tv U.S. Chamber of Commerce Labor Day Press Briefing CSPAN August 29, 2018 5:38pm-6:06pm EDT
right here is where the canyon starts to widen and deepen and turn into the classic view you see in photographs and calendars and famous images. 2:00 eastern on american history tv, a visit to the lowell observatory to hear about astronomical discoveries including the discovery of pluto and mapping for the apollo program. then, the what pocky national monument. >> this may be thought of as empty, but it is a very important and living site for a lot of the descendents of the p in thend people to live area. we hope people will come here to do ceremonies and pay homage to their ancestors because we believe their ancestors are still here. this is a very important site for many people in the southwest. tour of c-span's cities
and onff, arizona, sunday, at 2:00 p.m. on c-span three, working with our cable affiliates as we explore america. >> the u.s. chamber of commerce held its annual labor day press discuss workplace issues. this is about 25 minutes. >> good morning. thank you for being here. i will turn it over to j.d. and glenn who will give remarks and and we will open it up to questions. state your name and your outlet and that would be great. >> good morning. i am the senior vice president
the chamber. at i will talk about the state of the economy and its effects on the labor market and indirection with the labor market and turn who likes to do the hard work talking about the regulatory side. this past weekend, the chairman of the federal reserve board referred to the strong performance of the u.s. economy. fairly dull terminology, but that is quite pronounced, saying quite a bit about the fed's signaling going forward based on their view of the economy as it stands today. his comments are understandable. we went through the great recession, followed by the great meandering. has accelerated markedly. we grew at 4.2% in the second quarter,
the first half of the year, over 3%. there was expectation in some quarters that the economy was responding to somewhat of a fiscal sugar buzz and it would slow down going forward but apparently not so. the atlanta fed is telling us they are projecting the third quarter to come in at 4.6 percent. if we keep accelerating like this, this will become the great acceleration, a remarkable event when you think about how far we are since the recession. this many years into an expansion, you don't expect an acceleration but it is not a surprise. we talked about the reasons for the great meandering for many years. we talked about these events in prior years, how the obama administration's regulatory policies was a drag on the economy and if they would relent, the economy could pick up steam and we go about having regulatory debate in a stronger economy.
not that the obama administration didn't want a stronger economy, they did. but they always wanted something else more. the other thing always one out. -- won out. we now have seen strong evidence that the arguments were valid. the first thing the trump administration did was to suspend regulations in the pipeline of various agencies. congress got into the act of repealing the regulations they were allowed to repeal that were particularly onerous to economic growth. the trump administration out with reforms of their own that we are seeing unfold. all of these in detail were important but what was really change inwas the sea the psychology of the economy. we see this in business confidence and consumer confidence, which has shot up as the psychology, the background psychology in our economy has
changed. the economy is growing very robustly. it has showed up in the labor markets with a very low unemployment rate hovering around 4%. it ticks up and down depending on the month, but it is below what the congressional budget office would consider the long-term full employment rate. job growth continues very strong. we have job growth in excess of 200,000 jobs per month. what that tells you is, the economy is strong and it also tells you we are not yet at full employment. we will be at full employment assuming the rest of the economy is doing well when job growth matches the growth in labor supply. that would be more in the range of 80,000-100,000 jobs a month. as long as you have actual job growth in excess of the growth in labor supply, human know that -- you know that you are not at full employment. this also is something that is remarkable at this stage of the recovery. we have heard for years that is -- that is nasa's were having a
tough time finding the workers they need. to expand and meet their orders. many industries are subject to this. transportation, manufacturing, pretty much across the board. and yet, we are still growing jobs at a rapid pace. for the business is having trouble finding workers, i would say you had better get used to it. because this is the state of the labor market going forward until we have the next recession which thankfully is not on the horizon. so the tight labor markets are certain to continue for quite some time. the weakness we see in the labor market of course is the fact that real wages are not growing rapidly. this is not a recent phenomenon. this extends to the beginning of the recovery and extends back well into, prior to the great , mediann, where real
real wages are not growing very rapidly. nominal wages were growing. ,otal labor compensation grew but take home median wages were not growing rapidly. one of the strange questions and economics, nobody has an answer, why would labor markets that are so tight for so long, why are real wages not responding with accelerated growth? we are not sure what the answer is. noted,orward, as i have there is no cause for concern in the economy suggesting a recession anytime soon. so the labor growth and the tight labor market should persist. the fed is normalizing monetary policy so it isn't a threat. it is simply removing the stimulus. the accommodation from the great recession. we are not at the point where the fed is putting its foot on the brake. we are still taking our foot off the accelerator.
