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Betsey Stevenson: Senate Small Business Committee hearing testimony Q&A

March 6, 2019 0:47:38
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Betsey Stevenson: Senate Small Business Committee hearing testimony Q&A. March, 2019


What should we be doing in order to ensure
that we have a labor market that can

provide good honest paying jobs for

folks who do not have a 4 year college
degree and who do not live in one of these

metropolitan hubs on the coasts but who
maybe come from a state like mine that is

majority rural or majority ex-urban who
still want to have communities that

are prosperous who want to be able
to support and raise a family but

who want to do that without having
to move to someplace else and

who have not college 4 year colleges
either not available to them or not for

them but yet they still want to have
access to good quality meaningful work.

Well I think it's an excellent
question I would mention a few

things I think education certainly has to
be at the top of the list and I like how

you described it which is people get to
age 17 or 18 from whatever background

they come from with with the aptitudes and
preparation that they have and

absolutely we should be talking about how
to do better reform in society as a whole

to make sure we get people to that level
as prepared for success as possible but

to the extent that we're not I think it's
a mistake to just wish that we were and

proceed from there given where
people arrive at age 17 or

the apprenticeship type pathway that we've

heard I think is critically important and
frankly investing federal money that would

otherwise go to the kids who are going to
college I I'd rather see us investing in

the kids who aren't headed for college in
a sense so I think that's very important

and then one other thing I'd mention is
just our regulatory infrastructure right

now wildly undervalues work
in physical economy whether

it's farming whether it's
infrastructure construction resource

extraction manufacturing and
favors finance and technology and

we shouldn't be surprised where that that
that's where all the investment goes and

I think we need to recognize and
put a much higher premium on the value of

the work that people do in the physical
economy but if you sit here so

I agree with much of that
sort of on the demand side.

A tight labor market strong demand
pulls people into the labor market and

Bruce wages for lower skilled.

Employees lower paid employees so I think
that's very important to the overall

labor markets to build in the health
of people have less of an education or.

Less skills entering the workforce and
also say

as I mentioned my testimony a healthy
churn in the labor market is important for

everybody particularly marginally
attached workers and so

the more connect this back to
entrepreneurship the more fermenter you

have in the business market the more
that chain reaction flows to the benefit

of marginally attached workers many of
whom we've talked about here who face and.

Challenges entering the labor market one
of those is demand and one of those is

a static economy so when we have static
economies many of those regions you talk

about are very static they're not
suffering from business decline

they're suffering from lack of business
entry and they are missing that chain

reaction the business century sets off and
so to the extent that we can focus on

entrepreneurship as well that does create
more labor market opportunities up and

down the chain and more demand for work
of all different types the Dutch teams.

And so let me also focus on the demand
side putting this a little bit in

perspective so among people in their

their twenty's their late twenty's 64
percent do not have a college degree.

are in the goods producing sector so

there's nothing that this committee or
this Congress can do

that's going to be able to take most of
the people who aren't going to college and

get them into some sort
of good producing job so

we need to be thinking about technical
training in a way that's very

different from the way we used to think
about it so things like computer coding.

Other types of service jobs
are going to be important place for

good jobs so do we have the training
programs to make sure people can do those

kind of jobs that's an important question
and then the spillover effects for

things like are we providing subsidies for
high quality child care if we provide

subsidies for high quality child care
makes it easier for families to work and

it also pushes up wages in the child care
industry which is an important industry

and we can make that a better paying job
a better job for people to feel that both

men and women can enter the jobs taking
care of early childhood education so

we need to be both building the skills
of the workers who are able

and can thrive by having more skills we
need to be rethinking what we mean when we

see technical training and we need
to be investing in the parts of our

economy like health care and education
services where there is huge demand but

right now those are seen as undesirable
jobs they have they are undesirable

because they're low paid and a lot of
pay interacts with public policy and

terms of what's the reimbursement rate for
an elder care worker for example so

there are things we can do on that and
that will both support families and work.

Thank you great question I listed a number
of recommendations that my written

testimony which is 5 that I want to
highlight number one just understanding

and making sure that we're clear about the
fact that the worker is not monolithic and

so workers are going to be
subjected to different barriers and

challenges depending on
where they're from but

also maybe their reason they're
in this city and their gender.

