[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


                   GROWTH, OPPORTUNITY, AND CHANGE IN
                     THE U.S. LABOR MARKET AND THE
                    AMERICAN WORKFORCE: A REVIEW OF
                     CURRENT DEVELOPMENTS, TRENDS,
                             AND STATISTICS

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

                                HEARING

                               BEFORE THE

                        SUBCOMMITTEE ON HEALTH,
                    EMPLOYMENT, LABOR, AND PENSIONS

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE

                     U.S. House of Representatives

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, JUNE 21, 2018

                               __________

                           Serial No. 115-22

                               __________

  Printed for the use of the Committee on Education and the Workforce
  
 
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                COMMITTEE ON EDUCATION AND THE WORKFORCE

               VIRGINIA FOXX, North Carolina, Chairwoman

Joe Wilson, South Carolina           Robert C. ``Bobby'' Scott, 
Duncan Hunter, California                Virginia
David P. Roe, Tennessee              Ranking Member
Glenn ``GT'' Thompson, Pennsylvania  Susan A. Davis, California
Tim Walberg, Michigan                Raul M. Grijalva, Arizona
Brett Guthrie, Kentucky              Joe Courtney, Connecticut
Todd Rokita, Indiana                 Marcia L. Fudge, Ohio
Lou Barletta, Pennsylvania           Jared Polis, Colorado
Luke Messer, Indiana                 Gregorio Kilili Camacho Sablan,
Bradley Byrne, Alabama                 Northern Mariana Islands
David Brat, Virginia                 Frederica S. Wilson, Florida
Glenn Grothman, Wisconsin            Suzanne Bonamici, Oregon
Elise Stefanik, New York             Mark Takano, California
Rick W. Allen, Georgia               Alma S. Adams, North Carolina
Jason Lewis, Minnesota               Mark DeSaulnier, California
Francis Rooney, Florida              Donald Norcross, New Jersey
Tom Garrett, Jr., Virginia           Lisa Blunt Rochester, Delaware
Lloyd K. Smucker, Pennsylvania       Raja Krishnamoorthi, Illinois
A. Drew Ferguson, IV, Georgia        Carol Shea-Porter, New Hampshire
Ron Estes, Kansas                    Adriano Espaillat, New York
Karen Handel, Georgia
Jim Banks, Indiana

                      Brandon Renz, Staff Director
                 Denise Forte, Minority Staff Director
                 
                                 ------                                

        SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS

                    TIM WALBERG, Michigan, Chairman

Joe Wilson, South Carolina           Gregorio Kilili Camacho Sablan,
David P. Roe, Tennessee                Northern Mariana Islands
Todd Rokita, Indiana                   Ranking Member
Lou Barletta, Pennsylvania           Frederica S. Wilson, Florida
Rick W. Allen, Georgia               Donald Norcross, New Jersey
Jason Lewis, Minnesota               Lisa Blunt Rochester, Delaware
Francis Rooney, Florida              Carol Shea-Porter, New Hampshire
Lloyd K. Smucker, Pennsylvania       Adriano Espaillat, New York
A. Drew Ferguson, IV, Georgia        Joe Courtney, Connecticut
Ron Estes, Kansas                    Marcia L. Fudge, Ohio
Jim Banks, Indiana                   Suzanne Bonamici, Oregon
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on June 21, 2018....................................     1

Statement of Members:
    Walberg, Hon. Tim, Chairman, Subcommittee on Health, 
      Employment, Labor, and Pensions............................     1
        Prepared statement of....................................     2
    Wilson, Hon. Frederica S., a Representative in Congress from 
      the State of Florida:......................................     3
        Prepared statement of....................................     5

Statement of Witnesses:
    Farren, Dr. Michael, Research Fellow, Study of American 
      Capitalism, Mercatus Center at George Mason University.....    29
        Prepared statement of....................................    31
    Meyer, Mr. Jared, Senior Fellow, Foundation for Government 
      Accountability.............................................    53
        Prepared statement of....................................    55
    Moore, Mr. Stephen, Distinguished Visiting Fellow, Project 
      for Economic Growth, The Heritage Foundation...............     8
        Prepared statement of....................................    17
    Spriggs, Dr. William, Professor of Economics, Howard 
      University.................................................    36
        Prepared statement of....................................    38

Additional Submissions:
    Mr. Moore:
        Charts...................................................    11
    Chairman Walberg:
        Prepared statement of Mercatus Center....................    83
        Article: Mercatus On Policy..............................    88

 
                   GROWTH, OPPORTUNITY, AND CHANGE IN
                     THE U.S. LABOR MARKET AND THE
                    AMERICAN WORKFORCE: A REVIEW OF
                     CURRENT DEVELOPMENTS, TRENDS,
                             AND STATISTICS

                              ----------                              


                        Thursday, June 21, 2018

                        House of Representatives

               Committee on Education and the Workforce,

        Subcommittee on Health, Employment, Labor, and Pensions

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to call, at 10:05 a.m., in 
Room 2175, Rayburn House Office Building. Hon. Tim Walberg 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Walberg, Allen, Lewis, Estes, 
Banks, Wilson of Florida, Norcross, Blunt Rochester, Courtney, 
and Fudge.
    Also Present: Representatives Foxx and Scott.
    Staff Present: Marty Boughton, Deputy Press Secretary; 
Courtney Butcher, Director of Member Services and Coalitions; 
Michael Comer, Deputy Press Secretary; Rob Green, Director of 
Workforce Policy; Nancy Locke, Chief Clerk; John Martin, 
Workforce Policy Counsel; Kelley McNabb, Communications 
Director; James Mullen, Director of Information Technology; 
Alexis Murray, Professional Staff Member; Krisann Pearce, 
General Counsel; Benjamin Ridder, Legislative Assistant; 
Meredith Schellin, Deputy Press Secretary; Olivia Voslow, 
Legislative Assistant; Joseph Wheeler, Professional Staff 
Member; Lauren Williams, Professional Staff Member; Tylease 
Alli, Minority Clerk/Intern and Fellow Coordinator; Mishawn 
Freeman, Minority Staff Assistant; Ron Hira, Minority Labor 
Policy Fellow; Eunice Ikene, Minority Labor Policy Advisor; 
Stephanie Lalle, Minority Deputy Communications Director; Andre 
Lindsay, Minority Staff Assistant; Richard Miller, Director 
Labor Policy; Udochi Onwubiko, Minority Labor Policy Counsel; 
and Veronique Pluviose, Minority Staff Director.
    Chairman Walberg. A quorum being present, the hearing will 
come to order. Good morning and welcome to today's Subcommittee 
hearing. I would like to thank the members of the Subcommittee 
and our witnesses for being here today as we examine important 
and timely topics. Current trends in the U.S. labor market, 
their benefits for American workers, the Bureau of Labor 
Statistics_BLS_labor market economic information and 
methodologies.
    On the 1st of June, BLS released its May 2018 Employment 
Situation Report, which detailed the most recent data on U.S. 
employment. The report found numerous encouraging developments 
in the American economy and workforce, including improvements 
to rates of unemployment, job growth, and wage growth.
    According to the report, the unemployment is down to 3.8 
percent, the lowest rate of unemployment in nearly two decades. 
Since May 2017, the total number of unemployed workers has 
dropped by 772,000, to 6.1 million people. And there has been a 
28.6 percent drop in individuals experiencing long-term 
unemployment.
    As unemployment has fallen, the number of new jobs 
available across the country has risen. Since February 2017, a 
month after President Trump was sworn into office, the U.S. 
economy has added nearly 3 million jobs nationwide. In 
particular, health care, construction, manufacturing, retail 
trade, and mining have all experienced particularly robust job 
growth. This job upsurge has contributed to one of the most 
outstanding and astounding developments yet.
    For the very first time in BLS reporting history, the 
number of job seekers, 6.3 million Americans, has been eclipsed 
by the number of available jobs, 6.7 million job openings 
nationwide. We know that in addition to a strong job market, 
wage growth can help families achieve financial independence 
and security. According to the report, the workforce has 
experienced a rise in wages with average hourly earnings 
increasing by 71 cents over the last 12-month period. Much of 
this growth can be attributed to tax reform as well as efforts 
by Congress and President Trump to rein in regulatory burdens.
    The Tax Cuts and Jobs Act, which House Republicans 
delivered last year and President Trump signed into law in 
December, 2017, has lowered taxes for millions of Americans. 
Ninety percent of workers are seeing more in their take-home 
pay thanks to tax reform and the law has helped to spur 
powerful economic growth across the country.
    Strengthening the workforce and adding more jobs to the 
U.S. economy have been top priorities for House Republicans and 
the Trump administration. And tax reform has delivered bigger 
paychecks and greater opportunities for more Americans.
    Today's hearing presents an opportunity to delve into BLS's 
most recent information on the U.S. labor market. It recently 
published data on workers engaging in contingent and 
alternative forms of work and to gain a better understanding of 
BLS products and data to ensure we, as policy makers, and the 
public at large can best utilize this information. I look 
forward to hearing from our panel of witnesses and from other 
members of the Subcommittee today as we talk about these 
developments and ways to promote even greater growth for more 
American employers and workers.
    I now yield to today's--I yield to today's Subcommittee 
Ranking Member, Representative Wilson, for her opening remarks.
    [The statement of Chairman Walberg follows:]

   Prepared Statement of Hon. Tim Walberg, Chairman, Subcommittee on 
                Health, Employment, Labor, and Pensions

    Good morning, and welcome to today's subcommittee hearing. I would 
like to thank members of the subcommittee and our witnesses for being 
here today as we examine important and timely topics - current trends 
in the U.S. labor market, their benefits for American workers, and a 
review of the Bureau of Labor Statistics' (BLS) labor market economic 
information and methodologies.
    On the first of June, BLS released its May 2018 Employment 
Situation Report, which detailed the most recent data on U.S. 
employment. The report found numerous encouraging developments in the 
American economy and workforce, including improvements to rates of 
unemployment, job growth, and wage growth.
    According to the report, unemployment is down to 3.8 percent--the 
lowest rate of unemployment in nearly two decades. Since May 2017, the 
total number of unemployed workers has dropped by 772,000 to 6.1 
million people, and there has been a 28.6 percent drop in individuals 
experiencing long-term unemployment.
    As unemployment has fallen, the number of new jobs available across 
the country has risen. Since February 2017, the month after President 
Trump was sworn into office, the U.S. economy has added nearly 3 
million jobs nationwide. In particular, health care, construction, 
manufacturing, retail trade, and mining having all experienced 
particularly robust job growth.
    This job upsurge has contributed to one of the most astounding 
developments yet: for the very first time in BLS reporting history, the 
number of job seekers - 6.3 million Americans - has been eclipsed by 
the number of available jobs - 6.7 million job openings nationwide.
    We know that in addition to a strong job market, wage growth can 
help families achieve financial independence and security. According to 
the report, the workforce has experienced a rise in wages, with average 
hourly earnings increasing by 71 cents over the last 12-month period. 
Much of this
    growth can be attributed to tax reform, as well as efforts by 
Congress and President Trump to rein in regulatory burdens.
    The Tax Cuts and Jobs Act, which House Republicans delivered last 
year and President Trump signed into law in December 2017, has lowered 
taxes for millions of Americans. Ninety percent of workers are seeing 
more of their take-home pay thanks to tax reform, and the law has 
helped to spur powerful economic growth across the country. 
Strengthening the workforce and adding more jobs to the U.S. economy 
have been top priorities for House Republicans and the Trump 
administration, and tax reform has delivered bigger paychecks and 
greater opportunities to more Americans.
    Today's hearing presents an opportunity to delve into BLS's most 
recent information on the U.S. labor market, its recently published 
data on workers engaging in contingent and alternative forms of work, 
and to gain a better a understanding of BLS products and data to ensure 
we, as policymakers, and the public at-large can best utilize this 
information.
    I look forward to hearing from our panel of witnesses and from 
other members of the subcommittee today as we talk about these 
developments and ways to promote even greater growth for more American 
employers and workers.
                                 ______
                                 
