tv Politics and Public Policy Today CSPAN April 6, 2016 9:00am-11:01am EDT
>> welcome to the american enterprise institute. i'm delighted to welcome you to this discussion entitled "a labor market for the digital age." i'm honored to welcome the president of the center for american progress, who is co-sponsoring this event along with aei. and we're specially honored to honored to welcome governor mitch tan daniels, governor hickenlooper. zoe baird and walter eisman of the aspen institute. i know we have a tremendous conversation in store for us today on one of the great issues we're all wrestling with. i want to start by giving you a few remarks on why this subject, finding new solutions to the problems of unemployment and getting people ready for the skills that they need in the next century is so important to us here at aei. aei is a think tank dedicated to really two things. human dignity and human potential.
we believe our commitment to truth requires a competition of ideas to function well in a free society. this requires an opportunity society as well. there's a lot that americans disagree on these days. one thing that brings us all together, the real moral consensus, i believe, behind the american experiment is that we have to push opportunities to people at the periphery of society. indeed, to the people who need it most. what are we missing that is making this so hard right now? if this were just a question of government money, we could have solved it. our panel today will talk about what we really need. now we thought about this a great deal. there are a couple of philosophical points i think are worth making in passing. i was listening to a speech by roman catholic cardinal by the name of francis george, the
cardinal of chicago. one of the great intellectuals of the catholic church. he passed away relatively recently. i was listening intently. he was giving a fund-raising speech. he was known as a prodigious fund-raiser. this is something of great emotional importance to me, as president of aei. he was talking to the donors to his poverty programs. he said to his donors, the poor need you to pull them out of poverty. and you need the poor to keep you out of hell. and i thought to myself, i'm not going to use that to fund raise for aei. but it did raise an interesting issue for me. to what extent do we need the poor? to what extent do we need people who have been marginalized? i think it's pre-probably easy
for people in this room to tolerate people and we want to help those people but to what extent do we need those people? the answer to that question is why i'm so excited about this panel. this is a panel on how we can need people more, how we can make more people necessary, less superfulous, how we can stop treating people as liabilities to manage and treat more people with value to create in their lives and in the lives of other people. that's our goal today with this wonderful and distinguished panel. before i turn it over to walter isaacson, i want to welcome the president of the center for
american progress. >> thank you all very much. i want to thank arthur for his innovative ideas on a whole range of issues. i particularly appreciate his focus on human dignity, on opportunity, on addressing poverty. we don't always agree on solutions, but in a time where there is so much shouting in the world, we very much appreciate the competition of ideas we have with aei and a whole host of issues. i'm honored to be here with zoe baird and the work the markle foundation has done in this arena. this really critical contribution to addressing so many of the challenges we have in the country. i think there's really no --
really no putting aside the fact that essentially the country is, right now, struggling. struggling with a lot of important issues about how to ensure that prosperity is there for everybody. for the margins and for the middle. not just those at the top. and that's roiling politics on all sides of the debate. so, it's fantastic that the markle foundation has been able to bring together a bipartisan group of leaders in this arena and proving even in an election year, we can have a real focus on these challenges. there's obviously no hidden issue here that globalization and technology are really driving a lot of challenges we're facing. people feel like wages are stagnant. that the job engine in the united states is growing and building, but that the wages and
the middle class life they can produce are things that many people -- not just at the margins, many people have fundamental questions about. these kinds of challenges offer us a real opportunity, though. it's an opportunity to try and address these challenges. again, i'm really honored to be here with governors at the forefront of trying to think through these challenges for their state. that's why the innovations that they'll discuss today around using technology to solve these challenges is so critical. we at the center for american progress have been working on issues, like apprenticeships, issues around ensuring that the jobs of today are really providing wages and a middle class income for people. we're honored to be part of a debate and discussion with markle and aei that really focuses on how we use new innovations in technology to ensure that we're matching jobs for everyone.
it's an important -- it's an important debate to have. and the fact that we actually are providing solutions, as really we don't have a minute to waste since people are losing faith in institutions to address these problems. i'm honored to be part of this. and i'm really excited for this panel and to start walter off on this important discussion. thank you all. [ applause ] >> thank you. two people who have really elevated the dialogue in this town, not just by coming at it with values and ideas, but by innovative solutions as well. it's great to be working with cap and aei. thanks. and that's certainly true of the markle foundation, zoe. and of our two panelists with zoe. in this year, as she said, that's filled with bitterness,
shouting and somewhat of a poisoned partisanship, the governors on our panel represent what decent politics and getting things done for people is supposed to be all about. we know their biographies. zoe is the ceo of the markle foundation and leads network america. you just got appointed a few days ago, right, to be on the president -- commerce department's digital committee, i'll say. that's probably a longer name, since we're in washington for t you also helped build market-based platform. mitch daniel is the 12th president of purdue university, really one of the world's great leaders, as recognized not only by "fortune" magazine, but his two terms, successful terms as governor of indiana.
and he has also taken purdue into new directions. you know, moved to provide a whole new set of answers as to what should be done in higher education. and john hickenlooper, among other things, is the only brew master since sam adams to become the governor of a state. is that right? >> i think that's correct. >> yeah, okay. he was an entrepreneur, small businessman, brew master, a mayor of denver, an old friend and now the governor of the state of colorado. let me start off with what is the disjuncture we're facing now. as we slowly come out of the recession, there's been a mismatch. there are people looking for work and people they need to hire, and yet they don't align. let me start with you, zoe, and what they've been doing, what colorado has been doing and what purdue and indiana have been doing to get a better match between skills in the workforce.
>> let me frame the issue this way. which is that most of the people in this room probably, certainly many of us, have been part of encouraging people to get a college degree for decades. and for decades, about 70% of americans have not gotten a college degree. but americans have great skills. and the mismatch that walter talks about is really due to the fact that we have increasingly put "requires a college diploma and four years experience" on to a job description as our jobs have evolved in advanced manufacturing and information technology and health care. all these jobs that are being transformed by technology and are competing in a global environment as nira and arthur alluded to. what we've been doing is say we can capitalize on the talents of americans much more effectively if, as these jobs are changing, we are using the power of
technology to break down and understand what the skills are that are needed for these jobs and to help people get rapid training for those skills, whether it be training on the job or training in educational institutions. and mitch is going to talk about some interesting things he is doing at purdue. this is not to the exclusion of getting a college diploma. my bet is that if we can do this, more americans will have a college diploma over the course of a lifetime. we won't be telling them by age 22 either you've succeeded or failed. i think that's a big part of the challenge now, is to help every american see themselves in this new economy. and we can do that. so, we have created -- and john can talk about it a little bit. in colorado and in phoenix, we're trying to start out with something called skillful. you can take a look at t skillful.com.
although it's really oriented toward jobs and geographies. we're created skill-based labor market that works for the vast middle that does not have a college diploma. and john has recruited employers to participate with us, and help look at their jobs in a new way, looking at them for skills. we've got workforce centers and goodwill and folks on the ground helping job seekers figure out how to arc particular late their skills. linkd in has been working with us so it will work for the middle class and we're training people how to post a job description when you're not posting, i have an mba or cpa. but how do you define your skills, and then to connect that up with employers. the jobs are growing.
some jobs are growing. great jobs are growing. the potential for small businesses and other firms to grow is tremendous if we can connect the workers and the skills. >> how does skillful work in colorado? >> skillful -- and i'm very grateful for markle foundation to step into this. we've been trying to look at -- as arthur and nira kind of describe, there's been a whole chunk of society left behind, smart phones and all these innovations tied to globalization. whole industries have -- people have lost their jobs. we've done a pretty poor job of getting them back, reengaged to something close to what they had before. historically, we had been looking at the achievement gap within the different communities in colorado, like a lot of states. and what markle is doing is coming in and saying, all right, one way to address this is to use technology in a fresh way. and we've understood that kids -- it's not just about --
your education doesn't just prepare you for life. it's life and a career. and yet too much of that preparation hasn't focused on career. career is more about skills. so, we've been looking at, all right, how can we really scale up apprenticeships so that kids when they're 17 or 18 can decide to go to work somewhere and get paid. it might only be eight or ten bucks an hour. they work three days. two days they go to a community college or workforce training center or private enterprise, a place that's been accredited. but they study something that helps them. we're not talking pipe fitters and welding. we're talking banking industry, all different manner of advanced manufacturing, insurance industries. these kids are getting trained when they're not at work, in a curriculum that, again, how do you read a newspaper to see economic trends or who understand what other trends might affect your business.