the main threat we have faced, and we noted this since the beginning of the year, was the possibility of a trade war. the president's aggressive trade policies with respect to mexico europeana and the union, steel, aluminum, china, these have been very were some -- worry some. protectionism isn't helpful to economic growth. so far, the effects of the actions have an localized. -- have been localized. they are painful to those directly affected, whether you are importing products are your customers are importing products, certainly painful to those directly affected. in terms of the macroeconomy, we have not seen much of an effect with these actions. although many of them have been threatened and not yet put in place. where we start to worry is if this would start to filter down into business confidence. much as the previous administration's regulatory policy had. if business confidence were to be affected negatively by the
trade actions then it would eventually feed through to lower business investment, and it would then take the strength out of the economy. we have not seen that. and now, of course, we are with the euente we have the president announcing an agreement with mexico. we are waiting for canada to be included to make a judgment about the progress that is being made in the three country trade negotiations, but it is important to point out we are breakening to have peace out in that area of trade negotiations. if so, the threat of a trade war to our economy going forward would greatly diminished. we still have certain areas and products, steel and aluminum for example, we have the contest with china and negotiations there, but one by one, hopefully
continuing, the president is making progress on negotiating with these trading partners. reducing the pressures, the likelihood of a trade war. as far as i can see right now, that is the main threat we have to the economy today and for next year. otherwise, continued acceleration and growth this year into next is the consensus fed, cbo, private sector economists. it is a question of how long can the acceleration, the abnormally strong growth, persist? we don't know yet. we do know that the regulatory effects are still taking hold regulatoryesident's policies and we are about to pass the baton of strong growth impetus to tax reform. cost ofrm, reducing the capital for business investment, should take effect in the second half of the year and next year. that should give the economy and extra impetus for strong growth in the latter half of this year into next year.
effects that we probably haven't seen yet, because it takes a to beto the tax law understood and incorporated into business plans, to manifest into orders and finally, into new capital put into production. you have to get to the last stage before it shows up in business investment and that takes a while, hence the suggestion that we would start to see tax reforms affects in the first half of this year at the earliest. let me conclude on economic sent turn it over to my colleague. >> thank you. >> i am glenn spencer. senior vice president at the u.s. chamber. as was demonstrated clearly, the economy seems to be doing rather well. and as indicated, a big part was the regulatory reforms. i want to talk about the issues in labor and unemployment, where we have seen positive regulatory reforms. let's start with the department of labor. during the previous administration, the department issued any number of mandates on employers, some were formal
regulations, some work guidance documents, and there seemed to be a sense that employers were largely bad actors. it was a strategy built around shaming employers and pursuing punishments even before allegations had been fully adjudicated. that has changed under the trump administration. so-called 2 administrators interpretations that the labor department put in place. one of those tried to expand joint employer liability. the second tried to limit the use of independent contractors and of those have been repealed. -- both of those have been repealed. there was a letter that authorized union representatives inspectors. osha that has been withdrawn. there was a new process of drafting a new overtime regulation will replace the obama rule struck down by the court. and the department is also -- has also repealed the ruled
the obama administration tried to put into place to limit the legal advice employers could get with regard to unions. they pulled the policy back and replaced it with a commonsense policy in place for decades under republican and democratic administrations. hour division has started to issue opinion letters, letters the department will put out to help employers understand how to comply with wage hour regulations and the complex issues the department requires of them. the department has opened the office of compliance assistance. we see an emphasis on making sure employers understand how to comply with the law, we have replaced the assumption they are all bad actors and with the idea that we are putting the regulations outcome only need to make sure employers understand how to comply with them. it is a positive change. it has been noticed. employers around the country have noticed the change in tone and the path the department has
taken on regulatory reform. it also applies to the national labor relations board. they have started to unwind some of the unbalanced, unwarranted and frankly, unworkable policies the obama administration put in place over the nlrb. the board is in the process of drafting a new joint employer rule. we hope this will undo the browning farris standard put in place in 2015, and expansive, sweeping definition of employer liability and we hope this rule will clearly address that. the board has issued a request for brief in a decision that took away the ability of employers to manage their own email systems. the board has also done away with a ridiculous policy of scrutinizing employer handbooks and essentially inventing violations out of common sense, commonplace handbook policies that any employer would have. for example, things like requiring courtesy in the work place. somehow that was considered to be against the law.
