[Senate Hearing 112-887]
[From the U.S. Government Publishing Office]
S. Hrg. 112-887
REBUILDING THE MIDDLE CLASS:
WHAT WASHINGTON CAN LEARN FROM IOWA
=======================================================================
FIELD HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
ON
EXAMINING REBUILDING THE MIDDLE CLASS FOCUSING ON WHAT WASHINGTON CAN
LEARN FROM IOWA
__________
JANUARY 27, 2012 (Davenport, IA)
__________
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Pensions
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
TOM HARKIN, Iowa, Chairman
BARBARA A. MIKULSKI, Maryland MICHAEL B. ENZI, Wyoming
JEFF BINGAMAN, New Mexico LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington RICHARD BURR, North Carolina
BERNARD SANDERS (I), Vermont JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, JR., Pennsylvania RAND PAUL, Kentucky
KAY R. HAGAN, North Carolina ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon JOHN McCAIN, Arizona
AL FRANKEN, Minnesota PAT ROBERTS, Kansas
MICHAEL F. BENNET, Colorado LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island MARK KIRK, Illinois
RICHARD BLUMENTHAL, Connecticut
Daniel E. Smith, Staff Director, Chief Counsel
Pamela J. Smith, Deputy Staff Director
Frank Macchiarola, Republican Staff Director
(ii)
C O N T E N T S
__________
STATEMENTS
FRIDAY, JANUARY 27, 2012
Page
Committee Member
Harkin, Hon. Tom, Chairman, Committee on Health, Education,
Labor, and Pensions, opening statement......................... 1
Witness--Panel I
Loebsack, Hon. Dave, U.S. Representative, Second Congressional
District, Iowa................................................. 3
Prepared statement........................................... 7
Witnesses--Panel II
Allbee, Robert, Interim President, Muscatine Community College,
Muscatine, IA.................................................. 12
Prepared statement........................................... 14
McGill, Charles ``Skip'', President, United Steelworkers Local
105, Bettendorf, IA............................................ 16
Prepared statement........................................... 17
Fox, Robert, Davenport, IA....................................... 22
Prepared statement........................................... 25
(iii)
REBUILDING THE MIDDLE CLASS: WHAT WASHINGTON CAN LEARN FROM IOWA
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FRIDAY, JANUARY 27, 2012
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Davenport, IA.
The committee met, pursuant to notice, at 1:22 p.m. in the
John T. Belong Technology Center, 8500 Hillsdale Road, Hon. Tom
Harkin, chairman of the committee, presiding.
Present: Senator Harkin.
Also present: Representative Loebsack.
Opening Statement of Senator Harkin
The Chairman. The Senate Committee on Health, Education,
Labor, and Pensions will come to order.
First of all, I want to thank you all for being here today,
and I also want to thank Eastern Iowa Community College for
hosting us. Particularly, I want to thank Bob Gallagher, the
chair of the College Board. Board members, Milton Shaw and Mary
Lou Angler; Dan Martin, the director of operations of the
Belong Center, who took me around here today, Dan is here; and
Gary Mother, our executive director of External Affairs. Teresa
Paper, interim president of Scott Community College. Thank you
all very much for your help and hosting us here today.
I will recognize two of our officials who are here, elected
officials. Sheriff Deny Canard is here. I saw him earlier back
here, just saw him in Washington not too long ago; and our
Davenport Mayor, Bill Gluba--Mayor Lube. Thank you very much
for being here.
Again, thank you all. This is indeed a formal meeting of
the Senate Committee on Health, Education, Labor, and Pensions,
which I'm privileged to chair.
Last May, this committee held the first in a series of
hearings to examine the state of America's middle class. In
addition, last summer my State staff visited all of Iowa's 99
counties to hear directly from Iowans about what's happening to
the middle class.
As recent events have made clear, our once-great middle
class has been severely shaken. A strong America is built on a
strong middle class, which means a good job, steadily improving
wages and benefits, economic security in our retirement years,
education that is excellent and affordable, and hope for the
future. Yet today, more and more people are struggling just to
make ends meet. Jobs are insecure. Savings and pensions have
shrunk. People are profoundly worried about their future. At
the same time, income and wealth inequality are at extremes not
seen since immediately before the Great Depression.
For this reason, it's clear to me that the foremost
challenge we face today is fostering the recovery of our middle
class. I was very pleased to hear President Baa echo this view
in his State of the Union address this week, during his recent
visit also to Cedar Rapids. As the President made clear, the
basic bargain that built the middle class--that is, if you work
hard and play by the rules, you will be able to get ahead and
give your children a better life--has broken down for too many
people.
For this reason, I'm pleased to be here at the Belong
Technology Center today to learn about how the Quad Cities is
confronting these challenges head on. The Quad Cities and
Eastern Iowa more broadly have experienced tremendous economic
changes in recent decades. In response, these communities have
pursued smart, creative economic development strategies to
attract businesses that will help grow the middle class.
I hope to learn more today about the public-private
partnerships like those at Eastern Iowa Community College that
bring together local government, education, job training
programs, workers, private-sector employers to create the good
jobs in the community, and that's really the essence of what
this hearing is about.
I also look forward to hearing more about the role that
manufacturing has played in this local economy here. This
community knows very well that much of our manufacturing base
has been sent overseas, while improvements in technology have
made it possible for companies to produce more and more with
fewer and fewer employees. Manufacturing, however, remains
vitally important to this region. Indeed, I believe as a nation
we cannot rebuild our economy and our middle class without
rebuilding our manufacturing base.
Washington needs to hear from communities like yours, those
that are preserving and growing their manufacturing sectors,
about how to encourage companies to keep and create these good
manufacturing jobs in America.
Last June, I invited Amanda Grebe from up the road in
DeWitt to testify before the Senate Health, Education, Labor,
and Pensions Committee in Washington. Amanda, who I'm pleased
is able to join us today with her new daughter--the last time I
saw you, you were very pregnant--Amanda was just so eloquent.
In fact, she was so eloquent that Bill Moyers had her on his
show recently, and here's what she said to the HELP committee.
She said,
``Quite honestly, it's exhausting physically and
emotionally to live this way. My husband and I didn't
have dreams of great wealth. We never expected to have
summer homes or expensive cars or vacations on the
Riviera. We chose careers that inspire us, knowing that
we would never make six-figure salaries. All we've ever
wanted is security and a little comfort, to know that
our bills are paid, our needs are met, that we can have
a real getaway every now and then, that our children
can pursue higher education without the burden of
student loan debt, and that someday we can retire and
enjoy our final years together in the way we choose.''
And then she ended up by saying,
``I hold out great hope that this is not the end of
the discussion, that you will return to your offices
and your States and continue to ask everyday Americans
like me what they really need.''
Well, Amanda, that's why we're here today, and that's why
in the year ahead the committee intends to put rebuilding the
middle class in the center of our committee agenda. We'll have
some more hearings in Washington, but we are preparing
legislation right now that will hopefully strengthen the
economy, create jobs, and give more opportunity to help rebuild
the middle class.
Simply put, there can be no real economic recovery without
the recovery of the middle class. So I look forward to hearing
from our panelists today about how we can move forward and
aggressively on this front.
We have two panels. On the first panel, we're honored to
have Representative Dave Loebsack. Representative Loebsack
represents Iowa's 2d congressional district, but it's being
changed and altered because of the new district lines. It
covers most of eastern and southeastern Iowa.
Since being elected by the residents of the 2d district,
Dave has been a relentless advocate for Iowans, addressing
critical issues facing our Iowa families. And again, the
counterpart to our committee in the Senate is the House
Education and Workforce Committee, and Dave sits on that
committee. As you can see, we work together a lot between the
Senate and the House being on the same committees.
As a member of that committee, he has fought to protect the
rights, wages and benefits of hard-working Iowans and
Americans. He's committed to creating jobs and growing the
middle class by ensuring our children receive a first-class
education and providing access to higher education for all
those who wish to pursue it, and expanding training for Iowa
workers.
In addition to being on the Education Workforce Committee,
he's also a member of the Armed Services Committee, and I think
he's been to Iraq and Afghanistan more than just about any
Congressman I've ever met. He's a great supporter of our troops
and of our National Guard.
I will say to Congressman Loebsack, and I'll say it to
other panelists, your statements, your written statements,
which I went over last evening, will all be made a part of the
record in their entirety.
I'm going to ask Congressman Loebsack and our other
panelists if they could sum up their written statement in 5 to
10 minutes.
But again, Dave, thank you very much. Thanks for all your
great leadership in the House. Please proceed as you so desire.
STATEMENT OF THE HON. DAVE LOEBSACK, U.S. REPRESENTATIVE,
SECOND CONGRESSIONAL DISTRICT, IOWA
Representative Loebsack. Thank you, Senator Harkin. I do
want to thank the Eastern Iowa Community College, too, for
providing the venue for this. I had not been here to the Blong
Center before today, and it's great to be here. I look forward
to coming back many more times in the future, hopefully. And I
do appreciate, I guess, the leeway that is granted to the folks
who are testifying today, because in the House we have lights
in front of us that would start going off. There'd be a yellow
light with a minute to go, and five you'd have to stop. I'm not
going to go much more than that, but I do appreciate it.
I just want to make my statement, my opening statement, and
then I'll be happy also to listen to the other folks after I'm
finished. I really look forward to hearing from other folks
today, and I do want to provide a few thoughts of my own about
the state of the middle class and how we can get back to an
economy really that works for everyone, because we're not there
at this point, either here or across the country.
As someone who has lived, worked, and raised a family in
Iowa for nearly all my life, I am proud to call this State
home. I grew up in Sioux City and not very many means. I'd say
it was really a state of poverty, and I was raised by a single
parent myself, and we often had to make difficult choices
around the kitchen table that many families are facing today,
far too many families. If one family has to do it, that's too
many families as far as I'm concerned.
However, with hard work and help from teachers and
educators and social safety net programs that seem to be frayed
as we speak, or under heavy pressure, I was able to achieve.
I've dedicated my adult life to helping Iowans make sure that
they find the opportunity through hard work and community
support, the opportunity that I found, the opportunity that
Senator Harkin has worked his whole time since he's been in
Congress making sure that people have.
As he likes to say, ``It's not about a hand out, it's about
a hand up, and it's about ladders of opportunity.'' I've heard
you talk about that a lot, and I appreciate that so much.
As you mentioned, I am a member of the Education and
Workforce Committee, and that's allowed me to continue to work
and fight for hard-working Iowans; and Senator Harkin, I know,
has been able to do the same, as I said, during his time in the
Congress. And the State, I think we need to remember, truly has
a leader in Senator Harkin. I don't think we give him enough
credit sometimes for all the great work that he's done on
behalf of working families in Iowa, and around the country for
that matter.
And we have proof of this dedication right here because
he's holding this hearing, and really I should say that he's
one of the leaders in terms of finding relationships that are
productive also between labor, business and manufacturing here
in Iowa and across the country.
In this area itself, the Quad Cities, as we know, is home
to many of the economic drivers that we're going to hear from
and talk about today as well, and the entire region has a
strong manufacturing and industrial base, something I'm
learning about now that this area is part of my congressional
district. I'm learning all the time.
The good-paying jobs at the Rock Island Arsenal I think are
emblematic of the manufacturing jobs that have long helped to
make our country a leader in innovation and manufacturing.
That's why I worked with the chairman of this committee and our
colleagues from the Quad Cities congressional district to allow
the Arsenal to enter into public-private partnerships with area
employers.
It's interesting. At no cost to the taxpayers, the Quad
Cities economy will benefit from this legislation that I helped
pass. Area businesses will advance their products, and good
middle-class jobs will be supported by making sure that the
Arsenal can engage in unlimited public-private partnerships.
But, as we know, Iowa is still trying to recover from the
worst economic recession since the Great Depression. We know
that the unemployment rate, while it's improved some, Iowa
still sits at 5.6 percent, and I would argue it's more
unacceptable than ever. According to a study released last week
by the U.S. Conference of Mayors--and I know that Mayor Gluba
was part of that conference. He was in DC, as a matter of fact,
at their meetings. By 2013, the Quad Cities will have regained
only about half the jobs it lost from its pre-recession peak.
The mayors who see these problems firsthand are also
disappointed in Congress--lack of action on job creation and
economic development, and I heard loud and clear from the
mayors when they were in Washington, DC about that lack of
action.
Making the situation worse, the wealth and income gap in
America keeps growing. We need to focus first and foremost on
job creation. That is the bottom line. The middle class has
been eroded for years, and I hear from people when I'm home
working every weekend that the opportunities and the quality of
life that we enjoyed are slipping away for far too many
families. I share Iowans' very real concerns, not just about
what the future holds for our children and our grandchildren,
but about what the day-to-day holds today for middle-class
families that just can't catch a break in this economy.
We need to start building things in America again. I think
that's really critical, as was mentioned and as the President
mentioned when he was in Iowa just recently, and we have to
support our country's students, our workers and our businesses.
We need to make investments in key areas of our economy to
lay the groundwork for growth by ensuring that we have the best
education, research and innovation, and infrastructure and
manufacturing systems in the world, because we have competitors
from all over the world, as we know all too well.
Over the past few years I have helped develop and push
forward a ``Make it in America'' agenda. It would require the
creation of a national manufacturing strategy that would
require that we address China's currency manipulation and that
we improve our infrastructure, and that we also reauthorize the
Workforce Investment Act, something I know that Senator Harkin
is working hard on as chair of the HELP Committee. I'm proud
that the first bill that was passed as that agenda in the House
of Representatives over a year ago now, by the way, was my
SECTORS Act, and that passed with unanimous bipartisan support,
something that is awfully rare in the Congress today, as you
know, unless we're voting on renaming a post office or
something like that, right?
I've reintroduced my bipartisan SECTORS Act, which will
revamp our workforce development system by bringing together
businesses, unions, educators like this community college, and
the public workforce development system to improve job training
and help workers get jobs in the industries hiring or growing
in their areas, and help grow and create new industries as
well. So it's not just for existing industries but it's for
communities that identify new industries that they want to
create.
The SECTORS Act will essentially coordinate the training
needs of multiple businesses and help community colleges and
other colleges, training institutions, apprenticeship programs,
and others align their programs to industry and employee need.