    Ms. Wilson of Florida. I want to thank Chairman Walberg for 
holding this hearing on current developments and trends in the 
U.S. labor market and the American workforce.
    Wage stagnation and inequality remain a burden on workers 
and a drag on the American economy. The top-level labor market 
indicators have all been moving in a positive direction since 
the Obama administration rescued us from the depths of the 
Great Recession.
    The number of jobs has steadily increased over the past 
seven years with more than 18 million jobs added. The national 
unemployment rate has declined from 10 percent in 2009 to 3.8 
percent now. However, those positive numbers have not 
translated into higher wages. One key reason--for this is that 
link between pay and rising productivity is broken. From 1973 
to 2016, the typical worker saw an increase in wages of just 13 
percent despite overall productivity rising almost 75 percent. 
Between 1979 and 2016, the top 1 percent of earners saw nearly 
150 percent cumulative gains and annual wages almost four times 
faster than average wage growth.
    Wage stagnation has become worse under this administration. 
As you can see from this chart, President Trump inherited an 
economy that was beginning to show signs of modest wage growth. 
See the uptick between 2012 and 2017 on the left side.
    However, since President Trump took office, wages have been 
mostly flat. Over the last year, the average American has not 
gotten ahead. You can see how the trend lines have flattened 
out in the chart. Growth and average hourly earnings on an 
inflation, inflation adjusted basis was zero. And in the case 
of production and non-supervisory workers who represent four 
fifths of private employed Americans, these groups actually 
lost ground over the last year as their real average hourly 
earnings have fallen.
    These wage trends are more than just a line on the chart. 
This is a real blow to workers across the country who have been 
working hard and struggling to get by while healthcare and 
other costs go up.
    The tax cut has further exacerbated income inequality. 
According to the Tax Policy Center, by 2027 the top 1 percent 
of households will receive 83 percent of the benefits from 
their $1.8 trillion tax scam. Proponents claim that this bill 
would boost workers' wages but we can see that since the tax 
bill was enacted, inflation adjusted wage growth has been zero. 
Meanwhile, wealthy corporations are on track to spend a record 
$1 trillion of this massive windfall from the Republican tax 
scam on dividends, and stock buybacks that benefit shareholders 
and executives.
    We know some of the reasons why workers' wages are stagnant 
and income inequality continues to grow. For example, Congress 
and the administration have failed to update federal standards 
for the minimum wage and overtime. In addition, Congress has 
failed to strengthen workers' rights to collectively bargain 
for better wages and the administration has appointed officials 
who are aggressively undermining the limited protections that 
do exist.
    Next week marks the 80th anniversary of the Fair Labor 
Standards Act. Landmark legislation that provided millions of 
working people with protection from substandard wages. In the 
absence of federal action, 18 states raised their minimum wage 
at the beginning of this year. Earlier this week, voters in the 
District of Columbia joined eight other states in phasing out 
the minimum wage for tipped workers. Yet many states have 
failed to act.
    And in Miami, where I live, legislation that would have 
provided many workers with a minimum wage of $13 an hour was 
vetoed by the mayor. That's why we must act at the federal 
level to boost the minimum wage. Committee Democrats stand 
ready to pass policies that boost wages and combat income 
inequality. We should pass the Raise the Wage Act, H.R. 15, a 
bill to increase the minimum wage to $15 per hour by 2024 
giving more than 41 million Americans a pay increase. We should 
enact the Restoring Overtime Pay Act, H.R. 4505, which codifies 
the Obama administration 2016 overtime rule. The Trump 
Administration's abandonment of this rule cost low and middle 
income salaried workers 1.2 billion per year in lost wages.
    Committee Democrats also support the WAGE Act, H.R. 4548, 
legislation to improve workers' ability to bargain for better 
wages by strengthening workers' rights to join a union free 
from retaliation, establish meaningful deterrents for 
unscrupulous employers who interfere with their, with these 
rights.
    I hope that we can have a serious discussion about these 
policies and how we can combat decades-long wage stagnation and 
income inequality. I thank the witnesses for joining us here 
today and I look forward to hearing their testimony. I yield 
back the balance of my time.
    [The statement of Ms. Wilson follows:]

  Prepared Statement of Hon. Frederica S. Wilson, a Representative in 
                   Congress from the state of Florida

    I want to thank Chairman Walberg for holding this hearing on 
current developments and trends in the U.S. labor market and the 
American workforce.
    Wage stagnation and inequality remain a burden on workers and a 
drag on the American economy. The top-level labor market indicators 
have all been moving in a positive direction since the Obama 
administration rescued us from the depths of the Great Recession. The 
number of jobs has steadily increased for over the past 7 years, with 
more than 18 million jobs added. The national unemployment rate has 
declined from 10 percent in 2009 to 3.8 percent now.
    However, those positive numbers have not translated into higher 
wages.
    One key reason for this is that the link between pay and rising 
productivity is broken. From 1973 to 2016, the typical worker saw an 
increase in wages of just 13 percent, despite overall productivity 
rising almost 75 percent. Between 1979 and 2016, the top one percent of 
earners saw nearly 150 percent cumulative gains in annual wages--almost 
four times faster than average wage growth.
    Wage stagnation has become worse under this administration. As you 
can see from this CHART, President Trump inherited an economy that was 
beginning to show signs of modest wage growth - see the uptick between 
2012 and 2017 on the left side. However, since President Trump took 
office, wages have been mostly flat. Over the last year, the average 
American has not gotten ahead. You can see how the trend lines have 
flattened out in the CHART-- growth in average hourly earnings on an 
inflation adjusted basis was zero! And in the case of production and 
non-supervisory workers, who represent four-fifths of privately 
employed Americans, these groups actually lost ground over the last 
year, as their real average hourly earnings have fallen.
    These wage trends are more than just a line on the chart. This is a 
real blow to workers across the country, who have been working hard and 
struggling to get by while health care and other costs go up.
    The tax cut has further exacerbated income inequality. According to 
the Tax Policy Center, by 2027, the top 1 percent of households will 
receive 83 percent of the benefits from their $1.8 trillion tax scam. 
The proponents claimed that this bill would boost workers' wages, but 
we can see that since the tax bill was enacted, inflation adjusted wage 
growth has been zero. Meanwhile, wealthy corporations are on track to 
spend a record $1 trillion of this massive windfall from the Republican 
tax scam on dividends and stock buybacks that benefits shareholders and 
executives.
    We know some of the reasons why workers' wages are stagnant and 
income inequality continues to grow. For example, Congress and the 
Administration have failed to update federal standards for the minimum 
wage and overtime. In addition, Congress has failed to strengthen 
workers' rights
    to collectively bargain for better wages, and the Administration 
has appointed officials who are aggressively undermining the limited 
protections that do exist.
    Next week marks the 80th anniversary of the Fair Labor Standards 
Act, landmark legislation that provided millions of working people with 
protection from substandard wages. In the absence of federal action, 
eighteen states raised their minimum wage at the beginning of this 
year. Earlier this week, voters in the District of Columbia joined 8 
other states in phasing out the subminimum wage for tipped workers. Yet 
many states have failed to act, and in Miami, legislation that would 
have provided many workers with a minimum wage of $13 an hour was 
vetoed. That's why we must act at the federal level to boost the 
minimum wage.
    Committee Democrats stand ready to pass polices that boost wages 
and combat income inequality. We should pass the Raise the Wage Act 
(H.R. 15), a bill to increase the minimum wage to $15.00 per hour by 
2024, giving more than 41 million Americans a pay increase. We should 
enact the Restoring Overtime Pay Act, H.R. 4505, which codifies the 
Obama administration's 2016 overtime rule. The Trump administration's 
abandonment of this rule costs low and middle income salaried workers 
$1.2 billion per year in lost wages.
    Committee Democrats also support the WAGE Act, H.R. 4548, 
legislation to improve workers' ability to bargain for better wages by 
strengthening workers' rights to join a union free from retaliation and 
establish meaningful deterrents for unscrupulous employers who 
interfere with these rights.
    I hope that we can have a serious discussion about these policies 
and how we can combat decades-long wage stagnation and income 
inequality.
    I thank the witnesses for joining us today and look forward to 
hearing their testimony. I yield back the balance of my time.
                                 ______
                                 
                                 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                                 
    Chairman Walberg. I thank the gentlelady. Pursuant to 
Committee rule 7(c), all members will be permitted to submit 
written statements to be included in the permanent hearing 
record and without objection, the hearing record will remain 
open for 14 days to allow such statements and other extraneous 
material referenced during the hearings to be submitted for the 
official hearing record.
    It is now my pleasure to introduce our distinguished 
witnesses. Mr. Stephen Moore is a Distinguished Visiting Fellow 
with the Project for Economic Growth at The Heritage Foundation 
Institute for Economic Freedom and Opportunity. Welcome.
    Mr. Michael Farren, is a Research Fellow with the Project 
for the Study of American Capitalism at the Mercatus Center at 
George Mason University. Welcome.
    Dr. William Spriggs is a Professor of Economics at Howard 
University and is testifying on behalf of the AFL-CIO. Welcome.
    And finally, Mr. Jared Meyer is a Senior Fellow at the 
Foundation for Government Accountability. Welcome to all of 
you.
    I will now ask our witnesses to raise your right hand.
    [Witnesses sworn.]
    Chairman Walberg. Thank you. Let the record reflect the 
witnesses all answered in the affirmative. Before I recognize 
you to provide your testimony let me just briefly remind you, I 
think all of you know the lighting system there. Just like on 
the highways, green, keep on going in your five-minute 
testimony. When you see yellow be prepared to stop, you have a 
minute left, and when red hits, conclude your remarks as 
quickly as possible. We would appreciate that. And the same 
will be true for our committee as we have the opportunity to 
ask questions.
    And so now I would recognize Mr. Farren first for--I am 
just reading as this was put here. Let's look down there and 
read directly. Mr. Moore, starting from the left here and 
moving. We recognize you and thank you.

