Finally: A Job Creator as Labor Secretary
While I appreciate all the concern about Donald Trump’s labor secretary pick, Andrew Puzder, due to his tussles about the minimum wage and the overtime provision, similar to my post about Dr. Ben Carson, I ask, Who is more qualified to lead the labor secretary position – someone who has no job creation experience and is a political appointment or someone who has actually hired workers?
The position of labor secretary is a cabinet position that oversees the overall health and welfare of the American workforce including union scuffles, labor laws, and compliance. But this position, not unlike HUD, should be more than just a political hack appointment for theorists who are overeducated and see things as they should be rather than as they are. If you’ve never created a single private sector job, how do you know about what the business owner goes through during the process of trying to turn a profit and keep the business alive? Without the business, there is no job; the job is a fundamental when it comes to labor. No business … no job. Previously, commerce and labor were together, until the 1900s. There have been moves to re-combine the departments, since they are so interconnected: What is good for commerce is often good for labor; there is no labor without commerce no matter what the socialists think. A quick gander over the previous labor secretaries shows, again, not unlike HUD, a slew of political hacks. The last two by President Obama don’t have any experience at job creation and limited experience working in the private sector.
Thomas Perez was a civil rights attorney, active in the Democratic Party – i.e., a hack. While highly educated, he appears to have coasted through his entire post-college adult life from political appointment to political appointment. He did have part-time jobs while putting himself through school but he doesn’t appear to have any private sector job creation experience at all.
Before Perez, it was Hilda Solis. Solis was a political science major in college and she also appears to have surfed from political appointment to political appointment. She did work in the Carter and Reagan administrations but later quit. She was also a Representative to Congress for eight years. Solis did work part-time jobs to put herself through school and her husband owns an auto body repair shop. So, she knows a bit about business taxes and private sector labor there but she doesn’t appear to have any private sector job creation experience at all.
Puzder appears to have been a hippy dippy in the late 1960s, working in sales at a guitar studio, and playing in rock bands before going to law school. He then became conservative during the Reagan revolution and worked as the legal representative for the CKE Restaurant chain. He helped pull the chain out of bankruptcy and grow it through acquisitions and franchises while teetering on bankruptcy during the decline, not unlike Trump. He was named CEO in 2000 and turned the company’s finances around. Six years ago, the company was acquired by a private equity firm and it now has more than 3,700 restaurants in 40 countries generating $1.4 billion in revenue while employing more than 75,000 people in America.
Puzder did come under fire for racy advertising of women in bikinis eating hamburgers. Personally, I wouldn’t have done that or I would have also included hunks in Speedos eating hamburgers, just to be fair. But that’s no reason for him not to be labor secretary.
Fighting over the minimum wage is more complicated than it seems. While there are only 2.99 million minimum wage or below minimum wage workers in the United States, per the Bureau of Labor Statistics, and half of them are under 24 (meaning teenagers and probably not heads of households), the other 1.5 million people are older and rely on those jobs to feed themselves and their families. Many of them earn tips, too, so their wages are supplemented. Do we upend the entire economic system for less than 1 percent of the workforce while not even discussing all the ripple effects from higher consumer costs, to higher taxpayer costs, to government sector unions that all get automatic raises for doing nothing more than advocating for a higher minimum wage for those less than 1 percent? No, we don’t. When all the city, county, and state employees get bumped up to $15 an hour, all the employees currently at $15 an hour or more will all want more money, too, leading to higher costs all over the place.
Sidebar: I’ve already done some of the research into this and a $15 minimum actually raises property taxes by about 2 percent annually, permanently for a city like Concord while actually generating no economic benefit at all. The action of raising the minimum wage to $15 just transfers money from one income sector to the other, from one economic benefit sector to another. While the part-time leaf raker at the Beaver Meadow Golf Course that currently earns $8 during the summer or a full-time teaching assistant at the Christa McAuliffe Elementary School earning $12 an hour get bumped up property taxpayers and renters see higher costs to pay for those higher wages. Since everyone in Concord is using their money for some economic benefit – working class folks are spending all their money; richer folks are saving and investing money – all higher costs just shifts money around. Yes, the leaf raker earns a higher wage. But everyone else has less money to pay that leaf raker a higher wage. This doesn’t even get into the consumer costs. There is no reciprocal benefit to everyone making $15 or more currently who won’t see wages rise but will see higher taxes and consumer costs. How is that fair? It’s not; again, it’s just a transfer of money from one sector to the other with the perception that there is benefit even when a lot of people who are paying higher costs need that money for other things and are generating economic activity now by spending or saving that money – less economic activity when it is taken and transferred to another sector. In other words, raising the minimum wage truly generates no new economic benefit.
No one believes, however, that wages shouldn’t – and must – rise (as noted in the basic income arguments and other things). This is a given; we need more shifts in classes to the positive. It’s all about how you go about doing this. I agree with Puzder when it comes to the overtime rule change, for all the reasons I noted here in May.
Back to the main point. Let’s compare: A civil rights attorney with no job creation experience; a former Congresswoman with no job creation experience; or a lawyer who helps save a company and builds it up to 3,700 outlets and franchises with over a billion dollar in revenue with the help of tens of thousands of workers. It’s a clear choice: Let’s try someone leading the labor department who has actually created jobs.
Photo courtesy of the L.A. Times.