Director General van der Pas, Ladies and Gentlemen:

It is indeed a great pleasure for me to be here today to participate in this opening session of the U.S. - EU Seminar on Labor Mobility.

Ten years ago on May 2, 1996, EU Commissioner Padraig Flynn and U.S. Secretary of Labor Robert Reich signed a Memorandum of Understanding, which created a Working Group on Employment and Labor-related Issues. From that date to the present, the Working Group has sponsored a number of meetings, workshops and conferences.

These have included discussions on the organization of work, the adaptability of labor, product and capital markets, integrating migrants into the labor market, offshoring and outsourcing of IT workers, and training workers to meet the skills needs of industry. Interestingly, labor mobility and labor flexibility are central themes in each of these issues.

This afternoon, and tomorrow morning, you will have an opportunity to focus exclusively on the important issue of labor mobility and its contribution to economic and employment growth.

Much attention has been directed towards the mobility of U.S. workers, the flexibility of the U.S. labor market and the ability of the American economy to create jobs.

Over the last 10 years, from 1996-2006, the U.S. economy created over 16 million jobs, while unemployment fell from 5.6 percent to 4.7 percent by January 2006.

Our “Misery Index,” – a measure that adds the rate of inflation to the civilian unemployment rate, continues to be at historically low levels.

During 2005, the performance of the U.S. economy was strong. Let me offer some facts.

Real Gross Domestic Product grew by 3.5 percent – well above the historical average.

Employment increased by almost 2 million payroll jobs over the period and the unemployment rate dropped to 4.9 percent in December, well below the averages of recent decades.

Real disposable personal income increased, and real household net worth reached an all-time high.

Non-farm business productivity grew 2.9 percent, well above the 2.1 percent average of the past 50 years.

A look at U.S. labor market dynamics shows that American workers have relatively short spells of unemployment and that workers move into and out of jobs much more frequently than their European counterparts.

In January of this year, for example, more than two-thirds of unemployed workers reported being unemployed for 14 weeks or less. More than one-third of all unemployed workers reported that they were unemployed for less than 5 weeks.

In 2004, the long-term unemployed--those unemployed for over a year--measured 12.7 percent, significantly lower than the EU-15 average of 42.4 percent.

It’s important to recognize that at any given time in the U.S. labor market, some businesses are expanding while others are contracting. Jobs are continually being created and jobs are being lost. For example:

On average over the past decade, the American economy has created nearly 2 million jobs each year. This net increase has been the result of approximately 17 million jobs being created and 15 million jobs being eliminated each year.

Looking at gross job gains and job losses for the 3 months ending in March 2005, about 7.6 million jobs were created and about 7.4 million jobs destroyed. In other words, while the net gain was only 574,000 or about .6 percent of total employment, jobs created totaled 7.2% of those employed and jobs destroyed totaled 6.6% of those employed. This is an excellent illustration of the dynamism of the American labor market.

In the U.S. labor market, we promote flexible labor markets and support worker mobility through policies that:

Limit impediments to the flow of labor and other resources from low-to high productivity activities;

Ensure that regulations governing the hiring and firing of workers in the United States are low;

Promote competition by ensuring that industry regulation is kept at a minimum so as to promote product market flexibility;

Reduce the tax burden;

Promote the establishment of new businesses and the expansion of existing businesses; and

Limit social insurance benefits to ensure that the unemployed and those receiving social assistance have an incentive to return to work.

We recognize that unemployment and the risk of unemployment are a reality in a flexible labor market like the United States, and we appreciate the importance of responding to the needs of the American worker. We have found that those labor market policies that work best are those that maintain the dynamism of our constantly changing labor market. Let me briefly note some recent initiatives that have been developed to further support labor mobility, and hence dynamic growth, in the United States:

A High-Growth Training Initiative to develop training programs that meet the skill needs of industry;

Workforce Innovation in Regional Economic Development, or “WIRED” program that encourages workforce investment and economic development officials to work together to produce long-term strategic plans that prepare workers for high skill, high wage opportunities;

Earned Income Tax Credit, which creates a strong incentive to work by providing a refundable tax credit to low wage workers; Re-Employment and Eligibility Assessments, which provide reemployment services for UI recipients; and

For 2007, the President has proposed Career Advancement Accounts that will enable current and future workers to gain the skills needed to successfully enter, navigate and advance in 21st century jobs.

Over the next two days, you will discuss various elements of labor mobility. You will examine occupational and job mobility trends in the United States and the European Union and look at factors that influence the decision of workers to relocate in order to find new jobs. You will look at how new skills will assist workers to locate new employers and new jobs and to assist workers to move up career ladders at their current place of employment. Finally, you will review the impact that labor mobility has on the economy.

In concluding, I would like to take this opportunity to thank the organizers on both sides of the Atlantic for their hard work in putting this event together. I also want to wish you all the very best for a rewarding seminar.

Thank you.