Marty Walsh On The Labor Market, Minimum Wage And More
Following is the unofficial transcript of a CNBC interview with U.S. Secretary of Labor Marty Walsh at CNBC Work Summit, which took place today, Tuesday, October 25th. Video from the interview will be available at cnbc.com/work-events/.
Interview With U.S. Secretary Of Labor Marty Walsh
KAYLA TAUSCHE: Thank you, Tyler. I’m honored to be here today with the Secretary of Labor, Secretary Marty Walsh. Thank you for joining us.
SECRETARY MARTY WALSH: Thanks for having me today.
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TAUSCHE: So the labor market’s a little bit confusing. You just heard Tyler say that we're back at pre-pandemic unemployment levels, but job openings are starting to shrink and now more than half of large companies say they're looking at layoffs. So how certain is the strength in the economy?
WALSH: I still think that we're gonna have job gain as we move into the end of this year, early next year. A lot of people are still looking at different jobs. We saw a lot of moving around over this last course of the year. People leaving jobs, getting better jobs, and I, you know, I'm not convinced yet that we're headed towards that.
TAUSCHE: But the Federal Reserve has said that there needs to be some more pain felt in the employment space in order to get inflation under control and even the Biden administration has said that the economy needs to move toward a place of more steady stable growth. So from a jobs picture, what does that look like to you?
WALSH: It's hard to say that I mean, we definitely have to go towards more steady growth, we definitely have to bring down inflationary pressures. People still feeling them at the kitchen table every day. We need to do that.
But I also think there's a way to do that with by creating good opportunities for people so they have opportunities to get into the middle class and not enough people in America are working in those jobs, quite honestly, if they can get them into the middle class.
TAUSCHE: What is the middle class right now? How much does someone need to make to be able to make ends meet because a lot of the companies who are watching this broadcast this morning are wondering, what do I need to pay people to get them hired and get them to stay?
WALSH: Well certainly more than minimum wage. I think that we have to get people into better paying jobs. We need to get people into better stability when it comes to benefits and when, you know, the 401k, a pension plan, potentially if they have them.
I think there's a lot of Americans out there right now that have gone through the last two years a lot of concern in the pandemic, they were working in a job maybe making minimum wage, maybe they had two or three jobs.
Really I think the best way to describe what is what is a middle class job is a job you can work one job, get a good pay, so you don’t have to work two and three jobs to support your family.
TAUSCHE: The federal minimum wage is still $7.25. Several states are still using that as their minimum wage. Does the administration see any path going forward to raise that? You've tried in the past and it hasn't worked.
WALSH: It shocks me that there are members of in the building behind me, if you can't see the building behind me it's the Capitol Hill, that people think that families can raise their family on $7, $7 plus on the minimum wage in this country.
It's really amazing to me that people think that families can get by on minimum wage in this country. We can't. We're working, we passed legislation, the House voted it, it's in the Senate and it hasn’t moved there. We’ll have to see after the elections what happens as far as moving that minimum wage forward.
The President did file, sign the executive order raising the federal minimum wage to $15 an hour, but in fairness to a lot of companies, companies have already raised it far beyond the minimum wage in the country. They've gone to $15, $16, $17, $18 an hour to attract people into their businesses to work.
TAUSCHE: Your agency in recent weeks has moved to change a rule and reclassify gig workers for companies like Uber and Lyft and DoorDash as employees rather than contractors. You're soliciting comments right now. What's the feedback that you've gotten about whether that's a good move?
WALSH: Well, we haven't necessarily said what companies are affected by it, and what business are affected by it. What we're looking at is people that are employees that are working for companies that are being taken advantage of as independent contractors.
We want to end that. We have plenty of businesses in this country, like dishwashers and delivery drivers in areas like that, where people are working for a business that other employees in that business are employees, and they're labeling them as independent contractors.
So we're going to look at this. We're in the rulemaking process now. We're taking in the comments now, and we'll see when the comments come in what the final rule looks like.
