It is an amazing experience to sit in a movie theater watching the world premiere of a documentary in the small village on Long Island where it was filmed with the people it was filmed about. “This Business of Autism” is more than a profile of a social enterprise built around providing jobs for adults on the autism spectrum, it provides a manual, a template to how such businesses could be replicated and even more significantly, why they should be replicated.
The documentary leaps from Port Washington where Spectrum Designs, a social enterprise company founded in 2011 to employ adults on the autism spectrum, has just opened new, expanded offices, tripling the scale of its production (the documentary spends a considerable amount of time showing the building process and the fundraising to convert an office building into its plant). It travels to San Francisco to peek in on a Jobs Club that has focused on the need to train managers and mentors in companies that want to increase job opportunities for people with special needs, to Mercyhurst College in Erie, Pennsylvania, which has created an entire program that goes beyond the work skills to the life skills that are needed for the real world, and devotes a considerable amount of time to the wisdom of Dr. Temple Grandhin, who is herself on the autism spectrum, and lays out in no uncertain terms the need to instill self-sufficiency to the extent possible as early as possible.
The opening sets out the issue with jarring statistics: 1 in 59 children in the US is born with autism. Each year, 50,000 teens with autism age out of school-based services; an estimated 70- 90% of autistic adults are unemployed, under-engaged and leaving lives of isolation; 84% of these adults live with their parents, who have the constant fear of what will happen to their children after they pass away.
Autism is a lifelong neurological disorder affecting the way a person communicates, socializes and engages with the world. Though there is no cure, behavioral therapy can transform lives, and the earlier services are provided, the better. The highest functioning individuals on the autism spectrum are employed by the likes of NASA and Silicon Valley, but the vast majority – the 60 percent in the middle – have few employment opportunities.
It is fascinating to be brought into the homes of the parents of SpectrumDesign’s employees – starting with the founders of Spectrum Designs Foundation and Nicholas Center, Stella Spanakos and Nicole Sugrue, whose sons are autistic, lived with the daily panic of how their children will be able to fare in the world. Stella, after suddenly losing her husband, resolved to take the bull by the horns. She teamed up with Nicole, whose son was at the same summer camp as Stella’s. They decided to start a business that could employ special needs adults. Nicole googled “recession-proof businesses” and came up with t-shirt printing. They brought in Patrick Bardsley, who as an 18-year old had come from England to be a counselor at the summer camp and as fate would have it, became the one-on-one for Stella’s son; as Stella tells it, he was able to bring out the joy and happiness in her son, who was non-verbal and would act out, such as she had never seen from her son.
It turns out that t-shirt printing was a fortuitous choice because the tasks can be are defined, with a beginning, middle and end, can be easily taught, and are well suited to individuals who are in that 60% range on the spectrum.
They had the advantage of building a business around this social purpose, rather than insert employees with special needs into an existing business. And we get some insights into that: the visual cues are key, like the giant chart that tells everybody their tasks for the day with words and pictures; the lists of steps at each work station; naming the various machines and areas (one is named Octopus). Also, there is a one-to-three ratio of “educators” to workers.
What else is necessary? All the back-ups and supports, starting with the Nicolas Center, which helps counsel the young people and screen them for jobs and training.
I ask about the noise and stimuli of production that might trigger bad reactions, and am told that there are quiet spaces, a break room, and the enterprise, which actually has three components (custom printing, Spectrum Bakes which makes snacks custom packaged for gifts, and Spectrum Suds, a boutique laundry service), has quiet areas and activities. People are not employed in the print production area if they cannot deal with the noise and activity.
Training is a huge component. Workers are not slotted into a single repetitive task as on an assembly line (the image of Charlie Chaplin’s “City Lights” comes to mind), but rather undertake various parts of the process, indeed, every day there are different projects and jobs to undertake necessitating training for different tasks.
And that is a key issue: as Nicole noted, this is a business, albeit one that is based on social enterprise. Clients (who have included Northwell Health, KPMG, Google, Facebook, Accenture, NYU Langone Health and Mount Sinai) do not hire Spectrum Designs for their customized printing solely out of altruism but to get a quality product back. This isn’t an enterprise for a shop class in a high school, though certainly, high schools should undertake more of the skills training that people will likely need as adults. Indeed, the business has been growing at a rate of 80% a year, and from $100,000.in sales in 2012, to a projected $1.1 million in 2016, and targeting $3 million by 2020, in their expanded (tripled) space.
On the other hand, as the film demonstrates, the Spectrum Designs experience is replicable – I can even see them franchising in the way Sir Speedy does, since they have all the elements down: the machinery needed, equipment and product costs, construction costs and issues of building architecture that are pertinent, the revenue projections, and most significantly, the hiring, training, counseling aspects.
But while this not-for-profit has developed a sustainable business model, it also requires the support of community – that is the village of Port Washington, the Town of North Hempstead, and the state. The funding to build the business – purchase the machinery and the building- had to come from somewhere; the funding to counsel and train comes from somewhere.
Indeed, as the film also points out, the return on investment in developing self-sufficient individuals for society, the community and government is enormous, compared to government spending that goes merely to warehouse individuals.
The cost of autism across a lifetime averages $1.4 million to $2.4 million. These costs, which increase with intellectual disability, place a tremendous burden on families and society, but can be dramatically reduced with high-quality interventions and adult transition support.
Jack Martins, the former State Senator (a Republican) remarks in the film, “This is an appropriate role for government.”
And the genuine feeling of self-worth, of accomplishment in bringing home a paycheck is, well, priceless. There is a lot to be said for quality of life and not merely existing.
The interviews with the parents make clear how they struggled: they consider their children “the first generation”, when autism was just beginning to be diagnosed,and too many were diagnosed late or had to fight to get appropriate services (40 states now mandate now require health coverage for behavioral health treatment). As one parent notes, it is vital to receive appropriate services as young as possible because it makes a huge difference in the child’s development.
Now we are in the second generation, when the autism spectrum is better understood and the diagnosis more readily made – in fact, the prevalence of the diagnosis has doubled in a decade – it is a huge percentage of the population, touching so many families, so much so that people on the spectrum should be appreciated as having different abilities, rather than disabilities.
And that’s the goal for the “third generation”: that people can be appreciated for their differences and abilities, with appropriate academic and life skills preparation in schools, job training and opportunities, and adult home living arrangements that give some independence.
The documentary, “This Business Of Autism” addresses the positive impacts of developing profitable businesses while leveraging the unique capabilities of adults with autism. By confronting head-on the reality that an estimated 70% to 90% of these adults are unemployed or underemployed, these businesses can also provide avenues for corporate social outreach, mitigate the economic impacts on communities, and provide hope for families that their children might have sustainable, relevant and stimulating employment opportunities.
The film serves as a tutorial, a business manual, and even more importantly, raises awareness and overturns misconceptions. It sensitizes corporations, employers, communities about what they can do, what they need to do, to help.
“We wanted to show the capabilities of the middle 60% – not the top or the bottom 20% – but the middle 60% who are hard working, dedicated, loyal,” said Stephen Mackey, the film’s director, at the world premiere of the film, presented as part of the Gold Coast Arts Center’s Cinema Series, at the Soundview Cinemas, mere blocks away from Spectrum Designs new building on Main Street in Port Washington.
The documentary is available on Vimeo on Demand and on Amazon, and will be available on itunes and Googleplay.The producer is also taking orders for blueray, dvd and educational packages. “We believe that there are universities and vocational schools that will see what Spectrum Designs is doing. Half of the proceeds are being returned to the Spectrum Foundation.
Spectrum Designs Foundation has a sophisticated website, where customers can send in their order for custom apparent, promotional items, screen printing, digital printing and embroidery. Design your own or utilize their in-house graphic design team. (Spectrum Designs, 366 Main Street, Port Washington NY 11050, firstname.lastname@example.org, www.spectrumdesigns.org)
Obama Administration initiatives like TechHire have contributed to the record job creation and are in strong contrast to the feeble “score” Donald Trump is touting in retaining 800 jobs at Carrier Air Conditioners by throwing $7 million in tax incentives, paid for by Indiana citizens. It should have been a model to be continued and expanded. In contrast to Trump’s corporate welfare approach – which will be manifest in massive corporate tax cuts which will have to be paid for by working people – job-training programs like Obama’s would have helped those who are being displaced by advanced manufacturing technologies and the transition to clean, renewable energy enterprises, capturing more of the 5.5 million jobs that employers are having difficulty filling. Here’s yet another Fact Sheet of what America will lose with the incoming Administration. – Karen Rubin, News & Photo Features
FACT SHEET: Progress and Momentum in Support of TechHire Initiative
In March 2015, the President launched the TechHire initiative based on a simple idea: Building a pipeline of tech talent can bring new jobs to local economies, facilitate business growth, and give local residents a pathway into the middle class. To build such a pipeline, TechHire addresses employers’ great need for technology talent with emerging models for quickly training people with limited ingoing technology skills to be job-ready in months, not years.
