[Senate Hearing 110-986]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-986
 
    MIDWEST JOBS PICTURE: STRATEGIES TO REBUILD COMMUNITIES (PART I)

=======================================================================


                             FIELD HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   ON

 EXAMINING THE MIDWEST JOBS PICTURE, FOCUSING ON STRATEGIES TO REBUILD 
                          COMMUNITIES (PART I)

                               __________

                      OCTOBER 8, 2008 (TOLEDO, OH)

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                                 senate




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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS


               EDWARD M. KENNEDY, Massachusetts, Chairman

CHRISTOPHER J. DODD, Connecticut     MICHAEL B. ENZI, Wyoming
TOM HARKIN, Iowa                     JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland        LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico            RICHARD BURR, North Carolina
PATTY MURRAY, Washington             JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island              LISA MURKOWSKI, Alaska
HILLARY RODHAM CLINTON, New York     ORRIN G. HATCH, Utah
BARACK OBAMA, Illinois               PAT ROBERTS, Kansas
BERNARD SANDERS (I), Vermont         WAYNE ALLARD, Colorado
SHERROD BROWN, Ohio                  TOM COBURN, M.D., Oklahoma

           J. Michael Myers, Staff Director and Chief Counsel

        Ilyse Schuman, Minority Staff Director and Chief Counsel

                                  (ii)



                            C O N T E N T S

                               __________

                               STATEMENTS

                       WEDNESDAY, OCTOBER 8, 2008

                                                                   Page
Jacobs, Lloyd A., M.D., President, The University of Toledo, 
  Toledo, OH.....................................................     1
Brown, Hon. Sherrod, a U.S. Senator from the State of Ohio, 
  opening statement..............................................     2
Goshe, Craig, Former Employee, American Standard, Tiffin, OH.....     4
Price, Tieshetta, Worker, Toledo, OH.............................     6
Walker, Eric, Director, Lucas County Jobs Center, Toledo, OH.....     7
    Prepared statement...........................................     9
Helper, Susan, Ph.D., Professor, Weatherhead School of 
  Management, Case Western Reserve University, Cleveland, OH.....    19
    Prepared statement...........................................    21
Kildee, Dan, Treasurer of Genessee County, Flint, MI.............    23
    Prepared statement...........................................    24
Dmytryka, David, President, Dmytryka Jacobs Engineers, Inc., 
  Toledo, OH.....................................................    27
Calzonetti, Frank, Ph.D., Vice President, Research & Development, 
  University of Toledo Business Incubator, Toledo, OH............    28
    Prepared statement...........................................    31

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Enzi, Hon. Michael B., a U.S. Senator from the State of 
      Wyoming, prepared statement................................    44
    Vaughn K. Buntain, Executive Vice President, IBC Solar, Inc..    45

                                 (iii)



    MIDWEST JOBS PICTURE: STRATEGIES TO REBUILD COMMUNITIES (PART I)

                              ----------                              


                       WEDNESDAY, OCTOBER 8, 2008

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                        Toledo, OH.
    The committee met, pursuant to notice, at 10:08 a.m. at the 
Clean Energy Incubator at University of Toledo, 2600 Door 
Street, Toledo, OH, Hon. Sherrod Brown presiding.
    Present: Senator Brown.

 STATEMENT OF LLOYD A. JACOBS, M.D., PRESIDENT, UNIVERSITY OF 
                             TOLEDO

    Dr. Jacobs. We would like to welcome all of our guests from 
Washington and elsewhere. We are delighted to see all of you 
this morning.
    The occasion to which you are welcomed so warmly, I hope, 
is the first-ever Senate hearing on the campus of the 
University of Toledo on subjects that are so terribly important 
today--rejuvenation of the economy, the economy in general, and 
particularly the strategy to rebuild our communities, led, of 
course, by Senator Sherrod Brown. We are delighted you are 
here.
    It is entirely fitting to me, that hearings of this nature 
take place on a university campus, a university that is engaged 
in our community and in our economy and in our world, as we 
aspire to be at the University of Toledo. We see work like 
this, the undertaking of the day, to be integral to what it is 
to be an engaged university. That is part of our mission. We 
are really pleased that all of you are here.
    It is, of course, my pleasure to extend a particularly warm 
welcome to Senator Sherrod Brown and to his staff. Having 
Sherrod Brown here again is an honor for us.
    Let me just read a couple of brief sentences from 
biographic material for Senator Brown. In Ohio and in 
Washington, Senator Sherrod Brown has earned a reputation as a 
public official who looks to the future. I think we would agree 
with that.
    Beginning with his opposition to the North American Free 
Trade Agreement in 1993 and to Most Favored Nation Status for 
the People's Republic of China, to his book ``Myths of Free 
Trade,'' Sherrod is building a bipartisan coalition for a new 
trade policy to strengthen America's middle class, to provide 
opportunities for American manufacturing, and to protect 
workers rights, the environment, and product and food safety. I 
think that those comments are integral to what it is that we 
are gathered here for today.
    His amendments 5 years ago launched our Government's effort 
to combat antibiotic resistance threat to our public health 
system, which effort earned Sherrod the National Public Health 
Legislator of the Year Award from the American Public Health 
Association in 2003. He has worked to strengthen the Centers 
for Disease Control to guard against public health threats from 
terrorism, bird flu, tuberculosis, and methicillin-resistant 
staphylococcus aureus.
    Sherrod's interest in making Ohio the ``Silicon Valley of 
alternative energy''--we share that interest, Senator.
    [Laughter.]
    Sherrod's interest in making Ohio the ``Silicon Valley of 
alternative energy'' began when he wrote Ohio's first solar 
energy law in 1977. As a U.S. Senator, Sherrod is working with 
the area's universities, entrepreneurs, labor unions, and 
community leaders to help utilize this State's natural 
resources--wind and solar power, corn for ethanol--and to 
develop an alternative energy industry in this State.
    We are delighted you are here. Thank you so very much for 
choosing this site. You are wonderfully welcome. Thanks for 
being here.

                   Opening Statement of Senator Brown

    Senator Brown. Thank you very much.
    Thank you, President Jacobs, and I appreciate the 
attendance of all of you today in this, as he said, first-ever 
Senate hearing at the University of Toledo campus. I chose this 
campus as the first of two field hearings by the Health, 
Education, Labor, and Pensions Committee. We will do one at 
Sinclair Community College in Dayton also.
    I just look at what this university has done in the last 
few years, and I am so appreciative of Dr. Jacobs' work and 
Diane Miller and Bill McMillan for helping to arrange this 
today.
    I was in Perrysburg just the day before yesterday, and we 
were celebrating the groundbreaking, the expansion of First 
Solar. This university obviously has much to do with all of 
that, with alternative energy. I think since I have been in the 
Senate in the last 20 months or so, this is, I don't know, my 
seventh or eighth visit probably to this campus. There is 
always something going on here.
    We had one of our first roundtable discussions here. I have 
done about 120 of those around the State. Not hearings like 
this, but roundtables, where we will gather 15 or 20 people 
together and discuss a whole host of issues. We did one that 
really taught me a lot about and really helped to broadcast 
around Ohio the work that this campus has done, this university 
has done in wind turbine research and solar.
    Ohio, as you may know, Ohio is in the top five in 
investment both in solar and wind, and we are going to continue 
that. Dr. Jacobs' comments about the Silicon Valley of 
alternative energy proves that we are on our way.
    Congress passed 2 weeks ago--10 days ago, I guess--the tax 
extender so that investors have a more predictable long-term 
tax policy, and hey are much more likely to invest in something 
as capital intensive as alternative energy and to get these 
industries going in this country. The University of Toledo has 
played no small part in that.
    I would like to also recognize some of the local elected 
officials with us today. Commissioner Pete Gerken is here. 
Councilman Mark Sobczak and Senator Teresa Fedor are here. 
Thank you for joining us.
    I also want to thank Senator Kennedy, the Chairman of the 
Health, Education, Labor, and Pensions Committee. I am one of 
two freshmen he put on that committee back in December 2006. It 
is a terrific opportunity--this committee--to look at all kinds 
of workforce issues, education issues, health issues, pension 
issues, all the kind of things that matter perhaps more than 
any other committee in Congress in the daily lives of people 
here.
    Special thanks to Kelly Hastings of Senator Enzi's staff. 
Thanks to Senator Enzi, in addition to Senator Kennedy. Senator 
Enzi has been very cooperative in this committee doing this 
field hearing. He is the Ranking Republican from Wyoming and is 
a very bipartisan, forward-looking guy. We don't agree 
ultimately on a lot of issues, but we find ways to work 
together, and he is terrific at that.
    This is Kelly's first trip to Toledo, thank you for being 
here.
    Thanks to the witnesses for coming. The first panel I will 
introduce in a moment, then the second panel. After the first 
panel's comments and then questions, I will introduce the 
second panel. We will hear from both of these panels. I am 
asking each witness to keep their comments to about 5 minutes. 
I will then question each of you. We will do the same with the 
second panel.
    The hearing should take somewhere up to an hour and a half, 
2 hours, and we are not going to hurry through it. Certainly, 
we want the witnesses to say what they think that both I want 
to hear and need to hear, but this also is in the official 
record. That is why this is an official Health, Education, 
Labor, and Pensions Committee hearing. Your comments will be 
helpful to us as we figure out particularly what we do next 
year with the new President, which ever of the candidates wins 
and with some number of new members of the Senate.
    A strong middle class, as we know, is an essential 
foundation of prosperity and stability. Middle class families 
across the country are in a moment of great challenge and of 
great potential. Challenges that have been forced upon them by 
deregulation, unfair trade deals, and tax policies. Potential 
on account of our Nation's ingenuity and work ethic.
    And indeed, this is perhaps the most crucial time for the 
middle class in the lifetimes of most of us here. This past 
Friday, the Labor Department reported for the 9th consecutive 
month the country has lost jobs. In September, 159,000 jobs 
were eliminated from payrolls, the highest number in 5 years.
    Ohio's 7.4 percent unemployment figure hit a 15-year high 
this summer. Even prior to this steep downturn, Ohio still had 
hundreds of thousands fewer jobs than it had prior to the last 
recession. Across the country, some 9.5 million workers are 
unemployed and looking for work, more than 2 million more than 
a year ago, the highest figure recorded since December 1992.
    Two million people have been jobless for more than 6 
months. Nearly 6.1 million people are working part-time because 
they can't find full-time work or because business conditions 
have led to fewer hours and, obviously, less pay.
    This week, it is estimated that more than 800,000 Americans 
will exhaust their unemployment insurance, including 22,000 
people in our State. Last week, many of us in Congress fought 
to extend unemployment insurance for these workers. The House 
passed an extension overwhelmingly bipartisan vote of 368-28. 
Unfortunately, Senate Republicans blocked a vote in the Senate.
    Because Congress couldn't finish the bill, more than 
800,000 unemployed people will stop getting their much-needed 
checks when their time runs out. That number will grow to more 
than a million by the end of the year.
    Whether the country is officially in a recession or not, we 
can say with certainty that Ohio's middle class is in a 
recession. But Toledo and the Midwest is also ripe for 
survival, as evidenced by all the things going on here, what 
happened with First Solar recently, all the kinds of things 
that are happening.
    A strong workforce in Lucas County, northwest Ohio, its 
access to transportation lines, and location are all assets for 
new manufacturing and industries. This incubator is a symbol of 
the energy and hard work that can make Ohio a home to 
alternative energy manufacturers.
    How can Federal Government play a role to help reposition 
Ohio for a new era of prosperity? What role can rapid response 
networks play in getting workers and communities one step ahead 
of the curve? What skills and training can be enhanced to meet 
the demands of new industries? What investments in 
infrastructure and manufacturing could help communities 
rebuild?
    These are the questions that our witnesses are helping us 
answer today. I look forward to their remarks and to our 
discussion.
    Let me turn to the first panel. On the first panel, we will 
have Craig Goshe of Tiffin. Mr. Goshe worked at American 
Standard in Tiffin for some 31 years. He and I have worked 
together and talked several times over the last 18 months. I am 
very appreciative of what he has done. He worked there for 31 
years until being laid off last year.
    On the first panel we will also have Tieshetta Price of 
Toledo. Ms. Price is a dislocated worker currently working on a 
degree in medical coding and billing at Mercy College. Ms. 
Price, welcome to you. Thank you for being here.
    Eric Walker of the Lucas County Workforce Development 
Agency--as Commissioner Gerken says, the best of the State--
where he has been director for nearly 5 years, is a Toledo 
native of St. Francis High School, and has a B.A. in political 
science from Hampton University in Virginia.
    Thank you all for joining us. Mr. Goshe, we would love to 
hear your statement. Thank you.

 STATEMENT OF CRAIG GOSHE, FORMER EMPLOYEE, AMERICAN STANDARD, 
                           TIFFIN, OH

    Mr. Goshe. Good morning. I would like to take a moment to 
thank Senator Brown for holding this hearing and inviting me to 
be a part of it.
    My name is Craig Goshe from Tiffin, OH. I have been a 
resident of Tiffin and Seneca County all my life. I have been 
happily married for 28 years and have 3 children who all now 
have successful careers in different fields.
    Until the fall of 2007, I had planned to finish my career 
at American Standard, where I had been employed for 31 years. 
In 2000, I was elected to the executive board of GMP Local 7A, 
representing the workforce.
    American Standard provided a very good place to work for 
over 750 people up until 2003. At that time, American Standard 
moved much of its operations to Mexico and overseas. The 
layoffs continued over the next several years until the 
workforce was at 165 hourly employees, all of whom were ranged 
in age from 40 to 60 years. This was a very senior workforce, 
all hard workers who had given all their adult life to American 
Standard.
    In the 2004 negotiations, realizing the competition with 
global markets, we gave concessions in wages and in healthcare. 
Early in 2007, American Standard said it was trying to sell its 
bath and kitchen division, which we were a part of. During the 
2007 negotiations, we were told that with our facility being 
one that American Standard was trying to sell that we needed to 
give the company relief to make us more attractive to a new 
buyer.
    Hearing this from a company that was rewarding its CEO with 
millions of dollars in stock options every year was not easy. 
But again, we gave concessions in wages, healthcare, and 
pension benefits. In September, the bath and kitchen division 
was sold to Bain Capital. In late October, Bain Capital sold us 
to Sun Capital.
    Then in November, myself, along with three other members of 
the executive committee, were called into a meeting with 
executives of Sun Capital to tell us that they were considering 
closing our facility due to excessive inventory, high labor 
costs, and a slow housing economy.
    The company presented us with a total labor and benefit in 
Mexico at $3.77 per hour, compared to Tiffin at $27 an hour. 
Even though we were the most productive and highest quality 
plant in all of the division, we knew we could not compete.
    Our local government got involved, offering the company $6 
million in tax incentives over the next 10 years. Our committee 
asked, ``What will it take to keep the plant open?'' Sun 
Capital never responded.
    On December 3rd, we were given the WARN notice, and the Sun 
Capital stated that they were prepared to enter into severance 
negotiations. During these so-called negotiations, the company 
refused to move on any of our proposals and only provided the 
employees what was only required under the WARN notice.
    For 165 hourly workers, along with almost 30 salaried 
employees, this closing was devastating. Workers were faced 
with many questions, such as where will we find a job in our 
area that already has lost over 1,000 manufacturing jobs over 
the last 15 years? How will I be able to provide healthcare for 
my family? Many of my workers have developed health issues 
because of the environment that we have worked in over the last 
30 to 40 years.
    Immediately following the announcement of the plant 
closing, our Local 7A applied for trade adjustment relief. We 
contacted Senator Brown, and with his assistance, the employees 
of American Standard were granted TAA and ATAA benefits.
    Of the 194 total employees that lost their jobs, 147 
attended the informational meetings provided by the Job and 
Family Services. Sixteen employees enrolled in training, and 47 
applied for the wage supplement.
    Approximately 50 percent of the workers were eligible to 
retire at a full pension or a slightly reduced pension. 
However, the other 50 percent was left with finding a new job 
in an area that the unemployment rate is at 7.2 percent and 
trying to find affordable healthcare. Also, for these hourly 
employees, their pensions being frozen until age 65 or taking 
an early retirement at nearly 50 percent reduction.
    Good-paying jobs in Tiffin and the surrounding area are few 
and far between. The benefits that were provided through TAA 
were essential to many of my past co-workers, whether it was 
wage supplement for being forced to take a job at half the pay 
that you were accustomed to or extended unemployment and 
training to provide you an opportunity for a better job.
    A plant closing such as American Standard affects much more 
than just the workers and their families. It also affects the 
entire community, such as tax revenue. Our small town of Tiffin 
lost almost $150,000 per year in city tax alone. This affects 
many things from our schools to city projects and other 
programs.
    It affects retailers, charitable organizations, such as 
United Way, Hospice, American Red Cross, all of which our 
members of our local union were major contributors of. It 
affects local restaurants, taverns, and other manufacturers 
that supplied American Standard.
    I have been fortunate that I was able to find a position in 
management at a facility in Fostoria. However, this past week, 
I was forced to lay off 15 percent of my workforce due to the 
economic crisis that this country now faces. This was extremely 
difficult for me, considering I know what these workers must 
now face.
    In closing, I cannot express enough to our elected 
representatives the importance of continuing trade assistance 
for displaced workers. I also hope that our Government realizes 
that NAFTA must be changed to provide the American worker an 
even playing field in the future.
    Millions of jobs have been lost to Mexico, China, South 
America, and other countries. This trend must not continue. 
Over the past 2 weeks, our Government has asked us that Main 
Street bail out Wall Street. Now our Government and Wall Street 
must provide the opportunity of employment to the workers of 
America. If Main Street is not working, it is not buying.
    Again, I would like to take this opportunity to say, I 
express the feelings of myself and many of my co-workers.
    Thank you, sir.
    Senator Brown. Thank you, Mr. Goshe, very much for your 
comments.
    Ms. Price.

