Welcome!
2017-09-04 07:57:03
News Analysis: Trump Shifts Labor Policy Focus From Worker to Entrepreneur

Even by the standards of the Trump era, one of the more unusual departures from recent Washington practice came in June, in a case before the Supreme Court involving worker rights.

The Trump administration felt so strongly on the issue — that employers can force workers to forfeit their rights to bring class-action lawsuits — that it reversed the government’s position, something that has rarely happened in a pending case.

“What’s pretty unprecedented is that they came to a different conclusion in the Supreme Court case,” said M. Patricia Smith, the solicitor at the Labor Department under President Barack Obama.

(A Justice Department spokesman said that every administration sometimes departs from the position of its predecessors in new Supreme Court cases.)

It is one of a series of actions that have reversed course on rights and protections for workers.

The administration had proposed a 40 percent cut for the government agency that conducts research into workplace hazards, undone Obama-era guidances on enforcement of employment laws and sought to eliminate a roughly $10.5 million program that helps some unions and nonprofit organizations — whose efforts many business and free-market groups consider nettlesome — to educate workers on how to avoid injury and illness.

Championing the American worker was a central theme of Mr. Trump’s election campaign. He made inroads into the traditionally Democratic union vote, and echoed the words of labor leaders on themes like trade, infrastructure and offshoring jobs.

That a Republican administration would nonetheless pursue a business-friendly labor policy is not unexpected. But beyond partisan politics, its record on worker issues reflects a consistent Trump worldview: that entrepreneurship is the highest economic calling and the entrepreneur is the economic actor most deserving of respect.

Mr. Trump has framed his own career as an example of entrepreneurship’s risks and rewards, and has made entrepreneurship a key talking point as president. In nominating officials to serve in his cabinet, he has frequently highlighted their entrepreneurial accomplishments. He has praised a bill promoting women in entrepreneurship and predicted that “millions of people will be lifted out of poverty” thanks to a World Bank entrepreneurship initiative his administration supported.

“I’m very inspired to be in the company of such motivated entrepreneurs — people that I really respect, because I know what it takes; I’ve been there,” Mr. Trump said at a White House small-business event in August.

Allies say that despite criticism for his inattention to policy, he has set the tone for his administration on regulatory issues. “This is where Trump has been a master transmitting very clearly what his agenda is,” said David French, a senior vice president at the National Retail Federation.

In Mr. Trump’s view of the world, it is entrepreneurs, and not rank-and-file workers, on which the health of the economy heavily depends.

“Today, too many people, young and old, are looking for jobs,” Mr. Trump said in his 2011 book, “Midas Touch: Why Some Entrepreneurs Get Rich — and Why Most Don’t,” written with the financial self-help guru Robert Kiyosaki. “We need more entrepreneurs who can create businesses and jobs.”

Lawrence Glickman, a historian who studies free enterprise at Cornell University, said that such veneration of entrepreneurs arose as part of an early backlash to the New Deal. “The idea of work sort of drops out, and there’s only the heroic entrepreneur,” he said.

In its purest form, the view is somewhat at odds with the Republican fondness for corporate managers, who, whatever their importance, are essentially employees.

Mr. Trump himself has long elevated the entrepreneur above the business executive in his personal hierarchy. Reflecting on his decision to attend the Wharton School at the University of Pennsylvania in his book “The Art of the Deal,” Mr. Trump wrote, “Harvard Business School may produce a lot of C.E.O.s — guys who manage public companies — but the real entrepreneurs all seemed to go to Wharton.”

His administration’s actions have been consistent with that calculus of valuing entrepreneurship over employment.

In June, Labor Secretary R. Alexander Acosta announced the withdrawal of two prominent Obama administration guidances — documents that do not change the law but indicate how a department interprets it and can influence employers.

The first had clarified when a worker could be classified as an independent business operator as opposed to an employee, who is covered by protections like the minimum wage and overtime pay. The Obama approach suggested that many so-called gig-economy companies were improperly treating workers as independent contractors when in fact they were largely dependent on the companies for their livelihood.

In withdrawing the interpretation, the Trump administration appeared to give more cover to the Silicon Valley entrepreneurs who have been at the forefront of this debate in recent years.

David Weil, the Obama administration official responsible for the issue, said he had met with start-up founders and observed that “there is buried a little bit in their view, ‘Why are you bothering me with this employee stuff when I’m actually giving people a chance to be entrepreneurs?’”

The second guidance had laid out when a company could be considered a so-called joint employer — meaning that it shared responsibility for a worker alongside a contractor, staffing agency or franchisee — and could therefore be held liable for infractions those other companies committed.

Business advocacy groups have invoked entrepreneurship when arguing against what they say is a relatively expansive Obama-era view of who qualifies as a joint employer. According to Matt Haller, a senior official at the International Franchise Association, the Obama approach pressured many parent companies to exert a level of control over franchises that “turns an owner into a middle manager.”

“It becomes a drag on upward mobility,” Mr. Haller said. “I don’t know anybody — any successful franchisee — who hasn’t put skin in the game, who doesn’t want to be in control.”

A White House spokesman, Ninio Fetalvo, said, “President Trump is committed to growing the economy and creating jobs through the entrepreneurial successes of America’s small businesses.”

The administration’s entrepreneurial ethos is also reflected in its posture toward another rule: the requirement that employers pay workers a time-and-a-half rate for overtime if their salary falls below a certain threshold. The Obama administration extended overtime pay eligibility to millions of workers by raising this threshold to more than $47,000, from about $23,600, where it had stood for more than a decade.

Mr. Trump has described his own employment as a stop on the way to greater ambitions — he worked for his father’s real estate business before seeking his fortune in Manhattan — and his allies have invoked a similar logic when criticizing the overtime rule.

Shortly after the Obama administration finalized the new rule in the spring of 2016, Andrew F. Puzder, the fast-food executive who was Mr. Trump’s initial nominee as labor secretary, lamented that many low-level managers who worked long hours in hopes of “going on to upper management or owning their own businesses” would suddenly become mere clock punchers. The restaurants and retail outlets that employed them would keep close tabs on their schedules to avoid paying them overtime.

“The regulatory environment has made it impossible to really be the kind of entrepreneurs that produced the success that this country has enjoyed for the past hundred years,” Mr. Puzder complained in a 2009 interview, alluding to similar regulations in California. “We’re deciding that maybe we need to overprotect people.”

Mr. Puzder eventually withdrew his nomination amid personal controversy, but the philosophy he spoke up for has gained a foothold nonetheless.

At his confirmation hearing in March, Mr. Acosta suggested that the salary below which workers automatically become eligible for overtime should be substantially lower than the Obama standard — perhaps in the low $30,000s.

Then, referring to the Obama policy, he added, “Because of the size of the increase, there are serious questions as to whether the secretary of labor even has the power to enact this in the first place.”