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Testimony of Secretary of Labor Thomas E. Perez Before the Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Committee on Appropriations, United House of Representatives, March 17, 2015
Chairman Cole, Ranking Member DeLauro and members of the Subcommittee, thank you for the invitation to testify today. I appear before you today with a great sense of optimism about the direction of our economy and the role that the Labor Department can play in sustaining and further accelerating this recovery. I’m confident we can construct a stairway to shared prosperity in which everyone has the chance to live their highest and best dreams, and that’s what I want to discuss with you today.
The President’s FY 2016 Budget proposes investments in programs that build on what works and support an economy that works for everyone. The request for the Labor Department creates opportunities for workers to strengthen their skills, support their families, and protect their hard-earned retirement savings. The United States has experienced 60 consecutive months of net private sector job growth, extending the longest streak on record. There are now more than 5 million job openings, the most since January 2001. At the end of the Great Recession, there were nearly 7 jobseekers for every available position; today the ratio is less than 2-to-1.
Under President Obama, the deficit has fallen by about two thirds, measured as a share of the economy. The last time the deficit fell this quickly was at the end of World War II. Consumer confidence is near a seven-year high. Workers on manufacturing assembly lines are now averaging 42 hours per week, and auto sales are at prerecession levels.
Yet in this recovery, there are many families who are not yet experiencing the benefits of this strengthening economy. Their jobs are not paying a living wage, forcing parents to work two or three jobs to make ends meet or choosing between staying home with a sick child and earning a paycheck. If enacted, the President’s Budget for the Department of Labor would help change this reality by supporting working families, creating pathways to high-growth jobs, and protecting workers’ health and safety, wages, and retirement security. This Budget is an investment in the future of our country and an affirmation of an economy we all want an economy where hard work is rewarded, where workers get a fair shake and fair treatment at work, where workers have a chance to develop skills that lead them to family-sustaining jobs, and where workers have security to return home from work safely to their families and build for their future.
These investments, and continued economic growth, will only be possible if we reverse sequestration, as the President’s Budget would do. At the end of 2013, policymakers came together on a bipartisan basis to partially reverse sequestration and to pay for higher discretionary funding levels with long-term reforms. We have seen the positive consequences of that bipartisan agreement for our ability to invest in areas ranging from research and manufacturing to strengthening our military. The Budget builds on this progress by reversing sequestration, paid for with a balanced mix of common-sense spending cuts and closing tax loopholes, while also proposing additional deficit reduction that would put debt on a downward path as a share of the economy.
Meanwhile, the President has made clear that he will not accept a budget that reverses our progress by locking in sequestration going forward. Locking in sequestration would bring real defense and non-defense funding to the lowest levels in a decade. As the Joint Chiefs and others have outlined, that would damage our national security, ultimately resulting in a military that is too small and equipment that is too old to fully implement the defense strategy. It would also damage our economy, preventing us from making pro-growth investments in areas ranging from basic research to early childhood education to severely reducing the number of people who can receive training through our workforce training programs. As the President has stated, he will not accept a budget that severs the vital link between our national and economic security, both of which are important to the Nation’s safety, international standing, and long-term prosperity.
CREATING PATHWAYS TO HIGH GROWTH JOBS
Last year both parties came together to pass the bipartisan Workforce Innovation and Opportunity Act (WIOA), which provides a vital opportunity for reform of our nation’s job training system so workers are prepared for 21st Century jobs and employers have the skilled workers they need. The Budget request supports robust implementation of that law and its reforms.
Successful WIOA implementation means enabling and assisting states to develop comprehensive and cross-program state plans to best serve individuals and businesses, and to have the infrastructure in place to measure outcomes and report on performance as required under the law. The Employment and Training Administration (ETA) plans to employ flexibilities to allow states to use existing funds to transition to the new law. The Budget also requests additional staff and technical assistance funding, which will allow ETA to be responsive to the needs of the workforce system and assist states and localities in the second year of WIOA implementation. These staff would be located throughout the regions and in the national office, providing guidance and support to states in their efforts to fully implement the changes required by the law.
A key goal of the statute is to provide stronger accountability for, and transparency of, the outcomes of federal investments. For that reason, the Budget includes a significant increase for the Workforce Data Quality Initiative, from $ 4.0 million appropriated for FY 2015 to $ 37.0 million requested for FY 2016, to help states expand and enhance their information technology infrastructures to connect state workforce and education databases and to build the public-facing performance reports required by WIOA. $ 30.0 million of this request will help states build integrated or bridged data systems to facilitate WIOA implementation. These grants also will support building state-based wage data matching infrastructure to enable and/or streamline WIOA performance reporting, including eligible training provider performance reporting.
The Budget builds on WIOA with investments to expand the capacity of the core programs to reach more individuals who need help finding or training for a new or better job. The Budget includes a $ 2.7 billion discretionary investment (an $ 85.7 million increase above the 2015 enacted level) in the Adult, Youth, and Dislocated Worker State grants. The WIOA formula programs provide job placement, career counseling, skills training, credential attainment, and access to state job boards for disadvantaged, low-skilled, and underemployed adult workers; low-income and out-of-school youth; and dislocated workers. The Budget maintains the 2015 funding level for the Governors’ set aside while providing increased funding for direct services at the local level. The Budget also provides additional dedicated funding for those who need training to find a new job. Current resource limitations mean that only a small portion of the people who walk through the doors of American Job Centers are able to receive training through the workforce system. The Budget includes $ 16.0 billion for a 10-year mandatory High-Growth Sector Training legislative proposal that would double the number of workers who receive training though the workforce development system. This training will equip workers with the skills and credentials to get jobs in high-growth industries, such as health care, energy, advanced manufacturing, cybersecurity, and information technology.
DOL continues to work to meet the President’s goal of doubling the number of Registered Apprenticeships over the next five years and to work with bipartisan supporters to promote expanding apprenticeship–a proven strategy that allows people to earn while they learn. DOL data indicate that people who complete registered apprenticeships have median salaries exceeding $ 50,000, and over 90 percent of people are employed within three months after completion of the program. The Budget will invest $ 2.0 billion in grants to states and regions to bring more employers to the table in providing high-quality apprenticeship and equip states and regions with the expertise to assist employers in creating or expanding the apprenticeship model. In addition, we propose an annual discretionary request before this committee of $ 100.0 million within the ETA for apprenticeship grants for states, industry, and community based organizations to support sustainability and build capacity across the national apprenticeship system and to meet additional demand by employers and others beyond what can be funded under the American Apprenticeship grants we will award later this year.
Industry-recognized credentials help employers, jobseekers, and educators by communicating the skills and training that are needed for a particular occupation. The Budget includes a proposal for mandatory funding of $ 500.0 million for competitive Industry Credentialing and Assessment Grants to speed the development and adoption of credentials and assessments with real labor market value and more effectively match job seekers to employment opportunities. Of this proposal, $ 300.0 million would be targeted toward in-demand information technology jobs. While industry recognized, portable credentials improve labor mobility, a patchwork of State licensing laws can sometimes hinder that mobility. Different states often have a wide variety of licensing rules for the same occupation, requiring people to participate in unnecessary training or pay high licensing fees to obtain work for which they already have the skills. Our Budget requests $ 15.0 million for grants to States to identify and address areas where occupational licensing requirements are creating an unnecessary barrier to labor market entry or labor mobility. This will be particularly useful to transitioning service members, military spouses, and dislocated workers.
Despite the progress that has been made in recent years, there are still many young people lacking economic opportunities. The Department’s Budget expands programs to reach more of those youth and help them find meaningful employment. Now in its 50th year, Job Corps has provided education and career technical training for 3 million disadvantaged youth in a residential setting, and the Department is committed to taking all necessary steps including closure, as appropriate to reform the program to ensure Job Corps continues to effectively serve millions more young people in the future. The Budget request for Job Corps includes an increase of $ 17.0 million to implement WIOA-related changes, upgrade equipment to meet industry standards, and refine training to provide skills that are in high demand by employers. A portion of the increase will be used to pilot ways to better serve younger students, for whom the traditional Job Corps model has been less effective. Our Budget also seeks increases to strengthen oversight of the Job Corps program, as the Department moves toward a more risk-based approach for program oversight.
In addition to Job Corps enhancements, the Departments of Justice and Labor are proposing to pilot a program with $ 5 million in grants to community partnerships that provide youth with the opportunity to explore in-demand careers in law enforcement services, which will provide at-risk youth with tangible work experience and positive law enforcement exposure. Our Budget also includes a Connecting for Opportunity legislative proposal to create job opportunities for disadvantaged youth, which seeks $ 3.0 billion of mandatory funding over four years. This includes $ 1.5 billion in formula grants to expand year-round and summer job opportunities and $ 1.5 billion to create educational and workforce pathways to help youth earn high school diplomas, pursue further education, and make connections with the job market.
The Trade Adjustment Assistance Community College and Career Training (TAACCCT) grants provided nearly $ 2.0 billion in mandatory funding over four years, with the last round of grants awarded in FY 2014. This investment brought together education, labor, business, and community leaders, ensuring that community colleges were offering curricula aligned with industry’s needs. To build on the infrastructure and lessons learned from the TAACCCT grants and to continue expanding the role of community colleges in job training, the Administration is proposing a $ 200.0 million increase for an American Technical Training Fund that will be housed in the Career and Technical Education office at the Department of Education and jointly administered by the Departments of Education and Labor. These grants will support the development of new job training programs within current community colleges or other innovative, non-traditional training providers and will help scale existing models with evidence of effectiveness which could include past performance on graduation rates, job placement rates, and wages earned by graduates.
