[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
REVIEWING THE PRESIDENT'S FISCAL
YEAR 2015 BUDGET PROPOSAL FOR
THE DEPARTMENT OF LABOR
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD IN WASHINGTON, DC, MARCH 26, 2014
__________
Serial No. 113-55
__________
Printed for the use of the Committee on Education and the Workforce
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: www.gpo.gov/fdsys/browse/
committee.action?chamber=house&committee=education
or
Committee address: http://edworkforce.house.gov
_____________
U.S. GOVERNMENT PUBLISHING OFFICE
87-136 PDF WASHINGTON : 2015
________________________________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Publishing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, gpo@custhelp.com.
COMMITTEE ON EDUCATION AND THE WORKFORCE
JOHN KLINE, Minnesota, Chairman
Thomas E. Petri, Wisconsin George Miller, California,
Howard P. ``Buck'' McKeon, Senior Democratic Member
California Robert C. ``Bobby'' Scott,
Joe Wilson, South Carolina Virginia
Virginia Foxx, North Carolina Ruben Hinojosa, Texas
Tom Price, Georgia Carolyn McCarthy, New York
Kenny Marchant, Texas John F. Tierney, Massachusetts
Duncan Hunter, California Rush Holt, New Jersey
David P. Roe, Tennessee Susan A. Davis, California
Glenn Thompson, Pennsylvania Raul M. Grijalva, Arizona
Tim Walberg, Michigan Timothy H. Bishop, New York
Matt Salmon, Arizona David Loebsack, Iowa
Brett Guthrie, Kentucky Joe Courtney, Connecticut
Scott DesJarlais, Tennessee Marcia L. Fudge, Ohio
Todd Rokita, Indiana Jared Polis, Colorado
Larry Bucshon, Indiana Gregorio Kilili Camacho Sablan,
Trey Gowdy, South Carolina Northern Mariana Islands
Lou Barletta, Pennsylvania Frederica S. Wilson, Florida
Joseph J. Heck, Nevada Suzanne Bonamici, Oregon
Susan W. Brooks, Indiana Mark Pocan, Wisconsin
Richard Hudson, North Carolina
Luke Messer, Indiana
Juliane Sullivan, Staff Director
Jody Calemine, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on March 26, 2014................................... 1
Statement of Members:
Kline, Hon. John, Chairman, Committee on Education and the
Workforce.................................................. 1
Prepared statement of.................................... 3
Miller, Hon. George, Senior Democratic Member, Committee on
Education and the Workforce................................ 4
Prepared statement of.................................... 6
Statement of Witnesses:
Perez, Hon. Thomas E., Secretary, U.S. Department of Labor... 7
Prepared statement of.................................... 11
Additional Submissions:
Questions submitted for the record by:.......................
Chairman Kline........................................... 88
Mr. Miller............................................... 94
Pocan, Hon. Mark, a Representative in Congress from the
State of Wisconsin..................................... 95
Polis, Hon. Jared, a Representative in Congress from the
State of Colorado...................................... 94
Roe, Hon. David P., a Representative in Congress from the
State of Tennessee..................................... 92
Rokita, Hon. Todd, a Representative in Congress from the
State of Indiana....................................... 93
Walberg, Hon. Tim, a Representative in Congress from the
State of Michigan...................................... 92
Secretary Perez's, response to questions submitted for the
record..................................................... 97
Reviewing the President's Fiscal Year.
2015 Budget Proposal for the Department.
of Labor
----------
Wednesday, March 26, 2014
House of Representatives,
Committee on Education and the Workforce,
Washington, D.C.
----------
The committee met, pursuant to call, at 10:02 a.m., in Room
2175, Rayburn House Office Building, Hon. John Kline [chairman
of the committee] presiding.
Present: Representatives Kline, Petri, Wilson, Foxx, Roe,
Walberg, Salmon, Guthrie, DesJarlais, Rokita, Bucshon, Heck,
Brooks, Messer, Miller, Tierney, Holt, Davis, Grijalva, Bishop,
Loebsack, Courtney, Fudge, Polis, Sablan, Wilson, Bonamici, and
Pocan.
Staff present: Andrew Banducci, Professional Staff Member;
Janelle Belland, Coalitions and Members Services Coordinator;
Molly Conway, Professional Staff Member; Ed Gilroy, Director of
Workforce Policy; Christie Herman, Professional Staff Member;
Benjamin Hoog, Senior Legislative Assistant; Marvin Kaplan,
Workforce Policy Counsel; Nancy Locke, Chief Clerk; James
Martin, Professional Staff Member; Zachary McHenry, Senior
Staff Assistant; Daniel Murner, Press Assistant; Brian Newell,
Deputy Communications Director; Krisann Pearce, General
Counsel; Molly McLaughlin Salmi, Deputy Director of Workforce
Policy; Alissa Strawcutter, Deputy Clerk; Juliane Sullivan,
Staff Director; Loren Sweatt, Senior Policy Advisor; Alexa
Turner, Legislative Assistant; Joseph Wheeler, Professional
Staff Member; Tylease Alli, Minority Clerk/Intern and Fellow
Coordinator; Jody Calemine, Minority Staff Director; Melissa
Greenberg, Minority Staff Assistant; Eunice Ikene, Minority
Staff Assistant; Brian Kennedy, Minority Senior Counsel; Julia
Krahe, Minority Communications Director; Brian Levin, Minority
Deputy Press Secretary/New Media Coordinator; Leticia Mederos,
Minority Director of Labor Policy; Richard Miller, Minority
Senior Labor Policy Advisor; Megan O'Reilly, Minority General
Counsel; and Mark Zuckerman, Minority Senior Economic Advisor.
Chairman Kline. A quorum being present, the committee will
come to order. Good morning. I would like to begin by welcoming
Secretary Perez.
Good to see you here this morning, sir.
This is the committee's first hearing since he was
confirmed as the 26th Secretary of Labor.
So thank you for joining us and we look forward to your
testimony.
The purpose of today's hearing is to examine the
President's fiscal year 2015 budget request for the Department
of Labor. However, as is often the case, budget hearings are
about more than dollars and cents.
As the old saying goes, budgets are about priorities.
Naturally, budget hearings provide Congress an opportunity to
examine and discuss the policies an administration intends to
pursue in the coming years.
The authority of the Department of Labor governs
practically every private business and affects countless
working families. It is a great responsibility and one I am
sure that you, Mr. Secretary, take seriously.
Since taking office, you have shown a willingness to work
with the committee on a number of important issues, such as the
department's unprecedented enforcement of family farms and
health care providers serving active and retired military
personnel. We haven't agreed on every detail but we appreciate
the efforts you have made to address our concerns.
It is my hope that we can build on this progress in the
weeks and months ahead. Our nation faces significant challenges
that can only be addressed if we work together in good faith,
and we all know there is a great deal that demands our
attention.
For example, more than 10 million Americans can't find work
and roughly seven million are employed part-time but need a
full-time job. The labor force participation rate has dropped
to levels not seen since the Carter administration, a sign
millions of workers are so discouraged with their job prospects
that they have left the workforce entirely.
We have a health care law that is discouraging and
destroying full-time work. More than one out of every 10
African Americans can't find a job and nearly 47 million
individuals are living in poverty. In the Obama economy, stock
prices on Wall Street reach record highs while the wages of
working families on Main Street remain flat.
We are told time and again a strong recovery is just around
the corner if the President is allowed to spend more, tax more,
and borrow more. Yet after $17.6 trillion in total spending and
$6.8 trillion in new debt, we are stuck in the slowest economic
recovery in our nation's history. Despite the obvious fact that
the President's policies aren't working, he has once again put
forward a budget that doubles down on the status quo.
This fundamentally flawed approach is evident in the
President's request for six--six--new job training programs at
a cost of more than 10 billion. That is right, the President
wants to pile more training programs onto the more than 50
duplicative and ineffective programs that already exist, making
a confusing maze of programs even more difficult for workers to
navigate.
Taxpayers will be forced to invest in more bureaucracy
instead of in the skills and education that will help workers
succeed. Spending more money on a broken system will not
provide the support vulnerable workers and families need.
The American people can no longer afford to invest in the
President's failed agenda. We need to change course and adopt
responsible reforms that will get this country working again.
Reforms that will help every individual who wants to enjoy the
dignity of work find a job; reforms that will help ensure no
one who works full time is forced to live in poverty; reforms
that will help provide hope and prosperity for every working
family. The policies embraced by the President during the last
six years have not moved us towards these goals and his current
budget request won't either.
So obviously there are stark differences on how best to
move our nation forward. This committee will do its part to
find common ground where we can and invest in real solutions
that help grow our economy, create jobs, and expand opportunity
for all who seek it.
I urge the administration to be a partner in that effort.
No executive order or unilateral action can put the country
back on track and people back to work.
Mr. Secretary, let's please stop recycling bad policies and
start building on the small but encouraging progress we have
made in recent months to work together on behalf of the
American people.
With that, I will now recognize the senior Democratic
member of the committee, Mr. Miller, for his opening remarks.
[The statement of Chairman Kline follows:]
Prepared Statement of Hon. John Kline, Chairman, Committee on Education
and the Workforce
Good morning. I'd like to begin by welcoming Secretary Perez. This
is the committee's first hearing with Mr. Perez since he was confirmed
as the twenty-sixth secretary of labor. Thank you for joining us,
Secretary Perez, and we look forward to your testimony.
The purpose of today's hearing is to examine the president's fiscal
year 2015 budget request for the Department of Labor. However, as is
often the case, budget hearings are about more than dollars and cents.
As the old saying goes, budgets are about priorities. Naturally, budget
hearings provide Congress an opportunity to examine and discuss the
policies an administration intends to pursue in the coming years.
The authority of the Department of Labor governs practically every
private business and affects countless working families. It is a great
responsibility and one I am sure you take seriously, Mr. Secretary.
Since taking office, you've shown a willingness to work with the
committee on a number of important issues, such as the department's
unprecedented enforcement of family farms and health care providers
serving active and retired military personnel. We haven't agreed on
every detail, but we appreciate the efforts you've made to address our
concerns.
It is my hope that we can build on this progress in the weeks and
months ahead. Our nation faces significant challenges that can only be
addressed if we work together in good faith, and we all know there is a
great deal that demands our attention.
For example, more than 10 million Americans can't find work and
roughly 7 million are employed part-time but need a full-time job. The
labor force participation rate has dropped to levels not seen since the
Carter administration - a sign millions of workers are so discouraged
with their job prospects that they've left the workforce entirely. We
have a health care law that is discouraging and destroying full time
work. More than one out of every 10 African-Americans can't find a job
and nearly 47 million individuals are living in poverty. In the Obama
economy, stock prices on Wall Street reach record highs while the wages
of working families on Main Street remain flat.
We are told time and again a strong recovery is just around the
corner if the president is allowed to spend more, tax more, and borrow
more. Yet after $17.6 trillion in total spending and $6.8 trillion in
new debt, we are stuck in the slowest economic recovery in our nation's
history. Despite the obvious fact that the president's policies aren't
working, he has once again put forward a budget that doubles down on
the status quo.
This fundamentally flawed approach is evident in the president's
request for six new job training programs at a cost of more than $10
billion. That's right, the president wants to pile more training
programs onto the more than 50 duplicative and ineffective programs
that already exist, making a confusing maze of programs even more
difficult for workers to navigate. Taxpayers will be forced to invest
in more bureaucracy instead of in the skills and education that will
help workers succeed. Spending more money on a broken system will not
provide the support vulnerable workers and families need.
The American people can no longer afford to invest in the
president's failed agenda. We need to change course and adopt
responsible reforms that will get this country working again; reforms
that will help every individual who wants to enjoy the dignity of work
find a job; reforms that will help ensure no one who works full time is
forced to live in poverty; reforms that will help provide hope and
prosperity for every working family. The policies embraced by the
president during the last six years haven't moved us toward these
goals, and his current budget request won't either.
Obviously there are stark differences on how best to move our
nation forward. This committee will do its part to find common ground
where we can and invest in real solutions that help grow our economy,
create jobs, and expand opportunity for all who seek it. I urge the
administration to be a partner in that effort. No executive order or
unilateral action can put the country back on track and people back to
work. Mr. Secretary, let's stop recycling bad polices and start
building on the small but encouraging progress we've made in recent
months to work together on behalf of the American people.
With that, I will now recognize the senior Democratic member of the
committee, Mr. George Miller, for his opening remarks.
______
Mr. Miller. Thank you, Mr. Chairman.
And welcome, Mr. Secretary. Thank you for your partnership
and support of hard-working American families.
Since the Great Recession we have made a good deal of
progress toward repairing our economy, but much more needs to
be done. The good news is that for the past four years the
private sector has added 8.5 million jobs and the unemployment
rate is down to 6.7 percent. But unemployment is still too high
and we still have more than 3.6 million long-term unemployed.
On top of that, we are seeing an alarming growth in income
inequality. In the last decade real wages for low-income
workers have dropped, middle-class wages are mostly stagnant,
and while the top 10 percent have seen double-digit increases.
It is not right that low-wage workers are working harder
yet sliding backwards, and while very few wealthiest Americans
capture more and more of the gains. This increasing income
inequality is holding back our economic growth.
When the very richest make more money, they end up with
bigger bank accounts. When low-income and middle-income
consumers make more money they spend more money on Main Street
at the grocery store, at the shops and the restaurants,
generating economic activity that benefits everyone.
In fact, throughout this recession now many businesses have
reported after survey after survey that they didn't have enough
customers. There wasn't enough demand on Main Street for their
goods and their services and it was holding back growth.
As a front page story in the last week's Wall Street
Journal pointed out, stagnant incomes have created, quote: ``a
vicious cycle that has left businesses waiting for stronger
spending before they rev up hiring and investment.'' To grow
our economy we need policies that stop this vicious cycle,
policies that boost working families' incomes.
Pending before Congress are two tried and true ways to
stimulate that kind of growth: extended unemployment benefits
to those who simply can't find work--they are looking all of
the time, they can't find it; and the increase in minimum wage
so that no one who works full time has to raise their family in
poverty.
While the Senate is expected to vote on extending
unemployment benefits soon, House Republican leadership
continues to refuse to act on either of these measures. This
inaction is unacceptable. It also makes the Secretary of
Labor's job and the willingness to act all the more critical to
address the economic concerns of America's families.
This administration has proven time and again that it is
willing to advocate for hard-working Americans, taking decisive
action to reward work, to protecting the nest eggs and pensions
and 401(k) participants, enforcing and enhancing worker safety
and wage laws, and promoting unemployment of veterans--
promoting the employment of veterans and individuals with
disabilities.
For example, just recently the administration announced
plans to update our overtime rules to allow millions of
additional workers access to overtime pay. The idea is pretty
simple: If you work more you should be paid more.
The President has also recently announced that federal
contractors must pay a minimum wage of $10.10 an hour--the
first step toward raising the minimum wage for all Americans. I
know that both the President and Secretary Perez support my
legislation to increase the minimum wage to index it for
inflation and provide overdue relief to tipped employees,
lifting millions out of poverty.
On the retirement front, the department has been fighting
to help 401(k) plan participants protect their hard-earned nest
eggs from high fees and to ensure that workers receive the
investment advice that is truly in their best interest. At the
same time, the department has been fighting child labor abroad
and helping to level the playing field for American workers
with our trade partners.
