[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
UNLEASHING AMERICA'S WORKFORCE AND
STRENGTHENING OUR ECONOMY
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HEARING
Before The
COMMITTEE ON EDUCATION AND WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
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HEARING HELD IN WASHINGTON, DC, FEBRUARY 26, 2025
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Serial No. 119-2
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Printed for the use of the Committee on Education and Workforce
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: edworkforce.house.gov or www.govinfo.gov
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U.S. GOVERNMENT PUBLISHING OFFICE
60-852 PDF WASHINGTON : 2025
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COMMITTEE ON EDUCATION AND WORKFORCE
TIM WALBERG, Michigan, Chairman
JOE WILSON, South Carolina ROBERT C. ``BOBBY'' SCOTT,
VIRGINIA FOXX, North Carolina Virginia,
GLENN THOMPSON, Pennsylvania Ranking Member
GLENN GROTHMAN, Wisconsin RAUL M. GRIJALVA, Arizona
ELISE M. STEFANIK, New York JOE COURTNEY, Connecticut
RICK W. ALLEN, Georgia FREDERICA S. WILSON, Florida
JAMES COMER, Kentucky SUZANNE BONAMICI, Oregon
BURGESS OWENS, Utah MARK TAKANO, California
LISA C. McCLAIN, Michigan ALMA S. ADAMS, North Carolina
MARY E. MILLER, Illinois MARK DeSAULNIER, California
JULIA LETLOW, Louisiana DONALD NORCROSS, New Jersey
KEVIN KILEY, California LUCY McBATH, Georgia
ERIN HOUCHIN, Indiana JAHANA HAYES, Connecticut
MICHAEL A. RULLI, Ohio ILHAN OMAR, Minnesota
JAMES C. MOYLAN, Guam HALEY M. STEVENS, Michigan
ROBERT F. ONDER, Jr., Missouri GREG CASAR, Texas
RYAN MACKENZIE, Pennsylvania SUMMER L. LEE, Pennsylvania
MICHAEL BAUMGARTNER, Washington JOHN W. MANNION, New York
MARK HARRIS, North Carolina
MARK B. MESSMER, Indiana
R.J. Laukitis, Staff Director
Veronique Pluviose, Minority Staff Director
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C O N T E N T S
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Page
Hearing held on February 26, 2025................................ 1
OPENING STATEMENTS
Walberg, Hon. Tim, Chairman, Committee on Education and
Workforce.................................................. 1
Prepared statement of.................................... 4
Scott, Hon. Robert C. ``Bobby'', Ranking Member, Committee on
Education and Workforce.................................... 6
Prepared statement of.................................... 28
WITNESSES
Maietta, Rosanna, President and CEO, American Hotel and
Lodging Association........................................ 31
Prepared statement of.................................... 33
Beach, Dr. William, Senior Fellow in Economics, Economic
Policy Innovation Center................................... 39
Prepared statement of.................................... 40
Shierholz, Dr. Heidi, President, Economic Policy Institute... 49
Prepared statement of.................................... 51
Milito, Elizabeth, Vice President and Executive Director,
NFIB Small Business Legal Center........................... 63
Prepared statement of.................................... 65
ADDITIONAL SUBMISSIONS
Chairman Walberg:
Letter dated February 26, 2025, from Associated Builders
and Contractors (ABC).................................. 129
Statement of The Transportation Alliance (TTA)........... 131
Ranking Member Scott:
Letter dated January 25, 2025, to President Trump........ 9
Letter dated February 12, 2025, to President Trump....... 13
Letter dated February 6, 2025, to Gene Dodaro............ 17
Letter dated February 13, 2025, to Vince Micone.......... 19
Letter dated February 19, 2025, to Robert F. Kennedy, Jr. 23
Letter dated February 21, 2025, to Louis Charlier........ 25
Courtney, Hon. Joe, a Representative in Congress from the
State of Connecticut:
Article dated February 25, 2025, titled ``Economists Are
Starting to Worry About a Serious Trump Recession,''
from The Telegraph..................................... 102
Article dated February 24, 2025, titled ``U.S.
Manufacturers See Higher Metal Prices as Tariffs
Near,'' from Reuters................................... 105
Article dated February 25, 2025, titled ``Consumer
Confidence Registers Biggest Monthly Decline Since
August 2021 as Inflation Fears Take Hold,'' from CNN... 109
QUESTIONS FOR THE RECORD
Responses to questions submitted for the record by:
Dr. William Beach........................................ 133
Ms. Elizabeth Milito..................................... 136
UNLEASHING AMERICA'S WORKFORCE AND
STRENGTHENING OUR ECONOMY
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Wednesday, February 26, 2025
House of Representatives,
Committee on Education and Workforce,
Washington, DC.
The Committee met, pursuant to notice, at 10:16 a.m. in
Room 2175, Rayburn House Office Building, Hon. Tim Walberg,
(Chairman of the Committee) presiding.
Present: Representatives Walberg, Foxx, Grothman, Allen,
Owens, Miller, Kiley, Rulli, Moylan, Onder, Mackenzie, Harris,
Messmer, Scott, Courtney, Bonamici, Takano, Adams, DeSaulnier,
Norcross, McBath, Hayes, Omar, Stevens, Casar, Lee, and
Mannion.
Staff present: Mindy Barry, General Counsel; Sheila
Havenner, Director of Information Technology; Libby Kearns,
Press Assistant; Katerina Kerska, Legislative Assistant; Trey
Kovacs, Director of Workforce Policy; Campbell Ladd, Staff
Assistant; R.J. Laukitis, Staff Director; Georgie Littlefair,
Clerk; C.J. Mahler, Professional Staff Member; Audra McGeorge,
Communications Director; Daniel Nadel, Legislative Assistant;
Kevin O'Keefe, Professional Staff Member; Ethan Pann, Deputy
Press Secretary and Digital Director; Kane Riddell, Staff
Assistant; Kelly Tyroler, Professional Staff Member; Ann Vogel,
Director of Operations; Heather Wadyka, Professional Staff
Member; Ali Watson, Director of Member Services; Joe Wheeler,
Professional Staff Member; Ariel Box, Minority Intern; Ilana
Brunner, Minority General Counsel; Ni'Aisha Banks, Minority
Staff Assistant; Bryan Gonzalez, Minority Grad Intern; Jo
Howard, Minority Grad Intern; Amanda Lee, Minority Grad Intern;
Jessica Schieder, Minority Economic Policy Advisor; Hannah
Seligman, Minority Legal Intern; Dhrtvan Sherman, Minority
Research Assistant; Bob Shull, Minority Senior Labor Policy
Counsel; Raiyana Malone, Minority Press Secretary; Kevin
McDermott, Minority Director of Labor Policy; Marie McGrew,
Minority Press Assistant; Ben Noenickx, Minority Intern;
Eleazar Padilla, Minority Staff Assistant; Mason Pesek,
Minority Labor Policy Counsel; Veronique Pluviose, Minority
Staff Director; Theresa Tilling-Thompson, Minority Professional
Staff; Banyon Vassar, Minority Director of IT.
Chairman Walberg. Good morning. The Committee on Education
and Workforce will come to order. I note that a quorum is
present. Without objection, the Chair is authorized to call a
recess at any time.
We are here today to discuss the challenges that American
workers and businesses faced over the last 4 years, as well as
the opportunities before us, as President Trump and the
Republican led Congress move forward with solutions to get the
Nation's workforce on track.
From his first day, the past administration implemented a
policy agenda that I believe jeopardized the American workforce
and economy. In the wake of COVID-19 pandemic the Nation
experienced historic levels of job loss. I believe the problem
was exacerbated by policies of the last administration enacting
COVID mandates that rewarded Americans for staying home and out
of the workforce.
Democrat stimulus spending hampered job creation and made
more Americans dependent on the Federal Government. As a result
of the Biden Harris administration's reckless spending spree,
American families and businesses were rocked by record high
inflation, which hit a 40 year high in 2022.
Workers saw their standard of living decline as inflation
outpaced average wage growth. On top of that, the Biden Harris
administration pursued a radical regulatory agenda, which put
up barriers to hiring and harmed American workers and
businesses.
One example of this regulatory onslaught included the
National Labor Relations Board, its Joint Employer Rule, which
threatened to upend the franchise business model, limit
entrepreneurship and literally kill jobs, had it not been
halted by a Federal Court.
An economic analysis found that a similar joint employer
standard, which was in effect during the Obama administration
cost the entire franchise sector 33.3 billion dollars annually,
resulting in as many as 376,000 lost job opportunities.
Another regulation raised the salary threshold for
employees to be considered exempt from overtime pay by more
than 60 percent. This rule would have cost job creators an
estimated 1.3 billion dollars, increased compliance burdens on
small businesses, and limited workers opportunities for
advancement had it not been halted by a Federal Court.
Another regulation made it harder for individuals to choose
how they work. The war on independent contractors stifled
innovation and creativity, ultimately harming workers,
businesses, and the U.S. economy. This list is not exhaustive.
A recent study from the American Action Forum found that
the Biden administration issued a staggering 1.8 trillion
dollars in cumulative regulatory costs over 4 years, far
exceeding any preceding administration on record.
Many of the challenges from the last 4 years still remain,
but with President Trump back in office, and a Republican led
Congress, workers and job creators are increasingly optimistic
for the return of pro-growth economic policies that unleash the
ingenuity and entrepreneurial spirit of the American workforce.
Following the 2024 election, small business optimism
surged, reaching the highest point since October 2018. Just
this week, Apple announced plans to invest more than 500
billion dollars in the U.S. and hire 20,000 workers over the
next 4 years to support American innovation and manufacturing.
President Trump is already making good on his promise to
root out wasteful spending, and to stop the job killing
regulatory blitz. Upon taking office, he ordered a review of
all pending regulations, and signed an executive order
directing Federal agencies to eliminate ten existing
regulations for each new regulation issued.
There is also optimism that Congress and the President will
extend many provisions of the Tax Cut and Jobs Act of 2017, and
enact new tax proposals to benefit working families and
businesses. Following enactment of the 2017 Tax Act, working
Americans saw real wages rise nearly 5 percent in 2018 and
2019, the fastest growth in 20 years.
In this Congress, the Committee on Education and Workforce
will consider legislation proposals to improve the lives of
American workers, reduce burdens on small businesses, address
critical workforce shortages, and stimulate economic growth.
Before I turn to the Ranking Member for his opening
remarks, I want to recognize a Committee staffer who has served
both the majority and the minority. Sheila Havenner, the
Committee's Information Technology Specialist, or guru, is
retiring after more than a decade of public service.
She has been an invaluable asset, supporting the operations
of the Committee and its staff, and may I add, getting our
electronic voting up and running when everybody else was
telling me, back off Walberg. Do not push it so hard, we have
got to go through the process.
She got it done as you all know, and it worked flawlessly,
except for my verbiage. She will be missed, and I wish her the
best in her well-deserved retirement, and so I would ask if a
suitable show of appreciation thank you, Sheila. With that, I
yield to the Ranking Member.
[The statement of Chairman Walberg follows:]
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Mr. Scott. Thank you, Mr. Chairman. Before I begin my
remarks, let me associate this side with your remarks about
Sheila Havenner. She is for the past 11 years worked tirelessly
for the Committee, and has worked under Democratic and
Republican leadership, handling a range of information and
technology issues flawlessly, and so Sheila, thank you for your
service, and look forward to your next step. Thank you.
I would like to thank our witnesses for being here today,
and thank today's full Committee hearing, the first labor
related one for the 119th Congress comes just as President
Trump completed his first month in his second term.
It is important to be clear about the economy and labor
market that President Trump and congressional Republicans
inherited, as they are now completely in charge of the Federal
Government.
During the previous 4 years, during the Biden
administration, the economy created 16.2 million jobs, breaking
the record for jobs created for any single Presidential term,
and in fact, since Ronald Reagan in 8 years was the highest job
creator for Republicans, he created 16.1 million jobs, so
President Biden created more jobs than any Republican President
in history, whether they served four or 8 years.
Are we going to have the charts? That is the other one.
That is the deficit. Yes, okay. This chart shows the
President's job creation, average monthly job, job change by
administration showing Joe Biden leading the pack, and Donald
Trump with the worst job performance in about 100 years.
The unemployment rate fell from 4.6 percent in January 2021
to 4 percent in January, 2025. The unemployment rate has been
at or below 4.2 percent since November 2021, and as Dr.
Shierholz will note in her excellent testimony, the last time
the United States saw unemployment this low was about a half a
century ago.
For those who are interested in fiscal responsibility, I
will remind people next chart that every Democratic President
since Kennedy has left office with a better deficit situation
than they inherited, and every Republican President since Nixon
has left office, and left for their Democratic successors a
worse deficit situation than they inherited, all without
exception.
Further, President Biden was the first President on record
not to have a single month of seasonally adjusted job loss. At
the same time between 2019 and 2023, t he low wage workers
experienced historically fast, real wage growth, and labor
force participation for prime age workers reached the highest
level in more than 20 years, and in 2023, roughly 22 percent of
the people with a disability were employed, the highest
recorded ratio since comparable data was first collected in
2008.
This remarkable progress came as our country emerged from
the COVID-19 pandemic, and the progress was not inevitable, it
was a result of policy choices made by congressional Democrats
to ensure that workers were prioritized and benefited from
public investments.
For example, the multi-employer pension fund on the brink
of collapse, Democrats saved the pensions of more than 1.3
million retirees, protecting nearly 10,000 businesses already
to date. Regrettably, not one Republican voted to save the
pensions of these 1.3 million retirees.
Democrats also capped out of pocket insulin costs for
Medicare at $35 a month. Again, not a single Republican voted
for this landmark reform. Unfortunately, the progress we worked
so hard to achieve in the last 4 years, and the economic gains
that were made as a Nation, while other countries struggle to
overcome global inflation are at risk.
How can we be confident that the Trump administration and
congressional Republicans, who again are in complete control of
the Federal Government, President, House and Senate, will be
effective stewards of the strong economy that they have
inherited?
There is evidence that they are not going to be good
stewards. It has been a little over a month and so far the
second Trump administration has been filled with the same non-
stop chaos, confusion and unprecedented, and in some cases,
illegal, actions characterized by its first term.
So far, President Trump has rescinded the landmark
Executive Order 11246 from the 1960's that protects Federal
contract workers and job applicants from unlawful
discrimination. He illegally fired Inspector Generals,
Inspectors General at the Labor Department and several other
agencies who are charged with rooting out waste, fraud and
abuse.
He illegally fired Gwynne Wilcox, the first black woman to
serve on the National Labor Relations Board, leaving the NLRB
without a quorum to function and issue decisions; fired two
EEOC Commissioners, Charlotte Burrows and Jocelyn Samuels, who
were in the middle of their terms. This has never happened
before in the Agency's 60-year history, leaving the EEOC
without a quorum to address claims of illegal workplace
discrimination.
President Trump also allowed unelected billionaire, Elon
Musk and his DOGE team to invade the Labor Department and
apparently access sensitive data.
While the full extent of DOGE's intrusion into the
Department's systems is unknown the fact is that they may have
access to our constituents' personal and private data, as well
as case files on active criminal and civil investigations,
including ones that may relate to Elon Musk's own companies.
I have asked if this access includes access to files on
investigations that include the name of confidential witnesses
or whistle blowers, whether or not it includes access to
sensitive information like job numbers before they become
public, access to his company's, to his competitor's bids, so
he will know how to bid, and Mr. Chairman, we have not received
any answers.
We are now hearing about abrupt firings of civil servants
in at least six Labor Department agencies, including Mine
Safety and Health Administration, even though staffing
disruptions at MSHA were among the factors that led to the
Upper Big Branch mine disaster that killed 29 miners 15 years
ago this April.
This is outrageous, and my Democratic colleagues and I have
been demanding answers, and Mr. Chairman, I ask unanimous
content to enter several oversight letters into the record that
have been asking these questions.
Chairman Walberg. Without objection, they will be entered.
[The information of Ranking Member Scott follows:]
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Mr. Scott. Mr. Chairman, I invite you to join our efforts
to ask Elon Musk and DOGE questions about what they are doing,
and whether or not, so that we can get some sense of what they
have access to, why they need access to it, and what they are
doing with the information.
I would hope you would join us, and our staff will be
contacting your staff to see what we can do get--to not do
anything, just to ask questions to see what they are doing.
Finally, I note that this hearing is about ``Unleashing
America's Workforce.'' It comes the same week as the House
Republicans passed a budget resolution that would give
trillions of dollars of tax cuts to billionaires and
corporations at the expense of American workers and families.
Specifically, the budget resolution directs our Committee
to come up with at least 330 billion dollars in savings. That
means in the coming weeks the Republicans on this Committee are
likely to massively cut critical student loan programs, and
other educational programs, and school meal programs for our
kids, other kinds of programs in the health and labor areas,
all to help finance a 4.5-trillion-dollar tax cut for the
wealthy.
The consequences of these cuts will hurt our workforce,
harm the public, and threaten our economy. Just as smart,
sensible pro-worker policies helped establish a stronger
economy over the past 4 years, reckless and fiscally
irresponsible policies will undo that progress.
I say fiscally responsible because after all the mean-
spirited cuts and tax cuts for the wealthy, we end up with a
deficit that is worse than the one we have now. I would hope
that we could do better, and I thank you, Mr. Chairman, and I
yield back.
[The statement of Ranking Member Scott follows:]
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Chairman Walberg. I thank the gentleman, and I think you
all see we will have a spirited debate that goes on here, and
that is a good thing. I tell you, my Ranking Member, if all of
that was true, I would not vote for myself, but I have, so let
us get on with it.