        STATEMENT OF TIESHETTA PRICE, WORKER, TOLEDO, OH

    Ms. Price. Thank you for holding this meeting, Senator 
Brown.
    My name is Tieshetta Price, and I grew up in Toledo, and I 
graduated from Rogers High School. My mom and dad both live 
here in Toledo. I have one brother and one sister.
    I was terminated in February 2008 as a data entry clerk and 
receive unemployment, and it will end in October of this year. 
I have been seeking employment during this time, and I have had 
only one interview. Right now, it is pretty scary because I 
have bills, and I don't know where I am going to find help in 
meeting my needs.
    The week that I lost my job, I had just purchased a car. So 
now I have a car note that is due. I have a disconnection 
notice from Columbia Gas and right now can't afford car 
insurance.
    I am a single parent, and I have two sons. And I am not 
able to afford any additional school costs, such as school 
pictures. I use my car to get to school and search for jobs, 
and gas prices are very high. It is eating away at any extra 
money that I have.
    I am currently enrolled at Mercy College of northwest Ohio 
in medical billing and transcription. I found out about WIA 
because I attended an unemployment session at The Source and 
was informed about the WIA CAA program. I wanted to take this 
opportunity for more training, which I believe will lead to a 
career.
    It is very difficult to raise two teenage sons in this 
economy. I have to provide food, shelter, clothes, and other 
personal needs. And by not having a job, it is very hard. What 
the Federal Government can do is not limit funding to specific 
occupations and increase money for training and extend 
unemployment for at least a year.
    Thank you.
    Senator Brown. Thank you, Ms. Price. Thank you for sharing 
your story.
    Mr. Walker.

 STATEMENT OF ERIC WALKER, DIRECTOR, LUCAS COUNTY JOBS CENTER, 
                           TOLEDO, OH

    Mr. Walker. Thank you, Senator Brown, for this hearing and 
for taking the time to listen to everyday citizens from the 
city of Toledo, Lucas County in northwest Ohio.
    Second, I would like to thank the Board of County 
Commissioners--President Tina Skeldon Wozniak, Pete Gerken, and 
Ben Konop--for their commitment, innovation, and leadership on 
the issues of employment, jobs, and training.
    My name is Eric Walker, and I am the Lucas County workforce 
director at The Source. My job duties there are the 
distribution of $5 million to $7 million from the funds 
allocated from the Workforce Investment Act from the Department 
of Labor to educate, employ, and train youth, adults, and 
dislocated workers for the employers and businesses of Lucas 
County in northwest Ohio.
    In addition, I am the building operator of a 60,000-square 
foot facility with 20 various education, employment, and social 
service agencies and a staff of 120. I supervise 20 of those 
directly and work to provide outreach program services to all 
the citizens of the city of Toledo in Lucas County, northwest 
Ohio.
    Today's dislocated workers face a much larger challenge to 
employment than their predecessors. High unemployment, 
continued downsizing in the manufacturing sector, low levels of 
academic achievement, and other factors make returning to work 
a challenge for many people. While the numbers of available 
workers active in the workforce has stayed consistent over the 
past 10 years, employment figures have consistently declined.
    July's preliminary figures show that there are currently 
227,808 workers in the current labor pool compared to 232,741 
in July 1998. Over the past 10 years, the number of unemployed 
workers has ballooned to 21,000, or more than 9.2 percent in 
Lucas County. Comparative figures for 1998 show that only 5.9 
percent of individuals, or 13,487, were unemployed at that 
time.
    As a result, this means higher levels of competition for a 
shrinking pool of available positions. Manufacturing alone has 
shed almost 300,000 jobs between July 1998 and July 2008, with 
a drop of locally 20,000 workers here in Lucas County. For 
these workers, many who left for the workforce leaving high 
school, the challenges in technology make them less skilled to 
do their old jobs than younger, more educated counterparts.
    In the Toledo metropolitan area, where only 14 percent of 
those over the age of 25 have a bachelor's degree or higher, 
significant barriers to unemployment arise for those facing 
unexpected job challenge. The level of education and training 
means that the workers will be unlikely to adapt to a high-tech 
environment in today's newer manufacturing plants and that 
older plants plagued with lower productivity are more unable to 
compete in the global markets that face uncertain futures.
    Attracting new businesses is difficult as well when 
education levels are low. And in the Toledo area, with a 
population of postsecondary degrees, being able to compete with 
other Ohio cities such as Cincinnati with 17.1 percent of 
education in postsecondary; Columbus, 20.3 percent; and 
powerhouses like San Francisco at 26 percent; Raleigh, NC, 26 
percent; Charlotte, NC, 30 percent; and obviously, trying to 
compare Toledo with Silicon Valley, Research Triangle, and the 
financial heavyweight of Charlotte are very unfair.
    It is a clear indication of the challenges workers face 
here obviously in today's economy. As you listened to Ms. 
Price's testimony, we have obviously several other workers. We 
had over 8,000 people register in the last 3 months alone in 
Lucas County. Of those, 2,500 are currently receiving 
unemployment benefits.
    We don't know how many of those will be cut off and how 
soon they will be cut off. But obviously, without the 
additional unemployment insurance that was recently voted on by 
Congress, we will know that there is going to be difficulty in 
trying to pay for gas prices, food, healthcare costs, and other 
services.
    The staggering prices in basic necessities such as gas, 
food, and healthcare have placed an additional burden on 
today's workers. The expected increase of food and gasoline 
outpace the estimated 1.2 percent increase in the average wages 
for the region.
    Food prices are expected to climb between 5 and 6 percent 
in 2008, according to Department of Agriculture data. The 
Bureau of Labor Statistics shows that healthcare costs have 
been growing at about 4 percent annually for the past 10 years, 
and gasoline prices obviously have leaped a staggering 28.6 
percent alone this year, via energy information.
    More people are finding themselves out of work or are now 
the working poor and at lower level paying jobs, often limited 
with no healthcare, much additional stress, and obviously 
pressures on their lifestyles. It is extremely important that 
unemployment insurance be available to these workers.
    Economic recovery is going to take time and a luxury that 
many in northwest Ohio are without. While the automotive 
industry, a major driver of the regional economy, regroups and 
repositions itself, workers are still required to pay their 
mortgages, put food on the table, gas in the car, and seek 
treatment for illnesses and injuries.
    While it is true that unemployment benefits are a temporary 
support for dislocated workers, in many cases this is the only 
support they have. If the primary source of unemployed or 
underemployed workers disappears, these individuals will find 
themselves in a downward spiral that cannot only impact 
themselves, but their families and the community as a whole.
    As we head into the winter months, heating costs alone are 
expected to rise 17 percent, along with facing additional 
burdens. Protecting the unemployment safety net that many of 
these workers rely upon will become even more important. 
Unemployment benefits are the only thing sometimes keeping 
workers in their warm houses and helping them to pay their 
mortgages or to feed their families.
    Last week, as we talked about the $700 billion bailout for 
Wall Street, there was a report just yesterday that AIG 
received or spent $440,000 for a week-long resort for its 
executives at a California retreat. That $440,000 in Lucas 
County, northwest Ohio, could have trained an additional 100 
workers. This is staggering. And we want to thank you, Senator, 
for the time on the hearing, but when will Toledo, northwest 
Ohio, be bailed out as well?
    [The prepared statement of Mr. Walker follows:]
                   Prepared Statement of Eric Walker
    Thank you Senator Brown for this hearing and taking the time to 
listen to everyday citizens from the city of Toledo/Lucas County, 
northwest Ohio. Secondly, I'd like to thank the Board of County 
Commissioners, President Tina Skeldon Wozniak, Pete Gerken, and Ben 
Konop for their commitment, innovation, and leadership on the issues of 
employment, jobs, and training.
    My name is Eric Walker, I am the Lucas County Workforce Development 
Agency Director at The Source NOW, The Lucas County One-stop 
representing WIA funds for Area #9. My duties are the distribution of 
the $5-$7M in funds that are allocated from the Department of Labor 
through the State of Ohio to the Board of County Commissioners to 
educate, employ, and train adults, youth, and dislocated workers for 
the businesses and employers of Lucas County, northwest Ohio. In 
addition, I am a building operator of a 60,000 sq. ft. facility with 20 
various education, employment, social service agencies with a staff of 
120. I supervise 20 staff directly and work to provide outreach program 
and services to all the citizens of the city of Toledo, Lucas County, 
northwest Ohio.
    Today's dislocated workers face much larger obstacles to employment 
than their predecessors. High unemployment, continued contraction in 
the manufacturing sector, low levels of academic achievement and other 
factors make returning to work a challenge for many people.
    While the number of available workers active in the workforce has 
stayed fairly constant over the past 10 years, employment figures have 
consistently declined. July's preliminary figures show that there are 
currently 227,808 workers in the current labor pool compared to 232,741 
in July 1998. Meanwhile, the number of unemployed workers has ballooned 
to 21,061 or 9.2 percent. Comparative figures for 1998 show that only 
5.9 percent faced unemployment or 13,487 individuals.
    As a result, this means higher levels of competition for a 
shrinking pool of available positions. Manufacturing alone shed nearly 
300,000 jobs between July 1998 and July 2008 with a drop locally of 
nearly 20,000 workers. For these workers, many who have been in the 
workforce since leaving high school, the changes in technology make 
them less skilled to do their old jobs than their younger, more 
educated counterparts.
    In the Toledo metropolitan statistical area where only 14.4 percent 
of those over 25 have a bachelor degree or higher, significant barriers 
to employment arise for those facing an unexpected job change. A lack 
of education and training means that workers will be unlikely to adapt 
to the high-tech environment in today's newer manufacturing plants and 
that older plants, plagued with lower productivity, are unable to 
compete in the global markets and face uncertain futures.
    Attracting new businesses is difficult as well when education 
levels are low. How can the Toledo area, with only 14.4 percent of the 
population holding post-secondary degrees, ever hope to compete with 
other Ohio cities such as Cincinnati (17.1 percent) and Columbus (20.3 
percent) much less with powerhouses like San Francisco (26 percent), 
Raleigh, NC (26.2 percent) or Charlotte, NC (30.5 percent). While 
comparing northwest Ohio to regions like Silicon Valley, Research 
Triangle Park and financial heavyweight Charlotte may seem unfair, it 
is a clear indication of the challenges workers face in today's 
economy.

    Ms. Price testimony, recap/expand.

     Lisa Mayberry, mother of two, DW: driver 2 years for 1st 
Transit, attending Trainco for Class A CDL utilizing a CAA.
     Leslie Caputo, mother of three, DW: assembler 11 years for 
JAC Products, attending OCC for RN utilizing an ITA.

    The staggering rise in prices for basic necessities such as gas, 
food and healthcare place an added burden on today's workers. The 
expected increase in the costs of food at home, gasoline and health 
care greatly outpace the estimated 1.2 percent increase in average 
wages for the region. Food prices are expected to climb between 5 and 6 
percent in 2008 according to Department of Agriculture data, the Bureau 
of Labor Statistics reports that Health Care costs have been growing at 
about 4 percent annually for the past 10 years and gasoline prices have 
leaped a staggering 28.6 percent this year alone according to data 
published by the Energy Information Administration. Meanwhile, more 
people are finding themselves out of work or working at lower paying 
jobs--often with limited or no healthcare benefits--adding to the 
stress and pressure felt by workers.
    Economic recovery will take time and time is a luxury many in 
northwest Ohio are without. While the automotive industry, a major 
driver of the regional economy, regroups and repositions itself, 
workers are still required to pay their mortgage, put food on the 
table, gas in the car and seek treatment for illnesses and injuries. 
While it is true that unemployment benefits are a temporary support for 
dislocated workers, in many cases it is the only support they have. If 
the primary source of unemployed or under-employed workers disappears, 
these individuals will find themselves in a downward spiral that will 
not only impact themselves but their families and the community as a 
whole as well.
    As we head into the winter months when heating costs are expected 
to climb along with everything else, dislocated workers will be facing 
an additional burden. Protecting the unemployment safety net that many 
of these workers rely upon becomes even more important. Unemployment 
benefits may be the only thing keeping workers in their warm homes this 
winter and not in the cold or on the streets.
    Last week the Senate approved a bailout for Wall Street of up to 
$700 billion and the Iraq War has been costing $10 billion a month. 
When will main street, Toledo, OH, Lucas County, northwest Ohio receive 
that same consideration for re-tooling our local area workforce!
    Thank you again for your consideration on these issues for all of 
us.