Mr. Secretary, I commend you for your leadership in
tackling these critical issues, yet we need to be doing more.
Mr. Chairman, in the 40 years I have been in Congress I
have never been more disappointed by this committee's repeated
failure to address America's critical economic concerns. While
the Republican leadership will likely say that they have scores
of jobs bills designed to help the economy, most of them are
gifts to special interests at the expense of workplace safety,
clean drinking water, and the soundness and safety of our
financial institutions.
There is still time--not much time--to do better. We should
work with Secretary Perez in the final months of the Congress
to pass legislation that will increase the minimum wage; tackle
wage inequality for women; protect senior citizens, the LGBT
workers from discrimination; and provide quality jobs through
training to boost employment opportunities.
Mr. Secretary, thank you again for your appearance here
this morning and thank you for all you are doing on behalf of
America's working families.
I yield back.
[The statement of Mr. Miller follows:]
Prepared Statement of Hon. George Miller, Senior Democratic Member,
Committee on Education and the Workforce
Welcome, Secretary Perez, and thank you for your partnership in
support of hard-working American families.
Since the Great Recession, we've made a good deal of progress
toward repairing our economy, but much more needs to be done.
The good news is that in the past four years, the private sector
has added 8.5 million jobs, and the unemployment rate is down to 6.7
percent.
But unemployment is still too high, and we still have more than 3.6
million long-term unemployed.
On top of that, we are seeing an alarming growth in income
inequality. In the last decade, real wages for low-income workers have
dropped, and middle-class wages have been mostly flat, while the top 10
percent has seen double digit increases.
It's not right that low-wage workers are working harder, yet
sliding backwards, while the very few wealthiest Americans capture more
and more of the gains. This increasing income inequality is holding
back our economic growth.
When the very richest make more money, they end up with ever-fatter
bank accounts. But when low- and middle-income consumers make more,
they spend more of it at the grocery store, and in shops and
restaurants, generating economic activity that benefits everyone.
In fact, many businesses have reported that weak demand is a main
factor holding back their growth. As a front-page story in last week's
Wall Street Journal pointed out, stagnant incomes have created ``a
vicious circle that has left businesses waiting for stronger spending
before they rev up hiring and investment.''
To grow our economy, we need policies that stop this vicious
circle--policies that boost working families' incomes.
Pending before Congress are two tried and true ways to stimulate
that kind of growth: extend unemployment benefits to those who simply
can't find work and increase the minimum wage so that no one who works
full-time has to raise their family in poverty.
While the Senate is expected to vote on extending unemployment
benefits today, for the moment, House Republican leadership continues
to refuse to act on either measure.
That inaction is unacceptable. It also makes the Secretary of
Labor's job--and willingness to act-- all the more critical to address
the economic concerns of American families.
This administration has proven time and time again that it is
willing to advocate for hard-working Americans--taking decisive action
to reward work, protecting the nest eggs of pension and 401k
participants, enforcing and enhancing worker safety and wage laws, and
promoting the employment of veterans and individuals with disabilities.
For example, just recently the administration announced plans to
update our overtime rules to allow millions of additional workers
access to overtime pay. The idea is pretty simple. If you work more,
you should be paid more.
The president also recently announced that federal contractors must
pay a minimum wage of 10.10 an hour--a first step toward raising the
wage for all Americans. I know that both the president and Secretary
Perez support my legislation to increase the minimum wage, index it to
inflation, and provide overdue relief for tipped employees--lifting
millions out of poverty.
On the retirement front, the department has been fighting to help
401k plan participants protect their hard-earned nest eggs from high
fees and ensure that workers receive investment advice that is truly in
their best interest.
At the same time, the department has been fighting child labor
abroad and helping to level the playing field for American workers with
our trade partners.
Mr. Secretary, I commend you for your leadership in tackling these
critical issues. Yet we need to be doing more.
Mr. Chairman, in the 40 years I have been in Congress, I have never
been more disappointed by this committee's repeated failure to address
America's critical economic concerns.
While the Republican leadership will likely say that they have
scores of jobs bills designed to help the economy, most of them are
just gifts to special interests at the expense of workplace safety,
clean drinking water, and the soundness and safety of our nation's
financial system.
There is still time--but not much time--to do better.
We should work with Secretary Perez in the final months of this
Congress to pass legislation that will increase the minimum wage,
tackle wage inequity for women, protect senior citizens and LGBT
workers from discrimination, and provide quality job training to boost
employment opportunities.
Thank you again, Secretary Perez, for joining us today.
______
Chairman Kline. I thank the gentleman.
Pursuant to committee rule 7(c), all committee members will
be permitted to submit written statements to be included in the
permanent hearing record. Without objection, the hearing record
will remain open for 14 days to allow statements, questions for
the record, and other extraneous material referenced during the
hearing to be submitted in the official hearing record.
It is now my pleasure to introduce our distinguished
witness.
The Honorable Thomas E. Perez was sworn in as the 26th U.S.
Secretary of Labor on July 13, 2013. Prior to his confirmation,
he served as assistant attorney general for civil rights at the
U.S. Department of Justice and as the secretary of Maryland's
Department of Labor Licensing and Regulation.
We are delighted to have you here with us this morning, Mr.
Secretary. Before I recognize you to provide your testimony let
me briefly remind everyone of the five-minute lighting system.
Mr. Secretary, please give your testimony in its entirety.
We are not going to fool with the lighting system for that.
But for my colleagues, however, once again I will make
every effort to hold us to the five-minute rule for our
questioning of our witness so that all members may have a
chance to engage in the discussion. I understand that the
secretary has a hard stop at 12 o'clock, so I will try to keep
it moving along.
Mr. Secretary, you are now recognized to give your
testimony.
STATEMENT OF HON. THOMAS E. PEREZ, SECRETARY, U.S. DEPARTMENT
OF LABOR
Secretary Perez. Good morning. Thank you, Chairman Kline
and Ranking Member Miller and members of the committee. Thank
you for the opportunity to talk about the critical work of the
Department of Labor.
I know some of you are leaving the House at the end of this
term and I wanted to say thank you to Congressman Holt,
Congressman McKeon, and Congresswoman McCarthy for your
distinguished service.
And, Congressman Miller, I heard that you might not be
coming back, as well, and I cannot say enough thank you for
your leadership over four decades and your commitment to
empowering middle-class families and making sure that we
promote workers' rights not just here in the United States but
around the globe. We are forever grateful.
In the State of the Union address President Obama laid out
a vision based on the principle of opportunity for all. It is a
very simple vision: How far you get should depend on how hard
you work.
The core pillars of opportunity include: creating more good
jobs that pay a good wage, helping people get the skills they
need to succeed in those jobs, ensuring that our workplaces are
free from discrimination and are safe, making sure our economy
rewards the hard work of every American, and giving people the
chance to retire with dignity. All of these goals fall directly
within the purview of the Labor Department.
We have come a long way in the past few years to emerge
from the depths of the Great Recession. Private sector has
created over 8.5 million jobs in the last 48 months, where we
have seen consecutive growth each month. The economy is
unquestionably moving in the right direction.
But opportunity still remains elusive for too many
Americans. The President is working tirelessly to pick up the
pace of the recovery and ensure that nobody is left behind.
The Labor Department has played a critical role in helping
people find work and helping the nation emerge from the worst
economic crisis of our lifetimes. Our network of more than
2,500 American Job Centers helps out-of-work Americans access
all of the services they need: resume assistance, job leads,
career counseling, training opportunities, and more.
At the height of the recession the AJCs were the nation's
emergency rooms for job-seekers, administering the critical
care necessary to get people back on their feet. And since the
recession began we have served, on average, more than 14
million people each year, including more than a million
veterans, through our job training and employment services.
The American Job Centers are an important resource for
businesses, as well. During the State of the Union the
President singled out Andra Rush, a small businesswoman from
Detroit, who owns Detroit Manufacturing Systems. Her firm is
thriving because she found 700 of her employees through the
local American Job Center. We essentially served as her human
resources department during her period of exciting growth.
I would like to think of the Labor Department in this
capacity as playing a match.com kind of role, where we help
workers and employers find exactly the right fit, and different
needs for different people in different contexts.
During my eight months on the job I have spoken to dozens
of business leaders and CEOs, and to a person they are bullish
about the future of America. They all tell me that they want to
grow their business and they want to expand, and they also tell
me that in order to grow and expand they need a steady pipeline
of skilled workers.
So we need to build on our success and we need to fix what
isn't working, as well, so that everyone can benefit from the
programs that we are working with. And that is why the
President has tasked Vice President Biden with conducting a
soup-to-nuts review of our nation's training programs. I was
with the Vice President yesterday in New Hampshire as part of
this initiative.
This review will be guided by the principle of job-driven
workforce investment. Its goals are to expand employer
engagement and ensure our system is truly demand-driven. If you
are going to create jobs you have got to talk to the job
creators. We don't train widget-makers if nobody is hiring
widget-makers. That is what demand-driven is all about.
We are making sure that we make it easier for people to
acquire these in-demand skills. We are working to spur
innovation at all levels of the workforce system. We are
working to promote what works in workforce settings and fixing
what isn't working. And we are growing and transforming
registered apprenticeships to meet the increasing and exciting
need for these middle-class jobs.
One of our most important workforce challenges is
addressing the needs of the long-term unemployed. Even as the
economy recovers, the high rate of long-term unemployment
remains one of our most important pieces of unfinished
business.
And I will frankly acknowledge that of all the challenges I
face as Labor Secretary, this is the one that keeps me up most
at night because I have met so many long-term unemployed who
are working tirelessly day in and day out to find work. And we
need to keep working with them, and we are acting on a number
of fronts to help them punch their ticket back into the middle
class.
Just yesterday we highlighted in New Hampshire a successful
on-the-job training program wherein we subsidize the wages of
new hires for a limited period of time. That program has been
very successful in getting the long-term unemployed back to
work and is a win-win investment for both the worker and the
employer alike.
A top priority for Congress is to pass an extension of
emergency unemployment benefits, something that has been a
bipartisan practice for decades. More than two million people
have had this lifeline cut off since December and every day is
a struggle for them.
I was very encouraged by the recent bipartisan bill, which
was introduced in the Senate and hopefully will receive action
in the very near future, and I urge the House to follow suit
promptly.
If opportunity means nothing else, it must also mean the
right to return home safe and sound after a hard day's work. No
person should have to sacrifice their life for their
livelihood.
Since OSHA was created in 1970, the number of workers
killed on the job has been cut from 14,000 to an all-time low
of 4,400 last year in a workforce that is twice the size. And
we are working to make similar progress in mine safety.
I talk to employer after employer who recognizes that their
most precious resource is their human capital, and it is a
false choice to suggest that we either have job growth or job
safety.
Rewarding hard work with a fair wage is also central to the
opportunity agenda. Too many Americans are working a full-time
job and living in poverty. They deserve a raise.
That is why the President so strongly supports your bill,
Congressman Miller, to raise the minimum wage to $10.10 an
hour.
Just today the Council of Economic Advisors released a
report demonstrating how important this is for women, who
account for more than half of all workers who will benefit from
a minimum wage increase. The workers I speak to need this raise
and the businesses that I have heard from recognize that it is
the right thing to do and it is the smart thing to do because
it reduces attrition, increases efficiency, and puts money in
people's pockets, which they spend.
The President has also tasked me with updating and
strengthening our overtime protections. Overtime is a pretty
straightforward idea: If you work more you should be paid more.
Under the current rules, many salaried employees are barely
making enough to keep their families out of poverty, but they
are still expected to work 50 or 60 hours a week, and in some
cases more, and they are exempt from overtime protections and
therefore all too frequently not receiving a fair and
appropriate wage.
Mr. Chairman, the basic bargain of America is that
everybody has or should have a chance to succeed. No matter
where you started in the race, you can finish it ahead of the
pack. No matter the circumstances of your birth, or your zip
code where you live in, or what your last name is, you can live
out your highest and best dreams.
And that is what we mean by opportunity for all. That is
what the Labor Department is committed to every day. That is
what gets me out of bed in the morning and that is what excites
me about this work.
I am very bullish about our future, and I am very much
looking forward to listening and answering your questions
today. And thank you for the courtesy you have shown not only
today but in our prior meeting, and as well as meetings that I
have had with others. I have really enjoyed our interactions.
[The statement of Secretary Perez follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Kline. Thank you, Mr. Secretary. That was an
excellent summation. And if we had you on the clock you would
have made it under the time limit anyway.
Secretary Perez. Well, thank you.
Chairman Kline. So now, my colleagues, we are on the clock.
Mr. Secretary, you mentioned the Vice President is going
around apparently conducting a study of the nation's workforce
development programs. As you probably know, since 2011 the
Government Accountability Office has issued five reports
highlighting challenges with the federal workforce investment
system, and in fact, the GAO has issued 17 reports on the
Workforce Investment Act since the law expired in 2003.
I am having some difficulty understanding why we need an
18th study. I would hope that the administration, that your
department, would work with us in Congress to put forth a
comprehensive plan to reauthorize the bill. We are working on
that in Congress and we would like your engagement.
In your testimony you rightly discuss the need for American
workers and retirees to have access to secure savings and
retirement options. However, as I am sure you know, there has
been a great deal of discussion and bipartisan concern,
frankly, about the department's efforts towards redefining
``fiduciary.''
The previous, now-withdrawn, proposal would have increased
costs and reduced access to financial education investment
options. The fall 2013 regulatory agenda states that the new
proposal of this rule will come out this summer.
Can you assure us that the department's revised proposal
will address the bipartisan concerns that have been raised here
in Congress? We would like to keep that engagement going.
Secretary Perez. I have had a number of discussions, Mr.
Chairman, with people on this body as well as folks in the
Senate, and I can assure you that the outreach that we have
conducted and will continue to conduct will be robust, that we
will continue to listen. I am a big believer in listening and
learning.
And you look at the 503 regulation that was promulgated,
and in the aftermath of that regulation Governor Ridge, who was
very involved, wrote an op ed in the Wall Street Journal
referring to that process as a model in which we were
inclusive. We came up with solutions that were practical,
addressed issues.
That is how I have always tried to comport myself and that
is why I have met with a number of you and will continue to do
so.
Chairman Kline. Well, and we do appreciate that meeting,
your willingness to come over here and meet with us. We want to
continue that kind of relationship.
When we have an issue like this where there has been
bipartisan concern raised we really would like to make sure
that we are staying in contact here because there are great
concerns throughout the economy, and particularly in the
industry, about this new definition of ``fiduciary'' and the
impact that it might have.
Speaking of rulemaking, your testimony highlights the
accomplishments of, and future plans for a number of Department
of Labor agencies, but one agency that is missing from your
testimony is the Office of Labor Management Standards. On June
21, 2011 the department proposed a significant change to the
longstanding, court-approved definition of ``advice'' under the
Labor and Management Reporting Disclosure Act. Under the
proposal the advice exception would be limited to oral and
written recommendations, so we are hearing a great deal of
concern, again, Mr. Secretary, about the impact this would have
on employers and their relationship with attorneys as they move
forward to address their concerns.
