The Silicon Valley Leadership Group’s annual public policy lunch in October at the Santa Clara Convention Center included a panel discussion with U.S. Secretary of Labor Thomas E. Perez on “Trade, Jobs and Innovation.” This is an edited transcript of that discussion.
Participants:
Thomas E. Perez, United States Secretary of Labor
Shellye Archambeau, CEO, Metric Stream
Greg Becker, CEO, Silicon Valley Bank
Dan Levin, President & COO, Box
Barbara Marshman, Editorial Page Editor, San Jose Mercury News, moderator
Thomas Perez (concluding his keynote speech prior to the panel discussion): Don’t get discouraged about Washington because, in the end, optimism always prevails over cynicism. In the end, we play different instruments, perhaps, but we’re all in the same orchestra — that’s the orchestra of opportunity, the orchestra of shared prosperity. And, you know, the moral arc of this country… is long, but it always bends toward justice. It always bends toward people who seek to expand opportunity. But it never bends on its own. So keep staying involved, and let’s work together to make sure that promise is realized.
Barbara Marshman: Mr. Secretary, I want to make sure we have a chance to talk about the Trans-Pacific Partnership, the free-trade agreement. This is a room that probably would pass it by acclamation. But it is in trouble in Congress, and a number of representatives who have supported free trade in the past are doubting this one because of labor standards and potential loss of jobs. I know you’re a supporter. How do you respond to the criticisms?
Perez: You know, I’m a proud progressive Democrat, and I’m a proud supporter of TPP because it’s the strongest trade agreement that’s ever been negotiated in our nation’s history. The North Star for the president was, “How can we lift up American workers and create a level playing field for them? How can we create a level playing field for employers? And how can we go to school on the lessons and mistakes of history with prior trade agreements?” I think we’ve done just that. And I have a lot of faith in the values of the president. Now historically, there’s always been bipartisan support and bipartisan opposition with free-trade agreements. I really believe that the more people who read it, and see what we have done — the strongest labor agreement, ever — see what we have done in the tobacco context to protect against abuses of process by tobacco companies, see what we have done to make sure that we lower–we eliminate–taxes, 18,000, roughly, that are creating an unlevel playing field for folks in this room, I’m confident we’ll get there at the end. But I want to be honest. It’s always a close vote, and we need your engagement.
Shellye Archambeau: At the end of the day, it’s all about jobs, and creating an environment in which businesses of all sizes can compete. I represent the smaller businesses sitting here on this stage. Most people don’t realize it, but 98 percent of the companies involved with exporting and trade over the Pacific are small businesses who don’t have a voice singularly, but need a fair playing field. Our companies can compete better with anyone out in the marketplace as long as the table stakes are known, and as long as we understand rules, and the rules are fair. And I think TPP is all about making the rules fair — taking down some of the taxes, taking down some of the overall requirements to do business.
Perez: Quick data point. Export-related jobs, on average, pay about 18 percent higher than non-export-related jobs. So if we’re concerned about lifting wages, it’s a pretty good idea.
Greg Becker: There’s a saying,– “Perfect is the enemy of the good.” And I think, too often, we look for that perfect answer that checks every single box where every individual gets exactly what they’re looking for, and that’s never going to be the case. We’re in a much better place with TPP compared to not having it. I think the emphasis the secretary and the president are putting on it is critical to Silicon Valley, and to the United States.
Marshman: We have to talk about immigration reform– again. I’ve been talking about immigration in every conversation I’ve ever done with the Leadership group, going back 10 years. Now we’re getting whiplashed between Republicans, who, on the whole, are willing to talk about high-skilled workers, [while] Democrats want comprehensive reform because they’re afraid a piecemeal approach would mean real reform never happens. So what can we do, Mr. Secretary? What can people here do?
