[Joint House and Senate Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 113-336

                      EMPOWERMENT IN THE WORKPLACE

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

                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 18, 2014

                               __________

          Printed for the use of the Joint Economic Committee





[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]







                         U.S. GOVERNMENT PRINTING OFFICE 

88-592                           WASHINGTON : 2014 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Printing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001








                        JOINT ECONOMIC COMMITTEE

    [Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]

HOUSE OF REPRESENTATIVES             SENATE
Kevin Brady, Texas, Chairman         Amy Klobuchar, Minnesota, Vice 
John Campbell, California                Chair
Sean P. Duffy, Wisconsin             Robert P. Casey, Jr., Pennsylvania
Justin Amash, Michigan               Bernard Sanders, Vermont
Erik Paulsen, Minnesota              Christopher Murphy, Connecticut
Richard L. Hanna, New York           Martin Heinrich, New Mexico
Carolyn B. Maloney, New York         Mark L. Pryor, Arkansas
Loretta Sanchez, California          Dan Coats, Indiana
Elijah E. Cummings, Maryland         Mike Lee, Utah
John Delaney, Maryland               Roger F. Wicker, Mississippi
                                     Pat Toomey, Pennsylvania

                 Robert P. O'Quinn, Executive Director
                 Niles Godes, Democratic Staff Director
 



























                           C O N T E N T S

                              ----------                              

                     Opening Statements of Members

Hon. Kevin Brady, Chairman, a U.S. Representative from Texas.....     1
Hon. John Delaney, a U.S. Representative from Maryland...........     3
Hon. Carolyn B. Maloney, a U.S. Representative from New York.....     5

                               Witnesses

Ms. Diana Furchtgott-Roth, Senior Fellow and Director, Economics, 
  Manhattan Institute for Policy Research, Washington, DC........     8
Dr. Barbara Gault, Vice President and Executive Director, 
  Institute for Women's Policy Research, Washington, DC..........     9
Ms. Rachel Greszler, Senior Policy Analyst, Economics and 
  Entitlements, The Heritage Foundation, Washington, DC..........    11
Dr. Heidi Shierholz, Economist, Economic Policy Institute, 
  Washington, DC.................................................    13

                       Submissions for the Record

Prepared statement of Hon. Kevin Brady...........................    22
Prepared statement of Hon. Amy Klobuchar.........................    23
Prepared statement of Ms. Diana Furchtgott-Roth..................    25
Prepared statement of Dr. Barbara Gault..........................    32
Prepared statement of Ms. Rachel Greszler........................    39
Prepared statement of Dr. Heidi Shierholz........................    51

 
                      EMPOWERMENT IN THE WORKPLACE

                              ----------                              


                        WEDNESDAY, JUNE 18, 2014

             Congress of the United States,
                          Joint Economic Committee,
                                                    Washington, DC.
    The committee met, pursuant to call, at 1:59 p.m. in Room 
216 of the Hart Senate Office Building, the Honorable Kevin 
Brady, Chairman, presiding.
    Representatives present: Brady of Texas, Paulsen, Carolyn 
B. Maloney, and Delaney.
    Senators Present: Lee
    Staff present: Gail Cohen, Connie Foster, Niles Godes, 
Colleen Healy, Christina King, Patrick Miller, and Robert 
O'Quinn.

    OPENING STATEMENT OF HON. KEVIN BRADY, CHAIRMAN, A U.S. 
                   REPRESENTATIVE FROM TEXAS

    Chairman Brady. Good afternoon, everyone, and welcome to 
this hearing.
    Vice Chairman Klobuchar, Members, and distinguished 
witnesses:
    On May 21st, the Joint Economic Committee held a hearing on 
``Women's Retirement Security.'' Today we turn our focus to the 
workplace--which policies help to empower or harm American 
workers, and especially women in their quest to attain their 
vision of the American Dream. This has been a major focus of 
Congresswoman Cathy McMorris Rodgers, Vice Chair of the House 
GOP Conference.
    The disappointing economic recovery led by the Obama White 
House remains the most significant obstacle preventing American 
men and women from achieving economic empowerment. Although the 
current recession actually ended five years ago this month, 
almost three out of every four Americans believe we are still 
in a recession.
    That is because the economic policies pursued by President 
Obama and Congressional Democrats have produced the weakest 
recovery in more than 50 years, and a troubling ``Growth Gap'' 
between this recovery and other recoveries since 1960, robbing 
over $1,000 a month from a family of four's real disposable 
income.
    Because of this Growth Gap, we are missing $1.5 trillion of 
real GDP from the economy, and 5.8 million private sector jobs. 
Merely to catch up with an average recovery before President 
Obama leaves office, our economy would have to expand at an 
annual rate of 6.2 percent every quarter and add 371,000 new 
private jobs every month.
    Neither figure has been achieved once during the Obama 
recovery. Catching up will be hard to do, especially as the 
President continues to throw further roadblocks in front of 
this struggling recovery.
    Next month this Committee will examine the Administration's 
macroeconomic policy failures at a hearing marking the fifth 
anniversary of this recovery. For now, though, let's focus on 
the workplace.
    One of the best means of empowering workers is to provide 
choice and flexibility in the workplace. Flexibility is 
especially important to the many women who are caregivers to 
their children and elderly parents.
    Yet in March, President Obama directed the Department of 
Labor to extend overtime regulations to several million workers 
who are currently exempt. This regulation would harm working 
women who need the flexibility and choice between taking 
overtime pay and banking those extra hours for time off in 
their later work schedule.
    A much better approach is The Working Families Flexibility 
Act of 2013 which passed the House over a year ago, but has 
stalled in the Democrat-controlled Senate. Joint Economic 
Committee Member Senator Mike Lee is sponsoring the companion 
bill in the Senate.
    The bill would allow private-sector companies to offer 
hourly workers who put in more than 40 hours a week the choice 
between taking overtime pay or time-off. This is a choice that 
is currently available to federal, state, and local government 
workers, but is denied to private sector workers. It is a 
highly valued benefit for government workers, but not for 
workers along Main Street. So why did the President and 
Congressional Democrats fight so hard to deny women in the 
workforce this important choice?
    The House passed The Working Families Flexibility Act in 
May of 2013. It is past time for Senate Majority Leader Reid to 
bring this bill to the Senate for a vote.
    There are other ways this White House has made the 
workplace less family friendly, especially for women. Economist 
Casey Mulligan argues the President's Affordable Care Act will 
push more young women out of the full-time work, making them 
``29ers''--referring to the maximum number of hours that an 
hourly worker can work and still be considered part-time under 
the new health care law. Mr. Mulligan expects 2 percent of 
workers to become ``29ers,'' an increase by more than a factor 
of 10.
    Moreover, at the urging of special interests, the 
Environmental Protection Agency recently introduced new, 
sweeping global-warming regulations on carbon emissions. A 
study by the U.S. Chamber of Commerce's Institute for 21st 
Century Energy found that through the year 2030 these 
regulations would lower America's economy by an average of $51 
billion each year, reduce jobs by 224,000 each year, increase 
electricity payments from American families by $289 billion, 
and lower disposable income for U.S. households by $586 
billion.
    So thanks to the President, women will compete for fewer 
jobs in a slower economy, paying higher electricity bills, with 
less money in their family's budget. Thank you, Mr. President.
    America's broken tax code and extremely progressive income 
tax system penalizes two-income households--which are the norm 
today among married, working-age couples.
    Although Congress lessened this penalty in the last decade, 
it still exists and should be eliminated. It is hard enough to 
make ends meet as it is, especially with college costs, 
gasoline, utilities, and food costs all rising.
    Washington makes it harder to climb out of poverty, 
especially for young women and single moms with limited skills. 
While unintended, the conflict between the phase-out of many 
means' tested federal benefit programs like food stamps and the 
tax system, means that working families struggling to leave 
poverty face an effective marginal tax rate as high as 80 
percent, by one study's estimate. This interaction creates 
poverty traps that discourage work and make it harder to climb 
the economic ladder.
    Moreover, the Cato Institute's Michael Tanner and Charles 
Hughes found that welfare can pay more than the minimum wage in 
35 states, even after accounting for the Earned Income Tax 
Credit. And in 13 of those states, welfare can pay more than 
$15 per hour. The President should work with Congress to 
correct these perverse policies.
    Occupational licensing is another problem facing poor 
families, especially those headed by women who are seeking to 
work their way into the middle class. Joint Economic Committee 
Member Representative Hanna held a hearing on this issue 
recently at the Small Business Committee.
    Over the last several decades, the number of workers 
required to have occupational licenses has risen steadily. In 
many cases, occupational licensing goes far beyond what is 
necessary to protect public health and safety. It has been a 
means for incumbent workers to raise their wages by an 
estimated 15 percent, at the expense of new entrants who have 
fewer jobs, and consumers who pay higher prices.
    Although occupational licensing is primarily a state issue, 
Congress should use its investigative powers to shed light on 
how licensing abuse harms ordinary Americans, both as workers 
and consumers. Catching up will be hard to do, especially as 
the President continues to throw further roadblocks in front of 
this struggling recovery.
    Empowering workers, especially women, should be a common 
goal of both Democrats and Republicans. Staying the course with 
the same old federal traps and obstacles just simply is not an 
option.
    With that, I look forward to hearing from today's 
witnesses, and I recognize Mr. Delaney for the first of two 
opening statements.
    [The prepared statement of Chairman Brady appears in the 
Submissions for the Record on page 22.]