This controversial persuader rule would be issued in March,
as previously indicted in the fall 2013 Unified Agenda. The
department did not provide a new date for issuance of a final
rule but stated that they would be moving forward with it in
the future, and I don't have the quote here in front of me.
Again, there is a great deal of concern here and we would
like to stay engaged with the department as you look at that
rulemaking.
Secretary Perez. And I will continue to stay engaged. I
have certainly heard a number of concerns that were raised in
the course of the outreach I have done to a wide array of
stakeholders.
As you know, the rule is currently under review so there
are limits to what I can say, but I can certainly assure you
that we have been listening intently and I want to make sure--
and I made sure when I came in that I had an appropriate handle
and a full handle on all the issues and all the concerns that
were raised, and I continue to assure you that I will do that.
Chairman Kline. Thank you, Mr. Secretary.
Mr. Miller?
Mr. Miller. Thank you, Mr. Chairman.
Mr. Secretary, thank you.
Mr. Secretary, as we contemplate the Congress voting to
increase the minimum wage in this session of Congress, it
appears when you review the literature that the old traditional
argument that an increase to the minimum wage meant fewer jobs
has been stood on its head and study after study across the
country, in localities, across states, in competing
jurisdictions where the wages are different, that, in fact,
that the minimum wage appears to not only have employees retain
their jobs longer, but employers saying that they are getting
the better quality of applicant for that job and they are
staying longer at the higher wage.
This was reinforced by Costco, the big box wholesaler, out
of Seattle--national wholesaler--that said this was their
purpose in supporting an increase in the minimum wage, that
they thought they were getting better, longer-term employees.
And the Gap, the national retailer, just announced that it is
going to 10 an hour for the very same reasons and they expect
to recover whatever costs are associated with retention and
lower training.
This is also being proven out in various communities and
counties across the country, where mayors and county
governments and others and states have made a decision that
they cannot have a vibrant economy if low-income workers are
continuing to get poorer and poorer and poorer as they work
longer.
And I just wonder what your review of the literature says
to your department on this. You announced the--publishing of a
study this morning on the impact on women. But it seems that
there has been a sea change both in local experience and in the
empirical studies of the impact of the increase in the minimum
wage.
Secretary Perez. Congressman Miller, I completely agree
with you that there is an overwhelming body of evidence
demonstrating that when you raise the minimum wage it doesn't
result in job loss. It started with Alan Krueger looking at a
jurisdiction in New Jersey, and then across the river in
Pennsylvania, and when they demonstrated that when one
jurisdiction raised the minimum wage it didn't have an impact
on jobs, people asked, ``Well, that is just one pair of
jurisdictions.'' So economists studied literally thousands of
jurisdictions that had the same situation across this country
and came to the same conclusion.
And then I would also bring your attention to the state of
Washington. Washington has the highest minimum wage in the
United States and has so for some time, and you look at the
data there on job growth and job growth has been robust. And I
would note parenthetically that Washington does not have a tip
credit, so if you are a waitress or a waiter you are making the
same minimum wage as others.
And I have been to Seattle as recently as 3 weeks ago. The
restaurant industry continues to thrive. So there is a robust
evidence base demonstrating that this is good for workers; it
is good for employers because it puts money in people's pockets
and they spend it.
That is what Henry Ford did 100 years ago when he doubled
the wages for people on the assembly line. He did it because he
had 360 percent attrition, but he also did it because he wanted
to show that people who make my products ought to be able to
purchase my products, and when I put money in people's pockets
they spend it in our communities.
Mr. Miller. Thank you. You mentioned the tip credit. The
tip credit, I think, today--what tipped employees get paid as
part of the minimum wage is now down to 29 percent of the
minimum wage. It is the smallest share since 1966.
What you have are some of these people in the restaurant
industry and elsewhere arguing that their business plan--that a
1966 wage is critical to the maintenance of their business
plan. I don't know any other sector in the economy that would
make that argument today that I am going to have to pay you at
1966 wages in order for me to be able to survive as a business.
And the impact on women, overwhelmingly--or part of that
tipped workforce--is really dramatic in terms of the loss of
earning power for their work--their schedule.
Secretary Perez. Tipped workers have been taking it on the
chin in all too many states. And you are correct, they are
disproportionately women. They are much more likely to be
living in poverty. They are much more likely to be relying on
Food Stamps.
And again, you look at the experience of places like
Washington State. Your state of California does not have a tip
credit. And I have hardly seen a diminution in the restaurant
industry because the playing field is level for everybody.
And I have asked restaurateurs in those states, ``How do
you deal with this?'' And they say it is a level playing field.
And when people have money they actually start going to
restaurants again.
And so it has been a consumption-deprived recovery. That is
the theme I hear from employer after employer.
And when you put money in people's pockets, including
tipped workers, they are going to spend it. They are not going
to bank it in some, you know, offshore account.
Mr. Miller. Thank you.
Chairman Kline. Gentleman's time has expired.
Mr. Petri?
Mr. Petri. Thank you very much, Mr. Chairman.
I listened to your testimony with interest. I, although
years ago, I took economics 1, and I learned I didn't
understand or learn economics properly. I was taught that when
prices change in a marketplace it affects supply and demand,
and I always thought that applied to the price of labor as well
as anything else.
But leaving that aside, the President recently directed you
to carry out a review of federal policies governing overtime
pay under the Fair Labor Standards Act. Could you provide us
with any additional insights as to which areas you intend to
review or problems you are seeking to correct?
Secretary Perez. Sure. Overtime stands for the simple
proposition, as I mentioned in my testimony, that if you work
extra you should be paid extra. In 1975 there was a threshold
set for people who were working more than 40 hours a week; it
was 250 a week, so white-collar workers were entitled to an
exemption. And if you actually adjust that for inflation that
would be $970.
In 2004 there was regulation put in place by the Bush
Administration that did two things. It established the
threshold at $455 a week, and then it established a test to
determine whether you were an exempt employee. And the upshot
of the test--and there was a case out of the 4th Circuit that
was litigated here--is you can work one percent of your time in
a management function and 99 percent of your time stocking
shelves and you will be an exempted employee under the current
regulation.
And so there are two issues that we are working on in this
regulation, and that is, number one: what should the threshold
be? It is currently $455; it was $250 in 1975.
And secondly: how does the test work and how, if at all,
should the test be adjusted? And what we are doing here is what
we are doing in every regulatory context, is that we are
reaching out to a wide array of stakeholders. I spoke to some
business leaders last week; I am meeting with others actually
later today and tomorrow to get their insights. We are meeting
with workers.
We are casting a wide net so that we can understand the
impact of this, and I look forward to involving this committee
and getting insights from you and any constituents that want to
make sure that their voice is heard.
Chairman Kline. Mr. Tierney.
Mr. Tierney. Thank you, Mr. Chairman.
Secretary Perez. Morning, Congressman.
Mr. Tierney. Morning. How are you?
Secretary Perez. Very well.
Mr. Tierney. I want to read you just a couple of
statements. Our office is getting inundated from people that
really are seeking an extension of the unemployment insurance,
so just a couple of samples, one from a young woman from Lynn,
Massachusetts.
``I need to express my wish to have the unemployment
benefits extended as soon as possible. I have worked since I
was 16 years old until I was laid off from a major bank last
May. Since then I have searched for work everywhere. I go on
every Web site every day. I contact friends. I use the local
career center and fulfill all the requirements set by the DUA.
``I have two children, a mortgage, a car payments, and
utilities to pay. I am sure you can imagine how hard it is to
say `no' to every extra that the children ask for, but the
worst of it has been that recently when they keep asking why I
haven't gone grocery shopping yet, since I normally go every
Tuesday while they are in school, I have made every excuse. I
am really starting to get scared.
``It is humiliating to live like this, especially when I
have never had to ask for financial help from anyone. I am so
scared that this argument with Congress will go on forever. I
am begging for your help.''
Another one comes from a constituent in Saugus,
Massachusetts: ``I am one of the millions of Americans that
find myself for the first time in my life in the ranks of the
unemployed. My benefits were extended only the last two weeks
of 2013 but now I have no money coming in. I have slowly
drained my savings over the last seven months to the point
where I have nothing to fall back on.
``The argument that extending benefits removes incentive to
find a job is ludicrous. I am 55 years old; I have never had to
collect unemployment in my career and want and need to work.
Jobs at my level are competitive and scarce.
``I have worked hard and paid taxes all my life and need
this money to help me make ends meet. What little money I
receive goes right back into the economy to pay my bills.''
And then one last once from Burlington, Massachusetts: ``I
believe you have already been on my side of this issue but I
implore you to exercise whatever influence you might have on
the obstructionists seem to want to further hurt those of us
who are already hurting.
``My wife's unemployment was cut off at Christmas time; my
income alone can't sustain mortgage payments in a timely
fashion. My credit rating has taken a beating while options I
have are not very good keeping my home over the last 20 years.
Those checks were keeping our heads above water.
``I will be 65 in three months. My house is essentially my
retirement money and if I am forced to sell I will have to do
so at less than it is valued in order to pay my way out of
mounting debts. My life is consumed by worry. My health is so-
so and I have to continue working through the best I can, but I
am losing ground fast.
``There are well over a million of us scrambling to
rearrange chairs on the deck of the Titanic. How can this be
happening in America? I have worked my entire life and played
by the rules. Are people who find themselves in the same
position now considered to be a disposable commodity? I am
worried sick.''
So this assertion by at least one Republican that was
quoted recently in a news article that extending unemployment
insurance will encourage unemployment--what would you say to
that?
Secretary Perez. I couldn't disagree more, sir. I have
spent so much time with people like your constituents and their
stories compel me. And the things I hear most frequently is,
``I am spending full-time working--looking for work.''
A cancer survivor from New Jersey told me, ``I had a chemo
drip on me seven or eight years ago. Fighting cancer was far
easier than fighting long-term unemployment.''
I have met Wellesley grads who are long-term unemployed and
I have met people with a ninth-grade education who are long-
term unemployed. And they are all working their tails off to
find a job.
And we are trying to work with them. I was in New Hampshire
yesterday with the Vice President and we met a person who had
an engineering degree--40 years an engineer and he couldn't
find a job. And through our on-the-job training partnership,
where we subsidize the wage for a certain period of time, he is
back on his feet. The employer has hired others through that
initiative, which has proven very successful.
But there are millions of others who are left behind, and
what they tell me the most is that the thing that bothers them
the most to a person is when people suggest they are sitting at
home doing nothing. That is the thing that offends them the
most.
Mr. Tierney. What do you have to say to the comment made by
one of the people that I quoted that whatever they get from
unemployment benefits goes right back into the economy--the
have bills to pay?
Secretary Perez. Well, it is exactly true. People who are
minimum-wage workers are choosing between a gallon of milk and
a gallon of gas. People who are long-term unemployed are
choosing between food and medicine.
Congressman Courtney and I have been in touch with a woman
named Katherine Hackett. She sat in her house with her hat and
coat on because she had to keep it at 57 degrees. I mean, this
is what people are doing.
And we have a long, proud, bipartisan history of helping
folks in this situation, and I hope we can continue that, at
the same time looking at other investments so that we will get
them back on their feet. And that is what we are doing.
I said, this is what keeps me up at night more than any
issue that I deal with, and I call people that I meet. I call
them three weeks later because what they need is hope and what
they need is a helping hand right now, and we need to give it
to them.
Mr. Tierney. Thank you, Mr. Secretary.
Chairman Kline. Gentleman's time has expired.
Mr. Walberg?
Mr. Walberg. Thank you, Mr. Chairman.
And thank you--
Secretary Perez. Good to see you again, sir.
Mr. Walberg. Good to see you, and I definitely want to
express appreciation for your openness to meet, whether it is
in my office or on a phone call or I am sitting in my pickup
truck and you are in your office, I--
Secretary Perez. Please don't call me from your Harley,
though.
Mr. Walberg. Well, if I, do it will be by the side of the
road and your wife will be happy coming from Milwaukee.
Secretary Perez. Yes. Thank you for stimulating the economy
of my wife's home town, by the way.
Mr. Walberg. Well, I appreciate that. I think the openness,
whether we agree or disagree, whether we have some efforts to
work for compromise, it is always good to communicate. So thank
you very much.
Secretary Perez. Thank you.
Mr. Walberg. Certainly appreciate that.
On the crystalline silica regulation, in your testimony you
mentioned that OSHA is working on regulation regarding exposure
to crystalline silica. I have, as you might guess, have heard
from a number of stakeholders concerning the proposed
regulation.
A major flaw that they bring up to me in this regulatory
proposal is that OSHA acknowledges laboratories analyzing
workplace air samples can't accurately measure the proposed
lower limit that is under consideration. OSHA will allow the
laboratories two years to work on the problem. However,
employers are being told that they will not be given the same
grace period.
And so I guess my question would say, Mr. Secretary, how
can regulation propose to regulate what cannot be accurately
measured?
Secretary Perez. Well, Congressman Walberg, what I would
say at the outset is exposure to silica can have devastating
effects on people.
Mr. Walberg. Certainly.
Secretary Perez. And Secretary Frances Perkins, actually,
in 1937, hosted an event in which the issue of exposure to
silica was discussed. And so for decades, literally, we have
known the impact of silica.
And what we are doing in this proposed rule is taking the
science. We have worked with NIOSH; we have worked with other
key stakeholders; and we have put it out there in a proposed
rule where we have cast a wide net.
As we speak, I believe hearings are still underway--I know
they were underway last week; I can't say for certain whether
they are underway today. And at the end of that very inclusive
process we are going to gather all this information and address
concerns that are raised and come up with a final rule that I
think addresses the balance that needs to be addressed.
And I spoke to a guy named Alan White from Buffalo, New
York who is my age and he works in a foundry and he is dying
because he has silicosis. And he, you know, said to me, ``You
know, I feel like this issue has been, for me, studied quite
literally to death.'' And so--
Mr. Walberg. It is an important issue, but I guess concern
using 11-year-old data on this issue, and Mr. White is
concerned. I worked in a steel mill myself; there are concerns
there for me.
But we would hope that the information, the statistics, the
data would be more up-to-date than 11 years old. We also have
some concern that stakeholders estimate the silica rule will
cost well over $5 billion to implement. OSHA estimate is 637
million annually. That is quite a disparity.
Appreciate you trying to explain those dramatic cost
differences, but we also know that silicosis, the incidence has
gone down except in certain limited and important areas. But
ultimately, overall it has gone down.
Secretary Perez. Well, I can assure you that this
regulatory process is going to be hearing your views and a wide
array of views. I was looking at my notes here and our hearings
are continuing through April the 4th. I have been actively
engaged in discussions internally. I have a lot of faith in the
science and in the not just, you know, what we are doing, but
what we are reaching out so that we have the state-of-the-art,
current understanding of silicosis, its impact, its costs, its
benefits of rulemaking, and that is what we will do.
As I said, we are going to do the same thing we did in the
503 context, which is to listen, learn, craft a rule that is
appropriate and balanced and helps people stay safe without
having other ill consequences.
