Charting the Course

April 1, 2005

Charting the Course: Navigating New Directions in Workforce Development PAUL OSTERMAN Keynote Address Practicum April 21, 2005
PAUL OSTERMAN Keynote Address Working Ventures Practicum Charting the Course: Navigating New Directions in Workforce Development April 21, 2005 I really am very pleased to be here. In some respects I think I?m not a typical pointy-headed academic. You know, I actually did spend two years administering the Job Training Partnership Act in Massachusetts, and so I know this world fairly well and I?ve stayed in touch with it. And I have just tremendous respect for how hard it is to make progress in what?s fundamentally a field in which the needs are incredible and the resources are nowhere near the needs?and a field in which the alphabet soup keeps changing and where the regulations keep changing. I was one of the people who kept changing the regulations. It?s just a very tough environment and I?m very committed to it and I know you?re very committed to it. My goal here is really to step back and give you kind of a 10,000-foot perspective on what we?re about and where we are trying to get to. I think it?s going to take me maybe 20 minutes to half an hour to do that. Unlike most academics, I?m actually capable of stopping talking. So at some point I promise you, about 20 minutes to a half an hour, I?ll stop. You don?t have to panic about that, and then we?ll have some time for discussion. I?m going to talk in four stages. I will first give you my view on what?s happening in the American labor market, a perspective on that. Secondly I?m going to talk a little bit about the evolution of the employment training system, where I think we?ve been, where I think we?re going. Next I?ll talk about some specific strategies. And I?ll finally conclude with some worries and some concerns and some things that I think we need to think about and to work on.
Now you know what?s going on in the American labor market today in terms of wages, in terms of unemployment rates and so on. I want to take a somewhat longer-term perspective, and I find a useful way of doing that is to think about two different business books that were extremely popular. One of these books is In Search of Excellence. I don?t know if people have read that book. Are you excellent? [Laughter] And the other is Reengineering the Corporation. Two big best sellers with radically different views of the world. Now when In Search of Excellence came out in the mid-1980?s, we lived in a world in which people spent their careers in companies. Of the good companies, the companies that this book celebrated, half of them have subsequently disappeared and gone bankrupt?which is the trouble with pop business books. It was a world in which the good companies treated their workers as members of a family. And that?s what this book was basically about: it was celebrating treating your workers as members of a family. It was celebrating job ladders and career paths and all of this. That world was blown apart, and it was blown apart by a number of different things. It was blown apart by competition, by deregulation, by globalization and by just heightened internal competition. It was blown apart by information technology, which gave managers new ways to organize people. It was blown apart by new organizational ideas, creative organizational ideas, about different ways to manage bureaucracies, about different ways to manage people. I?ll discuss some of those in a few minutes. And it was blown apart by politics, by fundamental shifts in the balance of power in the labor market between employers and employees. It was blown apart by another shift in the balance of power between financial markets and the rest of the world, in which financial markets gained much more power. And so after that world was blown apart, it was the new world, or the potential new world, that was celebrated by
Reengineering the Corporation, which has none of the soft and fuzzy characteristics of In Search of Excellence. It basically is a book that is about laying people off, organizing efficiently and zero commitment to the workforce. I find that just thinking about those two books goes a long way in capturing what has changed. More concretely, what has changed in the labor market are a series of things. First is that the very meaning of work has changed: what it means to have a job has changed. Instead of job security, people are less secure. Now truth in advertising is in the data, and there are job tenure data collected by the Census Bureau. What the data show are mild declines in job security for men and basically slight increases in job tenure for women, with a slight decline in job security overall. But the reality is very different. And I know this is a terrible metaphor, but imagine that you were all my employees at the Osterman Widget Corporation and you worked for me for a long period of time and there had been no layoffs except when times were bad, and those layoffs were then followed by recall, and then suddenly I walk in and fire six of you because I?m restructuring. Now as a percentage, only six out of whatever, 300, have been laid off. That?s a relatively low percentage. But the world has changed for the rest of the 294 of you, and it?s changed in fundamental ways. You just think about your job and your security differently. And that?s the world in which we live. This other change is that the boundaries at the firm have changed. What?s inside and what?s outside used to be understood and standard, but today what?s inside and what?s outside is in play. The business language for this is ?core competencies.? That?s the buzzword in the business world: firms think about their core competencies. That?s what?s inside. And everything else is potentially outside. Contingent work is a form of putting work outside?the people are working in your organization but they?re not your employees. Outsourcing is a form of putting
