There are only two pathways to greater economic growth: more people working or individuals producing more (or both). The new administration has proposed policies to grow the economy and increase U.S. manufacturing.
It wants to get more people working and fewer watching by reducing the number of government employees so bureaucrats can enter the productive economy. It plans to leave minimum wage laws up to the states due to regional differences, so unskilled workers, especially teenagers, aren’t excluded from the labor pool, giving them a chance to gain valuable experience that will allow them to become more productive and command higher wages.
More importantly, productivity must increase, something that big labor fights. We no longer pick corn by hand, the Bessemer converter allowed us to replace brittle cast iron with low-cost steel, and computers allow bookkeeping without physical books. In order to create an environment where companies can further innovate, the administration intends to reduce government regulations. Companies will be able to focus on technology and process improvements instead of filling out government forms.
What doesn’t jibe with the administration’s policies is former Rep. Lori Chavez-DeRemer’s nomination for labor secretary. Randi Weingarten, president of the American Federation of Teachers, considers her nomination significant because Chavez-DeRemer supports “pro-union” policies such as the ProAct, which would replace secret ballots with a card check, making it easier for union bosses to harass people who don’t want to join a union, and eliminating right-to-work laws that prevent forced union membership.
Being pro-union is not the same as being pro-worker. In fact, it is the opposite, which is why union membership has recently hit a record low. Growing up in the Mon Valley of Pittsburgh, I witnessed firsthand the destruction of many of the factories that, during WWII, were part of the arsenal of democracy.
There are many factors responsible for the downfall of the U.S. steel industry, but unions resisting innovation are part of it. That is one reason U.S. Steel desperately needs investment today. Yet, although Nippon Steel wants to invest over $1 billion in Pittsburgh steel plants, the union says no — despite many rank-and-file steelworkers wanting it.
Today, the longshoremen threaten to shut down the economy if automation is installed at U.S. ports, which are already the least productive in the industrialized world.
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What’s more, we cannot simply hide behind tariffs. If we cannot compete with the world, we will simply fall behind and become economically backwards.
President Donald Trump wants to invigorate the economy and revitalize world-class manufacturing in the U.S., but Chavez-DeRemer’s pro-union stances may not be a good fit.
Phillip S. Coles is a professor of practice in supply chain management in the department of decision and technology analytics at Lehigh University’s College of Business.