It will also help industries re-train and recruit new workers.
It will enable workers to improve their skills and advance to
higher-wage jobs, and improve quality through better wages and
benefits, and strengthen the connections among businesses,
ultimately restore the middle class and expand the middle
class, what Senator Harkin started out with. That's what this
is about, folks.
The SECTORS Act is really supported by a wide range of
groups. I've got a handout if you want to look and see the
groups that support it, both in business and labor alike. The
Administration supports this approach. The President featured
similar training programs in his State of the Union address.
And again, I should say I'm not creating something new. In many
ways, I'm building on what I have learned, places like Eastern
Iowa Community College and Kirkwood Community College and
others around the country do.
I think it's fair to say without taking too much away from
Congress, although I think we can take a lot away from Congress
at the moment, I think it's fair to say that when we do things
in Congress, often we do things that are already happening
around the country, and we want the rest of the country to
benefit from what's already happening in those places, and
that's a big part of what SECTORS is.
The Department of Labor also recently released criteria for
the Workforce Innovation Fund grant program, which I encourage
the workforce folks in Iowa to apply for, and sector-based
strategies will be a strong focus of that fund. And the SECTORS
Act, as I already mentioned, fits in perfectly with the types
of collaborations and innovative programs taking place here in
the Quad Cities and across Iowa. Places like Eastern Iowa and
Kirkwood Community Colleges and others, as I mentioned, they've
already been on the front lines in many ways of the
intersection of work and learning, and I have my own saying. I
think it's my own saying, that while other colleges do a great
job, private colleges and universities, to me community
colleges are the principal intersection between workforce
development and education, and I don't think I'm over-
estimating what community colleges do when I say that.
I know that workforce and economic development are a major
focus of this committee, of the Senator's committee, and I
applaud you, of course, for bringing the State of the middle
class and our economy into focus, and I also want to thank you
for your work moving forward a bipartisan reauthorization of
the Workforce Investment Act.
There is also a movement in the House on reauthorizing
what's known as WIA, and I urge the Republican majority in the
House of Representatives to ensure that the process is
bipartisan. I've attempted to do that as best I can by having a
private meeting with the subcommittee chair who is in charge of
moving that forward, and to ensure that all good ideas are
considered.
It's clear that job 1 needs to be creating an environment
for new and existing industries to flourish in Iowa and across
America, and for workers to get the training they need to
compete in the global economy. I think, as we all know,
unfortunately, there are too many politicians in Washington, DC
who are focused on political food fights, on partisan games,
and they're not moving the ball forward.
I think we can do it. I'm not a Pollyanna about this. I've
been in Congress since 2007. I know what we're up against to
try to move the country forward, to try to cross the aisle
politically. I know that Senator Harkin has been working with
his Ranking Member on that committee to do just that, to move
us forward, to reauthorize the Workforce Investment Act, to get
other good pieces of legislation through to create jobs, to
move the country forward. But I, at every opportunity I have, I
put in a plea for bipartisan cooperation, and I will tell you,
in large measure I do that not only because it's the right
thing to do, but it's because its what I'm hearing people in my
district tell me every single weekend on extended district work
periods when I'm back. They want us to essentially put down our
political arms and work together to move the country forward to
get the middle class back, to expand the middle class and
create jobs and get this economy back on its feet.
Thank you, Senator. I appreciate it.
[The prepared statement of Mr. Loebsack follows:]
Prepared Statement of U.S. Representative Dave Loebsack
Good afternoon, I'm happy to be here today to provide my
thoughts on the state of the middle class and how we can get
back to an economy that works for everyone.
I am Representative Dave Loebsack and I represent the
eastern and southeastern portion of our State. I have lived,
worked, and raised a family in Iowa for nearly all my life and
am proud to call this State home.
I grew up in poverty in Sioux City and was raised by a
single parent. We often had to make the same difficult choices
around the kitchen table that many families are faced with
today. I am living proof of how hard work and community support
can make a difference in people's lives and how the community
in Iowa is strong.
I faced many challenges growing up but with hard work and
help from teachers, friends and education and social safety net
programs I was able to achieve and as a result, I've dedicated
my adult life to helping other Iowans find opportunity through
hard work and community support. I'm proud to be a member of
the Education and the Workforce Committee as it has allowed me
to fight for the rights, wages, and benefits of hard-working
Iowans.
I know Senator Harkin has been able to do the same during
his time serving Iowa in the Senate and the State truly has a
leader in him. We have proof of this dedication right here
today with the Chairman holding this hearing in one of the hubs
of labor, business, and manufacturing in Iowa.
The Quad Cities, comprised of Davenport and Bettendorf in
Iowa, and Moline and Rock Island in Illinois, is home to many
economic drivers like the Rock Island Arsenal, Alcoa, and John
Deere, for example. It is also surrounded by two other cities
that contribute to the regional economy, the cities of Clinton
to the north and Muscatine to the south--both of which have
strong manufacturing and industrial bases.
The Rock Island Arsenal is the largest employer in the Quad
Cities. It is not only a National Historic Landmark that has
contributed to our national security and helped to equip our
troops for over a century, it is the Army's largest arsenal and
the Army's only remaining foundry. It is also the only multi-
purpose, vertically integrated metal manufacturer in the
Department of Defense. It's highly skilled workforce at the
Joint Manufacturing Technology Center have played a central
role in equipping our troops fighting in Iraq and Afghanistan.
The good-paying jobs at the Arsenal are emblematic of the
types of manufacturing jobs that have long helped to make our
country a leader in innovation and manufacturing. Maintaining
the Arsenal's workforce and the type of manufacturing jobs they
hold is central not just to the Quad Cities, but to our
national security. That is why I worked on a bipartisan,
bicameral basis with the Chairman of this committee and the
rest of the Iowa and Illinois congressional Delegations
representing the Quad Cities to allow the Arsenal to enter into
public-private partnerships with area employers.
At no cost to the taxpayer, the Quad Cities will benefit
from the economic development for the region; area businesses
will benefit from exciting opportunities to advance their
products through collaboration with the Arsenal and access to
its state-of-the-art equipment and workforce; and good, middle-
class jobs will be supported. The Arsenal will benefit by
bringing in revenue that can be used to reduce the price of its
work for the taxpayer, making it more competitive for Army
work. It will also benefit from advancing critical skill sets
that only Rock Island Arsenal has, which will protect its
future and the future economy of the Quad Cities.
Another one of the unique characteristics of the Quad
Cities comes from the regional collaboration that occurs and
the community is certainly proud of. I'm also proud that there
is a strong labor presence here, and I think it's necessary to
highlight the importance organized labor has played in building
a strong community of highly skilled, highly dedicated workers.
That said, the State of Iowa is still trying to recover
from the worst economic recession since the Great Depression.
Iowa's unemployment rate sits at 5.6 percent and while that is
lower than before, it is more unacceptable than ever. Iowa's
unemployment rate does not tell the whole picture of our
communities. One county I represent has a rate of 9.1 percent,
the second highest in the State; many others are around 7-8
percent.
Even if every available job in the country were filled
right now, there would still be around 10 million unemployed.
Addressing these issues and getting back to an economy that
works for all Iowans must be one of our highest priorities.
According to a study released last week by the U.S.
Conference of Mayors, by the end of the year the Quad Cities
will have regained only about half the jobs it lost from its
pre-recession peak. The mayors, who see these problems
firsthand, are also disappointed in Congress' lack of action on
job creation and economic development initiatives for hard hit
communities and folks out of work.
Making the situation worse, the wealth and income gap in
America keeps growing. According to the non-partisan
Congressional Budget Office, since 1979, the wealthiest 1
percent of Americans have more than tripled their income while
the middle and working class have seen their incomes stagnate.
Wage growth has been stagnant while productivity and executive
pay have increased. It will be hard to get back to an economy
that is growing, which requires that businesses have customers
that can buy their products, when those customers can barely
afford to keep up.
We need to focus on job creation. The middle class has been
eroded for years and I know from talking to people when I am
home working every weekend, there is a fear that the
opportunities and quality of life we used to enjoy are slipping
away for too many families. I share Iowans' very real concerns
not just about what the future holds for our children and
grandchildren, but about what the day to day holds for middle-
class families that just can't catch a break in this economy.
They feel those who have done the right thing and worked
hard are suffering because of the actions of those who did the
wrong thing but continue to make financial gains as a result of
a political and economic system badly in need of strong reform
and oversight. Unfortunately, at the same time, our education
and workforce development systems have not had the support
needed to keep up with the changing nature of this new work and
economic environment making this overall an extremely difficult
problem to tackle, but one that we need to start working on
immediately.
In order to get our country back on track, we need to start
building things in America again and support our country's
students, workers, and businesses. We need to make investments
in key areas of our economy in order to lay the groundwork for
growth like ensuring we have the best education system, the
best research and innovation system, and the best
infrastructure, transportation, and manufacturing systems in
the world.
Over the past few years, I have helped push forward and
develop a ``Make it in America Agenda'' with my colleagues that
includes key pieces of legislation to move our economy forward
for every Iowan. It includes bills that would require the
creation of a national manufacturing strategy, address China's
use of currency manipulation, improve our infrastructure and
reauthorize the Workforce Investment Act--the Act that guides
the workforce and economic development system in the United
States.
I am proud the first bill passed as part of that ``Make it
in America Agenda'' was my SECTORS Act. The bill passed with
unanimous bipartisan support last Congress. I have reintroduced
the bipartisan SECTORS Act which will revamp our workforce
development system by bringing together businesses, unions,
educators, and the public workforce development system to
improve job training and help workers get jobs in the
industries hiring or growing in their areas and help grow and
even create new industries.&
These types of sector-based approaches have proven highly
effective in numerous States where they have been tried.
According to a multi-year study conducted by Public/Private
Ventures, participants in sector-based training programs earned
an average of 18.3 percent more than a control group over the
24-month period of the study and were more likely to work in
jobs with benefits and find consistent work.
Specifically, the SECTORS Act will spread sector
partnerships nationwide in order to coordinate the training
needs of multiple businesses, especially skill gaps critical to
competitiveness; encourage creation and obtaining of portable,
industry-recognized credentials for recruitment, screening, or
hiring purposes; and help community colleges and other
colleges, training institutions, apprenticeship, and all other
training programs align their programs to industry and employee
needs.
Additionally, sector partnerships will help businesses and
industries recruit new workers and retrain dislocated and
current workers; adopt new and more advanced technologies;
develop and strengthen career ladders within and across
companies to enable dislocated, existing and entry-level
workers to improve skills and advance to higher-wage jobs;
improve job quality through improving wages, benefits, and
working conditions; and strengthen connections among businesses
in the targeted industries.
The SECTORS Act is supported by groups such as the National
Skills Coalition, the Aspen Institute, the Alliance for
American Manufacturing, and the National Council for Advanced
Manufacturing. The National Association of Manufacturers also
said,
``The SECTORS Act represents a good, bipartisan
effort to tackle one of the major issues affecting
manufacturers, the shortage of skilled workers.''
We've also been seeing support from the President and his
Administration on moving more toward sector-based approaches to
workforce development. The Department of Labor recently
released their criteria for the $98 million Workforce
Innovation Fund grant program--which I would encourage the
workforce folks in Iowa and the Quad Cities to apply for--and
I'm happy to say that sector-based strategies will be a strong
focus.
The Secretary of Labor has also referenced the benefits of
sector-based approaches in grants, in the department's
priorities for a Workforce Investment Act Reauthorization, and
during testimony before the Education and Labor Committee on
the department's budget proposal.
I also know that the Chairman has heard testimony before
his committee on the benefits of sector-based approaches to
workforce and economic development as well. Sector strategies
are also a priority for the AFL-CIO in Workforce Investment Act
Reauthorization.
In addition, last year in the House, we had a hearing
during which all of the workforce development professional
witnesses, Republican and Democrat witnesses alike expressed
their support for sector-based approaches to workforce and
economic development.
The President is also pushing new ideas to ensure students
and workers get the education and training they need to take on
the jobs of today and tomorrow. During his State of the Union
on Tuesday, this was one of the major themes and he featured
sector-based training programs in his American Jobs Act
proposal last year.
I know workforce and economic development have also been a
major focus of this committee over the past year, Mr. Chairman,
and I applaud you for bringing the state of the middle class
and our economy into focus. I also want to thank you for your
work in moving forward a reauthorization of the Workforce
Investment Act in the Senate in a bipartisan fashion.
There is also movement in the House on reauthorizing WIA
and I urge the Republican Majority to ensure the process is a
bipartisan one to ensure all good ideas can be considered. I am
happy to report the SECTORS Act will be included in the
reauthorization bill Democrats are working on and hope that we
will all be able to fully move forward this important
reauthorization for the betterment of our workforce development
system, the education system, and the millions of unemployed
American workers.
The SECTORS Act and this type of workforce development
initiative fit perfectly with the types of collaborations and
innovative programs taking place here in the Quad Cities and
also across Iowa. Places like the Eastern Iowa Community
College, Kirkwood Community College, and other community
colleges have been on the front lines of the intersection of
work and learning and have led the way in connecting the often
disparate dots between the two.
We need to look at how we can make the workforce system,
employers, employees, teachers and schools talk more,
collaborate more, and coalesce around making the system work
better and be more in tune with the needs of the community at
large. We must think about how to make it attractive for
someone who has been working their whole life and probably has
a family to go ``back to school'' or get the extra training
they need to find jobs in growing industries. We really must
demonstrate there is a future in these fields, there is a
connection to these fields with the education they can receive,
and these fields will grow and will be able to provide a good
enough living to support a family and be part of the middle
class.
It's pretty clear that job one needs to be creating an
environment for new and existing industries to flourish in the
United States and here in the Quad Cities and for workers to
get the training they need to compete. Of course this is just
one part of the deep-rooted problems we need to start focusing
on in order to get our economy working again and to grow the
middle class.
Unfortunately too many in Washington are focused on
political games and brinksmanship and not the best interest of
the country, only their political party. We have a political,
economic, and long-term deficit situation badly in need of
strong reform and oversight. Iowans I talk to want Congress to
get to work, to act on legislation that helps the country and
work in a bipartisan nature to get things done.