work outside. Subcontracting is a form of putting work outside. All those dimensions increase, and increase substantially, and that has a big effect not only on job security but on career paths and on skill sets. The content of work has changed. One of the good things?and incidentally I don?t mean to paint that all these changes are bad, and I want to be careful not to imply that; some of this is quite grim but some of this is positive?and one of the positive changes has been the spread in terms of quality systems?of what we call ?high-performance? work organizations. The content of work has changed fundamentally. We used to have a debate in this country that we were becoming a nation of hamburger flippers. Academics used to write books about de-skilling, and then the tendency in the academy was to think that we were on a downward trajectory with respect to skill demands. That?s just not true: we?re on an upward trajectory. And one of the reasons we?re on an upward trajectory is the spread of these new work systems: the importance of quality, the importance of employees contributing their own ideas and their own creativity. Now there?s a question, an important question of whether employees share the gains that come from those new work systems. That?s a question that goes much more to the balance of power in the workforce and labor market. But just in terms of the nature of work itself, it has changed radically. And it?s changed in a way that increases the need both for hard skills but also for soft skills. And when I say soft skills, I don?t just mean how to be nice to people, how to show up on time, not smacking your boss in the face, I also mean problem solving, working in teams. And the soft skills that are high-level are much more in demand and much more important. It goes fundamentally to the kind of work that you all are trying to do, and I?ll talk about that.
Another fundamental change in this new economy is the increased diversity of firms. We used to know the model to which all employers were tending. In the union sector they were tending toward General Motors?right??the large integrated firms, which were organized that way. In the nonunion sector they were tending toward IBM. Now they weren?t all there, but those were the two kind of standard best-practice models that were out there. But now we live in a world in which, yes, there?s General Motors and there?s IBM but there?s also Silicon Valley; there?s also, you know, whatever it?s called in New York. What?s it called, Media Alley?is that what it?s called in New York? Media Gold? See, I?m cool. When you go to New York tonight, you?ll see it. [Laughter] You probably won?t, right? There?s much more diversity in what employers are like, what employers are looking for, what jobs are like. And we don?t have a one-size-fits-all labor market anymore. Now what I said has real implications for policy. Take that last sentence that I just gave you: we don?t have a one-size-fits-all labor market anymore. Our labor market structure, our labor market institutions, our laws were structured for the old world in which there was a standard model. So think about two sets of representative laws. Unemployment insurance, a fundamental bulwark in our labor market, is basically designed for a world in which someone is working full-time, full year at a job. They?re laid off from that job temporarily, they expect to be recalled, and they need temporary support until they get recalled. If you?re working two jobs or you?re working part-time in a contingent job or part-time in another contingent job or if you?re laid off permanently, you don?t fit that model. There?s a mismatch, and the mismatch isn?t just that the unemployment insurance law is wrong?it?s that our old labor market institutions were designed for this old world. Labor law, the notion of who?s an employee and who?s a manager, is thrown into question by these new high-performance work systems that I just described. But labor law
hasn?t been modernized; it doesn?t reflect those changes. So the change in this economy has led to this mismatch between our labor market institutions, which represent the old world, and what we need from labor market institutions in this new world. Now the employment and training system is one of those labor market institutions. It?s not the only one: we also have unemployment insurance; we also have labor law and so on and so on. But the employment training system is one of those labor market institutions. And thinking about what the employment training system needs to look like in light of these changes is a fundamental question. I?ve already clearly shown, I think I?ve tried to show, that some of these changes have real implications to this system. The increased demand for skill, the nature of the skill, the much higher level of insecurity in the workforce, the higher rate of job turnover?all have implications for where we want to go with the employment training system. Now when I talk about the employment training system, it?s very important to understand I?m not talking about WIA. I?ve included WIA, but the employment training system is also the community college system. The employment training system is also all of the proprietary schools out there; it?s also the secondary schools. To some extent, it?s firm-based training. We need to think?and I?m sure you all do think, because I know you come from different parts of this world?when you think about the employment training system, you need to think about it in broader terms than the old CETA, JTPA, WIA world in which many of us happily or unhappily grew up. Now having said that, let me now talk a little bit about that employment training system. And I think a useful way to think about this is to give it a little historical perspective, not in terms of kind of marching through all the alphabet soup, agencies and programs, but rather by asking a different question about the employment training system as it?s evolved. Because this will get us
