    [Senate Hearing 118-680]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 118-680

                        EVOLVING WORKFORCE DYNAMICS AND THE
                       CHALLENGES FOR DEFENSE ACQUISITION AND
                                DEFENSE INDUSTRIAL BASE

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

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               FEBRUARY 28, 2024

                                   __________

             Printed for the use of the Committee on Armed Services

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                     Available via http: //www.govinfo.gov

                                   __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    60-821 PDF                  WASHINGTON : 2025

    -----------------------------------------------------------------------------------

                          COMMITTEE ON ARMED SERVICES

                         JACK REED, Rhode Island, Chairman

    JEANNE SHAHEEN, New Hampshire		ROGER F. WICKER, Mississippi
    KIRSTEN E. GILLIBRAND, New York		DEB FISCHER, Nebraska
    RICHARD BLUMENTHAL, Connecticut		TOM COTTON, Arkansas
    MAZIE K. HIRONO, Hawaii			MIKE ROUNDS, South Dakota
    TIM KAINE, Virginia			JONI ERNST, Iowa
    ANGUS S. KING, Jr., Maine		DAN SULLIVAN, Alaska
    ELIZABETH WARREN, Massachusetts		KEVIN CRAMER, North Dakota
    GARY C. PETERS, Michigan		RICK SCOTT, Florida
    JOE MANCHIN III, West Virginia		TOMMY TUBERVILLE, Alabama
    TAMMY DUCKWORTH, Illinois		MARKWAYNE MULLIN, Oklahoma
    JACKY ROSEN, Nevada			TED BUDD, North Carolina
    MARK KELLY, Arizona                  	ERIC SCHMITT, Missouri

    		    Elizabeth L. King, Staff Director
      		John P. Keast, Minority Staff Director

                                      (ii)

                             C O N T E N T S

    _________________________________________________________________

                               February 28, 2024

                                                                       Page

    Evolving Workforce Dynamics and the Challenges for Defense            1
      Acquisition and Defense Industrial Base.

                               Member Statements

    Statement of Senator Jack Reed...................................     1

    Statement of Senator Roger Wicker................................     2

                               Witness Statements

    Taylor, Johnny C., Jr., President and Chief Executive Officer,        4
      Society for Human Resource Management.

    Johnson, Simon H., Ronald A. Kurtz 1954 Professor of                 16
      Entrepreneurship, Massachusetts Institute of Technology Sloan
      School of Management.

    Lockwood, Julie A., Director of Business Modernization, Institute    37
      for Defense Analyses.

                                     (iii)

    EVOLVING WORKFORCE DYNAMICS AND THE CHALLENGES FOR DEFENSE ACQUISITION
                          AND DEFENSE INDUSTRIAL BASE

                                  ----------

                          WEDNESDAY FEBRUARY 28, 2024

                                  United States Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 9:31 a.m., in
    room 216, Hart Senate Office Building, Senator Jack Reed
    (Chairman of the Committee) presiding.
        Committee Members present: Senators Reed, Shaheen,
    Blumenthal, Hirono, Kaine, King, Warren, Peters, Rosen, Kelly,
    Wicker, Fischer, Ernst, Sullivan, Scott, Tuberville, Mullin,
    Budd, and Schmitt.

                 OPENING STATEMENT OF SENATOR JACK REED

        Chairman Reed. Good morning. The Committee meets today to
    receive testimony on evolving workforce dynamics and challenges
    for defense acquisition and defense industrial base personnel.
        This Committee has spent several years examining the
    various challenges for our defense acquisition system. We have
    worked to identify supply chain problems, to pinpoint shortages
    in critical materials, and to improve investments in long lead
    items for our weapons systems.
        However, there is nothing more important for our defense
    acquisition strategy than our workforce, the men and women of
    the Defense Acquisition Corps, and the personnel in the defense
    industrial base whom they helped to guide and oversee. We
    cannot solve our acquisition problems without an adequate
    supply of skilled and trained workers.
        This challenge is spread through many sectors of our
    defense industrial base and in many geographic areas. From my
    own Rhode Island perspective, I often see the workforce
    challenges facing the submarine industrial base and the textile
    industry.
        These sectors each have their own unique hiring challenges,
    but those are further exacerbated by widespread competition for
    talent among Federal agencies, between the Federal Government
    and the private sector, and even between the defense industrial
    base and the rest of the commercial sector.
        During today's hearings, we will take a step back to better
    understand the broader dynamics at play and consider how the
    Department of Defense (DOD) can or should adapt its hiring and
    retention processes to try to address these challenges. Until
    we thoroughly identify and understand the changes happening in
    the broader workforce, we will not be able to properly meet
    them.
        Many of the defense workforce strains are related to
    demographic changes as more Millennial and Generation Z workers
    enter the workforce, and many of our baby boomers, who have
    been the backbone of the defense workforce for decades, begin
    to exit in greater numbers.
        The younger generations have different demands and
    expectations of their employers than previous generations,
    especially in the post-COVID landscape. I am concerned that the
    Department has not fully recognized this evolution and has not
    fully adapted its talent management practices as a result.
        The sources of these labor challenges are diverse. Two-
    thirds of Americans who lost their full time job during the
    pandemic say they are only somewhat active, or not very active
    at all, in searching for a new job.
        About half are not willing to take jobs that do not offer
    the opportunity for remote work, and we know that younger
    Americans are prioritizing their personal growth over searching
    for a job, with many saying that they are more focused on
    acquiring new skills, education, or training before reentering
    the job market.
        To discuss these issues and help us better understand how
    the Department of Defense can adapt its hiring and retention
    policies, I would like to welcome our distinguished panel of
    witnesses. Mr. Johnny Taylor is the President and CEO of the
    Society for Human Resources Management (SHRM).
        Mr. Taylor's career spans more than 20 years as a lawyer,
    human resources (HR) executive, and CEO in both the profit and
    not for profit sector. He is a global leader on the future of
    employment, workplace culture, and leadership. Dr. Simon
    Johnson is the Ronald A. Kurtz Professor of Entrepreneurship at
    the MIT Sloan School of Management.
        He is the co-author of the book, Jumpstarting America, How
    Breakthrough Science Can Revive Economic Growth and the
    American Dream. Dr. Johnson was previously a senior fellow at
    the Peterson Institute for International Economics, a member of
    the Congressional Budget Office's Panel of Economic Advisers,
    and a member of the Financial Research Advisory Committee of
    the U.S. Treasury Office of Financial Research.
        Dr. Julie Lockwood is the Director of Business
    Modernization at the Institute for Defense Analysis, or IDA. An
    economist with expertise in labor, health, and computational
    economics, Dr. Lockwood built and led the Human Capital Group
    within IDA, a team of researchers that used data analytics,
    machine learning, and applied econometrics to address
    Department of Defense personnel and readiness issues.
        We are grateful to have such an accomplished panel of
    experts with us to discuss this important issue. Thank you
    again to our witnesses, and we certainly look forward to your
    testimony. Let me now recognize Ranking Member Wicker.

               OPENING STATEMENT OF SENATOR ROGER WICKER

        Senator Wicker. Thank you, Mr. Chairman. The Department of
    Defense employs more than 700,000 civilians who is sure that
    our military personnel are capable of performing their mission.
    Their mission is to deter and win wars to protect our national
    security.
        For this reason, the Armed Services Committee takes a
    special interest in ensuring that the Department of Defense has
    every tool necessary to build a civilian workforce that is
    capable, innovative, and dedicated to keeping our country safe.
    The basic principles of building an effective workforce are
    simple.
        The Department of Defense needs to be able to hire the best
    people quickly and pay them what they are worth. But if an
    employee does not meet expectations, the Department needs to be
    able to dismiss that employee and find someone better.
    Unfortunately, the laws and regulations governing the
    Department of Defense workforce are anything but simple and
    efficient.
        Hiring takes too long even when Congress provides
    accelerated direct hiring authority. Pay is often inadequate,
    especially in trade provisions such as welders and electricians
    who maintain the Navy's nuclear powered submarines and
    carriers.
        The Department also does not pay competitive salaries for
    jobs that require extensive formal education, and everyone
    knows how hard it is to terminate an underperforming employee.
    Those who have spent any length of time in the Pentagon have a
    story of an underperforming colleague who was shuffled around
    to various offices to get him out of the way.
        Similarly, most know a truly exceptional performer who left
    the Department of Defense in search of better rewards for her
    hard work. The status quo is unacceptable, and the evidence is
    everywhere we look.
        Our public shipyards struggle to attract skilled trade
    workers. The Navy is hemorrhaging the civilian mariners, whose
    work ensures the delivery of critical supplies around the world
    to the rest of the fleet. We cannot hire or retain enough
    doctors or nurses to staff our military hospitals.
        Cyber professionals leave the Department of Defense in
    droves to join other Government agencies or the private sector.
    I could go on. The unique mission of the Department of Defense
    demands that Congress provides it exceptional authorities to
    allow the Department to build the civilian workforce needed to
    support our warfighters.
        The system that governs every other Federal agency is
    inadequate for our national defense workforce. Numerous
    bipartisan commissions and our military's senior leaders agree.
    I hope we can use this year's National Defense Authorization
    Act to provide legislative tools to achieve the basic
    principles of an effective civilian workforce.
        I would ask the witnesses to help us understand the
    weaknesses of the Department's current human resource system.
    But more importantly, I hope the witnesses can tell us what we
    can do to make the Department of Defense a more competitive
    employer. Thank you, Mr. Chairman.
        Chairman Reed. Thank you, Senator Wicker. Mr. Taylor,
    please begin.

        STATEMENT OF JOHNNY C. TAYLOR, JR., PRESIDENT AND CHIEF
        EXECUTIVE OFFICER, SOCIETY FOR HUMAN RESOURCE MANAGEMENT

        [Technical problems.]
        Mr. Wicker.--the state of the workforce. Thank you. SHRM
    empowers people and workplaces by advancing human resources
    practices and maximizing human potential. We are 75 years old
    this year, and we have been the trusted authority on all things
    work, workers, and the workplace.
        Our nearly 340,000 H.R. professionals across the globe
    represent nearly 362 million workers and their families in 180
    countries. A few weeks ago, SHRM released its state of the
    workplace report, which focused on the challenges employers
    faced in 2023 and the critical issues we expect that they will
    face in 2024 and beyond. The report looks at four key areas
    which impact the workplace.
        First, balancing inflation and talent challenges. Yes, we
    want to pay our people more, but somehow the consumer is
    pushing back increasingly on paying more for services and
    goods. Trading and evolving workforce. Indeed, both Chairman
    Reed and Ranking Member Wicker spoke to the challenges of for
    the first time we have five generations in the workplace at
    once and they have significantly different needs.
        Third, we looked at realizing the full potential of
    artificial intelligence (AI). Quite the debate these days, and
    I will spend more time in my introductory comments addressing
    that, and then we are struggling with engaging workers.
        So, it is just not enough to have the bodies there, but to
    engage them is yet a significant challenge. I would like to
    talk for just a minute about key findings from our report. One
    is inflation was the top concern for organizations in 2023, and
    not just general inflation, but indeed wage inflation.
        Seventy-three percent of H.R. professionals indicated that
    this is their current number one concern. We want the talent,
    we want to pay them, but we have got to figure out how to do
    so. Second, labor shortages.
        They were the number two issue in 2023. We have already
    somewhere between 8, 9, 10, 11 million open jobs at any given
    time, and that has created a major concern for organizations.
    More than two-thirds of employers have said we simply can't
    find enough people.
        There are labor shortages, and then we do need to reduce
    the cost and increase efficiencies. I will talk a little bit
    more about how that has directly led to adoption of AI and
    other technologies.
        Nearly 9 in 10 workers believe fair compensation from
    current employees, including the Government, the Department of
    Defense, for example, should be the top priority for
    organizations in 2024, yet only 27 percent of H.R. executives
    say this is their top priority. So, a major disconnect.
        A quarter of H.R. Departments are currently using
    artificial intelligence applications for specific purposes,
    such as recruiting talent, employee training, and development.
    So, in 2024, we expect that number will significantly be
    increased.
        Finally, improving people managers, that is, the people
    leaders understanding of their roles and developing more of
    their what we call soft skills, their not so soft power skills
    such as empathy.
        Top organizational priorities for 2024 are all about not
    just getting the talent but retaining the talent. What our data
    tells us overwhelmingly is that 60 percent or more of employees
    leave not the employer, but their manager, their people
    manager, and thus the challenge for us.
        So, let's talk about the labor shortages that we are all
    seeing and are specifically impacting the Department of
    Defense. H.R. Departments are being compelled to strategize to
    solve for the labor shortages with a market that does not want
    to respond in traditional ways. A key focus in the past was
    increase salary and that will help you attract talent. Well,
    what we know about the younger generation is that doesn't
    necessarily work.
        Our data will tell us that employees will say they will
    actually leave an employer for less money, to go make less
    money if they get to work for a more empathetic leader. This is
    the reality of Generation Z and Millennials, and something we
    have to take into consideration at the Department of Defense.
        The Department of Defense can greatly benefit by retraining
    and retaining officers and enlisted personnel who leave the
    military and are having difficulty finding work in the private
    sector. This is a significant conversation in the private
    sector world, I can tell you, is how do we create
    opportunities?
        How do we translate the experiences of people who have come
    from the military and from the Department of Defense into
    private sector jobs? But that creates an opportunity for the
    DOD, because, in fact, you might consider keeping those people.
    But returning alone is not enough.
        We need to train them and train these employees to be more
    adaptable, because in today's rapidly changing world,
    adaptability is paramount, and SHRM research indicates that
    over 31 percent of organizations are modifying the recruitment
    strategies, including enhancing social media presence,
    advertising, and employee referrals.
        So, in summary, got a lot more to tell you, but SHRM's
    testimony today underscores several pivotal areas where
    organizations can concentrate their efforts to attract, retain,
    and empower the workforce.
        Very quickly, adopt skills based hiring, invest in
    retention, leverage apprenticeship programs, modernize talent
    management processes. This is, Mr. Wicker, Senator Wicker, a
    real challenge for the Government, and we need to invest in
    people managers, upskill and reskill the workforce, create a
    culture of learning.
        The employees want this. They don't want to take the job
    and know the job for 30 years and then retire. Create AI
    responsibly. It is not enough to just enable the technology,
    but to do so responsibly, and then to focus on human and
    machine collaboration. At SHRM, we speak a lot about AI plus HR
    (human resources) will equal the new ROI.
        So, it is not a sum zero game for employees. We have got to
    embrace this technology and we think there are huge
    opportunities for the Department of Defense. Thank you.
        [The prepared statement of Mr. Johnny C. Taylor follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Reed. Thank you, Mr. Taylor. Dr. Johnson, please.

