President Obama delivered a major speech on the economy yesterday at Northwestern University in Chicago. The president touted the ten million jobs created during his presidency and a slow but steady decline in the unemployment rate, which now stands at 5.9 percent (the president spoke before the new jobs report was released). That is the first time that the unemployment rate dropped below 6 percent since the Great Recession started.
“As Americans, though, we measure our success by something more than our GDP, or a jobs report. We measure it by whether our jobs provide meaningful work that gives us a sense of purpose; whether they let us take care of our families. And too many families still work too many hours with too little to show for it,” Obama said. “Millions of Americans don’t yet feel enough of the benefits of a growing economy.”
The economy has added 10+ million jobs, unemployment is at its lowest point since 2008, the percentage of uninsured is the lowest Gallup ever recorded (dropping nearly 5 points in just the past year), and the deficit has been cut in half. Even with all of those positive headlines, the president says that he is still not completely satisfied due to the growing income inequality gap and lack of wage growth for working families.
The president laid out a number of solutions to improve the standing of the middle class, some of them a familiar refrain for the president and others more recent. He called on increased infrastructure spending, help for first-time homebuyers to get a loan, investments in clean energy, preschool for every child, redesign high schools to improve graduation rates, a fix to a “broken” immigration system, investments in research and development, a raising the nation’s minimum wage, equal pay for equal work, flextime, and paid maternity leave.
“Now, none of these policies on their own will get us where we need to be. But if we do these things systematically, the cumulative impact will be huge. Unemployment will drop a little faster, workers will gain a little more leverage when it comes to wages and salaries, families will be able to spend a little more and save a little more. Our economy will grow stronger, and that growth will be shared. More people will feel this recovery, rather than reading about it in stats on a page. That’s the truth.”
You can read the president’s full speech below:
It is great to be back at NU. Back when I was a senator, I had the honor of delivering the commencement address for the class of 2006. And as it turns out, I have a bunch of staff who graduated from here. So earlier this year, I popped in via video to help kick off Dance Marathon. But I figured this time, I’d come in person. Not only because it’s nice to be so close to home, but because this is a university that’s brimming with the possibilities of the new economy – research and technology, ideas and innovation; the training of doctors and educators, scientists and entrepreneurs. You cannot visit a campus like this without feeling the promise of the future.
That’s why I’m here – because it is young people like you, and universities like this, that will shape America’s economy and set the conditions for middle-class growth in the 21st century.
Obviously, recent months have seen their fair share of turmoil around the globe. But one thing has emerged crystal clear: American leadership is the one constant in an uncertain world. It is America – our troops and diplomats – that leads the fight to degrade and destroy the terrorist group known as ISIL. It is America – our doctors, our scientists, our know-how – that leads the fight to contain and combat the Ebola epidemic in West Africa. It is America – our colleges, our graduate schools, our unrivaled private sector – that attracts so many people to our shores to study and start businesses and solve problems. When alarms go off somewhere in the world, whether the disaster is natural or man-made; where an idea or invention can make a difference; the world calls America. Not Moscow. Not Beijing. But us. The United States of America. And we welcome that responsibility. That’s who we are. That’s how we roll.
But what supports our leadership role in the world is the strength of our economy at home. And today, I want to step back from the rush of global events to take a clear-eyed look at our economy, its successes and shortcomings, and what we still need to build for your generation.
As Americans, we can and should be proud of the progress our country has made these past six years. Here are the facts: when I took office, businesses were laying off 800,000 Americans a month. Today, our businesses are hiring 200,000 Americans a month. The unemployment rate has come down from a high of 10% in 2009, to 6.1% today. Over the past four and a half years, our businesses have created 10 million new jobs – the longest uninterrupted stretch of private sector job creation in our history. Right now, there are more job openings than at any time since 2001. All told, the United States has put more people back to work than Europe, Japan, and every other advanced economy combined.
This progress has been hard, but it has been steady, and it is real. It is a direct result of the American people’s drive and determination, and the decisions made by my administration.