The Veterans’ Employment and Training Service (VETS) helps veterans and separating servicemembers transition from the service to a meaningful career, starting with a robust and revitalized three day workshop that is required for every separating servicemember. These workshops are part of a comprehensive veteran employment support program anchored in our American Job Centers across the country. The Administration has been focused on improving the effectiveness of VETS, including in terms of ensuring that it is integrated with other employment and training programs, and its funding has increased 13 percent since FY 2009. The FY 2016 request maintains the funding increase for the largest VETS program the Jobs for Veterans State Grants which funds specialists who provide veterans with the employment services needed to overcome significant barriers to work. The FY 2016 Budget also maintains funding for the Homeless Veterans’ Reintegration program. I remain troubled that men and women who risk their lives for us struggle when they return to the United States, with far too many experiencing homelessness. I share the President’s commitment to end homelessness among veterans; we will continue to work with other Federal agencies to achieve this goal.
I also urge Congress to reauthorize the Trade Adjustment Assistance (TAA) program, as it provides critical training, income support, wage subsidies, employment and case management services, and job search and relocation allowances to workers whose employment has been adversely affected by foreign trade. Last year, TAA provided benefits and services to over 62,700 workers seeking new jobs and opportunities. And 83 percent of those who completed training received a degree or industry recognized credential. Nearly 77 percent of those TAA participants who exited the program found employment within six months, and, of those, 90 percent were still employed six months later.
The process known as PERM is ten years old. This is what we use to certify that an employer seeking to obtain a Green Card for an immigrant worker meets the statutory test requiring that there be an insufficient supply of United States workers and no adverse effect on wage and working conditions of United States workers. We are considering options to modernize the PERM program to be more responsive to changes in the national workforce. One of our most critical Budget proposals would authorize legislation to allow the Department of Labor to charge fees for new applications filed under the PERM program to improve the speed and quality of certification processing. The Department has heard from businesses across the country that are in favor of a filing fee. Not being able to charge a fee to support more efficient application processing and program administration is hurting businesses, workers, and our economy. The Budget also includes a one-time increase of $ 13 million and 17 temporary staff to reduce the escalating backlog of PERM cases.
SUPPORTING WORKING FAMILIES
Despite the improvement in the economy, the number of individuals who have been unemployed for six months or longer the long-term unemployed is unacceptably high. People who are out of work for a longer period of time have more trouble finding a job. To address and prevent long-term unemployment, the Budget includes a total of $ 180.9 million, an increase of $ 100.9 million, for the combined Reemployment and Eligibility Assessment and Reemployment Services program, a cost effective strategy with proven success. The combined services will be offered to all veterans who receive unemployment compensation through the Unemployment Compensation for Ex-Servicemembers UCX program, as well as the top third of unemployment insurance (UI) claimants who are most likely to become long-term unemployed. People who receive these combined services are less likely to exhaust their UI benefits, have shorter UI durations, and return to work more quickly with higher wages and job retention rates. This $ 180.9 million investment will yield an estimated $ 287.0 million in benefits savings in FY 2016. In addition, the Budget includes a $ 400.0 million discretionary increase in the Employment Service, enabling states to provide cost-effective in-person reemployment services to an additional 2 million displaced workers, including the long-term unemployed and our veterans, to connect them with jobs or the training or services they need to prepare for meaningful employment.
There are also people with full-time jobs who cannot make ends meet. They are diligent and resilient. They take responsibility for themselves and their families. But no matter how hard they work, they fall further and further behind. Many of them need SNAP or other forms of public assistance to sustain their families. Often, they are one setback away from complete desperation. For you or me, car trouble and a trip to the repair shop are inconvenient; for many others, it’s a financial catastrophe.
Current public opinion is clearly and convincingly in favor of increasing the minimum wage. Grass roots energy and momentum nationwide have moved states, counties and local governments to take action where Congress so far has not. Over the last two years, 17 states plus the District of Columbia have raised their own minimum wages. On Election Day last November, Nebraska, South Dakota, Alaska and Arkansas passed ballot measures, by landslide margins, to increase their state’s minimum wage. The legislatures in Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Rhode Island, West Virginia and the District of Columbia enacted increases during the 2014 session. While we applaud progress at the State, local, and employer level, we must raise the Federal minimum wage so workers across the country can benefit.
The United States is also the only developed country that does not guarantee paid maternity leave to our workers. Because of this, people are forced to choose between caring for their families and earning a paycheck that they desperately need. To respond to this, the Department’s Budget includes two paid leave proposals. The first is a mandatory legislative proposal for $ 2.2 billion to assist up to five states that wish to launch paid leave programs, following the example of California, New Jersey and Rhode Island. If enacted, grants would help states with administrative costs and half of benefits for three years. The second is a discretionary proposal for $ 35.0 million that would provide technical assistance and support to states that are still building the infrastructure they need to launch paid leave programs in the future.
PROTECTING WORKERS, WAGES, AND RETIREMENT SECURITY
The notion that we can either rebuild our economy or we can pay workers fairly and be vigilant about worker safety is a false choice. At the Labor Department, we’re being more strategic about cracking down on wage violations, working to ensure workplace safety, and protecting the retirement savings of your constituents who have worked their whole lives to save. Worker protection programs are crucial to protecting of American workers. The Budget includes $ 1.9 billion for the Department’s worker protection agencies, enabling them to meet their responsibilities of safeguarding the health, safety, wages, working conditions, and retirement security of American workers.
The Wage and Hour Division (WHD) is responsible for the administration and enforcement of a wide range of laws, which collectively cover 135 million workers in more than 7.3 million establishments through the United States and territories. The request for WHD includes an increase of nearly $ 31.7 million to focus on industries that employ vulnerable workers and are most likely to break worker protection laws enforced by WHD, including the laws that provide for a minimum wage, overtime, and the right of workers to take leave to care for their own or their families’ medical needs.
The Occupational Safety and Health and Mine Safety and Health Administrations (OSHA and MSHA) work to ensure safe and healthful working conditions for working men and women. Across the two agencies, the Budget includes nearly $ 990.0 million to bolster OSHA’s ability to enforce safety and health standards as well as more than 20 whistleblower laws that protect workers from discrimination and retaliation when reporting unsafe and unscrupulous practices. The Budget will also allow OSHA to enhance safety and security at chemical facilities, and provide MSHA with the resources it needs to enforce and promote mine safety and health laws while conducting statutorily required mine inspections.
Although the vast majority of employers treat their employees well, there are still those who disregard their responsibility to their workers. Many of the laws that are enforced by the worker protection agencies lack strong civil penalties. The Budget proposes to strengthen several of the civil monetary penalties collected by the Department. This is not intended as an additional penalty against employers who are striving to follow the laws and protect their workers. This is intended to strengthen the deterrent against those few who flout the law to save a few pennies while risking their employees’ lives and health.
About half of the workforce has no retirement plan through their work. About 15 percent without work-based plans have a personal retirement account. Social Security is an important benefit, but too many Americans have nothing else to supplement their Social Security benefits. Our nation needs to help more people save for their golden years. The Budget includes several proposals to help Americans with their retirement planning and savings. The request for the Employee Benefits Security Administration (EBSA) includes an increase of $ 6.5 million to pilot different approaches to increasing retirement plan coverage in states. The Budget request for EBSA also includes an increase of $ 7.6 million to advance the agency’s investigative tools to enhance health and retirement benefits analysis and targeting.
PROGRAM REFORM, IMPROVING DATA-DRIVEN DECISION-MAKING, AND INCREASING FEDERAL PRODUCTIVITY
In recent years, the Department has been striving to increase the productivity and efficiency of its workforce. The Budget includes a number of investments to improve the Department’s ability to serve the public, increase workers’ effectiveness, streamline processes, and enhance agencies’ ability to target enforcement to those areas where violations are most likely to occur.
The Department’s Budget includes a large investment in the IT infrastructure. Over the past six years, the Department has been working to streamline the nine separate IT infrastructure components into one consolidated system. Within this consolidated system, the Department is proposing to implement a Digital Government Integrated Platform, which will be used by agencies to support information sharing and improve the efficiency and effectiveness of the Department’s workforce, thereby transforming the way the Department provides services to the American public. This will improve compliance with the laws the Department administers by focusing strategies and resources through in-depth data analysis made possible by managing digital information. It will also allow for agencies to better train employers and workers on how to be safe in the workplace by enabling the Department to share videos that demonstrate safe workplace practices and tailor this information for non-English speaking employees. Several of the agency budgets, including the Office of Labor-Management Standards (OLMS), the Office of Federal Contract Compliance Programs (OFCCP), and the Wage and Hour Division (WHD), include proposals to upgrade their case management systems. These systems will improve the agencies’ ability to target enforcement efforts, enabling them to change the types of behaviors that drive non-compliance. Within the Office of Workers’ Compensation Programs (OWCP), there is a proposal to improve the claims processing systems. The 20-year old Longshore and Black Lung claims processing systems are out of date, and the FECA claims system is approaching the end of its life. OWCP is looking to move toward a unified claims-based system that would facilitate more effective delivery of benefits to claimants across the four programs OWCP administers and also yield savings in future years.