Pursuant to Committee Rule 8(c), all members who wish to
insert written statements into the record may do so by
submitting them to the Committee Clerk electronically in
Microsoft Word format by 5 o'clock p.m., 14 days after the date
of this hearing, which is March 12, 2025.
Without objection, the hearing record will remain open for
14 days.
Mr. Scott. Reserving the right to object. Mr. Chairman, on
my reservation, if you think anything I said was not true, I
would like you just to name it, and we will discuss it. I
withdraw my reservation.
Chairman Walberg. I appreciate my Ranking Member bringing
that up. We will have those opportunities, but today we have a
hearing that I am looking forward to hearing the witnesses, and
our discussion.
Without objection, the hearing record will remain open for
14 days to allow such statements and other extraneous material
referenced during the hearing to be submitted for the official
hearing record.
I will now turn to the introduction of witnesses. Our first
witness is Ms. Rosanna Maietta, who is the President and CEO of
the American Hotel and Lodging Association, which is located in
Washington, DC. Welcome.
Our next witness is Dr. William Beach, who is a Senior
Fellow in Economics at the Economic Policy Innovation Center
located in Washington, DC. Welcome.
Our third witness is Dr. Heidi Shierholz, who is the
President of the Economic Policy Institute in Washington, DC.
Welcome.
Our final witness is Ms. Elizabeth Milito, who is the
Executive Director of the National Federation of Independent
Business, NFIB, Small Business Legal Center in Washington, DC.
Welcome to the hearing.
We thank you all for being here today and look forward to
your testimony. I would like to remind the witnesses that we
have read your witness statements, which will appear in full in
the hearing record. I would ask that you each limit your oral
presentation to a 3-minute summary of your written statement.
The clock will count down from 3 minutes because Committee
members have many questions for you, and we would like to spend
as much time as possible on questions and answers.
Pursuant to Committee Rule 8(d) and Committee practice,
however, we will not cutoff your testimony until you reach the
5-minute mark. I also would like to remind the witnesses to be
aware of their responsibility to provide accurate information
to the Committee. I now first recognize Ms. Maietta for her
testimony.
STATEMENT OF MS. ROSANNA MAIETTA, PRESIDENT AND CEO, AMERICAN
HOTEL AND LODGING ASSOCIATION, WASHINGTON, D.C.
Ms. Maietta. Good morning, Chairman Walberg, Ranking Member
Scott, distinguished members. Thank you for allowing me to
testify today. My name is Rosanna Maietta, and I am proud to
represent the American Hotel and Lodging Association as its
President and CEO.
The 64,000 hotels across America support more than 9
million jobs. These hardworking Americans are in every
community. The majority of hotels around the country are Main
Street small businesses. We are a vital part of a thriving
America, a place where the American dream can still be
achieved.
Five years on from COVID-19, our industry has not
recovered. At the height of the crisis America's hotels lost
more than 680,000 workers. Now, we are down nearly 200,000
employees. We are taking major steps to address workforce
shortages.
Hotels have not just increased wages, we have raised wages
15 percent faster than the national average. We have provided
more flexible hours and expanded benefits. We invest in
apprenticeships that help workers build new skills and advance
their careers. Through partnerships with schools and local
organizations, we are creating lasting career pathways.
Persistent workforce shortages remain. Inflation has been
another headwind. Cost increases are far outpacing revenue
growth. For America's hotels, costs have soared from goods to
building materials, to property insurance. Many small
businesses have been forced to raise prices but still struggle
to keep their doors open.
Congress can help. First, until it was overturned, the
NLRB's Joint Employer Rule would have led to higher costs and
fewer opportunities for workers. We urge Congress to pass the
Save Local Business Act and codify the traditional standard
that serves millions of franchised workers and small
businesses.
Second, we agree with President Trump that legal guest
worker programs are part of the solution to workforce
challenges. Third, like all small business owners, hotel owners
need Congress to extend the Tax Cuts and Jobs Act. Without
congressional action, hoteliers face a massive tax hike that
would devaState our industry.
These important provisions include extending the small
business deduction, renewing bonus depreciation for capital
investments, and preserving the like-kind exchange to promote
job growth and economic development. We urge Congress to allow
the hardest working Americans to keep more of what they earn
through no tax on tips.
As the cornerstone of every community around America,
hoteliers are eager to work with Congress to drive more job
creation around the country. We look forward to continuing to
work with this Committee, and incoming Secretary Chavez-DeRemer
to ensure our industry remains an essential contributor to our
Nation's economy. Thank you.
[The statement of Ms. Maietta follows:]
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Chairman Walberg. I thank the lady. Dr. Beach, and I
recognize you for your testimony.
STATEMENT OF DR. WILLIAM BEACH, SENIOR FELLOW IN ECONOMICS,
ECONOMIC POLICY INNOVATION CENTER, WASHINGTON, D.C.
Mr. Beach. Thank you, Mr. Chairman. Chairman Walberg,
Ranking Member Scott, and members of the Committee, I thank you
for inviting me to testify today. Just as an additional
biographical matter, and maybe I am a bipartisan witness this
morning, I served as--I ran the Bureau of Labor Statistics for
2 years under President Trump and 2 years under President
Biden.
There are two ways to view labor force trends. First, from
a policymaker's perspective, and second, from a worker's point
of view. Now, policymakers generally, and understandably, focus
on broad indicators like unemployment and job growth. Workers,
on the other hand, care more about job openings, wages and
maintaining their standard of living.
Let me start with the policymaker's perspective, which is a
big picture way of seeing labor markets. My submitted testimony
underscores two big picture trends. Some data suggests growth,
while others point to continued employment slowdown which began
in 2022.
This slowdown has recently been accompanied by an uptick in
unemployment. Then there is the worker's perspective, which
include developments closer to home like job opportunities, job
turnover, and the purchasing power of the worker's income. My
submitted testimony shows that job openings are sharply down.
Over a million fewer job openings than a year ago.
Wages have started to flatten, and inflation, since mid-
2021 has eroded workers purchasing power making essentials like
housing, food and gas more expensive. Wages have not kept pace
with inflation, leading to a decline in living standards. What
should Congress do in the face of these trends?
I believe that Congress must take action to support
productivity and economic growth, primarily on two fronts,
through regulatory relief, and making the Tax Cuts and Jobs Act
permanent. On the regulation front, research that I just
published shows that freezing or reducing regulations can
stimulate economic activity as much as tax reform, and could
lower the inflation rate by 7 tenths of a percent.
Increased productivity is the key, since it enhances every
aspect of working life. Additionally, addressing the Federal
budget deficit is absolutely crucial. Since 2020, deficits have
fueled inflation by distorting the price system and increasing
debt. By practicing fiscal restraint and signaling lower future
deficits, Congress could help the Federal Reserve fight
inflation and support economic activity.
Combined with higher productivity and economic growth,
these steps will strengthen wages and improve the standard of
living for American workers and the families they support. I am
eager to answer any questions you may have for me. Thank you.
[The statement of Dr. Beach follows:]
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Chairman Walberg. Thank you. Dr. Shierholz, we welcome you
to testify.
STATEMENT OF DR. HEIDI SHIERHOLZ, PRESIDENT, ECONOMIC POLICY
INSTITUTION, WASHINGTON, D.C.
Ms. Shierholz. Thank you. Chair Walberg, Ranking Member
Scott and members of the Committee. Thank you for the
opportunity to testify today. We are meeting to discuss
unleashing America's workforce and strengthening the economy.
However, this discussion is occurring while this very
chamber moves forward with a budget that will make draconian
cuts to healthcare and food assistance for children and
families, hurting millions of America's workers, and weakening
our economy.
These cuts are not even being made in the name of
responding to a national emergency, or reducing deficits to
boost future growth. They are being made to create fiscal space
for tax cuts that will go overwhelmingly to this country's
wealthiest households, and those tax cuts are such massive
giveaways to the rich, that they will increase the deficit by
trillions, even with the draconian cuts for the most
vulnerable.
Nothing about this serves America's workforce or
strengthens the economy. To be clear, sometimes you do need
larger deficits to spur a weak economy, but that is not where
we are today.
Today's economy is very strong with historically low
unemployment rates, which means larger deficits will likely put
a drag on economic growth. The spending cuts will cause
enormous damage to this country's most vulnerable households
with tens of millions losing health coverage through Medicaid,
tens of millions receiving less help in buying groceries from
SNAP, or being cutoff completely.
Many others seeing the costs of their student loans rising,
and on, and on. When the Trump administration took office last
month, the unemployment rate was 4 percent, and it had been at
or below 4.2 percent for 39 months.
The last time the unemployment rate was that low for that
long was in the 1960's. Also, the Bureau of Labor Statistics
Data showed that the purchasing power of America's workers
wages, i.e. wages after taking inflation into account, that
purchasing power was higher in 2024 than it was at the business
cycle peak of 2019, and at any point before that. That was true
across the board for low wage workers, middle wage workers, and
high wage workers.
That is what unleashing America's workforce and
strengthening the economy looks like. This administration's
actions during its first month in office, along with its
backing of the extremist House budget plan makes it abundantly
clear that their agenda will be profoundly destructive to
incomes and economic security for both the most vulnerable
families, and for the broad middle class.
Further, the chaos and uncertainty the administration is
sowing in key economic institutions could cause a full blown
crisis if it is not stopped.
If you were truly interested in unleashing America's
workforce and strengthening the economy, you would enact
policies designed to protect and fortify a strong public
sector, and provide excellent public services, not gut an
already tiny Federal workforce and attack State and local
government workers.
You would help to ensure that all workers who want a union
can get a union, and get a collective bargaining agreement, not
strip the National Labor Relations Board of its independence
and make it a tool for union busting.
You would implement tax policy that ensures the health of
critical programs, like Medicaid, Society Security and SNAP,
not advance measures that give tax cuts to the wealthiest at
the literal expense of poor children, the sick, and the
elderly.
None of these top administration priorities have anything
to do with unleashing the country's workforce, or strengthening
the economy. Theirs is not an agenda of prosperity. It is a
reckless, cynical dismantling of the very foundations that make
economic opportunity and progress possible. I look very forward
to your questions.
[The statement of Dr. Shierholz follows:]
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Chairman Walberg. Thank you. Now I recognize for her
witness testimony, Ms. Milito.
STATEMENT OF MS. ELIZABETH MILITO, EXECUTIVE DIRECTOR, NATIONAL
FEDERATION OF INDEPENDENT BUSINESS, SMALL BUSINESS LEGAL
CENTER, WASHINGTON, D.C.
Ms. Milito. Thank you, Chairman Walberg, Ranking Member
Scott, members of the Committee, and staff who are here today.
I very much appreciate your attention. NFIB, the National
Federation of Independent Business represents small businesses
nationwide in every industry and in every State.
NFIB members are your local hardware store, the restaurant
where your family eats on Friday nights, the mechanic who fixes
your car, the plumber, roofer and landscaper who work on your
home. Small businesses employ nearly half the country's private
sector workforce.
It is estimated that 68 cents of every dollar spent at a
small business is reinvested in the community. When small
businesses succeed communities flourish. Unfortunately, over
the last 4 years small businesses have weathered storm after
storm, including COVID shutdown, supply chain disruptions,
historic inflation, a burdensome regulatory environment, and
workforce shortages.
It is no surprise that small businesses were not
particularly optimistic during the last administration.
Following the November election, small business optimism
surged, reaching the highest point since October 2018. The
election results signaled that a major shift to the Nation's
economic and regulatory policy was on the horizon.
Although small businesses remain optimistic, economic
uncertainty lingers. The expiration of key provisions included
in the 2017 Tax Cuts and Jobs Act, like the 20 percent small
business deduction, creates the threat of a massive tax
increase for over 30 million small businesses in a little over
10 months.
In fact, the January 2025 Small Business Economic Trends
Survey showed that the uncertainty index had increased. This
rating stresses the urgent need for Congress to provide small
businesses with certainty so they can resume planned
investments in their business and workforce without the
possibility of a massive tax hike.
In addition, small businesses continue to struggle to fill
positions. Owners are increasing compensation and benefits, but
staunchly oppose one size fits all, inflexible and costly
mandates from Washington, DC. and State capitals around the
country. Between 2021 and 2024, small businesses experienced a
regulatory tsunami that added 1.8 trillion in regulatory costs.
These costs disproportionately impact small businesses that
operate without compliance officers, lawyers or human resource
departments, making it more expensive to hire employees will
not lead to more hiring. For this reason, small businesses
viewed President Trump's commitment to rolling back
unnecessarily burdensome and duplicative regulations as one of
his first term's greatest accomplishments.
Small businesses are optimistic that the second Trump term
and the 119th Congress will implement pro-growth tax, labor,
regulatory and economic policies. However, threats do loom on
the horizon. Congress and the administration can work together
to create a pro-business environment, but you must reject
policies that increase uncertainty.
On behalf of the small business owners of NFIB, thank you
again for your time today.
[The statement of Ms. Milito follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Walberg. Thank you. I thank each of the witnesses.
Under Committee Rule 9, we will now question the witnesses
under the 5-minute rule, ask members to keep your questions
succinct, so the witnesses have time to answer. I will
recognize myself for 5 minutes for questioning.
Ms. Milito, you have pointed out that business optimism
surged after the November elections. You also pointed out in
your testimony that surveys found that challenges remain, which
are leading to uncertainty for small businesses.
Can you elaborate further on how the Biden administration's
policies have created these challenges for small businesses,
and also what are some of the ways that the Trump
administration and Congress could address these challenges.
Please elaborate further.
Ms. Milito. Thank you, Chairman Walberg for that question.
Small business optimism, as I said, surged in November and
again in December. Highest level since 2018, so there is no
denying the Trump effect, I will call it. October, November saw
the largest increase in our optimism index in the 41-year
history of the survey, so that is pretty astounding there.
Small business owners are impatient. They want to get
going, so they are going to hold President Trump to his
promises for the deregulatory efforts there. They are eager
for, you know, ten out one in, to get underway there, so they
are very, very optimistic that things are going to improve. The
landscape is going to improve.
There are a lot of expectations though, however, that
Congress is going to need to come through, and you know, extend
or make permanent the tax cuts from 2017. That is just
absolutely critical.
As I mentioned in my opening statement, those tax cuts,
there are over 30 million small businesses that are depending
on this Congress to pass the Main Street Tax Certainty Act, and
make sure that small business, 20 percent small business
deduction is made permanent, so that is just absolutely
critical, and uncertainty regarding what Congress is going to
do with that.
Chairman Walberg. Which impacts uncertainty with the
employees of the small businesses as well.
Ms. Milito. Absolutely. Absolutely. My written testimony
talks about ways that my members have used that tax cut to
invest directly in the workforce, in the business, in the
employees, and in the communities, that is how they are using
that tax cut.
Chairman Walberg. Thank you. Ms. Maietta, the Biden
National Labor Relations Board's Final Rule, the Joint Employer
Rule upended traditional direct and immediate control standard,
and create an expansive and vague standard for determining
joint employer. The Biden Joint Employer Rule was rebuked by
bipartisan majorities in the House and Senate, during the 118th
Congress, and was ultimately vacated by the Federal Court.
For franchise hotels, how important is it to have a clear
joint employer standard, and would the Save Local Business Act
provide that clarity?
Ms. Maietta. Thank you, Chairman Walberg. Absolutely.
Clarity and certainty is needed in business. That joint
employer measure under the Biden administration would have
devastated our industry, decimating it virtually overnight by
creating and injecting an incredible degree of uncertainty
around who controls the relationship between the employer and
the employee.
Eliminating the ability for a small business owner to make
decisions about how to run their business day to day, and
removing some of the protections that are so important around
brand standards, around health and safety protocols that our
guests and our employees rely on. The Save Local Business Act
eliminates that, and also what is really important for us is to
ensure that as administrations change, the legal standard is
codified into law, so that we do not have to worry, from
administration to administration, what is going to happen next.
Chairman Walberg. Okay. Thank you. Dr. Beach, inflation has
attacked Americans over the past 4 years, even with decreasing
inflation rates since 2022, how has inflation affected workers
the past 4 years, and how has it affected those wanting to
start or expand businesses?
Mr. Beach. Well, thank you very much for that question.
When we look at inflation, we take--we need to take a longer
view, and we need to begin with that month when inflation
really took off, and look at its cumulative effect over time.
About 30 percent of the loss in purchasing power that workers
experienced from mid-2021 on has been regained, but that means
70 percent has not. Those are my calculations.
That means that it is still difficult to purchase the
things that were discretionary before. For example, if you were
doing after school tutoring of your children, that might be
sacrificed now in order to pay your rent, your rent and your
food, might exclude insurance payments. It might exclude the
purchase of a new vehicle.
They might force you into a bus route, and that is one of
the worst things for low-income people and middle-income people
when they have almost no discretion on where to purchase, so it
reverberates on and on and on. The point is we have made
progress on inflation, but we still have a long way to go.
Chairman Walberg. Thank you. I appreciate your responses.
Now, I recognize the gentlelady from Oregon, Ms. Bonamici.
Ms. Bonamici. Thank you very much, Mr. Chairman. This is a
hearing about unleashing America's workforce and strengthening
the economy, and I am not going to sit here and pretend that
everything is normal. My mother was a small business owner. I
have family members who are small business owners, but right
now there are many unprecedented and illegal actions that the
Trump administration and DOGE are taking against the Federal
workforce.
Donald Trump and Elon Musk and DOGE have fired more than
30,000 Federal workers across the country, and with what
appears to be little planning and even less justification.
Needless to say, this has created an enormous amount of chaos,
which is harmful, not just to the Federal workforce, but also
to the economy. I have had five town hall meetings in Oregon,
and not just in urban areas, and people are stressed and really
anxious. They are concerned that Musk and DOGE are accessing
their sensitive personal data, and the government's previously
secure and confidential data systems.
