U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

88–592 2014

S. HRG. 113–336 

EMPOWERMENT IN THE WORKPLACE 

HEARING 

BEFORE THE

JOINT ECONOMIC COMMITTEE 

CONGRESS OF THE UNITED STATES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JUNE 18, 2014 

Printed for the use of the Joint Economic Committee 

( 
(II) 

JOINT ECONOMIC COMMITTEE 

[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress] 

HOUSE OF REPRESENTATIVES 

KEVIN BRADY, Texas, Chairman 

JOHN CAMPBELL, California 

SEAN P. DUFFY, Wisconsin 

JUSTIN AMASH, Michigan 

ERIK PAULSEN, Minnesota 

RICHARD L. HANNA, New York 

CAROLYN B. MALONEY, New York 

LORETTA SANCHEZ, California 

ELIJAH E. CUMMINGS, Maryland 

JOHN DELANEY, Maryland 

SENATE 

AMY KLOBUCHAR, Minnesota, Vice Chair 

ROBERT P. CASEY, JR., Pennsylvania 

BERNARD SANDERS, Vermont 

CHRISTOPHER MURPHY, Connecticut 

MARTIN HEINRICH, New Mexico 

MARK L. PRYOR, Arkansas 

DAN COATS, Indiana 

MIKE LEE, Utah 

ROGER F. WICKER, Mississippi 

PAT TOOMEY, Pennsylvania 

ROBERT P. O’QUINN, Executive Director 

NILES GODES, Democratic Staff Director 
(III) 

C O N T E N T S 

OPENING STATEMENTS OF MEMBERS

Hon. Kevin Brady, Chairman, a U.S. Representative from Texas ...................... 1 

Hon. John Delaney, a U.S. Representative from Maryland ................................. 3 

Hon. Carolyn B. Maloney, a U.S. Representative from New York ...................... 5 

WITNESSES

Ms. Diana Furchtgott-Roth, Senior Fellow and Director, Economics, Manhattan Institute for Policy Research, Washington, DC .......................................... 8 

Dr. Barbara Gault, Vice President and Executive Director, Institute for Women’s Policy Research, Washington, DC ............................................................... 9 

Ms. Rachel Greszler, Senior Policy Analyst, Economics and Entitlements, 

The Heritage Foundation, Washington, DC ...................................................... 11 

Dr. Heidi Shierholz, Economist, Economic Policy Institute, Washington, DC ... 13 

SUBMISSIONS FOR THE RECORD

Prepared statement of Hon. Kevin Brady ............................................................. 22 

Prepared statement of Hon. Amy Klobuchar ........................................................ 23 

Prepared statement of Ms. Diana Furchtgott-Roth .............................................. 25 

Prepared statement of Dr. Barbara Gault ............................................................. 32 

Prepared statement of Ms. Rachel Greszler .......................................................... 39 

Prepared statement of Dr. Heidi Shierholz ........................................................... 51 

(1) 

EMPOWERMENT IN THE WORKPLACE 

WEDNESDAY, JUNE 18, 2014 

CONGRESS OF THE UNITED STATES, JOINT ECONOMIC COMMITTEE, Washington, DC. 

The committee met, pursuant to call, at 1:59 p.m. in Room 216 

of the Hart Senate Office Building, the Honorable Kevin Brady, 

Chairman, presiding. 

Representatives present: Brady of Texas, Paulsen, Carolyn B. 

Maloney, and Delaney. 

Senators Present: Lee 

Staff present: Gail Cohen, Connie Foster, Niles Godes, Colleen 

Healy, Christina King, Patrick Miller, and Robert O’Quinn. 

OPENING STATEMENT OF HON. KEVIN BRADY, CHAIRMAN, A 

U.S. REPRESENTATIVE FROM TEXAS 

Chairman Brady. Good afternoon, everyone, and welcome to 

this hearing. 

Vice Chairman Klobuchar, Members, and distinguished witnesses: 

On May 21st, the Joint Economic Committee held a hearing on 

‘‘Women’s Retirement Security.’’ Today we turn our focus to the 

workplace—which policies help to empower or harm American 

workers, and especially women in their quest to attain their vision 

of the American Dream. This has been a major focus of Congresswoman Cathy McMorris Rodgers, Vice Chair of the House GOP 

Conference. 

The disappointing economic recovery led by the Obama White 

House remains the most significant obstacle preventing American 

men and women from achieving economic empowerment. Although 

the current recession actually ended five years ago this month, almost three out of every four Americans believe we are still in a recession. 

That is because the economic policies pursued by President 

Obama and Congressional Democrats have produced the weakest 

recovery in more than 50 years, and a troubling ‘‘Growth Gap’’ between this recovery and other recoveries since 1960, robbing over 

$1,000 a month from a family of four’s real disposable income. 

Because of this Growth Gap, we are missing $1.5 trillion of real 

GDP from the economy, and 5.8 million private sector jobs. Merely 

to catch up with an average recovery before President Obama 

leaves office, our economy would have to expand at an annual rate 

of 6.2 percent every quarter and add 371,000 new private jobs 

every month. 
2 

Neither figure has been achieved once during the Obama recovery. Catching up will be hard to do, especially as the President continues to throw further roadblocks in front of this struggling recovery. 

Next month this Committee will examine the Administration’s 

macroeconomic policy failures at a hearing marking the fifth anniversary of this recovery. For now, though, let’s focus on the workplace. 

One of the best means of empowering workers is to provide 

choice and flexibility in the workplace. Flexibility is especially important to the many women who are caregivers to their children 

and elderly parents. 

Yet in March, President Obama directed the Department of 

Labor to extend overtime regulations to several million workers 

who are currently exempt. This regulation would harm working 

women who need the flexibility and choice between taking overtime 

pay and banking those extra hours for time off in their later work 

schedule. 

A much better approach is The Working Families Flexibility Act 

of 2013 which passed the House over a year ago, but has stalled 

in the Democrat-controlled Senate. Joint Economic Committee 

Member Senator Mike Lee is sponsoring the companion bill in the 

Senate. 

The bill would allow private-sector companies to offer hourly 

workers who put in more than 40 hours a week the choice between 

taking overtime pay or time-off. This is a choice that is currently 

available to federal, state, and local government workers, but is denied to private sector workers. It is a highly valued benefit for government workers, but not for workers along Main Street. So why 

did the President and Congressional Democrats fight so hard to 

deny women in the workforce this important choice? 

The House passed The Working Families Flexibility Act in May 

of 2013. It is past time for Senate Majority Leader Reid to bring 

this bill to the Senate for a vote. 

There are other ways this White House has made the workplace 

less family friendly, especially for women. Economist Casey Mulligan argues the President’s Affordable Care Act will push more 

young women out of the full-time work, making them ‘‘29ers’’—referring to the maximum number of hours that an hourly worker 

can work and still be considered part-time under the new health 

care law. Mr. Mulligan expects 2 percent of workers to become 

‘‘29ers,’’ an increase by more than a factor of 10. 

Moreover, at the urging of special interests, the Environmental 

Protection Agency recently introduced new, sweeping global-warming regulations on carbon emissions. A study by the U.S. Chamber 

of Commerce’s Institute for 21st Century Energy found that 

through the year 2030 these regulations would lower America’s 

economy by an average of $51 billion each year, reduce jobs by 

224,000 each year, increase electricity payments from American 

families by $289 billion, and lower disposable income for U.S. 

households by $586 billion. 