All dealing with different barriers
also redefining college a lot

of times we talk about college and

higher education which is thinking 4
year college degrees training program

should also be included when we talk
about post-secondary education and

we cannot forget community college which
leads me to my 3rd point many times and

vigils are not able to access additional
credentialing because of access or

affordability and sometimes community
college can even be expensive for

our low wage workers who are seeking
to obtain maybe evening classes or

additional credentialing so that they can
access high wages and so redefining how

we talk about college and then making sure
that we're talking about the affordability

of all levels of college and then lastly
aligning workforce development with

economic development it is so frustrating
to me and many other stakeholders when we

talk about economic development
what businesses are looking for

over here and then we talk about what it
takes to actually move workers from A.P.

to Z. Here it is important that when we're
talking about crafting training programs

that we are listening to employers
what is it that you need so

that we can craft the curriculum

that will ensure that you can
draw from these trainees and

then you can hire them and employ them so
that we're killing a bunch of birds

with one stone and so those in addition to
all the many recommendations I've listed

in my written testimony I believe would
help ensure that we're able to get to

the labor workforce that we're looking for
thank you thank you thank you for

a term senator Young just one of
the yes I had a meeting with N.F.I.B.

which represents a lot of small midsize
businesses and for the 1st time in

years the number one concern in their
survey of business owners is the lack

they can't find trained workforce
to fill the jobs that they need

at the small and they're willing to train
people but obviously that's an additional

burden that they're facing so I think
it's very important question Senator.

Thank you Chairman for holding this
hearing and appreciate all of our

witnesses for being here Mr Military place
great emphasis on in your testimony on.

Indicating that we should at the federal
level consider banning the enforcement of

non compete agreements except for
perhaps under narrow circumstance.

It's a bold proposal and one that in
many ways I find attractive Could you

please explain what
exceptions might exist to

that ban in force Mint though thank you
Senator but the most obvious exception is

probably when a business owner
sells his or her business.

To an acquire in that case made in many
cases the transaction itself would depend

on their being in and compete so

I think that's the kind of thing that
makes a lot of sense in California

the most restrictive state the country
when it comes to not competes

they allow for that exception I think that
makes sense as a national rule as well OK.

There's there's another concern that I
didn't is a paid should we go this route

and it's the States this is traditionally
been the prerogative of the states to

determine whether or
not to ban the enforcement of competes and

if so you know whether they ban broadly or

more narrowly so what would be your
response to someone who had these sort of

federalist concerns sure I think it's
an important question to address.

It's been the purview of the states
because the federal government's

chosen not to have a say in the matter but

now computes are properly understood as
part of employment law and employment

law certainly is an area where the federal
government has a strong interest and

sets a national baseline against
which states can modify and

do other types of their own prescriptions
that that are unique to their states

I think this is clearly a case in
which both falling within employment

law jurisdiction and being a matter of
such importance to the overall health of

the national labor market there's both
a compelling economic rationale and

certainly a clear legal rationale as
well I think to for the program and

to have a say as it does on many many
other employment law matters sure

I couldn't to sit paid a number of
businesses I can think of I grew up in a.

Big family business in and
we'd have sales lists customer lists and

those were very important to
our business model and and so

there's certain information that's
important to certain types of businesses

are there steps that companies can take
without the use of a non compete agreement

under the law that can be used to
protect those legitimate in interests

I think that's one of the this is one of
the questions that gets the heart of why

non-computer so problematic it's that for
the very reasons that employers often use

to justify their use they're not
necessary employers have access to trade

secrets protection to other protections
of all intellectual property they have

the use of non-disclosure agreements and
on solicitation agreements and

when you look at the reasons that
employers give for the use of a non

compete they often fall into one of those
other more Finally scoped categories and

those categories those tools don't
carry the same type of broad harm

that not competes carry throughout
the labor market throughout the economy so

if you have alternatives that are more
finally spoke to the concerns that

employers have over legitimate concerns
frankly for intellectual property and

trade secrets those are the best tools
to apply to those challenges and

leave aside the broad prohibition
on the very thing that our

economy is based on which is competition.

And for workers their knowledge their
skills that's the only thing they have

to trade on and so this is the kind of
thing that I'd say going further really

harms individual liberty and makes it very
hard for us to get the kind of outcomes we

all say we want which is a boost in
wages more entrepreneurial dynamism

more innovation our economy we have
to look upstream from that and say

if this is a tool that's being misapplied
what are the alternatives and when we ask

that question we find that there are many
that employers have to reach to so

you mention dynamism and I know that's
something that you're intently focused on

it at economic innovation group you and
I have discussed it some length and

do we have economic literature is
there some good evidence out there

about the impact of non competes on the
marketplace and if so what conclusions can

we draw now that very clearly
the literature agrees on a few fundamental

things one that the enforcement of greatly
harms new business entry and markets in

some cases up to 20 percent that it
harms the overall wage environment for

workers even those not covered by a non
compete but it states that enforce them

it has a depressing effect on
everybody's wages in certain fields.