They are worried about social security numbers, their home
addresses, citizenship and disability status, work records,
family income and maybe bank account information. Well, now I
believe it was yesterday, the White House said well, Elon Musk
is not in charge of DOGE. Well, maybe that is because Elon Musk
now appears to have access to his business competitors' tax
records, and financial information in what could be a pretty
flagrant and massive case of corporate espionage.
Let us just say people are really concerned, and that is
having implications. Despite the title of this hearing, The
American workforce has not been unleashed, and our economy has
not been strengthened, quite the contrary. In my home State of
Oregon, agricultural researchers in rural Oregon were purged as
a result of cuts at the USDA.
The Oregon Health and Sciences University, Oregon's largest
recipient of funding from the National Institutes of Health
could lose tens of millions in Federal funding. That is going
to halt medical research, and upend the lives of patients and
with the work of scientific researchers.
The cuts to the U.S. Forest Service will leave Oregon more
vulnerable to wildfires, and shockingly, about 100 staff at the
Bonneville Power Administration, their purging could leave
northwest Oregon and the entire region facing brownouts and
blackouts, so that would be devastating for the entire economy
of the Pacific Northwest.
It is especially outrageous because the Bonneville Power
Administration is rate-payer funded, so it does not save any
money, but still those people were purged. There is a lot of
chaos out there. Now Bloomberg is reporting that this mass
government employee termination that we have seen at other
agencies is happening at the Department of Labor.
Dr. Shierholz, I am going to ask you, because I know Ms.
Milito talked about how we have to resist uncertainty, there is
a tremendous amount of uncertainty. Dr. Shierholz, if Elon Musk
and DOGE fire large numbers of employees at the Department of
Labor, safety inspectors, people who assist with unemployment,
or workers compensation, or do the work--other work of the
Department, what effect does that have on the working people in
Oregon and across the country?
Also, what effect does this kind of chaos have on the
economy overall?
Ms. Shierholz. This has a devastating effect on the ability
of DOL to do their work. The chaos and attacks on Federal
workers will deeply harm the Labor Department's ability to
attract and retain top talent, for example. When career
officials feel undervalued or face instability, which is
clearly what the Trump administration is trying to make them
feel, it slows policy development, it slows policy
implementation, it weakens enforcement.
It ultimately just hurts their ability to serve America's
workers, and I believe that is a core reason behind the actions
of the Trump administration. It seems abundantly clear that the
administration views that as a feature, not a bug, of what they
are doing.
Ms. Bonamici. Well, how does that affect the economy
overall?
Ms. Shierholz. It puts a big strain on the economy. One of
the things I think that people do not understand that the work
of Federal workers is so much a part of our daily lives that
people do not even understand what is happening. Like you go
into the grocery store, you know you can buy food that is safe
because of the work of workers at the Federal Food and Drug
Administration.
You drive on roads, and you know you can arrive where you
want to go safely because of the standards and the enforcement
of the Department of Transportation, and on and on and on. The
crucial work of our Federal workforce is what is the
underpinning of public services, and our stable economy, and
you gut that workforce, and you see a lot of those things
crumble.
The other thing that is useful saying our Federal workforce
is tiny. It is already very, very shoestring. It is less than 2
percent of all payroll employees. The idea that we are going
after this workforce that is protecting the American people is
just outrageous.
Ms. Bonamici. I just want to thank you, Dr. Shierholz. I
just want to emphasize again, as I yield back, that these
purges of Federal employees are going to create long-term harm,
but also we have thousands of people now additionally
unemployed because they lost their job with some promise of
payout, which apparently has not been authorized.
Again, uncertainty is what is happening, not what this
administration is fighting. I yield back.
Chairman Walberg. The gentlelady's time is expired. I now
recognize the gentleman from Georgia, Mr. Allen.
Mr. Allen. Thank you Mr. Chairman, and I would note I just
looked, there are 7.6 million job openings in this country
right now that need to be filled, so I think there is plenty of
opportunity for those folks who are looking for a change in
career to apply for a private--a job in the private sector.
It is stunning to me that people do not think that folks
who work for the government are capable of working in the
private sector. I mean for crying out loud, you have got to be
kidding me. With the staggering number of issues facing our
workforce, I am honored that Chair Walberg asked me to serve as
Chairman of the HELP Subcommittee at this Congress.
By showcasing this hearing we have no shortage of work to
get done. With that being said, Ms. Milito, why do small
businesses choose to offer health benefits to their employees,
even if they are not required by law?
Ms. Milito. Thank you very much. First of all, Mr. Allen, I
would like to thank you for your support of the Main Street Tax
Certainty Act and the 20 percent small business deduction. We
are very grateful and thankful for your support on that there.
Small businesses--when they look to hire, retain employees,
and as you mentioned, there is a tremendous workforce shortage
there--they look first to boost wages, and then the second
benefit they will offer is paid time off, and the third benefit
they try to offer is healthcare, so healthcare is critical.
Over 30 percent of small businesses do offer healthcare. It
is a costly benefit as you know.
Mr. Allen. Right.
Ms. Milito. It is so important for, you know, attracting
and retaining employees, and allowing small businesses to
compete with larger employees that sometimes have more what I
will call Cadillac or robust healthcare coverage. It is, you
know, that expanding access to ERISA plans is very important
there for protecting employees, and of course a lot of small
business owners get their own healthcare coverage for their
families too through the business as you know.
Mr. Allen. Well, you know, the Affordable Care Act has made
ERISA unaffordable.
Ms. Milito. Yes, very true.
Mr. Allen. Companies and I mean the costs are skyrocketing,
and then President Obama promised that the price was coming
down. They have made it impossible, and there needs to be
something done there to make it more beneficial, and more cost-
efficient for both the employers and employees, some
flexibility.
What role does the Employee Retirement Income Security Act
play in helping small businesses offer robust and affordable
health benefits to employees, and what should this Committee do
to better help small businesses who offer high-quality
coverage?
Ms. Milito. Thank you for that question. ERISA is really
the foundation for employer sponsored health insurance, and you
know, robust plans can come with a strong framework under
ERISA, lowering costs and enabling, as I said, small business
owners to compete.
Options that small business owners tell us they are looking
for, being able to ban together to form association health
plans, and other pooling arrangements that some states allow
their protecting self-insurance through stop loss insurance and
reducing red tape and unnecessary paperwork, and of course,
increasing price transparency, which is a big thing NFIB has
been pushing for for probably now decades.
Mr. Allen. Right.
Ms. Milito. The cost and availability of healthcare
insurance is our No. 1 on our problemsome priority survey. It
has been No. 1 now for decades.
Mr. Allen. Sure. Ms. Maietta, the Biden administration--the
Biden Harris administration's over regulation negatively
affected American workers and job creators last Congress. My
bill, the Employee Rights Act, or ERA addressed various harmful
Biden administration rules, including the Independent
Contractor Rule, and Joint Employer Rule.
In his first term, President Trump's NLRB proposed a
commonsense Joint Employer Rule that provided clarity to
franchises and franchises alike. How important is it for the
Trump administration and the current NLRB to announce--to once
again support a narrow Joint Employer Rule that gives clarity
to small businesses, either via a regulatory action, or through
a permanent legislative fix?
Ms. Maietta. Thank you for your question, Congressman
Allen. HLA was proud to support your bill, the Employee Rights
Act, codifying the traditional standard of joint employer is
fundamental to our industry. Franchising is the backbone of the
hotel industry. Half of our hotels are franchised hotels,
700,000 people work in franchised properties right now. That
certainty is critical to ensuring that a business owner can
make decisions about their own business.
The franchise model in our industry is unique because our
small business owners own the building, they own the capital,
and they directly employ the employees. It has led to a pathway
of entrepreneurship in effect.
Mr. Allen. Yes, I am out of time, but let me just add that
the only way to get out of this fiscal crisis is to grow
private jobs. That grows GDP, grows small businesses and I
yield back.
Chairman Walberg. I thank the gentleman. Your time has
expired. I now recognize the gentlelady from North Carolina, Dr
Adams.
Ms. Adams. Thank you, Mr. Chairman, and to our witnesses,
thank you for being here. Dr. Shierholz, the Wage and Hour
office in my district in North Carolina provides jobs and helps
protect all of my constituents from harm. These are people who
are committed to serving the community, to stop child labor,
and protecting their fellow workers from abuse.
As far as I am concerned, firings at Wage and Hour Division
seems like a ploy to roll back the clock on child labor
protections without consulting Congress. What sort of
information might be contained in the case file systems handled
by Wage and Hour offices, and how sensitive is it?
Ms. Shierholz. Okay. Many sensitive data sources and
processes are housed at the Department of Labor. For example,
because DOL administers all worker compensation claims for
Federal employees, it is responsible for all of those records,
which includes highly sensitive personal information like
medical, financial, and other personal information that is
gathered in connection with all of those claims.
The Trump administration is viciously and illegally going
after Federal workers. It is no wonder they want access to that
information. DOL data also includes confidential information
about those who have reported OSHA violations by their
employers.
Those workers make those reports under the promise that it
will be kept confidential, so that they are protected from
retaliation. The disclosure of those records presents a huge
risk to those workers, and it poses a risk to the Department's
enforcement efforts, particularly going forward as employers
will--workers will no longer come forward because they know
that they cannot be promised confidentiality.
Ms. Adams. Okay. Let me move on. I have a few more
questions. In terms of what you are saying, the issues that
might arise are problematic if a billionaire industrialist like
Elon Musk has access to this information, would you say yes?
Ms. Shierholz. Yes, absolutely, yes.
Ms. Adams. Okay. What kind of impact would layoffs in this
office have for workers and children in my district?
Ms. Shierholz. Layoffs--Federal worker layoffs will reduce
the services that those Federal workers do, the public
services, the crucial public services, food safety, research,
health, all of those kinds of services will be hurt by this.
Then--particularly in a district with higher unemployment
rates, it could--you know, you fire workers if there are not
other jobs available for them, then it could reduce public
spending, and actually have a drag on the economy.
Ms. Adams. Okay. OSHA appears to have complied with
President Trump's executive orders by going through all of its
guidance documents and materials, looking for certain banned
words like diverse, like gender, and deleting any documents
with these words. Is this a good use of staff's time in your
opinion?
Ms. Shierholz. It is not a good use of staff time. What it
does it serves to divert the staff from the true mission of
their organization, so you spend time doing these other kinds
of activities, and what you are not doing is developing and
implementing policies that protect the safety and health of
workers and enforcing workers--existing workers regulations.
Ms. Adams. OSHA, as far as I am concerned, is already
understaffed, and so we are wasting OSHA's already limited
capacity on banned word witch hunts, putting workers, people in
safety and putting the people, the worker's, their safety at
risk as well as their health?
Ms. Shierholz. That is exactly right.
Ms. Adams. Okay. Let me ask Ms. Milito. I noticed that in
your testimony that you expressed concern over the proposed
OSHA heat injury standard, and I was co-lead on the bill
calling on OSHA to make a heat injury standard last Congress.
I notice in your testimony that you claim the proposed rule
is too burdensome. I think that those are your words. Let me
ask you this, is your position that the current situation, a
situation where hundreds of workers die from heat illness is
more acceptable, and are you telling the Committee that you
think the deaths of hundreds of workers are acceptable?
To me, that is an erroneous burden of providing workers
cool water, shade, air-conditioning, those things outweigh the
lives of hundreds of human beings, so is that--was that your
testimony?
Ms. Milito. That was not my testimony, no. Many employers
have designed and take very seriously, effective heat injury
and illness prevention programs. They have them. Small business
owners--let me back up and say, small business owners live and
die on the reputation of their business.
They do not want to get--have employees get hurt. They
certainly do not want to have a fatality at their business.
That would kill--I mean it would just kill the business, so
they take very seriously their duty to keep employees safe.
Ms. Adams. Thank you.
Chairman Walberg. The gentlelady's time has expired.
Ms. Adams. Thank you. I was just reading your testimony,
and I am out of time. Thank you Mr. Chairman.
Chairman Walberg. I thank the gentlelady. Now I recognize
the Vice Chairman of this Committee, and the gentleman from
Utah, Mr. Owens.
Mr. Owens. Thank you so much, Chairman Walberg. First of
all, for organizing this very timely hearing. There is no more
important topic for us. This is one that is getting my heart,
by the way. If we are to grow our American middle class, we
need to unleash the unlimited potential of the independent
contractor.
By the way, for those who do not understand, this middle
class is with the remarkable American culture. It is the
culture founded on the freedom of dream big and taking risks
with the knowledge that in Americawe can embrace the concept of
second chancesif we fail.
I look forward to working with my colleagues on this
Committee to address never again allowing the D.C. bureaucrats
to have the power to stand in the way of that promise. For the
sake of transparency, after retirement from the NFL, I worked
over 25 years in the corporate sales. Every year during that
time, I worked also for myself part-time, as an independent
contractor.
I understand first-hand the passion of an entrepreneur who
want to craft and control their own future, and not leave it up
to the whim of someone else. Ms. Mietta, in your written
statement you say that that franchising is proving to be one of
the most successful drivers of entrepreneurship across the
United States throughout our history.
Can you discuss how franchising in the hotel industry has
created opportunities for entrepreneurship, and how it has
allowed Americans to become small business owners to live out
the American dream?
Ms. Mietta. Absolutely. Thank you for the question. The
franchise model in our industry is the epitome of the American
dream. Of the 64,000 hotel properties around the country, half
of those are franchised properties. That is the very epitome of
entrepreneurship and allowing people to own a property. Once
they own one, we have seen many of my members own many,
several, or hundreds, and it has allowed them to be real job
creators in this country.
Small businesses and the franchise motel in the hotel
industry is really the economic engine of this country. We want
to do everything we can to help preserve that.
Mr. Owens. Thank you. How would these opportunities be
harmed by the Biden National Labor Relations Board Joint
Employer Rule, which is an attack on these independent
contractor status?
Ms. Mietta. That is exactly right. The concern was very
high in our industry about the Joint Employer Rule under the
Biden administration, adding more uncertainty, and burdensome
regulations to an already stressed small business owner
exacerbates the challenges that they have day to day. At the
same time, if you think about the last year alone, operating
costs have risen twice as fast as revenue.
More uncertainty creates even greater stress for many
owners who are questioning whether they can stay in business,
and that is the last thing we want to see.
Mr. Owens. Okay. Thank you. Ms. Milito, as many as one-
third of American workers now earn at least part of their
living through opportunities as independent contractors, such
as freelancing, and at base work. This is happening despite the
Biden administration issuing of a 2024 Rule that would strip
away from entrepreneurs their status as independent
contractors.
Now that we are entering the America First Innovative
Entrepreneur First era, how can we assure that the Federal
Government protects and supports independent workers?
Ms. Milito. Thank you for that question, Representative
Owens, and thank you also for our support of the Main Street
Tax Certainty Act. The Department--the Biden Administration's
rule on the independent contractor was very biased, as you
pointed out, defining individuals classified employees.
You know, the administration seemed to want everybody to be
receiving a W-2. As you pointed out, small businesses often
start out, business owners start out as an independent
contractor. They may have just one client, and that is how they
get going, and then they build their reputation, and they take
on other clients there.
Under the Biden Rule, it would have been very difficult for
an individual, say an IT person, who wants to go out and starts
off with just one client because the way under the Biden Rule
would have been you are really an employee of that, even though
the individual may have been marketing, and trying to get other
clients there too.
It really would have threatened the flexibility of
individuals to start out and start their own business there,
and it also would have, of course, you know, created a lot of
liability for businesses that contracted with independent
contractors there too, and discouraged that, so it was bad on
both fronts.
Mr. Owens. Thanks a lot. I think one of the possibility as
an Education Workforce, we need to teach the power of
entrepreneurship, that this capitalism system we have is why we
have the greatest country in the history of mankind.
That in every industry there is right sizing, we call it
RIF, I have gone through that several times in the private
market, so I think it is important that federal employees
understand that when we are too big, we need to make
adjustments so that we get the best product possible.
There is a remarkable private sector out there waiting for
people to come and work for them, big time. Thank you so much.
I appreciate what you guys are doing, and I yield back.
Chairman Walberg. I thank the gentleman. I recognize the
gentleman from California, Mr. DeSaulnier.
Mr. DeSaulnier. Thank you Mr. Chairman. Dr. Shierholz,
thank you so much for being here. I have two questions, and a
followup if we have time. You already alluded to the illegal
actions by the current administration in regards to NLRB. Maybe
you could tell us your perspective of how that undermines
workers--working people's ability to create a union and be able
to fight for their rights by illegally terminating Board Member
Wilcox.
Ms. Shierholz. Yes, thank you for that question. Workers
whose employers who are violating their rights to organize will
no longer get a fair decision when they bring their case to the
Trump NLRB because it is no longer an independent agency.
President Trump fired Member Wilcox because she had, and I
am now quoting from the email she got announcing her retiring
because she was ``unduly disfavoring the interests of
employers.'' That means that anyone who serves on the Trump
NLRB will know that in order to keep their job, they have to
favor and vote and rule on the side of employers.
Member Wilcox would actually have to be reappointed in
order to restore the independence of the Trump NLRB.
Mr. DeSaulnier. I want to ask you a question about some of
the comments I am hearing. It is sort of hard to imagine about
research on trickle down and Reaganomics and Milton Freedman's
views. We have had plenty of time to analyze that. It does not
work. People with a lot of capital investment keep the money.
All you have to read is Piketty, and the inevitability of
people fighting back when wages are so disproportionately
represented in GDP versus capital.
Is there any research that shows that this--what is
referred to some of my colleagues as the innovation of
completely free market actually works? It does not work.
