C-SPAN/NEWSMAKERS

Host: Steve Scully

Guest: Jane Oates, Assistant Labor Secretary for Employment and Training

Reporters: Tom Raum, John Cranford

STEVE SCULLY, HOST, C-SPAN'S NEWSMAKERS: Joining us on C-SPAN's NEWSMAKERS program is Jane Oates. She is the assistant labor secretary for employment and training.

And here in our studio for the questioning is John Cranford of CQPolitics.com, managing editor, and Tom Raum, economics writer for the Associated Press.

Gentlemen, thanks for being with us.

Secretary Oates, let me begin with you. The unemployment numbers will be coming out at the end of this week.

What will the official numbers indicate? And how many are not being counted in those jobless numbers?

JANE OATES, ASSISTANT SECRETARY FOR EMPLOYMENT AND TRAINING, DEPARTMENT OF LABOR: Well, Steve, we have stopped trying to predict until numbers day. And Secretary Solis is, I know, going to be very available, as she has every other numbers day since she's been appointed.

We don't think it's going to get better, but we're hopeful. And we're going to be doing all that we can to respond to those numbers and, more importantly, the people who are behind those numbers.

SCULLY: As you know, one of the reasons we invited you on is, in part, because of a caller on Friday, a viewer in Detroit, Michigan, which has been among the hardest-hit cities in terms of unemployment, and a viewer who, as of yesterday, was no longer going to get benefits, because he's run out of those benefits.

What should he and others be looking for?

OATES: Well, that caller is heartbreaking, just like all the other people that we -- the secretary and all the assistant secretaries -- meet all too often. And we give them the same advice.

They should go to the local One-Stop in their area. They should get all the help that they can in brushing up their resume, in talking with an employment services counselor to help match the skills that they had in their former job with new and existing jobs in their area. And if they can't do that, they should enroll in training as soon as possible.

Under the Recovery Act, it's been made crystal clear that unemployed workers in most states, unless there's state legislation blocking this, are allowed to enroll in credit-bearing and job-changing kinds of training opportunities while they're on unemployment.

We strongly encourage everybody that's listening here that's in that same situation to enroll as soon as possible.

SCULLY: We'll go to the questioning from our colleagues here. First, John Cranford of CQPolitics.

JOHN CRANFORD, MANAGING EDITOR FOR ENTERPRISE REPORTING, CQPOLITICS.COM: Good morning, Madam Secretary.

OATES: Good morning.

CRANFORD: The number of people who have been unemployed for 26 weeks or longer is exceeding 5.4 million now. Do we have a long-term unemployment problem that is getting worse than we've seen in the past?

OATES: Well, I think anyone would agree that this recession is both persistent and really hard to define. It keeps changing. It's cross-sector. It's lasting longer than people had anticipated early.

But clearly, there are still growth industries. Nationwide, education and health care still have jobs in demand. And our challenge is to make sure that people are matched up with the skills they need to qualify for those jobs.

CRANFORD: But the question is, are we doing enough for the people who seem to be unable to find work?

There's something on the order of 15 million people who have self-identified as unemployed. But only about six million people are able to collect benefits currently. That seems to me to leave a whole bunch of people out in the cold.

OATES: Well, you know, for unemployment that's true. But for our services under the public workforce system, people who are working part-time or who are underemployed -- not at a job that matched their previous job's wage level -- are entitled to come in and get services.

We offer businesses services to work with incumbent workers who may be low wage or low skilled to build that skill level. So, I think our challenge is trying to find those people.

The people who are registered for unemployment are easy for us to locate. It's those folks that are off the radar screen that programs like this are so important to get the word out to them that they need to come in and connect with some of these services.

SCULLY: Tom Raum of the Associated Press.

TOM RAUM, ECONOMICS AND POLITICAL REPORTER, ASSOCIATED PRESS: Madam Secretary, how are you doing?

OATES: Hi. Good morning.

RAUM: The Commerce Department is going to come out this week with figures that show that the recession might actually, technically be over. Do you think that the recession is over? And how can it be over when so many people are out of work?

OATES: Well, I'm not an economist, so I don't care what we call it. What we have right now are challenging times where real people are looking for jobs. And we're not going to stop everything that we're doing until all those people are employed.