So there's an on and on right I mention in
my testimony job satisfaction the amount

of time that a worker stays in a job all
of them are harmed so it's very hard to

find an issue that unites the academic
literature the way the NAACP beats does.

It's not really a disagreement academics
as to whether they're harmful it's to

extent their harmful and the more
literature we have the more ways we're

finding that they're arming
both workers and entrepreneurs.

Thank you all for being here
with your literary thank you for

answering my questions and Mr Chairman I
know it's very and senatorial but

I yield back the balance of my time.

You know 2 minutes left or so
the sheen so good he can I take it.

Well thank you all very much for
being here I apologize for

missing your testimony but I want to
begin with you Dr Stevenson because

I sort of heard the end of the question
about child care but in New Hampshire

child care is next to mortgage is
the highest expense that families face and

for an average family with a newborn
up to one year old in New Hampshire

it's over $12000.00 a year just for
child care for that one child so

can you talk about the challenges that
presents for families as they're.

Trying to get in and
out of the workforce and

that is often coupled with the fact
that most people don't have access to

family medical leave our family leave
around the birth of a child and

what challenges that also
prevents where on the one hand.

They want to go back to work.

The cost of childcare
a very high they don't have

leave to stay home with the child and
what kind of a conundrum do families face.

Thank you very much for that question I
think one of the real surprises in recent

years is that we've been
in this long boom and yet

fertility continues to decline why is
it that millennial are finding it so

hard to have children well you touched
on part of the reason which is that

they're graduating from college with
enormous amounts of college debt and

then they're facing down or
child care costs that are then that is

itself actually equal to the cost of
going to college or even greater and

to those costs combined with.

Them having graduated in a recession so

not having that job changes they need to
have to get the wage gains they needed

early in their career and then they
face unsustainable cost of child care

they 5 are in jobs where they may
not have access to paid leave.

Maternity leave paternity leave or
flexibility parental leave all

of these things are leading some people
to say I can't afford to have children so

we're seeing fertility decline what we see
with these challenges from childcare and

not having access to the what I
think of as an infrastructure that

supports families is some people
choose not to have children but

other people get sidelined from the labor
force we see in the data very clearly that

people who have access to paid leave
women who have access to paid leave

are more likely to stay attached to the
labor force will be in the labor force for

longer and will have greater wage
growth over the course of their lives.

We see.

Quite clearly in the data that women who
feel that they need to take time out of

the labor force have a really hard time
getting back in one of the problems with

our labor force and with a lack of
dynamism is that we have we're failing

to provide the on ramps when people take
an off ramp out of the labor force so

we get people who for
some reason or another and

they can't get themselves back in for
many women and

many families if you sit down if you have
a 100 year old child and you sit down and

you look at what is the cost of
the Lowman going to work the what they're

going to pay in child care the marginal
tax rates on the woman's additional work.

You know the cost of her commute to work
they find at the end of the day they're

not netting very much and so many families
then get put themselves in a situation

where they say well maybe we
can't afford to have this and

we can't afford to have you stay in
the labor force but when you step out

it becomes really you come in at much
higher wages or maybe not at all.

As I mentioned at the end before is that
if you if we have greater support for

child care there's a couple things that
happen we invest more in children and

those children have better outcomes and
earn higher wages we have a large large

body of literature that shows that early
childhood education reaps benefits for

taxpayers over the course of the kid's
life but it also reaps benefits for

families as women are able to get back
to work as they're able to support their

families and those kids particularly
lower income kids will grow up and

a household with higher income which
generates its own 2nd set of benefits so

this issue is very very crucial to the
success of American families I certainly

agree and I hope that we can find ways
in which we provide more support for

families around child care and early
childhood education and my next question

is really for any or all of you because
one of the biggest challenges we have in.

New Hampshire right now as affordable
housing we have an economy that's

generally doing pretty well very
well we have a very low unemployment

rate one of the lowest in
the country we have a lot of jobs

that are going unfilled and
we have companies that can't get

workers because they can't afford housing
in the communities that they're in.

