Biden’s Labor Secretary insists April’s weak jobs gain of 266,000 ‘is a good number’

Boston Mayor Marty Walsh
Labor Sec. Marty Walsh.

  • The April jobs report fell far short of the 1 million growth expectation, adding just 266,000 jobs.
  • Labor Secretary Marty Walsh said he still thinks that 266,000 “is a good number.”
  • He said expanded federal unemployment insurance is still needed despite calls to end the benefits early.
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The Friday jobs report was a major disappointment, as the US economy added just 266,000 jobs in April despite economists predicting a gain of at least 1 million.

But Labor Secretary Marty Walsh said on CNBC that this report should still be celebrated.

“I think as we continue to move forward here, hopefully in the coming months we are going to see lots of those Americans who are looking for jobs, finding jobs, and I’ll be able to stand in front of this camera and talk about the great gains we’ve had,” Walsh said. “But I still think 266,000 jobs this month is a good number.”

“If you look back on the last three months, the United States economy has added 500,000 new jobs per month as compared to the previous three months where it was 60,000,” Walsh said. So we are definitely going in the right direction but we still have a ways to go, there’s no question about it. We are still dealing with a pandemic.”

Insider’s Ben Winck reported on Friday that along with the disappointing job gains, the unemployment rate rose in April to 6.1% from 6%, while economists had expected it to drop to 5.8%. Possible reasons for the report falling short of expectations could include temporary layoffs and too-generous unemployment insurance.

The report highlights an increasing split between the weak jobs recovery and a booming economy led by consumer spending. For instance, US gross domestic product grew at an annualized rate of 6.4% in the first quarter – the second-strongest expansion since 2003. Insider’s Juliana Kaplan and Grace Kay reported on shortages of all sorts of items amid reopening, such as chicken and lumber, all evidence of a sudden increase in spending.

Walsh criticized the argument that unemployment benefits are to blame for the weak jobs report. He said people “obviously” need unemployment benefits given the millions of Americans who are still out of work.

At nearly the same time, the Chamber of Commerce urged an end to the $300 weekly benefits, with the chamber’s chief policy officer, Neal Bradley, saying in a statement that the “disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market.”

But Walsh remained adamant that retaining unemployment benefits is vital to economic recovery.

“We have lost restaurants. We have lost businesses,” Walsh said. “I wouldn’t say we are in the midst of pandemic … but we are still living and dealing with the pandemic, and as we continue to move forward here we will continue to recover.”

Walsh emphasized that as vaccinations continue, “we are starting to see the confidence come back.”

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If you were overpaid unemployment insurance, the Biden administration says you should be able to keep some

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A person files an application for unemployment benefits on April 16, 2020, in Arlington, Virginia.

  • The US Department of Labor issued guidance Wednesday that lets states waive recovery of unemployment insurance overpayments.
  • “In many cases, individuals received payments for which they may not have been eligible through no fault of their own,” the department’s Suzi LeVine said.
  • States that already collected repayments should give that money back, the department said.
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When COVID-19 hit the United States, millions of Americans were thrown out of work – some 14 million between February and May 2020 alone – with claims for unemployment following in kind. Governments, and applicants, made mistakes: according to a recent report, states ended up doling out $6.2 billion in overpayments.

Now the US Department of Labor has issued guidance to states that recommends letting people keep that extra money, so long as they did not commit fraud to get it.

“Amid the pandemic, state Unemployment Insurance programs did the best they could in the face of unprecedented demand as millions of Americans filed claims for benefits,” Suzi Levine, the department’s principal deputy assistant secretary for employment and training, said in a statement on Wednesday.

“In many cases,” she said, “individuals received payments for which they may not have been eligible through no fault of their own.”

Under the first round of COVID-19 stimulus, known as the CARES Act, the federal government provided unemployed workers an extra $600 in benefits above the amount they would normally have received from their state alone. That money came with a requirement for states to address fraud, with this week’s guidance noting that those who are found to have lied must still pay back their money with 15% interest and possible criminal prosecution.

It wasn’t until last December, however, that Congress allowed states to decide whether or not it was worth their time – and morally correct – to demand that money back in every case, per CNBC; in Texas alone, 260,000 people were asked to do just that between March and October 2020, the network reported.

According to the department’s new guidance, such waivers should indeed be issued when the recipient did nothing wrong and when “repayment would be contrary to equity and good conscience.”

And if a state has already recovered the money, prior to this guidance? It should, generally, go ahead and give it back, the department said.

