Election Recap: Impact on Business
Tuesday night taught us a lot of things, but for entry-level employers who were still unclear of whether they had lost the Republican Party, last night should have provided the necessary clarity. While the Republicans ostensibly had a big night, it was the anti-establishment, anti-institution, and dare we say, the anti-corporate wing of the “party” that provided the victories. And while some priorities for entry-level employers may be in alignment with the Trump Administration, it will not be the Chamber of Commerce or other traditional institutions representing the business community driving the policy of the new president. Entry-level employers, and really all of corporate America, are left with more questions than answers as they try to distill what happened and what it means for their businesses.
Trump won with a campaign that avoided revealing policy details for the majority of key issues that will affect P&Ls, which creates a significant problem for business planning. But here are the general conclusions we can make about Trump’s positions that will impact employers of entry-level workers:
MINUMUM WAGE: Trump has taken multiple positions on minimum wage over the course of the campaign. Ultimately, he settled on a $10/hr. federal minimum wage, allowing states to pursue higher rates. It’s unlikely that this issue will be a priority in a Trump administration.
OVERTIME REGS: When questioned on the new overtime regulations, Trump stated that he would like to see “a delay or carve out” for small businesses. He has not put forward a specific position other than that. If the courts do not prevent the overtime regulations from going into effect on Dec. 1, then a Trump administration will be faced with the dilemma of rolling back the regulation after employees have grown accustomed to the new threshold.
PAY EQUITY: Trump has not committed to a position on this issue. His daughter, Ivanka, floored conservatives during the Republican National Convention by saying her father “will change the labor laws” and support equal pay and paid family leave. Trump’s lack of a stated position and previous comments like “You’re gonna make the same if you do as good a job,” show a lack of commitment to changing labor laws. If there is any labor-related issue he actually takes an interest in as president, it may be this one. The Trump administration will have to decide whether or not to roll back the EEOC’s new pay disclosure requirements.
PAID LEAVE: Trump has not taken a meaningful position on paid sick leave. However, Trump’s parental leave proposal is one of the most detailed employment policy proposals released to date and would include six weeks of paid leave and an earned income tax credit for dependent care. Conservative groups derided the plan.
HEALTH CARE: Trump says he will ask Congress to immediately repeal Obamacare on the first day of his administration. He plans to work with lawmakers to replace it and “implement reforms that follow free market principles.” His only definitive proposal on health care to date is allowing people to buy insurance across state lines — which isn’t a new policy discussion but would be a significant change to the insurance market. It's widely expected that Trump would hand off the health policy portfolio to House Speaker Paul Ryan.
TRADE: This is the second easiest issue to predict for Trump because he has never wavered from the populist viewpoint. “Free trade” is practically blasphemy to him and his base, at least as a candidate. Trump slams NAFTA and the Trans-Pacific Partnership (TPP) deal. He pledged to rip up old deals and introduce tough trade measures, especially against China.
TAXES: Trump has proposed large tax cuts across the board coupled with proposals to reduce spending. The Trump tax plan is dependent on economic growth expanding the tax rolls. Congress, regardless of party control, rarely reduces spending, and many economists are predicting a significant increase in the deficit.
IMMIGRATION: Employers dependent on migrant labor and visa workers should be concerned with Trump’s punitive approach to immigration. Trump will feel pressure to show immediate progress on this issue and some employers may end up in his administration’s crosshairs. Others may face worker shortages.
THE ROAD AHEAD: Employers may find themselves in the unusual position of facing few immediate threats out of DC. However, contending with an overall environment of economic uncertainty, which could tighten credit markets and shake consumer confidence and spending, could negatively impact bottom lines.
The biggest, most important take-away for entry-level employers following Election Day results is the reality that with DC closed to the labor community, we can expect a surge in activism at the state and particularly local level. Now, with no allies at the Labor Department, the only level of government available to activists will be dark blue urban centers.
Even though voters reaffirmed Republican majorities in DC and at the state level, they continue to take a schizophrenic approach to employment policies, approving minimum wage and paid leave proposals. Employers would be wise to recognize this reality and acknowledge we still have a lot of work to do.
Joe Kefauver is managing partner of Align Public Strategies, a full-service public affairs and creative firm that helps corporate brands, governments and nonprofits navigate the outside world and inform their internal decision-making. Align specializes in service sector industries.