I thank you for the opportunity to provide my thoughts on
these vitally important issues and thank you for helping to
bring these issues more to light. I look forward to working
with you to make sure that we have an economy that works for
every Iowan so that we can start to rebuild the middle class in
this country.
The Chairman. Congressman Loebsack, thank you very much for
a very eloquent statement. I think the SECTORS approach that
you have championed for a long time is the right approach. The
fact that you've gotten strong bipartisan support for it
indicates that it's broadly supported, and hopefully we can
incorporate the strategy in the Workforce Investment Act
reauthorization.
I'd like to ask Congressman Loebsack to join us up here. I
invite you to come up and join us for the rest of the panels,
and we'll get our second panel up here.
I'd like to call Mr. Bob Allbee, Mr. Skip McGill, and Mr.
Robert Fox to the panel.
I'll start with Mr. Allbee. Robert Allbee is the interim
president of Muscatine Community College. Prior to his tenure
at Muscatine he served as the director of operations for the
John T. Blong Technology Center. He's worked for the community
college for more than 30 years as a faculty member and as a
liaison with business and industry, designing customized
training programs. He holds degrees or has taken course work
from the University of Iowa, UNI, and Iowa State University.
Skip McGill for the past 10 years has served as president
of United Steelworkers Local 105. Local 105 has over 1,000
members and represents the bargaining unit employees at Alcoa
Aluminum facility in Bettendorf. Mr. McGill also serves on the
executive boards of the Iowa Federation of Labor AFL-CIO, and
the Quad Cities Federation of Labor AFL-CIO. Except for the
2\1/2\ years he served in the Air Force, he has lived and
worked in the Quad Cities his entire life.
Mr. Fox is a lifelong resident of Davenport. He currently
works as a systems administrator for Scott County and is a
graduate of St. Ambrose University and the University of Iowa.
We thank you all for being here. As I said to Congressman
Loebsack, your statements will be made a part of the record in
their entirety. I'll start with Mr. Allbee, then Mr. McGill and
Mr. Fox.
STATEMENT OF ROBERT ALLBEE, INTERIM PRESIDENT, MUSCATINE
COMMUNITY COLLEGE, MUSCATINE, IA
Mr. Allbee. Thank you, Senator Harkin, for the opportunity
to provide testimony today. I am obviously a big supporter of
public education, as you can tell from my background. I'd also
like to say that I'm a proud graduate of Eastern Iowa Community
College, so I have walked through every public campus and
university in this State at some point or another.
I'm going to provide a summary of my remarks that I
submitted to you, basically tell you who we are, what we do,
who we do it for, and how we do it. You've had the chance to
tour this facility today, so maybe this will be just a little
additional information or reinforcement for you.
The community colleges were established in 1965 by the Iowa
legislature. They've been around for a long time. Our district
has campuses in Clinton, here in Davenport, at Scott, and in
Muscatine. In addition, there are other facilities such as this
technical training facility. Our fall 2011 enrollment had more
than 9,000 students, of which approximately 3,600 are in career
technical education programs.
More than 30,000 folks annually take part in our continuing
education programs, which include short-term training programs
custom designed for business and industry. We're credited by
the Higher Learning Commission, which means our programs meet
or exceed the standards of excellence set for all public and
private colleges in more than 19 States in this region.
Career technical education programs help folks move from
unemployment or under-employment to highly skilled positions
which would help move them to the middle class. As an example,
we have a gentleman in his late 50s, returned to us in late
2010. He had been affected by a plant closure. He came back,
took our CNC machining program, in less than a year earned his
certificate and has since been hired at an area manufacturer
with a starting wage of close to $20. That is probably an
exceptional circumstance. He was an excellent student. But it
does show that a person can go from unemployment to a high
standard of living in the sense of more permanence, more
permanent employment, jobs with benefits, and also the ability
then, as he's working for that company, to receive additional
training paid for by his employer.
Individuals today require some form of credentialing beyond
their high school diploma or GED. Whether that form of
credentialing comes in terms of a short-term training
certificate, as I've just described to you, a diploma, or even
a 2-year degree, some sort of credentialing is required for
individuals to have jobs in skilled trades areas. Those are
extremely good jobs. Those folks are very intelligent folks,
highly educated in technical fields. Those sorts of skills, as
we've heard this week through President Obama's speech and in
his visit to Iowa, especially in terms of welding and
machinists, those positions are in demand and we're having a
hard time finding enough folks to fill them.
In this facility, we help bridge that gap and meet that
need. This facility and all of these career tech programs
within the Eastern Iowa Community College district have a very
close relationship with business and industry. Each program has
an advisory committee made up of individuals who work in that
field, whether it's machining or welding or whatever it happens
to be. They provide us with accurate information on curriculum
development, equipment purchases, and also future trends within
that industry so we can anticipate and be more proactive rather
than reactive to those needs.
This facility was created as a college for working
learners. There are six programs in this facility. You've been
made aware of them. They are welding, machining, logistics,
electromechanical, mechanical design, and renewable energy.
Those programs all have certificate or degree options to them.
We also in this facility provide support and training for
apprenticeship programs. The one I would single out that
happens in this building is for the area machinists and tool
and dye makers. As of the fall, there were more than 40
apprentices working in that program, which was an increase from
28 employees or folks enrolled in that program in the 2010-11
academic year. That program is continuing to grow. Again, that
program also has an advisory committee made up of folks who
work in that trade.
In this facility they use a modular approach. It is
competency based. And by modular, you might think of it as
steps on a ladder, moving from the more simple tasks within
that area to more complex tasks, all competency based. Classes
are 8 weeks in length and have multiple starting times
throughout the year. If you sort of discount a little bit of
the summer, 8 weeks is about the longest a person would have to
wait to start a class. Again, we do have a summer break built
into that.
Methodology, learning methodologies used within this
building are Web-based, server-based. There is a learning lab,
which I'm sure you toured when you were here in the facility,
staffed by a mentor, and also a great deal of hands-on learning
happens here. Faculty guide the students through the learning
process. The learning lab mentor assists the students with what
I would call the paperwork or the classroom portion of it, and
all hands-on work is done under the supervision of full-time
instructors, most of whom have a background within the
discipline that they teach. They have worked in the field in
the past.
We also do contract training for individuals. I know
Representative Loebsack mentioned this in his remarks. We do
quite a bit of work with incumbent workers, training them on
new technologies or upgrading their current skills.
And with that, I will stop and thank you for the
opportunity to testify.
[The prepared statement of Mr. Allbee follows:]
Prepared Statement of Robert Allbee
I would like to thank Senator Harkin for the opportunity to testify
today at this hearing on the middle class in the Quad Cities. I am
Robert Allbee from the Eastern Iowa Community Colleges. My current role
is as Interim President of our campus in Muscatine. Prior to this
assignment my role was as a Business and Industry liaison for the
College working directly with area industry to create training programs
for their current employees. That role also included the creation of
certificate, diploma and degree programs which would provide trained
employees for these industries.
The Eastern Iowa Community Colleges (EICC) was established in 1965
by the Iowa Legislature as 1 of 15 community college merged areas. This
combined Clinton Junior College, Muscatine Junior College and the
vocational-technical programs of the Davenport schools. In 1979 Palmer
Junior College was acquired to make Scott Community College a
comprehensive institution.
The Eastern Iowa Community College district consists of Clinton,
Jackson, Muscatine and Scott counties and parts of Cedar and Louisa
Counties. The district had a fall 2011 enrollment of more than 9,000
students of which approximately 3,600 enrolled in one of more than 40
career technology programs.
The Colleges are accredited by the Higher Learning Commission. This
accreditation means that our programs meet or exceed the standards for
academic excellence set for every private and public college in a 19-
State region.
EICC also enrolls more than 30,000 students annually in continuing
education, business and industry and adult education classes. These
classes are designed to help individuals improve a job skill, upgrade
general education skills or learn more about a topic of interest.
EICC Career programs support students as they move from
unemployment or underemployment to professional technical careers in
healthcare, manufacturing and other technical careers. The increase in
knowledge and job skills earned by EICC students also brings enhanced
job security, benefits as they enter their new career and skills that
are desired by area industry.
An example of a student success story is a male in his late fifties
who lost his job due to a plant closing. He returned to EICC in early
2010 and selected Computer Numerical Control (CNC) as his program of
study. In less than a year he completed his programming certificate and
was hired at an area manufacturer with an approximate starting wage of
$20/hour.
Individuals seeking employment today need some form of
credentialing beyond high school to compete for highly skilled
technical jobs. This credentialing may be in the form of a short-term
training program leading directly to employment, a program with
specific certification such as welding or an Associate of Applied
Science degree.
The Eastern Iowa Community Colleges work in direct cooperation with
area industry building programs that teach students the job skills
needed to successfully obtain employment and succeed in their chosen
profession.
The Blong Technology Center provides support for Quad City area
apprenticeship programs. This includes industry-sponsored programs in
cooperation with the Department of Labor. The Machinist apprenticeship
is housed at the BTC under the guidance of an advisory committee and in
2011/2012 enrolls more than 40 individuals from small- to medium-sized
manufacturers. With the inclusion of the on-the-job-training program
completers receive the Department of Labor Journey Workers card which
provides credentialing of their knowledge and skills which may be taken
anywhere in the country. This ensures employment potential for those
individuals for many industries.
For certificate, diploma and degree programs in the Career/
Technical field (CTE) the colleges establish advisory committees
comprised of subject matter experts from area industry who assist the
colleges with curriculum development, recommendations for equipment
purchases and future trends in the industry. This allows the colleges
to build and maintain relevancy within each program so that graduates
can successfully establish their professional knowledge base in their
skilled trade.
For contract training programs designed for specific companies the
college uses account representatives who establish a relationship
across many departments for their clients. This may include but not be
limited to: Human Resources, Skilled Trades, Quality Control and
Logistics.
The Colleges have also worked with area industry customizing pre-
employment training programs, such as welding, providing a pool of
potential employees for area manufacturers.
The site of today's hearing the John T. Blong Technology Center
(BTC) was designed as a College for Working Learners. Students at the
BTC include individuals who are unemployed, underemployed or taking
coursework to upgrade their job skills or to remain current with
technology.
The BTC offers certificate, diploma and degree programs in:
Machining, Welding, Mechanical Design, Electromechanical Controls,
Renewable Energy and Logistics. The Center also offers contract
training for business and industry which is customized for their needs,
continuing education courses and apprenticeship programs.
The Center uses a unique format designed for adult learners. The
programs are self-paced using a competency based modular approach.
Students may register for individual modules or entire courses based
upon their needs. The courses are 8 weeks in length and begin at
multiple times per year.
Program delivery encompasses different methodologies to accommodate
individual learning styles. The traditional lecture format is used in
some instances, however most classroom material is delivered using both
web-based and server-based technology.
Web-based technology works well for adult learners who also work
and have other personal obligations. This allows the students to watch
the lectures via the web when their personal schedule permits.
To complete the hands on activities that are such an important
aspect of technical programming the BTC has an open lab concept
featuring both day and evening hours. Within the modular format the
student works directly with their instructor to complete all hands on
projects under close supervision. Most of the instructional staff at
the BTC has real world experience in the subject matter they teach.
This brings a valuable presence and level of knowledge that enhances
the learning experience.
If a student needs extra help a ``learning Lab'' is available to
them under the supervision of a mentor. The mentor assists the students
with their server-based training and in many instances also provides
tutoring/instructional support for those individuals needing extra
help. Without this guidance and support many students who have been
away from the classroom for many years would find it difficult to
complete their course work.
The programs at the BTC are successful because of their multi-
faceted approach including: close and direct contact with area industry
designing programs that teach relevant skills necessary to obtain
employment in a skilled trade, a flexible learner-centered approach,
support services in a learning lab environment and instructors with
practical experience in their field.
This approach works for the many students served by the BTC:
apprentices, laid off workers seeking to avoid poverty when faced with
a job loss, those seeking a career, those looking to change careers and
incumbent workers seeking to keep pace with ever-changing technology.
The BTC provides the Quad City residents with the opportunity to learn
the skills needed for the manufacturing workforce of today with an eye
for their future stability.
I would like to thank Senator Harkin for the opportunity to testify
about the programs and services of the Eastern Iowa Community Colleges
that assist Quad City area individuals and business and industry.
The Chairman. Thank you very much, Mr. Allbee.
And now we'll turn to Mr. McGill, Skip McGill.
STATEMENT OF CHARLES ``SKIP'' McGILL, PRESIDENT, UNITED
STEELWORKERS LOCAL 105, BETTENDORF, IA
Mr. McGill. Senator Harkin, thank you for the opportunity
to testify today and for all the work you do for all the people
across this country. You've served Iowa well for many years.
My name is Skip McGill, and I'm president of United
Steelworkers Local 105, and I have been for over 10 years.
During that time, our union has been involved in many battles
for social and economic justice on behalf of all workers, not
just our workers.
The Quad Cities used to have a very big manufacturing base,
much more than it has now, supplying good middle-class family
jobs in this area. It began hurting around the time in the
1980s the Rock Island Railroad closed. After that, a lot of
things followed in Quad Cities. This was followed by closure of
Caterpillar plant here in Davenport, the world's biggest
manufacturer of construction equipment, in 1988, and some of it
was due to competition from a Japanese company, Komatsu.
Thousands of jobs were lost and communities and the local
economy were severely affected.
Between 1987 and 1988, JI Case company closed plants in
Rock Island, IL and Bettendorf, IA. I had friends and family
members who worked in Bettendorf. It was hard to see a relative
who worked so long to build a seniority base and have to make a
decision to move to Racine, WI so he could move where the jobs
are. He's probably more fortunate than a lot of people because
a lot of people don't get to follow their jobs to Mexico,
China, or Bangladesh.
The loss of good manufacturing jobs has an impact not only
on workers but on the local businesses those workers support.
When Case New Holland closed, the city of East Moline suffered
significant losses in annual revenues. They lost taxes and fees
for things like water, sewer, drainage fees. The residents were
faced with new costs also when they came up with an additional
$6 monthly garbage fee to help replace some of the revenue
lost.