Does anyone have any suggestions about
how we better spur affordable housing.

So I'll go 1st.

You know I'm sure that John may have some
comments around how there are a number of

initiatives to provide for

housing opportunities within
the context of opportunity zones.

However And we have those in New Hampshire
and we're seeing some benefits from

those as well as we have also have have
zones but they're not providing the right

end of that builders need to actually
put in housing that's more affordable.

So you know from a workforce perspective
this is something that the job

opportunities has 1st has recently started
to take on because we're finding that for

low wage workers about 40
percent of their wages or

more is going towards housing costs and
we're talking about renting right C.N.N.

There was recently a study on C.N.N.

The show that in Maryland we were 5th in
the nation for how much you must make

an hour to rent a 2 bedroom home right
it was somewhere around $29.50 and

so work housing instability is a workforce
challenge and so I think that this also

goes towards an earlier comment that I
made around aligning economic development

with workforce development because
you're absolutely right employers and

businesses in addition to looking for
a pipeline of educated skilled workers to

determine where they're going to move they
are also looking for the livelihood and

what's going to take to ensure that our
workforce is going to be able to live and

thrive and one of that includes
housing are their actual options and

are the affordable options and

so I would highlight of course or
a bless you know Opportunity Zones

as a way to encourage localities and
states to get creative with how

to ensure that housing is provided at
an affordable rate across income levels

I think that you know you're starting
to hear creative options for

whether they be housing co-ops for
you know particular populations for

instance we have individual
returning from incarceration and

they need a place to stay as well and
so how do we provide those housing

opportunities for them so
that it's not can.

Beating to the larger homelessness
situation so that might not necessarily

answer your question of what we can do to
incentivize builders and others to move

into our communities to ensure that we're
providing these housing I would say that

the only solution is how can how can we
use Opportunity Zones as a way to provide

incentives to connect some of these
stats I don't know John wanted to and

that may work in 20 years in going
to work next year or in the next

was just going to add that as we look at

housing challenges around the country
the most fundamental relates to zoning and

land use regs that are local so that the
prohibition on building towards density

and scale of housing close to where the
jobs are is a fundamental challenge that

no matter how effective a subsidy there
is no way to get around that principle

challenge and no subs is going to be
effective at overcoming that scale so

I agree there's tremendous opportunity
with opportunity zones to make certain

types of deals more affordable and
provide especially I think in workforce

housing where there's a huge missing
middle in the labor market I see that as

being a perfect match but
that doesn't compensate or

only partially compensated compensates for
the fundamental challenge which is

too many places are far too restrictive
about allowing for local building and

density and there hasn't been easy.

It's certainly appreciate that we have
a project and downtown Portsmouth that has

been held up around
concerns by a betters it's

you know multi family affordable
housing that is right downtown

now I think it's going to go forward but
as you say there are too many.

There's the ability of too many
restrictions to be put in the place of

going forward that housing
Thank you Mr Chairman.

Thank you Mr Chairman and
to each of the Palace thank you for

your participation it has
been a puzzle I think for

many to see that we are one of the very
wealthy countries in the world perhaps

the wealthiest of the major nations
in the world if you look at a G.D.P.

per capita basis we have a lot
more stuff than we used to have

as middle class families 30 years
ago the things we have in our homes

our are extraordinary and yet
the degree of anxiety and

happiness anger anger directed
towards our politics and towards.

Elements in our life that we're not happy
with is at a very very high level and and

I think it's been instructive to me to
recognize that perhaps some of this is too

much focus on you if you will G.D.P.
a dual

track if you will in education and
I want to put in a plug and

and then get to my quick the plug is that
some years ago and in the state of Utah.

A few of the state colleges decided to
make a change and became 4 year colleges

at the same time said there's no admission
requirement everyone is accepted and

you can come in and
you can get certification to go into.

A job you can get licenses to do various
things you can get an associate degree or

if you want you keep on going
to get a 4 year degree so

as you come in you don't just say which
one you're going to do you take different

classes you find which ones that
you find most compelling and

most interesting you pursue that
course and off you go some go for

your route 72 years some get sort of sort
of occasion but I put that aside but

it's a very successful effort in providing
people a wide range of tracks if you will

in the same institution but I want to turn
to is something which I have seen time and

again which is even with community
colleges that talk to the local business

community to say what kind of jobs
can you do are you looking for

what kind of training do we do it seems
to me that some of the most effective

training is done by the business
itself by the company itself

we give our Indi credit when companies
are willing to invest in stuff.