So thanks to the President, women will compete for fewer jobs 

in a slower economy, paying higher electricity bills, with less 

money in their family’s budget. Thank you, Mr. President. 
3 

America’s broken tax code and extremely progressive income tax 

system penalizes two-income households—which are the norm 

today among married, working-age couples. 

Although Congress lessened this penalty in the last decade, it 

still exists and should be eliminated. It is hard enough to make 

ends meet as it is, especially with college costs, gasoline, utilities, 

and food costs all rising. 

Washington makes it harder to climb out of poverty, especially 

for young women and single moms with limited skills. While unintended, the conflict between the phase-out of many means’ tested 

federal benefit programs like food stamps and the tax system, 

means that working families struggling to leave poverty face an effective marginal tax rate as high as 80 percent, by one study’s estimate. This interaction creates poverty traps that discourage work 

and make it harder to climb the economic ladder. 

Moreover, the Cato Institute’s Michael Tanner and Charles 

Hughes found that welfare can pay more than the minimum wage 

in 35 states, even after accounting for the Earned Income Tax 

Credit. And in 13 of those states, welfare can pay more than $15 

per hour. The President should work with Congress to correct these 

perverse policies. 

Occupational licensing is another problem facing poor families, 

especially those headed by women who are seeking to work their 

way into the middle class. Joint Economic Committee Member Representative Hanna held a hearing on this issue recently at the 

Small Business Committee. 

Over the last several decades, the number of workers required to 

have occupational licenses has risen steadily. In many cases, occupational licensing goes far beyond what is necessary to protect public health and safety. It has been a means for incumbent workers 

to raise their wages by an estimated 15 percent, at the expense of 

new entrants who have fewer jobs, and consumers who pay higher 

prices. 

Although occupational licensing is primarily a state issue, Congress should use its investigative powers to shed light on how licensing abuse harms ordinary Americans, both as workers and consumers. Catching up will be hard to do, especially as the President 

continues to throw further roadblocks in front of this struggling recovery. 

Empowering workers, especially women, should be a common 

goal of both Democrats and Republicans. Staying the course with 

the same old federal traps and obstacles just simply is not an option. 

With that, I look forward to hearing from today’s witnesses, and 

I recognize Mr. Delaney for the first of two opening statements. 

[The prepared statement of Chairman Brady appears in the Submissions for the Record on page 22.] 

OPENING STATEMENT OF HON. JOHN DELANEY, A U.S. 

REPRESENTATIVE FROM MARYLAND 

Representative Delaney. Thank you, Chairman Brady, for 

holding this hearing. And I want to thank all the witnesses for 

joining us today to talk about this important topic. 
4 

As we talk about empowerment in the workforce and policies 

that I believe we need to put in place to make a difference against 

this issue, it is important to think about the context of what is 

going on in the employment market and the labor market and the 

economy right now. 

We have created over 9 million jobs in the last 4 years, and the 

unemployment rate has fallen significantly. In my opinion, by almost any measure the President’s policies have made a clear and 

measurable difference in terms of getting people to work and getting the economy back on track. 

But there is much more to be done, and there is more to be done 

particularly when you think about what is going on in the world 

and the really important macro trends of globalization and technology, and the disruptive effect they are having on so many American workers. 

People with great educations or with access to capital are doing 

great in this economy. Billions of people around the world are benefitting because they are moving into a global economy. But the average American, the middle-skilled American worker is really 

struggling because of the disruptive effects of these trends. 

And we need smart public policy to make a difference against 

these trends. The long game, if you will, is education: greater investment in education and reform to how we think about education. 

The short to mid-term game, if you will, in my opinion is increasing our investment in infrastructure. It makes us more competitive, 

creates jobs; tax reform, as the Chairman mentioned, is incredibly 

important for this debate; and immigration reform. 

But while we hopefully will work on some of these policies to increase the country’s competitiveness, and increase our ability to 

create jobs that have a decent standard of living, we do have to 

worry about segments of our population who are either not working, or who are working at jobs where they have a declining standard of living. Because in fact we have not seen the standard of living of the average American go up in the last several decades. We 

have actually seen it declining. 

And that, to me, is the most troubling trend. For those that are 

unemployed, we need in my opinion two very specific things. About 

a third of them have been unemployed for over six months, so we 

need to extend unemployment insurance. That is incredibly important for these citizens. 

The other thing we need to do is invest greater resources in job 

training. In my State of Maryland, recent data indicates that 60 

percent of the positions that are available cannot be filled because 

people are not trained to do the jobs. 

So we need those policies for those Americans who are not employed. But even for those who are employed, they are facing pressures. They lack flexibility in their lives, in their schedules, around 

child care. They have no ability to negotiate or position themselves 

for growing wages, and in fact the standard of living is declining. 

We need a separate set of policies to empower those workers. 

One of them, or one policy in particular that is important particularly as it relates to women is the Paycheck Fairness Act, because 

the data clearly suggest that women are underpaid relative to men. 
5 

Even if you normalize for educational disparities, you see these 

trends. And these trends are disturbing particularly as you go up 

the corporate ladder where you see a talent drain occurring with 

respect to women. That is an important policy. 

And many of these policies, by the way, are not only good for the 

employees but they’re good for the bottom line of the business. 

As someone who ran and started two public companies prior to 

running for office, and created over 2,000 jobs, I saw first hand how 

good employee-friendly policies were very, very good for the bottom 

line. So the Paycheck Fairness Act, in my opinion, would be virtuous in this regard. 

The minimum wage, which is often positioned as negative for 

economic growth, in fact if you look at the data you see that a lot 

of minimum wage earners do business, or shop, or buy food at 

places that are minimum wage payers. So there is an incredibly 

kind of virtuous cycle associated with raising the minimum wage. 

It has to be done carefully. It cannot be done in a way that 

shocks the economy. But if we actually had a minimum wage that 

was adjusted for inflation, that to me would be important. 

Quality affordable child care is another issue, as well as expanding family and medical leave. These pieces of legislation are incredibly important for all these policies: creating jobs in the long term, 

dealing with the people who are unemployed, and helping those 

who are employed, giving them a little boost so that they have 

more flexibility in their lives and an opportunity to get better 

wages. There is a role for government to do it, and I look forward 

to your testimony very much here today. 

Thank you. 

Chairman Brady. Thank you. And I would like to recognize the 

former Chair of the Joint Economic Committee, Mrs. Maloney, for 

her opening statement. 

OPENING STATEMENT OF HON. CAROLYN B. MALONEY, A U.S. 

REPRESENTATIVE FROM NEW YORK 

Representative Maloney. Thank you so much, Chairman 

Brady, and we have a vote on. We are going to have to hurry, and 

hurry back to hear your testimony. I would like to also thank Vice 

Chair Klobuchar for allowing me to step in on her place today. 

This hearing looks at how workplace practices affect productivity, 

economic growth, and our economic wellbeing, and there is a very 

real cost to our economy associated with losing experienced and 

highly skilled workers to the very real competing demands of child 

care and looking after an aged parent. 

We will also be looking at whether or not federal and state laws 

to require a minimum wage reduces employment or slows economic 

growth. The minimum wage is now effectively lower than it has 

been at any time since 1968. 

The Congressional Budget Office found that if we raised the min- imum wage to $10.10 an hour by 2016, it would mean higher earnings for 16.5 million workers resulting in $31 billion more for lowand moderate-income households. And this is very important because this money would be plowed right back into the economy, effectively be a stimulus for our economy, and it is very important 

to addressing a concern that I think everyone has in our country 
6 

that the gap between the haves and have-nots is getting wider and 

wider. And we need to make sure that our workers are paid appropriately and have a living wage. 