 OPENING STATEMENT OF HON. JOHN DELANEY, A U.S. REPRESENTATIVE 
                         FROM MARYLAND

    Representative Delaney. Thank you, Chairman Brady, for 
holding this hearing. And I want to thank all the witnesses for 
joining us today to talk about this important topic.
    As we talk about empowerment in the workforce and policies 
that I believe we need to put in place to make a difference 
against this issue, it is important to think about the context 
of what is going on in the employment market and the labor 
market and the economy right now.
    We have created over 9 million jobs in the last 4 years, 
and the unemployment rate has fallen significantly. In my 
opinion, by almost any measure the President's policies have 
made a clear and measurable difference in terms of getting 
people to work and getting the economy back on track.
    But there is much more to be done, and there is more to be 
done particularly when you think about what is going on in the 
world and the really important macro trends of globalization 
and technology, and the disruptive effect they are having on so 
many American workers.
    People with great educations or with access to capital are 
doing great in this economy. Billions of people around the 
world are benefitting because they are moving into a global 
economy. But the average American, the middle-skilled American 
worker is really struggling because of the disruptive effects 
of these trends.
    And we need smart public policy to make a difference 
against these trends. The long game, if you will, is education: 
greater investment in education and reform to how we think 
about education.
    The short to mid-term game, if you will, in my opinion is 
increasing our investment in infrastructure. It makes us more 
competitive, creates jobs; tax reform, as the Chairman 
mentioned, is incredibly important for this debate; and 
immigration reform.
    But while we hopefully will work on some of these policies 
to increase the country's competitiveness, and increase our 
ability to create jobs that have a decent standard of living, 
we do have to worry about segments of our population who are 
either not working, or who are working at jobs where they have 
a declining standard of living. Because in fact we have not 
seen the standard of living of the average American go up in 
the last several decades. We have actually seen it declining.
    And that, to me, is the most troubling trend. For those 
that are unemployed, we need in my opinion two very specific 
things. About a third of them have been unemployed for over six 
months, so we need to extend unemployment insurance. That is 
incredibly important for these citizens.
    The other thing we need to do is invest greater resources 
in job training. In my State of Maryland, recent data indicates 
that 60 percent of the positions that are available cannot be 
filled because people are not trained to do the jobs.
    So we need those policies for those Americans who are not 
employed. But even for those who are employed, they are facing 
pressures. They lack flexibility in their lives, in their 
schedules, around child care. They have no ability to negotiate 
or position themselves for growing wages, and in fact the 
standard of living is declining.
    We need a separate set of policies to empower those 
workers. One of them, or one policy in particular that is 
important particularly as it relates to women is the Paycheck 
Fairness Act, because the data clearly suggest that women are 
underpaid relative to men. Even if you normalize for 
educational disparities, you see these trends. And these trends 
are disturbing particularly as you go up the corporate ladder 
where you see a talent drain occurring with respect to women. 
That is an important policy.
    And many of these policies, by the way, are not only good 
for the employees but they're good for the bottom line of the 
business.
    As someone who ran and started two public companies prior 
to running for office, and created over 2,000 jobs, I saw first 
hand how good employee-friendly policies were very, very good 
for the bottom line. So the Paycheck Fairness Act, in my 
opinion, would be virtuous in this regard.
    The minimum wage, which is often positioned as negative for 
economic growth, in fact if you look at the data you see that a 
lot of minimum wage earners do business, or shop, or buy food 
at places that are minimum wage payers. So there is an 
incredibly kind of virtuous cycle associated with raising the 
minimum wage.
    It has to be done carefully. It cannot be done in a way 
that shocks the economy. But if we actually had a minimum wage 
that was adjusted for inflation, that to me would be important.
    Quality affordable child care is another issue, as well as 
expanding family and medical leave. These pieces of legislation 
are incredibly important for all these policies: creating jobs 
in the long term, dealing with the people who are unemployed, 
and helping those who are employed, giving them a little boost 
so that they have more flexibility in their lives and an 
opportunity to get better wages. There is a role for government 
to do it, and I look forward to your testimony very much here 
today.
    Thank you.
    Chairman Brady. Thank you. And I would like to recognize 
the former Chair of the Joint Economic Committee, Mrs. Maloney, 
for her opening statement.

