Testimony before the Republican Members of the House Committee on Education and Labor
Given by Secretary Elaine Chao on July 21, 2010 at the Republican Members of the House Committee on Education and Labor
Thank you very much for the opportunity to be here. The topic that you are tackling today is a very important one.
At the outset of the Obama administration, the president’s chief of staff and secretary of state both said that a crisis is too good to waste, because crises are opportunities to do big things. Unfortunately for the American people, the big things that this administration is talking about are antithetical to economic recovery.
The administration’s agenda constitutes a veritable Europeanization of America’s workforce and economy. But America’s prosperity has never come from copying Europe’s way of doing things—Europe’s high taxes, entitlement-driven government and command and control regulations and policies.
As we have heard, over four million Americans have lost their jobs in 2009. Over 17 percent of America’s workforce is unemployed or underemployed in part-time jobs, casualties of the financial system’s failures, and an acute and widespread fear of the future. A fear of a future is really uncharacteristic of this country and which persists in no small part because of this administration’s job-destroying agenda.
This administration’s agenda is causing entrepreneurs to hold back. It is causing consumers to remain cautious. It is keeping private sector employers from hiring.
The big generators of American jobs have long been America’s private sector, not the government. According to a recent study, most of the net job creation from 1980 to 2005 were attributable to small businesses and young enterprises. Born of optimism and good old-fashioned guts and toil, the workplaces created by America’s entrepreneurs don’t start with human resource departments. They don’t start out unionized. What they have is a vision and heart, and they used to have hope, faith in the future.
I have brought two charts with me that show the way to create jobs is to reward entrepreneurship and investment. Today’s private sector employers look ahead, and all they see are increased taxes, increased mandates, increased cost to hire workers, more punitive bureaucracies and gigantic federal deficits that will crowd out private sector capital.
And they also see an administration so beholden to big labor that within days of taking office, the president—the new president—issued executive orders rescinding the rights of rank-and-file workers, to be informed of their rights not to pay portions of union dues attributable to political activities that they disagree with.
And even more ominously, employers see an administration that is pushing to deprive workers of secret ballots in workplace unionization elections and impose a 120-day deadline for employers to sign a labor contract, after which government arbitrators would dictate labor contracts.
It is with incredible audacity that this administration busied itself reversing 8 years of progress in enforcing rank-and-file union member rights under the 1959 Labor Management Reporting and Disclosure Act, a reform that Senator John F. Kennedy championed to provide transparency for union members to know how their hard-earned dollars are being spent and to have the benefit of union officials who are free from corruption.
While the administration focused in 2009 on appeasing its organized political allies, job creation ground to a halt. And the current job creation figures are dismal. This morning at 8:30am, the initial claims numbers were released by the Department of Labor. These latest weekly numbers show that the initial filings for unemployment insurance claims rose again last week, this time by about 36,000. Total initial claims filed for the past week were 482,000. The trendline of unemployment insurance claims continues to increase.
The dearth of job creation during this past year is something that this administration needs to understand how to address. It is the dearth of job creation that distinguishes this recession from other downturns.
In the best of years, millions of jobs are lost, but these lost jobs are more than offset by the millions of new jobs that are created. That is not happening now. Even though 53,000 fewer jobs were lost in the first quarter of 2009 compared to the last quarter of 2008, the unemployment rate soared. And that is largely because job creation tanked.
Nearly one million fewer jobs were created in the first quarter of 2009 than in the last quarter of 2008. And no one feels the lack of job creation more keenly than America’s 15 million unemployed workers, who have now been out of a job on average for about 29 weeks. This is the longest since this data began to be collected in 1948. Just as a comparison, in normal times laid-off workers were unemployed on average for 8 weeks.
Today the future looks so bleak to so many that in December 2009 alone 661,000 workers lost hope and gave up looking for a job and left the workforce. Had they remained in the workforce, the unemployment rate would have been even higher at nearly 10.4 percent.
So for the sake of these Americans and their families, this administration needs to understand the implications of their economic policy, and they need to re-prioritize and implement public policies that will create an environment in which the private sector can create long-term, economically self-sustaining jobs.
Thank you very much.