We don't give an R. and D. credit when
companies are willing to invest in people

and I wonder whether whether you
believe that employer based education

employer based training might be
a highly efficient way of helping people

find a a satisfying career and
whether we might be wise and

in providing a credit of some kind to add
to businesses that hire someone who may

have been incarcerated someone who's been
in the workforce for a long time someone

who's just coming in for the 1st time and
then providing them this credit for

training purposes to get them
started in their career.

Yeah I think I think that's exactly
the right way to think about it which is

that an employer led training is

pretty much as far as you know the only
way to do training I mean when you

when you have government led
programs that try to guess what.

Employers want they tend to work out
fairly poorly and partly it's for

your employers knowing better what they
want parted from you just actually getting

on the job sooner and so the kind of
credit you've described I think is

a very good approach we actually have
to our detriment I think a wide variety

of very targeted credits so a credit if
you hire this exact kind of hard to employ

person in this industry for and so on and
so forth I think a much better model and

one that fits with the tracking
concept we've discussed and

with apprenticeships generally is to
really focus the model on saying for

folks who are sort of in those
late teen years the Senshi age

we essentially want to subsidize

the employment that that getting that
person into a job being able to while

they're still in high school be on the job
part of the time is going to be incredibly

important to building skills sooner and
openly saying we can get someone to age

with you know earnings in the bank

years of experience and
industry credential and a job and

so targeting more of our what we call
education spending right now toward

supporting that kind of relationship
I think is a very important approach

thank you any others that would
like to comment yes on things York

so I do think you're on to something
a however I do think there should be

multiple options in terms of training
I mentioned the Maryland program

the employment advancement right now
this is an employer led program where

the employers you have the jobs you know
the curriculum that you're looking for

and so you tell us the curriculum and
we partner whether it's a nonprofit for

instance in construction it's failed TS
and we partner with a training provider.

Say associated builders and contractors or
it could be a community college but

you're working with that community
college to come up with the curriculum

that is directly aligned with
the jobs that you're looking for but

I also want to make sure that we
are moving away from community colleges

because community colleges also provide
an opportunity to access that training so

that you can access the jobs and
then we can allow employers to build on

top of that regarding your
last point tax incentives for

employers who may be interested in hiring
individuals the criminal background.

You know I struggle with this because for

the job opportunities taskforce we are
always interested in ways to incentivize

businesses to hire to
incentivize businesses to.

You know ensure that they have a robust
workforce but the flip side of that is

when we talk about individual
with a criminal background.

And we've talked about providing a tax
credit as an incentive these are actually

very qualified individuals they're
able bodied there's actually

nothing wrong with them aside from the
fact that they have a criminal record and

so in today's market when
we have an aging workforce

when we have all of these challenges where
employers are now having to recruit and

consider employees prospective employees
that before they did not necessarily have

to such as individual with a criminal
background I worry that we may be sending

the wrong message by relying too much
on tax credits to incentivize employers

hiring individuals a criminal background
when these are probably would be some of

your best employees because they're
hungry they have something to prove and

would be eager to come on your job site
and would be eager to be trained by you as

an employer and everything that comes with
that outside of having a tax credit or

some type of tax incentive and so
I mean to be I struggle with that

because I understand that we want to
incentivize businesses but I also want to

make sure that for individuals
the criminal background we're not putting

them in a box where we are assigning them
some particular handicap because the only

handicap is the fact that they have
a criminal record and we as a society have

assigned the stigma to that record but
they can work and they're great workers.

So I think what we've learned
in recent years is that

when the labor market gets really tight
businesses hire people that they wouldn't

have looked at when the labor markets
not to tight it's not a big surprise

it means that incentives matter how much
of an incentive to they have to hire

hard to employ people how much of an
incentive do they have to provide training

one strong incentive is a tight labor
market we're not always going to be

blessed with a tight labor market so

I think it's absolutely a good idea to be
thinking about what are the other ways

in which you can build incentives into
the system when there's not a tight labor

market I do think that it would be very
wise for the Committee to think about

a set of incentives that might actually
move with the state of the labor market

you might not need incentives strongly
today with our 4 percent unemployment but

I'd sure like to see those incentives
when employment is 6 or 7 percent and

I'd rather you debate that right now than
waiting until we see unemployment at 6 or

start debating it then it's possible
to have policies that are automatic

stabilisers by increasing the kinds
of incentives we provide employers to

hire people as the employment unemployment
rate rises so I personally think

that the types of tax incentives that
you're talking about are a wise thing for

you to be considering and I would add to
that to think about ways in which you

could think about ramping that up and
down as the business cycle changes.