at the same time, learning the basic skills you need. tie that in to the skills that businesses were already giving to employees. so, walmart trains kids in how to do inventory. how to do customer service. there's no place to collect all this information and to really look at the skills that you acquire when you're taking different courses. and markle and the skillful platform, in partnership with linkd in, they're providing a way so that the kids -- we will eventually get to the point where each community college class not only will the curriculum be there that you're going to learn, but also what skills you'll get. kids will be able to click on one skill or a couple of other skills and go to a place where it shows those types of jobs that these skills help prepare you for. you look at that job, click on that job, it shows you what other skills you might need to acquire. in real time, allow kids to have a much more direct and authentic
relationship to their career. their choice. again, we're not trying to have government or linkd in or anybody intruding into individuals' privacy. they can have a living resume that follows them. it's not just about what degree you got. it's each badge, each certificate that you achieve prepares you for your next level of education, of learning. and it's clear -- i mean, it's easy to see, we start this had about kid bus it really is going to apply to people in their 40s and 50s, who have been marginalized by all this rapid change in society. and a lot of the disruption we've seen in this presidential primary season -- i'll leave it at that -- i think that's a reflection of deep-seated frustration among large sections of the american public because we haven't done a good enough job of getting people rapidly
retrained for the jobs. in colorado, we've got 20 some thousand, 24,000 jobs waiting to be filled, many of them technology. you don't need a four-year education to do those jobs. people in their 40s and 50s that lost their career could be trained in six months, nine months, maybe a year, to get jobs that are $60,000, $70,000 -- good compensation for them. how do we make that happen rapidly? i think this platform will pay dividends. >> how are you doing it at purdue and how does it tie in with purdue moves, in our initiative to be a progressive university? >> things that might be useful to modernize purdue education for aan economy that zoe and the governor are talking b one of our colleges just got the first certification anywhere for a
so-called residential competency-based degree. progress at your own rate not on an old artificial calendar. and in that institute, they'll be -- we think the education will much more closely resemble the world to work. team taught and team learned, this sort of thing. you know, i don't much worry about our graduates. for a long time, each class leaving get hired and do very, very well. there's a mountain of data to support that. i think we've all got to be really appreciative, first of all, for efforts like those just described. everywhere i look, there are jobs waiting. there is a mismatch. i don't know that there are enough of them. competence in democratic institutions, which is always undergirted.
that worries so many of us this year. so to me, clearly, years of stagnant, low growth could not but produce a situation much like we have. we are not going to have the america we've known staggering along at historically, this historically pathetic recovery in quotes from a very deep recession. even factors for that, even if we had had a vigorous recovery, we would still be worrying about these problems and the inequality that can flow from them. what i'm trying to understand better -- i'm sure i will understand better after listening to you three today. what else do we have to worry about? clearly, the erosion of social capital is a big part of this. of all training programs you want in the world.
if people are addled by drugs have, no sense of motivation in their lives, connectedness we once took for granted you won't have economically productive people. effects of animation and so forth, i've been a techno optimist. i stubbornly cling to that. somebody calculated the three categories in this anemic recovery. retail, food service and call centers, which are perhaps the three most easily automated jobs we can think of. i think we've got some structural issues. some of the problems are very self imposed and by choices we've made that have limited overall economic growth. but i believe even if we get on top of that problem, we've got some very tough phenomena to wrestle with that i don't think we've seen before.
>> can i just press you, when you said choices we've made to limit economic growth, give us some examples. >> how much time do i have? you know, high taxes, laws that say don't have 50 employees, don't pay anybody more than 30 hours or serious consequences happen. let's have higher minimum wage requirements. let's have forced -- paid sick leave. let's treat contractors as employees. let's treat the employees of franchises as though they were employees of the parent firm. you make it more and more and more expensive and ownerous and difficult to hire people full time. why are you surprised fewer people get hired? >> indiana has, in some places, quite a low employment rate recently and in some places not. as you put your hat of being a governor on, what worked, what didn't and why? >> well, i think what didn't
work yet was sufficient upscaling and improvements of the k-12 system. aeros were pointed in the right direction, but that has not -- the biggest problem our one state faces right now is the human capital issue. we are not yet where we need to be. we do have these low rates of college attainment and so forth that zoe mentioned. manufacturing jobs have come back. and thanks in some part to lower energy rates. there's a place where american ingenuity has flowered recently. we should feel good about it. but i don't think anybody should feel happy at all. i think, you know, we were all -- i was raised to think that the most predictive
variable in terms of politics of the country was unemployment rate. i think it's meaningless today. at least the one we all look at it. experts here can tell you what goes into u6. that's the one to watch. it's 10% in terms of people who have given up, underemployed or. >> let me take that and turn it to zoe. what do you do about this hollowing of the middle class that the governor talked about, and also a growing number of people who are under-employed, mismatched and don't want to be? >> we did, as we were planning skillful, we did some polling and focus groups and folks from north star did it for us. and we wanted to understand before we acted, obviously, and understand whether people wanted to get training, whether they were looking for jobs, and some of the most powerful focus groups were focus groups of people in their 40s and 50s who all had jobs. when you asked them, do you go on the internet to look for a job, they all raise said their
hands yes. john will remember this. and when you said to them, how often do you do it, almost all of them said every day. they had jobs, but they clearly were hungry for something more. can we get at what that is, you know, a different kind of job, a higher wage, we can all only imagine the answers. but that's a significant part of what's driving skillful. as john said, it's for young people to find career paths, it's for parents so we can tell them how to think about the jobs of the future, but it's also for people who are in their 40s and 50s who feel underemployed, or who aren't -- they're hourly workers, even if they work for big companies, and they can't tell you what their annual income is. that was another very surprising
moment. people who worked for fortune 500 companies and you'd say -- and these are people in their 40s and 50s, not entry-level workers, and you'd say, what's your hourly? raise your hand if it's in this range -- i mean, the annual income. people didn't know their annual income, because they're hourly workers and they don't think that way. so this is what we have to change. now, at risk of going on a little bit here, in addition to what i've talked about, it is critically important that we build many more good jobs. so mitch is right, i mean, we have to make sure the jobs are there for people. and we have a collective effort that mitch was a part of called "rework america." we wrote a book called "america's moment," and it's probably around here somewhere. but you can find it online. >> will you hold up a bit. it's right by your foot. people see it? that's a question which i hope you'll address -- >> this is what i wanted to get into, how to create more jobs.
in this book, we talk about human development, as i was talking about with skillful, but we also talk about, how are we going to create many more jobs, good jobs. and we concluded and this was a bipartisan effort, ceos, tech officials, presidents of universities -- we concluded that globalization and technology provide an opportunity to create many, many more good jobs. because americans have the skills, the know-how, the talent that the world needs. the middle class is growing all over the world. so one of the things we need to do is to use technology to create platforms that make it easy for people in small businesses, in particular, small and medium-sized businesses, which is where most people are employed and where most job growth comes from, to make it easy for people to sell into those world markets, to become
part of the global economy, not because you have to travel, but because you don't know -- people say you don't know who's buying from you on the internet. you don't know if it's a neighbor or a dog. well, you don't know if it's a neighbor or someone who lives in another country. so that's one of the areas where we think there's tremendous potential. we've done some research with ebay, if you look at people selling goods and increasingly services on the internet, into foreign markets, their companies are growing faster than companies that are not selling globally. that's one area. another area where we can create many, many more good jobs is to enable small and medium-sized businesses to use digital knowledge, to use the same kind of data analytics that big companies are using to find markets, sell more efficiently, understand who wants what kind of product, customized products. you know, it's not just nike
that should be customizing shoes. but anyone should be able to have access to that kind of granular knowledge to grow their small business, their main street business. and so one of the other things that we're working on and believe can help here is for platforms to develop, and there are companies and these businesses that can help people accumulate information. a small business doesn't have a lot of big data. but if they're part of a system where the data is available, a small business in indiana can get information from a small business in colorado and still figure out some really important things to grow their business. and there are a lot of other policy directions that could help here, to help get capital into small businesses, to use this kind of information. but the bottom line on all these ideas is that we are in a
totally new age. we have a totally new economy. the transformation now is as great as it was when we moved from an agricultural economy to the industrial age. this move from the industrial age to the age to the digital age is as big a move. yet there was a study done of the presidential debates and in 25 debates, according to the study, there wasn't a single time that the word internet was used in conjunction with the economy or jobs. so we have to have a national conversation about the digital economy and how to create many more great jobs and how to prepare people for them. >> so, governor, picking up on that, zoe said that both technology and trade actually can create jobs rather than destroy them. but a lot of the anger today is people believe their middle class jobs have been destroyed by technology and undermined by trade. where do you stand, first of
