Labor Studies For Real

In stark contrast to political science and economics lecturers in classrooms around the country, U.S. Labor Secretary Elaine L. Chao spoke at the Heritage Foundation on June 26th, delivering a message of uncommon good cheer concerning the status and direction of “America’s Dynamic Workforce.”

“First and foremost among our core principles has been the strong belief that the private sector—not government—creates jobs,” says the 24th U.S. Secretary of Labor. “The role of government is to create the conditions for economic growth.”

Chao contrasted President Bush’s initial vision for the American workforce at the time of her induction to the unprecedented national tragedy that shortly followed. “When this administration took office in 2001, the dot.com boom was going bust and our economy was headed into a recession. And at the end of this recession, our country was hit by the terrorist attacks on 9/11. And over the next few years we faced further challenges,” Chao recalled.

“Yet despite these challenges, our economy has performed remarkably well,” the Secretary reported. “We’ve seen 45 consecutive months of job growth for a total of 8 million net new jobs created since August 2003. Our country’s unemployment rate remains at a low 4.5 percent. Compare that with the average 5.7 unemployment rate of the 1990’s!”

In addition to the American workforce’s inherent strength and versatility, Chao credited the success of recent years to President Bush’s economic policy, which “has focused on letting Americans keep more of their hard-earned money.” Chao emphasized the individual responsibility of American workers in this process: “We’re empowering workers by giving them more choice, control, and ownership over their skills, education, pensions, and workplace arrangements.”

The greater part of the Secretary’s speech was comprised of facts and figures showing the Department’s victories over the past six years, ranging from personal worker protection to national fiscal success.

Chao’s checklist included:

1. Updating white collar overtime regulations for the 21st century

• “In 2001, we discovered 145 active rulemakings, some of which were never going to be implemented. By Fall 2006, that list had been trimmed to 71 items.”

• “With the updated regulations in place, more than 6 million workers have had their overtime rights strengthened.”

2. Encouraging and protecting union transparency and democracy

• “Organized workers need to be protected and are entitled to know how their hard earned dues are being spent.”

• “The Landrum-Griffin Act of 1959 requires labor organizations to file annual financial disclosure reports with the Department…We discovered expenditures as large as $70.4 million lumped together in categories such as “grants,” with no itemization or explanation.”

• “We issued new financial disclosure forms in 2004, which requires that labor organizations with annual receipts totaling $250,000 or more will itemize all spending over $5,000.”

• “Now union members can see how their dues are being spent at www.unionreports.dol.gov.”

Naturally, there was much resistance to these regulations, exemplified well by a situation with the American Federation of Labor and Congress of Industrial Organizations.
“The AFL-CIO sued the Department, claiming that compliance would involve overly burdensome paperwork and cost unions in excess of $1 billion. However, contrary to the union’s estimates, the administrative cost to unions has proven to be minimal. The AFL-CIO’s final bill turned out to be $54,000.”

3. Enforcement plus compliance assistance is the best way to protect workers

“The key to this strategy is helping workers and employers understand exactly what the many laws and regulations require of them,” says Chao.

• The Occupational Safety and Health Administration has helped bring injury and illness rates down to record low levels: 13 percent since 2001.

• The Department’s Wage and Hour division has recovered record back wages for workers—more than $1 billion since the start of this administration.

• EBSA has achieved monetary results of $9.2 billion and 691 criminal indictments since 2001.

• The Department has recovered record amounts for workers who have been subjected to unlawful employment discrimination by federal contractors—up to nearly 80 percent since 2001.

4. Protecting the Integrity of the Unemployment Insurance Trust Funds

“The previous administration proposed a regulation that would allow states to use their unemployment funds to pay for voluntary family leave,” Chao outlined. “While perhaps well-intentioned, this proposal would have turned the states’ unemployment funds into banks to pay for benefits completely unrelated to unemployment.” The Secretary went on to discuss how the current administration has worked to issue rules “to protect the integrity of unemployment trust funds.”

5. Better results with less

Secretary Chao concluded her report by explaining the financial foresight of the Department in recent actions. “The Labor Department’s Fiscal Year 2008 discretionary budget proposal was $10.6 billion. This is the smallest budget request for the Department since Fiscal Year 1996.” Since Chao’s appointment, spending by the Department of Labor has decreased by 3.4 percent. And yet, through all measurable means, “the Department has achieved record results for America’s workers.”

Overriding actions taken by any government department, the American individual work ethic and value system is what Secretary Chao credited for the success of America’s economy in a global market. “America is a very special and unique place in the world because its system is based on the rule of law, transparency, and accountability. Our free society rewards hard work, risk-taking, creativity, and individual initiative,” is what Chao acknowledges and celebrates.

Mary Kapp is an intern at the American Journalism Center, a program run jointly by Accuracy in Media and Accuracy in Academia.