     STATEMENT OF SIMON H. JOHNSON, RONALD A. KURTZ 1954 PROFESSOR
      OF ENTREPRENEURSHIP, MASSACHUSETTS INSTITUTE OF TECHNOLOGY
                       SLOAN SCHOOL OF MANAGEMENT

        Dr. Johnson. Thank you, Senator. I would like to make three
    points. The first is about a term I fear you are going to hear
    increasingly, which is stranded expertise. It is a term being
    used in the tech sector to refer to the impact of AI in
    particular.
        But of course, it is not a new problem. We have been facing
    issues with expert people, people who spent a lot of time
    acquiring education and training, losing opportunities and
    being left behind. These have been a problem since at least the
    wave of automation. We have experienced that in the 1980s.
        The shock of Chinese imports from the early 2000,
    exacerbated this. In the age of AI, I think we are going to be
    seeing much more of this, and of course, it is overlaid,
    Senator Reed, with some of the issues we have talked about in
    terms of the demographics. I would also highlight the shift of
    innovation away from the historical dispersion of the United
    States toward the East and West Coast.
        Of course, from a broader social, economic point of view,
    this is a problem. But my second point is that this is actually
    an opportunity for the Department of Defense and a way to think
    about responding to the problems both you, Senator Reed and
    Senator Wicker already flagged. Because the key point is that
    innovation and technology develops and is maintained in
    particular geographies, around hubs, and we used to have a lot
    of hubs that were very dynamic in the United States.
        Now we have fewer, but that can be addressed. The analysis
    we did suggests there is over 100 urban areas in 36 states
    where 80 million Americans live that are ripe for stepping up
    to become fantastic places for exactly the kind of problems
    that you are trying to solve and address on this Committee.
        So, there is potentially available labor. So, there are
    already skills. There is no doubt some retraining needed and
    some repositioning. Of course, one of the problems with
    apprenticeship programs in the United States, one of the
    reasons the private sector doesn't, frankly speaking, love them
    is they are afraid that if once you train a worker, that worker
    leaves and goes to work for a competitor.
        But if the goal is to strengthen the defense industrial
    base and if people are sticking, because we have all become
    less mobile, modern Americans are much less mobile than our
    predecessors. Then if you are training people in a particular
    area to work on submarines, for example, or to acquire welding
    skills and electrical skills that are relevant to the submarine
    business, and they leave to a related enterprise in that area,
    you have not weakened the defense industrial base. You have
    actually strengthened and deepened its ties in that community.
    You have also, of course, got a reserve workforce that can be
    pulled in if you need to increase those activities. For broader
    understanding, Rhode Island, Senator Reed, you got some
    terrific hub based developments.
        But as we are seeing this all around the country and the
    CHIPS and Science Act, which was passed on a bipartisan basis,
    I think included affirmation of the importance of this as a
    general policy approach, but also something I would say that
    the DOD can take on board.
        Including, however, in that approach, Senator Reed would be
    addressing one of the key points you made, which is labor force
    participation. So, it is not enough to have the opportunities,
    people have to want to come to work, and that is partly about
    compensation. It is partly about can they access childcare? It
    is partly about how long does it take to commute to work.
        There is a package that should be looked at of this hub
    level, and I commend that to this Committee into the DOD for
    further investigation, the way it overlays with your existing
    activities and priorities around the country.
        The third issue is, I think, with stating out loud, which
    is China, and I think that that is on the back of all our
    minds, or maybe the front, Senator, when we think about the
    potential threats here.
        China is of course, not just threatening but actually
    investing very heavily in further research and development,
    trying to move innovation, trying to own the future of jobs
    across a lot of civilian, but also, I think, military
    activities. The best way to respond to that would be three
    fold.
        First of all, invest more in science for the United States.
    Second, figure out how to commercialize and bring more of those
    activities to market because if you have got a strong civilian
    economy supporting innovation, that is going to help you on the
    military side also. Obviously there is a huge amount of
    spillovers and interaction there. Again, I would recommend a
    hub based approach for that.
        The third approach, the third piece would be to develop a
    line of work for artificial intelligence that is pro-worker.
    What do I mean by pro-worker? I mean within the framework Mr.
    Taylor suggesting, AI is certainly arriving, but is this AI is
    going to displace manual workers and displace workers with less
    education, or does it enhance their productivity and enhance
    their opportunities? I think it could actually go both ways.
        There is a lot of opportunity, a lot of issues around
    health care, a lot of issues around education, a lot of issues
    around manufacturing that are not the top priority for AI
    oriented investments in innovation in the private sector. There
    more to more about social media and digital advertising, to be
    frank.
        So, focusing on those activities, and I think both Senator
    Reed and Senator Wicker alluded to this, changing how we think
    about manual work and thinking--changing the value we place on
    manual skills--I think that is something we have lost in this
    country over the past 40 or so years. It is something we were
    very strong at during WWII.
        That was the basis of being able to scale up that economy
    and move it toward wartime production. To the extent we have
    outsourced those jobs to other places and created fragile
    supply chains, we should look at AI as an opportunity to
    motivate people and to bring technology to bear that enhances
    the effectiveness of that part of the workforce. Thank you.
        [The prepared statement of Dr. Simon H. Johnson follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Reed. Thank you very much, Dr. Johnson. Dr.
    Lockwood, please.

