What Trump’s First Budget Means for Employers and Employees

What Trump’s First Budget Means for Employers and Employees

The White House on Thursday released the first budget proposal from US President Donald Trump’s administration, which makes deep cuts in many areas of discretionary spending to cover a substantial increase in funds for defense. One federal agency that stands to lose a big chunk of its funding is the Labor Department, which the Hill reports is allocated $9.6 billion in Trump’s proposed budget, a cut of $2.5 billion or 21 percent:

The White House budget proposed to crack down on “improper” unemployment insurance payments, claiming it will save as much as $536 per person. But it also puts various workplace training programs at risk. … Trump’s proposal requires the Labor Department to decrease federal funding for job training programs, turning over the responsibility to the states for keeping these programs alive. That includes closing job-training centers for “disadvantaged youth” which the White House said do a “poor job educating and preparing students.”

The White House would also put a job training program for senior citizens on the chopping block, which it claims will save $434 million. The plan would seek to save another $11 million by axing job training grants offered by the Labor Department’s Occupational Safety and Health Administration and “focusing the agency on its central work of keeping workers safe on the job.”

The planned cuts to OSHA’s job training programs suggest that the Trump administration is indeed looking to reduce the powers and responsibilities of that office. On the other hand, the White House is calling for more spending to help states set up apprenticeship programs.

Another noteworthy line item, SHRM’s Roy Maurer observes, is a $15 million carve-out for the Department of Homeland Security, one of the few departments whose budget is increased in this proposal, to begin implementing mandatory E-Verify nationwide—though only Congress can actually make E-Verify mandatory. Expanding DHS’s E-Verify program, which enables employers to that their employees are legally authorized to work in the country, is a key component of Trump’s plan to crack down on illegal immigration, although a recent study out of Arizona suggests that mandatory E-Verify doesn’t do that much to create job opportunities for legal residents.

Overall, many critics of the budget proposal say the cuts to the Labor Department budget will hurt many poor and working-class families, the Huffington Post’s labor reporter Dave Jamieson relays:

The National Employment Law Project, an advocacy group for low-wage workers, said that Trump’s budget is “virtually a complete breach of faith with America’s workers,” violating his own campaign pledge to create good jobs and boost wages. “It would walk us back decades on worker safety and health, including eliminating critical grant training programs to workers in the most dangerous jobs, leading to more injury, illness and death,” the group said.

At Wired, meanwhile, Emily Dreyfuss argues that Trump’s budget proposal does nothing to help the many middle-class American workers who stand to be displaced by technological change and have trouble adjusting to a new, more automated world of work:

Two economists who recently left Washington say the answer [to displacement by automation] lies in ensuring the government provides enough of a safety net to help middle class Americans navigate the coming transition. Jason Furman and Gene Sperling—former chief economic advisors to President Obama—prefer to think of it as a bridge, not a net, that will help people reach the future. At a conference at MIT last week, they joined AI and machine learning experts to debate how American policymakers should deal with the fact that artificial intelligence can’t and won’t be stopped. One thing everyone agreed on was that only the social programs of today can prepare people for tomorrow.

The Trump administration clearly disagrees. … Trump favors slashing things like training programs for seniors who must to learn new job skills, as well as grants for low-income students to attend college. He suggests cutting $221 million from the Economic Development Administration, which works to create new jobs and retain existing jobs threatened by globalization and automation. You might think such programs help the nation’s poorest and most disadvantaged citizens. They do, but wage stagnation means they increasingly serve a struggling middle class—the very people Trump so often claims to serve.

Even some conservatives who favor less government intervention in the labor market are opposed to doing away with some of the programs Trump plans to scrap, such as the $434 million Senior Community Service Employment Program, which the White House calls “ineffective.” But one conservative scholar tells the Daily Caller that reform would have been better than cutting the program altogether:

“Subsidized on-the-job training programs are useful in allowing individuals to keep a foothold in the labor market,” Aparna Mathur, a labor policy expert at the American Enterprise Institute, told the Daily Caller News Foundation.

“While I would have preferred modifications to the SCSEP so that individuals are not restricted to training opportunities only within certain types of work and establishments, completely doing away with the program is likely to cause hardship to seniors who often have traditional labor market opportunities closed to them, ” Mathur said.