President Joe Biden touted a strong labor market in the March 7 State of the Union address that was widely viewed as a kickoff to his 2024 re-election campaign.
HR Brew broke down key labor and workforce takeaways from his speech with Acting US Labor Secretary Julie Su.
Good economy, bad vibes. In his speech, the president ticked off a lengthy list of economic gains since he was sworn in, including the creation of 15 million jobs over the past three years, historic low unemployment, and job and small-business growth among Black, Hispanic, and Asian-Americans. But despite these strong statistics, polling indicates many Americans still feel bad about the economy. Some 51% of polled voters rated US economic conditions as “poor” in a February 2024 New York Times-Siena College poll. High inflation, high cost of living, and a lack of good paying jobs/low wages were cited among Americans with fair or poor assessments of the economy, Pew Research found in January.
One reason some Americans might be feeling bad about their pay, despite average hourly wage growth remaining above 4% year over year, is observing how it compares to those of the executives they work for, Su suggested. “We have seen a decades-long growing gap between CEO pay and frontline worker pay,” Su said. “I’ve been in the room where CEOs make $10, $15, $20 million a year, and their frontline workers are struggling to make enough to afford to live near where their job is.”
In his speech, President Biden called for ending tax breaks for “massive executive pay.” His administration has proposed blocking corporations from deducting taxes when they pay any employee more than $1 million a year. While Su recognized some of Biden’s suggestions for cracking down on executive pay will require Congress to act, she posited that “economic policies that benefit working people” also give workers greater choice when it comes to negotiating for better wages, benefits, and scheduling.
Unions’ uphill battle. President Biden spoke about the importance of unions to the middle class in his speech, and Su noted 2023 was a historic year for the labor movement. There were 33 major strikes led by US workers last year, according to Department of Labor data, the highest level in more than two decades. Workers in the automotive and entertainment industries notched big wins in contract negotiations with their unions. Still, overall union membership ticked down slightly in 2023, with 10% of wage and salary workers belonging to unions.
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Asked about why union representation is lagging, Su agreed that the process of unionizing and negotiating a first contract can drag on in US workplaces. “Many workers continue to struggle,” she said. “They vote for a union, and then spend a long time getting to a first contract. That is a big concern for the president, it’s a big concern for me.”
But she also said she was heartened to see some employers voluntarily recognize unions, “when their workers have been clear, that’s what they want.” Voluntary recognition may offer a path to less contentious negotiations, HR Brew previously reported.
No degree required. Just as some employers are dropping degree requirements and pivoting toward skills-based hiring, the Biden administration is also exploring ways to create career pathways that don’t require a college education. In his address, the president said the CHIPS Act, which focuses on semiconductor manufacturing, would help create “tens of thousands of jobs, many of them paying over $100,000 a year and don’t require a college degree.”
“Obviously, there’s a place for degrees,” Su said. “But too often, they can be barriers that are not tied to the actual skills needed to do a job. And so we’d like to break down as many barriers as possible that keep people from getting into good jobs.”
Su said the administration is focused on developing a workforce infrastructure that includes community college, training, and pre-apprenticeship or apprenticeship programs to support more diverse career pathways. On Feb. 21, the DOL announced it’s making $200 million worth of grants available to support apprenticeships in sectors such as clean energy, hospitality, and the care economy (e.g., nursing and childcare).