all, on technology? has technology destroyed jobs, or is that going to help with jobs? you're the only one that's a small businessman. >> at first, i want to recognize, governor -- former governor daniels as really one of the leaders in this for a long time. you know, when we talks about the social issues facing people's desire to work or to better themselves, that's not partisan issue. that's something we all recognize and i'm not saying that because colorado legalized recreational marijuana. although i will point out that we have anecdotal evidence that we're seeing less drug dealers out there. >> those weren't the drugs i was talking about. [ laughter ] >> but it's a whole universe there, and i think that ties in. the other one that is not a partisan issue is red tape. and creating bureaucracy that gets in the way of people starting businesses. right? most small businesses are started by a sheet rocker or a
painter, and he's the best sheet rocker in that company and he's going to start his own company. if there's a lot of red tape and bureaucracy, he's going to need more incentive to take that risk and go out on his own. and those are really in many ways, the job creators. which is how you get to the middle class. so the question of how we get there, it's not just technology. there's a company in denver, four years ago i got a tour of -- it's called the belgian electronic sorting technology. huge conveyor belt, flies along, a thousand cameras above it, taking ten photographs every second, and as these, let's say bluebirds, is what it was designed for. as they go over the edge, there are puffs are air that are red, takes them into the discard pile. the blue ones go into the juice bin. >> and the ones that are right get packaged for consumer sales. it was $240,000 to buy this
machine and each one gets rid of six jobs. i went home and almost couldn't sleep. holy smokes, it's not just the technology we see. it's imaging. it's all these things. but i am now a techo optimist, now that there's a title to it. i agree with zoe, we're going to create jobs. right now, we have a bottleneck. as in almost every industry, as in almost every industry, when you don't have the labor or capital, but labor is as important, you stifle the ability to create new jobs and grow. and that growth helps create the middle class, which feeds more growth. and i think getting in realtime enough people that -- where these companies can grow at the rate they should, will be catalytic. and i really do believe -- it won't be just the united states. the middle class that's growing around the world is going to allow -- if we get it right, get the workforce and the capital
where it needs to be, we'll see, again, it will be some years and it will be a lot of work, but we can see genuine increases in productivity all over the world. >> zoe said that the transformation from industrial to a digital economy is comparable to the one we went through when we went from an agricultural to industrial. one of the things we did back then, 100-some-odd years ago, we radically changed education in the united states. by saying high school should be free and universal. what radical changes in education should a company in this transition? >> well, it has to start at the bottom. and this has been said now for -- losing track of decades. the nation at risk report is now 3 1/2 decades old. and one cannot say we've made nearly sufficient progress. some would say very little at all there. everything you're doing after
12th grade as far as i'm concerned is factory recall work. i always favored one change we didn't get made in indiana, but i rather favored -- i think i favored, if a student turns up with a diploma and they're not ready for college or work, the remediation costs go back to the high school that certified them. not the taxpayers who have to pay a second time to do something we're not very good at. so as simplistic at that is, you won't have a complete solution that doesn't feel finally with the difficulties of our k-12 system. after that, i love the things zoe is talking about, the programs that the governor has in his state. as i answered your previous question, i think this is one thing we didn't make enough head way on, during my time in public service, one additional obvious
target of opportunity is that huge, astonishingly big number of americans who have some post secondary education and never finished. >> what about -- >> and going after them in a big way and there's some really great stuff going on in the online world that probably fits them better than it does, let's say, today's 18 to 22-year-olds. >> one of the proposals from both parties, but obama has embraced it, is to make things like purdue poly tech, or a two-year community or trade school as common and free as high school was made a hundred years ago. does that make sense? >> it would if we weren't $19 trillion in debt and counting. >> do you think it will add to the debt? >> of course. there is no free. so socializing those costs, i'm not saying all such ideas are
bad. you know, purdue university, we're in the third year of what will be at least a four-year tuition freeze. self-imposed. nobody made us do it. i think of them as my classmates, the cohort that graduates next month, and the one after that, and at least one after that, will leave a purdue that costs less than it did when they entered it, because room and board and books cost less now than when they went in the system. so there's scholarship across the spectrum, just like this room, that flooding any marketplace, same thing happens in health care. flooding the marketplace with subsidy dollars did not lead to less expensive education. the system pocketed much of the money and passed the cost on to its -- the intended beneficiaries of the subsidies. so i don't think that's a fruitful avenue. >> and one more question for
you, since you're shorter on your answers than some, i'll keep hounding you. >> it's because i have less to say. >> you're the co-chair that zoe has helped to sort, we at the aspen foundation were hosting mark warner on something that ties into everything we've been discussing, which is how do you have an economy and an social contract that deals with what you could call the gig economy, or the 1099 economy, where people aren't just going to a factory at age 20 and retiring at 60. i think -- is conner mckay here? conner, stand up. did you have some particular way you wanted to frame a question, because i wanted zoe to speak on it as well. >> -- specifically certification and qualifications could be applied to people in new kinds of work arrangements and how you
make skills portable from job to job -- >> skills and to some extent, pensions, benefits, all the things that used to be part of an employer-based economy. >> i'll answer you the way i did senator warner, who i kept trying to evade on this thing, but i have such high regard for him, i finally couldn't do it. i don't pretend to have these answers. i'll sign up as an exercise in continuing education, because i fully expect to learn a lot more than i have to impart. it's a fascinating phenomenon i've been reading into a lot since that assignment came along. by one measure, i think a recent study, fell into this category of temporary or on-demand, to contracted. that runs the spectrum from janitor down to uber. but still it's a real and it's a growing phenomenon. one question we got to ask ourselves, do we like this or don't like this?
i read sometimes, i think, conflicting sense from the same people on this. if we -- there's a lot to be said for the flexibility, the independence, perhaps the dignity that goes with choosing your own work, time, place and all that. it has all the down sides that conner is asking about. a lot of these folks don't have health insurance, workers comp, the things we've associated with full-time work. are we going to try to introduce that into the system and if so, how? the last thing i'll say, if we don't think it's a positive trend and i'm agnostic right now, but if we don't, we're sure
doing a lot, and i mentioned some examples before, to push things in that direction. you would think we had a conscious strategy to maximize the number of temporary, part-time, and independent workers, because of things we put in place that militate against their traditional and full-time employment. >> so that's a topic the foundation helped to full together. what do you feel about this new phenomenon, since it's like the tides, we can't be railing against it? >> yeah, i think we touched on it a little bit, but mostly raised questions, and that's why we're collaborating with mitch and mark warner to try to think through some of these. it's a very fundamental values question for this country. and we're driven by policies and laws that were enacted in a prior time. so to mitch's point, i don't think we're intentionally driving things in this way, i just think we aren't having the policy and public and political debate to right the framework
that works with the present economy. and we haven't had in washington certainly, a political environment where that can happen. the states are doing some of this better. but the challenge is not in the first instance, in my judgment, figuring out what law to change. the challenge is, what are the values that create the whole of america in a new economy? and when you're talking about social safety nets, when you're talking about economic security and some of these broader questions, we haven't even begun to have that conversation. arthur alluded to it in his opening comments, for which i'm very grateful. to aei and cap for collaborating with us. i think we need to have a fundamental conversation in this country. we can debate where the government does, businesses do it, communities do it, goodwill
does it. we've got goodwill working with us and that's not what i used to go to goodwill for. it's changing because of the needs in cities and states. we need to figure out what we're going after, and then we can address the policy, as mitch said. >> i have a question for the two governors and then i'll be opening it up. i've watched steve case who has a new book out, going to the rise of the rest. meaning, cities across this country that are suddenly coming back as opposed to it all happening in silicon valley or new york. and in your state, whether it's boulder or denver, certainly indianapolis, but south bend, many other places in indiana,
there's a new creative economy that's coming back into cities in particular. and starting new jobs, being innovators, being entrepreneurs. what can we do to encourage that? is it a real phenomenon? and where do you see it happening in your state? >> well, certainly i think it's real and a lot of it is richard florida's predictions, 12 or 13 years ago. not saying he got everything right, but the notion there's a creative class, the young graduates will come out of school. and they will live where they want to live, rather than starting with a company and spending their career there. so we started in denver, focused
on modifying taxes for places that did live music. and interesting to say it's superfluous, but now there are more live music venues in denver than nashville or austin. and they're one of the top two destinations for millenials looking for a place to relocate. we have a thousand miles of bike paths in metropolitan denver now. again, these are things that you would say just superfluous quality of life, but it attracts these -- all these young people. so many of the kids who write code for the internet or create software, they were the nerds in the school and didn't really hang out with the football players or the class president or maybe the cheerleaders. they hung around with the poets and the musicians and they like to be in a place where everyone is accepted and welcomed. and i think that's why you're seeing cities that adapt to this, like indianapolis, like denver, really are succeeding. you're seeing a blossoming all over the country around this sense that young people are kind of defining their own lives. >> yeah, i gave steve case a chute-out, but i also just read james fallows' great cover in "the atlantic," which talks about even in very small towns, he came to indiana. you're seeing a revival. what can we do to nurture that?