Mr. Walberg. I would hope that there would be a willingness
to open up to expand the amount of testimony questioning time
in this process, specifically dealing with this area, from the
stakeholders. I know that one suggestion has been to use water
on sand. Having worked in a steel mill and having seen our
locker room blown up as a result of water coming in contact
with molten metal, I think we ought to have stakeholders with
significant time to make sure that those questions are
answered.
Secretary Perez. Thank you. And we have extended, as you
know, the time period, I think, twice--it may have been once; I
think it was twice--and that is because we want to--
Mr. Walberg. --appreciate that--
Secretary Perez. --we want to make sure that we get it
right.
Mr. Walberg. Thank you.
Chairman Kline. The gentleman's time has expired.
Mr. Holt?
Mr. Holt. Thank you, Mr. Chairman.
Thank you, Mr. Secretary.
Secretary Perez. Morning. Thank you for your service.
Mr. Holt. You referred to Secretary Perkins. You are part
of a long line of really distinguished people who have looked
after the welfare of Americans' families, and I am pleased to
see the way that you are undertaking this--
Secretary Perez. Thank you.
Mr. Holt. --with a personal concern for that welfare.
Frances Perkins, yes, talked about silica. This is
something that we still have to work on, we still have to
improve. My father, back in the 1930s, was involved in bringing
to light the horrors of workers exposed to silica, and we have
not done enough yet. We shouldn't be cutting corners.
I look here on the wall at Mary Norton, a New Jerseyan, who
in this committee, as chair, shepherded the National Labor
Relations Act through Congress, setting the principle that
wages and hours regulations are a wise thing to do for this
country. And you mentioned my constituent and good friend Alan
Krueger, who has demonstrated economically the value of the
minimum wage to our overall economy.
And, you know, since I am talking New Jersey I mustn't fail
to mention Pete Williams, who was the father of OSHA, the
Migrant Labor Act, and all of these great protections for
working families.
But I wanted to ask two questions. The minimum wage:
Minimum wage has lost considerable buying power. It is not
indexed to inflation, as we now in New Jersey recently have
done through constitutional amendment. It is till way below its
peak of 40 years ago in buying power. And we need to see that
all workers, including workers depending on tips, women,
workers supporting families on a minimum wage, workers between
jobs--all these workers should have means to support their
family, have, of course, good benefits, and an expectation of
dignity in their non-wage-earning years. And that is my second
question.
So I wanted to ask two specific questions. Second question
has to do with those non-wage-earning years.
First of all, I wanted to give you a moment to specifically
address the CBO claim that some of our colleagues are seizing
on that raising the minimum wage, although overall very
beneficial, might cause some job loss.
Secretary Perez. Well, as I mentioned--
Mr. Holt. CBO has said that.
And then my second question has to do with those non-wage-
earning years. The chairman raised this point. I would like to
know more specifically how you can be sure--how you intend to
be sure that setting standards on investment advice doesn't
result in no advice and doesn't discourage saving and
preparation for non-wage-earning years.
Secretary Perez. I will attempt to answer those two
questions in short order.
The CBO report acknowledged that there is a potential range
of potential job loss that could result from a raise in the
minimum wage, and one range was zero. Mr. Elmendorf also
acknowledged that they didn't do any independent studies to
figure out what, in fact, it was.
And as I outlined earlier, there have been a bevy of
studies that have actually looked, in fact, at what happens
when you have these match paired tests. And in fact, raising
the minimum wage does not result in job loss because employers
have workers who are more efficient, who are--who don't leave
as fast, and as a result, it has a good impact.
So--
Mr. Holt. Well, I am glad you have addressed that so
clearly, because the other side has been using this, I think,
improperly. Thank you.
Secretary Perez. And as to your second question, very
quickly, we are looking very carefully at the best way to
address the issue of conflicted advice in the retirement
market. Two of the most important choices that people make are
the choice to buy a home and the choice now of how to invest
their retirement. In both cases we have a shared interest in
making sure that they are making informed choices. That is our
goal in this process and we are going to make sure that we
listen to everybody as we move forward.
Mr. Holt. Thank you very much.
Chairman Kline. Thank the gentleman.
Dr. Foxx, you are recognized.
Ms. Foxx. Thank you, Mr. Chairman, and--
Secretary Perez. Good to see you again.
Ms. Foxx. Good to see you too, Mr. Secretary. I appreciate
your coming by to see me recently and the great talk we had--
Secretary Perez. I enjoyed our visit and I hope your
brother is doing well.
Ms. Foxx. Yes, he is.
Secretary Perez. Good.
Ms. Foxx. Thank you very much. You are very good at--you do
your homework and I give you a lot of credit for that.
You have told a lot of emotional stories here about
individuals, but I think one of the things that we have all
heard over the years is you give a woman a fish and you feed
her for a day, teach her to fish and you feed her for a
lifetime. And when you came by to see me we talked about the
fact that we have passed a bill out of the House called the
SKILLS Act, which is now over in the Senate, and when we passed
the SKILLS Act we quoted President Obama often when he said in
the 2012 State of the Union Address that he wanted to cut
through the maze of confusing job training programs and create
one program for workers to find the help that they need.
We all know that there are about 12 million people in this
country unemployed and the long-term unemployment situation is
particularly dire in the country. We also know that we have
about four million jobs out there that can't be filled because
people do not have the skills to fill them.
And yet, in the fiscal year 2015 budget you are proposing
to create six new workforce development programs that total
more than $10 billion. You level fund the workforce investment
state grant programs, which are the primary funding streams
dedicated to helping unemployed Americans find and retain full-
time work.
I am wondering what has changed in the President's mind
since 2012 when he said we needed to consolidate programs and
have one program for people to come get the help that they
need. That is his quote.
Why are you creating new overlapping programs instead of
modernizing the current workforce investment system and working
with us in the House and encouraging the Senate to act on the
SKILLS Act so that we can do what the President said he wanted
to do? Why did he change his mind?
Secretary Perez. The President didn't change his mind, and
I think we have a shared interest, Congresswoman, in making
sure that we give people the skills that they need to succeed
and the ability to punch their ticket either for the first time
or again to the middle class, and making sure we give employers
the access to the skilled workforce that they need to grow
their business. And if you look at what the President's
proposals are doing, you look at what the Vice President is
doing, we are, among other things, spurring innovation, taking
what is working and taking it to scale, and trying to fix what
is not working.
And let me give you a couple examples. You cited, for
instance--
Ms. Foxx. We really would like those examples--
Secretary Perez. Sure. I will give you a--
Ms. Foxx. --exactly what you are doing--
Secretary Perez. Sure.
So for instance, you know, one of the programs you
mentioned as--which I thought was actually exactly consistent
with what you were getting at--is the President is proposing to
combine the Trade Adjustment Act and the displaced worker
provision of WIA into one program, and so that is actually
taking two and consolidating them into one.
Ms. Foxx. --we have 49 different programs.
Secretary Perez. Well, it is interesting. Let's talk about
the veterans programs, for instance, because these are not
programs as much as they are tools. If you are a veteran and
you walk into a one-stop center you don't know about the
various programs. You walk in and you say, ``I am a vet and I
want a job.''
There are four or five funding streams. If you are a
veteran with a disability we will take that funding stream and
help you. If you are a veteran and you don't have a disability,
well then we have another group of folks who can help you.
Those aren't programs; those are resources.
And you look at the GAO report, those are four or five of
what some people refer to as programs. What GAO said was the
thing that we notice is that these funding streams are actually
helpful to address the unique needs of certain job-seekers--
people with disabilities. We have programs that are targeted at
them. People who are ex-offenders.
We have to take the people where they come. And that is why
Congress, in its wisdom over the years--we didn't establish
these programs; Congress did. And they did that because
different people have different needs.
And what we are trying to do, through the apprenticeship
program, which is one of the six programs that you cite--we
already have investment in apprenticeship. We think it works.
We are trying to take it to scale. Just as if you had a weapon
system that works you would make more of it because it works.
I remember our conversation very well and I think we
actually have a lot of common ground on the issue of data, on
the issue of performance measurement, and I am really looking
forward to continuing that dialogue. And we want to work with
you to craft a bipartisan solution because in state and local
government when I worked on these issues they were--it wasn't
Rs and Ds; it was business leaders, political leaders, faith
leaders, and others coming together to help people get jobs and
help businesses grow.
Ms. Foxx. As I told you when you left my office, you know
where I am.
Chairman Kline. The gentlelady's time has expired.
Secretary Perez. I look forward to it.
Chairman Kline. Mr. Grijalva?
Mr. Grijalva. Thank you, Mr. Secretary, and--
Secretary Perez. Good to see you again.
Mr. Grijalva. --Secretary.
The question I have, you know, you hear the argument that
minimum-wage jobs are really intended for first-time employees,
primarily teenagers, as part of--and that is one of the reasons
is, is because they will be out of that work environment
quickly. You know, how many--my question is, if you look at
that--the minimum-wage workforce, could--is there--do you have
any information to break down that claim about--
Secretary Perez. Sure. Eighty-eight percent of minimum-wage
workers are ages 20 or older, and the recent CBO report again
confirmed that 12 percent of minimum-wage workers are
teenagers. The average age of a minimum-wage worker is 35 years
old.
Minimum-wage workers are disproportionately women. Twenty
percent of children have at least one parent who would receive
a raise if the minimum wage were increased. The data goes on.
Two million people would be lifted out of poverty. Twelve
million people in poverty would see their incomes rise with
this.
And so I have met so many people in the course of my tenure
in this position who are working a full-time job, trying to
raise their kids, and making the choice, as the person in
Connecticut said to me, between a gallon of milk and a gallon
of gas. The person working at Newark Airport who was making
minimum wage until recently--got his first raise in nine years,
and, ``I can't give my kid a birthday present because I got no
money to buy him one.'' And it was sad to tell.
And this was apparent. And that is the face of minimum-wage
workers across this country.
Mr. Grijalva. And the effect, if I may comment, Mr.
Secretary, the effect on the child and the poverty within
children based on the fact that we are at this stagnant level
of income for what, a quarter of minimum-wage workers that
happen to have dependent children.
Secretary Perez. It has a huge impact on children. Every
child deserves a fair start, a healthy start, and there is
legions of data that demonstrate that by the age of three all
too many people living in poor families, they have exposure to
literally millions less words that are spoken in their
household, and so they are already behind the eight-ball when
they start preschool.
If you are not getting through--if you are not reading at
grade level by the third grade a wide body of research that
demonstrates that you are going to have trouble later in life.
You look at the adult studies from the OEDC, you know, we are--
on numeracy and literacy, the good news is that we are ahead of
Italy and Spain; the bad news is that there are many countries
that are ahead of us.
And when you don't have a head start you are always trying
to catch up, and--and that is not good for children. That is
not good for children when they grow up and that is not good
for America.
Mr. Grijalva. The initiatives that have been talked about,
the minimum wage initiative of the President and the
administration and Labor, the availability of overtime for
salaried employees would add to consumer demand, would rev up
hiring in various business and investment. And also, all this
whole part is premised on all the studies that--recent studies
that talk about the significant income inequality in our
country has reached a point where it is holding back growth.
If that is true, should we be increasing the minimum wage
as an urgent stimulus tool for this economy, or increased
income tax credit, or should we do both?
Secretary Perez. Well, I think you can do both. And the
President put forth a proposal to expand the EITC. The EITC, as
you know, has enjoyed strong bipartisan support for decades, as
have increases in the minimum wage. And I think they work very
synergistically, and the President's proposal does just that.
In the Senate I believe it was Senator Rubio who had
floated a proposal on the EITC, as well, and I hope that we can
work together on that. Ronald Reagan was very proud of the work
he did in expanding the EITC. It was a very important tool.
Mr. Grijalva. Mr. Secretary, 200 members of Congress sent a
letter to the President based on the fact that the House
leadership won't move on the ENDA bipartisan legislation that
left the Senate, which would prohibit discrimination by federal
contractors in this case based on sexual orientation or gender
identity, and asking for an executive order. Your reaction to
that?
Chairman Kline. The gentleman's time has expired.
Mr. Salmon?
Mr. Salmon. Thank you.
Mr. Secretary, I noticed that the President's budget calls
for an increase in funding for whistleblower protection
programs--an increase of 12.8 million specific to OSHA. And we
know that the purpose of whistleblower protections is to allow
employees to shed light on corruption and abuse of powers. Are
you supportive of that?
Secretary Perez. Absolutely. We have done a lot of work in
that area and Congress has passed a number of very important
statutes in recent years, and I look forward to not only trying
to get that increased, but I would love to brief you on some of
the differences that exist in certain whistleblower laws,
because the laws that you have written more recently have
remarkably robust protections. Some of the laws that have been
on the books for decades could use updating, and we are
actually working with a bipartisan group of people to try to
address that.
Mr. Salmon. How important are those whistleblower
protection that are in statute in ferreting out corruption?
Secretary Perez. I think whistleblower laws are a critical
tool in our arsenal to make sure that our workplaces our safe,
to make sure that financial services--whistleblower cuts across
a wide swath of industry, and they have been a critical tool
throughout and I am confident that they will continue to be.
And I very much appreciate your question because I spend a lot
of time with our staff talking about how we can do even more in
this area.
Mr. Salmon. Thank you. I think we can do more.
In fact, are you aware that employees of unions are not
afforded whistleblower protections and have, in fact, been
fired without cause for simply exposing corruption? Is it time
maybe to make sure that all employees be afforded whistleblower
protections, including those that work for powerful union
bosses.
Secretary Perez. Well, if you have specific circumstances
where you think there is a hole in the law I would be happy to
talk to you about the specific circumstance and figure out if
it is covered under current law, and if it is, how we can make
sure we enforce that law, and if it is not, have a conversation
with you about whether it makes sense to move forward.
Mr. Salmon. I would love to do that. I just want to make
sure that across the board that when corrupt practices are
exposed by people that are courageous enough to stand forward
to do that, that they are protected regardless of what entity
that they are with. I think that is a valuable tool.
Secretary Perez. As you know, our Office of Labor
Management has done a steady diet of cases involving--and we
have gotten a number of convictions for many years--
Mr. Salmon. Right.
Secretary Perez. --and I am very proud of the work they
do--in cases that involve corrupt practices by labor unions and
others.
Mr. Salmon. Right.
Secretary Perez. When the law is violated we will take
action.
Mr. Salmon. Excellent.
On July 13, 2012 the case of 360Training.com, Inc. v. the
United States and Clicksafety.com, Inc., the U.S. Court of
Federal Claims found that OSHA violated federal procurement law
related to online training for OSHA safety programs.
Specifically, the court found that OSHA did not use the
publicly announced solicitation criteria to select awardees.
Court canceled all the awards for OSHA's online training
programs, ordering OSHA to rebid the solicitation.
So OSHA's limited training outreach is leveraged through
third party providers of in-person and online training. OSHA
has now had almost two years to rebid the online training
programs. What progress has been made by OSHA to reissue the
solicitation?
Secretary Perez. I would have to get back to you on that
because I don't know the specific details of that particular
matter. I think you mentioned it was in 2012 and I tried to get
briefed up on a lot of things that happened before I arrived,
and I want to make sure I give you informed answers.
Mr. Salmon. Great. I just would submit that two years is
plenty of time and would hope that we could move forward.
Thank you, Mr. Chairman. I yield back the balance of my
time.
Chairman Kline. I thank the gentleman.
