Remarks by Secretary of Labor Thomas E. Perez, National Fund for Workforce Solutions-Annual Meeting

Thank you for allowing me to join you today. Thank you, Whitney [Smith], for your introduction and for all you do to help workers gain critical skills.

As we've worked to pull out ourselves out of the Great Recession, the nation's workforce system and its partners have played, and continue to play, a crucial role in the recovery. The National Fund is a critical partner in our efforts to put people back to work, and on behalf of the entire Administration, I want to express gratitude for the work you do.

Your renewed focus on skills and credentials and on engaging employers as partners aligns neatly with our job-driven initiative, and we're so pleased to have allies like you on the ground in so many communities.

I would be remiss if I didn't give a shout-out to Fred Dedrick -- your expertise in addressing workforce challenges at the local, regional and state level in Pennsylvania has clearly been an invaluable asset in your work at the National Fund.

And to the funders -- both the national funders and those working at the local and regional level -- a heartfelt thank you for your commitment to and investment in workforce strategies that work. Your investments have never been more important than they are right now.

Because, quite frankly, the economic devastation that plunged our nation into the worst recession in generations called for an all-hands response. The government, the private sector, higher education, philanthropy, service providers -- we've all had to rise to the challenge, and we've all had a hand in this recovery.

Since the start of the Great Recession, an average of more than 14 million people each year have turned to our job training and employment services for assistance. In the last year alone, we served more than 2 million people just through WIA programs. And we're doing it all with fewer resources -- while the need for services has grown exponentially during the recession and since, funding has been reduced by more than 13 percent. That's why your partnership is so critical.

And we should all be proud of the progress made so far. We've seen 51 consecutive months of job growth, with the addition of 9.4 million new private sector jobs.
The Basic Bargain and the Opportunity Agenda

But let's be honest -- we're not here today to pat ourselves on the backs and declare "mission accomplished." You all know as well as I do that even as we have much to celebrate about the economic growth we're seeing, too many people are still hurting.

A recent story in the New York Times noted that the American middle class is no longer the most affluent in the world. It said that while our nation's economic growth is as strong as, or stronger than, other countries, only the wealthy are reaping the benefits. While productivity has grown more than 90 percent over three and a half decades, wages have grown only two percent. The middle class and poor, meanwhile, are finding it almost impossible to climb the ladder of opportunity that was once at the heart of the American Dream.

At the same time, even as we see steady job growth month after month, the long term unemployment rate remains stubbornly high, at 2.2 percent. Roughly a third of the nation's unemployed workers have been unemployed long term.

For many people, the basic bargain of America -- that if you work hard and play by the rules, you can share in the nation's prosperity -- has come into question.

That's what President Obama's opportunity agenda is all about -- making good on our country's half of the basic bargain. It's about making sure people have access to the opportunities that will allow them to punch their ticket to the middle class. It's about providing access to good jobs that pay fair wages. It's about helping people acquire the skills to compete for those jobs. It's about ensuring access to a world
class education.

And though we have some pretty daunting challenges to overcome, it's an exciting time to be the Secretary of Labor, because our role has never been more important than it is right now.

VP Review

At the heart of the opportunity agenda is making sure people can acquire the skills they need to get ready-to-be-filled jobs. Now, there's a lot that we do right on this front. But there's also a lot that we can do better. That's why the President tasked Vice President Biden with leading a top to bottom review of our workforce programs to make sure we're getting the best possible return on our investment. We expect the report to come this summer. The effort is focused on five areas:

Expanding and strengthening our partnerships with employers so they can seamlessly utilize the workforce system;

Making the system as easy as possible for job seekers to acquire in-demand skills;
Recognizing innovation, rewarding it and taking it to scale;

Imploding stovepipes across the federal government so that we can best serve job seekers in a coordinated, collaborative way; and

Lifting up the critical role of apprenticeships.

