending them off to the area vocational center because
they keep the tax dollars right there at that school.
So what we have seen--and I have heard this a long time
from industry--is ``My goodness, the people that they are
sending over for vocational training are the ones that the
schools basically will pay to send there. They call them `road
scholars' ''. They are the ones administrators will pay to get
rid of, put on the road and send someplace else. When we are
drawing from a shrinking force of qualified people, the quality
is going to fall apart. We also are going to have a vision of
what a skilled worker and it is not very good.
I will take also this observation. I am working with
students all of the time. They look at a high-tech computer-
driven economy, people making money on IPOs and so on. Let's
face it, a lot of the students who we want to go into
vocational education are the sharp ones and they have got lots
of options today they didn't once have. They say; `` I can go
on over here and make a bundle instead of doing that''. So we
have got to find some way to make it attractive to be over
there and that is becoming a very, very difficult problem, I
think, for many of these industries.
Chairman Talent. You don't see, I take it, from your
comments anything on the horizon out there where you can say to
yourself, oh, boy, we have been worried for these years but
this is coming now and it is going to fix it?
Mr. Holdsworth. I am not seeing it. I am not seeing it
right now.
Chairman Talent. This problem is not something that just
sprung up last month or 6 months ago. Everybody has seen this
coming for sometime. Mr. Pence, you mentioned about costs of
wages going up and it is still not alleviating the problem. Is
that a fair statement to this point?
Mr. Pence. Yes , a fair statement. We are here today
because whatever has been done in the past is not working and
we need to do more.
Chairman Talent. Do you have a comment, Mr. Gooding?
Mr. Gooding. The only comment I have we are seeing employee
burnout. In some cases we have men working literally two shifts
to satisfy customers. We are finding out customers have asked
us to do what we can. In some cases they are even changing
their budgets because the fact that we can't get there in time.
We are driving wages, just skyrocketing wages. We have roofers
that are making 55, 65, $70,000 a year but where does it stop?
I have moved up my base starting rate 2.25 cents an hour in the
last 8 months and I have only recruited two employees. I have
$2,000 signing bonuses. I am doing everything I can but we are
still not getting those people that we need.
Mr. Holdsworth. I do have another comment. It sounds
awfully doom and gloom here. Let me bring something else in for
just a minute. An interesting phenomenon is happening out
there. In community colleges, the largest new enrollment area
are called ``reverse transfers''. They are 4-year graduates.
They are going back to community college to learn job skills. I
think some of the stereotypes are breaking down. I think there
does need to be more activity within the education community
and business community to get to parents and to those people
who are helping to make the decisions and say there are other
options. These are challenging careers. They are well paid
careers and they are careers that lead somewhere. I've talked
to parents who see their children going into masonry and they
believe their children will be hod carriers for the rest of
their lives. That student today may be a hod carrier, tomorrow
may be a subcontractor and a few years from now a contractor,
and that is a leader in the community. People aren't seeing
that right now.
Mr. Pence. If I could add one last comment. This bill is
seen in the industries as the number one answer that may help
turn the situation around. I can't overstate there is real
excitement growing about this bill as the information spreads
outside the Beltway and more and more business leaders learn
about it. In the survey that we have done at NCMA, they are
telling us this bill alone will spur them to hire three to four
more masons per company. Now, that is an outstanding response.
People are coming to us at confabs and on the street and saying
``this is really an excellent bill''. ``How can we get on
board?''. People I have never heard from before from other
industries are calling me asking what is this wonderful
legislation about, how do we get on board and how do we help. I
think it is a good message to take back to the constituency in
the districts. I think they are looking for an answer like this
that really ``bull's eyes'' the issue that they are facing
every day.
Chairman Talent. We really need some method here of being
able to count those perhapssomewhat less direct or, I don't
want to say intangible, less direct benefits of a bill like that that
will result among other things bringing money into the Treasury at the
same time as we are looking at directly how much this is going to,
quote-unquote, cost the government. This is a struggle, of course, we
are engaged in now how much this bill is going to cost and yet
everything you have said tells me that if we don't do something like
this or, at a minimum, if something like this speeds up trends that
would otherwise occur in the marketplace, Mr. Holdsworth, because
perhaps the passage of this bill generates publicity so that parents
and counselors out there say, wait a minute, we need to look at this
all over again. If it speeds the process up by a couple of years, it
has got to generate more in terms of more projects you can do, Mr.