Today, there are nearly 600,000 open IT jobs across all sectors—more than two-thirds of which are in fields outside the tech sector, such as manufacturing, financial services and healthcare. These jobs pay one and a half times more than the average private-sector job, and training takes less than a year with emerging programs like “coding bootcamps,” free open data trainings, and online courses like the Department of Commerce’s Data Usability Project and massive open online courses (MOOCs) by the Federal government, academic institutions, non-profit organizations, and the private sector.
Since its launch, TechHire communities across the country have piloted fast-track training programs designed to give people skills that are in high demand by employers. So far over 4,000 people have been trained and connected to work opportunities with local employers, earning average salaries of well over median income. Today, U.S. Chief Technology Officer Megan Smith announced how private organizations will seize on this progress with new steps to meet the scale of the opportunity.
Expansion of TechHire to over 70 Cities, States, and Rural Areas. Earlier this spring, we announced that communities had exceeded the President’s goal of doubling the size of the TechHire initiative, reaching a total of 50 communities. Yet even after we made the announcement, new communities continued expressing interest to participate—so today, we are announcing 20 new communities joining the TechHire initiative, working with about 500 employers (and counting). As of today, communities in 39 states, plus DC and Puerto Rico, have joined TechHire.
Growth of the TechHire Action Network. Today, we are announcing a partnership between Opportunity@Work, an independent social enterprise, and the U.S. Department of Education to take the lead in continuing to support, organize and grow the more than 70 cities, states, and rural areas participating in the TechHire initiative.
TechUP’s Include.io 27-City Roadshow 2017. TechUP | WeTechUP.com is launching the Include.io 2017 Roadshow across 27 cities in the United States to ignite 100,000 diverse and non-traditional tech talent and help 1,000 companies build their best teams.
The Challenge and Opportunity
People Need Opportunities to Retool and Retrain for Good Jobs More than Ever
Over the past decade, towns across America have experienced shifts in prevalent industries and jobs due to rapidly evolving technologies and other factors. These changes have too often made workers’ skills less relevant, impacting their employment options and, in some cases, leading to spells of unemployment that make it difficult for families to meet even their most basic of needs.
When workers lose their jobs or get stuck in lower-wage jobs because of local economic shifts due to no fault of their own, they should have clear pathways to the middle class. Technology jobs can offer this pathway. Nearly 40 percent of these jobs do not require a four-year degree. In recent years, there has been a proliferation of fast-track tech training programs like “coding bootcamps” that prepare people with little technical know-how for tech jobs, often in just a few months. A recent survey from Course Report found that bootcamp graduates saw salary gains of 38 percent (or about $18,000 annually) after completing their programs.
The U.S. is Massively Underinvesting in Training for Jobs in Technology and Other In-Demand Fields to Meet Employers’ Needs
In the face of a large and growing need of companies and workers to retool and retrain, the U.S. is massively underinvesting in job training programs. The federal government’s largest job training investment program only trains about 180,000 U.S. workers per year. America spends 0.03 percent of GDP on training while other countries are investing nearly 20 times more. And in spite of the evidence that apprenticeships are one of the most effective training tools, fewer than five percent of workers in the U.S. train as apprentices, relative to 60 percent in Germany.
In early 2010, there were 14.4 million unemployed Americans. Current funding levels would only allocate $212 per person for training and reemployment services, an insufficient amount compared to a $1,700 average semester cost for a community college. During times of high unemployment in 2009, many states reported training waiting lists of thousands of people long due to funding gaps.
Training workers in the US for 21st-century jobs will require a significant increase in investment from current levels, which are far below Germany and other European countries. This investment would benefit our businesses, our workers, and our economy by focusing on technology and other in-demand skills that are critical to fill existing jobs and attract and create new jobs in communities.
Expansion of TechHire to over 70 Cities, States, and Rural Areaswith 20 New Communities Signing on Today
The TechHire initiative began in March 2015 with 21 communities, and today it has grown to over 70 communities working with 1,500 employers on three key actions:
Opening up recruiting and hiring pathways for people without traditional credentials who can demonstrate that they have the skills to succeed in a tech job regardless of where those skills were attained.
Recruiting, incubating, and expanding accelerated tech learning programs – such as high quality coding bootcamps and innovative online training – which enable interested, unexperienced students to rapidly gain tech skills.
Connecting people to jobs by investing in and working with organizations that can vouch for those who have the skills to do the job, but who may lack the typical profile of education and experience.
20 New TechHire Communities Announced Today
Today, the following 20 communities are joining the TechHire initiative:
Alachua and Bradford
Arizona (State of)
Carroll County, MD
El Paso County, TX
Howard County, MD
Oklahoma City, OK
Santa Fe and Northern New Mexico
Tampa Bay, FL
Trenton City, NJ
A detailed summary of each community can be found at the end of this document.
Growth of TechHire Action Network
Opportunity@Work, an independent social enterprise, will partner with the U.S. Department of Education and others to continue to support TechHire communities to implement, grow, amplify, and sustain their TechHire initiatives locally and across the country and organize the Action Network. Key goals of TechHire and the Action Network include:
(1) Connecting employers to nontraditional, often overlooked, and more diverse tech talent and lifting up best practices from model companies.
(2) Aggregating resources and partnerships to help underrepresented groups access and progress on tech career pathways.
(3) Recruiting new TechHire communities and partners across sectors to support TechHire and advance the goal to expand access to fast-track tech training for underrepresented groups.
(4) Developing and collecting tools and resources on TechHire.org to support job seekers, employers, educators, and community partners.
(5) Working with communities to identify and leverage federal, state, local, and philanthropic funding more effectively to support TechHire activities and accelerated tech training.
(6) Expanding the learning network of TechHire leaders across the country, convenenational and regional events to promote collaboration among TechHire hubs, share best practices, and troubleshoot common challenges.
(7) For more details, visit the TechHire.org page.
TechUP’s Include.io 27-City Roadshow 2017
The TechUP + Include.io roadshow will bring together TechHire partners, technologists, recruiting leaders, and local community innovators to showcase the depth and breadth of incredible, diverse tech talent across the Unites States. Each city event features tech demos, workshops, and a career fair to highlight the next generation of technologists, thought leaders, and scale human connections. Their goal will be to spark local tech ecosystems, build momentum around inclusion, fill open tech jobs and change the face of technology.
Summary Descriptions of the 20 Communities Joining TechHire Today
We are pleased that communities continue to spread the TechHire initiative across the country, and today we announce an additional 20 communities who have developed cross-sector coalitions to train workers with the tech skills they need for the open tech jobs that local employers are seeking to fill. A summary of each of the communities is below:
Alachua and Bradford Counties, FL
In Alachua and Bradford counties, Santa Fe College in Gainesville, FL, CareerSource of North Central Florida (CSNCFL), the Gainesville Area Chamber of Commerce, and the North Florida Regional Chamber of Commerce will collaborate with Gainesville Dev Academy and others to train and place at least 300 individuals into programming and app development jobs by 2020. This program will help serve local tech jobs across all sectors, including local tech companies like Immersed Games, MindTree, Onward Development, NextGen, and Verigo.
Led by the Anchorage Economic Development Corporation, the Anchorage Mayor’s Office will work with Anchorage Community Land Trust, Code for Anchorage, Future Coders of Alaska, Lynda.com, Coursera, and other programs to train and place over 500 workers into tech jobs by 2020. Once trained, program graduates will fill the needs of local employers including GCI, Municipality of Anchorage, Resource Data. Inc, and PangoMedia, as well as help retain Anchorage’s top talent. To help connect graduates to jobs, the Alaska Department of Labor aims to revamp the interface for the state job-seeker platform.
Arizona (State of)
The State of Arizona Office of Economic Opportunity will leverage a “No Wrong Door” approach to recruit disconnected youth and nontraditional candidates into tech training and jobs across industries from aerospace & defense to financial services. The Arizona Tech Council, Arizona’s premier trade association for science and tech companies, will help leverage the resources of the tech community to focus on expanding tech talent, along with the Greater Phoenix Chamber of Commerce and other local organizations. In partnership with the University of Arizona and other local training providers, TechHire Arizona aims to train and place over 100 individuals across southern Arizona and Maricopa County over the next year, which is slated to increase to well over 500 individuals across Arizona by 2020.