Ms. Shierholz. Nope, it does not. It used to be like this
sort of neo-liberal approach really was what economists--and I
am an economist by training, what economists really thought was
how, you know, like it was a reasonable model for how the
economy worked, but in the recent period it has become
empirical research has come out showing that is actually not
the case.
Trickle down does not work. There is another, there is sort
of a counterpart to that, the middle out, or bottom-up approach
to the economy, where you get money in the hands of people who
are the most likely to have no choice but to have to spend it.
That generates economic activity. That generates goods and
services, that is what is good for the economy.
Mr. DeSaulnier. As somebody who met a payroll for hundreds,
thousands of them as a small business owner, as a restaurant
owner, I knew that from the California Restaurant Association,
all the research we did that for whether you are a franchise or
an independent owner of retail, middle income people spend it
and go out to eat, and it gets multiplied in the economy.
I wanted to ask you about another vulnerable population in
your background. The administration seems to have attack on
both special needs and the disabled community. Gerald Ford
signed IDEA, to make sure that special needs kids, which has
expanded, would get free public education, so that they could
go out and be in the workforce.
We have made great strides in this country to get disabled
individuals to be able to work and contribute, and they have
contributed disproportionately I would say, given their amazing
ability for empathy. Do you have any comments about that, both
on the education side, as a workforce development tool for this
community, but also the actual employment of it, and what the
administration is doing to attack disabled people, and what
might happen if they close down the Department of Education.
Ms. Shierholz. Yes. Oh, am I on? I am on. The Trump
administration has been very clear that they do not care about
discrimination against people with disabilities. Like Trump
openly and publicly mocked a reporter with a disability. That
is the backdrop against which they are operating.
The Trump administration has made it clear that not
discriminating against workers with disabilities is just not
something that employers need to deal with. Like it is just not
a priority. That is something that employers just will be able
to take a pass on during the Trump administration.
Mr. DeSaulnier. How will they enforce all these laws that
were signed by a Republican President so frequently?
Ms. Shierholz. That raises a very, very, very good
question. When we have these laws that are in place, and we
have an administration that has been clearly flagrantly going
against them.
Mr. DeSaulnier. I have 30 seconds. Do you have anything to
add on your own on any of the other comments or questions
you've heard here?
Ms. Shierholz. Oh, there is so many.
Mr. DeSaulnier. I know. You have got 20 seconds.
Ms. Shierholz. I do not even know. One thing, I will just
say one thing. On the independent contractor thing, I just want
to be clear that the Biden administration, what their
Independent Contractor Rule did was codify the independent
contractor definition that had been in place for decades.
It was the 2021--no. I will not even try to get the year
right now, but it was the Trump Rule that went backward, that
made it much more difficult for workers to get--made it much
easier for workers to get classified as independent
contractors.
Chairman Walberg. Thank you. The gentleman's time has
expired. I now recognize the gentleman from Ohio, Mr. Rulli.
Mr. Rulli. Thank you, Mr. Chairman. Ms. Maietta, you said
in your testimony that nearly 800,000 workers in the hotel
industry rely on tips. You even joined President Trump on stage
supporting legislation to stop tax on tips. Whenever we have
this subject, I try to think in my mind how I could apply this
to normal, everyday people, and I am fortunate because I was
raised in retail stores that my family ran for over 100 years.
I was analyzing different customers that come in, and how
no tax on tips could affect them. What I was thinking was if
you have a single mom who is raising several kids on her own,
and she is a waitress, and she is working hard, and/or she is
working at the casino, and we all see the tip jar.
You know, so like whether you are actually giving tips to
them personally, or in a jar, however that works out, in my
math I am thinking $150 to $200 extra a week, you know, that
could add up to 5, 6, 700 dollars a month, and here are the
things that a single mom could do with that extra money in her
pocket.
She could actually perhaps maybe upgrade her car that keeps
breaking down, that she is getting her kids late to school
with. Perhaps she could maybe take a vacation because she has
not taken her kids to Disney ever. Perhaps she could even maybe
perhaps find a better school.
She could be in an urban situation where it could be
limiting her kid's possibility for a future. There are so many
wonderful things that could happen if we could get the cash in
the hands of someone crucial like that. When you think about
it, that is why we are all here to support the blue-collar
worker.
You know, no one, I do not think, probably in this room
really cares about the billionaires. We care about the average
day Joe bag of doughnuts that is working their heart out, and
barely making ends meet. When you think about something like
tax on tips, and we know that President Trump was the first one
to come up with this idea, can you perhaps talk a little bit
about how this could only not only affect that single mom that
is trying to raise her kid, but other parts of the industry?
How deep would this tax on tips break really be for the
blue collar worker? Thank you.
Ms. Maietta. Absolutely. Thank you for that question. I was
proud to represent the hotel industry with President Trump at
that event. No tax on tips would benefit some 800,000
individuals in the hotel industry, and so we are proud to work
with Congress to ensure that all the job classifications in our
industry that benefit from tips, whether it is the valet or the
bellhop, or the housekeeper, or the bartender, are part of the
rule that is being advanced in Congress right now.
It is so important for individuals to take home more of
what they earn every day, and that's why we are supportive of
that proposal.
Mr. Rulli, I love that. Could you maybe go into maybe a
little bit of a deeper dive when you think about the employee
and the owner relationship? Like anyone that is a small
business owner, and I think we know a lot of the hotels in my
district in particular, you have people that actually started
in that industry, and saved up, and perhaps whoever owned the
hotel before them, decided to retire.
I know even as a small business owner, a lot of times if
there is not a structure within your own personal family, you
would look to someone that was running the business for you to
pass that small independent business off to. When you look at
that relationship, and you look at probably the No. 1 problem
that an employer has, or a hotel owner would have, would be
employee retention.
We all know that that is such a crucial part of existing as
a small business owner, employee retention, because just the
cost to get a new employee, and to train that employee, while
another employee that is at full throttle has to pull back just
to make that happen.
Does this, no tax on tips, actually help with employee
retention if you are a small business owner trying to get
ahead?
Ms. Maietta. We believe it will. I mean retention is
something that keeps our hoteliers up at night because, of
course, it is such a competitive labor market right now. Our
industry provides a pathway for opportunity, and so in addition
to no tax on tips, our hoteliers are continuously providing
upskilling and new trainings, and the ability for certification
so that they can get ahead.
50 percent of general managers today started out in entry
level positions, so the ability to go from an entry level
position all the way through and rise up to become a general
manager, or even own their own hotel, is the very epitome of
the American dream.
Mr. Rulli. Real quick, can you leave us what is the thought
within the industry? Are people excited about this no tax on
tips? Is it an exciting thought?
Ms. Maietta. I can tell you that when I was at the rally
the hotel employees who were there were incredibly excited that
they get to take home more of what they earn every day.
Mr. Rulli. We really appreciate your time. With that,
Chair, I yield my time.
Chairman Walberg. I thank the gentleman. I recognize the
gentleman from New Jersey, Mr. Norcross.
Mr. Norcross. Thank you, Chairman, and thanks for bringing
this subject up, Unleashing America's Workforce, I think is a
great topic that we are all focused on, and I love the idea of
no tax on tips. I have been working on it for 2 years, and I am
glad the President is joining me.
We have to be very careful here that the abuses do not come
in with it that all of a sudden you are changing a salary
structure, and making it oh, we will call it a tip, so you can
be tax free. The real potential for abuse here, is it cash, is
it electronic, how do you report it? The concept of that for
the working schmucks of the world, give them a break.
We give enough breaks to the billionaires, help out the
little guy, so we are all in, and hopefully he will do this. He
also talked about no tax on overtime. Now, they want to
eliminate overtime. I am trying to figure out what is going on
here. I am a little confused. You know, a fair day's pay for a
fair day's work, 40 hours has been the backbone.
If you work more than 40 hours, then you are paid overtime.
I think it is a concept that we can all deal with. You want to
be home, but if they need you more, they pay you more. We are
trying to roll that back, and this is the stunning part for me,
and I have great respect for people who served in this
institution.
They are fighting to pay people less. They want to take
away overtime. It is just stunning that we cannot work together
on this issue, so that everybody makes out, because when you do
not make it overtime, the employer is doing better. It is not
the worker, so certainly something that I want to work with the
other side.
The ERISA issue. The biggest tax break to have the employer
pay for the health insurance is no taxes. Holy smoke. That is
the greatest deal we ever gave the employer because salary
comes first, time off--I will change that, paid time off is
what they are looking for, and then the third one is
healthcare.
Well, healthcare would be even more difficult if we did not
have the ERISA and what comes with that. The idea that we give
a tax break for employers and employees under ERISA to get
healthcare is an excellent idea.
I just want to finish up by asking Dr. a question. There is
a bill out there to eliminate OSHA. I do not know how many
people in this room have been on a job when somebody is killed,
but I will tell you, you will never forget it. Unfortunately,
it happened twice in my career. Somebody gets killed right in
front of you. You know what stops that? OSHA.
The deaths on the job today compared to where they were 50
years ago have changed night and day. Yes, there is a little
bit of work involved in it, but to save somebody's life, to
save somebody from being injured, OSHA stands between that and
somebody who does not have the expertise because they are a one
man or two man show.
The idea that OSHA will now put out the Heat Rule is just
common sense for anybody that has been there. It is not to be
punitive; it is to save lives. Dr., talk to me about OSHA. Have
we saved lives?
Ms. Shierholz. Yes. OSHA regulations, they are what--take a
look at workplaces, and see what are the broad safety and
health concerns that we have that workers have, and do smart
regulations with net benefits that will protect America's
workers. It saves workers from getting injured, it saves
workers from getting sick on the job. It saves workers from
dying on the job.
Then, so it is not just the regulations, it is also strong
enforcement. That needs to--I mean what we know is that no
regulation is--a regulation is only as strong as its
enforcement, so we also need strong enforcement to make sure
that it does not follow.
Mr. Norcross. Let us be clear, when you start to cut the
Department of Labor, and it goes into OSHA, it is already
decades. If they average out often OSHA gets out to inspect the
job.
Ms. Shierholz. Yes.
Mr. Norcross. They are not there to hurt them. They Are
there to save lives. Next time you think about cutting, getting
rid of it, think about somebody not going home to their
children because they were killed on the job, and I yield back.
Chairman Walberg. I thank the gentleman. I recognize the
gentlelady from Illinois, Ms. Miller.
Mrs. Miller. Thank you. First of all, Dr. Shierholz,
earlier in this hearing you said, ``The Federal workforce is
tiny.'' I think the American people would disagree with you and
find that laughable. I do not know what you are basing it on.
The Federal workforce is 2.4 million people, and that excludes
the military and postal workers.
Such an out of touch comment. To my fellow member on the
other side, you just said that we need to give the working
schmucks of the world a break. I hope you did not really mean
it. A schmuck is a foolish, stupid, dummy, sucker, loser. Okay.
It is time for the government to be transparent and
accountable.
That is what the American people want. We want businesses
and workers want less regulation and lower taxes. Now,
Executive Director Milito, is it true that small business
optimism has surged since President Trump has been elected?
Ms. Milito. It is very true. The Trump effect is real. I
will tell you that. It surged, you know, in 2018 too. As I said
before, small business owners are anxious for President Trump
to get started on this regulatory rollback there.
Mrs. Miller. That is great.
Ms. Milito. As the Chairman said in his opening statement,
President Biden's policies hampered job creation. We have
talked about some of those rules here today too, so yes, my
members are very happy, and are looking forward to, you know,
blue skies ahead.
Mrs. Miller. That is great. Can you be specific on why that
is the case? How would you define a pro-business environment
that President Trump is implementing that is causing the surge
in optimism?
Ms. Milito. Well, first I think business owners are very
happy to know that, you know, they have heard President Trump
talk about the small business tax deduction. Representative
Miller, I want to thank you for your support also on that front
too. Preservation of those tax cuts, the Tax Cuts and Job Act.
I will take issue, too, with Dr. Shierholz's
characterization of the tax cuts for billionaires and
corporations because my members would most definitely disagree
with that. That 20 percent small business deduction has been
critical for so many small businesses, and they have used that
to reinvest, not just in the business to buy new equipment, but
I have stories, you know, they have used it to pay for
healthcare, 100 percent.
They have used it to bonuses, they have used it to pay for,
you know, community things, sponsored the Little League things,
things like that. Again, they use that money to reinvest in the
business in employees, and in their communities, so that they
are very excited.
Mrs. Miller. That is great. We join the excitement as we
set the government back, reducing the government, making it
more transparent and accountable, like the American people
want. Ms. Maietta, in your testimony you State the hotel
industry has a proven track record of creating not simply jobs,
but pathways for sustained and rewarding careers.
Can you speak more about the potential for upward mobility
for workers in the hotel industry?
Ms. Maietta. Absolutely, and thank you for the question,
Congressman Miller. There is so much opportunity in the
industry. 80 percent of entry level employees get promoted
within the first year. 50 percent of our general managers
started in entry level positions.
On top of that, our HLA Foundation has invested some 44
million dollars back into the industry through retention and
recruitment programs, allowing us to help our industry identify
new groups of young people, individuals who are empowering
youth program, that attracts young people who are out of a job,
or out of work, for training to get jobs in the industry.
When you are in the industry we have--we work with the
Department of Labor on an apprenticeship program that has seen
a 90 percent completion over the last 5 years, and finally, we
also provide for the last several years, a million dollars
every year in scholarship funding to hospitality school
students who are aspiring for jobs in the industry.
Then for professional development scholarships for people
who are already in the industry to get ahead and pay for
certifications to get to that next level in their career.
Mrs. Miller. Such great news. We are not tired of winning.
Thank you, and I yield back.
Chairman Walberg. I thank the gentlelady. Now I recognize
the gentlelady from Georgia, Ms. McBath.
Mrs. McBath. Thank you so much, Chairman Walberg. Thank you
to our witnesses that are here today. I have read your
testimoneys. Thank you to Ranking Member Scott, and thank you
so very, very much, Dr. Shierholz. I would like to ask you is
there anything that you would like to say in response to my
colleague's comments to you across the floor? Is there anything
you want to say?
Ms. Shierholz. Yes. The Federal workforce is tiny, and I
gave the benchmark for what I mean by tiny, and it is from the
Bureau of Labor Statistics data, including the postal service
workers, the Federal workforce makes up less than 2 percent of
all payroll workers in this country.
It is just the idea that we are attacking this already
extremely strapped workforce just does not make any sense.
Mrs. McBath. Okay. Thank you. Well, I would like to say
that instead of taking action to address the cost of living
crisis in this country, Republicans are trying to distract the
American people from their plans to put Americans out of work,
increase their taxes, and cut programs like SNAP and Medicare
and Medicaid.
Since taking office over a little over a month ago,
President Trump and Republicans in Congress have only made life
more chaotic, more expensive, and more dangerous. President
Trump's hand-picked Postmaster General just announced plans to
resign, after his proposed changes caused major delays and
destroyed the American people's trust and confidence in the
post office.
They have pardoned and released violent felons and rabid
antisemites back onto our streets, criminals that attacked
police, and were directly involved in the death of an officer,
who once protected the building that we sit in today, Brian
Sicknick.
They forced the head of the Federal Aviation Administration
to resign, and just 10 days later we had the deadliest air
disaster in this country in almost 25 years. While this
administration promised to bring down the cost of eggs, prices
continue to skyrocket.
Waffle House and Denny's have added a new surcharge on
eggs, and instead of doing anything about it, the Trump
administration chose to fire 10 percent of the staff at the
Centers for Disease Control, which is in my home State of
Georgia. They chose to fire doctors and researchers at the CDC,
the National Institutes of Health and the FDA, the very people
who are directly involved with responding to outbreaks like
bird flu.
Time and time again, they say one thing, but they do
another, and it is the American people who are paying the
price. Paying the price at the grocery store, as well as with
their lives. The American people deserve better. They deserve a
government that is truly representative of their needs, not the
wants and the needs of Elon Musk.
If you really want to unleash America's workforce at this
hearing as it is entitled, give workers paid family leave. Let
us make sure that they can take paid time off to have a child,
or to take care of an aging loved one or parent. Let us ensure
that every American can have access to the skills that they
need to get a good job that they can raise a family on, without
going into a lifetime of debt.
We could reauthorize WIOA, update our Federal job training
programs, and finish the bipartisan work that former Chairwoman
Foxx, Ranking Member Scott, and this Committee has been trying
to get signed into law since I came to Congress 6 years ago.
Great work from members of both parties is being left
unfinished in this Committee and all over this Hill because of
a single tweet from an unelected billionaire. That is wrong.
That is not how our democracy is supposed to function. I look
forward to a time when I can work with my colleagues on the
other aisle, on the other side of this aisle, on issues that
will truly make life better for the folks who are relying on us
every single day to care for their interests.
We do a great disservice to them when we hold hearings like
this that disparage their ability to live life freely in this
country as they deserve, and I yield back.
Chairman Walberg. I thank the gentlelady. I recognize now
the gentleman from Indiana, Mr. Messmer.
Mr. Messmer. Thank you, Chairman Walberg. Ms. Milito, in
your written testimony you State that the Trump administration
should rescind or withdraw many of the burdensome rulemakings
of the Biden administration. Does that include the Heat,
Injury, and Illness Prevention in Outdoor and Indoor Work
Settings Rule?
Ms. Milito. Thank you for that question, Representative
Messmer, and also thank you for your support of NFIB, and for
the Main Street Tax Certainty Act. Yes. NFIB requested that the
Department withdraw the proposed rule, and proceed no further
with the rulemaking.
We certainly recognize that excessive heat can adversely
affect the health of workers, too, and when I talked in
response to an earlier question too, the length that small
business owners go to, to ensure that their employees are
protected and safe from all hazards, including heat hazard
there.
