POLITICS

Donald Trump Chooses Fast-Food CEO To Be His Labor Secretary

08/12/2016 10:25 PM IST | Updated 09/12/2016 9:35 PM IST
Fred Prouser / Reuters
Andrew Puzder, CEO of CKE Restaurants, takes part in a panel discussion titled "Understanding the Post-Recession Consumer" at the Milken Institute Global Conference in Beverly Hills, California April 30, 2012. REUTERS/Fred Prouser (UNITED STATES - Tags: BUSINESS FOOD)

In a rebuke to President Barack Obama’s work on the labor front, President-elect Donald Trump on Thursday chose a fast-food executive to be the nation’s next labor secretary, tasked with enforcing workplace safety and wage laws on behalf of U.S. workers.

Andrew Puzder, who advised Trump during his presidential campaign, is the chief executive of CKE Restaurants, which includes the burger chains Hardee’s and Carl’s Jr. among its brands. He’s largely credited with turning around Hardee’s after taking over the company in 1997.

The Wall Street Journal and The New York Times reported the Puzder pick on Thursday, citing anonymous transition officials. Trump’s transition team later confirmed Puzder’s appointment in a statement, with Trump lauding “his extensive record of fighting for workers.”

Just as with his Cabinet picks for health and education, Trump’s choice of Puzder for the labor post suggests an eagerness to dismantle much of Obama’s legacy and govern as a firm conservative.

Puzder was a sharp critic of Obama’s labor policies, lambasting him for expanding overtime pay for workers and for trying to raise the minimum wage. While Obama aligned himself with fast-food workers who’ve gone on strike to raise wages, Trump is instead naming one of their bosses to be the country’s top workplace watchdog.

Puzder has made his philosophy of governing fairly clear through his op-eds, television appearances and personal blog. Like Trump, he argues that the federal government has made regulations too burdensome on businesses, stifling job growth. Two of the major regulations he has criticized ― the minimum wage and overtime ― are ones he would be tasked with enforcing.

Earlier this year, the Obama administration overhauled the nation’s overtime rules, trying to make them more generous to workers. Under the changes, which are now blocked in court and may never see the light of day, 4.2 million more salaried workers would be guaranteed time-and-a-half pay when they work over 40 hours in a week. The overtime changes would be the most significant labor reform of the Obama era.

Puzder is not a fan of them. Writing in The Wall Street Journal in 2014, he said the rules would hurt the workers they were intended to help, like the fast-food managers who work for Hardee’s and Carl’s Jr. Many of those managers would be newly entitled to overtime. “Overtime pay has to come from somewhere, most likely from reduced hours, reduced salaries or reduced bonuses,” Puzder wrote.

In an interview earlier this year, Puzder also made clear that he didn’t want to see a major hike in the federal minimum wage, which is currently $7.25 per hour and was last raised in 2009. Raising the wage floor significantly, he said, would compel businesses to look into replacing workers with machines. “With government driving up the cost of labor, it’s driving down the number of jobs,” he said. “You’re going to see automation not just in airports and grocery stores, but in restaurants.”

Puzder told the Los Angeles Times that he isn’t opposed to a minimum wage in principle, and doesn’t mind an occasional bump. He also told the paper he’d be open to indexing the wage floor so that it rises gradually over time. 

In the same interview, Puzder didn’t seem to show much empathy for workers. He laid out all the reasons a company might prefer to use machines rather than humans for its labor force: “They’re 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.”

In an op-ed he wrote for The Hill, Puzder argued that safety net programs like food stamps discourage poor people from working and need to be reined in. Acknowledging that some employees in his own chains would earn wages low enough to qualify for public assistance, Puzder said some workers don’t want to earn more money because they would lose their benefits. “Consider that some of our crew members are declining promotions to shift leader positions because the increase in income would disqualify them for food, housing, medical or other government benefits,” he wrote. 

Puzder helmed Hardee’s and Carl’s Jr. at a time the chains became famous for their controversial TV ads. They showed the likes of Paris Hilton and Kate Upton, scantily clad, eating cheeseburgers in a surprisingly sexualized manner. Puzder defended the spots, saying they worked well for the young male demographic his company targets. He even said women eating burgers in bikinis is “very American.”

In addition to advising Trump, Puzder was also an adviser to the 2012 campaign of GOP presidential hopeful Mitt Romney. This election cycle, Puzder and his wife gave $150,000 to the Trump Victory Fund, Trump and the Republican National Committee’s joint fundraising committee, according to campaign finance records. Puzder himself gave another $10,000 to Rebuilding America Now, a political action committee supporting Trump. 

No one can say Puzder is unfamiliar with the Labor Department’s work. Like other fast-food chains, Hardee’s and Carl’s Jr. restaurants are often investigated for possible minimum wage and overtime infractions. A recent analysis from Bloomberg BNA found that officials discovered violations in roughly 60 percent of their investigations of those chain’s locations. Most Hardee’s and Carl’s Jr. locations are operated by franchisees, rather than by CKE Restaurants itself, meaning the company itself is typically not considered responsible under the law.

Obama used the power of the executive pen to institute many labor reforms, particularly in the last three years of his tenure, and Trump’s nomination of Puzder does not bode well for them. Aside from the overtime changes, Obama signed executive orders raising the minimum wage for federal contractors and guaranteeing them paid sick days, as well as an order that would take contracts away from firms that break labor laws.

It’s ultimately up to Trump whether he wants to reverse those executive orders, or write new rules that completely undo the ones instituted by Obama. A good example would be the Labor Department’s fiduciary rule, which basically cracks down on 401(k) fees and is tied up in court. In Puzder, Trump would have a Cabinet official who’s advocated for loosening the very types of regulations that the Obama administration championed.

One area where Puzder appears moderate is immigration. In an interview with The Hill last year, Puzder said the party needs to have empathy for undocumented immigrants. (Fast-food restaurants employ a disproportionate amount of immigrant workers, including many who are undocumented.) “People vote with their hearts ... Our values indicate we should be the party of immigration reform,” Puzder said. “[Many undocumented immigrants] live in fear of being deported, losing what they’ve built and being separated from their families.”

The pro-business Competitive Enterprise Institute hailed Trump’s decision to choose Puzder, saying he “understands that the key to economic growth and rising wages is empowering business to increase productivity, not artificial, government-imposed wage and hour mandates.”

One group that isn’t pleased with Trump’s selection is Fight for $15, the union-backed campaign that has agitated for higher minimum wages and collective bargaining rights. In a statement, Mary Kay Henry, the president of the Service Employees International Union, which has coordinated the campaign, said that Trump’s choice shows “how out of touch he is with what working Americans need.” 

“Working families, including those who elected him, issued a mandate for economic change because they are sick and tired of working longer and harder than ever but still struggling to build a better future for their families,” Henry said. “Puzder has proven he doesn’t support working people.”

Paul Blumenthal contributed reporting. The original version of this story cited an analysis by Bloomberg; in fact, it was done by Bloomberg BNA.

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