Just some questions now reclaiming my
time of the news at the beginning of the.

Must work something else can.

I support I think we are with the goal
of helping those who have criminal

backgrounds convictions in their
backgrounds from finding meaningful work

but we're all aware there's a stigma
associated with that some lawyers so

shy away from it for
a lot of different reasons what's been

other than just the market need you know
we need to hire people we're going to have

to hire people who wouldn't hired other
times what's been some of the more

successful methods that you've been
able to use to convince employers

to hire people that have
had a previous conviction.

So I mean one of the one of the methods is
actually one that's not led by a jail T.F.

it's one that Dr Stevenson just
articulated the fact that we have a tight

labor market and so you know by
default they're having to consider

workers who they would not
necessarily consider you know jail

is also a member of a number of business
associations you wouldn't think we are but

we tend to be because we have to be
responsive to both the worker and

the employer and we find that within those
groups those employers that you know for

a long time maybe have always hired
individuals a criminal background are now

able to you know anecdotally advise an
informant influence their colleagues and

their partners on what it's like
to actually have an individual

with a criminal background on their job
site and how the sky has not fallen and

actually it's one of you know my best
employees outside of that it's really

just getting folks to actually understand
particularly employers to actually

understand the dynamics of an individual
with a criminal background and

add that humanistic approach because
a lot of times we just focus on

the fact that you went to jail you have
this record and that's all I see and

that's all I care about these are
individuals these are our neighbors these

are brothers and sisters and again if they
are if they were not sentenced to life

they're coming home and so
if they do not have access to employment

then they are going to jeopardize our
communities because they will feel

that they have to resort to illegal means
this then becomes a business challenge for

those businesses that are looking not just
for stables educated skilled workforce but

also a safe environment so
how can we talk about the importance

of investing in these
individuals not just for

the moral social feel good kind of
thing but making the business case for

why this actually will ensure that
our communities are safer and

you have access to workers what we're
really relying on other anecdotes from

other employers who are relying on the
fact that you know if you train them and

provide them with the support quite
honestly doesn't matter that you have

a criminal background because if you
can get to work on time if you have.

Skills and the training that's necessary
all of that is irrelevant outside of

any regulatory challenges that
are presented with the criminal background

which is to cast the strategy
a productive pluralism that you describe

I think could have some
interesting implications for

small business of the primary focus of
labor market policies on connection

that's what we made it connecting
workers especially young workers to

productive employment that's consistent
and that builds skills and it seems like

that might entail greater engagement with
small business and with entrepreneurs.

I wonder if you could just discuss that
because I sounds to me like that's tailor

made for connecting workers to the needs
of small businesses started businesses and

unique industries.

Yeah I think that's right I think there's

relevance to small businesses here one
is to recognize the role that small

businesses play in the ecosystem of
the local economy you know Dr Stevenson

rightly pointed out that a very small
share of overall employment is in

manufacturing for instance but when you
step back and look at what the ecosystem

of the local economy what you tend
to have is a few large employers

some of whom need to actually be sending
something out to the rest of the world and

then that then supports a much more robust
and vibrant service sector around it so

I always say we can't all
serve each other coffee.

And so to have to have a vibrant small
business sector it can't simply all be for

instance child care providers providing
child care for each other and

we need to make sure that that
the economy is one in which the types of

business that small businesses are likely
to engage in can still connect to larger

multinational nationwide companies and
that's where a lot of their growth and

productivity gains are likely
to come from so so

small businesses as kind of a key
component of local economies in particular

is very important and then the 2nd thing
I'd say and this goes back to what we

were speaking about a moment ago with
respect to education is that small

businesses are in a an especially
tough place when it comes to training

you know a small business might need to
hire one person every year or 2 they can't

run a gorgeous global training program
with you know 3 off sites a year for

their one worker per year and
so for small business in

particular it's really important to have
structures at the local level that allow

multiple small businesses to come together
to collaborate with larger business is

a little bit like news York was describing
where you design the curriculum maybe it's

hosted at the community college and
then all the small businesses that need

a particular skill set have
access to those trainees and so

having small businesses be able
to collaborate in that respect

is critical to having them be able to take
on new workers where they're not going to

be able to invest in a full
training program themselves.