Perez: Let me start by saying thank you, because you-all have been very active participants. Let me tell you a brief story. I was with the president in Minnesota about a year ago. He was meeting with a group of about 10 or 12 women between 17 to 19 years old, all of them moms. They were in a training program that we funded to help them get a good job so they can feed their kids. So after the glare of the cameras left the room, and it was just the president, a dozen women having a really good day, and their first question? He said, “Anything you want. Ask me.” A woman asked this: “If you could wave a magic wand, and do one thing right now, what would you do?” First the president said to them, “Remember, my mother was your age when she gave birth to me. So you may be the mother of a future president of the United States.” Then he answered the question reflexively: comprehensive immigration reform. Because, like you, he has seen the consequences of the status quo, of our broken system. And, like you, he’s studied history, where this was always a bipartisan issue. Ronald Reagan. I worked with Ted Kennedy. Kennedy-McCain in ’07. The bipartisan bill in 2014. We’ve got to just keep fighting. You know, the Civil Rights Act of ’64 was first introduced in ’48. The power of persistence is a lesson of various movements. I would implore you, in the words of Winston Churchill, in the shortest speech of World War II, “Don’t give up. Don’t ever give up. Don’t ever, ever give up.” Blocking reform is crazy on one level, but it’s rational on another. Why is it rational? Because we have screwed up our redistricting processes so much that representatives are acting rationally if you define “rationality” as “what their constituents want.” Because outside of California, which has done the nonpartisan redistricting commission, districts are either far right or they’re kind of far left. And so we’ve got to invest in that infrastructure of democracy, or else we’re going to continue to have these manufactured crises. And immigration is one of them.
Marshman: Greg, if you had two minutes with Congress, what would be your elevator pitch for immigration reform?
Becker: I probably can’t say publicly what I’d say to them.
Marshman: Well, let’s say you’re in public when you have the conversation.
Becker: I’ve been going back to DC for a number of years with the Silicon Valley Leadership Group, and we hear all the time from our clients [that] the biggest challenge they have is they can’t find workers. The secretary was talking earlier about the fact that of the four and a half million open jobs, roughly 10 percent are high-tech jobs. And they can’t find individuals. We all believe education is part of that solution. But you can’t solve it with, you know, clicking your fingers. And immigration reform — especially high-skilled immigration reform — has to be part of it. It’s the high-paying jobs. It will help stimulate the economy. It will increase the tax base. And the list goes on and on and on. Before it was, on the Republican side, “We support high-skilled immigration,” and the Democrats want comprehensive [immigration reform]. And now that the Republicans are in the House, I would say that even high-skilled immigration won’t get passed. I truly don’t understand it. It is dramatically impacting the economy, which everyone is trying to stimulate. We just have to keep talking about it.
Dan Levin: I think it is the role of our national government to pursue a long-term agenda that will better the lives of every American. There is no more-important long-term agenda than driving economic growth. And the engine of economic growth in this country, from its inception, has been immigrants. Kraft Foods, AT&T, Goldman Sachs, Pfizer, Procter & Gamble, Comcast, Nordstrom — all founded by immigrants. Forty percent of the Fortune 500 founded by immigrants. Between 25 and 30 percent of the small businesses in the United States — which, by the way, make up half our GDP and 60 percent of our job growth — founded by immigrants. This is not a high-tech issue. This is not a Silicon Valley issue. This is about floating all boats. This is about doing the right thing for our economy. (Applause.)
Archambeau: And one of the key reasons we don’t look like Europe right now — and I say “Europe” meaning fast-aging population — they are indeed reducing their overall population growth, right? They don’t have the skills. They don’t have the energy. It’s because of immigration. That’s how we’ve grown in our overall population. It’s how we’ve stayed younger. We educate millions of people when it comes to higher STEM degrees — masters, Ph.D.’s, etc. They come to us. We have the best minds in the world come here to learn. And then, as soon as they graduate, we kick them in the — we kick them out. (Laughter.) And that’s crazy! It’s crazy. A simple thing. Just staple. Just take the diploma, and you staple right on it a card that says “Now we want to use the knowledge you’ve learned and help us build,” instead of going wherever they’re going to compete against us.
Perez: I care passionately about every issue I work on. That’s why I love my job. This one is particularly personal, because we all have that story. My folks came here from the Dominican Republic. There was an awful dictator. They had to leave. My grandfather was actually the ambassador until he spoke out after the massacre of the Haitians. I’m the youngest of five. I have a brother here, Robert, who’s in the back. He’s got two kids at Santa Clara, and, you know, they (applause) — All my siblings are doctors, and my dad worked himself to an early grave because it was all about education. We can go around the room and tell the same story. And, you know, that’s why I don’t understand. Make no mistake about it. We’ll prevail on paid leave. That’s a “when” question. We’ll prevail on comprehensive immigration reform. But what folks who oppose this are counting on is that you-all are going to give up. And the beauty of this community is, you never give up. That’s why I love being here.
