Former Labor Secretary Tom Perez, a Democrat, stated at his swearing in ceremony that “the Department of Labor, when boiled down to its essence, is the Department of Opportunity” and he is largely correct.
The DOL is responsible for enforcing federal labor laws for everything from occupational safety, to wages & hours, and unemployment insurance. It also handles economic statistics regarding the workforce through the Bureau of Labor Statistics, and helps with worker re-training efforts.
In short, its job is to make sure that Americans who want to work, are able to find jobs and that they are treated fairly and equally both in the process of being hired and employed, and are safe while doing the work. Or to put it another way, its job is to make sure the American workforce is the best that it can be…..a goal which I wholeheartedly applaud and support.
The question we have to keep coming back to though is….how much of what it does can be handled by the states, and/or private sector, particularly when it comes to worker re-training efforts.
What I would like to see at the federal level is a department that primarily advocates and facilitates between the states, municipalities, and the private sector on everything in its mandate. Let them do as much of the heavy lifting as possible, and certainly, if they prove they cannot handle the workload or it would be inefficient to have 50 states doing something that one single federal entity could do, then do the actual work at the federal level.
But either way, like everything else we undertake as a nation….its work and employees need to be fully funded to do the job they are asked to. Beyond that, I want to talk about our overall approach to labor and the workforce, beginning with the minimum wage.
Minimum Wage
Like so much of our society and government today, the minimum wage is a polarizing subject matter. The left wants to increase it, the right says it’s either fine where it’s at or wants to lower it. Both can make convincing sounding arguments for their side.
But here’s the problem. Raising or lowering it doesn’t at the end of the day fix anything.
If I am overweight and eat too much at a meal and loosen my belt, it made me feel temporarily good, but did it fix the underlying problem of my weight and that I ate too much? Playing with the minimum wage amount is like loosening or tightening the notches on the belt. At the end of the day you are just playing with the symptoms or masking the symptoms of the real problem…..poverty, lack of education, and economic opportunity.
Let’s say you make the minimum wage of $7.25 and your supervisor makes $9 an hour. Their supervisor makes $11 an hour. Congress passes legislation to increase the federal minimum wage to $9. What happens next? Your supervisor goes to his boss and says ‘hey, my worker just got a raise because they raised the minimum wage, and I should be making more than him or her, and definitely more than minimum wage…I want a raise!’ So your supervisor gets a raise from $9 to $11 an hour.
But now your supervisor is making the same as his boss. His boss isn’t happy either, and goes to the owner of the company and says ‘hey, since the minimum wage got increased, now my employee is making the same as me, and I need a raise’, and the cycle continues up to the point that the owner winds up charging more for their products/services, the cycle starts over again, and guess who got the smallest raise in the process? Yep, the person making the minimum wage only got a $1.75 increase, and everyone above them got more than that.
Now, to be sure, that cycle described above can take several years to shake out from the time a minimum wage increase happens, but it is only temporary. Just like when I loosened my belt to feel better after that big meal. If I keep it up, pretty soon my belt won’t have any more notches to loosen, and/or my pants won’t fit!
Do you ever notice how older generations complain that back in their day milk cost a quarter or a car cost $2,000, and the younger generations are like “what?!”. One of the ways we get inflation over time is by a) even having a minimum wage and b) continually increasing it.
Make no mistake, the original purpose of the minimum wage back during the Industrial Revolution was important to bring to the forefront the awareness of the issue of abject poverty and people not being able to earn a living wage at their full time jobs. But having a minimum wage is NOT the way to go about doing that in today’s modern economy.
We need to abolish the minimum wage and instead pursue other ideas like a guaranteed minimum income, or a basic income, that would be paid to citizens by the federal government. It would be means tested, and the citizen would have to show where they have been making attempts to find work, or if they are not working that they are actively going back to school for one of the jobs and industries that the economy has a need for. And if they are able to get a job, but it doesn’t pay as much as their guaranteed basic income, then they still would get the difference to bring them up to the basic income level.