     OPENING STATEMENT OF HON. CAROLYN B. MALONEY, A U.S. 
                  REPRESENTATIVE FROM NEW YORK

    Representative Maloney. Thank you so much, Chairman Brady, 
and we have a vote on. We are going to have to hurry, and hurry 
back to hear your testimony. I would like to also thank Vice 
Chair Klobuchar for allowing me to step in on her place today.
    This hearing looks at how workplace practices affect 
productivity, economic growth, and our economic wellbeing, and 
there is a very real cost to our economy associated with losing 
experienced and highly skilled workers to the very real 
competing demands of child care and looking after an aged 
parent.
    We will also be looking at whether or not federal and state 
laws to require a minimum wage reduces employment or slows 
economic growth. The minimum wage is now effectively lower than 
it has been at any time since 1968.
    The Congressional Budget Office found that if we raised the 
minimum wage to $10.10 an hour by 2016, it would mean higher 
earnings for 16.5 million workers resulting in $31 billion more 
for low- and moderate-income households. And this is very 
important because this money would be plowed right back into 
the economy, effectively be a stimulus for our economy, and it 
is very important to addressing a concern that I think everyone 
has in our country that the gap between the haves and have-nots 
is getting wider and wider. And we need to make sure that our 
workers are paid appropriately and have a living wage.
    The CBO also projected it would lift nearly 1 million 
people out of poverty. I think it is important. As for 
businesses, the Center for Economic and Policy Research found 
that they can benefit from improved efficiency and lower 
turnover facilitated by a higher minimum wage.
    And there are other policies that provide benefits to both 
employers and employees. We know that almost 50 percent of 
American women work, and yet the laws are not flexible or 
supportive for working women.
    Some companies have started first-rate policies, but really 
the federal policies and other policies really have not kept 
pace with the changing realities of the workforce.
    I have introduced a bill that I modeled after a bill in 
London that has worked very well called the Flexibility for 
Working Families Act. I would love Mr. Brady to join me as a 
bipartisan sponsor on it.
    It would not cost a business one dime, or the taxpayer. But 
it would guarantee the right of workers to ask for flexible 
work arrangements with not being fired, to allow them to meet 
with the human resource staff and try to work out a work 
schedule that would really confront the lives that they have.
    If granted, that flexibility could mean workers would be 
able to adjust their schedules to meet the demands of caring 
for children, or aging parents, while staying in the labor 
force and allowing companies to benefit from their experience 
with less turnover in staff.
    Our country's first and only national law to support 
working families is the landmark Family and Medical Leave Act 
of 1993 which allows individuals to take up to 12 weeks of job 
protected unpaid leave. This is an incredible bill. It was the 
first bill I voted on when I came to Congress, and very 
personal to me. I remember when I had my first child, calling 
personnel and asking about any leave policies, and they said 
there's no leave policies; people just leave. When are you 
leaving?
    Well this guaranteed that you could keep your job, come 
back to work, and have a family. I have put in legislation to 
expand this important legislation to also provide for unpaid 
leave so that parents can attend school conferences, or take 
family members to the doctor.
    We always say that this country is so family friendly, but 
if you look at our policies they really are not there. And this 
bill would also cover more businesses that employ between 20 
and 50 workers.
    In the past decades, protections that Congress has already 
put in place have allowed women to make some incredible 
strides. I can remember when women used to be fired because 
they became pregnant, or fired because they wanted to express 
milk on their lunch break and on their own time. And I can 
remember when advertisements used to be jobs for men, jobs for 
women.
    But one area where we have really been stagnant is in terms 
of pay. When I began working, we were 50 cents to the dollar; 
now it is 80 cents to the dollar. We got a raise, but it is not 
enough and we should be paid equally for our work. The Paycheck 
Fairness Act is a step in that right direction, but still a 
great deal more has to be done.
    And affordable and accessible child care. We have some 
policies, but they have not kept up with--the Child Care Tax 
Credit is not keeping pace with the realities of the cost of 
child care. And our economy and our families are more dependent 
than ever on the earnings of women.
    Almost a third of all working mothers are the sole earners 
for their household. So I hope we will examine how workplace 
policies affect women's ability to stay in the workforce and 
take care of their families. And it is important to recognize 
that it is just not some feel-good slogan, it is the economic 
reality of our country today that when women succeed, America 
succeeds.
    So thank you, Mr. Chairman, and we've got to run vote, 
right?
    Chairman Brady. Votes have been called. The good news is it 
is a single vote. To be respectful of your time and testimony, 
I am going to introduce our four witnesses now, recess for 20 
minutes, and then we will come back and start with testimony.
    First, Diana Furchtgott-Roth is the Director of Economics 
21 and Senior Fellow at the Manhattan Institute for Policy 
Research. She has served as Chief Economist at the U.S. 
Department of Labor; as Chief of Staff for President George W. 
Bush's Council of Economic Advisers; and an economist on the 
staff of President Reagan's Council of Economic Advisers. She 
received her B.A. in Economics from Swarthmore College, and her 
Masters in Philosophy and Economics from Oxford.
    Barbara Gault, Ph.D., is Executive Director and Vice 
President of the Institute for Women's Policy Research. 
Previously Dr. Gault conducted research at the Office of 
Children's Health Policy Research, and served as staff and 
board member of organizations promoting human rights in Latin 
America. She received her Doctorate in Social Psychology from 
the University of Pennsylvania, and her Bachelor's from the 
University of Michigan.
    Rachel Greszler is currently a Senior Policy Analyst for 
Economics and Entitlements at the Heritage Foundation. 
Previously Ms. Greszler has served as a Senior Economist on 
this Joint Economic Committee, Minority staff. Ms. Greszler 
holds a Masters in Economics and a Masters in Public Policy 
from Georgetown University, and a Bachelor's in Economics from 
Mary Washington College.
    Dr. Heidi Shierholz is an Economist at the Economic Policy 
Institute. Her research focuses on the economy and economic 
policy as it affects middle- and low-income families, 
especially in regards to employment. She is also a member of 
the Board of Directors of the D.C. Employment Justice Center. 
Previously Dr. Shierholz worked as an Assistant Professor of 
Economics to the University of Toronto. She holds a Ph.D. and a 
Masters in Economics from the University of Michigan, a M.S. in 
Statistics from Iowa State, and a Bachelor in Mathematics from 
Grinnell College.
    With that, we are going to recess for 20 minutes and we 
will be back after that.
    (Whereupon, a recess was taken.)
    Chairman Brady. The hearing will reconvene. I recognize Ms. 
Furchtgott-Roth for her testimony.

   STATEMENT OF MS. DIANA FURCHTGOTT-ROTH, SENIOR FELLOW AND 
    DIRECTOR, ECONOMICS 21, MANHATTAN INSTITUTE FOR POLICY 
                    RESEARCH, WASHINGTON, DC

    Ms. Furchtgott-Roth. Thank you very much for inviting me to 
testify today. With your permission, I will summarize my 
testimony and hope that the full testimony is accepted into the 
record.
    Chairman Brady. Yes, ma'am.
    Ms. Furchtgott-Roth. Employment of women 25 to 54 years 
stands at 45 million and has yet to reach pre-recession levels 
of 46 million. Labor force participation for women 16 years and 
older has declined from 59.4 percent in December 2007 to 57 
percent today. And the labor force participation rate for women 
in their prime working years fell from 76 percent to 74 percent 
over the same period.
    What is important is to provide a flexible work environment 
so that employers can hire women, and so that women can feel 
comfortable working. Women have an important role not just as 
workers in the economy but also as mothers who prefer flexible 
work schedules. And for those who do not think children are 
important, you should take a look at the website Yale Law 
Women. It has just announced its 9th list of top 10 family 
friendly firms.
    Now few of these young women have children, but already 
they are looking at family friendliness indicators, and I will 
quote, ``such as the billable-hour requirement.'' That means 
fewer, rather than more, billable hours. ``Part-time and Flex-
Time options. Caregiver leave policies, and child care 
availability.''
    As you just said, Mr. Chairman, President Obama's new 
proposed overtime rules would reduce flexibility for working 
women. What would be far better would be to pass the Working 
Families Flexibility Act of 2013 which would give women the 
choice of overtime pay or comp time in exchange for more hours 
worked.
    Many times when you've worked a very long week, you don't 
just want to have extra money, maybe you want to have time off 
with your kids, time that you can spend with them. And it is 
very difficult to buy more time if you are forced to take 
overtime pay instead of comp time, which is what many people 
would like.
    President Obama's new proposed regulation, which is now 
working its way through the Labor Department, would restrict 
the number of women who could receive comp time in exchange for 
overtime. I think that would be very harmful for working women.
    Another problem is the marriage penalty. The marriage 
penalty affects working women disproportionately because they 
are frequently the second earners in the family. If you look at 
women in the top income quintile, you find there are many, many 
two-earner families.
    You find as they work their way up the income ladder, their 
progress is stalled. Similarly, low-income women when they move 
into the workforce, they find they have to give up certain 
benefits. And that means that they have a disincentive to work.
    Just as it is important to have flexibility for working 
women, it is also important to put in place conditions that 
enable employers to hire women. The Paycheck Fairness Act would 
create burdensome reporting requirements for employers. It 
would discourage employers from hiring women.
    With the Paycheck Fairness Act, which the President by 
Executive Order has extended to federal contractors, you have a 
reporting requirement for groups of women and groups of men. 
And there are many reasons that groups of women and groups of 
men are paid differently in firms.
    Take Exxon, for example, that has groups of men that drill 
on oil rigs, groups of women who serve in office jobs, and 
there's no reason for these two groups to pay the same; but 
employers would have to justify that difference.
    The Paycheck Fairness Act did not even pass a completely 
Democrat-controlled Congress in 2009 and 2010 because it was so 
costly and so expensive.
    Similarly, raising the minimum wage would impede young 
women from getting hired. Right now the minimum wage is $7.25 
an hour. That means anyone with skills under around $8 an hour 
is not allowed to work. President Obama wants to raise it to 
$10.10 an hour.
    When you add Social Security, Worker's Comp, that means the 
cost is about $11 an hour to employers. Low-skill people just 
would not have the right to work, and that hurts teens and 
unskilled workers.
    Ninety-seven percent of American workers are paid above the 
minimum wage, but this minimum wage is important to people who 
want to enter into the workforce and who want to have their 
first job and have the first step on the career ladder.
    In the Flexibility For Working Families Act, which was 
mentioned by Mrs. Maloney, companies would have to justify and 
document if they did not give women the flexible schedules they 
asked for. Again, it is a disincentive to hiring women.
    We want to make it as easy as possible for companies to 
hire workers, including women, not place an additional cost on 
them.
    Thank you very much for allowing me to testify.
    [The prepared statement of Ms. Furchtgott-Roth appears in 
the Submissions for the Record on page 25.]
    Chairman Brady. Thank you.
    Dr. Gault.

