02.03.15

Strong Federal Investment in Workforce and Education Critical to Economic Growth, Committee Learns

WASHINGTON—Congress must do more to help every Americans enjoy current and future economic growth and keep our workforce globally competitive, witnesses testified before the House Education and the Workforce Committee today. By investing more in our workforce and providing greater resources for our most disadvantaged students, the federal government can stem the growing income inequality and widening education gap harming families nationwide, and ensure the U.S.’s economic growth, members learned.

“Our economy has come a long way since the depths of the Great Recession. Unemployment has reached a record low and private sector job growth a record high,” said Rep. Robert C. “Bobby” Scott (D-VA), ranking Democratic member on the committee. “Unfortunately, success in the labor market has yet to translate into higher wages for the majority of workers and the gap between the ‘haves’ and ‘have-nots’ continues to expand. Congress must ensure that all workers see our economy’s improvements reflected in their paychecks. It’s clear that we must raise the national minimum wage, improve worker protections, increase access to an affordable higher education, and improve educational equity for the sake of our long-term economic competitiveness.”

Witnesses testified at the hearing that a fairly rosy picture of the U.S. economy belies the fact that most families have yet to recover from the Great Recession. Since 2008, the economy has added private sector jobs for a record 58 straight months. During this span, 11.2 million private sector jobs have been created. Each of the past 11 months, the economy added 200,000 or more private sector jobs—growth not seen since the 1990s.

Yet, it is the wealthiest Americans who are benefitting from these economic improvements, while middle-class and working families are still struggling to get by. Incomes of the highest earners in the U.S. have grown substantially in recent years, but wages for everyone else have, at best, stagnated. From 2009 to 2013, average annual earnings for the top one percent of Americans rose from $871,100 to $968,000. The average income of the remaining 99 percent, however, fell in that period of time.

“It is encouraging that there is now widespread agreement across the political spectrum that the key economic challenge is middle-class income stagnation,” said Lawrence Mishel, President of the Economic Policy Institute. “Wage and benefit stagnation is a long-term trend and one that is not due to insufficient economic growth, since the economic growth over the last four decades did little to produce rising pay for the vast majority.”

Witnesses testified that Congress must act swiftly to address the issue of stagnant wages and to safeguard the economic security of all Americans. By instituting stronger workforce protections, Congress can help ensure that workers are not left behind as our economy grows. A higher national minimum wage, more family-friendly workplace policies, modernized overtime pay rules, and greater collective bargaining rights, for example, will all expand opportunities for workers and their families.

Furthermore, federal investment in infrastructure can create jobs, and efforts to expand job training programs can provide workers the skills they need to secure in-demand, high-paying jobs.

“We were happy to see these efforts come to fruition with the passage and enactment of the Workforce Innovation and Opportunity Act (WIOA) last summer,” said Drew Greenblat, President of Marlin Wire Products LLC, of the principal legislation behind federal workforce training programs. “Through the good work and significant efforts of many members of this committee and the staff, a bipartisan, bicameral solution was agreed to. Frankly, it was a bright moment last year, and I hope the committee can use that momentum…in 2015.”

Greenblat continued in his support of bipartisan, bicameral action on the major workforce issues facing the country. “Congress needs to find a way to break the immigration log-jam and do what the country needs done—repair the system—not only for manufacturers, but for the betterment of the entire U.S. workforce,” Greenblat said.

We must also improve access to higher education. Research from the Georgetown University Center on Education and the Workforce shows that by 2018, we will need 22 million new college degrees, but we will fall short by at least 3 million. College is important not only for our economy, but also for a student’s future earnings.  College graduates, on average, earn $46,900 a year, whereas those with only a high school diploma earn less than half that.

But pursuing a college degree is becoming farther and farther out of reach for too many Americans. College costs have skyrocketed, forcing students and families have to pick up more of the tab. Seven in 10 graduating seniors in 2013 had to borrow loans averaging $28,400. Student debt now stands at over $1.2 trillion and is a drag on our economic growth. To address this problem, greater federal investment in higher education is needed.

“We need your help in continuing to support need-based federal funding for our students, so that we can avoid further segregation of higher education based on financial ability, and hopefully, enable even more academically qualified students to experience the benefits of a university degree,” said Michael D. Amiridis, Executive Vice President for Academic Affairs and Provost University of South Carolina. “And if you do it year round for students who are making progress towards their degrees then you can help improve on-time graduation and reduce debt.”

To ensure workers can compete in the global economy, now and into the future, we must also work to improve educational equity, witnesses were quick to add. In fact, a study released just this week by the Washington Center for Equitable Growth shows that improving our educational performance could substantially increase our gross domestic product over the next 35 years.

Regrettably, the U.S. has failed to provide all students with equitable access to high-quality educational opportunities. This has left our highest-need students to fall further and further behind. This is why we need a full, bipartisan reauthorization of the Elementary and Secondary Education (ESEA), the nation’s most important K-12 education law.

“Investment in our country’s workforce must start early: the success of our children directly relates to the long-term health of our workforce and our economy,” said Rep. Scott. “Only through continued investment in high-quality education that prepares every student for college or career can our country continue to thrive. ESEA has never been reauthorized without strong bipartisan support, and Committee Democrats stand ready to work with Republicans to prepare all students for lifelong success.”