  TESTIMONY OF STEPHEN MOORE, DISTINGUISHED VISITING FELLOW, 
      PROJECT FOR ECONOMIC GROWTH, THE HERITAGE FOUNDATION

    Mr. Moore. Thank you, Mr. Chairman. I appreciate the 
opportunity to do this. I was thinking as I was preparing this 
testimony that I was in this room 10 years ago when things 
weren't very good for the labor force and I have been doing 
this for a long time. I have been in this business 30 years. I 
am happy to report that the state of the American job market is 
as healthy as it has been probably in at least 20 years and 
maybe in 30 years. So it is good to report some really positive 
news.
    And we all know about the reduction in the unemployment 
rate, that it has hit--by the way, full employment. Economists 
have generally defined full employment as four to four and a 
half percent so when you have a 3.8 percent unemployment rate 
that means you have a labor shortage and that's a good problem 
for a country to have. We--according to the latest labor 
department report, there are about 5 million more jobs than 
there are people to fill them.
    And by the way, I think that Congresswoman Wilson really 
raised the most important challenge we have right now is now 
how do we get the wages up? Because boy, do we have the jobs. 
And so that is the challenge.
    But I thought I would just walk you through a few of the 
trends that are going on. I don't know if we can put these up 
on the screen. But I just thought I would show you just a 
couple of quick things.
    Number one, this relates to what Congresswoman Wilson was 
talking about, about how do we get the wages up? I was one of 
the architects of the Trump tax plan. I worked very closely 
with my friend Larry Kudlow who is now the National Economic 
Council Chairman as a senior economic advisor to Trump, and we, 
I just wanted to make it very clear to all of you that the 
intention of that bill from the very first day we started, was 
not to help rich people. We love rich people. We want everybody 
to get rich in this country but that was not our intention.
    From the very first day we started working with Donald 
Trump about this is how do we get middle class wages up because 
Congresswoman Wilson is exactly right. We just have seen 
stagnation in middle income for at least the last 10 years and 
our goal was bring that number up.
    We have created the jobs. I think there is no question that 
the tax bill has been a job creator, but Ms. Wilson is right 
that we haven't yet seen the wage growth and that is the big 
challenge. And the reason I show this chart is we do believe 
that the way you bring wages up is to increase the productivity 
of American workers and to increase investment by business.
    When businesses invest that's when you get higher wages. 
You're right, we haven't seen. It's too early to tell whether 
that effect is going to happen, but we are very hopeful that 
because you can see there is a very high correlation between 
the amount that businesses invest and the amount that wages go 
up.
    The next chart just shows you the unemployment data and I 
think, you know, you are all familiar with this. I just thought 
that one of the interesting things is that the U6 number which 
includes people who are forced into part-time jobs because they 
can't find a full-time job or people who are just discouraged 
workers, that number has fallen a lot as well. And I think that 
is one of the most important indicators of health of the labor 
force.
    The next chart is, this is one of the most important ones. 
The big challenge that I see for your committee in terms of, 
you know, continuing with the healthy economy but also making 
sure that the gains are shared by everyone, is how do we get 
more people into the workforce? This is a problem that started, 
you know, with the recession and it still hasn't been cured, 
which is too many people are sitting on the sidelines and are 
not in the labor force. And what is disturbing about this is 
that most people don't understand this. Yes, it is obviously 
true that we have, you know, 10,000 people retiring every day. 
baby boomers are retiring and that is a challenge. But the big 
problem, if you look at this chart, is that actually older 
people are working more. We have actually increased the number 
of people or the percentage of people by age over 55 that are 
working.
    But look at the bottom, look at the young people. This is a 
big, big problem right now that Americans between the age of 16 
and 25 are working less. And I am a big believer, I think the 
statistics are very clear on this that the--your future 
earnings are very related to when you start working.
    So someone who starts working at age 16 is a lot more 
likely to be successful later in life than someone who starts 
working at 20 or 22 or 24. We do a real disservice when we have 
policies that discourage young people from working. And the 
good news is for young people the jobs are out there, we just 
have to get them into those jobs. So that's an important one 
and I think there is one more chart I wanted to show. And this 
has to do with the minimum wage issue.
    And look, I'm not--I want the highest wages for American 
workers. I completely share what Ms. Wilson was saying. We need 
to raise wages. I just reject the idea that raising the minimum 
wage is a very good way of doing that. And I would submit to 
you if there were going to be more increases in the minimum 
wage, lets at least think about a policy that creates a teenage 
minimum wage that would be, you know, six or seven dollars an 
hour so you can get those young people into the workforce. It 
is one of the most important things we can do for future 
earnings and future employment. Thank you.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Walberg. Thank you and now, Dr. Farren, I 
recognize you for your five minutes.

TESTIMONY OF MICHAEL FARREN, RESEARCH FELLOW, STUDY OF AMERICAN 
     CAPITALISM, MERCATUS CENTER AT GEORGE MASON UNIVERSITY

    Dr. Farren. Good morning, Chairman Walberg, Ranking Member 
Wilson and distinguished members of the Subcommittee. I'm 
grateful for the invitation to discuss how the work done by the 
Bureau of Labor Statistics serves policymakers, researchers, 
and ordinary people.
    My name is Michael Farren. I am a research fellow in the 
Mercatus Center at George Mason University and my previous 
research has left me pretty well acquainted with a lot of the 
data used and distributed by the BLS. In particular the Current 
Population Survey, which provides a lot of the information that 
is used in the BLS's monthly update on the state of the 
economy.
    The underlying goal of my testimony is to help members of 
Congress better understand the BLS and the information that it 
provides. The main takeaways from that are that the BLS, now 
and throughout the past, represents some of the best economics 
research available. Its data collection and analytical work are 
generally seen as the gold standard that other economists 
attempt to emulate.
    The weak link in the chain however, is how the BLS 
communicates the information it has developed. The BLS website 
is the primary platform through which data users interact with 
the BLS. But despite efforts to make it more user friendly, 
attempting to access the BLS data and actually understand it 
accurately can sometimes feel like wandering through a 
labyrinth.
    Thankfully though, the leaders at the BLS recognize the 
agency's struggles in this area and are taking steps to 
improve. But improvements should include additional expanded 
outreach to non-economists in additional--in addition to the 
outreach to researchers and policy wonks.
    So how can the BLS better connect with John Q. Public? And 
the unemployment rate is a good example of how it can do this 
better. Many Americans know a family member or a friend who 
once worked but grew discouraged and gave up looking for a job, 
especially during the Great Recession. But because these 
discouraged workers aren't actively looking for work, the BLS 
doesn't actually include them in its headline unemployment 
rate.
    That fact that the official unemployment measures families 
to account these people as jobless previously ignited some 
suspicion and distrust in the official estimates. The problem 
is that the definition used for unemployment by the BLS makes a 
great deal of sense to economists. It's accurate for an 
economist to understand unemployment to be but it seems 
arbitrary to non-economist leading to a suspicion that policy 
makers are influencing the official statistics in favor of one 
political party or another.
    A better approach would be to appeal to both economists and 
to John Q. Public adding additional measures of unemployment 
that make more intuitive sense to ordinary people, like the 
comprehensive jobless rate. That way the BLS could engage with 
non-economists and actually provide them with a starting point 
to understand the national economy better.
    The idea behind the comprehensive jobless rate is the 
result of previous Mercatus Winship by Scott Winship of the 
Joint Economic Committee and it represents the most holistic 
measure of unemployment possible. It simply counts all adults 
and adolescents who say they want a job as unemployed. And in 
doing so it provides an upper bound on the job--upper bound on 
the measure of joblessness. And therefore a comparison 
benchmark for the official BLS unemployment measures and in 
this way it is even useful to economists.
    In short, the comprehensive jobless rate could be one way 
for the BLS to more fully engage with the general public and 
help them understand the overall economic situation better.
    In conclusion, the BLS is rightfully regarded as an 
objective, data focused organization whose efforts are 
essential to a better understanding of the U.S. economy. Its 
data collection and analysis set the professional standard for 
many economists to follow. However, non-economists would have 
great difficulty using the BLS's resources to actually answer 
their own questions about the economy. Now this might be 
unavoidable. We shouldn't necessarily expect that deep economic 
understanding is commonplace and, in fact, some people might 
argue that deep economic understanding isn't even commonplace 
among economists. Regardless though, a worthwhile endeavor 
would be to make the data curated by the BLS more useful and 
more easily accessible to ordinary people as well as the 
economists who use it on a regular basis. Thank you very much.
    [The statement of Dr. Farren follows:]
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    Mrs. Foxx. [Presiding] Thank you, Dr. Farren. Dr. Spriggs, 
you are recognized for five minutes.

 TESTIMONY OF WILLIAM SPRIGGS, PROFESSOR OF ECONOMICS, HOWARD 
                           UNIVERSITY

    Dr. Spriggs. Thank you very much, Mrs. Foxx, and I want to 
thank Chair Walberg and Ranking Member Wilson for inviting me 
and thank you to the members of the subcommittee who are here.
    As the Ranking Member mentioned, the great puzzle we have 
is to raise the wages of the American workers not just for the 
sake of the workers and for our families but for the sake of 
our economy. We need to have a recovery that is led by wages, 
not a recovery that is led by workers going into debt.
    The trends that started in 2010 have continued. They have 
not accelerated and so that's good news that nothing has 
happened to slow down the rate at which we have been creating 
jobs, at the rate at which job openings have been coming 
relative to the number of unemployed persons, and the labor 
force participation rate for African Americans has continued to 
recover during this expansion, chasing the unemployment rate 
and the unemployment population ratio down and up for those 
communities. All that is good news.
    The puzzle for labor economists and what we all as policy 
makers have to answer is at this level of labor market 
tightness why aren't wages going up? And labor economists have 
begun to look and challenge themselves and their theories on 
this point. What is becoming clear from that research is that 
institutions, in fact, matter.
    One reason economists are finding that institutions matter 
is that we have increased concentration of firms both at the 
local and at the national level. This creates an inordinate 
power in the hands of employers, what economists call 
monopsony, and it isn't always this sort of textbook, ``I'm the 
only coal mill in town or whatever and so I'm the only 
employer.'' This is a broader sense of which employers have 
power over workers in their bargaining position.
    So if you look at what labor economists are doing now to 
look at that, Economist Benmelech, Bergman, and Kim have 
bothered to look at the local level, what is the concentration 
of firms and what does that mean for wages? And what they have 
found is what we would predict, that the increasing 
concentration of firms at the local level has lowered the wages 
of workers.
    What are the policies that can counterbalance that 
phenomenon? What is clear in their data is that when workers 
are unionized, they become that counterbalancing force. So they 
don't observe the negative pressure on wages from monopsony 
where they see higher unionization rates. This is melded 
together with what we know over the broader horizon of U.S. 
economic history and the post--war era that when we had higher 
union density, wages did go up with productivity and we saw the 
wages of nonunion members go up as well as union members.
    In fact, when you decompose what has happened for nonunion 
members, researchers have been able to document that nonunion 
workers actually had more downward pressure on their wages from 
the decline in union density than wages going down from 
competition with Chinese imports. So this is an important 
factor to consider.
    Over the longer span, research has now been able to 
document what happens to inequality broadly in our society and 
what happens to the link between wages and productivity because 
of our decline in union density. And it's quite clear that 
having workers' voice matters a lot. Raising the minimum wage 
is very important in this equation. That's the other way in 
which we help low wage workers combat the type of monopsony 
that takes place particularly among low-wage workers.
    This October will be the second longest period we have 
failed to raise the federal minimum wage since 1938. June will 
be the longest. Since there is no pending law, we will probably 
break those records. Congress has the ability to change the 
institutions, put them back to where America had them, restore 
to workers the voice and power that they had. That's in 
Congress'Congress's power. Thank you.
    [The statement of Dr. Spriggs follows:]
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    Mrs. Foxx. Thank you, Dr. Spriggs. Mr. Meyer, you are 
recognized for five minutes.