 STATEMENT OF DR. BARBARA GAULT, VICE PRESIDENT AND EXECUTIVE 
DIRECTOR, INSTITUTE FOR WOMEN'S POLICY RESEARCH, WASHINGTON, DC

    Dr. Gault. Thank you, Chairman Brady. Thanks also to Vice 
Chair Klobuchar for this opportunity to speak to the Committee 
about empowerment in the workplace.
    Employees are empowered through access to quality jobs and 
services that help them build skills to support and care for 
their families and to do their best work every day. Research 
shows that the important benefits brought to businesses, to 
families, the economy, and to society as a whole when employers 
offer jobs with fair wages, paid sick days, predictable 
schedules, and when workers have access to supports such as 
quality early care and education, paid parental leave, and the 
earned income tax credit.
    Many basic workplace benefits and supports are inequitably 
distributed in today's economy. Almost 4 in 10 private-sector 
workers in the U.S. lack access to a single paid sick day. 
Among Hispanic workers, 53 percent do not receive paid sick 
days, compared with 36 percent of white workers.
    Employees in food preparation and direct health care 
occupations are especially unlikely to be able to take a day 
off with pay when they are sick, which increases contagion in 
the workplace, forestalls preventive health care, and costs 
taxpayers and businesses millions of dollars each year in 
unnecessary health expenditures and lost productivity.
    Since employees on average take so few paid sick days when 
they are available, the cost to employers is negligible and 
offset by benefits in the form of health, safety, productivity, 
and retention.
    Research has also found that when parents have access to 
stable child care, they stay in their jobs longer and exposure 
to high-quality early care in education among low-income 
children leads to social and economic gains to families and 
society that lasts decades.
    In many states, however, economic growth is hampered by a 
lack of access to affordable, quality child care. Infant care 
costs more than public college tuition in 31 states, and 19 
states have waiting lists or frozen intake for child care 
subsidy.
    Among community college students seeking to gain job 
skills, a striking 30 percent are parents of dependent 
children, but less than half of community college campuses have 
child care facilities, and those that do have long waiting 
lists.
    Research finds that when parents attain post-secondary 
education their children experience real-time cognitive gains, 
especially if parents go to college when their children are 
still young.
    Empowered workplaces need skilled workers with stable, 
reliable childcare arrangements that allow them to focus on 
doing their best jobs. Workers in hourly positions often have 
difficulty arranging child care, elder care, or college 
attendance due to increasingly common scheduling practices that 
give them only a few days' notice of their schedules, or that 
require them to be available for call-in shifts.
    We can empower workers to plan ahead by requiring employers 
to distribute schedules with sufficient advance notice, and by 
prohibiting retaliation against workers who request schedule 
changes.
    Improved scheduling practices also have bottom-line 
benefits for businesses. They are associated with lower 
absenteeism and turnover, and heightened employee engagement.
    Expanded access to paid family and medical leave insurance 
can also help families stay connected to work while they care 
for newborns, sick children, or elderly parents, or seek 
treatment for their own serious medical condition.
    While such benefits are the norm in other high-income 
countries, the United States has yet to establish a family and 
medical leave insurance system which would help employers 
retain talent and improve the health and welfare of families 
and children.
    Three states, Rhode Island, California, and New Jersey, 
have established paid family leave programs, and these 
successful state models demonstrate that a federal family and 
medical leave insurance program is both attainable and cost 
effective.
    In a study of California's paid leave program, the vast 
majority of employers report increases in employee morale, 
minimal costs, and positive or no noticeable effects on 
productivity.
    Allowing transparency in pay would also go far toward 
creating empowered workplaces and helping women address gender-
based pay inequities.
    About half of all workers say they could be disciplined or 
reprimanded for sharing salary information. An analysis by the 
Institute for Women's Policy Research finds that if women 
earned wages equal to those of men with the same education 
levels and work hours, the poverty rate among working women 
would be cut in half, falling to 3.9 percent from 8.1 percent.
    Finally, we can strengthen our economy through basic 
supports to help low-income adults when they are looking for 
work, attending school, or receiving wages that are too low to 
cover their basic needs.
    Recent economic analysis of the effects of the EITC over 
several decades demonstrates the program's effectiveness at 
helping families maintain work. The Center on Budget and Policy 
Priorities found that in 2012 alone the EITC lifted 6.5 million 
people out of poverty.
    Similarly, the U.S. Census Bureau finds that unemployment 
insurance keeps millions of job seekers from falling into 
poverty each year. Employees, businesses, and our communities 
as a whole are stronger when people have the supports they need 
to attain new skills, stay healthy, care for their families, 
and maintain secure, high-quality jobs.
    [The prepared statement of Dr. Gault appears in the 
Submissions for the Record on page 32.]
    Chairman Brady. Thank you, Doctor.
    Ms. Greszler, welcome back to the Joint Economic Committee.

