[Joint House and Senate Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 115-80
A RECORD SIX MILLION U.S. JOB VACANCIES: REASONS AND REMEDIES
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HEARING
before the
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
JULY 12, 2017
__________
Printed for the use of the Joint Economic Committee
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JOINT ECONOMIC COMMITTEE
[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]
HOUSE OF REPRESENTATIVES SENATE
Patrick J. Tiberi, Ohio, Chairman Mike Lee, Utah, Vice Chairman
Erik Paulsen, Minnesota Tom Cotton, Arkansas
David Schweikert, Arizona Ben Sasse, Nebraska
Barbara Comstock, Virginia Rob Portman, Ohio
Darin LaHood, Illinois Ted Cruz, Texas
Francis Rooney, Florida Bill Cassidy, M.D., Louisiana
Carolyn B. Maloney, New York Martin Heinrich, New Mexico,
John Delaney, Maryland Ranking
Alma S. Adams, Ph.D., North Amy Klobuchar, Minnesota
Carolina Gary C. Peters, Michigan
Donald S. Beyer, Jr., Virginia Margaret Wood Hassan, New
Hampshire
Whitney K. Daffner, Executive Director
Kimberly S. Corbin, Democratic Staff Director
C O N T E N T S
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Opening Statements of Members
Hon. Patrick J. Tiberi, Chairman, a U.S. Representative from Ohio 1
Hon. Martin Heinrich, Ranking Member, a U.S. Senator from New
Mexico......................................................... 2
Witnesses
Statement of Ms. Diana Furchtgott-Roth, Senior Fellow and
Director of the Economics21 Program, Manhattan Institute....... 4
Statement of Dr. David T. Harrison, President, Columbus State
Community College.............................................. 6
Statement of Mr. Scot McLemore, Technical Workforce Development,
Manager, Honda North America, Inc.............................. 8
Statement of Dr. Betsey Stevenson, Associate Professor of Public
Policy at the Gerald R. Ford School of Public Policy,
University of Michigan......................................... 10
Submissions for the Record
Prepared statement of Hon. Patrick J. Tiberi, Chairman, a U.S.
Representative from Ohio....................................... 36
Prepared statement of Hon. Martin Heinrich, Ranking Member, a
U.S. Senator from New Mexico................................... 36
Prepared statement of Ms. Diana Furchtgott-Roth, Senior Fellow
and Director of the Economics21 Program, Manhattan Institute... 38
Prepared statement of Dr. David T. Harrison, President, Columbus
State Community College........................................ 62
Prepared statement of Mr. Scot McLemore, Technical Workforce
Development, Manager, Honda North America, Inc................. 71
Prepared statement of Dr. Betsey Stevenson, Associate Professor
of Public Policy at the Gerald R. Ford School of Public Policy,
University of Michigan......................................... 74
Article titled ``Our Miserable 21st Century''.................... 78
Response from Ms. Furchtgott-Roth to Questions for the Record
Submitted by Senator Klobuchar................................. 85
Response from Dr. David T. Harrison to Questions for the Record
Submitted by Senator Klobuchar................................. 86
Response from Mr. Scot McLemore to Questions for the Record
Submitted by Senator Klobuchar................................. 87
Response from Dr. Betsey Stevenson to Questions for the Record
Submitted by Senator Klobuchar................................. 87
A RECORD SIX MILLION U.S. JOB VACANCIES: REASONS AND REMEDIES
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WEDNESDAY, JULY 12, 2017
United States Congress,
Joint Economic Committee,
Washington, DC.
The Committee met, pursuant to call, at 10:00 a.m., in Room
2020, Rayburn House Office Building, Hon. Pat Tiberi, Chairman,
presiding.
Representatives present: Tiberi, Paulsen, Schweikert,
LaHood, Rooney, Maloney, Delaney, and Beyer.
Senators present: Heinrich, Peters, and Hassan.
Staff present: Breann Almos, Theodore Boll, Whitney
Daffner, Connie Foster, Colleen Healy, Paul Lapointe, AJ
McKeown, Thomas Nicholas, Russell Rhine, and Alex Schibuola.
OPENING STATEMENT OF HON. PATRICK J. TIBERI, CHAIRMAN, A U.S.
REPRESENTATIVE FROM OHIO
Representative Tiberi. Good morning, and welcome to the
Joint Economic Committee's hearing on job vacancies in the
labor market. I want to especially welcome, from the Senate
side, our ranking member, Senator Heinrich, as well as other
members of the committee who expressed interest in exploring
this important topic.
On the surface, low unemployment and a large number of
vacancies suggest that the labor market is tightening. However,
wage growth has been slow and many potential workers remain on
the sidelines. Something is not yet right with the U.S. labor
market.
I have heard from many employers in Ohio and around the
country that they are still struggling to fill good-paying job
vacancies. These employers tell me about people not being able
to pass a drug test, people not having the skill set to qualify
for job openings.
I believe there are causes on the demand side as well as
the supply side of the labor market, and among both are
economic policies by the last administration that weakened the
recovery of business investment, labor productivity, and work
incentives after the last recession.
Business investment and productivity must rise faster for
wages to rise faster, and more people must join the workforce
to raise economic growth.
The U.S. population is still growing. Since just prior to
the last recession, the population has increased by 22 million
people of working age, yet the labor force has increased by
only 6 million people. The baby boom generation is moving into
retirement, but people in their prime working years also are
participating less in the labor force than before the
recession.
In addition to the work Congress and the administration are
doing to reform taxes, improve regulation, and alleviate
unnecessary government mandates, we must also focus our
attention on improving the institutions that prepare our
workforce for new challenges. That is why I have invited expert
witnesses to this hearing who can provide perspectives from the
economist's, the educator's, and the employer's point of view.
We must explore the value to the economy and individuals of
sending ever more people to college, how well high schools
position graduates for the workplace, how employer requirements
inform the educational system, and what employers are
contributing to the skill development of current and
prospective employees.
In the United States, we must find better ways to equip
young people and workers of all ages with marketable skills and
the ability to adapt to the changing market demands as they
progress through their careers.
I look forward to learning from the insights of our expert
panelists today on how to improve worker proficiency,
flexibility, and motivation. Faster economic growth and rising
living standards for American families result from getting this
policy right.
With that, I now yield to our Ranking Member Heinrich for
his opening statement.
[The prepared statement of Chairman Tiberi appears in the
Submissions for the Record on page 36.]
OPENING STATEMENT OF HON. MARTIN HEINRICH, RANKING MEMBER, A
U.S. SENATOR FROM NEW MEXICO
Senator Heinrich. Thank you, Chairman Tiberi. And I want to
thank our panel for joining us here today.
The employment picture is certainly brighter than it was 8
years ago, but not as bright as this country wants or needs.
Too many Americans still can't find a job or are in jobs that
pay wages too low to achieve financial security.
Employers complain that they can't find candidates with the
right skills to grow their business, and in some parts of the
country, for example, many rural areas, have largely been left
out and need basic investment. Today, we are focusing on one
way to create opportunities for more Americans, namely by
investing in education and training options.
Some industries in some regions of the country face a
mismatch between the skills employers need and the skills that
workers have. Addressing this is important, but that alone
won't adequately improve the economy or strengthen financial
security for families and for communities. To do that, Congress
must work with State and local leaders to take an all-of-the-
above approach that supports workers and businesses.
In the 21st century economy, college is increasingly
important for financial security. Congress has a significant
role to play in making sure that students are not priced out of
the future that they want and are ready to work for. Access to
an affordable college degree must be available to every student
who desires it.
We also know that a college degree is not and should not be
the only path to a bright future. Career and technical
education, apprenticeships, and other training programs lead to
good-paying jobs. Here, community colleges have a critical role
to play because they understand the needs of local employers,
are committed to creating opportunities for their students, and
can design programs and courses that are responsive to
employers' current and future needs.
TechHire Albuquerque launched earlier this year in New
Mexico using a Federal grant program. Central New Mexico
Community College partnered with employers and State agencies
to create an IT pipeline by providing training, work
experience, and job placement. Graduates learn new computer
skills, coding skills, earn industry-recognized credentials,
and are able to put those skills to use with area employers.
Employers are able to fill open positions with candidates that
they know have proven skills, and that is the type of
innovation and creative problem-solving Congress should be
promoting.
It is also critical that we target training at high-growth
sectors of our economy. That is what Central New Mexico
Community College has done with its Stemulus Center, offering
coding boot camps and new classes in Java, Android, and
Salesforce.
This week, Senator Gardner of Colorado and I introduced the
CHANCE in Tech Act, which encourages educators and businesses
to start apprenticeship programs for the tech sector. This will
connect more Americans to a growing sector where jobs are
opening up each and every day.
In an all-of-the-above approach, we must recognize that
investing in the workforce starts well before college or even
high school, for that matter. It starts by investing in proven
programs that set children up for success later in life. This
is why access to universal pre-K is so important and why I am a
strong advocate of the two-generation approach, which provides
quality early education for children, while at the same time
providing workforce training for those children's parents.
We have seen this work in New Mexico. The United Way Early
Learning Center in Santa Fe offers year-round full-day services
for children alongside technology, employment, and social
service assistance for their parents.
For workers to remain competitive in the future economy,
learning and skills development must continue over the course
of a lifetime. Companies must get back in the business of
investing in their workers, not just because it is the right
thing to do, but because it is the prosperous thing to do for
the business and for workers alike.
There is much work for us to do here. For the Nation to be
competitive in the future economy we are going to have to find
some new solutions. And I look forward to hearing from our
witnesses with their ideas.
Thank you, Chairman.
[The prepared statement of Senator Heinrich appears in the
Submissions for the Record on page 36.]
Representative Tiberi. Thank you, Senator.
I would like to now introduce our expert panel of
witnesses. First, Ms. Diana Furchtgott-Roth is a senior fellow
at the Manhattan Institute and the director of the Economics21
Program, recently served on the transition team for President
Donald Trump. She served as chief economist at the Department
of Labor from 2003 to 2005. Before that, she served in multiple
roles for the George W. Bush, George H. Bush, and Ronald Reagan
administrations. She holds a BA in economics from Swarthmore
College, and a master's of philosophy in economics from Oxford
University.
Welcome. Thank you for being here.
Dr. David Harrison is the fifth president of Columbus State
Community College. In his role, he initiated innovative
projects, such as the Preferred Pathway Program, which
guarantees Columbus State graduates entry into Ohio's superb
universities, including our alma mater, the Ohio State
University. He also led the formation of the Central Ohio
Compact, a regional strategy among K through 12 and higher
education leaders, to help more students succeed in college and
in the workplace. Under Dr. Harrison's leadership, Columbus
State has received multiple distinctions for its innovative
efforts.
Dr. Harrison, thank you for being here. And, as you know, I
have a special place in my heart for Columbus State. I took
real estate classes there and my two sisters went there.
Scot McLemore leads the development and execution of talent
acquisition and deployment strategies at Honda North America.
He has spent 27 years at Honda in both engineering and human
resource positions, with a focus on technical development. In
true American fashion, he started as a manufacturing engineer
in the welding department of the Marysville Auto Plant, which
is just outside my district. He currently serves as co-chair of
the Ohio Manufacturing Careers Council Image Committee, vice
chairman of the Columbus City Schools STEM Industry Council,
and is a member of several career and technical center advisory
committees.
Thank you for testifying today, Mr. McLemore.
And last but not least, Dr. Betsey Stevenson. She is an
associate professor with the University of Michigan, Gerald R.
Ford School of Public Policy, and also with its Department of
Economics. We Buckeyes promise not to hold that against you.
Before that, she was a member of President Obama's Council of
Economic Advisers. She also served as a chief economist at the
Department of Labor from 2010 to 2011. Dr. Stevenson
specializes in topics such as the impact of public policy on
the labor market, women's experiences in the labor market, and
the economic forces shaping the modern family.
Dr. Stevenson, thank you for being here today. I know you
just got here, so thank you for coming from the airport
directly.
We will begin with our panelist from my far left. You are
recognized for 5 minutes.
STATEMENT OF DIANA FURCHTGOTT-ROTH, SENIOR FELLOW AND DIRECTOR
OF THE ECONOMICS21 PROGRAM, MANHATTAN INSTITUTE
Ms. Furchtgott-Roth. Thank you very much, Mr. Chairman.
Thank you very much, Ranking Member Heinrich. It is such a
great pleasure to be here. Thank you very much, members, for
coming to hear the testimony.
As you heard, there is a big problem with job vacancies,
with a mismatch between employers who want to find people to
work, and yet we also have people sitting on the sidelines. I
would like to just briefly in my oral testimony review five
points: community colleges; streamlining benefits; removing
constraints to economic growth, such as what the Federal
Reserve is doing; tax policy; and regulatory policy.
I know that Dr. Harrison is going to talk about community
colleges, but I at least want to mention their very important
role, how they can increase the earnings power and upward
mobility of their students.
I performed research using individual students in the State
of Florida in 2009, showing that C students, students with a C
average, performed much better when they went to community
colleges and took a high-return degree. They were earning about
$45,000 a year when they graduated, much more than C students
who went to try to get a 4-year degree right away. However,
community colleges are also a transfer point for people who
want to get a 4-year degree. These results have been extended
and confirmed by a study published by the Community College
Research Center of Columbia University.
To maximize students' opportunities, the American
Association of Community Colleges has implemented a Pathways
Project in 30 colleges to guide students toward high-return
professions where they can get good jobs afterwards, steering
them into degrees such as computer science and healthcare
services. We call these fields high-return because there are
high-paying jobs waiting for them when they graduate. So this
is a very, very important component.
Moving on to my next point about benefits, it is
interesting to compare the United States and the United
Kingdom, which since 2000, have seen an increasing divergence
in their labor force participation rate. It used to be, in
2000, that the United States had a higher labor force
participation rate than Britain. Now, Britain has a higher
labor force participation rate and a higher employment rate
than the United States.
What has been happening is that in the United States we
have been raising our benefits, expanding eligibility for
disability insurance, for food stamps, for other kinds of
programs. The United Kingdom has been reducing its eligibility,
and they have been steering people into work as a condition of
continuing to get benefits. So in the United Kingdom, if you
are offered a job, you have to take that job. In that way, more
and more people are returning to the workforce, and the number
of people on benefits has been declining.
In 2016, 3.7 million people in the United Kingdom were on
out-of-work benefits, compared to 5 million in 2011. In
contrast, in the United States, about 60 percent of nonworking
men are on Federal disability benefits. So we might want to
take a look at what the United Kingdom is doing.
What we are also interested in doing is reducing
constraints on growth. If we look at tax policy and regulatory
policy, they are providing constraints on growth here in the
United States. Our corporate tax rate is way above those in
OECD countries. It is 39 percent, compared with 25 percent, on
average, for OECD countries. Canada has a 15 percent rate.
If we could do one single thing to increase economic
growth, it would be lowering the corporate tax rate and moving
to a territorial system rather than a worldwide system, which
would stop companies inverting and moving off to Canada and
other countries, such as Ireland. So I would say that would be
the most important thing that we could do.
We also need to have regulatory reform, put in place cost-
benefit analysis for regulations, and make sure that these
regulations have benefits that justify the costs. Right in the
EPA's environmental impact analysis and it's regulatory impact
analysis for it's carbon rule, it admitted that jobs were going
to be lost because of these regulations, falling primarily on
states such as Ohio. And we need to make sure that these
benefits also are--there are good benefits and also that the
costs are not geographically concentrated in certain high-
energy States.
