The Senate confirmation hearing for Andrew Puzder, President-Elect Trump’s nominee for Secretary of Labor, will reportedly take place this Wednesday, January 12. (UPDATE (1/10/17): According to Politico, Mr. Puzder’s confirmation hearing will now take place on Tuesday, January 17.) Mr. Puzder’s nomination is vigorously opposed by employee advocates, unions, and Democrats. (He is still expected to be confirmed by the Republican majority.)
Sen. Patty Murray (D-Wash.) was recently quoted in Bloomberg BNA as calling Mr. Puzder “uniquely unqualified” and says, “workers deserve a secretary of labor whose priority is higher wages and good jobs for workers — not profits for big corporations that come at workers’ expense.”
It’s beyond dispute that Mr. Puzder, Chief Executive Officer of CKE Restaurants, Inc. (Hardee’s and Carl’s Jr.), opposes raising the salary level for overtime “exempt” status and opposes significant (or maybe any) increases to the federal minimum wage. But the one that really makes my “fake-news spider sense” tingle is the allegation that he wants to replace human employees with machines.
Does Mr. Puzder really want as few human workers as possible, paid as little as possible?
With the hearing coming up, I thought I would see whether this is a fair interpretation of what he’s said.
First, Mr. Puzder wrote a 2014 editorial in the Wall Street Journal opposing increases in the minimum wage. The op-ed is behind a paywall (if you subscribe to the WSJ you can read it at this link; and if you don’t subscribe, here is a link to Mr. Puzder’s blog, which has a link to the op-ed that may work). Some pertinent excerpts:
[If the minimum wage is raised from $7.25 to $10.10 an hour,] here’s what middle-class business owners, who live in the real world, will do when faced with a 40% increase in labor costs. They will cut jobs and rely more on technology. Such changes are already happening in banks, gas stations, grocery stores, airports and, more recently, restaurants. . . .
The only other option is to raise prices. . . . [P]rice increases burden consumers, particularly those with low incomes who are supposed to be helped by a minimum-wage increase.
A better policy would be to encourage the private sector to create more middle-income jobs. . . .
While a 40% across-the-board increase in the minimum wage may have political appeal, any politician sincerely attempting to help those in need would recognize the negative impact of federal increases and the need for policies that increase economic growth. At the very least, they would recognize the impact such an increase would have on our youth, particularly in regions where unemployment remains alarmingly high. . . .
(Emphasis is mine.)
What Mr. Puzder seems to be saying is that raising the minimum wage isn’t the quick fix for workers that it’s often made out to be. A higher minimum wage can have the perverse effect of increasing unemployment and poverty because employers won’t be able to afford to hire as many employees. This is a longstanding argument against raising minimum wages. Reasonable minds can differ, but I don’t see Mr. Puzder as saying displacement of human workers by technology is a good thing. In fact, I think he’s saying the opposite — that high unemployment is a bad thing, which is why he advocates a more “realistic,” lower, wage. So more people can have jobs.
Then we have his interview in Business Insider in March 2016. Mr. Puzder said that he was interested in technology that would allow customers to “order on a kiosk, . . . pay with a credit or debit card, your order pops up, and you never see a person.” And, then, the infamous quote: “[Machines] are always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case.”
Exactly.
But, again, the context appears to be his belief that minimum wage increases (and maybe also our very litigious environment) make employees less affordable for businesses. Especially if the businesses have alternatives. Mr. Puzder even asks, “Does it really help if Sally makes $3 more an hour if Suzie has no job?” That question leads me to infer that he thinks it would be a shame if Suzie didn’t have a job.
Taking the op-ed and the Business Insider interview together, I’m not convinced that Mr. Puzder is an evil man who wants to put people out of work. It seems that he wants to keep wages at a level that will create more job opportunities, and more employment, for everybody. Whether you’re a Democrat or Republican or Libertarian (or “Other”), you surely agree with that end, whether or not you agree with Mr. Puzder about the best way to get there.
