Remarks Prepared for Delivery by U.S. Secretary of Labor Elaine L. Chao For Workforce Innovations 2006 Opening Plenary

July 11, 2006

Thank you, Emily [Stover DeRocco, Assistant Secretary, Employment and Training Administration, U.S. Department of Labor]. I want to thank Emily for the terrific job she is doing. And I want to thank Bill Sanders [Director of Workforce Innovations, Employment and Training Administration, U.S. Department of Labor] and the ETA staff who have put together another great Workforce Innovations conference.

Welcome, everyone. Many of you have traveled a great distance, so thank you all for the time and effort you’ve made to be here. Last year, we met on the East Coast, so this year we decided to give the West Coast equal time!

I want to thank the state of California for being a terrific host.

It’s a delight to be with you, today. This is my fourth Workforce Innovations conference and I look forward to each and every one. I appreciate the energy, commitment and passion that you bring to the critical mission of serving America’s workforce.

Since the last time we were together, our country has experienced some significant challenges. Hurricanes Katrina, Rita and Wilma struck devastating blows to the Gulf Coast region. Thousands of people lost their homes, jobs and livelihoods.

The Workforce Investment System stepped up to the challenge and brought relief to those who needed it. Many of you volunteered to go to the Gulf Coast where you helped thousands of workers start putting their lives back together. You walked them through filing unemployment claims, lined up job training and found new jobs for many. 23 states agreed to take on claims processing. The Department provided additional resources, but you were on the ground, responding directly. Our thanks to each and every one of you, for a job well done!

Today, I’d like to discuss the challenge of helping our nation’s workforce remain competitive in the worldwide economy. I believe the best way to do this is to ensure that our nation’s workers have the skills that are in demand in our nation’s rapidly changing economy. And the Workforce Investment System has a critical role to play in meeting this challenge.

Let me start with a snapshot of our country’s economic progress. Last Friday, the Labor Department announced the national unemployment rate for June which remained at 4.6 percent. And that’s more than a point lower than the average 5.7 percent unemployment rate of the 1990s!

Our economy is one of the most vibrant of all industrialized nations. It clocked in at an average annual growth rate of 3.5 percent in 2005. And it grew at a strong 5.6 percent annualized rate in the 1st quarter of 2006. Our economy has created 5.4 million net new jobs in the last two-and-half years. Contrast this with Europe where job growth has been stagnant over the last 10 years, and where Germany and France, for example, have persistent unemployment rates nearing 10 percent! In America, more people are working than ever before.

This is due, in large measure, to our nation’s ability to adapt and innovate. Our country is transitioning to a knowledge-based economy. This transition has created millions of new jobs in industries that did not even exist a generation ago. These industries provide high-value, high-paying jobs and demand highly educated and skilled workers to fill those jobs. And as our economy continues to advance, the demand for talent will continue to grow.

Two-thirds of the estimated 18 million new jobs created in the next 10 years will be in occupations that require some advanced education. This can be a 4-year college degree, a 2-year degree from a community college or specialized training like an apprentice program. But completing some form of higher education is critical to building a solid, sustainable career path.

That is why the American Competitiveness Initiative is at the heart of President Bush’s economic agenda. Unveiled during the State of the Union address, the American Competitiveness Initiative supports President Bush’s vision of America leading the global economy for generations to come.

This initiative pledges additional national resources over the next decade to:

* Increase U.S. investments in research and development;
* Strengthen U.S. education in math and the sciences; and
* Encourage entrepreneurship and innovation.

Strengthening math and science education is critically important because the demand for knowledge in the sciences is especially great. In the next 10 years, there will be more than 6 million new and replacement job openings that require strong math and science skills. It is these jobs that drive innovation, in turn creating millions of additional jobs.

But these jobs are unlike the jobs of the past. They require new skills sets and a greater understanding of the science and technology that drive these industries. And for millions of Americans, these jobs are beyond reach without additional education. And that is where you come in. You are the leaders in talent development. And you are the key to providing workers with access to education and skills training that will help them prepare for the jobs in this new economy. Unfortunately, the current workforce system does not provide adequate tools to accomplish this mission.

We are still working with an old system that is based on job matching and retraining. This system served the old economy well. It took care of Americans during cyclical layoffs, provided labor to meet job orders and offered short-term retraining to those looking for a new job. But the world is changing. Technology is transforming entire industries. Retraining workers for skills in demand in the short term is not enough. Lifelong learning and continually upgrading skills are the strategies required for sustaining success in today’s workforce.

That is why the Labor Department has been so active in supporting our nation’s community college system. They represent the heart of a higher education system capable of serving today’s workforce. They are accessible to nearly all Americans and have 1,200 locations nationwide. They hold evening and weekend classes. And they are adaptable to the rapidly changing demands of a regional economy.

Whether it is through community colleges, universities or some other education provider, we must provide working Americans with the resources to further their education and maintain their own competitiveness in the global economy. That is why a major component of the Competitiveness Initiative is the proposed creation of Career Advancement Accounts.

Full-time students and young Americans have Pell grants and a host of other resources to help them obtain an education. But for the working American, the one who must support a family, make house and car payments and contribute to a 401(k), there is very little. Career Advancement Accounts offer a way for those Americans to afford continuing education. They give them a chance to improve their skills and take the next step up the career ladder.

I realize that this proposal represents a change in the way our system approaches services to the community. But I believe that the worldwide economic transformation we are experiencing demands action. For 75 years, the system continuously built layers onto our workforce and economic support structures. Those layers now overlap so much, and are so complicated, that they no longer provide the best possible services to our workers or the employers that hire them. Career Advancement Accounts will change this equation, focusing the resources of the workforce system where they are needed most — in educating America’s workers.

Under this structure, the role of the system and its Boards is to act as facilitator and coordinator. This is critical to success. The amount of resources flowing into regions for workforce and economic development is staggering. It includes Federal money from nearly every Cabinet department, state appropriations, philanthropic and foundation funding and even private sector investment in the form of angel and venture capitalists. All of these resources are in support of the same goal — expanding and growing regional economies.

As a follow up to the President’s American Competitiveness Initiative, we are demonstrating how to coordinate all of these resources through a new initiative called WIRED. The acronym stands for Workforce Innovations in Regional Economic Development. And it represents an investment of nearly $200 million in 13 regions from around the country. These funds will help create incubators of regional talent that will serve as a foundation for economic development.

They are based on the idea of regionalism. The artificial boundaries that have divided our economic support systems are irrelevant in a rapidly changing, worldwide economy. By aligning the resources from all the major assets in a region — from established and growing businesses, community colleges and universities to angel investors and private foundations — regions can transform their economies and develop the talent needed to sustain that transformation.

This is not a concept unique to WIRED. Every region in the country can undertake a similar approach. It requires identifying the public and private resources in each region and then aligning those resources with a vision for economic revitalization.

In many ways, the Workforce Investment System is best equipped to lead this effort. It has the links to the education, employer and other leadership communities that can best affect change in a region. But it requires creative thinking on our part. And it requires the realization that the world has changed and we can help lead the way.

This conference is a great place to start. Emily has put together a strong program for you this week, and I hope you will enjoy it and find it rewarding.

America’s workforce today is among the most competitive in the world. To ensure that it stays that way, workers must be able to access the skills and job training they need in the 21st century economy. You can help workers make this critical link. You can be the catalyst for developing the regional talent that will revitalize areas struggling with change. And you can lead the way by creating within the Workforce Investment System, a successful model of the creativity and innovation that have made our nation so strong.

So thank you for all that you do to serve our nation’s workforce. And have a great conference!
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