Mr. Bishop?
Mr. Bishop. Thank you, Mr. Chairman.
And, Mr. Secretary, thank you very much for being here.
Secretary Perez. Pleasure to be here.
Mr. Bishop. I want to pick up on the unemployment insurance
issue that Mr. Tierney raised, but before I do I just want to
put some facts on the table. In the chairman's opening
statement he made the assertion that the President's policies
are not working, and I just think it is important to put some
facts around that.
From 2009 to 2014 we have added 8.5 million private sector
jobs in this country. In the 10 years previous to that we lost
3.5 million private sector jobs in this country. And I think we
can all agree that 8.5 million jobs added is not enough, but I
would hope that we can all agree that adding 8.5 million jobs
is quite a bit better than losing 3.5 million jobs, which we
lost under the policies of the previous President.
But now let me just go to unemployment, if I could.
The CBO has issued a report that says that failure to
extend unemployment insurance will result--pardon me; let me
say it positively--that if we extend unemployment insurance
compensation we will increase jobs by about 200,000. And I
think, again, if you ask any member of Congress what our number
one priority ought to be I think most of us on both sides of
the aisle would answer that we have got to put this country
back to work.
So I guess what I am struggling to understand is why, when
we have, as you put it, a consumption-deprived recovery--and
when I ask business owners in my district what they need more
than anything else, what they tell me is they need customers,
which is the same thing that you are saying. So when we have a
chance to put money in the hands of 2 million people who are
going to go out and spend it on the everyday necessities of
life, and in the process of doing so create 200,000 jobs, I am
struggling to understand the opposition.
Would you agree with the CBO assessment that this is a--if
we make this investment in alleviating human misery and helping
people stay afloat while they are looking for work that we are
ultimately going to create jobs as a result of that process?
Secretary Perez. Yes I do, in short. And the basic premise
is that when we provide this lifeline to people we are putting
money in their pockets. They spend it, and when you spend it
businesses are making more money and they hire more people. And
that is the essence of the 200,000 number that you see in that
report, and that is one of many reasons why I think it is so
critically important to extend that lifeline.
I mean, if we want to grow jobs comprehensive immigration
reform is a pretty good idea, and the studies have pretty
clearly documented the impact of comprehensive immigration
reform, the Senate bill, on job creation. Investing in
infrastructure--building our roads and bridges--is a way to
create jobs. And so these are the things that the President
continues to talk about.
We are proud of the progress that we have made. We will be
the first to admit that there is more work to do and we need to
pick up the pace of progress and make sure that people for whom
the opportunity quilt is fraying can get that job that allows
them to feed their family and have a modicum of decency, a
decent retirement, the ability to go to a restaurant once in a
while, the ability to look your kids in the eye and say, ``I am
providing for you.'' That is what I hear the most from folks
who are fighting to get a job.
Mr. Bishop. On the same theme, the Economic Policy
Institute has estimated that if we increase the minimum wage we
will put $35 billion into the economy without spending a dime
of federal money and we will increase employment by
approximately 85,000 jobs. Do you find those statistics to
comport more with the studies that have been done over the
years with respect to minimum wage than does the really vague
estimate that the CBO put out?
Secretary Perez. Well actually, when you look at the
estimates of the number--the billions of dollars, the debate is
whether it is like $20 billion or $30 billion in the economy.
That is real money. I mean, Mr. Elmendorf, as I understand, in
the previous hearing in the Senate, indicated that this is--
this program puts a lot of money--when you raise the minimum
wage, for instance, it puts a lot of money into the economy and
that is good.
And there was another study that demonstrated that you can
reduce Food Stamps intake by 4.6 billion a year. We are trying
to reduce Food Stamps in this country. One way to do it is to
increase the minimum wage. 4.6 billion a year and millions of
people who would no longer be on the rolls.
People I talk to say, ``I don't want to be on Food Stamps.
I want to be self-sufficient but I can't make a decent enough
wage.''
Mr. Bishop. Thank--
Chairman Kline. Gentleman's time has expired.
Dr. Roe?
Mr. Roe. [Off mike.]
Secretary Perez. Morning, Doctor.
Mr. Roe. --on the subject of unemployment insurance, Mr.
Secretary, I was meeting with our homebuilders at home about a
week ago and in areas of the country I don't think there is no
question that probably there does need to be unemployment
insurance extension, and their comment was they can't find
anybody to work now and they are afraid if you extend the
unemployment insurance that it will encourage people to stay
out until they have exhausted those. Whether that is true or
not I don't know, but this was our area homebuilders.
And you bring up immigration reform--they are interested in
immigration reform because they can't find workers to fill
those jobs. So just a comment there.
And one other brief comment, if you want to actually
stimulate the economy one of the things you could do is
increase energy exploration in this country. For every 25 cents
that a gallon of gas goes down it puts 35 billion in the
consumers' hip pockets. So a coherent energy policy in this
country--it wouldn't cost the taxpayers a nickel. You would
stimulate the economy and to follow the logic that has been
passed, the people would spend that money and drive the
economy.
I have just a couple of quick questions. One is, we have
one part of the health insurance market, Mr. Secretary, that is
working very well, and that is the self-insured part. In this
market right now there is a lot of controversy.
Whether you agree or don't agree with the Affordable Care
Act, the self-insured market, which is about 60 percent of the
ERISA market or a little more, it seems to be working. And one
of the things that was brought up is the Department of Labor
looking at regulating the stop-loss and changing the adjustment
point. That is very, very important for people out there who
have or use that portion of the market.
Secretary Perez. Congressman Roe, I am unaware of any
efforts to regulate in the stop-loss area.
Mr. Roe. Very good. So we will take that as a no then.
The second thing I would like to ask--and this is a
question I have been heavily--at least a situation I have been
heavily involved in are pension plans. We provided a pension
plan from the day I started work--
Secretary Perez. I remember talking to you about this.
Mr. Roe. We did, for over 30 years. And one of the things
that--and I think it is extremely important for people who work
for you for years and years and decades to retire at a
reasonable lifestyle. I certainly agree with that.
One of the things that bigger companies--we were--we got
big enough we could afford advice, but for people who have a
401(k) or maybe an IRA, I know in the U.K. basically they have
sort of had rules banning the financial advisors from receiving
any kind of recall revenue from the funds they regulate--I
mean, funds that they buy. And what has happened is many of the
banks or some of the banks have dropped out of that business.
Do you think that this is a solution looking for a problem
instead of a problem looking for a solution?
Secretary Perez. Let me comment on the U.K. issue. The U.K.
banned commissions. We have never proposed nor do we intend to
propose to ban commissions.
As to your question about whether it is a solution in
search of a problem or a problem in fact, I strongly believe
that it is a problem in fact. And we have a shared interest. As
I mentioned before, the two most important decisions that
people make financially in their lifetimes are the decision to
buy a home and the decision now how to invest your retirement.
And whether you have $5,000 to invest or $500,000 to
invest, we have a shared interest in making sure that the
decisions you make are informed, that the person giving you
that advice, just like in the home context, that broker or
lender giving you that advice is looking out for your best
interest, not for his or her, you know, lining of the pockets.
And we saw in the mortgage context that there were some
really bad practices that transformed the American dream into
the American nightmare through the corrosive power of--
Mr. Roe. That is a different issue than what I am talking
about, and what I am saying is--because my time is short--is
that I can go, I can pull up on my iPad right now and show you
a 401(k) that I have that shows you the investment risk, the
fees--everything is fully disclosed. And look, a net of fees,
if my returns are excellent, I am really not as worried about
what the fees are if my return is good, my net is.
That information is available right now. I can show you
after this hearing if you want to see it my own personal
401(k).
And so anyway, just a point there. I think it is a problem
looking for a solution.
I think my time is about expired so I will yield back.
Chairman Kline. I thank the gentleman.
Mr. Loebsack, you are recognized?
Mr. Loebsack. Thank you, Mr. Chair.
And thank you, Secretary Perez, for being here today,
making the time to testify before the committee.
I like the phrase ``consumption-deprived economy.'' I think
that makes a lot of sense. I think we all know that to the
extent to which we have been experiencing a recovery in the
economy, it has been weak and wanting and we have got quite a
distance to go.
And I would agree that it is important to raise the minimum
wage to get more money in folks' pockets so they could go out
and buy the services, the goods, whatever that it is they need
that they are not able to buy right now because they are not
making enough money. So I am one of those also who strongly
supports increasing minimum wage and I think it is really
significant and best way to grow the economy, so I thank you
for your support on that.
I do want to talk specifically a little bit about sector
partnerships, something that, as you may know, I have been
working on for many years, really going back to 2010, at a time
when in the U.S. House we had significant bipartisan support
for this. And I have actually worked with Chairwoman Foxx on
this, in terms of the most recent attempt to reauthorize WIA. I
have seen time and again where sector partnerships have been
very, very effective in Iowa, and making certain that we close
the skills gap that we see out there, especially at the mid-
skill level.
And so I was really happy to see in the budget that there
is some funding, some grants along these lines, but I also know
that you worked in Maryland at the Department of Labor and you
worked on these issues. Could you give us a little bit of
history as far as your experience in Maryland working on sector
partnerships?
Secretary Perez. Sector strategies are a critical lynchpin
of an effective workforce system that is demand-driven. The
sector strategy is simple. You take the biotech sector in
Maryland--and we met with them, the employers--large, mid-size,
and small; we brought educators in. We understood what their
demand needs were not only today but 5, 10 years down the road,
and working with the secret sauce of community colleges and
other providers of education, we build that pipeline to the
middle class.
And it is not simply biotech. It is health sector; it is
hospitality; it is whatever--I was in Central New York
recently. They are having a nanotech boom and we were talking
about how we commercialize that. In other words, they have got
great technology. Now we have got to turn it into a product
that can make--can create jobs and grow a community.
This is tried and tested. And we have evaluated sector
strategies in Maryland and through the work we are doing at the
Department of Labor. This is a really critical and, I think,
time-tested strategy, and that is what we support this
throughout the country in our grant-making and in our work
through our TAACCCT, which is our grants to community colleges
to support sectors in various areas.
I really appreciate the leadership you have shown in Iowa
and others have shown. You are totally correct, this is not a
partisan thing. This is a good idea. And it is good across the
ideological spectrum.
Mr. Loebsack. No, and I think it is important that, you
know, while obviously most if not almost all of this is going
to take place at the state and local level because it is about
local communities thinking strategically for themselves about
how they are going to grow their economy and how they are going
to increase an industry or establish an industry and then find
the folks out there with the skills who can actually be
employed in the industry or the group of industries, whatever
the case may be, but I also think it is important at the
federal level we provide some incentive as well for folks to be
thinking about that.
How do these grants that are in the budget--how would these
work, as far as sector partnerships?
Secretary Perez. What we are trying to do is figure out
what works and take it to scale. We know sector strategies
work, so we are trying to take it to scale so that across this
country we can take advantage of this.
Our work in Los Angeles, for instance, there are five or
six community colleges in Los Angeles. They received an award
under our TAACCCT program to help build capacity in the health
care setting.
Prior to that grant these community colleges had never
spoken to each other, so you could take, you know, Nursing 101
at Community College A and the curriculum was different than
the curriculum in Community College B and it wasn't aligned to
what the industry needed. And so we, in our match.com role,
have been a facilitator of this partnership and collaboration.
It is really simple but it is rather elegant and it really
works.
Mr. Loebsack. And you can include apprenticeship programs,
too, from labor unions, obviously, too, to train the skilled
folks as well.
Secretary Perez. There is 27 return for every dollar of
public investment in apprenticeship. And in the state of
Wisconsin the average age of a skilled tradesperson is 59 years
old. Businesses across this country are telling me, ``We need
to get the pipeline moving.''
Mr. Loebsack. Thank you, Mr. Secretary.
And thank you, Mr. Chair.
Chairman Kline. Thank the gentleman.
Mr. Guthrie?
Mr. Guthrie. Thank you.
Thank you, Mr. Secretary, for being here today.
Thank you, Mr. Chairman, for the recognition.
I want to talk about ESOPs--employee stock ownership plans.
And it is important to me the largest ESOP in the country is
actually in my hometown, Bowling Green, Kentucky, and it
started as a grocery chain that went ESOP--was sold to the
employees, and has expanded into a big market where, as a
matter of fact, and created wealth. That is why I am interested
in it because it has absolutely created wealth.
There is one of the grocery stores across from where I--a
foundry that I worked, and the lady who made ham--worked at a
deli counter in a medium-sized grocery store probably, my guess
is, didn't make much north of minimum wage, retired with seven
figures in her account--over a million dollars. So it is
important.
And I know we are--so what I am focusing on is DOL's
proposal to expand the definition of ``fiduciary'' to include
independent appraisers of ESOPs. And my concern is it would
jeopardize the long-term viability of ESOPs, raising the cost
of administering the plans and creating barriers to
establishing new ones. And ESOPs in private companies have
documented record of being productive, profitable, and
sustainable more than some of the conventionally owned
companies.
And while no one disagrees--and I certainly don't disagree
with going after any rogue actors, I am afraid we are throwing
the baby out with the bathwater with this rule. The proposed
rule is controversial, as evidenced by the Employee Benefits
Security Administration withdrawing the first version of the
rule.
So I'll get to my questions, then: What is the status of
the second round of rulemaking, and does DOL intend to go ahead
with a new version? And if so, what is the timeframe?
Secretary Perez. I don't have a precise timeframe, and I
can't give you one right now because again, as I said in
response, I think, to a question from the chairman, we are very
concerned about getting things right. And so that is one of the
most frequently asked questions I get in any rulemaking and my
goal is always to get things right.
I am a huge fan of ESOPs, and so is the Department of
Labor. And we have seen them remarkably successful in
empowering workers to have ownership. And I loved your story.
Mr. Guthrie. Is there concern about--within the department
if you put the independent appraisers as a fiduciary then the
concern is that you would have a difficult time finding someone
to appraise because they are now on the hook legally for that--
Secretary Perez. Here is the challenge that we need to
thread the needle on, and I think it is a shared challenge: You
are getting ready to sell your business. It is an ESOP and you
are getting ready to sell your business, and the question
presented is--and you are going to sell it to your employees.
Mr. Guthrie. Right.
Secretary Perez. And the question presented is, what is the
business worth? And we have regrettably seen a number of cases
where appraisals have been deliberately inflated--and by the
way, we saw this in the mortgage setting, you know, ``What do
you need your appraisal to come in at?'' And the appraisal
masterfully came it at what you needed it to come in at during
the height of the bubble.
And when that appraisal is deliberately inflated then it
ends up hurting workers because they are buying a business that
they are paying too much for and--then they potentially lose
jobs. That is the problem we are trying to solve.
Mr. Guthrie. Well, my understanding is they would have--
they have standing, though, in court if that--if it was a
deliberate--for any appraisal. I guess they would have standing
if particularly they thought it was a deliberate inflation to--
against the trustees.
The concern that people, who are in the ESOP world, is that
it would be just--they have to have an annual appraisal. That
is part of the law to do so. And finding fiduciary--finding
appraisers who would make the appraisal, given that they have
the fiduciary responsibility, would either be real expensive
because you have to buy insurance into it, and I am certainly--
the description that you have about the deliberate increase--
that does rip the employees off. It needs to be remedied.