The FY 2015 Omnibus provided additional resources for the Adjudicatory Boards to address the backlog of Black Lung cases. The Budget continues this funding and the Department remains committed to eliminating the case backlog.
The Bureau of Labor Statistics (BLS) is the principal Federal statistical agency responsible for measuring labor market activity, working conditions, and price changes in the economy. The request for BLS is $ 632.7 million and includes an increase of $ 6.5 million to expand the Job Openings and Labor Turnover Survey (JOLTS). JOLTS provides critical information about the health of the labor market by tracking the number of job openings, hires, layoffs and quits in the economy. This is useful because weaknesses in some of these underlying sources, such as openings, are leading indicators of recessions. Earlier warning about recessions allows policymakers more time to respond. Similarly, increases in some of these underlying sources, such as quits, provide important signals as to the growing strength of the labor market. The expansion would allow JOLTS data to be released at the same time as the monthly unemployment numbers, thereby improving the analysis of both pieces of information, and also would add greater industry detail and State level information. In addition, the request includes an increase of $ 4.7 million for the International Price Program (IPP) export price indexes, which are used in the calculation of real Gross Domestic Product. These indexes are used to help understand trends in U.S. real trade balances, competitiveness, and issues such as the impact of exchange rate movements. In the past few years, BLS has taken a series of temporary measures to maintain this and other key economic programs, but these measures cannot be sustained permanently and the levels in the Budget are necessary if programs are to be maintained.
The Department has long been a leader in using data to make decisions. I am proposing to increase the Chief Evaluation Office’s funding while also continuing to transfer resources from the agencies to the CEO for evaluation of those programs.
The Budget proposes several reforms for ETA and OWCP programs, and the Pension Benefit Guaranty Corporation (PBGC). The reforms to the UI program will improve the solvency of State programs, strengthen the program’s connection to work, and make the UI program more targeted and responsive to economic downturns. The Budget again proposes reforms to the Federal Employees’ Compensation Act (FECA) to act on longstanding recommendations from the Government Accountability Office, the Congressional Budget Office, and the Department’s Inspector General to update and improve the program. If enacted, these changes will yield government-wide savings of more than $ 360.0 million over 10 years. Within PBGC, the Budget includes a proposal to raise the premiums that plans pay to PBGC, taking into account the risks that different sponsors pose. This proposal will save about $ 19.0 billion over the next 10 years.
Promoting the welfare of American workers, job-seekers, and retirees is the fundamental mission of the Labor Department, and it is critical to the Nation’s continued economic recovery and long-term competitiveness. The Budget calls for investments and significant reforms to help workers gain new skills in growing sectors, supports a middle class economy, and builds upon our previous success.
These proposals are evidence-based, and our efforts will help get Americans onto career pathways that promote opportunity and a hopeful future, helps workers support their families, and improves the effectiveness of the federal employees at the Department.
Mr. Chairman, thank you for inviting me today. I am happy to respond to any questions that you may have.
What GAO Found Military officials planning for and executing operations under force management levels have taken various actions to maximize military capabilities deployed to countries under those limits, as discussed below: Increased Engagement with Partner Nation Security Forces. The Department of Defense (DOD) has increased its engagement with partner nations through advise-and-assist missions that rely on partner nation security forces to conduct operations. While this action helps leverage U.S. resources, it can create complications for U.S. planners in terms of allocating capabilities and resources. In 2011, GAO reported that the Army and Marine Corps have faced challenges in providing the necessary field grade officers and specialized capabilities for advisor teams, as well as challenges regarding the effect on the readiness and training of brigades whose combat teams have been split up to source advisor teams. GAO made three recommendations related to advisor teams. DOD concurred and implemented two recommendations relating to improving the ability of advisor teams to prepare for and execute their mission. Reliance on Airpower. DOD has relied on U.S. and coalition airpower to provide support to partner nation ground forces in lieu of U.S. ground combat capabilities. For example, since U.S. operations related to the Islamic State of Iraq and Syria (ISIS) began in August 2014, coalition members have dropped more than 57,000 munitions. Air-based intelligence, surveillance, and reconnaissance systems have also proved critical to commanders by providing them timely and accurate information. While effective, this reliance on air power is not without its costs or challenges. For example, the Secretary of Defense stated in February 2016 that the intensity of the U.S. air campaign against ISIS has been depleting U.S. stocks of certain weapons. Increased Pace of U.S. Special Operations Deployments. DOD has increased its use of U.S. Special Operations Forces to increase its operational reach and maximize its capabilities under force management levels. However, the increased use of U.S. Special Operations Forces in operations has resulted in a high pace of deployments which can affect readiness, retention, and morale. GAO made 10 recommendations to DOD related to U.S. Special Operations Forces. DOD concurred or partially concurred and has implemented 7 recommendations relating to security force assistance activities and readiness of U.S. Special Operations Forces. Increased Use of Contractors and Personnel on Temporary Duty. DOD relies on contractors to support a wide range of military operations and free up uniformed personnel to directly support mission needs. During operations in Afghanistan and Iraq contractor personnel played a critical role in supporting U.S. troops and sometimes exceeded the number of deployed military personnel. However, the increased use of contractors and temporary personnel to provide support during operations has its challenges, including oversight of contractors in deployed environments. GAO made four recommendations to improve oversight of operational contract support. DOD concurred with all four, and has implemented three of them. GAO also made a recommendation that DOD develop guidance relating to costs of overseas operations, with which DOD partially concurred and which remains open. Why GAO Did This Study The United States has engaged in multiple efforts in Afghanistan, Iraq, and Syria since declaring a global war on terrorism in 2001. Currently, in Afghanistan, Iraq, and Syria, U.S. forces are deployed under force management levels set by the administration. Force management levels and similar caps limit the number of U.S. military personnel deployed to a given region and have been a factor in military operations at least since the Vietnam War. Force management levels were also used to shape the drawdowns of operations in Afghanistan and Iraq. In June 2016, the President announced that the force management level for Afghanistan is 9,800. According to DOD, in September 2016 the United States authorized additional troops for Iraq and Syria, for a total of 5,262. Today’s testimony discusses some of the actions DOD has taken to maximize military capabilities while operating under force management levels in ongoing operations. In preparing this statement, GAO relied on previously published work related to operations in Afghanistan, Iraq, and Syria since 2001. What GAO Recommends GAO made 18 recommendations in prior work cited in this statement. DOD has implemented 12 of them. Continued attention is needed to ensure that some recommendations are addressed, such as improving visibility in total Special Operations funding to determine whether opportunities exist to balance deployments across the joint force. For more information, contact Cary Russell at (202) 512-5431 or RussellC@gao.gov.
Justice and Law Enforcement
The Securities and Exchange Commission today announced that Chief Economist and Division of Economic and Risk Analysis (DERA) Director Mark J. Flannery will leave the agency by the end of the month. He will return to his position as a finance professor at the University of Florida’s Graduate School of Business Administration.
Dr. Flannery has held the positions of Chief Economist and DERA Director since September 2014 and has led a broad range of activities, including providing economic analysis to support SEC rulemaking and developing sophisticated analytical tools to assist in risk assessment and enforcement activities. He has also worked to secure a defining role for the SEC in the international regulatory arena by representing the agency on the Financial Stability Board’s Standing Committee on Assessment of Vulnerabilities (SCAV). On the SCAV, he has led discussions on the considerations and implications of stress testing asset managers, investment company redemption risk, and fixed income liquidity, among others.
“Mark has provided invaluable insight and analysis on important rulemakings and he has been instrumental in leading the Commission’s efforts in working with international regulators on the economics of financial stability,” said SEC Chair Mary Jo White.
In addition to his international regulatory efforts, Dr. Flannery has provided guidance and direction to economic analyses in recommendations to the Commission to enact rules related to asset management, corporate disclosure and governance, OTC derivatives, and market structure.
“I have thoroughly enjoyed my time heading DERA, whose talented and creative staff have worked so hard to enhance the economic analyses associated with many dimensions of the Commission’s activities,” said Dr. Flannery. “I am grateful to Chair White for providing me the opportunity to work with many other members of the Commission’s staff in developing new tools for overseeing our financial markets.”
Dr. Flannery recently served as Visiting Scholar at the New York Federal Reserve’s Research Department and Chairman of the Federal Reserve System’s Model Validation Council (2013-2014). He has held his position as Bank of America Eminent Scholar in Finance at the University of Florida since 1989. Dr. Flannery received an A.B. from Princeton University, and his master’s and doctorate in Economics from Yale University.
Upon Dr. Flannery’s departure, Scott W. Bauguess, the SEC’s Deputy Chief Economist and DERA Deputy Director, will become the acting Chief Economist and acting Director of DERA.
Dr. Bauguess joined the SEC in 2007 from Texas Tech University where he was on faculty in the College of Business. He became an Assistant Director in the division in 2011, and Deputy Director in 2013. Dr. Bauguess received his Ph.D. in Finance from Arizona State University in 2004. He also holds a B.S. and M.S. in Electrical Engineering and prior to his doctoral studies spent six years working as an engineer in the high tech industry.