Thank you very much.
[The prepared statement of Ms. Furchtgott-Roth appears in
the Submissions for the Record on page 38.]
Representative Tiberi. Thank you for your testimony.
Dr. Harrison, you are recognized for 5 minutes.
STATEMENT OF DAVID T. HARRISON, PRESIDENT, COLUMBUS STATE
COMMUNITY COLLEGE
Dr. Harrison. Chairman Tiberi, Ranking Member Heinrich,
Vice Chair Lee, members of the Joint Economic Committee, thank
you for the opportunity to speak with you today on this
important topic.
My name is David Harrison. I am president of Columbus State
Community College, and we happen to be one of the 30 colleges
nationally that are part of the American Association of
Community Colleges Pathways cohort that my colleague just
mentioned.
I am pleased to be with you today to discuss the leadership
role that community colleges can play in addressing job
vacancies for employers and in providing people with pathways
to successful careers.
The gap between open jobs and qualified employees is
widening, and the reasons are many. The Nation's workforce is
becoming more diverse. We have overemphasized the bachelor's
degree as the only path to success for young people, and our
educational system has been slow to respond.
You may be surprised to learn about today's college
student. Three-quarters of them commute to class while
balancing jobs and family responsibilities. They are first-
generation college students, adults in transition, and military
veterans returning home. These are the students that are the
solution to the vacancy problem, and we need to think
differently about how to help them succeed.
By overemphasizing the bachelor's degree, we have not
served many young people well, as more than half reach the age
of 25 without a postsecondary credential or an employable skill
set. A technical credential is a better option for many of
these students.
Harvard University notes that jobs requiring an associate
degree are growing at three times the rate as those requiring a
bachelor's degree. Only a third of new jobs will require a
bachelor's degree, with the rest requiring an associate degree
or technical certificate.
Filling these 6 million jobs is possible with the right
combination of strategies, including elevating the associate
degree to prepare more people for high-demand jobs and
expanding regional public-private partnership between K-12,
community colleges, and employers.
I am pleased to share with you today promising practices we
have developed in central Ohio, built on a strong culture of
public-private partnerships. American Electric Power funds a
program at Columbus State called Credits Count that enables us
to prepare students for technical careers starting in middle
school and take college courses while they are still in high
school, leading to a technical credential.
JPMorgan Chase selected Columbus State as one of nine
international partners to implement their New Skills at Work
initiative, creating grade 9 to 14 career pathways for students
in central Ohio. And we have partnered with Honda of America to
develop a talent pipeline of electromechanical engineering
graduates to address an urgent need. You will hear more about
this from our great partner, Scot McLemore, whose testimony
follows mine.
But we won't fill these 6 million jobs by focusing on young
people alone. Demographics are not on our side. Many regions of
the country, including Ohio, are projecting decreases in public
elementary and secondary school enrollment. We must have
policies that help military veterans and others in transition,
as well as initiatives to address employment barriers due to
transportation, childcare, and other factors. Employers who
adopt fully inclusive employment practices are emerging as
clear winners.
Here again, public-private partnerships in central Ohio are
producing results. The Ohio insurance industry partnered with
several colleges, including Columbus State, to develop an
educational pathway that mirrors the professional career path
in the industry, with a specific focus on adult students. This
effort has helped Nationwide Insurance hire more than 1,000
Armed Forces veterans, with the goal of hiring 1,000 more.
The Federal Government can support these regional efforts
in three key ways. First, expand programs that are working. The
National Science Foundation's Advanced Technological Education
program is an important source of venture capital for community
colleges to develop programs in partnership with employers. At
Columbus State, our NSF grants are focused in advanced
manufacturing, cybersecurity, data analytics, and logistics
technology, all high-growth fields requiring specialized
skills.
Second, support programs that help adults in transition.
The bill proposed by Senators Portman and Kaine to expand Pell
grant eligibility to cover high-quality, short-term job
training for low-income students could go a long way to help
adult students prepare for the high-performance workplace.
And finally, look to community colleges as the regional
leader in convening effective partnerships with employers and
other local groups to fill jobs, launch careers, and expand
economic growth. Community colleges are purpose-built to
address this workforce issue. Most of us are already doing this
work, and we stand ready to do more.
Thank you for allowing me to be part of this conversation,
and I look forward to your questions.
[The prepared statement of Dr. Harrison appears in the
Submissions for the Record on page 62.]
Representative Tiberi. Thank you.
Mr. McLemore, you are recognized for 5 minutes.
STATEMENT OF SCOT McLEMORE, TECHNICAL WORKFORCE DEVELOPMENT,
MANAGER, HONDA NORTH AMERICA, INC.
Mr. McLemore. Thank you, Chairman Tiberi, Ranking Member
Heinrich, and the members of the committee for hosting this
hearing on the critical issue of workforce participation and
workforce development.
My name is Scot McLemore, and I serve as the manager of
talent acquisition at Honda North America. In my role at Honda,
I work to develop strategies to help address workforce
challenges. Honda has more than 70 facilities in the United
States, including 12 manufacturing plants that produce a wide
range of products, including cars, trucks, light business jets,
power equipment, and power sports products. More than 73
percent of Honda's 30,000 U.S. associates work in manufacturing
roles. In addition to our direct employment, Honda works with
more than 600 U.S. suppliers, who employ tens of thousands of
workers nationwide.
Manufacturing jobs are high-paying jobs with good benefits,
which should be highly attractive in our current economic
climate. However, today, our ability to recruit and hire a
qualified sustainable workforce is limited by two key factors.
One, a shortage of young people interested in entering
manufacturing; and two, a lack of prospective employees who
have the essential skills needed to be successful in a
manufacturing job.
Modern manufacturing equipment and processes involve an
integration of pneumatic, hydraulic, mechanical and computer-
networked components. Too often, individuals do not possess the
problem-solving ability, technical training, computer
knowledge, or math skills needed to compete in the 21st century
workforce.
In order to address these problems, Honda has developed a
number of educational initiatives and workforce training
programs, which aim to build enthusiasm for future careers in
manufacturing and provide potential employees with the
necessary skills to compete in the modern manufacturing
economy. Many of our programs are designed as public-private
partnerships, including partnerships with academic
institutions, local governments, and community organizations.
While I will talk briefly about some of our programs, more
information about them can be found in my written testimony.
Honda believes that the first step in developing a
technical workforce is to create excitement for manufacturing
jobs through early engagement with students, parents, and
educators. Beginning with middle school, Honda has partnered
with several organizations to develop initiatives aimed at
building interest in manufacturing and developing the critical
thinking skills that are necessary to succeed in manufacturing.
These initiatives include: a unique educational video game for
classroom use; mobile labs featuring robotics; and STEM-based
summer programs. However, a bridge must be formed between
creating interest in manufacturing and actually preparing
individuals to have the analytical and technical skills to
operate equipment found on today's manufacturing floor.
As such, we work with high schools and community colleges
to develop curriculum, supplement classroom lessons with plant
visits, provide mentorships and scholarships. Most importantly,
we have established programs with community colleges that
provide students with the opportunity to learn the technical
skills necessary for a manufacturing career while
simultaneously receiving their degree.
An example of this is our partnership we have with Columbus
State Community College, which is designed so students can work
at Honda 3 days a week and go to school 2 days a week. This
program gives students the chance to build technical skills
while earning their degrees, allowing students a way to
graduate debt free. Upon graduation, students may be offered a
full-time position with the company. We have similar internship
efforts in other States and communities where we have
manufacturing operations in the United States.
Because the technology in the automotive industry is
constantly changing, we make a commitment to ensure that
education does not stop once associates are hired. Honda
remains committed to ensuring our existing workforce has the
skills necessary to be part of our exciting future. To that
end, we have established technical training centers near some
of our manufacturing plants to help our associates stay current
with technology and grow professionally.
Going forward, we strongly believe that Honda's future and
the future of manufacturing in the United States rests in the
hands of programs like the ones I have outlined. However, there
must be a significant increase and expansion of these
collaborative efforts to develop a 21st century workforce.
Additionally, continued support and improved access for STEM
education is critical to ensuring that our future workforce has
the skills to compete in modern manufacturing.
One step Congress can take immediately is to reauthorize
the Carl D. Perkins Career and Technical Education Act, which
recently passed the House of Representatives. The current
version of the bill will help encourage more collaboration
between stakeholders to ensure students have a pathway to a
relevant and meaningful technical career. Honda stands ready to
work with Congress to help solve the critical workforce issues
that stifle the full economic potential of our country.
I am happy to answer any questions you may have. Thank you.
[The prepared statement of Mr. McLemore appears in the
Submissions for the Record on page 71.]
Representative Tiberi. Thank you.
Dr. Stevenson, you are recognized for 5 minutes.
STATEMENT OF BETSEY STEVENSON, ASSOCIATE PROFESSOR OF PUBLIC
POLICY AT THE GERALD R. FORD SCHOOL OF PUBLIC POLICY,
UNIVERSITY OF MICHIGAN
Dr. Stevenson. Thank you, Chairman Tiberi and Ranking
Member Heinrich. It is a pleasure to be here, and I want to
thank you for the invitation to testify today about the state
of the job market.
I want to start by placing the record number of job
openings in the context of a strengthening labor market and an
increase in dynamism. Businesses have continued to hire in
large numbers, just again this June surpassing expectations.
And over the past 6 years, we have seen the longest most
persistent streak of job growth on record.
All this growth is leading to more job openings, and
perhaps more importantly, it is also leading more workers to
quit their jobs. You might think that doesn't sound like a good
thing, but it is actually a great thing when workers feel
confident enough to leave their jobs in order to seek out
better opportunities. In fact, job changes are essential for
workers to climb the ladder to better and higher paying
opportunities. A return to a healthy level of churn is
incredibly important and, frankly, we are not quite there yet.
One of the most profound challenges our labor market faces
is lackluster wage growth, so I want to spend most of my time
talking about that. Wages provide a clear market-based signal
of demand for skills, and one of the clearest signals is the
high wages of college-educated workers compared to those with
less education. That is not to downplay other forms of
training, but I think it is essential to start by understanding
that the earnings gap between college graduates and those
without a college degree has grown steadily for decades and in
recent years has been at an all-time high. The benefits of a 4-
year degree are also seen in substantially lower unemployment
rates and higher labor force participation rates, even compared
to people with a 2-year degree.
In addition, while there is concern about student loans,
very clear research shows that most of the increase in student
loan defaults is associated with borrowers at for-profit
schools and other 2-year institutions associated with weak
employment outcomes. These findings underscore the importance
of funding successful community college programs that are
clearly linked to employment outcomes.
One of the largest challenges the labor force faces in
developing the skills of workers is ensuring that students from
across the income spectrum have access to successfully and
affordably complete a 4-year degree, because that is where the
strongest demand is still being seen.
In competitive markets, a skill shortage should lead
businesses to pay higher wages. And yet researchers have
consistently failed to find evidence of employers bidding up
wages of workers in specific occupations or geographic areas,
even when there is a big gap between the number of openings and
the number of hires, and that represents a real puzzle. I think
the biggest place we see this is in healthcare, where there are
a lot of openings, not a lot of hires, but the wages aren't
picking up.
Many economists have pointed to slowing productivity growth
as one of the sources of the slow wage growth, but it is
important to recognize that, even if we were to solve that
problem, in recent decades, there has been a disconnect between
productivity growth and wage growth that we need to address.
Some of the things that we are seeing is a decline in
unionization, reduced worker bargaining power, and reduced
worker mobility, and an increase in businesses engaging in
clear anticompetitive labor market policies, including
forbidding the sharing of pay information and requiring
noncompete clauses, policies that are designed to restrict the
ability of workers to make those changes that allow them to bid
up their wages as they become more productive. Congress should
seek to make the labor market as fair as possible by penalizing
businesses that engage in such anticompetitive practices.
Additionally, policies like updated overtime regulations,
robust minimum wage, enforcing workplace protections are all
key areas that are important to raise wages.
Let me be clear, the current pace of job growth is
unsustainable unless more workers elect to join the labor
force, and without higher wages, that is very unlikely to
happen.
So let me conclude by saying that there is something else
policymakers can do beyond training, which is provide stronger
infrastructure to support jobs. Today's workers, particularly
lower wage workers, face challenges in getting to work without
adequate public transportation, face challenges finding care
for their children without adequate affordable childcare, and
too often lose their jobs or are forced to quit when they need
time off to care for a sick family member or their own illness.
Better infrastructure--in the form of affordable childcare,
paid family leave, and better public transportation--since it's
better infrastructure to support work, such as affordable
childcare, etcetera to support work would clearly help attract
more men and women to the labor force. Research has shown
clearly that such policies would boost women's labor force
participation.
Additionally, recent research has shown that roughly half
of the drop in male labor force participation is due to men
cycling in and out of the labor force. So making it easier for
men and women to consistently hold onto a job will boost labor
supply.
Let me end by taking a moment to note some cultural changes
that are going on with our labor market, because I know this
committee is particularly interested in that. Many of our
declining sectors are in traditionally male occupations, while
traditionally female or more gender-mixed occupations are
growing. These changes are going to require that we not only
provide training for workers to successfully enter new
occupations, but that we rethink how we provide that training
and how we conceive those jobs so that there is greater
diversity for men and women to enter the jobs that are going to
offer them the highest pay, regardless of their cultural
connotations.
Thank you.
[The prepared statement of Dr. Stevenson appears in the
Submissions for the Record on page 74.]
Representative Tiberi. Thank you. Thank you all for your
very well-thought-out testimony.
Dr. Harrison and Mr. McLemore, last month, this committee
held a hearing on the opioid crisis. Ohio, and New Mexico are
two States that have been hit hard by that crisis. One of the
things that I hear from employers in central Ohio regarding
that is that they have job openings, but folks can't pass a
drug test.
So anything you can share with us on your experiences with
respect to that, and are there approaches that we can take to
address such a problem?
Mr. McLemore. Thank you, Mr. Chairman. That is a very
important question and concern.
I think for employers across the U.S., including
manufacturing obviously. Based on my experience, Honda has seen
some impact from the opioid abuse situation, but compared to
other employers within the State and across the U.S., it hasn't
had a very big impact currently.
I guess in thinking about that situation, though, my
concern is also with those that are not yet employed, meaning
the youth of America, which we don't know the full impact of
that. So when thinking about that question, one of the things
that I want to be aware of and take back to Honda, and work
with our partners on, is understanding that situation and maybe
incorporating those concepts with soft skill training as we go
out to the high schools and middle schools, making sure that
young people are aware of the impact of drug abuse and how it
could negatively impact their career. But currently, we are not
seeing as much of an impact as some other employers.
Representative Tiberi. Dr. Harrison.
Dr. Harrison. At the college, we know that our student body
reflects the overall population, and we are in the early stages
of trying to build this in as a career readiness component of
our work so that students really are understanding what is
going to be expected in the workforce.
It is interesting the conversations that I have had with
employers, because they are struggling with it and are
addressing it in different ways. So recently, I was in a
conversation with two different CEOs. One was talking about the
fact that they were working so hard to find new people they
were having to relax their drug policies; and the other CEO was
going in exactly the opposite direction, in terms of trying to
increase the scrutiny and tests even more.
As you know, Mr. Chairman, in our State, our Governor has
really made this a priority in the State budget, and it is
something that we are really trying to wrap our arms around,
because it is a statewide issue that is certainly hurting our
State's economy, but also hurting families. We also know, with
our work at the college, is that it really is a multiplying
effect, in that if one family member is affected, it really
does affect the entire family. And that infrastructure is
something that we really do pay attention to.