>> our predecessors weren't as farsighted as john's and they didn't build the rocky mountains -- [ laughter ] >> -- so we have to work a little harder. one of the great strengths of our federal system is that there's a genuine competition. and states, we see it all the time, that screw up long enough, somebody comes along, says, that's not working, let's try something different. there's nothing that states compete more aggressively on, most states, than to build a hospitable climate for jobs and investment and the kind of people increasingly that the governor is talking about. so that's all we worked on, essentially. that's the organizing principle of the eight years i spent in public life and i hope we made some headway. now i will say this, i've had the same, so far i think,
romantic notion mr. fallows has and rich carlburg wrote a book called something 2.0 years ago. same basic idea, it's absolutely true, and i've seen it a hundred -- hundreds of times in my state, that individual enterprises can thrive in a wired world in an unlikely place. but the rural parts of our state and almost every state i know, they're still depopulated. so the jobs are not all going to the coast, because frankly they do everything they can to push them away. california acts like they're doing you a favor if you try to hair somebody and they're going to make it as hard and expensive as they can. you come to indiana and the index to the national cost of living is 92 cents. index to california or an east coast state, you're going to take home 25 to 30 more cents from every dollar of revenue. colorado's pretty hospitable
too. so you can do all those things, but i do think we still have a challenge with regard to the smaller communities. it's the metro areas. it's the areas frankly with university -- significant university presence that seem to be attracting these folks. i'll leave you with one last thing. we're taking something of a calculated gamble in our university. we live in a nice town, but it doesn't have all the features that some of our competitors do. so we're doing a 50/50 deal with our town. an arrangement, i don't know who tried this before, we're going to transform the whole stretch that connects us to the town and runs through our school. this is either going to be a big step forward in attracting students and faculty of exactly the kind that the governor sees coming to denver, or somebody in 20 years is going to go, what idiot pooled money on that?
we'll find out. >> well, daniel, patrick mornahan once said, if you want to build a great city, build a university and wait a hundred years. so we'll find out in a hundred years. yes, sir. i'm sorry. quick hands came up. i'll get you, and you and you. >> i'm with the progressive policy institute. miss baird, you mentioned the jobs that don't really require a college degree but ask for a college degree. governor daniels mentioned the many people who don't have a degree but have the skills that are relevant. wondering if the panel can talk about those kinds of information failure in the labor market. the long-term unemployed who never get their resumes seen, or people who serve their time as felons and whose talents are not accepted into the labor market. what can we do about the large populations whose resume signals are wrong right now? >> well, that's part of what
we're trying to take on in skillful. you guys have done a lot of really good work and particularly on some of these issues of where the information comes from. but it is possible to take a biotech job, for example, they've done interesting work where they looked at biotech jobs that require a college diploma and broke down the skills required for those jobs based on what people are doing in the job and what they say they need to know, and they found that most of the middle-skill jobs that they looked at, which are good-paying jobs, that lead to great career paths in biotech, which is a growing field, could be done by someone with an associate's degree and two biology courses. that's one example. there are other examples of jobs
like an executive assistant job, which 20% of the people who are executive assistants today in require a college diploma. it's hard to believe that the job's changed that much. but if it has, the kinds of skills someone's picked up, a new program they're comfortable working with, new kind of spreadsheet, whatever, you can reveal that on a profile online and demonstrate that even though you didn't get the college diploma, you have all the skills needed for an executive assistant or an advanced manufacturing job in biotech. so that's what we're doing with skillful, with linked in. we're training people to demonstrate their skills differently. we have an employer tool kit, where employers can look and see what the skills are at different levels of jobs in these fields and apply that to their own job postings.
and we're trying to break through, and obviously we have a lot to learn and this will be reiterated and revised and there will be many new versions as we learn what works and what doesn't. but that's just what we're trying to go after. >> yes, ma'am. and would you introduce yourself. [ inaudible ] you don't need a mike. >> i'm paula stern. >> i didn't recognize you. hey, paula. >> thank you very much for the very excellent, very rich conversation. my question is, i'm asking on behalf of the national center for women in information technology and one way you can do something about that problem is don't ask for gender. ask for what your skills are when you post those jobs. but we're actually doing a study with the mayor of new orleans to see if we can find the biases that might skew who is eligible for jobs too. so we're actually trying to get at that, not just gender, but a
lot of other issues. >> and that's what we do. we have 150 different documents for free. pull them down, use them, apply them to your own culture, your corporation or setting, academia included. my question really goes to the president and the federal government's role as the leader who has enunciated this computer science for all initiative, which is a dramatic program dealing with the fact that the states and the local level have not put computing and computing science into curriculum. and how we get this done at the state level, knowing that there are those who feel that we're spending too much money and are in debt too much, and therefore, we should be hesitant about investing in our workforce, or
in our infrastructure. but education is a lot of money being spent already by the states and local. i'd like to see -- >> yeah, let me see, you're the sitting governor. >> i thought that question was really about the federal government. no -- [ laughter ] >> i was going back to the states and computer science for all initiative. >> so, states, colorado -- >> we'll run you for national office if you want. >> not right now. i think that the different states are progressing at different rates. and actually i'd be interested to hear what mitch says on this as well. you know, the controls of pedagogy, what gets taught in the schools, you want to change that and take it on, you have to go against the academic bureaucracy within our universities, and it's very hard to ply them, to mold them outside of their traditional way of approaching this stuff. so we have different school districts that have been able to do this. colorado's a state that lets the
local school districts have a great deal of leeway in how they address this. and we have, i think, some great successes. and my job is to make sure those successes get spread to all -- you know, that each other school district can see the outcomes that they're getting and embrace these approaches. when you start teaching coding in sixth or seventh grade and let kids work up into stuff that's fun. right? how do you design a very simple computer game that you can play on your smartphone. the next step then, the governors compete with each other, as governor daniel said, we governors, we work better, republicans and democrats, we as governors work better. i was the chair of the national governors association. we can come to, maybe not a consensus, but agreements quite easily, but it doesn't mean we're not intensely competitive. and i mean, intensely competitive. so hopefully as those of us that are doing this kind of broadcast
the success and kind of brag in governors meetings, it will change rapidly. i think what the president's trying to do is saying, that process is too slow. we need realtime change right now. and i don't disagree with him. the motivational incentive. like anything, you've got to align self-interests to really make change happen. you know, the process that's going on right now needs to be incentivized. we gotta find the right incentive. >> purdue university had the first computer science department in the world. just passed its 52nd -- >> that may be true. >> and so we're very committed to this, making major investments to grow it. the demand exceeds any supply we can create. i've had more than one person suggest to me an interesting idea. we haven't acted on it, but it's worth thinking about it, and that is that we ought to add computer science as a candidate for fulfilling our language requirement.
that it's a language like spanish or german. and perhaps in some -- in this age, maybe even more useful. we ought to let that satisfy our language requirement. so i'm going to think about that. talk to our folks about it. to me, it's an intriguing -- it's animated by a sentiment much like yours. >> and i'd suggest too, on math requirements, we put in calculus, it's great for missile trajectories, but algorithms and that thinking can be part of the math curriculum. >> we require four years of math. doesn't have to include calculus. we don't -- it doesn't -- you don't have to have any particular score. but statistically many of the scholars in the room will know this, the last i looked, the single strongest part to completing college to time, et cetera, was four years of math. something about the discipline and so forth.
so one simple thing that schools could do, dial that up, if they're not there already, and you might see improvements. purdue certainly has in terms of progress and completion and so forth. >> the gentleman here, the woman there, and then we'll get -- make this loop, thank you. keep the microphone here. we'll pass it around and then to the -- yeah. >> thank you. this is for president daniels in his role at purdue. [ inaudible ] >> i'm sorry? i'm nick farmer. independent citizen. >> if i could interrupt, president daniels has a nice ring to it. [ laughter ] i'll be quiet. >> john, behave yourself. >> what percentage of your students are u.s. citizens, and what percentage of your graduates end up working in the united states?
and how does this inform your thinking about policies that's working and not working in the country today? >> 85% of our undergraduates and only -- probably 55% of our graduate students are domestic. and we think we have -- a lot of us talk about the undergraduates. we have 30,000 on the main campus. we think we're in about the right balance. i like the fact -- internationally, we're one of the most diverse universities, with, as i say, 15, and in some recent years, it was a little higher than that, percent, coming from other lands. i tell our students all the time, you can learn a lot about this world before the first time you study abroad or the first foreign trip you take if you just make the effort on this campus. but we talk about that a lot. and i think we're in a reasonably good balance point. we do look very hard. i mean, i hope we'll fix visa policy in this country sometime.
i understand it's been held hostage to other issues in the immigration area. it is one of those things, i think, where people who disagree about other things understand. we ought to take all the smart people who want to come here and stay. we think we keep about 15%. it's hard to know. we think we keep 15% to 20% of the international students. i'm not counting those who stay for graduate school. that would add to it. but those who go into the workforce. i wish it was a multiple of that. and from talking to hundreds and hundreds of them by now, i promise you, more would stay if it weren't so darn hard. >> and just to follow-up on your saying to an undergraduate, this is the most diverse community you'd probably be in, and if you want to learn about a global economy, just look around you. do you think diversity in and of itself is an asset for a university? >> sure.
up to a point. but, yes. not to open up another subject, but the most important diversity of all is sometimes the hardest to find, viewpoint and outlook, but there are ways to work on that as well as demography, and we do. >> yes, i'll catch all of you and unfortunately, i'm -- and then we'll go over there, because i'm prejudiced to this side of the room. >> i'm sharon, voice of a moderate. i'd like to challenge you on saying your bike trails are not the reason why people are going to colorado. [ laughter ] i would like to say that. i just went to colorado, and i look forward to going back. but my question is -- kind of gave me flashbacks to my childhood. i'm 53 years old. but 43% of american people cannot afford broadband. we find that jobs have to be applied for online.