What GAO Found In administering the Supplemental Nutrition Assistance Program (SNAP), all state SNAP agencies verify household income by conducting multiple data matches, which they find useful for detecting potential discrepancies related to SNAP eligibility (see figure below), according to GAO’s survey of all state SNAP directors. Most states reported that particularly useful data matches provided current information, can be accessed in real-time (i.e., immediately), and are from original sources. Some data sources for unearned income, including from the Social Security Administration, have all these characteristics. Data matches for earned income lacked one or more of these useful characteristics, but can be used as leads to follow up on with households or employers. Examples of Data Matching for Supplemental Nutrition Assistance Program (SNAP) Eligibility States identified challenges with following up on data matches and with the costs of data matching. The issue states cited most often in GAO’s survey as very or extremely challenging was the need to conduct follow-up for data that are not sufficiently recent, accurate, or complete, which can be cumbersome and time-consuming. Officials GAO interviewed in several states were implementing ways to manage follow-up. Over one-third of states also reported that costs associated with accessing certain commercial data to verify earnings were very or extremely challenging, with some states limiting their use of these data due to costs. The Department of Agriculture’s (USDA) Food and Nutrition Service (FNS), which oversees the SNAP program, has efforts underway to promote data matching to improve program administration, but may be missing some opportunities. For example, FNS has initiated pilot or demonstration projects to improve program integrity or service to households. However, FNS has not actively collected or disseminated information on promising data matching practices, consistent with federal internal controls. Further, 32 states reported in GAO’s survey that more information from FNS on promising data matching practices would be extremely or very useful. With more information, states will have increased awareness of other potentially useful or cost-effective practices. In addition, FNS has begun to explore ways to help states reduce the cost of using commercial data, but has not systematically analyzed spending and SNAP needs for these data to consider how to best leverage government buying power through strategic sourcing practices. Without this analysis, FNS may not be able to identify the best ways to lower data matching costs. Why GAO Did This Study During fiscal year 2015, state SNAP agencies provided about 46 million low-income individuals approximately $ 70 billion in federally funded benefits, and an additional $ 7.6 billion in federal and state funds was spent in administering the program in fiscal year 2014, according to the most recent data. SNAP agencies use data matching to verify eligibility information about applicant or recipient households, including their incomes, as well as to help detect improper payments. GAO was asked to review issues related to data matching in administering SNAP. This report examines (1) the extent to which states use data matching to obtain income information and find these matches useful for SNAP eligibility, (2) challenges states experience using data matching, and (3) actions FNS has taken to promote data matching for SNAP. GAO surveyed all state SNAP directors for a 100 percent response rate and interviewed state officials in six states that varied in caseload size, geography, and other criteria, and visited local offices in three of these states. GAO also reviewed relevant federal laws, regulations, and agency documents and interviewed agency officials. What GAO Recommends GAO recommends that FNS disseminate information on promising practices to state SNAP agencies, and analyze spending and data needs as it explores ways to reduce costs of using commercial data. FNS agreed with these recommendations For more information, contact Kay E. Brown at (202) 512-7215 or email@example.com.
Agriculture and Food
Based on an investigation conducted by the U.S. Department of Labor’s Employee Benefits Security Administration, the department has filed a complaint alleging that Jeffrey Draeger and the corporate defendants violated the Employee Retirement Income Security Act (ERISA) when they failed to forward withheld employee contributions and COBRA payments to the firms’ health and welfare plan. The complaint also alleges that the defendants failed to provide participants with timely notice that they were at risk of losing their insurance coverage. In fact, participants lost such coverage due to the fiduciaries’ nonpayment of insurance premiums. Specifically, the department alleges that at least between August 2012 and October 2012, the defendants withheld employee contributions totaling not less than $ 60,080 from plan participants’ weekly paychecks and failed to remit those amounts to the plan. Instead, they retained and comingled those assets within the company’s general banking account for non-plan purposes. The defendants also received not less than $ 3,264 in COBRA payments from participants but failed to forward those amounts to the plan. In the complaint, the department also alleges that the defendants failed to provide participants with timely notice that they were at risk of losing their health insurance coverage, and eventually lost their coverage, due to the fiduciaries’ nonpayment of premiums. Participants incurred more than $ 62,000 in uncovered medical claims as a result of their cancelled coverage.
2015 EBSA News Releases
On December 2, 2016, ATF will have the distinct honor of hosting a ceremony to rename and dedicate ATF Headquarters as the “Ariel Rios Federal Building.” This is a moment of great pride for the ATF family. Special Agent Rios, through his life and work, embodied ATF’s commitment to protecting the public and serving the nation. It is my honor to briefly tell you about the man and the agent.
On December 2, 2016, ATF will have the distinct honor of hosting a ceremony to rename and dedicate ATF Headquarters as the “Ariel Rios Federal Building.” This is a moment of great pride for the ATF family. Special Agent Rios, through his life and work, embodied ATF’s commitment to protecting the public and serving the nation. It is my honor to briefly tell you about the man and the agent.
Testimony of Secretary of Labor Thomas E. Perez Before Committee on Education and the Workforce, United House of Representatives, March 18, 2015
Good morning, Chairman Kline, Ranking Member Scott, Members of the Committee. Thank you for this invitation and opportunity to testify before you today. In 20 months as Labor Secretary, it has been my pleasure to get to know many of you, and to work together constructively on important issues facing our nation’s workers and employers.
I appear before you today with a great sense of optimism about the direction of our economy and the role that the Labor Department can play in sustaining and further accelerating this recovery.
We’ve come a long way in the last six years. In the few months before President Obama took office, the economy was in free fall we had lost roughly two million jobs. Today, we have had five years 60 consecutive uninterrupted months of private sector job growth, to the tune of 12 million new jobsover that time. That’s the longest such streak on record, and 2014 was the best year for job creation in the United States since 1999.
The wind is clearly at our back. The economic indicators are promising across the board. The current unemployment rate is 5.5 percent, down from 10 percent in the fall of 2009. 2014 was the first year in 30 years that the unemployment rate declined in every state in the nation. Consumer confidence is near a seven-year high. The deficit hasn’t fallen this fast since the end of World War II. We’re exporting more in American goods and services than ever before. The auto industry was almost left for dead in 2008, but today sales are high again. All of these factors are leading finally to a strengthening labor market coming out of the Great Recession, there were nearly seven job seekers for each available position; today that ratio is less than two-to-one.
However, this isn’t a time to celebrate, but rather to muster the resolve and find the common ground to do even better. We must do more to ensure that the fruits of this recovery are enjoyed by more people and more working families.
The President’s FY 2016 Budget makes important investments in our nation’s workers, recognizing that our economic success is directly linked to the well-being of our workers and their ability to compete in the global marketplace. The Budget invests in successful job training models, including apprenticeship, which can create pathways to good jobs and is used successfully by many of our global competitors. The Budget includes new resources for reemployment and eligibility assessments and services for workers who are likely to be out of work for long periods, based on evidence that these services can shorten periods of unemployment and help workers get back on their feet more quickly. It also provides a 10 percent increase for the Department’s enforcement agencies, giving them the staff and tools they need to protect the wages, safety and health, and retirement benefits of the Nation’s workers.
The Budget builds on the bipartisan deal struck at the end of 2013, when policymakers came together to partially reverse sequestration and to pay for higher discretionary funding levels for both defense and non-defense areas with long-term reforms. The President’s Budget reverses sequestration, paid for with a balanced mix of commonsense spending cuts and tax loophole closers, while also proposing additional deficit reduction that would put debt on a downward path as a share of the economy.
The President has made clear that he will not accept a budget that locks in sequestration going forward, which would bring real defense and non-defense funding to the lowest levels in a decade. As the Joint Chiefs and others have outlined, that would damage our national security. It would also damage our economy in the near-term and long-term by preventing us from making pro-growth investments in many areas, including efforts to upskill our workforce and help those still out of work find jobs, a key to our long-term prosperity.
Preparing People for 21st Century Jobs
It starts with helping individuals acquire the skills and training they need to succeed in 21st century jobs. Last July, both parties in Congress came together to pass the Workforce Innovation and Opportunity Act (WIOA), the most significant reform of the workforce system since the late 1990s. I’m grateful to so many Members of this Committee for their leadership in crafting WIOA. It’s further proof that cultivating and growing our human capital is not a Democratic or Republican idea; it’s simply the smart thing to do in a complex and competitive global economy.
WIOA modernizes and streamlines workforce development, by building a more integrated system that links job seekers and workers with local and regional employers, education, and training services across core programs covered by the law. As I see it, the workforce system has two sets of customers workers looking to move up the economic ladder and businesses who need talented workers in order to stay on the competitive cutting edge. WIOA recognizes and reinforces those two complementary roles. WIOA strengthens the partnerships that sustain the workforce system and the American Job Center network; fosters regional collaboration and sector strategies; provides access to proven training strategies, such as on-the-job training and apprenticeship; enhances services for individuals with barriers to employment, including individuals with disabilities, disconnected youth, and other vulnerable populations; provide common outcome measures for the core Federal programs covered by the law; and strengthens program evaluation and accountability to promote continuous improvement. There is a lot of work to be done before the majority of WIOA’s requirements take effect in July, and I look forward to working with all of you to ensure successful implementation of this landmark law.