TAUSCHE: But there are pros and cons I mean on one hand, yes, it would afford those workers benefits. On the other hand, it might deny them some flexibility in setting their schedule if the company then says, you’re an employee, you have to work a minimum of this many hours per week.
WALSH: Well, let's see what the final rule looks like number one, but again, the flexibility is not an excuse to pay somebody as an employee, you can't use that as an excuse. But we'll see what the final rule is and then, when that's done, you and I will have a conversation about it.
TAUSCHE: The infrastructure law that was passed last year, there have been some estimates about how many jobs that would create. I believe Moody said it would be about 800,000 jobs. Do you have an accounting of how many jobs that's created and where they are?
WALSH: I don’t have what they what they've said today, but they said the infrastructure investment will create 800,000 jobs and then the spin off in the private sector industry will create much, many more jobs. Some of these construction jobs so folks that are working on these construction projects will be able to go to these other private sector jobs when they're done.
I don't have an exact number of how many jobs are on the street today. I know there are 1,000s of projects that predominantly out of Transportation Secretary Buttigieg has put the put them out there and we're starting to see them in cities and towns all across America.
TAUSCHE: Are you confident that those jobs would still go forward even if the economy starts to slow that a private sector company might say you know what, we want to participate in that program, but let's wait a couple years to see how the economy looks before we commit to it.
WALSH: Oh no, I think the project from the infrastructure investment act will go forward. Those that those monies are there. As a matter of fact, if we did have a downturn in the economy, those jobs will keep people working through a difficult time if we came to that point in our country.
The private investment that I'm talking about is in cities and towns that will spin off of these investments of new new new rails, new streets, new bridges, new broadband internet, charging stations, all of these different investments will help our economy moving forward with new development down the road.
TAUSCHE: I believe that same Moody's estimates said that about 12% of those 800,000 jobs would be union jobs. And I'm wondering if you could just provide a commentary a snapshot on union membership in America right now because if you look at the most recent survey available from the Bureau of Labor Statistics that showed that labor jobs decreased by more than 240,000 in 2021. We don't know what that looks like in 2022 so I'm wondering if you do.
WALSH: Yeah, I don't know, I don’t have the number of 2022 but 2021 was unique year the numbers went down in a lot of ways because companies unions weren’t organizing number one and number two, we had a pandemic and a lot of people retired, left their business or they retired. Those jobs weren’t back filled by companies.
I think that, you know, I don't think the unions will see all this interest in unionization right now in the country that we're seeing, you know, polling, I think it's like 65%, 70% of Americans still looking favorably upon unions as in the past the highest in 50 years. I don't think you'll see the benefit of that organizing until probably 2023, 2024.
TAUSCHE: And what are the forces that will drive that?
WALSH: I think people that are looking for better opportunities for themselves,. I think that you know, you have a lot of workers that are the pandemic you know, when I think about the pandemic, I think it's done a few things for the workplace.
Number one, it's changed the workplace. We have a lot of hybrid situations going on. It's changed what people want out of their careers. It's also changed people's perception of not wanting to be taken advantage of thinking that unions can help them grow.
TAUSCHE: Because they can't argue, the worker, it won't be successful arguing or bargaining on their own behalf? They need a collective organization?
WALSH: Well I think, yeah when there’s a collective power, there’s more, more support although I'd tell you, companies have done a good job of working through people keeping trying to keep people retaining people and recruiting people to their companies. They've realized in this last couple of years that they have to do more to retain and recruit people.
TAUSCHE: So what do you think the Biden administration's reputation among organized labor is right now. I know that the President when he was on the campaign trail said that there was no one that would be a bigger proponent for labor than he would be. He made a splash in the early days by canceling the Keystone pipeline, and a lot of those union jobs went away. So where are we halfway through the term right now.
WALSH: If you're, if you're a union member, you should be looking favorably upon this administration for a whole host of reasons is that you know, one of which the Labor Secretary of the United States has union book in his pocket.