The CBO also projected it would lift nearly 1 million people out 

of poverty. I think it is important. As for businesses, the Center for 

Economic and Policy Research found that they can benefit from improved efficiency and lower turnover facilitated by a higher minimum wage. 

And there are other policies that provide benefits to both employers and employees. We know that almost 50 percent of American 

women work, and yet the laws are not flexible or supportive for 

working women. 

Some companies have started first-rate policies, but really the 

federal policies and other policies really have not kept pace with 

the changing realities of the workforce. 

I have introduced a bill that I modeled after a bill in London that 

has worked very well called the Flexibility for Working Families 

Act. I would love Mr. Brady to join me as a bipartisan sponsor on 

it. 

It would not cost a business one dime, or the taxpayer. But it 

would guarantee the right of workers to ask for flexible work arrangements with not being fired, to allow them to meet with the 

human resource staff and try to work out a work schedule that 

would really confront the lives that they have. 

If granted, that flexibility could mean workers would be able to 

adjust their schedules to meet the demands of caring for children, 

or aging parents, while staying in the labor force and allowing companies to benefit from their experience with less turnover in staff. 

Our country’s first and only national law to support working 

families is the landmark Family and Medical Leave Act of 1993 

which allows individuals to take up to 12 weeks of job protected 

unpaid leave. This is an incredible bill. It was the first bill I voted 

on when I came to Congress, and very personal to me. I remember 

when I had my first child, calling personnel and asking about any 

leave policies, and they said there’s no leave policies; people just 

leave. When are you leaving? 

Well this guaranteed that you could keep your job, come back to 

work, and have a family. I have put in legislation to expand this 

important legislation to also provide for unpaid leave so that parents can attend school conferences, or take family members to the 

doctor. 

We always say that this country is so family friendly, but if you 

look at our policies they really are not there. And this bill would 

also cover more businesses that employ between 20 and 50 workers. 

In the past decades, protections that Congress has already put 

in place have allowed women to make some incredible strides. I can 

remember when women used to be fired because they became pregnant, or fired because they wanted to express milk on their lunch 

break and on their own time. And I can remember when advertisements used to be jobs for men, jobs for women. 

But one area where we have really been stagnant is in terms of 

pay. When I began working, we were 50 cents to the dollar; now 

it is 80 cents to the dollar. We got a raise, but it is not enough and 
7 

we should be paid equally for our work. The Paycheck Fairness Act 

is a step in that right direction, but still a great deal more has to 

be done. 

And affordable and accessible child care. We have some policies, 

but they have not kept up with—the Child Care Tax Credit is not 

keeping pace with the realities of the cost of child care. And our 

economy and our families are more dependent than ever on the 

earnings of women. 

Almost a third of all working mothers are the sole earners for 

their household. So I hope we will examine how workplace policies 

affect women’s ability to stay in the workforce and take care of 

their families. And it is important to recognize that it is just not 

some feel-good slogan, it is the economic reality of our country 

today that when women succeed, America succeeds. 

So thank you, Mr. Chairman, and we’ve got to run vote, right? 

Chairman Brady. Votes have been called. The good news is it 

is a single vote. To be respectful of your time and testimony, I am 

going to introduce our four witnesses now, recess for 20 minutes, 

and then we will come back and start with testimony. 

First, Diana Furchtgott-Roth is the Director of Economics 21 and 

Senior Fellow at the Manhattan Institute for Policy Research. She 

has served as Chief Economist at the U.S. Department of Labor; 

as Chief of Staff for President George W. Bush’s Council of Economic Advisers; and an economist on the staff of President Reagan’s Council of Economic Advisers. She received her B.A. in Economics from Swarthmore College, and her Masters in Philosophy 

and Economics from Oxford. 

Barbara Gault, Ph.D., is Executive Director and Vice President 

of the Institute for Women’s Policy Research. Previously Dr. Gault 

conducted research at the Office of Children’s Health Policy Research, and served as staff and board member of organizations promoting human rights in Latin America. She received her Doctorate 

in Social Psychology from the University of Pennsylvania, and her 

Bachelor’s from the University of Michigan. 

Rachel Greszler is currently a Senior Policy Analyst for Economics and Entitlements at the Heritage Foundation. Previously Ms. 

Greszler has served as a Senior Economist on this Joint Economic 

Committee, Minority staff. Ms. Greszler holds a Masters in Economics and a Masters in Public Policy from Georgetown University, 

and a Bachelor’s in Economics from Mary Washington College. 

Dr. Heidi Shierholz is an Economist at the Economic Policy Institute. Her research focuses on the economy and economic policy as 

it affects middle- and low-income families, especially in regards to 

employment. She is also a member of the Board of Directors of the 

D.C. Employment Justice Center. Previously Dr. Shierholz worked 

as an Assistant Professor of Economics to the University of Toronto. She holds a Ph.D. and a Masters in Economics from the University of Michigan, a M.S. in Statistics from Iowa State, and a 

Bachelor in Mathematics from Grinnell College. 

With that, we are going to recess for 20 minutes and we will be 

back after that. 

(Whereupon, a recess was taken.) 

Chairman Brady. The hearing will reconvene. I recognize Ms. 

Furchtgott-Roth for her testimony. 
8 

STATEMENT OF MS. DIANA FURCHTGOTT-ROTH, SENIOR FELLOW AND DIRECTOR, ECONOMICS 21, MANHATTAN INSTITUTE FOR POLICY RESEARCH, WASHINGTON, DC 

Ms. Furchtgott-Roth. Thank you very much for inviting me to 

testify today. With your permission, I will summarize my testimony 

and hope that the full testimony is accepted into the record. 

Chairman Brady. Yes, ma’am. 

Ms. Furchtgott-Roth. Employment of women 25 to 54 years 

stands at 45 million and has yet to reach pre-recession levels of 46 

million. Labor force participation for women 16 years and older has 

declined from 59.4 percent in December 2007 to 57 percent today. 

And the labor force participation rate for women in their prime 

working years fell from 76 percent to 74 percent over the same period. 

What is important is to provide a flexible work environment so 

that employers can hire women, and so that women can feel comfortable working. Women have an important role not just as workers in the economy but also as mothers who prefer flexible work 

schedules. And for those who do not think children are important, 

you should take a look at the website Yale Law Women. It has just 

announced its 9th list of top 10 family friendly firms. 

Now few of these young women have children, but already they 

are looking at family friendliness indicators, and I will quote, ‘‘such 

as the billable-hour requirement.’’ That means fewer, rather than 

more, billable hours. ‘‘Part-time and Flex-Time options. Caregiver 

leave policies, and child care availability.’’ 

As you just said, Mr. Chairman, President Obama’s new proposed overtime rules would reduce flexibility for working women. 

What would be far better would be to pass the Working Families 

Flexibility Act of 2013 which would give women the choice of overtime pay or comp time in exchange for more hours worked. 

Many times when you’ve worked a very long week, you don’t just 

want to have extra money, maybe you want to have time off with 

your kids, time that you can spend with them. And it is very difficult to buy more time if you are forced to take overtime pay instead of comp time, which is what many people would like. 

President Obama’s new proposed regulation, which is now working its way through the Labor Department, would restrict the number of women who could receive comp time in exchange for overtime. I think that would be very harmful for working women. 

Another problem is the marriage penalty. The marriage penalty 

affects working women disproportionately because they are frequently the second earners in the family. If you look at women in 

the top income quintile, you find there are many, many two-earner 

families. 