WIOA is part of a fundamental transformation in the way we prepare people for the careers of today and tomorrow. More than ever before, we’re taking a job-driven approach, building unprecedented partnerships with employers and making sure training programs connect ready-to-work Americans with ready-to-be-filled jobs. Guided by this principle of job-driven training, in 2014 the Labor Department invested aggressively in our workers and their potential. We put hundreds of millions in grant money on the street to help individuals upskill in a way that will allow them to move into jobs that are available right now, or will be available soon.
Among the Labor Department’s investments were funds for community colleges, to help them enhance their capacity to provide adult learners with the credentials and certifications required to launch middle-class careers. Community colleges are a key piece of the workforce system, and that’s why we invested nearly $ 2 billion in the Trade Adjustment Assistance Community College and Career Training (TAACCCT) program, a program that we have implemented in partnership with the Department of Education. The two Departments believe that the TAACCCT program plays a major role in helping America’s community colleges and other higher education institutions drive changes in designing and delivering programs that provide career pathways to good jobs for adult workers and meet employer needs for highly skilled workers in growth industries. I’ve been around the country visiting these campuses and seen this program at work. From aviation instruction in Tucson, to critical infrastructure training in rural North Carolina, to mechatronics programs in San Antonio, I’ve seen how these schools are using federal dollars to align their curricula with employers’ needs and give their students the best shot at success in the job market. The President’s FY2016 Budget includes $ 200 million for an American Technical Training Fund that will be housed at the Department of Education and jointly administered by the Departments of Education and Labor and will build on much of the work of the TAACCCT program.
Even as the economy has recovered, long-term unemployment has remained stubbornly and unacceptably high. A little more than a year ago, I met Katherine Hackett, a single mother of two from Connecticut who found herself out of work for more than a year after a long and successful career in the health care field. She represents everything that’s right about America hard work, personal responsibility, contribution to community. But she was forced to wear a hat and coat around the house last winter because she couldn’t afford to turn the thermostat above 58 degrees. Thanks to unemployment benefits, the Affordable Care Act, and the workforce system, Katherine turned things around, and now she puts on her coat every morning and heads to her new job at an orthopedic practice.
Long-term unemployment is one of those issues that keeps me up at night. There are so many individuals like Katherine out there who were just in the wrong place at the wrong time. Last summer in Cleveland, I met with a group of long-term unemployed workers. One has an MBA, but has been laid off several times since 2007 through no fault of her own. Her situation has grown increasingly dire since her husband was diagnosed with Alzheimer’s and had to close his business.
“I’ve got no quit in me,” another Cleveland worker told me. So we’re not quitting on him either. The President identified long-term unemployment as an important priority last year, and we invested $ 170 million in a new grant program called Ready-to-Work, which supports innovative projects in 20 states and Puerto Rico connecting the long-term unemployed with training that leads to a skilled job in growing fields like IT, advanced manufacturing, health care, engineering and more. All of our efforts have begun to pay off long-term unemployment, while still a major challenge, has fallen considerably. In April 2010, 6.8 million people had been out of work for 27 weeks or more; today, it’s down to 2.7 million.
The President’s FY2016 Budget includes $ 16 billion over 10 years for High-Growth Sector Training and Credentialing Grants to provide more resources for training, which due to resource limitations is currently provided to only a small share of people who come into American Job Centers. This additional funding would double the number of recently unemployed individuals who can access training, up from 10 percent now, and help regions with high unemployment serve the long-term unemployed in times of recession. The proposal also includes dedicated funding to develop sector-specific credentials and assessments to more easily connect workers with jobs and ensure that training meets employers’ actual skill needs.
We are also doing more to promote apprenticeship, a tried-and-true workforce investment model that for too long we have devalued in the United States, especially relative to global competitors. With the headwinds of the improving economy and the Department’s efforts to reach more companies to start apprenticeships we’re already moving the needle, with the addition of 40,000 apprenticeships over the last year.
The fact is you don’t need to start with a four-year college degree to find good, middle-class work. We need a renewed focus on the learn-while-you-earn apprenticeship approach, in which Registered Apprenticeship programs pair on-the-job training with classroom instruction provided by technical schools and community colleges. In fact, through our Registered Apprenticeship College Consortium, or RACC, co-managed with the Department of Education, graduates of Registered Apprenticeship programs can turn their years of on-the-job and classroom training into college credits toward an associate or bachelor’s degree. I’ve seen Registered Apprenticeship programs prepare young people to be construction workers in Los Angeles, sheet metal workers in Boston, and commercial painters in inner-city Philadelphia. But apprenticeship isn’t just for the building trades. In South Carolina, for example, tax credits and state-led investments are growing apprenticeships in all kinds of industries health care, manufacturing and hospitality. Companies like CVS, BlueCross BlueShield and UPS have apprenticeship programs because they know it’s a cost-effective way to build a top-notch workforce.
Later this year, we will award $ 100 million in American Apprenticeship Grants, a new program designed to kick start new apprenticeship programs and take successful Registered Apprenticeship models to scale through public-private partnerships. Among other things, we’ll be looking to support efforts that expand apprenticeship in emerging fields and those designed to serve underrepresented populations, including minority communities, workers with disabilities, and women. We consider that $ 100 million just a down payment. The President wants to double the number of Registered Apprenticeships over the next five years; and to that end his budget calls for an additional $ 100 million in grants that would help states invest in strategies needed to expand apprenticeships and assist companies to start new apprenticeships, as well as a 4-year, $ 2 billion proposal to expand and support innovative apprenticeship strategies.
Giving Workers a Raise
Even as the economy has recovered impressively, it has not reversed a decades-long trend in wage stagnation among middle- and low-income families. To create opportunity and shared prosperity to advance the President’s middle-class economics agenda we have to help more people increase their incomes and make their paychecks go further.
It starts with a long-overdue increase in the Federal minimum wage for all workers, including tipped workers. The President first called on Congress to take this step more than two years ago, because he believes that no one who works full-time in the wealthiest nation on earth should have to raise their family in poverty. In the 1960s, you could actually support a family on one minimum wage salary, but over time inflation has eroded its value and purchasing power. While the minimum wage hasn’t budged, the price of everything from a dozen eggs to a month’s rent keeps going up.
Across the country, I have met with low-wage workers for whom every day is a struggle to get by. They are diligent and resilient. They take responsibility for themselves and their families. But no matter how hard they work, they fall further and further behind. Many of them need SNAP (formerly known as food stamps) or other forms of public assistance to get by. Often, they are one setback away from complete desperation. For you or me, car trouble and a trip to the repair shop are inconvenient; for many of them, it’s a financial catastrophe
But in my travels, I don’t just meet with low-wage workers; I meet with the men and women who sign their checks. And I’ve found that so many forward-looking employers are embracing higher wages, paying more even although the law doesn’t require it, doing so as a matter of enlightened self-interest. From Costco to the Gap to Shake Shack, and the Ace Hardware store a few miles from here, businesses of all kinds have found that an investment in their workers is an investment in their own bottom line. They recognize that it translates into improved morale and greater productivity. It increases retention rates, thus cutting turnover and training costs. Besides, many of them recognize that in an economy driven by consumer demand, better paid workers mean more people with more money in their pockets to spend on all kinds of goods and services, which leads to stronger business growth and more jobs a virtuous cycle. But we cannot rely on all employers to do the right thing we know that there are some who will try any way they can to raise their profits at the expense of their workers.
Historically, increasing the minimum wage has been a bipartisan project. President Clinton worked with Speaker Gingrich to do it in the 1990s. President Bush came together with Speaker Pelosi to do it a decade later. Public opinion today clearly and convincingly favors increasing the minimum wage. Grassroots energy and momentum nationwide have moved states, counties and local governments to take action where Congress so far has not. Over the last two years, 17 states plus the District of Columbia have raised their own minimum wages, thus benefitting a total of seven million workers nationwide. On Election Day last November, Nebraska, South Dakota, Alaska, and Arkansas all passed ballot measures to increase their states’ minimum wage. That is why we have to raise the national minimum wage even though a lot of states are raising their minimum wages, because whether a full time job lifts you out of poverty shouldn’t depend on whether you’ve won the geographic lottery or not.
Absent Congress taking action, the Obama Administration has acted within its authority to increase the minimum wage for as many workers as possible. In February of last year, the President signed an executive order mandating a $ 10.10 minimum wage for workers on new federal construction and service contracts, which will give a boost to those workers. It will also give a boost to taxpayers in the form of more effective and efficient service on government contracts that result from better paid workers on those contracts. The Department issued a final rule in October 2014 implementing the Executive Order, and the new rule took effect on the first of this year for all new covered contracts and replacements for expiring contracts with the Federal Government.
The Department is also using its regulatory authority, at the President’s direction, to modernize the nation’s rules on overtime pay, which have not kept up with inflation or with changes in the economy. The overtime rules have only been updated once since 1975. The basic premise of the overtime law that Congress enacted more than 75 years ago is pretty straightforward: if you work more, you should get paid more. But that basic principle is undermined in too many cases. The assistant manager at a fast food restaurant who puts in 60-70 hours a week for $ 455 and spends almost all of their time performing the same work as the employees they supervise and who does not get overtime is getting a raw deal. We are updating the rule to prevent this situation. In so doing, we have conducted unprecedented levels of outreach, holding multiple listening sessions with employers and workers in a wide array of industries. We want to make sure that our proposal, which we expect to release in the coming months, is informed by as many stakeholder views as possible.