TechHire Bellevue will bring together local employers, government and workforce development resources, with educational support from Coding Dojo and Bellevue College to facilitate training and hiring of local talent into tech jobs. The TechHire effort aligns with local employers’ missions to increase workforce diversity. Examples include Microsoft’s LEAP and Civic Tech programs, as well as Expedia, which has hired nearly a dozen Coding Dojo graduates to date. TechHire Bellevue will specifically target under-served populations locally, including minorities, veterans and the homeless, to help them learn and connect with local tech jobs.
A regional consortium of Boston employers and training providers are blazing the path to IT jobs, led by the Boston Private Industry Council (PIC), the City’s workforce development board, and SkillWorks, a regional funders’ collaborative. Companies from a range of sectors—including healthcare, education, government, technology, and finance—will support the initiative. TechHire Boston plans to more than double the number of high school Tech Apprentices from 100 to 250 and increase the number of individuals connected to IT-related jobs to 500 by 2020.
Carroll County, MD
Carroll County employers, training providers, and community organizations are uniting to train and employ more than 200 local tech workers by 2020. Led by Carroll Community College, the Carroll Technology Council and the Mid-Atlantic Gigabit Innovation Collaboratory, Inc. (MAGIC), a broad group of partnering organizations will connect local participants in leading-edge tech training programs to a network of over 520 county employers.
CareerSource Central Florida is developing a coalition across sectors to train and place 100 people within the year and 400 people by 2020 into tech jobs, with an emphasis on serving underemployed, minority, and female candidates. The University of Central Florida, Valencia College, and Florida Institute of Technology will each play a role in developing trainings for students to quickly learn tech skills. Businesses from across Florida that participate in the Florida High Tech Corridor Council will support the initiative with an array of commitments, including commitments to consult on course design, interview candidates, and provide on-the-job learning opportunities.
El Paso County, TX
Emerging companies in El Paso County will soon have an influx of talent, thanks to collaboration among the Workforce Solutions Borderplex Development Board Area and local partners to lead Reboot El Paso, a collective effort to create and expand IT career pathways. The initiative aims to train and place 400 individuals into tech jobs by 2020. First, the coalition will build awareness among non-traditional candidates, with an emphasis on veterans, the long-term unemployed, and youth. Then, the coalition commits to develop a pipeline to jobs with employer partners and assess applicants for fit to the jobs with competencies rather than credentials. Finally, the coalition will connect graduates to jobs.
Howard County, MD
Howard Community College and the Howard Tech Council (HTC) will come together to train individuals for jobs in tech fields including computer science, information technology, cybersecurity, and computer forensics. Howard County’s TechHire initiative will leverage an apprenticeship model, whereby trainees can participate in on-the-job learning with the over 200 regional employers that participate in Howard Tech Council. By 2020, the Howard County TechHire initiative aims to train and place 800 individuals, with an emphasis on the long-term unemployed, minorities, and the military.
The City of Mobile, Alabama will partner with the Gulf Coast Technology Council and 17 employers to develop industry-driven training, including customized capacity building for incumbent workers, a coding bootcamp pilot, and advanced manufacturing technical trainings for entry-level job seekers. The trainings will be facilitated by Depot/U, Iron Yard, and General Assembly. This program will include opportunities for trainees to network with local employers seeking talent, including Accureg Software, AM/NS Calvert, Rural Sourcing Inc., and The Red Square Agency. By 2020, the collaborative aims to train and hire 500 technical workers, including those who are underemployed and dislocated, boosting Mobile’s burgeoning tech community.
Oklahoma City, OK
StarSpace46, Inc., Creative Oklahoma, and Techlahoma Foundation will work with fast-track and agile training programs to train and place 500 IT workers by 2020. With commitments from employers spanning from the aerospace sector to the not-for-profit sector, trainees will gain and utilize skills in native mobile development, user interface design, and front-end and application development. Students will also gain access to mentorship in entrepreneurship and business.
Omaha is bringing together AIM and the Greater Omaha Chamber of Commerce, including traditional and start-up employers alike, in their effort to develop a local tech training and employment ecosystem. Local training bootcamps have committed to help train over 1,000 people by 2020, to help fill local tech jobs in industries from financial services to tech.
Pensacola State College will collaborate with employer convener Innovation Coast, Inc., including community workforce partners Global Business Solutions, Inc. (GBSI), Technical Software Services, Inc. (TECHSOFT), Gulf Power Company, AppRiver, and the Institute of Human & Machine Cognition (IHMC), to train and place 200 technology workers by 2020. With a focus on veterans, minorities, and economically disadvantaged individuals in the Pensacola area, students can gain skills across IT fields, including cybersecurity, coding, and networking. In addition to training, this initiative includes opportunities to make connections with potential employers and reduce unemployment.
Santa Fe and Northern New Mexico
NMTechWorks is a community coalition in Santa Fe and Northern New Mexico with support from the Mayor’s Office, local employers, and non-profits. This multi-sector effort is designed to map, expand, and link pathways to tech careers, especially for rural, Native American, and Spanish-speaking community members. The Community Learning Network and StartUp Santa Fe are teaming with Cultivating Coders, a locally-based accelerated training provider, and others to grow the IT pipeline and train more than 500 students by 2020 for high-demand tech jobs with employers such as the Los Alamos National Laboratory, OpenEye Scientific Software, and Descartes Labs.
Tampa Bay, FL
CareerSource Tampa Bay, Hillsborough County’s workforce development board, will fast-track critical IT training and employment opportunities for well over 1,000 local out-of-school youth and young adults through 2020. Employers across industries, such as BayCare Health Systems and Cognizant Technology Solutions, are partnering with the initiative in order to advance the economic health and technology industry of the community.
Trenton City, NJ
The Trenton TechHire initiative is a cross-sector partnership between employers, City of Trenton’s My Brother’s Keeper Initiative, and Agile Strategies group, local education institutions, and local nonprofit organizations. This collaboration will prepare over 150 residents for tech jobs across sectors by 2020. Partners such as FCC Consulting Services, Tektite Industries, Inc., New Jersey Manufacturing Extension Program, and Power Magnetics, Inc. will meet regularly with Shiloh Community Development Corporation and the City of Trenton to strengthen and sustain the initiative.
In Tulsa, 36 Degrees North, Techlahoma and a network of workforce and education partners will collaborate to quickly train candidates for tech jobs with local employers including ConsumerAffairs and Mozilla. With strong support from the Mayor’s Office, Tulsa TechHire plans to train and place 600 candidates, including women and youth, into tech jobs across sectors by 2020.
In Puerto Rico, co-working space Piloto 151 and Codetrotters Academy have launched a strong public-private partnership with support from the Puerto Rico IT Cluster, the Puerto Rico Department of Economic Development (DDEC) and the Puerto Rico Science & Technology Research Trust. The Puerto Rico TechHire initiative will bring together a wide range of local technology companies and startups, including Rock Solid Technologies, Spotery, Migo IQ, and Wovenware, among others, in order to train and place 100 workers into tech jobs over the next year, ramping up to 300 workers by 2020.
Tech Toledo, the Toledo Regional Chamber of Commerce, and OhioMeansJobs Lucas County are initiating an information technology workforce alliance to address short-term needs and develop longer-term programs for IT internships and apprenticeship programs. Tech Toledo will work with employers such as Meyer Hill Lynch, Toledo Lucas County Public Library, and The Andersons, Inc., to find and develop training to help fill their in-demand IT job needs. Tech Toledo will place at least 100 workers into tech jobs by 2020.
The City of Stamford and the Connecticut Department of Labor are working with Crashcode and The Business Council of Fairfield County to train and place 1,000 new workers into tech jobs by 2020 via an accelerated training program. Regional tech companies including Datto, CometaWorks, Comradity, GoNation, CTFN, and others will support with training design and hiring opportunities for graduates.
With Donald Trump continuing to rewrite history, advance falsehoods about Obama’s Presidency, it is important to examine the Employment report for November. Trumpsters depend upon disaffection and dissatisfaction. A strong economy is the antithesis. Also, Trump wants to take credit as the forward momentum of Obama’s policies continue on into the new administration, before the administration’s policies, undoing everything Obama accomplished, have their impact.
Trump was able to exploit years of propaganda from the Republicans aimed at destroying his presidency. Obama found a way to thread the needle in coming up with solutions, despite unprecedented obstruction of infrastructure spending, the America Jobs Act, spending for transportation and highways, defeating his plans to build high-speed rail and invest in clean, renewable energy.
Obama was almost a victim of his own success – like President Bill Clinton before him, who presided over a golden era of peace and prosperity, when everyone’s income and standard of living rose, only to see Al Gore denied the presidency – people take for granted how much better they are off from when Obama took office, when 850,000 jobs a month were being lost, 20,000 people a month were losing their health care, millions were losing their homes to foreclosure.