Loss of high-wage jobs in sectors such as manufacturing in
Iowa have been replaced with increasingly lower paying jobs
which fail to pull working families into the middle class and
provide them with benefits like health insurance. Today, jobs
in Iowa are 8.4 percent less likely to include health insurance
than they were a decade ago. And since 2000, Iowa has lost
nearly 50,000 jobs that provided health coverage, translating
into a loss of coverage for over 96,000 Iowa workers and family
members.
Unions build and strengthen the middle class by negotiating
fair wages and benefits for workers. My written testimony
includes a speech I hold near and dear to my heart, and it was
given by John F. Kennedy in 1960. He began by saying,
``Those who would destroy or further limit the rights
of organized labor, those who would cripple collective
bargaining or prevent organization of the unorganized,
do a disservice to the cause of democracy.''
In the last several decades, the wealthiest of Americans
have fared well, while middle-class incomes have declined. I
believe this directly relates to the decline in union density.
And as we all know, middle-class incomes are tethered to union
density, as the data shows. Anyone who cares about the middle
class needs to also care about unions and the rights of workers
that have come under attack in this country. This misconception
of unions as a bunch of greedy workers that just want more for
themselves is simply not true. We support our communities and
want them to thrive, and provide time, money and resources to
those in need.
It's no coincidence that countries with a strong middle
class have a strong union movement. In America today, States
with higher concentration of union membership have a much
stronger middle class. Unfortunately, every 23 minutes, a
worker is fired or punished for supporting a union. The
coordinated attacks on unions through right-to-work laws are
designed to further weaken unions. Right-to-work allows
nonunion-dues-paying employees of a company to reap the
benefits of union representation. They're free riders.
To rebuild the middle class, we must support the rights to
form and join unions, roll back some of the current laws that
weaken unions, put money in the pockets of the middle class
through tax cuts, tax credits, pay for it by removing the tax
breaks millionaires and investors have that allow them to pay
less in taxes than struggling families, invest in our crumbling
infrastructure. This creates jobs in many sectors and will
sustain our economic growth and national security for years to
come. Create more jobs with a real ``Buy American'' policy.
There is overwhelming support for tax dollars to be used to buy
American-made materials, among 91 percent Democrats and 87
percent of Tea Party supporters. Enforce the trade laws
currently on the books and enact new ones to level the playing
field for American workers and their employers that are
committed to invest in America; close loopholes being used now
to circumvent some of the trade laws.
A by-product of a stronger labor movement is a stronger
middle class. A byproduct of a stronger middle class is a
stronger, more stable economy.
Thank you, Senator.
[The prepared statement of Mr. McGill follows:]
Prepared Statement of Charles ``Skip'' McGill
Chairman Harkin, I thank you for the opportunity to testify today
and for all the work you do for working people across this country. You
have served Iowa well for many years and it is an honor to be able to
testify before you today. I was proudly sitting in the gallery on May
4, 2004 when the Senate voted on your amendment to the Department of
Labor proposed changes to the overtime pay rules; another middle and
lower income bracket battle you championed. As long as there are more
out to save the middle class than there are to destroy it, we will find
a way.
I am president of the United Steelworkers Local 105 and have been
for over 10 years. During that time we, as a Union, have been involved
in many battles for social and economic justice. Many of the battles do
not affect the workers I represent but are waged because we are all in
this together and we know what's right and wrong. I'm sure you are
aware that Labor has been at the forefront of minimum wage increase
efforts and none of the workers we represent make minimum wage.
the middle class in the quad cities
The Quad Cities used to have a very big manufacturing base with a
lot of big name companies with factories located here. We had a lot of
good middle class work here in the Quad Cities including the Rock
Island Railroad. This area began hurting when the railroad closed up
shop in 1980.
We had Caterpillar, the world's biggest manufacturer of
construction equipment. Back in the mid-1980s Caterpillar was starting
to see more competition in the construction equipment market from the
Japanese company Komatsu. Caterpillar closed in 1988 costing thousands
to lose their jobs and hurting the communities and local economy. I had
friends that worked at that plant.
The Quad Cities had already been hit like this in 1985 when
International Harvester sold off their farm equipment business and
closed the plant in Rock Island, IL. This plant went through its share
of occupants. That plant was Farmall, International Harvester, and Case
New Holland and then they closed. This was a workforce that could
produce up to 350 tractors a day. That closing sent a ripple effect
throughout the Quad City economy.
Also in the 1987-88 timeframe JI Case company closed plants in Rock
Island, IL and Bettendorf, IA. I had friends and family members that
worked at the Bettendorf plant. It was hard to see a relative who had
worked so long and hard at a plant and had built up seniority and what
they thought was job security to get the rug pulled out from under
them. He was faced with some tough choices and made the decision to
continue his seniority, so he moved his family to Racine, WI where his
job went. He is more fortunate than many of the people displaced by
plant closings because at least he had the opportunity to go where the
jobs went; most of the time the jobs can't be followed to Mexico, China
or Bangladesh.
The loss of good manufacturing jobs has an impact not only on
workers but also the local businesses those workers support. When Case
New Holland closed, the city of East Moline suffered significant losses
in annual revenues. They lost taxes, and fees for things like water,
sewer, drainage fees, utility taxes and decreased property taxes. The
city had to cut the budget due to the loss of revenue and even came up
with a new $6 monthly garbage fee that citizens did not have before.
Iowa's job market in recent years has been defined by the loss of
higher wage, middle-class jobs (particularly in manufacturing), and
their replacement with increasingly lower paying jobs. The most recent
recession exacerbated this trend. The Iowa Policy Project reported in
2011 that over the last 4 years, ``the middle third of the occupations
spectrum accounted for nearly two-thirds of all recessionary job
losses. During the recovery, by contrast, low-wage occupations have
accounted for almost all job growth--led by retail salespeople, clerks
and food preparation workers. . . . The average annual pay for jobs
lost during the recession was $38,850. The average annual pay for jobs
added during the recovery is almost $6,000 lower--only $32,990.''
(State of Working Iowa, 7-8).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Moreover, job losses in Iowa manufacturing over the past decade
have been particularly concentrated among sectors paying wages high
enough to pull working families into the middle class. (State of
Working Iowa, 8).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The disappearance of good jobs in Iowa means not only lower wages,
but fewer workers and families with health insurance. Today, jobs in
Iowa are 8.4 percent less likely to include health insurance than they
were a decade ago. Since 2000, Iowa has lost nearly 50,000 jobs that
provided health coverage, translating into loss of coverage for over
96,000 Iowa workers and family members. (State of Working Iowa, 10).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
how unions work to strengthen the middle class
Unions build and strengthen the middle class by negotiating fair
wages and benefits for workers.
I would like to share part of a speech given way back in 1960 that
I hold near and dear to my heart. It hangs on my office wall.
Those who would destroy or further limit the rights of
organized labor--those who would cripple collective bargaining
or prevent organization of the unorganized--do a disservice to
the cause of democracy.
Fifty years or so ago the American Labor Movement was little
more than a group of dreamers, and look at it now. From coast
to coast, in factories, stores, warehouse and business
establishments of all kinds, industrial democracy is at work.
Employees, represented by free and democratic trade unions of
their own choosing, participate actively in determining their
wages, hours and working conditions. Their living standards are
the highest in the world. Their job rights are protected by
collective bargaining agreements. They have fringe benefits
that were unheard of less than a generation ago.
Our labor unions are not narrow, self-seeking groups. They
have raised wages, shortened hours and provided supplemental
benefits. Through collective bargaining and grievance
procedures, they have brought justice and democracy to the shop
floor. But their work goes beyond their own jobs, and even
beyond our borders.
Our unions have fought for aid to education, for better
housing, for development of our national resources, and for
saving the family-sized farms. They have spoken, not for narrow
self-interest, but for the public interest and for the
people.--John F. Kennedy * August 30, 1960
I believe at the time of that speech, John F. Kennedy knew the
relevance of Unions; he knew the role of Unions in building a middle
class and sustaining it; and I believe he knew that Unions were about
to come under attack. Too many think they do not enjoy the benefits of
a Union but they do. They stand by and watch as Unions fight battles
not realizing they are fighting for them.
In the last several decades the wealthiest of Americans have fared
well while middle-class incomes have declined. I believe it is directly
related to the decline in Union density. Union membership rates have
dropped to a low level and as you can see by this chart, middle-class
incomes are tethered to Union density. With that said; anyone who cares
about the middle class better start caring about Unions and the rights
of workers that have gone under attack in this country.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
We remembered and honored Dr. Martin Luther King just last week. He
is another great leader that recognized the importance of Labor in
bringing all people up. He was clear about the history of and
continuing need for labor struggle--that workers' rights aren't won
without a fight--saying to the Illinois AFL-CIO convention in 1965:
The labor movement was the principal force that transformed
misery and despair into hope and progress. Out of its bold
struggles, economic and social reform gave birth to
unemployment insurance, old age pensions, government relief for
the destitute, and above all new wage levels that meant not
mere survival, but a tolerable life. The captains of industry
did not lead this transformation; they resisted it until they
were overcome. When in the thirties the wave of union
organization crested over our Nation, it carried to secure
shores not only itself but the whole society.
I don't understand the misconception that Unions are a bunch of
greedy workers that just want more for themselves. That is not true; we
support our communities and want them to thrive. Every year throughout
the year we provide time, money and resources to those in the community
in need. We donate to the American Cancer Society, United Charities,
Special Olympics of Iowa and Illinois, the American Red Cross, the
National Child Safety Council, VA Homeless Outreach Center, support our
troops through supply drives, give scholarships, etc.
Many of my Brothers and Sisters and I don't believe you can have a
strong middle class without a strong Union movement. It's not a
coincidence that countries with a strong middle class have a strong
Union movement. And in America today, States with a higher
concentration of Union membership have a much stronger middle class.
According to AFL-CIO data, every 23 minutes a worker is fired or
punished for supporting a Union. The sad thing about that is, I'm sure,
that in most of those cases the person firing or issuing discipline is
in the middle class. Labor is under attack by those who want to weaken
Unions even more and that is quite the opposite of what we need to do
if we hope to strengthen the middle class. Let's not fool ourselves and
think that everyone would like a stronger middle class. The middle
class will reach back and grab the hand of the person on the ladder
rung below them; but there are some at the top that will kick to knock
others down a few rungs.
What needs to be done is to support workers' rights to form and
join Unions (The Employee Free Choice Act). The coordinated attacks on
Unions through Right to Work Laws are designed to further weaken
Unions. Supporters of Right to Work here in Iowa have said if there
were any kind of repeal of the Right to Work Law, jobs would leave the
State. They know that's not true; where would they go, to one of our
bordering States that don't have right to work and have less
unemployment? I have not had one State legislator who supports Right to
Work propose a bill that I suggested. Right to Work allows non-dues
paying employees of a company reap the benefits of union
representation--they are free-riders. Simply put, the Bill I proposed
allows residents of Iowa to enjoy every benefit provided to the tax-
payers of Iowa, but allows them to only pay State taxes if they want
to. There would be public outcry against these free-riders. That's
Right to Work. I call it ``The Right to Reside Law''.
how good manufacturing jobs strengthen the middle class
and improve communities
Good manufacturing jobs, especially good Union manufacturing jobs
have a heavy impact on communities when there is a layoff or closing.
Iowa is heavily dependent on manufacturing jobs. Iowa has consistently
been in the top 10 States most dependent on the manufacturing sector
according to the U.S. Bureau of Economic Analysis.
I realized something had to be done when the financial industry was
spiraling out of control but not sure the right thing was done. We gave
them a bunch of money because of so many loan defaults. It probably
would have cost less to just pay the loans off and let people stay in
their homes. Yes, we need to do something about the deficit but we need
to stop the bleeding first.
What do I think we need to do to rebuild the middle class?
We must:
Support the Right to form and join a Union.
Roll back some current laws that weaken Unions.
Put money in the pockets of the middle class through tax
cuts and tax credits--pay for it by removing the tax breaks
millionaires and investors have that allow them to pay less in taxes
than struggling families.
Invest in our crumbling infrastructure--This creates jobs
in many sectors and will sustain our economic growth and national
security for years to come.
Create more jobs with a real ``Buy America Policy''--there
is overwhelming support for tax dollars to be used to buy American-made
materials among 91 percent of Democrats and 87 percent of Tea Party
Supporters.
Enforce the trade laws currently on the books and enact
new ones to level the playing field of American workers and their
employers that are committed to investing in America.
Close loopholes being used now to circumvent some of our
trade laws.
A byproduct of a stronger Labor Movement is a stronger middle
class. A byproduct of a stronger middle class is a stronger more stable
economy.
The Chairman. Well said. Thank you very much, Mr. McGill.
And now we turn to Robert Fox.
STATEMENT OF ROBERT FOX, DAVENPORT, IA
Mr. Fox. Good afternoon and thank you, Chairman Harkin, for
the opportunity to speak today.
As you said, my name is Robert Fox. I'm 31 years old, and I
was born and raised in Iowa. I have a son who will be 3 next
month. My parents are from Iowa, and they still reside here.
My parents were young when they had me, so they had initial
struggles to start, but they believed in the American Dream.
Both my parents attended public school and were high school
graduates. My father was a mechanic, and my mother worked in an
office's mail room. They both worked hard in their professions
and worked their way up the corporate ladder.
My father eventually moved up from a manual labor job and
into an office job, and my mother moved out of the mail room
and into a claims representative at an insurance company. They
both worked hard and bought their first home in the winter of
1993.
I had a good childhood, mostly because it's all I knew. I
never went without, but that doesn't mean that my parents
didn't so I could. I watched as my mother would always eat last
to ensure that I had plenty to eat, and my parents ensured that
I wore clothes that were appropriate to current styles. But to
do so, they were forced to wear clothes that were outdated
themselves.
I attended public schools, played sports, and graduated
just on the cusp of honors. I wanted to attend the University
of Michigan at Ann Arbor, but the cost of out-of-state tuition
prevented me from doing so. I decided on Iowa State University
where I could study computer engineering. It was a childhood
dream to be an architect, but I soon found out that I couldn't
draw a straight line, even with a ruler.