   STATEMENT OF MS. RACHEL GRESZLER, SENIOR POLICY ANALYST, 
   ECONOMICS AND ENTITLEMENTS, CENTER FOR DATA ANALYSIS, THE 
              HERITAGE FOUNDATION, WASHINGTON, DC

    Ms. Greszler. Thank you for the opportunity to be here 
today.
    I would like to focus on three points:
    First is there is a great lack of employment in today's 
economy, and unemployed workers cannot be empowered.
    Second, existing regulations and workplace policies could 
be reformed to encourage greater worker empowerment.
    And third, policymakers can look to successful and 
innovative companies as a way to encourage empowerment.
    First, nearly 10 million workers are unemployed, and 
another 8 million have left the labor force. There is no 
workplace empowerment for the unemployed, but businesses are 
not hiring.
    According to a recent survey, only 8 percent of small and 
independent businesses say that it is a good time to expand 
operations. They cite taxes, followed by government 
requirements and red tape as their two primary concerns.
    Increased costs and regulation make it harder for 
businesses to expand and start up. A recent Brookings 
Institution report documents a, quote, ``troubling secular 
decline in business dynamism and entrepreneurship.''
    Policymakers need to relieve employers and entrepreneurs of 
the red tape and economic burdens that are holding them back 
from investing, expanding, and hiring workers.
    Second, for the roughly 146 million workers who have jobs, 
certain reforms such as licensing and government restraint from 
micro managing private businesses, could encourage greater 
workforce empowerment.
    Licensure laws require individuals to obtain a license to 
practice a certain trade. Licensing laws are often irrational, 
arbitrary, and onerous. For example, the average cosmetologist 
spends 372 days in training, whereas the average EMT spends 33 
days.
    These licensing laws are particularly harmful to low-income 
workers who often lack the resources necessary to obtain a 
desired license, as well as mothers who often have less time 
that they can devote to such training. Despite its widespread 
use, evidence suggests that licensing does not improve quality, 
but it reduces the supply of workers and increases prices.
    States should be encouraged to re-evaluate their licensure 
laws in accordance with cost/benefit analysis and to allow 
cross-state licensing reciprocity so that a massage therapist 
who practiced in one state would not have to obtain a new 
license upon moving to another state.
    A measure that employers could take to empower employees 
through choice and higher wages is to allow employees the 
option of exchanging employer-subsidized benefits such as 
health insurance for cash wages. The option of cash wages could 
increase incomes for many workers, particularly women who are 
often the second earners and already have access to health care 
through a spouse.
    And the primary thing that the Federal Government can do to 
encourage workplace empowerment is to refrain from micro 
managing private businesses. For example, the President's 
proposed increase in the overtime cap would significantly limit 
flexible work arrangements.
    As a working mother, I place a high value on the ability to 
work from home as needed. But if firms are required to pay 
workers overtime, they will want those workers in the office 
where they can monitor their hours.
    What's more, incomes would not rise. Even Jared Bernstein, 
former economic adviser to Vice President Biden, has written 
that employers would offset the higher overtime costs by 
reducing their base pay.
    The government should refrain from micro managing employers 
and instead encourage employers to empower the workers with 
individual choices which can only be provided if those 
employers are allowed to determine their employee's pay.
    My final point is that policymakers should look to the 
successes of less regulated businesses and entrepreneurs as a 
way to empower existing ones. Companies and industries such as 
Etsy, Uber, and food trucks, are prime examples of 
entrepreneurship and empowerment.
    Etsy is an online marketplace that allows individuals to 
sell their goods and services without having to jump through 
significant hoops, invest large amounts of time and money, or 
commit to a regular work schedule. Etsy has opened the door for 
more than a million individuals who might not otherwise 
participate in the labor force to become active workers.
    Eighty-eight percent of Etsy sellers are women, and 74 
percent consider Etsy as their business place. Etsy sellers are 
their own bosses. They decide what to sell, how much to sell it 
for, and how often to work.
    Uber is a software company that contracts with individual 
drivers. The drivers use Uber's unique technology that allows 
individuals to request, ride, and pay for transportation 
services via mobile app. Uber drivers also act as their own 
bosses and work as much or as little as they would like.
    Finally food trucks are another example of entrepreneurship 
and empowerment. Because food trucks operate without a brick-
and-mortar storefront, they enjoy lower startup costs and 
operations. Food truck owners and operators have more control 
over their daily schedule.
    Uber and food trucks have been wildly successful, yet they 
have been threatened by demands from their competitors to 
impose hefty new regulations and costs that would depress their 
growth and profitability.
    Policymakers should refrain from imposing unnecessary and 
costly regulations on new, innovative companies and look to the 
successes of these businesses as ways to promote greater 
entrepreneurship and empowerment.
    Where competitive disadvantages and regulation exists, 
policymakers should level the playing field by reducing 
existing disadvantages rather than creating new ones.
    Thank you.
    [The prepared statement of Ms. Greszler appears in the 
Submissions for the Record on page 39.]
    Chairman Brady. Thank you.
    Dr. Shierholz.

