Good morning everyone, it's great to be back at CAP. I don't want to miss this opportunity to salute this great organization for 10 years of outstanding work on behalf of the values we care most about. I'm honored to be here to talk about some of those values and to speak specifically about poverty, an issue that drives a lot of my work at the Labor Department and has animated much of my entire career in public service.
I want to thank the Center for American Progress, the Leadership Conference on Civil Rights and the Coalition on Human Needs for this extraordinary partnership you've built. Half in Ten is shining a light on one of the moral imperatives of our time and offering ambitious and innovative solutions to one of our most vexing problems. Neera, Wade, Deborah -- thank you for the bold leadership you demonstrate every day.
I want to start by noting what, at first glance, might seem to be an inauspicious anniversary. It was 84 years ago this week that the stock market crashed and sent the nation tumbling into the Great Depression. The ensuing decade was one of great anxiety and deprivation for millions upon millions of Americans.
It was one of those moments in our history where we had to make a decision about the size, scope and function of the federal government. And we made the right choice. Our leaders rose to the challenges of the moment. Instead of imposing austerity and telling Americans they were on their own, those leaders pursued government policies to promote the common good. From Social Security to rural electrification to the Wagner Act to the Fair Labor Standards Act, they lifted up the entire nation by lifting up those struggling the most. They had us turning toward one another, rather than against one another. FDR, of course, was the most prominent of those leaders, but the progressive change of that era would not have been possible without the individual whose name is on the building where I go to work every day -- the first woman ever to serve in the President's Cabinet, Secretary of Labor Frances Perkins.
Imagine if, at that moment in the early 1930s, the forces of austerity had prevailed. Imagine if we had turned our backs on intense human suffering as our economy was going over a cliff. The programs that were controversial then are articles of faith now, pillars of middle-class security. It's food for thought as we once again, in 2013, are having a pitched battle over the role of government and whether, for example, providing access to affordable health care for every American is a worthwhile goal.
The New Deal eventually ushered in a period, in the middle of the 20th century, of unprecedented broadly-shared prosperity and a thriving middle class. Work was widely available, and wages rose as productivity rose. Which is not to say that poverty didn't persist. Decades later, President Johnson's War on Poverty further closed the chasm between the haves and have-nots. Medicare, Medicaid, Head Start, food stamps and more -- together they struck a powerful blow for social justice and allowed us to keep faith with the basic bargain that everyone deserves common dignity and a fair start in America. These programs worked, and don't let anyone tell you otherwise. There is hard data to show that SNAP put food on the table, that the Earned Income Tax credit increased work participation. In the early 1960s, by one measure that more accurately captures after-tax in-kind poverty-fighting programs, roughly one in three Americans were poor. By 1980, the number was down to 13 percent.
It didn't happen without intense opposition. In 1965, Ronald Reagan said that Medicare and programs like it would "invade every area of freedom as we have known it in the country." If we don't stop it, he added, "one of these days you and I are going to spend our sunset years telling our children and our children's children what it once was like in America when men were free." It sounds a lot like the rhetoric we hear today about any affirmative steps taken to provide economic security and build new ladders of opportunity.
The bottom line is: if we take the long view, poverty reduction is a great American success story. I hope you'll leave here with that hopeful message. Even as we grapple with still-unacceptable rates of poverty, even as we take the new Half in Ten report as an urgent call to action, let's remember how far we've come. For most of our nation's history, there was no safety net to speak of. Many rural families had no running water. Americans regularly died or went broke for lack of affordable health care. Old age was often synonymous with poverty.
But for decades and decades, roughly since that fateful October 84 years ago when the economy fell into the abyss, we've used a combination of compassion and competence to allow countless more people to lead lives of dignity rather than despair.
Now, let's use that history as the best evidence that we can meet today's challenges. We have tools to solve these problems. We just need to muster the political will. It's remarkable what we can accomplish when leaders in both parties, as in the past, focus on the urgent problems facing American families instead of engaging in political brinksmanship that only adds uncertainty to a fragile economy.
I know there's a prevailing sense that we can't possibly get anything meaningful done given the current climate in Washington. I don't accept that. When there are big, important things to do, we can't walk away because the climb is steep or the lift is heavy. As President Kennedy said about going to the moon and other national challenges: We choose to do these things "not because they are easy, but because they are hard." Besides, if you look at what happened in the immediate aftermath of the last government shutdown in early 1996, it was followed pretty quickly by a very productive legislative year that included immigration reform, a minimum wage increase, the passage of HIPAA and a hate crimes bill.