Iowa State allowed me to spread my wings a little bit.
However, after a short time I realized that my chosen major
wasn't the best fit for me. I elected to change my major midway
through my third year of school. I would probably advise
against that. I left Iowa State and attended the Des Moines
Area Community College to fill in some general requirements
that were needed for my new course work. The fiscally
responsible side of me decided it was better to attend
community college back home and not pay rent in Ames, so off I
went to move back in with my parents.
I attended Scott Community College from the school year of
2006-7, where I earned an Associate's in Arts and Science.
During that time I was approached about working for a small
business in the area. I was at a crossroads. Do I take the job,
which paid well and would be very good for my resume, or do I
return to my beloved Ames and finish my degree from Iowa State?
I chose the job in hopes that a strong resume would help me
long term. With this decision I was forced to find a school
locally that would allow me to continue to work and still
complete my degree. I chose St. Ambrose University, where I
earned a Bachelor's degree in Computer and Information Systems.
While attending St. Ambrose, I was lucky enough to be offered a
full-time job with a company I had been doing some consulting
work with. I took the job because my health insurance provided
by my mother was soon to be expiring, and they offered
benefits.
Speaking of work, I started working when I was 14 doing a
manual labor job for minimum wage, but it was fantastic. It
granted me freedom. I was able to buy my own car. I bought gas,
car insurance, all the necessities. Throughout high school I
worked a retail job on nights and weekends to keep up with my
car insurance and gas money. This was great. I could see that
the harder I worked, the better things could be for me.
During college, I continued to work that retail job on
breaks and was offered an opportunity to intern for a summer at
a local credit union. This is where my passion for my chosen
career had picked up. I really, really got into it. I worked a
job during the school year for Iowa State in the Agronomy
Department that continued to give me experience and passion for
my chosen career.
After I moved back to the area and during my completion of
my Bachelor's degree, I was offered a full-time job. I was
pleased to be an adult. I had a full, real job. I had a job
that was full-time with benefits, and it was in my field of
study. I worked at this local company for approximately 3 years
before moving on to my current position with local government.
I've been with local government for almost 6 years now, and I'm
very pleased to be employed full-time and still in my field of
study, which is kind of difficult for some other folks.
With local government I'm an IPERS employee, which is
fantastic. With this program, it allows me to easily put away
for my retirement. Without IPERS, I fear I wouldn't be able to
contribute to retirement at this time. Retirement is one of
those scary things that everyone is worried about, and with
other money being tight, it's a little bit of a relief that I'm
able to have something when I'm past my working prime.
During my time with local government I have tried to
continue my education with both technical and leadership
skills. In the summer of 2009 I completed an MBA from the
University of Iowa's Tippie MBA program. I did it with hopes of
becoming more marketable internally, but also externally in
case something would occur that I would no longer have full-
time employment. Unfortunately, tuition isn't really covered by
my organization, so the bulk of the costs were shouldered by
myself. This, in addition to some previous student loans for my
Bachelor's degree, have combined into a hefty student loan
burden.
While in grad school, which only took 2 years, the tuition
was raised every year and approved for a raise for the third
year. Thankfully, I graduated in the summer before this raise
took effect. With this continued cost of education, I fear that
the only way I'll be able to send my son to college and not
burden him with the same or worse amounts of student loans as
myself is if I die and my life insurance pays for it.
In conjunction with working hard, going to school, getting
a job, there is the ``buy a house and your life will be better
than your parents'' portion of the American Dream. I was
fortunate enough to purchase my home in March 2000. This was
actually the house I grew up in. I was always told that it was
just what you did when you became an adult as part of the path
to financial security. My purchase was made within my budget
and with a proper lender.
However, life changes, and now the payment can be difficult
at times. And here lies the rub. I have cut costs, pinched
pennies, followed a budget, and money is still tight. I
continue to make my house payment, but other bills suffer at
times. Because I continue to make my house payment, I don't
qualify for additional assistance to lower my payments, get
into a better mortgage, et cetera.
I know some people are in the same boat and have elected to
not pay their mortgage just so they can qualify for assistance
to get out of their houses that are severely under water. I
luck out in the fact that my house isn't under water, but it
also hasn't gained value like the traditional thinking of keep
a house for 10 years and, on average, it's going to double in
value. When I sell my home, I hope to get what I paid out of
it, and that doesn't include anything that I've put into it
since then.
There's concern that my generation might be the first
generation to not do as well or better than our parents'
generation. Is this because changes in thoughts or actions by
my generation is an issue with companies that we work for--I've
noticed in my short time as a working adult that there has been
a shift in loyalty. It appears that companies are no longer
loyal to their employees, and therefore their employees are no
longer loyal to their companies.
For example, as I mentioned earlier, my mother started with
a company in an entry-level job and worked her way up to a
decent career. The company she worked for was a small regional
company that got bought out by a larger regional company and
then by a national company. As she worked through purchases,
she continued to work hard and do well for herself even though
she still only had a high school education but was very
dedicated to her job.
After over 20 years with her organization, she was fired.
The reasoning was that she was not meeting her requirements.
Unfortunately, those requirements had become unrealistic to
meet, even with tremendous amounts of time spent after her
normal working day, which was no longer allowed by the company.
So after she could not meet her work plans, she was let go.
Once she was let go, her company was able to hire two fresh
college graduates for approximately the same pay but with zero
experience. Is it my mother's fault that she had 20 years of
experience and was being paid appropriately? Is it the
company's fault for trying to save a buck? I don't know.
I don't want to be complete doom and gloom today. I believe
we are starting to move in the right direction, but we can't
stop doing the right things to make America a better place. I
think universal health care is a great step in the right
direction. I also see that there are steps to help prevent
another housing bubble. There are talks to help students better
afford college and/or be able to pay for college and not leave
with an extreme amount of debt.
I know that we are a great country and that right now
things are a bit tough but that we will continue to be a great
country just as long as we don't forget about the people that
made this such a great country.
Again, I appreciate your time here today and thank you for
letting me tell my story.
[The prepared statement of Mr. Fox follows:]
Prepared Statement of Robert Fox
Good afternoon and thank you Chairman Harkin for the opportunity to
speak today. My name is Robert Fox. I am 31 years old and I was born
and raised in Iowa. I have a son, who will be 3 next month. My parents
are from Iowa and still reside here. My parents were young when they
had me, so there were initial struggles to start, but they believed in
the American Dream. Both of my parents attended public schools and were
high school graduates. My father was a mechanic and my mother worked in
an office's mail room. They both worked hard in their professions and
worked their way ``up the ladder.'' My father eventually moved up from
a manual labor job into the office and my mother moved out of the mail
room and into a claims representative at an insurance company. They
both worked hard and bought their first home in the winter of 1993.
I had a good childhood, mostly because it is what I knew. I never
went without, but that doesn't mean my parents didn't just so I could.
I watched as my mother would always eat last to ensure that I had
plenty to eat. My parents ensured that I wore clothes that were
appropriate to current styles, but to do so they were forced to wear
clothes that were dated themselves. I attended public schools, played
sports and graduated just on the cusp of honors. I wanted to attend the
University of Michigan in Ann Arbor, but the cost of out-of-state
tuition prevented me from going. I decided on Iowa State University
were I would study computer engineering (it was my childhood dream to
be an Architect but I found out later that I had a hard time drawing
straight lines, even with a ruler). Iowa State allowed me to spread
``my wings'' a little bit, however, after a short time there I realized
that my chosen major wasn't what fit me best. I elected to change my
major midway through my third year of school. I left Iowa State and
attended Des Moines Area Community College to fill in some general
requirements that were now needed for my new course work. The fiscally
responsible side of me decided it was better to attend community
college back home and not pay rent in Ames, so off I went to move back
in with my parents. I attended Scott Community College for the 2006-7
school year where I finally earned an Associate of Arts and an
Associate of Science. During this time I was approached about working
for a small business in the area, I was at a cross road . . . Do I take
the job, which paid well and would be good for my resume or do I turn
down the job and go back to Ames and finish my degree from my beloved
Iowa State University? I chose the job, in hopes that a strong resume
would help me long term. With this decision, I was forced to find a
school locally that would allow me to continue to work and still
complete my degree. I chose St. Ambrose University, where I earned a
Bachelor's degree in computer and information systems. While attending
St. Ambrose, I was lucky enough to be offered a full-time job with a
company I had been doing consulting work with. I took the job because
my health insurance provided by my mother was soon to be expiring and
they offered a benefits package.
Speaking of work, I started working when I was 14 doing a manual
labor job for minimum wage but it was fantastic. It granted me some
freedoms of my own car and gas and the ability to do some of the things
I wanted to do. Throughout high school I worked a retail job on nights
and weekends to keep up my car, insurance and gas money. Things were
pretty good; I could see the harder I worked, the better things could
be for me. During college I worked the retail job on breaks and then
was offered an opportunity to ``intern'' for a summer at a local credit
union. This is where my passion for my chosen career picked up. I
worked a job during the school year for Iowa State's Agronomy
department that continued to give me the passion for my chosen
profession. After my move back to this area, and during my completion
of my Bachelor's degree, I was finally offered a full-time job. I was
pleased to be an ``adult''. I had a job that was full-time with
benefits and it was in my field of study. I worked at this local
company for almost 3 years before moving on to my current position with
local government. I have been with local government for almost 6 years
now. I am very pleased to be employed full-time and in my field of
study. With local government, I am an IPERS-qualified employee. With
this program, it allows me to easily put away for my retirement.
Without this, I fear that I wouldn't be able to contribute to a
retirement plan at this time. Retirement is one of those scary things
that everyone is worried about, and with other money being tight, it is
a little bit of a relief that I'll be able to have something when I'm
past my working prime.
During my time with local government I have tried to continue my
education with both technical and leadership skills. In the summer of
2009, I completed an MBA from the University of Iowa's Tippie College
of Business. I did this with the hopes of becoming more marketable
internally, but also externally in case something would occur and I
would no longer have full-time employment. Unfortunately, tuition isn't
really covered by my organization so the bulk of the costs were
shouldered by me. This, in addition to previous student loans, has
combined for a hefty student loan burden. While in grad school, which
was only 2 years, the tuition was raised every year and approved for a
raise the third year (thankfully I graduated that summer before the
raise went into effect). With this continued cost of education, I fear
that the only way I'll be able to send my son to college (and not
burden him with the same or worse student loans as myself) is if I die
and my life insurance pays for it.
In conjunction with working hard, going to school, getting a good
job, there is the buy a house and your life will be better than your
parent's portion of the American Dream. I was fortunate enough to
purchase my home in March 2007; it was actually the house that I grew
up in. I was always told that it was just what you did when you became
an ``adult'' and that it was part of the path to financial security. My
purchase was made within my budget and with a proper lender. However,
life changes and now that payment can be difficult at times. And here
lies the rub, I have cut costs, pinched pennies and followed a budget,
but money is still tight. I continue to make my house payment, but
other bills suffer at times. Because I continue to make my house
payment, I don't qualify for additional assistance to lower payments/
etc. I know of some people who are in the same boat and have elected to
not pay their mortgage just so they can qualify for assistance to get
out from under houses that are severely underwater. I luck out in the
fact that my house isn't underwater, but it also hasn't gained value
like traditional thinking of ``keep a house for 10 years and on average
it will double in value.'' When I sell my home, I hope to get what I
paid for it . . . not including any updates I have done.
There is concern that my generation might be the first generation
to not do as well as or better than their parent's generation. Is this
because changes in thoughts and actions by my generation? Is this an
issue with the companies that we work for? I have noticed in my short
time as a working adult that there has been a shift in loyalty. It
appears that companies are no longer loyal to their employees and
therefore their employees are no longer loyal to their companies. For
example, as I mentioned earlier my mother started with a company in an
entry level job and worked her way up into a decent career.
The company she worked for was a smaller regional company and it
got bought by a bigger regional company and then into a national
company. As she worked through purchases, she continued to work hard
and do well for herself even though she still only had a high school
education but was very dedicated to her job. After over 20 years with
her organization, she was fired. The reasoning was that she was not
meeting her requirements. Unfortunately those requirements were
unrealistic to meet, even with tremendous amounts of time spent after
her normal work day (which was not allowed). So after she could not
meet her work plans, she was let go. Once she was let go, her company
was able to hire in two fresh college graduates for approximately the
same pay but with zero experience. Is it my mother's fault that she had
20 years of experience and was being paid appropriately? Is it the
company's fault for trying to save a buck?
I don't want to be complete doom and gloom today. I believe we are
starting to move in the right direction, but we can't stop doing the
right things to make America a better place. I think universal
healthcare is a great step in the right direction. I also see that
there are steps to help prevent another housing ``bubble''. There are
talks to help students better afford college and/or be able to pay for
college and not leave with an extreme amount of debt. I know that we
are a great country and that right now things are tough but we will
continue to be a great county just as long as we don't forget about the
people that made this such a great country. Again, I appreciate my time
here today and thank you for letting me tell my story.
The Chairman. Mr. Fox, thank you very much. I think that
just about sums it up pretty well, your life story and what's
happened to you. But you're still hopeful.
Mr. Fox. Absolutely.
The Chairman. Still optimistic. You have a good education.
Mr. Fox. I have a very good education.
The Chairman. Are you carrying much student debt, student
loan debt?
Mr. Fox. Yes, I'm carrying quite a bit of student loan
debt.
The Chairman. Were you eligible for Pell grants when you
went to school?
Mr. Fox. I was not. We fall into what I would classify as
too rich to be poor and too poor to be rich.
The Chairman. That's right, yes.
Mr. Fox. My folks collectively made a very good wage before
my mother was let go. However, it takes, you know--the way the
Pell grant system works, I'm sure you're aware of, is there's
the total money, and it doesn't count in the fact that, hey,
they don't work--you know, you have to have a car to get to
work, you have a house, a house payment, et cetera. So I didn't
qualify for any grants. I applied for every scholarship that I
was eligible for. Because I was on the cusp of honors, that
traditionally didn't get me a lot of scholarships.
The Chairman. Now, you're 31.
Mr. Fox. Correct.
The Chairman. And you have a 3-year-old son, is that what
you said?