Not every misfortunate in society necessarily calls for a
burdensome Federal regulation. I mean that is the fact of the
matter too. OSHA is constrained by the statute under which it
was created by Congress here, this body here, a broad public
health hazard like heat is not an occupational hazard unless
Congress opts to, you know, change the statute, so there is no
authority to regulate. Thank you.
Mr. Messmer. Thank you. I plan on introducing legislation
that would prevent this rule from every being implemented,
since it exceeds OSHA's authority, does not meet the needs of
small businesses, and fails to take into account differences
between regional climates, job functions, and medical
conditions of individuals. Do you consider this legislation the
right step forward?
Ms. Milito. I absolutely do, yes. NFIB does, and thank you
for your efforts on that ruling, thank you.
Mr. Messmer. The 199-A small business deduction is probably
one of the biggest provisions in the 2017 Tax Cut Act that we
are going to try to extend. Would you classify your members as
billionaires?
Ms. Milito. Absolutely not. No. They would not call
themselves billionaires or rich corporations.
Mr. Messmer. I would agree with that. Thank you. Ms.
Maietta, the persistent workforce challenges that businesses
face today is finding qualified workers and filling open
positions. This challenge is particularly pronounced in the
hotel industry where seasonal changes affect demand.
How could apprenticeships help fill the gap and create a
more resilient workforce for the hotel industry?
Ms. Maietta. Thank you, Congressman, for that question.
Apprenticeships have been a very important part of what our
industry has done in the last 5 years. We have been working
very successfully with the Department of Labor on that program,
and have added three different tracks that have seen some 1,200
individuals participate, and go through the program, and at the
end get an increased wage.
Of course, we would love to continue to work with the
Department of Labor on helping to eliminate some of the burdens
and barriers to entry for some of our members, and to ensure
that there is ongoing incentive funding that is a significant
attraction for the employers, and changing some of the rule
requirements and the reporting, which can be burdensome when
you are also running a hotel.
Mr. Messmer. Okay. Thank you. Dr. Beach, in your written
testimony you note that the burden of regulation has grown
significantly since 1980.
Mr. Beach. Yes.
Mr. Messmer. Has this reduced economic growth?
Mr. Beach. It most definitely has.
Mr. Messmer. You also stated that freezing new regulations
for a decade would increase GDP by 1.8 percent. Could you go
into some detail how that freeze would----
Mr. Beach. Well, yes. The freeze would increase the output
because it would allow investment to occur at a much greater
level. In fact, the response that we got in our research from
the investment variable, if you will, was much stronger than
the output variable.
Now, what would that be the case? Well, regulations are
costs on businesses, and they have to allocate money to those
employees, which they hired to fill out forms, and to comply
with the business. When those costs come down, then they can
allocate it, those dollars, to more productive purposes.
That happens. Also, the price system is positively
affected. We see a reduction in the CPI as goods to households
cost less. Well, when goods to households costs less, that
means that households can allocate funds to repairing that car
that does not work, or to ordering that after school tutoring,
so there are a lot of impacts that come from reducing
regulation.
Mr. Messmer. Thank you, and I yield back my time.
Chairman Walberg. I thank the gentleman. I recognize the
gentlelady from Connecticut, Mrs. Hayes.
Mrs. Hayes. Thank you, and thank you to our witnesses for
being here today. I think much of the testimony that we are
hearing lacks context. The timeframes that you are citing
occurred during COVID, when 1.2 million Americans died, and our
economy was deeply impacted.
Ms. Maietta, like you, House Democrats were incredibly
sympathetic to the hotel industry, which is why in the first
CARES Act where we expanded SBA loans, hotels took advantage of
about a billion dollars in funding. In fact, in 2020, the
largest recipient of CARES Act funding was a Dallas based
hotel. We understood the need to stabilize that industry.
I would also like to say when we talk about small
businesses, it is just not true to say that President Biden
hampered job creation. You do not have to listen to Democrats,
listen to the data. The data tells the story of what has
happened. Under President Biden the economy added 16.2 million
jobs. That is more jobs in 4 years than any President on
record, and more jobs than any Republican President, whether
they served four or 8 years.
That is not Democrats, that is data. He also made history
as the first President of the United States on record to not
have a single month of seasonally adjusted job losses during
his entire term. The Federal Government has awarded small
businesses more than 183 billion dollars in contracts, and 28
percent of all Federal contracts go to small businesses.
We have tried to do our part to invest in this economy and
help these industries. A lot of what I am hearing today, we
have some choices to make, and right now we are being faced
with a 4.6 trillion dollars in tax cuts. I heard you say that
only about 30 percent of small businesses provide healthcare
benefits.
I am sure that many of those employees who have children
take advantage of programs like Medicaid, which many working
people take advantage of, so that would be a huge detriment to
employees and small businesses. You talk about--I have heard
you say on three different occasions the after school and
tutoring programs at the exact same time that this budget will
cut Title I funding that provides for those programs to low-
income students.
Head Start would definitely be--slashing programs like Head
Start would definitely hurt employees who are trying to work,
and have to make sure that their kids have child care. On the
topic of putting money back into the pockets of workers, we are
dangling no tax on tips as if this is the answer to it.
While I support no tax on tips, I will tell you what else I
support, raising the Federal minimum wage, which currently
stands at $7.25 an hour. That is $2.90 a week, or $15,000 a
year for an employee. I could tell you they could do a lot more
for getting their car repaired, or their child a uniform, or
after school tutoring services if they were making $17 an hour,
or $680 a week, which is still only $35,000 a year.
If we really want to have a conversation about engaging the
workforce, we would be talking about actually helping
employees, making sure that we are spreading the wealth amongst
everyone. The mission of the Department of Labor is actually to
protect the employees, improve the welfare of the American
workforce by promoting job opportunities, safe working
conditions, and benefits.
OSHA and the protections that OSHA provides through the
Department of Labor, are doing exactly what they are supposed
to, protecting employees, and I would argue that heat related
job conditions are a health hazard. They are a health hazard. I
am not really sure. I have a bunch of questions, but I do not
even think it would make sense for me to ask these questions
because I do not believe the witnesses are here to provide
context or information.
We have had hearing after hearing where the same people who
appear at this table are at events at the White House and come
here to promote the dangerous agenda of this administration. I
am open to working with anybody on this Committee to making
sure that we are stimulating the economy, and promoting small
businesses, but also helping employees.
If we want to have no tax on tips, let us also raise the
minimum wage. If we want to provide benefits to people, let us
make sure that we are not cutting Medicaid and dental services
and community healthcare programs for children, for the
elderly, for many working people who still make below the
poverty line and have to depend on these programs.
I am here for all of those things. I yield back.
Chairman Walberg. I thank the gentlelady. Now, I recognize
the gentleman from New York, Mr. Mannion.
Mr. Mannion. Thank you, Mr. Chair, and thank you to the
witnesses for being here today. Dr. Shierholz, a couple
questions. Thank you, I am over here, yes. If a complaint comes
before the National Labor Relations Board, this is one of their
functions, what happens at that point?
Ms. Shierholz. Yes, this is a really important thing. I
think it is not really well understood. One thing is individual
citizens do not have a private right of action as it relates to
the National Labor Relations Act. If their employer is getting
in the way of them being able to organize, breaking the law,
they cannot actually hire a lawyer and go out and sue that
employer. They cannot do that.
The NLRB is the only game in town if they want to get a
fair hearing, so that is what the NLRB is for. It is there to
adjudicate whether--one of the things it does is to adjudicate
when there are issues related to like if an employee feels like
they are not being--their employer has violated their right to
organize, that is one of the places the NLRB steps in.
Mr. Mannion. Thank you so much. Are there any outstanding
complaints before the NLRB related to Elon Musk's holdings, or
any companies that he runs?
Ms. Shierholz. Yes. Elon Musk has been under investigation,
either himself personally, or by actions taken by the companies
he owned by multiple Federal agencies from OSHA to SEC to the
NLRB. The New York Times found that 11 Federal agencies were
looking into violations of companies owned by Musk, and
surprise, surprise, there were also--those same agencies are
also the ones being faced with DOGE actions.
Mr. Mannion. Can a President remove a member of the NLRB
without any process?
Ms. Shierholz. No. It needs a process. What the President
did with Gwynne Wilcox was an illegal firing. What it did was
take away the independence of the NLRB by saying that she was
unduly favoring the rights of employees. It just made it very
clear to the rest of the people on the NLRB that if they want
to keep their job, they need to rule on the side of employers.
It is no longer independent.
Mr. Mannion. The NLRB members serve a 5-year term. Is it
intentional why that is a 5-year term?
Ms. Shierholz. Yes, it is supposed to be a case where it is
an independent agency. It is not, you know, and if a Democrat
is there it actually can go over into a Republican President's
term as an independent agency, but President Trump has undone
that.
Mr. Mannion. Thank you so much. Dr. Beach, you were the
Commissioner of the Bureau of Labor Statistics?
Mr. Beach. That is correct.
Mr. Mannion. I appreciate your service to this country, and
how long was your term?
Mr. Beach. Four years.
Mr. Mannion. Four years. Those terms generally move from
one potential administration to another with their timing. Is
that correct?
Mr. Beach. Yes, sir, 4 years, but I served at the pleasure
of both Presidents. They could have dismissed me at any time.
Mr. Mannion. Thank you. If they had chosen to dismiss you,
would there have been a process that would have had to have
been followed, or could they have just indiscriminately let you
go?
Mr. Beach. As far as I know the process would be packing up
some boxes and leaving the office.
Mr. Mannion. I believe that the process would require, just
like your approval in that position, a Commissioner approval,
advice and consent of the Senate. It would also require advice
and consent of the Senate for removal, congressional authority.
Mr. Beach. Yes.
Mr. Mannion. I yield back, Mr. Chair.
Chairman Walberg. I thank the gentleman. I recognize the
gentleman from Missouri, Mr. Onder.
Mr. Onder. Thank you, Mr. Chairman, and thanks to all the
witnesses who came here today. The 2020 CARES Act with enhanced
unemployment benefits cost 900 billion dollars over a year and
a half, followed by then the 2021 Appropriation's Act, and then
ARPA of course, has in addition to generating extraordinary
inflationary pressures that our American economy, businesses,
and individual Americans struggle under today.
In addition to that, it resulted in a decrease in workforce
participation. The Ranking Member was bragging about so called
job creation under the Biden administration, and yet workforce
participation is at a historic low. We have 7.6 million
unfilled jobs.
I would note that 60 percent of all job creation since 2021
has been recovery of job loss during the pandemic, not new job
creation. I would further note that 22 percent of all new jobs
created in 2024 were due to--were government jobs, not jobs in
the private sector.
Finally, then in 2024, the last year of the Biden
administration, the average inflation rate was 4 percent,
compared to the Trump pre-COVID inflation rate, unemployment
rate of 3.5 percent. You know, we talk a lot when in this
Committee we talk about, a lot about, skilled workforce,
workforce training, career and technical education.
A lot of this job loss has been in entry level jobs, the
kind of jobs one might take in small business franchises, in
the hospitality industry and the hotel industry. Could you
comment, Ms.--pronounce your name for me, I apologize.
Ms. Maietta. Maietta.
Mr. Onder. Maietta. Maietta, could you comment about the
effect of that loss of entry level workers because I think I
was once in an interview, a hostile interview. He said, well,
you Republicans want everyone to be punching a clock. I said
well, my first three jobs were I punched a clock. Are you
demeaning the value of that?
I think this loss of entry level workers in our economy has
been devastating. Would you care to comment on that?
Ms. Maietta. Absolutely. Thank you, Congressman, for the
question. You know, as I said earlier in my testimony, the
hotel industry is down some 200,000 jobs since the pandemic. It
has been increasingly difficult to fill those positions. We
have tried to be as competitive as possible by raising wages.
Mr. Onder. Right.
Ms. Maietta. 15 percent faster than the national average,
expanding our benefits, making sure that, you know, some
members have started to implement sign on bonuses, offering
transportation credits, healthcare for part-time employees,
discounts and perks, and yet we are still seeing difficulty in
hiring and competing with, you know, big box retail, that has
millions of dollars to invest in advertising.
Mr. Onder. Yes.
Ms. Maietta. A lot of our small businesses simply cannot
compete with that. One thing that is critically important for
our industry is the H2B Legal Guestworker Program. Many of my
members rely on that to fill, especially peak and seasonal
jobs. Some of my members are actually in town today to meet
with your colleagues here on the Hill from the resort and
independent community.
One member was telling me that he has a resort on a small
island that inhabits 500 people, including babies. At peak
season he employs 5,000 people. Without the H2B program, he
would simply not be able to function.
Mr. Onder. Sure. Thank you. Mr. Beach, you made a number of
points about macroeconomics, would you care to comment? Yes?
Mr. Beach. Well, I would like to comment on this last
point.
Mr. Onder. Sure.
Mr. Beach. One of the casualties of increasing costs on
low-income households is the increasing inability of those
households, or those individuals to travel to another part of
the country to take a job.
Mr. Onder. Yes.
Mr. Beach. By increasing these costs, by slowing down job--
wage growth, we are actually locking people into places where
there may not be jobs. I think that is one of the things that
we need to be increasingly attuned to.
Mr. Onder. Yes, thank you. Yes. I would just make the
additional point that even though wages, and you mentioned 15
percent higher than the national average in your own industry,
these increase in wages have not kept pace, even then with
inflation, which has been devastating, which is why it is so
critical that we end the inflationary policies of the Biden
administration.
Chairman Walberg. I thank the gentleman.
Mr. Onder. Thank you, Mr. Chairman, and I yield back.
Chairman Walberg. Your time has expired. I recognize the
gentlelady from the Keystone State, Ms. Lee.
Ms. Lee. Thank you Mr. Chair. I just think that we are
beyond the point of accepting and regurgitating any propaganda,
or acting like we are in normal times. My Republican colleagues
say they want to unleash America's workforce, but actions speak
louder than words. If you really want to know where they stand,
do not just listen to what they say, look at what they are
doing.
As we sit here in this Committee, we are witnessing the
Republican administration dismantle the Federal workforce in
real time. There have been legally questionable buy-out offers,
funding freezes, stop work orders. More than 30,000 workers
have been laid-off indiscriminately.
The administration has been demonizing Federal employees,
convincing the public that government workers are somehow the
enemy as all part of a major grift. The architects designing
these policies are not everyday workers. You need to know that.
They are billionaires, and corporate executives. They are
members of the ultra-elite, who extract wealth, resources, and
labor from working class communities.
These are the folks who stand to gain from slashing wages,
gutting the public services, and hoarding wealth, and that is
exactly what they are doing. Last night House Republicans voted
to adopt a budget blueprint that would hand out 4.5 trillion
dollars in massive tax cuts for the ultra-wealthy, paid for by
cutting vital programs that keep working families afloat:
Medicaid, SNAP, Head Start.
More than 38 million people across the country, including 3
million people in the Keystone State, rely on Medicaid and CHIP
for their healthcare. Dr. Shierholz, how will America's
workforce be unleashed, as my colleagues say, by Republicans'
budget, which provides more than 4.5 trillion dollars in tax
breaks to billionaires and big corporations?
Ms. Shierholz. Oh, I am on, okay. Yes. This unleashing is
not going to happen because of this House budget. The draconian
cuts to healthcare and food assistance for children and
families will hurt millions of workers. That is not an
unleashing. It will weaken our economy.
Those cuts, as you have said, they are being made to make
fiscal space for tax cuts that will go overwhelmingly to this
country's wealthiest households, just like the TCJA did, like
just to put some numbers on this.
The TCJA, it will give the top 1 percent in 2025, the top 1
percent will get $60,000 in tax cuts as a result of the TCJA.
The middle class, less than $1,000.00. The lower class, less
than $100. It is just overwhelmingly for the wealthy.
Ms. Lee. Thank you Doctor. Just to be clear, do you believe
that these tax breaks will decrease the income, the wealth
inequality, or increase it?
Ms. Shierholz. It will unambiguously increase it. When you
put the tax breaks that overwhelmingly favor the very, very
wealthy, combined with the tax cuts that reduce the incomes of
the most vulnerable households, I mean it is literally taking
food out of the mouths of poor children. I mean not literally,
but to line the pockets of the very wealthiest households in
this country.
Ms. Lee. Thank you. The truth is Republicans do not want to
unleash the workforce. They want to destroy it and replace it
with an economy that only works for the wealthy. That is proven
further by the administration's actions to undermine civil
rights protections across the workforce.
Over the summer, President Trump went viral talking about
black jobs. One of the first acts as President was to rescind
Federal anti-discrimination hiring rules, and eliminate funding
for workplace diversity programs. Black Americans make up
approximately 20 percent of the Federal workforce because so
many of us grew up knowing the value of securing what we called
good government jobs.
These jobs are not just stable and provide fair pay. They
have long been a pathway to overcoming discrimination in the
private sector, and to begin building economic security. By
attacking both the Federal workforce and civil rights
protections, the Trump administration is actively reversing the
progress, not just for black workers, but for all workers
across the country who have made the fight for economic
equality.
Dr. Shierholz, is discrimination against workers good for
the economy?
Ms. Shierholz. It is--okay, you know that that is whether
it is good for the broader economy is not the key metric that I
care about when it comes to discrimination, but no, it is not
good for the economy. One of the ways it holds back the economy
is by not letting people realize their full potential. It
reduces productivity and is a drag on growth.
Ms. Lee. Thank you. You know what they say, a high tide
lifts all ships. To be mindful of time, I just want to say one
more time, actions speak louder than words. Do not listen to
what they are saying. See what they are doing. To recap,
Republicans are not trying to unleash anything.