college applications are online. the internet is the new telephone. people no longer need to call 911. they're not having those lines. they need a way to communicate, basic communication. when you look at that, 47%, so it's like there's 4% of america that are not paying taxes and they can't afford broadband, and it's very disturbing to middle people. so this is my question. we had a recent metro shutdown. people found out they could do their work from home. women found out they could do their work, whether it be taking administrative roles, they could make appointments and do reservations from their home. they couldn't travel into the city, and their employers allowed them to work from home because of that situation. do you think in a digital economy we can create more roles for women to work from home but still not lose our pay, because we are being just as productive. i think a digital economy can
change the mind-set of the current people that are the leaders, we can bring it back to this topic -- >> -- appointed you to look into these and many other issues. do you want to take that? >> sure. i'm going to be co-chairing this new advisory board on the digital economy, and one of the questions that the commerce department's really put a lot of time and effort into, as have other agencies, is access to the internet in rural areas. and there's certainly a lot of companies that put a lot of time and effort into that as well. it's clearly critical. your question about women working from home, though, is more complicated, because it gets back to some of the issues mitch raised. there's a tension over whether people who work full time for a company from home get benefits whereas if they go to an office building, they would get benefits. and you know, we need to resolve some of those tensions.
most of our population has been moving toward cities. so for the vast numbers of the women that you're talking about, the issue is less internet access and more some of these other benefit, job condition issues. but certainly access to the internet universally in this country is something we have to pay critical attention to. and if you look at what china is doing and other countries, it's not lost on them that that's going to be the engine of both economic growth as well as individual opportunity. >> i'll just interject, because i hope you'll look at it when you do it. the core of your question is an interesting one, which is whether place-based, and being in a place with other people, and we've seen marissa mayor when she took over yahoo! saying quit trying to telecommute from home.
you have to be physically around because people are more productive. steve jobs certainly felt that way as well. and yet it's somewhat discriminatory also to feel that way. so it's not an answer i have, but it's a great question going forward. >> 30 years ago, everyone said as the internet began to kind of appear and televisions became bigger, that people wouldn't go to movies anymore. i think there's a natural inclination. people want to be in groups. so it's not just being demanded. >> that's what this forum and marco and they thrive on, people actually like being together. [ laughter ] anybody with the name walter gets called on early. >> thank you very much. my name is walter tejada. till december last year, i was 30 years as the county board supervisor in arlington, virginia. now i'm in the private industry trying to earn a living.
but the levels of local, state, or federal government are being mentioned. i was chuckling a bit. at the local level is where a lot of the action is taking place. and arlington might not be the best example because we're very technology driven. the pentagon is located in arlington. yet there's still a digital divide. and that's not confined only to the white male from the heart of america that may have been displaced from a manufacturing job because of a trade agreement or whatever issues are involved. the skills for technology really are for everybody. in areas where we have a great deal of diversity, a lot of folks are being left out that are probably described most as being in the service industry, where folks want to have their cup of coffee and have someone smile at them and give their change back and say have a nice day. they're not worried where they live or the kind of skills they
might have. what options, or who do you say to folks who perhaps vocational training with some quick technology certification might expedite a world into a higher ladder in society and maybe into more knowledgeable technology skills down the line? a lot of times when they talk about the workforce development, it usually start about high-paying jobs and usually requires a high level of education. but a lot of people, for whatever reasons, immigrant or whatever the case, might only have a high school diploma, so it's not just confined to one segment of the country or one particular population, but in general. so what suggestion and advice would you offer? >> anyone want to take that? >> zoe. >> zoe? >> before she -- i think that's what skillful is about. going forward i think you're going to see less -- employers are not going to look for a specific generic document. they're going to look for what is the aggregation of skills
that i'm looking for in this job? because they're going to get a better price for it. if it's less expensive to get two or three certificates and a badge and learned this stuff, the employer will get somebody better suited and be happier in the job and be less expensive, which i think is going to drive the transition. i think that's a lot of what skillful is about, getting employers and potential employees together, much closer and much more rapidly. >> and what mitch is doing is really extraordinarily innovative because universities and community colleges have basically been paid on seat time, not skills acquired. and so -- and that's how we provide financial aid and everything else. so what mitch is doing at purdue in his polytechnic institute is giving people certificates at whatever pace they can pick them up, in order to achieve certain skills, still in a diploma-based curriculum. and that's starting to happen
more and more. arizona state university is doing a lot of online teaching where people can pick up at their own pace the things that they're trying to learn and demonstrate that they've gotten the training and the learning that's provided by that. and i think there are a number of community colleges that are grappling with this. how do they move from being seat time to certificate or diploma-based because the graduation rates over even three years in community colleges is staggering low. i'm not even going to shock you with the number. and so if they can give people achievement along the way for the investments they're making, we also are trying, as mitch alluded to to get people who have had some college, who have run up big debts but don't have a diploma to show for it. the way to show that they have
picked up the skills. they took statistics. they took coding. so they can demonstrate they have skills that are in demand in the workplace, and finally feel proud as well as economically satisfied. feel proud of what they've learned. because i think that a critical part of this equation is to have americans believe in themselves again, and believe in the country again, and to believe that the things that they know are valued skills in the public arena. and that's a -- i think, a critical part of what we have to achieve. >> yes, ma'am. >> hi, nicole turner lee. i'm at the multicultural media, telecom and internet council. talking about women and girls, i'm also affiliated with arizona state university center for gender equity for women and girls of color.
so my question is actually this. we talked about the knowledge economy and this has been a great conversation, but how do you reconcile implicit and explicit bias that exists in institutions and from employers, particularly for people of color and more vulnerable populations, like people who are disabled or seniors. the knowledge economy does not look like those folks, like me so how do we think about this conversation of disparities and push it past just the skills-building phase and more towards shifting institutional paradigm so they're more accepting of people once they're able to attain these competencies. >> you know, at the end of malcolm gladwell's book, the blink, there's an anecdote that describes in 1982 almost every trombone and tuba player in every orchestra was a man. because women didn't have the lung capacity, the strength, their lips weren't strong enough. and then this woman did the blind audition because the son of the first violinist at berlin
symphony or something. in the blind test, they let everyone else go home. you're it. then she came out and everyone freaked out and there were lawsuits. it's a wonderful image of what happened. now, of course, every symphony has blind auditions, and now it's almost 50/50. i think that blind audition should be everywhere. it should be in our court system. each defendant should be offered a right to have, if they don't want to be seen by the jury because they have tattoos all over themselves for whatever reason. they should have that choice. they should have that right. and certainly when you're applying for jobs, i think. it makes perfect sense, and technology helps us do that. >> it helps and it hurts. >> way over there. >> i'm stephanie berry. i'm actually retired from government. but my question is, how do we create a new labor force to go against problems like infrastructure?
in the digital age, seems to me technology could help us figure out how to build infrastructure what matches the advances in the digital world, but i haven't heard much about how do we push these companies to actually buy that new thing that brings in a lot of people, to take on some of the hard problems that we have right now? >> well, i think it's coming. your car is going to talk to the road very soon. and talk to other cars. the infrastructure we build in the future is going to be smart in a way that we never imagined just recently. you know, i'm not sure, stephanie, this is quite encompassed in your question, but no bigger believer in infrastructure in the room than i am. we built more than our state had
seen in a long, long time -- or ever. and i'm a true believer this is a major issue for the country, to rebuild and build the new infrastructure we need. but two things. one, we ought not overestimate the degree of employment that comes with it. only so many people -- you want to talk about a high-skilled job. try to drive a bulldozer, or a grader. so this is not, you know, ccc in the 1930s. some people have an imaginary view that's going to put jillions of people to work. no. the employment affected infrastructure is the second after businesses relocate to try to take advantage of the infrastructure. so you're seeing important new investments, but -- oh, the last point. if you want to talk about a place where public policy gets in the way of progress, this is it. it's so easy to talk about
building infrastructure. go try to do it sometime and spend eight years in an environmental impact statement, or a statement to check and see if maybe somebody can find an arrowhead somewhere. we have really -- everybody concerned about the infrastructure crisis ought to read philip howard's work about how ridiculously difficult we make it for no compelling societal reason. >> let me follow-up on that, because we talked earlier about making trade schools and community colleges free. talked about infrastructure spending. as a governor, how do you calculate return on investment? whether it's creating free community college or new water systems and internet systems, so that you know whether it's costing society or benefitting society? >> you do your best. every investment involves a leap of faith.