But I also want to ask you about it's
really impossible to talk about work today

without automation and when people think
about a mission they tend to think of

a robot or a computer that was going to
replace their job and entirely you and

I guess I can open it up to the entire
panel what are your I know you miscast of

a different view on this perhaps those
of you have different views on it but

how should workers understand both the
challenge and the opportunity embedded in

out of nation and technology which
does as always create the potential

of displacement but it also creates the
potential of increased productivity and

thereby higher pay and
new fields opened up so what's the.

You know you talk to people particularly
in small business world but

even in larger firms and there's just
a lot of fear among workers that they're

going to get replaced by a robot so.

What's the best way for

us to focus on that particularly as
it impacts entrepreneurship and and.

And startups.


Say one thing that I've realized the more
I talk about this that we have a real

problem that we anthropomorphize robots
and so it sounds like it makes sense to

say a robot could take your job but
a robot is just a new form of

technology you would never say
electricity took my job that would that

would sound ridiculous you would never
say many of their sort of technological

breakthroughs that have made people
more productive over time took your job.

It happens that the kinds of robots we're
picturing look more like a worker but

at the end of the day the effect is the
same and as Dr Stevenson said Rarely do

they actually replace the person they
replace some portion of the person's tasks

and so the key is going to be for
workers to collaborate with technology and

to recognize that the technology is
what makes the worker more productive.

I think the one of the thing we could
focus on as as we talk about it and

as policymakers talk about it is is
to realize that workers are actually

the constraint on how quickly we can
deploy technology that when when when we

talk about you know these jobs with we
can't find the worker for the job but

he's not ready so one effect of that is
that's going to slow down the rate at

which automation actually happens but
is a 2nd is to reconfirm the fact that

this is going to accrue to the benefit
of workers and really finding ways to

design technology for the workers we
have and equip workers to work with that

technology is going to be the secret sauce
for for a Labor Mike market that thrives.

Kalmia has a automation
apocalypse skeptic I don't

I don't think there's evidence to back up
many of the concerns that we often hear

thrown around about the rise of automation
as it relates to replacing workers

to Oren's point there are very few jobs
that can actually be replaced in full

by a robot of any form I think the key is
that we're missing the kind of safety net

that robust business dynamism used to
provide we've always had industries and

jobs being faith phased out of our economy
that's always been true productivity

gains by definition are displacing
of some future potential worker

as we get more efficient doing certain
things the difference is we haven't felt

that in previous eras because we've had
a more robust from entry that's caught

more of those being left out of certain
jobs are taken out of certain insurers and

brought them back into productive use so
areas of the country that are particularly

undynamic are the ones not with
high death rates of firms but

have incredibly low birth rates
of firms that's what's missing or

one of the major things that's
missing I think is as we

think about the worker piece of all this
we need to think about the entrepreneur

as well.

Incumbent businesses tend to shed jobs on
that every year as a whole of any size and

so it's where we get where we get net
job creation is disproportionately from

new businesses when that fades that's the
engine of job creation that's the missing

safety net for workers.

So my testimony focused much on this
because this is something that I'm

thinking a lot about and
it's been repeated the idea that.

Automation doesn't take
jobs it takes tasks but

that creates an enormous opportunity for
us to create jobs that are more

meaningful than this one of the things
I'm looking at in my research is which

are the tasks that are being taken
are they the tasks we like to do or

the tasks we don't like to do in the past
what has happened with technological

changes our jobs have gone better we've
seen an increase in job satisfaction we

like the stuff that we're able to do
more I certainly know that my job

being a university professor is something
that's much more common today because of

all the technological change
that has come before and

I like my job a lot more than I would have
liked working in an agricultural field.

There is a lot of promise
that comes from this but

I do think it's worth keeping in mind
that there is a lot of disruption.

When I go to conferences on AI I will
tell you that I'm shocked at how fast

the technology is moving
I agree very much with.

You know that we can only move as fast as
our workers are ready for us to move so

there is a real limit that comes from our
workers but the technology is moving quite

rapidly and we need to make sure
that our workers can keep up it's

one of the reasons why I have such concern
that in the race between technology and

education technology seems to be
racing in front of education and

I think we need to correct that
problem quite rapidly I do want to

emphasize that these kinds of
technological changes this.