So it is indisputable that our economy is stronger today than it was when I took office. At the same time, it is also indisputable that millions of Americans don’t yet feel enough of the benefits of a growing economy where it matters most – in their own lives.
These truths aren’t incompatible. Our broader economy has come a long way, but the gains of recovery aren’t yet broadly shared. We can see that homes in our communities are selling for more money, and that the stock market has doubled, and maybe the neighbors have new health care or a car fresh off an American assembly line. And those are good things. But the stress that families feel – that’s real, too. It’s still harder than it should be to pay the bills and put some money away. Even when you’re working your tail off; it’s harder than it should be to get ahead.
This isn’t just a hangover from the great recession, either. I have always said that recovering from the crisis of 2008 was our first order of business, but our economy won’t be truly healthy until we reverse the much longer and profound erosion of middle-class jobs and incomes.
Here’s our challenge. We’re creating more jobs at a steady pace. We’ve got a recovering housing market and a revitalized manufacturing sector – two things critical to middle-class success. We’ve also begun to see some modest wage growth in recent months. And all of that has gotten the economy rolling again. As Americans, though, we measure our success by something more than our GDP, or a jobs report. We measure it by whether our jobs provide meaningful work that gives us a sense of purpose; whether they let us take care of our families. And too many families still work too many hours with too little to show for it. Job growth could be so much faster, which would drive up wages. So our task now is to harness the momentum we’ve got and make sure that as the economy grows, and jobs grow, wages grow too.
When the typical family isn’t bringing home any more than it did in 1997, that means it’s harder for middle-class Americans to climb the ladder of success. That means it’s harder for poor Americans to grab hold of the ladder at all. And that’s not what America is supposed to be about. It offends the very essence of who we are – a people who believe that even if we’re born into nothing, with hard work, we can change our lives, and our kids’ lives, too.
But this is about more than fairness. When middle-class families can’t afford to buy the goods and services our businesses sell, it actually makes it harder for our economy to grow. Our economy cannot truly succeed in a winner-take-all system where a shrinking few do very well while a growing many struggle to get by. Our economic greatness rests on a simple principle: when the middle class thrives, America thrives. When it doesn’t, we don’t.
This is the defining challenge of our time. We have to make our economy work for every working American. And every policy I pursue as President is aimed at answering that challenge.
Over the last decade, we learned the hard way that it wasn’t sustainable to have an economy where too much of our growth was based on inflated home prices and bubbles that burst; where the recklessness of a few could threaten us all; where incomes at the top skyrocketed while working families saw theirs decline. We needed an economy that’s built on a rock – one that’s durable, and competitive, and a steady source of good, middle-class jobs.
That’s why, the day I took office, I said we would rebuild our economy on a new foundation for growth and prosperity. And with dedicated, persistent effort, we have been laying the cornerstones of this new foundation every day since.
The first cornerstone is new investments in the energy and technologies that make America a magnet for good, middle-class jobs.
We upped our investments in American energy to reduce our dependence on foreign oil and strengthen our own energy security. Today, the number one oil and gas producer in the world is no longer Russia or Saudi Arabia; it’s America. For the first time in nearly two decades, we now produce more oil than we buy from other countries. We’re doing it so fast that two years ago, I set a goal to cut our oil imports in half by 2020 – and we will meet that goal this year.
At the same time, we’ve helped put tens of thousands of people to work manufacturing wind turbines, and installing solar panels on homes and businesses. We’ve tripled the electricity we harness from the wind, and increased tenfold what we generate from the sun. We have brought enough clean energy online to power every home and business in Illinois and Wisconsin, 24/7. That’s progress we can be proud of. And I know that here at Northwestern, your researchers are working to convert sunlight into liquid fuel. Which sounds impossible. Or at least really hard. But if you need to get the hard or the impossible done, America is a pretty good place to do it.
Meanwhile, our 100-year supply of natural gas is a big factor in drawing jobs back to our shores. Many are in manufacturing – the quintessential middle-class job. During the last decade, it was widely accepted that American manufacturing was in irreversible decline. And just six years ago, its crown jewel, the American auto industry, could not survive on its own. We helped our automakers restructure and retool, and today, they’re building and selling new cars at the fastest rate in eight years. We invested in new plants, new technologies, and new high-tech hubs like the Digital Manufacturing and Design Institute that Northwestern has partnered with in Chicago.