         STATEMENT OF JULIE A. LOCKWOOD, DIRECTOR OF BUSINESS
             MODERNIZATION, INSTITUTE FOR DEFENSE ANALYSES

        Dr. Lockwood. Chairman Reed, Ranking Member Wicker, and
    fellow distinguished Members of the Senate Armed Services
    Committee, good morning. I am honored to contribute to this
    timely discussion on trends impacting the Nation's defense
    civilian workforce.
        My perspectives are informed by my own research, that of
    fellow economists, and also the work of many talented
    researchers at the Institute for Defense Analyses (IDA) and at
    other federally funded research and development centers
    supporting the Department of Defense.
        I should State that the views that I expressed today are
    mine, and not necessarily those of IDA, as a nonpartisan
    institution. To succeed, the Department of Defense and its
    partners in the defense industrial base must maintain skilled,
    capable, and adequately staffed workforces.
        Today's labor market is characterized by the convergence of
    several important trends, some of which have been discussed
    today already, which together produce intense competition for
    talent. Increasing job market polarization driven by
    technological advances has left many missed skilled workers
    behind.
        Young men's rates of college attendance, enrollment, and
    completion are in decline. An aging workforce will bring waves
    of retirements to DOD, threatening continuity and also
    institutional memory. The gig economy, meanwhile, offers
    workers low commitment alternatives and a very flexible
    lifestyle, and remote work is here to stay in some form or
    other.
        In addition, affordable housing shortages add to existing
    downward pressure on worker mobility, and rapid advances in AI
    and other technologies are accelerating competition for STEM
    [Science, Technology, Engineering and Mathematics] graduates.
    One or two of these concurrent trends alone would be troubling,
    but taken together, I believe they represent a sea change.
        At present, there is excess demand for labor in the United
    States, with 9.5 million open positions for only 6.5 million
    workers. That is assuming every worker is well suited to the
    open positions, which they are not. DOD and its industry
    partners are not currently well positioned to compete
    effectively for the high demand talent that our national
    security requires.
        These trends impact each segment of the labor force that
    this Committee seeks to address, wage grade workers in our
    shipyards and our arsenals, STEM professionals in our labs and
    in the acquisition workforce, and critical supervisors and
    middle managers on the GS schedule. A common set of
    prescriptions can improve the health of each.
        To compete for the skilled workers that DOD and its
    partners in the industrial base need to accomplish their
    critical missions, the Department should act aggressively to
    hire faster, pay competitively, reward performance, manage
    underperformance, and set the conditions needed for managers to
    make effective workforce mix decisions.
        Moreover, DOD has an excellent opportunity to engage with
    this missing middle of mid skilled workers, a labor segment
    traditionally heavily involved in national defense, by filling
    critical shortfalls with a combination of trained workers and
    enabling technologies--some of the AI that my colleagues here I
    have spoken to already.
        People need purpose and inspiration to get off the couch
    and back in the workforce. If you take away only one idea from
    my time with you today, please let that be that incentives
    matter. By incentives, I do not only mean the pay and benefits
    that employees might earn for an excellent performance.
        I also mean the conditions under which DOD's many managers,
    workers, and researchers invest their personal effort and make
    day to day decisions that impact the Department's bottom line.
    I believe that DOD's dedicated workers generally want to make
    optimal choices but are often stymied in doing so.
        You can set the conditions to align incentives within these
    decision environments, to make it easier for everyone to choose
    the sensible thing for the mission and for the taxpayer in
    their daily work, whether that is shaping DOD's workforce mix
    or when managing their teams. Incentive alignment will produce
    more effective decisions and free resources for other mission
    critical areas.
        I personally think we could use a few more submarines.
    Decisive action can help achieve this incentive alignment and
    will reinvigorate DOD's civilian workforce by clearly signaling
    that the Department values its wage grade, professional, and
    defense industry personnel. That it will recognize and reward
    their contributions.
        These innovations will allow DOD to advance as a high
    performing organization. Thank you for your time and I look
    forward to your questions.
        [The prepared statement of Dr. Lockwood follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Reed. Well, thank you all for excellent testimony.
    Really superb, and this is, I think, the beginning of a dialog,
    not a one stop and move on. I like submarines, but I share that
    with Senator Wicker, and he----
        Senator Wicker. Here, here. The only thing I take issue
    with is she said a few. It would be quite a lot more submarine.
        Chairman Reed. I agree. The only condition he puts on and
    they all have to be named after a city in Mississippi, but that
    is a small point. One of the issues that I see as I try to deal
    with these issues is that we have a problem of bringing in new
    workers. We also have a problem at the supervisory level.
        Discussions with people in the industry say that is
    probably one of the key things that is slowing them down. They
    can get by with younger workers, but without the supervisors,
    they can't leverage those workers. So, Mr. Taylor, and Dr.
    Johnson, and Dr. Lockwood, your comments.
        Mr. Taylor. Well, indeed--I alluded to that. Thank you,
    Chairman Reed. We know that, and even in industries like the
    Tech Valley and Silicon Valley, the tech industries, we can get
    them employees to come in.
        The difficulty is keeping those employees, and
    increasingly, the new difficulty is keeping people in middle
    management. In part because we have naively assumed that
    because one is a great mechanic, that one will be a great
    manager of mechanics.
        So, we take that person. We don't invest in teaching them
    how to be a great people manager. They hate the job and the
    employees that work for them hate the job, and therefore no one
    wins, and that has led to the retention problem.
        One of the areas that we strongly recommend the Department
    of Defense consider doing is investing in people management.
    How do you--it is not enough for someone to have the
    technical--the underlying technical skills.
        We have got to teach them, you know, technically to do the
    job, but teach them how to manage people. Because listen, at
    the end of the day, we have all talked about compensation, and
    compensation does matter, but all of the data tells us that
    people will leave an employer if the only thing they are doing
    is making a lot of money but being mistreated, and they don't
    find that this is a good work environment.
        So, people management work is a lot of the work that the
    Department of Defense should consider investing in.
        Chairman Reed. Thank you. Dr. Johnson, your comment.
        Dr. Johnson. So, Senator, here is the good news, bad news
    aspect of artificial intelligence, you know, in answer to your
    question.
        The good news is there is definitely potential, and we can
    see it already in some parts of the private sector to develop
    tools that will enhance the ability of supervisors to manage
    more effectively and perhaps make it more easy to transition to
    become a supervisor.
        So, I don't think there is enough effort going into that. I
    think it would be something very good for the DOD to focus on
    also. But I think that the bad news part is there is also a
    tendency, and not I am sure, in this room, but elsewhere, to
    think about algorithms as replacing people and doing the work.
        We can rely on them, and we can close our eyes and the car
    will drive itself. That is a bad mistake. But what we are
    looking at, as Taylor said, is different ways for people to
    interact with machines at the supervisory level.
        But I would emphasize making those manual jobs more
    attractive, more interesting. Pulling younger people in with an
    AI element, not thinking about replacing people because that
    would be a mistake.
        Chairman Reed. Dr. Lockwood, please.
        Dr. Lockwood. Yes. I will just build on both of these
    gentleman's remarks by noting I wholeheartedly support Mr.
    Taylor's cry for additional training. I will note that among
    our defense workforce, that our uniformed personnel are
    frequently sent to special schools to learn managerial and
    leadership skills.
        However, very little investment is made in our civilian
    managers, and this is a critical gap that you can fill. I will
    note that some important changes have been made, some progress
    has been made in the area of leadership training, for the
    acquisition workforce in particular.
        But leadership is different than management, so this is a
    key opportunity for the Department. Thank you.
        Chairman Reed. Thank you very much. In terms of addressing
    our problems, one suggestion that I think everyone made
    directly or indirectly is we have got this pool of workers,
    military personnel that we can transition. Just very quickly
    because my time is expiring. Mr. Taylor, how do we encourage
    our military personnel who are leaving the service to go into
    industries related?
        Mr. Taylor. Yes, we know that there currently exist
    transition programs, but we have got to double down on those.
        If we know that an individual is within 6 months to 12
    months away from either retiring or completing their military
    service, we have got to give them the skills to make sure that
    they can translate that either to role in the DIB, maybe not
    necessarily in the military, or within the private sector.
        So, training them on how to become recruitable in the
    private sector would be the way to do it.
        Chairman Reed. Thank you. My time has expired, and there is
    one other question I want to--or comment I want to put on the
    table. One is, Dr. Lockwood focused on the acquisition forces
    in DOD and management training.
        One of the areas I think, too, is in the civilian
    companies, the contractors. My sense is they don't do that very
    well. Dr. Lockwood or Dr. Johnson.
        Dr. Lockwood. I would respectfully take a question on the
    management within our contractual partners for the record.
        Chairman Reed. Very good. Thank you. Dr. Johnson.
        Dr. Johnson. I think you are pressing on exactly the right
    issue here, Senator Reed. I think that we are under investing
    in managerial capabilities across a large part of our economy.
        Of course, there is a big sucking sound as talent gets
    pulled toward the Silicon Valley type of sector, and the rest
    of the economy is neglected and underinvested in by itself,
    which is very counterproductive from an economic point of view
    and from a national security point of view.
        I think you are--absolutely top priority in line with
    both--with certainly what Mr. Taylor said. I am sure with what
    Ms. Lockwood will say later.
        Chairman Reed. Last word very quickly, Mr. Taylor.
        [No response.]
        Chairman Reed. Thank you very much. Senator Wicker, please.
        Senator Wicker. Thank you, Mr. Chairman. In a 2023 Federal
    employee viewpoint survey, workers were asked whether they
    agree with this statement, in my work unit differences in
    performance are recognized in a meaningful way. Only 45 percent
    of respondents agreed with that.
        The same survey asked if they agree with this statement,
    there are no poor performers in my work unit. Only 19 percent
    of employees said that. Dr. Lockwood, in your written
    statement, you say DOD needs to accelerate reprimand or
    separation in cases of underperformance that does not improve
    with reasonable training investment. Tell us about that and
    what can Congress do.
        Dr. Lockwood. Thank you for the question. I think the
    bottom line is that if high performers are compensated,
    promoted, and otherwise treated the same as mediocre
    performers, that those high performers will be discouraged and
    take their talent somewhere else.
        So, I think we can pretty clearly say that that is
    suboptimal for the Department. I think there are a number of
    things the Department could do to enable managers. One thing is
    perhaps to limit employment terms. So, one might imagine a new
    form of Federal employment, a limited term contract.
        We see this in several other developed economies. This
    would kind of split the difference, perhaps, between the use of
    a very flexible contracted solution through one of our
    industrial base partners or a typical Federal contractor, and
    what we understand now as Federal employment to give both the
    Department and the worker added flexibility.
        Senator Wicker. Okay, so I asked what Congress could do and
    do you think it would take statutory changes to implement
    something like that?
        Dr. Lockwood. I do. In particular, because oftentimes both
    civilian and uniformed managers have concern of reprisal or
    other forms of unfortunate action should they do the hard work
    of trying to separate a nonproductive member of the staff. So,
    Congress clearly signaling that this is your intent and desired
    outcome, I believe would be helpful to the Department.
        Senator Wicker. Let me ask all of you about the Federal
    wage system. It has not been reformed since 1972. It is going
    to be a long time. It has weaknesses, such as the system in
    determining the wage is hyper local. It is incredibly
    bureaucratic and complicated, and by law, public unions, public
    employee unions are heavily involved.
        Dr. Lockwood let's start with you. In my opening statement,
    I mentioned welders and electricians. The Navy's public
    shipyards are struggling to hire and retain these critical
    workers. Does the FWS [Federal Wage Systems] have something to
    do with this, and what can Congress do to help?
        Dr. Lockwood. I believe it does. So currently, wages are
    set in pretty hidebound grades where we are taking a number of
    perhaps currently unrelated occupations, binding them together,
    and setting wages within a few steps for that grade.
        Those grades were established back in the 1970s based on
    the prevailing wages at that time, and currently bend together
    occupations that don't resemble one another at all. I believe a
    far more effective approach would be to compensate on the
    occupational level, both with a view toward the local wage, but
    also understanding that should we need to draw workers into a
    labor market that is relatively undersupplied, it will take a
    higher wage to do so.
        We need to set wages cognizant of not only occupation
    locally, but also nationally.
        Senator Wicker. It seems to me we are just going to
    basically have to give the Department flexibility beyond
    specific instructions.
        Dr. Lockwood. I believe that is the case.
        Senator Wicker. Dr. Johnson and Mr. Taylor.
        Dr. Johnson. I would just add, Senator, there is a very big
    issue coming to you soon with regard to workplace surveillance,
    because the tools for surveilling workers are already greatly
    enhanced.
        In that conversation, there will be, and I think this is
    something that OSHA [Occupational Safety and Health
    Administration] will be looking to Congress for guidance on--I
    think you have to consider, to what extent that surveillance
    makes workers safer, more productive, and lines up with
    reasonable incentive systems, as Dr. Lockwood was saying, and
    to what extent it becomes oppressive and discourages workers
    from coming in to work for the defense industrial base. This is
    going to be a very hot issue very quickly.
        Including that, Senator Wicker, in a discussion of the
    Federal wage system, could be quite a good idea. I would also
    emphasize the need for more housing. So, one reason wages have
    to be higher in some areas is because the community decided not
    to build housing. Now, that is the decision of the community.
        It is not usually up to Congress, but I think deciding to
    spend your submarine dollars in places where housing is
    affordable suggests to me you will be able to build more
    submarines for the same wage bill.
        Mr. Taylor. I would add, from the private sector side, we
    use the term pay for performance. If Congress can do anything
    to give the flexibility to the Government worker, the
    Department of Defense, you could actually help there.
        Ultimately people--that doesn't surprise me, that 19
    percent, say only 19 percent think they have no poor
    performers. The Government has for quite a while recruited
    people, and what part of the sell has been job security. Well,
    that is the downside. If you know that you have job security,
    then there is no incentive necessarily to do anything to not
    have your job.
        But more importantly, why would you differentiate if there
    is no pay for performance? If I am going to make, give or take
    1 percent more than the colleague who does barely enough to get
    past, then there is no incentive for people to work harder and
    for you to attract the best talent.
        Senator Wicker. Thank you sir.
        Chairman Reed. Thank you very much. Senator Kaine, please.
        Senator Kaine. Thank you, Mr. Chair, and thanks to our
    witnesses. A couple of topics I want to get into. First, Mr.
    Taylor, I appreciate that the Society for Human Resource
