Donald Trump wants to ease regulations on employers. They benefit employees but are a burden for companies. Their requirements include a minimum wage, workplace safety, equal pay, overtime compensation, and even tipping. They also allow the government to fine companies for violating these laws and former employees to sue for restitution. Donald Trump has reduced the statute of limitations on fining companies that don’t keep records of work-related injuries, removed reporting requirements of labor violations of federal contractors, and has supported GOP proposals against the right to unionize.
Under Donald Trump, companies are the most important vehicle of economic growth. Therefore, he will reduce labor regulations that hamper their ability to profit. Where regulations still exist, he will reduce enforcement and side with the employers. Companies will stop paying employees and instead claim damage to the company or poor performance to withhold their last paycheck. They will charge fees for poor performance and won’t compensate for overtime. They will require workers come in early and stay late without pay. They will require new hires to forfeit the right to class-action and mandate private arbitration. They will give promotions without raises and start offering paid leave instead of overtime pay. They will stop matching retirement accounts. They will pay more for unemployment insurance so they can terminate employment–Trump will likely shorten the unemployment benefit period. They will charge employees for mandatory training and certifications. They will charge sick employees more to cover health insurance, not just for smokers. They will charge for on-site daycare and fitness centers. They will threaten workers who claim work-related injuries, including threats related to their immigration status. They will cut back on workplace expenses by forcing employees to work remotely and not compensate them for purchasing the right equipment to work from home. They will force employees to sign non-compete agreements so that employees can’t find related work if they resign, and they will misclassify employees as independent contractors to not pay benefits.
Federal employees have been misclassified with executive status because executive employees aren’t eligible for overtime pay. Trump has rolled back regulations that prevent wrongful termination and the ability to file for relevant restitution. Trump’s Secretary of Labor has been soft on labor regulations in his career and testified in his confirmation hearing before the Senate that he would defer to Trump’s views where he didn’t hold a strong position. Trump’s Secretary of Transportation is a former Secretary of Labor who ignored numerous complaints about wage theft and workplace safety. During her term, the Department of Labor sided with businesses who mistreated and underpaid employees. Her department’s regulations discouraged workers from reporting stolen wages and told them to handle the situation directly with their employers. A delivery driver worked 55 hours a week without overtime pay and waited 17 months for the Department of Labor to drop the claim without investigating. Her office also ignored an undercover agent posing as a worker complaining about child labor. She didn’t keep records of complaints, and then she declared that “occupational injuries declined to a new low” during her tenure based on the low number of records.
Donald Trump wants to rollback labor and other regulations to give companies more ways to earn a profit. He wants to reduce work-visa programs, and he has deported immigrants working illegally. He also has his own record of wage theft. The Trump Organization often didn’t pay its employees and subcontractors. He wants to remove the Joint Employer Standard that prevents companies from outsourcing to third parties and subcontractors who violate labor laws. He supports the Working Families Flexibility Act, which allows companies to offer paid vacation instead of overtime pay and allows them to prevent employees from using those earned vacation days for more than a year and not paying if the employee leaves the company with unused vacation days. His Secretary of Treasury also claims that automation does not lead to termination of employment.
Instead of providing a fair wage, Donald Trump proposes growing the economy by giving tax breaks to wealthy individuals and large corporations so that they move their business back to the United States and hire more Americans. This use of trickle-down economics only works if wealthy individuals and corporations use these tax savings to employ new workers. Large corporations invest billions in automation instead of giving billions to their employees and communities. Tax cuts to wealthy individuals only generate jobs if those individuals decide to create a business or incur additional expenses. Many wealthy individuals invest in assets like homes, cars, tuition, and stock portfolios. These transactions are between wealthy individuals and wealthy institutions. Instead of flowing through the economy and potentially generating millions of jobs, the money gets stuck there.
This method mostly affects retail employees, social assistance workers, and restaurant employees because the majority of minimum wage and low-wage jobs are concentrated in these areas. Underpayment and nonpayment of wages is most common in these industries. The downward pressure on wages will lead to lower pay for salaried positions.
Providing a fair wage to low-income and middle-class workers will grow the economy. Workers and their families incur expenses, and additional transactions of goods and and services creates jobs. This money changes hands numerous times and doesn’t get stuck in non-financial assets like homes and cars because most low-income and middle-class workers can’t afford to purchase these items outright. The money never leaves the economy because it’s not extra. They don’t have enough liquidity to save it.
To provide a fair wage, there needs to be an increase in wages. Most individuals and families have necessary expenses like food, rent, utilities, gasoline, basic medicine, and other expenses that come up. Therefore, an increase in wages will flow right back into the economy.
There are two main theories against an increase in the minimum wage. The cost-push theory says that companies will have to raise prices to maintain the same profit margin because their wage and salaries expenses will rise. The demand-pull theory says that prices will go up because an increase in aggregate demand without an increase in aggregate supply causes a demand shock and bids up the price due to a sudden increase in demand outpacing production. Both of these theories posit that inflation largely negates an increase in the minimum wage.