Representative Tiberi. Thank you.
Mr. McLemore, the comment in your testimony that the
factory room floor or the version of the factory room floor is
outdated. And I think of when my dad worked in a factory, and
that image in my mind versus when I received my first tour of
Honda of America, are quite different.
How do we, or how do you, as someone in that industry,
begin to try to tell kids who from a very young age, you got to
get a 4-year degree, you got to get a 4-year degree, you got to
get a 4-year degree? I am thinking of a constituent I spoke to
yesterday, a mom whose daughter graduated from an Ohio college,
a private college in Ohio, 4 years, well into the six figures,
and she got a job as a public school teacher. A good job, she
wants to do it, but the cost versus the employment, very
different. Yet you have jobs that don't require a 4-year
degree. There are other factory jobs that are much different.
How do you begin, or how do we begin, to help educate
America's youth that there are good jobs that you don't need to
get a 4-year degree?
Mr. McLemore. Yes, Mr. Chairman, that is a great question.
I think it is a big challenge for employers and manufacturers,
and, the answer to that question I think really is in the model
that we have created with Columbus State.
So what you may find, I believe, in my written testimony
that I wasn't able to describe, is our ability to create a line
of sight for parents and students in middle school, starting
with our manufacturing game, that gives them a glimpse of and
some experience of what it is like to be in a modern
manufacturing environment. So this is a start, which we think
is very innovative.
But I think in addition to that, in our partnership with
Columbus State, we go together, as an example, to a suburban
high school near Columbus and in the Columbus School District
and talk to parents and students directly about manufacturing
careers, about the pathway, but also, we talk about the
opportunity to continue that education through tuition
reimbursement and partnerships that Columbus State may have
with the Ohio State University, Miami, and other 4-year
institutions in the State of Ohio.
Once students, and specifically parents and many times the
mothers of those children, understand those opportunities, it
is like a light bulb going off, because they have no
understanding that these careers are available just down the
street. If I could add, what is quite interesting, the work
study students that we have at Columbus State that we have made
full-time offers to, seven of the eight of those students did
not know Honda had those manufacturing careers before they
started at Columbus State in that program.
So our challenge is selling manufacturing. So we have
partnered with the Ohio Manufacturers' Association, Jobs Ohio,
and the Office of Workforce Transformation, to create a
marketing strategy for the State of Ohio for all manufacturers.
We have developed a toolkit, allowing them to go into schools
and sell manufacturing. It is about changing the conversation.
Representative Tiberi. That is pretty exciting.
I am going to yield to our ranking member.
Senator Heinrich. Thank you, Chairman.
Dr. Stevenson, we have heard a lot about the critical role
that skills play in workforce development, but it is certainly
not the only challenge facing workers today. You touched on it
a little bit in your testimony, but what are some of the other
major challenges that we need to be thinking about to make sure
that those workers can actually have access to that skills
training, that education, and get on the path to higher
productivity jobs?
Dr. Stevenson. Thank you for that question. And I do think
that you mentioned in your opening statement the need for an
all-of-the-above strategy. We see that there are big gaps
between children's start in life, and some of that starts with
early access to preschool. It is very hard for kids to catch up
when they have these very big gaps from the beginning. And it
turns out that supporting early childhood education doesn't
just support the children, but it allows the parents to stay
attached to the labor force.
What we see is that the more people stay attached to the
labor force and have continuous employment, the better they are
able to build a career path and get those increases in wages.
Gaps out of the labor force are bad for people's wage growth.
And there are lots of things that lead to gaps. Not having
adequate paid family leave leads to gaps. And we have seen
evidence of that across other countries. We have seen it in the
United States. When we have had States like California pass
paid family leave programs, you see more continuous employment,
particularly of young moms.
And as I mentioned in my testimony, I think some of the
very compelling research coming out about young men is that
they are cycling in and out of the labor force. They go, they
get a job, but they don't last very long. Then they take some
time out. Then they run out of money and they go back and get a
job. But that doesn't lead to a pathway in which they are
building a set of skills that are going to generate jobs. And
some of that is due, you know, to the problems with drug use.
Some of it is due to criminal justice problems. But there are
lots of reasons in which workers don't feel that they have
access to an upward mobility.
Senator Heinrich. You end up with a series of jobs, not a
career path.
Dr. Stevenson. Exactly. And I really want to emphasize how
important workers seeing a career path and having a progress
narrative is, a progress path where they see that if they
continue to diligently work, they are going to get a raise.
There are so many workers today who their real wages are no
different than they might have been 20 years ago. And that does
not create the incentives for workers to adopt the skills that
we need in order for them to build greater productivity.
Senator Heinrich. Dr. Harrison, I want to jump to you real
quick. What do we need to do--and I assume you have some
partnerships, or I hope you do, with high schools as well--to
make sure that they see that early on, to know what some of
those paths are and what some of those opportunities are?
And then I also want to touch on the issue of, in talking
to people who are struggling in the labor force, it seems to me
that the worst of all possible worlds--and I have run across
this in many cases--are the students who end up with a
substantial debt burden from their college experience, but not
the degree or the skill sets to actually be able to do
something about that debt and their earning power to put that
behind them.
What should we be doing to make sure that, you know, we
avoid that scenario with your students or other students across
the country?
Dr. Harrison. Thank you, Ranking Member Heinrich.
First, with regard to your question on high schools, we are
in 140 high schools in 60 districts in our region and have
actually almost 5,000 high school students taking college
coursework at any one time. One of the catalytic programs we
have had has actually been funded by the U.S. Department of
Education, their Investing in Innovation program (i3). We are
the only community college in the country that was selected
that is allowing us to work with seven districts with a high
percentage of low-income students to really model and build in
these kind of career paths, like we are doing--like we are
doing with Honda.
The disconnect with regard to the bachelor's degree holder
that has taken on a lot of debt and isn't making enough money
to service that debt is something we see all the time. We have
got more students at Columbus State with bachelor's degrees and
even advanced degrees than we have ever had, because they
haven't been able to get a high-earning job based on the
bachelor's degree that they have.
You all know the data, I am sure, as well or better than I
do, but the average bachelor's degree holder graduates with
$30,000 or more in debt. It takes them over 20 years to pay it
back. This is a generational kind of thing. So really helping
students and families understand that they do have options is
something that we are working hard on.
We have got a great complement of universities in central
Ohio, certainly led by Ohio State University, and are really
promoting the 2 + 2 pathway to bachelor's degree in a very
public way, where students earn their freshman and sophomore
year of the associate degree at Columbus State and then are
guaranteed admission to Ohio State and other university
partners, saving tens of thousands of dollars on the bachelor's
degree.
The other thing that Scot touched on--and I do want to call
out really the leadership that Honda has provided, and Scot
specifically, in terms of elevating these career pathways, and
not just for the benefit of Honda but for manufacturing
generally. But if you do the math for the students in the co-op
program that he is talking about, I will call out one student
specifically, Anton, who was in I think our first class, a son
of Filipino immigrants, started in our co-op program making $18
an hour while still in high school, graduated with his
associate degree at the age of 19, walked in--I shouldn't say
walked in, earned a $60,000-a-year job at Honda, and now I
think is in a bachelor's degree program with full tuition
reimbursement paid by Honda. So he is going to graduate with
his bachelor's degree in his early 20s, not only debt-free, but
he has been making money since he was 18 from Honda. That is
replicable, and that is something that we think is scaleable.
Senator Heinrich. Thank you very much.
Representative Tiberi. Good question.
Representative Schweikert, you are recognized for 5
minutes.
Representative Schweikert. Thank you, Mr. Chairman.
And this is one of those, I have a fixation on this
particular subject area, so please forgive me if I am slightly
disharmonious, because we all have this habit of speaking our
own book, our own life experiences, our own area of specialty,
and I fear missing what many of us who are fixated on the
actual demographics are seeing.
So I would like to just run through a number of things. Can
we actually do one big step backwards away from antidotals and
actually first some discussion on what we see in the labor
force participation numbers for typically some of the
demographics in the number of our population that if it were
post-1996 welfare reform, for that 10 years would have been
actually in participation in the labor force and today are not.
And we all screw up your name. Is it Furchtgott-Roth?
Ms. Furchtgott-Roth. Furchtgott-Roth. You should just say
Diana.
Representative Schweikert. Furchtgott-Roth. You were the
only one who actually mentioned some of the underlying data.
First off, let's actually just do backwards something you did
mention.
Sixty percent of males who are not in the labor force today
are on----
Ms. Furchtgott-Roth. Are on some kind of disability
benefits.
Representative Schweikert [continuing]. Disability or a
social entitlement program right now.
Ms. Furchtgott-Roth. Yes. The point is that these have been
expanded. They were expanded during the Great Recession, and
then this expansion has stayed rather than being ratcheted
back. So our labor force participation rate right now is 62.8
percent, and it has been around 66, 67 percent in the past. And
some people say this is because older workers are retiring, the
baby boomer's retiring. But really, the 55 and over labor force
participation rate is rising. It is the 25 to 54 that we are
concerned about.
Representative Schweikert. You actually beat me to
something we have seen in some of the fascinating data is
actually older actually choosing to stay in the labor force
much longer.
Ms. Furchtgott-Roth. Yes.
Representative Schweikert. Some of that may be savings and
retirement and retirement lifestyle aspects.
If I wanted to find literature to actually look at the
post-1996 welfare reform labor force participation velocity of
particularly my population moving from let's call it lower
tiers into true middle class, where would you send me?
Ms. Furchtgott-Roth. Well, there has been a lot of very
interesting work on mobility. Scott Winship, who works with the
Joint Economic Committee for Senator Lee, has done some of the
best work on that. And so I would say you should go to Scott
Winship and just find his latest articles. He is right on your
staff. He is one of the leading experts in the United States on
mobility and inequality and these different kinds of issues. He
has written extensively on it.
Representative Schweikert. Thank you. And my fixation to
particularly staff and everything else is that looking for a
more holistic approach, because my fear is this constant saying
I am going to do a job training program here, I am going to do
this here or do this here doesn't help me when I am looking at
just shy of 100 million of my brothers and sisters in the
Nation, what percentage of that should probably still be
participating.
Dr. Harrison, in a number of meetings I have had--now, this
is actually more for the high-tech community. I had a
fascinating discussion a couple months ago with I think it was
Oracle, who are saying they are tired of hiring 4-year computer
science degrees and then spending the next couple of years
getting them an Oracle certificate, whether that be Oracle or
SaaS.
Are we in a world where it is time to have a revolution in
the accreditation world, where I can do my AA, I can do my
part, and the accreditation world says, I am going to take a
little of this, a little of this, a little of that, and
actually start doing things that are actually part of what
labor markets demand?
Dr. Harrison. Well, I think that is possible. I think it
would have to be employer-driven. I think that is the, at least
at the community college level, kind of the barometer that we
would use. And the ability for employers to determine----
Representative Schweikert. But in your world as a community
college, are you allowed to produce programs and say, this
doesn't meet our accreditation standards, but Honda really
wants to hire someone who has done these classes? I mean, it is
almost more community college of coder camps or learning to run
CNC equipment or other things.
Dr. Harrison. We are allowed and, in fact, it is becoming
more commonplace. Our State just approved a short-term
certificate pathway that is going to allow for more of these
kinds of things. The computer scientists that Oracle was
talking about, they are coming to Columbus State to learn
Amazon web services, cloud technology, or Apple Swift
programming.
Representative Schweikert. Okay. Because that is part of my
holistic approach is I think it is a revolution, everything
from what we consider to be education anymore down to the job
skills to--we have to actually also start to explore if you
want to see why healthcare doesn't have wage inflation, how do
we compensate healthcare? Well, at CMS, you know, we
functionally have government control in pricing.
I mean, there is a series of these things that we throw out
in discussion, but if you drill down into them, we are at fault
in the way we build sort of this regulatory mechanics. So I
know I am way over time, but it is a powerful discussion for
our society.
Representative Tiberi. Senator Peters, you are recognized.
Senator Peters. Thank you, Mr. Chairman.
And I think that those are interesting points, and I am
going to explore some of those a little bit further if I have
time as far as looking at some new paradigms as to how we
provide education, which I think is interesting.
But I am also interested in data. And as we were talking
about the openings, the job openings that are available, I
would like to have a better sense of where those job openings
are. There has been a discussion about manufacturing.
Certainly, I hear that as I travel around Michigan.
Manufacturers are having similar issues as you are having in
Ohio; it is no different in Michigan.
But when I looked at some Bureau of Labor data, it seems in
terms of openings, it is in areas like food services. It is in
hospitalities, which are far above the average of openings.
Many, many more openings in those jobs tend to be lower wage
jobs.
Dr. Stevenson, I think you mentioned some of that in your
testimony. Where is the data? Where are most of the job
openings out there? What sorts of skills? What sort of job
classifications? What I saw are healthcare, social assistance,
day-care, food services. Is that accurate? Where's the data?
Dr. Stevenson. So I think it is really important that we
distinguish between job openings and job growth, because we do
have a lot of underlying churn. So there will be a lot of
hiring, millions of jobs hired in manufacturing, even if as a
sector manufacturing is declining.
So we do have to think about this, because if manufacturing
as a sector is declining, it means it is like a game of musical
chairs where they keep pulling out some of the chairs, but we
are still going to have a whole bunch of new workers going into
that field. And I think that that highlights the need for us to
provide training that is adaptable and movable and is general
enough that students or graduates, workers are able to move to
other sectors if they find themselves short of one of those
seats when they are working in a declining sector.
The sectors that are growing are in the service sector. In
general, the goods-producing sector is in decline, and
manufacturing is part of that. And this is a longer run trend.
And where we are seeing growth is education and health services
and business and professional services.
And that is some of the reason why you see these strong
returns to college education, but it is also just a shift in
global society where we think about where is the U.S. really
strong? And we are really strong in services. We export a lot
of business and professional services. And I think we will
continue to see job growth in those areas, even though we are
going to continue to see hiring in sectors that are not growing
as quickly.
Senator Peters. The other area that I find interesting, and
we heard some comments earlier about employers having to do
some training--and certainly, Mr. McLemore, you have talked
about that as well--is that when I came out of college, I did
go through a very extensive training program that the company
provided for me. And yet we have seen what I think is a
troubling trend that more and more employer-paid training is
going down. It used to be, I think in 1996, about one in five
companies--one in five employees that came in had some sort of
employer training. Now, that number is extremely low and
employers are just expecting folks to be trained when they walk
in the door, instead of investing in their employees. That is
not what it was like when I came out of college.
Is that an accurate reflection? Are those numbers, indeed,
accurate? You are shaking your head, Dr. Stevenson.
Dr. Stevenson. Yes, that is accurate and, frankly, it is
quite puzzling, because we see workers--we have seen a decline
in mobility. So workers are spending more time with their
employers, and yet their employers are investing less in them.
And I don't have a good explanation for why that is, but it is
certainly what we are seeing.
Senator Peters. So you are seeing less employer investment
in employees, and you are seeing wages that are not going up,
even though there are shortages. That doesn't seem to comport
with classical economics, does it?
Dr. Stevenson. It does not.
Senator Peters. Anybody else have a comment on why is there
disconnect? There are shortages of skills. Employers are not
investing in skills, and they are not paying more to attract
folks to come into their businesses. Any other ideas?