    Managers has supported a bill that I have been promoting for
    many years. I talk about it a lot in the HELP Committee, and
    they are tired of me talking about it, but I don't talk about
    it a lot at Armed Services, the Jobs Act.
        We do not allow Pell Grants to be used for high quality
    career and technical education. It has got to be a college. An
    awful lot of really high quality job training programs are not
    college semester in length. Instead of a 15 week course that
    you meet three times a week for an hour and a half, a lot of
    high quality job training is an 8-week course where you are 5
    days a week, 8 hours a day, many more classroom hours than a
    semester.
        We allow Pell Grants to be used for full time students, for
    part time students, for people who are incarcerated, if they
    are getting college credits that they can use to get employed
    when they are back in society, but we have never allowed Pell
    Grants to be used for high quality career in tech.
        I think if we could pass the Jobs Act, and it is wildly
    bipartisan. I think I have got about 65 of my colleagues who
    are sponsoring it, particularly at a moment when we have just
    done a big infrastructure bill. Who is going to build it? We
    have just done a big manufacturing bill and who is going to
    make it?
        We have just made a commitment to build subs with the
    Australians, but both the United States and Australia have some
    similar workforce challenges. So, I very much appreciate SHRM
    supporting the Jobs Act, and I would look forward to working
    with my colleagues to figure out some way to finally get
    movement on it at a time when the unemployment rate is low. To
    another topic that I would like to ask your opinion on.
        There is a wonderful program that I have been involved with
    called the Accelerated Training for Defense Manufacturing
    Program that is done in Danville, Virginia, at the Institute
    for Advanced Learning and Research, and its investment to build
    the submarine industrial base.
        In that program, we bring people from all over the United
    States who are working with suppliers in the industrial base--
    some of the main shipyards, but also some suppliers. They train
    side by side.
        There is Aussies there now. Part of the AUKUS [Australia,
    United Kingdom, United States] arrangement. But also, I noticed
    the last time I went, there is a lot of Afghans, Afghans who
    served patriotically with the United States in Afghanistan.
    They moved to United States, and they are like, I will be a
    shipbuilder. Strikes me that one of the answers to this issue
    on workforce shortages is immigration.
        An immigration reform system that prioritizes workforce is
    something that is really important. Oftentimes when we talk
    about immigration here, it is all about the border. We ought to
    talk about the border, but we also need to talk about the
    workforce.
        An unemployment rate that is as low as ours right now.
    There is not going to be a solution to some of these problems
    that does not involve a work based immigration reform, and I
    was hoping that you might just each offer your perspectives on
    that.
        Mr. Taylor. Senator Kaine, you mentioned something that is
    at the core of most of the conversations in human resource
    circles. The fact of the matter is that Americans have been
    having fewer and fewer children over the last 2 decades. So, we
    have a birthrate problem. We have a replenishment problem.
        We at SHRM are very careful not to get into the political
    issues of immigration other than to say we need these 8, or 9,
    or 10 million jobs to be filled. It is just nonsensical that we
    would in many instances have people who we have allowed to come
    to the U.S., we have educated them in our schools, and then we
    send them back when we have open jobs for them to fill.
        Again, staying away from the political parts of it, the
    reality is employers are saying we need this talent. We don't
    have the luxury of saying, great, we are going to have a bias
    against people who are not born and trained here in the U.S. In
    fact, we need all the talent. So, SHRM is quite supportive of
    this immigration. Now, how we get to that is a different issue.
        We need to ensure that we protect our border and our
    Homeland, and we need to know who is in our country, is our
    opinion. At that point, getting them to the talent, matching
    them up with organizations is something that we all are pushing
    for and frankly demanding at this point, with 3.7 percent
    unemployment.
        Senator Kaine. Dr. Johnson and Lockwood.
        Dr. Johnson. So, Senator Kaine, I see your two proposals as
    very tightly connected. My understanding is that the current
    Pell Grant system had its origins in the 1958 National Defense
    Education Act. Which is itself a response to Sputnik and a
    realization by Congress that we needed more engineers and
    scientists.
        So, there is a big push at the higher end of education for
    math and science, but not so much for this--in this middle--the
    middle skill area that we are talking about. So that is a gap
    we have had for a long time.
        I think your idea is absolutely brilliant and spot on. But
    then when it comes to immigration, I think the question is, are
    we providing sufficient opportunities to all the people born in
    the United States, including in that middle area? If we are and
    they are not taking them, or if we still have gaps, then I
    think the case for immigration on a work based or skills basis,
    immigration reform is very compelling.
        MIT [Massachusetts Institute of Technology]--I am an
    immigrant, Senator, as you may have guessed, and I went to--I
    got a Ph.D. from MIT, and there is many other people in MIT
    currently who would love to spend their careers building the
    economy and strengthen the national security of the United
    States.
        Many of them will be able to come in because we have not
    easy, but various points of entry, if you have a master's
    degree or higher, into the United States. But we don't do that
    for skilled labor, because in part of the insecurity and
    concerns about opportunities for native born Americans in that
    part of labor force.
        But I think both your ideas together, Senator, I would make
    a package, because I think that is a compelling--joint in two
    fold attack on the same problem.
        Senator Kaine. Thank you. Dr. Lockwood, I am over time, but
    you could be as succinct as Mr. Taylor was earlier when he
    closed over time.
        Dr. Lockwood. Yes. We absolutely need to invest in skills
    based education and we need to stop enshrining the 4-year
    degree as the only valuable and worthwhile thing that a young
    person can do. We have overinvested in bachelor's degree
    education and underinvested in core skills training.
        So that is something Congress can do now. I will just also
    note that our immigrant base is wildly productive in terms of
    new business starts and general entrepreneurship, and skills
    based immigration is definitely something that has been an
    incredible net benefit to the American economy and it ought to
    continue.
        Senator Kaine. Thank you, Mr. Chair.
        Chairman Reed. Thank you, Senator Kaine. Senator
    Tuberville, please.
        Senator Tuberville. Thank you, Mr. Chairman. I would also
    like to add on to Senator Kaine's thoughts on Pell grants,
    Government grants, loans. I spent 40 years in the education
    business. It is out of control.
        We need to use it for the right reasons. It needs to be
    redrawn. I have seen people take Pell Grants, go buy cars with
    them, drop out of school immediately after they get Pell
    Grants. I have seen the same thing with loans.
        There is not enough oversight on it, but we need to put
    more emphasis on what we are doing, and what he's calling the
    Jobs Act. We can get more out of it if we would just
    concentrate on it and put some authority behind it, and let
    people know that you have got to do it the right way.
        I am all for jobs training because I have seen a lot of
    these kids that go to 4 year universities and waste their time
    and get degrees, and they can't get jobs when they get out.
    Their job has got to be at Walmart or somewhere else like that.
        It is not that Walmart's a bad job, it just if you spend 4
    years of your money or the Government's money in going to
    school, you need to have some kind of opportunity to achieve
    something more successful.
        You know, I come from Alabama, and we have an industrial
    base of about $50 billion annually, 300,000 jobs that work in
    our military industrial base. We have Alabama Shipyard and
    Austal USA. We build ships, submarines, you name it. It is an
    amazing place. I enjoy going into these buildings and watching
    these people work.
        What is amazing to me, the stories I get are from some of
    these major corporations, is they take their own initiative.
    They are going to fast food places and recruiting, and watching
    people work. One shipbuilder told me that their best welders
    have come from fast food joints because they are willing to
    work. Dr. Lockwood, be careful, you are telling people, get up
    off the couch and go to work.
        You don't need to say that around here. But they do, we
    have got to get people back to work. So, Dr. Johnson, you
    brought up a few minutes ago that our workforce has dropped
    since WWII. Well, we all know that.
        You know, I mean, that is the problem. What is the cause
    and what is the solution to that? I mean, we got to have--what
    is the cause for--we all know we have to have the cause of that
    since WWII and the solution. Is it NAFTA [North American Free
    Trade Agreement], that we send our manufacturing overseas?
    Because China has five to one manufacturing plants compared to
    us here in the United States. Is that part of it?
        Dr. Johnson. Well, Senator, when I think of Alabama, I
    think of Huntsville and the remarkable success there, the
    rocket program, which was basically built from scratch in a
    place that had tremendous, no doubt potential, but had not
    previously established itself in that area of technology.
        We used to do that a lot, Senator. That was a big lesson
    out of WWII. We used to do it all around the country, and the
    private sector did it as well as the public sector. But
    unfortunately, what has happened due to market forces, and so I
    am not blaming any single individual, is we have shifted much
    more of that innovative activity toward the East Coast and the
    West Coast.
        These are cities that don't like to build more housing
    prices. Housing is very high. It is hard to move there. A lot
    of the expertise in the middle, the middle skills part of
    manufacturing, for example, in the Midwest of the United
    States, is stranded there because the opportunity is in other
    places, but they can't afford to move because of the housing
    market, and we are not making a best use of our talent.
        So, I think more investments in more communities, including
    Alabama, which is features very highly in our book, by the way,
    that is the right geographic approach in general to bolstering
    science and technology. When it comes to national defense,
    Senator, I think it lines up even better because we want to
    build communities with these skills. People don't move that
    much.
        Great, so their skills will stay in this community that is
    focused on producing submarines or rockets or whatever that
    community is. That that is going to be a very strong local
    regional defense base. So, we will use a little bit of our
    disadvantages in our favor in this case, and I think we will
    get a better economy and more national security as a result.
        Senator Tuberville. I think still in our country, we still
    have a lot of patriotism out there. Sometimes we don't see
    that, but people want to work for our military industry. They
    make very good money, I mean, but you got to pay a price.
        You got to sacrifice, and we can't overlook our education
    in this country. Our education is going south. Take it from
    somebody who has been in high schools all over this country as
    my former job. The things that we are teaching are not
    conducive to push these young men and women in making better
    for themselves.
        I mean, they just say, if I get a degree or if I get a
    diploma in high school, that is good enough, and that is really
    not good enough. They have got to be incentivized in how to do
    it. Mr. Taylor was talking earlier about that. We have got the
    incentivize. But again, it all goes back to our military
    industry.
        As you said, Huntsville. It is growing. I just bought a new
    house up there and watched it go up, okay. There wasn't--in the
    entire time that that house was built, there wasn't one white
    American, one black American, or one Asian American that worked
    on that house. It was people from other countries, okay.
        I don't know whether they were legal or not. They said they
    were. I asked them, I said, make sure there is not--I happen to
    be a Senator. Make sure there is people that are Americans that
    are working on this house.
        But we can't build anything, we can't build anything unless
    we have immigration in this country. I truly believe that. I
    truly believe that. But we got to do it the right way. Thank
    you very much. Thank you, Mr. Chairman.
        Chairman Reed. Thank you, Senator Tuberville. Senator
    Rosen, please.
        Senator Rosen. Well, thank you, Chairman Reed, for holding
    this hearing. I would also like to thank each of the witnesses,
    of course, for testifying today.
        I worked in my former career in STEM and so I am going to
    talk a little bit about the STEM workforce shortage. As
    mentioned in the National Defense Industrial Strategy, we have
    to find creative solutions to upskill our manufacturing
    workforce so that we can meet our Nation's strategic production
    targets and our goals.
        Mr. Taylor, can you speak to the labor shortages in STEM
    fields, the impact on our defense industrial base, and if there
    are specific sectors impacted by the skilled workforce shortage
    more than others?
        Mr. Taylor. Right. As you can imagine--thank you, Senator
    Rosen. You know, one of the problems is we wait too long to
    talk about what the talent problem is.
        We look to employers and say, you have not hired enough
    engineers this year, for example. The reality is this is a PK
    [pre kindergarten] through 12 problem, and we are not looking
    at it--we want to solve for it immediately. We have a
    pipelining problem from the diversity, for example, of the
    types of Americans who come through the systems K through 12
    educations, we know disproportionately underperform in
    communities--underrepresented minorities.
        Then you wake up and say, well, we don't have enough
    diverse talent in STEM. Well, it is because that started 13, 14
    years ago. It didn't start immediately, and so, employers are
    committed to the idea of increasing and solving for their STEM
    worker talent shortages, but we know when we say at SHRM, it is
    the two Es. It is education and employers.
        We have got to start a lot earlier in the process. The
    other thing that the Senator just spoke to is that increasingly
    companies are going straight to high schools and saying--in
    fact, some new instances of going to middle schools and saying,
    I am going to identify your kids now and ensure that they are
    obtaining the skills that we need to--the STEM skills, you
    know, the basic math, the sciences, et cetera, and we
    essentially are going to pull them through and mentor them so
    that we have potentially employable people 10, 12 years later.
    As opposed to hoping that the K through 12 system will provide
    the pipeline.
        Senator Rosen. I am glad you brought that up because my
    very first bill is called Building Blocks of STEM, and it does
    exactly that, and allows to build that STEM pipeline, K through
    12 schools all across America to invest in STEM education.
        I have seen the greatest programs in kindergarten and
    elementary school, how they kind of use little robotics and fun
    things that kids don't even realize they are learning STEM, but
    they are learning all of these great things of logic. So, thank
    you for bringing that up and I was glad to have a bill pass to
    do that.
        I am going to move on to Dr. Johnson. As DOD, we are going
    to focus on partnering with the private sector. We know that is
    really important to increase our workforce preparedness. How
    can the Department expand its outreach to encourage more of the
    private sector in the advanced manufacturing process?
        Dr. Johnson. I think that is a great question, Senator, and
    I think focusing on hubs areas, geographies where the private
    sector has the potential, where you can--you have the labor
    force, you have the potential labor force, including with your
    admirable STEM initiative.
        Thinking about where housing can also be built, Senator
    Rosen. I think too often there is great opportunities in places
    where the communities don't want to build housing, so the
    housing just becomes super expensive.
        Then you have to pay a very high wage, or nobody is going
    to move there. So, I think looking for those geographic
    partnerships is something that has not previously been
    sufficiently emphasized, Senator.
        Senator Rosen. Well, this isn't for defense, but we are
    becoming a new tech hub in Reno, and this is the kind of thing
    that we are talking about happening in Nevada. But I am going
    to move on to Dr. Lockwood quickly because I want to talk about
    the impact of budget delays.
        I know the impact of failure to pass a full year funding
    deal, including for the DOD, it constrains are long term
    strategic plans. It has negative impacts for all of our prime