Mr. Fox. Yes. He'll be 3 next month.
The Chairman. And now you are a public employee?
Mr. Fox. Correct.
The Chairman. And you said you're in the IPERS system?
Mr. Fox. Correct.
The Chairman. Iowa Public Employees Retirement System. This
committee has also had a number of hearings in the past year or
two on pensions and what's happening to the erosion of pensions
in this country. How important is the earning of a pension
benefit to you? Where would you be without it if you were just
relying on private savings for your pension?
Mr. Fox. The pension is huge for me. I know that in my
time, I'll be there 6 years next month, and I've already seen
some changes to the IPERS program. The vested timeframe has
changed. For new employees it's--I think it was 3 years before,
and now it's 6 years. So it's a little longer for the employees
to get vested.
For me, it ensures that I have some form of retirement. I
try to do as much as I can, but it's about enough to get the
free money. So it's, like, hey, we'll match up to a certain
percent. After that, I really can't do much more than that.
The Chairman. Again, I'll just say I think another area
where the middle class has really been eroded, is in pensions.
And I could be corrected, but I think I can remember this. In
1970, one out of two workers in America had a pension, what we
would call a pension, a defined benefit, which would last them
until they died. That was before the days of 401(k)s, one out
of two. Today, only one in five workers in America has a
pension, one in five. Some workers have some form of a 401(k),
but it is not enough to last them for their expected lifetime.
In other words, they're going to retire and they're going to
run out of that 401(k), and they're going to be 81 or 82 years
old, and they won't have enough to last them.
Two out of five, almost one-half of every American working
today has no 401(k), they have no pension whatsoever, and they
have no savings. All they've got is Social Security. That's all
that they have. So from two out of three having a defined
benefit pension that would last them, plus Social Security,
this situation is a tremendous erosion of the middle class, and
more and more people are being pushed into 401(k)'s. I'm not
saying 401(k)'s are bad, but I think people are lulled into a
sense of security because I've got $100,000 in my 401(k), but
that doesn't last very long when you're retired.
I just wanted to ask you about the pension because it's
part of our whole middle class, what we're looking at in this
committee about reviving the middle class, is how do we get a
pension system in this country. We always had the three legs of
the stool. We had Social Security, savings, and a pension. Now
the pensions are gone. People can't save money. They're just
lucky to live day to day. And the last thing we've got is
Social Security, which is helpful, but it's not enough to keep
everything going when you retire.
I wanted to turn it over to Dave here for questions, but I
wanted to--oh, yes. Mr. McGill, you talked about manufacturing.
During the 2000s, the United States nationally lost over 6
million manufacturing jobs, 34 percent of our manufacturing
employees just in a decade. Again, we know that those are good
middle-class jobs. They pay higher wages. They offer stronger
benefits. According to a report from the Milken Institute,
every job created in manufacturing supports 2.5 jobs in other
sectors of the economy. Some have estimated that the multiplier
effect may even be larger.
Give me your thoughts on rebuilding a manufacturing sector
in America. Here's what I'm getting at. People say, ``Well, you
know, Senator Harkin, we're not going to go back to the old
steel mills and the old way of doing things and stuff.'' I say
no one wants to do that. But I saw with my own eyes here at the
Blong Center today new techniques in welding, for example, I'd
never seen before.
There are new technologies and a new way of manufacturing
that I think, if we focus on it, sets us up for the next 20, 30
years of manufacturing and getting--it's not so much bringing
the jobs back to America. It's setting a platform for the new
kinds of manufacturing that we're going to need in the future,
highly technical, using new materials, materials that we
haven't used before.
I just say that as a way of asking you, from your position
and what you've seen, about manufacturing and what those kind
of jobs mean to your workers. You've seen it in the past, and
what do you see in the future?
Mr. McGill. Well, I'm not sure what to do about it. I mean,
I know from personal experience. I work at Alcoa, and we're
experiencing a lot of our smelting operations in the United
States closing or curtailing, and a lot of that is because we
can't compete. It takes a tremendous amount of electricity to
run that process.
The Chairman. That's right.
Mr. McGill. And we're competing with countries that provide
the electricity for the plants. They subsidize the electricity.
They give it to them. They don't have any energy cost. Then
they're selling it and shipping it here.
The Chairman. Might we be talking about China?
Mr. McGill. Yes, China. There's a couple of really big
plants in Russia, and they're all over the world. There's a
real large plant in Iceland that Alcoa recently opened, so
we're competing with ourselves too. And it's causing our plants
here to close, and I'm sure it's a lot of the cost and
subsidies and things that cause jobs to go overseas.
Fortunately, we have a highly skilled workforce. We have
the technology. We can do it here. In fact, we are. I mean, our
plant right now in Bettendorf is going through a $300 million
expansion. We're expanding, and a lot of it is in the
automotive area, a lot of aluminum for cars, and a lot of that
has to do with the CAFE standards going down. You have to
lighten them, so it means more aluminum in cars.
So I'm not sure, other than subsidizing the power--I mean,
they have power contracts in places they negotiate all the
time. Messina, NY almost closed.
The Chairman. I'm going to turn it over to Congressman
Loebsack. But it seems to me, David, that people who say,
``Well, we can't do this anymore, look at what happened to
General Motors.'' Just a couple of years ago, General Motors
was ready to go under. Some people said they should go under,
move it to Japan, let others take it over. I'm not ashamed to
admit I supported the effort to provide funds to General Motors
and Chrysler. Today, General Motors is the biggest car
manufacturer once again in the world. People can't buy those
Volts fast enough, and they're shipping them overseas. So we
are capable of turning this around as a country.
Mr. McGill. I think a lot of it--the other subsidy is a lot
of countries have national health care, so the companies don't
have that cost either.
The Chairman. Well, we'll get into that.
[Laughter.]
Congressman Loebsack.
Representative Loebsack. Thank you. Thanks again, Senator,
for doing this. This has been really enlightening and eye-
opening to hear the stories from the three of you.
Mr. Fox, between Terry and I, we have four kids in your
generation, and we hear about struggles a lot. Fortunately, one
of them is in the Marines, and he and his wife have been there
for 10 years. So they're a little bit more secure in that
sense, although they have had to be deployed to war zones to
get that financial security, I guess. But nonetheless, I do
hear the stories like yours a lot, and we've got to do
everything we can, obviously, on the financial aid front, on
any number of fronts too.
I know the President has made some moves. I don't know if
that's affected you or not in terms of forgiving longer-term
debt after a certain amount of time. That's marginal but
nonetheless might be helpful, and I worked on legislation some
time ago that he built upon with his Executive order.
But your generation--I think about your generation a lot,
as you might imagine, when I get e-mails from my kids and all
the rest, and when they talk about some of the same issues that
you're facing.
And certainly, Mr. McGill, I really do appreciate,
obviously, what unions have done. I think you're right. I wrote
this down, when organized labor can organize and push hard,
then the middle class can be secure, more secure and expanded,
and the economy can be stronger. There's no doubt about it. I
appreciate all that you've done over the years and all that you
continue to do.
Mr. Allbee, I'd just like to ask you, because I think
you're aware that a big part of what's happening here at this
college and what we saw today is designed to try to fill in the
gaps that I hear about all the time when I talk to businesses
large, small, medium-size, whatever, and it seems almost
counter-intuitive. It almost doesn't seem to make sense that in
an era of high unemployment, that I would be talking to
business owners all the time who can't find the skilled workers
they need. It doesn't make sense, but it's true. That's part of
what my SECTORS bill is about, trying to match up what's
available with what's needed.
Can you talk to us a little bit about that first?
Mr. Allbee. I can. I think you have a--well, I would say a
couple of things. Any impact on financial aid will really
hinder students' ability to pursue technical training. That's a
critical piece of that.
A couple of other things. Mr. McGill was talking about
manufacturing job losses here in the Quad Cities going back to
the 1980s. As an educator, it is an extremely tough sell to
young people to convince them that there are stable jobs in
manufacturing. That's one thing. And understandably, if their
parents have been affected by that and were laid off or had a
family member laid off, as Mr. McGill was talking about some
friends, it's then a harder sell to convince the parents that
that's a career your son or daughter should investigate, and we
keep working on that.
As a part of that, we have to communicate to those young
folks that these are good jobs, they're highly skilled jobs.
They're maybe not what they have in their minds. We need to
expose them to those careers and get them into industry through
coops or internships to see what those jobs are like. That's
one aspect.
The second one is--and this is through no fault of
anyone's--if an individual has been out of school for a long
time and they haven't kept those skills current, when they get
to us, if they don't have skills, say, in mathematics, we're
going to have to back them up a little bit to get them trained
in those areas, and those are things that I see that hinder the
ability to get skilled workers into the workforce.
Representative Loebsack. Yes, and I often thought--that's
my brother who went to Western Iowa Tech and became a welder
over 40 years ago. We didn't have computers the way we do now.
I mean, now if you want to work on a CNC, you have to know
about computers. You have to have some math and all the rest.
It's a lot more complicated than it used to be.
But I think this also points to the issue of a lot of these
at-risk kids who don't see a future ahead of them, and this is
where the concurrent programs, where the community colleges and
others can work with kids when they're in schools, even in the
middle school, so that they can have some sense of a possible
future out there.
They may not want to go into welding. They may not want to
do some of these things because it's not the cool thing to do
now, culturally or otherwise. But at least they can see that if
they do this and they stay in school, they can go to a
community college and they can get a job, a job that's going to
pay good wages, have good benefits and all the rest. I think
it's really important.
And I'll just say one more thing, if I may, on a policy
front. What can we do in Congress to make it in America again?
I mentioned a few things, the China currency issue, some other
things. You know, we can also begin to stop jobs from going
overseas as easily as they have by closing the tax loopholes
that are out there that now provide incentives for companies to
take jobs overseas, and maybe we can go a little bit further.
Maybe we can actually incentivize companies to bring jobs back
from overseas. That's another issue that's a little bit more
difficult to deal with.
But it's relatively easy to close tax loopholes that allow
and, in fact, encourage companies to take jobs overseas, and I
think we might agree on that one.
Thank you. I'll be happy to turn it back to you. Thanks for
having me. I really appreciate it.
The Chairman. Thank you very much, Dave.
For those of you who are here, our committee issued a
report last September. It's called ``Saving the American Dream:
The Past, Present, and Uncertain Future of America's Middle
Class.'' You can get that online by going to harkin.senate.gov/
middleclass, and you can get this report online.
The reason I mention it is because there's a chart in there
that we had in our report that I think again illustrates what
happened. It says, ``While wages have stagnated, costs have
shot up,'' and it's a bar graph, OK? It's just a bar graph, and
it shows the changes from 1970 to 2009. Average hourly earnings
from 1970 to 2009 have gone down 1 percent. It's gone down 1
percent. Food budget, only up 2 percent; gas, up 18 percent;
rent and utilities, 41 percent; health expenditures, 50
percent; college, 80 percent; home-buying, 97 percent; college,
113 percent. Yet, average hourly earnings are down 1 percent.
That's that squeeze that families are running into and why, Mr.
Fox, a lot of young people your age are saying, ``Well, are we
even going to have it as decent as our parents had it?''
If you want that report, you can get it online.
Mr. Allbee, I just had one more thing I wanted to cover
with you, and then I'm going to open it up to the audience. I
want to hear from you. If you have questions or comments or
thoughts, I'd like to hear that. But I just wanted to ask one
more thing of Mr. Allbee, and that had to do with the local
workforce investment board, your workforce investment board and
how you interface with them, and how can we ensure that
community college and workforce investment board work together
jointly? How do you work with the regional workforce board?
Congressman Loebsack has introduced this bill, the SECTORS
approach, which I see happening here at the Blong Center. But
just talk a little bit, how do you find that relationship, and
should we be thinking about anything we can do to strengthen
that or move it in a different direction?
Mr. Allbee. Locally we have a good working relationship
with our regional board. They provide funding for folks who
wish to come back for training. We work closely with them so
that we're--this sounds very simplistic, but that we're
providing training for jobs that are in demand in the
community. We'll use a CNC operator certificate as an example.
If we were to start a new program in that, we would have to
have that approved through that board for training purposes so
that they could provide funds for eligible folks.
We work very closely with them. We share information back
and forth, things we find out through our association with
industry to say, ``Hey, this is a job area that needs training
regionally.'' We would work very closely with them in that
regard.
The same would be true the other way. They would share
information with us saying, ``Hey, we hear that this is an area
in demand.'' I would encourage that to continue, but I think
locally we have good lines of communication, and we have a
representative on that board. I think, locally anyway, it
works, and it's a very positive relationship.
The Chairman. You have a good working relationship.
Mr. Allbee. Yes, sir.
The Chairman. That's good. One of the privileges we have in
having hearings like this in the State and not having 12
witnesses is I get to open it up to the audience, and I would
like to open it up.
Mr. Bennett. Hi. My name is Mike Bennett from Davenport.
The Chairman. Mike Bennett.
Mr. Bennett. Seventeen years ago, I stopped at a university
in Davenport called St. Ambrose University, or not St. Ambrose
but Mary Crest, and I went to a symposium on NAFTA. It was just
being passed by Congress. And when I went there, they had
people from Washington, and they had people from Mexico there,
and they were just saying how great this program was going to
be for both countries, great for Canada. And what I've kind of
noticed over the years--I've lived here most of my life--they
had some officials from Maytag there. They were just saying how
great it was, and their washers and dryers, they were going to
lower the prices significantly so they'd be a lot cheaper for
consumers to buy washers and dryers.
Well, the last few months at Sears, I haven't noticed the
prices going down at all. And I think as an individual, what
I'd like to see Congress and the Senate do is maybe try to take
some teeth out of that NAFTA bill possibly, try to work on
maybe having more of a balance with China and trade, because
what I've kind of heard over the years is that their middle
class, now they're able to buy cars, and I feel that is
basically at the expense of American blue-collar workers that
have lost their jobs at the Maytags and the various other
manufacturing places in Iowa and Illinois.
I guess that's my main gripe, that people in Washington try
to do something to help the middle class, and maybe if we have
to impose tariffs like Mr. McGill was saying, we can't compete
with these other countries because they're getting free
electricity, maybe we need to have some tariffs on the stuff
that we build at Alcoa so that our American workers have jobs.