Obama also had in place programs to help the people who found themselves unable to pursue the 5.5 million unfilled jobs because of lack of training. He had programs to boost advanced manufacture, and open up markets to the 95% of the world that is outside the US.
Trump is profiting from being handed a growing economy, and he has signaled he will install the very same people who profited from millions of Americans misery, he will undo the financial and consumer protections, he will throw people back into the insecurity of losing health insurance and jobs and homes. He has shown in his appointments and in his business record that he will exploit workers and further weaken unions.
Statement on the Employment Situation in November
WASHINGTON, DC – Jason Furman, Chairman of the Council of Economic Advisers, issued the following statement today on the employment situation in November.
Summary: The economy added 178,000 jobs in November, extending the longest streak of total job growth on record, as the unemployment rate fell to 4.6 percent.
The economy added a solid 178,000 jobs in November as the longest streak of total job growth on record continued. U.S. businesses have now added 15.6 million jobs since early 2010. The unemployment rate fell to 4.6 percent in November, its lowest level since August 2007, and the broadest measure of underemployment fell for the second month in a row. Average hourly earnings for private employees have increased at an annual rate of 2.7 percent so far in 2016, faster than the pace of inflation. Nevertheless, more work remains to ensure that the benefits of the recovery are broadly shared, including opening new markets to U.S. exports; taking steps to spur competition to benefit consumers, workers, and entrepreneurs; and raising the minimum wage.
FIVE KEY POINTS ON THE LABOR MARKET IN NOVEMBER 2016
1. U.S. businesses have now added 15.6 million jobs since private-sector job growth turned positive in early 2010. Today, we learned that private employment rose by 156,000 jobs in November. Total nonfarm employment rose by 178,000 jobs, in line with the monthly average for 2016 so far and substantially higher than the pace of about 80,000 jobs per month that CEA estimates is necessary to maintain a low and stable unemployment rate given the impact of demographic trends on labor force participation.
In November, the unemployment rate fell to 4.6 percent, its lowest level since August 2007. The labor force participation rate ticked down, though it is largely unchanged over the last three years (see point 3 below). The U-6 rate, the broadest official measure of labor underutilization fell 0.2 percentage point for the second month in a row in part due to a reduction in the number of employees working part-time for economic reasons. (The U-6 rate is the only official measure of underutilization that has not already fallen below its pre-recession average.) So far in 2016, nominal hourly earnings for private-sector workers have increased at an annual rate of 2.7 percent, faster than the pace of inflation (1.6 percent as of October, the most recent data available).
2. New CEA analysis finds that State minimum wage increases since 2013 contributed to substantial wage increases for workers in low-wage jobs, with no discernible impact on employment. In his 2013 State of the Union address, President Obama called on Congress to raise the Federal minimum wage, which has remained at $7.25 an hour since 2009. Even as Congress has failed to act, 18 States and the District of Columbia—along with dozens of local government jurisdictions—have answered the President’s call to action and have raised their minimum wages. (In addition to the States that have already raised their minimum wages, voters in four States approved measures to raise the minimum wage in November.) To assess the impact of minimum wage increases implemented by States in recent years, CEA analyzed data from the payroll survey for workers in the leisure and hospitality industry—a group who tend to earn lower wages than those in other major industry groups and thus are most likely to be affected by changes in the minimum wage. As the chart below shows, hourly earnings grew substantially faster for leisure and hospitality workers in States that raised their minimum wages than in States that did not. By comparing trends in wage growth for the two groups, CEA estimates that increases in the minimum wage led to an increase of roughly 6.6 percent in average wages for these workers. At the same time—consistent with a large body of economic research that has tended to find little or no impact of past minimum wage increases on employment—leisure and hospitality employment followed virtually identical trends in States that did and did not raise their minimum wage since 2013. (See here for more details on CEA’s analysis.)
3. The strengthening labor market is drawing individuals into the labor force, offsetting downward pressure on employment growth from the aging of the population. Employment growth depends on three factors: population growth, the rate at which the population participates in the labor force, and the share of the labor force that is employed. The chart below decomposes employment growth (from the household survey) into contributions from each of these factors for each year of the current recovery. It further decomposes labor force participation into shifts attributable to demographics (such as the aging of the U.S. population) and shifts attributable to other factors (such as the business cycle). Throughout the recovery, demographic changes in labor force participation—primarily driven by a large increase in retirement by baby boomers that began in 2008—have consistently weighed on employment growth. In recent years, however, non-demographic changes in labor force participation have supported employment growth, as the strengthening of the labor market and increasing real wages have drawn more individuals into the labor force. The entry (or reentry) of workers into the labor force has helped employment growth maintain its recent solid pace even as the unemployment rate has fallen more slowly. These two shifts in labor force participation—demographic and non-demographic—have largely offset one another in recent months, and as a result the overall labor force participation rate has remained broadly stable since the end of 2013.
4. The number of unemployed workers per job opening, an indicator of labor market slack, is near its lowest level prior to the recession. Using data from the household survey and the Job Openings and Labor Turnover Survey, the chart below plots the ratio of unemployed workers to total job openings. In the recession, unemployment rose rapidly while job openings plummeted, sending the ratio of unemployed workers to job openings to a record peak of 6.6 in July 2009. As the unemployment rate has decreased over the course of the recovery, and as job openings have climbed to record highs this year, the ratio of unemployed workers to openings has fallen steeply, standing at 1.4 as of September (the most recent data available for openings). This is close to the ratio’s lowest level in the 2000s expansion, another indicator—in addition to recent increases in real wages—of a strengthening labor market.
5. The distribution of job growth across industries in November diverged from the pattern over the past year. Above-average gains relative to the past year were seen in professional and business services (+49,000, excluding temporary help services), while mining and logging (which includes oil extraction) posted a gain (+2,000) for the second time in recent months amid moderation in oil prices. On the other hand, retail trade (-8,000), information services (-10,000), and financial activities (+6,000) all saw weaker-than-average growth. Slow global growth has continued to weigh on the manufacturing sector, which is more export-oriented than other industries and which posted a loss of 4,000 jobs in November. Across the 17 industries shown below, the correlation between the most recent one-month percent change and the average percent change over the last twelve months was -0.06, the lowest level since September 2012.
As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, and it is informative to consider each report in the context of other data as they become available.
“[I]t has been the risk-takers, the doers, the makers of things—some celebrated, but more often men and women obscure in their labor—who have carried us up the long rugged path towards prosperity and freedom.” – President Obama, Inaugural Address, January 21, 2009
In these waning days of Obama’s historic presidency, before the incoming Trump Administration can undo and erase his legacy, it is important to be reminded of his accomplishments:
America’s entrepreneurial economy is the envy of the world. Young companies account for almost 30 percent of new jobs, and as we have fought back from the worst economic crisis of our lifetimes, startups have helped the U.S. private sector create 15.5 million jobs since early 2010—the longest streak of private-sector job creation on record.
Today, in celebration of National Entrepreneurship Month, the Administration is releasing a Top 10 list of President Obama’s most significant specific actions to promote American entrepreneurship, as well as announcing new efforts to build on these successes. The President’s unprecedented focus on the role of startups in the United States’ innovation economy is exemplified by his launch of Startup America in 2011, a White House initiative to celebrate, inspire, and accelerate high-growth entrepreneurship throughout the Nation.
Thanks to the grit, determination, and creativity of entrepreneurs all across the country, American startup activity is rebounding and growing more inclusive of historically underrepresented groups and regions. Studies indicate that:
Reversing a downward cycle that began during the Great Recession, U.S. startup activity ascended last year, representing the largest year-over-year increase in the last two decades, while measures of startup revenue and employment growth have rebounded across industries as well.
New companies created 889,000 jobs in the final quarter of 2015—the highest job creation number since 2008.
Rates of entrepreneurship have increased for Latinos, African Americans, and immigrants between 1996 and 2015.
Between 2007 and 2016, the number of women-owned firms is estimated to have grown at a rate five times the national average, including a more than doubling of the number of firms owned by African American women and Latinas.
American startups are not only rebounding, they are taking root in more communities all across the country—for example, the share of U.S. metro areas that attracted early stage venture capital has increased by around 50 percent since 2009.
The number of U.S. startup accelerator programs increased from fewer than 30 in 2009 to over 170 in 2015, providing mentorship and early funding to thousands of startups across 35 states plus D.C. and 54 metro areas.
Access to capital for high-growth entrepreneurs has improved significantly since 2009, with venture capital investment up an estimated 200 percent, far exceeding its pre-recession peak, and angel investment up 40 percent, approaching its pre-recession peak.