I think that that's something that's important. But the President is also focused on working people in America. He talks about unions a lot. He mentions the word union, but he talks about people and talks about creating a pathway into the middle class both for union workers and nonunion workers.
And you know, the President wants to see from the very beginning when he started to run for president, he talked about creating an economy from the bottom up in the middle out meaning creating pathways into the middle class. Now, whether that's unionization or whether that's a good job and good opportunities.
TAUSCHE: But he didn't talk about inflation being as high as it has been and I'm wondering—
WALSH: We didn’t know it was going to be that high.
TAUSCHE: But I’m wondering at what point does that eclipse—
WALSH: Well, let's be honest—
TAUSCHE: Any positive feelings that a worker would have?
WALSH: Sorry I didn’t mean to cut you off there. No, there's no question about it. Inflation is an issue that we're dealing with. We're not running away from it. You know, inflation was not caused by President Biden, was not caused by President Biden's policies.
Inflation is in large part is due to a global pandemic, a worldwide recession that's going on, inflation that’s in double digits in other countries. Oil, oil prices going up, the war in Ukraine, there's a lot of components to that and, you know, the President is very serious talking to us, the cabinet, to make sure we're doing everything we can to bring those inflationary pressures down.
You know, we've seen some of the gas prices come down, we've seen a little bit of inflation come down, but not enough and none of us are satisfied, the President's not satisfied until we bring those costs down at the kitchen table. American people are concerned about a lot of things right now in this world and inflation is one of them.
TAUSCHE: There are two major policy pillars from the President's campaign that have ended up on the cutting room floor and that is immigration reform and childcare. I'm wondering what impact do you think each of those would have on the the economy and on the labor market if you were to be able to advance either one of those?
WALSH: I mean, I think we should we have to advance both and I’ll start with childcare. Childcare is is a basic necessity to get millions of women back into the workforce in a full-time basis. Childcare has not been addressed by this country or by most states in this country for the last 50 years.
The cost is too high for the average family and we can't retain the workers in those industries. We lost a lot of workers in the childcare industry because they’re paying them minimum wage or a little bit above minimum wage.
TAUSCHE: I saw a stat that 100,000 workers from the—
WALSH: They’ve left.
TAUSCHE: Childcare industry have left since the pandemic but how do you get them back?
WALSH: We have to we have to respect them and pay pay them better wages. Anyone watching today that has kids in childcare, you know, you're paying 30%, 40%, 50%, 60% of your salary for childcare, a lot of families have made the decision we don't want to have two people working, one person will maybe stay home, work part time and make up those costs so that that issue has to be resolved number one.
It's not just an economic issue. It's it's a it's a human human rights issue in our country to get good childcare in this country. The second part immigration. Right now, we're talking about worker shortages and what's happening is the political parties are getting immigration all tied up.
One party is saying showing pictures of the border and meanwhile if you talk to businesses that support those, those those congressional folks, they're saying we need immigration reform. Every place I've gone in the country and talked to every major business, every small business, every single one of them is saying we need immigration reform.
We need comprehensive immigration reform. They want to create a pathway for citizenship into our country, and they want to create better pathways for visas in our country.
TAUSCHE: Parties have very different ideas about what that would look like but even just from—
WALSH: They’re not offering, I haven't I haven't heard any of the parties off -- well, the Democrats have put through a plan but I haven't seen the other side offer offer a solution yet. Yet, we need a bipartisan fix here.
TAUSCHE: On inflation, do you believe that immigration reform would actually solve price pressures if you were able to get more immigrant workers into the economy?
WALSH: Well, I’ll tell you right know if we don't if we don't solve immigration, we're going to have economic, we’re talking about worrying about recessions, we're talking about inflation. I think we’re going to have a bigger catastrophe if we don't get more workers into our society and we do that by immigration.
TAUSCHE: What does the supply chain look like going into the holiday season?
WALSH: I feel good where we are. I mean, obviously we talked off air a minute ago about we have two big negotiations going on. We have the ports and the shipping companies that are going on right now. That's moving steady. Right now, I stayed in very close contact with both the companies and the unions.