 STATEMENT OF DR. HEIDI SHIERHOLZ, ECONOMIST, ECONOMIC POLICY 
                   INSTITUTE, WASHINGTON, DC

    Dr. Shierholz. Thank you, Chairman Brady, and others 
Members of the Committee:
    I appreciate the opportunity to come here to discuss 
empowerment in the workforce. And I think it is perhaps useful 
to start by defining what is meant by an empowered workforce.
    Under any reasonable definition, an empowered workforce is 
one that shares fairly in the fruits of its labor. In 
particular, a minimal definition of an empowered workforce is a 
workforce where, as productivity grows, most workers share in 
that growth and see compensation growth.
    By contrast, an economy where productivity grows but the 
fruits of that growth accrue to just a small sliver of the 
workforce, that is an economy where that small share is 
empowered but where the workforce as a whole is broadly 
disempowered. So from the 1940s to the 1970s, the U.S. had an 
empowered workforce by this definition. As productivity grew, 
compensation grew with it. Compensation for typical workers 
grew with it.
    Since the 1970s, however, the U.S. has not met this minimal 
definition of an empowered workforce. Productivity has 
continued to rise consistently, but the typical worker's 
compensation began lagging farther and farther behind. And 
rising wage inequality is at the core of the disconnect between 
productivity growth and compensation growth for most workers 
since the 1970s.
    Between 1979 and 2012, the top 1 percent saw their wages 
grow by over 150 percent. The bottom 90 percent, on the other 
hand, saw their wages grow by 17 percent. That was far less 
than the average growth rate.
    In other words, the top captured so much of the growth over 
this period that the entire bottom 90 percent saw wage growth 
that was lower than the average. Below-average wage growth for 
the vast majority means that in a very real sense a discussion 
about workplace empowerment boils down to a discussion about 
rising wage inequality.
    And I am very pleased that the Committee is focusing this 
hearing on labor market policies and practices, which I think 
are a very key part of this dynamic. And I will list a few of 
these things. We need a higher minimum wage. In real terms, the 
minimum wage is now 25 percent below its peak in 1968. Raising 
it to $10.10 would partially restore this eroded labor 
standard.
    The real value of the salary threshold under which all 
salaried workers are covered by overtime provisions has also 
been allowed to erode dramatically. Simply adjusting the 
threshold for inflation since 1975 would roughly double the 
current threshold, guaranteeing an additional millions of 
workers time-and-a-half pay when they work more than 40 hours a 
week.
    And I think it is worth noting that there is nothing that 
prohibits employers from offering comp time to people who get 
overtime. There's nothing. They can simply pay their workers 
overtime, and then give them unpaid leave. So employers still 
have the flexibility to offer employees overtime and comp time. 
Low-wage service workers are increasingly subject to just-in-
time scheduling, which is an enormously disempowering practice 
where employers give workers little or no advance notice of 
their schedules, and send workers home early when business is 
slow. Imagine what this does to people who have to arrange for 
child care to get to work.
    Policymakers should pass laws that require minimum 
guaranteed hours per pay period, and require compensation for a 
minimum number of hours when workers are called into or sent 
home from work unexpectedly.
    We need to update labor law, which has not kept pace with 
dramatically increased employer aggressiveness in citing unions 
and has resulted in a growing wedge between workers' desire to 
organize and their ability to do so.
    We need to crack down on wage theft and misclassification. 
Wage theft is when employers do not pay workers for work they 
have done. Employers steal billions of dollars from their 
employees each year by doing things like working them off the 
clock and failing to pay the minimum wage. And 
misclassification is when employers treat employees as 
independent contractors, which allows them to avoid paying 
Worker's Compensation and Unemployment Insurance, or the 
minimum wage, or offering overtime, which means workers are 
denied access to these benefits and protections.
    So in closing, I would just like to again thank the 
Committee for highlighting how labor market policies have 
affected worker empowerment. I think there is a strong public 
narrative out there that just dismisses rising wage inequality 
and worker disempowerment as a natural and unstoppable 
consequence of a modern economy, when in fact there are 
government policies behind these trends. So that is actually 
good news, because it means that the dramatic rise in 
inequality that has impeded worker empowerment for a generation 
does not have to continue. We need to enforce the labor 
standards we have, update the ones that need it, and empower 
workers to bargain for better working conditions for themselves 
and their families. Thank you.
    [The prepared statement of Dr. Shierholz appears in the 
Submissions for the Record on page 51.]
    Chairman Brady. Thank you, Doctor.
    Ms. Greszler, you make the point that there is very little 
empowerment for those who do not have a job.
    Ms. Greszler. Um-hmm.
    Chairman Brady. And as Ms. Furchtgott-Roth made note in her 
testimony, for women of prime working ages, there's actually 2 
million fewer in the workforce today than there was before the 
recession began. Labor participation rates, how many are in 
that workforce, has actually declined as well.
    So for women of working ages, prime working ages, the 
economy has actually gone backwards for them. So how do we get 
these women back to work? What are the obstacles? Or what can 
Washington do to remove the obstacles so that the businesses 
that you referenced in your testimony will begin hiring again?
    Ms. Greszler. Well I think the biggest thing that the 
government can do is to refrain from a lot of the policies that 
are currently being considered: the Paycheck Fairness Act, and 
this increase in the overtime cap. These things are going to 
reduce flexibility because they are going to enforce employers 
to have one-size-fits-all pay scales, and one-size-fits-all 
jobs that women don't want.
    Women in their prime working years often also have 
children, or they may have parents that they need to care for, 
and if they are going to have to accept either this job, which 
is a defined job and there's no flexibility around it, or 
staying at home, they're often going to have to choose to stay 
at home because they cannot meet a job that is not willing to 
accommodate them.
    Chairman Brady. In your view, what impact has the 
Affordable Care Act had on hiring, or on full-time employment 
for women?
    Ms. Greszler. I think the Affordable Care Act is going to 
have--well, already has had some implications. It's reducing 
the hours that employers are offering, and that hurts women as 
well. A lot of women want to work part-time.
    It is also going to increase the marginal tax rates for 
women. Women are often second earners in their family, and if--
you know, the median wage right now, there is a study by Casey 
Mulligan, an economist at the University of Chicago, who showed 
the median earner, the marginal tax rate for them, is going to 
be 47 percent in 2016 as a result of the Affordable Care Act 
and all the other slew of government transfer programs and 
benefits.
    And this is not going to help working women, or mothers who 
would like to enter the labor force who, you know, they are 
maybe struggling; they are low- to middle-class, and they would 
like to start working so that they can have an additional 
income. If they are going to face a marginal tax rate of 47 
percent and only be able to take home one of every two dollars 
that they earn, they are unlikely to enter the labor force.
    Chairman Brady. Thank you.
    Ms. Furchtgott-Roth, you know we are told that capturing 
more workers in the overtime legislation the President has 
directed would be a good thing, and you have a different view. 
Could you go sort of deeper into that?
    Could you hit the microphone?
    Ms. Furchtgott-Roth. It would limit choices for women. 
Right now if someone is earning around $23,000-$24,000 a year 
and their employer asks them to work more, they are not allowed 
to take any time off in exchange. They have to be given 
overtime pay.
    A lot of these women cannot wait to move to higher income 
levels because then they get more flexibility. They get a 
choice of overtime pay or time off. And, you know, young people 
these days, they are very keen on lifestyles, they want a lot 
of choice, and they want to be able to choose.
    It would be really detrimental to extend the current 
overtime regulations to more women. The President says if you 
work more, of course you should get paid more. You find in many 
kinds of jobs, for example yours, Mr. Chairman, when you work 
longer in Congress, you don't complain that you don't get 
overtime pay. You have a particular salary and you know it 
consists of a certain number of hours.
    The same with people in many, many other professions. They 