Compared with 137 countries, the United States continues to top the rankings in the Global Entrepreneurship Index, with the world’s most favorable conditions for entrepreneurs to start and scale new companies.
Breaking down barriers for all entrepreneurs is not the task of just one Administration. For example, studies suggest that the share of venture-funded startups with women founders has nearly doubled in 5 years—but it is still only 18 percent. Continuing to reverse America’s 40-year decline in startup activity will require building on the President’s record of addressing income inequality, promoting competitive markets, reducing unduly restrictive occupational licensing, and scaling up rapid training for 21st century technology skills.
In addition to releasing today’s Top 10 list of President Obama’s specific actions to promote entrepreneurship, the Administration is also announcing new private-sector actions to promote inclusive entrepreneurship.
New Actions by Organizations Answering the President’s Call to Action
Engineering deans from over 200 universities are committing to building a more-representative student talent pipeline. At the first-ever White House Demo Day in 2015, 102 engineering deans pledged to develop concrete diversity plans for their programs to tap into diverse talent. Since then, the American Society for Engineering Education (ASEE) has worked with its members to share best practices and to promote the inclusivity in engineering schools of all students regardless of visible or invisible differences. ASEE is creating a platform to disseminate best practices among participating engineering schools that will help them implement the diversity initiative. Today, at 206, the number of engineering deans that have signed the pledge has more than doubled since 2015. ASEE will continue promoting and enhancing diversity and inclusion through all its participating members. Read letter HERE.
79 companies have now joined the Tech Inclusion Pledge. At the Global Entrepreneurship Summit this past summer, President Obama announced a commitment by senior leadership from 33 companies of all sizes to fuel American innovation and economic growth by increasing the diversity of their technology workforce. Today, 46 additional companies, including Xerox, TaskRabbit, and Techstars, are joining this Tech Inclusion Pledge, committing to take concrete action to make the technology workforce at each of their companies representative of the American people as soon as possible. To facilitate additional pledge commitments and help companies meet those commitments, the National Center for Women & Information Technology (NCWIT) and CODE2040 commit to maintain a website with free research-based implementation resources. Read letter HERE.
Early-stage investors are making a new commitment to promote inclusive entrepreneurship. Today, more than 30 investment firms, angel investor groups, and startup accelerators with over $800 million under management have committed to achieving greater transparency in their funding criteria and to actively mentoring entrepreneurs from underrepresented backgrounds, in an effort to increase the diversity of startup founders in their portfolios. For example, MassMutual Foundation and Valley Venture Mentors are partnering to create a scalable model for rural startup accelerators, while Pipeline Angels is bringing its training programs for underrepresented investors to 20 additional cities. Read letter HERE.
The President’s Top 10 Actions to Accelerate American Entrepreneurship
Signed permanent tax incentives for startup investment. The President signed into law 18 tax breaks for small businesses in his first term, including tax credits for those who hire unemployed workers and veterans. In addition, in December 2015, Congress responded to the President’s call to make two critical tax incentivespermanent for the first time:
Made the Research and Experimentation (R&E) tax credit available to startups. In addition to making the R&E tax credit permanent for the first time since its enactment in the early 1980s, Congress also expanded the credit to allow pre-revenue startups and small businesses to take advantage of the credit by counting it against up to $250,000 in payroll expenses for up to 5 years.
Permanently eliminated capital gains tax on certain small business stock. First enacted on a temporary basis in the Small Business Jobs Act of 2010 and now permanent, this measure eliminates capital gains realized on the sale of certain small business stock held for more than 5 years, providing a major incentive for private-sector investment in high-growth entrepreneurial firms that fuel economic growth.
Accelerated the transition of research discoveries from lab to market.The Federal government invests over $140 billion each year on Federally-funded research and development (R&D) conducted at universities, Federal laboratories, and companies. The President issued a memorandum to agencies to accelerate the commercialization of Federal R&D, and made these Lab-to-Market efforts a core part of his management agenda.
Scaled up I-Corps, a rigorous entrepreneurship training program for scientists and engineers. The Innovation Corps (I-Corps) program, first launched in 2011 by the National Science Foundation (NSF), provides entrepreneurship training for Federally funded scientists and engineers, pairing them with business mentors for an intensive curriculum focused on discovering a truly demand-driven path from their lab work to a marketable product. Over the past 5 years, more than 800 researcher teams have completed this I-Corps training, from 192 universities in 44 states, resulting in the creation of over 320 companies that have collectively raised more than $93 million in follow-on funding. The I-Corps model has been adopted in 11 additional Federal agency partnerships, including an expansion to 17Institutes and Centers at the National Institutes of Health and the Centers for Disease Control and Prevention, and is implemented through a National Innovation Network across more than 70 universities. Additionally, the Department of Defense’s MD5 National Security Technology Accelerator is helping provide students with the training to apply a similar lean startup methodology to real-world national-security problems, soon expanding to eight institutions of higher education this spring, and including new challenges in diplomacy, urban resilience, and energy.
Facilitated personnel exchanges between Federal labs, academia, and industry. The National Institute of Standards and Technology (NIST) published a final rule on “Technology Innovation-Personnel Exchanges,” allowing Federal agencies to more easily exchange personnel with universities, non-profits, and the private sector to advance R&D commercialization.
Increased access to Federally-funded research facilities and intellectual property for entrepreneurs and innovators. Funded by NIST, the Federal Laboratory Consortium launched online tools for finding specific information and open data on more than 300 Federal laboratories with 2,500 user facilities and specialized equipment, as well as over 20,000 technologies available for licensing.
Strengthened Federal R&D funding for startups and small businesses. For the first time in a decade, in 2011 the President signed a long-term reauthorization of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which annually provide over $2.5 billion in Federal R&D funding to technology startups and small businesses. The U.S. Small Business Administration (SBA) and 11 participating Federal agencies have expanded access to SBIR/STTR opportunities, including by building theSBIR.gov platform and initiating a road tour that has engaged historically underrepresented communities across the country.
Cut red tape for entrepreneurs.The Administration’s Startup in a Day initiative is cutting red tape to make it easier for more entrepreneurs to get started and grow their businesses. Over 100 cities, home to nearly 38 million Americans, have taken a public pledge to streamline their business startup processes, allowing entrepreneurs to navigate requirements in as little as 24 hours. To support these streamlining efforts, the SBA sponsored a prize competition won by 28 cities and communities; examples include the City of Los Angeles and the City of Long Beach, which both created online business portals that are open-source and can be shared with cities and communities across the country. Additionally, over 52,000 small business borrowers have connected to lenders under a new SBA online matchmaking tool called LINC, while SBA One is taking SBA’s lending process entirely online, which will save hours of time and thousands of dollars per loan for entrepreneurs.
Expanded regional entrepreneurship opportunities. High-growth entrepreneurship is taking root in more and more communities across the country, in part thanks to targeted investments by this Administration.
Seeded startup accelerators in diverse communities. The SBA’s Growth Accelerator Fund Competition serves entrepreneurs in a broad set of industries and sectors—from manufacturing and tech start-ups, to farming and biotech—with many focused on creating a diverse and inclusive small business community. From 2014 to now, SBA has funded over 200 startup accelerator programs in every corner of the country, serving well over 5,000 startups that have collectively employed over 20,000 people and raised over 1.5 billion in capital.
Pioneered a regional innovation strategy. SBA’s investments in 62 Regional Innovation Clusters have helped participating small businesses achieve an average employment growth rate of more than five times faster than regional benchmarks, and more than $650 million in Federal contract opportunities.
Incentivized regional partners to work together on tech entrepreneurship. Through its Regional Innovation Strategies (RIS) program and the i6 Challenge, the Department of Commerce’s Economic Development Administration (EDA) has awarded $59 million in capacity-building grants that help entrepreneurs in diverse regions of the country move ideas to market, supporting the creation and expansion of research-commercialization centers and early-stage seed-capital funds. Earlier this month, EDA announced nearly $15 million in Federal funding plus $18 million in matching funds, reaching urban and rural areas in 19 states, including the first RIS investments that support historically black colleges and universities: a direct investment in Clark Atlanta University’s agriculture and food technology commercialization program; and an investment in a program to increase access to early-stage capital in southeast Louisiana, in which Southern University is a partner. Among the 35 organizations receiving EDA support are a female-focused early-stage capital fund in Texas, a Native American-focused proof-of-concept program in Oklahoma, and urban innovation hubs focused on fashion technology in Brooklyn and on social innovation in New Orleans.
Directly boosted entrepreneurs’ access to capital. With only three states attracting the majority of venture capital, the Administration has focused on incentivizing investment in startup communities across the country.