i would say when you're building roads or bridges or broadband, or pipelines, whatever, for the long-term, you can only -- you have to imagine things that aren't in view yet. the value of infrastructure, i always believed and i've seen this -- now i think i can say this with some authority -- is what comes along after. you can't always predict that. the market will tell you. >> like when they built the internet to connect a few university computers. >> absolutely. and it doesn't mean you can't be more rigorous about it. we got rid of what, frankly, was a political patronage system for deciding which roads and bridges to build, swept all of that away and had more of a blind system. we had algorithms based on what we believed were the safety, convenience, and economic advantages. but you have to be modest enough to know these are estimates and you could be wrong. you can try to proceed and should try to proceed based on some logic that gets at your
question, knowing that some of them are going to work out better than you imagined, and some of them you'll put it there, and where is everybody. >> anybody in the way back that i'm discriminating? the gentleman here. >> mike from the national governors association. thank you both for being here today. you've done great work with us in the past. governor daniels, you mentioned earlier how the k-12 system is one of the most important points to address the problems that face our nation. what are the opportunities to integrate work-based learning or other apprenticeships or other activities across the entire education system to better link the world of work to the education path? >> it's a great question. like everything else, i don't pretend to have an answer, but i'll tell you this. of all the new things we're starting at purdue, we're starting a high school of our own and it's going to look a lot like -- it's a mirror image of
this polytechnic institute. now, i'll confess to you that seeing if we can more -- if we can contribute something to a high school education that does exactly what john was talking about, by the way, gives certificates or badges. we imagine that a number of these graduates will go straight from high school to work. but my real -- the number one objective, honestly, is to go back to something else we talked about before, the pool of first generation and minority students who are even remotely likely to succeed at our university, in our state is heartbreakingly small. and i'm tired of waiting on the k-12 system. so this high school, if we can make it work, and we never
started a high school, so, i don't know. if we can make it work, though, the one rule that i've established is, in every diploma of every graduate, there will be a direct admission to purdue university. because we can't wait anymore. every year at this time i check and the total number of african-american graduates in the state of indiana at the purdue median, and we're a land-grant school. we have high standards, but we're not a highly, highly, highly selective school. we want to be the opposite. we were put there to -- and someone made mention -- to bring the -- to throw open the doors of higher education beyond the elites and in every year i've been there, it's been a low three-digit number. just at our medium. that's the whole universe. i'm not going to tell you how many of those are young men. and so we're going to try to jump into the deep end of this pool.
yes, i think we can, i hope, contribute something or learn some things that will speed young people to remunerative employment, but also it's really aimed at trying to have a university community that includes more people of low income and first generation. >> last quick question. back there. i'm sorry. i see a couple other hands, but i'm trying to be fair here. >> thank you. good afternoon. brian wright, independent citizen. we've heard some conversation about the lack of wages, or the wage growth issue. we've talked a little bit about the issue of student debt burdening young people. also heard a little bit about the tremendous debt for folks who are 40, 50, and above. what you all say as the economy works its way forward, the fourth industrial revolution moves forward, this idea of a data mining royalty, that is, when we are data-mined, our personal data is mined, ought there be a royalty assessed
against that, and the funds contributed to something like the alaska permanent fund that was launched by the republicans up in alaska, so that each year individuals targeted, as we would like to or otherwise, that a check is cut to those people based on the amount of data that they are mined. >> it's such an interesting question. i was recently with some leading m.i.t. researchers and a bunch of people from silicon valley talking about what the research agenda should be. and i put on the table, why don't you take a hard question. forget all the stuff that people suggest to you that, you know, how many people are going to work in the gig economy or things like that. take a hard question, which is your question, how do you evaluate whether or not people should benefit from the value of what they provide into an internet system relative to what
they get from all the free goods, all the fact that they can use all these services for free? i mean, those are the kinds of questions for this economy that i hope institutions like aei will take a look at, because we don't have a clue. we don't know how to measure the economy that we're in either. you know. gdp isn't really the best measurement for the economy we're in now either. so there's a really ripe field for new understandings that can lead to new policy decisions and business decisions. >> and i'll let both the governors have a quick last word, too, if you want. and then we're going to turn it back to arthur. >> sure. so, thank you very much, walter, for doing this and zoe for helping create this platform that brought us together. before i get home and my wife yells at me -- >> your new wife. >> i want to point out i'm a strong supporter of hillary clinton. when i said president daniels, it was really in contrast to the primaries. i just want to be clear so i don't get yelled at when i get
home. [ laughter ] i think this is one of the key issues that this country faces, how do we more rapidly connect kids with the skills, not necessarily the knowledge, but the skills that they're going to need to succeed in life. and i think skillful and what mark has been working on is part of this. i think apprenticeship is going to be a huge part of it. high school, like what president daniels refers to, is another part of this. my son is in a public school, longer school day, longer school year, but no homework. he's in eighth grade. loves it. and the school's out-achieving -- we have experiments like that all over the country. how come we're not scaling it? and i think that may be where you get institutions of higher learning that get to be in the ground floor and then it gets scaled more rapidly. >> mr. president? [ laughter ] >> well, it's a really provocative question, i think arthur should be the subject of
one of your upcoming programs. one thing that just strikes me, our own students and everything else i read, young people, in particular, but all americans seem very complacent about giving up all this data. and by the way, if you tell them, we'll give you ten cents every time, fine. but we haven't thought enough about that, i don't think. it probably ought to be a matter of free choice but we ought to make sure it's an informed choice and i don't feel informed to know exactly what the implications are when i let somebody look through my personal affairs. >> it's one of the many new elements in this new economy. i first want to thank zoe. it's been amazing how since you've taken over marco, you've been at the forefront of every interesting and important issue. i thank you very much for it. and arthur brooks. those of us who work here on think tank row, we look upon arthur as our moral compass, especially with your new book. thanks for all you've done. arthur.
>> thank you, walter, and thank all of you. please watch this space for more conversations on this incredibly important topic. i'm sure the most newsworthy items is the nomination by -- [ laughter ] >> we'll have a conversation about what it means to have policy and help people earn their success, which is the moral compass on which this entire discussion is centered. i thank all of you on behalf of all of us.
nato secretary-general jens stoltenberg is in washington, d.c., today to talk about challenges the alliance is facinging. c-span will have live coverage of his remarks at 4:00 eastern as he outlines nato priorities for his warsaw summit this summer. we're also live at 6:00 eastern when hillary clinton holds a rally in pittsburgh. pennsylvania holds its rally on april 26th. also, donald trump is campaigning today in new york. c-span2 will be live with his rally in bethpage on long island. new york's primary is april 19th. that rally is scheduled to begin at 7:00 eastern. american history tv on
c-span3. this weekend -- saturday night at 8:00 eastern on lectures in history. >> what we see is new factors making emancipation desirable. old obstacles falling by the way side with a result that by august, if not earlier, 1862, lincoln has decided when the time is right, he will announce a new aim for the war effort that would add to union human freedom. >> wheaton college history professor tracy mckenzie on the evolving war goals of the north during the civil war. then at 10:00 on "reel america". >> how was it possible for america to achieve such production and at the same time build an army? and the amazing reports came in from agents of the united states. 20% of american industrial manpower was woman power. legions of american women were
amassing to stop my advance across the world. forsaking aelry for the grim tasks of war. >> this war department film documents how women in world war ii helped the war effort. the hidden army of american women working in army manufacturing are a main reason germany lost the war. sunday evening at 6:00 on "american artifacts," we visit the daughters of the american revolution museum to learn about an exhibit marking the 125th anniversary of the organization founded in 1890. >> one thing that stands out at this time period is this creation of this imagery of the apotheosis. and it's an old concept. it goes back to ancient times where a warrior is made god-like by lifting him up and celebrating him. >> on the presidency at 8:00 -- >> though washington and
jefferson are the two most prominent examples of slave owning, it is worth highlighting key facets of their successors who owned slaves, especially those who did so while they occupied the white house. james madison who followed jefferson as the fourth president of the united states owned over 100 slaves, holding a large percentage while he occupied the white house. he is responsible for proposing and expanding the three-fifths compromise which guaranteed the south held a disproportionate influence in congress to preserve and uphold slave-own interestings. >> tyler perry, african-american studies professor at california state university fullerton on the 12 american presidents who were slave owners. eight of them while in office. for the complete american history tv weekend schedule go to c-span.org. a panel discussion now on innovation in the biopharmaceutical industry and how new drugs are being applied
to test and treat diseases such as alzheimer's. this was part of the meeting of the national lieutenant governors association. it's about an hour. okay. good afternoon, and welcome back. usually after lunch we fall asleep. however, i think this panel will keep us all up and alive and kicking. so let me just say good afternoon. well, especially because we have jimmy hendrix as one of the panelists. so i just want to say it's a pleasure to always join my peers here at nlga. and the conversations are always inspiring and enlightening.
and it is good to, every once in a while, have their experience and they give us a chance to keep the dialogue going and get the conversation and the debate ongoing. the folks from nlga, we have partners, and the partners program. they bring diverse points of views and different perspectives to inform us and keep us really on the cutting edge. so i want to thank the partners. thank you so much for being a part of this. and let me bring to the podium the leader of the nlga partner program, chris riley of archer daniels midland, or adm. he was just telling me what they do. it's really quite interesting. so welcome, chris. >> thank you, lieutenant
governor potter. i appreciate that, thank you. enjoy those. good afternoon. thank you for fostering these partner shns that allow public/private partnerships to build fruit. i want to say thank you to the lieutenant governors who are here because it's your program, but yet we want to invest in the program. and it wouldn't be a program to invest in if if you didn't show up and partake in all the conversations that we get to have together. we want you to succeed as much as you want to succeed. and we want to help you in whatever ways you need that. so i think on behalf of the caps, thank you for being here and we really appreciate it. with that we had our call, our discussion about what the topic we wanted to have this year at this meeting. and it became wonderdrugs. and, you know, as i was talking to jim a little bit, it's about innovation. jim, i'll give you a little plug. and having been a diabetic since 1978, i've seen a lot of
innovation in just diabetes alone. and from taking insulin shots from bigger needles to smaller needles and an insulin pump which has just changed my life. i'm real excited to hear our speakers today. with that, please join me in czeching vice president tara ryan of the pharmaceutical research and manufacturers of america, otherwise known at phrma. >> so i feel like my introduction was taken away from me because i was going to say what an honor to be on stage with jimmy hendrix, but i think we all feel that way. he's going to be a great panelist. i'm not sure he's going to play any music. thank you for letting phrma come today and talk about one of the most important issues you're facing at the state level. the midcade budget is something governors and lieutenant governors are thinking about every day.
