OpenMarket: Labor and Employment

Twenty four states rang in 2020 with minimum wage increases. Most of the increases are modest, so the tradeoffs will be, too. But there was curiously little discussion of those tradeoffs. The more than 50 increases that have just taken effect are all at the state and local level, but minimum wages will almost certainly be a significant campaign issue in 2020. Regardless of November’s election results, next year’s incoming Congress will likely attempt another increase next year.

The Competitive Enterprise Institute had a busy year in the labor and employment space. Much of the work focused on expanding worker freedom, ending wasteful subsidies, and promoting individuals’ right to earn a living. Below are selected examples of CEI’s work to promote employee freedom of choice and flexible work arrangements.

A major holdover case from the Obama-era National Labor Relations Board (NLRB), which acted as the litigation arm of organized labor, is finally resolved. On December 12, the NLRB approved a settlement with McDonald’s USA LLC. The settlement puts to bed a case brought by the Fight for $15 that alleged McDonald’s was a “joint employer” with a number of franchisees and was responsible for the separate business’s labor violations.

As taxpayers, we trust our locally elected officials to act as fiduciaries of our hard-earned dollars. However, it is well documented that the government frequently fritters away tax dollars on activity that serves no public purpose.

Chairman John Ring delivered the latest salvo in response to the manufactured “scandal” at the National Labor Relations Board (NLRB). Democrats, with help from the NLRB inspector general, have improperly accused members of the board of bogus conflicts of interest that have impeded the policymaking ability of the agency. These attacks are political, and have no factual basis.

On September 30th, Eugene Scalia was sworn in as the 28th Secretary of Labor. Last week, the Senate confirmed Scalia on a 53-44 vote. With about 15 months left in President Trump’s term, here are few actions the Labor Department can take to increase union financial transparency, cut down on federal construction costs, and study the impact of wage and hour laws.

Congress nearly increased the federal minimum wage from $7.25 to $15 per hour this year. Though the Raise the Wage Act is unlikely to pass the Senate, 29 states and numerous local governments have passed their own increases. Moreover, the next session of Congress will almost certainly reintroduce the bill. This issue will be alive for a long time to come. Though some workers would benefit from a higher minimum wage, this would only be at other workers’ expense. As I argue in a new paper, minimum wages have tradeoffs.

Late Tuesday evening, the California legislature passed controversial legislation that would codify a state Supreme Court decision, which adopted a flawed test that effectively prohibits companies from doing business with independent contractors and restricts individuals’ ability to earn a living as an independent contractor.

By deferring compensation, in the form of pensions, and pushing those costs well into the future, politicians can gain favor with government employee unions, which are major political players and donors, while passing on the pain of paying for said compensation on to their successors.

Today, the Competitive Enterprise Institute (CEI) released a report that analyzes the Protecting the Right to Organize (PRO) Act of 2019 (H.R. 2474), which the House of Representatives is expected to vote on in September. The bill overhauls labor relations law and tilts the playing field in favor of unions without regard to the negative consequences on workers, employers, and the economy.