get a salary and they do not expect then to get paid overtime 
when they say stay late. They make up for it later.
    So I think it would be extremely detrimental.
    Chairman Brady. The majority of part-time workers are 
women. Many face the absence of extra benefits at their work, 
including health insurance, retirement benefits. Full-time 
workers tend to be the ones with those additional benefits.
    So what would you recommend to encourage not only greater 
pension coverage for workers, but also additional benefits for 
workers at smaller firms and those who work part-time?
    Ms. Furchtgott-Roth. They should make sure that they are 
informed and that they take advantage of any IRAs that they 
have. If you think that it is necessary to increase that IRA 
amount, then that IRA amount could be increased from $5- or 
$6,000 a year to maybe $10,000 a year so that they have more 
room to save on their own.
    I just want to say that part-time jobs are very desirable 
by many people. Many people especially mothers, prefer part-
time jobs to full-time, and they would only work if they have 
part-time jobs.
    If they have fewer benefits, they often have a higher cash 
wage. So quite a lot of the growth in income, as can be seen 
from Table 5 of the excellent study that Dr. Shierholz has 
written called ``Raising America's Pay,' in Table 5 you can see 
that when benefits are included and a comprehensive measure of 
income is used, then income has risen substantially for many 
income groups, almost all income groups.
    But just on an hourly wage basis, that is not necessarily 
true because they are getting more benefits. Many people would 
prefer a higher cash wage to a lower cash wage and more 
benefits.
    Chairman Brady. Thank you.
    Senator Lee.
    Senator Lee. Thank you very much, Mr. Chairman. Thanks to 
all of you for coming to testify before this Committee today. 
Your insights have been very, very helpful.
    Ms. Furchtgott-Roth, I would like to start with you and 
talk to you a little bit about the Working Families Flexibility 
Act, which was introduced and passed in the House by 
Representative Robey.
    I am sponsoring the Senate companion bill on this side of 
the Capitol, and I just wanted to talk to you about this for a 
minute.
    It has always been striking to me that federal law puts us 
in a position where we even need legislation like this. I mean, 
we start out with an understanding that the only people who are 
subject to the existing federal restrictions that make this 
legislation even necessary are those who are, number one, 
hourly as opposed to salaried; and number two, not government 
employees.
    And so people who are either salaried or who work for the 
government don't have to worry about it. So those of us in 
those categories are able to, as circumstances may require, go 
to our children's school plays, or games, or whatever else we 
need to do during the day on one day of the week, if we need to 
work more later in the week to offset those hours we do that, 
and sometimes we take that for granted.
    But it seems particularly unfair that we tell hourly 
employees who are not government workers that they do not have 
the same advantage.
    Can you think of--can you identify any good public policy 
reason why we ought to be discriminating against hourly 
employees who are generally lower paid merely because they do 
not work for the government, is there any good reason to do 
that?
    Ms. Furchtgott-Roth. There is no good reason to do that. 
And as I said in my testimony, it is unfair that upper income 
workers have the advantage of comp time and lower income 
workers do not.
    We should expand that advantage to all American workers. 
They should all be allowed the choice.
    Senator Lee. Right. I think it is important for all of us 
to remember that, you know, whenever people have increased 
flexibility they can live their lives better. So this is not 
just an economic issue. This has all sorts of social 
implications, as well. And it has always been difficult to me 
how someone could be against this, how someone would want the 
government to continue to discriminate against hourly workers 
who are generally less well paid, and particularly those hourly 
workers who do not work for the government.
    Ms. Furchtgott-Roth. It also takes away an option for 
employers. Because employers can offer a benefit of comp time 
that enables them to compete. Just as 97 percent of employers 
pay above minimum wage, they have to pay more to retain talent.
    So allowing them the option to offer comp time is a way to 
retain talent. And I brought one of my young staff with me, 
Jared Meyer. He often works very late, working on our e-brief, 
and sometimes he wants a day off. He wants a day off to go see 
his family in Chicago. So I say, fine, Jared, take the day off.
    But if the law was to go through, I would not be permitted 
to give him that option.
    Senator Lee. Okay. I suppose that it has one benefit 
relative to government in that it gives perhaps the government 
something of a competitive advantage in hiring workers. But 
that is probably not the kind of advantage we want to be giving 
government. I assume you would not disagree with that?
    Ms. Furchtgott-Roth. That is correct, I don't think we need 
to give government any more advantages than it already has. 
Government workers have very, very low quit rates and they are 
undoubtedly at a big advantage in many ways.
    Senator Lee. Thank you.
    Ms. Greszler, in your testimony you noted that several 
regulatory factors tend to add rigidity to the labor market, 
restricting job growth and labor flexibility. And some of these 
include licensing laws, dated labor laws, and general 
government micro management.
    I think there is an important corollary to this, which is 
that many workers may be drawn out of the formal economy and 
into the informal economy as we might describe it. Could you 
speak to how these kinds of restrictions, those regulatory 
restrictions that I just described, might do this? How they 
might encourage people to participate in the informal economy 
rather than the formal economy? And what kinds of public policy 
ramifications that might have?
    Ms. Greszler. Sure. Licensure laws, regulations, all these 
things that drive up the cost to either starting a business, 
continuing to work if it's a new regulation that's come down 
and it's going to cost your company, or you as an individual 
too much to implement that and keep profitable, then you're 
probably just going to go off on the side and say, well, I'm 
going to do this, you know, under the table, or I'll give you 
this service but, you know, I'm not going to report that.
    It's fairly easy for people who are their own employers to 
do that if they're not working for a large company and 
receiving a W-2. You see that in restaurants that don't want to 
pay a minimum wage. They might just say, okay, I can't afford 
to do this. You know, in my home town there was an ice cream 
shop and everybody knew, everybody that works there is under-
the-table because they can't afford to pay people the minimum 
wage.
    And so there are plenty of people that wanted to work 
there, and they were willing to accept lower than the minimum 
wage but that all goes off the books. The company is not paying 
taxes. The individuals aren't. And so we are driving people 
into the informal economy, and that is reducing revenues.
    Senator Lee. So it's reducing revenue to the government. 
That hurts the government.
    Ms. Greszler. Um-hmm.
    Senator Lee. How might it also----
    Ms. Greszler. It hurts--I'm sorry.
    Senator Lee. How might--I see my time has expired, let me 
just follow up on this one more point, if I could.
    How might it also hurt the worker, separate and apart from 
how it might hurt the government.
    Ms. Greszler. Right. When the worker is not part of the 
formal economy, they are not entitled to any of the benefits 
that are required of employers. They are not contributing 
payroll taxes, so that is not going toward Social Security. 
There's no record of that.
    They are not entitled to any benefits that employers are 
required to provide, and so they are left with really few 
protections from the government if they are working under the 
table.
    Senator Lee. Okay. Thank you. I think that is a great 
example of how many of these restrictions that are publicly 
touted as ways of protecting the little guy actually end up 
hurting the little guy. And men and women throughout America 
are often victims to this.
    Thank you, very much.
    Chairman Brady. Thank you, Senator. I want to thank all of 
you for being here today, for taking your time. It was great 
testimony. Thank you for being here.
    Republicans and Democrats on the Committee will continue to 
examine this economy, ways we can get people back to work, and 
how we can look at empowering workers and increase their 
standard of living.
    In this recovery, Wall Street is doing very well. Middle-
class America has been left behind. And so we are looking for 
and searching for answers that we can work together on to try 
to find a stronger economy for Americans.
    With that, the hearing is adjourned.
    (Whereupon, at 3:19 p.m., Wednesday, June 18, 2014, the 
hearing in the above-entitled matter was adjourned.)
                       SUBMISSIONS FOR THE RECORD

