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Trump’s Top Labor Official Opposes Minimum Wage Increase

May 1, 2019, 8:17 PM

Labor Secretary Alexander Acosta said May 1 that he doesn’t support a change to the federal $7.25 minimum wage, signaling that the Trump administration’s top labor official would advise the president not to sign any bill raising the nationwide pay floor.

“We do not support a change in the federal minimum wage at this time,” Acosta said May 1.

House Democrats are still trying to build enough support to move a bill that would raise the federal minimum from $7.25 to $15 an hour in a series of steps. A group of lawmakers in the party are instead pushing a bill that would stagger pay floor increases based on regional cost of living. Republican critics have slammed the $15 measure as a job killer, but some have left the door open to a smaller hike.

Congress last raised the federal minimum wage in 2007, using a series of steps ending in 2009.

Acosta’s comments were part of his testimony during an Education and Labor Committee hearing where lawmakers grilled him on the Labor Department’s 2020 budget, controversial regulatory proposals, and other policy efforts.

While minimum wage discussions have been working their way through Congress, much of the hearing focused on the agency’s workforce development plans, an issue that has captured bipartisan attention as the nation faces a workforce skills gap.

Job Corps Changes, IRAPs

Lawmakers asked Acosta about his agency’s proposed 2020 budget and recent controversial regulatory proposals. But it was plans for workforce development that received the most attention.

Some Democratic members of the committee criticized the secretary for the department’s budget proposal, which reflected a 10 percent cut from current funding levels. That includes shedding funding for the Job Corps training program by about $700 million, or about 40 percent.

The House Appropriations Committee has proposed a $13.3 billion budget that would include large Job Corps investments. The live-in program, which operates nationwide at more than 120 locations, helps young workers between the ages of 16 and 24.

The DOL is also in the process of developing an industry-led apprenticeship program nationwide as an alternative to the agency’s 80-year-old Registered Apprenticeship Program. The program, details of which haven’t yet been publicly revealed, have concerned industry representatives as well as lawmakers.

Rep. Marcia Fudge (D-Ohio) questioned Acosta on whether workforce development is truly a priority for the agency, given the budget cut proposal.

Acosta countered that the department and its staff have invested a lot of time in expanding Registered Apprenticeships and developing the Industry Recognized Apprenticeship Program. The DOL’s interest in developing the programs shouldn’t be judged by dollar amount, he said.

“Time and effort is nothing. It is talk, not action,” Fudge said.

IRAP does have some fans on the committee. Rep. Lloyd Smucker (R-Pa.) was among those who applauded the DOL’s effort to expand apprenticeships.

Job Corps centers have been marred by concerns about safety, violence, and drug use at certain facilities, highlighted by complaints from the White House and lawmakers. The DOL’s Office of the Inspector General recently found that the program couldn’t demonstrate it had helped participants find jobs.

Acosta announced during the hearing that the DOL established a new pilot program called Job Corps Scholars to modernize the decades-old system. The program awards 20 grants to accredited, two-year public community colleges to provide skills instruction and career pathway support to eligible Job Corps students. The program is expected to serve 1,600 students with vocational training over the course of two years.

Workplace Safety, Fiduciary Rule

Acosta also shed some light on the department’s plans for workplace safety protections for health-care workers, solutions to the multi-employer pension crisis, and a new fiduciary rule.

The DOL is still in talks with the Securities Exchange Commission to develop an alternative to the Obama-era fiduciary rule, which would have required investment advisers to put the interest of retirement savers above their own. That regulation was blocked by a federal court.

Fixing failing multi-employer pensions is “an acute” issue, Acosta said. He said he hopes that Gordon Hartogensis, newly confirmed director of the Pension Benefit Guaranty Corporation, can work with Congress to establish a bipartisan solution.

The DOL’s Fall Regulatory Agenda included a plan for OSHA to host a small business impact review by January on the workplace violence faced by emergency room workers. This would be the first step to establishing a rule. Acosta said during the hearing that OSHA still plans to convene that review panel, but he didn’t indicate a concrete timeline for a proposal.

Epstein an Afterthought

Despite the continuing controversy surrounding Acosta’s involvement as a prosecutor in a high-profile Florida teen-sex-trafficking case, the issue came up just once during the hearing. The case involved hedge fund manager Jeffrey Epstein, who subsequently served 13 months in state prison and avoided prosecution for federal charges.

Rep. Frederica Wilson (D-Fla.) said Acosta made “questionable decisions” surrounding the Epstein case.

Acosta disagreed.

“This matter was appealed all the way up to the deputy attorney general’s office,” he said. “Not because we weren’t doing enough but because the contention was that we were too aggressive.”

To contact the reporter on this story: Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; Cathleen O'Connor Schoultz at cschoultz@bloomberglaw.com