    Senator Brown. Thank you. Thank you, Mr. Walker. I heard 
that report, too, yesterday. That is just outrageous, and it is 
one of the reasons people obviously are so angry.
    Mr. Goshe, you said half of American Standard workers 
received full pensions. Where is the cutoff? What requirements 
are there?
    Mr. Goshe. There were full pensions or slightly reduced. 
Any worker who had achieved the age, at the age of 55 was 
granted a full pension. Workers such as myself----
    Senator Brown. Fifty-five with how many years of service 
necessary? Just 55, period?
    Mr. Goshe. Well, everybody there had at least 20 years.
    Senator Brown. Had at least 20, OK.
    Mr. Goshe. They did--the age was the defining, or it was 
the factor of 55 years of age. The second group was what we 
called the ``80-point club,'' which I fell into. Age and years 
of service totaling at least 80.
    Senator Brown. So if somebody--you had 31 years, you could 
be 49 and could still get it?
    Mr. Goshe. Yes, 50 and 31. Right, yes. That provided a 
worker with a slightly reduced pension.
    Senator Brown. OK. That group was both in the half that got 
decent pensions?
    Mr. Goshe. Yes.
    Senator Brown. OK, and what is the range of pensions that 
you or others in those two categories get? What kind of monthly 
pension do they get?
    Mr. Goshe. Ranging probably, based on how much money you 
made during your career, I would say somewhere in the 
neighborhood of $1,200 to possibly $3,000 a month. It was a 
pretty broad range. It was based on your years of service and 
your income during your----
    Senator Brown. So the other half of employees were either 
under 55, they were under 55 and their service plus time didn't 
add up to 80? That was the other half?
    Mr. Goshe. Right. And their pensions are vested, but they 
are not allowed to draw their pensions, full pension until age 
65, or they can take a reduced pension starting at age 55. But 
it is going to be a 50 percent reduction, and that reduction 
will continue through their life.
    Senator Brown. The rest of you get your pensions from the 
day you left?
    Mr. Goshe. Yes, sir.
    Senator Brown. Those workers that wait until 65--if 
somebody was 54 years old and had 25 years of service, say they 
were just under 55 and their years didn't add up to 80--they 
would get a pretty good pension, but it wouldn't be for 11 more 
years, until they turned 65, or they discounted it half?
    Mr. Goshe. No, if you are, say, at age 54, and you had 
enough years of service to achieve the 80----
    Senator Brown. I am saying if you didn't achieve it. If you 
were 54 and didn't----
    Mr. Goshe. Oh, if you didn't achieve the 80? You could draw 
the pension----
    Senator Brown. You would be vested?
    Mr. Goshe. You are vested and you could draw it at age 55, 
but at almost a 50 percent reduction, and once you reach 65, it 
would not escalate. That is what your pension would be for your 
life.
    Senator Brown. Considering the job situation in Tiffin and 
Fostoria and sort of all of Seneca County, that area, did you 
see a good many people take their pensions earlier, even though 
it was discounted by so much? Did you have a lot of co-workers 
that made that choice?
    Mr. Goshe. Oh, absolutely. I believe every employee that 
was eligible for pension right away took it, OK? Nobody waited 
because a lot of workers didn't know----
    Senator Brown. Even though it was 50 percent discounted, 
they still took it?
    Mr. Goshe. No, sir.
    Senator Brown. OK. I am sorry. Could you explain that?
    Mr. Goshe. Those employees that were not eligible have not 
drawn their pension as of yet. OK, the ones that are not 
eligible are not. They have got to wait until they are 55. Now, 
if they were 55 and they didn't have the 80 points or if they 
were age 54 and didn't have enough points, I don't know if any 
of them started drawing at age 55 or not yet. That I don't 
know.
    Senator Brown. OK. Did American Standard, then Bain 
Capital, then Sun Capital, have they lived up to their 
obligations?
    Mr. Goshe. They lived up to their obligations as far as our 
pensions. They did not live--during preliminary talks, they 
told us that they realized their obligation to us workers over 
30, 40 years of service, that they had an obligation for 
severance packages, which was somewhat hopeful.
    But when we went into severance negotiations, they told us 
basically, ``We only owned you guys for the 2 months. How much 
do you think we owe you?'' Discrediting our years of service 
with American Standard.
    Senator Brown. The 2 months that Sun owned them?
    Mr. Goshe. The 2 months that Sun Capital owned us, they 
told us in negotiation, ``We only owned you guys for 2 months. 
How much do we owe you?''
    Senator Brown. So someone that was at American Standard, 
then Bain, then Sun for 20 years and was, say, in his early 
50s, late 40s, just got 2 months' severance?
    Mr. Goshe. All that they were allowed was what was due us 
through the WARN notice--60 days of pay and any vacation pay 
that they might have accrued through 2007 for 2008. So there 
might have been a month of vacation pay involved.
    They provided us healthcare coverage until February 29, 
until the end of February. That is because we were technically 
still during a vacation period there, if you took your vacation 
pay. So after February 29, you were done. There was no 
healthcare. There was no severance pay. Everybody was done.
    Senator Brown. So tell me what, Mr. Goshe, most are not--
and I hesitate to use this word--as fortunate as you in that 
you had a good pension and you have good employment now. People 
that fell short of the pension, that didn't have the time or 
the age, what are--tell me some stories of what your co-workers 
are doing now?
    What are they doing for healthcare? What are they doing for 
work? Are they employed at significantly lower wages? Are they 
working at all? Have they moved out of Seneca County? Tell me 
what has happened.
    Mr. Goshe. To my knowledge, none of us have moved out of 
Seneca County, simply because of the fact that most of the guys 
own homes, and to try to sell a home in Seneca County right now 
is pretty slim pickings.
    A lot of them accepted jobs at neighboring little plants 
around the community that pay maybe $8 to $10 an hour. Probably 
the top industrial employer right now may be at $12.50 an hour.
    Senator Brown. What company is that?
    Mr. Goshe. Toledo Molding & Die. They are probably at 
around $12.50 an hour. But a lot of the workers ended up at 
Cooper Tire in Findlay, OH, where they went under a two-tier 
wage system. There is no pension there for them. They are 
working 12-hour shifts, every other weekend, if they are 
lucky--that was if they were fortunate enough to get in there.
    There were some employees that got into Toledo Molding & 
Die. There were some that got into the education that was being 
provided. But for the most part, I would say a lot of them 
accepted substantially lower-paying jobs throughout our 
community.
    Senator Brown. And you say that the average, the age range 
is 40 to 60. Not a lot of people went back to school, like Ms. 
Price is doing, did they?
    Mr. Goshe. No. I believe 14 of our past members that 
pursued the trade assistance as far as education.
    Senator Brown. OK. Thank you. Thank you for advocating for 
your fellow workers and congratulations on your new job now.
    Ms. Price, your unemployment runs out this month?
    Ms. Price. Yes.
    Senator Brown. How much is your unemployment, if I could 
ask?
    Ms. Price. One hundred fifty-seven dollars a week.
    Senator Brown. Tell me about the job you were laid off from 
and tell me about that company, if you would?
    Ms. Price. The name of the company is Pro Quo Books. I was 
a data entry clerk, and we just inputted the ISBN numbers off 
the back of the books for storage and sales in the warehouse.
    Senator Brown. And they laid off a number of people?
    Ms. Price. I basically got fired because the place was like 
moldy and dirty. I kept getting sinus infections and medicine, 
and it just didn't work out for me. But the way they fired me, 
that is how I ended up getting unemployment because it was 
unjust. So that is how I got unemployment.
    Senator Brown. OK. You are in school now at Mercy College.
    Ms. Price. Yes.
    Senator Brown. How much school have you had, and how much 
do you still need?
    Ms. Price. I just started school last month. So this is the 
third week.
    Senator Brown. It is a 1-year program, 2-year program?
    Ms. Price. I think 6 months. I will be finished in February 
with the medical billing and coding. Then I am going back for 
medical transcription.
    Senator Brown. OK. What do you hear from other students and 
your teachers about the job placement after you finish at 
Mercy?
    Ms. Price. There are lots of people in my class that are 
laid off, can't find jobs. Just basically everybody is going 
through the same thing.
    Senator Brown. They are laid off from other jobs. My 
question is, your chances of finding a job after you finish 
your education? Those jobs are relatively plentiful?
    Ms. Price. Yes, they are in demand right now.
    Senator Brown. So your teachers tell you that after you 
finish this course, your chances of getting a job are really 
good?
    Ms. Price. Yes.
    Senator Brown. What do those pay typically? Do you know 
what the range is there?
    Ms. Price. I think between $45,000 and $50,000.
    Senator Brown. OK. And you would work for, what, doctors, 
hospitals, various clinics, various kind of medical facilities?
    Ms. Price. Clinics, yes.
    Senator Brown. And that would be--that is not the first 
training? That would be the second tier of training to get that 
$45,000 job?
    Ms. Price. If I am not mistaken, I think the medical 
billing and coding may make between $30,000 and $40,000, and 
then the medical transcription, that--I am not sure how much 
that makes. I was going to do that on the side for extra money.
    Senator Brown. OK. Medical transcription is working with 
medical records on----
    Ms. Price. When the doctor dictates in the tape recorder, 
and then you type the paperwork up for the records, for the 
patient's record.
    Senator Brown. Are you getting help elsewhere besides 
unemployment, and what kinds of help can you expect or can we 
help you get after your unemployment expires?
    Ms. Price. Well, I currently receive child support. I have 
two sons, and my unemployment is going to run out this month. 
So I get a little bit of food stamps from the welfare office 
and medical for my kids and myself. But as far as cash--
    Senator Brown. You get Medicaid?
    Ms. Price. Yes. As far as cash, all I receive is from child 
support.
    Senator Brown. So child support, unemployment, and food 
stamps?
    Ms. Price. Yes.
    Senator Brown. Anything else through the Ohio Benefit Bank? 
Do you know about that?
    Ms. Price. No.
    Senator Brown. If there is anything there? OK.
    Mr. Walker, what do we do to help people like Ms. Price? 
She is obviously working hard and trying to do everything 
right.
    Mr. Walker. With Ms. Price, we are going to be able to co-
enroll her with the Workforce Investment Act supportive 
services. So, currently, the policy is there will be an 
additional $1,000 worth of benefits. She will have to bring in 
bills to us, and we will be able to reimburse her for some of 
her out-of-pocket costs--gasoline, transportation, as well as 
anything that she is faced with, uniforms and other supportive 
services.
    Senator Brown. I was told that 8,000 people coming into 
your center in the last 3 months, fewer than half, about a 
third are receiving unemployment insurance. What happens to the 
other 5,000 or so?
    Mr. Walker. The other 5,000, Senator, we can't tell you 
with certainty. Many of those are dislocated workers as well 
that have already exhausted their unemployment benefits. Those 
are the ones that we are tracking because we know that they are 
currently receiving.
    Now, that is one of the problems, unfortunately, of the 
unemployment system. Once people fall off the system, we have 
no way of knowing, unless they tell us, that they are still 
dislocated, unemployed, or that they actually receive the 
unemployment insurance.
    Senator Brown. Of the 8,000, 2,500 are receiving 
unemployment insurance?
    Mr. Walker. Correct.
    Senator Brown. The others all used to receive it? Almost 
all of the others at one point received unemployment?
    Mr. Walker. It is very possible. As I said before, we don't 
have a tracking system or mechanism unless they tell us that 
they are currently dislocated workers or they were receiving. 
We know that we have currently 8,000 people registered that are 
seeking jobs or looking for employment in the city or Lucas 
County at The Source.
    Senator Brown. You have 8,000 people, many of whom had work 
and are looking for work. Are you able to estimate how many 
people are out there that don't know about you that have 
exhausted their unemployment benefits and have sort of nowhere 
to turn? They haven't found out about the Workforce Development 
Agency. Is that a significant number of people in Lucas County?
    Mr. Walker. We hope not, but obviously, there is always a 
hidden population. You know, one of the things, unfortunately, 
that happens is that many tier one or, should I say, tier two 
or tier three auxiliary people fall off.
    Just like last year with Ford Maumee, there were 700 
workers. When 92 percent of those were able to receive a full 
pension or, more importantly, a buyout offer, we had a worker 
that worked across the street in the union hall who was an 
auxiliary worker. She did not know about the rapid response. 
She did not know about the WARN Act. But yet she was an 
auxiliary or a second-tier worker.
    Many times people that work in small businesses that run 
lunch stands or run newspaper agencies or have carryout 
businesses, they are what we call the auxiliary or the second 
or third tier. Because once that primary employer, just like 
Mr. Goshe, has lost his job, the places where he used to go, 
the places that he shopped at, the places that he stopped at, 
those mom and pop businesses just simply dry up and go out of 
business because, all of a sudden, those 400 or 500 or 600 
people that used to stop there on a daily basis are no longer 
there.
    Many times, those are the ones that we never get to or that 
we never see because, unfortunately, they just simply go out of 
business literally overnight.
    Senator Brown. And they aren't eligible for unemployment?
    Mr. Walker. It depends if they paid into the system or not. 
If they have--if they pay into the taxes for the State of Ohio, 
then they are eligible. Now that is an individual situation, on 
a case-by-case basis.
    Senator Brown. So when you say tier one and tier two, tier 
two is workers that often own their own businesses and are 
affected by the losses of the larger businesses of tier one?
    Mr. Walker. Correct.
    Senator Brown. Is that the term you use?
    Mr. Walker. Yes, sir.
    Senator Brown. OK. Tell me more about the rapid response 
system and how it is working, where it is working, and where 
its shortcomings are.
    Mr. Walker. We provide rapid response services to any 
business that we receive a WARN notice. So any business that 
has 50 or more employees that files a rapid response notice 
with the State of Ohio, we go out to provide rapid response 
services.
    What we try to do is to get inside of the business before 
it closes or before the employees are laid off so that they 
know, first, about unemployment benefits. Second, they know 
about education, employment, and training services that are 
offered in the local areas. And then, more importantly, any 
other services such as job and family services, which provides 
food stamps, cash benefits, or other insurance, especially if 
they have minor children.
    We try to meet with the employers or the management of each 
of those businesses and employers to let them know of those 
benefits. Second, what happens, obviously, is that we try to 
get those people pre-registered so that they understand that 
they can come to The Source or any one-stop in their local area 
and to become registered.
    We want to provide them with a resume and let them know how 
we can provide hopefully adequate referrals to any available 
employment there might be and the transferable skills that they 
have with their current occupation.
    Senator Brown. Senator Fedor and I have talked a lot about 
veterans benefits, and she has worked very hard on that in the 
State legislature. How do veterans benefit?
    If you have a laid off worker come to you that is or isn't 
receiving unemployment insurance, and--I assume you ask if they 
are veterans--you guide them maybe to the veterans service 
organization. Or what do you do when people come in that are 
veterans?
    Mr. Walker. Two things. We have the Ohio Veterans Programs 
Services inside of the one-stop. They are part of the rapid 
response team that goes out to do the orientation. We also have 
the Lucas County Veterans Commission, which is inside The 
Source, that provides cash benefits, medical assistance, and 
sometime vouchers for other services such as housing. So what 
we try to do there in those cases is to make the direct 
referral.
    Now one of the other questions that you asked me, what is 
the shortcoming in the system? Unfortunately, unemployment in 
Ohio is a call-in system. Once we go out to do the rapid 
response, and people then, the employee then calls in to the 
State of Ohio to give their Social Security number and place of 
employment, they are now eligible to receive unemployment 
benefits.
    The only problem with that is that they are no longer 
engaged actively in working or job seeking. Until they are 
called in or for UCRS, which is an Unemployment Re-employment 
Session or Service, they are sitting at home collecting a 
check. And many times, that lures people into a false sense of 
security or it leaves them not engaged.
    Right now, it probably takes at least 6 months to find re-
employment if people are able. And unfortunately, the system is 
not designed like back in the old days when we had unemployment 
offices, where people had to come in every 2 weeks to file 
their claims and see someone physically face-to-face. So many 
times now after the person has engaged or is receiving that 
check, they won't re-engage until all of a sudden the check is 
about to run out or, more importantly, the benefits are no 
longer there.
    So the first chance that we get hopefully to work with an 
employee or to get them to re-engage, as in Ms. Price's case, 
the 
better off they are. Because the sooner that we can get them 
into retraining, which provides them with additional programs 
and services, the better off we are able to hopefully get them 
re-employed.
    Senator Brown. Let me ask, in closing--and then I will 
bring the next panel up--one question, the same question of all 
three of you. What is the most important thing, the single most 
important thing or the most important couple of things that you 
would like to see the Federal Government do to answer some of 
the personal or professional or society problems that you bring 
out?
    And I will start, Mr. Goshe, with you.
    Mr. Goshe. The two issues that Government has to address, 
No. 1, is the NAFTA. The American worker is really at a 
disadvantage. As I said earlier, we can't compete with $3.77 an 
hour in wages and benefits. The American worker cannot compete 
against that.
    And another important issue is extending the TRA and TAA 
benefits, continue that to allow workers a chance for 
retraining. I think those are the two major issues that we have 
to address, along with affordable healthcare.
    Senator Brown. OK. Ms. Price, do you have one or two or 
three things specifically you think we should do?
    Ms. Price. I just feel that with the way unemployment and 
everything is going that with situations like this, 
unemployment should have some type of emergency funding to help 
people that are in school and trying to do the right thing. And 
just what do we do? That is all.
    Senator Brown. That is more than all. That is a very good 
question.
    Mr. Walker.
    Mr. Walker. Probably three things, Senator. No. 1, 
obviously, I would advocate for retraining and re-education for 
the American workforce and retooling.
    More importantly, more in additional funds either for the 
Workforce Investment Act, the one-stop centers that we 
currently work in, summer jobs for our youth. You know, 16 
years ago, I used to run the PIC summer youth program. That 
year, there was $2 million alone. We were able to employ 2,000 
youth in the summer to provide them with an education and, more 
importantly, work experience. This last year, we were able just 
barely to place 2,000 adults back into re-employment.
    And obviously, the most important thing I would say is that 
we need to take care of America. Stop bailing out, 
unfortunately, a nonpopular war that is leading us nowhere. We 
have to take care of the citizens here to rebuild a strong 
middle class obviously for the betterment of all of us.
    Senator Brown. Thank you. Mr. Walker, thank you. Ms. Price, 
thank you very much. Mr. Goshe, thanks for coming up here from 
Tiffin.
    Good to see you all. Thank you. All your comments will be 
part of the public record, and thanks for your contributions 
and all you are doing.
    And good luck in school, Ms. Price.
    Ms. Price. Thank you.
    Senator Brown. We will take a couple of minutes break.
    [Recessed.]
    Senator Brown. Thank you.
    Susan Helper is AT&T Professor of Economics at Weatherhead 
School of Management at Case Western Reserve University in 
Cleveland. She is a research associate of the National Bureau 
of Economic Research and the MIT International Motor Vehicle 
Program. She has her B.A. from Oberlin College just east of 
here and her Ph.D. from Harvard.
    Daniel Kildee has been Genessee County treasurer for the 
last 12 years. Because some regions most exposed to foreclosure 
are also hardest to make attractive to employers, we asked him 
to come talk with us today.
    He founded the Genessee Land Bank, Michigan's first land 
bank, something Ohio is looking seriously into. Kildee's land 
bank program was named winner last year of the Harvard 
University Fannie Mae Foundation Innovations in American 
Government Award for Affordable Housing.
    Thank you for your contribution in all of this.
    Mr. Kildee. Thank you.
    Senator Brown. David Dmytryka is the president of Dmytryka 
Jacobs Engineers in Toledo. He is a member of the Toledo 
Chamber of Commerce, member of the Toledo Area Small Business 
Association, and also a member of the Lucas County Workforce 
Investment Board.
    Mr. Dmytryka, thank you. Did I say that right? Dmytryka?
    Mr. Dmytryka. Yes, sir.
    Senator Brown. And Frank Calzonetti, you come to Toledo--
you really get names like Calzonetti and Dmytryka. Kildee is 
not from Toledo and Helper is not from Toledo, is it?
    [Laughter.]
    Dr. Calzonetti is a professor of geography and vice 
president for research and development at the University of 
Toledo. He is responsible for the promotion of research, 
technology transfer, and technology incubation at the 
University of Toledo. He got his B.A. from Wayne State 
University, an M.A. in geography from Wayne State, and a Ph.D. 
in geography from the University of Oklahoma.
    Thank you, all of you, for joining us. And Dr. Helper, why 
don't you begin?