the board has overturned a health care decision, a ruling that allowed for the formation of fractured micro-units even at work laces were a majority of -- workplaces where a majority of workers rejected unionization. and they rejected the process to automatically have that be a violation of the labor relations act. there are a lot of decisions the board has taken and this has been noticed around the country that there was a new direction at the board. i would suggest that all of this is a big contributing factor to the economic growth jd outlined. there are a few clouds on the horizon, so let's talk about those. the first relates to immigration. at a time when employers are having trouble finding employees they need, this is something we hear from members all the time
and something you can find in a timeers easily, and like this, it doesn't make sense to pull back on legal , particularly as it relates to employment-based visas and the status of people living and working in this country for many years. the second cloud i will mention relates to legislative efforts to completely rewrite the national labor relations act. there are 2 bills introduced this year that give a sense of what some members of congress have in mind when it comes to labor relations. these bills ought to set off alarm bells. the so-called workplace democracy act and the workers freedom to negotiate act contain enough radical provisions to make the bill from 2009 look reasonable. for example, both bills would .epeal all rights to work laws 27 states passed a right to work law. those bills would remove the laws. these bills would impose either
card check or bargaining orders during unionizing campaigns which would give unions a free pass to organize worksites around the country. these bills would impose mandatory binding arbitration for first contracts, which could stick workers and employers with unworkable contract terms. , these bills would repeal the ban on secondary boycotts on the meaning of labor dispute with a single employer could suddenly involve dozens of employers. those are a few of the damaging proposals in these bills. there are many more. to be clear, these bills aren't going anywhere right now. , but if you look at the list of sponsors of the bills, i think both of them will have legs all the way through 2020 and we will keep an eye on them. is that thered are concerted efforts to tie up the new members of the nlrb in recusal issues. we think this is a campaign to
impose a new standard at the nlrb but if this becomes a standard, it will impact other agencies. to sum up, the climate is good, we see lots of positive things employmentn the space and regulatory space. there are a couple downsides, things we will keep our eye on so they don't interfere with the encouraging track we are on. we are open to questions. >> thank you for being here today. i am isabel with inside u.s. trade. my question is for jd. you mentioned the impact that trade is having on the economy. this week, what is your take on the investment protections that were agreed to between the u.s. and mexico? do you expect canada's participation, or lack thereof, later this week to have an impact on the economy in the short-term and long-term?
>> let's talk about the general canadian aspect. it is clear canada needs to be a part of the final agreement. in order to reap all the economic benefits available from free trade. the initial agreement between the u.s. and mexico, canada is looking at the agreement and hopefully we will find a way to have them included. will be interesting to see what the new name of the agreement will be. apparently nafta is no longer permitted. names matter. in terms of the details of the agreement, i haven't gone through the details or seen an analysis of the investment provisions, so i will have to hold off on responding to that until the experts who do understand these things better than i provide their analysis. >> my question is for jd.
