Three Reasons Andrew Puzder Is the Wrong Answer to Workers’ Problems

UPDATE: Shortly after posting, Andrew Puzder’s nomination for Secretary of Labor was withdrawn. Although we are not optimistic that Donald Trump will now throw his support behind a strongly pro-worker appointee, we take this as an important victory for American workers—if for no other reason than that it would be hard to find a much worse choice than Puzder.

Though Trump seems committed to a highly pro-business cabinet, there are plenty of impressive business leaders who have staked their reputations on good business practices and excellent treatment of their employees. Tony Hsieh of Zappos and Costco’s Craig Jelinek—both renowned for balancing profitable businesses with happy workforces—come to mind, among hundreds of other candidates. Progressives should not get their hopes up for a pro-labor union warrior in the Trump Cabinet, but we have every right to expect a Labor Secretary nominee who is not outwardly hostile to workers. If Puzder’s successor fails to meet that standard, we must continue to fight back.

When we were planning the release of our new paper, “New Frontiers of Worker Power: Challenges and Opportunities in the Modern Economy,” we decided that the confirmation hearing of Donald Trump’s Secretary of Labor nominee, Andrew Puzder, would be a good news hook to hang it on. That was back on January 12. Then the hearing was delayed until January 17. Then it was delayed again, until February 2. Then once more until February 7. Finally, Puzder’s hearing was put on hold yet again, due to the nominee’s failure to submit his disclosure and ethics paperwork to the Senate Committee on Health, Education, Labor, and Pensions. Tomorrow, more than a month after the initial date, and barring any further delays, Andrew Puzder will have his day on Capitol Hill.

Puzder is the CEO of CKE Restaurants, which has a long history of workplace safety violations. He also has his own history, which includes making offensive statements about his workforce; a demonstrated desire to cut hours and jobs wherever possible, regardless of its impact on his employees; and, worst of all, charges of domestic violence against his former wife. Combined, this makes for an ignominious start to what was already a controversial appointment. In many ways, his disregard for his own employees is emblematic of the environment facing workers today. This history of aggressively anti-worker behavior should be more than enough to disqualify him as leader of the Labor Department—the agency charged with advocating for the needs of America’s workers—but his shortcomings are even more problematic in today’s economy, in which the threats to workers seem to be growing by the day.

In addition to weak enforcement of basic labor protections and shrinking union membership, workers are facing new threats arising from disaggregated business models, the digital intermediation of work, and a systemic imbalance of power in the labor market. Increasingly, workers are removed—be it by supply chains, smart phones, or physical distance—from the centers of power that determine their working conditions. These developments lie outside the standard labor protection topics, but have emerged in recent years as key factors shaping worker welfare.

Our paper outlines three new frontiers of rising worker abuse and potential methods to address them.

First, new methods of organizing firms and supply chains have complicated traditional bargaining methods. Instead of centralized businesses with permanent full-time staff, firms are increasingly relying on independent- and sub-contractors as well as technological intermediation to manage their workforce needs. As firms abandon the traditional centralized employer model that dominated the economy throughout the middle of the 20th century in favor of a more disaggregated and specialized structure—a phenomenon dubbed the fissured workplace—collective bargaining under the Wagner Act has become increasingly difficult and ineffective. Even if unionized, many workplaces are effectively controlled by powerful up- or downstream firms, with which employees of contracting firms cannot bargain, like in the example of Walmart warehouses. Legally and practically, these circumstances make traditional organizing nearly impossible.

Modern workers need access to new methods of making their voices heard. The paper describes some promising online models, such as coworker.org, which have sought to organize and support workers through online community-building, leveraging broader public relations and social bargaining strategies to win concessions and open negotiations with firms along the supply chain.

In addition to these physical and legal barriers, platform workers like Uber drivers, as well as a growing number of service sector employees, face a number of new digital threats. For a growing number of workers, tasks are dolled out by opaque algorithms and performance is measured by constant surveillance and crowdsourced customer reviews. Despite the fact that they determine workplace outcomes for all workers they effect, the precise machinations of these equations are unknown to the workers and not subject to any sort of anti-discrimination or other regulatory review.

Ignorant of the complex calculations that determine their workplace experience, workers in digitally intermediated workplaces have little opportunity to determine, let alone contest, the factors shaping their conditions. Algorithms and workplace surveillance should be regulated to ensure fairness, transparency, and reasonable privacy measures.

Finally, this decline of workers’ ability has coincided with a concurrent rise in private sector monopsony. Increasingly, firms are able to structure the conditions under which they negotiate with their workers. The broad decline of competition and firm dynamism and the rise of myriad anti-competitive business practices like non-compete clauses and mandatory arbitration have contributed as much to declining worker bargaining power as the aforementioned trends of disaggregation and digital intermediation. In the long run, a broader commitment to competitive markets in merger review and antitrust regulation are necessary, but more immediate steps such as a reduction in the proliferation of noncompete clauses and forced arbitration would be steps in a positive direction.

Taken together, these circumstances call for a recommitment to the elevation of worker voice, and the broadening of pro-worker policy reform. The paper explains these trends and some potential policy reforms in greater detail.