    contractors, for our subcontractors. They can't prepare and
    plan, and when you can't plan, you can't have the workforce.
        If you lose the talent workforce and they go somewhere else
    for a job, they may not come back, and it takes a long time to
    build a qualified welder for a submarine and all of those kinds
    of things.
        So, if we are going to build those resilient supply chains
    for our defense industrial base, Congress must pass regular
    appropriations in a timely manner. So, Dr. Lockwood, can you
    talk to us about the impact of the Federal funding, the
    uncertainty all across our defense industrial base, what that
    really means for our safety and security across the world?
        Dr. Lockwood. Absolutely. I do view uncertainty in the
    timing of Federal budgets to have a very negative impact on our
    total readiness posture.
        In addition, I would say that further dampens interest in
    Federal employment by creating the perception of turmoil or an
    unnecessary politicization of these critical roles that we need
    filled.
        I will also add that particularly for young people who are
    just entering their careers, extremely long delays in time to
    hire often become untenable. They have loans looming. They need
    to start work immediately.
        They can't afford to wait 6, 12 months to be certain of
    having a job. So, this is something that we can address. Thank
    you.
        Senator Rosen. Thank you, Mr. Chairman. I yield back.
        Chairman Reed. Thank you very much, Senator Rosen. Senator
    Sullivan, please.
        Senator Sullivan. Thank you, Mr. Chairman, and I appreciate
    the witnesses today on a really, really important topic.
        By the way, I agree 100 percent with Senator Kaine on his
    Jobs Act. I think it is something--and Senator Tuberville, on
    what we need to do, but I think it is a really good opportunity
    and we should keep moving forward on that.
        As you know, when we are looking at our strategic
    competition, one of the things that the dictators in Beijing,
    Xi Jinping and others, are really scared about is our submarine
    force. It is an asymmetric advantage that is still very
    significant, and they are terrified by it, which is why we
    should be building a lot more submarines.
        I met with the CNO [Chief Naval Officer] of the Navy
    yesterday and just talked about how there is so much bipartisan
    interest here in the Congress to increase our capacity to build
    ships and subs. My staff have done some research for me.
        We have the capacity. We have done it before. A lot of
    people don't know, our country had a 2-year head start before
    Pearl Harbor on increasing our ship capacity. So, in 1937, we
    had 335 ships in our fleet.
        By Pearl Harbor, December 7th, 1941, we had 790, okay. So,
    we doubled the size of the fleet before we got into a war, and
    it is a dangerous time right now. Very analogous to the 1930s,
    in my view, and a lot of what happened was Congress acted. Four
    laws in particular, the Vision Trammel Act, the Second Vision
    Trammel Act, the Naval Expansion Act of 1940, and the Two Ocean
    Navy Act of 1940.
        I want to start with you, Dr. Lockwood. What are the big
    ideas, big ideas--we have done this before, right. We don't
    want to start building our industrial base out once the bullets
    start flying. The time to do it is now, and we have done this
    before. We have the capacity to do it as a nation before.
        What are the big ideas that you think we need, particularly
    as it relates to subs. The estimates are we need over 100,000
    new trained workers. But I think the bipartisan nature of what
    is needed--we would be open to anything, even a new shipyard.
    What are the big ideas? I want to hear from you very briefly,
    and then the others, if you can actually respond in a request
    for the record.
        Dr. Johnson, I have a quick question for you on what is
    happening in Silicon Valley. But Dr. Lockwood, the biggest
    thought pieces you can do here, quickly.
        Dr. Lockwood. Thank you. Let me quickly say that the
    submarine force is near and dear to my heart, as the wife of a
    current serving commander of a fast attack boat for--deployed
    in Guam, the USS Asheville.
        Senator Sullivan. Well, Xi Jinping is scared to death of
    what your husband has----
        Dr. Lockwood. Indeed. I believe that to be a true fact,
    sir.
        Senator Sullivan. We need a lot more of them.
        Dr. Lockwood. Yes. I do believe--the analysis I have seen
    has indicated there is simply no way that this country can meet
    its own needs and also support its AUKUS commitments without an
    additional shipyard.
        Senator Sullivan. So, you agree with the idea of an
    additional shipyard?
        Dr. Lockwood. I do.
        Senator Sullivan. A public shipyard?
        Dr. Lockwood. I think we need all available options, sir.
        Senator Sullivan. Okay.
        Dr. Lockwood. I would be open to performing additional
    analysis to try and determine exactly what format would be most
    effective. I will note that in WWII, tanks rolled off the floor
    of the Ford plant, and they are damn proud of it, and they
    should be.
        Senator Sullivan. Good. Well, if you can get back to us
    with more details on that idea and other big think ideas on
    this. The way the Congress acted prior to WWII, very
    impressive. Dr. Johnson, real quick, I agree with Senator
    Tuberville that there is still very much patriotism in our
    country that wants to help.
        One of the ironic areas that I have kept a close eye on
    over the last several years is the return of patriotism in
    Silicon Valley. Ten years ago, they didn't have it, right. They
    were much more interested working with the goddamn Chinese
    communist than American military industrial capabilities.
        That is changing. It is a great opportunity for us as a
    country. It is a strategic advantage the Chinese and Russians
    don't have. But the Pentagon's culture in rules don't allow us
    to take advantage of it. You have heard this phrase, the valley
    of death, right.
        You have a--high tech companies got great capacity, can't
    break into the Pentagon system, and then the company goes out
    of business because it takes 5 years to get the Pentagon
    interested.
        What is your thoughts on what we can do to enhance the
    ability of our industrial capacity to take advantage of this
    new interest with some of our high tech companies who want to
    help us, want to help America be strong, and not fund the
    Chinese, like so many of them used to do, which was very
    pathetic and un-American in my view.
        Dr. Johnson. Yes, Senator. I think you are spot on with
    that overall characterization. I think you need some carrots.
    It could be prizes. It could be prestige. Things that pull
    those tech companies toward the problems that you want them to
    solve.
        Because if you leave them to their own devices, we know
    what they are going to do. It is more social media, or it is
    more digital ads. I don't think that particularly helps
    national defense at all.
        So, I think defining--using DARPA [Defense Advanced
    Research Projects Agency] type approach and defining, this is
    the problem to be solved, which could be a direct military
    problem, or it could be health care related to the military. It
    could be transitioning military personnel to civilian. It could
    be education more broadly.
        There is a lot of really important goals that matter a lot
    to you on this Committee, and Silicon Valley pays zero, almost
    zero attention to them. I will also, by the way, Senator, send
    you some enhanced--some reinforced--reinforcement for your
    talking points on the role of submarines in WWII, the role of
    U.S. innovation on naval aircraft prior to WWII, which was
    actually huge.
        The fact that this country was producing roughly one
    aircraft carrier per month at its peak in WWII because we were
    able to move so much of our production when it was needed but
    not prematurely. So, you are right about the base that was
    built. Anyway, Senator, I will followup with you directly on
    that.
        Senator Sullivan. Thank you. Thank you, Mr. Chairman.
        Chairman Reed. Thank you, Senator Sullivan. Senator Warren,
    please.
        Senator Warren. Thank you, Mr. Chairman, and thank you for
    holding this hearing on workforce dynamics. You know, the
    strong economic recovery under President Biden is a win for the
    United States.
        We have 14.8 million jobs created. Fastest growth in real
    inflation adjusted wages of any recovery in more than half a
    century. But there is still work to do. We need to invest in
    our defense manufacturing workforce and make sure that we have
    the workers that are needed to meet our national security
    needs.
        One tool that I would like us to talk about, for making
    sure that the labor supply keeps up with the labor demand, is
    providing the quality, affordable childcare that workers need
    so they can actually go to work. You know, we do this to some
    degree already, including with the DOD's excellent childcare
    program.
        But while we could invest a whole lot more for our military
    and our civilian families, over half of Americans right now
    live in childcare deserts. That means children outnumber the
    childcare slots by three to one.
        That means millions of families across the country that
    need childcare and either can't find it, or if they can find
    it, they can't afford it. Professor Johnson, you are an
    economist at MIT, former Chief Economist at the IMF
    [International Monetary Fund].
        So, let's do some econ 101 and drill down on the root of
    this problem. How does insufficient supply of childcare affect
    labor supply, including the defense workforce?
        Senator Warren. The lack of adequate childcare obviously
    limits the ability of women to participate in the workforce. Of
    course, many of those aircraft carriers and submarines that
    were built in WWII were built by women.
        Senator Warren. Yes. So not enough childcare means not
    enough workers to power our economy in the defense industry and
    basically everywhere else. But let's go down one more level on
    this. Professor Johnson, help us understand the bottleneck in
    childcare. If we want to increase the supply of childcare, what
    is the key input that we need more of?
        Dr. Johnson. You need more people willing to work in the
    childcare, private sector.
        Senator Warren. Okay, so we need more childcare workers to
    help unlock this labor supply across the board. How can we do
    that? Why don't we just pay childcare workers more money?
        Dr. Johnson. Well, that is the best idea, and that is what
    would work. But just emphasize, these childcare centers, for
    the most part, operate on razor thin margins. So, there's not
    much else to squeeze.
        The money that's paid by parents goes to the childcare
    workers. But the parents can't afford to pay the childcare
    workers enough to pull people into that childcare work. So, the
    market, I am afraid Senator Warren, is failing us here.
        Senator Warren. Okay, so the market fails, but DOD has
    stepped up. DOD child development centers capped fees at 7
    percent of family income.
        Then the Federal Government picks up the rest of the cost.
    It is a worthwhile investment in military readiness. But DOD
    has not updated its pay scale for childcare workers for 30
    years now, and unsurprisingly, DOD is struggling to attract the
    workers it needs. Meanwhile, Federal investments in civilian
    childcare fell off a cliff last year when the pandemic funding
    ended, and that exacerbated childcare shortages.
        So, Professor Johnson, if the Federal Government stepped up
    its investments in childcare, particularly to increase
    childcare worker pay, what impact would that have on the
    defense workforce?
        Dr. Johnson. I think it would strengthen the defense
    workforce. More women would be able to go to work. You would
    also have more opportunity for women to build the skills that
    we have all been talking about, emphasizing across all range of
    skills earlier in their careers.
        So instead of having to take some years out of the labor
    force, they would continue to be engaged, and that is really
    important for having supervisory talent, for example, when you
    reach a certain age.
        Senator Warren. I take it, Mr. Taylor, do you agree with
    this?
        Mr. Taylor. Not only do I agree, it is an issue that you
    are increasingly seeing on the private sector side.
    Corporations are underwriting it, and we don't have a 50 year
    old lag in terms of compensation. So many, increasingly
    organizations are building their own childcare facilities and
    fully subsidizing them to draw talent in and to retain that
    talent.
        The other thing, though, Senator Warren that I think is
    really important is increasingly we speak about, and we are
    seeing this in all of our data, it is dependent care. So more
    than just childcare.
        Many of us find ourselves in the middle of this sandwich
    generation, where you have to decide not to go take a job
    because no one is there to provide for your elderly parents or
    grandparents. So, we are seeing a big theme in all of our data
    that says not only childcare, but broadly dependent care.
        Senator Warren. So, I think this is terrific. You know, I
    am all for building a strong defense manufacturing workforce,
    the topic we are here today to discuss.
        But let's treat it like the supply chain issue that it is,
    and address root causes like underinvestment in childcare and
    dependent care, and childcare workers.
        I am glad to be working with Members of this Committee to
    invest in the DOD's childcare program. I want to call out my
    partner in this, Senator Scott. We are working on this in our
    subcommittee, and we are going to keep fighting for affordable
    childcare for our defense workforce and for all Americans.
    Thank you, Mr. Chairman.
        Chairman Reed. Thank you, Senator Warren. Senator Scott,
    please.
        Senator Scott. I want to thank Senator Warren. We have had
    a good subcommittee on Personnel, and we are we are having one
    this afternoon. It is going to talk about injuries from, I
    guess, more noise--yes, it is going to be--it will be
    interesting because we have got to deal with this. So here is
    what I don't understand.
        Do you know how many full time jobs have been added in the
    country in the last 9 months or last 3 months? Anybody know? We
    have lost 1.5 million. We are adding part time jobs. So, you
    are trying to figure out, why is this happening? I became
    Governor at the end of a big downturn. I became Governor in
    January 2011, and I went to a National Guard. They were coming
    back from overseas, and they had 30 percent unemployment. Then
    I ran my whole campaign on getting people jobs. I said, I would
    get 700,000 jobs. So, I tried to figure out how to get that
    done.
        So, we just tried to figure out. I had to go recruit
    companies every day to try to get them to come to Florida,
    because people were moving out of Florida back in 2010 when I
    got elected. So, we did a variety of things. First off, we--as
    the Federal Government, we give a lot of money to our states
    to--for workforce boards.
        You know how many people and they were filling jobs for?
    Nobody had any idea. There was no measurement. So, the first
    thing is we required them to give us a daily report. It was
    over--I think it was over $250 million a year that we were
    spending of Federal money. That is number one.
        Number two is we--I am a veteran, and I think it is
    ridiculous that people come back from overseas and don't have a
    job. I remember I was getting out of the--I didn't go to
    Vietnam, but I served during Vietnam era, and when Vietnam
    ended, it was impossible to get a job in this country.
        All my friends here now couldn't find a job. So, we sort
    of--we started getting monthly reports on that and it took
    about a year. We did a variety of programs. We did a lot of
    workforce meetings and things like that. It took about a year,
    but actually our unemployment went--was lower for our veterans
    than it was for nonveterans. It was way higher for veterans
    when I started. I think it was almost 15 percent or something
    like that when I started. Unemployment for the state was over
    10.
        Then what we started doing is we, when I became Governor,
    all they wanted to do is say, oh, if you don't go to college,
    you know, man, you know, you must not be very smart. You are
    not going to have any opportunity, which is complete BS.
        Most of my family didn't go to college. I am the exception
    of my brothers and sisters, my nieces and nephews, and they are
    never unemployed. They always have a job. The other thing we
    did is we waved a whole bunch of things for our veterans. So,
    there will be--here is my first questions.
        So, we have all these rules for schools, and we have state
    schools, we have not for profits, we have for profits--we have
    all this stuff. Should there be different standards for
    everybody? I mean, when you guys hire somebody, you say, man, I
    think they ought to be a different standard for how they get
    Federal money or Pell Grants or any of this stuff. Should there
    be? Should it be treated differently just because of their--how
    they are organized?
        Does anybody have a view on that? Because I mean, I could
    give you an example, if you are a university, you have no
    obligation to help people get a job. I changed the formula in
    Florida, and we became number one in higher education because I
    said, I remember I am a kid that had no money, went to school
    and did junior college that cost only $200 bucks a semester.
    University was expensive at $255.
        They said, we are going to give our universities money
    based on three things, do you get a job? How much money you