STATEMENT OF SUSAN HELPER, PH.D., PROFESSOR, WEATHERHEAD SCHOOL 
 OF MANAGEMENT, CASE WESTERN RESERVE UNIVERSITY, CLEVELAND, OH

    Ms. Helper. Great. Well, thanks a lot for inviting me to 
testify on these really important issues. And I also have a 
supplemental document for the record.
    Today----
    Senator Brown. If I could interrupt you? Anyone that wants 
additional submissions for the record can do that. Just give 
them to Chris today or submit them--if you get them to us 
within a week or so, it will be in the official record. So 
anyone that is on one of the panels can certainly submit 
anything in addition.
    I apologize, Dr. Helper, continue.
    Ms. Helper [continuing]. So, today, I would like to briefly 
discuss some solutions to the employment issue that also create 
community, improve competitiveness, and provide clean energy. 
So we have seen the short-term problems. I want to think kind 
of about the long-term and think about how soon can we get to 
the long-term, and what kind of jobs will be created?
    And recent trends don't paint a positive picture. Over the 
last 7 years, the income of the median working age household 
fell $2,000. This is the first economic expansion in U.S. 
history in which the typical worker's income actually fell.
    We could do a lot better than this. We could create good 
jobs while helping to achieve other national goals. In 
particular, both manufacturing and service firms can use a 
``high-road'' production process that harnesses everyone's 
knowledge--that of front-line workers as well as top executives 
and investors--to achieve innovation, quality, and quick 
responses to unexpected situations.
    This high-road model of production provides an alternative 
to the all too common low-road model, in which most employees 
are treated as disposable drones who merely follow orders from 
``stars'' at the top, who need to go on luxury retreats to 
California.
    Here is an example of how the high road works. A 
firefighter in Solon, OH, had an idea based on his own 
experience--a compass to guide firefighters when they are 
inside burning buildings. You can get disoriented. I have 
brought an example of it.
    Much of the design for this was provided by a federally 
funded manufacturing extension program, and the tooling for the 
molding that makes this was built by Colonial Machine in Kent. 
Colonial Machine is actually successful because they made 
several investments at once.
    They adopted advanced information technology while also 
changing their production strategy so they could produce more 
customized products; their operations strategy, using some IT 
capabilities to reduce setup times; and they also changed their 
human resource strategy. So they employed workers with more 
problem-
solving skills that use more training. But the success of 
changes in one area actually depended on investments in other 
areas.
    For example, customizing the products wouldn't have been 
profitable without being able to change over more quickly. And 
the reduction in setup time was made possible both by this 
information technology, but also by the ability to use the 
information that the trained and empowered workers had.
    So just training workers by itself, that is important, but 
just by itself it would have had little impact without re-
designing their jobs so the workers could pool knowledge and 
have the power to recommend changes.
    The high road's linked information flow is powerful because 
real production rarely takes place exactly according to plan. 
This is particularly true when firms are producing products 
that aren't yet mature, like green products, or there is a big 
need to change production conditions, such as a desire to 
reduce a firm's carbon footprint.
    And in these cases especially, the understanding that 
direct workers have is really crucial to running and improving 
the process. We can wait around for the managers and the 
engineers to issue directives, but that takes a lot longer and 
costs a lot more. So, thus, high-road practices increase 
competitiveness.
    High-road production also empowers workers by involving 
them integrally in designing and improving their own jobs. 
Workers interact more closely with their customers, suppliers, 
and co-workers, and that makes the jobs harder to offshore. So, 
thus, the high-road practices can help communities, providing 
fairly paid and stable jobs.
    These high-road practices aren't new. But markets alone 
fail to provide the proper incentives for firms to adopt these 
policies. First, many of the benefits of the high road accrue 
to workers, suppliers, and communities in the form of higher 
wages and more stable employment. And so, firms usually invest 
too little in training because they worry that they are not 
going to get the full benefit of their training expenditures 
since the trained employees might be hired away by other firms.
    And second, the high road works only if a company adopts 
several practices at the same time, as I talked about in that 
Kent example. Thus, direct services to workers and firms are 
necessary to develop interdependent high-road capabilities.
    Because of these market failures, low-road options remain 
attractive to firms, even though they impose costs on society. 
So to pave the high road, we need more Government investment in 
education, training, research, and development. But we also 
need to block the low road by doing such things as protecting 
labor, environmental rights, and trade agreements, and 
strengthening safety regulations for both workers and 
consumers.
    But we still need more than that. Education alone won't 
allow firms to overcome the market failures that block the 
adoption of efficient high-road practices. Nor will it re-
invigorate income growth, which for the median college-educated 
man has risen only 0.5 percent annually since 1973.
    Increased R&D spending by itself won't get innovative 
products to market. Even with fair trade agreements, American 
workers will still face foreign competition, and a key way to 
respond to this challenge is providing direct services to firms 
to build capabilities.
    The Federal Manufacturing Extension Partnership (MEP) is an 
important example of a program that helps firms move toward the 
high road by helping companies make complementary investments 
to develop new products, find new markets, and operate more 
efficiently. With the help of programs like MEP, U.S. 
manufacturing firms can compete with low-wage nations.
    A study by the Michigan Manufacturing Technology Center 
suggests that most small manufacturers have costs within 20 
percent of their Chinese competitors. And this is a gap that 
MEP programs can often eliminate. In fact, the MEP program pays 
for itself in increased tax revenue from the firms it helps.
    Yet the Bush administration wants to end the program, and 
instead, I would argue we should triple the program's funding, 
and that would cost only $300 million a year. We should also 
extend this program to the service sector.
    An important adjunct to this technical assistance program 
is the Strengthening Employment Clusters to Organize Regional 
Success, or the SECTORS Act that was recently introduced by 
you, Senator Brown, and Senator Snowe. This legislation 
provides for grants of up to $2.5 million each for cross-firm 
partnerships for planning and training within an industry 
cluster.
    High-road production can also help meet national goals, 
such as moving toward a clean energy economy. Green stimulus 
programs, such as that proposed by the Political Economy 
Research Institute, can create good jobs in the short-term 
while providing the foundation for a sustainable economy. So 
these public dollars can actually do double duty, both the 
short-term and the long-term.
    This institute proposes spending $100 billion over the next 
2 years to employ 2 million people in building a green energy 
infrastructure. These investments are really productive. 
Investments that are increasing residential energy efficiency 
can pay for themselves in 3 years.
    The programs can also be structured to create a career 
ladder, as the Green Energy Academy at Cuyahoga Community 
College is beginning to do. Workers can start with entry-level 
activities, such as demolition, and then move on to higher-
skilled activities, like energy-efficient interior design.
    In conclusion, high-road practices offer a way of providing 
family-supporting employment while meeting the challenges of 
increasing competitiveness, community, and clean energy. 
Policies such as those discussed above would be a really useful 
start.
    [The prepared statement of Ms. Helper follows:]
               Prepared Statement of Susan Helper, Ph.D.
    Senator Brown, thank you very much for inviting me to testify on 
these important issues. I will also submit a supplemental document for 
the record.
    Today I would like to briefly discuss some solutions to the 
employment issue that also create community, improve competitiveness, 
and provide clean energy. The current high levels of unemployment will 
eventually recede. But--how soon? What kind of jobs will be created?
    Recent trends don't paint a positive picture. Over the last 7 years 
the income of the median working-age household fell $2,000--the first 
economic expansion in U.S. history in which the typical worker's income 
decreased.\1\
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    \1\ http://www.cbpp.org/8-29-06pov.htm.
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    We can do better than this. We can create good jobs while helping 
to achieve other national goals. In particular, both manufacturing and 
service firms can use a ``high-road'' production process that harnesses 
everyone's knowledge--that of front-line workers as well as top 
executives and investors--to achieve innovation, quality and quick 
responses to unexpected situations. This high-road model of production 
provides an alternative to the all-too-common ``low-road'' model, in 
which most employees are treated as disposable drones who merely follow 
orders from ``stars'' at the top.
    Here's an example of how the high road works. A firefighter in 
Solon, OH had an idea, based on his own experience: a compass to guide 
firefighters when they are inside burning buildings. Much of the design 
was provided by the federally funded Manufacturing Extension Program, 
and the tooling for the plastic molding was built by Colonial Machine 
in Kent, OH. Colonial Machine is successful because the firm made 
several investments at once: they adopted advanced information 
technology, while also changing their product strategy (to produce more 
customized products), their operations strategy (using their new IT 
capability to reduce setup times), and human resource policies 
(employing workers with more problem-solving skills, and using more 
teamwork). The success of the changes in one area depended on 
investments in other areas. For example, customizing products would not 
have been profitable without the reduced time required to change over 
to making a new product; this reduction was made possible both by the 
improved information from the IT and the improved use of the 
information by the more-empowered workers. Just training workers by 
itself would have had little impact without re-designing their jobs so 
that workers could pool knowledge and have power to recommend changes.
    The high road's linked information flow is powerful because real 
production rarely takes place exactly according to plan. This is 
particularly true when firms are producing products that aren't yet 
mature (such as ``green'' products), or there is a major change in 
production conditions (such as a desire to reduce a firm's carbon 
footprint). In these cases especially, the understanding that direct 
workers have is crucial to running and improving the process--waiting 
for managers and engineers to issue directives takes much longer and 
costs much more. Thus, high road practices increase competitiveness.
    High road production also empowers workers by involving them 
integrally in designing and improving their own jobs. Workers interact 
more closely with their customers, suppliers and co-workers, making 
jobs harder to offshore. Their increased value to their employer also 
enables them to be paid more. These practices can greatly help 
manufacturing, which has been hammered with the loss of 3.7 million 
jobs over the last 7 years--and these were good jobs that paid 20 
percent more than the national average. They can also improve service 
jobs whose numbers have been growing--but many of which are low wage. 
Thus, high road practices help communities, by providing fairly paid, 
stable jobs.
    High-road practices are not new. But, markets alone fail to provide 
the proper incentives for firms to adopt high-road policies. First, 
many of the benefits of the high road accrue to workers, suppliers, and 
communities, in the form of higher wages and more stable employment. 
Thus, firms usually invest too little in training; they fear that they 
will not get the full benefit of their training expenditure since the 
trained employees might be hired away by other firms. Second, the high 
road works only if a company adopts several practices at the same time. 
Thus, direct services to workers and firms are necessary to develop 
interdependent high-road capabilities.
    Because of these market failures, low-road options remain 
attractive to firms, even though they impose costs on society. To 
``pave the high road,'' we need more government investment in 
education, training, research, and development. But we also need to 
``block the low road,'' by doing such things as protecting labor and 
environmental rights in trade agreements, and strengthening safety 
regulations for workplaces and consumer products.
    But more is needed. Education alone will not allow firms to 
overcome the market failures that block adoption of efficient, high-
road practices. Nor will it re-invigorate income growth, which for the 
median college-educated man has risen only half a percent annually 
since 1973. Similarly, increased R&D spending by itself won't get 
innovative products to market. Fortunately, high-road producers excel 
at overcoming the obstacles that have hampered American firms' ability 
to move from lab to production.
    And, even with fair trade agreements, American workers will still 
face foreign competition. A key way to respond to this challenge is by 
providing direct services to firms to build capabilities. The Federal 
Manufacturing Extension Partnership is an important example of a 
program that helps firms move toward the high road by helping companies 
make complementary investments to develop new products, find new 
markets and operate more efficiently. With the help of programs like 
MEP, U.S. manufacturing firms can compete with low-wage nations. The 
Michigan Manufacturing Technology Center suggests that most small 
manufacturers have costs within 20 percent of their Chinese 
competitors'--a gap that MEP programs can often eliminate. In fact, the 
MEP pays for itself in increased tax revenue from the firms it helps.
    Yet the Bush administration wants to end this program. Instead, we 
should triple the program's funding--a step that would cost only $300 
million per year. We should also extend the program to the service 
sector.
    An important adjunct to this technical assistance program is the 
``Strengthening Employment Clusters to Organize Regional Success 
(SECTORS) Act.'' Recently introduced by Senators Brown and Snowe, this 
legislation provides for grants of up to $2.5 million each for cross-
firm partnerships for planning and training within an industry cluster.
    High road production can also help meet important national goals, 
such as moving toward a clean energy economy. Green stimulus programs 
such as that proposed by the Political Economy Research Institute can 
create good jobs in the short term while providing the foundation for a 
sustainable economy. They propose spending $100 billion over the next 2 
years to employ 2 million people in building a green energy 
infrastructure. These investments are quite productive; for example, 
investments in increasing residential energy efficiency pay for 
themselves in 3 years. These programs can also be structured to create 
a career ladder, as the Green Academy at Cuyahoga Community College is 
beginning to do. Workers can start with entry-level activities such as 
demolition, and then move on to higher-skilled tasks like energy-
efficient interior design.\2\
---------------------------------------------------------------------------
    \2\ http://shop.cleveland.com/SS/
Page.aspx?sstarg=&facing=false&secid=51643&artid=904229.
---------------------------------------------------------------------------
    In conclusion, high road production practices offer a way of 
providing family-supporting employment, while meeting the challenges of 
increasing competitiveness, community, and clean energy. Policies such 
as those discussed above would be a useful start.

