Why Puzder Is the Right Pick to Help Fix America’s Labor Problems

Andrew Puzder, the chief executive officer of CKE Restaurants, is President Trump’s nominee for Secretary of Labor.

But Puzder has a problem: Senate Democrats are reluctant to confirm him, pushing his hearing into February at the earliest.

The delay matters. After all, labor policy is a crucial concern for all Americans. Whether you’re the president, or a high-schooler on a paper delivery round, labor law defines how you work and what you are paid. And today, facing globalization, automation and income inequality, labor policy is particularly contentious.

That said, I believe Puzder is the right pick to lead America to a better labor market future.

Puzder’s private sector experience means he puts economic reality before base populism. To understand why this matters, consider the minimum wage debate.

On paper, efforts to raise the minimum wage seem economically reasonable and morally rational. Democrats claim that minimum wage laws foster equality and growth. And it always sounds good when a politician tells a voter that his or her life can be made better by getting the rich to pay more.

But there’s a big catch. Because minimum wage laws set artificial values on productivity, they force employers to pay employees more than the employee’s productive value. As Puzder put it, “How do you pay somebody $15 an hour to scoop ice cream? How good could you be at scooping ice cream?”

Puzder’s private sector experience means he puts economic reality before base populism

Puzder recognizes that if a business is forced to pay an employee more than the value of their output, two effects will follow. First, business prices will have to rise to offset the new cost. Second, businesses will look to save money elsewhere. And when it comes to the restaurant industry — where Puzder has made his mark — minimum wage laws push employers to replace human workers with machines. It is in this sense that minimum wage laws hurt the least-skilled and lowest-paid Americans the most.

Puzder prefers a better approach: giving employees the skills to earn more.

CKE Restaurants, which operates the Hardee’s and Carl’s Jr. fast-food chains, places premium importance on equipping employees with the experience, skill and opportunities for promotion. Puzder is also well known for cutting bureaucratic red tape. He encourages dissatisfied staff to reach out to him personally with ideas for change. That kind of creativity would do wonders in the U.S. government.

But it would also serve a broader interest: helping America build a more skilled workforce.

As I’ve noted before, while globalization benefits Americans by keeping more money in our pockets, it also increases competition for well-paid jobs. But Puzder recognizes that if more Americans have greater skills, their productivity will also increase. And as productivity grows, wages and economic growth will also grow.

Puzder also understands that American innovation is the great servant of individual opportunity. Supporting innovation might seem like something both Democrats and Republicans would agree on, but it is not.

Consider the sharing economy. Today, many on the American Left are pushing tougher regulations on innovative sharing economy companies such as Uber and Airbnb. These regulations would reduce American earning potential and employment freedom. But Puzder’s solution here is simple: get government out of the way, and let the market provide the answer. This isn’t complicated. We like Uber, Lyft and Airbnb and similar services for a reason: they work for users and providers.

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Americans need bold action to shake up our labor market. Don’t believe me? Just look at the labor participation rate. Since 2009, more and more working age Americans have given up look for work. Too many of our fellow citizens lack the skills, or the opportunities to find a good job. Over the past eight years we’ve tried the pro-regulation approach to boosting opportunity. The results have not been good.

Let’s give Puzder a chance.

Tom Rogan is a senior contributor for Opportunity Lives, a columnist for National Review, a former panelist on The McLaughlin Group and a senior fellow at the Steamboat Institute. Follow him on Twitter @TomRtweets.