The Future of the Department of Labor Under Trump

The Trump administration has pledged to help “forgotten” Americans, especially those in the working class. The president has targeted regulations on coal, hoping to resuscitate the industry, and tried to convince manufacturers to locate in the United States, which could create more jobs.

But most workers aren’t in the coal or manufacturing industries, so another way to help the “forgotten” Americans may be to focus on improving the working lives of the more than 120 million other Americans who clock in to a job every day. One place to start that project is the Department of Labor, where 17,000 or so staffers and appointees administer and enforce laws protecting America’s workers.

The Department of Labor weighed in on a number of controversial issues during Obama’s time in office. During Obama’s presidency, Labor Secretaries Hilda Solis and Thomas Perez (now the head of the Democratic National Committee) stepped up enforcement and re-prioritized issues like wage-and-hour violations. The Department of Labor cracked down on employers misclassifying workers as independent contractors and worked with Obama to extend overtime eligibility to 4 million Americans.

These weren’t always popular policies. The U.S. Chamber of Commerce, for instance, filed a lawsuit over Obama’s overtime rule, arguing that the administration “went too far” and that the rule would reduce workers’ opportunities for career advancement. It was not the only time business interests objected to labor policies issued by the Obama administration.

One of the changes labor advocates often applaud was the confirmation in 2014 of David Weil—at the time, a professor at Boston University, who wrote the book The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done To Improve It—to head the Labor Department’s Wage and Hour Division, which is instrumental in enforcing workplace overtime and pay laws. Weil was the first head of the division in a decade—previous nominees had been stalled by confirmation battles—and benefited from a Democratic rule change, led by Nevada’s Senator Harry Reid, that required a simple majority, rather than 60 votes, for presidential appointees to be confirmed. Once in office, Weil tried to use the limited resources of the Department of Labor more effectively to find and prosecute companies that were shortchanging their workers on pay.

Now that Obama has left office, Weil is back at Boston University, and I recently talked to him about the Obama administration’s legacy on labor and what he thinks the future holds under Trump. This interview has been edited for clarity and length.

Alana Semuels: Do you think American workers are better off after eight years of Obama?

David Weil: I think we were making headway. Last September, when the Census Bureau released information about median household incomes, for the first time in decades, there were sizable increases in real household incomes. They increased over 5 percent in last year. That was a combination of the ongoing impact of the recovery, and what always happens, which is the tightening of the labor market. But because of a lot of things, including the fissured workplace, tightening labor markets don't do it all. [The Fissured Workplace is the title of Weil’s book and refers to how companies are increasingly outsourcing work, rather than employing full-time workers on their own.]

We were having traction in a lot of the activities in the Labor Department. And you can't overlook the importance of the Affordable Care Act in terms of improving the lives of working people. I do believe we were starting to move the needle in significant ways.

We are talking about problems, like the erosion of labor standards and the erosion of conditions for a lot of working people, that have been going on for decades. Those forces aren’t going away. That’s why it is so important that we remain vigilant in terms of how consistent this administration is at really addressing them in any real way. With these kinds of policies, it’s very dangerous to walk away from them. These things can slip back.

Semuels: What specifically changed in the Department of Labor under Obama?

Weil: One of the things Obama did from the beginning was to fight hard to get resources for his enforcement agencies. He came in and the number of investigators in the Wage and Hour Division was barely 700 nationally—and it is responsible for 7.3 million workplaces. He fought hard to get it up to 1,000, and he did that in the first two years, when there was Democratic control of the House and Senate.

In the second term of the Obama Administration, the president was very focused on and incredibly supportive of the Labor Department and its initiatives. Tom Perez had an enormous amount of respect within the White House, and so he was able to move the agenda. We broke a lot of ground.

We did 18,000 different outreach efforts, to push out the message of compliance, to make it clear that we’re serious, that we’re going to collect back wages. If you’re an egregious violator, we will use the full force of the law to make sure you don’t do it again. We worked hand-in-glove with the solicitor’s department, did high-profile investigations against the worst offenders. We worked with the New York Attorney General’s Office to put a franchisor who had been in wide-scale violation of the law—cooking payroll taxes—in prison.

One of the biggest problems we tried to address—we were successful in at least moving the needle on this—is helping workers understand they have these rights, that retaliation is not acceptable, and that using these rights is really fundamental to not only protecting themselves, but their fellow workers.

Semuels: Many Republicans, including those in the current administration, say that workers will do better if the government meddles less with business. What’s your take on that?