   Prepared Statement of Hon. Kevin Brady, Chairman, Joint Economic 
                               Committee
    Vice Chair Klobuchar, Members, and distinguished witnesses:
    On May 21st, the Joint Economic Committee held a hearing on 
``Women's Retirement Security.'' Today, we turn our focus to the 
workplace--which policies help to empower or harm American workers, and 
especially women, in their quest to attain their vision of the American 
Dream. This has been a major focus of Congresswoman Cathy McMorris 
Rogers, chairman of the House GOP Conference.
    The disappointing economic recovery led by the Obama White House 
remains the most significant obstacle preventing American men and women 
from achieving economic empowerment. Although the current recession 
actually ended five years ago this month, almost three out of every 
four Americans believe we are still in a recession.
    That's because the economic policies pursued by President Obama and 
congressional Democrats have produced the weakest recovery in more than 
50 years, and a troubling ``Growth Gap'' between this recovery and 
other recoveries since 1960, robbing over $1,000 a month from a family 
of four's real disposable income.
    Because of this Growth Gap, we are missing $1.5 trillion of real 
GDP and 5.8 million private-sector jobs. Merely to catch up with an 
average recovery before President Obama leaves office, our economy 
would have to expand at an annual rate of 6.2 percent every quarter and 
add 371,000 new private jobs every month. Neither figure has been 
achieved once during the Obama recovery. Catching up will be hard to 
do, especially as the President continues to throw further roadblocks 
in front of this struggling recovery.
    Next month this Committee will examine this Administration's 
macroeconomic policy failures at a hearing marking the fifth 
anniversary of this recovery. For now though, let us focus on the 
workplace.
    One of the best means of empowering workers is to provide choice 
and flexibility in the workplace. Flexibility is especially important 
to the many women who are caregivers to their children and elderly 
parents.
    Yet in March, President Obama directed the Department of Labor to 
extend overtime regulations to several million workers, who are 
currently exempt. This regulation would harm working women who need the 
flexibility and choice between taking overtime pay, and banking those 
extra hours for time off in their later work schedule.
    A much better approach is The Working Families Flexibility Act of 
2013, which passed the House over a year ago, but has stalled in the 
Democrat-controlled Senate. JEC Member, Senator Mike Lee, is sponsoring 
the companion bill in the Senate.
    The bill would allow private-sector companies to offer hourly 
workers, who put in more than 40 hours a week the choice between taking 
overtime pay or time-off. This is a choice that is currently available 
to Federal, state, and local government workers, but is denied to 
private-sector workers. It's a highly-valued benefit for government 
workers, but not for workers along Main Street. Why do the President 
and Congressional Democrats fight so hard to deny women in the 
workforce this important choice?
    The House passed the Working Families Flexibility Act in May 2013. 
It is past time for Senate Majority Leader Reid to bring this bill to 
the Senate for a vote.
    There are other ways this White House has made the workplace less 
family friendly, especially for women. Economist Casey Mulligan argues 
the President's Affordable Care Act will push more young women out of 
the full-time work, making them ``29ers''--referring to the maximum 
number of hours that an hourly employee can work and still be 
considered part-time under the new health care law. Mr. Mulligan 
expects 2 percent of workers to become ``29ers,'' an increase by more 
than a factor of 10.
    Moreover, at the urging of special interests, the Environmental 
Protection Agency recently introduced new sweeping global warming 
regulations on carbon emissions. A study by the U.S. Chamber of 
Commerce's Institute for 21st Century Energy found that through the 
year 2030 these regulations would lower America's economy by an average 
of $51 billion each year, reduce jobs by 224,000 every year, increase 
electricity payments from American families by $289 billion, and lower 
disposable income for U.S. households by $586 billion.
    So thanks to President Obama, women will compete for fewer jobs in 
a slower economy, paying higher electricity bills with less money in 
their family's budget. Thank you, Mr. President.
    America's broken tax code and extremely progressive income tax 
system penalize two-income households-- which are the norm today among 
married, working-age couples. Although Congress lessened this penalty 
in the last decade, it still exists and should be eliminated. It's hard 
enough to make ends meet as it is, especially with college costs, 
gasoline, utilities and food costs all rising.
    Washington makes it harder to climb out of poverty, especially for 
young women and single moms with limited skills. While unintended, the 
conflict between the phase-outs of many means-tested Federal benefit 
programs like food stamps and the tax system means that working 
families struggling to leave poverty face an effective marginal tax 
rate as high as 80 percent, by one study's estimate. This interaction 
creates poverty traps that discourage work and climbing the economic 
ladder.
    Moreover, the Cato Institute's Michael Tanner and Charles Hughes 
found that welfare can pay more than the minimum wage in 35 states, 
even after accounting for the Earned Income Tax Credit, and in 13 of 
those states, welfare can pay more than $15 per hour. The President 
should work with Congress to correct these perverse policies.
    Occupational licensing is another problem facing poor families, 
especially those headed by women, who are seeking to work their way 
into the middle class. Representative Hanna held a hearing on the 
occupational licensing issue at the Small Business Committee.
    Over the last several decades, the number of workers required to 
have occupational licenses has risen steadily. In many cases, 
occupational licensing goes far beyond what is necessary to protect 
public health and safety. It has been a means for incumbent workers to 
raise their wages, by an estimated 15 percent, at the expense of new 
entrants who have fewer jobs, and consumers who pay higher prices.
    Although occupational licensing is primarily a state issue, 
Congress should use its investigative powers to shed light on how 
licensing abuse harms ordinary Americans, both as workers and 
consumers. Catching up will be hard to do, especially as the President 
continues to throw further roadblocks in front of this struggling 
recovery.
    Empowering workers, especially women, should be a common goal of 
both Democrats and Republicans. ``Staying the course'' with the same 
old federal traps and obstacles is not an option.
    With that, I look forward to hearing from today's witnesses.
                               __________
 Prepared Statement of Hon. Amy Klobuchar, Vice Chair, Joint Economic 
                               Committee
    Thank you, Chairman Brady for holding this important hearing on 
empowerment in the workplace and our country's economic well-being.
    I would like to thank all of the witnesses on today's panel. A 
special thanks goes to the witnesses I invited: Dr. Barbara Gault, 
Executive Director and Vice President of the Institute for Women's 
Policy Research, and Dr. Heidi Shierholz, an economist with the 
Economic Policy Institute.
    I'd like to take a minute to talk about the condition of the labor 
market and the workforce today. Job growth has continued to strengthen, 
with the private sector gaining jobs for the past 51 months. During 
this time, more than 9.4 million jobs have been added. The national 
unemployment rate is 6.3 percent, the lowest level in five-and-a-half 
years.
    For most workers, the prospects of getting and keeping a job today 
are better than they've been in years. The number of unemployed workers 
per job opening has decreased from nearly seven in July 2009 to 2.2 in 
April 2014, close to the pre-recession level of roughly two unemployed 
workers for every job opening. But we still have work left to do.
    Despite the drop in the national unemployment rate, long-term 
unemployment is still a very real problem. Nearly three-and-a half 
million Americans - over one-third of unemployed workers - have been 
out of work for more than six months. Long periods of joblessness do 
significant damage to workers' future earnings and to our nation's 
productivity.
    Long-term unemployment problems spill over to create problems for 
the next generation. Spells of long-term unemployment not only reduce 
life-time earnings and increase mortality rates for the unemployed, but 
also lead to lower educational performance and lower earnings for the 
children of the long-term unemployed.
    We must also do more to address growing income inequality. The 
average income for the top one percent of households has grown more 
than seven times as fast as it has for the average household. Yet for 
the rest of America, income growth has stalled completely: the average 
American household earned less in 2012 than they did in 1989. The 
middle class is shrinking and is less secure. Seventy percent of our 
economy is based on consumer spending. So when families can't afford to 
buy things, our businesses suffer and our whole economy suffers.
    There are a number of steps our country should be taking to make 
sure that our economy continues to grow for everyone so that all 
participants in the workplace benefit. We've got to approach long-term 
unemployment from all sides. Two months ago, the Senate passed an 
extension of unemployment insurance, but it remains stalled in the 
House. Unemployment insurance is an important piece of the puzzle, but 
it's not the only piece. We also need to make investments in job 
training.
    Ramping up job training is part of the key to empowering workers. 
We know that there are shortages of workers with the skills that 
employers need. In a poll of manufacturing companies in my home state, 
60 percent of respondents said it was difficult to find workers with 
the right skills and experience, up from 40 percent in 2010.
    That's why I introduced a bipartisan bill with Senator John Hoeven 
that would add 100 STEM high schools and strengthen partnerships 
between employers and technical and community colleges. We're already 
seeing this model work in Minnesota. Alexandria Tech has a 96 percent 
placement rate. Improving access to job training programs and STEM 
education will not only help people get jobs, but will also help ensure 
that those are good paying jobs.
    Another thing we should do is combine workforce training for 
parents with quality early education for low-income children. In my 
home state, Minnesota Child Care Assistance Programs help lower-income 
families pay for childcare costs so their parents can look for work or 
attend school. Integrated programs that meet the needs of both parents 
and children have been shown to be effective at reducing poverty for 
both generations. The idea is simple: helping parents helps the kids. 
When parents are doing well, that has an enormous positive impact on 
their children.
    Raising the minimum wage can help reduce poverty and help families' 
economic security. At $7.25 per hour, the real value of the current 
minimum wage is now lower than it was in 1968. Low wages hurt workers 
but also cost the rest of society. For instance, more than half of the 
nation's fast-food workers rely on the federal safety net because their 
wages are low, resulting in annual costs of over $6.8 billion to 
taxpayers.
    Finally, we need to eliminate the gender pay gap. Women who work 
full time earn about 80 cents for every dollar men earn. Much of this 
disparity is due to differences in education and occupation, but even 
after accounting for those and other factors, women still make less 
than men. The Paycheck Fairness Act would give women new protections 
against pay discrimination and help affirm that basic principle that 
all women deserve equal pay for equal work.
    We need to keep moving forward, ensuring every person can work a 
steady job, with good wages, provide for their families and save a 
little for the future.
    Labor laws have played and must continue to play a key role in 
protecting workers from unfair labor practices:

      Child labor laws prevent young kids from being exploited 
and forced to work instead of going to school;
      Laws that mandate decent working conditions protect 
people from being hurt or injured on the job; and
      we need to uphold the fundamental right of workers to 
organize.

    This is about providing stability and consistency to workers and 
businesses. It's also about doing the right thing for American 
families. Again, I want to thank the witnesses for being here this 
afternoon. I look forward to your testimony.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                                  [all]