RAUM: It looks like this was a deeper recession than any one since the Great Depression in the 30s. And economists say that the jobless rate will go to 10 percent and hang there for a very long time.

How long do you think the jobless rate will stay at such high levels? And do you think when it comes back, it will come back to a normal level of four to five percent? Or will it be elevated for some time to come?

OATES: Well, I think that the economists all agree that this is going to -- this jobless recovery is going to be longer than anyone would have predicted a year ago. So that what we're going to do is -- what we're doing right now is investing in job training in new and emerging industries, as well as the two industries I identified that have national growth consistently through these challenging times.

So, we're carefully looking at green, and we're looking at all aspects of workers. We're looking at programs targeted to those emerging industries, to those industries like construction that have to green up a little bit, where existing workers, in order to get jobs today, have to learn greener ways of doing business.

And we're looking at targeting both older workers and youth. I think the young people today are in a particularly challenging position, because they haven't been able to get a first job, so they really have no resume yet. So, we're targeting specific programs at those 18- to 24-year-olds who are trying to start their working career.

CRANFORD: You mention green jobs. It looks as if the last expansion, the one that ended in December of 2007 before the current recession, was anomalous compared with economic periods of prosperity previous, because the number of jobs that were created in the last expansion didn't come close to matching the number of people who entered the labor force.

That also makes it look like we've got a longer term problem here, and looking for green jobs may not be enough of a solution to the problem.

OATES: Well, I think that there's not going to be one solution. You know, if you look at past economic downturns, one industry kind of pulled us out of it. Post-war it was manufacturing. In the 90s it was I.T.

I think, just as this recession gave us a multi-sector downturn, we're going to have to look at multi-sectors in order to pull us out of this.

So, whether you look at the emerging and expanding careers in health, I.T. work, whether you look at the variety of opportunities in green using renewable energy sources, as well as looking at technologies that could help us recycle and reuse much better, I think all those are important.

But I think, simultaneously, this administration is working with business. You know, we have a -- we think we have dual customers in our public workforce system. But clearly, Commerce and SBA work much more closely with business.

And I believe our sister agencies are working to expand the markets of small business by treating them to lots of experiences in how to expand their market to foreign markets.

I mean, very few of our small and medium-sized businesses do a lot of work with exports.

Now, clearly, if we can expand the markets for those small and medium-sized businesses to do business outside the geographic United States, they can build jobs. And then our role will be to make sure that those workers have the training they need as they expand.

RAUM: What's the outlook for workers who are about to run out on their unemployment insurance for getting an extension? I gather the House passed a bill last month that extends it for 13 weeks, but it seems to be hung up in the Senate somewhere.

What's your status of that?

OATES: Well, our understanding as of close of business on Friday, was that the Senate was going to vote on this. They were going to do a cloture vote this week. We think that sends a clear message to workers, who are so anxious.

I mean, I think your viewers probably know better than anyone, the people -- the American people want to work. They understand the dignity of a job, and they want to earn their own money, and they don't want to be dependent on the federal government. But for many of them, far too many, there are no jobs to be had.

So, I hope that Congress acts this week and does something responsibly to help those folks that are clearly doing their part looking for a job, but not finding any success right now.

RAUM: The House bill would only give this extension to states where the unemployment rate was 8.5 percent or higher. I gather that didn't work in the Senate, and now they're looking at a compromise where all 50 states would get some extension, and those in the hardest-hit states would get an additional six weeks, or something.

What is the administration position on that Senate compromise?

OATES: The administration doesn't have a clear position right now. They've been working closely with the Senate. We've all been in conversations. We understand, you know, when the House passed their bill, they were being fiscally responsible. And the Senate is looking for a way to match that fiscal responsibility with a call to action.

I mean, I think the question that I heard most clearly in the last few weeks in the debate was, what's the difference if you're an unemployed worker in Nebraska, where the unemployment rate is below 8.5 percent, but you've used up your benefits and can't find a job?

I mean, I think it's hard to say "no" when it's your constituents who are coming and telling you how difficult it is to find employment in these times.