Leading on Leave
Too many families nationwide see their income depleted and their quality of life damaged because of a medical emergency, or even something as joyous as the arrival of a new baby. Too many workers must make the painful choice between caring for themselves or their families and a paycheck they desperately need. These hard choices sap earning power from working families, tear at the family fabric, take workers and let’s face it, mostly women out of the workforce, and hurt the growth potential of our entire economy.
All this is because, shockingly, we are the only industrialized nation on earth where paid family leave is not the law of the land. Countries from Canada to Australia, the UK to Japan both progressive and conservative governments are all leading on leave, while we’re falling behind. They all recognize that paid family leave is good economic policy and good family policy. These other nations have figured out that robust paid leave policies can strengthen families, businesses and the overall economy. We can and should do the same.
When I was in Germany in October last year, I met a man named Jason. He’s an American, raised in Ohio, but he’s living and working in Germany. And he wants to stay there because he and his wife are planning to have their second child and they can’t afford to give up the paid leave benefits that everyone working in Germany enjoys. Thousands of families from across the country have written to us at the Labor Department, and I have talked to many more, expressing their frustration that they are financially punished for taking home a new baby, that they have to jeopardize their economic security in order to give an elderly parent the care they need, or care for a husband or wife wounded in the military. I have also met with business leaders who see the positive effect on their bottom lines of having paid leave policies. They know it’s not just the right thing to do, it’s the smart thing to do.
How can we say we’re for family values when so many mothers and fathers have to jeopardize their economic security to take a few weeks off from work after the birth of their child when we make it a luxury, reserved for the well-off, to care for a seriously ill loved one?
Workers covered by the Family and Medical Leave Act can take up to 12 weeks of unpaid time off without losing their jobs, but many cannot afford to lose income. A handful of States have enacted policies to offer paid leave. And The President has proposed more than $ 2 billion in new funds to encourage states to develop paid leave programs, following the example of California, New Jersey and Rhode Island. This proposal will help these programs get off the ground by paying the administrative costs and up to half of benefits in up to five states for three years, as well as provide technical assistance and support to states that are still building the infrastructure they need to launch paid leave programs in the future. The Department will also use existing money to offer $ 1 million for states to conduct paid leave feasibility studies. Last year, we awarded a total of $ 500,000 in such grants to Massachusetts, Montana, Rhode Island and the District of Columbia.
Sick days laws are a sign of healthy governance they lead to positive outcomes for the economy, for the health of workers, their families and for public health. We also have strong evidence that they do not lead workers to take unnecessary time off or impose harmful costs on employers. President Obama recently signed a Presidential Memorandum directing federal agencies to advance their employees up to 240 hours of sick leave for parents following the birth of placement of a child. Moreover, he’s calling on Congress to pass legislation that would provide federal employees with six weeks of paid parental leave, and allow parents to use sick days to care for a healthy child following birth or adoption. Like any other employer, this can help the federal workforce recruit and retain the top talent we need, and lower turnover and retraining costs.
The economy, the workforce and family needs have all changed dramatically in recent decades. More than 60 percent of mothers with kids under the age of 6 participate in the labor force, compared to less than 40 percent in 1975, and we are increasingly seeing folks caught in a “sandwich generation,” having to care for both their parents and their kids at the same time. We’re in the second decade of the 21st century, but our laws are stuck in a Leave it to Beaver era. We need to do much more to lead on leave.
Creating Opportunity for Our Veterans
Helping our working families means doing everything we can for our veterans and their families who have sacrificed so much for our nation. The Labor Department’s collective resources and expertise are integrated with state workforce agencies and local communities to meet the employment and training needs of all Americans, including veterans, transitioning service members, members of the National Guard and Reserve, and their families. As the Federal government’s leader on veteran employment, the Veterans Employment and Training Service (VETS) ensures that the full resources of the Department are readily available for veterans and service members seeking to transition into the civilian labor force.
Our partnerships throughout the Labor Department extend VETS’ ability to achieve its mission, and bring all of its resources to bear for America’s veterans, separating service members, and their families. VETS’s mission is focused on four key areas: (1) preparing veterans for meaningful careers; (2) providing them with employment resources and expertise; (3) protecting their employment rights; and (4) promoting the employment of veterans and related training opportunities to employers across the country.
The Labor Department’s Employment and Training Administration administers the national workforce system a system that supports economic growth and provides workers and employers with critical resources and support to maximize employment opportunities. Each year, more than 16.9 million Americans, including 1.2 million veterans, receive employment assistance through the workforce system at nearly 2,500 American Job Centers across the country. ETA and VETS fund the counselors in the American Job Centers (AJCs) who work directly with veterans on their employment and training needs. The Labor Department’s connection with state workforce agencies across the nation facilitates veterans’ employment with large national employers as well as small and medium sized businesses that do most of the hiring. Our long-established relationship with State Workforce Agencies is a partnership that delivers proven and positive results.
VETS contributes to the Administration’s commitment through the redesigned Transition Assistance Program (TAP). TAP is a collaborative effort led by the Departments of Labor, Veterans Affairs, and Defense, aimed at providing separating service members and their spouses with the training and support they need to transition successfully to the civilian workforce. Through TAP, the Labor Department brings its extensive expertise in employment services to bear to provide a comprehensive three-day employment workshop at U.S. military installations around the world. Since the inception of the TAP program over 20 years ago, the Labor Department has provided training and services through Employment Workshops to over 2.6 million separating or retiring service members and their spouses. Last year, we conducted more than 6,600 Employment Workshops for over 207,000 participants at 206 military installations worldwide. Of the 207,000 participants, more than 9,000 were members of the National Guard and Reserve. In a recent survey for the TAP Employment Workshop, 91 percent of participants reported that they would use what they learned in their own transition planning and 89 percent reported that the Employment Workshop enhanced their confidence in transition planning.
VETS programs also provide training and facilitate placements for veteran job seekers. For Program Year 2013, 52.9 percent of veterans who received services through the Wagner-Peyser or Jobs for Veterans State Grants programs started employment during the first quarter after leaving the service. Of those job seekers, 81 percent retained employment in the second and third quarters and earned an average of $ 17,243 during that six month period.
Additionally, a GAO study last year on the handling of federal veterans’ discrimination and reemployment cases under the Uniformed Services Employment and Reemployment Rights Act (USERRA) indicates that our claimants are satisfied with our service throughout the investigation process, even for cases that are not resolved in their favor. VETS’ investigators are trained to keep the claimant involved throughout the investigation, explaining the status, process, and critical issues. We concurred with GAO’s recommendations regarding the customer satisfaction survey and VETS plans to conduct a customer satisfaction survey for USERRA claimants in FY 2015.
Our debt to our veterans means that every day we must support their successful transition into the civilian workforce through effective, targeted policies and programs that serve them as dutifully as they have served us. I trust that our team at the Labor Department feels that in their core, and that we will remain relentless in the pursuit of opportunity for our veterans.
New Tools and a New Approach to Enforce Wage Laws
The Labor Department is one of the federal government’s largest law enforcement agencies. It is critical that we use our enforcement resources efficiently and effectively to achieve our mission of ensuring that workers receive the fair wages that they deserve. Enforcement matters, because the laws that you pass and the regulations that we promulgate to implement those laws, are only as good and as meaningful as our ability to make those words on a page a reality for American workers. Enforcement also levels the playing field for employers who play by the rules.
This has been a top priority from the beginning of the Obama Administration. The President has provided the Labor Department’s Wage and Hour Division with the resources it needs to hire and train hundreds of new enforcement personnel. We have increased our investigation force by more than one-third. But these important increases only bring us back to 1970s staffing levels when the labor force was significantly smaller. The President’s FY 2016 budget continues this commitment, requesting $ 277 million overall for the Wage and Hour Division, including a $ 31.7 million increase for additional enforcement staff and support.
We have equipped our investigators with the modern tools they need to do their work. We’ve used data and evidence-based strategies to deploy them strategically. And we’ve also shifted the focus of our enforcement efforts. Instead of a purely reactive approach where we respond to incoming complaints, we have targeted investigations in industries where we know workers are vulnerable, and where they are often reluctant to raise their voices and exercise their rights. Not only does strategic enforcement yield very real results for working families, but it’s also a more efficient use of resources. We’ve directed our resources to where the data and evidence show wage violations are most likely to occur, where emerging business models lend themselves to such violations, and where workers are least likely to exercise their rights. And the numbers tell us that our strategic enforcement efforts are working. Since 2009 we have recovered over $ 1.3 billion in back wages for 1.5 million workers since 2009. In data released last month, WHD noted that in FY 2014, it had collected an average of more than $ 659,000 in back wages for workers every day last year. That’s enough for more than 3,500 working families to buy a week’s groceries.
One of our highest-impact enforcement actions came last year against a Philadelphia-based sports bar chain called Chickie’s and Pete’s. Tipped employees are some of the most susceptible to wage violations, and in this case Chickie’s and Pete’s management unlawfully took tips from their workers and at times failed to pay them even the $ 2.13 cash wage per hour the law requires for tipped workers. In the settlement, we were able to secure more than $ 6.8 million in back wages and damages for over 1,150 employees.