Dr. Harrison.
Dr. Harrison. Well, the only thing I would add to that is
we work with a lot of small businesses who don't necessarily
have the means to train their employees in the way that you are
talking about, or employees are true multitaskers. So what we
are working on with our chamber of commerce and others is to
figure out ways to pool that so that that becomes a more
collective approach, so that the employer is benefiting, but we
are also able to really build the skill set of our region.
Senator Peters. Let me add in the remaining time, since it
is getting low here. One area that does train folks are labor
unions, particularly in the building trades. They have very
extensive apprenticeship programs. I have toured many of them
in Michigan. Complete training. Students can come in, get
basically free training, and get a great job afterwards. And
yet we have seen a declining number of union jobs.
Is that related to--Dr. Stevenson, you are shaking your
head again as well. With declining labor and apprenticeship
programs, to me that is a significant problem.
Dr. Stevenson. That is a significant problem. With
declining unionization, declining union investment in training,
somebody has to pick up the slack. And that is either going to
be businesses, and they haven't been doing that, or it is going
to be government.
Senator Peters. Great. Thank you.
Representative Tiberi. Thank you.
Mr. Rooney, you are recognized for 5 minutes.
Representative Rooney. I don't have a clock, so let me know
if I----I would like to ask Ms. Furchtgott-Roth a question,
since you referenced the labor force participation rate. And I
have been mulling over this study from Nick Eberstadt over at
AEI, which is pretty chilling, and I would like to introduce it
to the record, if I might.
Representative Tiberi. Without objection.
[The article titled ``Our Miserable 21st Century'' appears
in the Submissions for the Record on page 78.]
Representative Rooney. But he starts out by saying: By the
criteria of adult work rates, employment conditions in America
remain remarkably bleak. And he goes on to cite all kinds of
horrendous things. But a couple of them that stood out in the
nature of the argument or the comment that three 25- to 55-
year-old males for each 25- to 55-year-old unemployed male are
sitting out of the workforce and living off of benefits. That
is 5 million people since 2000. And half of these sitting out
of the workplace, some 7 million take daily pain meds. Half are
on Medicaid. And there are also some statistics from Alan
Krueger at the Council of Economic Advisers, after you were
there, about that a majority of these people were surveyed that
they, quote, ``don't do civil society,'' unquote.
So I am not an expert in this and you are, and I would like
to ask you, what do you see we can do to kind of draw these
people out and into the workforce using some of the tools that
you describe in your testimony?
Ms. Furchtgott-Roth. Well, it used to be that if you were
an able-bodied adult, you couldn't get benefits. You had to
work. You couldn't get health insurance; you had to work for
that. And this has changed in the United States over the past
10 years, and the results are what we have seen, as Nick
Eberstadt has described.
There have been other people who have written on this.
Casey Mulligan at the University of Chicago in his book ``The
Redistribution Recession,'' and also his book on the effects of
the Affordable Care Act on labor force participation.
It is clear that if you get benefits without having to
work, then fewer people are going to work. It is not something
that an economist needs to do a study to analyze. Anyone can
understand it, although many economists have measured this
phenomenon.
As well as the services, there are also a lot more job
openings than hires in information, financial activities,
finance and insurance, real estate rental. There are
opportunities out there. I would say that employers don't
necessarily do formal training, but they do a lot of on-the-job
training. When someone comes, they show them the ropes. Many
employers are saying that they cannot find people who come and
who want to do these jobs.
There was an experiment of sorts in North Carolina when
Governor McCrory in 2013 said, we can't find enough welders. He
cut back uninsurance benefits dramatically, to 19 weeks from
about 63 weeks. And all of a sudden a lot of jobs started
getting created in North Carolina. Employment went up;
unemployment went down.
Representative Rooney. Thank you.
Dr. Stevenson, maybe for you, but also it would be great
for you too, is in the concept of the workforce participation
and the testimony you put about there that business can do
more. There has been a lot of reading. I just read this, but
``Poor No More,'' about the argument that instead of workforce
training and preamble activities to work, you just get someone
in there and put them to work. And between OJT and
apprenticeship and things like that, they will gradually get
with the program, and then maybe you supplant it later with
some training to advance their skills.
Can you comment on that?
Dr. Stevenson. Are you asking if I think it is a good idea
to put people into jobs before they are prepared so that they
can learn on the job?
Representative Rooney. That is what I am asking.
Dr. Stevenson. You know, I think people have different ways
of learning. There is obviously an importance of having a
certain basic skill. And, you know, I advise my students that,
to the extent they can, they should concentrate on building
their skills, because they will be more productive once the
skills are built.
You know, I would like to emphasize that, you know, a
century ago, countries mocked the United States for how much we
were sending people to high school. They said that was a waste
and we should put people into jobs and they should learn on the
job. And what we did was set ourselves up for the most
impressive growth in the world last century, because we were
willing to educate people. And I think we should be thinking
about education today in the same way that we thought about it
when we were expanding high school to the masses.
We need to make sure that people have the opportunities to
develop skills so that they can productively contribute. Lots
of people learn really good by doing, and so--learn really well
by doing, and I think that, you know, it is a great idea to
build out those opportunities. But, you know, I wouldn't say
that we should just have students, or young people, dumping
them into jobs without giving them adequate training.
Ms. Furchtgott-Roth. On the other hand, the skills that you
get when you graduate from high school now are not necessarily
the skills that people had 50 years ago, if you look at the
tests that people passed 50 or 60 years ago compared with the
tests they pass now. There are some parts of the country where
the graduation rate is only 55 percent, and we need to do more
to let those students have alternatives, such as charter
schools or school choice, allow the tax money to follow the
child so that parents have the ability to choose a better
school for them and so they do get those skills, because with
the math skills and the reading skills, you can start in a lot
of employers with a lot of jobs and work your way up. But
without those basic math and reading and writing skills, it is
difficult.
Representative Rooney. Thank you. Good discussion.
Representative Tiberi. Senator Hassan, you are recognized
for 5 minutes.
Senator Hassan. Thank you very much, Mr. Chair and Ranking
Member Heinrich, for this hearing. And to the panel, thank you
all for being here this morning.
I know you have all been talking about the relatively low
national unemployment rate, and it is clear that there is no
easy solution to addressing a record high number of unfilled
jobs reported from the Bureau of Labor and Statistics as 5.7
million openings in May.
We all can agree we need more participation in the labor
market and a more skilled workforce in order to be successful
in changing our economy. As Governor of New Hampshire, now
Senator, it is the number one thing I hear about from
businesspeople and employers.
One way to do this is to identify the individuals who have
fallen out of the labor workforce that Congressman Rooney was
just pointing to and to assist them with additional supports so
that they can gain the skills necessary to fill vital job
openings, because, again, I hear from employers that the people
who do show up often don't have the high-tech skills that we
need.
In New Hampshire, programs like Families in Transition and
Goodwill have had success looking at the whole person and
providing wraparound services to help people navigate
homelessness, addressing their transportation needs, and
securing childcare, in addition to job training. These programs
in New Hampshire have demonstrated that at-risk individuals,
when given the right supports, are capable of finding stable,
good-paying employment, and working their way into the middle
class.
So do you agree that these types of programs assist in
expanding our labor markets? And do any of you have suggestions
on how to scale and implement these types of services
nationwide?
And, Dr. Stevenson, I would like to start with you.
Dr. Stevenson. Yes. So I strongly believe that these types
of family support programs are essential to increasing the
labor force. And to put some data on it, research has shown
that female labor force participation in the United States
would be 6 percentage points higher if we had the kind of
access to childcare and paid family leave that other countries
have. So we know that our lack of this type of support is
actually holding back female labor force participation. We also
know that the lack of support leads to long-term negative
consequences as well.
We are also learning more about people's cognitive
limitations. So that sounds almost like a difficult thing to
talk about, but if you spend your time trying to figure out how
you are going to put food on the table, you have got less left
to give your employer. And so by making sure that we remove
some of the burdens that people have, struggling to figure out
how are they going to get their kids cared for while they are
at work, what are they going to do when their kid is throwing
up at school, when we reduce some of those cognitive burdens,
they have more to give their employer, and that leads to higher
productivity and better outcomes.
And we know what needs to be done for that. We know that we
need more government support for paid family leave and for
childcare.
Senator Hassan. Thank you.
Any of the other panelists like to address that?
Ms. Furchtgott-Roth. We already have a substantial deficit,
and these government programs would come at an additional cost.
One has to figure out what is worthwhile. And there are plenty
of----
Senator Hassan. I also saw Dr. Harrison wanted to comment,
so I want to make sure we get to him as well.
But just to that point, in New Hampshire, because of our
low unemployment rate, we actually had significant reserves in
our welfare fund. We could use those reserves for some of these
supports and wraparound services. And then we see things like
people who get benefits from expanded Medicaid going into the
workforce, because they weren't healthy enough with chronic
illness and kind of a revolving door into the emergency room to
work. Now they are. So there is some good evidence that it
could actually address some of our deficit issues as well.
Ms. Furchtgott-Roth. Right, exactly. But if we look at
Europe that has government-paid maternity care, frequently
government-paid childcare, in many cases, their labor force
participation rates are no higher than ours, plus their
economic growth is much lower than ours in general, because
these benefits kind of weigh down on their sectors.
Senator Hassan. Well, and I don't think anybody is
suggesting exactly the same thing.
Dr. Harrison.
Dr. Harrison. I was just going to say, these issues really
are all related, and we see the same thing happening at the
college. As I said in my testimony, most college students are
working. Many of them have family responsibilities. So the same
kinds of challenges that exist in the workplace exist in terms
of helping them advance their education.
We need to remember that the education/employment pipeline
really isn't sequential anymore. It is happening concurrently.
And it is left to the student in many cases to balance their
job schedule, their family responsibilities, and their academic
workload. And that is something that we work with every day. We
try to help them manage it.
Senator Hassan. Thank you.
Mr. McLemore, anything to add?
Mr. McLemore. No, Senator. I think it has been covered
quite well by my fellow panelists.
Senator Hassan. Thank you very much.
And thank you, Mr. Chair.
Representative Tiberi. Thank you.
Mr. LaHood is recognized for 5 minutes.
Representative LaHood. Thank you, Mr. Chairman. And I want
to thank the witnesses for being here today, for your valuable
testimony, and for the subject matter.
The district I represent in central and west central
Illinois is a fairly rural district, but a common complaint
that I hear from employers, and I have some larger employers--
Caterpillar is based there, State Farm Insurance, John Deere,
ADM--that there are lots of jobs available, but no one can pass
a drug test or a criminal background check, and I hear that
constantly.
And I know some States have been creative in what they have
done to help in this area, but I wanted to ask Dr. Harrison or
maybe Mr. McLemore, in your experience, have you seen where
States have been creative or how they have helped to address
this problem and any thoughts you can shed on that?
Dr. Harrison. I don't have a silver bullet solution to
that. I mean, I think it is something in Ohio we are certainly
struggling with. And the one thing I would say is we are trying
to do it collectively in our State, and address both the
individual that is involved, but also look at, you know, how we
can prevent that down the road.
As I mentioned earlier, we are trying to do it through
education and awareness and those kinds of things. But it is an
issue certainly Ohio is struggling with.
Representative LaHood. Mr. McLemore.
Mr. McLemore. Yes, I agree with Dr. Harrison. It is a
collaborative approach. I don't have specifics around how we
would address it, other than I did mention earlier, Honda does
support and participate in soft skills training at the high
school level. One of the things that I believe we could do is
to include that in our soft skills training with youth and talk
about the negative impact of that on their lives as well as
their careers, specifically in manufacturing or in any career
that they pursue. But we haven't implemented any specific
models, other than involving soft skills training for youth.
Ms. Furchtgott-Roth. We have had success in the past with
massive reeducation campaigns. There are kids who will take
drugs, but they won't throw trash on the ground. They have been
brainwashed not to litter. They have been brainwashed not to
smoke cigarettes. The rate of smoking has dramatically
decreased, littering. And recycling, we brainwash them to know
that you should throw your bottle in the right trash can.
We need to have a similar effort with these opioids and
with these drugs. We are not putting enough effort into it. We
need to be starting at grade school, massive campaigns like we
have. And I am sure that if we have done it with these other--
we have seen results with these other things, we can also see
results with drugs.
Representative LaHood. And is it your thought that the
statistics that show how many jobs are available, that that
would change if this was implemented the right way?
Ms. Furchtgott-Roth. I also think that we need to be
carefully looking at the replacement ratio, as how much people
gain when they are not working and dial that back. They are not
eligible for all kinds of programs that they didn't used to be
eligible for 10 or 15 years ago. It didn't used to be that
able-bodied adults were able to collect benefits. They had to
work. Now they can collect benefits. So we are also seeing the
results of these.
Representative LaHood. Thank you.
Another area that I wanted to cover is what I call kind of
the brain drain from rural areas to urban areas. There seems to
be a gravitation towards more of our cities and urban areas and
young people that don't necessarily want to come back to rural
areas or smaller size cities and go to larger cities.
Can you, Dr. Harrison or Mr. McLemore, comment on that?
Mr. McLemore. Yes. Congressman, it is a challenge for
Honda. Most of our manufacturing facilities are located in
rural areas. In terms of finding talent, we are working very
hard with the initiatives that we have put in place with local
community, technical career centers, and high schools, to
encourage young people to pursue these manufacturing
opportunities.
We have recently partnered with the Society of
Manufacturing Engineers and are funding a manufacturing pathway
at our Anna High School near our engine plant. In addition to
that, we have mobile manufacturing labs, one of which I think
Dr. Harrison is aware of, where we are offering training, both
incumbent training as well as training in those regional and
those rural areas.
So for Honda, it is an important challenge and it is
important that we find solutions for that.
Dr. Harrison. We have seen both sides of that, where we do
see exactly as you are describing, people moving from rural
areas to urban areas, like Columbus. But I was in conversations
just recently with employers and some of our economic
development leaders looking at a heat map of where the jobs are
and where the people are. And a lot of the jobs are clustered
in the urban areas, and they can't get people to relocate from
some of the rural areas of our State. So the jobs aren't always
where the people are, and that is something that we continue to
try to align.
Representative LaHood. Thank you.
Thank you, Mr. Chairman.
Representative Tiberi. Before I recognize Representative
Maloney, the Senator and I were wondering if we could go one
more round, the folks that are here, of questions, because we
think this has been a very, very good--is that okay with the
four of you? Thank you.
Senator Maloney--Representative Maloney. I almost demoted
you.
Representative Maloney. Thank you for holding this hearing.
And, Ms. Stevenson, I was just at a Janet Yellen hearing. I
am a little late. So it is important.
Labor force participation for women peaked in the 1990s,
and has since declined. And according to a Brookings Institute
study, 28 percent of that decline can be attributed to the lack
of family friendly work policies. And how would a Federal paid
family leave policy affect vacancies in the labor force and the
speed with which they would be filled?
Ms. Furchtgott-Roth. Well, I think, first of all, there are
different ways to have family leave policies, but I think any
mandatory family leave policy would result in a declining
hiring of women of childbearing age, because women of
childbearing age would come with a certain cost to them. So if
an employer had to choose a qualified man and a qualified
woman, the qualified woman would lose out. I would say that
mandatory paid family leave policies are not a good idea to
promote labor force participation.
Representative Maloney. And your comment, Ms. Stevenson?
Dr. Stevenson. So I would disagree with that, respectfully.