    Senator Brown. Thank you. Thanks very much, Dr. Helper.
    Mr. Kildee.

 STATEMENT OF DANIEL T. KILDEE, TREASURER OF GENESSEE COUNTY, 
                           FLINT, MI

    Mr. Kildee. Thank you, Senator, for inviting me to be here.
    It is good to be back in Ohio. I have spent a good deal of 
time here in Toledo, also in Youngstown, in Dayton, in 
Cleveland, Cincinnati, other places, working on urban land 
issues, which is my calling, I suppose.
    Obviously, a lot of what has been addressed is critical to 
restoring our economy. I want to focus on just one specific 
piece of that, and that has to do with the condition of 
America's cities, particularly America's older industrial 
cities.
    I am sitting here with a geographer, so I can probably 
defer to him on some of these subjects. But cities evolved, 
obviously, historically because they were efficient. Cities 
were an efficient way to manage the human condition, but also 
to support an economy.
    The problem that we have had is in places like Toledo, 
Flint, other places--certainly Toledo not to the extent of many 
communities. But I will take my own city of Flint, MI, as the 
example. Flint was one of those winners in the manufacturing 
era. We once had 79,000 people drawing a salary from the same 
company. Not just in the same industry, but in a city of 
197,000, we had 79,000 people working for General Motors 
Corporation.
    Well, things have changed a bit. We now have 8,000 people. 
In just 30 years, we have gone from 79,000 employees for one 
company to 8,000 working for that company. The population of 
the city of Flint has gone from 197,000 to under 120,000 during 
that same period.
    While our situation may be extreme, it is not unique at 
all. You see that happening all over the country. Youngstown, 
OH, is a very good example of a city that is shrinking.
    What we have seen is that there are lots of negative 
elements that accrue to a city that has had this kind of loss 
of jobs and loss of population. One critical one, critical to 
this discussion is that those cities have a very difficult time 
competing for the knowledge economy jobs.
    There is a difference in terms of the way jobs go these 
days. Many jobs that are going to be important in the 21st 
century are jobs that are very mobile and can locate in places 
that are attractive. What we see now, places like Flint and 
other places around the country, is that we are simply not an 
attractive place for knowledge employers, knowledge workers.
    As we have lost all this population, we have left behind 
cities that have spent literally billions of dollars in 
developing public assets, public infrastructure, schools, 
parks, streets, water and sewer systems. We don't have the 
population to support them. And we have huge abandonment of 
residential and commercial structures left behind.
    What we have been working on in Flint and in other places 
around the country is to try to rationalize the management of 
urban land to not engage and support a system of public 
investment that continues to increase the cost of government, 
which decreases our competitiveness, by building new schools, 
new infrastructure out on farm fields when we have developed 
significant public infrastructure in cities that have land that 
is available, but land that is not easily put into the market 
because of the governmental systems that essentially treat 
urban land as if it is a disposable commodity and that can be 
thrown away once used. We challenge that notion.
    My work has been at the local level to try to come up with 
a process of presenting vacant and abandoned, underutilized 
urban land to the real estate market in a way that the market 
can absorb as one contribution to making America's cities and 
my own hometown of Flint a more competitive place, to reduce 
the cost of government, to increase the efficiency of the 
workplace. And particularly now, when we see fuel prices going 
where they are, cities--more than ever before in recent 
history, I think, cities are going to be important to our 
competitiveness.
    If we don't rationalize the use of urban land and present 
urban land to the market in a way that the market can truly 
absorb, I think it is going to be very difficult, despite great 
workforce development efforts, hopefully increasing the access 
to post-secondary education--all the things that we have heard 
about--it is going to be very difficult for these older 
industrial cities to compete in the new economy unless we fix 
those cities and make them attractive places again.
    And that is the work that I am here to address. Thank you.
    [The prepared statement of Mr. Kildee follows:]
                 Prepared Statement of Daniel T. Kildee
    For America's older industrial cities, the last 30 years have been 
the most difficult time in their history. As the economy has shifted to 
one of global competition, and as manufacturing jobs have been either 
replaced by new technology, moved across our border, or been eliminated 
due to increased worldwide competition, our cities are in trouble. Many 
of the communities that led the way in the manufacturing era have been 
left behind in the new economy--with greater demand for public services 
and the loss of population from the urban center. As the jobs left the 
cities, the people left with them, or at least those people who could 
afford to follow the work or find a new way of life.
    America's oldest cities, at one time the economic engine of the 
economy, now struggle to manage the combined effects of dramatic 
population loss, a deteriorating landscape, aging infrastructure and a 
shrinking tax base. For the workers of the next generation of jobs, 
America's older cities are not high on the list of desirable places to 
live.
    My hometown of Flint, Michigan is a typical case.
    Flint is the birthplace of General Motors. From the 1920's to the 
later 1970's, Flint was the center of the auto industry. The population 
of Flint grew fast during those decades, and by 1970 Flint's population 
was just under 200,000. At one point 79,000 people worked for GM in 
Flint alone--not just in the same industry, but for the same company. 
We exported cars and imported wages. It was not unusual for a young man 
to leave high school, walk over to one of a dozen factories and go to 
work that same day--working on the same assembly line with his father 
and grandfather. Flint was the place to be. Workers from all over the 
country made Flint their home.
    But things have changed. Many of those jobs have simply 
disappeared. Just over 8,000 GM jobs are left in Flint. Flint's future 
will not be built on a revived auto industry alone, even if the 
industry is able to regain stability. And while many agree that the 
next generation of jobs will require America to offer clean, vibrant, 
and attractive cities to the knowledge workers and creative 
entrepreneurs who will drive the new economy, those same cities will 
simply not be able to compete for those workers unless the landscape of 
the older industrial cities can be made attractive once again. To do 
that, this country need to adopt policies that recognize that if we 
fail to rebuild our cities, we will not be able to fully rebuild our 
economy.
    Neighborhoods that are in decline, littered with abandoned 
properties will not attract the workers nor attract those new employers 
that will be the foundation of a diversified economy.
    But for decades, cities across the Nation have struggled with the 
daunting problem of abandoned houses and vacant land. Particularly in 
Michigan, where the cities of Detroit, Flint, Saginaw, and others have 
experienced significant population loss, the problem has been 
exacerbated by the absence of a coherent governmental approach to urban 
land.
    As cities compete for the knowledge jobs of the 21st century, older 
cities have been hampered by the conditions of neighborhoods and 
downtown. For decades, people traveled to the cities where the jobs 
were plentiful. Companies made huge capital investments in factories 
and equipment, and the people followed.
    The new economy is different. To a great extent, jobs are more 
mobile in the information age, and employers locate the jobs where the 
creative, entrepreneurial workers live. Those workers want to live in 
vibrant and energized cities.
    So we have a disconnect: the abandoned cities--the ones that need 
the jobs most--have a difficult task attracting the workers that 
attract the jobs.
    For the most part, this legacy of abandonment is the result of 
years of decline associated with the migration of population from the 
city to suburban communities. Recently, however, the abandonment of the 
urban landscape has been magnified by the dramatic increase in 
mortgage-foreclosed homes flooding this already weakened real estate 
market. While this problem is already having an impact on my community, 
the fact that there are between 5,000 and 6,000 mortgage foreclosures 
pending in my community is a matter of great concern, particularly in 
light of the weak real estate market in Flint and the presence of 
thousands of previously abandoned homes already littering once thriving 
neighborhoods.
    Abandoned property is a source of blight, crime, and disease. 
Vacant urban land reduces the very resource available to address the 
problems it creates. Local property taxes are made less available due 
to devaluation of land values. For example, abandoned houses account 
for 75 to 90 percent of fires in the city of Flint, yet the city has 
reduced fire service due to a significant financial crisis. Given the 
enormous financial pressure for basic city services, it is clear that 
reform of urban land is fundamental to revitalization of our cities.
    Vacant land is both a cause and result of urban dis-investment. As 
cities have experienced population loss and housing market declines, 
the result is the decline of property values. Blight spreads as empty 
houses sit vacant, infecting adjacent properties and ruining entire 
neighborhoods in a matter of just a few years. An abandoned house is a 
``Typhoid Mary'' to a neighborhood struggling to sustain itself.
    Sadly, for the past several decades, one of the governmental 
systems intended to address the problem actually contributed to the 
downward spiral of land values and neighborhood stability. Under the 
former system of tax foreclosure, abandoned properties were either 
transferred to private speculators through tax lien sales or became 
State-owned property through foreclosure. Under either scenario, local 
leaders had little power to interrupt the incremental decline in the 
re-utilization of tax-
reverted land. In fact, the former system encouraged low-end reuse of 
tax reverted land due to the length of time between abandonment and 
reuse--often more than 5 years. The lack of clear title to these 
properties under the tax lien system also made reinvestment almost 
impossible.
    The former system was decidedly non-strategic.
    The changes to Michigan's tax foreclosure law are a significant 
step in the right direction. Since the passage of PA 123 of 1999, the 
State of Michigan and county governments have greater authority in 
gaining control of vacant abandoned land. PA 123 of 1999 accelerated 
the process of tax foreclosure, which previously took as long as 7 
years to complete. The new system of county or State tax foreclosure is 
completed within a 2-year period, and abandoned property is taken after 
only 1 year.
    While the new system is significantly more efficient, we need to go 
further in order to optimize the reuse of vacant urban land with long-
term neighborhood stability in mind. Michigan needs a systemic approach 
to urban land that affords local government the tools necessary to 
manage the ``downsizing'' of cities more effectively. It is only 
through smart ``downsizing'' that cities can ultimately seek to grow 
again. For communities with significant numbers of abandoned property, 
a land re-utilization plan that delivers tax-foreclosed property to its 
best and highest use is needed.
    Faster and more efficient demolition of existing structures is the 
earliest and most tangible benefit of such a system. Over time however, 
land assembly for development and long- and short-term green space 
development is made possible by ``land banking'' tax-reverted property, 
rather than simply selling land at public auction. Replacing one 
irresponsible landlord with another is no solution to the problems of 
sub-standard housing and neighborhood blight. Quickly auctioning tax-
reverted property, while somewhat more desirable than the former 
system, does not provide urban communities the control of land 
essential to a coherent revitalization plan. Encouraging and supporting 
locally derived land re-utilization planning is essential to urban land 
reform.
    Adoption of legislation that authorizes a foreclosing county to 
create a ``land bank'' is one key step in any comprehensive urban land 
reform initiative. Such legislation was introduced in the previous 
session of the legislature. While there may be some changes needed to 
the previously introduced legislation, a land bank is an important 
component of Genesee County's vision for revitalization of our urban 
center.
    Another policy initiative receiving serious State government 
attention involves the ``smart growth'' concept, a popular phrase in 
current land use lexicon. A commitment to including urban land reform 
issues as a central subject of the ``smart growth'' discussion is 
essential to the development of meaningful policy.
    To fully realize the goal of preserving farmland, open green space, 
and undeveloped land for future generations, we must unlock the 
unrealized value that urban land presents.
    Such reform will benefit cities, suburbs, and rural communities as 
well. As we struggle to address two serious challenges--maintaining our 
precious natural resources and preserving and revitalizing our urban 
centers, we must create public policy which ensures urban land is not 
overlooked. Such an approach will allow us to support our cities and at 
the same time preserve the precious resources that have made Michigan 
such a beautiful place to live.
    In Flint, we have made tremendous progress in just a few years by 
re-engineering the tax foreclosure system. The overriding philosophy of 
our initiative is that the land itself has value that is far more 
important than the liquidated value of the property sold at a 
distressed sale.
    If there is not a similar approach to the disposition of mortgage-
foreclosed properties, all the good work being done around the State of 
Michigan in reforming the tax foreclosure system will be overwhelmed 
with speculative purchasers mismanaging the real estate within our 
communities and driving down home prices--robbing responsible 
homeowners of their hard-earned equity.
    The remainder of my written testimony is a description of the work 
of the Genesee County Land Bank. I submit this report to provide 
additional background on our work and its potential application in 
restoring the urban landscape, and in particular to explain how a 
locally controlled land bank authority may be a viable mechanism for 
disposition of mortgage-foreclosed properties.
    Thank you for the opportunity to provide my thoughts to you and the 
committee as you deliberate this important and growing issue facing the 
Nation.

    Senator Brown. Thank you for your public service.
    Mr. Dmytryka.

    STATEMENT OF DAVID DMYTRYKA, PRESIDENT, DMYTRYKA JACOBS 
                  ENGINEERS, INC., TOLEDO, OH

    Mr. Dmytryka. Thank you, Senator, for allowing me to offer 
my opinions on the local workforce here in Toledo and how my 
company deals with finding and hiring quality engineers.
    As you have mentioned, I am president of Dmytryka Jacobs 
Engineers (DJE). We specialize in electrical and controls 
engineering and control system integration. The majority of our 
work is providing automation systems for municipal water and 
wastewater facilities.
    Our market area is Ohio, Michigan, including Genessee 
County, and Indiana. We are probably one of four or five 
companies in Ohio that provide these services in this 
particular industry. Based on our current workload and backlog, 
I believe we are the largest water and wastewater systems 
integrator in Ohio.
    My partner and I formed DJE in June 1994, some 14\1/2\ 
years ago. It started as just the two of us. We came within 
about 3 weeks that first 6 months of closing the doors because 
of lack of work when, the last day of the year, we landed two 
large jobs, large by our standards at the time. That got us 
going for good.
    If I remember correctly, our first 6 months, we may have 
grossed $18,000 as a company, and at first full year, we were 
up to about $240,000.
    Today, we are 18 employees strong, 11 of them degreed 
engineers all from the University of Toledo. Six of those are 
registered professional engineers in the State of Ohio.
    Through our first 5 or 6 years, we hired about 8 new 
employees--mostly degreed engineers--to meet our needs. All of 
these hires were people we previously knew, either from having 
worked with them in past lives or through personal friendships. 
This method of recruiting is not uncommon among small 
businesses.
    I was at a meeting last night with five other small 
business owners discussing issues that we, as small business 
owners, face every day. When the issue of recruiting potential 
new hires came up, I was and wasn't surprised in their method 
of recruiting. That being the same as ours--known 
acquaintances.
    Somewhere around 2001, we developed an informal 
relationship with the University of Toledo's College of 
Engineering. I happen to have gone to high school, college, and 
did graduate work with one of the engineering technology 
department's professors. When we needed some help, I would give 
him a call, let him know the kind of student we were looking to 
hire as an intern, and then he would talk to a couple of the 
professors and give our name out to the students.
    After a positive interview, we would make the student an 
offer and a duration commitment, with the understanding that 
the commitment could be extended if things continued to work in 
both favors. Our plan was to grow from within, training these 
students in the way we needed to use their skills and then 
continue to keep them as ongoing engineers.
    Our plan has been successful. Six of the seven students we 
hired in this manner are still with us today, four as degreed 
engineers, two are due to graduate this December. The lone 
exception decided to switch from engineering to business.
    We have made offers to both of the soon-to-be graduates. 
One has accepted. The other is still considering his options.
    Our hiring of college students as interns has been made 
easier by the use of our Ohio's Third Frontier Internship 
Program. This program reimburses us a portion of the salary we 
pay these college student interns. With our practice of keeping 
these students on staff as young engineers, the Third Frontier 
Internship Program has helped both us and the students.
    Three and a half years ago, we were at a crossroads. We had 
about 12 or 13 employees. And because of the type of business 
we are in, things were starting to get tough. We felt we either 
needed to expand, maybe up to about 20 employees, or contract 
to about 8. My partner and I decided that we would expand.
    We began the process of finding a larger facility, bidding 
larger projects, and hiring more technical people. We built a 
new facility adjacent to UT's health science campus, which we 
moved into a year ago April; bid projects more aggressively and 
received the work; and hired several more people, bringing our 
current total to the 18, as I mentioned before.
    Our plan for growth has succeeded maybe too well. We 
currently have an 18-month backlog of work and need to hire two 
or three engineers to help us with this load. Our supply of 
known acquaintances appears to be exhausted.
    [Laughter.]
    Can't steal anymore. The interns, soon-to-be engineers will 
help, but we now need experienced people that can hit the floor 
running. My partner and I are currently discussing the options 
available to us, one of which includes the possible use of The 
Source, the Lucas County's one-stop.
    From the news reports about the economy, we may appear to 
be an exception. However, several engineering friends of mine 
say they are also in the same position we are. Many people I 
mention this to say that what we are experiencing is a great 
problem to have. To me, it is still a problem. However, I am 
confident that with what we are doing, we will be able to get 
through it.
    Thank you.
    Senator Brown. Thank you, Mr. Dmytryka.
    Dr. Calzonetti.