to today. And the question I want to ask is: What has been the theme? What has been the problem? And now I?ll show you that I?m a fancy academic: What has been the problematique? Fran?ise, can you say that for me, please? That was very?she?s French and so she said it right. Say it really loudly. [Audience response] Is that good or what? You really feel you?ve been to a good talk when you?ve heard something French. [Laughter] What has been the problematique of the employment training system over the years, and how has it evolved? And this is actually the central question because it?s going to address the question, ?How do we justify our existence today and how do we make the case for what we?re doing today???because we?re not making that case. So think about this evolution. When the employment training system first came on to the scene in the late 1950s, early 60s, what was it about? It was about technology, it was about automation, it was about dislocation. It was a world in which we thought that these white guys at General Motors were losing their jobs because of automation. And the Manpower Development Training Act was about that. And that developed a political constituency. This was the Kennedy election, early Kennedy, and it developed a political constituency for the employment training system, and it gave it power?it gave it a reason to exist. Raison d??re, Fran?ise? [Laughter] Gave it force, okay? And that was important. The next issue was poverty, and from the mid-1960s up through the 1970s the employment training system was driven by poverty. Now we may have different views about the war on poverty and all that, but it gave us, again, a reason to exist, it gave us force, it gave us a national presence, a rationale. In the mid-1980s the employment training system became, was about, something very different. It became a discussion about competitiveness. This was a period in which we thought the Japanese and the Germans were eating our lunch. And the data
seemed to suggest that that was true. It was a period in which we thought the reason our lunch was being eaten was because we had an underskilled workforce. It became the period in which we started talking about standards and all of that set of issues. And this was a very important stage because it became the first period in which the employer community, the business community started paying attention to these sets of issues. And I?ll come back to that. But that?s what happened. We had America?s Choice, it was the School to Work Transition Act, it was a discussion of standards and skill standards. And there was energy and drive and a national interest in these sets of concerns. And what was exciting about that was it was broader, it had the business community and a broader political constituency involved. So those are three things, but where are we now? I think that where we are now is we?re nowhere, we?re basically adrift. Why are we adrift? We?ve done well relative to other economies; we?re eating their lunch, they?re not eating our lunch. And so the competitiveness rationale has dissipated. For a set of reasons, which are deeply unfortunate but nonetheless undeniable, we?ve lost our national interest in equity and poverty. The extent to which the business community is involved has shifted to education and has left the employment training field behind. Now you know this is true because you know in the last national election neither candidate talked about any of our issues: they were silent. Our issues were not on the national agenda. Now we know in the abstract that this is wrong, right? We know that there remain serious issues of equity and poverty; we know that what we have to offer can help firms be more competitive. We also know that there?s a demographic argument for our system, right? The demography is changing in a way that seems to imply that there?s going to be a labor shortage and people are going to need more skills and more training. We can develop the academic case, but we don?t have the political case, we don?t have the narrative. The three other periods had a
narrative; whether it was automation, poverty or competitiveness, there were compelling national narratives. And that?s what we lack now. Now I wish I could stand up here and tell you what the next narrative should be and can be, but I can?t tell you that. We can come back and talk about it. But that, I think, really does bring us to today, and as I?ll say again when I finish this talk, I oscillate between optimism and pessimism about where we are today. And the optimism is everything that you all are doing, and I?ll elaborate on that, but the pessimism is this lack of a narrative, this drift, the fact that no one really pays attention to it and talks about this. Let me kind of shift to another level of discussion about policy and talk more concretely about what I think we should be trying to do and how to think about what we should be trying to do. First of all is a way of thinking about strategies. I find it personally useful to think about employment training strategy as falling into three buckets. One bucket is a set of policies that try to improve access, that basically try to improve people?s access to jobs. Another is a set of policies that try and make bad jobs into good jobs. And the third is a set of policies to try and create more good jobs. I think fundamentally our strategies and your programs can be thought of as falling into one of those three buckets, which is why I just find it useful to think about it in this way. Now the access policies are pretty straightforward. There?s skill training; there are labor market intermediaries, which I?ll elaborate on, people who do matching and placement. It?s the set of policies, basically the supply side of matching policies, that have always formed the core of our system and remain very important?remain the bread and butter of the system. There?s a lot to be said about making bad jobs into good jobs. Some of what can be said is outside of our ambit. It?s about the minimum wage or it?s about living wages or it?s about employee
representation and unions or alternative forms of employee representation and unions. But a lot of it is within our ambit, it?s about career ladders?right??which I?ll talk about. It?s about sectoral models that work with firms? upgrades; it?s about incumbent worker training; it?s about a lot of things that make bad jobs into good jobs. And then the final bucket, which is creating more good jobs, is where historically I think your employment training system has been the weakest, namely making the case that we?re part of economic development. Now there?s actually a lot of history to support that we?re very much a part of economic development. I don?t know if anybody in this room is from the Carolinas, but the Carolinas took all the jobs out of Massachusetts by using, in part, their community college system to train workers to do the jobs that used to be done in Massachusetts. The employment training system was part of the economic development system of those states. And we all have examples, I?m sure, of other places where the employment training system has been used that way. But historically, although the employment system can be part of creating more good jobs, it hasn?t been really seen that way. So those are the three buckets. Now there?s another way to think about policy and that is to think about what people are talking about now: What are the big ideas on the scene? And I?m going to talk about four of them. One of them, I shudder to say, is about coordination. Now the reason I shudder to say coordination is because ever since I was born people in the employment training system have been talking about coordination. And the amount of energy that?s gone into planning and planning grants and making this agency talk to that agency and so on and so on has been amazing with the results being like that. So I?ve always been very skeptical of coordination. But there?s one arena in which I think thinking about coordination is fundamental, and that?s the arena of how you link the education system, and particularly the adult basic education system, to