I do think that paid family leave policies promote greater
attachment of women to the labor force, and that greater
attachment leads to greater wage growth, which encourages
overall participation.
I have recently been part of a bipartisan commission with
AEI and Brookings to put together a paid family leave proposal.
And we did tackle this issue of wanting to ensure that there
was as little discrimination as possible or employers
attempting to opt out. And so we do recommend that paid family
leave be available to both men and women.
And that is not just for the issue of discrimination, but
because that is actually what people want. Surveys show very
clearly that young men today want to be able to take time to
take care of their kids. They want to be fully engaged parents.
And that means they need to be able to take a day off when
their kid is sick, or they want to be able to take time off
when they have a newborn child into the home.
And so what we see is that when we have paid family leave
policies, if we had a nationwide paid family leave policy, I
believe that women would have greater labor force
participation. They would find it easier to stay attached to
the labor market.
I do also want to add that while we have seen labor force
participation of women peak in the 1990s, we have seen their
contributions continue to grow in other ways. And so that
illustrates that it is not just about--paid family leave isn't
just about trying to get women to participate more in the labor
force, but making sure we are taking advantage of our most
skilled workers.
Women are increasingly the most college-educated workers.
They increasingly have the same level of job experience as
their male colleagues. And these high-skilled, highly
experienced workers find themselves in a bind when they have
young children and are unable to access paid leave policies.
And so overall, I think the economy would benefit from
something that neutralized the issue of paid leave so that
employers weren't wrestling with whether that was a benefit
they wanted to offer, but something that everybody had equal
access to.
Representative Maloney. Well, President Trump has shown
support with his daughter for paid leave for the birth of a
child. And research from the United Nations shows that America
is among two countries in the whole world that does not have a
policy for paid leave for the birth of a child. We are in the
same company with Papua New Guinea.
So this seems to have more support. A bill passed the House
of Representatives twice, did not pass the Senate.
What are your comments on paid leave for the birth of a
child?
Dr. Stevenson. I think the good thing about coming last is
we have lots and lots of evidence that it works around the rest
of the world. And I have confidence that the United States is a
strong economy that can succeed and do even better when we move
to the types of policies that every other country besides Papua
New Guinea have.
Representative Maloney. And, Ms. Furchtgott-Roth.
Ms. Furchtgott-Roth. Many employers have their own paid
family leave policies, and this is something that should be
worked out between the employer and employees on a case-by-case
basis. There are some companies in the Washington area that
provide 5 months of paid maternity leave for a birth of a
child, and there are others that don't provide any.
But it basically raises the costs of employment. We have
already been decrying the lack of job opportunities. Any
mandated costs on employers increase the move to technology,
the substitution of technology for workers, and would result in
lower employment rather than higher employment.
Representative Maloney. Dr. Harrison, in your written
testimony, you were talking about career education and hooking
up businesses with schools and training young people. I have a
very successful program near my district, right on the border,
between IBM and a high school, where literally every child is
trained for a job in IBM. They have partnered with them. They
then help them achieve a college education, and then they move
them directly into their jobs. And it is fantastic. Every child
in that school gets a job when they graduate.
And do you see this moving forward with businesses, you
know, partnering with public education to train for the
specific jobs they need? You keep reading that certain
industries can't find the workers they need. Why in the world
aren't they partnering and working with our schools to train
them with exactly the skill sets that they need?
Representative Tiberi. And before you answer, I just want
to remind the gentlelady that her time has expired. But go
ahead and answer.
Representative Maloney. Thank you so much, Mr. Chairman,
but this is an important question. When you see something
succeeding, you want to try to figure out how you can make it
happen again.
Dr. Harrison. I will be brief. I believe that is the P-TECH
program.
Representative Maloney. Yes, that is it. That is exactly in
Brooklyn.
Dr. Harrison. And in central Ohio, we have a version of
that replicated in many industries. You weren't here earlier,
but our partnership with Honda of America is a great example of
that. We have many other companies, American Electric Power,
JPMorgan Chase, others, who are working to do the same kind of
thing. It is not as specific yet as what IBM is doing, except
with regard to what we are doing in manufacturing, but there is
really kind of a groundswell of work in information technology,
because a lot of the larger companies in central Ohio share
that as an acute need. So it is something we are working
collaboratively on with K-12, community college, and our
university partners.
Representative Maloney. Thank you. My time has expired.
Representative Tiberi. Mr. Beyer, you are recognized for 5
minutes.
Representative Beyer. Thank you, Mr. Chairman, very much.
And thank you all very much for being here.
And, Ms. Furchtgott-Roth, I would like to immediately push
back as a business owner. I have 380 employees, $200 million a
year, and we instituted paid maternity leave 6 weeks about 4
years ago. And we have had no tendency to try to replace these
people with technology. In fact, it has been an extraordinary
recruiting tool for us to bring people in.
We find that it is so hard to attract women to a business
where women are very successful that this can be a positive
thing rather than a negative thing. I don't see--in fact, there
are lots of studies that show, especially within the Federal
Government, the legislation that Representative Maloney has
offered again and again, that it actually saves the Federal
Government money to do maternity leave rather than cost. You
don't have to train new people. You don't have to hire new
people.
Ms. Furchtgott-Roth. Precisely. And as you know, employers
are very smart. They can work this out on their own. The
company that I mentioned that offers 5 months' paid maternity
leave also has trouble attracting women, and this is a
recruitment tool.
I am just saying that the Federal Government does not have
to do a mandate. This is being increasingly worked out on an
employer-by-employer basis, as there is increasing shortage of
women and companies want to recruit them.
Representative Beyer. But it may well be part of the
fundamental problem about why we have this so-called skills
gap.
You know, when I talk to people in the business community,
as I do all the time, you hear this we just can't find the
qualified people again and again. But this issue has been
around a long, long time, not just since the Great Recession.
And there is lots of research out there. In fact, I have got a
passel full of articles here. But people from like Boston
Consulting Group, Andrew Weaver, Paul Otterman, they show that
really there is little evidence of a meaningful and persistent
skills gap, that there are many other things part of it,
including wage stagnation and including that one of the
greatest obstacles may be employers' insistence on prior work
experience in the same industry to bring them in.
So, Mr. McLemore, as a car dealer--and I would love a Honda
franchise, by the way--you know, we are very familiar of how
closely we have worked together with our manufacturing to
provide training. What is your perspective on this skills gap
and the search for skilled employees?
Mr. McLemore. Well, thank you for that question. I think,
as you mentioned, there are many reasons why we have this
challenge. And I think what I found in our partnership with
Columbus State and the partnership with our other educational
institutions is it is really around the understanding that
these opportunities exist, and then what are the pathways in
which they can get the skills and be trained to be prepared for
these roles.
It is just amazing to me how few individuals understand
what the opportunity looks like and what it feels like. And
then on top of that, how do they enter that workforce and what
are the skills that are even required?
I know the challenge for Dr. Harrison and other community
colleges regarding programs that they can provide is to pull
people into those programs. So what they have done is they have
asked employers to come and sell those programs by marketing
the careers which they would get as a result of that education.
I think the key is those partnerships and that collaboration.
Without that, people are not going to seek that training, I
don't believe, wholesale on their own. Just not enough people
are going to do that.
So I think that is a big challenge for us, creating what I
call the line of sight for those individuals that are either
displaced or are not currently seeking that pathway.
Representative Beyer. Thank you very much.
Dr. Stevenson, there has been a lot of discussion about the
impact of social benefit programs on labor rate participation.
We hear this all the time in rural Virginia, that, you know,
with SSDI and everything, why do people need to go to work?
What is your perspective? Are social support programs our
biggest labor participation problem?
Dr. Stevenson. I do not believe so. If you compare what we
have to other countries, we do not have a very robust safety
net. If you look at growth in SSDI, the primary drivers of
growth are that there are more people who qualify for SSDI.
Because of women's increased labor force attachment, there are
more women who qualify. And then you have an aging workforce,
which means that people are getting to that time in their life
where they are more likely to develop the kinds of problems
that would lead them to be on SSDI.
I do believe that it would be useful for us to do a better
job of helping people who are able to get back to work get back
to work. And there are certainly lots of demonstration projects
out there to try to figure out how to do that.
If you look overall at our benefit structure, it is not
benefits that are keeping people out of work. And we have
seen--I should say, you know, we did see unemployment insurance
ramp up when we had unemployment rates of 10 percent, but we
have seen unemployment insurance come back down as unemployment
has recovered. And the decline in unemployment surpassed every
forecaster's expectation, despite the fact that we had such
robust levels of unemployment insurance.
Representative Beyer. Thank you.
Representative Tiberi. Thank you. Good questions.
We are going to go for a second round here. And one of the
questions the gentleman from Virginia asked you, Mr. McLemore,
kind of piqued a thought in my mind. Let me give you a
hypothetical. This could apply to any State, but let's do it
from an Ohio perspective. And, Dr. Harrison, please share your
thoughts as well.
Let's assume you had a large international manufacturing
CEO, to my left. He is the CEO of a large manufacturer. He
wants to put a facility, a manufacturing facility, let's say in
the Midwest. And so he comes to Ohio, and the concern he has is
can I get enough people to work.
Senator Heinrich. I think I might want to put it in
Albuquerque. But we can discuss that later.
Representative Tiberi. Well, you might, you might. But we
don't have anybody from Albuquerque on the panel to answer the
question, so we will just use Ohio. But it could be
Albuquerque. It could be a manufacturer in Albuquerque and a
community college president in Albuquerque. And his question to
you would be, from a community college president's perspective
and from a manufacturer's perspective who has been around, in
your case, 30 years, what do I do to get 5,000 workers employed
in your region? Tell me, should I be concerned and look to
Michigan, New Mexico, New Hampshire? How would you answer that
question?
Dr. Harrison. I will start this time. I think my first
question to him would be, how creative are you willing to be?
Because we in Ohio, central Ohio, we have got the building
blocks that would be able to get 5,000 people ready to go for
her or his business. It would take a collaborative effort. It
would take a community effort. But I say all the time I have
got 26,000 students at Columbus State, they are all looking for
a job or for a better job. There is a way, there is a pathway
to make that happen with this employer.
What we are seeing is all employers are struggling with
this. Those who are creative in their HR practices are really
starting to turn it into a competitive advantage, and the
gentleman to my left I think can speak to that.
There wasn't a career path for people with associate
degrees at Honda 4 years ago. And now we are filling rooms with
information sessions and those kinds of things, and that is
being noticed by employers from other industries. So these
creative, inclusive business practices, from an HR standpoint,
is what we are seeing leading employers really start to pay
attention to.
Mr. McLemore. So Dr. Harrison nailed it, as I thought he
would. It is a question of how much does that CEO and that
company want to engage in that collaborative effort within that
State.
So for Ohio, just speaking from our perspective, currently
with our partnership with Columbus State, but in addition to
that, JobsOhio, so local and State government, there is a lot
of momentum that is happening around discussions like what we
are having today. And I think if a company and a CEO wants to
really understand how to make that happen quickly, they have to
be willing to engage directly, because I think the
infrastructure is there for Ohio.
So it is understanding what infrastructure exists, whether
that is through data, but that partnership and a willingness to
come to the table and be innovative and speak frankly about
what their needs are, and then how can a community college
accommodate those needs.
Ms. Furchtgott-Roth. You also find that people move. So
when the Boeing plant was opened in South Carolina, people were
moving to north Charleston to take those jobs. North Dakota,
when there was the oil boom, people were moving to North
Dakota. Stephen Moore has written a series of books called
``Rich States, Poor States'' documenting this movement from
States that don't have jobs to States that do have jobs.
Mr. McLemore. Mr. Chairman, could I add something to that?
So a thought came to mind.
One of the things that we did with Columbus State is we
conducted a specific workforce analysis of the specific role
that we were struggling to fill internally. And what we did is
we turned the results of that over to Columbus State so that
they could accurately align their curriculum to the specific
needs that we had.
So in addition to understanding and being collaborative, I
think for the company, it would be in their best interest to
speak directly about what skills they are looking for and what
their needs look like, and how can the community college and
other educational institutions provide students that have those
skills.
Dr. Harrison. Mr. Chairman, if I may, it really is a
partnership and a kind of collaboration that Scot is talking
about. I was in a meeting not unlike this or a conversation not
unlike this with chief HR people from our region from a lot of
different industries recently, and I was just asking them about
their employment practices. And the conversation went something
like, well, we go to the, you know, our local university and we
look for accounting majors with a 3.4 GPA or above. And oh, by
the way, we are trying to diversify our workforce. And we all
kind of laughed. I am like, well, how is that working for you?
And then I said, you know, my student served 6 years in the Air
Force, it has taken him 4 years to earn a 2-year degree because
he is working and supporting his family. He is never leaving
Columbus, and he is going to work hard for you for the next 30
years. I had three of them come up to me after the meeting and
say, I want the Air Force guy, but my current HR practices
wouldn't allow me to hire him. He wouldn't make it through the
system.
So, again, they are starting to recognize--but, again,
progressive companies are starting to recognize that that is an
issue and they are making those changes.
Representative Tiberi. One final--go ahead. No, no, please,
because this is a little bit off. Go ahead.
Senator Heinrich. So I find that fascinating and
heartening, and I want to go back just real quickly to
something we touched on earlier, but, frankly, I didn't feel
like we heard a lot of solutions to, and that is that
geographic mismatch between urban and rural areas.
And I don't believe that we can just say the solution is
going to be everybody is going to move to an urban area. We
need a vibrant rural small town economy in this country and one
that is not purely based on low-wage service-sector jobs. So
what should we be thinking about in terms of how we can invest
in that population, in their education, and in business
development opportunities to make sure that the solution is not
just, okay, you are going to chase the job? That pull is always
going to be there for people to move to places where jobs are
created, but we can't afford to turn our back on rural America.
We need to invest in jobs there.
Dr. Harrison. My light is on so I will go.
Senator Heinrich. You drew the short straw, Dr. Harrison.
Dr. Harrison. Well, we face this in Ohio, because we have,
you know, very successful and growing urban populations and we
have got large rural areas. And one of the things that we are
working with when we think about statewide strategy is, in a
technologically driven workforce, how distributed can the
workforce be?
And we do believe that there are technology-enabled jobs
with large and small companies where people don't have to leave
their community, they may not have to leave their home. So
things like broadband access and those kinds of things to rural
areas has become really important, but also I think just an
understanding of the possible. Because in so many rural areas
in Ohio, the aspiration is to be the manager of McDonald's, and
there is nothing wrong with that, but that is all they see.
Scot talks about the line of sight.
So the ability to work with large technology companies and
help people understand that these are within their reach. There
are many tens of thousands of jobs that are unfilled in Ohio.
These are the steps to get there. It may not even require a
bachelor's degree or even associate degree. A technical
certificate can get you started. And with the right employer,
you may not have to even leave----
Senator Heinrich. I liked your example of the Air Force
veteran, in part, because I think that line of sight needs to
go in both directions. So people need to know what is possible
in places where those jobs may not be there today, but they
could be, and then employers also need to understand the
inherent advantages that you may acquire with a workforce in a
rural area that has an incredible loyalty to the business
itself and an investment in community that you might not find
in other places.
Representative Tiberi. You had a thought there.
Mr. McLemore. No. I am just realizing I misunderstood
Congressman LaHood's question, I think.