But wage violations are pervasive, especially for low-wage workers, and so we must continue to step up our efforts and take our enforcement to the next level. We want and need to create ripple effects that impact compliance far beyond the workplaces where we are actually on the ground investigating. The goal is to ensure our investigation of a single employer resonates throughout that sector and influences the behavior of many other similar employers. In this way, we send a message about our vigilance, which acts as a credible deterrent, encouraging compliance with the law and protecting the interests of the overwhelming majority of employers who play by the rules and cannot afford to compete against those employers who cut corners and evade the law.
One way to leverage our enforcement resources is to identify the supply chain. The idea is to cause those at the top of the chain to evaluate the compliance practices of those below them; and to get them to think twice about whether it is worth the risk to their good name, and possibly their bottom line, to do business with a supplier or subcontractor who skirts the law.
It is important to recognize that the overwhelming majority of employers are on the up and up, committed to doing the right thing by their workers. It is a few bad apples doing a disproportionate share of the damage. Wage violations, in fact, undermine the competitiveness of those who are playing by the rules. And we hear often from law-abiding employers, recognizing their stake in enforcement and urging us to crack down against those who are distorting the playing field.
It is important to understand that our ultimate goal is compliance, not harsh penalties. That’s why education and outreach are an essential part of our strategy. Since 2009, the Wage and Hour Division has conducted more than 10,000 outreach events and presentations providing information and distributing materials about what the rules are and how not to run afoul of them. At the end of the day, the idea is not to punish; the idea is to work with employers to help them get it right.
Keeping Our Workers Safe
Our enforcement efforts at the Labor Department importantly extend to workplace safety. The Occupational Safety and Health Administration (OSHA) and the Mine Safety and Health Administration work hard to help ensure that workers return home safe and sound at the end of every shift. I believe that workplace safety promotes profit and business growth and reject the false choice that says an employer must look out either for the financial well-being of its shareholders or the physical well-being of its workers. It can and must do both, with one reinforcing the other.
A recent report released by OSHA shows that even with workers’ compensation benefits, injured workers’ incomes are, on average, almost $ 31,000 lower over 10 years than if they had not been injured. To give just one example of our safety enforcement efforts, OSHA recently levied a $ 1.76 million fine against Wisconsin-based Ashley Furniture for repeated and willful safety violations. The company had not taken the necessary steps to protect its workers from dangerous woodworking machines, leading to more than 1,000 workplace injuries, including several amputations, over roughly a three-year period.
OSHA continues its commitment to protecting the rights of America’s workers, including those who report work-related injuries or engage in other activities protected by law. Last year, OSHA completed more than 3,000 whistleblower investigations and awarded over $ 35 million in back wages and other remedies to complainants who blew the whistle on unsafe working conditions and other potential violations of the law. Earlier this year, for example, OSHA issued the maximum punitive damage award permitted by law ($ 250,000), as well as other relief, against Metro-North Railroad for violating the Federal Railroad Safety Act when it retaliated against an employee after he reported a knee injury. The employee’s supervisor had told him, while in route to the hospital that reporting the injury would “ruin” his chances for career advancement in the company.
OSHA is also in the process of crafting a new regulation to protect workers from exposure to crystalline silica dust, a serious hazard identified by Labor Secretary Frances Perkins more than 80 years ago. Inhalation of the dust can lead to deadly silicosis, as well as lung cancer, kidney ailments, and other respiratory diseases. A proposed rule, developed in consultation with all stakeholders and based on rigorous scientific analysis, was released in the summer of 2013. We held hearings last year, solicited comments at multiple stages of the rulemaking process, and continue to move toward a final rule.
Last year saw a huge breakthrough in safety for the nation’s coal miners. In 2014, the Labor Department’s Mine Safety and Health Administration reported the lowest annual number of coal mining deaths ever recorded. MSHA also took a historic step forward in the effort to end black lung disease by issuing a final, life-saving rule, decades in the making, to reduce miners’ exposure to respirable coal mine dust. More than 70,000 coal miners in the United States will now be able to breathe easier thanks to this new rule. My visit to Morgantown, West Virginia, for the announcement of the final rule was one of my most moving experiences as Labor Secretary. I will never forget the sound the click-click-click of oxygen tanks attached to so many miners in the room. The President’s FY 2016 Budget provides MSHA with the resources it needs to conduct statutorily required mine inspections, as well as target the nation’s most dangerous mines.
I want to be clear that I know enforcement alone is not sufficient to protect our nation’s workers. We have had a strong focus on compliance assistance especially for small businesses through education and outreach to the employer community. For example, in FY 2014, OSHA conducted more than 5,000 outreach activities for workers and employers, the Office of Federal Contract Compliance Programs (OFCCP) conducted 580 compliance assistance events and WHD held nearly 2,300 outreach actions.
Helping Americans Retire With Dignity
Middle-class economics means ensuring that individuals can enjoy economic security after their working years are over. The Labor Department’s Employee Benefits Security Administration (EBSA) is charged with ensuring that workers receive the retirement, health and other workplace benefits that allow them to rely on their health care benefits and retire with dignity.
This is not your grandfather’s retirement. At a time when defined benefit pension plans are becoming less and less common, individual workers have to take on more responsibility for their own retirement savings. To help them navigate a complicated menu of investment options, more and more individuals rely on professional advice.
How to prepare for retirement is one of the most important decisions you make in life, just like a health care or legal decisions. When you go to the doctor or consult an attorney, you expect those professionals will provide informed, unbiased advice that is best for you.
But the same does not hold true in retirement savings. While most financial advisers are doing the right thing, many receive back-door payments for steering their clients to bad investments with high fees and low returns. Too often, the corrosive power of fine print, along with hidden fees and conflicted advice, can eat away like a chronic illness at hard-earned retirement savings.
To fix this problem, the President has directed the Labor Department to issue a new rule designed to protect investors and prevent abuse. The proposed rule we will be publishing in the next few months will modernize a nearly 40-year-old regulation, the fiduciary rule. And it would require retirement advisers to put the best interests of the clients they advise above their own financial interests. As Arthur Levitt, the longest serving chair of the Securities and Exchange Commission put it recently: this proposed regulation is “long, long overdue.”
We formally transmitted a draft rule to the Office of Management and Budget last month. Until it is published, we cannot provide specific details on the rule. But it is the product of substantial, robust outreach to a wide range of stakeholders who have provided invaluable input. We have consulted extensively with the financial services industry as well as other key stakeholders, like some of the largest corporate plan sponsors, financial planners who already adhere to a fiduciary standard, current and former officials of the Treasury Department, and importantly, the SEC, from whom we received extensive technical assistance. The rule and the new proposed exemptions will permit common compensation practices while requiring a simple commitment that advisers put their clients’ interests first. In addition, the rule will allow financial advisers to continue providing general education on retirement saving.
Once the proposed rule is made public, we will embark on an open process seeking public comments and input. We urge all interested stakeholders to fully participate in this public process. The administration welcomes all perspectives as part of a collaborative process going forward. And we look forward to a constructive dialogue with you on this critical public policy matter.
The Labor Department is charged with enforcing our nation’s laws to ensure that workers are able to earn a living free from discrimination on the job. As a civil rights attorney for many years, this aspect of DOL’s work is a top priority for me. For example, in 2014, investigators from OFCCP audited nearly 4,000 workplaces, recovering $ 12.7 million for people subjected to unlawful employment discrimination. And we are bolstering that enforcement work with a robust regulatory agenda to make our workplaces fairer and our economy stronger.
A persistent pay gap continues to undermine the economic security of women and the families that depend on their income. To help remedy this injustice, while we wait for Congress to pass the Paycheck Fairness Act, we have issued proposed regulations that will prohibit discrimination by federal contractors against workers who discuss their pay in the workplace. Eliminating this restriction will create greater transparency and allow workers to discover inequities that might exist, empowering them with the information they need to advocate for themselves and safeguard their rights.
Workers ought to be judged on one thing and one thing alone: their effectiveness at getting the job done. But unbelievably, there is no federal statute protecting LGBT individuals from being fired for no reason other than who they are and whom they love. In December, we took steps to ensure that, at least among those doing business with the federal government that would not be the case. At the President’s direction, we issued a regulation prohibiting job discrimination by federal contractors based on sexual orientation or gender identity. And as recently as a few weeks ago, we extended the right of job-protected leave under the Family and Medical Leave Act to same-sex spouses, regardless of the state they live in, pursuant to the Supreme Court’s 2013 U.S. v. Windsor decision, which overturned part of the Defense of Marriage Act.