It's my hope and belief that the 50th anniversary of the March on Washington this summer allowed us to sharpen our focus on poverty. One of the most compelling aspects of that celebration was the reminder that the original March was about workers' rights as well as the struggle for racial emancipation. The list of demands included a national minimum wage and job training for the unemployed, in addition to school desegregation and voting rights.
President Obama, speaking at the Lincoln Memorial this August 28, captured it perfectly. He said of the original marchers: "They were there seeking... not just the absence of oppression but the presence of economic opportunity." He talked about the idea that "one's liberty is linked to one's livelihood" and "the pursuit of happiness requires the dignity of work." Then he went on to say: "It's along this second dimension -- of economic opportunity, the chance through honest toil to advance one's station in life -- where the goals of 50 years have fallen short."
He essentially declared economic fairness to be the unfinished business of the civil rights movement and challenged all of us to live up to the ideals that brought hundreds of thousands to Washington on a sweltering day half a century ago.
But make no mistake about it: he and those of us who work on his behalf are already heeding the call.
The Obama Administration, facing from its very first moments an economic crisis second only in our history to the Great Depression, has been about building an economy that works for everyone, where there is real opportunity for upward mobility, where you have a chance to succeed no matter where you came from. I believe, as the president does, that we don't have a spare American. So this President is fighting for every child to have the great start in life that all children deserve with a plan for universal pre-kindergarten. He's working to ensure that America's hardest-hit communities are able to rebuild -- and though we need Congress to act on the Promise Zone tax credit that will create jobs and grow small businesses in those communities, we'll be announcing federal partnerships with the first five Promise Zones by the end of this year.
Guided by his commitment to opportunity for all Americans, the president has put raising the minimum wage near the top of his economic agenda. It's just unconscionable that, in the wealthiest nation on earth, hard-working people putting in 40 hours a week live in poverty. They shouldn't have to lay awake at night sick with worry about whether they're going to pay the rent or heat their home this month. They shouldn't have to live one minor setback away from destitution and desperation.
Until the administration acted last month, one category of workers couldn't even get the minimum wage guarantee -- home care workers who are becoming increasingly important in an aging society where seniors and people with disabilities want to remain in their homes. Because of an exemption in the law whereby these professional workers were classified as "companions," they had been denied basic employment rights. And roughly 40 percent of them, despite long hours of grueling work, have to turn to public assistance to supplement their incomes and support their families. But our new regulation now provides these workers -- 90 percent of them women and nearly half of them people of color -- with basic workplace protections like minimum wage and overtime.
The home care rule is just one step. We need to do more to address gender-based wage disparities. I just don't know how to explain to my daughters that women still earn 77 cents on the dollar compared to men. For women of color, the gap is even wider: about 69 cents for African-American women and 60 cents for Hispanic women, relative to their white male counterparts. And single mothers earn less than married women and women without children. Study after study shows that we can't tackle poverty in America without tackling this pay gap.
Fixing our broken immigration system will also go a long way toward addressing poverty. Bringing 11 million undocumented workers out of the shadows and on a path to citizenship will give them access to higher wages and greater economic opportunity.
Martin Luther King once said that "of all the forms of inequality, injustice in health care is the most shocking and inhumane." And so the Affordable Care Act is also an important part of our anti-poverty efforts. Notwithstanding the frustration many Americans have experienced with healthcare.gov, the fact remains that the ACA is more than a website -- it is affordable, quality health insurance for everyone. It is already making a difference in so many lives -- young people who can stay on their parents' plan until they're 26, seniors who have access to more affordable prescription drugs, and more. The glitches will be worked out -- tech experts are working on it as we speak -- and millions of Americans will be able to reap the benefits of this landmark law.
Of course, the best anti-poverty program is the availability of good jobs. That's why the President is calling for major investments in technology, manufacturing and education. That's why he wants to upgrade our infrastructure to create opportunities for good middle-class work -- the same way a Republican President, Dwight Eisenhower, did with the construction of the interstate highway system some 60 years ago.