The Administration is serious about expanding opportunity through the workforce system, and we're making the investments to prove it. This year we will put on the street roughly $1 billion in in targeted, job-driven training funds to help more people acquire the skills they need to compete for the jobs of today and tomorrow.

I know most of you are already familiar with so much of the work we're doing in these different areas, but I want to go into some detail on a few of the efforts we have underway.

Industry and Employer Partnerships

I've had the opportunity travel all over the country and talk to employers -- large and small and from a wide array of industries -- to find out how we, the Labor Department, can best serve them and help them grow. And what I consistently hear is that employers are bullish about our future. They feel good about the trajectory of the economy, and they want to expand. But too often, the thing standing in their way is a dearth of skilled workers prepared to fill the jobs they want to create.

To better connect with employers and help build the workforce pipelines they need, the Employment and Training Administration is working to increase the number of states and regions actively engaging in sector-strategy work. The President's budget requests $15 million for sector strategies to help local and regional partners implement programs designed for the industries actually operating in their areas

We're also focused on providing technical assistance to those already engaging in sector strategy work. In fact, this month we're kicking off a new technical assistance project in the Employment and Training Administration that we are calling our Sector Strategies TA Initiative. Your own Fred Dedrick is a member of the TA team that was competitively selected to implement this project. The Initiative will include a number of components:

Beginning this summer, we'll establish a national peer learning network for grantees.

We're planning three two-day convenings -- in Boston, Atlanta and San Francisco -- to bring together state and regional workforce leaders, grantees, experienced sector strategy leaders, and expert facilitators for knowledge sharing, peer learning and consultations.

We're developing an interactive web resource to provide a platform to support peer-to-peer TA.

We're also working to ensure all of the important stakeholders are at the table -- including community colleges. Our nation's community college system has long been the place where people go to get a secure grip on the ladder of opportunity, and the role of community colleges is as important today as it's ever been.

From the outset, the Obama administration has recognized that strong partnerships with community colleges are a critical component of an effective skills infrastructure. That's why, since 2011, we have invested nearly $1.5 billion through TAACCCT grants to strengthen the links between community colleges, employers, and the public workforce system, and we'll announce another $450 million this year.

And as I've seen firsthand, TAACCCT is making a profound difference in people's lives -- people like Sheri Dron, who I met last fall. When her husband died suddenly a couple of years ago, she wasn't sure she'd be able to keep her house. But she enrolled in the Precision Machining Program at Front Range Community College outside Denver, got a scholarship and already has a paid internship putting her new skills to work.

Access to In Demand Skills

One of the critical strategies to help job seekers and workers acquire in-demand skills is our work around career pathways.

Since 2012, when we joined with our partners at HHS and the Department of Education to issue a commitment and framework for career pathways, we have worked to drive career pathway programs through our grants like TAACCCT, as well as our technical assistance and policy work.

This includes some exceptional, if under the radar, work in partnership with industry to develop industry competency models. We've developed 22 competency models to date, most recently for the transportation, distribution, and logistics sector. These models help employment and training practitioners develop curriculum and equip workers with in-demand skills. If you aren't already using these competency models, I encourage you to do so, and please share your comments and thoughts on their usefulness with us.

The National Fund has been an important partner in the field in helping to drive and implement career pathways at the local level.

On Tuesday, I met with Kentucky Governor Steve Beshear, who has done some remarkable work in attracting employers, particularly in attracting European manufacturing firms. What he shared with me is what many of you already know: that the key for him to attract businesses and jobs to his state is a skilled workforce. Tax incentives and other tools are nice, but he said the real difference maker is having a workforce equipped with in-demand skills. And he has walked the walk to help Kentuckians get those skills. In 2012, he signed a career pathways bill into law -- and I know it's no coincidence that the Louisville area National Fund site set up shop just a few months before that bill was signed.

Governor Beshear is also leading the way in another of our focus areas -- apprenticeships. He has been working with the German Embassy to develop apprenticeship models in Kentucky that are similar to what they're using in Germany.

