In 2014, Heidi Shierholz left the Economic Policy Institute, a liberal think tank, for an appointment as the United States Department of Labor's chief economist. Obama's second-term Labor Department, helmed by Tom Perez, was leading the way on the president's economic agenda. It pushed through some of the strongest rules and regulations for workers in many decades, including the new rule expanding eligibility for overtime, the fiduciary conflict-of-interest rule, and executive orders boosting minimum pay and requiring paid sick leave policies for federal contract workers.
A Clinton presidency would have ensured further advancement of progressive policy through the Labor Department. With the unexpected election of Donald Trump, however, labor advocates have spent the past couple months rushing to come to terms with the new landscape. Shierholz is leaving her DOL post and coming back to the Economic Policy Institute to head its new Perkins Project, named for Franklin Roosevelt's labor secretary, Frances Perkins, which will "track the Trump administration's wage, labor, and employment policies, and hold them accountable for their record."
The Prospect sat down with Shierholz to reflect on the Obama administration and discuss the prospects of labor law enforcement under a Trump administration, and the potential consequences of having fast-food CEO Andrew Puzder, who oversees a restaurant franchise chain that has incurred a long list of labor law violations and discrimination lawsuits, as Trump's secretary of labor.
A condensed and edited version of that interview follows:
The American Prospect: Looking back on the Obama administration, how would you characterize his record on labor and employment? And also that of Tom Perez, who led the Labor Department through Obama's second term?
Heidi Shierholz: I characterize the Obama legacy vis-à-vis labor in three ways: First, through rules and regulations-it wasn't a super radical agenda but it pushed as far as it could within the bounds of what was doable. Second, there was a big push for strategic enforcement-using federal dollars more efficiently and just being smarter about effective enforcement. And then there was the bully pulpit, which Perez used to continually push on increasing the minimum wage, getting paid sick and family leave. Even though it was very clear that wasn't going to happen at the federal level, it helped states and localities to actually move in that direction.
Obama oversaw job growth, a huge decline in the unemployment rate, and modest upticks in median wages. But what do you see as the main challenges that persisted through his presidency and still remain a challenge going into the Trump administration?
There's this big remaining unfinished business that wasn't just about the Great Recession-it preceded the Great Recession by three and a half decades-which is wage stagnation and rising inequality. There was a little bit of progress on that over the last couple years but there's still a huge distance to go on that. We do have an unemployment rate of 4.7 percent (and there is still progress we can make), but we are not seeing wage growth that's fast enough for moderate-income workers to really dig out of that inequality. So that's what we still need to do.
A common critique of the Obama economic recovery is that the labor force participation rate has continued to decline (currently is at just under 63 percent) throughout the economic recovery. What do you say to that?
It's unambiguously true. You can just look at the trends and see that's actually happening. I think there's still something of a mystery as to what's going on. It is one of the reasons why when you hear people talk about how we're nearing full employment … if you look at the labor force participation rate-even just among prime-age workers-you see a big drop. That is one of the pieces of information that just makes me say, "We are not at full employment yet."
Some of the drop in labor force participation was expected-we knew baby boomers would hit retirement age. But the big drop among prime-age workers-that was unforeseen.
In Trump's inaugural address he painted a bleak picture of "American carnage." What was your impression of that as an articulation of Trump's economic vision?
There is something real that he tapped into-the fact that right now we have an unemployment rate that's quite low but it doesn't feel so great to people who have stagnant wages.
But it's not universal carnage and bleakness-that's how it was eight years ago and we've come a long way since then.
The thing that's disturbing about the way he talked about it is I don't see anything there that's really going to address that issue. It sounds like he wants to keep wealth from leaving the country, but it's not about getting it into the hands of workers suffering from wage inequality; it's back into the hands of U.S. corporations. There's nothing in there that speaks to how you really address this four-decade-long wage stagnation.
What is the mission of this new campaign, the Perkins Project? What will be your approach to monitoring the Trump administration?
A good way to think about is as a watchdog. Trump strongly campaigned on wanting to defend workers, and so it's going to be important to assess that record, really documenting how workers will be affected by policies that go into place, and where is the difference, or not, between the administration's rhetoric and what's actually happening on the ground.
Can you outline the scope of focus?
It will largely be [focused on] employment-related agencies-so DOL will be a key one, but also the National Labor Relations Board and the Equal Employment Opportunity Commission. And also any kind of legislation, too; it won't be purely [the executive branch].
What's your sense of how the Trump administration will approach labor law enforcement-and just how stark of a departure will it be from Obama?
The changes that were made during Obama toward strategic enforcement-that's just good government. It's using funds wisely, so somebody who cares about the efficiency of government, which Trump said that he does, should not want to undo any of that work. So [at the Labor Department's] Wage & Hour division, they've been using data to figure out where there's a high likelihood of violations and then going there for investigations. That makes excellent sense, it's just clearly good government.
The issue is that one of the industries that rises to the top [of the violations list] is the restaurant industry. And if we have a person who is a restaurateur at the head of the DOL, [Trump has nominated fast-food magnate Andy Puzder as his labor secretary] whose restaurants who have been found to be in violation, it will be interesting to see how it would be justified to back off the strategic enforcement. That will be a key thing to keep tabs on.
Do you think Puzder, based on his ideology and his stated beliefs, would present a sort of existential crisis for the Department of Labor?
It's a fox-henhouse situation. There's a committed career staff that will continue with the work of DOL and they've seen different administrations. So they're sort of a bulwark against the existential crisis. But you still have someone being nominated who has this unbelievable record of violating the very regulations that he's going to be charged to enforce.
Trump has made a big deal about the monthly jobs numbers, calling them "fake" or "phony." Is there a real risk of him trying to influence or undermine the integrity of the Bureau of Labor Statistics' (BLS) job numbers? And is there a way he could actually do that?
The BLS and our other government statistical agencies are just incredibly transparent and have huge safeguards in place to ensure the high quality of their work. If someone tried to manipulate those numbers, there would immediately be thousands of whistleblowers. There's such a collection of, and I say this in the most complimentary way, data nerds that populate our statistical agencies that the minute anybody tried to introduce politics into the actual production of the numbers, every journalist across the land would be called immediately. I have very little concern about anybody being able to politically influence the actual production of the numbers without having a total firestorm.
So would the way Trump may try to undermine the numbers is to use the bully pulpit to go on a Twitter rampage about the BLS numbers in an effort to undermine public faith in those reports?
Yes. That's the real threat. In my view the numbers themselves are safe because there's this firewall of people who would blow the whistle. But you can undermine people's trust in those numbers because not everyone knows [about the BLS's methodology].
As someone who was on the frontlines of labor policy in the Obama administration, how are you thinking about this huge whiplash heading into the Trump presidency? What's your state of mind moving forward?
That could have been answered differently on each day since he was elected, when we started to really see what that whiplash would look like. But now I feel that we will shine a light on this, we will push back. This is not something that will happen without people knowing about it. The actions that will negatively affect workers, we will make sure that they cannot happen without people knowing about it and without knowing the consequences, and without a concerted effort from keeping them from happening.
My state of mind is I'm ready to be out there and hold this administration accountable.