We also need skilled, trained workers to fill those jobs, something I spend a lot of time working on as Secretary of Labor. We are making unprecedented investments, working with partners like our community colleges, to build a workforce development system that is aligned with the needs of employers.
As we take on poverty, we have to have a short and a long game. There are some singles and doubles that we can hit right now, but we also need to be ambitious in our pursuit of long-range goals. Let's not give up on paid leave, for example.
Remember how long it took to make FMLA the law of the land? It's going to take patience and persistence. Change takes time. Let's start laying the ground work for big ideas so that we're able to strike when the iron is hot.
Let me also add that any anti-poverty approach must raise up the rights of workers to join a union and bargain collectively for higher wages and better working conditions.
There is an undeniable relationship -- not just correlation, but direct causation -- between declining poverty and the strength of the labor movement. It just stands to reason: when workers have a strong voice and a seat at the table... they are able to bargain for their fair share of the value they help to create. But when someone muzzles that voice and cuts off the legs of that seat... that's when you see stagnant wages even as productivity and corporate profits continue to record heights. Empowered, organized workers reduce inequality and build the middle class.
In the coming years, we're going to see a rapidly evolving workers movement that takes many forms. More and more, we're seeing new groups of workers beginning to organize at the grass roots level. Fast food workers, taxi drivers, domestic workers and others in low-wage industries are taking action and speaking up for their right to a fair day's pay for a hard day's work. The labor movement and other allies (many of them in this room) are welcoming and supporting these independent movements. This is exactly what we need: everyone working together, forging new strategies and building new alliances, in support of working people taking courageous action to improve their lives and communities.
This isn't your father's labor movement as you know. For more reasons than I have time to enumerate, our unions are seeking out new and innovative ways of doing business. Around the country, I see example after example of labor working with management to forge win-win solutions that get workers the good jobs, skills and opportunity they need.
For example: the Culinary Academy in Las Vegas, which I toured this summer. This partnership between the local hospitality industry and the unions is training thousands of people a year for good jobs -- as cooks, maids, bartenders, stewards and more -- paying a middle-class wage and providing a secure career path.
The Building Trades, for example, working together with construction companies, are leveraging $750 million a year in private sector money to provide state-of-the-art apprenticeship training that helps so many people find good work and skills that create the foundation for a stable career.
And SEIU 1999, working directly with health care employers, has training centers in several states designed to prepare people for careers as nurses, homecare workers, pharmacists and more. This is labor and management working hand-in-glove, rejecting the stale debates of yesterday, finding common ground and identifying mutual interests.
As we aspire to build more of these partnerships, we can look overseas for a model. Take Germany, a manufacturing powerhouse, and what they have accomplished with their werks councils. Workers and employers there have demonstrated conclusively that labor-management cooperation increases productivity, spurs innovation and creates shared prosperity. We can do the same as we rebuild manufacturing here in the states -- if we reject false choices and work together on creative solutions.
Rejecting false choices in this manner is critical to all our anti-poverty work. I think there's a misperception -- which some have done everything in their power to promote -- that it's all a zero-sum game. Fighting poverty, this myth goes, means a redistributive approach that will hurt other people. If it's good for the shop floor, it's got to be bad for the executive suite. I categorically reject this kind of divisive thinking, and the false choices underlying it. Some people want you to believe in a binary nation of "makers" and "takers." But we believe in one America, all of us in it together.
On issue after issue, we need to leave behind the old battles that pit us against one another and identify the win-win solutions that are there to be seized. One of my heroes and mentors, Senator Ted Kennedy, taught me among other things that idealism and pragmatism don't have to be mutually exclusive.
We don't have to choose between job safety, for example, and job growth. The CEOs I talk to know that when workers are sick and get injured on the job, it's bad for their company. They know that cutting corners on safety is not only irresponsible... it's also a penny-wise, pound-foolish business strategy.
Comprehensive immigration reform isn't about so-called "amnesty" for some at the expense of everyone else. That's another false choice. In fact, it will strengthen the overall economy, increasing GDP, lowering the deficit, fostering innovation and entrepreneurship and contributing to the solvency of Social Security. It's a moral imperative and an economic imperative.
