Coming ‘disaster’ for the economy: Labor Secretary Marty Walsh

Labor Secretary Marty Walsh speaks during a news conference at the White House in Washington, April 2, 2021.

Erin Scott | Reuters

There has been a lot of talk about looming layoffs, and by some recent surveys, up to half of large employers are considering lowering the cost of labor as the economy slows. But US Labor Secretary Marty Walsh does not see a reversal of recent job gains, according to an interview at CNBC’s Labor Summit on Tuesday.

CNBC’s Kayla Toshi said at the virtual event, “I still think we’re going to have a job gain as we get towards the end of this year, early next year. A lot of people are still looking for different jobs.” “We’ve seen a lot of commuting during the last cycle of the year. People are leaving their jobs and getting better jobs, and I’m not yet convinced that we’re headed toward that.”

For the Federal Reserve, a certain level of high unemployment is necessary to cool an economy that has been spoiled by persistent inflation. Unemployment rate is 3.5% now, went down In the latest monthly non-farm payrolls report. The Fed is targeting the unemployment rate at 4.4% as a result of its policy and higher interest rates.

“We definitely have to ease inflationary pressures,” Walsh said at the CNBC Action Summit, but added that the way to do that is not layoffs.

A House investigation released Tuesday found that the country’s 12 largest employers, including Walmart and Disney, have… layoffs of more than 100,000 workers In the last recession during the pandemic.

In a slower economy, Walsh said, the federal government’s Infrastructure Act will support job growth in sectors including transportation. “This money is there… If we have a downturn in the economy, these jobs are going to get people to work in tough times.”

In the fight against inflation, Walsh said moving people up the income ladder is a better way to help Americans make ends meet than lay them off.

“I think there is a way to do that by creating good opportunities for people so that they have opportunities to join the middle class, and there aren’t enough people in America working in those jobs, quite frankly. … I think there are a lot of Americans out there right now. who have been through the past two years, a lot of worrying about the pandemic, they’ve been working at a job that’s probably getting minimum wage, and they’ve probably had two or three jobs.I really think the best way to describe what a middle-class job is, a job that you can work in, And one job, and get paid well, so you don’t have to work two and three jobs to support your family.”

From a policy perspective, Walsh expressed disbelief that raising the federal minimum wage remains a contentious issue on Capitol Hill.

“It shocks me that there are members in the building behind me, if you can’t see the building behind me, it’s the Capitol, which believes families can raise their family on $7 or more, on the minimum wage in this country,” he said.

But Walsh acknowledged that the legislation to increase the minimum wage, which has been suspended in the Senate, has an uncertain future ahead of the midterm elections.

Here are some of the other key policy issues that the Secretary of Labor addressed at the CNBC Action Summit.

Lack of immigration reform is a ‘disaster’ in the making

Amid one of the toughest labor markets in history, Walsh said the political parties’ approach to immigration — “totally restrict immigration” — is among the most consequential mistakes a nation can make in labor policy.

“One side shows pictures of the border, and at the same time if you talk to the companies that support these people in Congress, they say we need to reform the immigration system,” Walsh said. “Everywhere I’ve gone in the country and talked to every big business, every small business, every single one of them says we need immigration reform. We need comprehensive immigration reform. They want to create a pathway to citizenship in our country, and they want to create better visa pathways in our country” .

Demographic data on the working-age population in the United States is alarming, with baby boomer retirements expected to accelerate in the coming years, doubling by peaking in high school graduates by 2025, limiting the overall size of the next generation of workers. In the community. Transfer of knowledge between generations of workers.

“We need a bipartisan reform here,” Walsh said. “I’ll tell you now if we don’t solve the immigration problem… We’re talking about worrying about recessions, we’re talking about inflation. I think we’re going to have a bigger catastrophe if we don’t get more workers in our society and do that by immigration.”

I wouldn’t say if Uber and Lyft are in the crosshairs of setting the rules for the new temporary jobs economy

The Labor Department’s proposed rule on independent contractors hit shares of the temporary job economy companies including Uber and Lyft a few weeks ago. The rule-making process is still under review and is seeking public comment and some Wall Street experts Don’t expect it to have a huge impact on carriers.

Walsh wouldn’t even say if they were a rule-making target.

“We haven’t necessarily mentioned which companies are affected by it, and what companies are affected by it. What we are looking for are people who work in companies that are tapped as independent contractors. We want to,” Walsh said.

Dan Ives says the new rules of the entrepreneurial economy look like

He mentioned quite a few functions that would likely be covered, and one of them overlaps with the Uber, Lyft, and DoorDash business models. “We have a lot of companies in this country, like dishwashers and delivery drivers in areas like that, where people work in a company where other employees work in that business, and they classify them as independent contractors. So we’re going to look at this. We’re in the process of making rules now. We are receiving feedback now, and we will see when the feedback comes in what the final rule looks like.”

Walsh added that the idea of ​​an independent contractor wanting to remain flexible is not overpowering. “Flexibility is not an excuse…pay someone as an employee. You can’t use that as an excuse.”

Guilds will finally gain in 2023 and 2024

Walsh, a union book hauler, said public support for unions must be matched by actual gains in union ranks in the next two years. The latest available survey from the Bureau of Labor Statistics shows that job jobs fell by more than 240,000 in 2021, even US public support for unions is on the rise And major brands including Apple, Amazon and Starbucks are facing a growing wave of unions in stores And in operations like Warehousesalbeit still on the sidelines in terms of the total number of workers they employ.

“I don’t have a 2022 number, but 2021 was a unique year,” Walsh said. “The numbers went down in a lot of ways because the consortiums weren’t organized, number one, number two, we had a pandemic and a lot of people retired, quit their businesses or retired. Those jobs weren’t feasible by companies… It’s like 65%, 70% of Americans still look favorably on unions…highest in 50 years. I don’t think you’ll see the benefit of this regulation until 2023, probably 2024.”

Other polls have found that public support for unions is Higher than the support of guild members for their work organizations.

He reneged on Biden’s childcare promise

President Biden promised during the election campaign to do More about child care; promised to include it in the Infrastructure Act; He promised to include it in Chapter Two after it was dropped from the core infrastructure package; Then it was deleted from that backup plan.

Walsh said the government must deliver on that promise to families and childcare workers.

“Caring for children is essential to getting millions of women back into the full-time workforce,” he said.

at recent days Women in the workplace A study from McKinsey and found that women are still choosing to exit the workforce in droves, a reflection of the labor market gains that began during the pandemic.

“Child care has not been addressed by this country or by most states in this country for the last 50 years. The cost is too high for the average family and we cannot keep people working in those industries. We have lost a lot of workers in the childcare industry because they are paying them the limit. minimum wage or slightly above minimum wage,” he said, referring to estimates that 100,000 workers have left the sector during the pandemic.

“We have to respect them and pay them better. Anyone who watches today has children in childcare, you know, you pay 30%, 40%, 50%, 60% of your salary for childcare,” he said. . “A lot of families have made the decision [that]”We don’t want two people to work, maybe one person to stay at home, work part-time and offset those costs,” so this problem needs to be resolved. It is not just an economic issue. Getting good care for children is a human rights issue in our country,” he said.

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