Washington, DC – I am pleased that Chairman Casey convened this hearing on job training and manufacturing. 

Manufacturing in the United States has changed dramatically over the last 60 years.  Low-tech, labor-intensive goods such as apparel, shoes, sporting goods, and toys that were once made in America are now imported, while U.S. manufacturers export high-tech, capital-intensive goods to the rest of the world.

Computer-driven machinery has replaced routine labor in manufacturing.  This has boosted productivity growth, averaging 2.9 percent a year.  What took 1,000 workers to manufacture in 1950 now takes only 184 workers.  Consequently, manufacturing jobs as a share of total non-farm jobs have declined from 30.6 percent in 1950 to 8.9 percent in 2010.

Six decades ago, a high school dropout with no special skills could get a job on an assembly line, work hard, and over time enter the middle class.  Today, a job in manufacturing demands special skills and may even require a college degree.

The changing nature of manufacturing demonstrates the importance of job training for the success of both America’s manufacturers and their workers.  Congress enacted the Workforce Investment Act in 1998 to consolidate the federal government’s fragmented job training system into a coherent one-stop system that could serve the needs of employers and workers. 

However, the Government Accountability Office (GAO) found continuing fragmentation, overlap, and potential duplication in job training programs run by multiple federal agencies.  For fiscal year 2009, the GAO found 47 federally funded job training programs administered across nine agencies.  Almost all of those programs overlap with other programs in the provision of similar services but with differences in eligibility, objectives, and service delivery.

In addition to costly duplication, federal job training programs do not necessarily serve their purpose well either for those seeking jobs or workers seeking retraining.  Job training programs that work best are employer-driven, not bureaucracy-driven.  Manufacturers know what skills employees need to succeed better than bureaucrats.

The Senate will soon be reconsidering the Workforce Investment Act.  Congress has an opportunity to consolidate and reform existing federal job training programs and to improve their value for U.S. taxpayers.  I urge Republicans and Democrats in both Houses of Congress to seize this opportunity.

However, the best job training programs are meaningless if there are no jobs available for their graduates.  The Employment Situation Report for June, which was released last Friday, confirms that the economic policies of President Obama and Congressional Democrats are failing to revive our moribund economy and create jobs – manufacturing or otherwise.

By the Obama Administration’s own standards, its stimulus plan has failed to create jobs.  According to the June report, the United States still has 6.5 million fewer payroll jobs than promised.  And June’s unemployment rate of 9.2 percent is far above the promised 6.7 percent.

History demonstrates that business investment in new buildings, equipment, and software, not federal spending, drives the creation of new payroll jobs.  U.S. businesses are sitting on nearly $2 trillion that they could invest here at home to create jobs for American workers, but they are refusing to do so.

 

Why does American capital seem to be “on strike”?  The answer is that the Administration’s economic policies keep businesses guessing what onerous burdens await them.  As several Texas businessmen have told me, “Predicting market conditions is what we do for a living, but predicting what the President and Congress may do—forget it!”

It now is widely understood that excessive federal spending, budget deficits, and debt accumulation mortgage our economic future and increase uncertainty over the size and form of future tax increases.  However, we also have a regulatory explosion under President Obama that thwarts business expansion and increases uncertainty.

Here are just a few examples of regulatory excesses that discourage job creation:

• The State Department’s failure to issue a construction permit for the Keystone XL pipeline from Canada, a project estimated to create over 13,000 high-wage manufacturing and construction jobs in 2011-2012 across the country, stimulating significant additional economic activity. 
• The Administration’s moratorium on and subsequent slow rolling of permits for deep-water oil exploration and development;
• The EPA’s proposed regulations on greenhouse gas emissions; and
• The National Labor Relations Board’s unprecedented actions against Boeing for locating one of its manufacturing facilities in South Carolina.

While solving our fiscal problems requires congressional action, President Obama could end his regulatory onslaught on American business on his own and without delay.  If President Obama is serious about relieving unemployment, he should act now to reverse his Administration’s confidence-shattering, job-destroying regulatory policies.

I look forward to hearing the testimony of today’s witnesses.