the community college system, to the job training system. And the reason that?s fundamental?and it?s particularly fundamental in a world in which there are immigrants who need adult basic education but then need job training and certificates and degree programs?is because they have these systems in which there are, to my knowledge, no handoffs from one kind of system to another, no supports, so the dropout rates are just phenomenal, and no linkage to training and no linkage to employers. So while I?m not a big fan of coordination, and I think that over the years a lot of wasted energy has gone into it, in this respect I think this is one of the new big ideas out there. It?s also fundamental politically because?I?ll try and remember to come back to solving this problem of the narrative and the politics of this?how we link to the education system is a big piece of that. The other three big ideas out there today are labor market intermediaries, sectoral programs and career ladders. And I know from the panel?I attended a panel this morning in which all these three ideas were talked about?many of you are familiar with them, and I?m not going sit here and kind of grind through it. But labor market intermediaries speak to two fundamental issues of the labor market in today?s new world. One issue they speak to is this turnover/mobility issue. In the old world, in the In Search of Excellence world, people spent more time with their old employer. We didn?t need strong job matching; we didn?t need effective matching systems. But in today?s world, we do need effective matching systems. So that?s one issue that labor market intermediaries speak to. The other issue labor market intermediaries speak to is how you connect to employers, and I?ll come back to that. One of the weaknesses of the old system was a lack of connection to employers. Now having said this, there are, I think, different flavors of labor market intermediaries. One flavor of labor market intermediary is a bulletin board. Now there are different kinds of
bulletin boards. There are bulletin boards and there are bulletin boards. There?s also the Internet, which is a bulletin board. There?s the old flavor of the employment service, there?s another bulletin board. There are the One-Stops, which, you know, say ?Hi, come into my One-Stop, sit at this computer terminal and look at the job listings.? Those are all bulletin boards. Now those labor market intermediaries may play a positive role, but they?re passive, right? They?re simply a listing service. The second flavor of labor market intermediary is a proactive intermediary; it?s an intermediary that goes to the employer and says, ?What do you need? Let me understand your problems. I?m going to help you solve your problems.? And then it goes to the workforce and says, ?What do you all need? I?m going to try and meet your needs and then I?m going to try and make a marriage.? It?s out there talking to both dimensions. Now the balance in who it?s talking to is a fundamental issue that I?m going to come to. But it is a proactive intermediary. The third flavor of intermediary is an intermediary with a vision that has some politics to it. It wants to use its action?its activities with employers and its activities with the workforce?politically in its community to build power, to change how the labor market behaves more broadly than just with its clients. It tries to build power?if it?s a union it tries to build power that way, or by providing a service; if it?s a community group it tries to build power that way, by mobilizing people who will act politically; if it?s the Chamber of Commerce, and intermediaries are often sponsored by the Chamber of Commerce or NAB or business associations, it tries to build power that way to, say, change the school system. But it uses its usefulness in the labor market as a way of actually having a broader, larger impact. And I?ll come back to that. Now the need for these intermediaries is clear substantively. Firms need assistance in a variety of
ways, and workers need assistance in a variety of ways. So that?s fairly clear, okay? What?s not clear is how well they do it or how to build on it, and I?ll come to that. The third kind of thing I need out there is sectoral programs. Now sectoral programs, to my mind, essentially mean coming to understand a particular industry deeply. So one kind of labor market intermediary might work with the healthcare sector, the automobile parts sector, furniture manufacturing and universities and do all those things that I talked about. But another flavor might say we are going to work with healthcare or we are going to work with machine tools or we are going to work with X and we are really going to understand the needs of that industry. And we?re going to go beyond what I?ve just described; we?re actually going to try to organize that industry. We?re going to try and get the small businesses in that industry to come together and cooperate, not just through unemployment training but also around marketing or also around innovations of various kinds or also around working the school system. And that becomes a sectoral program. In a sense, it has a vision of economic development associated with it as well as a vision of employment and training. And there are a number of very successful sectoral programs out there as important models. Now both labor market intermediaries and sectoral programs engage in what? In the final kind of au courant?right Francois, au courant? this is really a classy talk?au courant program design, which are career ladders, right? And career ladders are essentially finding ways to take bad jobs and make them good, by helping people take what was a low-level service job and move up to something else, whether it?s starting off in the kitchen of a hotel and becoming a cook or washing dishes and becoming a cook, or whether it?s starting off emptying bedpans and becoming a nurse, moving up on a career ladder in a hospital. Now intermediaries can work