The cost-push theory does not hold because most of our products are made by workers in other countries. Therefore, the prices of goods sold in the United States don’t rise unless wages rise in foreign countries. Additionally, wage increases in the United States decrease the price of goods produced overseas because of economies of scale. The demand-pull theory does not hold because most of the people who make minimum wage have accrued a lot of debt. They have credit card debt, student loans, car loans, mortgages, and medical bills. They will pay off their debt. If there is any money left over, they will probably save up for larger purchases, getting their own apartment, a down payment, or in case of unforeseen expenses in the future. Some people will buy more goods and services, which stimulates the economy and causes inflation that, in one study, was 0.4% for a 10% increase in the minimum wage. However, most of the new money will be used to pay off debt accrued from prior transactions.
Minimum wage increases tend to have a cascading effect that causes salaries to go up, as well. This should support both theories, but top earners don’t spend their money in the same way as middle-class and low-income workers. They invest in the stock market, their 401k, a certificate of deposit at a bank. They make capital investments. The top earners buy homes and cars in one lump sum. These are stores of value. They do not employ someone. These investments do not increase inflation for the majority of goods and services.
An increase in the minimum wage increases the participation rate because more people have an incentive to start looking for work. There are a number of people that cannot work because the cost of childcare while they’re at work is higher than their take-home pay. There are also additional transportation costs. If Trump raises the minimum wage, more people will start looking for work. This will create those childcare jobs. Due to the cascading effect, salaried employees will get a raise, which generates jobs when they do home repairs, hire a babysitter, take a vacation, and increase daily expenses. An increase in wages and salaries tends to increase productivity due to increases in motivation and a sense of accomplishment. Studies have shown the benefits to the economy far outweigh the increase in inflation.
Raising the minimum wage will also reduce government spending on housing, Medicaid, and food stamps and provide a net benefit to middle-class and low-income workers but only a small bump in liquidity, which keeps transactions just for necessary expenses like before. With more people working, tax revenue goes up. Sales tax may get a small bump from the middle-class and low-income workers. There will be a larger increase in sales tax when salaried employees use some of their raise to purchase durable goods like a laptop or new furniture.
Increasing the minimum wage will increase taxes and reduce government spending, which improves the budget. It will reduce personal debt. It will increase productivity. It will create some jobs. It will also cause a much higher velocity of money than a tax break, which means many people get to share in the benefits instead of just a few people storing the money in large homes. In our environment with unpaid personal debt, it is unlikely that inflation will rise much if at all. Only an increase in the minimum that has a far better than anticipated effect on the economy might cause an increase in inflation that could easily be stemmed by a small increase in the borrowing rate.
Trump has presented many plans, including tax cuts, privatization, trade barriers, spending cuts, and decreased regulations. What he hasn’t discussed is helping American workers help themselves. All he needs to do is allow us to get back on our feet, and we can handle the rest. American workers are strong. We know what we need, and we know how to help ourselves. If you believe the government should get out of the way, tell Trump to give us what we need and get out of our way. Raising the minimum wage so we’re able to take care of ourselves, make plans for the future, and have the resources to realize our goals is all he needs to do.
Instead, Trump is doing everything to avoid helping middle-class and low-income workers and their families. Wage theft is defined as working off the clock, not getting paid overtime, not getting paid at all, getting paid below minimum wage, illegal deductions from your pay, net pay below minimum after legal deductions, and being classified as different type of worker such as an independent contractor instead of an attached employee in order to not provide the rights and protections guaranteed by law.
If you know of a business that is stealing wages, report it. Don’t allow anyone you know to work for them. If you can, grab your wallet, and don’t buy products or services from them. Use social media to tell everyone what you’ve researched, what you’ve concluded, what evidence you have. Keep records of it. Even if you think the Department of Labor and the White House won’t do anything about it, make sure everyone knows, and make sure this is featured in the next Presidential debates.
Also remember you have much greater access to your county commissioner, your city hall, and your municipal leadership. You can form a group in your community, ask for a town hall meeting or file petitions with the county commissioner, your mayor or city council members to ask for a minimum wage above the state and federal level. In the Greater D.C. Metro Area, Montgomery County, Maryland has a minimum wage of $11.50, the minimum in Prince George’s County, Maryland, is $10.75, and the State of Maryland minimum wage is $9.25. The states are doing what they can, and Trump seems to be okay letting them do that. However, if the cost of living is much higher in your city than in the rest of your state, you have the opportunity to raise your concerns. In most cases, you can talk directly with someone at city hall or the county commissioner’s office.
We also have many allies on the national level. Most of them may be in the minority party at the moment, but that can change. Contact Congress and tell them your concerns. Show them everything you have collected. Show them your social media presence and pool together everything everyone else has collected. Show them they have enough evidence to get some votes in the majority to bring a debate to the floor and even pass a bill limiting Trump’s ability to take away workers rights.