So our challenge is really, as the demographics, as it was
stated, we are losing people in rural areas populationwise to
urban areas. For Honda, we are focusing on our 15-county
radius. As I mentioned before, our facilities are located in
rural communities. Our focus is there. However, it includes
Franklin County and other urban areas in which, actually, I
live.
So I am familiar with the challenges of getting people that
live in urban areas out to a Marysville, Ohio. Even though I
have been doing it for 30 years and I think it is great, it is
an awareness of those opportunities out there. But we are
continuing to focus on our local communities, whether they be
rural or whether they be urban.
Representative Tiberi. Senator Hassan.
Senator Hassan. Thank you. And this has really been a great
discussion, and I greatly appreciate it.
You know, one of the things that some businesses in New
Hampshire have been doing to this whole issue of line of sight
is not only working to help young people understand the career
pathway, and we have a whole career pathway initiative in our
public school systems with our community college systems right
now, but we also see companies bringing in guidance counselors
and parents, especially around advanced manufacturing, because
so many parents think that manufacturing is something that will
injure your child in a dirty environment instead of the high-
tech effort that it now is.
But I also just wanted to touch on a couple of the efforts
that the Federal Government has invested in to help with the
kind of partnerships that Dr. Harrison and Mr. McLemore, you
have been talking about so well this morning.
One of them came with the passage of the Workforce
Innovation and Opportunity Act in 2014, which was integral in
helping States expand sector partnerships, to ensure workforce
training is coordinated and responsive truly to the employer's
need. And they are led by industry and a makeup of different
stakeholder groups. It is a sector partnership model. And are
you familiar with it? Do you think it is something that if we
expand it, it would be helpful in developing the kind of
workforce we need?
Dr. Harrison. In central Ohio, we really do focus on a
sector strategy approach, and a lot of that is a cascade from
our statewide economic development plan. And the answer is yes,
we see it working really well.
We also see real advantages--and Scot talks a lot about
this in our local groups--of having cross-sector----
Senator Hassan. Right.
Dr. Harrison [continuing]. Conversations as well, because,
as I said before, the model that Honda has put in place with
their co-op program, we have got companies from other
industries that are trying to replicate. So I think both are
important.
Senator Hassan. Yeah, because the other program that has
been very important in New Hampshire is our TAACCCT grant
program, and I think you referenced a similar program. Our
Great Bay Community College started an Advanced Technology &
Academic Center largely through the use of a TAACCCT grant that
brought an additional $4 million in State funds, and then
participation and partnerships of companies all across the
region. So we now have more than 100 partners in industry as
well as State and Federal agencies. And the Center is helping
to create a program that gives students advanced manufacturing
skills.
And, again, it seems to me that you are both saying,
strategically done with good partnerships so that the educators
understand the needs of the actual industry and a variety of
industries, they can really make a difference. Is that a fair
assessment?
Dr. Harrison. Those kinds of Federal investments can truly
be catalytic. We were involved in a TAACCCT grant in logistics
that included colleges from eight States. And the ability to
really bring those kinds of things to scale and the Federal
investment gets people to the table and really brings
employers, K-12, and the community college kind of run in the
same direction and really trying to move the needle forward.
Senator Hassan. The last question I have about this issue
is just--strikes me, because it is something that one of our
major employers, a large hospital in the Seacoast of New
Hampshire took on, but it is understanding that, as we work
with a labor pool that may have had low participation rates or
lack of education or training, often these folks are working at
entry-level jobs. And the training programs that have
traditionally been offered even through community colleges have
been, you know, 6 months, a year, 2 years.
What this healthcare organization decided to do was help
train people up in what is normally a 2-year curriculum in kind
of a series of boot camps over weekends, so that you are still
giving people the opportunity, to that Air Force vet's example,
of working and supporting their families. But often, for single
parents in particular, the notion that they could just give up
their work for 6 months or a year to get highly trained is just
not reasonable.
So are you seeing kind of different ways of developing the
curriculum and the schedule for students so that they can do
both of these things?
Dr. Harrison. In more and more of our programs, our
curriculum design is based on stackable certificates so that
students are able to earn a workforce-based credential with
market value before earning the associate degree, but what they
have earned there counts fully towards their ultimate earning
of the associate degree, because most students are working
while they are going to school.
I do want to follow up, if I may, on the Federal investment
idea. And, Mr. Chairman, you will be very familiar with this.
The city of Columbus competed against 77 other cities last year
with the U.S. Department of Transportation grant called Smart
Cities Challenge. A similar kind of program in this workforce
area could truly be catalytic. And if you look at how that has
brought the community together. It was a $40 million investment
from the U.S. Department of Transportation. Central Ohio has
now put in over $500 million in private and local funding to
really make that a benchmark that we think will move the needle
not just for central Ohio but for our Nation.
The same kind of model could work in this workforce
misalignment area when you are getting the right people at the
table. And, again, Federal funding can really help move that
along.
Senator Hassan. Well, thank you.
And thank you, Mr. Chairman.
Representative Tiberi. A perfect segue. A final question,
Dr. Harrison, because you mentioned this in your testimony.
Anecdotally, I have heard in my district, a person in a
rural area, who has a job in Columbus downtown, but has a beat-
up car. Car breaks down, now they can't get to work, no bus
line; opposite to, you have a person who lives in the urban
part of Columbus, job is in Dublin, a suburb, or Amazon on the
east side, no bus line. How does that Smart Cities Challenge,
in your mind, fix that, or does it?
Dr. Harrison. Well, we are hoping it does, because, first
of all, our public transportation, COTA, is a key part of that,
and it wasn't necessarily part of Smart Cities, but it was part
of another Department of Transportation grant where we have got
a rapid transit line that now comes down Cleveland Avenue,
where the buses signal the traffic signals so that there are
fewer lights that they have to stop at. And the hub of that is
right in front of our bookstore at the college, which is kind
of the entry to the city.
So what that will do, we hope, is promote more public
transportation, because now, instead of sitting on a bus for 45
minutes or an hour one way, when you have got children or a job
you have got to get to, it makes it much more efficient. We
also think that the Smart Cities work specifically should be
able to contribute to a much more robust ride-sharing
operation.
If you look at the traffic that comes into our campus every
day, it is full of cars with only a driver, and they are
following each other down 670 or 71 or Cleveland Avenue, and
the ability to really create a smarter infrastructure around
those connections I think will be important. If you layer on
then an electric or autonomous vehicle that is part of that, it
really can change the dynamics of the region.
Representative Tiberi. Wow, this has been fascinating. I
hope you four have thought so as well. I think the committee
here has gotten a lot out of this.
So I appreciate your time today. Thank you for making
yourself available. We like to remind the witnesses that the
record will be open for 5 business days for any member that
would like to submit questions for the record. Thank you all so
much.
This hearing is adjourned.
[Whereupon, at 11:46 a.m., the committee was adjourned.]
SUBMISSIONS FOR THE RECORD
Prepared Statement of Hon. Patrick J. Tiberi, Chairman, Joint Economic
Committee
Good morning and welcome to the Joint Economic Committee's hearing
on job vacancies and the labor market. I want to especially welcome our
Ranking Member Senator Heinrich, as well as the other Members of this
Committee who have expressed a keen interest in exploring this
important economic topic.
On the surface, low unemployment and a large number of vacancies
suggest that the labor market is tightening. However, wage growth has
been slow and many potential workers remain on the sidelines. Something
is not yet right with the U.S. labor market.
I've heard from many employers, in Ohio and around the country,
that they are struggling to fill good-paying job vacancies. These
employers tell me about people not being able to pass a drug test, and
people not having the skillset to qualify.
I believe there are causes on the demand side as well as the supply
side of the labor market, and among both are economic policies by the
Obama administration that weakened the recovery of business investment,
labor productivity, and work incentives after the last recession.
Business investment and productivity must rise faster for wages to
rise faster, and more people must join the workforce to raise economic
growth.
The U.S. population is still growing. Since just prior to the
recession, the population has increased by 22 million people of working
age, yet the labor force has increased by only 6 million people. The
baby boom generation is moving into retirement, but people in their
prime working years also are participating less in the labor force than
before the recession.
In addition to the work Congress and the Administration are doing
to reform taxes, improve regulation, and alleviate unnecessary
government mandates, we also must focus attention on improving the
institutions that prepare our workforce for new challenges.
That is why I have invited expert witnesses to this hearing who can
provide perspectives from the economist's, educator's, and employer's
point of view.
We must explore the value to the economy and individuals of sending
ever more people to college, how well high schools position graduates
for the workplace, how employer requirements inform the educational
system, and what employers are contributing to the skill development of
current and prospective employees.
In the United States, we must find better ways to equip young
people and workers of all ages with marketable skills and the ability
to adapt to changing market demands as they progress through their
careers. I look forward to learning from the insights of our expert
panel today on how to improve worker proficiency, flexibility, and
motivation.
Faster economic growth and rising living standards for American
families will result from getting this right.
__________
Opening Statement of Hon. Martin Heinrich, Ranking Democrat, Joint
Economic Committee
Thank you, Chairman Tiberi, and thank you to our panel for being
here today.
The employment picture is brighter than it was eight years ago, but
not as bright as we want or need.
Too many Americans can't find a job, or are in jobs that pay wages
too low to achieve financial security.
Employers complain they can't find candidates with the right skills
to grow their business.
And some parts of the country--for example, many rural areas--have
largely been left out and need basic investment.
Today, we are focusing on one way to create opportunities for more
Americans--namely, by investing in education and training options.
Some industries in some regions of the country face a mismatch
between the skills employers need and the skills workers have.
Addressing this is important, but that alone won't adequately
improve the economy or strengthen financial security for families and
communities.
To do that, Congress must work with State and local leaders to take
an all-of-the-above approach that supports workers and businesses.
In the 21st Century economy, college is increasingly important for
financial security.
Congress has a significant role to play in making sure students are
not priced out of the future they want and are ready to work for.
Access to an affordable college degree must be available to every
student.
We also know that a college degree is not and should not be the
only path to a bright future.
Career and technical education, apprenticeships and other training
programs lead to good-paying jobs.
Here, community colleges have an important role to play because
they understand the needs of local employers, are committed to creating
opportunities for their students, and can design programs and courses
that are responsive to employers' current and future needs.
TechHire Albuquerque launched earlier this year in New Mexico.
Using a Federal grant program, Central New Mexico Community College
partnered with employers and State agencies to create an IT pipeline--
by providing training, work experience, and job placement.
Graduates learn new computer coding skills, earn industry-
recognized credentials, and are able to put those skills to use with
area employers.
Employers are able to fill open positions with candidates with
proven skills.
That's the type of innovation and creative problem-solving Congress
should be promoting.
It's also critical that we target training at high-growth sectors
of the economy.
That's what Central New Mexico Community College has done with its
STEMulus center, offering coding bootcamps and new classes in Java,
Android and Salesforce.
This week, Senator Gardner and I introduced the CHANCE in Tech Act,
which encourages educators and businesses to start apprenticeship
programs for the tech sector. This will connect more Americans to a
growing sector where jobs are opening up every day.
In an all-of-the-above approach, we must recognize that investing
in the workforce starts well before college or even high school. It
starts by investing in proven programs that set children up for success
later in life.
This is why access to universal pre-K is so important and why I am
a strong advocate of the two-generation approach, which provides
quality early education for children while providing workforce training
for parents.
We've seen this work in New Mexico. The United Way's Early Learning
Center in Santa Fe offers year-round, full-day services for children
alongside technology, employment and social service assistance for
parents.
For workers to remain competitive in the future economy, learning
and skills development must continue over a lifetime.
Companies must get back in the business of investing in their
workers. Not just because it's the right thing to do, but because it's
the prosperous thing to do for businesses and workers alike.
There is much work for us do here. For the Nation to be competitive
in the future economy, we must find new solutions.
I look forward to hearing from our witnesses.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Prepared Statement of Scot McLemore, Manager, Talent Acquisition, Honda
North America, Inc.
Thank you Chairman Tiberi, Ranking Member Heinrich and the members
of the committee for hosting this hearing on the critical issue of
workforce participation and workforce development. This is a topic
vital to the United States economy and to companies like Honda who have
significant domestic manufacturing operations.
My name is Scot McLemore and I serve as manager of Talent
Acquisition at Honda North America. In my role at Honda, I work to
develop strategies to help address workforce challenges. It is my honor
to be here today to share some of those initiatives with you and
discuss ways that industry and government can partner to activate the
full potential of the domestic manufacturing sector. Honda has more
than 70 facilities in the United States, including 12 manufacturing
plants that produce a wide range of products; including cars, trucks,
light business jets, power equipment and power sports products. More
than 73 percent of Honda's 30,000 U.S. associates work in manufacturing
roles. In addition to our direct employment, Honda works with more than
600 U.S. suppliers who employ tens of thousands of workers nationwide.
i. overview
Manufacturing jobs are high-paying jobs, with good benefits, which
should be highly attractive in our current economic climate.
Unfortunately, however, there is a shortage of young people entering
the manufacturing workforce, and that alone threatens the foundation of
American industry. According to a 2015 Deloitte study completed in
conjunction with the Manufacturing Institute, nearly 3.4 million
manufacturing jobs will need to be filled over the next decade; 2.7
million of those jobs will be due to retirement and another 700,000
will be due to new job creation. Of those 3.4 million jobs, two million
are expected to go unfilled because of a lack of interest in
manufacturing or simply because prospective employees lack the
essential skills needed to be successful in a manufacturing role.
This situation presents a great opportunity for our country, but
without immediate action, the number of unfilled jobs will only
continue to grow. The same Deloitte study found that only 37 percent of
parents would recommend a manufacturing career to their children.
Despite the reality that the average manufacturing employee earns
roughly $15,000 more than the average employee does across all other
sectors, the industry has long been stigmatized by the outdated visions
of the factory floor of yesteryear.
Even when prospective employees understand the opportunity of a
career in manufacturing, too often they lack the skills to succeed in
modern industry. Specifically, these individuals often do not possess
the problem solving ability, technical training, computer knowledge, or
math skills needed to compete in the 21st century workforce. Modern
manufacturing equipment and processes involve an integration of
pneumatic, hydraulic, mechanical, electronic and computer-networked
components. Employees must have the ability to understand these systems
and how they work together to be able to install, troubleshoot and
modify to maintain daily operations within a facility.
Honda's success is reliant on our ability to hire and develop
talent to build the high-quality products that bring our customers joy.
While it is true Honda has a stake in more people entering
manufacturing positions, we want to implement programs that create
interest and opportunities for all companies and to help advance the
entire U.S. manufacturing economy.
ii. what honda is doing to encourage interest/address skills gap
As we have developed our workforce education and training programs,
Honda has taken an intentional approach that establishes a pathway for
students from middle to post-secondary education so that they may have
a successful career within the manufacturing sector, which I will
outline today. Our programs reflect our desire to build enthusiasm and
passion for individuals who pursue careers in manufacturing, which we
believe can be achieved through innovative instruction and continued
skills support.
A. Early Engagement
Honda believes that the first step in technical workforce
development is to create excitement for manufacturing jobs through
enthusiastic engagement with students, parents and educators. One way
we are working to engage students early in their academic career is
with the deployment of an educational video game for middle school aged
children. Through a partnership with an Ohio-based company called
EdHeads, we have developed a unique virtual experience designed for
classroom use. The game teaches logic, critical thinking and takes
students right to the engine manufacturing line where they apply math
and problem solving skills to find answers to real world problems. This
free resource is available at http://edheads.org/page/manufacturing1. I
encourage you to visit the site and share this resource with any of
your constituents who may be interested.