They are dismantling it, destabilizing working families,
and concentrating even more power in the hands of billionaires,
and corporations who have a vested interest in undermining
worker power, cutting critical programs, upending vital
projects. A strong workforce is the foundation of a strong
economy, but their policies are making jobs less stable, wages
lower, and opportunities scarcer for all people, especially
marginalized people.
We cannot afford to let it go unchecked. Thank you. I yield
back.
Chairman Walberg. The gentlelady's time is expired. Thank
you. I now recognize the gentleman from Wisconsin, Mr.
Grothman.
Mr. Grothman. Thank you. We are going to lead off with Ms.
Maietta. In your testimony you discussed the importance of the
hotel lodging industry, the importance of recruiting and
retaining a qualified workforce. You also mentioned the
importance of Congress's work to reform the Workforce
Innovation and Opportunity Act, to better connect employers to
the workforce system.
Why is it important that workers have multiple pathways
into the workforce, and multiple avenues for advancement?
Ms. Maietta. Yes, thank you, Congressman. Pathways into our
industry are incredibly important, especially at a time when it
is such a competitive and tight labor market, and we are short
staffed. Two-thirds of my members report being short staffed,
particularly in entry level jobs, so creating those pathways
continues to be an important part.
We are happy to work with this Congress and this Committee
on reforms to WIOA.
Mr. Grothman. All right. Good, good, good. Now, I have a
general question. We just heard a little bit about people not
advancing in income and equity. When I talk to my employers, as
well as knowing some people in their personal life, we really
hate it when people move up the ladder in this country because
we have all these programs, low-income house, earned income tax
credit, Medicaid, food share.
That if you make too much money we take the programs away
from you. It is like we do not want anybody making more than
$16,000 or $17,000 a year in this country. As a result, people
I think are kind of stuck because you talk to employers, and
they said my employees are turning down raises. They do not
want overtime because they are going to lose their government
benefits.
Do you guys find this a problem, or do they have to look
for cash work, which is probably not advisable, but it is the
only way they can make more money because the government whacks
them over the head with these government programs. We bribe
them not to work too hard. Is this a problem you guys find in
your businesses?
Ms. Milito. I can address this first. I mean, I am looking
here at NFIB's data from that came in from January 2, 35
percent of all owners reported job openings they could not fill
in the current period, so.
Mr. Grothman. Do you get--this is what I am getting. I get
it all over my district. You get people working, they cannot
work more than maybe 16 or 17 hours a week. They cannot accept
the raise because all these government programs we give you
like almost a free apartment, a nice free apartment, and then
if you make more than 16,000 or 18,000 bucks a year, they begin
to force you to pay, you know, normal rent.
In essence we are contributing to this income gap by
telling so many people in the country do not work hard, or we
are going to take away your government benefits.
Mr. Beach. We certainly saw that in the 2021 period. I was
working both in the Trump administration and Biden
administration on just what were the disincentive effects of
what we just passed with good intentions.
There is evidence out there that well intended programs can
discourage work effort. I want to tell you this one thing
though. Everybody has seen the program of less regulation and
less taxes already, and that was the period from 2017 through
2019 when households across the income spectrum saw significant
gains and African American households saw gains they had not
seen in 50 years.
We have seen this before, and we know what will happen if
this program is properly executed, but disincentive effects do
occur.
Mr. Grothman. Well, all you have got to do is talk to
people. I think sometimes the problem with some of these
Congressmen is they do not talk to anybody but the lobbyists.
If you get out in the real world, you will again and again
find stories of employees who have to turn down extra hours.
They have to turn down raises. They cannot move up the income
letter because these stupid programs are so generous that in
essence, you are stuck in there for life.
The other thing is you cannot get married, that is another
matter, or you are going to lose your bene's. I think we have
got a big problem starting with Lyndon Johnson where they began
to put in huge programs, and you lose your bene's if you work
to hard, and the message we are sending to people is do not
work very hard.
I mean I am sure in the hotel and lodging industry that it
is true. It is true anywhere where you have people making in
that $15 to $20 range, where you can easily push yourself to
the point where you lose your low-income housing.
Ms. Shierholz. I would say that what you are talking about
is cliffs in benefit programs, where you get one more dollar,
and then you lose your benefits. What the answer to that then
is to work with those programs to make them less cliffy. Do
not--address that there. Do not try to take away the generosity
of the programs because they are providing important----
Chairman Walberg. The gentleman's time has expired. Now we
move on to the gentleman from Connecticut, Mr. Courtney.
Mr. Courtney. Thank you, Mr. Chairman, and thank you to the
witnesses for being here today. I have to say I think there is
really an amazing disconnect listening to the majority's sort
of narrative today about ways to, you know, strengthen the
economy when at the very moment that we are sitting here we are
seeing lots of warning flags about the fact that the economy
actually is going in a very negative direction very quickly.
This morning's Telegraph out of London has a story,
economists are starting to worry about a serious Trump
recession. The consumer confidence index, which was just
released a couple days ago, again had its biggest monthly
decline since August 2021, as inflation fears take hold.
Again, if you read these articles and stories, it is
because of the Trump tariff regime that is driving again of
this uncertainty, and really hesitancy that is going to really,
I think haunt the economy in a very short period of time.
Again, the layoffs, which Ms. Lee talked about, is adding to I
think the negative downward pressure that is happening to the
economy.
Again, I represent a district with a large military base.
We are going to have thousands of DOD layoffs. We have a fire
station, a firefighter station on a submarine base. They have
six out of 14 employees that are probationary, which again is
the DOGE target cohort that is there.
Again, regardless of the fact that fires on Navy ships is a
really bad thing. You know, that does not come into the
equation of this Trump policy that again, is just
indiscriminately reducing the workforce, and at the same time
the tariff policy is driving up prices, and that is not just me
saying that.
Reuters had a story again, just a couple days ago, about
U.S. manufacturers see high metal prices as tariffs near. Steel
prices have gone up 20 percent since the election. That is not
happening in Europe. It is not happening in China. It is
happening again because the market is reacting to what they
hear from the White House.
The President said it yesterday that the tariffs against
Canada and Mexico are back on the table, which again, his month
delay is now running out. The steel and aluminum tariffs, which
again are all across the globe, are again, driving up one of
the basic commodities in our economy.
The National Association of Home Builders, which is hardly
a Democratic base organization, has been raising the warning
flags, the American Farm Bureau has been raising the warning
flags about the fact that fertilizer costs are going to go up
because of a tariff on Canada.
Again, 25 percent addition to fertilizer costs, which most
of it is imported from Canada, is the reason why the American
Farm Bureau is begging the administration and Congress to not
let these tariffs go into effect.
Dr. Shierholz, from you know, a macroeconomic standpoint,
when you see policies that are driving up costs very quickly in
real time, that as we are sitting here today, and again,
layoffs that are happening at the same time. I mean that sounds
like a formula for stagflation.
Ms. Shierholz. Yep. It is worrisome. I would not be an
economist who studies the incoming data all the time without
saying I want to give it a little bit more time to make sure
that it is not a blip. We want to make sure that there is a
trend, but you are absolutely right that things are starting to
flash concerns, and I think it has a ton to do with things like
this very chaotic, unstable policy that is coming out of the
administration.
It is like nothing we have ever seen before.
Mr. Courtney. Again, if we are talking about helping
America's workforce, we need to get this stability and get the
uncertainty that is again, being driven every single morning in
the news in terms of what is coming out of the White House.
Mr. Chairman, I again, would ask that the Daily Telegraph
article, Economists are Starting to Worry About a Serious Trump
Recession. The Reuters article, U.S. Manufactures see Higher
Metal Price as Tariffs Near, and CNN Consumer Confidence
Registers the Biggest Monthly Decline Since August 2021, as
Inflation Fears Take Hold, admitted for the record.
Chairman Walberg. Without objection, hearing none, inserted
them.
[The information of Mr. Courtney follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Courtney. I yield back my time.
Chairman Walberg. I thank the gentleman. I recognize the
gentleman from North Carolina, Mr. Harris.
Mr. Harris. Thank you, Mr. Chairman, and thank you to all
of you on the panel, and I apologize for folks coming in and
out, but a number of other Committee meetings and markups are
taking place. I did have the pleasure of reading your
testimoneys, and looking over them.
I did want to ask you something, Dr. Beach. Your written
testimony makes it clear that overregulation is hurting
American businesses and workers. In fact, you made a statement,
``Regulations function as a hidden tax. Siphoning resources
away from productive use, businesses must redirect capital
toward compliance, instead of expanding current operations and
researching new technological breakthroughs.''
During the first Trump administration, the President's
focus on deregulation efforts benefited workers. Why was this
effort so beneficial in your opinion?
Mr. Beach. I think a stimulated investment, and an
investment caused a greater pool of investment dollars that are
out there in the banking system, they are out there in private
companies to invest in expansion of their companies, and also
to start new companies.
We have seen--the real key here is whether or not the free
enterprise system is creating new businesses. That is the
metric you should look at, not big businesses, but small ones.
From the sub-chapter S corporations to the proprietor, and I
think that is one of the major things that happen. When that
happens, when workers have new equipment, new businesses to
work, they are more productive.
When productivity rises, then their wages rise, and we saw
almost an immediate effect. You do not have to go back to the
Trump administration to see that. You can see that in the
Clinton administration, you can see that in the Carter
administration.
In fact, every time we have had a significant deregulatory
wave, we have seen a boost in economic output, a boost in
inflation, a decrease in prices, and there is no reason why we
should not see that. Now, of course, you have got to make sure
the regulations that you reduce are not going to put people in
safety issues, right, and you have to be smart about it.
There are just billions of regulations out there that do
not qualify in that category, so that is the effect we would
expect.
Mr. Harris. Well, and I think that is an excellent point,
and I guess I would ask as a followup to that, when you think
about what took place during that first term, and you
referenced previous administrations, how would you say the
President--how can he improve the economic conditions and
support workers and businesses during the second term now that
he is under way?
Mr. Beach. Well, I think he has a more aggressive program,
and that is the first thing, so you have to combine not raising
taxes, that is the first thing. You cannot do that. You have
to, regardless of what you think about this, that has to be
made permanent, and the 199-A is a big provision for small
businesses.
Do that, and then he has a 10 to 1 reduction plan. That
would be way more than what he had done in the first
administration, and we are expecting some big effects. My
research shows that we get big output and big gains in
investment, and big gains in hours worked. There will be plenty
of overtime.
Let me tell you we talked about overtime before, there will
be plenty of overtime once this program is in full swing.
Mr. Harris. Got you.
Mr. Beach. If I could just say one more thing.
Mr. Harris. Sure.
Mr. Beach. About the Federal workforce, we do not really
have to speculate a lot about what will happen to the Federal
workforce. You know, this is not the first time that this has
happened. I am old enough to remember, and perhaps you are as
well, the Reinventing Government Program of the Clinton Gore
administration.
That was the first time that people got letters and some
emails saying would you like to resign. That was the first
time. There were massive decreases in the Federal workforce.
What happened after that was a period of, I think every
Democrat would say, unprecedented growth. We even balanced the
budget by the end of that term.
I do not know whether that is going to happen this time, no
one knows, but there is a record out there that we can look at.
Mr. Harris. Well, in the final minute we have left, I
believe rather than promote the proven policies that you have
talked about that unleashed the economy, like lower taxes and
deregulation, things that help businesses and increase wages
for workers. Our colleagues oftentimes on the other side would
rather increase individual's dependence on the State through
every expanding welfare.
I will ask you just in the closing few moments we have,
outside of the massive Federal expansion of unemployment
insurance for over a year and a half during COVID, could you
just quickly discuss what Federal programs or policies
incentivize unemployment?
Mr. Beach. Incentive unemployment, that is a great concept.
Well, I think if you have extended unemployment benefits, the
evidence shows that people do stay out of work until like the
last week, so that extends it. We have talked here about
putting in place excessive benefits that, particularly in the
housing area, that might cause people to think do I work that
extra hour and lose my means tested housing benefit?
Those are well-intentioned programs. We just have to be
really careful that we do not get unintended consequences.
Mr. Harris. Got you. Well, thank you so much. Mr. Chairman,
I yield back.
Chairman Walberg. I thank the gentleman. I recognize my
friend from the Great Lake State, Great Michigan.
Ms. Stevens. Thank you, Mr. Chair.
Chairman Walberg. Ms. Stevens.
Ms. Stevens. Thank you. Thank you so much, and I am sitting
next to another Lakes member of the Congress from Minnesota
here, so, but we pride ourselves on our fresh water. Look, it
is wonderful to have your expertise here, and there are some
Ph.D.'s in economics, and we had a vote last night--come in the
dark of the night.
First we were voting, then they said no vote on this budget
resolution, everyone left the Capitol, and out of nowhere they
said we are actually just kidding, we are going to vote. I mean
it was wild. Some of these reporters covering the Congress for
decades, they have never seen anything like it.
Now, the 880 billion dollar cut to Medicaid is compelling
me here regarding this topic of an exercised workforce because
as an evangelizer of special education programs, you know,
fully funding the realized promise of IDEA and special
education in the United States of America, I also think about
the families in Oakland County, Michigan who have children with
medically complex conditions and scenarios.
I have heard this all over. They would be bankrupt. They
would be sold out the river without Medicaid. Dr. Shierholz,
maybe you could start here, because I am just trying to think
when we have the lowest levels of unemployment, otherwise known
as the highest levels of jobs in Detroit, Michigan,
manufacturing town, in over 50 years.
That happened 2 years ago. I told the President about it. I
thought this is exciting. This is a moment for us. What does
this mean if we are going to really make all these cuts to
Medicaid? What does that do to our workforce?
Ms. Shierholz. It is really, really bad for our workforce,
and for our most vulnerable families. The other thing about
Medicaid, in addition to the things that you are mentioning is
it will have--cutting Medicaid, will have negative impacts, not
just now, but literally for generations.
There is very solid research that shows kids getting
Medicaid as a kid, they have better outcomes, better income,
better health, better educational attainment as grownups. When
you think about the idea that that policy that is so
unbelievably effective in helping our most vulnerable
households, the idea that that is on the chopping block is just
mind boggling.
Ms. Stevens. These are working professionals, and we want
these people, and sometimes they get home health for that
dependent. I am just thinking to the hotel and lodging, you
know, you are in this big race for, you know, workers. I am
just thinking would it not help you get more workers if people
were, you know--had their Medicaid?
Ms. Maietta. Thank you, Congresswoman, for that question.
Look, I can tell you that we offer competitive wages and
expanded benefits, and at the same time we are still 200,000
people down, so there are certainly a lot more pressures that
exist in terms of attracting people into our industry now.
Ms. Stevens. It is a shortage, and I just think about, I
mean look I am in my communities, and I think about these
people. They want to go to work, and they have got dependents,
and they need the schools with the programs, and they need the
access to health. You know, you are also an economist.
I mean have you not read about this, that we need
healthcare for the most vulnerable, so that they can get to
work? I mean we have got 200,000 open jobs. What is the
impediment? Is it a workforce protection, or is it actually
basic services that enable people to go and work?
Mr. Beach. Right. Healthcare is absolutely essential for
workers, it is just true. We are talking about Medicaid right
now, and cuts to Medicaid. I would encourage everyone on this
Committee to think about the billions of dollars in Medicaid
mispayments that have been documented.
The misallocation of funds to people who are not executing
the program, and there is a lot we can do before we go into the
Medicaid Program where it affects individuals and their
recipients of it.
Ms. Stevens. Maybe I will have a roundtable with some of
these people who have been abusing Medicaid. I just have never
met them, you know.
Mr. Beach. They are out there.
Ms. Stevens. The only people I meet are the people who were
working their tails off trying to make ends meet. You know, I
do not know if you have ever walked into a union household
because I have. This is not a shout back at you. I am just
saying I meet these families, and they are incredible, and they
want their kids to exercise their full potential, and you are
right.
I will be honest. We do have to have a cleanup of waste,
fraud and abuse, but not at the expense of punishing a
workforce when we have got job openings and needs. These are
our taxpayer dollars, and we are paying into a government as
Americans that is owed to us, not the billionaires, who in the
dark of the night are proposing things, and not responsible
conversation.
I thank my Chair for enabling me to use my 5 minutes as a
lawmaker to start this conversation. I look forward to
continuing to have it, and I yield back.
Chairman Walberg. I thank the gentlelady. I recognize the
gentleman from Guam, Mr. Moylan.
Mr. Moylan. Thank you, Chairman Walberg, and Ranking Member
Scott, thank you for hosting this important hearing on the
American Workforce. I am also glad to have Ms. Maietta here
today representing AHLA. The hospitality and tourism industry
supports thousands of Guam in my district, and it is vital to
Guam's economy.
I am also glad to hear support for the H-2B Visa Program.
How H-2B workers fill gaps in Guam's workforce, participate in
the growing of our economy, tremendously, and work to
strengthen our national security at this critical time, inside
and outside the military bases.
We must work to expand and extend the H-2B Program, and
give businesses the tools they need to succeed. Likewise, the
Tax Cuts Jobs Act provides important tax relief for our local
businesses. We must reauthorize the Tax Cut Job Act and give
our businesses, and our workers, the relief they need to
thrive.
Strong economics support American prosperity, and the
American dream. Simply put, the economic security is a national
security, and that is important in the INDOPACOM specifically
against our aggressors.
Over the past last 4 years, policies like the Biden
administration show why doctors operate with scalpels and not
hammers. The one-size-fits-all rulemaking is not an option. I
encourage the Trump administration and Congress to appreciate
the unique circumstances in the territories and policymaking
please.
Regulations like the Overtime Rule, it is just--unjustly
affects my community and districts like mine. The Trump
administration's commitment to working individually with states
and territories is a meaningful improvement. I am thankful for
that.