The question is the way the department is going about it,
would it--are there other ways to do it? Are there other
options--
Secretary Perez. Well, I would love to brainstorm with you
because I think we have a shared interest in getting this right
and we have a shared affection for ESOPs. I know you do, and I
know I do.
Mr. Guthrie. Because I would hate to see somebody cashing
out their business at the expense of their employees.
Secretary Perez. Yes.
Mr. Guthrie. My experience of the one that--it is in my
district that I am--that I know, because I know the people very
well, they created an enormous amount of wealth for the
employees and--and matter of fact, most of the people who
retire from--I mean, checkers in grocery stores now, because of
some of the way they did their businesses, they are having to
go through counseling almost like lottery winners do because
they are used to living close to minimum wage or just above and
all of a sudden they are retiring with seven figures in their
account, especially if they have been there long-term because
of some decisions that the ESOP made--the trustees of the ESOP
made.
And so I would love to be able to have a dialogue with you
about how we can--
Secretary Perez. Well, I would like to meet your ESOP.
Chairman Kline. The gentleman's time has expired.
Mr. Guthrie. Okay, let's do that. I will do that. Thank
you.
Chairman Kline. Mr. Courtney?
Mr. Courtney. Thank you, Mr. Chairman.
And it is great to see you, Mr. Secretary. Just wanted--
Secretary Perez. Good to see you, sir.
Mr. Courtney. --to give you a little update actually within
the last few minutes from the state of Connecticut, where you
visited twice to talk about the minimum wage. The state senate
just convened at 11 o'clock and within about an hour or so they
are going to take up a minimum wage bill, which will take
Connecticut up to 10.10. And the House, unlike this city, is
actually poised to act immediately and by the end of the day or
maybe into the wee hours of the morning Connecticut will pass a
$10.10 minimum wage.
Of course, Mr. Chairman, I just point this out because the
secretary has been to Connecticut twice--
Secretary Perez. Only once with the President.
Mr. Courtney. That is right. And also with the House
members on the second visit, which--
Secretary Perez. Yes.
Mr. Courtney. --in any case, your arguments were, I think,
very helpful in terms of creating an environment where the
minimum wage bill will pass.
I also would point out that last week we had a job fair at
Manchester Community College, right in the Hartford sort of
eastern part of the state. We had over 60 employers there,
which is higher than last year's equivalent event. Yesterday we
had a Hiring for Heroes event in East Hartford Connecticut with
over 80 employers.
So the job market is growing in Connecticut and we are
already above the 7.25 minimum wage, so again, it is--the
notion that this is, you know, somehow going to obstruct its
recovery, just events in just the last few days in a state that
is poised to move forward really kind of rebuts that.
And I also just want to thank you for pointing out the
impact on SNAP and Food Stamps if we pass a minimum wage. I sit
on the Agriculture Committee. We went through this unfortunate
exercise to try and sort of chainsaw Food Stamps through the
energy assistance calculation that goes into determining
allotments, and governors all across the country are already
sort of rebelling against that provision of the farm bill and
protecting people's access to Food Stamps, which is probably
going to pretty much eliminate any of the savings that folks in
the city were trying to carve out of that program.
The better way to do it is to raise people's income, and as
you point out, the savings that we would garner from raising
the minimum wage far surpasses anything that folks were trying
to do with the farm bill that just passed here. So again, thank
you for your leadership in terms of making those arguments.
I also just want to note, you mentioned Katherine Hackett
earlier today, who again, is one of the victims of the non-
action on the unemployment extension. As you pointed out, she
was in Connecticut, where it was a pretty cold winter, with the
temperature in the 50s in the house because of the fact that
unemployment ran out. She has, again, found employment, as you
and I discussed, with a temporary position right now.
But I think it is important to also get out in the record
that this is a woman who, again, has worked her entire adult
life, paid taxes, two sons in the military, one Marine Special
Forces the other a physician working at Fort Hood, Texas. There
is not a more patriotic, dignified, upstanding American than
Katherine Hackett, and the failure of this place to do what we
have always done in past recessions, which is to pass an
emergency unemployment, in her case, I mean, is really just a
textbook example of the fact that, you know, we have got to get
this done.
Individuals like her, who are out there busting their tail
looking for work, deserve to get a lifeline so that they can
keep a roof over their head and keep the heat turned on and the
lights turned on in their house.
Lastly, I just want to ask you, the numbers just came out
for veterans unemployment. Again, 7.2 percent is the national
unemployment average. We are still looking at 9 percent
unemployment for post-9/11 veterans.
I was wondering if you could just sort of comment in terms
of, again, we had the jobs fair yesterday, which we coordinated
through DOL, but, you know, what are some of the other
initiatives from the department, including OFCCP, to try and
promote better hiring amongst this deserving population?
Secretary Perez. Veterans employment has been an all-hands-
on-deck enterprise in not only the administration--Department
of Labor, Department of Veterans Affairs, Department of
Defense--but also with the business community and so many
others. I am really excited about the partnerships we have had
with the U.S. Chamber, with labor unions, Helmets to Hardhats.
People have really come forth in meaningful ways.
The 503 regulation is going to help so many people--so many
veterans who are looking for work and need somebody to focus on
their ability and not the first three letters of the word
``disability.'' And so I am bullish.
And this is, again, another example of--when I hear
critiques about too many programs, they are not programs; they
are people and they are funding streams. It is like an app on
an iPod or an iPhone. You know, we have a number of different
apps to use for our veterans, and not every veteran needs every
app, but some veterans do.
And it is nice that we have--and I want to commend Congress
for the leadership in recognizing that we need to have a lot of
different apps because there are different needs in that
context.
Chairman Kline. The gentleman's time has expired.
Dr. DesJarlais?
Mr. DesJarlais. Thank you, Mr. Chairman.
And thank you, Secretary Perez--
Secretary Perez. Pleasure to be here.
Mr. DesJarlais. --for joining us today.
In your testimony you talk quite a bit about collaboration
and honest dialogue, but no matter who I talk to down in
Tennessee, whether it is bakers, manufacturers, or famers - or
anyone that is just trying to do the right thing for their
employees and their families and their businesses - there seems
to be some disconnect in the way I am sure you honestly set out
to run the department and the way the department has interacted
and continues to interact with stakeholders.
For example, Tennessee's 4th District is home to the
largest farm bureau in the United States and agriculture is not
just a way to make a living in Tennessee, it is a way of life.
And no matter where I go, still I have farmers bring up the
fact the department's ill-conceived and thankfully unsuccessful
efforts to control not only how farmers run their farms but how
they raise their families continues to come up.
But, you know, thanks to the outcry of the opposition and
the work of a lot of my colleagues in Congress, this campaign
was ultimately abandoned. Can you assure my constituents in
Tennessee that the Department of Labor, under your leadership,
will not pursue this sort of interference in family farms
again?
Secretary Perez. Certainly. We understand the riders that
have been put in place and we respect the will of Congress in
that and we will do that.
The definition of a family farm, I have come to learn, is
easier said than done. When I drive--and I spend a lot of time
in rural Wisconsin because that is where my in-laws have a
place, and, you know, farms that I see up there don't list, you
know, how many employees they have at their farm; they list who
they are.
And what has brought us in have been deaths--people in
mostly grain silos who have been suffocated. And whenever we
have learned during the course of our investigation that it
fell within the definition of a family farm, we have left and--
because we recognize the limits of our jurisdiction.
We want to make sure that we promote safety and we have
really done a lot of work in that area, including child labor
in this context. It is a very important issue.
Mr. DesJarlais. It is, and I thank you for that. And so we
can also assure that the department in future regulatory
efforts will at least reach out to learn more about how to
define family farms before making unilateral changes to farm
regulations. Can we count on that, as well?
Secretary Perez. I am actually very proud of the work that
our OSHA folks have done in reaching out. They actually have a
very aggressive safety outreach program for, you know, folks in
the agriculture sector.
And the biggest issue that I have seen, again, has been
this grain silo issue. I spoke to a family who had lost a
child, and he and his best friend were holding each other's
hands as they were getting quite literally suffocated. And that
is one of the many stories that you just reflect on over and
over again--how can we prevent this?
And I am really proud of the preventive work that our OSHA
is doing and I look forward to working with you to figure out
ways--because no parent--no constituent, regardless of the size
of a farm, wants to bury their child. And that is what we are
working to prevent.
Mr. DesJarlais. But as you said, we need to be very careful
when we move forward with blanket regulations, as well.
I am glad you brought up OSHA. On February 21, 2013 OSHA
issued a letter of interpretation dramatically changing its
policy related to the presence of third parties during an
inspection. The agency reversed its previous position, stated
that third parties could accompany the inspector even if they
are not employees.
This change to longstanding policy, Mr. Secretary, raises a
number of troubling questions. For instance, why was a change
of this significance made through a letter of interpretation
rather than the formal rulemaking process?
Secretary Perez. I don't believe it was a change of policy
regarding third party representatives. The OSHA Act provides
that a representative of the employer and an authorized
representative of the employees are allowed to accompany the
inspector, and so the department has permitted third parties to
be walk-around representatives in order to make a contribution
to a thorough and effective inspection, and this has been OSHA
policy predating me, predating this administration, as I
understand.
Mr. DesJarlais. Okay. Well, I know that it has caused some
problems back home in my district, and recently had
biomanufacturing mention this, but there is also concerns for
them--for instance, how are employers expected to treat these
non-employee individuals in relation to liability issues?
Secretary Perez. I am sorry. I didn't--
Mr. DesJarlais. How are they expected to treat these non-
employee inspectors, in terms of liability issues if they are
bringing them on the premises?
Secretary Perez. Well again, we work with employers all the
time to accommodate this and that has not been an issue in the
many years that we have been dealing with this matter to date.
And I am more than willing to put our folks at OSHA in contact
with employers in your community who have concerns.
Mr. DesJarlais. Thank you--
Chairman Kline. Gentleman's time has expired.
Ms. Fudge?
Ms. Fudge. Thank you very much, Mr. Chairman.
And I thank you, Mr. Secretary, for your testimony today. I
just have a few questions, and I am certain that they shouldn't
be too difficult.
The first one is, is there any validity to the assertion by
the National Association of State Workforce Agencies as to our
ability to determine retroactive pay for the emergency
unemployment insurance?
Secretary Perez. Well, we have done it a number of times
before and I think we can do it again. And I would note that
the labor commissioner in Nevada for the Republican Governor
Sandoval noted, I think as recently as yesterday, that we can
implement what is in place in the Senate bill. It can be done.
If you have the will to do it can be done. I have been a
state labor secretary. We have done things like this and, you
know, the--folks I talk to in state government have said to me
that the burden that we would confront pales in comparison to
the burden that long-term unemployed are confronting every
single day. And so one person said it would be a privilege to
get them their benefits back.
Ms. Fudge. Thank you very much. Just so that we are clear,
that means that the language in the Senate bill is fine?
Secretary Perez. I think the language is very workable, and
they redid it, as I understand it, to address some of the
concerns that were raised.
Ms. Fudge. Thank you.
Job Corps. Job Corps is really very important. It is a very
important program in my district as well as it is across the
country.
Last year the Department of Labor was forced to reduce the
number of slots available to youth due to cost saving measures
that were implemented in 2012. Do you think that the department
is going to be able to expand enrollment for students this next
year?
Secretary Perez. I hope that we will. Job Corps--there were
some--we fell short in the Job Corps setting. We, as a result
of some failures of internal controls, failures in procurement,
we ended up in a situation where we had to freeze enrollment.
That was on us. That was our fault. And there was an I.G.
report and we have been working methodically to implement all
of the recommendations there.
I am pleased to say that we have made tremendous progress.
Enrollment is inching back up. And with the complement of
resources we have in 2014 we hope in the very near future to be
allocating additional slots. And our methodology there is we
are going to be allocating it to the centers that are the most
productive.
Ms. Fudge. Thank you.
My home community college, Cuyahoga County Community
College, the students there rely very heavily on the Trade
Adjustment Assistance Community College and Career Training
programs to learn skills that American businesses rely on. We
have a huge manufacturing system in our state.
But it is my understanding that the funding for this
program is going to expire next year. Is that correct?
Secretary Perez. We are about to undertake year four of
four. It has been a 2 billion investment. There has been a
remarkable return on investment and I would love to take anyone
who is interested to your areas so that you can see the return
on investment. It has been a real game-changer.
And I am hopeful that, again, in the spirit of our shared
interest, and taking what works and taking it to scale, that we
can do this.
Ms. Fudge. Why would we not fund a very successful program?
What happens when we don't fund it if this is one of the
programs that works?
Secretary Perez. Well, we don't make the progress we need
in getting people back to work and getting people their ticket
to the middle class. And that would be unfortunate because we
really have had great success in the TAACCCT program.
Ms. Fudge. Thank you.
And lastly, certainly I do commend you for your emphasis on
expanding apprenticeship programs, and I believe that
apprenticeships are a good way to create career pathways and
improve an individual's earning potential. Please speak to how
the department is planning to accomplish this goal of expanding
apprenticeships.
Secretary Perez. Well, the President would like to double
the number of apprentices in this country over the next 4 or 5
years. You go to Germany and you see the leadership that they
demonstrate in the apprenticeship context and the stature that
people in this world--in this field have, and we need to
emulate that because we have, in this nation, over the course
of, frankly, a few decades, somehow devalued career and
technical education.
There is a bright future for people who want to work with
their hands in this country. I know that because I go out and I
talk to employers day in and day out. Ford Motor Company is
very concerned about the number of electricians and welders
that they are going to have. Their folks are retiring; their
business is growing; they are in-sourcing production and they
need this help.
And that is why I think apprenticeship is an area where I
hope we can work together on, because you complete an
apprenticeship program, you punch your ticket to the middle
class. These are great jobs. They start at $27, $32 an hour
plus benefits. Good stuff.
Ms. Fudge. Thank you.
Chairman Kline. Thank the gentlelady.
Mr. Rokita?
Secretary Perez. Good to see you again.
Mr. Rokita. I thank the chairman.
Hi, Tom. How are you?
Secretary Perez. I am doing great. How are you, sir?
Mr. Rokita. I feel I can call you Tom because we know each
other--
Secretary Perez. Absolutely.
Mr. Rokita. --from prior work. We both were Dow fellows,
and for the record, you know the purpose of that program is to
bring people from all sides--different sides of the aisle--who
are very strong in their preferred ideologies and introduce
them to each other. We studied the great texts and--
Secretary Perez. Traveled.
Mr. Rokita. --and travel and get in a situation like this
and actually come to some solutions for the country. So let's
test that.
I have an idea. I think that regardless of a union
contract--and, you know, we can argue back and forth about the
social value of a union contract and that is not the point--but
regardless of a union contract, if an employer of a union
employee wants to give that employee a raise that employer
should be able to do that.
If we are interested in the worker, if we are interested in
those four pillars that you talked about at the beginning of
your testimony, this seems like a reasonable idea to me. Why be
beholden to a union contract if an employer wants to give an
individual employee a raise? Could you support an ideal like
that?