The Chairman. Could I sum it up by saying you're in favor
of fair trade?
Mr. Bennett. Yes.
The Chairman. Fair trade. I think it's something that we in
Congress have not paid that much attention to in the past, the
little things that don't get into the trade bill but become big
things later on, as you have talked about in terms of currency
manipulation. We don't normally pay much attention to that. But
if a country can artificially support its currency and it
doesn't float it on the international market, that's like a
subsidy, and we can't do anything about it.
So you're right, those are things that we have to start.
The Senate passed a bill to stop Chinese currency manipulation
last year, but the House hasn't.
Representative Loebsack. Hasn't, no. The House leadership
has not taken it up yet, that's right, although it has
bipartisan support. And when it comes to trade agreements, if
we ever--when we negotiate and potentially pass trade
agreements, I think you mentioned and the Senator mentioned
it's got to be fair, and we've got to have parts, various
elements in that trade agreement that are not just tariff
barrier issues. The currency manipulation thing is a non-
tariff barrier, but it's a barrier nonetheless.
We know that the Chinese have been manipulating their
currency. There's no doubt. When they keep their currency
artificially low, that promotes their exports, and it means
that their exports to the United States are cheaper and their
imports from the United States more expensive, and that hurts
American workers. There's absolutely no way around it.
Mr. Bennett. I was in North Carolina by Charlotte for about
4 years, and I just returned to Davenport last year, and the
textile industry down in the Charlotte area, it's almost like
their bread and butter, and that's pretty much gone. They just
can't compete with the Asian textile industry, and I think
their unemployment rate down there is like 12 percent because
of that.
Representative Loebsack. That's part of why there are
Republicans and Democrats alike who are concerned about the
China currency manipulation, because it doesn't matter what
your political party affiliation is. If people in your district
are suffering because of unfair trade policies, you're going to
do the best you can to represent those people and make sure it
doesn't happen.
The Chairman. Anything else anybody wants to bring up, or
thoughts?
Yes, sir.
Mr. Cole. My name is Richard Cole, and I've been an
educator for about 50 years. And I think parents, teachers,
counselors, administrators are misguided when they think
everyone should go to college. I'm guessing that 30 percent
approximately should not, could not, and it's a waste of time
and money. And until we change that somehow and get more
credibility to being a plumber and making a lot of money or a
welder and making a decent living and so on, we've got too many
kids that have gone to college, gotten a degree, they're
sitting home in their parents' basement at 23, 24, 25 years old
playing with their Nintendo, and I think that's a waste of our
human resources.
Somehow we've got to get those people to appreciate welding
and CNC machining. I'm afraid that in the next 5 to 10 years,
competing with China, competing with whatever, we're not going
to have a labor force that can fill those jobs that are
available. We should get our middle class back.
The Chairman. I just saw here or learned here that you have
high school students that come here, right? Can you talk about
that?
Mr. Allbee. We do. Within this facility, students come from
area high schools for concurrent enrollment, receive both high
school and college credit for that, especially in machining and
welding within this facility.
The Chairman. But they can learn the technology here.
Mr. Allbee. Absolutely, yes, and Mr. Cole has been a part
of that effort before. He has taught some for us.
But again, it goes back to that we have to convince both
parents and young people that careers in manufacturing are
good, viable careers, that there's new technology. Those jobs
don't necessarily look like they used to. And again, I
understand why people are skeptical about it as a result of job
loss and plant closings. I get that. It's going to be a
challenge to convince folks that it's a viable career for them.
The Chairman. I think we have to do a better job at that.
That's why we're trying to get our Workforce Investment Act
through, too.
Yes, back here.
Ms. Steavenson. Hi. My name is Karoline Steavenson. My
question is, is there any discussion in Congress on increasing
the Federal loan agreements? Because I believe right now the
loan limits per semester are approximately between $6,000 and
$7,000. But with tuition increasing and the cost-of-living
increasing, especially in certain areas of the country like
California, $6,000 or $7,000 a semester, at many universities
that won't even cover your tuition.
And if you want to go to graduate school, I too would like
to go to graduate school like you did, but I looked into
Federal loans for graduate school, and I believe the maximum
for that is between $20,000 and $24,000 a year. So depending on
where you go to school, you've got your tuition, your cost-of-
living, you really cannot finance your education unless you
also are fortunate enough to get a job while you're going to
graduate school. And, of course, that just drags out that whole
process because it's very hard to go to school full-time and
work full-time at the same time.
I know this because to get my first Bachelor's degree, I
was raising kids, working part-time and going to school full-
time. I got my second Bachelor's degree to change careers and
was working part-time and still had one child at home and going
to college full-time. Now I am also just drowning in student
loan debt.
So I want to know, it doesn't seem practical since your
report pointed out that wages have gone down but all the other
cost-of-living indicators have just increased dramatically, why
doesn't Congress sit down and have a serious discussion and say
is $6,000 maximum in Federal student loans, is that really
enough? Don't people need more?
The Chairman. Well, yes, but here's a little bit of the
dilemma, and I think President Obama is onto something here.
After he made that statement in the State of the Union, I asked
my staff, I said go back and find out for me what was in-state
tuition for me when I entered Iowa State University in 1958,
what is it today, and what would it be today if it just had
followed inflation? I don't have it in front of me, but this is
close.
When I entered Iowa State in 1958, the in-state tuition was
$231. If you factored in inflation since that time, it would be
$1,700 and some-odd dollars. Yet the in-State tuition at Iowa
State is $8,200, 400 percent more than the rate of inflation.
This is a dilemma. I mean, do we just keep raising Pell
grants? More and more people need Pell grants because they're
unemployed and their family incomes are low. They need the Pell
grants and the loan program. Again, when I borrowed money when
I went to school, I borrowed it at 1 percent. That was the old
Eisenhower program.
Representative Loebsack. It was 3 by the time I went to
college.
[Laughter.]
The Chairman. It was the Eisenhower National Defense
Education Act.
Representative Loebsack. That's exactly what it was, and it
became National Direct Student Loan.
The Chairman. And then we had a great thing, no interest. I
had no interest charges all the time I was in school. I entered
the military for 5 years, no interest charges all the time I
was in the military. I get out of the military, I go to law
school. Now I've got the GI bill. No interest charges all the
time I was in law school.
I want to thank all you taxpayers for my education, by the
way. Thank you very much.
And then I had a year's grace period before the interest
even started running. Nine or ten years where there were no
interest charges. Even though I had a debt, I didn't feel it
was over-burdensome. Now I had a couple of degrees under my
belt.
Somehow we hear this all the time, about the need to raise
the level of the student loans, but does that just translate
into schools raising tuition and raising tuition and raising
tuition? I think we need to take a strong look at what's
happening to tuition.
Representative Loebsack. Yes, I would agree with the
Senator. I taught at Cornell College for 24 years myself, and I
suppose my bias, without looking at it statistically, would be
that I don't buy into the argument that just because we
increase student loans or Pell grants, or whatever, that
colleges take advantage of that and automatically increase
their tuition commensurate with all that, or even more.
But we have to look at that. That's one of the arguments
that's made, and that's what the Senator is getting at. But
we've got to look at that, there's no doubt about it. And I
know the President talked today or yesterday, I think at the
University of Michigan, urging schools to keep their costs in
line, but it's not that easy.
I mean, this is a very, very difficult issue, and being on
the Education and Workforce Committee, I was one of those who
worked hard to increase the loan amounts, to decrease the
interest rates on these direct student loans, and what's going
to happen if we don't do something? Are those going to go back
to higher interest rates next year, and we've got to do
something to deal with that, because right now that's
automatically going to happen. We provided some relief for a
short amount of time for students who are taking those loans
out.
But we can't let, I would argue, a sort of a shock effect
to happen here where it automatically goes up to double or
wherever it's going to go if we don't take some action. But
there is a bigger issue. I think we have to have--again, the
last thing people want is Congress to take time to study
something forever again. But I think we have to do that to make
sure that we're having the right mix of policies, if you will,
to make it more affordable--that's the bottom line--for people
to go to college.
The Chairman. My staff just sent me a couple of notes. One,
I forgot to mention this, that we did, Congress did change the
student loan program to make it a direct student loan program.
Representative Loebsack. That's right, that's right.
The Chairman. So what we used to give to banks to process
it and stuff now goes directly back to students.
The second thing, Mr. Cole, your thing is that the Perkins
Act, which supports career and technical education programs,
expires next year. And so again, that comes under our
jurisdiction. Again, I need information, what do we need to do
to get the Perkins Act looking ahead and what we need to do
with that.
Mayor Gluba.
Mayor Gluba. Senator, thank you for bringing this hearing
here today. Having known you for 40 years and your personal
situation, you came out of a difficult family situation and
worked your way through, served as a veteran, got the GI bill,
got elected to Congress, worked your way up to where you've
become heir to one of the most powerful committees in the U.S.
Senate. Senator Kennedy used to chair this.
I know your heart is in the right place. I know the ADA,
the Americans with Disabilities Act, you passed on your own,
put that through because of your brother's death. I mean,
you've got the right heart and gut feeling to do what's right.
I guess my suggestion on this student loan, I'm kind of an
expert in the sense that when I went through college, St.
Ambrose was $800 a year. We worked on Interstate 80 out here in
1957 when I was 18.
The Chairman. So did I.
Mayor Gluba. Paved the thing, made that money, worked 7, 8,
or 10 weeks to pay my way through college.
The Chairman. Oh, it was great, it was great.
Mayor Gluba. And then we have five kids, five children,
four graduates from the University of Iowa. But the first two
or three 20 years ago didn't cost that much. You could do it
with some student loans and some work study, et cetera. But the
last two, they raised for Dan and Kevin a 17 percent increase 1
year under our Governor, 19 percent the next year, and it's
been going up constantly.
I think the damage has been done, Senator and Congressman
Loebsack. I think it's a shame. It's just disgraceful what we
as a generation have forced our kids essentially to--we told
them how important it was, you've got to get an education, and
you do, to compete in the world today, and we pushed them to
get an education. They went out and they borrowed money. The
parents co-signed forms because they didn't have it, didn't
make the money, wages have been declining.
And now, to give you a hard-core example, one of them is
$147,000 in debt, and I'm on the hook for that, and I've pretty
much hit the end of my days. I'm retiring. And his payments
will be about $1,800 a month. He's making $11 an hour because
there are no jobs in the field of industrial design. That's one
of them.
The other one is sitting on $100,000 student loan debt,
makes $69,000 a year. That sounds like a lot. Works in
Washington. But half, $2,400 a month, he and his buddy pay for
rent. Your workers here are about the same. The other half goes
to student loan debt. He still doesn't have enough to cover it.
So what I suggest to the President and I suggest again
today is something like this. I mean, we paid a generation to
go to school. You just pointed that out. I remember growing up,
we had Quonset huts at St. Ambrose and University of Iowa.
The Chairman. And I was----
Mayor Gluba. We paid the greatest generation to go to
school, those from 1945 on, and that became the greatest
generation, the scientists, the technicians, the engineers, the
doctors, the lawyers, and this country's growth exploded
between 1945 and about 1977.
Today my suggestion is something like this. My kids are
taking money the best they can and paying off banks. Banks are
sitting on it, and they have $1.5 trillion.
The Chairman. A trillion dollars, that's right.
Mayor Gluba. Isn't that right? Cash in our banks, and
they're taking money from kids who are paid $11 an hour and
wanting more, sending bill collectors after them, who would
normally be buying a house or a car or starting a family, can't
afford to do that.
So the plan is this, something like this, Senator. I
suggest a third should be written off, right off the board,
right off the top. The banks take the hit on that. Student loan
debt is now higher than credit card debt.
The Chairman. It's true.
Mayor Gluba. It's a trillion dollars.
The Chairman. That's very true.
Mayor Gluba. Plus credit card debt, and the credit card
companies didn't get paid. They took a hit. The banks took a
hit on the house payments not getting paid. So write off a
third. Let them take the hit. They've got so much interest and
fat, they don't need it. Give the kids the requirement, young
people, and these are past and present, not just the ones that
are coming, that a third of their debt could be forgiven by
them volunteering their time for non-profit organizations or
cities or counties or States, Big Brothers, Big Sisters, United
Way, all kinds of things.
The Chairman. Vista.
Mayor Gluba. I don't know, maybe 10 years they could
volunteer, whatever it takes. And then pay the other third off
over a 30-year period at either no or next-to-nothing interest
rate. Then you'll see these kids putting money into the
economy, because we don't have the demand. When you don't have
the demand, you don't have jobs. They don't have money, and the
banks don't.
Something like that, Senator, is my advice, and I know
you'll do what you can.
The Chairman. Well, Mayor, thank you very much for your
kind words. We've been friends for 40-some years now, and we
both come from the same background.
Back in the 1980s when we had the farm crisis, and I was on
the Agriculture Committee, as you know, farmers were committing
suicide, they were losing things, and so we passed legislation
in the 1980s. President Reagan was president then. The Senate
was Republican. I had just come to the Senate, and then the
House was Democratic. So it was bipartisan.
We passed legislation to do basically what you said what we
did to farmers. We took a lot of their debt. Some of it we just
wrote off. The Federal Government subsidized that write-off.
And then we took the rest of it and we refinanced it over a
long period of time and gave them a reduced interest rate, and
that saved farmers all over this country, and they paid the
money back. We knew that the economy, in the Agriculture
Committee, the economy was going to come back. It took some
time, but why should we weed everybody out during a slump?
I think you're onto something there. We've done things like
this before to certain segments of society, and if we're going
to give these young people any kind of breathing room, we're
going to have to do something like that.
Mayor Gluba. We're eating our young, Senator. We're just
eating our young. I talked to you, and you've got Cordray,
Richard Cordray, and he said that phrase. He said, you know,
``We're eating our young,'' and he's absolutely right. He's
head of the financial bureaucracy now, and he could come down
and put the hammer on these banks, and they won't hurt a bit.
They'll go right on. They make so much money now on all kinds
of scams.