with firms, and sectoral programs can work with firms, to develop career ladders. And those are the kind of key programmatic ideas that are out there. Now what?s important about these ideas? One is: taken as a whole we?ve come to understand what represents best practice in our field. Best practice in our field means the following things, I think, now. For one, working both sides of the labor market, both employees and employers. The old employment training system, the one we all grew up in, or at least the ones people my age grew up with, trained people and threw them over the wall and had no connection to the real economy. Employers didn?t see them as significant players and there was just no connection. Working both sides of the labor market is essential, both in terms of outcomes, the quality of the product you produce for the people you want to help, but also in political terms. The second element of best practice coming out of all of this is that you need deep knowledge of the employer and the industry; you need to become an expert in some aspect of the demand side of the real economy. The third element of best practice, and this is more controversial, is, in my view, support services and long-term commitment. The effective programs that I know find ways to work with people, despite the lack of stipends?you know, despite the lack of support in the federal systems. They find a way to give them resources, to keep them in the program, help them deal with life crises that always emerge, to reduce dropout rates and to enable them to have long-term training, not short-term quick and dirty training, which was too often characterized in the past. And those are the best practice elements. Whether you call them intermediaries, whether you call them sector programs, I don?t care, those are the best practice elements. We?ve come to see, and we have examples of programs that pay off and that work.
But having said that, and now I?m coming to the fourth part?I told you I?d stop?there are significant open questions. One significant open question is the word you don?t want to hear me say, and which I?m going to say, which is scale. How do you take this program that serves 100 people or this one that serves 300 people and have it really make a difference with anybody besides the 100 people or the 300 people? ?Cause the best program in the world, in Chicago, which serves 500 people, and no one will notice, right? Now when you think about scale, I think we need to think about scale more creatively than we have in the past. One version of thinking about scale is just increasing the numbers of the people you serve: more people, more resources. And that?s important. I do want to do that, believe me, but I don?t think that?s the end of the scale discussion, I don?t even think that?s a winning game. The real way to think about scale goes back to this argument I made about intermediaries having a vision, namely how do you take your program and use it to leverage change in the larger, more powerful institutions in your labor market? If you?re doing training with a community college, using them as your training provider, you?ve noticed that the community college is badly organized for your people, they?re pretty rigid about when classes start and when classes end. They?re pretty rigid about when you can get credit for remediation programs. They?re pretty rigid about all kinds of things. So you fix it for your 200 people, right? But can you fix it for the other 10,000 people who attend that community college? If you can do that, you?ve achieved scale. It?s not your program, but you?ve used your program to leverage larger scale change. You?re working with an employer and that employer didn?t know your community even existed, never recruited in your community, and now it?s recruiting 50 people from your community. Well, that?s great for those 50 people. But if you could change that employer?s
recruiting habits for more people, for the rest of its labor force, you?ve leveraged change. And that?s really, I think, a more creative way to think about scale. Now having said this, it?s not easy to do, obviously. But, you know, we all live in a world in which this program and that boutique program do well; they live for a while and then they die and nothing?s changed. And at the end of the day we have to think about scale, and that?s a real challenge. The second challenge, I think, about what I?ve said is the following. I?ve made a big deal out of how important it is to work with employers. It?s important in terms of outcomes for your clients, and it?s important politically. But how do you work with employers without losing your commitment to poor people? I mean fundamentally how do you work with?and that?s the most straightforward way of saying it that I can think of. Because if you become essentially a business training organization, you?re going to lose your commitment to poor people. And this isn?t a statement about good and evil, but it?s a statement that the employer community? if you?re trying to sell yourself to them?are going to be constantly putting pressure on you to cream, in one way or another. It?s a statement that the employer community, if you?re going to work deeply with them, is going to be constantly putting pressure on you to engage in very specific training now?job training for what that firm needs, which may not serve your client well if he or she has to change jobs over time, as he or she almost certainly will. So there?s always?this new model, this best practice, has built into it a deep tension. And resolving that tension and working with it, I think, is the second important challenge. Now there are different ways of doing it, and I?ve seen programs can succeed, have been successful doing that. But you?re always going to have to be alert to it and you?re always going have to pay attention to that.
