Trump’s Labor Secretary Could Be the Fight for 15’s Worst Nightmare


(Photo: AP/Jack Plunkett)

CKE Restaurants CEO Andy Puzder speaks at a news conference on Wednesday, August 6, 2014 in Austin, Texas to highlight Carl’s Jr.’s commitment to the state of Texas.

As part of his cockeyed plan to help working Americans, President-elect Donald Trump has promised to roll back most of President Obama’s regulations in his first 100 days in office. Many of those rollbacks will go through the Labor Department, which under Obama has been implementing a slew of pro-worker rules and executive orders. As Trump fills his cabinet with controversial and, in some cases, preposterous figures, worker advocates anxiously await to see whom Trump will tap for the labor secretary post.

Perhaps the worst-case scenario for low-wage workers would be Andy Puzder, the millionaire CEO of CKE Restaurants, the parent company of the fast-food burger chains Carl’s Jr. and Hardee’s, and a harsh conservative critic of Obama. In his frequent op-ed and cable news commentaries, Puzder has championed every aspect of right-wing trickle-down economics. Rolling back taxation and regulation for the rich and corporations will lift the economy, he’s argued, as will getting rid of all those minimum-wage hikes.

Last year, the fast-food CEO made more in one day ($17,192) than one of his full-time minimum wage workers would make in a year ($15,130), according to TalkPoverty. Yet Puzder opposes any increase to the minimum wage, believes that workers are kept in poverty because of government assistance programs, and thinks expanding access to overtime pay would diminish the prestige of entry-level management jobs.

Last weekend, Puzder met with Trump, reportedly discussing regulations, labor reforms, small business loans, and international trade. After the meeting, Puzder said he would accept any role offered to him. He told a Fox Business news anchor a couple days before the election that serving in a Trump administration would be “the most fun you could have with your clothes on.”

Puzder is reportedly on a labor secretary shortlist that also includes Victoria Lipnic, who, as a commissioner on the Equal Employment and Opportunities Commission and former assistant labor secretary under George W. Bush, represents a more traditional pick. Many on the right, however, think Puzder’s experience steering a troubled fast-food company back to profitability would bring a much-needed business perspective to the department. After Trump won the GOP nomination, Puzder became a major campaign fundraiser and has served as an economic advisor, counseling Trump on how to spur job creation from the top down. He was also the chairman of the economic policy subcommittee for the GOP platform.

“I think basically everything this administration has done has been anti-business,” Puzder said of Obama’s presidency in a Fox News interview in 2014. Obama’s initiatives, he continued, created an “almost unnavigable regulatory maze.”

 

IF TRUMP TAPS HIM FOR LABOR SECRETARY, it would give the regulation-averse corporate lobby yet another fierce ally in Trump’s White House. Puzder is a member of the Job Creators Network, a group of CEOs that promotes a conservative business agenda and has ties to anti-union astroturf operative Richard Berman. He co-authored a book entitled Job Creation: How It Really Works and Why Government Doesn’t Understand It, with a foreword written by supply-side economics guru Arthur Laffer.

As the Fight for 15 has called on policymakers and CEOs to increase pay for low-wage workers, Puzder has become the tribune of low-wage employers, arguing that any increase to the minimum wage will kill jobs. “I think you’ll see a lot of restaurants closing. I don’t think that restaurants can operate profitably if they’re paying a $15 minimum wage. So I think you would see a devastating impact to the country,” Puzder said in the 2014 Fox News interview, before such cities as Seattle, San Francisco, Los Angeles, not to mention the states of California and New York, passed $15 minimum wage laws.

Puzder’s predictions have not been borne out. Researchers in Seattle, the first city to begin increasing its minimum wage toward $15 an hour, have found that the wage hikes have thus far helped low-wage workers, and despite fear-mongering, have not led to “significant increases in business failure rates.”  

While fast-food workers across the country are participating in what is likely to be the largest Fight for 15 protest ever Tuesday, Puzder has said they ought to be demonstrating against wage increases. “If your concern is creating entry-level jobs for young Americans, then a $15 minimum wage is something you should be protesting against,” Puzder told Fox Business. “If you’re objective is to bolster and support the unions, and you’re not all that concerned about whether young people will have entry-level jobs, then you should be protesting in favor of a $15 minimum wage. I think most people are concerned about young people in this country and fewer people are concerned about Big Labor.”

“Puzder as labor secretary is like putting Bernie Madoff in charge of the treasury,” Kendall Fells, organizing director for the Fight for 15, told the Prospect in an interview. “Does it really make America great again if it pushes more low-wage workers into poverty?”