Catalyzed investments of $8.4 billion through theState Small Business Credit Initiative (SSBCI). The SSBCI was created through the Small Business Jobs Act of 2010, which provided $1.5 billion to strengthen state programs that support lending to small businesses and small manufacturers. Administered by the Treasury Department, SSBCI has catalyzed over $8.4 billion in more than 16,900 new loans and investments all across the country. To date, business owners report more than 190,000 jobs will be created or retained due to the new loans and investments stimulated by SSBCI funds. More than half of all SSBCI loans or investments went to young businesses less than 5 years old, and over 40 percent of the loans or investments were in low- or moderate-income communities. Over 30 states have allocated nearly half-a-billion SSBCI dollars to venture-capital programs—a dramatic increase in funding for the programs that are critical to expanding high-growth entrepreneurship into diverse regions around the country.
Strengthened investment fund program for small businesses. The Small Business Investment Company (SBIC) program, run by the SBA, is a multi-billion dollar investment program to bridge the gap between entrepreneurs’ need for capital and traditional sources of financing. This Administration has created new pathways for impact investment funds that devote growth capital to companies in underserved communities and emerging sectors, as well as for early-stage innovation funds. The recently announced Open Network for Board Diversity (ONBOARD) is a public-private initiative working to expand the presence of underrepresented groups on high-growth company advisory boards, boards of directors, and senior leadership, particularly for those supported by SBICs.
Prioritized inclusive entrepreneurship.As part of the first-ever White House Demo Day in August 2015, 40 leading venture-capital firms with more than $100 billion under management committed to advance opportunities for women and underrepresented minorities, and more than a dozen major technology companies committed to new actions to ensure diverse recruitment and hiring. These actions are complemented by today’s announcements, as well as continued progress by Federal agencies, including:
Reduced barriers faced by women entrepreneurs. SBA created the InnovateHER Business Challenge, where organizations throughout the country hold local competitions for new and innovative products and services to empower women and their families; in 2015, over 1,000 entrepreneurs participated in over 100 competitions, and these numbers doubled in 2016. Women-owned small businesses reached an important milestone in 2015, meeting the Federal contracting goal for such businesses for the first time in history; overall last year, the Federal government awarded an all-time high of 25.75 percent of government contracts to all small businesses, supporting 537,000 American jobs.
Unlocked the potential of Federal inventions with entrepreneurs from all backgrounds. The National Institute of Standards and Technology, the Minority Business Development Agency, and the Federal Laboratory Consortium partnered together to launch the Inclusive Innovation Initiative (I-3), designed to increase minority business participation in Federal technology transfer.
Trained veteran entrepreneurs for 21st century opportunities. The Department of Veterans Affairs Center for Innovation is helping to expand the 3D Veterans Bootcamp, a program that provides Veterans with technical training in 3D printing and design skills to accelerate designs to market. The training will annually prepare over 400 Veterans and transitioning service members for careers in advanced manufacturing and will provide guidance and resources for those wishing to launch their own business. Additionally, SBA launched Boots to Business, an entrepreneurship education program that provides transitioning service members with introductory business training and technical assistance. Since 2013, over 20,000 transitioning service members, including many spouses, participated in the Boots to Business introductory class on over 165 military installations worldwide.
Launched TechHire to train people for entrepreneurial opportunities and well-paying jobs. In 2015 the President launched TechHire, a multisector effort to empower more people from all backgrounds with the skills they need, through universities and community colleges but also innovative nontraditional approaches like “coding bootcamps,” that can rapidly train workers for technology jobs. Since then, 50 communities in partnership with over 1,000 employers have initiated local efforts that have placed over 2,000 people into tech jobs and entrepreneurial opportunities.
Expanded entrepreneurial opportunities for the unemployed and underserved. The Department of Labor (DOL) has funded the expansion of voluntary state-run Self-Employment Assistance (SEA) programs, designed to encourage and enable unemployed workers to create their own jobs by starting their own businesses while receiving unemployment insurance benefits; helped make entrepreneurial training available to more than 200,000 low-income and out-of-school youth with barriers to employment; and helped make it easier for formerly incarcerated persons to participate in the SBA’s microloan program.
Created opportunities for promising entrepreneurs and innovators from abroad. While there is no substitute for Congress passing commonsense immigration reform, the Administration is taking the steps it can to fix as much of the broken U.S. immigration system as possible. Many of these commonsense steps are designed to attract and retain the most talented workers, graduates, and entrepreneurs from around the world.
Released a rule tailored for international entrepreneurs. The Department of Homeland Security (DHS) published a proposed International Entrepreneur Rule, which describes new ways in which DHS will make it possible for certain promising startup founders to grow their companies within the United States. Once this rule is finalized, it will provide much-needed clarity for entrepreneurs who have been validated by experienced American funders, and who demonstrate substantial potential for rapid growth and job creation—benefiting American workers and the U.S. economy.
Acted to retain more of the scientists and engineers educated in the United States. American universities train some of the world’s most talented students in science, technology engineering, and mathematics (STEM), but the broken U.S. immigration system compels many of them to take their skills back to their home countries. DHS published a final rule on STEM Optional Practical Training allowing international students with qualifying STEM degrees from U.S. universities to extend the time they participate in practical training, while at the same time strengthening oversight and adding new features to the program.
Unlocked the talents of high-skilled Americans-in-waiting. The Administration is making it possible for high-skilled workers on temporary visas to accept promotions, change positions or employers, or start new companies while they and their families wait to receive their green cards, and ultimately become Americans, by the publication of a policy memo on job portability and a final rule improving employment-based visa programs. In addition, DHS published a new rule that has allowed the spouses of certain high-skilled immigrants to put their own education and talents to work and contribute to the American economy.
Updated securities laws for high-growth companies.Thanks to the bipartisanJumpstart Our Business Startups (JOBS) Act signed by the President in 2012, entrepreneurs have greater access to capital from the seed stage all the way to an initial public offering (IPO). These new capital-formation pathways include:
The “IPO on-ramp” makes it easier for qualifying smaller firms to responsibly access public markets. Thanks in part to the JOBS Act, which phases in regulatory requirements for smaller companies making an initial public offering (IPO), in the year ending in March 2014 smaller IPOs were at their highest level since 2000; one study estimated that the JOBS Act was responsible for a 25 percent increase in IPO activity, including among biotech startups.
Entrepreneurs can raise up to $50 million through regulated “mini public offerings.” Through the “Regulation A+” provision of the JOBS Act, the U.S. Securities and Exchange Commission (SEC) has qualified around 50 companies to make streamlined public offerings of over $840 million in aggregate—whereas the previous version of this rule was rarely used.
Entrepreneurs can raise up to $1 million from regular investors through a new class of regulated crowdfunding platforms. A new, national, SEC-regulated marketplace for securities-based crowdfunding first opened for business 6 months ago; by one measure, these new crowdfunding platforms have allowed startups and small businesses to raise $12 million from over 15,000 regular investors.
Made the U.S. patent system more efficient and responsive to innovators.The President signed the Leahy-Smith America Invents Act in September 2011, giving the U.S. Patent and Trademark Office (USPTO) new resources to significantly reduce patent application wait times. Total processing times for both patents and trademarks have been reduced by approximately 25 percent and 14 percent, respectively, since 2009. This reduction has come with both a 50-75 percent reduced cost for startups and small businesses, as well as the creation of a fast track program where applicants can get a final disposition in about 12 months. In addition, with a series of executive actions, the Administration has taken steps to increase transparency to the patent system and level the playing field for innovators, and leveraged the knowledge of the American people by crowdsourcing information about prior art. USPTO has also launched an International IP Toolkit to empowerinnovators with tools to facilitate exports and empower global expansions, a Patent Pro Bono Program across all 50 states to provide free legal assistance for inventors who file patent applications without the assistance of a patent attorney, and a fast-track review for patents related to cancer treatment as part of Vice President Biden’s Cancer Moonshot.
Unleashed entrepreneurship in the industries of the future. The President has long recognized that it is entrepreneurs in clean energy, medicine, advanced manufacturing, information technology, and other innovative fields who will build the new industries of the 21st century, and solve some of our toughest global challenges.
Boosted innovation and entrepreneurship in the bioeconomy. In 2012, theAdministration released the first-ever National Bioeconomy Blueprint, to outline a series of steps to grow and manage a sector that is generating annual revenues greater than $300 billion and that is contributing the equivalent of at least 5 percent of annual U.S. GDP growth. In 2015, recognizing that navigating the regulatory process for biotechnology products can be unduly challenging, especially for small companies, the Administration initiated an effort to improve transparency and predictability in the regulatory system for biotechnology products.