    TESTIMONY OF JARED MEYER, SENIOR FELLOW, FOUNDATION FOR 
                   GOVERNMENT ACCOUNTABILITY

    Mr. Meyer. Thank you very much, Mrs. Foxx, and I want to 
thank Chair Walberg and Ranking Member Wilson and other members 
of the Committee for the opportunity to testify today. My name 
is Jared Meyer and I'm a senior fellow at the Foundation for 
Government Accountability, which is a non-profit research 
organization that promotes work at both the state and federal 
levels.
    The American economy is generating more jobs outside of the 
traditional employee-employer relationship and implementing the 
right policies to accommodate this change is impossible if all 
of you don't have access to comprehensive, up-to-date data. 
Imagine navigating an unfamiliar city when your smart phone is 
out of battery or getting married before meeting your future 
in-laws. Thankfully the Bureau of Labor Statistics recently 
released the Contingent Workers Supplement, or what I will 
refer to as the CWS, to survey the prevalence of these 
alternative work arrangements like independent contracting. 
While the Committee should applaud this release, here are three 
improvements to ensure that the survey doesn't under estimate 
the workforce and give an incomplete picture of how Americans 
are working.
    First, the CWS needs to capture work arrangements that are 
used for supplemental income. Second, the survey needs a longer 
look-back period given the nature of flexible work. And third, 
the survey needs to be released regularly.
    So all of us constantly hear about these online platforms 
like Airbnb and Lyft. But the changes to the workforce, they 
extend far beyond transportation and travel. Consider my mom's 
story. When I was growing up, my mom would go to Goodwill and 
buy old sweaters that she would then sew into mittens. I grew 
up in Minnesota, so mittens were pretty necessary. But then, 
during the holidays, she would go to local craft fairs and sell 
them and on a good weekend, maybe she would sell a dozen pairs 
to put towards Christmas gifts to the family.
    But imagine what my mom could do today. With just a few 
clicks of a mouse, and in a few minutes, she could have an 
online store on Etsy that could reach people all over the 
world, turning her hobby into a major source of income for our 
family. This is what technology has done for the labor force, 
opened more avenues for entrepreneurship.
    So the new CWS comes after a 13-year break from conducting 
the survey. During that time, there were many organizations 
that attempted to measure the technology-fueled change in the 
workforce. The consensus reached was that the number of people 
working as independent contractors has increased over the 
years. Most estimates place the share of workers who are 
working as freelancers, as independent contractors between 
about 15 percent and 30 percent of the workforce.
    But according to the newly released CWS, independent 
contractors represent just 6.9 percent of the workforce. This 
is less than half the level of other estimates and less and 
lower from the levels of the previous CWS which was released in 
2005. Do any of us believe that there are fewer people 
freelancing today than in 2005, two years before the iPhone was 
first released?
    I don't question the accuracy of the CWS but its design 
leads to an incomplete picture of the labor force because it 
doesn't count most independent contractors. Its main 
shortcoming is that it only measures alternative work if these 
jobs are a respondent's primary source of income.
    See, I earn about 20 percent of my income from independent 
contractor work, but I wouldn't be counted as participating in 
an alternative work arrangement under the CWS because I earn 
more as a full-time employee at FGA. So this decision likely 
explains the dramatic difference between the CWS and other 
reputable estimates. But something needs to change when 
millions of Americans are working hard and to earn supplemental 
income, but this isn't reflected in government data.
    To count independent contractors, I suggest that the CWS 
use an earnings threshold of $600 a year rather than a majority 
of income. This is the same threshold that the IRS uses to 
require firms to issue 1099 tax forms to workers. Many workers, 
especially millennials, desire these types of nontraditional 
jobs. Less than 10 percent of independent contractors 
identified by the CWS would have preferred a traditional work 
arrangement and the data show that independent contractors are 
as educated as traditional workers. They earn just as much and 
they're just as secure in their jobs.
    Workers also value flexibility, but the CWS only considers 
work done during the previous week. Given the nature of 
freelancing work, the CWS should ask about independent 
contractor jobs done over the previous year. For example, a 
teacher may freelance as a math tutor over the summer or a 
landscaper may work as a ski instructor over the winter. And 
rather than just being a sporadic survey, BLS should release an 
update to the CWS every two years as it did from 1995 to 2001 
but with the additional updates to give a more broader and 
accurate picture of the labor market.
    When crafting policies to help your constituents, you need 
access to comprehensive, up to date labor market data. This is 
why, to summarize, the CWS should measure independent 
contractors based on a $600 a year earning threshold. Second, 
use a one year look back period instead of a one week and 
third, be released every two years rather than us having to 
wait another 13 years to see this data.
    Thank you again for the opportunity to testify and I look 
forward to your questions.
    [The statement of Mr. Meyer follows:]
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    Mrs. Foxx. Thanks to all of our witnesses for your 
excellent presentations. I will begin the questioning and yield 
myself five minutes.
    Mr. Moore, as you presented in your testimony, many 
economic trends for American workers are moving in very 
positive directions. Unemployment rate at the lowest rate we 
have seen in two decades, the number of unemployed workers 
dropped by nearly three quarters of a million people, wages are 
beginning to rise. In fact, for the first time on record, the 
number of job openings now 6.7 million actually exceeds job 
seekers. Some have suggested President Trump was handed an 
economy that was already creating jobs and was primed for the 
sort of growth we are now experiencing.
    However, in your testimony you pointing to an economic 
forecast which suggests growth of more than 4 percent in the 
second quarter of this year, exceeding the growth rate seen as 
President Obama left office. Knowing of the positive impacts of 
the tax law passed by Congress, is there another recent policy 
change impacting the current economic boom which is significant 
in terms of its positive financial impact on the typical 
American household?
    Mr. Moore. Well, first of all, I mean, I don't think there 
is any question that the tax bill has had a very positive 
effect, I mean, if you look at the growth rates in the economy 
we have seen just unquestionably a bump up in growth and, you 
know, we had a recovery over the last seven years but it was 
the weakest recovery we had from a recession since the Great 
Depression. So it was an anemic recovery. It was a long 
recovery but it was very weak with very little wage growth and 
not enough growth.
    The average growth rate from 2009, June of 2009 when the 
recovery began though June of 2016 was less than 2 percent per 
year. We--the growth, you know, I have heard you all talking 
about how do we, you know, reduce income inequality. How do we 
reduce poverty? How do we get wages up? You have to have 
growth. You have to have economic growth.
    Now there is some really good news that just came out 
literally yesterday from the Federal Reserve Bank of Atlanta 
that the growth rate for the 2nd quarter is--looks like it's 
going to come and 4 and a half to 5 percent. That's a 
phenomenal number. Congratulations. I think that the--we are 
going to see I think another four or five quarters of very high 
growth rates.
    So the big issue now is, you know, why did it happen? I 
think the tax cut--why was the tax cut so related to growth? I 
think the two most important things you did in the tax cut was 
bringing down our business tax rates. You know, it has just 
made America more competitive. America is a great place to 
invest in. One of my favorite headlines of I think this was 
from last week, from the Wall Street Journal, U.S. economy is 
now the envy of the world. We are growing faster than virtually 
any other country. Europe is growing at half a percent right 
now, we are growing at four.
    So I think you guys should take a lot of--you deserve a 
congratulations for the tax cut but the work isn't done because 
we are not--we still haven't seen the wages rise enough. And 
we, I really am concerned about that we are not seeing enough 
young people getting into the workforce and we need to have 
that happen.
    Mrs. Foxx. Thank you very much. I saw some very compelling 
statistics about young people not working in the summer for 
example, college students and high school students recently, 
phenomenally low numbers, very, very telling.
    Dr. Farren, as you state in your testimony, and I would 
agree the Bureau of Labor Statistics collects and publishes 
information that can be very helpful not only to policy makers 
but to business owners, perspective employees, and students 
choosing a future career.
    However, given that most people do not access BLS's website 
on a daily basis, how do they learn about current economic and 
labor market conditions? And how can BLS make its products more 
accessible and understandable to non-economists who have an 
interest in this information?
    Dr. Farren. Thank you very much for the question. The 
easiest way for the BLS to make the data more accessible to 
non-economists is to make it more accessible to economists in 
the first place. The people in this panel, the people in the 
media that actually use this data, the people in trade 
associations and union associations that actually use this data 
to communicate with their constituents and with the people that 
read what they write is the first way.
    The second way is there is some evidence of other websites 
like the Fed websites from the St. Louis Federal Reserve Bank 
and the IPUMS website that offer additional ideas of how to 
make the website more accessible.
    Mrs. Foxx. Thank you very much. I now recognize Ranking 
Member Scott for five minutes.
    Mr. Scott Thank you, Madam Chair. Mr. Moore, you indicated 
that the purpose of the tax bill is not to help the top 1 
percent. What portion, when it finally passed, what portion of 
the tax benefits went to the top 1 percent and corporations?
    Mr. Moore. So this is a key point, I'm so glad you asked 
about this, Representative. The--we believe that when you cut 
the corporate tax rate and the business tax rates that a big 
percentage of the benefits of that go to working class 
Americans. That's why I showed you that chart about increasing 
productivity and increasing investment.
    Mr. Scott So you don't disagree with the 80 percent went to 
the top 1 percent and corporations?
    Mr. Moore. No absolutely not. We actually think that if you 
look at a Congressional Budget Office study that came out last, 
I believe it was in 2016 or '17 and I can get you that data. 
The Congressional Budget Office sets a 70 percent of the 
benefit of cutting the business tax rate goes to workers. So 
the--
    Mr. Scott. Okay. So that is the trickledown effect.
    Mr. Moore. Because you--the way you get wages to rise is to 
have number--two things you need. A tighter labor force, right. 
You need a tight labor force to have wages rise. And number 
two, you need workers to be more productive and workers are 
more productive when they have more computers and technology to 
work--
    Mr. Scott And how many jobs are projected to be created 
with the $1.5 trillion tax cut?
    Mr. Moore. I'm sorry, I had a--
    Mr. Scott How many jobs did you--are you projecting will be 
created?
    Mr. Moore. From the tax bill or?
    Mr. Scott Yes.
    Mr. Moore. It's hard to say, I mean, I think we projected 
that the tax bill over 10 years could create an extra 10 
million jobs. I mean, so far so good. The tax cut has only been 
in existence for less than six months.
    Mr. Scott And you have seen projections in the 300,000 
range?
    Mr. Moore. Sorry, monthly or?
    Mr. Scott No. No. Total.
    Mr. Moore. I'm sorry, I'm not understanding your question.
    Mr. Scott Well, you said 10 million. Most of the 
projections have been in the 300 to 600,000 range.
    Mr. Moore. The 300,000.