   STATEMENT OF FRANK J. CALZONETTI, PH.D., VICE PRESIDENT, 
     RESEARCH & DEVELOPMENT, UNIVERSITY OF TOLEDO BUSINESS 
                     INCUBATOR, TOLEDO, OH

    Mr. Calzonetti. Thank you, Senator Brown, for having the 
hearing here at the UT Clean and Alternative Energy Incubator.
    I would also like to thank the support that Jessie and 
Chris provided to us in smoothing out this, and also to Diane 
Miller, who did a lot of work here. I would also like to thank 
all of you elected officials and others who have come here to 
participate in this very important event.
    Decades ago, Midwestern U.S. cities led the world in 
innovation and industrial might. Automobiles, steel, glass, and 
other manufactured goods were sold throughout the world, and 
our cities attracted new workers eager to join the growing 
middle class.
    This comparative advantage once held by these cities was 
largely lost as businesses moved or expanded operations first 
in the South and then overseas. Automation replaced some jobs, 
and new entrants into the marketplace, such as Asian automobile 
manufacturers, offered products in demand by American 
consumers.
    In recent decades, these Midwestern cities, along with 
their State governments, have been struggling to identify new 
pathways to rejuvenate their economies. For instance, according 
to the Milken Institute findings of top-performing cities of 
2007, not one Midwestern city was among the top 25 ranked 
performing cities in the Nation. And according to the Brookings 
Institution's Metropolitan Policy Program 2007 study on the 
economic conditions of cities, only one Ohio city, Columbus, 
was ranked among the top 200. It was ranked 122. Toledo was 
ranked 261.
    Why can't the economies of these cities be revitalized? It 
has been shown in studies that changing a development 
trajectory into a future economy is often a difficult task. The 
tendency for people in these communities is to focus on 
restoring the previous industry that brought jobs and 
prosperity in the past.
    But Toledo and other Midwestern cities are working to move 
in a different direction and to utilize the talents, skills, 
and infrastructure that built our earlier economy into a new 
economy that is directed to rapidly expanding industries that 
are steeped in science and technology and grounded by our 
research universities.
    Our view is not ``rust to bust,'' as some of you may have 
seen in Richard Longworth's 2008 book on the U.S. Midwest, but 
rather ``rust to renewables'' is a phrase coined by Solar 
Fields CEO Norm Johnston, who graduated from this Clean and 
Alternative Energy Incubator and now has his company located in 
nearby Perrysburg.
    Toledo is in the early stages of building a new advanced 
renewable energy economy that is extending in a new direction 
the economy of our recent past. Toledo is still known by many 
as the ``glass city'' that once led the world in innovations 
and manufacturing in glass.
    Driven by the energy of talented entrepreneurs and creative 
inventors, Toledo brought forth many new inventions that made 
Toledo glass companies world leaders. For instance, the 
automated glass bottling machine was invented here in Toledo by 
Michael Owens, and this has been called the most significant 
invention in glass for over 2,000 years.
    We have taken a good, hard look at what is driving new 
economies and are putting it into practice in Toledo. The 
driver is research and development, which is translated into 
innovations. Entrepreneurship, cluster development, and leading 
positions in growing markets are also of vital importance.
    We understand the important role of the universities in 
this process as a primary source of discoveries, talent, and 
opportunities that can support innovation-based economies. Our 
university has focused our attention in areas where it has 
particular faculty strengths that supplement regional assets 
that are also likely to emerge as important in our global 
economy. Thus, we have focused resources on building world-
class programs in advanced renewable energy and in the 
environment. In particular, we have focused on building pre-
eminent programs in solar energy.
    Entrepreneurship is needed to transition discoveries into 
the marketplace, either through the establishment of new 
enterprises or through the development of new initiatives 
within existing firms. Toledo has a history of entrepreneurship 
in glass, which continues today in our contemporary solar 
energy entrepreneurs.
    Research does show that knowledge is still localized and 
grows through various mechanisms of knowledge transfer, despite 
the availability of information being transferred throughout 
the globe on the Internet. Thus, a clustering of sources of 
innovation--such as research university, Government labs, 
industry labs--along with entrepreneurs, existing business 
enterprises, supporting government organizations and agencies, 
providers of services help to provide a region with leadership 
in technological areas that drive competitive advantage and 
workforce development around clusters needs.
    Toledo has been well positioned to take leadership in solar 
energy. One of the first entrepreneurs to act upon the business 
opportunities in solar energy came from Toledo, Dr. Harold 
McMaster. In 1984, McMaster formed Glasstech Solar to produce 
solar cells by coating glass with thin layers of chemicals. 
This research led to thin films based upon cadmium telluride in 
Toledo as a new company, Solar Cells, Inc., was formed.
    In 1999, True North Partners renamed the company First 
Solar as they purchased the controlling interest, You were just 
at First Solar day before yesterday.
    The University of Toledo also took early steps to support 
the development of this new industry. As McMaster and his 
colleagues at Glasstech advanced their technology, they sought 
out the assistance from the University of Toledo.
    In 1987, the University of Toledo hired Dr. Al Compaan, 
back there in the third row, to come in and work on advancing 
this technology. Under his direction, the university, with 
McMaster's company as collaborator, won State of Ohio grants 
and also some Federal grants to address processing issues in 
thin film solar cell development. In 2001, the university made 
a conscious decision to put major resources into building 
programs of excellence in solar energy.
    Also, in 2002, the university took a leadership position to 
develop a cluster around this technology with the help of the 
National Science Foundation's Partnership for Innovation 
program. We called this the Northwest Ohio Partnership on 
Alternative Energy Systems. This project provided funding to 
northwest Ohio to become a leader in alternative research, 
manufacturing, and use.
    We determined that there would be tremendous growth in the 
renewable energy industry in the future, and we wanted to be 
out in front of this wave. Our choice turned out to be a good 
one, and solar energy is booming throughout the world. 
According to McKinsey & Company, just this past summer, global 
installed solar capacity is to be 20 to 40 times its current 
level in 2020.
    The University of Toledo's Clean and Alternative Energy 
Incubator was opened in January 2005, and this facility is now 
a focal point for linking university research to the formation 
of new companies, as well as providing a place for meetings and 
workshops in solar energy and other renewable energy 
technologies.
    Northwest Ohio has a strong foothold as a leader in solar 
energy. At UT, we won a State Wright Center for Photovoltaics 
Innovation and Commercialization award for $18.6 million, and 
we were just awarded another $8.5 million from the State of 
Ohio for the Ohio Research Scholars program to attract four new 
faculty members here. Both of those proposals were led by 
Professor Robert Collins.
    In addition, our local industry sector is rapidly expanding 
and diversifying. First Solar, the company that grew from 
Harold McMaster's Solar Cells, Inc., and was actually developed 
in the laboratories at the University of Toledo, now has an 
employment of 700, and it will be increased by about another 
134 new jobs as this expansion takes place.
    Solar Fields, again, they came out of this incubator, 
formed a joint venture agreement with Q-Cells, the world's 
largest solar cell manufacturer, to form Calypso USA.
    Xunlight, another company that graduated from our 
incubator--and the CEO, Xunming Den, is there in the third 
row--has more than 70 employees now at its Nebraska Avenue 
location right here in Toledo.
    So we are making progress in positioning Toledo as the 
place to go for advanced research and manufacturing on solar 
cells. We have more to do to build this economy.
    Our task ahead is to build a new workforce for this new 
economy. Toledo has much talent and expertise to offer, and we 
see opportunities for solar installers, solar cell 
manufacturing plant workers, technicians, scientists, 
engineers, and a host of other opportunities upstream and 
downstream in this industry.
    Toledo has faced problems as its economy is moving through 
this transition, but we are optimistic that we have the 
talented entrepreneurs, the research universities, the 
supporting infrastructure to make Toledo the national leader in 
solar and other advanced renewable technologies.
    [The prepared statement of Mr. Calzonetti follows:]
            Prepared Statement of Frank J. Calzonetti, Ph.D.
    Decades ago, Midwestern U.S. cities led the world in innovation and 
industrial might. Automobiles, glass, steel, and other manufactured 
goods were sold throughout the world and the cities attracted new 
workers eager to join a growing middle class. The comparative advantage 
once held by these cities was largely lost as businesses moved or 
expanded operations in lower cost, or less unionized, locations first 
in the south then overseas. In addition, new entrants into the 
marketplace, such as Asian automotive companies, offered products in 
demand by American consumers, such as inexpensive and fuel efficient 
vehicles, resulting in a loss of market share and related employment. 
Job losses also occurred as manufacturing plants automated in order to 
increase efficiency and enhance quality. These factors, among others, 
mean that high paying, secure jobs in manufacturing could no longer be 
the primary pathway to support families in most Midwestern cities. This 
led people to abandon their Midwestern roots to follow jobs to lower 
cost positions in other States, resulting in a significant population 
decline across the Midwest.
    In recent decades, these cities, along with their State 
governments, have been struggling to identify new pathways to provide 
renewed job growth, firm formation, investment, and a reversal of 
population decline. For instance, in the Milken Institute's listing of 
the top performing cities of 2007, not one Midwestern city was among 
the top 25 ranked performing cities in the Nation. According to the 
Brooking Institution's Metropolitan Policy Program (2007) study of the 
economic conditions of 302 U.S. cities, only one Ohio city, Columbus, 
was ranked among the top 200 (#122). Other Ohio cities were ranked in 
the following order: Akron (#217); Canton (#246); Cincinnati (#263); 
Dayton (#283); Mansfield (#257); Springfield (#262); Toledo (#261); 
Youngstown (#282); and Warren (#294).
    Despite efforts by State and city governments, most Midwest cities 
are still in a state of distress. Why can't the economies of these 
cities be revitalized? It has been shown that changing a development 
trajectory into a future economy is a difficult task. The tendency is 
to work to restore and retain the previous industry that brought jobs 
and prosperity in the past. As noted by many students of this 
phenomenon (e.g., Boschma and Lambooy; Ashein and Isaken), leaders in 
``declining'' manufacturing regions must redirect thinking away from 
the view that competing on the basis of low-cost manufacturing or 
attracting new manufacturing operations will return the area to 
previous greatness. Toledo and other Midwestern cities are working to 
move in a different direction to utilize the talents, skills, and 
infrastructure that built our earlier economy into a new economy that 
is directed to rapidly expanding industries that are steeped in science 
and technology grounded by our research universities. Our view is not 
``rust to bust,'' as noted in Richard Longworth's 2008 book on the U.S. 
Midwest Caught in the Middle, but rather ``rust to renewables,'' a 
phrase coined by Solar Fields CEO Norm Johnston, a Perrysburg Ohio 
company which graduated from the University of Toledo Clean and 
Alternative Energy Incubator.
    Toledo is in the early stages of building a new advanced renewable 
energy economy that is extending in a new direction the economy of our 
recent past. Toledo, still known by many as the ``glass city,'' once 
led the world in innovations and manufacturing in glass. Driven by the 
energy of talented entrepreneurs and creative inventors, Toledo brought 
forth many new inventions that made Toledo's glass companies world 
leaders. For instance, the automated glass bottling machine, created in 
Toledo by Michael Owens, has been called the most significant invention 
in glass for over 2,000 years.
    We have taken a hard look at what is driving new economies and are 
putting it into practice in Toledo. The driver is research and 
development which is translated into innovations, entrepreneurship, 
cluster development, and leading positions in growing markets. First, 
innovation is driving many regional economies throughout the world. We 
understand the important role of university research as a primary 
source of discoveries, talent, and opportunities that can support 
innovation-based economies. The University of Toledo is still emerging 
as a major research university so it is unrealistic for a research 
budget of $60 million a year to transform a $24 billion Toledo economy. 
The University has focused its attention in areas where it has 
particular faculty strengths that supplement regional assets that are 
also likely to emerge as important to our global economy. Thus, we have 
focused resources on building world-class programs in advanced 
renewable energy and the environment. In particular, we have focused on 
building preeminent programs in solar energy.
    Entrepreneurship is needed to transition discoveries into the 
marketplace either through the establishment of new enterprises or 
through the development of new initiatives within existing firms. 
Toledo has a history of entrepreneurship in glass which continues today 
with contemporary solar energy entrepreneurs. Although 
telecommunication technology provides a free flow of information 
throughout the globe, research shows that knowledge is still localized 
and grows through various mechanisms of knowledge transfer. Thus, a 
clustering of sources of innovation (e.g., research universities, 
governmental and industry R&D laboratories), along with entrepreneurs, 
existing business enterprises, supportive government organizations and 
agencies, service providers, and other supportive organizations help to 
provide a region with leadership in technological areas that drive 
competitive advantage and workforce development around the clusters' 
needs.
    Toledo was well positioned for leadership in solar energy. Solar 
energy, particularly thin-film photovoltaics (light and electricity), 
builds upon Toledo's glass industry and early entrepreneurial moves 
into solar energy made over 20 years ago. Photovoltaic (PV) cells, or 
solar cells are devices that are capable of generating electrical 
energy under exposure to light. It was not until the mid-twentieth 
century that the first solar cell was patented at Bell Labs in New 
Jersey and not long after, commercial activity began and solar cells 
found use in space applications. As PV became a critical source of 
power for satellites and other space craft, the first oil shock of the 
early 1970s spurred interest in the development of terrestrial 
applications of PV technology. One of the first entrepreneurs to 
identify and act upon this opportunity was Toledoan Dr. Harold 
McMaster. McMaster, with his partner Norman Nitschke (another prolific 
Toledo inventor) formed Glasstech, Inc. in the Toledo neighboring city 
of Perrysburg. They constructed a new machine for ``tempering'' glass 
that increased its strength and crumbled instead of breaking into 
shards and Glasstech grew into a leader in the manufacture of furnaces 
for tempered glass. In 1984, McMaster formed Glasstech Solar, Inc to 
produce efficient solar cells by coating glass with thin layers of 
chemicals. Glasstech initially worked on thin film silicon technology 
at its Wheatridge, Colorado location. Their research led to thin films 
based on cadmium telluride in Toledo as the new company Solar Cells 
Inc. was formed. In 1999, True North Partners LLC, renamed the company 
First Solar after they purchased a controlling interest.
    The University of Toledo also took early steps for support of the 
development of this new industry. As McMaster and his colleagues at 
Glasstech advanced their technology, they sought out assistance from 
The University of Toledo. In 1987, The University of Toledo hired Dr. 
Alvin Compaan into the Department of Physics and Astronomy. Under 
Compaan's direction, the University, with McMaster's company as a 
collaborator, won two State of Ohio Edison awards to address processing 
issues in thin film solar cell development. These awards were the first 
of a long series of continuous funding from State and Federal agencies 
to support solar energy research and development in Toledo. In 2001, 
the University made a decision to place solar energy research as a top 
institutional priority by placing additional positions, supporting new 
laboratories, and seeking congressional assistance for projects in this 
area.
    The University, in 2002, took a leadership position to develop a 
cluster around this technology with the National Science Foundation 
funded ``Northwest Ohio Partnership on Alternative Energy Systems.'' 
This project provided support to seed new research projects, explored 
the opening of an alternative energy incubator, and established new 
partnerships with industry and other organizations to make northwest 
Ohio a leader in alternative energy research, manufacturing, and use. 
We determined that there would be a tremendous growth in the renewable 
energy industry in the future and we wanted to be in front of this 
wave. Our choice turned out to be a good one and solar energy is 
booming throughout the world, and according to McKinsey & Company (June 
2008) global installed solar capacity is to be 20 to 40 times its 
current level. The University of Toledo's Clean and Alternative Energy 
Incubator was opened in January 2005, and this facility is now a focal 
point for linking university research to the formation of new 
companies, as well as providing a place for meetings and workshops on 
solar and other renewable energy technologies.
    Northwest Ohio has a strong foothold as a leader in solar energy. 
At UT, we have the $18.6 million Wright Center for Photovoltaics 
Innovation and Commercialization, we have just been awarded another 
$8.5 million from the State of Ohio (both proposals led by Professor 
Robert Collins) to hire four additional solar energy faculty members. 
In addition, our local industry sector is rapidly expanding and 
diversifying. First Solar, the company that grew from Harold McMaster's 
Solar Cells Inc. and was developed in laboratories at The University of 
Toledo, is now the largest solar cell producing company in the United 
States with an output of 307 MW in 2007 and employment of 700, which 
will be increased by another 134 new jobs with a new expansion at its 
Perrysburg location. Two additional solar cell companies recently 
graduated from the Clean and Alternative Energy Incubator. Solar Fields 
formed a joint venture agreement with Q-Cells, the world's largest 
solar cell manufacturer, to form Calyxo USA; Xunlight, which only 
graduated from the incubator in August 2007, now has more than 70 
employees at its new Toledo location.
    We are making progress positioning Toledo as the place to go for 
advanced research and manufacturing on solar cells. We have more to do 
to build our economy. One task ahead is to build a new workforce for 
our new economy. Toledo has much talent and expertise to offer and we 
see opportunities for solar installers, solar cell manufacturing plant 
workers, technicians, scientists, engineers, and a host of other 
opportunities in upstream and downstream industries. Toledo has faced 
problems as its economy is moving through this transition, but we are 
optimistic that we have the talented entrepreneurs, the research 
universities, the supporting infrastructure, and indeed the workforce 
to make Toledo the national leader in solar and other advanced 
renewable technologies.