You find as they work their way up the income ladder, their 

progress is stalled. Similarly, low-income women when they move 

into the workforce, they find they have to give up certain benefits. 

And that means that they have a disincentive to work. 

Just as it is important to have flexibility for working women, it 

is also important to put in place conditions that enable employers 

to hire women. The Paycheck Fairness Act would create burdensome reporting requirements for employers. It would discourage 

employers from hiring women. 
9 

With the Paycheck Fairness Act, which the President by Executive Order has extended to federal contractors, you have a reporting requirement for groups of women and groups of men. And there 

are many reasons that groups of women and groups of men are 

paid differently in firms. 

Take Exxon, for example, that has groups of men that drill on 

oil rigs, groups of women who serve in office jobs, and there’s no 

reason for these two groups to pay the same; but employers would 

have to justify that difference. 

The Paycheck Fairness Act did not even pass a completely Democrat-controlled Congress in 2009 and 2010 because it was so costly 

and so expensive. 

Similarly, raising the minimum wage would impede young women from getting hired. Right now the minimum wage is $7.25 

an hour. That means anyone with skills under around $8 an hour 

is not allowed to work. President Obama wants to raise it to $10.10 

an hour. 

When you add Social Security, Worker’s Comp, that means the cost is about $11 an hour to employers. Low-skill people just would 

not have the right to work, and that hurts teens and unskilled 

workers. 

Ninety-seven percent of American workers are paid above the 

minimum wage, but this minimum wage is important to people 

who want to enter into the workforce and who want to have their 

first job and have the first step on the career ladder. 

In the Flexibility For Working Families Act, which was mentioned by Mrs. Maloney, companies would have to justify and document if they did not give women the flexible schedules they asked 

for. Again, it is a disincentive to hiring women. 

We want to make it as easy as possible for companies to hire 

workers, including women, not place an additional cost on them. 

Thank you very much for allowing me to testify. 

[The prepared statement of Ms. Furchtgott-Roth appears in the 

Submissions for the Record on page 25.] 

Chairman Brady. Thank you. 

Dr. Gault. 

STATEMENT OF DR. BARBARA GAULT, VICE PRESIDENT AND 

EXECUTIVE DIRECTOR, INSTITUTE FOR WOMEN’S POLICY 

RESEARCH, WASHINGTON, DC 

Dr. Gault. Thank you, Chairman Brady. Thanks also to Vice 

Chair Klobuchar for this opportunity to speak to the Committee 

about empowerment in the workplace. 

Employees are empowered through access to quality jobs and 

services that help them build skills to support and care for their 

families and to do their best work every day. Research shows that 

the important benefits brought to businesses, to families, the economy, and to society as a whole when employers offer jobs with fair 

wages, paid sick days, predictable schedules, and when workers 

have access to supports such as quality early care and education, 

paid parental leave, and the earned income tax credit. 

Many basic workplace benefits and supports are inequitably distributed in today’s economy. Almost 4 in 10 private-sector workers 

in the U.S. lack access to a single paid sick day. Among Hispanic 
10 

workers, 53 percent do not receive paid sick days, compared with 

36 percent of white workers. 

Employees in food preparation and direct health care occupations 

are especially unlikely to be able to take a day off with pay when 

they are sick, which increases contagion in the workplace, forestalls 

preventive health care, and costs taxpayers and businesses millions 

of dollars each year in unnecessary health expenditures and lost 

productivity. 

Since employees on average take so few paid sick days when they 

are available, the cost to employers is negligible and offset by benefits in the form of health, safety, productivity, and retention. 

Research has also found that when parents have access to stable 

child care, they stay in their jobs longer and exposure to high-quality early care in education among low-income children leads to social and economic gains to families and society that lasts decades. 

In many states, however, economic growth is hampered by a lack 

of access to affordable, quality child care. Infant care costs more 

than public college tuition in 31 states, and 19 states have waiting 

lists or frozen intake for child care subsidy. 

Among community college students seeking to gain job skills, a 

striking 30 percent are parents of dependent children, but less than 

half of community college campuses have child care facilities, and 

those that do have long waiting lists. 

Research finds that when parents attain post-secondary education their children experience real-time cognitive gains, especially 

if parents go to college when their children are still young. 

Empowered workplaces need skilled workers with stable, reliable 

childcare arrangements that allow them to focus on doing their 

best jobs. Workers in hourly positions often have difficulty arranging child care, elder care, or college attendance due to increasingly 

common scheduling practices that give them only a few days’ notice 

of their schedules, or that require them to be available for call-in 

shifts. 

We can empower workers to plan ahead by requiring employers 

to distribute schedules with sufficient advance notice, and by prohibiting retaliation against workers who request schedule changes. 

Improved scheduling practices also have bottom-line benefits for 

businesses. They are associated with lower absenteeism and turnover, and heightened employee engagement. 

Expanded access to paid family and medical leave insurance can 

also help families stay connected to work while they care for 

newborns, sick children, or elderly parents, or seek treatment for 

their own serious medical condition. 

While such benefits are the norm in other high-income countries, 

the United States has yet to establish a family and medical leave 

insurance system which would help employers retain talent and 

improve the health and welfare of families and children. 

Three states, Rhode Island, California, and New Jersey, have established paid family leave programs, and these successful state 

models demonstrate that a federal family and medical leave insurance program is both attainable and cost effective. 

In a study of California’s paid leave program, the vast majority 

of employers report increases in employee morale, minimal costs, 

and positive or no noticeable effects on productivity. 
11 

Allowing transparency in pay would also go far toward creating 

empowered workplaces and helping women address gender-based 

pay inequities. 

About half of all workers say they could be disciplined or reprimanded for sharing salary information. An analysis by the Institute for Women’s Policy Research finds that if women earned 

wages equal to those of men with the same education levels and 

work hours, the poverty rate among working women would be cut 

in half, falling to 3.9 percent from 8.1 percent. 

Finally, we can strengthen our economy through basic supports 

to help low-income adults when they are looking for work, attending school, or receiving wages that are too low to cover their basic 

needs. 

Recent economic analysis of the effects of the EITC over several 

decades demonstrates the program’s effectiveness at helping families maintain work. The Center on Budget and Policy Priorities 

found that in 2012 alone the EITC lifted 6.5 million people out of 

poverty. 

Similarly, the U.S. Census Bureau finds that unemployment insurance keeps millions of job seekers from falling into poverty each 

year. Employees, businesses, and our communities as a whole are 

stronger when people have the supports they need to attain new 

skills, stay healthy, care for their families, and maintain secure, 

high-quality jobs. 

[The prepared statement of Dr. Gault appears in the Submissions for the Record on page 32.] 

Chairman Brady. Thank you, Doctor. 

Ms. Greszler, welcome back to the Joint Economic Committee. 

STATEMENT OF MS. RACHEL GRESZLER, SENIOR POLICY ANALYST, ECONOMICS AND ENTITLEMENTS, CENTER FOR DATA 

ANALYSIS, THE HERITAGE FOUNDATION, WASHINGTON, DC 

Ms. Greszler. Thank you for the opportunity to be here today. 

I would like to focus on three points: 

First is there is a great lack of employment in today’s economy, 

and unemployed workers cannot be empowered. 

Second, existing regulations and workplace policies could be reformed to encourage greater worker empowerment. 

And third, policymakers can look to successful and innovative 

companies as a way to encourage empowerment. 