health care costs are rising. i want to set some of the record straight while i'm here today because it's important. we've seen a lot of focus on the rising cost of prescription drugs. and i think what we don't ever hear about is how those drugs are put in context to the overall health care system. i have some slides here. i talk really fast, but i've been told that i might get an electric shock if i go over, so i may talk faster than i normally do. and i'm not very good with clickers. there are more than 7,000 medicines in development around the world today. 7,000. patients have so much reason to be hopeful. we just listened to just, what chris was saying about having the insulin pump. the direction that medicine is going is changing so dramatically and so quickly that i think one of the biggest issues is we don't know how to get our hands around the new medicines coming to market. 70% of new medicines in development have the potential to be first in class therapies.
that means they'll be able to treat disease in a way no medicine before them has ever been able to do. and as more therapies become tailored to individuals you learn a lot about medicine. president obama has spoken about it. states are really looking into how to deal with personalized medicine. 42% of new medicines in the pipeline have the potential to be personalized medicine. so we're looking at a really different world as far as health care. and i think you have to really keep that in perspective when you are thinking about how to address health care costs. we were at a meeting recently where one of the insurers on a panel said there are too many medicines in the pipeline. can you imagine that with the value of the medicines that are coming to market that somebody could say something like that? there are so many diseases right now that don't have appropriate medicines either to treat the symptoms or to cure them that there are a lot of patients out there, probably some of you in the audience and many of your family members that are waiting for something to come to treat their disease in a way that hasn't been able to be treated before.
and another thing is, medicine is probably the most cost effective means of preventing and treating disease. not only do medicines help patients live longer and heal healthier lives but help avoid health care costs. we hear when drug costs go up but we almost never hear when drug cost goes down or offset other costs in the health care. that's one challenge drugmakers face. you almost never hear about the cost offsets. you can talk about high prices of drugs when they come to market because they make headlines. we've bhrd it with the new he hepatitis c drugs. it takes a few years to collect the data to show what the cost offsets are. you have to be thoughtful about your approach. the new drug that comes to market, which, if it's a cure, it will have offsets down the road. you'll have people who don't have to have transplants. people who are not going to suffer from a type of cancer
where they need oncology treatment for a long time and a whole variety of health care medical needs and other medicines they may have to be subjected to for a lifetime. medicines shift the treatment paradigm towards prevention by allowing patients to avoid long-term hospitalizations and health care which are far more expensive than just the drugs alone. a health affair articles found one extra dollar spent on medicines for congestive heart failure and diabetes can generate $3 to $10 in savings on emergency room visits and in-patient hospitalizations. adherence to medicines lowers total spending for chronically ill patients. spending $1,058 on congestive heart failure medicine lowers medical spending by more than $8,000. these are numbers you have to think about when how to achieve cost savings overall in your health care systems. this was one of the headlines back in the late '80s and '90s,
the hiv epidemic. a lot of press about how treating patients with hiv/aids was going to bankrupt the system. today we know that hiv went from being a fatal disease to a chronic disease where people are being treated for it. women who have hiv/aids are giving birth to children free any of disease. the medical breakthroughs have had an enormous impact on medical cost and on the economy. for example, in 1985, it cost the u.s. army an estimated $500,000 to treat each aids patient in its care. now medicines have reduced the number of hospitalizations, made them shorter when they do occur and despite significant increases in the number of people with aids because people are living, the fact is we are treating five times the number of patients at the same cost we were in the late '80s and early '90s. that's significant progress. went from a fatal disease to chronic disease and treating five times the number at the
same cost. we let innovation work. it balanced out the system. children with mothers who have aids are being born disease-free. we're in a different place but it's only because people said let the innovation work. we've had people come in to phrma and speak about the different changes they've had about their medical care who were diagnosed at age 18 and now are in their 40s and 50s living basically normal lives. another thing that you hear a lot in the media is that our companies take the research from the nih and then just charge big prices on it. i wanted to put this in context for you. the total nih budget, the total budget is $30.1 billion. phrma member companies, we only have about 33 member companies. phrma member companies, baio pharmaceutical r&d was $51.2
billion. so we take the basic research from nih and do the clinical trials and figure out how to make that work for patients to treat certain diseases. nih doesn't just do research for the pharmaceutical industry but for academic institutions, research for the department of defense for a variety of other institutions and agencies as well. but don't be confused into thinking if all of our companies went away nih would be bringing new drugs to you. that is not going to happen. despite the fact even if you doubled the budget we might get some things done faster. might get better research more quickly for patients who need this. it's not going to solve the problem. you still need the investment by biopharmaceutical companies to do the research to turn the basic science into something that is treating disease. from the perspective of people who are working in the state as lieutenant governors, it's important for you to understand the value that clinical trials bring to your state. there are significant economy
benefits that's result from conducting clinical trials in your communities across the united states. they are the most time and resource intensive part of the r&d process for new medicine. a report done in 2013 said the biopharmaceutical sfrindustry sponsored 1,600 clinical trials involving 1.1 million participants. and these trials occurred across all 50 united states. another thing that we hear a lot about, and there's a lot of debate about this, is the fact that as far back as 1960, the drugs spend as part of the health care dollar was 10%. governor actiaries place is at about 10% today n anticipate looking at the numbers that it will be 10% of the health care dollars as far forward as 2025. that 10% is an average. and it fluctuates. and if you put in other factors of the health care system like long-term care and
hospitalization, that number will increase, 14%, 15%. it's still a small share of the health care dollar. if you look at we hear a lot about 2014 and the big spike in the drug spend. it's a double-edged sword. the affordable care act passed and in 2014 the medicaid expansion. all of these people who finally had access to medicines. so that took up -- that to helped in the increase in the drug spend. it was an odd year as far as drugs going off patent because we didn't have a big number of drugs going off patent. more than 40 drugs were approved by the fda. a lot of things coming together in one year and the media has taken that without giving you some of the background to explain why it happened. one of the drugs that came to market in 2014 was a cure for he hepatitis c. another thing you don't hear a lot about. the net price -- we hear about the list price of a drug, the $84,000 pill. i bet if i asked, has anyone
heard about the $84,000 pill, everybody in the room will raise your hands. what you never hear about are the rebates to have drugs covered on drug lists. this slide shows the total drug spend in the united states, commercial medicaid, medicare, for a single source branded product. the blue bars represent by how many dollars list prices went up and the green is how many dollars net prices grew each year. the difference between the light and dark bars in any given years due to rebates, discounts and charge backs. there's a significant gap between the blue bar and green bar. the blue line graph represents the percentage change in invoice or list prices compared to the previous year. so between 2013 to 2014, list prices grew by 13.5%. the green line represents the percentage change after rebates, discounts and charge backs are
removed. between 2013 and 2014, net prices grew by only 5.5%. net prices are increasing. but their rate of growth has declined each year since 2012. the net price growth of 5.5% in 2014 was in line with overall health care spending. this refutes the argument that you see in a lot of the coverage. i want to walk quickly because these guys can't cover this but the changes that our companies face following the passage of the affordable care act. brand drugmakers paid a basic or minimum mandatory rebate of 15.1% of each of their drugs that are covered in medicaid. when our companies negotiate for -- to have drugs covered in medicaid, they are also forced by virtue of participating in medicaid to participate in the program. but before the affordable care act we paid 15.1% on all of our drugs covered in medicaid. following the passage of the
affordable care act -- before the federal law passed, manufacturers were only required to pay rebates to med dade enrollees in fee for service programs. following that -- following the passage of the affordable care act we pay rebates on all managed care lives. and as you know, the majority of state said cade programs are shifting their population to the sense you're excludeing some of your most vulnerable into your medicaid managed care who is getting the benefit of rebates on those lives as well. and on top of that we had medicaid expansion. so our company took a significant hit on different things they were required to do following the passage of the fo affordable care act. and another thing from a state perspective that's important for you to understand, and i think under the level of understanding on the value that medicaid rebates bring to your states varies based on how much you work with your medicaid department, how much you work
with your health and human services and your health committees. but the rebate process is incredibly complex. so we have the minimum mandatory rebate of 23.1 for all the drugs. in addition to that a consumer price index penalty. every time a drug in the commercial market goes up, the rate of the -- the price goes up faster than the rate of inflation, there's a penalty that's paid to the state. and that penalty is compounded over the time the drug is on the market. in addition to that, we pay supplemental rebates for product placement on your preferred drug list. so we've got the minimum mandatory rebate, cpi penalty that accrues over time, the supplemental rebates. in 2014 alone, we paid $19.4 billion in rebates. and if you look just in your own state at the volume of rebates we pay to you, the number is significant. it's important component of -- don't forget. don't just look at the list price of the drug. look at what we're paying to
have that drug covered. by the time a drug goes off patent in your state there's a good chance we're paying more than any of the generics. we're almost paying to have our drugs covered on your medicaid program. just quickly to put drugs in perspective, spending on drugs in perspective, private insurers spent nearly as much on medicine as on administrative costs in 2013. they spend as much on medicines as they did on their administrative costs. those are your insurers. and the u.s. will spend $13.5 trillion on hospital care over the next decade. now is the time to bring better drugs to market so we can decrease some of your hospital and long-term care costs. it is the only way that you're going to find a solution to figuring out how to deal with your health care costs. this simm portent. i recognize the red light is on and i was told i was going to get an electric shock. so i may end up here. the price of medicines is
important. it is not some arbitrary number pulled out of the sky. there are so many complex factors. every company does it differently. we talk about the r&d costs. probably heard about some of the legislation that's floating around in the states. but they look at the patient population. there's some barriers in place at the federal level that keep companies from being able to talk about a product coming to market. there some are barriers about knowing when you'll get fda approval. there are some things we should be looking at the the federal level to help states better understand what's in the pipeline n what's coming. you want some predictability. it's not looking at the r&d that goes into a drug that's going to provide that predetectibleth for you. there are other things states to be focussing on to figure ot what's coming and how to address some of these newer drugs as they come to market. there's a huge compocomponent, insurers are going to cover the drug and what conversations can our companies have with the insurers before the drug gets approved to be launched in the u.s. and there are some barriers in
the way right now that keep those conversations from happening earlier than maybe they should. so there's a lot of discussion that can go around just looking at how drugs are priced. it shouldn't be based on r&d alone because in addition to the one drug that comes to market. you generally start off with about 10,000 compounds. and those compounds get narrowed down and tested and tested and you end up with one drug. it takes 10 to 12 years for that process to happen. the patent starts running at the time the research begins. by the time that drug comes to market, the patent is 10 to 12 years into its lifespan. and i think i'll just end on this one because i have a lot more slides. one of the things you hear about is states inability to negotiate properly. i'll talk about the pharmacy benefit administration. it's another one of those if i said raise your hand. how well do you know what the pharmacy benefit managers do a whole host of hands would go up.