    Mr. Scott Yes.
    Mr. Moore. I'm sorry, I'm not understanding your question.
    Mr. Scott Well, I guess not if you are guessing 10 million 
but--
    Mr. Moore. You know, the numbers that have come in just in 
this last six months on the unemployment have been pretty 
robust. I mean, we got over 200,000 in the last month. It's 
going to take a little. Look. This isn't going to happen 
overnight.
    Mr. Scott That is right.
    Mr. Moore. When you cut the business tax rates it is going 
to take maybe a year or two for the full impact of the tax cut 
to kick in.
    Mr. Scott Dr. Spriggs, can you say how much the jobs have 
been increasing since the passage of the tax bill?
    Dr. Spriggs. The creation of jobs has not accelerated since 
the passage of the tax bill. Wages have not accelerated. In 
fact, real wages have remained flat since the tax bill. So so 
far, the only thing that has happened is that the trend in 
wages has flattened but the trend in the terms of job creation 
haven't accelerated. So in order to get 10 million jobs which 
would be 1 million jobs a year, we would have to see some 
marked acceleration in job creation because that is a 
projection above trend in order for this to have an effect. And 
so far we are not above trend.
    If you look from 2010 to today, we have been on the same 
path for the last eight years. So nothing has changed either in 
the last two years, nothing has changed since January in terms 
of job creation.
    Mr. Scott And can--we have heard about the effect of 
minimum wage. Can you say how minimum wage affects positive or 
negative job growth?
    Dr. Spriggs. So the best research we have done and labor 
economists have gotten far better at being able to identify the 
precise effects of the minimum wage are that it essentially 
doesn't do anything on job growth. It changes the nature of 
jobs that will be created. They will tend to be higher wage 
which is the intent. When you look at the period when Congress 
made sure to keep the minimum wage going up with median wages, 
you see that, broadly speaking, wages went up and we had higher 
productivity. So the effect of raising the minimum wage isn't 
so much on job growth as to the character of the jobs and the 
wages that go up for everyone.
    Mr. Scott What about youth employment?
    Dr. Spriggs. Youth are the area that economists looked at 
first because the, in the old days they were the ones who 
predominately had those jobs. Today predominately people of the 
minimum wage are immigrants. That's part of the reason why we 
haven't found an effect on teenagers.
    Teenagers' unemployment we have as many studies that say 
there is positive growth as there is negative growth. The net 
effect is zero when you look at all the studies, add them all 
up together.
    Mr. Scott Thank you, Mr. Chair.
    Chairman Walberg. I thank the gentleman and I recognize 
myself for five minutes of questioning. I had markup votes in 
Energy and Commerce, I am sorry I had to leave. I wanted to 
hear the testimonies, glad we had a chance to read those. This 
is certainly an opportunity amongst many to see the difference 
between a formula that says increase taxes, spending, and 
regulation to grow the economy versus reduce taxes, spending, 
and regulation to grow the economy. And time will bear it out. 
I am betting on the last. It will work better because it has 
worked throughout the course of history in our country.
    Mr. Moore, as you highlighted in your testimony, the growth 
in the U.S. economy and prospects for workers now better than 
they have been in more than a decade. Much of this growth is 
due to our work with the President to update and modernize U.S. 
tax code. However, the tax code is not the only set of laws 
that have grown outdated and stifled workforce opportunity. 
Many federal labor and employment laws were written in the 
1930s and 40s and have not been substantially updated in 
decades.
    In your view, what changes to our nations labor laws are 
needed to continue the growth and opportunity to begun under 
the Trump administration?
    Mr. Moore. That's a good question. I think we have a 
fundamental disagreement at this table about the effect of the 
minimum wage. I think that, you know, the evidence is pretty 
clear from the academic studies that when you raise the minimum 
wage the people are mostly--who feel the brunt of that are 
teenagers and especially minorities because they tend to have 
the lower skills.
    I mean, obviously, you know I have a 17 year old son, 
Congressman. I love him to death, but even I wouldn't pay him 
$8 an hour, right. I mean, he just doesn't know how to--he 
doesn't have the skills. I mean, the importance of the starter 
job is so critical to getting people, I mean, when you--
everyone remembers the first job they had. And I remember mine. 
Will give you a, you know, an indication of my age. My first 
job I was working for $2.10 an hour in a warehouse in Chicago, 
Illinois.
    Chairman Walberg. I was working for a buck 50 at a gas 
station.
    Mr. Moore. Okay, you're a little older than I am.
    Chairman Walberg. In Chicago.
    Mr. Moore. In Chicago. So but my point is, you know, you 
learn a lot from your first job. You learn how to show up, work 
skills, maybe work with a cash register or equipment and so on. 
In fact, you know, and the evidence is very clear that people 
who are on the minimum wage, most of them, not all of them but 
most of the people on the minimum wage it's a starter job and 
it's after six to nine months most of the employers pay them on 
increase once they get the skills and learn how to do things.
    You know, the interesting thing about this minimum wage 
issue because I think it is important because, remember what 
happened literally six weeks after you passed the tax cut. Two 
of the biggest employers in the United States, Walmart and 
Costco, what did they do?
    Chairman Walberg. Raised the minimum wage.
    Mr. Moore. They raised their minimum wage. And this is the 
argument we, you know, it was the argument I was making 
earlier. When you create a tighter labor market as we have 
right now, it benefits workers because if you don't like your 
one job, you can go down the street and get another job. And 
that has helped and that is why Walmart and these companies are 
increasing their wages because they have to retain their 
workers.
    Chairman Walberg. Right.
    Mr. Moore. And that's a great way to get wages up.
    Chairman Walberg. Competition, yes. Dr. Farren, it's clear 
a lot has changed since 2005, which was the last time the BLS 
completed the Contingent Worker Supplement. With the technology 
available today, hailing a ride, job sharing, the economy, et 
cetera, it is freelance work and flexibility is easier than 
ever. We need to know the statistics on that. How can BLS 
ensure this population of workers is captured in future studies 
in a more realistic way?
    Dr. Farren. Thank you. So one of the ways that the BLS can 
do this is to make sure that they are targeting the right 
people with their surveys.
    Chairman Walberg. Excuse me, Dr. Farren. I meant Dr. Meyer 
on that. We could get that on you but I think I probably Mr. 
Meyer is better set for that one.
    Mr. Meyer. Well, I'll just continue on what Dr. Farren was 
responding to your question because you brought up that this is 
important. We don't want people doing hard work, being left out 
of government data do I will just reiterate that first we need 
to measure independent contractors even if they're not getting 
the majority of their income from this. And I just recommended 
a $600 threshold because it seems to be based on how we 
determine other tax law along independent contractors. But also 
consider--you unfortunately missed the story of my mom selling 
mittens in Minnesota at craft fairs.
    Chairman Walberg. I heard about it yesterday.
    Mr. Meyer. Oh. Well, with this surgery that was currently 
done it was from May 2017 was when the respondents were asked. 
My mom wouldn't be reflected in that because she wasn't working 
the alternative work arrangement at that point. So I think 
bumping it back to a year and looking at over a year, that $600 
threshold that would give us a much more complete picture. 
Though it should be noted that the BLS is releasing another 
supplement to the CWS that focuses just on technology mediated 
work so think of online platforms but I care about all 
independent work. We want to capture the self-employed, the 
entrepreneurial economy and I think by making those simple 
changes it--additionally additions rather than changes to the 
survey it would go a long way to providing you with better 
information.
    Chairman Walberg. It is an amazing growing economy with all 
sorts of diversity to it. Thank you. My time is expired and I 
now recognize the gentlelady from Florida, Ms. Wilson.
    Ms. Wilson of Florida. I ask unanimous consent that the 
chart I showed earlier--be entered into the record.
    Chairman Walberg. Without objection. And hearing none it 
will be entered.
    Ms. Wilson of Florida. At this time I would also like to 
note that the mention of increased wages by Chair Walberg did 
not adjust for inflation. Real wages adjusted for inflation 
have not grown from May of last year.
    Dr. Spriggs, thank you so much for being here today. And I 
have a few questions. Why is it that wages aren't rising even 
though the unemployment rate is at historic lows? What does 
this tell us about the state of our labor market institutions 
and what are the top three actions Congress should take to 
repair these institutions?
    Dr. Spriggs. Thank you, Congresswoman, and briefly before I 
answer your questions, Walmart raised wages at the same time 
they announced they were letting go of thousands of workers. At 
the same time they were announcing they were going to do a 
massive stock buyback. So the net effect for workers really was 
zero. The net effect for the Walton family was that they got a 
whole lot richer.
    So for labor economists, this is the exact market where our 
elementary theory should make wages go up because there are 
more job openings announced than there are people looking for 
work. The young people are entering the labor market are far 
better educated than the older workers who are retiring. 
Companies have had several years of record profits, they have 
just been given a tax cut that gives them billions of dollars. 
This is exactly the environment in which our textbooks say 
wages should go up if it was only the market. Wages aren't 
going up.
    So it's clearly that you have to look back at our economic 
history, the time period that most people think we want to get 
back to, meaning the period from 1946 to 1979, and when you 
look at that period what stands out is we relied on labor 
market institutions that Congress had established. Knowing the 
history of the Great Depression, they understood that labor 
markets on their own don't work. We gave workers the right to 
bargain so we need to revisit and see what went wrong because 
workers have been losing the right to bargain and Congress 
could pass legislation as you mentioned that could restore 
that.
    We have not done the job to maintain the minimum wage. My 
first minimum wage job, we must be the same age, Chair, was 
$1.75 because Sears Roebuck told us we are going to pay you 25 
cents over the minimum wage. That was their incentive to make 
sure that we kept the job and didn't go walking off.
    Today, that would be around $10 an hour. It would have been 
illegal. It would have been illegal to pay someone $8 an hour.
    Now I was a high school student. I don't think, I think I'm 
pretty smart, but I don't think that I'm that much smarter than 
today's high school student that we can justify paying them 
less than I got paid for my starting job. And clearly they are 
more productive.
    The third thing that Congress can do is not only is it just 
help with labor standards and organizing but when the balance 
of power turns against workers through labor market standards, 
that lowers the bargaining power of workers so when you roll 
back safety standards like the beryllium rule and exposure to 
beryllium, when you speed up hog slaughtering lines, when you 
do other actions that diminish the relationship between workers 
and management, you undermine the whole ability of workers to 
bargain. And that's key to raising wages so Congress must watch 
these rollbacks and labor standards.
    Ms. Wilson of Florida. Quickly, how will the Tax Cuts and 
Jobs Act affect income inequality?
    Dr. Spriggs. Well, it's weighted heavily towards those at 
the top. If the intent was that companies were going to use it 
to actually invest in capital which would improve the 
productivity of workers, so far we see no signs of that. The 