The third kind of challenge is sustainability. If this program is so good to the employer community, how come they?re not paying for it, how come you?re afraid to ask them to pay for it, right? How do you kind of begin to think about issues of sustainability, so when the foundation grant goes away you?re still there? That?s the third big challenge. And then the fourth challenge is assessment: how do you know it?s paying off? Now I don?t have to give you, or maybe I do have to, a lecture about assessment, right? You?re running a program, you?ve got a million things on your mind, and God knows you don?t want somebody coming in and asking to do an evaluation, diverting scarce administrative resources, so forth and so on. Plus it?s a risk, plus you have an assignment: how do I tell people that they, you know, got into this program?or they can?t get in the program?cause the coin was flipped? You want to try to work in the community and get that community support and so on, so forth. There are a lot of pressures against real assessment. But it?s important to do it. And it?s important to do it both as a management tool and it?s also important to do it politically, because you have to sell your program and your model to a wider constituency. Now assessment doesn?t only mean a narrow focus on numbers; it doesn?t only mean performance standards and wage gains and so on. Good narratives can be a form of assessment. Good ethnographic research can be a form of assessment. I?m not trying to be a numbers guy here and tell you there?s only one right way to do assessment, but I think you need to take assessment?we as a field?need to take assessment very seriously. So kind of in conclusion, this is a transitional period in the economy. There have been other transitional periods in the economy?transitional periods very parallel to this one, in which the rhetoric in the market has not seemed to be dominant, in which old institutions are blown away, but in which actually relatively good outcomes have resulted. The Progressive Era was a
period following a market-dominated period of social Darwinism and market rhetoric upon which we built a set of new institutions that led to better outcomes for a lot of people. And we?re in the same kind of period now. We?re trying to build new institutions. The old employment training system was isolated; it was a side show; it wasn?t taken seriously by the core of the economy. We need to change that, and we need to change that by finding this new rhetoric, a new model, a new argument. There?s a tremendous amount of local creativity. Again, this is parallel. When you think about the New Deal, it was one of the great periods of American reform in the labor market, but most of the programs of the New Deal were modeled and were invented at the state and local level and then were adopted nationally. And where there is tremendous national creativity out there and local creativity out there now, the question is how to build it. But that then gets us to this point where I kind of vacillate between despair and elation. I wouldn?t even say elation, but despair and something more positive. [Laughter] Hope, right. We need as a community and as a field to think strategically. We need to understand how to build this new narrative. We need to understand how to relate to the employer community, and we need to understand how to relate to the education establishment, all of which are more powerful and, in many ways, more important than we are. We have something to add?something fundamental to add?that they don?t have. First off, we have a commitment to social values. And I don?t mean an analysis of politics: we care about distribution, we care about equity, we care about poor people. If we didn?t, we might as well just give all this money to the education system. The education system has many missions: it?s a great system but it?s not fundamentally run right. Or we should just let employers do training. But because we have this commitment, there?s a role for us. And because those systems fail a lot of people, there?s still a
role for us. But we have to make the case for that role, and we have to find a way to link those systems creatively and to build a political case. Some days I do feel that we haven?t done it, that we?re in kind of a stagnant field, and other days when I visit programs?and I visit a lot of programs and meet a lot of people?I feel very different about it. But this, I think, is really the fundamental challenge we face. Now I?ve tried to describe to you program models and to describe to you strategies and describe new ways to think about it, but at the end of the day when I?m putting together this case, connecting to these systems, developing the narrative, developing the strategy and showing what we can contribute to the economy and to our people?this is really what?s going to save the day and make it work for us. So that?s it, so thank you. [Applause] Time for a couple of questions. Give me a minute, here we go. Just tell us who you are and? QUESTION: I?m from Austin, Texas. I have actually two questions. The first one is you had mentioned very briefly, particularly as you were talking about making bad jobs better jobs through unions, and I?d like to kind of get your take on what the role of unions needs to be in this day and age, if there is one. And then the second is to connect us better into the K through 12 public education system. And if you could just, give your impressions of that as well, in connection to workforce adult ed? ANSWER: The question about the role of unions is huge, is a huge question. And over the years, unions have been a force for economic justice and for raising standards in the economy. There?s just no?in my view there?s no question about that. What?s happened to unions has