Apprenticeships

I was thrilled to hear about this effort because, quite frankly, Germany has left us in the dust when it comes to recognizing the valuable role apprenticeships play in creating a pipeline of skilled workers.

Here in the United States, we have about 358,000 registered apprentices working with approximately 250,000 employers. In Germany, a country with a much smaller population, there are 1.8 million registered apprentices, working with 500,000 sponsoring companies. About 23 percent of German employers participate in the apprenticeships programs there, covering a broad range of industries, in the United States, just 1 percent of employers participate, with a heavy concentration in construction. While Germany is a clear leader, other countries, like Switzerland, the UK, Canada and Australia also invest more heavily than we do in apprenticeship programs.

Here at home, meanwhile, over the course of the last few decades, we have seen the stature of apprenticeships decline. I hear from parents who tell me "My kid's going to college." They don't realize that an apprenticeship might be a better fit to provide opportunities for success.

We have underinvested, undervalued and underutilized a critical workforce development and training tool.

At the same time, what I hear from companies like Ford and Boeing is that their workforces are aging, and that they need a pipeline of skilled workers to fill the gaps that will be left as experienced workers retire.

Investing in apprenticeships is a win-win-win for workers, employers and the economy. Workers who complete apprenticeship programs earn an average of $50,000 per year and, over their lifetime, earn $300,000 more in wages and benefits than their non-apprentice peers. And for every taxpayer dollar we spend on apprenticeship programs, we see $27 in benefits.

We see pockets of innovation and success around the country. Rhode Island, for example, increased its tax credit for apprenticeship, and Iowa is investing $3 million into apprenticeship this year. South Carolina, meanwhile, has increased apprenticeships by 500 percent through a tax credit and an innovative, business-oriented organization.

And we see some employers leading the way as well. UPS, for example, is expanding their existing apprenticeship program for drivers, and extending the program to other areas within their organization, such as information technology, operations, and automotive repair.

I've had the opportunity to visit some apprenticeship training facilities, and the enthusiasm for these programs is infectious. During a recent visit to the Finishing Trades Institute in Philadelphia -- a model labor-management partnership -- I met young people from the inner city who were overflowing with optimism about their futures. The apprentices are learning to be painters, glaziers and drywall finishers, and they'll have the potential to earn $26 an hour at the age of 20. One of them said to me "this is just as good as college because you're getting a degree, they are paying for it, and you get paid."

In California a few months ago, I visited an apprenticeship training facility run jointly by the Electrical Contractors Association and the IBEW Local. I talked to a young man there making about $60,000 a year as a journeyman, and he said to me "I've got the golden ticket, Tom." The program gave him the golden ticket to the middle class.

We're learning from the successful models already in use around the country, and we have a number of efforts underway to expand and promote apprenticeship programs.
Later today, I'll be participating in an apprenticeship roundtable -- one in a series of six this month that we're holding around the country.Our goal is to engage leaders from high-growth industries -- industries like health care, energy, construction, manufacturing -- to explore how we can work together to increase apprenticeships.

A few weeks ago, the president announced the availability of $100 million in American Apprenticeship Grants. His budget, meanwhile, calls for a four-year, $2 billion Apprenticeship Training Fund to provide states and regions with flexible funds to complement their existing efforts to expand registered apprenticeships.

And since the April launch of the Registered Apprenticeship College Consortium (RACC), more than 18 colleges and apprenticeship programs have applied. The program, a partnership among community colleges, national accreditors, employers, and major apprenticeship sponsors, will make it possible for apprenticeship graduates to earn credits that will transfer to a community college.

Low-Income and Disadvantaged Youth

As I mentioned previously, all of these efforts are part of the President's opportunity agenda. They're part of our effort to help build ladders of opportunity for all workers.

But there are segments of our population where the rungs of the ladder have been particularly far apart, where our nation has fallen woefully short of holding up our end of the great American bargain. Young people from low-income families, and particularly young men of color, have too often been left out in the cold. Here are just a few of the startling statistics:

25.8 percent of African-Americans and 23.3 percent of Hispanics live in poverty, compared to 11.6 percent of white Americans.