    Senator Brown. Thank you, Dr. Calzonetti.
    Thank you all for both your realism and your optimism and I 
appreciate that from all four of you in the challenges you 
bring.
    Dr. Helper, talk to us more about MEP, about the 
Manufacturing Extension Partnership. You talked about how that 
Government investment, which you would like to triple, how 
every year it is cut and we restore the cuts but try to move 
forward on it, how it pays for itself.
    Ms. Helper. For a typical MEP program, you come in and 
increase the program's productivity by 20 percent. It can do 
that by maybe training some workers. In the case of this 
Colonial Machine, we were able to help it provide some work. 
There was some idle capacity. They were able to fill it with 
work.
    You can get programs where workers, these workers, for 
instance, at American Standard have 20 years of experience. 
Management typically today doesn't tap into that, they are so 
busy trying to keep wages low that they don't understand either 
what their workers are doing or what the workers can do to make 
things better.
    One of the things that the MEP has done a little bit and I 
think can do a lot more of is encouraging employee involvement, 
encouraging a kind of longer term perspective. Similarly, there 
are a lot of these big firms who have small suppliers. 
Increasingly, they are outsourcing to small suppliers.
    But the small suppliers don't have the capability to think 
about, ``I need to be planning long-term for investments that 
will improve my quality, will get me into new lines of 
business, will help me develop new products.''
    All of these things can have a really important impact on 
the bottom line not just for the firms, but also for the 
workers. And so, by providing these firms, allowing them to 
continue in business and allowing their workers to continue to 
have jobs, they pay taxes more than paying for the MEP 
services.
    I think one of the things that people often say is, ``well, 
we should just have tax breaks.'' But one of the things that 
the MEP does or the theory behind the tax break is, OK, we are 
going to lower the price of getting manufacturing if they do 
something we want them to do. But in the case particularly of 
these small businesses, it is really tough to run a small 
business. You have got to do a lot of stuff.
    You are the R&D manager. You are the marketing manager. You 
are changing light bulbs, fixing toilets, all this kind of 
stuff. It could be really hard to keep up with what is the 
latest innovation in production techniques. It can be hard for 
you to even know what the improvement path is, what consultants 
to hire.
    MEP can--and the Michigan Manufacturing Technology Center 
actually does a great job of this, of kind of laying out an 
improvement path for companies as for making the integrated 
changes that are necessary to really bring a company into this 
knowledge economy.
    Senator Brown. Is there sort of an upper limit or a limit 
on the size of a company that MEP works with? If it is more 
than 200 or 300 employees, MEP is much less likely to be 
involved? Are there any rules that way, or can anybody ask them 
to come in, any manufacturer in Cleveland or Toledo or Tiffin 
or anywhere?
    Ms. Helper. It is interesting. And this, I think, is some 
of the problem with the program as currently structured. The 
mandate is to help small business. But because the subsidy has 
been cut so much, the small business often has trouble meeting, 
in some sense, the co-pays. And so, increasingly, the MEPs have 
been looking, providing training for large companies because 
they can actually keep the budget of the MEP balanced.
    The mission is supposedly to help the smaller companies, 
but in practice, to keep themselves afloat, they have been 
looking at larger companies as well.
    Senator Brown. If MEP comes to a company that is looking 
for assistance on more energy efficiency in the production 
process or something with employee training, implicit in MEP 
coming in, the company will have to spend significant dollars 
to--even though it might save money--significant dollars to 
comply with that.
    Smaller companies are just less likely, less able to do 
that. Is that what you are talking about when you said the co-
pay?
    Ms. Helper. Yes. There are two issues with small companies 
using MEP as currently structured. The first one is that MEP 
basically gets a subsidy that covers their space and covers 
their marketing expenses. But the company that came up with 
this paid the actual hourly salary of the workers, the 
engineers at MEP that designed this thing.
    You have got to come up with the capital to actually pay 
for the expenses of delivering your product. So that is the 
first issue--just coming up with that money up front often.
    The second issue is figuring out what you need, and that 
one of the things in some of my research that I have seen and 
some of the MEPs, both the strength and the weakness of the MEP 
program is quite decentralized. And so, some of them have 
responded to the continuing uncertainty about the budget by 
scaling back and having shorter programs, more kind of 1-day 
things.
    But, it takes an overview of where you are going to be able 
to tap into that. A big company that knows, ``We have some 
needs. Here is something that can train my workers in the 
latest C&CE'' or ``here is how you do a supplier development 
program.'' They can tap into that more easily than a small 
business owner that is trying to figure out ``how do I make my 
payroll tomorrow?''
    This is really, I think, an area where the MMTC excels in 
offering these 2-day kind of overview diagnostic that they 
subsidize, is my understanding. I think they scramble to find 
the money to fund it, but I think it is really important to be 
able to get small business to tap in.
    Senator Brown. So it is your recommendation that MEP 
funding be tripled in order to obviate the need for the co-pay 
or to extend the reach of MEP into more businesses or both?
    Ms. Helper. Both. I mean, I think some co-pay is important. 
You need to have some skin in the game, but I think the level 
of the co-pay now is a barrier.
    That is the first problem, and then it also means that MEP 
has trouble or many of the individual centers have trouble 
coming up with the ability to fund a kind of overview or 
diagnostic for the firm. But then the firm could figure out and 
could see, ``These courses would actually be valuable to me.''
    It may seem like there is free training out there. Of 
course, it would be overprescribed. There are a lot of MEPs 
that have trouble actually finding firms that know how to take 
advantage of the services. So there is a kind of a market 
making that the MEP budget and a kind of national attention to 
some of these issues can help with.
    Senator Brown. Thank you, Dr. Helper.
    Mr. Kildee, you mentioned Youngstown. Not that I am more 
interested in Youngstown than I am Flint, but I am more 
interested in Youngstown than I am Flint, for many reasons. But 
we appreciate the work that you have done in a real challenging 
situation in Genessee County.
    In Youngstown's population, you said Flint went from 
197,000 to 120,000. Youngstown only got up to 160,000, and it 
is down to half its size. It actually had a bigger population 
percentage drop, as Detroit has, as Cleveland has, than even 
Flint has.
    But Youngstown, there is an incubator project very 
different from this one. It is not aimed at alternative energy. 
It is not university based. But it is high-tech based. It is 4 
or 5 years old. Do you guys know that? Not much older than 
that.
    They now have a whole bunch of different small businesses, 
about 250 employees. The average age is 28, and the average 
salary is $58,000. They just brought, and I bring that up 
partly to brag about them, but mostly to ask you a question 
about sort of where they may be going on this and where we 
might be able to go on this.
    They have just got a new business that is coming from San 
Francisco that they think has real potential job growth. The 
movement from San Francisco to Youngstown is mostly--they had 
an Ohio connection somehow. But the movement is not somebody 
coming back to be near family. It is nothing like that. It is 
because the time of commute and the cost of housing and the 
cost of living generally, but particularly housing is so 
starkly different, obviously, between Youngstown and San 
Francisco.
    Is that a model that we can pursue? I mean, in some sense, 
it sounds like a race to the bottom, but it really isn't 
because it is still good wages here. It is just our homes cost 
less and property and all that. Is there a way to use that 
model in places like Flint and places like Toledo that we begin 
to bring businesses back here because of lifestyle, because of 
an easier place to live than many of these cities that have had 
explosive growth that Dr. Calzonetti talked about?
    Mr. Kildee. I think it can be. Cities like Youngstown, 
Flint, other places that are similarly situated do have some 
natural advantages. The size, at least the historical 
efficiency of those cities is still in place. Those cities were 
built and worked very well for a long time.
    I think the challenge--as I mentioned earlier, in order to 
attract the kind of employers that you mentioned coming from 
the West or the South or new startups, in order to attract 
entrepreneurs, we really have to build the cities that people 
want to live in. They don't have to be big cities.
    Flint, for example. We are now seeing a rebirth in the 
downtown of Flint because we are building a different kind of 
downtown, relying on the fact that we have a branch of the 
University of Michigan, which, by the way, is an actual 
university----
    [Laughter.]
    In Ohio, people sometimes challenge you about that. We have 
a branch of the University of Michigan right in our downtown. 
Youngstown has, of course, the University----
    Senator Brown. Does U of M have several branches? I didn't 
know that.
    Mr. Kildee. Three.
    Senator Brown. Three. Where else?
    Mr. Kildee. Ann Arbor, which we call the south campus--the 
University of Michigan-Flint, and Dearborn.
    Senator Brown. Dearborn.
    Mr. Kildee. Which is in----
    Senator Brown. That is really the south campus.
    Mr. Kildee. Right, right. I think, to answer your question 
specifically, yes, there is great opportunity for medium-sized 
cities, but we have to rethink public investment in these 
cities. The Federal Government has a stake in this, and money 
that comes from the Federal Government to the States or from 
the States to the local communities ought not be neutral on the 
question of cities.
    We ought not treat public infrastructure development that 
expands the size, the footprint, and then the cost of 
government with a more rational use of public investment to 
rebuild streets or parking decks or rebuild historic structures 
in our downtowns, in our cities where we have already spent, 
like I said before, literally billions of dollars. Investment 
ought not be neutral.
    Interestingly enough, and I know it will probably never get 
to a point where public policy would support this, but the cost 
of developing new public infrastructure in a suburban or 
currently rural community, in order to attract jobs and to 
build an economy, is far greater than the cost that it would 
take to underwrite the operating loss for a short period of 
time for a pharmacy, a grocery store, and the little amenities 
that these downtowns need in order to complete their 
attractiveness to new, young, thoughtful, and not-so-young, 
knowledge-oriented workers.
    The kind of public investment that requires us to build a 
multimillion dollar exchange in suburbia is actually costing us 
a lot of money because we have to maintain that. We have to 
also maintain the public infrastructure that we built 50 years 
ago and left behind.
    To me, it is not just a matter of better use or better 
stewardship of public dollars when we invest, but actually 
thinking about the implications for those investments. In order 
to make cities like Youngstown, Flint, Gary, IN, attractive 
again, we really do need to rethink our public investment 
strategy. And I think urban land is an opportunity that can't 
be overlooked.
    Senator Brown. In a sort of a macro-political sense, how do 
we do that?
    Mr. Kildee. There is a lot of State policy that needs to be 
changed. That is what we did in Michigan, and I really didn't 
get into the detail of this because if we start talking about 
tax collection systems, we will clear the room.
    [Laughter.]
    But we changed our tax collection system in Michigan based 
on our model. We re-engineered that system from a liquidation 
approach, which meant that when we had uncollected taxes, we 
would just simply sell tax liens to private investors and 
auction urban property to people on the Internet. That 
liquidation model is what many mortgage lenders are using right 
now in clearing their books of foreclosed assets. I worry about 
that as well.
    We decided to approach urban land, particularly tax 
foreclosed urban land, with an investment strategy, treating 
this land as if it has real value. It is only by engaging that 
kind of a system and appreciating the property that we can get 
for very little money can actually be made valuable again if we 
treat it that way, that is going to require some State policy 
changes.
    Finally, for the first time ever, Federal law, since July, 
now actually uses the term ``land bank.'' The $3.92 billion 
that is being distributed throughout the United States right 
now for communities to purchase mortgage-foreclosed properties 
supports the creation of land banks. And I have been working 
with your county treasurer, Wade Kapszukiewicz, right here in 
Lucas County to pursue the creation of a land bank right here.
    Toledo is in a much better condition than Flint. This is 
the time to do this. You might not feel like it is. But come to 
Flint, and I will show you. This is the time when a community 
really should embrace its urban land assets, not when you get 
to a point when you are in a Flint, MI, or a Youngstown 
condition, when you are really in the emergency room.
    It might not feel like it for some of you that are doing 
the hard work here in Toledo, but you are in a much, much 
better position to minimize any negative effects of what has 
been a failed American urban land strategy for the last 30 or 
40 years, if you act now.
    Senator Brown. Thank you.
    Wade has been working with Cuyahoga County, Jim Rokakis, 
also on land bank. I spoke with him a few days ago, and the 
governor is starting to focus on this, too. I mean, I think 
there is a real movement in Ohio to in part mimic what you are 
doing, in part to strike up in some new directions, too.
    Mr. Dmytryka, thank you. You have obviously thought a lot 
about attracting people into science, technology, engineering, 
especially math. I am sure that you are focused on your own 
business, and your involvement with the chamber has given you 
and the Workforce Investment Agency generally has given you 
also a broader picture, too.
    What do we do in this country to attract particularly 
minority and women engineers, but just engineers generally? 
Where are we falling down? What can society do? What can the 
Federal Government do? What can State governments do to make it 
easier for your business to be able to find those engineers 
outside of people that you know who know people?
    Mr. Dmytryka. I think that planning for the future, our 
company is to the point where the people that we are looking 
for aren't necessarily today the ones coming out of school. 
Yes, we are still taking them because we still want to grow 
from within. But our model of growth that we implemented back 
several years ago, we now need some of those middle and upper 
level people.
    To me, one of the things that I have been involved in, and 
I think anybody in my position could rather easily be involved 
in, is I go back to the grade school that my kids went to and 
do a project with the 7th grade. And it takes me an hour once a 
week for the second semester, and it is a hands-on project 
offered by the Society of Automotive Engineers.
    One year, we will do gliders, and one year, we will do 
gears on a little electric model car. And we put them in teams 
of three or four. Because now I don't know any of them--my 
boys, my youngest one has been out of that school for 6 years 
now. I still go back because I enjoy it, but I don't know them. 
So we just put them in groups and make them work together, 
whether they like their partners or not. That doesn't become my 
problem. It becomes their problem.
    But the idea of working together in a team environment, it 
is the first time they have probably ever done that, trying to 
learn something about a glider and why it flies. You know, 
doing some research, even if it is getting on the Internet and 
finding machines that fly or machines with gears and how one 
big gear is going to turn smaller than a little gear. But the 
one has more power than the other, trying to get them to that 
idea.
    That is something I think anybody can do to that point. Now 
I don't know if it is necessarily anything that can come from 
Washington or Columbus or downtown Toledo. It is on the 
individual basis. And by giving that time back, I am hoping 
that out of 28 kids, if one of them gets into engineering, then 
30 years from now, somebody sitting in my position is going to 
have somebody who is going to be able to help them out.
    Senator Brown. So are engineers around the country doing 
things like that in the schools? Electrical engineers, 
mechanical engineers, industrial engineers, do you know if that 
is going on much?
    Mr. Dmytryka. I can't believe I am the only one, OK? I 
might be good, but I ain't that good.
    [Laughter.]
    I can't believe I am the only one. The program comes out 
from SAE, which is a national organization.
    Senator Brown. So likely they are promoting that in other 
places in the country and the State?
    Mr. Dmytryka. Yes. Yes, sir.
    Senator Brown. That is an interesting thought. Because I 
know that Chancellor Fingerhut and the governor are really 
tuned into what we do. And one of the things I mentioned 
earlier, I do these roundtables around the State where I have 
done probably 120 of them, sitting around with 15 or 20 people 
and asking questions about their communities.
    What has astounded me is how many business people, whether 
they are employers, whether their business is social service, 
hospitals, whatever, saying they can't find enough employees 
that either can pass the drug test or qualify to--and sometimes 
it is engineering. Sometimes it is way less skilled than that, 
and it is sort of all across the board in a lot of ways.
    A lot of it is the building trades, that we don't have 
enough people we are training in the building trades. And very 
good jobs with managing your own pension so they are going to 
have pensions when they retire and all that those middle class 
jobs mean.
    So thank you for your thoughts on that.
    Mr. Dmytryka. Thank you, sir.
    Senator Brown. Dr. Calzonetti, thank you for introducing 
two great entrepreneurs that are providing jobs in this 
community. It all started at University of Toledo. We 
particularly like that.
    This is a story that the governor and I were talking about 
in Perrysburg how we tell this story about Xunlight and First 
Solar and wind turbine research and solar, all the things that 
you are doing here. We are telling the story. He tells it 
around the State. I tell it around the country, and it is 
pretty exciting.
    As a geographer, what role do you think that the Great 
Lakes can play in--I am going to go a little far afield from 
alternative energy, which is your real focus, I understand. But 
what role can the Great Lakes play in the kind of resurgence of 
Michigan and Ohio and other States that have been so productive 
and built this country and could build this country again?
    Mr. Calzonetti. Well, the Great Lakes obviously a 
tremendous resource, not just the largest fresh water source in 
the world, but----
    Senator Brown. I am not even a geographer, and I knew that.
    [Laughter.]
    Mr. Calzonetti. [continuing.] As a source of energy. You 
may have seen the article in yesterday's Washington Post about 
the wind potential in the Great Lakes. I mean, as a source of 
energy from wind, it can be enormous. And so, there is the 
energy potential for producing wind energy.
    Senator Brown. Someone at the University of Toledo told me 
that one of the advantages the Great Lakes has in wind is that 
the blades, the most efficient blades are now 250, 300 feet 
long and you can really only move them on water?
    Mr. Calzonetti. That is right.
    Senator Brown. That is another advantage we have.
    Mr. Calzonetti. Exactly right. So, when you move to larger 
systems, obviously, offshore makes a lot of sense. Cleveland is 
making a big push, as you know, in moving forward with offshore 
wind development.
    If you look at the load centers, where the load centers are 
throughout the country, you will find that the load centers are 
mostly next to coastal areas. The Great Lakes have a lot of 
resource there.
    We, at the University of Toledo, have the Lake Erie 
Research Center. We are very interested in the health of the 
Great Lakes, what it means for drinking, bathing, and 
recreation and fishing, and concerned about the dead zone 
issues and other issues that affect the health of the Great 
Lakes. Of course, there is a lot of fresh water there that 
people are looking at throughout the country, and so it is good 
for us to protect that as well.
    But it is a key resource that also supports transportation. 
If you go back to the history of Toledo, it was really built 
around its transportation assets, and it was a place where 
people can come in from the Erie Canal, go across Lake Erie, 
and then they would have easy access to the West. And the lakes 
still are very important for transportation, as you mentioned, 
with the wind turbine blades, and also the potential to bring 
in freight from throughout the world and also taking advantage 
of multimodal opportunities.
    Senator Brown. Thank you.
    Let me ask a general question and any one of you can 
answer, you all don't have to answer this. I am going to ask 
you the question that I asked the other panel. What one or two 
things can Government do?
    You heard the first panel, and you heard Ms. Price's story 
and Mr. Goshe's story. Any one of you have an opinion on what 
Government can do for people who walk into the Lucas County 
one-stop agency and what role Government can play to help 
people more immediately?
    Do you have any thoughts on that? It is not an easy 
question.
    Mr. Kildee.
    Mr. Kildee. I can offer one thing. It doesn't relate 
directly to what they are addressing when they walk in, but I 
deal with a whole lot of folks--I have a foreclosure prevention 
program, and it is the same population that I am sure that are 
concerned about their job, they are concerned about losing 
their house.
    I find one common theme, and this is a huge one. It is the 
fact that many people are being bankrupted by the lack of 
access to affordable healthcare. I have prevented 2,300 
foreclosures in my county. And with very few exceptions, people 
that are coming in to see me have one of two conditions. First, 
they either do not have healthcare and that some awful 
condition has caused them to have to forego paying their 
mortgage or their taxes in order to take care of their health 
of their family, No. 1.
    Second, and this is sadly the case, that there is a level 
of illiteracy, functional illiteracy among a percentage of our 
population. The sad thing is, here, I am the county treasurer. 
I am the tax collector, looking to try to figure out a way to 
not foreclose on a family because they failed to pay their 
taxes, and in my view, the very government that is asking them 
for taxes failed to educate them properly in the first place 
and can't make a priority of healthcare the way we have made 
the priority of other things in this country.
    It is a big answer to a very direct question. But it is 
pretty hard, for me anyway, to avoid that glaring failure that 
I see affecting so many families.
    Senator Brown. Thank you.
    What is the one or two things that you would recommend that 
I can do, my office can do, the Senate, the House and the White 
House can do, that you would like to see? Do you want to start, 
Dr. Helper?
    Ms. Helper. I guess what I want to think about is a 
strategy that should underlie every Government policy and a 
couple questions to ask. One is, is it sustainable? Does it 
reduce the carbon footprint, or does it make things worse in 
terms of environment?
    The second thing is, is it going to promote operating or an 
economy that is based on cultivating the talents of all 
workers? So it would create a stable middle class that knows 
how to innovate, as opposed to competing on can we bribe rich 
people to bring their plant here at some great cost?
    So it seems like there are a bunch of policies that come 
under that, but for every bill that comes forward, think about 
those problems, those programs. Healthcare is obviously really 
important. I keep coming back to the MEP. It is a tiny program, 
but what it does is it links together.
    I think one of the problems with a lot of the programs we 
have is if you know how to do it, there is all kinds of stuff 
you can access to. There is training. There is this. There is 
that. But MEP has the possibility of being kind of a one-stop 
for business, and unite all that, so workers can actually 
advance, contribute, et cetera.
    Senator Brown. Mr. Kildee, anything you want to add?
    Mr. Kildee. Just actually to reiterate an earlier point, 
and that is to rethink the Federal role in public investment. 
The devolution of authority to the States and local communities 
to determine how to use Federal dollars I think in some ways 
has allowed the Federal Government to abdicate its 
responsibility for having priorities for the use of its money.
    Cities really do matter. Cities ought to be a Federal 
responsibility to a much greater extent than they have been in 
the recent period. And so, when it comes to transportation 
dollars, when it comes to support for higher education, for 
example, or K-12 education, recognizing that cities, but 
especially America's older, weak market cities have special 
challenges that ought to be recognized. And not out of the 
largess of the Federal Government should that become a 
priority, but in the self-interest of this Nation we have to 
reinvest in those cities.
    To prioritize Federal support in those old cities that 
built this country in the first place I think would be a step 
in the right direction.
    Senator Brown. Thank you.
    Mr. Dmytryka.
    Mr. Dmytryka. I would follow up on that. I think reading, 
writing, arithmetic, down at the bottom levels and working your 
way up. Definitely. Functional illiterates, they are there, and 
they don't really--they get in the workforce, and I don't 
know--in my industry, they wouldn't help.
    The other thing is to the difference between someone with a 
high-tech background and someone who wants to work in high 
tech, which is a distinct difference because not everybody is 
going to go to college, get a bachelor's, master's, or Ph.D. 
But an awful lot more people could be trained to work in the 
high-tech industries with some knowledge, but they are not 
going to get that knowledge unless they know how to read, 
write, and do arithmetic.
    So it is going back to that.
    Senator Brown. Dr. Calzonetti.
    Mr. Calzonetti. Yes, I would say that the world is rushing 
into clean energy, tremendous opportunities. Countries 
throughout the world and companies in those countries are 
making investments supported by their governments.
    The United States has been a leader in the development of 
the technology. For instance, solar cells came out of Bell Labs 
in 1954 first patented. Wind turbine technology, a lot of it 
was developed at NASA Glenn in the 1970s.
    Senator Brown. And in Sandusky, too.
    Mr. Calzonetti. And Sandusky, yes. At the Plum Brook 
facility.
    However, who picked up on this technology? We need to have 
a government that is going to make advanced energy a high 
priority, invest in this, and to keep the companies that are 
growing very well here, here.
    I just returned from China. I went over there, talked to 
them about what we are doing here. I was invited back. They 
want us to come back. They have 10 companies that want to meet 
with us about our technology to set up facilities in China. We 
need a government that is going to take a full assessment of 
the full cost of energy systems, the environmental cost of 
energy systems, as well as the cost of energy security.
    If you go back to, for instance, President Carter days, 
that was the first time that it was acknowledged that 
maintaining the supply lines from the Persian Gulf was a matter 
of U.S. economic security, and there are enormous costs for 
doing that. We have a lot of potential that would build 
technology right here in this country, and we need to have a 
new commitment to develop that technology.
    Senator Brown. Thank you. Thank you all. Dr. Calzonetti, 
Mr. Dmytryka, Mr. Kildee, and Dr. Helper, thank you.
    Anyone, including the first panel, that wants to submit any 
additional testimony, get it to us within 10 days. Thank you 
again.
    Thank you for being here, Ms. Hastings, and thank you 
again, Chris, very much for your work and, Jessie, for your 
work.
    John Ryan, my State director, is also here. Thank you, 
John, and all of you that joined us, thank you. Stay in touch 
with us. If you have thoughts or ideas that you want to share 
with us, certainly feel free to come forward and do that.
    The hearing is adjourned. I thank you very much for being 
here.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