Federal Reserve's forward looking orders for new equipment not 
in defense show no signs that companies are spending any more 
money on physical capital- the capital that increases the 
productivity of workers. Instead, companies have announced over 
a trillion dollars in stock buybacks.
    Ms. Wilson of Florida. Thank you.
    Chairman Walberg. Thanks, gentlelady, and then I recognize 
the gentleman from Georgia, Mr. Allen.
    Mr. Allen. Thank you, Mr. Chairman and thank you so much 
for participating in this important hearing. You know I don't 
know how it is in other districts, but in my district, 
obviously we have--everybody needs workers. Right now I'm 
meeting with companies and the wage issue is, I mean, you know, 
truck drivers for example. $70,000 a year and all their medical 
care paid for. Chemists or plant workers, $20 an hour, all 
their medical paid for. But yet we still have these shortages. 
The biggest restraint that we see, obviously that the tax 
reforms and tax cuts and the jobs act has done exactly what we 
had hoped it would do and that was grow the economy. We are 
looking at tremendous job growth throughout this country.
    But you cannot grow an economy without a workforce. And 
there is going to be a lot of pressure on all of our 
institutions to produce that workforce. We have got a lot of 
people that still aren't in the workforce that need to be in 
the workforce. In fact the New York Times reported that Social 
Security disability benefits are plummeting which means we are 
getting folks into the work place.
    And so with that, Mr. Moore, you know, this article 
attributed this reduction as the latest evidence that a 
stronger economy is pulling people back into the workforce and 
keeping people into the workforce. Does this report surprise 
you given the strengthening in the labor market?
    Mr. Moore. No, I saw that same report that you're 
mentioning and it is such good news that because what happened 
in the last, after the last recession was that disability 
became a new form of welfare. So we saw a huge spike up in 
disability payments. It wasn't because more people were injured 
on the job, it was because this is the way you got paid because 
you couldn't find a job.
    As we have created, I mean, this is what I was just telling 
Chairman Walberg, I think this relates to your point is that 
there is so many benefits to creating a tight labor market 
where, you know, there was a story in the New York Times a few 
months ago about employers literally waiting outside of the 
prisons so when people were released from prison they could get 
them into the workforce. I mean, this is a wonderful thing to 
see.
    I'll mention one other quick thing that is related to this 
whole discussion. Just yesterday, the manufacturing numbers 
came out. As you know, manufacturing numbers did not grow 
virtually at all during the first seven years of the recovery. 
Manufacturing, over 90 percent of manufacturers are positive 
and bullish and they expect to expand their operations. I mean, 
that is a wonderful thing. So those are high paying, blue-
collar jobs in states like Michigan and Georgia and many of 
those states we went to on the campaign were frankly, look, we 
had a recovery but there were a lot of states like Michigan and 
Wisconsin and Pennsylvania and Ohio and West Virginia where 
people didn't feel the recovery. Now they are starting to feel 
a recovery.
    Mr. Allen. Yes. Yes and again to my district, we are seeing 
that, we are seeing new businesses being created and I will 
tell you this. You know, my folks in the 12th district are very 
appreciative of the increase that they have gotten in their 
paychecks. The increased benefits, I mean, nationwide we are 
talking more than 4 million people, $6 billion, you know, that 
companies are putting out there.
    And again, you know, it's to number one is to keep their 
folks because of the competiveness in the work place. How do 
you use us solving this problem, Mr. Moore, as far as, you 
know, we got 6.7 million jobs out there? We have got to get, 
you know, we have lot of people that aren't in the workforce 
back to work, give them the dignity and respect they deserve.
    Mr. Moore. It's a skills problem. It's a skill problem. I 
mean, there are a lot of workers out there that could be and 
should be working but a lot of them just don't have the basic 
skills that are necessary and I like what President Obama 
proposed and I think President Trump has reiterated this. I 
love the idea of apprenticeship programs. If you do--if you get 
an apprenticeship program and you've, you know, you learn how 
to be a plumber, or a, you know, an electrician or something 
like that, why shouldn't we give those people the same 
equivalent of a four-year college degree? If they are getting 
the kind of skills they need.
    I do think one of the things you all have to think about in 
this committee, I think it's a really important issue for the 
next 20 years is what is the real valuation of a four-year 
college degree with somebody getting a sociology degree versus 
somebody who is getting a real skill?
    I mean, if you are a pipe fitter these days, my goodness, a 
pipefitter or a welder, you can get a job for $60, $70,000 a 
year, start your own business, you can be making $100,000. 
There is nothing wrong, Congressman, with working with your 
hands. And those are getting to be better jobs all the time.
    Mr. Allen. Right. Well, thank you so much and I yield back.
    Chairman Walberg. I thank the gentleman. Now I recognize my 
friend from Connecticut, Mr. Courtney.
    Mr. Courtney. Thank you, Chairman Walberg, and thank you to 
all the witnesses for being here today. Again the timing given 
the fact that it's six months since passage of the Trump tax 
cuts is appropriate to begin the process of trying to 
understand better the impact. And again, I think, you know, it 
seems like pretty much everyone is pretty much unanimous about 
the value of having the Department of Labor, you know, have the 
tools to track data because otherwise we are just sort of 
stumbling around in the dark.
    So if you look historically at the Reagan tax cut, the Bush 
tax cut, and now the Trump tax cut, what is interesting is that 
in the first two cases, every single House Republican voted in 
favor of those bills. The Trump tax cut however, was kind of 
interesting is that there was a dozen House Republicans who 
voted no. Eleven were concentrated in states, New Jersey, 
California and New York. And the reason is because of one 
aspect of the bill which has not gone into effect yet really, 
which is the cap on state and local tax deduction which Mr. 
Moore giddily described as death to Democrats in the lead up to 
the vote which I'm sure those Republicans from those states 
would sort of ask themselves what am I, chopped liver? And as 
well as Governor Baker from Massachusetts.
    So you know, Dr. Spriggs, you did actually focus on this on 
page seven of your testimony about the fact that, you know, 
this shoe is going to start dropping with the next tax filing 
in 2018 where a lot of middle class families and frankly it 
isn't just blue states, Mr. Moore, it's going to impact states 
all across the country, are suddenly going to be in a totally, 
you know, no win situation in terms of, you know, how you pay 
for basic fundamental services like public schools, public 
safety, transportation, infrastructure, et cetera. Which again 
a large portion of that is paid for by state and local 
governments.
    So when we talk about the skills gap, the biggest vehicle 
is still the public school system and the career and technical 
schools which again I would say yes, apprenticeships. I can 
take you up to Electric Boat in Connecticut and show how 
successful that's going but frankly, we need to go deeper into 
the tech schools and invest there but the bulk of that is going 
to come from state governments and local governments. So, Dr. 
Spriggs, could you talk about again that shoe which has still 
not dropped yet in terms of capping and crippling and 
handcuffing the ability of state and local governments to deal 
with labor market issues with education and job training?
    Dr. Spriggs. Thank you very much, Congressman Courtney, 
because that is the big gap that we have experienced. We have 
done the things to restore business dynamism, businesses have 
been created because we took a more balanced approach in terms 
of who benefitted from the recovery act--and you need balanced 
income growth to generate the most number of customers and 
that's what gets you business creation.
    But we didn't do the job in restoring public investment. 
And you're exactly right, it's not just the blue states. We saw 
teachers in Oklahoma and West Virginia- These are very much red 
states- walk out because they have had their school starved for 
the necessary investment and they have seen their pupil-teacher 
ratios go up and up and up and they can't do their jobs 
effectively.
    We are down 100 over 120,000 teachers just to get back to 
where we were in 2008 and then you have to think about the 
growth in the student population. We probably need close to 
another 200,000 local school teachers and you're exactly right. 
The states that have been squeezing on public education the 
most are now going to find how do they catch up with the tax 
bill that is going to force them to double tax their citizens. 
And it's that double taxation that creates the bind for the 
state and local governments and it will in many voters' eyes 
appear to be unfair. Why am I paying taxes twice just to get 
the necessary things for my child to get educated? And if I'm 
an employer for the workforce I want to be educated.
    We have never in the history of the United States had this 
massive de-investment in K through 12. We are moving against 
the trend globally where everyone else is increasing their 
investment in education and this is just going to make it that 
much more difficult.
    Mr. Courtney. And again just to drive one last point again, 
we have still not seen the true effect yet of the SALT 
provision in the Trump bill which is going to really again 
start landing hard on middle class families in 2019 and years 
beyond. Isn't that correct?
    Dr. Spriggs. That's correct because it's going to take a 
lot more revenue to get back to where we were because we are 
falling further behind.
    Mr. Courtney. Thank you. I yield back.
    Chairman Walberg. I thank the gentleman. And I recognize 
the gentleman from Indiana, and glad to have you on our 
Subcommittee and the Committee as the newest member, appreciate 
that. Mr. Banks.
    Mr. Banks. Thank you, Mr. Chairman. A pretty good first 
committee. I appreciate each of the panelists who are here 
today.
    Mr. Moore, when we passed the Tax Cuts and Jobs Act six 
months ago before the bill passed, all of the loudest voices in 
your field said we'll never exceed 3 percent GDP. Why were they 
so wrong and how good can it get moving forward?
    Mr. Moore. That's a good question. You know, the economy 
for the last four quarters has been growing at about 3 percent 
so we are there now. And you're right, most economists 
believe--who were skeptics of the tax and by the way, this 
growth isn't just being driven by the tax cut. I mean, it's 
being driven by pro-America energy policies, by the 
deregulations, by just being, by a pro-business kind of 
atmosphere.
    I mean, you saw literally the day after the election 
consumer and business confidence went through the roof. It 
didn't happen by accident. This was a, the American had elected 
a pro-business president.
    It's a, we will see if this is, look. I don't want to read 
too much in short term data. It's only been, you know, a year 
and a half since Trump has been president. The tax cut is only 
six months old so it's a little early to make a big, you know, 
bold proclamations about the tax bill. All we can say so far, 
so good. You know, almost every economic indicator right now, 
almost every indicator is pointing straight north. And so this 
is a positive thing.
    One just quick thing on this SALT deduction because this is 
a big issue and I was one of the biggest advocates of 
eliminating the SALT deduction. And I just want to point out 
this because it is really important. Ninety percent of 
taxpayers around the country are not affected one iota by that 
because there is a $10,000 deduction on their state and local 
tax deduction. That means for the bottom 90 percent they are 
completely unaffected.
    The top 1 percent pay half of the cost of the cost of 
getting--this is the--this was the most progressive if you want 
to use that term, feature we had in the tax bill. Is half of 
the cost of that was paid by the richest 1 percent. It is one 
of the reasons that the tax bill is not regressive because the, 