And today, American manufacturing has added more than 700,000 new jobs. It’s growing almost twice as fast as the rest of the economy. And more than half of all manufacturing executives have said they’re actively looking at bringing jobs back from China. To many in the middle class, the last decade was defined by outsourcing good jobs overseas. If we keep up these investments, we can define this decade by what’s known as “insourcing” – with new factories now opening their doors here in America at the fastest pace in decades. And we’ve worked to grow American exports, open new markets, and knock down barriers to trade, because businesses that export tend to have better-paying jobs. Today, our businesses sell more goods and services Made in America to the rest of the world than we ever have before.
That’s progress we can be proud of. But we also know that many of these manufacturing jobs have changed. You’re not just punching in and pounding rivets anymore; you’re coding computers, and guiding robots, and mastering 3D printing. These jobs require some higher education or technical training. That’s why the second cornerstone of this new foundation is preparing our children and our workers to fill the jobs of the future.
America thrived in the 20th century because we made high school free, and sent a generation to college, and cultivated the most educated workforce in the world. But other countries caught on to the secret of our success. They set out to out-educate their kids, so they could out-compete ours. We have to lead the world in education once again.
That’s why we launched a Race to the Top in our schools, trained thousands of math and science teachers, and supported states that raised standards for learning. And today, teachers in 48 states and D.C. are teaching our kids the knowledge and skills they need to compete and win in the global economy. Working with parents and educators, we’ve turned around some of the country’s lowest-performing schools. We’re on our way to connecting 99% of students to high-speed internet, and making sure every kid, at every seat, has the best technology for learning.
These changes are hard, and we have a long way to go. But public education in America is actually improving. Last year, our elementary and middle school students had the highest math and reading scores on record. The dropout rates for Latinos and African-Americans are down, and the high school graduation rate is up – it’s now above 80% for the first time in history. We’ve invested in more than 700 community colleges – gateways to the middle class – and we’re connecting them with employers to train high school graduates for good jobs in fast-growing fields like high-tech manufacturing, energy, I.T. and cybersecurity. Here in Chicago, Mayor Emanuel just announced that the city will pay community college tuition for more striving high school graduates. We’ve helped more students afford college with grants, tax credits, and loans, and today, more young people are graduating than ever. We’ve sent more veterans to college on the Post-9/11 GI Bill – including several veterans here at Northwestern, and a few here with us today in this hall. Thank you for your service.
Of course, even if you have the right education, for decades, one thing that made it harder for families to make ends meet and businesses to grow was the high cost of health care. And so the third cornerstone had to be health care reform.
In the decade before the Affordable Care Act, double-digit premium increases were common. CEOs called them one of the biggest challenges to their competitiveness. And if your employer didn’t drop your coverage to avoid these costs, they might take them out of your wages.
Today, we’ve seen a dramatic slowdown in the rising cost of health care. If your family gets your health care through your employer, premiums are rising at a rate tied for the lowest on record. What this means for the economy is staggering. If we hadn’t taken this on, and premiums had kept growing at the rate they did in the last decade, the average premium for family coverage today would be $1,800 higher than they are. That’s $1,800 you don’t have to pay out of our pocket or see vanish from your paycheck. That’s like a $1,800 tax cut. And because the insurance marketplaces we created encourage insurers to compete for your business, in many of the cities that have announced next year’s premiums, something important is happening – premiums are actually falling. One expert said it’s like “defying the law of physics.” But we’re getting it done. That’s progress we can be proud of.
We’re covering more people, too. In just the last year, we’ve reduced the share of uninsured Americans by 26%. That means one in four uninsured Americans – about 10 million people – have gained the financial security of health insurance in less than one year. And for young entrepreneurs like many of you here today, the fact that you can compare and buy affordable plans in the marketplaces frees you up to strike out on your own and chase that new idea – something I hope will unleash new ideas and new enterprises across the country.
