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8 Ways to Build an Economy That Works for Everyone

On Monday, Secretary of Labor Thomas Perez spoke at the National Press Club. His speech, “Shared Prosperity: Building an Economy that Works for Everyone,” provided insights on current policy focus areas at the Department of Labor.

He opened by reminding the audience of a phrase used by President Obama during a rally in Milwaukee: “By almost every measure, the American economy and American workers are better than when I took office.” Much of our economic data supports Obama’s claim, but certainly more work is to be done to improve American competitiveness at home and abroad.

Perez cited one positive statistic on the economy; September was the 55th straight month of private-sector job growth, adding 10.3 million new jobs. “That’s the longest uninterrupted stretch of private sector job creation on record. Unemployment is now at its lowest level since July 2008. All told, the United States has put more people back to work than Europe, Japan, and every other advanced economy combined,” said Perez.

But although there are certainly many positive examples of how the economy has turned, Perez reminds us that there is work to be done. “Remember, the president said ‘by almost every measure…’ Almost isn’t good enough. It’s not good enough for him. It’s not good enough for me. It’s not good enough for America.” Perez believes that there is unfinished business to the economic recovery, and that in order to preserve and ensure that prosperity is broadly shared, he outlined several initiatives the department is championing.

1. Create Bipartisan Support and Collaboration

Perez noted that in order to achieve the department’s vision, the first step is to understand prosperity in a historical context, and work towards bipartisan support on key policy issues. He gave a quote from President Teddy Roosevelt: “Our aim is to promote prosperity and then see that prosperity is passed around, that there is a proper division of prosperity.”

“Some say the challenges that remain are intractable. Some pundits claim that the problem is ‘structural,’ whether it’s low wages or long-term unemployment. We hear chatter that globalization and technological progress creates inequalities and opportunity gaps that simply can’t be helped. Well, I don’t buy that. ‘Structural unemployment’ — that amounts to excuse making, a way to justify inertia, gridlock and just plain giving up. And low wages and lousy benefits, we must remember, are a choice, not a necessity,” said Perez.

2. Raise the Minimum Wage

Raising the minimum wage has been a contentious issue on Capitol Hill, but as Perez cites, every president except two since FDR have raised the minimum wage. “We’ve been stuck at $7.25 per hour for five years. The purchasing power of the minimum wage is 20 percent less today than it was 30 years ago, and the United States has the third lowest minimum wage — as a percentage of median wage — among OECD countries.”

3. Invest in Infrastructure

Another step for shared prosperity is to improve the quality of roads, bridges, ports and transit systems. “Infrastructure investments that will create middle-class jobs right away and facilitate commerce for decades and decades to come. Yes, it involves some federal spending…but no, it’s not an exotic left-wing idea. The interstate highway system was Dwight Eisenhower’s most enduring presidential legacy.”

4. Fix Immigration

Another step that Perez identified was the need to fix our broken immigration system. “It’s not just a moral, humanitarian and national security imperative; it’s an economic imperative.” Perez shared that “the Congressional Budget Office estimates that immigration reform would increase real GDP relative to current projections by 5.4 percent over the next two decades. That translates into an additional $1.4 trillion in economic activity — adding jobs, putting upward pressure on wages and helping stabilize the Social Security Trust Fund.”

5. Implement Paid Leave

Perez referred to paid leave as a “sleeper issue,” in that it is not a high profile topic – yet. “We stand alone as the only industrialized nation on the planet where paid family leave is not the law of the land,” said Perez. Paid leave is good economic and good family policy. He shared some interesting questions about the issue of paid leave:

  • Why are we making people choose between the job they need and the family they love?
  • Why aren’t we giving them the tools to be both attentive parents and productive employees?
  • And how can we say we’re for family values when so many women have to jeopardize their economic security to take a few weeks off from work after giving birth?

6. Close the Skills Gap

Closing the skills gap is one of the most important elements facing the American economy. Not only will a lack of stills hurt the American economy, but it risks our global competitiveness. “Just as we need to invest in our physical infrastructure, we need to invest in our human infrastructure. Just as we built the railroad system, just as we built the Internet, we need to have a skills ecosystem that both meets the needs of our economy today and opens new frontiers for growth,” said Perez.

7. Reaffirm Union Support

In his speech, Perez expressed his support for unions, and how they provide workers a voice and support for improved working conditions. “Worker voice can take many forms, one of the most important being membership in a union,” said Perez. “The Obama administration is resolute when it comes to protecting the collective bargaining rights of workers across America, rights that have come under withering attack in recent years.”

8. Promote Leadership

Yet none of these initiatives could occur without leadership, and Perez believes that if leadership isn’t found in Congress, President Obama will execute his executive powers. Perez noted that Obama has used his authority in the past year to provide overtime protections to home health care workers, raised the minimum wage for workers under federal service and construction contractions, and are updating overtime regulation for American workers.

Perez’s comments were a stark reminder of the challenges facing the American economy, and how the path toward full recovery still has various obstacles. This list is absolutely daunting from a policy perspective, and it’s clear that Perez has his work cut out for him. With any luck, he might be able to pass some meaningful reform around infrastructure and the help solve the skills gap. The remaining issues seem to be too contentious right now for serious reform. Although the challenges exist, Perez was resolute in his belief that we can achieve greater prosperity for all Americans.

“[The economy] not functioning the way it should unless it’s working for everyone, unless prosperity is broadly shared,” said Perez.

 

Photo accessed from Department of Labor FlickR

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