you know, it's paid for by millionaires and billionaires, the 
very people that the people voted against the bill said they 
wanted to tax more. That's what you did by getting rid of the 
state and local tax, right.
    You come from Indiana by the way. Indiana is a fairly 
modest spending state. Your taxes are pretty modest, your 
spending is pretty modest, it's one of the reason people are 
coming to Indiana. Why should people in Indiana have to pay 
higher taxes, federal taxes to pay for high cost services in 
New York, New Jersey, Connecticut and California? It's just not 
fair. People, if people in New York and California and New 
jersey ant high cost government services, they're certainly 
entitled to do it but that should be paid for the by the people 
who live in those states, not a person who lives in Elkhart, 
Indiana. In my opinion.
    Mr. Banks. I appreciate that. I have a couple of more 
questions for you. Dr. Spriggs has had me thinking a little bit 
when he talked about income equality, wage equality. Yet in 
your testimony you include a very compelling graph, a 99 
percent correlation between business investment and wages. 
Could you perhaps expand on that for a moment? I have a very 
important question to ask you after that and have very little 
time so.
    Mr. Moore. So it's just a, you know, connecting the dots 
that for higher wages you have to have more productive workers, 
you know, why is an American worker paid more than a Mexican 
worker in Mexico? Because American workers are more productive. 
They produce more on the job. I don't think any economist 
really disputes that.
    So how do you get workers to be more productive? Better 
education, better skills, certainly so that you have more human 
capital but also so they have more computers, more technology 
and things to work with. I mean, a worker works with a computer 
makes twice as much as one who doesn't have the computer and, 
you know, I just disagree with this analysis that investment 
has an increase.
    If you look at the cap ex numbers what we call cap ex which 
is business capital expenditures, they have gone way up since 
the tax cut. And, I mean, look, if you tax something, you get 
less of it. If you tax something less, you get more of it. You 
reduced the taxes on business capital investment. That is why 
one of the most important things, Mr. Chairman, I think you did 
in this bill was the immediate expensing provision so that 
businesses could go out.
    I remember talking to Fred Smith who is the, you know, the 
chairman and CEO of FedEx, one of America's, you know, most 
successful companies. And I think FedEx employs well over 
100,000--a couple hundred thousand workers. And, you know, I 
remember talking to him and he said, ``Look, you pass this 
thing with the expensing and the lower corporate tax reduction, 
we are going to start, you know, purchasing planes, trucks, all 
of these things,'' and it is happening. It's a great story of 
revival.
    Mr. Banks. Yes, okay I have 10 seconds left. Either tonight 
or tomorrow we will be passing the Farm Bill which includes 
significant reforms for work requirements.
    Mr. Moore. Absolutely.
    Mr. Banks. Would you agree that is significant to fill our 
workforce gap?
    Mr. Moore. We need to do that, right. I mean, look. In this 
day and age I think we all agree, anybody who wants a job and 
has basic skills can find a job. Let's have, you know, for food 
stamps and other welfare programs work requirements. And this 
is a good way to get people into the workforce. You can't get 
anybody out of poverty if they're on welfare. Right. The first 
step to getting a person out of welfare is, I mean, out of 
poverty is to get them into a job. So we did this by the way in 
the mid-1990s, Congressman. Signed by Bill Clinton, a Democrat 
and a Republican Congress. And the work for welfare 
requirements were the most successful things we ever did. We 
saw the income of those people who moved off of welfare over 
the next five or six years rose. Get people into a job, it's 
the most important thing you can do to help those families.
    Mr. Banks. Thank you, my time has expired.
    Chairman Walberg. I thank the gentleman and even as a 
Wolverine it gives me pleasure to recognize the Buckeye, the 
gentlelady from Ohio, Ms. Fudge.
    Ms. Fudge. Thank you so very much, Mr. Chairman. Thank you 
all for being here. And just, Mr. Moore, just to be accurate, 
most people on food stamps who can work do work. So let's start 
there.
    You know, we all have heard the statements that all 
politics is local. And I agree with that and so since my 
unemployment rate is nowhere near 3.8 percent, I just consider 
it fake news. It's just all fake news. Just like a 4 percent 
GDP is also fake news.
    Mr. Moore, if it was not your intent to make the rich 
richer with the Trump tax scam, you absolutely failed miserably 
because that is exactly what the bill did. And for those people 
who have received a small reduction in their taxes, they are 
paying three to four times that just trying to get healthcare 
because my colleagues continue to try to do away with the 
Affordable Care Act.
    Mr. Spriggs, how much of the Republican tax cut has 
actually gone to workers?
    Dr. Spriggs. At the moment it's not clear to see what went 
to workers. Again, if it was going to be in the form of 
investment at their job that gave them more equipment that 
would increase their productivity we haven't seen it. 
Productivity hasn't gone up, the investment in the equipment 
hasn't gone up and so it's not clear and their real wages 
haven't gone up.
    Ms. Fudge. So then since you don't know then whatever 
numbers they keep telling us is just made up. Just more fake 
news, right?
    Dr. Spriggs. I--
    Ms. Fudge. Tell me, who benefits from the billions in stock 
buybacks that the companies announced after the tax scam was 
passed?
    Dr. Spriggs. So, we know that the ownership of stocks is 
highly concentrated at the top 1 and 10 percent despite people 
wanting to say it is in your 401(k) we have to remember that 
lots of workers, the majority don't have 401(k)s. So the 
reality is this goes to a very few. And in the case of the 
Walmart example that I gave, this goes to one family, 
essentially. So this has been a, the effect has been a massive 
redistribution upward.
    Ms. Fudge. Okay. Let me just ask because we were talking 
earlier about the concern that young people not working 
primarily because older people are working longer because they 
can't afford to not work. This country knows that we are more 
than a billion dollars in debt as it relates to funding 
pensions. We compounded the problem when we passed the tax scam 
and put the country $2 trillion in debt. So now we come back 
and we say we are going to cut Social Security benefits and we 
are going to cut Medicare and Medicaid to pay for a tax cut for 
rich people. So if older people cannot afford to retire because 
they can't, they don't have the savings and or they don't have 
the pension, what do we do from here?
    Dr. Spriggs. Well, we have a big problem for the generation 
that entered the labor market during the Great Recession. They 
didn't get the job to start with that was typical. They weren't 
able to pay into a retirement plan. We have left them in a 
very, very hard position. And employers have skipped over them 
and now want to hire new graduates so we have that problem. We 
have the--
    Ms. Fudge. Mr. Spriggs, I don't want to--my time is really 
running short so do you think it would be more effective if we 
put money into summer jobs instead of taking care of children 
at the border who we took their parents away from them. It 
would probably be less expensive I would guess to just give 
kids summer jobs or give them better training instead of 
creating a problem that is costing this country billions of 
dollars.
    Let me just ask this question of all of you. You were 
talking about vocational education. I think it's great. I think 
there is absolutely nothing wrong with working with your hands. 
How many of you steered your kids into vocational education 
instead of college. Just raise your hand. Okay. I didn't think 
so.
    Mr. Chairman, I would like to yield the last 30 seconds I 
have to the Ranking Member, Mr. Scott.
    Mr. Scott Thank you. Dr. Spriggs, can you tell me some of 
the challenges involved in the gig economy?
    Dr. Spriggs. Well, the challenges are that many of the jobs 
are an attempt to arbitrage labor market regulation. They 
attempt to find areas where we don't do a good job of 
regulating and they attempt to create the myth that these 
aren't employees when in fact they are employees. So think of 
Uber. Uber is really just Louis on Taxi. It's just a 
dispatcher, except now it's the phone. And they want to pretend 
that they don't have employees. They have employees. So the 
biggest problem is it creates huge holes in our labor standards 
and that's not good for workers or for the economy or for our 
tax system.
    Chairman Walberg. I thank the gentleman and the gentlelady. 
I recognize the gentlelady from Delaware, Ms. Lisa Blunt 
Rochester.
    Ms. Blunt Rochester. Thank you, Mr. Chairman and thank you 
Ranking Member Wilson and thank you also to the panel.
    I had the opportunity to serve as Secretary of Labor in the 
State of Delaware so the issue of labor market information is 
vital. I believe it is vital. We, as we already mentioned it is 
vital to policy makers, to economists, to students, to parents. 
And as Secretary of Labor, we had a lot of good partnerships 
and also products. Everything from working with schools to our 
workforce investment boards to the media.
    So one of my questions is about data itself and about the 
integrity and confidence and validity of it and I will start 
with Dr. Spriggs.
    Before becoming president, I know Mr. Trump talked about 
BLS unemployment data covered up massive unreported 
unemployment levels and used words like fake and phony and so I 
just want to get your impression. I know you worked for the 
Department of Labor. If you could talk a little bit about the 
data itself and the integrity of the data. Just share is it 
fake, is it phony?
    Dr. Spriggs. Well, like Dr. Farren, I sing high praises for 
the BLS and for the integrity and for the way that they are 
very careful to be as nonpartisan as possible in their work and 
to be focused and to be professional and as he mentioned the 
world recognizes them as the gold standard. They do provide 
many products. One of the most important is their quarterly 
census of employment in workers that allows local workforce 
boards to see the flow of work and to be able to better predict 
where are new jobs being created within both their WIB area and 
within their county so they do marvelous jobs.
    Ms. Blunt Rochester. Can I ask Dr. Farren and Dr. Meyer, 
you both mentioned it also in your testimony. Dr. Farren, you 
mentioned making it more useful and accessible to ordinary 
people. Mr. Meyer, you talked about updating the CWS. I guess 
my question is, do you support increased funding? Because I 
think we are seeing a decline in staffing so how can we provide 
great services and great products if we don't have the people 
or the resources to do it? Oh, it's just a yes or no question. 
Do you support increased funding?
    Dr. Farren. I'm an economist, so I can't give a yes or no 
question.
    Ms. Blunt Rochester. Okay.
    Dr. Farren. But the answer is what is efficient, what are 
the tradeoffs for additional funding? What are the tradeoffs 
for spending money more better?
    Ms. Blunt Rochester. Okay, Mr. Farren, if you can't because 
you're an economist I will go to Mr. Meyer.
    Mr. Meyer. I would say yes if it would lead to better 
measurements that policy makers can use to put in place the 
best data--
    Ms. Blunt Rochester. Excellent.
    Mr. Meyer. If it's just spending for the sake of spending, 
then no.
    Ms. Blunt Rochester. We don't do that. Excellent. Okay. And 
then my last comment or question. I am actually my other 
committee is agriculture and so I get the opportunity to be a 
part of the Farm Bill discussions. One of my concerns I think 
all of us agree that we have these unfilled jobs and that we 
have a skills mismatch and that we really want people to work 
whether you're Democrat or Republican.
    My question is on the Farm Bill, we are--the proposal is 
basically to create a massive jobs program and I was around for 
welfare reform as well. This appears to be untested and 
underfunded. We are talking $30 per person per, you know, per 
month. Good jobs training programs cost more than that.
    Dr. Spriggs, can you talk a little bit about what you think 
would be the impact of instituting something like this, where 
people would be sanctioned off and not also have good job 
training programs.