Meanwhile, partly because health care prices have been growing at the slowest rate in nearly half a century, the growth in what health care costs the government is down, too. The independent, nonpartisan Congressional Budget Office recently reported that in 2020, Medicare and Medicaid will cost us $188 billion less than projected just four years ago. Here’s what that means in layman’s terms. Health care has long been the single biggest driver of America’s future deficits. Health care is now the single biggest factor driving those deficits down.
It’s a game-changer for the fourth cornerstone of this new foundation: getting our fiscal house in order for the long run, so we can afford to make investments that grow the middle class. Between a growing economy, spending cuts, health reform, and asking the wealthiest Americans to pay a little more, over the past five years, we have cut our deficits by more than half. When I took office, the deficit was nearly 10% of our economy. Today, it’s approaching 3%. In other words, we can shore up America’s long-term finances without falling back into the mindless austerity or manufactured crises that dominated Washington budget debates for too long.
Finally, we put in place financial reform to protect consumers and prevent a crisis on Wall Street from hammering Main Street ever again. We have new tools to prevent “too big to fail,” stop taxpayer-funded bailouts, and we made it illegal for big banks to gamble with your money. We established the first-ever consumer watchdog to protect consumers from irresponsible lending or credit card practices, and secured billions of dollars in relief for consumers who get taken advantage of. Now, an argument you’ll hear is that the way to grow the economy is to just get rid of regulations. And we’ve scrubbed the books and identified hundreds that are outdated, don’t help the economy, or don’t make sense, and we’re saving businesses billions by gradually eliminating them. But rules that discourage a casino-style mentality on Wall Street, that protect workers, that safeguard the air our children breathe – those don’t just have economic benefits; they have benefits in lives saved, and families protected, and those I’ll always stand up for.
Here’s the bottom line. For all the work that remains, for all the citizens we still need to reach, what I want people to know is that there are some really good things happening in America. That’s because this new foundation is now in place: new investments in the energy and technologies that create new jobs and new industries; new investments in education that will make our workforce more skilled and competitive; new reforms to health care that cut costs for families and businesses; new reforms to our federal budget that will promote smart investments and a stronger economy for future generations; new rules for our financial system to protect consumers and prevent the kind of crisis we endured from happening again.
Add it all up, and it’s no surprise that for the first time in more than a decade, business leaders from around the world have said that the world’s most attractive place to invest isn’t India, or China, but the United States of America. And because the financial sector is healthier; because manufacturing is healthier; because the housing market is healthier; because health care inflation is at 50-year lows, and our energy boom is at new highs – our economy isn’t just primed for steadier, more sustained growth. America is better poised to lead and succeed in the 21st century than any other nation on Earth.
I will not allow anyone to dismantle this foundation. Because for the first time, we can see real, tangible evidence of what the contours of the new economy will look like. It’s an economy teeming with new industry and commerce; humming with new energy and new technologies; bustling with highly-skilled, higher-wage workers. It’s an America where a student graduating from college has the chance to advance through a vibrant job market; where an entrepreneur can start a new business and succeed; where an older worker can retool for that new job. To fully realize this vision requires steady, relentless investment in these areas. We can’t let up, or grow complacent. We have to be hungry as a nation. We have to compete. And if we do – if we take the necessary steps to build on this foundation – then I promise you this: over the next ten years, we will build an economy where wage growth is stronger than it was over the past three decades.
Let’s talk about some of those steps.
First, we’ve got to realize that the trends that have battered the middle class for so long aren’t ones we’re going to reverse overnight. The facts I just laid out don’t mean much for someone at home who’s underpaid, underemployed, or out of work for too long. And there are no silver bullets for job creation or faster wage growth. Anyone who tells you otherwise isn’t telling you the truth. But there are policies that would grow jobs and wages faster now and in the long run.
If we rebuild roads and bridges, we won’t just put construction workers and engineers on the job; we’ll revitalize communities, connect people to jobs, and make it easier for businesses to ship goods around the world. And we can pay for it with tax reform that cuts rates on businesses, and closes wasteful loopholes, making it even more attractive for companies to invest and create jobs here at home. Let’s do this and make our economy stronger.
