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For release on delivery
6:00 p.m. EST
December 13, 2017

Workforce Development in Today’s Economy

Remarks by
Lael Brainard
Board of Governors of the Federal Reserve System
“Leading the Way: A Workforce Development Video Campaign” awards ceremony
hosted by
the Federal Reserve Bank of New York and Pathways in Technology
Early College High Schools in the Greater Rochester Area
Rochester, N.Y.

December 13, 2017

I would like to thank the staff at the Federal Reserve Bank of New York for
inviting me to attend this awards ceremony. 1 As many of you may already know, the
Leading the Way campaign is a joint effort between the Federal Reserve Bank and the PTECH 2 schools of the Greater Rochester area. It is wonderful to be part of an event that
celebrates collaboration between educational institutions, local government, the Federal
Reserve, and employers as they work together to provide appropriate training for young
workers to fill local jobs needs. Collaboration creates a more vibrant workforce that is
connected to actual jobs.
Today’s Job Market
I have just come from a meeting of the Federal Open Market Committee (FOMC).
The FOMC is one of the main policymaking committees of the Federal Reserve System.
Our main job on the FOMC is to set interest rates to achieve the maximum level of
employment in the country and sustain inflation at a moderate level.
The nation’s unemployment rate is currently around 4.1 percent, which is a
relatively low level by historical standards. What that means for the young people
participating in this program is that this is a great time to find a job. Moreover, not only
is the national unemployment rate low, so are unemployment rates for young people and
members of ethnic and racial groups that have traditionally faced greater challenges in
the labor market. As many of you know, during the deep recession of 2008 and 2009,
many Americans were so discouraged by poor job prospects that they stopped even
looking for work. That meant that too many Americans were sitting on the sidelines. In


I am grateful to Heidi Kaplan for her assistance in preparing this text. The remarks represent my own
views, which do not necessarily represent those of the Federal Reserve Board or the Federal Open Market
P-TECH is short for Pathways in Technology Early College High.

-2 the past few years, the job market has gotten so strong that many of these people have
come off the sidelines--and many are now back at work.
The Rochester area, like much of the country, has now recovered from the Great
Recession. The education and health-care sectors continue to be the main drivers of job
growth. And, the local community colleges have partnered with local employers to align
their curriculums with the employers’ job openings, to increase workers’ connections to
jobs, and to become a resource for regional job information. Finally, the local
government has worked to contend with a long-term loss of jobs in manufacturing and a
more recent loss of jobs in professional services by attracting investment in a world-class
photonics hub in Rochester.
I often meet with people who run large companies to get their take on the strength
of the economy. Whereas a few years ago, they might not have been engaged in a lot of
hiring, today they tell me that it is becoming more challenging to find well-qualified
workers for the job openings they want to fill. That’s good news for those of you
participating in the P-TECH program. It means employers are looking for graduates of
programs just like yours, which are attuned to the job opportunities of employers.
P-TECH Rochester programs offer students professional mentors, job shadowing
opportunities, and on-the-job experience to ensure that they are ready to contribute
positively to the workplaces of local employers. I also understand that companies are
investing more in on-the-job training and are strengthening efforts to retain more of the
workers they attract, which means younger workers--such as P-TECH graduates--have a
better chance of securing jobs that lead to long-lasting careers. By any measure, the

-3 market for younger workers today looks much better than it did in the years just after the
Great Recession, when unemployment rates for teenagers were above 20 percent. 3
In fact, firms are turning more and more to programs like P-TECH to help them
find and train the workers they need. So the skills you are gaining today are likely to
provide pathways not only to the jobs of today but also the careers of the future.
Workforce Development
The Federal Reserve Bank of New York is one of the facilitators of the Leading
the Way campaign. The Federal Reserve System has a long-standing interest in
understanding labor market dynamics and promoting workforce development
opportunities. Programs like this help workers prepare for jobs and help firms invest in
workforce development. Together, these efforts help make the economy more productive
and help us achieve our goal of maximum employment. In addition to the Federal
Reserve Bank of New York’s efforts, the Federal Reserve Bank of Boston is learning
about labor markets in small industrial cities through their Working Cities Challenge and
the Federal Reserve Bank of Dallas has focused on the importance of infrastructure
including broadband for economic inclusion. The Federal Reserve Bank of Atlanta has
been a leader within the Federal Reserve System in establishing the Investing in
America’s Workforce Initiative, an effort across the Federal Reserve System to reframe
training expenditures as investments in human capital rather than costs. In October,
Atlanta established the Center for Workforce and Economic Opportunity to focus on
employment policies and labor market issues that affect low- and moderate-income


See Lael Brainard, “Coming of Age in the Great Recession,” speech given to the Federal Reserve’s
conference on “Economic Mobility: Research and Ideas on Strengthening Families, Communities, and the
Economy,” April 2, 2015,

-4 individuals. The System also recently hosted a national conference in Austin to promote
the importance of investing in America’s workforce. 4
As employers’ demand for specific education and training increase, collaborative
initiatives, like those exhibited through the P-TECH programs of Greater Rochester, will
help minimize the skills mismatch appearing in many communities with burgeoning job
Young Workers
Since 2013, the Federal Reserve Board has been administering the Survey of
Young Workers to learn more about work experiences and future prospects for 18-to-30year-olds nationwide. When I look at the survey findings, I am struck by how well the PTECH program addresses many of the issues young people identified in the survey.
As a first example, the survey findings highlight the important correlation
between postsecondary education and labor market outcomes. The survey data indicate
that higher levels of educational attainment are associated with higher earnings, greater
job satisfaction, and increased optimism about one’s job future. P-TECH focuses on
providing students with postsecondary credentials, helping to address one of the survey’s
main concerns.
Second, responses to the survey underscore the importance of young workers
receiving appropriate information that enables them to select an educational program that
provides better labor market outcomes. The survey found that more than 30 percent of


For more information on the Working Cities Challenge, see For the Dallas Fed’s work on closing
the digital divide, see For the Atlanta Fed’s Center for Workforce and
Economic Opportunity, see And on the Investing in America’s
Workforce Initiative, see

-5 young adults did not receive information about jobs and careers in high school and
college. P-TECH is focused on providing information about educational opportunities
and jobs to students before they enter high school.
Third, the survey found that many young workers are not employed in fields
aligned with their education. Fewer than half (45 percent) of the young workers surveyed
said they were employed in a career field that is closely related to their educational and
training background. P-TECH focuses on aligning education with actual jobs.
Finally, the survey found that steady employment is very important to young
workers. In 2015, young adults had a strong preference for steady employment (62
percent) over higher pay (36 percent). And, among the respondents who preferred steady
employment, 80 percent would rather have one steady job than a stream of steady jobs for
the next five years. The work that P-TECH students do directly with employers helps
steer them toward long-term, steady employment.
In conclusion, I am proud that the Federal Reserve is contributing to the efforts of
the P-TECH program in the Rochester area and I look forward to the video presentations
we will have shortly. I want to congratulate in advance the winners of the video
competition, who will also be announced shortly. I also want to congratulate all of you
for being part of a 21st century education program that will help connect you to pathways
of opportunity and help enable you to make important contributions to the vitality of your