Spurred innovation and entrepreneurship in the commercial space industry. Working with NASA, American companies have developed new spacecraft that are cost-effectively delivering cargo to the International Space Station and are working towards ferrying astronauts there by the end of 2017. U.S. companies that got their start supporting government missions have increased their share of the global commercial launch market from zero in 2011 to 36 percent in 2015. Federal agencies are also leveraging innovative procurement methods and creating a supportive regulatory environment to allow space entrepreneurs to pursue ventures in areas such as remote sensing, satellite servicing, asteroid mining, and small satellites. More venture capital was invested in America’s space industry in 2015 than in all the previous 15 years combined.
Enabled a new generation of aviation technology for commercial use. Powering a revolution in unmanned flight, this summer the Administration announcedground rules to govern commercial, scientific, public safety and other non-recreational uses of unmanned aircraft systems (UAS)—commonly known as “drones.” These rules are enabling the safe expansion of a new generation of aviation technologies and startups that will create jobs, enhance public safety, and advance scientific inquiry. Industry estimates suggest that, over the next 10 years, commercial unmanned aircraft systems could generate more than $82 billion for the U.S. economy and by 2025, the industry could be supporting as many as 100,000 new jobs.
Supported the growth of advanced robotics. In 2011, President Obama announced the National Robotics Initiative (NRI) — a multi-agency collaboration to accelerate the development of next-generation robots that can solve problems in areas of national priority, including manufacturing, sustainable agriculture, space and undersea exploration, health, transportation, personal and homeland security, and disaster resiliency and sustainable infrastructure. The NRI has invested over $135 million in 230 projects in 33 states, fueling the development of new technologies and business opportunities, including robots that can inspect bridges, monitor water quality, and even aid in future space missions.
Supported manufacturing entrepreneurship through a national network of R&D hubs.Manufacturing USA brings together industry, academia, and government to co-invest in the development of world-leading manufacturing technologies and capabilities. In the 4 years since its establishment, Manufacturing USA has grown to a network of nine institutes and over 1,300 members—of which more than one-third are small- and medium-sized enterprises. These public-private partnerships are catalyzing entrepreneurial activity by, for example, working with regional Manufacturing Extension Partnership Centers to help small manufacturers across the nation adopt advanced manufacturing techniques; and blending manufacturing technology and entrepreneurship in project-based learning programs for high schoolers.
Stimulated entrepreneurial solutions through increased use of incentive prizes. Since 2010, more than 100 Federal agencies have engaged 250,000 Americans through more than 700 incentive prizes on Challenge.gov to address tough problems ranging from fighting Ebola, to improving speech recognition, to blocking illegal robocalls. Competitions such as the NIH Breast Cancer Startup Challenge and many more have made over $220 million available to entrepreneurs and innovators and have led to the formation of over 300 startup companies with over $70 million in follow-on funding.
Fostered grassroots innovation through the maker movement. Beginning with the White House Maker Faire in June 2014 and continuing with a National Week of Making in both 2015 and 2016, the Administration has supported a growing grassroots community of makers—Americans using new tools, technologies, and spaces to design, build, and manufacture. Federal agencies, companies, non-profits, cities, and schools collectively committed to creating over 2,500 maker-oriented spaces in the United States to expand access for both students and entrepreneurs. Earlier this month, more than 300 organizations from all 50 states, with industry support including Chevron, Cognizant, and Google, came together to launch an independent nonprofit called Nation of Makers, to provide an ongoing community of practice and leadership to the maker movement.
President Obama has also elevated innovation and entrepreneurship as a foreign policy priority beyond America’s borders. Following his historic 2009 Cairo speech, the President hosted the first Global Entrepreneurship Summit (GES) at the White House in 2010; since then, annual GES events worldwide have provided over 7,000 emerging entrepreneurs with networking and investment opportunities and catalyzed over $1 billion in private-sector commitments. The U.S. Agency for International Development (USAID) Partnering to Accelerate Entrepreneurship (PACE) initiative catalyzes private-sector investment and identifies innovative models that help global entrepreneurs bridge the “pioneer gap.” Working in partnership with more than 40 incubators, accelerators, and seed-stage impact investors worldwide, USAID’s U.S. Global Development Lab creates public-private partnerships dedicated to testing ways to foster entrepreneurship, which are expected to leverage $100 million in combined public and private investments. The Presidential Ambassadors for Global Entrepreneurship (PAGE) initiative is a collaboration among American entrepreneurs, the White House, the Department of Commerce, and other Federal agencies to harness the creativity of U.S. business leaders to help develop the next generation of entrepreneurs both at home and abroad. The Department of State’s Global Innovation through Science and Technology (GIST) program has engaged with science and technology innovators and entrepreneurs in 135 emerging economies around the world, providing training and resources to help them build successful startups.
For additional information and progress updates on organizations answering the President’s Call to Action to Advance Entrepreneurship, click HERE.
New actions to address wage collusion, unnecessary non-compete agreements, and other anti-competitive practices respond to the President’sExecutive Orderissued on April 15, directing agencies to increase competition for consumers and workers.
“Today, we’re in the midst of the longest streak of job growth in U.S. history. The U.S. Census Bureau recently reported that in 2015, the typical household saw its income grow by 5.2 percent (about $2,800), the largest one-year increase on record,” the White House stated.
“At the same time, the President has made clear that there is still more work to do to reverse longer-run patterns of stagnant wage growth and rising income inequality. Over the past several decades, only the highest earners have seen steady wage gains; for most workers, wage growth has been sluggish and has failed to keep pace with gains in productivity. Over the same period, the share of national income going to labor has also fallen, and labor income itself has become divided increasingly unevenly.”
To ensure that workers share more fully in the gains they help create, the White House is announcing new steps in response to the President’s April 2016 Executive Order calling for actions that enhance competition to benefit consumers, workers, and entrepreneurs.
Issue Brief on How Monopsony Power Impacts Wages and Employment.The Council of Economic Advisers is releasing anew issue brief that reviews evidence that firms may have wage-setting power in a broad range of areas, explains how anticompetitive forces can lead to a redistribution of revenues from workers to companies, and reviews the policy implications of this analysis.
Non-Compete Agreements: Call-to-Action to States, Largest-Ever Data Collection, and State-by-State Policy Report.Non-compete agreements narrow the employment options for an estimated one in five workers in the United States. As the White House andTreasury reported earlier this year, there is substantial evidence of overuse and misuse of these clauses. Today, the Administration put out a call to action and set of best practices for state policymakers to enact reforms to reduce the prevalence of non-compete agreements that are hurting workers and regional economies. To contextualize these best practices, the White House is releasing a state-by-state report on key dimensions of current state non-compete policy. Finally, we are announcing commitments to undertake the largest data collection of its kind to better measure non-compete usage by firms and individuals, alike.
Antitrust Guidance and Reporting Hotline for Human Resource Professionals.On Thursday,the Department of Justice (DOJ) and the Federal Trade Commission (FTC) released guidance for HR professionals for how to spot and report collusion among competing employers that may violate the antitrust laws. In the guidance, DOJ announced that going forward it will criminally investigate allegations that employers have agreed amongst themselves on employee compensation or not to solicit or hire one another’s employees.
These new actions complement the many other steps the Administration has advanced and supported to level the playing field for workers in the job market, including raising the minimum wage, advancing paid leave, supporting collective bargaining, and pushing to reform occupational licensing and land use restrictions.
THE CASE FOR ACTION
Increasingly, researchers are reporting signs of declining U.S. labor market competition. Economists have begun exploring how these trends connect to rising income inequality. While recent discussions on television set-top boxes and airline tickets have focused on the ability of a small number of firms to set high prices, reduced competition in the labor market results in lower wages and greater earnings inequality, and can also result in lower employment.
There are many forces that can limit competition between firms and give employers some power to set wages below the market rate. In some cases, wage-setting power can result from employer actions—like collusion or the use of non-compete agreements—that artificially restrict competition. More generally, any factor that limits workers’ choices, restricts their mobility, or creates barriers to changing jobs can weaken workers’ bargaining position—which may force them to accept lower compensation or inferior working conditions. The data show that workers today are in many ways less mobile and less likely to switch jobs than they were 20 or 30 years ago.
One factor that contributes to trends in labor mobility is the amount of market power that employers can exercise in the labor market. When a small number of employers—or even one employer—wields a large share of market power, they can exercise so-called “monopsony power.”
Monoposonies are the other side of the coin to monopolies. Both reflect a company’s ability to affect markets in ways that would be impossible in competitive markets. Monopolies occur when companies have outsized market power, so they can set the price of a good or service at a level higher than if there was fair competition. Monopsonies occur when companies with power in labor markets can set the wages they pay at lower levels and hire fewer workers than if there was strong competition. These lower wages have real consequences for families and the economy more broadly.