Really, something like that needs to be done, and it needs
to be done now, for past kids. I'm talking about for people 35
years old. They've been pouring money into the banks. If they
could buy a better car, they could help their kids through
school, they could set some money aside for retirement. But
there's no way.
The Chairman. And they're stuck with high interest rates. I
don't know what your kids' interest rates are, but I'll bet
they're over 5 or 6 percent.
Mayor Gluba. Six, seven, eight. I give up. They just can't
pay them anyway. They don't make enough money. Now they come
after the parents. They're mean. They're tough. The parents,
I've talked to a lot of them. They're helping their kids in
many ways today, but forget about pensions and retirements.
There's none of that in the future.
The Chairman. I don't know how many people know this, Bill,
but in 2005 Congress passed legislation that did a couple of
things. But one of the things it did--it was a bankruptcy
reform bill. One of the things that was slipped in there was
that student loans are not dischargeable in bankruptcy. You can
discharge a car loan, a house loan, a personal loan, credit
card debt. Any debt you've got you can discharge in bankruptcy
because of our bankruptcy law, except for student loans. So
once you get a student loan, it's around your neck forever.
They can dun you anytime. They can even take away your Social
Security money.
Mayor Gluba. Oh, gee.
The Chairman. I hate to tell you that. That's why we've got
to do something about this student loan. You're right, it's
bigger than credit card debt now, and it's going up.
Can I say something else? Can I walk on thin ice? I'm
getting old enough I can do that. I wonder how many kids who
get over the age of 18 who are now emancipated take out student
loans for lifestyle, for lifestyle?
I remember, I shouldn't tell these stories, but when my
wife and I returned to Ames--this was years ago--we both
finished law school, we were starting our careers, we bought a
small house. Actually, we rented. Then we bought a house right
off the campus of Iowa State.
So we're both working, and we decide to go out on a
Saturday night to Aunt Maude's to have dinner.
Representative Loebsack. Oh, my gosh.
The Chairman. Aunt Maude's. Do you remember Aunt Maude's?
Representative Loebsack. Yes, I do. It was wonderful.
The Chairman. As a student, I would never have thought
about going there. I mean, you can go out and buy a hamburger,
but you don't go to Aunt Maude's.
Representative Loebsack. Wonderful steaks.
The Chairman. Oh, yes. This is high class.
You go there and it's loaded with students. That's the
first thing I started thinking about. When I went to Iowa
State, I didn't have a car. I had one sport jacket that my
neighbor gave me. That was all I had. And we lived in the
basement. Three of us lived in a basement, cooked on a little
electric skillet. We didn't have anything.
But, gosh, I go to these campuses now, students got new
cars, they got great clothes, they go on spring breaks, they
have flat-screen TVs, they've got the latest in iPads and iPods
and this and that.
When I went to college--I know I'm on thin ice here, but
when I went to college, a lot of us of our generation went to
college, a lot of our classmates that I graduated from high
school with went into the workforce. And I remember one time,
one of my classmates from Dowling High School came up to Iowa
State, had a new car, was making good money, had a girlfriend,
and they were making good money because they were working at
Firestone or John Deere or places like that, and they were 19
years old, 20, and they were making good money, and they had a
good career ahead of them, and they did, they did have a good
career; the idea being that, well, we were willing to give that
up for a few years, knowing that if we went to school and
learned and stuff, that later on we would make more money. The
idea was that we would have to sacrifice. They had a good life
then, but we didn't. And so that was sort of the bargain.
I'm just wondering now if a lot of kids who go to college
think that, well, I want to have a good lifestyle and I want to
have all the accoutrements of life and all this kind of stuff,
and I'll borrow the money to do it, and they get in the hole,
because borrowing that money is so easy, so easy, especially if
they're, as I say, they're over 18, they're emancipated,
they're not part of their parents. They go out and do that, and
I've just run into so many of them that now wish they hadn't
done that.
That's just some thoughts I have about whether students are
really looking seriously at why they're borrowing that money
and what they're doing with it. Maybe they shouldn't. Maybe
they should cut back their lifestyle a little bit on that.
Maybe I'm just an old parent, that's all, grandparent now I
should say.
Mr. Mohr. Thank you and Congressman Loebsack for being here
today. I have something I would like you to consider regarding
Pell grants.
The Chairman. Yes, sir.
Mr. Mohr. As you know, Pell grants are available to our
lower income students. One of the issues is whether or not
Congress should increase the Pell grant.
The Chairman. Yes.
Mr. Mohr. Coming from a community college, I'm hearing more
here at Eastern Iowa Community Colleges. A couple of years ago
or last year, Congress, in order to save money, did away with
the Summer Pell.
The Chairman. That's right.
Mr. Mohr. And now the consideration is should we raise the
Pell. And I'm speaking to you as a representative of a
community college. We would much rather see you reinstate
Summer Pell and keep the Pell at the current level, and I'll
give you a reason why.
The existing level of Pell will pretty much pay for
community college tuition. It may not pay for private schools,
universities, but it does pay for community college tuition.
But, by doing away with Summer Pell and saving money, which
was Congress' intent, we have a whole lot of people who are
unemployed who would come out here to this Blong Center. They
can't wait until fall. They want to come to school. As Bob
mentioned, we start classes every 8 weeks. Well, if you're
unemployed, if you're Mr. Fox's mother and you need to get
retrained to go back to school, now you can't come here in the
summer because you can't get Summer Pell. You have to wait for
the fall. And if you're unemployed, that's very difficult to
do.
And so I would urge you to consider----
The Chairman. I take that to heart.
Mr. Mohr [continuing]. Re-instating Summer Pell than keep
the maximum Pell--use the dollars for----
The Chairman. Well, that's good to hear that because the
other thing that I haven't looked at--I hadn't thought about
this aspect of it, but we heard from the nursing profession,
and we know how many nurses we're going to need in the future.
And yet they rely on that Summer Pell because of the way they
go to school in nursing school. So, yes, this is something that
we're going to have to look at.
Representative Loebsack. Thanks, Gary, for that question.
As you know, that year-round Pell grant program was my program.
I'm the person who introduced that in the first place and got
it through, and I introduced it because of testimonials from
nursing students, from folks who lost their job, came back,
took community college or a certificate program and had to go
year round by virtue of the nature of the program, you know?
And they needed that, there's no doubt about it.
The Administration proposed it be cut. It was cut. They
supposedly are saving $5 billion over the next several years. I
think it was the wrong thing to do. I think it was simply the
wrong thing to do. I think it has put a lot of people out there
in a situation where it's very difficult for them to get a
nursing degree or whatever. My daughter got a nursing degree at
Kirkwood Community College, and I heard from her and I heard
from a lot of folks as I traveled around the district when I
first got elected. That's why I offered that program in the
first place.
Now, whether the bargain or the deal would be we don't
increase other Pell grants, I don't know, but I would certainly
like to see it reinstated. I'm not optimistic at this point,
but I think it makes perfect sense. I think it's the way to go.
It would help lots and lots of people. It did and it would.
Thanks.
The Chairman. I'll tell you, you won't find two stronger
supporters of the Pell grants than the two people sitting here,
because that goes to kids that really need it, really need it.
I'm going to ask our panel, through all of this I never
asked if you had any other things you wanted to offer here or
thoughts that might have come up during the conversations here
at all, if there's anything that comes to mind at all on that?
Mr. Fox. To answer your question, it's 6.25 percent is what
your current interest rate is, 6.25. That's what my graduate
loans are at. I was lucky and I was able to refinance my
undergraduate loans at, like, 3.2 or 3.5.
The Chairman. I'm trying to find out, Mr. Fox, why that is
so. Right now, the Fed's interest rates are close to zero, if
I'm not mistaken.
Mayor Gluba. They get money free from the Federal Reserve
Board. They're sticking my kids with 6.5 percent.
The Chairman. Why? I mean, usually we always think of the
government service on money as being 1 percent. Maybe it's 2
percent, but it's certainly not over that. Maybe 1 to 2
percent. So why, if they can get money from the Fed at zero,
why are they charging 6 percent?
Mayor Gluba. Greedy.
Mr. Fox. All of mine are direct loans. My understanding was
that because when I read through all, after watching the
housing market tumble, I got pretty diligent on reading any
contract I was signing, and I got the impression that it was
because, A, the legislation says, all right, for this amount of
timeframe, this is what the interest rate is regardless of what
the real interest rate is.
Representative Loebsack. That's right, that's exactly
right.
The Chairman. Mr. McGill, we didn't followup too much on
the issue of unionization. This committee has had a number of
hearings on that as it relates to the middle class. You had a
chart in your testimony, I believe, that we have seen before
which shows the decline of union memberships and the decline of
the middle class just tracking very closely.
The National Labor Relations Act, as I said, in 1938 made
it a policy of this country to encourage collective bargaining.
That's still the law, by the way, to encourage collective
bargaining.
I don't know why we have turned so vociferously on unions
in this country, and workers' rights to organize and bargain
collectively. It seems it's just a fundamental right that
people should have, and they shouldn't be punished for it. It
was organized labor that went out there and fought and bled and
got beat up and all kinds of things to secure better wages,
hours, and conditions of employment. And it seems to me we do a
disservice if we don't support the right of people to organize
and to have a vote, to be able to organize and bargain
collectively.
People ought to have the right to join a union or not join
a union. But if people vote to have a union, should there be
free riders? I believe you suggested a piece of legislation
here in the State of Iowa that says that, OK--how was that?
That everybody pays taxes but--explain that.
Mr. McGill. You can enjoy all the benefits of every other
resident of the State of Iowa, just pay State taxes if you want
to, voluntary.
The Chairman. In other words, you can enjoy fire
protection, police protection, roads, everything else, but you
don't have to pay taxes unless you want to.
Mr. McGill. Right, only pay them if you want to, just like
in work environments in the State of Iowa where there's a
right-to-work law that says that everyone gets the benefits
that are negotiated by the union, provided by the union,
including grievance and arbitration process, but you don't have
to pay union dues. I don't get to go to any country club I want
to without paying.
The Chairman. Right. It just seems to me to make common
sense.
Mr. McGill. Yes, in a way. And I did want to followup on
one thing, and that was some of the things that we do for
communities. One of the things my union did, the Steelworkers,
we filed a suit on the Chinese dumping of tires, and it did
prompt the President to sign a tariff. So there are tariffs
that were imposed, and there are people that work at one of our
represented locations, Cooper Tire, who I believe have a job
today that wouldn't have if we didn't stop or slow the import
of substandard tires from China. We did take that battle on,
and it was----
The Chairman. As I said to you earlier, the United
Steelworkers has a very enlightened leader, a guy by the name
of Leo Gerard, who is just enlightened and very aggressive on
these kinds of issues, and sees the bigger picture of what
happens to the country.
Any last thing before I gavel the committee?
Yes, ma'am.
Ms. Coogan. Senator Harkin, my name is Janet Coogan. I am
Dean of Career and Technical Education at Scott Community
College, and I would like to speak today in favor of State
funds in support of career and technical education in
partnerships with local industry.
We've been fortunate enough to have ACE grants in the past
several years at Eastern Iowa Community College district that
support our partnerships with industry, and most recently I
would like to share a positive project with you.
We've recently partnered with Genesis Health Center, where
the director of surgery approached me and wanted me to
investigate and to work collaboratively with them with a
surgical technology program to train surgical techs. And along
with Mark Capper and our Eastern Iowa Community College
district, we did apply for an ACE grant through the State of
Iowa, and we're very fortunate in receiving that $366,000 to
create new infrastructure and renovate one of our classrooms
into an actual operating room lab.
Genesis Medical Center donated their operating room lights,
a $30,000 piece of equipment, to equip our lab, as well as
donated a clinical instructor for us and opened up their labs
so that our students could participate in clinicals in their
surgical operating room while our lab was being constructed.
And because of that ACE funding through the State of Iowa,
we are fortunate now in having a very successful program where
we now have a 3-year waiting list of students who want to get
trained in our program, and so far our students have all been
employed in our local economy.
The Chairman. Great.
Ms. Coogan. That's just an example of the great news about
those State funds, and I would really suggest that those
continue.
The Chairman. That's a good optimistic note. Thank you.
Amanda Greubel is here. Amanda, you came down. Amanda came
in to testify and just blew everyone away. It was just
fantastic testimony. And as I said, I didn't see this but I
heard that she was on Bill Moyers. He featured her on a segment
that he did a couple of weeks ago.
Do you have anything to add to all of this at all, Amanda,
or not? Since you kind of started a lot of this.
Ms. Greubel. I'm completely with Mayor Gluba. I think I
hear a lot of talk about what can we do for students who are
coming into college. Those of us who have been out a little
while and are at the point of having young children and having
a lot of those expenses, we're really struggling with student
loan debt. I would say anything that could be done to relieve
some of that burden on those of us in our late 20s and 30s and
all of that, that would really be a huge help.
My husband and I talked several times about, if we didn't
have this student loan debt, what would we be doing, and would
we be able to save for our kids' college, would we be able to
put more into retirement, would we be able to do those things
that we know we need to do for our future and our family's
future.
I was sitting back here wanting to applaud and jump up and
down.
The Chairman. I now know Amanda well enough, her
background, to know that she did not borrow money for
lifestyle. She borrowed it just to go to school.
Ms. Greubel. I worked two jobs while I was going through
college.
The Chairman. That's right. Absolutely.
Ms. Greubel. But I'd say the other question I had was I've
had a lot of people since June ask me do you think your
testimony did any good, and all I could say was I know that I
heard from a lot of people saying thank you for your words and
thank you for coming out so strongly, but I didn't know what to
tell them as far as if it did any good. I guess that's my
question for you.
The Chairman. Yes, it does good. I mean, it's like building
blocks. One block here and another, and we're building, I
think, hopefully we're building a legislative agenda here that
will start to take root, start to build things up here in the
next couple of years. These things do take some time. But
believe me, you've added significantly to people's perception
of what is happening out there in the world, and there's a lot
of people who feel that they don't have the ability to say
things well or to be eloquent, so they look to someone like you
to speak eloquently for them, and you did so very well.
With that, the committee will stand adjourned, subject to
the call of the chair. Thank you very much.
[Whereupon, at 3:06 p.m., the hearing was adjourned.]