If we make it easier for first-time homebuyers to get a loan, we won’t just create even more construction jobs and speed up the housing recovery; we’ll speed up your efforts to grow a nest egg, start a new company, and send your own kids to college or graduate school someday. Let’s do this – let’s help more young families buy that first home, and make our economy stronger.
If we keep investing in clean energy technology, we won’t just put people to work assembling, raising, and pounding into place the zero-carbon components of a clean energy age; we’ll reduce our carbon emissions and prevent the worst costs of climate change down the road. Let’s do this – let’s invest in new American energy, and make our economy stronger.
If we make high-quality preschool available to every child, we won’t just give our kids a safe place to learn and grow while parents go to work; we’ll give them the start they need to succeed in school, earn higher wages, and form more stable families of their own. In fact, today, I’ll set a new goal – by the end of this decade, let’s enroll six million children in high-quality preschool.
If we redesign our high schools, we’ll graduate more kids with the real world skills that lead directly to a good job in the new economy. If we invest more in job training and apprenticeships, we’ll help more workers fill more good jobs that are coming back to this country. If we make it easier for students to pay off their college loans, we’ll help a whole lot of young people breathe easier and feel freer to take the jobs they really want. Let’s do this – let’s keep reforming our education system to ensure that every kid has a shot at success like you do here at Northwestern.
If we fix our broken immigration system, we won’t just prevent some of the challenges like the one we saw at part of the border this summer; we’ll encourage the best and brightest from around the world to study here, stay here, and create jobs here. Independent economists say that the bipartisan immigration reform bill that the House has blocked for over a year would grow our economy, shrink our deficits, and secure our borders. Let’s pass that bill, and make America stronger.
If we want to make and sell the best products, we have to invest in the best ideas, just like you do at Northwestern. Your nanotechnology institute doesn’t just conduct groundbreaking research; that research has spun off 20 startups and more than 1,800 products, and that means jobs. Here’s another example. Over a decade ago, America led the international effort to sequence the human genome, and one study found that every dollar we invested returned $140 to our economy. I don’t have an MBA, but that’s a pretty serious return on investment. Today, though, the world’s largest genomics center is in China. That doesn’t mean America is slipping. That means America isn’t investing. We can’t let other countries discover the products and businesses that will shape the century. Let’s invest more in the kind of basic research that led to Google and GPS, and make our economy stronger.
If we raise the minimum wage, we won’t just put more money in workers’ pockets; they’ll spend it at local businesses, who’ll hire more people. In the two years since I first asked Congress to raise the minimum wage, 13 states and D.C. have raised theirs. More business owners are joining them. And it’s on the ballot in five states this November, including Illinois. Recent surveys show that a majority of small business owners support a gradual increase to $10.10 an hour. A survey just last week showed that nearly two-thirds of employers thought the minimum wage should go up in their state – and more than half of them think it should be at least $10. So let’s do this. Let’s agree that nobody who works full-time in America should ever have to raise a family in poverty. Let’s give America a raise, and make our economy stronger.
If we make sure a woman is paid equal to her efforts, it won’t just give women a boost; it’ll give their families and the entire economy a boost. Women now outpace men in college degrees, and graduate degrees, but they often start their careers with lower pay, and that gap grows over time. Let’s inspire and support more women in growing fields of science, technology, engineering and math. Let’s catch up to 2014, pass a fair pay law, and make our economy stronger.
And while we’re at it, let’s get rid of the barriers that keep more moms who want to work from entering the workforce. Let’s do what Dean Blount here at Kellogg has been working with us on at the White House – let’s help business and political leaders who recognize that flexibility in the workplace and paid maternity leave are good for business. Let’s offer that deal to new fathers, too, and make sure work pays for parents raising young kids. California adopted paid leave, which boosted work and earnings for moms with young kids. Let’s follow their lead and make our economy stronger.
