Tuesday, October 14, 2008

HR EYE ON THE ELECTION - The State of Labor

North American Free Trade Agreement (NAFTA) Lo...Image via WikipediaSecretary of Labor Elaine Chow recently opened the U.S. Chamber of Commerce "Labor Policy at a Crossroads" event in Washington D.C. Her full remarks can be found here.

Among her points:

Major Changes in Our Economy
Over the past several decades, the American economy has evolved in ways no one could have anticipated. Today, America is linked to the rest of the world through technology and trade — relationships that continue to revolutionize the flow of capital, goods, labor and services. These links cannot be severed without destroying our national economy.

The Impact of Education

Labor policy must embrace the idea that workforce development is not a social welfare program — it is a fundamental building block of economic development. And the next administration must be willing to challenge the current system to do even more.

It isn't a secret that education is key to getting a better job. Today, high school dropouts make about $540 per week on average for full-time work and the unemployment rate of this group of workers is about 9.6 percent. Workers with a high school diploma average $776 weekly and this group has a 5.7 percent unemployment rate. Workers with some college or an associate degree average about $902 per week and this group's unemployment rate is 4.8 percent. But workers with a bachelor's degree or higher average $1,484 per week and have an unemployment rate of 2.7 percent. More than ever before, education is the real ticket to the middle class.

Major Labor Policy Changes Coming
...government plays an important role in promoting the flexibility of human capital, and it can also play a role in providing a labor system that works for everyone — workers, employers, unions, government, and all of the other stakeholders. But we should be clear about this — government can ensure a level playing field and provide opportunities, but it should never guarantee outcomes. It is critical that government only interjects itself in the relationship between workers and employers when it is absolutely necessary.

Unfortunately, there are those who would prefer that government play a much larger role in the workplace permanently. They advocate that the United States should be more like Europe, and adopt European-style entitlement programs and more rigid labor laws. On the other side are those who value opportunity over predetermined outcomes. They value the American work ethic and the desire to succeed.

Congress has already begun to push our economy towards Europe. Already proposals have been offered in which the government would dictate to employers what leave policies they must offer, who they can promote, which benefits their health insurance plans must offer, what types of investments can be included in their pension plans and how they can handle even the most basic business operations. And this is the short list! This kind of Europeanization of the American workforce would have dire consequences for our country's ability to compete abroad and would disrupt the traditional labor relationships here at home.

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