CRANFORD: To follow on what Tom was just asking, do you think the federal government ought to take responsibility for all unemployment benefits? We've left it to the states since the end of the Depression. Is it time to change that?

OATES: Well, I think the Recovery Act made a step in that direction when we allowed states to borrow without any interest during this time. And I think, if you were to speak to someone at the state level, being able to supplement their own U.I. trust with interest-free money from the federal government has kept many of them in a position where they didn't have to lay off more state workers or teachers, or anything else.

So, I think those states are very appreciative that the president responded in that way.

SCULLY: Secretary, just let me follow up on the Recovery Act. About $750 billion allocated. Not all of it has been spent. But has it created the jobs that you personally expected it to create?

OATES: Well, it's hard for me to answer that question, because my time is spent on our $700 million that we're putting out there for job training. I can tell you, about half of our grant -- we have five grants out there. Three of them have been paneled, and we will be ready to announce those in November.

I can tell you, we have had unprecedented response -- triple in the past any grant solicitation that we've put out there. That tells me that our grantees have been working with local businesses, and they have needs for training.

So, that makes me very optimistic, because in order to apply for our money, you had to partner with business, and they had to have jobs ready for these folks when they come out of training. So, I hope, you know, in six to nine months, that if you are nice enough to ask me back, I'll be able to tell you about those jobs that were created.

Our role, of course, is to get the people trained to be able to qualify for those jobs.

RAUM: Could a case be made that the government should do a more aggressive job in providing unemployment compensation? Why should it ever run out? For instance, if you're out of work and you're looking for a job and can't find one, why should there be a deadline after which you just don't get any more money?

OATES: You know, now, I'm glad there's not an economist in the room, because they would tell you that there is, in their world, there is a formula that says at some point, if people get compensation for too long, they stop looking for a job. And they look at models across the globe where that's happened.

I think the American people are different, and I think they do -- the 79 weeks. I don't think there's anybody that I've run across that's used those 79 weeks, even in the most generous states, without actively looking.

But that is -- you know, that's the other side of it. How long do you keep somebody on government benefits before they stop looking and learn to live on their reduced monies that the government is giving them, instead of a paycheck?

RAUM: Does the Labor Department have a role in increasing the job retraining efforts, given that so many jobs have changed? The nature of employment is changing. The times are changing. Much is being outsourced to overseas.

Should the government take a more active role in trying to retrain workers?

OATES: Well, at the Employment and Training Administration that I oversee, that's our core mission. It's -- our day-to-day work is making sure that we're putting real training opportunities out there for people across the country to get the skills they need for jobs that are available in their local area.

So, absolutely yes. You're singing our song.

CRANFORD: It's not just training, though. Right? An interesting study by the Cleveland Federal Reserve Bank about three years ago showed that states that had the highest college and high school graduation rates, and the states that had the highest number of new patents, seemed to have also the highest income levels.

Over the last 40, 50 years, we should have seen incomes leveling out across this country, but they haven't. It seems to me that maybe the government has bifurcated its training and education responsibilities. Ought they to be better linked?

OATES: Well, I can tell you that we totally agree with that statement. I mean, since the -- actually, the undersecretary of education and I were confirmed on the same day. And since June 19th, we've been working hand-in-hand to do just that.

Let me give you just a few examples. Easy examples are the U.I., the letters that we've put out saying that, if you're on unemployment insurance, that unemployment insurance should be your qualifier when you're filling out that FAFSA, the Federal Application for Student Aid, that aid that gives people access to federally subsidized loans, the Stafford Loan program, and the Pell Grant program. That was an easy one.

But then we started thinking about, how do we really get our regional offices in Labor and Education working together, so that if somebody wanted to use our training money, but also supplement some of their own money so that they could get more advanced training, that they would understand how to do that legally and in a fair way. Those conversations have been extraordinarily effective.

Now we're beginning real conversations about how do we get our business advisory groups really ramped up, so that when businesses are coming to Labor, they're saying the same thing to us as they say when they go to post-secondary education or the Office of Career and Adult Education.

So, I really agree. We need to make this simple for the American public. They don't have to do it one way when they come to the Department of Labor for a training program and a different way when they want to go into an education post-secondary program.

That's the only way we're going to meet the president's goal of every single American having at least a year past high school.