    Dr. Spriggs. The work requirement changes the program into 
a subsidy for employers who do not raise wages. And that would 
be bad. So when you look at how much we subsidize Walmart and 
McDonalds, the two largest employers in the United States and 
in the world because they fail to pay their workers sufficient 
wages that they do not need food assistance, it is the most 
inefficient system of employment in the world.
    No one subsidizes, no one in the world subsidizes people 
going to fast food restaurants to make their nation fat but 
that's exactly what this legislation would do because when you 
force a worker to accept a low wage in order to get the benefit 
that is what you are doing. And so no, this is a bad public 
policy. The far better public policy is to address why in the 
name of having shortages of workers these employers are not 
raising their wages. You would lower the use of food assistance 
if workers got paid a decent wage.
    Ms. Blunt Rochester. Thank you.
    Dr. Spriggs. Because already it is the case that workers 
are needing food assistance.
    Ms. Blunt Rochester. Thank you, Dr. Spriggs. I yield back.
    Chairman Walberg. I thank the gentlelady and now I am 
pleased to recognize the gentleman from Minnesota, Mr. Lewis, 
for your five minutes of questioning.
    Mr. Lewis. Thank you, Mr. Chairman, and thank you, panel, 
for your testimony today. Dr. Farren, I want to start with you 
if I may. In your testimony, you mentioned the research related 
to the current population survey and as we have seen, even in 
an economy with 3.8 percent unemployment, the lowest since 2000 
I believe, even in an economy that may be growing at 4 percent, 
4.2 percent GDP when in fact CBO predicted we would only grow 
1.9 percent. Even in the economy this hot, we still have a 
problem with the sticky labor force participation rate. And I 
am just wondering your analysis of the March 2018 study by the 
American Action Forum that found that there was some relation 
to opioid dependency as a part of at least the absence of 
nearly a million prime-age workers from the labor force and 
with a reduction in that serious problem helped.
    Dr. Farren. So looking at it from a purely economical 
standpoint, certainly if the workers who were ill and addicted 
and therefore not in the labor force were actually in the labor 
force, economic growth would even be larger and you wouldn't 
even necessarily have to have them in the labor force for that 
to happen because addiction obviously hurts peoples performance 
and their families and taking care of their loved ones and that 
sort of thing as well. And also, obviously it would be much 
better for the people engaged who are addicted to actually have 
better lives as a result.
    Mr. Lewis. And between 1999 and 2015, this decline, this 
absence, results in about $700 billion loss in real GPD, real 
output. And that is consistent with your analysis?
    Dr. Farren. That's what I have seen other economists 
reporting, yes.
    Mr. Lewis. Mr. Moore, I want to drill down a little bit on 
labor force participation rate. As someone who has studied 
macroeconomics for some time, you are quite familiar with this. 
The fact of the matter is we are still stuck back into the 70s 
era of cardigan sweaters and malaise when it comes to some of 
these labor force participation rate figures. Is it a matter, 
as one panelist said, of just merely not having a high enough 
livable wage or is it a matter of the wrong incentives from 
some of our other public assistance programs where we have a 
3.8 unemployment rate which of course as everyone knows doesn't 
take into account a denominator that drops people off when they 
no longer work, look for work. And so it doesn't pay to get out 
from under some sort of dependency.
    Mr. Moore. So there was a very good study that was done by 
Casey Mulligan who is one of the top economists in the country 
at the University of Chicago. And he is probably much more of 
an expert on this than I am so I will quote some of his 
research on this. He has shown that if you take someone who is 
receiving welfare benefits, a package of welfare benefits, that 
because of the various laws, the phaseouts of benefits, the 
taxes that they would pay, that in visual might be a mother or 
it might be an unemployed individual, they would lose about 50 
cents of benefits for every dollar that they would earn. You 
know, that's a high marginal tax, right. I mean, we don't even 
charge wealthy people a 50 percent marginal tax rate. So--
    Mr. Lewis. So we often talk about that marginal rate and 
that is the key in all of this. The marginal rate, the rate on 
the next dollar earned at the top end of the spectrum, but what 
you are saying and what that study says is in fact every one 
works for after-tax income.
    Mr. Moore. Well, especially people who are on welfare and 
now are trying to get off of welfare. You know, if you, let's 
say you are on welfare. If you get a job that say pays you 
$40,000 a year, but what Casey Mulligan is saying guess what, 
you know, you are going to lose $20,000 in benefits so you're 
actual increase in your take home pay is only going to be half 
of that. That's a high--so we should really investigate the 
phaseout of all of these benefits and also the work requirement 
basically because you have to work.
    Now look, if you had a situation right now like we had in 
2008 and 2009 where the unemployment rate went up to 9 and 10 
percent, a work requirement probably wouldn't work because, you 
know, there weren't jobs for people. But now there are 
plentiful jobs for people and we just have, I mean, I just 
think you do a real service not just to the, it's not just 
about reducing the cost of the programs. It is about getting, 
improving people's lives by getting them into the workforce. 
And that is so critical. You can't have a second and third and 
fourth job, you know, Mr. Lewis, until you have the first job.
    Mr. Lewis. And that is what this is all about and that is 
what work requirements are all about and that is moving from 
dependence to independence. We can subsidize dependence all day 
long but that doesn't move people to a more productive job and 
a more productive life and I thank you for your testimony and I 
yield back.
    Chairman Walberg. Thank you. I thank the gentleman for your 
questions and appreciate the Committee attentive to the issue 
today. As well as thank you so much for the witnesses for being 
here. In fact, I wish we had more members here today so we 
would have heard more from you on this important topic. We want 
to get things right so thank you for being here.
    Ms. Wilson, it is good to have you in the ranking member's 
chair today. Doing an excellent job, and ask if you have any 
closing remarks?
    Ms. Wilson of Florida. Thank you, Chairman Walberg, for 
holding today's hearing. I think it is vital that this 
committee examine the U.S. labor market trends. While strong 
job growth is important, we cannot neglect the fact that wage 
stagnation and income inequality are decades long problems that 
must be addressed.
    When we talk about wage stagnation and income inequality, 
we are talking about more than the line on a graph. Workers 
across the country are not getting a fair share of the wealth 
they helped create. This means some workers are struggling to 
buy groceries every week to feed their families. Struggling to 
pay rent, and to keep a roof over their heads and it means some 
workers are finding it almost impossible to save for their 
children's education so that they may have a better life.
    I think we can all agree that we want workers to be able to 
earn wages that allow them to support themselves and their 
families. Unfortunately, despite what we have heard today, 
workers' wages are not better off under this president.
    In fact, since President Trump took office, wages have been 
mostly flat and some workers lost ground over the last year. 
Workers across the country are feeling the impact of these 
trends in their daily lives and want us to step up and help fix 
the problem but rather than pass legislation to help all 
workers, President Trump and the Congressional Republicans 
passed a tax scam that only makes historically high levels of 
income inequality worse.
    The tax giveaway to the top 1 percent of American earners 
and corporations did not lift workers' wages. It just gave 
wealthy corporations a massive windfall for stock buybacks that 
benefit shareholders and executives. We know that this is not 
the right approach. As we heard from Dr. Spriggs, when our 
policies promote broad wage growth, we are better off. When we 
strengthen wage protections and workers' rights to collectively 
bargain for better wages, we combat wage stagnation and the 
income inequality that leaves workers behind.
    That is why Committee Democrats support bills to raise the 
minimum wage, update overtime protections and strengthen 
workers' rights to join a union free from retaliation.
    I again want to thank our witnesses for joining us here 
today and I yield back the remainder of my time.
    Chairman Walberg. I thank the gentlelady. In the words of 
the Northwest Ordinance and Article 8 Section 1 of the Michigan 
Constitution, that copied from the Northwest Ordinance, it 
says, ``Religion, morality, knowledge, being necessary to good 
government and the happiness of mankind, schools in the means 
of education shall forever be encouraged.''
    And I am glad that in some of the conversation today, Mr. 
Moore and Mr. Banks touched on it as well. The primacy of 
preparing people for real world jobs through education 
opportunities that expanded beyond just the status quo normal 
of what we have done in the past and we are the Education and 
Workforce Committee. And I think aptly named that because they 
have to go together. We don't just educate to educate. We 
educate to work.
    And in order to work today, you have to be educated. I 
don't care what you are going to do. And I think this committee 
and this subcommittee it is important that we as we think of 
health, employment, labor, and pensions, the whole scheme of 
things that we take due diligence to prepare people to educate 
them early for jobs in the real world that will provide a 
certainty--to the best that we can humanly provide a 
certainty--that they are going to have a background in training 
experience or educational experience. Forgive me, Virginia, for 
using that word. But educational experience that prepares them 
to experience the happiness that we promote in this great 
country.
    So we need to talk more about the career options, the 
education options to prepare people in apprentice programs in 
short term educational certification programs, whatever it is 
necessary to find more opportunity for people to be in that 
sweet spot that is special to them becomes special to us 
because it grows our economy. It grows our security. It grows 
the desire of even other as we talk about immigration to look 
at America as still the place where all the best happens in the 
form of opportunity.
    And I appreciate the fact that in this committee we are 
able to pass a new CTE bill out of the House, even the PROSPER 
Act that goes unique directions compared to what we have done 
in the past by fostering the opportunity for educational 
experience that meets needs as opposed to meets institutions. 
And I am looking forward to see benefits of that come in a new 
approach to post-secondary education that challenges everyone 
to keep the needs of the future workers in mind.
    I as well think that today we had the opportunity to at 
least hear to some degree what needs to be done in keeping the 
statistics, putting reports in place that makes sense out of 
what is happening and what is available to be used in 
educational opportunities in our workforce experience.
    And I know we are going to disagree on approaches. I know 
we are going to do that. We have two parties here that have 
different points of view. I think that our approach will 
ultimately win out. I would like to be proven wrong or at least 
the opportunity for someone to prove that wrong but we need 
good statistics. And we need good, good researchers to point 
out this is what is happening in the workforce, this is where 
we are at in reality. This is where we need to move toward. 
These are the opportunities we have.
    And so your testimony today along with things that are--
have actually happened by law and what the results will be has 
been very helpful. So with that and seeing that there is no 
further business to come before this subcommittee I will 
declare it adjourned.
    [Additional submissions by Chairman Walberg follow:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    [Whereupon, at 11:40 a.m., the Subcommittee was adjourned.]

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