Blacks and Hispanics raised by single moms are 75 percent and 96 percent, respectively, more likely to drop out of school.

During the summer months, just 17 percent of black teenage boys and 28 percent of Hispanic teenage boys have jobs, compared to 34 percent of their white peers.

Your success in life should not depend on your zip code or the color of your skin. It should depend on how hard you work -- nothing more, nothing less. The President's My Brother's Keeper Initiative aims to address these disparities, to restore hope to struggling communities and ensure true access to opportunity. And access to good jobs that pay fair wages is a core component of real opportunity.

The My Brother's Keeper Task Force identified important government programs that are essential to closing these wide opportunity gaps, including a number of DOL programs. Job Corps, for example, which celebrates its 50th anniversary this summer, provides at-risk young people with a structured residential environment where they get the training they need to move into good jobs. Last year, more than 35,000 graduates moved into a job, post-secondary education or advanced skills training. Another 39,000 got their high-school diploma or GED, or completed career technical training. Job Corps is one of the crown jewels of the War on Poverty, and it continues to be an effective program. More than 70 percent of enrollees are students of color.

Through our Reintegration of Ex-Offenders grants or REXO, we aim to help reduce recidivism among youth and young adults by providing that second chance so many young men of color need. Today, we'll be announcing a new round of funding totaling $74 million, $44 million of which will be devoted to training and employment for inmates 19 and older participating in state or local work release programs. Another $30 million will be targeted to youth -- these Face Forward grants, as we call them, are awarded to community-based organizations to provide juvenile offenders with support services, training and skills development to help them obtain employment and overcome the stigma of a juvenile record.

Through a program called YouthBuild, we invest $75 million to help young people can work toward their GED or high-school diploma while learning job skills by building affordable housing in their communities.

We're also working with our partners across the federal government on the Performance Partnership Pilots, which aim to provide unprecedented flexibility to states, local communities, and tribes to help them remove some of the barriers to effectively serving disconnected youth, including youth who are low income and either homeless, in foster care, involved in the juvenile justice system, unemployed, or not enrolled in or at risk of dropping out of an educational institution.

The idea is to allow the pilot jurisdictions -- up to 10 of them -- to pool money from a variety of discretionary funding streams to better enable them to provide disconnected youth with real ladders of opportunity. The program is a recognition that artificial stovepipes hinder innovation and keep communities from providing the best services possible. We're working with our partner agencies to develop the grant solicitation, incorporating input received to date through consultation and outreach. We continue to welcome feedback from stakeholder groups, and we expect the solicitation to be released by the Department of Education this fall.

Conclusion

In his State of the Union Address earlier this year, where he laid out his opportunity agenda, the President said "what I believe unites the people of this nation, regardless of race or region or party, young or old, rich or poor, is the simple, profound belief in opportunity for all -- the notion that if you work hard and take responsibility, you can get ahead."

Everything I've touched on today -- as well as all of the other efforts underway at DOL and throughout the workforce investment system -- is an effort to animate this core American belief.

The business of government is opportunity. We have a duty to make sure everyone has the opportunity to climb the ladder of success. I'll echo Senator Tom Harkin of Iowa, who said it's not an escalator. There's no free ride. But those willing to climb the ladder should be offered a hand up when the next rung is just out of reach.

That's what we do at DOL every day: we provide access to the ladder. And that's what you do at the National Fund. You've been unwavering partners in our efforts to help people get the skills and training necessary to allow them to compete for the jobs of today and tomorrow. And particularly as we've had to do more with less through this economic recovery, your partnership has been invaluable.

Thank you for your efforts. Thank you also for your commitment to evolving your model as our economy evolves. We hope you will continue to create new partnerships throughout the country, and continue to partner and grow your relationships with the public workforce system, so that we can all continue the critical work of expanding opportunity for all.

I look forward to taking your questions.

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