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Friday, December 9, 2016

A Preposterous Attack on Andrew Puzder

Clutch those pearls hard, Times writers. Some modicum of worker freedom might stand a chance.

I have no idea whether the restaurateur Andrew Puzder will be a good Labor Secretary. I will say that it is a huge but much-welcome departure from tradition that the Labor Secretary possess actual knowledge and experience in hiring workers and dealing with the biggest obstacle to job growth today, which is the agency he has been tapped to head. 

Clutch those pearls hard, Times writers. Some modicum of worker freedom might stand a chance.But if Puzder is not successful, it will not because of the reasons the New York Times cites in a stunningly bad editorial. The article contains so much misinformation that I would like to do what I’ve never done before: deploy the literary device called Fisking, which is going through the article line by line and exposing it for what it is.

For all the predictable reasons, the Times thinks that a vast regulatory apparatus in Washington, imposed on every business and worker in the country, is just an awesome way to help the American worker.

The truth is very much otherwise. These very regulations are the cause of mass suffering, sizeable unemployment, terrible job lock, and slow job and business growth. When I think about human rights and how their violation imposes such a high social cost, labor regulations come first to mind.

So let’s investigate what the Times has to say:

Working in fast-food is no picnic.

Hold on right there. You know what’s worse than working in fast-food? Not working at all, which is precisely what the minimum wage does: locks people out of the labor market. It was invented and enforced to do precisely that.  

Maybe it has just been way too long since the writers for the New York Times struggled for work, but here’s the truth: getting an early job in fast food is liberation. It’s exciting, action-packed, educational, and you actually make money! I loved every fast food job I ever had. It was more than a picnic. It was the greatest thing to happen to me up to that point in my life. Tens of millions say the same.

The industry is infamous for grindingly low pay and labor law violations. Yet Andrew Puzder, the chief executive of the company that operates Carl’s Jr. and Hardee’s, has been chosen by President-elect Donald Trump as labor secretary. Here is the record at those restaurants. When the Obama Labor Department looked at thousands of complaints involving fast-food workers, it found labor law violations in 60 percent of the investigations at Carl’s Jr. and Hardee’s, usually for failure to pay the minimum wage or time and a half for overtime.

Here’s grindingly low pay for you: $0. If you know anything about the egregious enforcement of this apparatus of law, you know that no growing, dynamic company can avoid pushing the limits of these regulations. If these “labor law violations” mean giving people work, without having flawlessly complied with a million unknowable regulations pushed out over the last hundred years from D.C., good for Hardees and Carl’s Jr. 

In fact, I suspect that the benefit of compliance is a myth in general. If anything, companies are far too compliant with regulations that actually harm workers. The “time-and-a-half rule” is an example: as a worker, I want to be able to work and make money as much as someone is willing to pay me, and do so without mandates from Washington. I don’t want the boss to tell me “go home now” because some bureaucrat is standing over his shoulder.

The Times gives the impression, once again, that people who are working are being exploited. It’s the regulatory apparatus that is the exploitative agency, because it works to keep people out of work and make it impossible for companies to grow.

The central problem for workers today is persistently low pay, even at profitable companies with highly paid executives.

High pay is better than low pay. Absolutely. Redistributing the salaries of executive to workers would raise wages for about 10 minutes. Then what?

Mr. Puzder, however, has been adamantly opposed to a meaningful increase in the federal minimum wage, which is $7.25 an hour. Mr. Trump has said he could stomach an increase to $10, which is still abysmal. Ideally, a labor secretary, who is supposed to have a deeper understanding of this issue, would push for much more. But Mr. Puzder has said that a big raise would mean fewer jobs for workers starting out. Even if that was true, and the evidence suggests otherwise, there are millions more who would benefit from raising the minimum wage.

Trump should be criticized for calling for such an increase. Indeed, I’ve done that (no one could accuse me of being a Trump apologist.) The minimum wage should be lowered. In fact, as the Times editorial page pointed out in January 14, 1987, “The right minimum wage is $0.” Let’s quote the Times from a smarter era: “But there’s a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market.” In the twenty-nine years since that editorial, there seems to have been a brain drain on the editorial team.

Progressives need to deal with this: the minimum wage began as a eugenic device designed to exterminate and disenfranchise population groups. The idea was to raise the wage floor very high so that “undesirables” would stay in the basement and die. And you know what? It has mostly accomplished its intended goal. While we are at it, let’s confront the deeply misogynistic origins of labor regulations too: they were instituted to drive women out of the workforce and back into domestic work.

For a full year, the Times has warned about the rise of white supremacist movements and the rise of misogyny. I worry about these too. Now we have a pick for Labor Secretary who wants to do something about laws rooted in white supremacy and misogyny and the Times flips out.

As for the claim that millions will benefit, maybe so, but they benefit at the expense of people who cannot get work. Those people are now priced out of the market, a result which labor unions love. It’s taking from some to give to others – the very business of government.  

Mr. Puzder has also been a scathing critic of efforts by the Obama administration to update the rules for overtime-pay eligibility, which have not been fully adjusted for inflation since the mid-1970s. His argument boils down to an assertion that employees prefer a low salary and the “prestige” of a managerial title — even though they would be entitled to overtime if they remained hourly employees. His opposition to the new overtime rules is especially troubling given that it would be his task as labor secretary to defend the rules, which have been challenged in court.

To be a scathing critic of the attempt to raise the eligibility for overtime is to be a rational human being. Companies all over the country have been scrambling to comply, breaking the hearts and shattering the dreams of employees for months in order to comply – until a federal judge mercifully shot down the regs. And did you catch that the Times thinks that “his task” as Labor Secretary is to “defend the rules?” Who says? Maybe the task of the Labor Secretary is to promote job growth, based on some semblance of clear thought. If the job of a cabinet pick is merely to grow the state, we are doomed.

Mr. Puzder has also blamed the Affordable Care Act for causing a “restaurant recession.” There is no evidence that health care reform has harmed job growth, and there is certainly no evidence of a restaurant recession.

That there was a “restaurant recession” after Obamacare makes perfect sense to me. I know of no business owner or manager who hasn’t gone a bit more gray following the ACA. It’s been gruelling. But decide for yourself what you think of Puzder’s article. You can read it here. His evidence fits with everything I know. And I’m hardly alone: ACA might have been the major reason Trump was elected. And yet, even then, even after the Times’s candidate lost, and major insurers are going belly up, and premiums are soaring, these editorialists are still unable to confront reality. As Trump would say, sad!

Mandatory sick leave has been criticized by Mr. Puzder as well. He says it would be an undue burden on businesses. Yet in all other advanced economies, paid sick days, paid parental leave and similar policies are rightly seen as investments in human capital, as necessary as investments in plants and equipment.

If all these mandates are investments in human capital, why do they need to be mandated? Businesses are surely smart enough to know something about investment, surely more than government knows. If these were great programs, they would happen organically, not as top-down mandates. As it is, these impositions only lead to job lock. They might have been instituted to help the worker but the reality is that they have made workers cling to jobs too long and decline the risk of shopping their skills for fear of losing benefits.

My dream is that every law that the Times lauds in this editorial goes away, liberating the American worker to make his or her own deals. You will see employment boom as never before, and business too. It would be glorious. But even that doesn’t go far enough. How about lowering the legal age to work too?

Clutch those pearls hard, Times writers. Some modicum of worker freedom might stand a chance.