Secretary Perez. When you look at the data from the Bureau
of Labor Statistics, the median wage of a person--of a union
member is $200 more than the median wage of a nonunion member,
and that actually doesn't include benefits. The benefit package
would--
Mr. Rokita. I am not talking about union versus nonunion. I
am talking about in a union shop, if a union employer wants to
give an individual union employee a raise, can't they do that?
Secretary Perez. Well again, I think the answer is--and the
reason I gave that data is they have been. And as a result, the
union--
Mr. Rokita. But the scenario is one union employee, not the
whole union shop, a raise.
Secretary Perez. Well again--
Mr. Rokita. Good or bad?
Secretary Perez. --I think the--whatever the agreement is
going to govern the terms of how they move forward, and again,
I look at that Bureau of Labor Statistics data and I think it
has worked well for union members who, again, have a median
income of $200 more than nonunion members doing similar work.
Mr. Rokita. No, no, no. But again--I mean, we could go
round and round and eat up my 5 minutes, and I hope you would
give me more respect than that--the idea of giving one union
employee a raise is good, right?
Secretary Perez. Well again, I think you want to give
people a raise, but--
Mr. Rokita. --union contracts, is it true--we have talked
about minimum wage here a little bit--isn't it true that a lot
of union contracts, and maybe you know the percentage, are key
to the minimum wage rate, such that if we raise the minimum
wage and made it a national law, federal law, even though you
are the, supposed to be the unbiased umpire of union contracts
and disagreement therewith, wouldn't this automatically bump up
the pay under a lot of union contracts?
Secretary Perez. Well, as I understand the data, you
increase the minimum wage and there are something--depending on
what study you look at, roughly 15 million to 19 million people
who are directly affected, and then there are another category
of people--eight to 10 million people--who are affected and
they are affected because their wage is slightly above the
minimum wage and employers will react to that by--
Mr. Rokita. Do you know the percentage of union contracts
that are keyed to the minimum wage--
Secretary Perez. I don't know the answer to that.
Mr. Rokita. Okay.
Silica dust, the permissible exposure limit. Do you know
what percentage of American businesses, employers are in
compliance with the current limits?
Secretary Perez. I don't have a precise answer to that
question, and I am sure our OSHA folks can work with you to
answer any questions you might have.
Mr. Rokita. Sixty to 70 percent is what I think it is,
based on what I have read. Does that surprise you?
Secretary Perez. I don't know what the answer is so I don't
want to guess.
Mr. Rokita. Let's assume it is 60 to 70 percent. Now we
could go two ways from there. We could either use your--the
resources in your budget--and I am on the Budget Committee; I
have seen your resources. And by the way, I could build the
pyramids with your budget even under a union contract.
Now, if the goal is workplace safety why wouldn't we use
those resources to get more in compliance, get that 70 percent,
which is a decent number, up to 90, 95, or whatever percent?
Why go and get a whole new set of regulations that is actually
going to reduce the compliance rate when you have a limited
resource in terms of your budget?
Secretary Perez. Well actually, if you look at the work it
is not an either-or situation. The work that OSHA has been
doing in the compliance setting has been significant. They have
many tools in their arsenal, including prevention. In the grain
silo context they have been doing a lot of preventive work so
that people aren't going to funerals.
In terms of your question of--I don't know if it is 30, 40
percent, 70 percent, but I will say this: If my daughter--if I
knew that my daughter had a 30 or 40 percent chance of going
into a workplace and having that exposure kill her I wouldn't
want her to be in that workplace.
Mr. Rokita. Yes. Agreed. So why--
Chairman Kline. Gentleman's time has expired.
Mr. Sablan?
Mr. Sablan. Thank you very much, Mr. Chairman.
And, Mr. Secretary, welcome and thank you very much--
Secretary Perez. Good to see you again.
Mr. Sablan. --for your service to our country.
It was people like Senator Inouye, now Mr. Miller, and your
predecessor, Ms. Solis, who pushed and enacted Public Law 110-
229, which extended the federalized immigration to the Northern
Mariana Islands, and the law established a 5-year transition
period during which foreign workers were to be replaced by U.S.
workers. This transition period ends this December.
But the law foresaw the possibility that 5 years might not
be enough time so the secretary of labor--so you were given the
authority to extend the transition period if, and I quote:
``necessary to ensure an adequate number of workers will be
available for legitimate businesses,'' end of quote. And the
secretary was required to make a decision one way or the other,
Mr. Secretary, within 180 days of the end of the transition
period.
So I as--we ask the question, what kind of progress have we
made in the Northern Marianas over the past 4 years? When the
period--transition period began in 2009 there were over 17,245
foreign workers, according to the GAO. As of October of 2013
the Department of Homeland Security said there were 9,617, so I
think that is significant progress in getting to entirely U.S.
workers.
But I also think it is clear that getting to zero by the
end of this year is not possible, which is--that is why I wrote
to your predecessor in February of 2013, almost 14 months ago
actually, asking for a decision to extend the period--the
extension period. And I asked for that decision to be made
sooner rather than later because leaving the decision to the
last minute leaves businesses uncertain whether they would have
an adequate number of workers.
Leaving the decision to the end of transition period would
also have less number of, say, consumers in the Northern
Marianas, and so if the businesses don't invest, they don't
create jobs, and that plays hell on an economy trying to pull
itself out of a deep recession. That is the economic argument.
Now, there is the humanitarian concern as well, because
waiting until the last minute leaves 9,617 foreign workers
hanging in the breeze. Many of these people have lived in the
Northern Marianas for decades; they have families and homes
there.
If they have to be gone by the end of this year we owe them
the courtesy, Mr. Secretary, of letting them know as soon as
possible. They need to start looking for work elsewhere,
selling their belongings, and moving their families and their
kids.
But for 14 months your department has been unable or
unwilling, sir, to make a decision. Now, Mr. Secretary, I know
that the Northern Marianas does not have an admirable history
that--when it comes to foreign workers. Mr. Miller will tell
you that himself.
But it is possible that your department does not trust the
Northern Marianas will replace foreign workers with U.S.
workers, that we are just buying time. But I remind you, sir,
the annual number of foreign workers is not a decision of the
Northern Marianas government. The Department of Homeland
Security sets that number and the law requires fewer and fewer
each year.
For this year Homeland Security set the number at 14,000.
That is a long way from zero.
I also want to remind you, sir, that my office has reached
out to your department to ask that you provide technical
assistance to the Northern Marianas and advice on how to train
up U.S. workers. We really want your help.
We want to complete the transition that Public Law 110-229
requires, but we need to do it in a way that keeps our economy
whole and does not put the jobs of U.S. workers in that economy
at risk. And that uncertainty in the absence of your decision,
sir, is not helping.
So I hope you will take my words to heart, Mr. Secretary. I
am not asking my question, sir, I am just making a statement
and hoping that you would hear us and then make the decision
soon.
Having said that, Mr. Chairman, I also--I fully support
increasing the federal minimum wage to $10.10, and I know that
may sound strange coming from someone who asked for a delay in
the minimum wage in my district. I did so because in my view
the rate increase in the Northern Marianas since 2008 needed to
be tempered. But I have never wavered in my commitment to see
workers in the Northern Marianas receive the full minimum wage
and I know they will be glad to see it increase to $10.10 an
hour.
Mr. Chairman, that is my statement. Thank you.
Chairman Kline. I thank the gentleman.
Dr. Bucshon?
Mr. Bucshon. Thank you very much.
Secretary Perez. Morning, sir.
Mr. Bucshon. Thank you, Mr. Secretary. My dad was a coal
miner and I was a physician, and that will lead into some of
the questions that I have regarding.
I am concerned about the scientific basis upon which MSHA's
proposed respirable dust rule is predicated on and the
availability of technology to reduce dust concentrations to
levels contained in the proposal. GAO is currently conducting
analysis of this rule to include a review of the technological
and other options available for lowering the level--lowering
the level of dust in coal mines and the cost advantages and
disadvantages of these technologies.
Do you think you would be willing to take into
consideration all the relevant information and conclusions from
the pending GAO study before finalizing that rule?
Secretary Perez. I cannot comment specifically about the
rule because, as you know, it is still under consideration and
so I am limited in what I can say. What I can say is that it
has been a very, very lengthy process, and appropriately so--an
exhaustive process, an inclusive process. And we have learned a
lot.
We learned, for instance, you know, when we studied the
tragedy at UBB in West Virginia the medical examiner reported
that 17 of the 24 victims who had enough lung tissue to be
tested showed evidence of black lung even among miners who had
been there as little as five years. And so this is an issue
that is very real. The impacts are real.
I mean, mine safety is very real. As you know, there was a
fatality--I think we notified your office about it yesterday--
Mr. Bucshon. Yes there was, in my district.
Secretary Perez. --in Indiana, and our thoughts and prayers
go out to the victim and the victim's family. And it is a
constant reminder of the stakes.
And that is why we had such a lengthy comment period and we
had seven public hearings around the country because we knew in
this particular context that we had to make house calls and get
out there--
Mr. Bucshon. Thank you for that information on--as far as
the hearings go, as you probably know, most of those didn't
occur in coal areas; they were in more urban areas unrelated to
the coal industry. But that said, you know, historically I have
tried to get the data from MSHA and HHS about the studies that
the proposed rule is based on and have pretty much been
stonewalled on that based on HIPAA regulations, as far as this
being personal medical information. As you know, most medical
journals produce aggregate data almost on a daily basis.
So do you think that I might be able to get the aggregate
data that shows the actual evidence behind the proposed rule?
Secretary Perez. Well again, our NPRM had a pretty
significant amount of information about the underlying basis,
including the fact that pneumoconiosis has been the underlying
or contributing cause of death for more than 76,000 coal miners
since 1968 and the cost of compensating disabled coal miners
and beneficiaries has exceeded, I think, $45 billion since
1970.
Mr. Bucshon. Yes. I wouldn't dispute those numbers. My
question is, is changing from two to one, you know, your
respirable dust--the impact that would have and what the
scientific basis for that change.
Miner safety is number one in my mind. Everybody I knew
growing up and my father were underground coal miners. I was a
thoracic surgeon who treated all of these people in practice.
The numbers you talk about are true. The dispute, I think,
can be from the technological availability and whether or not
there is actually scientific evidence to show that the rule
change will make--have an impact.
I have another question regarding your letter, March 11,
2014, to Chairman Kline and Representative Walberg. You
referred to TRICARE providers as ``TRICARE subcontractors''
throughout. As your letter acknowledges, the National Defense
Authorization Act, NDAA, made it clear Congress' intent to
exclude TRICARE providers from OFCCP's jurisdiction.
To be clear, is it your view, yes or no, that TRICARE
providers are, in fact, federal subcontractors regardless of
the moratorium?
Secretary Perez. Well again, I have had a lengthy
conversation with both Chairman Kline and Chairman Walberg, and
we discussed the fact that OFCCP has been exercising
jurisdiction over TRICARE subcontractors since the late 1990s.
At the same time, I saw the information in some of the
contracts that created conflict, and that was why I offered the
proposal that I offered to the chairman to address that issue
and--deal with the situation, and that was--and we continued to
have conversation in that area.
And so we will continue to work on this issue and we have
taken steps in the aftermath with Chairman Walberg, with
Chairman Kline, and with Congressman Courtney.
Mr. Bucshon. Thank you very much.
I yield back.
Chairman Kline. I thank the gentleman.
Ms. Wilson?
Ms. Wilson of Florida. Thank you to the chair and ranking
member for today's hearing.
Mr. Secretary, I want to thank you for your work with the
attorney general in making Miami a safer place to live. Thank
you so much.
And thank you for being here today and speaking to us about
these very important issues, especially extending emergency
unemployment compensation and raising the minimum wage. I have
said it over and over again, the mantra of this Congress should
be jobs, jobs, jobs. But until my colleagues in the House pass
a serious employment agenda, extending emergency unemployment
compensation and raising the minimum wage is the least we can
do. We need to help the people of America.
If we raise the minimum wage people will have more money to
spend, companies will be able to create more jobs, people will
have higher salaries and pay more in taxes, and American
workers will be happier and healthier. Everyone wins and
America wins.
Mr. Secretary, it is shameful that we have not extended
unemployment compensation to the millions who are unemployed.
It is un-American to hurt those who are down on their luck.
In my district, on the bright side, there is a model of how
to improve the economy through targeted investments in
education programs. A collective effort between Florida
International University, Miami-Dade County Public Schools, and
local business helped position graduates to succeed in college
or in STEM careers, including apprenticeships, internships, and
careers they never dreamed would be in their portfolio, and we
want to replicate and expand this program by working with your
agency. This initiative is having a significant impact on
thousands of my constituents and making South Florida an
attractive place to live.
I have two questions for you if the time permits. Several
of my colleagues and I have expressed concerns about the
department's proposed fiduciary rule and its effect on our
constituents' access to retirement planning and financial
advice. Can you assure us that the revised fiduciary proposal
will not negatively impact lower-income workers' ability to
receive investment advice?
Secretary Perez. That is certainly a goal of ours and that
is what we are going to work toward.
Ms. Wilson of Florida. That is what you are going to work
toward?
Secretary Perez. Absolutely.
Ms. Wilson of Florida. Well, we appreciate that because so
many people are learning to save for the first time in their
whole--the whole family has never saved, and they are going to
need advice. And we don't want anything to interfere with that,
so thank you very much.
Can you please discuss the impact of raising the minimum
wage, what kind of impact that would have on Florida, when
estimated 1,732,000 people would see an increase in their
income?
Secretary Perez. It is money in people's pockets, and when
people have money in their pockets they spend it. And when they
spend it, businesses have to hire more people because people
are spending more. And it would enable--I don't know the
precise number; I would have to disaggregate from the national
data--but it would enable, you know, many, many Floridians to
get out of poverty.
It would enable working women to be able to feed their
children and not have to make the choices between a gallon of
milk and a gallon of gas. And these are choices that people
tell me that they make week in and week out, and these are
choices that people in America in the year 2014 shouldn't have
to make.
Ms. Wilson of Florida. Mr. Secretary, are there any plans
in place for summer jobs for youth through local workforce
agencies or OIC or the Urban Leagues of our--especially in our
urban districts?
Secretary Perez. We have certainly had many conversations
with business leaders about summer jobs issues. I just spoke to
the CEO a couple days ago of Jamba Juice, which has been a
leader in summer youth employment. They are a California-based
company with a national footprint and they have been a national
leader in this area.
As you know, there was money in the Recovery Act to assist
in summer jobs. That money has largely dried up.
The President has a proposal to invest in this, because I
will tell you the research shows that summer jobs work. When
people get the chance to see what it is like to show up at 8
o'clock and work till 5 o'clock and get that mentoring, it
makes a difference. And that is why the President wants to take
something that has worked and take it to scale.
Chairman Kline. Gentlelady's time has expired.
Ms. Bonamici?
Ms. Bonamici. Thank you, Mr. Chairman.
And thank you, Mr. Secretary, for being here today. I
really appreciate your testimony and your work, and I apologize
for not being here during the questioning. I am in two hearings
today.
So recently I joined some of my colleagues on the committee
and sent you a letter asking you about the Department of Labor
efforts to ensure equitable treatment in the workplace for LGBT
workers. I want to thank my colleagues, Mr. Polis and Mr.