My first question is for Ms. Milito. You testified that
between 2021 and 2024, small businesses faced 1.8 trillion in
costs of complying with regulations. Unlike small businesses
have otherwise used that money to invest in their workforce if
they have not faced those burdens.
Ms. Milito. Thank you Representative, for that question.
The hidden tax, as Dr. Beach mentioned, comes out to about
$50,100 per employee, the hidden regulatory tax there. That is
a lot of money, and a lot of money that small business owners
could use on other things, investing in their business, and
investing in employees.
I will give you an example. Money that could be used for
bonuses at the end of the year. Money that could be used to
either purchase health insurance for the employees, or as I
hear from many members they are using, for instance you
mentioned that small business tax deduction. Using that, and
from regulatory savings too, using that to pay up to 100
percent of the employee's premiums for healthcare.
Those are ways in which small business owners can take
money, either through regulatory savings, or through the small
business tax deduction, and reinvest it back directly into
their workforce.
Mr. Moylan. Thank you. It is much needed, especially my
community in Guam, where our workforce is so small, as we do
this military buildup, that we really need these additional
workers to stay and be happy, and not get overburdened with
this. It is critical for us that we have that. Thank you very
much.
My next question for Dr. Beach. In your testimony, you
discussed the need for Congress to reduce regulatory burdens on
American businesses. Please elaborate. Give me more on the need
for Congress to avoid this one-size-fits-all approaches to
business regulations.
Mr. Beach. Well, I think periodically Congress needs to go
through all the regulatory matter, and begin to think. Well,
are these needed now? There are outmoded regulations,
regulations nobody would support. Get those off the books. We
found that when we worked at the State level, there are a lot
of those out there.
Then look at the regulations which are in place which are
designed to just be cautious about certain aspects where we do
not need to be that cautious anymore. We are in an information
technology age now and so record keeping and other elements
need to be changed.
Always think about regulations that inhibit investment,
inhibit the buying of new machines, and putting off the old
machines, so that workers have the best things they can work
with, and be the most productive. You know, that is not
specific, but those are categories where I think Congress could
really focus their attention on the regulatory matter.
By the way, since the Loper Bright decision, that whole
regulatory matter is coming back into your hands, and so this
is going to be not a subject of academic interest, but
practical interest for the members of this Committee and
others.
Mr. Moylan. Thank you very much. Thank you to the panel.
Mr. Chairman, I yield back.
Chairman Walberg. I thank the gentleman. I recognize my
friend from California, Mr. Takano.
Mr. Takano. Thank you, Mr. Chair. Dr. Shierholz, whenever I
encounter doctors, they are always telling me and complaining
about how low the Medicaid reimbursements are, and just how few
Medicaid--how few doctors actually even will take Medicaid
patients.
My suspicion is that Medicaid is one of our leanest
programs of health. This idea that was banded about that there
is billions of dollars to be saved. What do you have to say
about that?
Ms. Shierholz. It is a large program. I am not saying that
there is zero waste, but you are absolutely right. It is an
incredibly lean program, and what we know is there is certainly
not 880 billion dollars-worth of waste, which is what the House
budget is trying to cut from Medicaid.
What that means is that there is no way that this will be
cut without absolutely gutting benefits that go to households
who really, really need it.
Mr. Takano. Thank you for that. I, too, agree that in a
program this big there is some waste that we need to--and
inefficiencies, but on the whole, doctors are not getting rich
off of this program. It is not a Cadillac plan, right? It helps
children, a huge amount of children that get help, and children
actually do not cost that much money.
It makes a huge difference to be able to serve those
children, and to serve the mothers of those children. I want to
followup on something that my colleague, Dr. Allen suggested,
that over 30,000 Federal employees who were terminated,
``looking for a change in career,'' as he called it, simply
apply for a new job in the private sector.
Can you be more explicit about the dangers of gutting the
professionals responsible for safety, quality control,
enforcement standards, and much more across every sector? Yes,
go ahead.
Ms. Shierholz. Yes, definitely. I keep returning to this,
but it is really important to say the Federal workforce is
already very, very small. It already has been shrunk. It is
less than 2 percent of payroll employees, but they do so much
to protect the safety of our food.
Like it is because of the National Weather Service that we
know when we need to evacuate when there is a weather
emergency, and on and on, and on and on, and just the services
that Federal Government employees provide are just a backdrop
to our lives, and to the economy of this country.
The idea that we can gut that without doing enormous harm
to those services, and to the stability of our economy is just
a farce.
Mr. Takano. Well, look, you know, supposedly the VA has
created exemptions for certain essential folks, for the
probationary employees that were not fired, who are essential.
You know, I am getting back as the Ranking Member of the
Committee, stories about two individuals of the Cleveland
Medical Center who did intake.
I mean not highly technical people, but they did intake for
mental healthcare patients. The fact that they were fired meant
that--it means right now it is wreaking havoc on mental health
services for that VA. This is being--well, they can just go get
a job in the private sector. What people fail to recognize is
that, as you said, the Federal Government is already lean, the
Federal workforce has already been shrunk over time.
In fact, the VA and the Health Administration area, the
VHA, is 40,000 understaffed, and that is why there are access
issues at the VA. Can you also talk about the economic
implications of layoffs of this magnitude?
Ms. Shierholz. You know, mentioning the VA it also makes
me--it is useful to point out that the Federal Government
disproportionately employs veterans. What we know right now is
that veterans are facing incredible stress, returning from
service, and then facing layoffs right now. It is just an
unbelievable slap in the face to people who have served our
country.
Mr. Takano. It is estimated that 6,000 veterans have been
terminated from their jobs. That is the estimated amount. Not
counted in that are the military spouses.
Ms. Shierholz. Yes.
Mr. Takano. Who, by their nature, travel according to their
spouse's duty station, and so they are perpetually a
probationary employee and were caught up in this algorithm of
everybody who is on a probationary--it is harder to fire people
who are more senior, and who have tenure, but let us make a
political show of just firing as many people as we can to show
that we are cutting waste, fraud and abuse.
That whole premise is belied by the fact that they fired
the Inspector Generals, whose job it is to find the waste,
fraud and abuse. I do not think they actually had any kind of a
plan, or any kind of analysis to show where this waste, fraud
and abuse was. It looks like the evidence shows it is willy
nilly indiscriminate firing of probationary employees. I yield
back.
Chairman Walberg. I thank the gentleman. I now recognize
the gentlelady from North Carolina, whose portrait hangs behind
us.
Mrs. Foxx. Oh, I forgot about that.
Chairman Walberg. Well, we did not. We are glad it hangs
there, and I recognize her for her testimony, Ms. Foxx.
Mrs. Foxx. Thank you, Mr. Chairman. I appreciate that very
much. I want to thank the witnesses for being here today. Dr.
Beach, in your testimony, you explained that cutting Federal
regulations could be as good or better than making tax cuts
permanent. We have actually heard this from business and
industry.
Mr. Beach. Yes.
Mrs. Foxx. Cutting taxes is extremely important for
unleashing the American worker, but why do Federal regulations
have such an outsized impact on economic growth, and what sort
of benefit would workers experience if both tax cuts and
regulatory reform are made?
Mr. Beach. Well, the answer to that is that in the last 15
years regulations have just grown tremendously. All the data
shows a massive increase. These regulations are primarily in
the financial sector. They are in areas affecting investment,
and in manufacturing and in transportation.
They are not necessarily in the safety and health areas,
they are in the compliance of this and that, and so forth and
so on. These all need to be reviewed. When you reduce the
regulatory burden, when it is that high, the effect is very
large.
Now, why is it larger than making the Tax Cuts and Jobs Act
permanent? Well, you are just avoiding a tax increase here, so
you are telling business well, your taxes are not going to go
up. Individuals, your taxes are not going to go up, and you may
want to do a few things, overtime, and you know, tax for tips,
and that sort of thing. That may be possible.
Right now, the opportunity is on the regulatory side in
terms of growth.
Mrs. Foxx. Thank you very much. In your capacity at the
Bureau of Labor Statistics, were you able to determine why the
growth of public service sector jobs account for such a large
portion of the current job growth?
Mr. Beach. We saw a lot of increase in State and local
education, in state's higher education during the period 2021-
2022. There was growth in the Federal workforce. There is no
question about that, even though it was, as my colleague says,
a 2 percent of all payroll employment, that is a pretty good
percentage.
A lot of the growth is happening at the State and local
level in the education area. That is what apparently was going
on at that time. It is tied, of course, to Federal programs,
which had the intended effect of increasing employment in those
sectors.
Mrs. Foxx. Thank you very much. Ms. Milito, what workforce
issues did small businesses face during the previous
administration that Congress has not addressed but should?
Ms. Milito. Thank you for that question, Representative
Foxx. We are very hopeful that Congress will take action on
something with the heat standard, and this was discussed
earlier, legislation that would prohibit OSHA from ever
touching a heat standard again, again, I want to correct
something.
I did not say that it was not a health hazard. Heat is a
health hazard, but it is not an occupational hazard. It is not
an issue for OSHA to address there, so legislation that would
prevent OSHA from passing a standard on that would be very
important. Certainly too, withdrawing the Biden administration
rules on overtime, the joint employer standard, which the
Court's stopped there, but the Independent Contractor Rule is
still out there hanging in the Courts around there, and we
would like to see those wiped out too.
Those are some areas where our members are looking for
relief. We have sent a letter, as of just yesterday actually,
over to the White House asking for relief in these areas.
Mrs. Foxx. Well, I am going to ask you a second question,
but you may have answered some of this before I got here. I
will ask you to followup in writing. The Trump administration
takes aim at Federal regulations, what concrete steps can
Congress take to join with the administration, and help ensure
small businesses succeed?
I am not going to ask you to answer that now. We will
submit that to you formally and ask for a response. Ms.
Maietta, how would worker upskilling and education improve in
your industry with a lighter Federal regulatory burden?
Ms. Maietta. You know, Congresswoman, thank you for that
question. It is so hard today to own and operate and run a
small business in this country. We, in the hotel industry, are
regulated at the local, State and Federal level. Increased
regulatory burdens just add to increasing costs, and
implementation, new processes or systems that can then limit
the ability to hire quickly, or staff up, or train and help
your employees get ahead in the industry.
Issues like--measures like the NLRB Joint Employer Rule, or
Overtime Rule would have severely impacted the industry, and
made it even harder to continue to operate in today's
environment.
Mrs. Foxx. Thank you, Mr. Chairman. I yield back.
Chairman Walberg. I thank the gentlelady, and now I get to
another member of the Great Lakes Caucus who knows the beauty
of fresh water without sharks and salt, the Representative from
Minnesota, Ms. Omar.
Ms. Omar. Thank you, Mr. Chairman. I find it truly
astonishing that House Republicans have brought us here today
to discuss ways to unleash America's workforce, while they are
actively abandoning workers. How exactly are we supposed to
unleash anything when Federal workers are being threatened by
an unelected billionaire?
When critical government services and authorized funds are
being disturbed at a whim? When worker protection, basic
safeguards against unsafe working conditions, and employment
discrimination are being undermined? We are already hearing
reports that the Trump administration has begun firing many
workers at the Department of Labor, and the National Institute
for Occupational Safety and Health.
Ranking Member Scott and I recently sent a letter to HHS,
demanding more information about these staffing cuts and grant
distributions. We have not heard anything back yet. Dr.
Shierholz, I want you to help us understand how these attacks
on critical agencies will impact worker safety. What does it
mean for workers if these agencies lose significant numbers of
Federal employees?
Ms. Shierholz. What OSHA does is protect workers health and
safety by passing laws, by passing regulations, publishing
regulations, enforcing those regulations. When they have less
personnel, they will be able to do that less effectively.
America's workers will be less safe on the job, full stop.
The Wage and Hour Division, for example, they enforce wage
protections. They make sure--like their workforce has already
been shrunk dramatically, so their--low-wage workers today lose
tens of billions of dollars a year in the form of wage theft by
their employers not paying minimum wages that they are owed,
not paying overtime that they are owed.
We cut Wage and Hour Division, and that skyrockets even
further. Workers will be hurt by actually being hurt on the
job, and by losing wages that they were legally owed.
Ms. Omar. Who really benefits when the agencies lose this
capacity?
Ms. Shierholz. Okay. The people who benefit are bad apple
employers. They benefit because they are able to cut corners on
workers safety protections, they are able to cut corners on
actually paying their workers. They just do not have as much
oversight over what they do.
Bad apple employers gain over workers. Bad apple employers
gain over lawful employers because then they can--they are in a
competitive advantage over lawful employers. Then the other
group that benefits from this are the wealthy, who are going to
be the disproportionate beneficiaries of the tax cuts that
these kind of agency cuts are going to help pay for.
Ms. Omar. I appreciate that, thank you so much. I have to
say, you know, these attacks will have, as you just said, real
and devasting consequences for working people in this country.
It is about thinking about economic mobility. It is about
thinking about job security. It is, at minimum, thinking about
institutional stability.
What we are witnessing that is taking place in this country
really is something that I find very outrageous and shameful,
and I am glad that we are having this conversation. I hope that
we get to have many of these conversations. Last, before I
yield back my time, Mr. Milito, why do you--Ms. Milito, why do
you believe workers suffering heat exhaustion is not a work
hazard?
Ms. Milito. Excuse me, it is a public health hazard, and
OSHA is limited by what the authority that Congress has
delegated it. OSHA has authority to regulate and oversee
occupational set hazards.
Ms. Omar. Standards. Yes, standards, right?
Ms. Milito. Occupational hazards.
Ms. Omar. Yes. Why would you think it is not an
occupational hazard if someone is being forced to work 8 hours
under 120 degrees without getting regular breaks?
Ms. Milito. Employers are already taking action to protect
the workers from heat.
Ms. Omar. You believe employers should have the
responsibility to decide who dies and who survives in the heat?
Ms. Milito. They have a responsibility to keep their
workers safe, most definitely, but that is separate and apart
from OSHA's authority.
Ms. Omar. You are saying those employees--employers who
have not done that, who have seen people die at their
workplaces, in places like Texas, is just because they are bad
people, and we should not have the responsibility of protecting
the workers is what I hear. I yield back.
Ms. Milito. That is not what I am saying, but thank you.
Chairman Walberg. I thank the gentlelady. I recognize now,
the gentleman from California, Mr. Kiley.
Mr. Kiley. Thank you, Mr. Chair. In the last Congress this
Committee held the Biden administration accountable for its
anti-worker agenda. Now that we have turned the page, we have
an incredible opportunity to enable and facilitate the pro-
worker, pro-small business pro-growth policies that are coming
from the new administration.
This Committee's oversight proved particularly critical
when President Biden made the baffling decision to elevate the
State Labor Secretary with the very worst record in the country
to be his Secretary of Labor. Our Committee actually brought in
Ms. Julie Su for a hearing at that time where we were able to
show how she was the Secretary of Labor for the State,
California, that had the single highest rate of unemployment in
the entire country in her tenure, first out of 50.
Had the lowest rate of wage growth in the entire country,
50 out of 50, and had the highest rate of real poverty in the
country, first out of 50. Then, that she also led--was the
architect of the most disgraceful, notorious labor law in
modern U.S. history, that being AB5.
Now after she came in for a hearing here, the U.S. Senate
refused to confirm her. Her nomination was stopped with
bipartisan opposition, but of course the Biden administration
chose to lawlessly keep her at the helm of the Labor Department
for the entire tenure of the administration.
In that position she did indeed attempt to Federalize the
failed policies of California by implementing a new rule that
was designed to mimic the effects of AB5 in California, as far
as limiting the freedom of independent contractors.
Now, the good news is that that regulation has not yet
wrecked the sort of damage that we had anticipated, perhaps
because of the illegitimacy of Ms. Sue's tenure at the helm of
the Labor Department, which shattered all records, by the way
for an acting unconfirmed Secretary.
Nevertheless, we still find ourselves in the situation
where that regulation is on the books, where there continues to
be uncertainty as far as the livelihoods of independent
contractors, the ability of small businesses to work for them--
with them.
In order to resolve this issue to provide certainty, to
protect the rights of workers and countless enterprises across
the country, I have introduced the Modern Worker Empowerment
Act, which would specify that the classification standard for
an independent contractor comes down to two intuitive factors.
No. 1 being the degree of control of the hiring entity over
the work performed. The second being the opportunity for profit
or loss, or the opportunities and risks inherent to
entrepreneurship. This is a pretty common-sense standard
designed to say that if you truly are running your own
enterprise, then you do not need to be forced into a W-2
classification.
In addition to that, I have introduced the Modern Worker
Security Acts. We have the Modern Worker Empowerment Act, and
the Modern Worker Security Act. This legislation is designed to
encourage the use of portable benefits, which will provide a
level of a social safety net for independent workers that they
can take with them from job to job, things like healthcare and
retirement savings.
The problem in existing law is that if associations or
companies, or other groups choose to provide those benefits,
then it is kind of like no good deed goes unpunished. You have
had that then used by regulators to say oh, look at that, you
are providing benefits. You must be an employer, we are going
to force this to be considered a W-2 arrangement, which is not
what either party to the transaction wants.
It has had this chilling effect on the ability to offer
portable benefits, and for workers to have that measure of
security. I am hoping that we will be able to move both of
those measures through this Committee, and provide more
certainty to millions of folks across the country.
I think this will have a tremendous impact on our
workforce, and maybe with the remaining time, Ms. Milito, since
you mentioned this, the labor regulation, the independent
contractor regulation in your testimony, could you just give us
a sense of how damaging this uncertainty has been for small
businesses?
Ms. Milito. Yes. It has created a lot of, yes, headaches
for business owners who cannot determine whether or not
somebody they have hired once a week to come and do their
website improvement needs to be, as you put it, a W-2 person,
or because they also do website work for other businesses. Can
I pay them, you know, as an independent contractor because they
have their own business. They have their own business card.