Greater labor market competition can help promote efficiency and employment and ensure that the benefits of economic growth are shared by all. In particular, increased labor market competition means:
Higher wages and more hiring.When businesses must compete for workers, they recruit workers and offer higher wages as long as the value of output they produce can support the going wage. Competition thus encourages employers to seek out all productive and efficient hiring opportunities and establishes a close link between wages and productivity. When there is strong competition, firms have no incentive to set wages below the market rate, because if they do, they will lose their workers to competing firms.
Greater economic opportunity and fairness for workers. In a competitive labor market, wages are determined by the market, and are not subject to companies’ abuse of outsized bargaining power. But when firms have wage-setting power, they have an incentive to pay the lowest wage that workers are willing to accept. As a result, market power not only shifts revenues away from labor, toward managers and inflated profits; it also means that individuals who start out facing greater obstacles and fewer opportunities often end up being paid the least. Competition can help equalize wages across workers with similar skills and ensure a level playing field for all workers.
Addressing Gross Overuse of Non-Compete Agreements
According to survey data, one in five U.S. workers is bound by a non-compete agreement, including 14 percent of workers making less than $40,000 per year. A considerable proportion of non-compete agreements signed by both low- and high-wage workers come at the expense of wage growth, entrepreneurship, and broader economic growth. Researchers have found that states that strictly enforce non-compete agreements have 10 percent lower average wages for middle-aged workers than states that do not.
The White House is announcing several new steps to reduce the misuse of non-compete agreements.
In addition to encouraging states to take action, the Administration also calls on Congress to pass federal legislation to eliminate non-competes for workers under a certain salary threshold, as in the Mobility and Opportunity for Vulnerable Employees Act (MOVE Act), originally sponsored by Senators Al Franken and Chris Murphy, and in the Limiting the Ability to Demand Detrimental Employment Restrictions Act (LADDER Act). We call on Congress to consider this critical issue and the potential economic consequences of inaction.
Best Practices and Call to Action for States on Non-Compete Agreements.Elected officials in Connecticut, Hawaii, Illinois, New York, and Utah have signed on to support a call-to-action for state non-compete reform, below:
In order to reduce the misuse of non-compete agreements in states that choose to enforce them, the White House is calling on state policymakers to join in pursuing best-practice policy objectives, including one or more of the following:
Ban non-compete clauses for categories of workers, such as workers under a certain wage threshold; workers in certain occupations that promote public health and safety; workers who are unlikely to possess trade secrets; or those who may suffer undue adverse impacts from non-competes, such as workers laid-off or terminated without cause.
Improve transparency and fairness of non-compete agreements by, for example, disallowing non-competes unless they are proposed before a job offer or significant promotion has been accepted (because an applicant who has accepted an offer and declined other positions may have less bargaining power); providing consideration over and above continued employment for workers who sign non-compete agreements; or encouraging employers to better inform workers about the law in their state and the existence of non-competes in contracts and how they work.
Incentivize employers to write enforceable contracts, and encourage the elimination of unenforceable provisions by, for example, promoting the use of the “red pencil doctrine,” which renders contracts with unenforceable provisions void in their entirety.
State-by-State Explainer of Non-Compete Laws. To educate workers, employers, policymakers and advocates, the White House is issuing a report about existing state laws and some of the key issues related to non-compete agreement reform.
Employer Support to Eliminate Non-Competes for Most or All Employees. Across the country, businesses are eliminating non-compete agreements in favor of more targeted options. They are supporting a shift in non-compete policy because they recognize that fewer, more targeted non-compete agreements will likely increase their pool of available talent and improve innovation.
New Surveys to Examine Prevalence and Impact of Non-Competes, including:
Largest data collection effort ever undertaken on non-compete agreements. PayScale, a company that provides compensation data and software to employers and employees, has committed to collect new data to support the effort to better measure and understand the use of non-compete agreements. This commitment will include anonymously surveying thousands of firms on non-compete practices and asking millions of employees about their non-compete status.
In-depth survey on non-compete use. This upcoming year, researchers Evan Starr, Natarajan Balasubramanian, and Martin Ganco, with the support of the Ewing Marion Kauffman Foundation, plan to field an in-depth survey about non-compete usage and its impact on firm growth, employee mobility, and entrepreneurship.
Curbing Collusion among Firms to Suppress Wages and Limit Worker Mobility
Increased market concentration of firms can also facilitate collusive agreements that allow a small number of employers, who compete over the same workforce, to artificially suppress wages below market rates or agree not to hire one another’s employees. Like price fixing in product markets, collusion among employers to reduce wages is illegal in the U.S. and subject to anti-trust laws.
These types of agreements eliminate competition in the same irredeemable way as agreements to fix the prices of goods or allocate customers, which have traditionally been criminally investigated and prosecuted as cartel conduct. As FTC Chairwoman, Edith Ramirez puts it, “Competition is essential to well-functioning markets, and job markets are no exception.”
In 2014, eight Silicon Valley employers settled a civil class action suit for $415 million for allegedly colluding to suppress the wages of programmers and engineers. Specifically, the suit pointed to evidence of “no-poaching” arrangements in which the firms agreed not to engage in competitive recruiting of each other’s workforces. Other suits, filed in five metropolitan areas across the country, have alleged collusive behavior among hospitals to suppress the wages of nurses. For example, in Detroit, eight hospitals reached settlements that amounted to roughly $90 million in total for alleged collusion to lower wages below market rates.
This past week, the Department of Justice (DOJ) and Federal Trade Commission (FTC) announced new guidance aimed at combatting collusive behavior in the employment arena. Additionally, in a recentspeech, Acting Assistant Attorney General Renata Hesse highlighted existing DOJ policy that “a merger that gives a company the power to depress wages or salaries to reduce the prices it pays for inputs is illegal whether or not it also gives that company the power to increase prices downstream.”
Antitrust Guidance and Hotline for Human Resources Professionals to Identify and Report Wage Collusion.
Human Resources (HR) professionals are often in the best position to ensure that their companies’ hiring practices comply with the law. Last week, the DOJ and the FTC released guidance for HR professionals for how to spot and report collusion among competing employers that may violate the antitrust laws.
In the guidance, DOJ announced that going forward it will criminally investigate allegations that employers have agreed among themselves on employee compensation or not to solicit or hire one another’s employees. In the press release announcing the guidance, Acting Assistant Attorney General Renata Hesse stated: “HR professionals need to understand that these violations can lead to severe consequences, including criminal prosecution. The newly released joint guidance provides HR professionals with information to prevent violations and report potentially unlawful activity, furthering the Justice Department’s commitment to protect workers from harmful conduct that stifles competition.”
Building on Progress
Today’s actions build on a series of steps the Administration has taken to reduce barriers to fair wages and labor practices, including:
Raising the minimum wage. It has been nearly a decade since Congress last took action to raise the minimum wage, which remains at $7.25 per hour. Since the President started calling for a higher minimum wage in 2013, 18 states and DC have taken action to raise wages, which CEA estimates will benefit over 7 million people by 2017. Over 60 cities and counties have also taken action on their own. These increases help push back against downward pressure on wages.
Expanding paid sick leave. Policies that support minimum benefits are an important complement to minimum wage laws, especially when employers have enhanced power in the labor market. That is why President Obama expanded paid sick leave to federal employees with new children and to federal contract workers to care for themselves, a family member, or another loved one. He continues to call on Congress to pass legislation that guarantees most Americans the chance to earn up to seven days of paid sick leave each year—and urges states, cities and businesses to act where Congress has not.
Supporting worker voice. When workers have a say in their wages and working conditions, they can help ensure that they see a fair share of the economic returns to their labor. In October 2015, the Administration underscored the importance of worker voice by bringing together workers, employers, unions, worker advocates, and others to the White House Summit on Worker Voice.
Reforming occupational licensing requirements and improve portability across states. In 2015, the White House, Treasury Office of Economic Policy, and Department of Labor issued a report on evidence that occupational licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across state lines. Following this report, the Administration has worked with Congress, state legislators, and experts to draft and present a series of best practices to help state and local governments better tailor their occupational licensing laws. To date, legislators in at least 11 states have proposed no fewer than 15 reforms in line with these recommendations, and four state bills have passed so far.
Reforming land use regulations. Over-burdensome land use regulations have made it hard for housing markets to respond to growing demand, jeopardizing housing affordability for working families and limiting GDP growth by stifling labor mobility to the most productive regions. Earlier this year, the White House released a Housing Development Toolkit that highlights the steps communities have taken to modernize their housing strategies and expand options and opportunities for hardworking families.