Penny Pritzker, the U.S. secretary of commerce, dropped into Minneapolis earlier this month and spoke in a wood-paneled room in the Minneapolis Club to a collection of Minnesota executives. Pritzker’s father co-founded Hyatt Hotels, and the family is influential in Chicago. She has helped manage several businesses in her life, and she raised money for President Obama’s elections in 2008 and 2012. Obama nominated her as commerce secretary, and she was confirmed by the Senate 97-1 in June 2013. Now she oversees a department that promotes international trade and economic development on American soil, issues patents and tracks economic statistics and the weather. She urged members of the shiny-shoed assembly of about 150 in Minneapolis to ask their U.S. representatives to back the Trans-Pacific Partnership trade pact, pass a budget and push for a longer-term approach to domestic infrastructure spending. She sat for a quick interview right after the speech.
Q: Why must we change the way we fund infrastructure, and can you explain the political realities there?
A: Doesn’t matter the size of your business, you need digital infrastructure in order to communicate and you need physical infrastructure to get your goods to market. We’ve been funding infrastructure in three-month increments. That means a mayor or a governor, they don’t have certainty of funding. They don’t know what projects they can undertake. It takes longer to build things than three months. It takes longer to plan than three months. If I know how much money I’m going to have next summer to fix the roads in Minneapolis, or the bridges, or install new broadband capacity, I can do the planning over the winter. The way we’ve been doing our infrastructure funding makes no sense at all. Let’s compare ourselves with China, where they’re investing at levels we’ve never seen in the world in terms of roads, fast rail. It’s crazy that we’re not able to figure out how to do these things. The rest of the world is doing it, and at some point this is going to catch up with us. If you travel around the world and see the state of our airports vs. world-class airports in Europe, the Middle East, Asia, you realize that our infrastructure’s not keeping up. It’s not just that it’s not state-of-the-art, but it also can’t handle the capacity. We have ports that can’t handle the ships that are being built today.
Q: Do you worry about wage stagnation and income inequality?
A: I worry about it, and the administration worries about it. The reason is that we have a compact in this country that there’s opportunity for everyone, and so it goes back to our choices. In order for wages to grow, we need our economy to be strong, and we need to have strong employment. So it’s all intertwined to me, where doing things to grow our economy I believe will ultimately result in wage growth. But also, we need to help people prepare for those jobs. We have 5.8 million open jobs right now in this country, and that’s the largest its been since the early 2000s. We know we have a shortage in technical fields, we know there’s a shortage in cybersecurity, we know there’s growing needs in advanced manufacturing. We need to offer educational paths, training paths and retraining paths.
Q: What’s your message to those who say a growing economy no longer guarantees rising wages on the bottom end?
A: I don’t buy that. I think it’s basic supply and demand, but we need to make sure that we’ve invested in our workforce. The number one most important thing is investing in our people. Today, it’s not about learning a skill or a trade and then doing that for the rest of your life. You have to be a constant learner. I know that, you know that. Everyone in this room has had to evolve their skill sets. We need to teach our young people to be able to learn so that they’re constant learners. The world is changing, and changing quickly, but that’s not something we can control; it’s something we have to embrace and invest to be prepared for.
Q: With regard to the Trans-Pacific Partnership, some say it’s bad to have free trade with countries that have lower labor standards than the U.S. Is there a risk in allowing some other system, say China’s, to become dominant in Asia?
A: If we don’t set the rules of the road for trade in the 21st century, others are going to do it. And one of the things that we’ve done is try to bring our standards and values to the table in these negotiations so that we are asking our free trade partners to have labor standards that comply with international labor organizations. We’re asking that they comply with fishing and deforestation standards. We’re insisting on intellectual property protections, so that if you’re an innovator or inventor, you know that your ideas are protected. These agreements are profoundly important to America’s economic health long-term, and if we don’t set these standards, others will.
Q: What message do you hear from business leaders on immigration?
A: That we should do immigration reform. There are studies that show the economic benefit of immigration reform. You have it in Minnesota, you have a shortage of skilled labor. You’re down to 4 percent unemployment. Over 50 percent of students in our Ph.D. and master’s programs in the STEM fields are foreign students. Why are we not offering them the opportunity to stay? Why are we encouraging them to leave and go back to their home countries? It doesn’t make sense. It’s not good business.