Stoa Policy Choice: Department of Labor Reforms

Resolved: The United States Federal Government should substantially reform one or more of the laws administered by the Department of Labor.

This 1995 Heritage Foundation Report doesn’t call for reforming laws administered by the Department of Labor. Instead, How to Close Down the Department of Labor, begins:

The Department of Labor (DoL) has become one of the most pervasive regulatory agencies in the federal government. Created in 1913, DoL is currently responsible for the administration and enforcement of over 180 federal statutes. This proliferating body of legislation and regulation covers a wide range of workplace activities for nearly 10 million employers and well over 100 million workers, presenting a barrier to the formation of firms and their ability to create jobs.1

Well, that was twenty-four years ago and the U.S. Department of Labor is still up and running. So it’s worth considering what today’s Department of Labor wants to run, from this March 11, 2019 news release, PRESIDENT’S 2020 BUDGET EXPANDS OPPORTUNITIES FOR AMERICA’S WORKFORCE:

• Develops a skilled workforce by investing $160 million in apprenticeships to fill family-sustaining careers in a job market with a record number of open jobs and create new opportunities…

The intentions of government programs and regulations are often different from actual results. Turns out federal job training programs have a poor track record. Maybe this next proposed $160 million will work better than past efforts: $1.7 Billion Federal Job Training Program Is ‘Failing the Students’ (New York Times, August 26, 2018):

In April, the Labor Department’s own inspector general starkly concluded that “Job Corps could not demonstrate beneficial job training outcomes.”

Also, The Job Corps Failure: Taxpayers spend billions on a training program that doesn’t deliver (Wall Street Journal, April 22, 2018):

The new report suggests that Job Corps’ biggest beneficiaries may be government contractors, not rookie job seekers. Job Corps spent more than $100 million between 2010 and 2011 on transition-service specialists to place students in a job after training.

But among 324 sampled Job Corps alumni, the IG found evidence that contractors had helped a mere 18 find work. The contractors often claimed credit for success even though they provided no referrals or résumé and interview help. Overall, the IG estimates that Job Corps paid contractors some $70.7 million for transition services they failed to adequately perform.

As with the federal transportation and foreign aid debate topics, research soon reveals the main advocates for federal programs are the connected contractors receiving federal grants to build out programs, from high speed rail to “green” energy projects across the developing world.

For further discussion of federal training programs see, Why the U.S. Fails at Worker Training (The Atlantic, November 15, 2017) and WHAT COULD POSSIBLY GO WRONG WITH A FEDERAL APPRENTICESHIP PROGRAM? (Daily Caller, July 19, 2018)

Department of Labor Laws vs. Programs
The resolution wording could be seen as limiting affirmative cases to Department of Labor laws (actually regulations), rather than Dept. of Labor programs. On the plus side are proposals for the Department of Labor to protect economic freedom from arbitrary state and local licensing regulations. The Tangled Mess of Occupational Licensing (Cato Policy Report, Sept./Oct. 2018) looks at Kentucky regulations of hair braiding:

Then the government came knocking. “She told me she was from the state Board of Cosmetology … and that I was not allowed to do hair without a license,” Gueye told the Urban News Service. “I told her I had been braiding for years, and I did not know you had to have a license.” …

Despite her decades of experience and her many happy customers, the decision that the government put before Gueye was difficult, if straightforward: spend hundreds of hours and thousands of dollars to get right with the state — and stop earning money in the meantime — or choose another line of work.

The burden Kentucky’s government imposed on Gueye was arbitrary, expensive, and a threat to her family’s financial security. Her experience is sadly common.

The Institute for Justice litigates to overturn restrictive state licensing regulations. Here is the IJ hair braiding page. And here is the IJ video:

The Cato Tangled Mess Report further notes:

Today licensing has ballooned to ensnare 1 in 4 workers. …Licenses are now required not just for doctors, dentists, and lawyers but also for shampooers, makeup artists, travel agents, auctioneers, and home entertainment installers. According to the Council of State Governments, 1,100 occupations were licensed in 2003.

What role could the federal government play in protecting the economic freedom, the “right to earn a living”? Will Federal Government Overrule States on Occupational Licensing? (The NCSL Blog, March 14, 2019) reports on

The hearing, “Occupational Hazards: How Excessive Licensing Hurts Small Business,” was conducted by the Small Business Subcommittee on Economic Growth, Tax and Capital Access.

Testimony at the hearing called for the Federal Trade Commission to review anti-competitive practices carried out by state licensing boards:

However, since the 2015 Supreme Court decision in North Carolina Board of Dental Examiners v. Federal Trade Commission, in which the majority ruled that licensing boards comprised of active industry professional are subject to federal antitrust laws and may be penalized for engaging in anti-competitive behavior, occupational licensing has increasingly drawn the attention of federal legislators and executive branch officials.

So that’s an opportunity for the Federal Trade Commission. What about the Department of Labor? The NCSL post notes:

States engaged in occupational licensing policy are being helped by a U.S. Department of Labor grant that funds the 11-state Occupational Licensing Learning Consortium as well as technical assistance on the subject for all states from NCSL.  However, expanding federal reach to rewrite state licensing laws would be a step far beyond this.