So, I hope each month that we're in office -- that the assistant secretaries at Education and I are in office -- you're going to see more and more clarity, more and more transparency and clearer examples of our collaboration.

RAUM: Doesn't the number that we commonly use for unemployment, which is 9.8 in September, 9.8 percent, doesn't that really understate the true problem? Isn't the unemployment rate closer to like 16 percent, if you take into account those who are underemployed, those who have given up looking for work? Shouldn't we look at that larger figure instead of the 9.8?

OATES: Well, I think, absolutely, the figure is larger than that.

We know that there are people who have never been full-time employed, therefore aren't eligible for unemployment. Those could be displaced homemakers, women who are reentering the job market after raising children, who haven't had jobs in 10 years.

Those could be young people. And they could also be people, as you gave the example, who have just disassociated, used up their benefits and stopped looking.

But whatever the number is, the most important thing to know is that our public workforce system is open for all of those people, not just for people who are collecting unemployment insurance, for anybody who is looking for full-time employment, to move from part-time employment to full-time employment or to better their current employment.

So that, you know, we don't discriminate at all. We don't give priority to people who are on U.I. We work with disadvantaged adults, disadvantaged youth, those seeking employment, as well as dislocated workers.

CRANFORD: There's a concept floating around called wage insurance that would allow workers to continue to collect their previous pay, even if they took a lower paying job. Unions are kind of opposed to this, because they think it will drive down wages.

What's your position? What's the administration's position on a system of wage insurance?

OATES: You know, we really don't have an opinion on that. There are so many innovative ideas floating -- some promising, some with imbedded problems. We're listening to everything. We're involving ourselves in those discussions. But we haven't come out with any formal opinion on wage insurance.

SCULLY: Secretary Oates, whether it's been this administration or the previous administration, there really has been a flat line in terms of job growth over the last eight to 10 years. Why is that?

OATES: Well, you know, I think that part of the problem is something I brought up earlier. We are utilizing globalization. We're being victimized by it instead of really utilizing it.

And I think the leadership that we have in Commerce Secretary Locke and Ambassador Kirk, and Fred Hochberg at the Export-Import Bank, are really going to expand those horizons for business.

I mean, we really need to take advantage of putting the high-quality American products in countries all over the world -- not just Europe, not just Canada and Mexico, but all over the world. And I certainly don't have the expertise to tell small businesses how to do that, but I really feel that this administration does.

And I feel like, if we're able to expand our markets, we're going to be able to build small and medium-sized businesses as well as large businesses, create jobs. And we'll be there to help train the workers for those jobs.

SCULLY: So, who is victimizing us?

OATES: Well, I think it's just our lack of taking advantage of the global market. And when I use the term "victimizing," which is probably more dramatic than I should, it's basically that we've allowed Americans to become very used to participating in that global market by buying products from other countries, which is fair. But we haven't gotten our products out to foreign countries at the same rate.

And I think we really -- since small business and medium-sized business are such a part of our economic engine, it's incumbent upon us in this administration to help them gain the skills they need to take the same market share into the global market as some of our larger businesses have been able to do so effectively.

RAUM: How are we baby boomers affecting the equation on unemployment? Are more people in their 60s who have jobs not retiring, therefore not freeing up openings for other younger workers? Or are some who are in their 60s electing to take early Social Security, because they can't find a job?

OATES: You know, I think it's probably a mix. But I don't think we ever want to be a country that says, especially as many of us are approaching that 60 mark, that someone should leave their job when they still have value to add there. I mean, clearly, it's creating some challenges, when people do models that say people are going to retire at a certain age, and for whatever reason they decide not to.

But I hope we're able to build an economy when we come out of this recession that values every worker -- the new worker at 18 coming in, people coming in through different portals, because they weren't working for whatever reason -- custodial, parenting or whatever -- or senior workers, people 55 and older, who feel they still have value to add at the workplace.

You know, just from the perspective at the Department of Labor, I bet a quarter of my workers at ETA are eligible to retire. If they were to retire tomorrow, I would have a huge loss in the institutional knowledge and the unique skill set that veteran workers bring.

So, I would be really -- I would be very reluctant to say that we should throw people off a cliff and say, go enjoy your time somewhere else, because I think they really add something to the workplace.