Marshman: Speaking of never giving up, we seem to be creating jobs at a pretty good clip. We’re at 4 percent unemployment — 2 percent among college graduates over 25. We’d like to keep it going. And traffic and housing prices are about the main impediments right now. No funding for infrastructure. Shellye, can you help us put a real-world face on this? Do you have any examples, of how it affects you?
Archambeau: Oh, absolutely! Every day. We’ve had employees leave MetricStream because the traffic’s gotten so bad, they can’t do the commute any more. It might have worked five or six years ago, now it doesn’t; so they go find an opportunity that’s closer to home. We’re investing outside of California, because we can’t get people to move here.
Levin: I live in the house I grew up in, in Portola Valley. My father was born and grew up in San Francisco. My grandfather came to San Francisco before the 1906 quake at the age of four, and I’ve watched all of this. I’ve watched the orchards disappear. I can tell you exactly what’s going on economically in the Bay by the traffic on 280, and I tell all my 19-year-old colleagues, “Just wait a couple years. The traffic will be much better.” (Laughter.) But, you know, I am horribly pained by our local, state, and [federal] government’s inability to invest in infrastructure and housing the way that we as business leaders need them to. The fragmented state of public transportation in the Bay Area is a tragedy. The inability of especially larger cities in the Bay Area to invest in the housing stock to house not only our employees, but also the middle class that makes our lives possible, that educates our children, that puts the fires out, that keeps our communities safe.
Archambeau: Just a chance to put a little plug in on the transportation issue. There is a transportation ballot measure being put together to help fix and improve some of that basic infrastructure. The last time something like this was put in place it was the 1980s, when we built Highway 85. So we have a lot of work to do, and I just want people to keep their eyes out for this.
Perez: You know, I’ve got 447 days till the weekend. (Laughter.) And I think about that every single day. I can sit here and give you lots of data; but behind data is people. I met a fast-food worker who didn’t go to work one day because he was sick, and his boss said the next day, “You’ve got to give me a doctor’s note, or else you’re fired.” And he looked at him, and he said, “How can I give you a doctor’s note when I can’t afford to go to a doctor?” And I can’t help but think, this is just not who we are. I met a woman in Connecticut who gave birth to her daughter, and, because there was no paid leave there — she’s a school-bus driver — she took her newborn kid on the bus with her. Meanwhile, there’s a lot of parents putting sick kids on the bus because they’ve got no choice. I met a permatemp at the White House a couple weeks ago. What’s a “permatemp?” It’s a permanent temporary employee. That is an oxymoron, my friend. You know what? He has to work 70 hours a week in his plant in Mississippi to make what the permanent — the “perma-permas” — make in 40 [hours]. He had to train one of the perma-permas on how to do the job even though he’s a permatemp. We can do better, and it’s — that’s a stakeholder economy that we need to build.
Marshman: You’ve been really vocal about the need for paid leave, and you probably know [that] when California finally passed a law with some nominal requirement, the Leadership Group was the only business group that supported that. What do you think can be done on the federal level?
Perez: Oh, it’s a “when” question. You know, it took 10 years to get the Family and Medical Leave Act in the ’90s. And this will happen now. There are a couple bills in Congress. One of my favorite people in the Congress is a woman named Rosa DeLauro. She is a vigorous champion. And one of the biggest champions is this woman named Nancy Pelosi. And do you know what? It’s an economic imperative. It’s about your competitiveness, and that’s why I know it’s a “when” question. We’ve just got to keep fighting. And, in the meantime, we’re not sitting around. We’re working with state and local governments, and we’ve seen states act. We did an executive order so that if you want to do business with the federal government, you’ve got to offer paid leave. We’re using every tool in our arsenal, and it is a when question. But we need to make the answer to that “when” question “sooner,” because Kareem in Connecticut, who’s driving the school bus? Too late for her, and that’s too bad.