    make? What is the cost to get a degree? It is actually how
    people got degrees and we kept tuition low. So, by the time I
    left, we were number one in higher education.
        Now, University of Florida, according to a lot of studies
    like Wall Street Journal, is the number one public university
    in the country because we paid for our result. So, what do you
    guys think about having the same standards for--if we have
    standards for proprietary schools that they have to help people
    get a job or they don't get money. Same standards for all
    schools.
        Dr. Johnson. So, Senator, I work for an engineering school
    that spends a lot of time trying to get its graduates jobs, and
    I fully agree that is a very important emphasis. I also point
    to Orlando. It is, to emphasize, I believe it is one of the
    leading examples of public private partnerships generating
    skills related to defense industrial base, and also generating
    huge amount of jobs.
        Do I think that one size--we should have one size fits all
    for even higher education, even the university sector? I think
    some diversity and competition is good. I think at MIT does
    very well in that competition. I think encouraging others to do
    exactly what you are saying is a good idea. Would I require it?
    I think in this country, such requirements are hard to make
    work and often get a backlash.
        But I think where you are pushing, Senator, that education
    of all kinds should be linked to finding jobs, and keeping
    people in jobs, and measuring outcomes and making that data
    available to everyone, I think that is tremendously important,
    Senator.
        Senator Scott. Can I ask one question real quick? So, the
    other thing I did was if you came down, if you were Harris, and
    you were going to expand or let's say Northrop Grumman, they
    said they are going to add--they were removing the stealth
    bomber, so I tried to get them to do more of in Florida.
        So, they said we are going to need x number of jobs. So, we
    guaranteed--I guaranteed, because I paid for it as state
    budget, I said, we are going to graduate these peoples with
    these degrees. Some of them were university, some more
    technical schools and stuff like that. So, do you think that
    that is what we ought to be doing with our education dollars?
        Dr. Johnson. I think workforce planning, Senator, of
    exactly the kind you are talking about is very good. I think we
    you need to be careful about over subsidizing the private
    sector with things they would otherwise have done.
        But if it is a net increase to the defense industrial base
    and on a Federal, State partnership basis, I absolutely agree
    that making sure people have the skills and are incentivized to
    stay in Florida, which is also what obviously happened, I think
    that is really important for the development of the defense
    industrial base.
        Senator Scott. Thanks.
        Chairman Reed. Thank you, Senator Scott. Senator Hirono,
    please.
        Senator Hirono. Thank you, Mr. Chairman. We know that there
    is a workforce shortage in just about every business, every
    industry, from restaurants to the defense industry--this is for
    Mr. Taylor.
        The DOD has established the Defense Civilian Training Corps
    (DCTC) to attract top talent into the defense ecosystem and
    specifically relating to acquisitions. So how is this Training
    Corp doing in terms of attracting the kind of people that the
    defense industry needs?
        Mr. Taylor. Thank you for the question. I think Dr.
    Lockwood would be more familiar with that particular DCTC
    program.
        Dr. Lockwood. Thank you. I will note that there are
    actually currently several STEM employment, workforce
    coordination programs going on in the Department of Defense,
    and certainly that one is among them.
        I believe that these programs would be far more effective
    if there was a greater degree of coordination among them. For
    example, sharing of hiring objectives and even of candidates.
    Likewise, to the other Senator's point earlier, providing
    metrics for such programs would be very important.
        Senator Hirono. Well, why isn't there coordination? Why
    aren't there metrics to measure the effectiveness of these
    programs? Whose responsibility is it to ensure those aspects
    are addressed?
        Dr. Lockwood. Thank you for the question. As to the
    particular statutory authority, I will take that for the
    record. I will note that a mandate to coordinate among
    programs, to share best practices, to ensure that these
    programs are appropriately targeted to market and are
    adequately innovating would be very effective, and I believe
    that is something that the Congress, and the Senate in
    particular, can draw greater attention to.
        Senator Hirono. Okay. You can help us, my staff to better
    focus on some of those kinds of changes that we need to change.
        Mr. Taylor, I was particularly gratified that you mentioned
    that if we want people to have STEM experiences in education,
    that it is really something that we should look at from pre-K
    to 12, and that, we also should pay attention to diversity. So,
    yes, Senator Rosen has a bill that would encourage, I think,
    more emphasis on these kinds of programs.
        I have a bill that would focus on women and minorities in
    STEM education. What ideas do you have that would focus us on
    the need for paying attention to K-12 and onward if we want
    more people to--being STEM educated?
        Mr. Taylor. Thank you for that question. I had the good
    fortune of once running what was called the Thurgood Marshall
    College Fund, which represents the country's publicly supported
    historically black colleges and universities, 47 of them. In
    fact, Mr. Gates here was my colleague.
        We specifically created a program where we went into three
    markets that were largely populated with historically
    underrepresented people. We took kids who were between the ages
    of, and I want to get the numbers right, 9 and 13, with a
    specific focus on taking those kids in afterschool programs
    that were STEM oriented to expose those children and their
    families to STEM careers, but more importantly, the importance
    of taking certain types of curriculum early on so that by the
    time--if you wanted to go to college to be an engineer, there
    are things you needed to do in high school, courses you had to
    take, et cetera.
        So, we mapped them. We gave them--oftentimes their families
    did not have--they didn't have parents who were college
    graduates, or if they were college graduates, they weren't STEM
    college graduates.
        We literally took those kids, and we followed them through
    10th grade, preparing them up to and including taking the SAT,
    ACT, et cetera. So those sorts of programs helped us yield a
    significantly higher number of future STEM workers from those
    communities than we would have without them.
        Senator Hirono. So, you are saying that we have to be very
    intentional about how we are going about it, and that you have
    some longitudinal data that shows that when you are this focus,
    that you will have people going into the STEM areas. Because,
    for example, women and minority people drop out of the STEM
    pipeline at every step of the way because especially for women,
    for example, there are not very many models for women in STEM.
        In terms of workforce training, we are building a drydock
    at Pearl Harbor Shipyard. It is the biggest infrastructure
    project that the DOD is engaged in. It is $3.5 billion. I hope
    that it will come in at that price.
        But they had a hard time finding workers for this project.
    Some 2,000 plus workers will be needed to build this drydock
    over the next 2 years or so, and in the meantime, we have an
    apprenticeship program for Pearl Harbor Naval Shipyard, one of
    four public shipyards that we have.
        They had 2,500 applicants for 152 positions. So obviously,
    there are a lot of people who want to get this kind of training
    so they can be in the pipeline to work in our shipyards, but we
    are not creating enough spaces for them. Do any of you have any
    ideas of what we can do to accommodate these young people who
    want to be trained in our workforce? Anyone?
        Dr. Lockwood. Yes. It has already been mentioned by a few
    of my colleagues here, but school to work training pipelines
    and close public, private partnerships with educational
    institutions are very effective at establishing firm pipelines
    for workers.
        We have demonstrated this many times in the private sector,
    particularly in the auto industry, in some of the states
    represented here, reinforcing the training at community
    colleges and trade schools, and linking those skilled
    professions directly into where the jobs are needed.
        Dr. Johnson. Senator, apprenticeships powered by AI, I
    think that is where the future is, and that is what the private
    sector is not going to do enough, without your prompting.
        Senator Hirono. Thank you, Mr. Chairman.
        Chairman Reed. Thank you very much, Senate Hirono. Senator
    Mullin, please.
        Senator Mullin. Thank you, Mr. Chairman, and thank you for
    the witnesses who are here. I just find it, the irony of us
    talking about what we need to do to get a workforce going and,
    you know, from a guy that is owned multiple trade companies--I
    mean, we incentivize in Congress.
        We incentivize people to stay home. They can work the
    system. I mean, here we are legalizing drugs, marijuana for
    medical purposes, and we are incentivizing kids to get a
    medical card to smoke marijuana in high school at 18 years old,
    and they can't pass a drug test to get hired by DOD to begin
    with. I mean, we do it to ourselves here in Congress. If we
    want to really get our workforce going, then we need to
    incentivize people to work, not have an excuse to stay home.
        If we have a program that gives people a helping hand, we
    won't give them a helping hand to push them into the workforce
    either. Like get a helping hand, stay on a platform, and then
    you disincentivize them to build a step up. I have had hundreds
    of employees that refused a raise over the years that I have
    been self-employed because they can't afford to take the raise,
    because if they take this raise to $18 an hour, they lose these
    benefits.
        If you can't take a raise $18 an hour and do that job, you
    are never going to get the job that can do $30 an hour because
    the ladder stops at that point. It is our fault, and so, if we
    in Congress want to get serious about the workforce, then we
    need to figure out how we incentivize people to get into the
    workforce.
        That means we need to push them into the workforce, not
    allow them to become dependents of the State. That is exactly
    what we have. We have three generations now of people that are
    dependent on the State. But that is me ranting. I will stop and
    I will move on to ask you my questions.
        Dr. Lockwood, I would like to start with you. As the
    largest maintenance repair and overhaul facility in the world,
    which is at Tinker Air Force Base, we have a huge number of
    civilian employees, around 16,000.
        Most of these employees are wage grade maintainers and many
    have decades of experience. We have received reports from--or
    reports that the DLA, which is the Defense Logistics Agency, is
    increasingly relying on contractors to do these kinds of jobs
    at other sites. Are you familiar with this?
        Dr. Lockwood. Yes.
        Senator Mullin. Okay. With a followup question on that,
    then, when using contractors instead of Government employees,
    what are the vetting requirements for bringing them in on our
    bases?
        Dr. Lockwood. It is my understanding that like other
    workers on military facilities, that they must pass a
    background investigation.
        Senator Mullin. Or are we concerned about moving that
    direction with contractors instead of having actual--our own
    contractors or our own employees working for the Department of
    Defense in a civilian capacity, relying more on that?
        Dr. Lockwood. I will note that the use of contractors in
    general is very costly to the Department. In many cases, the
    Department is paying a heavy premium rate for the use of
    contractors.
        So, rather than necessarily take the expedient route of
    simply contracting out for that additional labor support, I
    would encourage instead the Department to correctly align
    incentives for the management of its own civilian personnel.
        Senator Mullin. Because we are paying a much higher price
    to have outside contractors, and so, if we can pay that wage
    for outside contractors. What is it that is keeping our
    Government, us, from upping the wages of individuals?
        Because we have--we are literally losing employee
    contractors at Tinker because they are getting picked off by
    outside industries. Just give them a $10,000 sign on bonus, and
    then we are turning back around and hiring them as contractors
    to come back in and work on the base for an exuberant amount
    more.
        Dr. Lockwood. You are absolutely correct.
        Senator Mullin. So, what do we need to do to change that
    here in Congress?
        Dr. Lockwood. Right. I will note that currently the
    Department of Defense does not have the salary flexibilities
    that it needs in order to pay workers a going wage.
        It is bound to the Federal wage schedule, which has been
    superseded several times by statute, creating great distortions
    in that wage that is actually offered to workers on the ground.
    Furthermore, the structures that surround civilian hiring are
    cumbersome, and it is very difficult for civilian employees of
    the Department, civilian managers to actually manage that
    workforce effectively.
        Dealing with contractors is far simpler. If you need to
    dismiss someone for underperformance, you can do that
    immediately. You don't need to justify it. You don't need to go
    through a year's worth of write ups and large paper trail, and
    your job will not be in any way threatened by spurious
    complaints to the Inspector General.
        So, as a result of this, the use of contractors is very
    expedient, but incredibly costly to the taxpayer.
        Senator Mullin. But--I agree with that. We also need to
    talk about direct hiring, which we have done this in McAllister
    Ammunition Plant, which Mr. Taylor, I was going to ask you
    about that because onboarding also takes forever to bring them
    on.
        People aren't going to wait 6 months for a job to on board
    on going through the process, so direct hiring is important.
    But going back to this, and I will wrap it up real quick, Mr.
    Chairman, if we are--we are not saving us a dollar by keeping
    our wages down, it is costing us because we are all we are
    doing is gaming a system by going out and hiring contractors
    who come in and do the same job because it is faster, but
    actually it is because we need the workforce.
        So, we, here in Congress, really need to start looking at
    the wages that we are paying and get on a scale to what it is
    today. I mean, look at how much wages have increased in the
    last 4 years.
        I mean, it is astronomically, right? We haven't actually
    adjusted our pay wage at a serious look to keep up with
    inflation, especially with inflation being at 17 percent. We
    haven't actually adjust that in over 2 decades almost. Is that
    correct?
        Dr. Lockwood. That is absolutely correct. The Federal wage
    system is an antiquated relic of the 1970s, where we set wages
    in specific bends, binding occupations together that no longer
    bear any relation to one another.
        Furthermore, we apply this antiquated methodology to an
    unrepresentative set of data that is currently collected by the
    Department of Defense. Completely redundant, in my personal
    opinion, to that already collected by the Bureau of Labor
    Statistics, which conducts a much larger and comprehensive
    survey of all American professions.
        Senator Mullin. Thank you. Thank you, Mr. Chairman, and
    sorry about going over time.
        Chairman Reed. Thank you very much, Senator Mullin. Senator
    Shaheen, please.
        Senator Shaheen. Thank you, Mr. Chairman, and thank you to
    each of our witnesses for being here today. I think most of us
    would agree that the Federal wage system is broken. It gets
    hung up on political ideology differences and trying to fix it,
    and that is the problem.
        But I don't know, I think maybe it was you, Mr. Taylor, who
    said that we have, my recollection was 9 million job openings,
    but only 6.5 million workers was--isn't one of the challenges
    that we are facing, the demographics of this country?
        That we are not producing--because of our birthright, we
    don't have the number of people that we need to fill the jobs
    that are being created?
        Mr. Taylor. Undoubtedly, and I mentioned that, that we have
    a birthrate problem. We have had so for the last 2 decades.
    What comes as a surprise to people is you are talking about a
    post-COVID impact.
        During 2020 and 2021, the birth rate dropped 4 percent. We
    saw a significant--so it was already on its way down and then
    it dropped, and for good reason. No one wanted to go to a
    hospital during that period of time.
        Senator Shaheen. On top of that, we have had the most
    restrictive immigration, legal immigration rates, in my
    lifetime in the last 6 years or so. So, that also exacerbates
    the problem. If we can fix our broken immigration system, we
    would do much better in terms of having the workforce that we
    need.
        But can you--one of the things, and I understand Senator
    Warren talked about how we were able to out produce our
    adversaries during WWII, and one of the ways was by getting
    women into the workforce. How can the defense industrial base
    better leverage women's participation? I don't know who might
    like to answer that.