Our challenge is to make sure we have enough jobs to continue to offer jobs to people of all ages.

RAUM: But have you measured this, the effect of the baby boom generation on the unemployment benefits you have to pay? Does it make the problem worse or better? Or is it a neutral?

OATES: You know, I really -- I shouldn't say, because I haven't analyzed it. But it's a very interesting question to have people take a look at.

CRANFORD: The whole question of whether there are enough jobs currently for the people in the labor force is a flip from what people have been afraid of two or three years ago, which was that the labor force itself was shrinking.

Is it possible that three or four years from now we're going to be back in that mode, where we're wondering where the workers will come from?

OATES: Well, I think we're, even in this recession, in some niche job areas, we're there right now. I mean, clearly, we've heard for the last decade that we have a shortage of people with the mathematical and scientific skills that we need to fill the jobs of today and fill the jobs of tomorrow.

We have too few people, too few women, too few people of color going into careers like engineering. We need to continue the K-12 and higher effort to expand that. We need to make sure that we're offering our workers the skill upgrades that they need to do the kinds of jobs that are in demand today in a variety of sectors.

And we need to make sure that -- you know, the old phrase that seems tired, but is so important -- this lifelong learning piece is instilled at every work site, that we make sure that we continue to have the best skilled, most highly educated workforce in the world.

And that's a challenge, because while there are fewer -- there may be fewer jobs -- and we would all agree that there are -- those jobs are demanding much higher skills than jobs 20 years ago did. There are few jobs today that pay a livable wage for people who don't have something past a high school diploma. So that we need to make sure that we're doing all that we can to ensure that young people are staying in school, and staying in school longer, to get the kinds of high level skills that they need.

SCULLY: Secretary Oates, you said that you'll wait till the numbers come out at the end of this week. But are you, and is the Labor Department expecting to see 10 percent unemployment, either this month or in the next couple of months?

OATES: Secretary Solis and the team at Labor are listening to everybody. We're not being naive. But to try to put a number on what we think will come Friday means that we'll either be apologizing or trying to celebrate.

And I think, right now, we're trying to be optimistic, but to kind of hope for the best and plan for the worst, so that our efforts are geared much towards what should we be doing to make sure that we're improving the outcome, even if the number stays the same or gets a little better.

We don't see -- this is going to be a long-term solution. And we think that we're going to be working on this for months to come.

SCULLY: Well, based on that, though, how long do you think -- how many years do you think we'll be looking at the jobless rate at the level that it is right now?

OATES: Well, again, I don't think anybody wants to make those predictions. And I'm certainly not going to make one this morning.

We think that we're not -- we're getting ready for the numbers staying about where it is now for some time, and hoping that, as we see glimmers of hope on Wall Street, as we see businesspeople who are coming in seeming to be more comfortable adding a few jobs, we see people beginning to think about growing their own business, we think that those are positive signs. But they are certainly not the end of this tunnel. This tunnel is going to be several months.

And, you know, each time we get numbers, each time we get new outlooks, we get a clearer idea of what next month is going to look like. But we don't know what six months or 12 months from now are going to look like, honestly.

CRANFORD: Secretary Oates, what does the current situation with unemployment and weak job growth mean for immigration? Are we going to see more tension on the immigration front? Are we going to see a demand for immigrants in certain job areas? What's your view on that?

OATES: You know, I think that once health care passes and is put into motion, I think the administration is going to look seriously at immigration. I think it's been a long time coming. And it's an issue that we have to resolve.

I think that in terms of employment, you know, we would be foolish if we didn't continue to welcome new immigrants to this country. This country is built on immigrants. You know, your parents -- my parents certainly didn't come on the Mayflower. I'm a second generation person.

But I think, in terms of jobs, when you talk about tension, I think that we need to make sure that people are working together on the solution, and we're not isolating any one group as causational in this. This is a problem that wasn't caused by new immigrants, wasn't caused by anyone coming over. This is an economic problem, and we can resolve it.

I mean, clearly, we're seeing a reduction in the number of H1B applications. In the beginning of that program, the applications were pretty much done in a month.

