Donald Trump’s pick for secretary of labor, Andrew Puzder, is scheduled to undergo confirmation hearings Thursday before the Senate Health, Education, Labor and Pensions Committee. Prior to his nomination, Puzder was the CEO of CKE Restaurants, the parent company of fast-food chains Hardee’s and Carl’s Jr.
Democrats and other critics of Puzder’s nomination have raised concerns about Puzder’s employment of an undocumented housekeeper (a transgression that has disqualified nominees of previous administrations). But for me, the biggest issue is the extent to which he can fulfill the Labor Department’s own stated mission, to be an advocate for labor:
“Our Mission To foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.”
Why does labor need a government agency to look out for its interests? Plenty of evidence shows that negotiations between workers and companies over issues like wages, benefits and working conditions are lopsided. In most cases, employers have much more bargaining power than workers, and they can use that to their advantage when setting wages, hours, working conditions and so on (the technical term for this is “monopsony power”).
In essence, when businesses have a negotiating advantage, they can increase the profits flowing into owners’ pockets by paying workers less than they deserve.
Andy Puzder, CEO of CKE Restaurants and President Donald Trump’s nominee as Labor Secretary, departs the main clubhouse at Trump National Golf Club in Bedminster, New Jersey, last November.
REUTERS
Unions are one way to balance negotiating power, but the number of workers represented by them has fallen considerably in recent decades, leaving workers to rely on government to level the negotiating field. Laws and regulations concerning such things as the minimum wage, safety standards, overtime pay and family leave prevent firms from fully exploiting their bargaining power advantage.
He favored both legal immigration of low-skill workers and being allowed to hire undocumented workers.
He opposed laws that require firms to pay overtime and laws that ensure companies aren’t misclassifying workers as salaried to avoid paying overtime.
CKE Restaurants has reportedly replaced full-time workers with part-timers to avoid paying for health insurance.
He opposed minimum wage laws.
He sent CKE Restaurant lobbyists to Washington to argue against a proposed law that would have made it easier for workers to unionize.
There’s more, but suffice to say what emerges from Puzder’s past behavior is a picture of someone willing to pursue most any policy that will allow employers to pay lower wages or cut costs in other ways, such as reducing health and safety requirements or avoiding paying for worker’s health insurance.
To me, that’s a portrait of a “Secretary of Business Owners” rather than a “Secretary of Labor.” In this time of rising inequality, stagnant wages and increasing economic insecurity due to globalization and technological change, workers need someone to protect their interests, someone willing to work endlessly to improve all aspects of their working lives.
President Trump promised workers that he would stand up for them and bring decent jobs to regions of the country that have struggled in recent years. In my eyes, the nomination of Puzder for labor secretary betrays that promise, and to me, that’s reason enough that he should not be confirmed.
View all articles by Mark Thoma on CBS MoneyWatch»
Mark Thoma is a macroeconomist and time-series econometrician at the University of Oregon. His research focuses on how monetary policy affects the economy, and he has worked on political business cycle models. Mark is currently a fellow at The Century Foundation, and he blogs daily at Economist's View.
Commentary: The problem with Puzder as Labor Secretary
By Mark Thoma
/ MoneyWatch
Donald Trump’s pick for secretary of labor, Andrew Puzder, is scheduled to undergo confirmation hearings Thursday before the Senate Health, Education, Labor and Pensions Committee. Prior to his nomination, Puzder was the CEO of CKE Restaurants, the parent company of fast-food chains Hardee’s and Carl’s Jr.
Democrats and other critics of Puzder’s nomination have raised concerns about Puzder’s employment of an undocumented housekeeper (a transgression that has disqualified nominees of previous administrations). But for me, the biggest issue is the extent to which he can fulfill the Labor Department’s own stated mission, to be an advocate for labor:
Why does labor need a government agency to look out for its interests? Plenty of evidence shows that negotiations between workers and companies over issues like wages, benefits and working conditions are lopsided. In most cases, employers have much more bargaining power than workers, and they can use that to their advantage when setting wages, hours, working conditions and so on (the technical term for this is “monopsony power”).
In essence, when businesses have a negotiating advantage, they can increase the profits flowing into owners’ pockets by paying workers less than they deserve.
Unions are one way to balance negotiating power, but the number of workers represented by them has fallen considerably in recent decades, leaving workers to rely on government to level the negotiating field. Laws and regulations concerning such things as the minimum wage, safety standards, overtime pay and family leave prevent firms from fully exploiting their bargaining power advantage.
Unfortunately, very little in Puzder’s record suggests that he’ll be an advocate for labor -- and much of it shows he’ll likely favor the interests of businesses over the interests of workers. For example, according to this examination by Puzder opponents of his time as the CEO of CKE Restaurants:
There’s more, but suffice to say what emerges from Puzder’s past behavior is a picture of someone willing to pursue most any policy that will allow employers to pay lower wages or cut costs in other ways, such as reducing health and safety requirements or avoiding paying for worker’s health insurance.
To me, that’s a portrait of a “Secretary of Business Owners” rather than a “Secretary of Labor.” In this time of rising inequality, stagnant wages and increasing economic insecurity due to globalization and technological change, workers need someone to protect their interests, someone willing to work endlessly to improve all aspects of their working lives.
President Trump promised workers that he would stand up for them and bring decent jobs to regions of the country that have struggled in recent years. In my eyes, the nomination of Puzder for labor secretary betrays that promise, and to me, that’s reason enough that he should not be confirmed.
In:- Minimum Wage
- Donald Trump
View all articles by Mark Thoma on CBS MoneyWatch»
Mark Thoma is a macroeconomist and time-series econometrician at the University of Oregon. His research focuses on how monetary policy affects the economy, and he has worked on political business cycle models. Mark is currently a fellow at The Century Foundation, and he blogs daily at Economist's View.
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