First, nearly 10 million workers are unemployed, and another 8 

million have left the labor force. There is no workplace empowerment for the unemployed, but businesses are not hiring. 

According to a recent survey, only 8 percent of small and independent businesses say that it is a good time to expand operations. 

They cite taxes, followed by government requirements and red tape 

as their two primary concerns. 

Increased costs and regulation make it harder for businesses to 

expand and start up. A recent Brookings Institution report documents a, quote, ‘‘troubling secular decline in business dynamism 

and entrepreneurship.’’ 

Policymakers need to relieve employers and entrepreneurs of the 

red tape and economic burdens that are holding them back from investing, expanding, and hiring workers. 
12 

Second, for the roughly 146 million workers who have jobs, certain reforms such as licensing and government restraint from micro 

managing private businesses, could encourage greater workforce 

empowerment. 

Licensure laws require individuals to obtain a license to practice 

a certain trade. Licensing laws are often irrational, arbitrary, and 

onerous. For example, the average cosmetologist spends 372 days 

in training, whereas the average EMT spends 33 days. 

These licensing laws are particularly harmful to low-income 

workers who often lack the resources necessary to obtain a desired 

license, as well as mothers who often have less time that they can 

devote to such training. Despite its widespread use, evidence suggests that licensing does not improve quality, but it reduces the 

supply of workers and increases prices. 

States should be encouraged to re-evaluate their licensure laws 

in accordance with cost/benefit analysis and to allow cross-state licensing reciprocity so that a massage therapist who practiced in 

one state would not have to obtain a new license upon moving to 

another state. 

A measure that employers could take to empower employees 

through choice and higher wages is to allow employees the option 

of exchanging employer-subsidized benefits such as health insurance for cash wages. The option of cash wages could increase incomes for many workers, particularly women who are often the second earners and already have access to health care through a 

spouse. 

And the primary thing that the Federal Government can do to 

encourage workplace empowerment is to refrain from micro managing private businesses. For example, the President’s proposed increase in the overtime cap would significantly limit flexible work 

arrangements. 

As a working mother, I place a high value on the ability to work 

from home as needed. But if firms are required to pay workers 

overtime, they will want those workers in the office where they can 

monitor their hours. 

What’s more, incomes would not rise. Even Jared Bernstein, 

former economic adviser to Vice President Biden, has written that 

employers would offset the higher overtime costs by reducing their 

base pay. 

The government should refrain from micro managing employers 

and instead encourage employers to empower the workers with individual choices which can only be provided if those employers are 

allowed to determine their employee’s pay. 

My final point is that policymakers should look to the successes 

of less regulated businesses and entrepreneurs as a way to empower existing ones. Companies and industries such as Etsy, Uber, 

and food trucks, are prime examples of entrepreneurship and empowerment. 

Etsy is an online marketplace that allows individuals to sell their 

goods and services without having to jump through significant 

hoops, invest large amounts of time and money, or commit to a regular work schedule. Etsy has opened the door for more than a million individuals who might not otherwise participate in the labor 

force to become active workers. 
13 

Eighty-eight percent of Etsy sellers are women, and 74 percent 

consider Etsy as their business place. Etsy sellers are their own 

bosses. They decide what to sell, how much to sell it for, and how 

often to work. 

Uber is a software company that contracts with individual drivers. The drivers use Uber’s unique technology that allows individuals to request, ride, and pay for transportation services via mobile 

app. Uber drivers also act as their own bosses and work as much 

or as little as they would like. 

Finally food trucks are another example of entrepreneurship and 

empowerment. Because food trucks operate without a brick-andmortar storefront, they enjoy lower startup costs and operations. 

Food truck owners and operators have more control over their daily 

schedule. 

Uber and food trucks have been wildly successful, yet they have 

been threatened by demands from their competitors to impose hefty 

new regulations and costs that would depress their growth and 

profitability. 

Policymakers should refrain from imposing unnecessary and costly regulations on new, innovative companies and look to the successes of these businesses as ways to promote greater entrepreneurship and empowerment. 

Where competitive disadvantages and regulation exists, policymakers should level the playing field by reducing existing disadvantages rather than creating new ones. 

Thank you. 

[The prepared statement of Ms. Greszler appears in the Submissions for the Record on page 39.] 

Chairman Brady. Thank you. 

Dr. Shierholz. 

STATEMENT OF DR. HEIDI SHIERHOLZ, ECONOMIST, 

ECONOMIC POLICY INSTITUTE, WASHINGTON, DC 

Dr. Shierholz. Thank you, Chairman Brady, and others Members of the Committee: 

I appreciate the opportunity to come here to discuss empowerment in the workforce. And I think it is perhaps useful to start by 

defining what is meant by an empowered workforce. 

Under any reasonable definition, an empowered workforce is one 

that shares fairly in the fruits of its labor. In particular, a minimal 

definition of an empowered workforce is a workforce where, as productivity grows, most workers share in that growth and see compensation growth. 

By contrast, an economy where productivity grows but the fruits 

of that growth accrue to just a small sliver of the workforce, that 

is an economy where that small share is empowered but where the 

workforce as a whole is broadly disempowered. So from the 1940s 

to the 1970s, the U.S. had an empowered workforce by this definition. As productivity grew, compensation grew with it. Compensation for typical workers grew with it. 

Since the 1970s, however, the U.S. has not met this minimal definition of an empowered workforce. Productivity has continued to 

rise consistently, but the typical worker’s compensation began lagging farther and farther behind. And rising wage inequality is at 
14 

the core of the disconnect between productivity growth and compensation growth for most workers since the 1970s. 

Between 1979 and 2012, the top 1 percent saw their wages grow 

by over 150 percent. The bottom 90 percent, on the other hand, saw 

their wages grow by 17 percent. That was far less than the average 

growth rate. 

In other words, the top captured so much of the growth over this 

period that the entire bottom 90 percent saw wage growth that was 

lower than the average. Below-average wage growth for the vast 

majority means that in a very real sense a discussion about workplace empowerment boils down to a discussion about rising wage 

inequality. 

And I am very pleased that the Committee is focusing this hearing on labor market policies and practices, which I think are a very 

key part of this dynamic. And I will list a few of these things. We 

need a higher minimum wage. In real terms, the minimum wage 

is now 25 percent below its peak in 1968. Raising it to $10.10 

would partially restore this eroded labor standard. 

The real value of the salary threshold under which all salaried 

workers are covered by overtime provisions has also been allowed 

to erode dramatically. Simply adjusting the threshold for inflation 

since 1975 would roughly double the current threshold, guaranteeing an additional millions of workers time-and-a-half pay when 

they work more than 40 hours a week. 

And I think it is worth noting that there is nothing that prohibits employers from offering comp time to people who get overtime. There’s nothing. They can simply pay their workers overtime, 

and then give them unpaid leave. So employers still have the flexibility to offer employees overtime and comp time. Low-wage service 

workers are increasingly subject to just-in-time scheduling, which 

is an enormously disempowering practice where employers give 

workers little or no advance notice of their schedules, and send 

workers home early when business is slow. Imagine what this does 

to people who have to arrange for child care to get to work. 

Policymakers should pass laws that require minimum guaranteed hours per pay period, and require compensation for a minimum number of hours when workers are called into or sent home 

from work unexpectedly. 

We need to update labor law, which has not kept pace with dramatically increased employer aggressiveness in citing unions and 

has resulted in a growing wedge between workers’ desire to organize and their ability to do so. 