Murphy, more people employed at higher wages, paying more taxes, less
cost to the taxpayer because of delay in our construction projects. My
guess is and it is just a gut guess, this bill pays for itself
probably. And yet we are locked in this struggle internally here where
we are not allowed really to take that into account in terms of scoring
this bill. It is very unfortunate. The people who are most familiar
with the situation believe so strongly it is going to have these very
beneficial aspects to it.
Mr. Holdsworth. I just have this observation as well. The
average age of a college--community college student is 28 or
older. That student graduated from high school when he or she
was 18. There have been 10 years that that student has been
underemployed. I can do this only anecdotally, but I can't tell
you how often I have talked with students who have said: ``I
have been bouncing around, do you want fries with that? And now
at the age of 28 I have got a family, I have got
responsibilities, I have got these things''. If this bill is
able to get that student to work at the age of 20 or 21 instead
of going back to school at 28, you have performed a tremendous
service in terms of tax revenue because that person is now
producing.
Chairman Talent. I agree. I think it is real important to
understand the bills we pass here occur of course in the
broader context of what is going on out there in the country. I
do think, not to be all gloom and doom, that there is a
reaction setting in. You mentioned the community colleges and
certainly in my area and in my State, they are stepping up and
responding. State authorities are beginning to understand this.
You are seeing the proprietary schools going into these trades
and expanding them and working out arrangements with local
trade associations to get machines on loans so they can train
people. One of the ones in my area worked out a cooperative
arrangement to get welding equipment so they can teach people
that. But if we can help by putting this bill into that overall
mosaic, if you will, and help complete it faster, it will have
a tremendously positive impact; and, on the other hand, if the
downside is true and this response is not coming quickly and we
really begin seeing the impact in construction or manufacturing
of this shortage of these skilled employees and the potential
for the economy is very negative. So this is at a minimum a
very wise hedge against possible recessionary influences
against this kind of situation.
Mr. Gooding, I didn't intend this to last so long but what
the heck, I am the chairman.
Mr. Gooding. Mr. Chairman, the only thing I would like to
add to this is the welfare-to-work program as we see it in our
particular industry hasn't produced the people that we need and
I think that your bill will certainly change that dramatically
and I just hope and pray that it is accomplished in a very
short order because we offer good benefits, but unfortunately
we have just run out of ideas of how to get those employees to
at least knock on the door.
Chairman Talent. Mr. Pence, and then I will close this.
Mr. Pence. I think your earlier comment about the dynamic
scoring barrier, if we get past that somehow, it might be
possible this bill would come up as a plus when all things are
considered. We, just talking about it among staff and among the
coalition, the numbers we have been seeing are clustering in an
area that are not very expensive. We don't have the numbers
back from JCT of course yet, but if they are at all close of
what we have been talking about in our caucuses, this bill is
not going to be that expensive and with dynamic scoring we
would be in the plus range and home free.
Chairman Talent. It would be great. Let's close this by
bringing home what Ms. Velazquez and I were talking before
about what this Committee is about and why we really try to
make it about people and real opportunities for real people,
both small business people and their employees. If this bill
has the impact of enabling small business people to grow and
expand and have more opportunities, and of enabling their
employees, individuals, somebody hired in their late 20s
wondering how they are going to be able to put food on the
table for their family, and now the local machine shop or
electrical shop is able to say to them we will send you to the
community college, we will give you the on-the-job training,
your whole life turns around now.
These are real people that we can help with this and I
agree with you, Mr. Pence, what will end up being no cost to
the government, and it is these kinds of things that we try and
look for on the Committee. We do try and confront problems in
legislation, concerns people have on a straightforward basis.
Usually we can work them out and I am grateful to you all for
being here.
Unless the gentlelady has any further comments or
questions, I will adjourn the hearing.
[Whereupon, at 12:50 p.m., the Committee was adjourned.]
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