July 26, 2004

In testimony before the Senate Banking Committee, Federal Reserve Chairman Alan Greenspan July 20 attributed continuing wage sluggishness to the fact that workers are under-qualified for the opportunities available. On following day, July 21, he testified before the House Financial Services Committee, and reasserted his earlier testimony and stated further that this lack of education and job skills produces America's growing problem of income inequity.

One counterargument to Greenspan's claim is that most of the new jobs are in low-wage industries such as retail, hospitality and personal services. However, even in these areas, workers' wages have settled while supervisory workers have benefited a "disproportionate" share of recent wage gains, according to Chairman Greenspan.

This testimony coincides with concerns expressed by Conference members who serve on the Education and Workforce Development Committees. In response to these concerns, the Conference unanimously passed a resolution at its recent annual meeting in Boston entitled, Reforming America's High Schools: Alignment of Standards and Graduation Requirements. It speaks to the increasing need to build a strong working relationship between education, and workforce preparation and development to keep the U.S. ahead of global competition. Greenspan said, "We have not been able to keep up the average skill level in our workforce to match the required increases of increasing technology." While he did not offer any policy recommendations, he once again called for improving education and training.

The Conference is working on an initiative that will strengthen the alignment of standards, graduation requirements, and the ongoing relationship needed between education and workforce preparation to address concerns expressed by mayors and Fed Chairman Greenspan.

Both Presidential candidates have expressed support to establish a new effort that ensures that high school graduates are well prepared for post secondary education and/or work.