We need to crack down on wage theft and misclassification. Wage 

theft is when employers do not pay workers for work they have 

done. Employers steal billions of dollars from their employees each 

year by doing things like working them off the clock and failing to 

pay the minimum wage. And misclassification is when employers 

treat employees as independent contractors, which allows them to 

avoid paying Worker’s Compensation and Unemployment Insurance, or the minimum wage, or offering overtime, which means 

workers are denied access to these benefits and protections. 

So in closing, I would just like to again thank the Committee for 

highlighting how labor market policies have affected worker empowerment. I think there is a strong public narrative out there that 
15 

just dismisses rising wage inequality and worker disempowerment 

as a natural and unstoppable consequence of a modern economy, 

when in fact there are government policies behind these trends. So 

that is actually good news, because it means that the dramatic rise 

in inequality that has impeded worker empowerment for a generation does not have to continue. We need to enforce the labor standards we have, update the ones that need it, and empower workers 

to bargain for better working conditions for themselves and their 

families. Thank you. 

[The prepared statement of Dr. Shierholz appears in the Submissions for the Record on page 51.] 

Chairman Brady. Thank you, Doctor. 

Ms. Greszler, you make the point that there is very little empowerment for those who do not have a job. 

Ms. Greszler. Um-hmm. 

Chairman Brady. And as Ms. Furchtgott-Roth made note in her 

testimony, for women of prime working ages, there’s actually 2 million fewer in the workforce today than there was before the recession began. Labor participation rates, how many are in that workforce, has actually declined as well. 

So for women of working ages, prime working ages, the economy 

has actually gone backwards for them. So how do we get these 

women back to work? What are the obstacles? Or what can Washington do to remove the obstacles so that the businesses that you 

referenced in your testimony will begin hiring again? 

Ms. Greszler. Well I think the biggest thing that the government can do is to refrain from a lot of the policies that are currently being considered: the Paycheck Fairness Act, and this increase in the overtime cap. These things are going to reduce flexibility because they are going to enforce employers to have one-sizefits-all pay scales, and one-size-fits-all jobs that women don’t want. 

Women in their prime working years often also have children, or 

they may have parents that they need to care for, and if they are 

going to have to accept either this job, which is a defined job and 

there’s no flexibility around it, or staying at home, they’re often 

going to have to choose to stay at home because they cannot meet 

a job that is not willing to accommodate them. 

Chairman Brady. In your view, what impact has the Affordable 

Care Act had on hiring, or on full-time employment for women? 

Ms. Greszler. I think the Affordable Care Act is going to have— 

well, already has had some implications. It’s reducing the hours 

that employers are offering, and that hurts women as well. A lot 

of women want to work part-time. 

It is also going to increase the marginal tax rates for women. 

Women are often second earners in their family, and if—you know, 

the median wage right now, there is a study by Casey Mulligan, 

an economist at the University of Chicago, who showed the median 

earner, the marginal tax rate for them, is going to be 47 percent 

in 2016 as a result of the Affordable Care Act and all the other 

slew of government transfer programs and benefits. 

And this is not going to help working women, or mothers who 

would like to enter the labor force who, you know, they are maybe 

struggling; they are low- to middle-class, and they would like to 

start working so that they can have an additional income. If they 
16 

are going to face a marginal tax rate of 47 percent and only be able 

to take home one of every two dollars that they earn, they are unlikely to enter the labor force. 

Chairman Brady. Thank you. 

Ms. Furchtgott-Roth, you know we are told that capturing more 

workers in the overtime legislation the President has directed 

would be a good thing, and you have a different view. Could you 

go sort of deeper into that? 

Could you hit the microphone? 

Ms. Furchtgott-Roth. It would limit choices for women. Right 

now if someone is earning around $23,000–$24,000 a year and 

their employer asks them to work more, they are not allowed to 

take any time off in exchange. They have to be given overtime pay. 

A lot of these women cannot wait to move to higher income levels 

because then they get more flexibility. They get a choice of overtime pay or time off. And, you know, young people these days, they 

are very keen on lifestyles, they want a lot of choice, and they want 

to be able to choose. 

It would be really detrimental to extend the current overtime 

regulations to more women. The President says if you work more, 

of course you should get paid more. You find in many kinds of jobs, 

for example yours, Mr. Chairman, when you work longer in Congress, you don’t complain that you don’t get overtime pay. You have 

a particular salary and you know it consists of a certain number 

of hours. 

The same with people in many, many other professions. They get 

a salary and they do not expect then to get paid overtime when 

they say stay late. They make up for it later. 

So I think it would be extremely detrimental. 

Chairman Brady. The majority of part-time workers are 

women. Many face the absence of extra benefits at their work, including health insurance, retirement benefits. Full-time workers 

tend to be the ones with those additional benefits. 

So what would you recommend to encourage not only greater 

pension coverage for workers, but also additional benefits for workers at smaller firms and those who work part-time? 

Ms. Furchtgott-Roth. They should make sure that they are informed and that they take advantage of any IRAs that they have. 

If you think that it is necessary to increase that IRA amount, then 

that IRA amount could be increased from $5- or $6,000 a year to 

maybe $10,000 a year so that they have more room to save on their 

own. 

I just want to say that part-time jobs are very desirable by many 

people. Many people especially mothers, prefer part-time jobs to 

full-time, and they would only work if they have part-time jobs. 

If they have fewer benefits, they often have a higher cash wage. 

So quite a lot of the growth in income, as can be seen from Table 

5 of the excellent study that Dr. Shierholz has written called ‘‘Raising America’s Pay,’ in Table 5 you can see that when benefits are 

included and a comprehensive measure of income is used, then income has risen substantially for many income groups, almost all income groups. 
17 

But just on an hourly wage basis, that is not necessarily true because they are getting more benefits. Many people would prefer a 

higher cash wage to a lower cash wage and more benefits. 

Chairman Brady. Thank you. 

Senator Lee. 

Senator Lee. Thank you very much, Mr. Chairman. Thanks to 

all of you for coming to testify before this Committee today. Your 

insights have been very, very helpful. 

Ms. Furchtgott-Roth, I would like to start with you and talk to 

you a little bit about the Working Families Flexibility Act, which 

was introduced and passed in the House by Representative Robey. 

I am sponsoring the Senate companion bill on this side of the 

Capitol, and I just wanted to talk to you about this for a minute. 

It has always been striking to me that federal law puts us in a 

position where we even need legislation like this. I mean, we start 

out with an understanding that the only people who are subject to 

the existing federal restrictions that make this legislation even necessary are those who are, number one, hourly as opposed to salaried; and number two, not government employees. 

And so people who are either salaried or who work for the government don’t have to worry about it. So those of us in those categories are able to, as circumstances may require, go to our children’s school plays, or games, or whatever else we need to do during the day on one day of the week, if we need to work more later 

in the week to offset those hours we do that, and sometimes we 

take that for granted. 

But it seems particularly unfair that we tell hourly employees 

who are not government workers that they do not have the same 

advantage. 

Can you think of—can you identify any good public policy reason 

why we ought to be discriminating against hourly employees who 

are generally lower paid merely because they do not work for the 

government, is there any good reason to do that? 

Ms. Furchtgott-Roth. There is no good reason to do that. And 

as I said in my testimony, it is unfair that upper income workers 

have the advantage of comp time and lower income workers do not. 

We should expand that advantage to all American workers. They 

should all be allowed the choice. 

Senator Lee. Right. I think it is important for all of us to remember that, you know, whenever people have increased flexibility 

they can live their lives better. So this is not just an economic 

issue. This has all sorts of social implications, as well. And it has 

always been difficult to me how someone could be against this, how 

someone would want the government to continue to discriminate 

against hourly workers who are generally less well paid, and particularly those hourly workers who do not work for the government. 