        Dr. Johnson. Well, the discussion with Senator Warren,
    which I think is exactly on this target, Senator Shaheen, was
    about childcare, and women not being able to participate in the
    workforce. Both keeping the numbers down, but also meaning that
    at an important developmental part of their career, they are
    not in the workforce and not acquiring the skills, and
    therefore they can't move up later, including to supervisory
    positions.
        So, you are missing people in a static sense, but also in a
    dynamic sense.
        Senator Shaheen. Childcare is clearly an issue. It is
    something that I appreciate having had three children and
    having a challenge with childcare for the 30 years that they
    were at home.
        But I think we have got a bigger problem in that, as I have
    visited schools, that young girls are not as engaged in the
    STEM subjects as young boys are. So, for robotics competitions,
    for example, girls are much--less likely to participate than
    young boys. Are there ways that we can encourage girls to think
    about those subjects that we are not already doing? Dr.
    Lockwood.
        Dr. Lockwood. Thank you for the question. I have a young
    daughter at home, and she told me when she was 3 that when she
    grows up, she wants to be a doctor and a mommy and a scientist,
    and I want that to be possible for her, so I determined I
    certainly was not going to quit.
        To double down on the childcare issue, I do believe this is
    a critical thing, but to your point, it is really important
    that the child can envision herself doing the job. Children are
    not going to study.
        They are not going to invest in things that they think are
    for other people. So, the broader we can make opportunities to
    engage in after school activities, to put the robot--to put the
    drone remote in the hands of all the children is a good thing.
        I will also note that among the developed economies, the
    United States has among the shortest school day. This creates
    an incredible burden for all working families. There are in
    many areas good before and after school----
        Senator Shaheen. Yes, you don't have to explain that to me.
        Dr. Lockwood. Okay.
        [Laughter.]
        Senator Shaheen. I understand that.
        Dr. Lockwood. So, yes.
        Senator Shaheen. To follow on Senator Hirono's question
    about the submarine industrial base, excuse me, over the next
    10 years, the submarine industrial base is going to need to
    hire nearly 100,000 trained workers at both primary
    construction yards and 17,000 people at vendors to support the
    supply chain.
        You talked a little bit about ways that we could encourage
    apprenticeships and other ways we could encourage workers to
    join in the submarine industry. Are there ways that suppliers
    can also improve the labor environment for skilled workers?
        Dr. Johnson. Well, I think it is going to take all of them.
    That is really interesting. This is about a human capital
    strategy.
        We can decide that we are going to opening a number of
    shipyards or whatever we do, but ultimately, your point, well-
    crafted H.R. strategy, where you say we need 100,000 people at
    this period of time means we will get some percentage of people
    from this sector, the supplier community, the Government, et
    cetera.
        This requires a comprehensive strategic overview and plan.
    What we have seen is there are no shortage of programs within
    the Federal Government, but they are not orchestrated, and they
    are not specifically identified, time limited, budget limited,
    et cetera, to get the results.
        In the private sector, if I said I was going to need
    100,000 employees, as has often been in the companies where I
    have been, fortune 500 companies, CHRO, you are told 5 years
    from now we are going to need this many of these types of
    employees in these geographic locales, and we build a strategy
    around it.
        That is HR at its best and it can be done, but very
    intentionally.
        Senator Shaheen. The Portsmouth Naval Shipyard, which is
    one of those four public shipyards which shares the border
    between New Hampshire and Maine, has taken an approach that
    integrates its workforce into decisionmaking, and that has
    really kept the workers there. It is really focused on working
    with management on good labor practices. So, I would agree,
    that is a great way to better keep people in the workforce.
    Thank you, Mr. Chairman.
        Chairman Reed. Thank you, Senator Shahee. Senator Budd,
    please.
        Senator Budd. Thank you, Chairman. I thank the witnesses
    for being here today. As Senator Kaine mentioned a few moments
    ago, expanding the Pell Grant for short term skills based
    education, it is one of the quickest in the best ways to combat
    these labor shortages that we are talking about today and the
    ones we have seen around the country.
        I think that my proposal, the Pell Act, which the House is
    actually taking up this week, is one of the best ways to
    approach expanding this program. So, my bill allows a variety
    of educational institutions to participate in the grant program
    with guardrails that empower institutions to produce high
    demand workers for high paying jobs. That is exactly what we
    need to buildup our defense industrial base.
        Dr. Lockwood, the need for a strong pipeline, switching
    gears here to cyber--cyber workers. That need has grown
    exponentially, given the current threat environment that we are
    in. So, a two part question, what can the DOD learn from the
    private sector on recruiting and also retaining cyber talent,
    and simultaneously, how can the DOD better compete against the
    private sector for that talent pool?
        Dr. Lockwood. Thank you for the question. I think one of
    the key lessons of the private sector is that a 4-year degree
    is not necessary. We need to enable our young people to become
    productive workers as soon as possible.
        Dr. Johnson has earlier mentioned AI enabled training. I
    will just offer that DOD already has experience with AI enabled
    training, and particularly in the IT field, where the Navy some
    years ago piloted a program to train its shipboard computer
    technicians using an AI assisted digital tutor.
        This was an incredibly effective training methodology and
    quickly was brought to bear to skill up, in this case, an
    enlisted force, individuals entering without a college
    education, and quickly make them wildly productive.
        Not only were they very quickly trained, but the quality of
    their training was significantly superior to those who had gone
    through the traditional schooling. Sir, I am sorry, could you
    remind me of your second question?
        Senator Budd. How can the DOD better compete against the
    private sector for that talent pool? Because they are going to
    be using some of these same things that you are mentioning. So
    how can we differentiate DOD?
        Dr. Lockwood. Yes. Thank you. I think one thing that the
    Department can offer that the private sector cannot is purpose
    that is driven by something other than a profit motivation. To
    some extent, the Department will not always be able to compete
    on wages. It can compete on purpose.
        I would encourage you to develop a revolving door mindset
    to make it easy for workers to flow in and out of public
    service and private employment. Right now, it is more of a one
    way exit than a revolving door, so making it easy to recapture
    that talent, to give reentering either servicemembers or
    civilian workers time to recover their career track within the
    DOD apparatus would be, I believe, very effective. Thank you.
        Senator Budd. Thank you. So, you know, every high school or
    college here with a STEM major, they are aware of all these
    opportunities with Google, Amazon, and other big tech firms.
        Do you think the Pentagon can improve its advertising or
    public education on severe--excuse me, on civilian career
    opportunities, and what recommendations, if any, would you have
    that would allow us to further increase the visibility of DOD
    opportunities?
        Dr. Lockwood. Thank you for the question. During the time
    of COVID, DOD and even its industrial partners' footprint in
    public schools was significantly curtailed and it has not
    recovered. I think face time is very important with our young
    people and the public schools provide an important avenue for
    that.
        Senator Budd. Critical to the defense industrial base and
    the DOD civilian workforce is not only hiring talent, but
    retaining talent, as you know. Are you aware of any barriers in
    OPM's [Office of Personnel Management] promotion process which
    could inhibit retention within the DOD civilian workforce? Dr.
    Lockwood.
        Dr. Lockwood. Yes. Thank you for the question. I will note
    that the OPM process for nearly all personnel actions is quite
    bureaucratic, and it takes very long time. In many cases also
    the position descriptions are outdated and perhaps not well
    honed for the actual work that needs to be done. This would
    inhibit timely promotion and advancement if candidates are
    being screened by OPM against outmoded job descriptions.
        Senator Budd. One of the things of my colleagues have
    mentioned is the shipbuilding challenges, undersea submarine
    building challenges coming up.
        You know, as the Navy works to expand the size of its
    fleet, so what incentives are particular to that would you
    suggest for the Department of Defense and the manufacturing
    workforce in this particular area related to shipbuilding and
    undersea capabilities? Any of you.
        Dr. Lockwood. We need to draw more workers into this field.
    So, in terms of incentive programs, I think we need to fix the
    broken Federal wage grade system and, compensate for these high
    demand skills.
        There needs to be a very visible public campaign to
    advertise these availabilities and to really put ourselves out
    there and say this is critical for the national defense, and
    let's all get after it.
        Senator Budd. Thank you.
        Mr. Taylor. Senator Budd, just very quickly to that point,
    we actually went to the civilian workforce and asked the
    question. This is broadly. Only 46 percent of working American,
    civilians have even considered the Department of Defense as
    employer.
        When we asked them specifically why, the primary reason
    that was cited was a lack of knowledge about the DOD's culture
    and their employer brand. So, in addition to raising salaries
    and providing all sorts of benefits and talking about it, we
    need to sell that this is an actual opportunity. People just
    don't think of doing it. They think about, go to the military
    or not.
        Senator Budd. Very helpful. Thank you all.
        Chairman Reed. Thank you, Senator Budd. Senator Kelly,
    please.
        Senator Kelly. Thank you, Mr. Chairman, and thank you to
    our witnesses for being here today. Dr. Johnson, I appreciated
    the focus of your testimony on the CHIPS and Science Act, which
    I helped negotiate, and I particularly appreciated your focus
    on the science and economic development investment in the
    science portion of that bill.
        As you noted, while we were able to provide advanced
    appropriations for the Critical CHIPS Act programs, there are
    many other new programs created that are going to rely on an
    annual appropriations.
        Now, I come from 15 years at the space program where we see
    this firsthand, but Dr. Johnson, can you expand upon your
    testimony and explain how investments in basic science and
    innovation can yield economic growth, even if we can't always
    foresee exactly how those investments will pay off?
        Dr. Johnson. Yes, Senator. So, as you know, this was a big
    revelation to us actually from the 1940s. It came out of the
    war effort accelerated by Sputnik and then the creation of the
    space program.
        What we have come to understand, and now there is a lot of
    data on this, which is summarized in my testimony. We have a
    whole book on this topic. Is that when you put money into basic
    science, you generate a whole range of ideas, many of which you
    don't expect to see.
        Then you if you have a process of channeling that into
    specific applications--the space program would be one public
    purpose program, but there is many other commercialization,
    including everything that is brought through digital computers
    and the internet, for example, and mobile telephone
    communications.
        That machinery that we have in the United States is
    actually pretty strong, the private sector piece. But the
    private sector does not invest enough in basic science because
    it is all about the spillover effects. It is all about all
    those unexpected effects. It is all about being able to
    suddenly invent a vaccine because you have got a new disease
    you would never heard of before, but you have that capability
    and so on.
        The Federal commitment to science is fundamental to our
    economic prosperity but also, Mr. Chairman, to our national
    security because this is what we have been very good at, this
    is what has propelled us forward in many ways, and this is what
    China has learned from us and what they are doubling down on
    now. So, we have to invest more just to stay up with them. I
    think we can do even better than that.
        Senator Kelly. Is it true--I was always of the
    understanding that the private sector is not going to invest in
    something that has a return on investment that goes beyond 5
    years. I don't know if that number is the number you go by, and
    that is why it is up to the Federal Government to be making
    these basic science investments because private sector just
    can't do it if they are not going to see a return on the money.
        Dr. Johnson. It can be about time horizon. I think much
    more, it is about spill--spillover effect. So, the Human Genome
    Project, for example, shopped around some private venture
    capitalists in the 1980s. They turned it down because they
    said, look, great project. You are going to create a lot of
    knowledge, but we won't be able to capture the value of that
    in--ourselves. It will be general knowledge.
        So, the Human Genome Project was funded, as you know, by
    the Federal Government. Massive success. 300,000 jobs created,
    tremendously strong industry. A big part of our economy, and
    produces drugs, therapies, and vaccines that are essential to
    everybody in this country. But it needed that public impetus.
        This, of course, is what the National Institutes of Health
    does really well. But we need more of that. We need more of
    that across more sectors.
        Senator Kelly. Well, as somebody who is always trying to
    sell our space program, I would--you know, stress it, it wasn't
    about like a product like Velcro, it was about creating
    industries, industries that no longer existed. I mean, our
    aerospace industry here in the United States has become a big
    part of our economy. That didn't exist before the 1960s really.
        So, from a national security perspective, what
    opportunities--I want to connect us to the CHIPS and Science
    Act. So, what opportunities are we missing by not fully funding
    the CHIPS and Science Act? Because this could be really a long
    overdue and historic investment in American research and
    innovation.
        Dr. Johnson. Oh, it is a breakthrough piece of legislation,
    absolutely, Senator. That taps into what was done previously in
    the 1940s and with the space program but it goes much further.
    It is a little bit painful that the appropriation is not
    followed through.
        So, the Congress recognized the opportunity and I think
    agreed on a very broad bipartisan basis. But you have got to
    put some money into it. Then, Senator, I think the question
    becomes, what next?
        What are the next sectors where we want the breakthroughs?
    What is the next equivalent of satellites, next equivalent of
    the internet, next equipment of mobile communications? There is
    a lot of opportunities in biomanufacturing. There is a lot of
    opportunities in other parts of semiconductors.
        There is opportunities in critical minerals, for example.
    There is a long list and I think Congress needs to engage with
    that. I think you should be thinking about CHIPS and Science
    Act 2.0, after, of course, you fund the first version.
        Senator Kelly. Yes. I had other, you know, some questions
    that led to STEM education. But I look at basic science and
    STEM education as being sort of like kind of in the same
    bucket. You know, this is like the seed corn for--you know, it
    is the catalyst for what grows the economy, both education and
    investment in science. So, thank you.
        Dr. Johnson. The National Defense Education Act of 1958 and
    NASA, the two big reactions to Sputnik, they were both
    brilliant moves by Congress, Senator. So, I am sure we can do
    it again.
        Senator Kelly. Well, thank you, and, Mr. Chairman, I have a
    couple of questions for the record.
        Chairman Reed. We will accept those, Senator. Thank you
    very much.
        Senator Kelly. Thank you.
        Chairman Reed. Senator Schmitt, please.
        Senator Schmitt. Thank you, Mr. Chairman. Dr. Johnson, I
    wanted to kind of explore your idea of these tech hubs. I am
    from St. Louis area, and St. Louis has been identified, and
    there is a lot of assets there.
        So, you have got NGA, you have got the Taylor Institute
    there. There is a lot of alignment that can be a draw. One of
    the challenges, I think, as we talk about workforce is there is
    a bit of a--there is a misalignment in higher education, right?
        You have got a lot of 4 years that chase degrees for
    enrollment. You have got community colleges trying to figure
    out where they fit in. The you have got these apprenticeship
    programs that, as you mentioned in your opening comments, maybe
    sometimes are limited to what that particular company might