TAUSCHE: So you don't see a rail strike on November—
WALSH: No, that’s the ports.
TAUSCHE: The ports.
WALSH: And on the rail stuff, you know, we had 12, 12 unions came up with an agreement. Six have voted to ratify their contract. Five are still up for ratification, one union voted it down and they're at the table right now working with the companies hopefully coming up with a new proposal to put in front of the members. So right now we're just moving along here. We'll know in the next couple of weeks here but I feel good where we are today.
TAUSCHE: The cost of shipping containers has gone down. I know that you've been personally involved in training commercial truck drivers. Do you feel like each part of this system that you've solved the variables that were leading to all of the pain last year?
WALSH: Yeah, I mean, the pain last year, but but you got to think now the infrastructure investment bill is going to invest in the rails. We're going to be, you know, we're going to be needing more supplies on our rails moving goods and service goods around the country. You see the ports in LA, Long Beach, you see the ports around the country, they're adding capacity there.
So we're looking at more opportunities there. Solve it, you know, we've solved the problem of the pandemic and bringing goods and services into the country. Now, there's still some issues in other parts of the globe that, you know, had to shut the factories down. So as they got their factories up and running, we'll see more of those services, those goods coming into the country.
And I think the President's emphasis on buy and build in America and more manufacturing in America is going to be key for the future of our supply chain.
TAUSCHE: You remarked recently on the low turnover among cabinet officials in this administration before the midterms. Does that mean that you see a lot of turnover after the midterms?
WALSH: No, I think, you know, I think we have a good strong team and we're working very well together. I mean, obviously, this is my first venture into federal government. So I don't know what the average lifespan or service of a cabinet person is.
But as of right now, I'm just focused on my job and I think a lot of people are focused on their job. We have a lot lot going on, the implementation of the chips bill, implementation of the inflation reduction act, implementation of the the infrastructure bill, we're working on job training, workforce development, apprenticeship. So there's a lot of good things happening in this administration.
TAUSCHE: For officials who may or may not be considering what their next step is, do you think that the US edging closer to a recession would make that decision easier or harder for them?
WALSH: As far as the cabinet?
TAUSCHE: Yes.
WALSH: I think it's harder for all of us. I think if you know, what you don't want to do you want to just continue to work for the administration. We've made great progress in a lot of different areas and we have challenges in front of us. And I think that, you know, some of our work is not done.
I mean, we've done a lot here at the Department of Labor to revamp the way we do job training, working very closely with trying to work closely with businesses. You know, when I go on the road, I talk to business groups all the time. I was in West Palm Beach last week, I spoke to a Chamber of Commerce down there.
I think it's really important for us to continue this conversation. So the reason why I say that to you is that we get ideas from them about workforce development, job training, what are they looking for out of their employees.
TAUSCHE: Yeah, you mentioned the midterms earlier and we've talked now about immigration, childcare, minimum wage, all of those are policy priorities for your party. But how much of what you're able to do will be shaped by the midterms and how much of the agenda is in flux until you know what Congress looks like?
WALSH: I think at the end of the day, no matter what happens in a couple of weeks here, elected officials, Congress, whether you are a Democrat or Republican, you need to work on behalf of the American people, and we need to put the American American public first.
You have to put them back at the top of the pedestal. It's not about parties, it's about delivering for people. And you know, depending on what part of the country you're in, people feel differently about where their own situation is, whether it's inflation is their top issue, or what the Supreme Court did with with with a woman's right.
A lot of people will see after the election which direction Congress is gonna go but I think the President is going to stay focused on on his agenda.
TAUSCHE: We have a lot of dates circled on the calendar in November.
WALSH: We certainly are.
TAUSCHE: Talk to you again soon. Mr. Secretary, we really appreciate your time.
WALSH: Thank you.
TAUSCHE: Labor Secretary Marty Walsh. Tyler, back to you.
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