i'm wondering how concerned is the business community to u.s.-china compared to u.s.-canada, mexico, and europe trade disputes. >> i don't think you could rank the relative concerns of the business community. it will depend on part -- in part on what aspects of the trade relationships the business industry is exposed to. the business community is concerned about all three. the u.s., canada and mexico trade region is enormous and terribly important to the u.s. economy. obviously europe is important to the u.s. economy. what elevates china in one respect is that negotiations with china are inherently more complicated. it is a lot easier to negotiate a trade agreement with a country or region that is much more like your own, so you can negotiate
an agreement with the european union because you have many more aspects in common. the chinese economy is structured differently than that of europe or the united states. that makes negotiating trade agreements between them, when there are many dissimilarities, that much more difficult. a simple economy -- a simple example is the enterprises that are state owned in the chinese economy. the unitedewer in states, and they are narrower in scope. having a trade agreement that covers potentials for subsidies forgovernment support industries that are dominated by state owned enterprises is difficult and was something omitted. the expectation that when china joined the wto is, the chinese economy would evolve more towards the western model. that was a bad assumption.
not because it couldn't have transpired in that way, but because it assumed the chinese government wanted it to transpire that way. the chinese government prefers to structure the chinese economy in a different way. it is a matter of policy. it is also a matter of where they're starting out in the evolutionary process. china is catching up rapidly. in technology, industrial-strength, but it is in catch-up mode. so you have a different structure in a different term -- a different place in terms of evolution. negotiating with china will require the strong involvement i am surent xi, which will be there. it is in the chinese interest, as well as the u.s., to come up with that agreement. i would emphasize when this dispute first began, we saw stories asking the question, who would lose most in a trade conflict between the u.s. and
china? notice the question who would lose most. everybody loses. nobody wins in a trade conflict between the u.s. and china. we want to have that agreement, so both countries can win. come --llow up on that to follow up on that, [indiscernible] >> asked me that three years from now. tariffs are tactics. this is a point that i emphasize time and time again. in my opinion, the president, i have not had discussions with .im so i am speculating the president is not imposing tariffs because he particularly likes tariffs. he is imposing tariffs because he had to upset the apple cart. the comfortable regime of trade negotiations, it has in his view we weren't getting far with those, so he imposed tariffs to get people's attention. it was the equivalent to the two
by forgetting the -- the two by four getting the mule's attention. he was able to come up with some sort of detente with the eu and revised agreements with mexico. will it work with china? i don't know. that is something we will have to see. you judge the tactics and the strategy at the end, not the beginning. >> i am with politico. this is more for glenn. there are reports out that an nlrb member was reappointed, and i was wondering your reaction. [indiscernible] repeal happened under [indiscernible]
what are your thoughts and reaction? >> last night, the white house sent mark pierce, his name to the senate to be nominated for the nlrb. he will have to be confirmed the senate. -- by the senate. if you look at his record during his time at the nlrb, the decisions he authored and the precedent he overturned, i think republicans in particular, when they look at the record, will reach the appropriate conclusion about what to do with the nomination. clearly there were decisions he issued that we at the chamber were opposed to, so i think it is unfortunate but it is up to the senate to do its job with the nomination. >> are there any other questions? >> as you said, tariffs are a tactic and you have to judge at the end. but the cost is real right now.
at the hearing last week, there were companies that won't be able to survive because of tariffs. think think, how do you the cost, especially to small costnies, the [indiscernible] noted, if you are directly impacted by iteris in any way, it is obviously extremely painful. it can put you out of business and drive you out of markets. speaking from a macroeconomic view, those are localized effects. you have to evaluate, as we often do in all manner of public policy, cost versus benefit or immediate costs. we have to wait to judge the benefits. we can judge the benefits until we see what the final outcome is.
-- can't judge the benefits until we see what the final outcome is. >> thank you all for coming. >> thank you. >> senator john mccain wrote a farewell address to the nation before he died on saturday. some of it reads, "do not despair of our present difficulties, we believe always in the promise and greatness of america because nothing is inevitable here. americans never quit. we never surrender, we never hide from history. we make history. farewell, fe