The Labor Department helps individuals with disabilities, who continue to suffer high rates of unemployment and low labor force participation rates, to find job opportunities and live in the economic mainstream. The Labor Department’s efforts in this regard are in addition to other programs administered by other Federal agencies. Last year, we completed the first and most significant portion of the implementation of our rulemaking under Section 503 and VEVRAA. Section 503 created, for federal contractors, a first-of-its-kind nationwide seven percent employment goal for qualified individuals with disabilities and VEVRAA created a benchmark for measuring progress toward the objective of increasing veterans hiring. Through our Employment First initiative, we’ve provided technical assistance to 35 states to help them promote integrated employment as the first choice for job-seekers and workers with disabilities. And in 2014, the Office of Disability Employment Policy provided technical assistance to more than 65,000 employers through its employer-focused technical assistance centers, the Job Accommodation Network and the Employer Assistance and Resource Network. In the next year, as we implement WIOA, the Labor Department will be working closely with the Department of Education to integrate the Vocational Rehabilitation program, as a core partner in the workforce development system, in order to provide a seamless and coordinated service delivery system for all workers and job-seekers, including those with disabilities. To that end, individuals with disabilities, including veterans with disabilities, will have access to all workforce development system services in order to prepare for and obtain competitive employment. We believe this coordination at the Federal level will increase job opportunities for individuals with disabilities at the State level.
As we prepare this summer to mark the 25th anniversary of the Americans with Disabilities Act, we must recommit ourselves to helping more individuals with disabilities experience the dignity of work; achieve economic self-sufficiency; and acquire the independence and confidence that comes with the ability to support your family and chart your own destiny.
Our civil rights and anti-discrimination work is a matter of the rule of law, and it is rooted in fundamental American values of fairness, tolerance and inclusion. But it is also driven by pragmatic considerations as well. It is both the right thing and the smart thing to do. When we protect employment rights, when we expand participation in the workplace, when we take advantage of the talents and embrace the contributions of all our people, it leads to greater economic growth and prosperity benefitting everyone. We don’t have a person to spare in America. More than ever, in a complex and competitive 21st century economy, we can’t afford to let any talent or human capital go to waste. America is always strongest when we field a full team everyone off the bench and in the game.
Evidence and Data Based Decision-Making
In recent years, the Administration has been striving to increase the productivity and efficiency of its workforce. The President’s FY 2016 Budget request includes a number of investments to improve the Labor Department’s ability to serve the public, increase our workers’ effectiveness, enhance our agencies’ ability to target enforcement to those areas where violations are most likely to occur, and streamline processes.
The Department’s Budget request includes a large investment in the IT infrastructure for the Department. Over the past six years, the Department has been working to streamline the nine separate IT infrastructure components into one consolidated system. Within this consolidated system, the Department is proposing to implement a Digital Government Integrated Platform, which will be used by agencies to support information sharing and improve the efficiency and effectiveness of the Department’s workforce, transforming the way the Department can provide services to the American public. This includes such things as combining disparate email systems, data sharing, and voice over IP and video conferencing, which will reduce costs over time.
The Bureau of Labor Statistics (BLS) is the principal Federal statistical agency responsible for measuring labor market activity, working conditions, and price changes in the economy. The request for BLS is $ 632.7 million and includes an increase of $ 6.5 million to expand the Job Openings and Labor Turnover Survey (JOLTS). JOLTS provides critical information about the health of the labor market by tracking the number of job openings, hires, layoffs and quits in the economy. This is useful because weakness in some of these underlying sources, such as openings, are leading indicators of recessions. Earlier warning about recessions allows policymakers more time to respond. Similarly, increases in some of these underlying sources, such as quits, provide important signals as to the growing strength of the labor market. The expansion would allow JOLTS data to be released at the same time as the monthly unemployment numbers, thereby improving the analysis of both pieces of information. The JOLTS data would be expanded to add greater industry detail and state-level information.
The Labor Department is committed to an evidence-based and data-driven approach to management. An important part of the evidence-based approach is our evaluation system. The Chief Evaluation Office is a departmental unit that coordinates the Department’s overall evaluation plan, so we can expand or replicate what works, and improve or replace things that evaluations find do not work or do not work as well as they should. The Labor Department is recognized as a Federal evaluation leader and our evaluation efforts have been recognized as good models by OMB, GAO, and the “Investing in What Works Index” produced by the organization America Achieves.
The Chief Evaluation Office has between 50 and 70 evaluations underway at any given time, and they initiate about 30 new evaluations a year. Because some studies require a longer term follow-up period, it may be a few years before we have findings. In 2014, the Labor Department launched a new evidence-based clearinghouse called CLEAR Clearinghouse for Labor Evaluation and Research, which reviews evaluations according to standards of quality of the design and methods similar to what the Department of Education does through its What Works Clearinghouse. CLEAR has reviews and ratings of hundreds of evaluations on topics ranging from reemployment services and opportunities for youth, to behavioral economics and OSHA enforcement.
Thanks to the resilience of the American people, the ingenuity of our businesses and workers, and leadership from the federal government, we have emerged successfully from the worst economic crisis of our lifetimes.
But the rising tide of this recovery is still not lifting all boats. We can’t settle for an economy that provides opportunity just for a few. America’s promise has always been that hard work and responsibility will be rewarded with a chance to succeed, the opportunity to do better than your parents and to leave something more for your children. Keeping that promise is what gets me out of bed every morning, and I am eager to work in partnership with this Committee to meet these important challenges. Thank you again, and I look forward to your questions.
What GAO Found Of the 10 spaceport operators (entities that host launches from their property) that are currently licensed by the Federal Aviation Administration (FAA), 3 have had commercial activity in the last 5 years, and all 3 told GAO that they have both property and liability coverage to protect themselves from losses resulting from space launch mishaps. Federal laws and regulations do not require spaceport operators to have insurance, but operators of nonfederal spaceports that are located on federal property could have federal contracts that require them to have insurance to protect their own property from damage resulting from space launch mishaps. Moreover, for launches licensed by FAA, since the Commercial Space Launch Act Amendments of 1988, FAA has required launch companies (firms that conduct or will conduct the launch of vehicles and payloads) to purchase insurance to cover damage to the uninvolved public, as well as damage to federal government property, in case of a launch mishap. Launch participants may also choose to negotiate additional insurance coverage through launch-specific contracts. However, spaceport operators said that they find the regulations that determine financial responsibility for commercial space launches to be confusing. Specifically, several spaceport operators GAO interviewed said that, based on their interpretation of the financial responsibility regulations, they were unsure whether their property would be covered under a launch company’s insurance policy or whether they would need to purchase their own insurance for their property to be covered. FAA’s mission includes encouraging, facilitating, and promoting commercial space launches by the private sector, among other things. Furthermore, federal internal control standards state that management should externally communicate the necessary quality information to achieve the entity’s objectives. Unless spaceport operators have a clear understanding of FAA’s financial responsibility regulations, a risk exists that they may not obtain adequate insurance against losses in the event of mishap. Uninsured losses, in turn, could potentially cause delays in resuming commercial launches following a mishap and unnecessary costs to the federal government, both of which could hinder the development of the domestic commercial launch industry. Stakeholders in the space launch industry are divided on the need to change the current insurance approach, in which insurance for spaceports is not required but can be negotiated through contracts between launch companies, which operate launch vehicles, and spaceport operators, which run spaceports. Stakeholders identified some positive aspects of the current insurance approach—for example, some said that negotiating contracts specific to each launch allows for greater flexibility. However, they also raised concerns, including a lack of certainty about coverage for potential damage. GAO identified two potential options for requiring protection for spaceports: (1) requiring launch companies to purchase insurance to cover spaceport property and (2) requiring spaceport operators to purchase insurance to cover their own property. In general, stakeholders tended to oppose the option in which the burden of purchasing the insurance was on them. Specifically, most spaceport operators GAO interviewed favored the first option, while most launch companies favored continuing the current approach. Stakeholders discussed benefits associated with both options—for example, they said that both options could increase certainty by specifying which party was required to insure spaceport property. However, they also noted challenges, such as higher costs for the party required to purchase the insurance and decreased flexibility to customize their use of insurance depending on the details of a particular launch. Why GAO Did This Study The U.S. commercial space industry has expanded, conducting eight launches in 2015 compared with none in 2011. These launches have traditionally been from federal facilities, but as of July 2016, there were 10 nonfederal FAA-licensed spaceport operators supporting both private and federal space activity. Almost all of these spaceport operators are local government entities. The complexity of the arrangements at these spaceports, and a mishap in October 2014 where the spaceport was not adequately insured, have raised questions about insurance coverage for spaceport assets, including potential federal involvement. Congress included a provision in statute for GAO to report on the potential inclusion of local government property in the existing indemnification regime for commercial space launches. This report examines (1) the insurance coverage spaceport operators have in place and (2) stakeholder views on the need to change the current insurance approach and on options for revising it. GAO reviewed key documents; interviewed FAA and NASA officials and representatives of FAA-licensed spaceports, launch companies, insurance brokers, and insurance companies; and selected two spaceports to visit based on launch activity. What GAO Recommends GAO recommends that FAA provide additional communication to clarify its interpretation of the financial responsibility regulations for commercial space launches. The Department of Transportation provided technical comments. For more information, contact Alicia Puente Cackley at (202) 512-8678 or firstname.lastname@example.org.
Editor’s note: This has been shared from the Department of Commerce’s blog. The U.S. workforce is diverse, skilled, innovative and mobile – and among the most productive in the world. Throughout my 20 years working at the Department of Labor, I am continually amazed by stories of Americans who have unlocked their full potential and reached […]
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On Oct. 1, Noce began his sixth, eight-year term, making him the longest-serving, active magistrate judge in the federal system.
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