However, we also recognize that creating interest comes down to
providing hands-on opportunities for students to experience
manufacturing in real life. To help facilitate this learning, Honda has
partnered with several businesses and academic institutions to create
mobile labs that feature robotics and other technologies that help
middle school students develop critical thinking skills and gain an
understanding of modern manufacturing. The fact that these labs are
mobile allows them to travel to rural areas that may be underserved by
most traditional workforce development programs. By expanding the
number of students who have early access to this technology, Honda
hopes to grow the base of students who become interested in
manufacturing and become future manufacturing employees.
In addition, Honda has partnered with TechCorps, a nonprofit
organization focused on developing technology-related skills in K-12
students, to create summer programs geared toward middle school
students in Ohio. Interested students can attend full-day, week-long
summer camps where they are submerged into STEM subject matters,
including computer programming, web development and app development.
These summer camps are designed so students emerge with knowledge,
concepts and skills that are useful in today's classroom and tomorrow's
workplace.
B. Skills Gap/Technical Education
As Honda recruits technical talent, we experience the challenge of
identifying individuals who possess the required skills to maintain
modern manufacturing equipment. Many young people have not experienced
learning beyond a textbook or computer to really understand how things
work. We recognize there must be a bridge formed between creating
interest in manufacturing and preparing people to use analytical skills
to effectively interact with today's manufacturing equipment. Through
our workforce development initiatives, Honda has helped to create that
bridge from middle school robotics clubs to high school ``hands-on''
learning using classroom equipment which operates similar to the
equipment found on today's manufacturing floor to providing technical
training through work study and internship programs at community
colleges.
At the high school level, Honda is a strong supporter of the
Marysville Early College STEM High School. This school was developed as
a partnership between Honda, the Marysville School District, Columbus
State Community College, the Ohio Hi Point Career Center, and the Union
County Chamber of Commerce. Early college high school is a unique
approach to education, based on the principle that academic rigor
combined with the opportunity to save time and money are powerful
motivators for students to work hard. Early college high schools blend
high school and college-level courses in a supportive but rigorous
program, compressing the time it takes to complete a high school
diploma and the first two years of college.
In the dual enrollment program at Marysville Early College STEM
High School, students have the opportunity to graduate with not only a
high school degree, but also an associate degree from Columbus State.
Additionally, graduates possess skills that they can use right away,
including mechanical engineering, robotics and welding skills. Honda
believes this type of school can be replicated, not just across Ohio
but also throughout the country as a way to help reduce the skills
shortage.
At the postsecondary level, Honda works with multiple institutions
including Columbus State, Clark State, Edison State, Marion Technical,
Rhodes State and Sinclair, to develop a STEM-focused curriculum with
real-world applications. Classroom lessons are supplemented with plant
visits, mentorships, scholarships and work-study programs to encourage
interest but--more importantly--further develop the skills essential to
a successful technical career.
One example of providing students with access to technical training
is a work-study partnership with Columbus State, which is designed so
students can work at Honda three days a week and go to school two days.
This program gives students the chance to build technical skills while
earning their degrees. The partnership also provides students with a
way to graduate debt free and an opportunity to pursue a career with
Honda. Upon graduation, students may be offered a full-time position
with the company.
While the majority of the efforts I've highlighted thus far are
based in Ohio, Honda has similar efforts in other communities where we
have manufacturing operations in the United States. One of our more
recent partnerships is with Guilford Technical Community College (GTCC)
in North Carolina, global headquarters of Honda Aircraft Company, Inc.
that produces the award-winning HondaJet.
Honda worked closely with GTCC to develop programs to train
prospective Honda aircraft technicians and avionics experts. Honda
continues to work with Guilford College as it expands its new avionics
program. The government has also supported Guilford in the expansion of
these programs, which has resulted in an emerging aerospace and
advanced manufacturing industry cluster in the region.
In Indiana, Honda has partnered with Ivy Tech Community College to
offer paid internship opportunities for students enrolled in the
school's advanced automation and robotics technology program, an area
where the skills gap is acutely felt by manufacturers. Ivy Tech
students have the opportunity to work two days a week at Honda while
continuing their education at Ivy Tech. These internships offer
students an opportunity to apply their knowledge in the real world and
for Honda to evaluate the student for potential full-time employment.
C. Continuing Education
Because the technology in modern manufacturing, particularly that
within the automotive industry, is constantly changing, we make a
commitment to ensure that education does not stop once associates are
hired. It does not matter if associates have five years of work
experience or 25. Honda remains committed to ensuring our workforce has
the skills necessary to be part of our exciting future. To that end, we
have established technical training centers near several of our
manufacturing operations including in Ohio, Indiana and Alabama. These
training centers help ensure that Honda associates stay current with
the robotics and technology in their work process and, most
importantly, can continue to develop professionally by building on the
skills and knowledge they have gained throughout their careers. Honda
is constantly looking for the most effective method to provide
associates with the skills required to produce the high-quality
products we build. One example is the use of Virtual Reality technology
or ``VR.'' This technology allows associates to interact with virtual
components and equipment simulating real equipment in a training
environment reducing material and equipment costs. This type of
technology may be used in a secondary or post-secondary classroom
setting in the future to help prepare students for technical
manufacturing careers.
The success of these technical training centers is a credit to our
partnerships with academic institutions like Columbus State. By having
educational professionals work with our technicians, Honda is able to
employ best practices and educational techniques that are critical to
the success of these programs. We are also able to ensure the alignment
of Columbus State's curriculum with the skills required within Honda's
production facilities.
D. Recommendations
We strongly believe that Honda's future and the future of
manufacturing in the United States rests in the hands of programs like
the ones I have outlined today. These programs have been developed so
that they can easily be adopted in other regions of the United States
based on the activities and philanthropic approach of the various Honda
operations and/or by other companies.
The key theme throughout this presentation is ``partnership.''
Closing the manufacturing skills gap will be impossible without
proactive collaboration between academia, government and private
industry. While many partnerships already exist, there must be a
significant increase and expansion of these collaborative attempts to
develop a 21st Century workforce.
Additionally, continued support and improved access for STEM
education is critical to ensuring that our future workforce have the
skills to compete in modern manufacturing.
One thing Congress can do immediately is to reauthorize the Carl D.
Perkins Career and Technical Education Act, which recently passed the
House of Representatives. The current version of the bill will help
encourage more collaboration between stakeholders to ensure students
have a pathway to a relevant and meaningful technical career.
Like many employers, Honda stands ready to work with Congress to
help solve the critical workforce issues that stifle the full economic
potential of our country.
I want to thank the members of this committee for your interest in
this issue and for inviting me today to highlight some of Honda's
efforts. We greatly appreciate being included in this very important
conversation.
__________
Prepared Statement of Betsey Stevenson, Associate Professor of
Economics and Public Policy, The Gerald R. Ford School of Public
Policy, University of Michigan
Chairman Tiberi, Ranking Member Heinrich, thank you for the
invitation to testify today about the state of the job market and the
record number of vacancies that our businesses posted at the end of
April. I want to start by placing job openings in the context of a
strengthening labor market. Today's high level of vacancies is largely
a reflection of strong job growth. Then I will turn to challenges in
the labor market in filling positions.
a strong labor market
As of June 2017, the unemployment rate stood at 4.4 percent. The
sharp drop in the unemployment rate coming out of the Great Recession
consistently surpassed consensus forecasts, thanks to the stimulus
package (ARRA) and fiscal and monetary policies that strengthened the
economy and boosted aggregate demand.
Businesses are continuing to hire in large numbers. Just this past
June total hiring once again surpassed expectations. Over the past six
years, we're seen the longest, most persistent streak of job growth on
record. Since March 2010, businesses have added nearly 16.5 million
jobs. Today there are 7.8 million more jobs than the pre-recession
peak. All of this growth has led to more openings, and as the committee
has noted, the number of job vacancies on the last business day in
April was the highest since the series began in 2000. To put this in
context, during the depths of the recession new job postings dropped to
a low of 2.2 million a month.
The number of vacancies are recorded on the last business day of
the month. This point in time snapshot of available jobs can be
compared to the subsequent hiring that happens over the next several
weeks. Over the past six months, there have been 5.6 million vacancies
on average on the last business day of each month. Over the subsequent
month, 5.3 million workers were hired, illustrating the close link
between vacancies and hiring.
One of the clearest signs of the strengthening labor market has
been the increase in workers quitting jobs. During the depths of the
recession, only 1.6 million workers quit a job in September of 2009. In
contrast, over the past year, more than 3 million workers a month have
quit a job. Workers' willingness to quit suggests that they are
receiving better offers or have confidence that they'll be able to find
other work.
The typical hiring of roughly 5 million workers a month is the
result of a dynamic labor market in which entrepreneurs hire people for
their new businesses, and old businesses fill positions as people leave
and create new jobs as they expand. Roughly 5 million workers also
leave jobs each month as they seek better opportunities, or as
businesses eliminate jobs they no longer need, or to close their doors
completely when the market no longer wants their products. For workers,
job changes are essential for them to climb the ladder to better and
higher-paying opportunities. Research shows that changing jobs is a
primary way in which workers achieve real wage gains, on the order of
2-6 percent increase in real wages from job changes in recent years.\1\
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\1\ For example, Molloy, Raven, Christopher L. Smith, and Abigail
K. Wozniak. Declining migration within the US: The role of the labor
market. No. w20065. National Bureau of Economic Research, 2014 and
Fallick, Bruce, John Haltiwanger, and Erika McEntarfer. ``Job-to-job
flows and the consequences of job separations,'' 2012.
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I want to highlight that one of the challenges facing the U.S.
labor market in recent decades has been a decline in dynamism. Dynamism
is what allows the reallocation of workers and capital to their most
productive use. When workers can find better opportunities easily, both
businesses and workers benefit.
sectoral shifts leave some workers without necessary skills and require
new training programs
While job change is a natural and essential part of our economy,
sectoral shifts present challenges for workers and for policy makers
seeking to smooth the costs associated with these transitions. Workers
in shrinking sectors face a decreasing number of opportunities for wage
gains, and an increasing likelihood of being left without a job if they
lose the one they have. Goods-producing jobs, most notably
manufacturing, are losing jobs, while healthcare, education, and
information technology are adding jobs. While more jobs are being added
across sectors than are lost, the within-sector losses present
hardships and uncertainty for workers in declining sectors. It's
important to keep in mind that this happens within the context of
substantial churn within the sector. For example, over the past two
decades more than sixty million people were hired into manufacturing
jobs, yet more than sixty-five million people quit or lost
manufacturing jobs. It's like a game of musical chairs in which the
number of chairs shrunk by five million. Those who lose their seat face
tremendous hardship and a difficult, and sometimes impossible,
transition as they struggle to find one of the remaining positions or
give up and attempt to apply their skills and experience elsewhere.
Sectoral changes are not a new force in the U.S. economy, but the
changes that are occurring are hurting some groups more than others.
Many declining sectors are in traditionally male occupations, while
traditionally female or more gender-mixed occupations are growing.
These changes will require that we not only provide training for
workers to successfully transition, but that we confront and eliminate
stereotypes about jobs and the people who hold them. That may require
rethinking how we train workers for these jobs since research shows
that education and training methods, materials, instructors, and even
environment can shape gender and racial inclusivity.
Growing sectors represent opportunities for workers, but they also
present challenges in that hiring needs may outpace the skills of
current workers. Since the end of 2000, more than 104 million people
have been hired in education and health services and nearly 97 million
people have left such jobs, for a net gain of 7.5 million jobs. At the
end of March, there were 4.6 million vacancies in education and health
services, but only 2.6 million workers were hired the following month.
A similar pattern has held over the past few years, with openings
exceeding hiring suggesting that perhaps this is an industry that is
struggling to find qualified workers. However, there is little evidence
of accelerated wage growth in the health care sector, suggesting that
demand for workers isn't outpacing supply enough to lead to higher
wages.
large wage premiums for college-educated workers highlight the demand
for college-level skills
Wages provide a clear market-based signal of demand for skills and
one of the clearest signs of demand for skills is the strong growth in
wages of college-educated workers compared to those with less
education. The gap between the earnings of college-educated adults and
those with a high school degree are large and have grown over the past
thirty-five years. Over the last decade, the wage advantage of college-
educated workers has never been greater, contributing to an increasing
gap between those with substantial higher education and those without.
The benefits of a four-year degree are also seen in the
substantially lower unemployment rate for college graduates--2.4
percent in June 2017--compared to 4.6 percent for high school graduates
and 3.8 percent for those with only some college. Labor force
participation rates also differ by education--73.9 percent of college
graduates over age 25 were in the labor force in June 2017, compared to
57.5 percent of those with only high school. Labor force participation
rates are difficult to interpret today because the aging of the
population is placing downward pressure on the fraction of people in
the labor force as Baby Boomers begin to retire--a pressure that the
U.S. economy will face for some time. However, similar patterns are
seen when examining prime age--those 25 to 54 years old--workers. Among
prime age men who are college graduates roughly 9 in 10 are employed,
compared to roughly 8 in 10 with a high school degree.
These differences are important to highlight because one of the
largest challenges the labor force faces in developing the skills of
workers is ensuring that students from across the income spectrum have
access to successfully and affordably complete a four-year degree.
While many people argue that college for all may not be necessary, or
even possible, it is important to recognize that a century ago the same
arguments were made about public high school. Our country's willingness
to ignore these naysayers and make high school free and widely
available was an engine of economic growth in the last century. While
the United States led the world in educating our citizens last century,
we have failed to keep up as other countries' student successes have
surpassed ours.
greater wage gains are necessary
One of the missing pieces of evidence when it comes to assessing a
mismatch between the skills that employers demand and the skills that
workers have is wages. Many researchers have diligently sought evidence
of worker shortages that would naturally, in a competitive market, lead
the businesses who would benefit most from hiring such workers to bid
up their wages. While job growth exceeded expectations this past June,
wage growth once again undershot expectations. Wage growth was slow
coming out of the recession, yet accelerated in 2015 and 2016. From
2014 to 2015, real median household income grew $2,800--the fastest
growth on record. Wages for all private sector workers grew an average
of 2.9 percent in 2016. Yet, growth in both wages and overall
compensation per hour has slowed in recent quarters.
Many economists have pointed to slow growth in labor productivity
as a source of slower wage growth. Higher productivity should, in
theory, lead to higher wages and is an important reason for workers to
acquire the skills that employers are seeking. The connection between
wages and productivity is important and provides an incentive for
workers to become more productive. However, in recent decades the link
between productivity and wages has weakened and the wages of most
workers have not risen as rapidly as productivity. There are several
potential explanations for this decoupling of wages and productivity--
including declining unionization, reduced worker bargaining power, and
reduced worker mobility. Businesses are also increasingly engaging in
anti-competitive labor market policies including forbidding the sharing
of pay information and requiring noncompete clauses. Congress should
seek to make the labor market as fair as possible by penalizing
business that engage in such anticompetitive practices. Additionally,
policies like updated overtime regulations, a robust minimum wage,
enforcing workplace protections are all key areas that could help raise
wages and improve working conditions.
The current pace of job growth is unsustainable unless more workers
elect to join the labor force. The challenge that businesses will
increasingly face as they continue to hire is not that the workers who
are available do not have the skills they are seeking, but that there
will simply be too few workers available for them to find workers.