Now, none of these policies on their own will get us where we need to be. But if we do these things systematically, the cumulative impact will be huge. Unemployment will drop a little faster, workers will gain a little more leverage when it comes to wages and salaries, families will be able to spend a little more and save a little more. Our economy will grow stronger, and that growth will be shared. More people will feel this recovery, rather than reading about it in stats on a page. That’s the truth.
I’m going to keep making the argument for these policies, because they are right for America. They are supported by the facts. And I’m always willing to work with anyone, Democrat or Republican, to get things done. Every once in a while, we actually get to sign a bill together, and I say, “See, how fun was that? Let’s do it again.”
But if gridlock prevails; if cooperation and compromise are no longer valued, but vilified; then I will keep doing everything I can on my own if it will make a difference for working Americans. I will keep teaming up with governors, mayors, CEOs, and philanthropists who want to help. Here’s an example. There are 28 million Americans who would benefit from a minimum wage increase. 28 million. Over the past two years, because we teamed up with cities, states, and businesses and went around Congress, seven million of them have gotten a raise. And until Congress chooses to step up and help all of them, I will keep fighting for this.
I am not on the ballot this fall. Michelle’s pretty happy about that. But make no mistake: these policies are on the ballot. Every single one of them. This isn’t a political speech, and I’m not going to tell you who to vote for – even though I suppose it is kind of implied.
But I have laid out my ideas to create more jobs and grow more wages. A true opposition party should have the courage to lay out theirs. There’s a reason fewer Republicans are preaching doom on deficits – because they’re now manageable. There’s a reason fewer are running against Obamacare – because while good, affordable health care might still be a fanged threat to freedom on Fox News, it’s working pretty well in the real world.
But when push came to shove this year, and Republicans in Congress actually had to take a stand on policies that would help the middle class and working Americans – raising the minimum wage, enacting fair pay, refinancing student loans, extending insurance for the unemployed – the answer was “no.” One thing they did vote “yes” on was another massive tax cut for the wealthiest Americans. In fact, just last month, at least one top Republican in Congress said that tax cuts for those at the top are – and I quote – “even more pressing now” than they were 30 years ago. When nearly all the gains of the recovery have gone to the top 1%, I find that a little hard to swallow. If there were any credibility to the argument that says when those at the top do well, eventually everyone else will do well, it would have borne itself out by now.
America’s economic greatness has never trickled from the top down – it grows from a rising, thriving middle class. Those are the two starkly different visions for this country. And I believe, with every bone in my body, that there’s one distinct choice.
This is our moment to define what the next decade and beyond will look like. This is our chance to set the conditions for middle-class growth in the 21st century. And the decisions we make this year, and over the next few years, will determine whether or not we set the stage for America’s greatness in this new century like we did in the last; whether or not we restore the link between harder work and higher wages; whether or not we continue to invest in a skilled, educated citizenry; whether or not we rebuild an economy where everyone who works hard can get ahead.
Some of that depends on you. There’s a reason I came to a business school instead of a school of government. I believe that capitalism is the greatest force for prosperity and opportunity the world has ever known. I believe that private enterprise – not government, but the innovators and risk-takers and makers and doers – should be the driving force of job creation.
But I also believe in a higher principle: we’re all in this together. That’s the spirit that made the American economy not just the world’s greatest wealth creator, but the world’s greatest opportunity generator. You are America’s future business leaders, and civic leaders, and in many ways, that makes you the stewards of America’s single greatest asset: our people. So as you engage in the pursuit of profit, as you should, I challenge you to do it with a sense of purpose. As you chase your own success, as we want you to do, I challenge you to cultivate ways to help more Americans chase theirs. It is the American people who have made the progress of the last six years possible. It is the American people who will make our future progress possible. And the story of America is a story of progress. However halting, however incomplete, however harshly challenged at each point on our journey – the story of America is a story of progress.
It has been six long years since our economy nearly collapsed. And despite that shock; through the pain so many of us have felt; for all the gritty, grueling work required to come back and all the work that’s left to be done – a new foundation is laid. A new future is yet to be written. And I am as confident as ever that it will be led by the United States of America.
Thank you, God bless you, and God bless America.