there's a whole supply chain before the patient picks it up at the pharmacy. the negotiations that go on with the pbns. this slide is outdated. today there are three pbms. they van enormous leverage power in negotiating drug prices. the pbms negotiate with pharmacies and insurers and other players but they are the ones that do the negotiating to the initial rebate prices. the hepc experience, gilead is not one of our member companies but it's a good story. they came to market and said we don't want to negotiate. it's a great drug. it's a cure. they don't want to spend a lot of time negotiating th. they knew they had competition on their heels so they opted out of negotiating. their average rebate was 23%. as soon as a competitor went to
market, it went up to 40% and now up past 60%. we're getting it cheaper here in the united states than anywhere else in the world. that's because of the power of negotiations. it's because of of the power of negotiate itions. it's working. it worked in hep c. express scripts and the other pbns said don't cover this drug it will bankrupt the system and now they're saying it's so cheap everybody who needs it should have it. everybody should be covered. i mean, i think cms sent letters covered this hepatitis c drug. the power of innovation is working and i think i'll end on that note. >> thank you. now, patrick, your light going to start on yellow and we will see how that goes. no, i'm just kidding. please join me in welcoming patrick plues from bio.
[ applause ] >> good afternoon. i'm patrick plues, vice president for state government affairs of the biotech organization. i want to build on what tara was talking about in terms of our industries. our organizations are very similar. we do share some membership. bio is the biotechnology arm of the bio farm industry. and we represent agriculture and bio fuels so we feed, fuel and heal the world at bio. we love iowa. we love our bio fuels in iowa. one of the -- one of the differences between bio and pharma, one of the profound differences a lot of the member companies are very small start-up biotechnology companies that depend on a loft the lar r larger -- a lot of the larger biopharmaceutical companies. it's a relatively new science
and biomedicine with the -- started to get its start in the 1970s. in clusters in cambridge, massachusetts, and san francisco t california. building some clusters in new york and pennsylvania and what have you. but our technology -- the medicines that our companies are providing are very complex medicines that manufacturing process is very complex. but more importantly the research and development to bring these products to market is extremely long and extremely expensive. sorry about that. i have an extra slide in here. you know, we should be proud in the u.s., this company is the number one investor in research and development, investment across the world. europe has fallen in place -- it's lost ground to not only the united states, but asia.
the biopharmaceutical industry invests roughly five times more in r&d than the aeronautics and space industry. more than the computer industry. and it's important to note this because these are small companies that are being backed by a whole variety of financing mechanisms. but it's based -- the success of these companies is based on a lot of innovation and a lot of financial investment but also there has to be a reward for that investment. again, you know, to tara's point, we often hear about nih doing most of the research and the biopharmaceutical companies doing -- just for profit. once again we like to dispel that myth. the nih is an important partner to at of our companies to a lot of our companies but think of them building a hypothesis for
the idea. our companies go in, use that basis science and then develop something usable in a patient. but if you look, once again, this is different than tara's number because this also includes some of the small start-up biotech companies that are out there right now in the u.s. once again, roughly 70% of the products in development are first in class around this means these are new technologies that are not only looking at diseases in different ways but also treating diseases that up until now have very little or no treatment options. for things in neurology, cardiovascular disease, hiv and aids. so i'd like to sort of talk a little bit more about what are these small companies like? and who is behind them? these are very -- these are run by very innovative individuals.
they get their funding from venture capitalists, individual investors, a lot of the large pharmaceutical companies out there, as well as patient groups. a lot of our companies receive a lot of their funding from patient groups. these are -- they have one thing in common. they recognize the need for investment and they recognize the investment is very risky. so the rewards should be commensurate with that risk. both financially and the reward of providing a patient population with a new treatment that they have never had before. in the pipeline of companies, the small companies account for roughly 70% of all the clinical pipeline now that's in the industry. and they do a lot of it on their own. but 42% of it's partnered with a lot of the larger companies. the point i'm trying to make here, the innovation is happening at the small company level. and we're working very closely with the larger companies to make sure that innovation gets further developed and these products get out to the people
that need them. and where that innovation is occurring is across the whole spectrum of therapeutic areas. the bulk of the research is happening in the small biotech spaces like in oncology but we're roughly 9% of the research we're nothing is in the rare disease space. these are diseases that impact 2 200,000 people or less and this is a very important s a pektss to remember -- aspect to remember because the return of investment on small patient populations can be a challenge. so a lot of companies have to look to see, you know, how are they going to recoup the r&d investment on a small patient population but a lot of the companies have decided this is the space they want to play in and they're trying to get disease -- they're trying to get treatments to conditions and diseases that for very small populations and that's usually in the biotech space. that's where that slide went.
another point that we'd like to dispel is a lot of people think that with a big, large pharmaceutical company we've got -- we're loaded with cash, we're very big. you know, we're very profitable. that is a very small portion of our industry. roughly 90% of the companies that we represent at bio are not profitable. they don't have a product in the market. they are living day to day with precarious financing that they have got to get. they have to reach certain milestones and research and investment to get that extra dollar. so it's just important when we talk about this industry that there is risk -- there's so much risk associated with bringing a product to market that so many of the companies that we represent in bio is not profitable. it takes a long time to get a product to the market. finally as policymakers, i want to make a very important point that, you know, we hear a lot of rhetoric about the industry that's not -- that's very anti-industry. that rhetoric has consequences.
we have noticed in the beginning of the year that our -- that the biotech segment in the bio pharma world lost $3 billion in market share from the beginning of the year when we started seeing tweets and posts from some presidential candidates about how they want to place price controls on the industry. that's an example of comment being made by policymakers that will have a very tangible and negative impact on the industry and to date, the biotech industry compared to other industry sectors, other industry sectors are starting to climb out of the slump in the market that we had in first quarter and the biotech industry is not there yet. i think there's a fundamental fear among the investment community there may be some policies that are enacted that have a very profound and bad impact on the future growth of
this industry. so i want to leave you with that those point, the policymakers have a profound impact on the success of this business and the u.s. is the heart of the biotech industry right now. so thank you. >> thank you, patrick. and to discuss what medical innovation can mean to one disease and probably one if it hasn't impacted all of us, it has most of us, either a loved one or a friend or someone that we know, and welcome our final speaker, the leader of scientific efforts for the alzheimer's association, director james hendrix. [ applause ] >> so when you heard jimi hendrix was coming to talk, this is not what you expected to see. [ laughter ] so, yeah, i'm with the alzheimer's association. i have a few words about who we are. we're the largest patient advocacy organization focused on alzheimer's disease. we are focused on two main areas, care and support. we're in every state. we provide care and support free
of charge. we have 24/7 hotline. anybody can call at any time. and we always answer the phone. but we also support research. we have over -- there are over 5.3 million americans who have alzheimer's disease today and we expect that to triple by the middle of the century if we do not solve the disease soon. the alzheimer's organization is the largest provider in the world. we're the third most impactful funder of alzheimer's and dementia research in the world behind the u.s. government and the chinese government. according to thompson reuters. we are proud of our research program and we recognize the need for the whole research ecosystem to work effectively. that includes the private sector, pharma and biotech and government, as well as funders like ourselves. so