Obviously, we're seeing more Americans going after those higher skilled jobs. We at the Department of Labor want to make sure that before we bring in any guest workers, that we've exhausted the possibility in that local area of out-of-work Americans that could qualify for those jobs.

But, you know, we think we'll be a very small part in immigration reform -- an important part -- because, certainly, as you say, folks look to come here to begin their life and expand their own American dream. But they want a job when they come as a prospective new citizen.

SCULLY: Jane Oates is the assistant secretary at the Department of Labor, her specialty including employment and training.

Secretary Oates, thanks for joining us...

OATES: Thank you so much, Steve.

SCULLY: ... on C-SPAN's NEWSMAKERS.

We continue the conversation with Tom Raum of the Associated Press and John Cranford of CQPolitics.

Let me begin with you.

One of the issues that came up in this discussion, the pressure that this is having on states. Can you elaborate on that?

CRANFORD: Well, every state runs its own unemployment insurance program, and they all set different standards for who gets benefits, when they get benefits and how large the benefits are.

Most of the states only supply benefits for up to 26 weeks. And what we've got is a large number of people who have been unemployed for a very long time, much longer than the usual period.

And so, states have to find some way of keeping benefits flowing to these unemployment workers. And at this point, the federal government is picking up that tab.

SCULLY: And Tom Raum, you picked up on the point of a lot of people in their 50s, 60s, staying in the workforce, preventing mobility for those in their 20s or 30s, and keeping older people in the workplace. What dynamic does that have on our economy?

RAUM: Well, I don't know exactly. I think, on the one hand you have people that are not retiring, who would have maybe retired when they were 60 or 62, and now they can't afford to retire, and they're lucky to have a job. And then you have other people who are 62 and can't find a job. They've been laid off. So they apply for early Social Security and take themselves out of the workforce.

So, I think you have -- it works both ways.

SCULLY: What do you think we'll see when the numbers come out this week?

RAUM: I think it'll be -- if it's not 10 percent, it'll be very close to 10 percent. And I think it will go above 10 percent and stay there for several months, at least.

CRANFORD: Yes, it definitely looks like 10, 10.5 before the peak is reached.

We hit 10.8 in 1984 at the end, and sort of the aftermath of the 1982 recession. We could very easily reach that again.

SCULLY: A question for both of you. What did you learn today?

CRANFORD: It sounds to me as if the secretary was working very closely with the Department of Education on ways to link education and training, which is something that's been lacking in the federal effort for some time. So, that's impressive.

RAUM: I got the sense that the administration was comfortable that they were close to an agreement in Congress on this extension that's up in the Senate this week.

SCULLY: Let me bring it back, though, to the viewer that we had in Detroit on Friday, which really began the conversation here at this network on what happens to those out of work.

And his basic point is, he is getting retrained. There are no jobs in Detroit.

CRANFORD: Right. And that's the fundamental problem. The cover story on CQ Weekly this week is to look at the way that the labor force is growing, continues to grow, but the production of payroll jobs is not. It's not matching. It hasn't in the last expansion come close to matching the number of new workers.

And it's not clear why the economy is not generating jobs the way it used to, but it's going to be a persistent problem.

SCULLY: And the question that CQ Weekly is asking, Tom Raum, is, can job creation be overtaken by the job destruction that we've been seeing over the last 10 years?

RAUM: At some point you have to accept the fact that some of these jobs, in Detroit and other places, are just not coming back.

And in the past, there's always been some event in American invention or discovery that has produced new industries -- you know, the Industrial Revolution, the high-tech boom. And I don't see anything on the horizon right now that might be a new, huge job creator. But, you know, it's not an impossibility of happening.

I think we might have to get used to the fact that we have -- unemployment used to be four percent full. That was considered full employment, if you had about four percent. Basically, everyone who wants a job can find one.

I think we may have to get used to having a higher normal unemployment rate, maybe five or six percent.

SCULLY: Tom Raum, who writes for the Associated Press. His beat includes economics and politics. And John Cranford of CQPolitics.com, one of the contributors to the cover story this week.

Gentlemen, thanks for being with us, and to Secretary Oates, on the issue of unemployment and job retraining.

Thanks for joining us on this NEWSMAKERS this Sunday morning.

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