And the Cato Report looks at what the federal government could do:

Although licensing is primarily a state and local issue, the federal government has also taken action. In 2015 the Obama White House published a report describing the problems of licensing and calling for widespread reform. That same year the Supreme Court ruled against a licensing board, deciding that boards made up of practitioners are legitimate targets for antitrust litigation (North Carolina Board of Dental Examiners v. Federal Trade Commission).

Congress is now considering a bill in response to the Federal Trade Commission case that would help states reform occupational licensing rules. The Restoring Board Immunity Act would give limited legal immunity from antitrust lawsuits if states do one of two things: periodically review licensing boards to detect and end anticompetitive behavior, or place the burden on the government to show that occupational licensing regulations are necessary (as Arizona has already done).

Affirmatives might consider reforming the Fair Labor Standards Act (FLSA), administered by the Department of Labor. Allowing young people to work and earn income might finally allow all those age 13 and under debate timekeepers to be paid.

Jobs And Labor Modernizing the Fair Labor Standards Act for the 21st Century (Heritage Foundation, July 12, 2001), though published eighteen years ago, outlines problems that still exist:

The FLSA needs to be updated to give workers greater flexibility in ordering their lives, both on and off the job, and to permit employers to reward workers financially for improving productivity and profitability without being burdened with the unpredictable and complex requirements of a Depression-era labor law.

And for critics who claim Republican administrations have weakened labor unions, Labor unions can be great institutions again (American Enterprise Institute, September 4, 2018), notes:

Some conservative critiques of Big Labor are true, but they need not remain so. Unions could be something much more than political units operating inside industry. In fact, they have been and in some places still are something much more: institutions of civil society….

Lindsey wrote of the working class: “Its members shared a whole set of binding institutions (most prominently, labor unions), an ethos of solidarity and resistance to corporate exploitation, and a genuine pride about their place and role in society. Their successors, by contrast, are just an aggregation of loose, unconnected individuals, defined in the mirror of everyday life by failure and exclusion.”

There are many root causes beneath this blue-collar deinstitutionalization, but part of it lies in the nature of American unions. Although they often served, and often still do serve, as excellent mediating institutions, their legal and professional framework makes this increasingly difficult. …

Labor unions can be great institutions again (American Enterprise Institute, September 4, 2018)

Downsizing the Federal Government reviews Department of Labor operations and suggests most DOL programs are ineffective:

The department will spend $39 billion in 2018, or $310 for every U.S. household. Spending has declined as the economy has grown in recent years. The department employs 17,000 workers.

Interestingly, the page begins by saying “The Department of Labor’s budget is dominated by the costly unemployment insurance system.” A Brookings Institution study from 2006, Reforming Unemployment Insurance for the Twenty-First Century Workforce begins:

Despite significant changes in U.S. labor market, the basic structure of the nation’s unemployment insurance (UI) program has remained unchanged since it was created in 1935. The current system is in need for reform in order to meet the needs of a twenty-first century workforce.

See also Congress takes bipartisan steps to expand successful, pro-work intervention (AEIdeas, April 2, 2019), begins:

States typically offer laid off workers up to 26 weeks of benefits through the Unemployment Insurance system. These weekly checks are intended to ease the financial strain workers experience between jobs and provide them time and resources to search for new work. But the UI system has a major problem — too many recipients exhaust UI benefits before they find work.

Another area of federal labor law are work visas for workers from other countries. The debate over labor mobility is different though related to the immigration reform debate. Just as hundreds of oil field workers commute from Texas to Alaska for work, hundreds of thousands used to migrate from Mexico for agricultural work across the U.S., then head back to Mexico when harvests were done.

Complex and convoluted Department of Labor work visa programs cost U.S. farmers millions, plus make live difficult for tech and other industries who need specialized workers. The NBA seems to be able to get work visas or citizenship for all the basketball players it wants from Africa, Eastern Europe, Turkey, and Australia, why shouldn’t other industries be able to hire the workers they need? The Vernon K. Krieble Foundation’s proposed Red Card Solution calls for private firms to manage work visas, with focus on safety and security. See The Red Card Solution: How it Works.

See No Better Foreign Aid than Labor Mobility, or for Boosting U.S. Economy (Economic Thinking, February 22, 2019), was written for the foreign aid topic, but the focus is on outdated U.S. labor laws. Labor unions and progressives (and some conservatives) claim that workers from other countries hurt U.S. workers or drive down wage rates. But the benefits of labor mobility are far higher to American workers, companies, and consumers. Benefits from foreign workers are similar to benefits from foreign tourists:

Legal rules that govern foreign labor, are very different than for tourism. Why is that? Tourists spend money for meals, housing, entertainment when they tour foreign cities and sites. But so do workers from other countries. Visiting workers purchase local food, rent or buy housing, and spend money on clothing and entertainment. Why are regulations for the U.S. and other countries so different for tourism than for labor?

As more tourists arrive and boost demand for hotels and local attractions, companies and entrepreneurs dream up more attractions and build more hotels. Disney Land and Disney World are crowded with tourists from around the world, but they can expand, and new amusement parks are developed to profit from more and more tourists.

Similarly, as more visiting workers arrive, they attract investments in more housing and entertainment, as well as more factories offering more jobs. Hotel owners make money and expect to profit from visiting tourists renting their rooms. Similarly, factory owners and farmers make money as visiting workers take on tasks that allow profitable manufacturing and agriculture

See No Better Foreign Aid than Labor Mobility, or for Boosting U.S. Economy (Economic Thinking, February 22, 2019),