Is going to allow us to produce services
that are more tradeable So the idea that

when we see here services you think cup of
coffee I mean that's not the right way to

think about it that's what the US is
really succeeding with a lot of trade and

business services there are a really
important source not just international

trade for us but of course across
national boundary trade remote we're.

Because allowing us people to
live in places they couldn't have

lived in the kind of job that they were
having before so technology will create

a lot of opportunities we need to make the
space for it to happen not try to get in

the way of it and then help make sure
the prosperity that comes from it is ****

is shared so that lots of workers
are able to benefit from this change and

not just the few owners of the people
who own the technology and

the anecdote I always like to tell
people is what you know I've had a long

conversation once with an uber driver who
told me that he thought self driving cars

were the worst thing in the entire
world and towards the end of

terrible self driving cars are I asked him

what if you owned the car what if you were
the one sending it out to do your work and

you could stay home and all of a sudden
his attitude toward self changing cars

changed a lot so the real question about
this technology is not going to be that

it replaces workers it's going
to be about who owns it.

I have nothing else to add to
the remarks of my eloquent panel

asides that absolutely for workforce
advocates we're looking at how we can use

these opportunities to turn them into
training opportunities for workers but

we're also struggling because you know we
also like self checkouts at the grocery

store but also know that that is you know
taking real jobs away from real people and

so how do you balance efficiency and
easy access and quick this

with ensuring that folks are able to
still be employed and have good jobs.

And you have something just
too quick observations one

as you point out innovation is where
job growth will take place and

good jobs will take place where is where
we started because innovation occurs much

more frequently among small businesses and
large businesses so our tools to preserve

a healthy small business community very
much as part of having the type of

economy we need in the type of jobs
that we want so I just just make that

sort of brings together that the 2nd
observation is on these tax credits.

And we recognize that the labor market
changes at times and there's different

periods in which employers are and
have different incentives but

I can tell you as one of the champions
of the Work Opportunity Tax Credit and

having talked to a lot of employers who
have used the Work Opportunity Tax Credit

there is a higher risk factor
by those employers and

it has to be compensated some hail and
we can talk about

getting good workers as we all want but
we know that our workforce

programs are not equitably distributed
particularly people coming off of

welfare returning citizens and the work
opportune are people who are unemployed.

If you're an employer and
you have a choice between

trying to take someone who currently
has a job or somebody is unemployed

there's a natural biased in favor
someone who's already employed so

long term unemployed individuals have
a much more difficult time in getting

the attention and the Work Opportunity
Tax Credit has compensated for

that it has worked very well over time I
just really want to put that on the record

because there was some some conversation
about the values of tax credits or

compensation issues and I've certainly
understand that discussion and we really

need to focus on what is the right policy
but I do believe that our current tool

the Work Opportunity Tax Credit is one
that is worked well and is very valuable.

I want to thank all 4 of you for
being here all the members attended for

this is really meaningful to us for

the jurisdiction is going to small
small business and entrepreneurship and

it's important to mention
those 2 because they're

not always the the focus small business
obviously have oversight responsibility

over the Small Business Administration and
we're going to be undertaking a task I

hope of reauthorizing it because it gets
the chance to help modernize its programs

to deal with some of the things
we're taking testimony on and

on the entrepreneurship side the notion
that we want to continue to be an economy

in a society in which new business and
new ideas are being pursued and

in many ways technology is
intimidating to people but it also has

lowered the barrier to entry in a lot of
fields it used to be that in order to have

a business you had to have a big marketing
department that people you could send out

to find customers you today a small
business is everything from an over

driver who is independent contractor to
someone selling things on on line and

they don't have a massive sales
force it's so technology's empowered

entry into the marketplace that would
not have been there so it's actually

in many ways opened up entrepreneurship
access to markets but it also.

Is lowered the barriers to entry in
a business you would normally need

more traditional constructs around in
order to pursue So these are the kinds of

things that we need to be thinking about
as we not just try to reauthorize and

modernize S.B.A. but writ large public
policies that help incentivize all this so

again I'm grateful to you for
your time for

your forward thinking ideas across
the board on strengthening the nation's

labor markets on hand which I
think go hand in hand with and

with Mansingh small business dynamism and
entrepreneurship and the record for

this hearing is going to remain open for

questions for the record by any of
the members that should be submitted

by Wednesday March 20th at 5 pm without
Thank you again this hearings adjourned.


You Bill.