This would allow the free market to function better and allow supply and demand to work the way it was intended to. However, it would need to be subject to major auditing to avoid fraud and people just being okay with living off the government.
On a related note, I remember about 10 years ago I took our old tv’s to Goodwill because we had finally upgraded to flat screen tv’s, and got turned away. They said that people don’t want curved screen tv’s anymore, just flat screens. Excuse me? If you are having to go to Goodwill for a television, then you get what you get and you don’t get upset. If you are having to go to Goodwill then you shouldn’t be taking time to watch tv to begin with, and if you want a flat screen so bad, then go work some more and make enough money to buy a flat screen yourself!
The other big component to our workforce and labor that needs to be addressed is all of the jobs that need to be done that Americans just don’t want to do that I touched upon earlier with regard to illegal immigration.
So much is made of manufacturing job loss due to jobs going overseas, when the reality is that total manufacturing output in the US is actually more today than it was in the 1980’s…..we have just automated a lot of the work and taken the worker out of the equation.
A big factor in why companies went down the path of automating work was partially because a machine could do a better or more precise job, but also because it was cheaper and more economical in the long run for the company, but the unspoken part of the equation is that often times companies were having difficulty finding people to do the work.
Even today there are companies that are desperate for workers and willing to train them, but people don’t want the jobs. Everyone in America wants their kid to grow up to be a doctor or a lawyer or accountant and we as a society turn our nose up at blue collar jobs like plumbers and electricians and heating and air conditioning repair.
To borrow from Shakespeare, there are no small jobs, just small-minded workers. This issue, more than any other, is our Achilles heel as a society, to think that there are forms of work that are beneath us. That is why we have millions of illegal immigrants in the country doing work we ourselves do not want to do for a price that we won’t work at.
And guess what….government cannot solve that problem. Government can support and run programs to help re-train workers, but really that should be done by the industries that need the workers, because they can do it best. Government can make sure that the playing field is level and everyone has an equal opportunity to try, but government can’t go out and play the game for us. Government is the referee, not the player.
One last thing I want to touch on with regard to workers and the labor force is how our workforce is impacted by international trade agreements. This really belongs more under the Commerce Dept, but what the hell, it’s my page, and I’m covering it here.
Here again, there is an evolutionary component or learning curve if you will. In the 19th century protectionism was all the rage. Then the 20th century saw the advent of free trade. The 21st century by the time it closes will have been about fair trade.
Make no mistake, America as a whole has benefited greatly from free trade. But we have to acknowledge the simple truth that significant portions of our population were hurt by free trade and their jobs and employers moving overseas or going out of business as a result of it.
The reason for this is because we didn’t insist on “fair” trade. What fair trade means to me is that when we make a trade agreement with another country and agree to no tariffs on products coming from that country and vice versa, that we make sure that any American companies wanting to relocate jobs to that country has to still play by the same rules they have to play by here in terms of wage and hour laws.
Just like how an embassy is technically the soil of a foreign nation, when jobs get moved from one country to another, the rule should be that the jobs are subject to the more generous of the two nation’s labor laws. Otherwise companies will constantly move their operations to the cheapest country they can possibly move them to, even if the workers there are less efficient or less well trained than in a more developed country.
Lastly, with regard to labor and the workforce, while unions were absolutely critical and vital to getting worker protections in place beginning with the Industrial Revolution and helping to rid us of such horrors as child labor and sweat shops, more often than not unions have really outlived their usefulness and are more of a parasite on the industries in which they still exist. I am not advocating that we get rid of unions, but I am saying that if all of the above things I have mentioned in terms of fixing the system and how we do things in America, the need for unions will be even more of a moot point than it is right now. And if for some unforeseen reason in the future the need for unions increases again, then by all means they can and should be started up again, but I think we are reaching the point where we can safely live without unions and not worry about people in those industries not being properly paid or taken care of in terms of benefits.
Perry Waag 