Ms. Furchtgott-Roth. It also takes away an option for employers. Because employers can offer a benefit of comp time that enables them to compete. Just as 97 percent of employers pay above 

minimum wage, they have to pay more to retain talent. 

So allowing them the option to offer comp time is a way to retain 

talent. And I brought one of my young staff with me, Jared Meyer. 

He often works very late, working on our e-brief, and sometimes he 
18 

wants a day off. He wants a day off to go see his family in Chicago. 

So I say, fine, Jared, take the day off. 

But if the law was to go through, I would not be permitted to 

give him that option. 

Senator Lee. Okay. I suppose that it has one benefit relative to 

government in that it gives perhaps the government something of 

a competitive advantage in hiring workers. But that is probably not 

the kind of advantage we want to be giving government. I assume 

you would not disagree with that? 

Ms. Furchtgott-Roth. That is correct, I don’t think we need to 

give government any more advantages than it already has. Government workers have very, very low quit rates and they are undoubtedly at a big advantage in many ways. 

Senator Lee. Thank you. 

Ms. Greszler, in your testimony you noted that several regulatory 

factors tend to add rigidity to the labor market, restricting job 

growth and labor flexibility. And some of these include licensing 

laws, dated labor laws, and general government micro management. 

I think there is an important corollary to this, which is that 

many workers may be drawn out of the formal economy and into 

the informal economy as we might describe it. Could you speak to 

how these kinds of restrictions, those regulatory restrictions that I 

just described, might do this? How they might encourage people to 

participate in the informal economy rather than the formal economy? And what kinds of public policy ramifications that might 

have? 

Ms. Greszler. Sure. Licensure laws, regulations, all these things 

that drive up the cost to either starting a business, continuing to 

work if it’s a new regulation that’s come down and it’s going to cost 

your company, or you as an individual too much to implement that 

and keep profitable, then you’re probably just going to go off on the 

side and say, well, I’m going to do this, you know, under the table, 

or I’ll give you this service but, you know, I’m not going to report 

that. 

It’s fairly easy for people who are their own employers to do that 

if they’re not working for a large company and receiving a W–2. 

You see that in restaurants that don’t want to pay a minimum 

wage. They might just say, okay, I can’t afford to do this. You 

know, in my home town there was an ice cream shop and everybody knew, everybody that works there is under-the-table because 

they can’t afford to pay people the minimum wage. 

And so there are plenty of people that wanted to work there, and 

they were willing to accept lower than the minimum wage but that 

all goes off the books. The company is not paying taxes. The individuals aren’t. And so we are driving people into the informal economy, and that is reducing revenues. 

Senator Lee. So it’s reducing revenue to the government. That 

hurts the government. 

Ms. Greszler. Um-hmm. 

Senator Lee. How might it also—— 

Ms. Greszler. It hurts—I’m sorry. 

Senator Lee. How might—I see my time has expired, let me 

just follow up on this one more point, if I could. 
19 

How might it also hurt the worker, separate and apart from how 

it might hurt the government. 

Ms. Greszler. Right. When the worker is not part of the formal 

economy, they are not entitled to any of the benefits that are required of employers. They are not contributing payroll taxes, so 

that is not going toward Social Security. There’s no record of that. 

They are not entitled to any benefits that employers are required 

to provide, and so they are left with really few protections from the 

government if they are working under the table. 

Senator Lee. Okay. Thank you. I think that is a great example 

of how many of these restrictions that are publicly touted as ways 

of protecting the little guy actually end up hurting the little guy. 

And men and women throughout America are often victims to this. 

Thank you, very much. 

Chairman Brady. Thank you, Senator. I want to thank all of 

you for being here today, for taking your time. It was great testimony. Thank you for being here. 

Republicans and Democrats on the Committee will continue to 

examine this economy, ways we can get people back to work, and 

how we can look at empowering workers and increase their standard of living. 

In this recovery, Wall Street is doing very well. Middle-class 

America has been left behind. And so we are looking for and 

searching for answers that we can work together on to try to find 

a stronger economy for Americans. 

With that, the hearing is adjourned. 

(Whereupon, at 3:19 p.m., Wednesday, June 18, 2014, the hearing in the above-entitled matter was adjourned.) 

(21) 

SUBMISSIONS FOR THE RECORD 
22 

PREPARED STATEMENT OF HON. KEVIN BRADY, CHAIRMAN, JOINT ECONOMIC

COMMITTEE

Vice Chair Klobuchar, Members, and distinguished witnesses: 

On May 21st, the Joint Economic Committee held a hearing on ‘‘Women’s Retirement Security.’’ Today, we turn our focus to the workplace—which policies help to 

empower or harm American workers, and especially women, in their quest to attain 

their vision of the American Dream. This has been a major focus of Congresswoman 

Cathy McMorris Rogers, chairman of the House GOP Conference. 

The disappointing economic recovery led by the Obama White House remains the 

most significant obstacle preventing American men and women from achieving economic empowerment. Although the current recession actually ended five years ago 

this month, almost three out of every four Americans believe we are still in a recession. 

That’s because the economic policies pursued by President Obama and congressional Democrats have produced the weakest recovery in more than 50 years, and 

a troubling ‘‘Growth Gap’’ between this recovery and other recoveries since 1960, 

robbing over $1,000 a month from a family of four’s real disposable income. 

Because of this Growth Gap, we are missing $1.5 trillion of real GDP and 5.8 million private-sector jobs. Merely to catch up with an average recovery before President Obama leaves office, our economy would have to expand at an annual rate of 

6.2 percent every quarter and add 371,000 new private jobs every month. Neither 

figure has been achieved once during the Obama recovery. Catching up will be hard 

to do, especially as the President continues to throw further roadblocks in front of 

this struggling recovery. 

Next month this Committee will examine this Administration’s macroeconomic 

policy failures at a hearing marking the fifth anniversary of this recovery. For now 

though, let us focus on the workplace. 

One of the best means of empowering workers is to provide choice and flexibility 

in the workplace. Flexibility is especially important to the many women who are 

caregivers to their children and elderly parents. 

Yet in March, President Obama directed the Department of Labor to extend overtime regulations to several million workers, who are currently exempt. This regulation would harm working women who need the flexibility and choice between taking 

overtime pay, and banking those extra hours for time off in their later work schedule. 

A much better approach is The Working Families Flexibility Act of 2013, which 

passed the House over a year ago, but has stalled in the Democrat-controlled Senate. JEC Member, Senator Mike Lee, is sponsoring the companion bill in the Senate. 

The bill would allow private-sector companies to offer hourly workers, who put in 

more than 40 hours a week the choice between taking overtime pay or time-off. This 

is a choice that is currently available to Federal, state, and local government workers, but is denied to private-sector workers. It’s a highly-valued benefit for government workers, but not for workers along Main Street. Why do the President and 

Congressional Democrats fight so hard to deny women in the workforce this important choice? 

The House passed the Working Families Flexibility Act in May 2013. It is past 

time for Senate Majority Leader Reid to bring this bill to the Senate for a vote. 

There are other ways this White House has made the workplace less family 

friendly, especially for women. Economist Casey Mulligan argues the President’s Affordable Care Act will push more young women out of the full-time work, making 

them ‘‘29ers’’—referring to the maximum number of hours that an hourly employee 

can work and still be considered part-time under the new health care law. Mr. Mulligan expects 2 percent of workers to become ‘‘29ers,’’ an increase by more than a 

factor of 10. 