The Empowerment Act that you have introduced would be very
helpful in that front in codifying that simple, very simple
two-factor test the Trump Rule had, so thank you for that.
Mr. Kiley. Thank you. I yield back.
Chairman Walberg. I thank the gentleman. I now recognize
Mr. Casar from Texas.
Mr. Casar. Thank you. We are 1 month into the Trump
Presidency, and American workers already have many fewer rights
than they did just about a month ago. These attacks have been
numerous, but I want to talk about what has been one of the
biggest threats to workers so far, and that is Elon Musk and
Donald Trump's effort to eliminate the National Labor Relations
Board.
The NLRB is an independent, government organization that
protects workers from being fired or discriminated against for
collective bargaining. The NLRB was started in 1935 when
Members of Congress and the President came together and said
that workers need more rights, and that there needs to be a
check on the power of the ultra-rich that caused the Great
Depression.
If you try to organize a union at your workplace, and your
employer fires you, it is the NLRB that makes sure that you are
protected. If you form a union, and your employer refuses to
bargain with you, it is the NLRB that holds those big
corporations accountable.
Without a strong NLRB, workers will face more challenges in
fighting for higher pay, better benefits and workplace safety.
Musk and Trump know this, because they know that if you cannot
bargain, then all you have got left is begging. That is why
they are coming after unions. That is why they are coming after
workers' ability to bargain together because they want to be
able to force workers at their companies to work for more hours
for less pay, with less safety, less rights, while keeping more
money for their big billionaire donors and friends.
Dr. Shierholz, is it correct that overall workers that form
a union and bargain receive higher pay and better benefits than
those workers who do not unionize and bargain in the same
industry?
Ms. Shierholz. Yes. It absolutely is. Careful, raw
comparisons, careful regression adjusted comparison, it all
shows that workers who are in unions make more than similar
workers who are doing the same work, same demographic
characteristics who are not in unions.
Can I take 1 minute that I am dying to correct the record
on about the independent contractors?
Mr. Casar. Go ahead, can you correct the record?
Ms. Shierholz. There has just been sort of outrageous
things said about the Independent Contractor Rule. The
Independent Contractor Rule that the Biden administration did,
did not mimic AB 5, it merely restored the method for
determining classification that had been in place at Wage and
Hour for decades.
Trump was the one that put in a rule that very much
weakened it. Biden just restored back to the method that had
been used for decades. Sorry, to----
Mr. Casar. No, but it should be no surprise to us.
Ms. Shierholz. Yes.
Mr. Casar. That Trump and Musk, who have private companies
that generate them billions of dollars want to have workers
have fewer rights, have workers have to pay their own taxes,
rather than employers having to contribute; Want workers to not
be able to get overtime pay. They want those workers to not be
able to form a union and bargain, that way they can just get
more and more money from workers and taxpayers, and keep it for
themselves.
Last year, the NLRB cited Musk's company SpaceX for forcing
workers to sign illegal severance agreements, and for firing
workers in retaliation for speaking critically of Musk. There
is story after story, instance after instance, of Musk trying
to bust unions and not respect workers' basic rights, that we
won back in the 1930's.
Instead of accepting those NLRB rulings, Elon tried to sue
the NLRB out of existence, arguing in Court that the
organization created by Congress is unconstitutional. Now,
after spending 277 million dollars to get Trump into office,
he's using his power in the White House to try to tear down the
NLRB.
One of the first things that Trump did was fire Gwynne
Wilcox, an NLRB Board Member who is independent. Trump is not
allowed to have fired her, but without her, the Board does not
have enough members to function, making it so the NLRB cannot
hand down rulings to protect workers.
In summary, Mr. Chairman, Elon Musk and Donald Trump's
agenda is not to make the government more efficient for
workers, it is to make the government more efficient for
themselves, and getting rid of the NLRB, attacking workers'
rights that we have won in the 1930's, is the perfect example
of how Trump and Musk are talking about how they are for
working people, but what they are actually doing is screwing
you over, and taking your money for themselves. With that, I
yield back.
Chairman Walberg. I thank the gentleman. Now I recognize
the Representative from Pennsylvania, Mr. Mackenzie.
Mr. Mackenzie. Well, thank you Mr. Chairman. I appreciate
the opportunity to speak today at this wonderful hearing that
we are hosting on unleashing America's workforce and
strengthening our economy.
I really cannot think of a better topic for this Committee
to be discussing after a great hearing that we had on the
American educational system because one of the key things that
I want to focus on as a Member of Congress, is what we can do
to strengthen our workforce, promote economic growth, and
support working families.
All across this country for the past number of years,
families have been suffering with high prices for massive
inflation. We have a workforce challenge that so many people
cannot even get into the workforce because there are barriers
for them.
Childcare is too expensive. Many businesses are not
offering paid maternity leave, and so for a lot of workers,
they are making a rational decision about whether they should
be in the workforce or not, and it is purely economic. They say
why would I go work 40 hours a week when the costs of having a
child and raising a child make it unsustainable to be in that
workforce, or have any take home pay left at the end of the
day?
Those are the issues we need to focus on, and we need to
focus on our workforce because far too often people, when they
want to talk about economic growth, they only talk about taxes,
regulation and trade. Those things are all hugely important,
not dismissing those at all, but the fourth thing that we need
to focus on is workforce.
That needs to be a part of every economic discussion is
workforce. If businesses do not have the proper and skilled
workforce, there is no business operation that will be carried
out. I want to talk just very briefly about my opinions that I
think we need to actually continue this trajectory that we have
been on in this country about promoting career and technical
education, promoting community colleges, 2 year degrees, all of
these things, but for far too long were disparaged.
Everybody said you only should go to a 4-year college if
you want to be successful. We know that is not true, and so I
think we need to speak that truth here in Congress, and
continue our mission to make sure that every student, every
adult, gets into a meaningful and rewarding career where they
can make a family sustaining wage, and that they can do that
through a lot of different educational opportunities and
pathways.
I think we need to talk about that. Now, when it comes to
workforce protections, I am grateful that the Chairman has
promoted me to be the Chairman of the Subcommittee on Workforce
Protections.
Again, I want to talk this Congress, about what we can do
through things like the tax code, about expanding paid
maternity leave, expanding tax credits for child care,
expanding child tax credits, so people have more money back in
their pockets when they are raising children, and also
expanding things like adoption and IVF tax credits for those
that are looking to grow their families in those ways. We want
to make sure that they can do that.
I have presented those opportunities to the Ways and Means
Committee, and hopefully some of those things will be taken up.
I also want to talk about the fact that we need to crack down
on unscrupulous employers who are utilizing the illegal
immigrant labor in this country.
We need to expand the use of E-verify to actually punish
those business because they are doing the wrong thing. They are
exploiting those individuals. They are taking advantage of
their competition in the marketplace who are trying to do the
right thing, and they are also taking advantage of social
safety nets that everybody pays into when you pay legal wages
through our workforce systems.
Those are just some of the things I want to talk about, and
with the last minute of my time, I am actually going to bring
up a bit of a niche subject, but it is on top of mind for me
because I just came from a Homeland Security Committee on
Workforce.
Our House Republican Caucus is talking about workforce all
across the halls of Congress today, which is a great thing.
Over in Homeland Security, we were talking about the need for a
cybersecurity workforce. There are 500,000 positions that are
unfilled in the cybersecurity space.
There is a piece of legislation, the Cyber Pivot Act, which
fits neatly into what I am talking about here. It would be full
scholarships through 2 year programs at career and technical
schools to get people into those entry level cyber positions.
It passed unanimously last session.
Unfortunately, it did not get across the goal line, but
hopefully we can do that this time. Anybody on the panel, do
you have an opinion on the need to expand our cyber workforce,
and what we can do about that?
Mr. Beach. I was on a I guess you would call it a workforce
in the Biden administration to look at that very subject. We
concluded there was an acute need on the cyber side. There is
also an acute need in firefighters, and other kinds of
frontline people, so it is a broad base that research has been
done. You should do an oversight hearing on that, or some kind
of an informational hearing to bring those plans to bear.
There is quite a bit of data out there, and I think it is
absolutely essential that we engage on that topic, and thank
you for doing that.
Chairman Walberg. Thank you. The gentleman's time has
expired. I recognize my friend, and the Ranking Member of this
Committee, the gentleman from Virginia, Mr. Scott.
Mr. Scott. Thank you. Ms. Maietta, you mentioned the
apprenticeships and working with the Department of Labor. Those
are registered apprenticeships, and can you--I assume based on
your comments, you would like to see more of them?
Ms. Maietta. The apprenticeship program has been really
essential to our industry in allowing that trajectory to move
up, and once graduated from the program, employees see a wage
increase as well.
Mr. Scott. They are a good thing?
Ms. Maietta. They have been really beneficial. We would
love to talk about expanding that.
Mr. Scott. Good, good. Ms. Milito, you mentioned the tax
cuts for small businesses. Of the 4.5 trillion dollars, how
much of that tax cut are you talking about?
Ms. Milito. Sorry, of the 4.5 trillion dollars, the dollar
number you are talking about for the small business deduction,
I do not know that I have that figure here with me right now,
but I am happy to provide that too. It is, you know, in the
scheme of things, again remember this is a small business tax
deduction. This is not going to millionaires or----
Mr. Scott. I think we could take care of the small
businesses for about 15 percent of the 4.5 trillion. They do
not have to bust the whole budget to help small businesses. Ms.
Shierholz, you mentioned the size of the Federal workforce. Was
part of your comment too the fact that of the Federal budget
only 5 percent of the--less than 5 percent of the Federal
budget goes to the Federal workforce, and that if you cut it 20
percent, you would not have gotten 1 percent of the budget?
Ms. Shierholz. You said it. Yes, that is the right way. The
math just is not there. You cannot cut the Federal--you cannot
cut your way through anything by cutting the Federal budget--
Federal workforce.
Mr. Scott. Wages versus inflation, I thought the wage
inflation had caught up with the inflation. It started off
pretty bad in the first year, but early in, when inflation got
really bad, the American Rescue Plan Act provided for the
median family of four over $5,000 in stimulus checks, $6,000 in
child tax credits, and then SNAP benefits, reduced healthcare
costs.
If you add all that up and put that in there, can you say
something about wages and inflation?
Ms. Shierholz. Yes. Thank you for bringing that up. The
idea that inflation is outpacing nominal wages is absolutely
wrong, unless you cherry pick the numbers. If you do what
economists typically do which is look, compare where we are now
to the last business cycle peak, that is sort of the
straightforward way to do it.
It is unambiguous that working people, low-wage workers,
middle-wage workers, or high-wage workers, all have higher
inflation adjusted wages now than they did at that last
business cycle peak in 2019.
Mr. Scott. President Trump is crediting his miserable job
performance to COVID-19 pandemic. Is it not true that the
pandemic started in March 2020 and ended in January 2023, so he
had about 11 months in the pandemic. Biden had about 2 years
and was able to create jobs. Is that right?
Ms. Shierholz. Yes, that is right.
Mr. Scott. Okay. Can you say a word about the stimulative
effect on the economy of tax cuts to the rich, and the American
Rescue Plan Act investments?
Ms. Shierholz. Yes, the--okay, so the American Rescue Plan
Act, that was a thing. It was passed in early 2021, after the
job gains due to reopening the economy had run their course,
and we were still down millions of jobs. It was a thing that
set us up for the incredibly strong jobs recovery that we had.
The tax cuts that are in the House budget plan, the totally
extremist House budget plan, will go entirely--almost entirely,
overwhelmingly to very rich households, and that could actually
put a drag on the economy. We are in a period of a very strong
economy, and at a time like this, increasing the deficit by as
much as the House plan is going to do, actually may translate
into a drag on the economy.
Mr. Scott. Well, tax cuts to the rich have not
traditionally done much for the economy at all. Is that right?
Ms. Shierholz. Fair, yes. Yes.
Mr. Scott. Investments that affect people who will actually
spend the money do a lot better. Can you say a word--we have
had comments about the enhanced unemployment compensation. I
thought there were studies about that that showed that it did
not make any difference?
Ms. Shierholz. Yes. What the general, like sort of weight
of the literature shows that unemployment insurance does keep
people unemployed for a little bit longer than they would if
they did not have it. You know why? They are staying in the
labor force looking for work, because they are required to look
for the--actively looking for work to get the unemployment
insurance benefit.
It is not that they get unemployment insurance benefit and
as soon as it runs out they get a job. That is not what that
sort of spike at benefits.
Mr. Scott. The states that ended the enhanced unemployment
compensation compared to those that did not end the enhanced
unemployment compensation, they continued it. People going back
to work was the same. Is that right?
Ms. Shierholz. Yes, that is exactly right, yes.
Chairman Walberg. Well, the gentleman's time has expired,
but I also recognize him for his closing comments.
Mr. Scott. Thank you. Mr. Chairman, the gentleman from
California suggested that the Acting Secretary of Labor, Ms.
Su, was serving illegally. I would ask him to produce some
documentation of that allegation because I think that was tried
in Court, and found that she was serving perfectly legally.
He might not have liked it, but she was serving legally. I
would like him to produce some evidence to support that
allegation. Again, Mr. Chairman, I ask you to join us in
getting answers to what DOGE and President Trump are doing at
the Department of Labor and other agencies.
For example, what is happening at the NLRB and EEOC? What
information does DOGE have access to, like files of
investigations into his own businesses, bids. Can he get bids
of his competitors? Does he have access to job numbers, and
things like that before they are public?
Do any conflict of interest rules apply to anything he has
done? We do not have to do anything, but we would like to just
ask questions and get answers. Mr. Chairman, we have heard
about the job creation during the Biden administration, and
while we saw--while at the same time we saw him reducing the
deficit.
He created more jobs in 4 years than any President in the
history of the United States, and more jobs in 4 years than any
Republican was able to do, whether they served four or 8 years.
President Clinton did more in 8 years.
We know how to do this, we just have to pass a fiscally
responsible budget that effectively invests in the economy, and
we will get good results. The last thing we need is a budget
that we pass like the one we passed last night, showering
massive tax cuts on the wealthy, the top 1 percent in
corporations.
We just heard that that does not do anything for the
economy because they do not spend the money. We need--we do not
need that kind of showering of tax cuts. Then do not need to
make people pay for it with cuts in Medicaid, education, and
other essential services.
Add insult to injury, the budget after all the speeches, it
incredibly ends up with a deficit worse than if we had done
nothing. I do not know how people--I do not know how--well, I
did not vote for it, so I hope we could do better, Mr.
Chairman, and with that I yield back.
Chairman Walberg. I thank the gentleman. I think we agree
on a number of things, it is just how we get to that. We have
heard amazing statements today during this hearing, which I
think has been a great hearing. I appreciate the witnesses who
are at the table, all four.
It shows the opportunity of ideas, and which ideas work,
and work best. We have heard about the framework resolution,
the budget resolution that indeed was a framework. I appreciate
my colleagues on the other side of the aisle hanging pieces of
that framework on the framework, and conjecture that has been
given, I do not appreciate, and would hope that it would not
continue.
Fear mongering, that intensifies without I would suggest
fact and reality at this point in time. We would all agree that
we have a challenging situation economically in this country
right now. We would all agree that we would want to get to the
reason, the rationale behind that, but I hope we would have
more concern about our taxpayers and our businesses that supply
the economy for our taxpayers themselves personally, and within
our country, than we would have for big government.
Or, as it has been called today, tiny government. That tiny
government, that that is a quote that we want to use, still
produces nothing as far as the economy. They do not generate
one dime. That is where it comes from the businesses, and the
individuals, the blue collar, and white collar, and whatever
collar workers that are out there doing the work that has made
America what it is, the envy of the world.
We are not perfect, but we have patterns and systems that
have worked. There is a reason that the Biden administration
did not do away with the Tax Cut and Jobs Act. Thank God that
it stayed in place, and continues to this day, and we know the
impact. We can put out statistics for almost anything, but the
fact of the matter that 77 million people decided they wanted
something different in the last 4 years, and 75 million people
voted for a congressional body to take us in a different
direction than what was going on in the last year.
I think it is significant that we ought to recognize. I
think there are things that we agree with that are in the
workforce space, WIOA reauthorization, Workforce Pell, and
other things in the CTE space that we can agree on and work
together, and have minor differences, but the general issues
are there.
From my perspective, I am not giving away the fact that we
represent the blue-collar worker. We are not going to
relinquish that because of what they add to this great country.
They are a vital American group, and in the Tax Cut and Jobs
Act, they received the biggest benefit. That is a fact, and of
course we will debate that, but that is what is there.
We have heard a lot about how the Biden administration's
radical regulatory agenda has harmed American workers and the
economy. However, with President Trump back in the White House
and a Republican led Congress, job creators are optimistic for
the return, and polling is showing that.
The surveys are showing that optimism for pro-growth
policies that support and strengthen our workforce and
businesses. The Committee is committed to considering
legislation solutions to improve the standard of living of
American workers, reduce the burdens on business, and
strengthen economy, and that includes things like WIOA
reauthorization and Workforce Pell and the rest.
Thank you again for giving us a lot of ideas that we can
knock around, and we can ruminate on. That is an agricultural
term, you know, but I think we can in working together, we can
get it right. The American people, and the American industry,
and the small businesses, and the entrepreneurs, the blue
collar and the white collar, and the striped collars workers
will benefit from it.
With no other business to come before the Committee, the
Committee stands adjourned.
[Whereupon, at 1:16 p.m., the Committee was adjourned.]
[Additional submissions from Chairman Walberg follows:]
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[Questions and responses submitted for the record by Dr.
William Beach follows:]
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[Questions and responses submitted for the record by Ms.
Elizabeth Milito follows:]
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