The head of a fast-food company with many franchisees and a member of the International Franchise Association’s board of directors, Puzder has vehemently opposed the National Labor Relation Board’s recent joint-employer standard that could put corporations on the hook for franchisees’ wage and hour violations. The SEIU-backed Fight for 15 also sees the joint-employer standard as a key to forcing companies like McDonald’s to recognize unions.

 

PUZDER PEDDLES THE MISCONCEPTION that minimum-wage jobs are largely held by young people just entering the job market, and that increasing the minimum wage would price out these young workers and exacerbate youth unemployment levels. The reality is that the vast majority of minimum-wage workers are not teenagers; in fact, the average worker is 35 years old. More than one-quarter have children and the average minimum-wage worker earns half their family’s total income, according to the Economic Policy Institute.

Furthermore, Puzder has himself invested in automating fast-food jobs in his company, citing the crippling cost of government regulations like the minimum wage and Obamacare, along with other cumbersome costs entailed in paying human beings. Apparently unlike humans, the machines are “always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case,” he told Business Insider.

Low wages in the fast-food industry force many workers to rely on government assistance programs like food stamps and Medicaid. In a 2015 op-ed for The Hill entitled “More Work, Less Welfare,” Puzder declared “these programs have the unintended consequence of discouraging work rather than encouraging independence, self-reliance, and pride.” He alleged that his workers were turning down promotions to shift manager positions or asking for fewer hours because they’re afraid they’ll lose their government benefits, a right-wing mythology called the “welfare cliff” that is based in a fundamental misunderstanding of poverty programs. Puzder does not mention that the main reason why his workers must rely on government assistance is that companies like his pay poverty wages and limit access to full-time hours.

As a solution, Puzder advocates for expanding the Earned Income Tax Credit (EITC), a policy that bolsters income for the working poor with federal dollars, getting employers off the hook for paying poverty-level wages. “It’s a form of corporate welfare. A full-time worker should not need the EITC,” says Judy Conti, federal advocacy coordinator for the worker advocacy group National Employment Law Project. “For private sector employers who claim to be conservative to say that the answer is a federal subsidy for low-wage work that costs taxpayers’ money [rather than companies paying more] is pretty shocking and pretty transparently hypocritical.”

Puzder has also attacked Obama’s overtime rule—which was dealt a big blow last week when put on hold by a federal judge—that doubles the salary threshold for overtime exemption to $47,476. The Obama rule would enable managers who made more than the current threshold of $23,660 but less than the revised figure to access overtime pay for the additional hours they’re compelled to work. Puzder contends that these managers feel “a sense of ownership” and “prestige” and that giving them access to overtime pay would turn them into “glorified crew members.” The end result, he says, will be reduced hours, salaries, and bonuses.

“For most businesses it will be just another added regulatory cost they must look to offset. For their employees, it will be another barrier to the middle class rather than a springboard,” Puzder wrote in an op-ed for Forbes. “One can only wonder when the advocates of progressive economics will realize that, despite their best efforts, you cannot regulate your way to economic prosperity.”

Ross Eisenbrey, the vice president of the Economic Policy Institute, who came up with the idea to raise overtime threshold, says that Puzder’s argument is bunk: Companies have absorbed higher overtime pay in the past without going out of business. “There’s no law of economics that says Puzder couldn’t raise the price of the sandwiches he sells by a nickel or two to pay for his employees’ overtime,” Eisenbrey wrote in 2014. “After all, his competitors will all be subject to the same rules. And, he could take it out of his pay, and the pay of his top executives.”

 

PERHAPS TRUMP’S CONSIDERATION OF PUZDER shouldn’t be surprising. The president-elect loves eating fast food and Puzder shares Trump’s dislike of political correctness, especially when it comes to his company’s TV ads that feature scantily clad models eating 1,000-calorie-plus burgers to attract what he says are “the hungry young guy” demographic.

“I like our ads. I like beautiful women eating burgers in bikinis. I think it’s very American,” Puzder told Entrepreneur. “I used to hear, brands take on the personality of the CEO. And I rarely thought that was true, but I think this one, in this case, it kind of did take on my personality.”

A Labor Secretary Puzder would be a 180-degree shift from the current labor secretary, Tom Perez, who has not been shy about using his bully pulpit to highlight the plight of the country’s low-wage workers. Perez has also lobbied states and cities to pass higher minimum wages and mandate paid sick and family leave, and he’s continually emphasized the importance of unions and collective bargaining.

“To say that it would be night and day may well be [the] understatement of century,” Conti says. “Perez gets up every day and goes to work trying to make lives better for those who are struggling. Puzder will get up every day and try to make life better for millionaires and billionaires who are already doing fine, perhaps at the expense of those who are struggling.” 



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