Moreover, at the urging of special interests, the Environmental Protection Agency 

recently introduced new sweeping global warming regulations on carbon emissions. 

A study by the U.S. Chamber of Commerce’s Institute for 21st Century Energy 

found that through the year 2030 these regulations would lower America’s economy 

by an average of $51 billion each year, reduce jobs by 224,000 every year, increase 

electricity payments from American families by $289 billion, and lower disposable 

income for U.S. households by $586 billion. 

So thanks to President Obama, women will compete for fewer jobs in a slower 

economy, paying higher electricity bills with less money in their family’s budget. 

Thank you, Mr. President. 

America’s broken tax code and extremely progressive income tax system penalize 

two-income households— which are the norm today among married, working-age 

couples. Although Congress lessened this penalty in the last decade, it still exists 
23 

and should be eliminated. It’s hard enough to make ends meet as it is, especially 

with college costs, gasoline, utilities and food costs all rising. 

Washington makes it harder to climb out of poverty, especially for young women 

and single moms with limited skills. While unintended, the conflict between the 

phase-outs of many means-tested Federal benefit programs like food stamps and the 

tax system means that working families struggling to leave poverty face an effective 

marginal tax rate as high as 80 percent, by one study’s estimate. This interaction 

creates poverty traps that discourage work and climbing the economic ladder. 

Moreover, the Cato Institute’s Michael Tanner and Charles Hughes found that 

welfare can pay more than the minimum wage in 35 states, even after accounting 

for the Earned Income Tax Credit, and in 13 of those states, welfare can pay more 

than $15 per hour. The President should work with Congress to correct these perverse policies. 

Occupational licensing is another problem facing poor families, especially those 

headed by women, who are seeking to work their way into the middle class. Representative Hanna held a hearing on the occupational licensing issue at the Small 

Business Committee. 

Over the last several decades, the number of workers required to have occupational licenses has risen steadily. In many cases, occupational licensing goes far beyond what is necessary to protect public health and safety. It has been a means for 

incumbent workers to raise their wages, by an estimated 15 percent, at the expense 

of new entrants who have fewer jobs, and consumers who pay higher prices. 

Although occupational licensing is primarily a state issue, Congress should use its 

investigative powers to shed light on how licensing abuse harms ordinary Americans, both as workers and consumers. Catching up will be hard to do, especially as 

the President continues to throw further roadblocks in front of this struggling recovery. 

Empowering workers, especially women, should be a common goal of both Democrats and Republicans. ‘‘Staying the course’’ with the same old federal traps and obstacles is not an option. 

With that, I look forward to hearing from today’s witnesses. 

PREPARED STATEMENT OF HON. AMY KLOBUCHAR, VICE CHAIR, JOINT ECONOMIC

COMMITTEE

Thank you, Chairman Brady for holding this important hearing on empowerment 

in the workplace and our country’s economic well-being. 

I would like to thank all of the witnesses on today’s panel. A special thanks goes 

to the witnesses I invited: Dr. Barbara Gault, Executive Director and Vice President 

of the Institute for Women’s Policy Research, and Dr. Heidi Shierholz, an economist 

with the Economic Policy Institute. 

I’d like to take a minute to talk about the condition of the labor market and the 

workforce today. Job growth has continued to strengthen, with the private sector 

gaining jobs for the past 51 months. During this time, more than 9.4 million jobs 

have been added. The national unemployment rate is 6.3 percent, the lowest level 

in five-and-a-half years. 

For most workers, the prospects of getting and keeping a job today are better than 

they’ve been in years. The number of unemployed workers per job opening has decreased from nearly seven in July 2009 to 2.2 in April 2014, close to the pre-recession level of roughly two unemployed workers for every job opening. But we still 

have work left to do. 

Despite the drop in the national unemployment rate, long-term unemployment is 

still a very real problem. Nearly three-and-a half million Americans – over one-third 

of unemployed workers – have been out of work for more than six months. Long 

periods of joblessness do significant damage to workers’ future earnings and to our 

nation’s productivity. 

Long-term unemployment problems spill over to create problems for the next generation. Spells of long-term unemployment not only reduce life-time earnings and 

increase mortality rates for the unemployed, but also lead to lower educational performance and lower earnings for the children of the long-term unemployed. 

We must also do more to address growing income inequality. The average income 

for the top one percent of households has grown more than seven times as fast as 

it has for the average household. Yet for the rest of America, income growth has 

stalled completely: the average American household earned less in 2012 than they 

did in 1989. The middle class is shrinking and is less secure. Seventy percent of 

our economy is based on consumer spending. So when families can’t afford to buy 

things, our businesses suffer and our whole economy suffers. 
24 

There are a number of steps our country should be taking to make sure that our 

economy continues to grow for everyone so that all participants in the workplace 

benefit. We’ve got to approach long-term unemployment from all sides. Two months 

ago, the Senate passed an extension of unemployment insurance, but it remains 

stalled in the House. Unemployment insurance is an important piece of the puzzle, 

but it’s not the only piece. We also need to make investments in job training. 

Ramping up job training is part of the key to empowering workers. We know that 

there are shortages of workers with the skills that employers need. In a poll of manufacturing companies in my home state, 60 percent of respondents said it was difficult to find workers with the right skills and experience, up from 40 percent in 

2010. 

That’s why I introduced a bipartisan bill with Senator John Hoeven that would 

add 100 STEM high schools and strengthen partnerships between employers and 

technical and community colleges. We’re already seeing this model work in Minnesota. Alexandria Tech has a 96 percent placement rate. Improving access to job 

training programs and STEM education will not only help people get jobs, but will 

also help ensure that those are good paying jobs. 

Another thing we should do is combine workforce training for parents with quality 

early education for low-income children. In my home state, Minnesota Child Care 

Assistance Programs help lower-income families pay for childcare costs so their parents can look for work or attend school. Integrated programs that meet the needs 

of both parents and children have been shown to be effective at reducing poverty 

for both generations. The idea is simple: helping parents helps the kids. When parents are doing well, that has an enormous positive impact on their children. 

Raising the minimum wage can help reduce poverty and help families’ economic 

security. At $7.25 per hour, the real value of the current minimum wage is now 

lower than it was in 1968. Low wages hurt workers but also cost the rest of society. 

For instance, more than half of the nation’s fast-food workers rely on the federal 

safety net because their wages are low, resulting in annual costs of over $6.8 billion 

to taxpayers. 

Finally, we need to eliminate the gender pay gap. Women who work full time earn 

about 80 cents for every dollar men earn. Much of this disparity is due to differences 

in education and occupation, but even after accounting for those and other factors, 

women still make less than men. The Paycheck Fairness Act would give women new 

protections against pay discrimination and help affirm that basic principle that all 

women deserve equal pay for equal work. 

We need to keep moving forward, ensuring every person can work a steady job, 

with good wages, provide for their families and save a little for the future. 

Labor laws have played and must continue to play a key role in protecting workers from unfair labor practices: 

• Child labor laws prevent young kids from being exploited and forced to work 

instead of going to school; 

• Laws that mandate decent working conditions protect people from being hurt 

or injured on the job; and 

• we need to uphold the fundamental right of workers to organize. 

This is about providing stability and consistency to workers and businesses. It’s 

also about doing the right thing for American families. Again, I want to thank the 

witnesses for being here this afternoon. I look forward to your testimony. 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
54 
55 

Æ