A bedrock anti-poverty program like Medicaid doesn't just help those who are enrolled, the direct beneficiaries. It serves as an economic stimulus that benefits everyone. One study from Stanford University showed that every dollar in additional Medicaid spending under the Recovery Act generated two dollars in increased GDP. Programs like unemployment insurance and food stamps have a similar effect. And yet, many in Congress want to cut SNAP and several states have declined to expand Medicaid under the Affordable Care Act -- go figure.
For 75 years, the Chicken Littles have been telling us that a wage floor would absolutely cripple the U.S. economy. But their Doomsday scenario somehow has never come to pass. Why? Because when you raise the minimum wage and put more money in the pockets of working families, they don't stash it in offshore bank accounts; they turn around and pump it right back into the economy. They spend it on groceries, gas, school supplies and other goods and services. So increasing the minimum wage is not just the right thing to do for working people; it's the smart thing to do to grow our economy. Win-win. No false choice.
No less a capitalist than Henry Ford understood this. In 1914, he doubled the wages of workers on his Dearborn, Michigan assembly line. This is what he said: "If we can distribute high wages, then that money is going to be spent and it will serve to make storekeepers and distributors and manufacturers and workers in other lines more prosperous and their prosperity will be reflected in our sales. Countrywide high wages spell countrywide prosperity."
So many business leaders I have spoken to get that you don't have to choose between shareholders and employees. That a fair wage means a productive workforce, which means a more profitable company. That when working families are on the ropes, it affects the corporate bottom line. That business interests are consistent with the common good.
In the service industry, for example, the low-wage business model is not the only option. A recent study from the University of California-Berkeley reached this mind-blowing conclusion: the nation's fast food workers are relying on safety net programs to the tune of a combined $7 billion a year. I don't think this is what a great economy does -- pay people so little that they have to rely on the state just to make ends meet.
But it doesn't have to be this way. Other companies have proven that they can thrive by implementing a different model. Costco, one of the nation's most successful retailers, sells great products at reasonable prices while paying employees around $15 or $20 an hour plus benefits. I went to a Costco opening in northern Virginia this summer and talked to the manager who's been with the company for several years. She started by pushing carts, now she's running a store. Costco provides these kinds of opportunities for upward mobility and middle-class employment while still being quite profitable.
As we heed the call of this new report and re-dedicate ourselves to cutting poverty, I hope we'll all look at it as more than just an engagement of the political left. If that's all it is, we reduce our chances of success. We have to look for allies where we haven't before. We have to reach out for new partners, rejecting those false choices that typecast us and box us into unconstructive arguments. And we have to frame anti-poverty efforts, as I have tried to today, in terms of universal benefits, shared prosperity and the economic strength of the entire nation.
I think that kind of cooperation and consensus-seeking, especially after the last month of unnecessary management-by-crisis here in Washington, is exactly what our country needs right now.
Fighting poverty and helping the least among us are, I believe, widely embraced values that transcend partisanship or politics. They are embedded in all of our religious faiths and preached at churches, synagogues and mosques every week in America. Just as Judaism teaches tikkun olam -- "repairing the world" -- so did I learn from my Jesuit education the concept of "men for others," while almsgiving is one of the fundamental tenets of Islam.
When I was a young child and my mother would put me to bed at night, I would say to her "hasta manana" -- "good night," or literally, "see you tomorrow." And my mother would reply: "Si Dios quiere" -- "if it's God's will."
That was an expression of her deep faith, faith that I also share. But at the same time, I feel a sense of ambivalence about those words. If we simply declare things to be God's will, aren't we neglecting our responsibility to change them?
I don't think it's God's will that people who work 40 hours a week should live in poverty.
I don't think it's God's will that going to work should mean risking life or limb.
I don't think it's God's will when people are put out of work through no fault of their own and then can't access the tools needed to find a new job.
I don't think it's God's will that women should get paid 77 cents for the work a man gets a dollar for doing.
And I don't think it's God's will that people with disabilities should be marginalized, about two-thirds of them not participating in the labor force at all.
I do believe it's God's will that we should be and must be our brothers' and sisters' keeper.
I do believe it's God's will that we should never walk away from human suffering.
I do believe Dr. King was expressing God's will when he spoke of injustice anywhere being a threat to justice everywhere.
And my faith informs my belief that we can never stop working toward building that more perfect union...that we must never give up the fight for social justice... that we must always work harder to deliver on the promise of America -- to give every single one of our people the opportunity to rise as far as their highest dreams and hardest work will take them.
Thank you very much.