                   Prepared Statement of Senator Enzi

    Thank you Senator Brown for holding this important field 
hearing today to address the needs of American workers and the 
role job training can play in strengthening and rebuilding our 
communities.
    I believe job training is critical to the success of our 
communities and Nation. Job training is important both to 
provide a skilled workforce to avoid closings and to assist 
workers who have become dislocated. That is why I helped author 
the reauthorization of the Workforce Investment Act (WIA) which 
creates a streamlined job training and employment system for 
our employers and workers. Unfortunately, the Workforce 
Investment Act (WIA) is 5 years overdue for reauthorization. 
The Senate passed a bipartisan WIA reauthorization bill in both 
the 108th and 109th Congress by unanimous consent. However, in 
this Congress a Senate reauthorization bill was not even 
introduced. Such inaction is unacceptable.
    Congress must renew and improve the Workforce Investment 
Act by building on its successes so that all Americans have 
access to education and training opportunities. The structure 
is already in place, we just need to refine the system to 
prepare our workers for the new careers of the 21st century. 
The fact is that we don't even know what the high wage, high 
demand, high skill careers will be in the next decade. The 
skills for today's jobs are not the skills needed for 
tomorrow's jobs--everyone must have the opportunity and access 
to training and education that will keep them successful in a 
rapidly changing work environment.
    We face many challenges today. Today, an estimated 85 
percent of jobs are classified as ``skilled'' jobs, compared to 
only 15 percent of jobs classified as ``skilled'' jobs in 1950. 
From 2004 to 2014 the numbers of jobs in the U.S. economy is 
expected to grow by 13 percent, those jobs requiring at least 
some college will grow the fastest. By some estimates, nearly 
four out of every five new jobs being created will require some 
education or training beyond high school which is why it was 
critical that Congress passed the Higher Education Opportunity 
Act which we had been working on for 5 years!
    In order to meet these challenges head on, we must work 
with our businesses--big and small--to make sure they have the 
highly skilled workforce they need to be successful in the 21st 
century global economy. Additionally, our workers need more 
opportunities to grow their skills and our businesses deserve a 
high quality, highly skilled workforce.
    Over the past 4 years we have been able to reauthorize Head 
Start, career and technical education programs and higher 
education. We are working on high school reform to make sure 
that more of our students graduate on time with the knowledge 
and skills they need to be successful in college and the 
workforce without remediation. We need to get the 
reauthorization of the Workforce Investment Act done so that 
everyone throughout life has access to the education and 
training opportunities they need to be successful. Once again I 
urge the Senate leadership to take up reauthorization of the 
Workforce Investment Act (WIA), it is past time for the Senate 
to get serious about workforce development and job training and 
take action on this important legislation.

  Prepared Statement of Vaughn K. Buntain, Executive Vice President, 
                            IBC Solar, Inc.
    The State of Ohio can create jobs and an industry very easily: 
follow the example of Germany. The former eastern Germany was a 
devastated waste land of high unemployment, low productivity, and empty 
factories. To reintegrate those eastern States, Western Germany did two 
things:

      1. Created a new industrial base--in their case: renewable 
energy.
      2. Fueled that base with regulations to inspire companies to 
invest.

    Today, Germany is the leading country in the world for solar energy 
with 14 percent of their energy supplied by renewable energy and their 
goal is 20 percent by 2020. Thousands of jobs, hundreds of new 
companies--most of them in the former east Germany. No other country 
comes close.
    This example demonstrates three things for Ohio:

      (A) Create tax incentives that pull companies to Ohio. Right now, 
in a recent report, Ohio ranks near the bottom of States with favorable 
tax climate (read how independent reports classify the State's tax 
climate and don't be side-tracked by programs that Ohio is offering . . 
. other States are also doing things--and they leave Ohio ranked near 
the bottom).
      (B) implement a 20 year feed-in tariff for solar energy--this 
will create thousands of jobs, pull dozens of companies to Ohio, 
enlarge the tax base and put Ohio on the leading edge of solar energy 
initiatives--far out in front of CA. The 20 year period is what pulls 
investors to the area . . . banks are willing to make loans for 
purchasing solar photovoltaic systems because they have a long window 
of opportunity . . . make it attractive for individuals and companies 
to invest in solar energy . . . if people can save money and make 
money, they will invest . . . unfortunately, few people in U.S. 
politics today understand that. Give the utilities the ability to 
recover feed-in tariffs using well-known, SBC mechanisms. I'm happy to 
provide details of Germany's success with the feed-in tariff, if 
necessary.
      (C) Decouple utility earnings from revenues so that utilities can 
start promoting energy efficiency and solar adoption. A simple fact: As 
long as utilities earn more when their customer base uses more energy, 
they will never encourage energy conservation . . . give them the 
tools.
    Bottom line: Take the lead, show leadership--do what no other 
States are doing and you can make Ohio the leading State in the union 
for solar energy. There are plenty of people willing and able to 
assist, including IBC Solar, Inc.
    Thank you.

    [Whereupon, at 11:59 a.m., the hearing was adjourned.]

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