partly been brought on by their failure to adapt, to attract new people, their failure to modernize their internal systems, and it?s partly been brought on by political changes. There are plenty of examples in the employment training field of unions being very creative. And what?s actually very good about employment training is that it creates kind of a win-win arena between firms and unions. It creates something. Instead of having to argue about ?the wage should be high/the wage should be low,? employment training creates a field, an arena, in which you can actually help both the employees and the firms. And so there are examples in healthcare; there are examples in telecommunications; there are examples in the automobile industry, in the baking industry and machine parts?of unions and employers engaging creatively around employment training issues and effectively. And so I think the more of that that you see, the better. In terms of the K- through 12 system, and I?m not an expert on education?I don?t want to sell myself as being that. My personal view is the job of the K through 12 system is to get people out of high school with a real high school education that means a high school education, and get people prepared to go to college. And the K through 12 system should not be, by and large, a vocational training system. Now there are very high quality?in my state we have high quality voc-tech schools and we have very low quality vocational education programs, too. But we have high quality voc-tech schools. And I wouldn?t, you know?they?re appropriate for some people. But fundamentally I want to see people graduate from high school with a degree that really means something and then we can talk about post-secondary education, job training and the like. Having said that, I want to be clear, I?m not an education expert. Yeah? QUESTION: I wonder if you have any ideas for possible candidates for a narrative, your thoughts, maybe rolling around in your head that we might be thinking about?
ANSWER: I think that there?s the economic development narrative, namely that what?s going on out there in the economy now, particularly among small- and medium-size firms is tremendous insecurity around how you meet quality standards, how you avoid having your product being outsourced?all that set of issues is a powerful narrative. And if you look at the role of business associations like NAN and the Chamber of Commerce, they?ve made some progress in using that narrative. I think the labor shortage narrative is important, too. And I think firms in the next decade are going to really confront the labor shortage. Now immigration is a safety valve on the labor shortage. But the thing about immigration is that it?s very bi-mobile and at least half the immigrants who are coming into this country are people who can?t move into these high quality jobs without an employment training system. So I think the pieces are there. How you articulate it and verbalize it in a way that?s politically compelling, I actually am not sure yet. At least I can?t do it. One more quick one, then we have to wrap up. QUESTION: I?m from Boston. My question?s a large one, though. My question is about the fact that what used to be primarily a local and regional labor market has become a worldwide globalized labor market, and I think a lot, and talk about ,what that means in terms of the changes in the workplace. My question really is why would U.S. employers care any more whether we?re trained and skilled and, you know, loyal or any of those things when they basically, except in the service sector, can go around the rest of the world for the labor force?
ANSWER: Well, the way I pose that is that globalization, the ability to outsource and also the ability to import labor force through immigration, gives employers another option. And it?s an option which in many cases is a very good option. I mean it?s a good option for employers and I view immigration as positive for America. You know, it?s a good option for us. It doesn?t mean, however, that outsourcing or immigration are costless for employers, that they can simply snap their fingers and generate a labor force. There are costs and risks associated with that. There are risks for employers in outsourcing to other countries core technologies that are part of their competitive edge. There are management and control problems associated?even though you think you can talk to somebody in India by telephone or overnight, in fact managing the workforce is more difficult because it?s there rather than here. There are all kinds of issues. And so we have to produce a workforce that is sufficiently productive. [END]