Higher wages and better working conditions are therefore essential to
ensure that more workers are encouraged to participate.
job training and apprenticeships play an important role in building
worker's skills
There is a large role for training programs, apprenticeships, and
community colleges to play in preparing workers to transition to the
jobs that employers are hiring in. One policy that can help both
employers and employees and strengthen the overall economy is evidence-
based job training programs. In his FY2017 budget President Obama
outlined a comprehensive strategy to invest in highly demanded skills
and education to make our economy more competitive in the 21st century.
While preparing workers for jobs begins with education when children
are young, it continues in adulthood by helping workers get the skills
to make the American economy more competitive. One of the most
important skills all workers need in the 21st century is the ability to
learn on the job and adapt to new technologies and new ways of doing
things. That's why successful programs not only teach concrete skills,
but help participants develop lifelong learning abilities. This is also
why ultimately the success of our adult training programs has its roots
in our preschool programs.
Successful training programs require evidence and adaptation to
that evidence. WIOA, which covers job training programs for 20 million
people a year, includes reporting and measurement aspects that will
build the evidence base about what works in job training, and what we
can do better. Crucially, WIOA passed with bipartisan support, and
additional investments could help states and localities set up the
infrastructure necessary to track what happens to workers after
training programs.
the need for new and innovative apprenticeships
Apprenticeships are an important part of worker training and some
people are best suited to learn through hands-on doing. Additionally,
apprenticeships help workers learn the skills associated with learning-
on-the-job, an important skill in its own right in an ever evolving
economy. Yet, apprenticeships have traditionally focused on a narrow
slice of the labor market and need to be adapted and expanded to
provide training for the jobs of the future. Research shows that
apprenticeships tend to lead to higher-paying jobs--the average
apprentice earns a starting wage of $60,000, more than the median
worker's income, and 89 percent of people who complete registered
apprenticeship programs are employed once their training ends. Based on
this evidence, the Obama Administration allocated $265 million toward
apprenticeship funding, and between 2014 and 2016, active
apprenticeships increased 31 percent. Continuing and building this
investment is crucial to prepare our economy for the 21st century.
the importance of fair wages and a competitive labor market
Government investment in job training and worker investment
programs is one solution, but it's not the only answer. Businesses can
do more to invest in workers. Many leading businesses have realized
that the investments they make in their workers today have long-term
benefits. From Henry Ford a century ago, leading businesses have
realized they can attract and retain top talent by paying higher wages.
Henry Ford called raising wages his best cost-cutting business
decision. The reason was that his workers knew that it would be hard to
find as good a job as they had with Ford if they were to lose their
job. In today's labor market, business policies that may seem like they
are cost-cutting in the short-run are hurting businesses as well as
workers. When workers are easily replaced and jobs pay the bare minimum
needed to hire workers, businesses can easily lose the loyalty and
conscientiousness that lead to fewer mistakes and higher productivity.
In fact, there is an important link between business management skills
and worker skills. Research shows that the businesses with better
management have workers with higher average skills and have less
attrition--importantly, they also pay their workers higher wages
compared to the market as a whole.
Let me end by noting that much of the strong labor market we're
seeing today is due to actions Congress, the Administration, and the
Federal Reserve took that prevented the recession from becoming a
depression--stimulating the economy through investments and tax cuts,
stabilizing the financial sector, assisting the auto industry,
supporting the housing market, and reducing long-term interest rates.
Estimates from the Council of Economic Advisers show ARRA and other
fiscal measures saved or created about 9 million job-years through 2012
and increased GDP by 9.5 percent, relative to its 2008 level. All of
this shows that policy can, and does, make a difference.
Thank you.
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Questions for the Record for Ms. Furchtgott-Roth Submitted by Senator
Amy Klobuchar
the importance of early preparation: elementary and secondary education
We must do everything in our power to prepare our children for the
future. Last Congress, we passed a bipartisan bill that makes critical
updates to ``No Child Left Behind.'' I worked on a provision in this
bill with my colleague Senator Hoeven to expand STEM opportunities by
allowing school districts to use Federal funding to create STEM
specialty schools or to enhance existing STEM programs within schools.
In addition to improving STEM education, what other steps
could help prepare our children for postsecondary education and the
labor force?
This is a very important question. We need to make sure that
children graduate with better math and writing skills so they will be
prepared to start a job, a community college certification, or a four-
year college program.
I have written about the failure of primary and secondary school
education in Chapter 3 of my book, ``Disinherited: How Washington Is
Betraying America's Young,'' coauthored with Jared Meyer and published
by Encounter Books in 2015. In 2016 the book won the Sir Antony Fisher
International Memorial Prize from the Atlas Foundation.
In most fields, if you cannot do your job, you are replaced with
someone who can. But not in education. First, measuring teaching
ability is not simple, and matching teachers with students is not
always easy to do--especially if parents are not allowed to choose
their children's schools. Second, unqualified teachers can often stay
on because they are protected by the educational system.
In 2015, American 15-year-olds scored several points below the
Organization for Economic Cooperation and Development average on the
PISA examination in mathematics, considered the gold standard for
international testing. The U.S. ranking fell to 35th from 28th in 2012
in math, underperforming the OECD average. Small countries such as
Latvia, Malta, and Vietnam, and large countries such as China and
Russia all do better than we do in math. In reading and science, our
15-year-olds are above average, but around 24th, after Canada and most
of Europe.
Children in the OECD member nations and in China, Vietnam, and
Russia have longer school days and more days in the school calendar
than do American children. Plus, when these children are at school,
they have fewer hours of sports, assembly, and politically correct
programs connected with, for instance, Women's History Month and Earth
Day. Young Americans are often not taught difficult subjects, such as
advanced literature or history, serious mathematics, hard sciences, or
in-demand skills such as computer programming. Schools have dropped
useful, career-oriented skills such as wood shop and auto mechanics.
Even if children do not do well in watered-down curricula, they are
shuffled along to the next grade. The Board of Education is more
interested in pleasing parents than in providing a solid curriculum. In
order to graduate, some students have to have a certain number of hours
of community service, but they do not have to meet standards in reading
or math.
This is part of a pattern of American education that measures
inputs rather than outputs. We measure hours of attendance and hours of
community service rather than skills acquired. We often give extra
credit for effort, but we do not require higher levels of competency in
order to earn a high school diploma.
In contrast, many countries around the world focus high school
graduation on a final set of exams, whether General Certificates of
Secondary Education in England, the baccalaureate in France, or the
Abitur in Germany. They do not consider hours of community service or
level of effort; what matters is how well young people can demonstrate
what they have learned. The result is predictable. Countries that
evaluate young people on outputs such as how well they perform on an
exam produce students who are more competent than those in countries
that measure inputs.
Despite young Americans' poor performance, one area in which the
Nation excels is in self-esteem. Eighty-four percent of American
eighth-graders agreed with the statement ``I usually do well in
mathematics,'' with 39 percent of eighth-graders agreeing ``a lot.''
This confidence does not translate into academic performance, however--
in Singapore, where only 64 percent of eighth-graders have confidence
in their math ability, the least-confident group of students
outperforms the most-confident group of American students on
international math assessments.
Immediately after World War II, the United States had better high
school graduation rates than in any other country. How have we fallen
so far?
Many believe that systemic poverty and underfunded schools are the
cause of students' poor performance. But in the last 40 years, school
funding has exploded. The annual per-student cost of primary and
secondary education in America is more than $13,000. After adjusting
for inflation, this amounts to an increase of 239 percent over the last
half century. America spends more on education per student than any
other country in the world, yet average student achievement is only
mediocre. Contrary to what many education advocates argue, increased
spending by itself has not helped and will not do so in the future.
Part of the problem lies in dysfunctional families. In the recent
book ``Hillbilly Elegy,'' author J.D. Vance explained that no matter
how good his school would have been, he could not concentrate on his
studies due to his parents' fights at home, their subsequent divorce,
and his mother's problems with drugs. He was woken several times during
the night and shuttled from one parent to another. Solutions to these
problems are beyond the scope of my reply to this question.
Another problem is that parents often want to send their children
to good schools, but there are none available. In cities such as
Washington, D.C., and New York where there are active charter schools,
the good schools are vastly oversubscribed, and candidates chosen by
lottery. America needs a system where poor schools go out of business
and new schools thrive, just as with other businesses, such as
restaurants.
We should also look at extending the hours of the school day,
reducing vacations, and eliminating some of the time devoted to sports,
so that children have more academic content in the school year.
__________
Questions for the Record for Dr. David Harrison Submitted by Senator
Amy Klobuchar
the importance of early preparation: elementary and secondary education
We must do everything in our power to prepare our children for the
future. Last Congress, we passed a bipartisan bill that makes critical
updates to ``No Child Left Behind.'' I worked on a provision in this
bill with my colleague Senator Hoeven to expand STEM opportunities by
allowing school districts to use Federal funding to create STEM
specialty schools or to enhance existing STEM programs within schools.
In addition to improving STEM education, what other steps
could help prepare our children for postsecondary education and the
labor force?
STEM education is an important component in college and career
readiness for students. American Electric Power (AEP) and the AEP
Foundation partnered with Columbus State to establish the Credits Count
program to develop STEM career exploration opportunities in middle
school, and to bolster college readiness by enabling high school
students to earn college credits while still in high school in STEM-
related fields. The Federal Government can support these regional
efforts by expanding programs that are working. The National Science
Foundation's Advanced Technological Education program is an important
source of venture capital for community colleges to develop programs
with employers. We are the only community college in the U.S. selected
for the U.S. Department of Education's Investing in Innovation (i3)
program, which will fund an aggressive expansion of programs designed
to enhance college and career readiness in schools with a high
percentage of low-income families.
In addition to STEM education, research shows that dual enrollment
programs, like Credits Count, has a positive impact on college
readiness. Findings from a report released by the National Student
Clearinghouse indicated that students who earn college credit while
still in high school have a 66 percent college completion rate, which
is 12 percent higher than that of students who do not take dual credit
classes while still in high school.
In Ohio, state policy has been adopted to further advance college
credit pathways for high school students and create a deeper alignment
between secondary and post-secondary education. College Credit Plus
enables high school students to begin taking college coursework as soon
as they are ready. Last year more than 4,800 high school students from
140 high schools and 60 school districts enrolled at Columbus State
through College Credit Plus.
Columbus State has leveraged public-private partnerships and
extensive employer collaboration described in the written testimony to
quickly bring proven practices and programs to scale. We expect this
growth to continue as more students and families look to Columbus State
for a high-quality, affordable pathway to STEM careers.
__________
Question for the Record for Mr. Scot McLemore Submitted by Senator Amy
Klobuchar
question: the importance of early preparation: elementary and secondary
education
We must do everything in our power to prepare our children for the
future. Last Congress, we passed a bipartisan bill that makes critical
updates to ``No Child Left Behind.'' I worked on a provision in this
bill with my colleague Senator Hoeven to expand STEM opportunities by
allowing school districts to use Federal funding to create STEM
specialty schools or to enhance existing STEM programs within schools.
In addition to improving STEM education, what other steps
could help prepare our children for postsecondary education and the
labor force?
Thank you for the question and your efforts to expand access to
STEM education. Honda supports early STEM education but also believes a
clear ``line of sight'' should be provided for students and parents to
better understand pathways to manufacturing careers. We must create
enthusiasm for the career paths and job opportunities related to STEM
disciplines through direct engagement with students and educators.
Honda's educational video game, mobile labs, and plant tour are
designed to address outdated perceptions of manufacturing and highlight
the benefits of a career in modern manufacturing. Providing students
with hands-on experience, even a virtual simulation, is an important
step in creating enthusiasm for a manufacturing career and for other
professional sectors as well. Efforts must also be made to engage
parents, teachers and guidance counselors, who too often advocate that
a four-year college route is necessary for professional success. Post-
secondary work-study programs, like Honda's partnership with Columbus
State Community College, allow students to experience the manufacturing
environment and graduate debt-free with an associate degree that
provides them the immediate skills needed to enter the labor force.
__________
Questions for the Record for Dr. Betsey Stevenson Submitted by Senator
Amy Klobuchar
workforce training and apprenticeships
Dr. Stevenson, workforce training is crucial to make sure that our
workers are trained today for the jobs of tomorrow. Senator Collins and
I have introduced the American Apprenticeship Act, which provides
competitive grants to states that have developed effective strategies
to diversify, market, and expand Registered Apprenticeship and pre-
apprenticeship programs. Our community colleges also play an important
role in helping to create a high-skilled workforce, and I have seen the
benefits of apprenticeship programs and community colleges working with
local industries in Minnesota.
Can you discuss how apprenticeships and community college
programs can work together to help workers build the skills they need
to compete in the 21st century economy?
From your experience, can you discuss in more detail the
benefits of apprenticeship programs in a broader range of career paths
and skills?
What gaps do you currently see in Federal policy when it
comes to supporting and expanding apprenticeships in the United States?
In the 20th century, America led the world in educating her
citizens. While other countries mocked us for training people who they
claimed didn't need training, we ignored these naysayers and built more
high schools. The result was that we went from only 6% of 18-year-olds
with a high school degree in 1900 to more than half by 1940. Today,
nearly nine in ten Americans age 25 and older have a high school
diploma, and one in three Americans have a bachelor's degree. Many
scholars have argued that by bolstering the skills of American workers
we laid the foundation for the tremendous growth that America
experienced in the 20th century.
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The rate of return for investing in education is high--each year of
college raises lifetime earnings by around 8 percent, and completing a
college degree raises a person's lifetime earnings by more than a
million dollars. Because a more educated citizenry is a more productive
workforce, countries with more educated citizens tend to have greater
GDP per person.
It is clear that it is time for the United States to take back the
lead in training our citizens if we want to continue to have a
successful and innovative economy. So what's the best way to do that?
We need to make college more affordable and accessible to more people.
But even more important to our success, we need to increase the rate at
which people succeed and successfully complete college or other
training programs. Apprenticeships and other on-the-job training during
school hold the possibility of preparing students for the world of
work, while keeping them engaged, motivated, and confident enough to
complete their studies.
Many people learn better through situated learning by actively
participating in the learning experience, such as what occurs during
apprenticeships. The United States faces two pressing challenges in
developing apprenticeship programs. The first is that there are far too
few. Apprenticeships have been growing and the Department of Labor, as
I'm sure you are aware, currently lists more than a half million active
apprentices. A study by the Center for American Progress, however,
argues that this is less than a tenth of what other countries, such as
the United Kingdom, have once you adjust for population size. To put it
in perspective, there are roughly 20 million people attending college.
We could and should expand apprenticeship slots substantially.
The second problem is that apprenticeships need to move beyond the
trade occupations into services. The U.S. economy is a service-based
economy. Construction and manufacturing jobs, a focus for many
apprenticeship programs, are a mere 13 percent of all jobs in the
economy. Eighty-four percent of workers employed in the private sector
in the United States work in the service-producing sector. A third of
our exports are services, such as business and professional services
like consulting, computer services, and financial services. In order
for apprenticeships to succeed in training workers for the jobs of the
future, our apprenticeship programs need to expand into the types of
jobs workers are more likely to be hired into. For instance, last month
45 thousand jobs were created in health care and social assistance.
There need to be more apprenticeship programs dedicated to areas such
as health and educational services.
Community colleges can play an important role in developing hybrid
programs in which students do necessary classroom learning that is
complemented by on-the-job training. Such programs may be particularly
important to raise productivity in the service sector and to provide
workers with the skills they need as our economy continues to shift
toward one that requires workers to have more adaptable skills.
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