Pocan, for leading that effort and thank you for your prompt
reply. I look forward to working with all of you on this issue.
An issue of significance in Oregon and, of course,
nationwide is the need to provide good compensation to hard-
working Americans, and I support Ranking Member Miller's
proposal to increase the minimum wage. Glad to see the
administration recognizing the importance of that issue.
Oregonians increased the minimum wage and linked it to the
CPI by ballot initiative back in 2002, and I want to note that
effort was supported by the Oregon Catholic Conference and
other members of the faith community, as well as poverty
advocates. And I have to say, we have one of the highest
minimum wages in the country at this point and it is working
just fine.
One issue I wanted to discuss more closely with you today
are the recent efforts by the administration to address the
skills gap. This is something that I hear about when I am out
in the community on a regular basis.
I have introduced a bill--it is called the WISE Investment
Act, which is Workforce Infrastructure for Skilled Employees
Act--to help close the skills gap by better connecting local
workforce boards, community colleges, and vocational schools
with local employers, especially small businesses. And I heard
the President task Vice President Biden with a review of
federal worker training programs so I am encouraged about
making progress in this area. You said in your testimony
something about the soup to nuts approach.
So will you please talk a bit about what the Department of
Labor is doing about the skills gap and provide an update on
the progress being made by the Vice President on his task force
in evaluating federal worker training efforts?
Secretary Perez. Sure. This is an issue near and dear to my
heart, and here is the good news: Everywhere I go employers are
bullish about the future. They want to expand their footprint.
There was a study recently by the Boston Consulting Group
about--they survey businesses that are doing business in China,
and over half said they want to come back. So there is a lot
out there. There is a lot of opportunity out there today and
tomorrow and years from now.
There are structural things happening in this country in
manufacturing, including but not limited to our advantages in
intellectual property, our supply chain, our workforce, our
energy costs. Good things are happening, and the challenge I
hear from employer after employer is, ``How do we make sure we
have that skilled workforce to succeed?'' And that is what we
are trying to do.
I spoke about our investments in apprenticeship. We need to
double--frankly, we probably need to do more than double--the
number of apprentices in this country so that people can have
access to these jobs.
I spoke to the CEO of PG&E, the utility out in California--
in Northern California, and he talked about the multi-trillion
dollar future investments in our utility infrastructure in the
United States in the years ahead and the workforce needs that
come with that.
Ms. Bonamici. Right.
Secretary Perez. Again, good middle-class jobs. And so we
are working to invest in those areas.
The sector strategies that Congressman Courtney talked
about, where we are understanding at a regional level how
many--what are your health care needs? How many allied health
professionals do you need? How many nurses do you need? And
then working in partnership with community colleges and others
to meet those demand needs and help people punch their ticket
to the middle class through those training programs.
Oregon has done a great job on short-time compensation. You
have been a national leader. I would love to see other states
take that up. You really have done a great job. It is a very
powerful lay-off aversion strategy.
And what the Vice President is doing is we are compiling
the things that work and taking them to scale, figuring out
where we have areas of improvement--and we have undeniable
areas of improvement in issues of performance measurement, data
collection, areas like that. And so we are learning about this.
This isn't a pat-yourself-on-the-back exercise. This is
about making sure that we are doing the best job possible.
Ms. Bonamici. And then in the remaining time I just wanted
to address the issue of emergency unemployment compensation for
the long-term unemployed. I had a roundtable discussion with
several people who were long-term unemployed, and I have to say
that this was putting faces on the people who are out of work,
they were looking for work on a daily basis, applying for jobs.
They were more mature than--you know, they weren't teens; they
were people who had worked for several years.
So can you discuss a little bit about who is the population
of--well, now my time is expired but maybe if you could respond
to the committee, who are the long-term unemployed? Because I
have found that they are people who are supporting families,
trying to make rent payments, mortgage payments, and they are
looking for work. They need this lifeline so that they can put
gas in their car and have a phone to--
Chairman Kline. The gentlelady's time has indeed expired.
Ms. Bonamici. Thank you, Mr. Chairman.
Chairman Kline. Mr. Pocan?
Mr. Pocan. Thank you, Mr. Chairman.
And thank you, Mr. Secretary. It is very nice to meet you
today.
Secretary Perez. Good to see you.
Mr. Pocan. It is great to hear you have roots to my home
state of Wisconsin through your wife and in-laws. I appreciate
that.
I would like to try to get to three or four areas as I bat
cleanup here, so first would be on the minimum wage. I am a
small business owner. I have been an employer for 26 years.
I kind of straddle an interesting area. I also have a union
shop, so I kind of am business and labor but a member of the
Painters and Allied Trades for that time, as well.
And my business almost exclusively deals with other small
businesses, and what I hear are the things that have come up
today about, you know, it is smart to pay people more. You can
retain them; there is less cost in trying to train employees.
And also the ``consumption-deprived economy''--I am going
to use that term now--that you talked about, that really people
know that if that money gets out there it is going to help all
of our small businesses. So we are hoping for something like
this.
But the one thing that wasn't discussed today was something
that I have seen in the state of Wisconsin as a former
legislator there, which is when we don't pay people more, when
the minimum wage is as low as it is, we wind up subsidizing as
taxpayers through programs like--whether it be food assistance
programs, health assistance programs, et cetera. Do you have
anything to comment on some of the subsidies that we all as
taxpayers pay when people aren't paid enough?
Secretary Perez. Well, most recently there was a study that
indicated that raising the minimum wage to $10.10 would result
in $4.6 billion per year--$46 billion over 10 years in savings
in Food Stamps alone. And that doesn't include other subsidies.
As your income goes up, by the way, your Earned Income Tax
Credit will eventually diminish. You still would be eligible
for some, but not as much. And we are rewarding work.
I was working as a Senate staffer in 1996 when welfare
reform passed, and it wasn't simply about getting people to
work; it was getting people self-sufficient. And that was my
recollection.
And the minimum wage was increased at the same time and
President Clinton talked about how we are raising this minimum
wage because we do have a goal of promoting self-sufficiency,
and that is--I mean, when you think about it, $4.6 billion
reduction. We have had a debate about Food Stamps. I want less
people to be on Food Stamps, and most importantly, the people I
meet who are working 50 hours and still relying on Food Stamps,
they want to be off Food Stamps but they can't because they are
not making enough money.
Mr. Pocan. Great. Thank you.
Emergency unemployment benefits. For the State of the Union
I brought as my guest someone who had lost their benefits in
December--a steamfitter, worked all of his life, played by the
rules, and his wife actually wrote us and the real problem that
they highlighted was they had to put their home for sale rather
than get foreclosed on. Their daughter wanted to bring a friend
over for dinner; they said, ``We can't afford another plate.''
So this is a real issue to people in my district growing
every single week that we don't take action. Are there any
credible arguments about why you can't do retro-pay with
unemployment comp, as you have heard?
Secretary Perez. I have not had--again, I used to be a
state labor secretary. This has been done multiple times. This
wheel has been invented. It can be done. It has been done; it
can be done again.
And as I said before, what one state official said to me
was, you know, the burden on states pales in comparison to the
burden that families are confronting, like the families you
have both described.
Mr. Pocan. Thank you.
Then let me ask on apprenticeships. Mr. Miller and I are
working on an apprenticeship bill right now. As I mentioned, I
come from the trades.
When the economy gets a cold, people who work in the trades
get pneumonia. We were up to 24, 26 percent unemployment. You
mentioned Wisconsin. We have got people 59 years old. That is
the age we are looking at a lot of these programs.
We need to get people into the apprenticeship programs. I
am really glad to see that you are looking at some of these
programs and expanding, and I agree, I think you could expand
even more than what we are expanding.
I was just wondering if you are familiar with the program
in Milwaukee, the Building Industry Group, BIG STEP, which
helps get people to jump into the trades from underrepresented
populations?
Secretary Perez. Well, the average age, I said, of a person
in the skilled trades is 59 in Wisconsin. The average age of a
Latino in Wisconsin is 17. I know where the future of the
workforce is, and they are in the city of Milwaukee and they
are in Racine and they are in many other corners of the state.
And programs like the program you describe are programs
that enable people to have a career pathway, and that is a big
part of what we are trying to do. That is what apprentices do.
Apprenticeships give you that career pathway, and those
careers, as you well know, Congressman, because you have lived
it, you have led it, they pay really, really good wages. And
that is where investments like that program you describe in
Milwaukee need to go.
Mr. Pocan. Thank you.
In 5 seconds, if I can--
Chairman Kline. No, the gentleman's time has expired.
Mr. Pocan. Okay. All right.
Chairman Kline. Mrs. Davis, you are recognized as the last
questioner? And the secretary has been kind enough to extend
his stay until 12:15 so ask fast.
Mrs. Davis. Okay. Thank you, Mr. Chairman.
And thank you, Mr. Secretary--
Secretary Perez. An honor to be here.
Mrs. Davis. I think anyone who has sat here and listened to
you or heard you today recognizes that many, many programs are
in place and are working well. And yet, a lot of people feel
that the economy just still is not quite taking off the way
that it should.
In a nutshell, what is holding the economy back?
Secretary Perez. Well, we need to pick up the pace of
progress. And I think we know what works.
When we have invested historically in infrastructure we put
people to work in good jobs and we are doing real projects.
That is one way to help the building trades. That is one way to
get people back to work.
When we pass comprehensive immigration reform we grow the
economy. When we do the issues--when we address the challenges
that we are addressing in the skills set we grow the economy
because people have access to the skill set that enables them
to get the jobs that are available today and survive tomorrow.
Mrs. Davis. You know, the GAO reported--and you mentioned,
I think, 15 million to 19 million--16.5 million is the figure
that the GAO had used of people who would benefit. I think
there obviously has been some focus also on whether 500,000
jobs or whatever that number might be would be lost. Why the
focus not on the 16.5 million people that really impacts, women
particularly, who are minimum-wage workers and their children?
And we know that has a multiplier effect when children are more
exposed to all the advantages that any other child has.
Secretary Perez. And in addition to the 16 million or 17
million or 18 million, depending on the study, there are the
other folks who are indirectly benefitted because they are
slightly above the minimum wage and statistics say that the
combined impact is about 28 million. And we talked before about
the billions of dollars that this puts into the economy at a
time when businesses need it.
Mrs. Davis. Is that a tough story to tell?
Secretary Perez. I think it is pretty straightforward. I
think we have done it many times before.
And, you know, they call it economic theory for a reason.
You know, sometimes you have got to get it into the reality,
and the reality is, you know, in states like Washington that
have increased the minimum wage years ago, we have a laboratory
to figure out, you know, has Washington gone to heck in a
handbasket? And the answer is no, actually, they are one of the
most robust economies in this country, notwithstanding the fact
that a tipped worker in Washington State is making the minimum
wage. They have leveled the playing field. They are allowing
more people to make ends meet.
Mrs. Davis. Thank you, Mr. Secretary. And as you know, I
have a little bit of time left--just a little, and the chair is
pushing.
My colleagues have really done a good job, I think, in
trying to pull together a few of the pieces that I wanted to
talk to you about--the veterans programs that we have that many
of the other programs that are working to help our innovation
economy. While, you know, we still do see that veterans
unemployment is lower, I am also impressed, though, that in
addition to the G.I. bill and in addition to many programs at
the universities that really go well beyond educating and
training and then not just praying for the veterans but, you
know, really putting in a support system that helps them.
I had a number of veterans that came to me and said, ``Why
aren't we doing more of that for either the long-term
unemployed or people who have been looking for a job?'' Do you
see in the programs that you are taking a look at and the Vice
President is taking a look at--you have mentioned a number of
those here today, the sector strategies--where we are really
making a difference, I mean, where you think there is a real
value added in the way the programs are moving forward now?
Secretary Perez. Are you referring to the long-term
unemployed?
Mrs. Davis. Not just the long-term unemployed, but
especially, you know, as we are trying to match the needs of
the economy, the future innovations, and today.
I mean, one of the things I would just say really quickly
is--and I am not sure why this is happening, Mr. Chairman, but
we have the America Competes Act. We ought to be moving forward
on that. The Science Committee ought to be doing that. I am not
sure why that is not happening.
But what is it that you are doing that really answers the
need that the America Competes Act should be doing right now?
Secretary Perez. What we are doing is working on a regional
level to understand what is happening in Northern California,
what are the needs of employers in Northern California, and
then working with our educational infrastructure there--
community colleges, 4-year colleges, high schools, and others--
to match that need so that people can punch that ticket to the
middle class.
Going into Minnesota, where the demand needs are different.
Getting a handle on that. Listening, learning, and then putting
together the partnerships that enable people to have those
career pathways that enable them to get access to not only the
jobs of today but then to survive the jobs of--the downturn of
tomorrow.
I grew up in Buffalo, New York. I saw ups and downs. And
the challenge we had in Buffalo, New York was that 40 years ago
a ninth-grade education enabled you to punch your ticket to the
middle class. That is just not true anymore, and--for all too
many folks, and that is why we need to up-skill America to make
sure that they can survive not only today but they can weather
the storms that may be 10, 15 years down the horizon.
Mrs. Davis. All right. Thank you.
Secretary Perez. Thank you.
Chairman Kline. Gentlelady's time has expired.
And we are running over, so let me recognize Mr. Miller for
any closing remarks?
Mr. Miller. Thank you, Mr. Chairman, and thank you so much
for this hearing and, Mr. Secretary, for your participation.
Mr. Chairman, it has been referred to numerous times this
morning the report on the minimum wage by the National Economic
Council. I would ask unanimous consent it be made part of the
record of this hearing?
Chairman Kline. Without objection.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Miller. And, Mr. Secretary, thank you. I want you to
continue to focus on what the decisions about people's
retirement. In working with people who advise individuals and
small businesses, the question around fees and cost are very,
very important. John Bogle, the founder of Vanguard, will tell
us that fees can eat up 30 percent of your retirement savings
without you ever thinking about it, and the people that play
with other people's money, they have a fiduciary relationship
and they have an obligation to those retirees.
And so I think that you are headed in the right direction.
This is a very important subject. It has been before the
Congress for a long time, but it really is about whether or not
people are going to have sufficient retirement savings for the
rest of their lives, and so I don't want to suggest that
somehow that is complicated and we really shouldn't get into
it. It is very important to retirees and to their families.
Thank you so much for your service and thank you for your--
again, for being here.
Chairman Kline. I thank the gentleman.
And I, too, thank you, Mr. Secretary, for coming.
Secretary Perez. Thank you.
Chairman Kline. I, too, would ask you to look closely at
that fiduciary rulemaking. You have seen real bipartisan
concern here; you have heard it from my colleagues on both
sides of the aisle. We are concerned about the timing, what the
SEC is doing, what you are doing, and what the impact will be
on important advice that people, particularly low-income
people, might need.
So I would ask you to look at that with that awareness in
mind.
I apologize we did run over. I want to thank you again for
extending your time a little bit to accommodate our questions.
Look forward to continuing to work with you.
Secretary Perez. Me too.
Chairman Kline. There being no further business, the
committee is adjourned.
[Questions submitted for the record and their responses
follow:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[Secretary Perez's response to questions submitted for the
record follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[Whereupon, at 12:20 p.m., the committee was adjourned.]
[all]