Weil: There are decades of evidence and some very recent studies in a lot of different areas that show that labor markets are not textbook, freely operating, perfectly competitive mechanisms for resource allocation. There’s an incredibly important role for government to play. It’s not exclusive; it’s not like government can solve all the problems of the labor market. And I don’t believe businesses are evil—businesses create a lot of value and create opportunity for workers. But business behavior has to be bounded by certain social norms about what we regard as acceptable behavior.

If you push up the bar about what is acceptable compensation, for example, businesses will figure out a way to do that and still be economically healthy. That’s the productive interaction between public goals and allowing private operations to work in those goals.

That was a very fundamental notion of a lot of President Obama’s policies. It wasn’t that the government is going to solve all the problems, but that the government has a very critical role to play in different parts of the economy, and certainly in the area of the labor market. It sometimes amazes me that we can get back to this silly notion that markets will solve everything, when we have abundant evidence over decades that that just that ain’t so.

Semuels: You implemented a policy in the Wage and Hour Division that’s called “strategic enforcement.” Can you explain what it is and how it affected workers?

Weil: If you create workplaces where people see on a day-to-day basis that they're not being paid for hours worked, that the most fundamental standards like minimum wage or paid overtime are being violated, it really undermines the rest of the labor standards. People get the message.

Yet Wage and Hour, like a lot of enforcement agencies, used to spend most of its resources on following up on complaints that came in—a very reactive mode. One of the fundamental notions we really changed in the agency was saying that if you don’t move to a much more proactive stance, if you don’t figure out where the problems are, and allocate your enforcement tools towards those, and then if you don’t use the full complement of enforcement tools the law gives you, which we were not historically, it’s going to be virtually impossible to have any impact on the prevalence of compliance.

The whole notion of strategic enforcement is that you have to be much more proactive in focusing enforcement activity on certain industries and employers. It’s relatively easy to articulate, but organizationally, changing the way an agency works is a difficult thing to do. But I think we were able to really move in that direction. Historically, only about 25 percent of investigations were proactive, directed investigations. By the end of my time there, 50 percent of investigations were directed.

Semuels: Do you think this strategy or other initiatives from the Obama Department of Labor will still be used in the new administration?

Weil: I was gravely worried about that with the first nominee [Andrew Puzder], who was, on the record, hostile to the basic mission of the Department of Labor. He was outspokenly against minimum wage and overtime, the basic notions of them, and those two particular programs reside in the Wage and Hour division. His own pattern of behavior with his company—all of that made me very, very, deeply concerned about what would happen had he been confirmed, so I was certainly delighted for a variety of reasons when he withdrew.

I remain concerned. I think we have to see what this next chapter brings. Alexander Acosta has given his life to public service, and the vetting will allow us to see what his policies look like, and what his priorities are.

Semuels: What are some of the ways the Department of Labor could change under President Trump?

Weil: We have to see what the Trump budget looks like—what will they be allocating to the whole range of programs in the Department of Labor? What is the message that's going to be sent about how serious they are about that?

It is not clear yet what this administration really means to do for the forgotten worker that Trump as a candidate talked endlessly about. Certainly the signal they sent for the first nominee was: Not much.

It’s a new chapter, though. Lets see what other signals come out of the White House—what are they doing with the overtime rule, for example? That’s going to be an incredible measure of how serious they are. If you want to say what rules really affect the kind of workers that people talk a lot about as explanations for why Trump won, I would say a lot of those workers are the kind who are going to be helped by the overtime rule we put in place. You look at a number of other rules we put into place, and the proof is in how robustly they enforce those rules.

And this is a whole separate discussion, but the overlay of immigration policies on what we need to be doing in the labor market is deeply troubling. There’s a lot of writing on the wall that deeply, deeply concerns me.

Semuels: Federal agencies are headed by political appointees but comprised of thousands of career staffers who do their jobs regardless of who is president. How much of a difference can a new appointee make?

Weil: In most agencies, the vast majority of people are career people, who have given their life to public service. They provide a block against a new group of people saying, “We don’t want to enforce those laws.” The career-service people are there to say, “These are the laws of the land, and this is how we enforce them.” It’s incredibly important to recognize that group of people as the bedrock of what makes a lot of our basic laws tick.

It’s so important to remember that all of these things are based on the rule of law, on the establishment of laws that we’ve agreed to as a society. Those don’t go away. There is certainly an impact that the political leadership can have on the mix of tools that are used, how the bully pulpit is used, how connecting the dots is done, telling the story of what you're trying to do. All of that has big impact. But it’s not the whole story.