    need. So, with that is sort of the backdrop, how does this
    actually work?
        Because am intrigued by this and I think it is an
    encouraging idea. We do need to have, I think, an industrial
    base that is more widely dispersed. We have talked about the
    dangers in our supply chain.
        Let's just take St. Louis as an example. It could be
    anywhere. It could be in Rhode Island or somewhere else. How
    does this actually work? How do we get into, you know, 5 to 10
    years in a place where somebody who wants to work on nuclear
    submarines, so not necessarily just the engineer that has got
    the 4-year degree--how does this work--how does alignment work
    in a tech hub?
        Dr. Johnson. St. Louis is a fascinating example, Senator,
    in part because you were one of the country's leading tech
    hubs, 100, 120 years ago, right. One very unfortunate thing
    that happened, and I don't have any particular person to blame
    on this, is that as innovation moved East and West Coast, you
    got less innovation, less corporate headquarters in St. Louis,
    but not for any particular good reason, right.
        I mean, people have got strange reasons like the way where
    airline routes went and so on, but it is not--you have got a
    lot of talent. The talent can't move, doesn't want to move,
    shouldn't need to move.
        I think tying it to--with the mindset of Senator Kelly, if
    we have, if Congress has and if the relevant agencies have
    priority sectors to pursue and places that are available,
    including with State and local support, which would be making
    sure the workforce develops, Senator Scott made very good
    points about that--also available housing, I would say,
    Senator.
        So, you are not adding 10,000 workers, but they have no way
    to live. So, the price of housing goes up and that means you
    have got to pay a higher wage, or they just won't come. So, I
    think that looking for that combination, and I think St. Louis
    scores very highly in our metrics, because it seems to us that
    you have exactly that kind of combination of circumstances. But
    we found 102 places in 36 states that have potential.
        Honestly, a country this size, with science being so
    important to our economy and to our national defense, we should
    be running a massive portfolio of these deep science
    investments. Looking for ways to commercialize them, getting
    those public, private partnerships with State and local
    support.
        But the Federal Government is the catalyst. Without the
    Federal Government, you are not going to be able to move the
    needle. We have done it before, and you agreed to do it again
    in the CHIPS and Science Act.
        Senator Schmitt. So that is--from your answer there, it
    seems like that is the research investment side. But on the
    workforce because I am genuinely curious.
        So, let's say I am a 17 year old in high school, and I want
    to pursue this path where, you know, like there is some
    immediate opportunities. What does that look like, or what
    should it look like for that individual to try to navigate to
    get to a place where we want to be, within that tech hub?
        Dr. Johnson. So, Senator Scott talked about workforce
    planning at the state level. I think that is better on a State
    and local than at the Federal level, where he was matching up
    incoming investment or defense contractors to say, we are going
    to need this kind of jobs over this many years.
        He was a match up with people coming out of the high
    schools, I think in particular high schools, in the technical
    colleges. I think that is exactly the right thing to do,
    Senator. I think that apprenticeships are undervalued by the
    private sector because you lose the--if you train the
    apprentice, the apprentice leaves, so the private companies
    don't want to do it.
        But from a public policy point of view and from a St. Louis
    point of view, more people who have completed apprenticeships
    is good for the local economy. Particularly if they don't want
    to move or are not inclined to move to the East and West Coast.
    Then you have got this very strong, trained labor force,
    including with the middle skills that we have all been
    emphasizing, agreeing on.
        I think this is a completely bipartisan consensus across
    the country as I--when I talk to people. It is not politicized
    at all. Everybody wants something in this direction. The
    Federal Government, though, is the critical catalyst.
        Then deciding which sectors and lining it up with the
    defense industrial base, that is a brilliant piece to add.
    Because if we know that submarines are important or if we know
    that aircraft are kind of important then--and you know there is
    going to be a 20 year commitment to that from a national
    security point of view. Then you can plan a lot more activities
    around that, including the location for those innovations.
        Senator Schmitt. If you guys have anything to add to----
        Mr. Taylor. Yes, Senator. The reality is, if I am going to
    use the example of that 17 year old, first of all, he or she
    needs to know what the opportunities are. So, I am sitting out
    in Florida, St. Louis, or wherever I am, and I just don't even
    know what the possibilities are by virtue of my background.
        Then we have got to specifically articulate a pathway that
    may not and oftentimes doesn't require a 4-year college degree.
    It could be that young man, if you do this for 6 months, this
    could prepare you for an apprenticeship that could get you this
    job, et cetera.
        So, we literally--the biggest problem that we are hearing
    from young people is they understand what the Government says
    it needs or what our country says it needs, they just don't
    know the pathway to get there.
        So, educating old school guidance counselors. Like right,
    everyone is not going to college and maybe go into the
    workforce. This is how you prepare yourselves for that. Those
    are the two most important things as we are hearing from
    younger, potential workers.
        We talk to high school students a lot and they are like,
    listen, I know what I think I want to do. That sounds
    interesting, and if you can pay me $35 bucks an hour, 20 years
    old, why not, without debt from college, et cetera. I just
    don't know how that works. So, articulating to the future
    workforce how it all works will go a long way toward solving
    for these talent challenges.
        Dr. Lockwood. Bring back shop class. Let them work with
    their hands. Let them build things. Let them tinker. Let them
    print things with the 3D printer. Let them be creative. They
    can see then, that there is a path for me to do these mid skill
    jobs, that there is dignity in that, that the country needs
    that. It is valued, and in that shop class you can make the
    pitch.
        Senator Schmitt. Bring back civics and shop class. Let's do
    it. All right, thank you. Thank you, Mr. Chairman.
        Chairman Reed. Thank you, Senator Schmitt. Senator
    Blumenthal, please.
        Senator Blumenthal. Thank you, Mr. Chairman. Shop class is
    good. I don't know about in the era of AI, artificial
    intelligence, how many shop class enlistees there will be, but
    maybe the nature of shop class should be changed. I want to
    engage in kind of a thought experiment. I am the CEO of
    Electric Boat.
        As you know, Electric Boat in Connecticut makes the most
    capable and reliable submarines in the world. If you look at
    employment patterns at Electric Boat, they have mountains and
    troughs. The reason they have mountains and troughs is that the
    Pentagon often changes procurement requirements.
        We want two submarines a year, no Virginia-class. We want
    one sub, maybe one plus the Columbia-class, plus--you know, if
    you are a manufacturer, pretty hard to engage in recruiting,
    hiring, training that involves investment when those
    procurement commitments are changing. Just to mention the
    elephant in the room, right now we have no budget for this
    fiscal year.
        So, the Pentagon is kind of scratching its head and saying,
    okay, we think we know what the budget is going to be. Chairman
    Reed has done extraordinarily skilled and excellent work in
    passing the National Defense Authorization Act, which provides
    a basic contour for what procurement should be, but the money
    has to be approved.
        To what extent does this indecision by the Congress and by
    the Pentagon, indecision and reversal of decisions affect the
    ability to recruit, train, and hire a workforce like Electric
    Boat?
        Dr. Lockwood. The workers will go somewhere else. They are
    not going to sit around and wait for us to get our act
    together. They have families to feed. So, unless we can really
    maintain the continuity of that production pipeline, which I
    agree we desperately need, we will struggle to retain.
        Mr. Taylor. The prospect of that, even the prospect of
    potentially not knowing, so the idea of not knowing--employers,
    employees or voting with their feet. So even if you have the
    employee, they are currently working in these industries, this
    level of indecision gives them an anxiety that will often lead
    them to come to the private sector because they are like, at
    least to there, I kind of know what I know.
        Dr. Johnson. Senator, I completely agree with where you are
    going and what my colleagues just said, but I would also remind
    everyone that the V12 Merlin engine that powered the Spitfire
    and the Hurricane in WWII and was decisive for keeping Germany
    out of Britain, started to develop in 1929 before there was any
    public procurement guidelines for that engine. There was a
    private sector innovation, Senator.
        What you really need in this country is not just better
    organized procurement exactly as you are wanting. You need
    people who are pushing on the innovative frontier for the new
    stuff the Pentagon is not--doesn't even though they want yet,
    right. How do we incentivize that?
        How do we encourage that? How do we build the skills? I
    think the shop class has never been more important, Senator,
    because I think losing those manual skills, losing our thinking
    with our hands is a huge disadvantage when we think about the
    world. Because the engineers who built the Merlin, who built
    the Spitfire, who built the American effort in WWII were very
    hands on people, once they understood how to bend metal.
        That is the key to a lot of these innovations that we are
    talking about.
        Senator Blumenthal. You know, I think what you are saying
    about shop class, which is not just what happens in the
    classroom, but the manual skills and the instinctive approach
    to how to put things together and make them work, that is what
    Electric Boat is trying to hire, the welders, the electricians,
    the pipefitters.
        People who are skilled at the trades. Not only in shop
    class, but frankly, in high school. I think we need to do a
    better job of selling people, future workers, on the idea, you
    know, you can have not just a job, but a career, a real career.
    Making a lot more money than let's say my four children. They
    were all educated in liberal arts institutions. Three of them
    are lawyers like me.
        But there are a lot more lawyers per person maybe than
    there need to be. We need more of the folks who can do the work
    at Electric Boat, with the careers that really provide not just
    financial gratification, but real dignity, the dignity of work.
    You are nodding, so I assume you agree.
        Dr. Johnson. Dr. Lockwood said it already--sorry, Dr.
    Lockwood said. I totally agree. Dignity and status and purpose,
    but you have got to also pay people good money, right? Because
    people have to live, and that is a question of how much you pay
    them relative to what it cost to live in the areas that you are
    trying to develop.
        But if you get that right, which we have done in this
    country before, Senator Blumenthal, and you have got very
    strong, obviously, places in Rhode Island and in Connecticut
    that also get this right, then we can do incredible things.
        Mr. Taylor. Senator, there is----
        Senator Blumenthal. Go ahead. Mr. Taylor.
        Mr. Taylor. Yes. I would just submit to you that we
    oftentimes talk about and believe that our talent pool must
    come from the K through 12 system. We increasingly have that
    middle group, that middle 45 to 55 year old who is now
    displaced, wants to work. You want to talk about dignity of
    work, and so many of our training programs disproportionately
    focus on young people.
        That is good, but we are ignoring that there is a
    significant swath of the population that is available, wants
    that dignity of work, needs to do it, and we don't provide
    reskilling and upskilling programs from the Government,
    frankly, to them.
        We will give you a Pell Grant all day for the kid, but what
    happens to that 45 year old whose job has been significantly
    changed on the account of technology and they could become a
    welder, but themselves don't know how to do that and don't
    think there is a pathway to that.
        So, I would not ignore that significant portion of our
    population that wants to work but doesn't know how to reskill.
        Senator Blumenthal. I thank you all for your insights,and
    by the way, Chairman Reed and I have just come back from a trip
    to Ukraine, and the Ukrainians are taking what seem to be often
    very low tech drones, and because they have those manual
    skills, they are able to reconfigure them, I don't know what
    the technical term would be, and make them lethal.
        Now, they still need arms. They need support. They need the
    resources. They are sadly lacking, and we need to give it to
    them in the supplemental that is now before the House that we
    passed here in the Senate. But they have been extraordinarily
    innovative and creative because they have many of those manual
    skills. Thanks, Mr. Chairman.
        Chairman Reed. Thank you, Senator Blumenthal, and thank you
    for your not just participation today, but for your willingness
    to travel to Ukraine and to do so many other things.
        But this has been a very, very helpful and useful panel. I
    would like to touch on, again, on something that was mentioned,
    but that is the perception of working for either the Department
    of Defense or a defense company seems to be very negative. That
    is an issue we have to deal with, and let me just quickly, Mr.
    Taylor, Dr. Johnson, Dr. Lockwood.
        Mr. Taylor. Yes, we actually--I don't--at the end of the
    day, it is far more attractive to most employers. They know of
    the brand name. You know, it is like Lockheed Martin, Boeing,
    et cetera, that is a far more attractive opportunity to them
    than--and they don't even think about the opportunities.
        As I know, half of the American civilian workforce has said
    they don't think about the Department of Defense proper. So, to
    the extent that we could create--this is what the job is, it
    doesn't matter if it is at the Department of Defense or the
    rest of the industrial base, I think we could solve for some of
    the problems. Private sector has a one up on the Government in
    those roles.
        Dr. Johnson. It is a very interesting problem that you are
    articulating Senator because I do think serving the Armed
    Forces is still prestigious and sought after. I served in the
    military when I was young, not in this country unfortunately. I
    did register for Selective Service when I was eligible. I got
    turned down because I was slightly too old, which was
    disappointing.
        But I think the reason for that--and those were regarded as
    good things and those were great experiences. I think that is
    because we have this perception and correct understanding that
    you build skills in those military roles and somehow--and
    perhaps it is about the wage classification system, as was
    articulated.
        I am not saying that there isn't--there aren't deep
    structural problems, but somehow that same prestige, that same
    conviction that you are building, leadership--we have great
    students in our MBA classes who are former military, for
    example, and who are terrific leaders, and everybody
    automatically assumes that is what you get if you are bringing
    a lieutenant or captain into an MBA program.
        Somehow that is not coming across in the defense industrial
    base. I think Dr. Lockwood has got some very good ideas, and as
    do you Senator, about how to fix that. But I think the way you
    articulate just in those terms is exactly right.
        Chairman Reed. Thank you. Dr. Lockwood, please.
        Dr. Lockwood. Yes, I think it is to some extent about
    prestige. It is also about what people know about. I will note
    that there has been a great consolidation in the military
    footprint. When you ask young people, do you know a veteran,
    fewer than ever say yes. So, we just need to be out there in
    the community.
        We need to say that this is not someone else's duty. This
    is not something I can outsource. This is our responsibility as
    all Americans, to participate in some way in making sure that
    our country and, you know, that of our allies is safe.
        So, I think if we couch it as a community responsibility,
    and if we put ourselves out there in new ways, that both our
    partners in the industrial base and our defense civilian
    workforce can get more of the attention that it rightly
    deserves. Thank you.
        Chairman Reed. Well, thank you all for excellent testimony.
    As I said initially, this is not a one stop. We look forward to
    your collaboration and your input too. If there are issues that
    we are not dealing with, or we should be dealing with, or if
    there is advise you can give us, don't hesitate, please.
        Thank you very much. With that, I will adjourn the hearing.
        [Whereupon, at 11:32 a.m., the Committee adjourned.]

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