States, not the federal government, will ultimately make the call. But, LeVine said, they now have “greater flexibility to forgo recovery of improper payments from honest workers who continue to struggle,” allowing them to focus on those cases “where real fraud exists.”

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Google will pay $2.6 million to workers over claims its hiring and pay practices were biased against women and Asians

FILE PHOTO: A logo of Google is seen at an office building in Zurich, Switzerland July 1, 2020.   REUTERS/Arnd Wiegmann
Logo of Google is seen at an office building in Zurich

Google has reached a deal with the US Department of Labor, requiring it to pay nearly $2.6 million in back wages to thousands of workers over claims that the company’s pay and hiring practices illegally disadvantaged women and Asians.

Google must also review its pay and hiring practices, conduct a gender pay equity study, and provide updates about its progress toward closing the gender pay gap as part of the deal, which was signed on January 15 and made public by the DOL on Monday. 

The department said that as part of an audit of several Google locations in Washington state, California, and New York, it had identified “preliminary indicators” that Google had failed to comply with a 1965 executive order that bars discrimination in the pay and hiring of federal contractors.

That audit revealed early evidence suggesting that, between 2014 and 2017, Google had paid female engineers at its Mountain View, California, as well as Seattle and Kirkland, Washington, locations “less than comparable male employees,” according to the DOL.

The agency also found evidence suggesting Google had discriminated against female and Asian applicants for engineering jobs at its San Francisco and Sunnyvale, California, locations as well as at the Kirkland facility.

“We believe everyone should be paid based upon the work they do, not who they are, and invest heavily to make our hiring and compensation processes fair and unbiased,” Google spokesperson Jennifer Rodstrom told Insider in a statement.

“For the past eight years, we have run annual internal pay equity analysis to identify and address any discrepancies. We’re pleased to have resolved this matter related to allegations from the 2014-2017 audits and remain committed to diversity and equity and to supporting our people in a way that allows them to do their best work,” Rodstrom added.

In total, around 2,565 women who worked at Google are eligible for back pay over wage discrimination allegations, while around 2,976 women and Asian applicants for Google jobs are eligible for back pay as a result of the alleged hiring discrimination.

In return for agreeing to the DOL’s “early resolution,” Google won’t have 39 of its facilities audited by the agency for five years, though the agency can still bring legal action if Google violates the agreement.

Google has faced allegations of racial and gender bias previously, including an ongoing class-action lawsuit over gender bias claims, and more recently, an employee rebellion over the company’s dismissal of AI ethics researcher Timnit Gebru.

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New Trump rule could cost waiters more than $700 million in lost wages, allowing employers to take more of their tips to pay other workers

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A new Trump administration rule could cost tipped employees more than $700 million in lost wages each year.

  • A new rule published by the Department of Labor on Tuesday would allow restaurant owners to take employees’ tips to pay “back-of-the-house” workers, such as cooks and dishwashers.
  • An analysis by the Economic Policy Institute found that change could cost workers more than $700 million in lost wages.
  • The regulation also allows employers to required tipped employees to perform more “non-tipped” labor, such as cleaning.
  • “It’s really, really clear this is about the interests of corporate executives and shareholders,” Heidi Shierholz, an economist at EPI, told Business Insider.
  • Visit Business Insider’s homepage for more stories.

A new regulation rolled out in the final days of the Trump administration will allow restaurants to pull tips from their waitstaff to pay cooks in the back, putting more cash in the pockets of ownership while forcing front-of-the-house staff to do more work for less money.

Employers, to this point, have been allowed to pool tips and share them among employees who typically receive them; for example, servers giving a share of their earnings to hosts and bussers. The 148-page regulation put out Tuesday by the Department of Labor would expand that, allowing restaurants to pay the wages of prep cooks and dishwashers with money earned by those waiting tables.

The rule also does away with a so-called “80/20” rule: previously, tipped employees – who can earn as little as $2.13 an hour in wages from their employer – could not be asked to spend any more than 20 percent of their shift performing non-tipped work, like rolling silverware or cleaning the workplace. The new standard is “reasonable time” spent doing such things.

“It’s totally ambiguous and makes it extremely difficult to enforce,” Heidi Shierholz, director of policy at the center-left Economic Policy Institute, told Business Insider.

The Trump administration’s stated purpose for rule is equality.

Cheryl Stanton, administration of the wage and hour division at the Department of Labor, said the rule “could increase pay for back-of-the-house workers, like cooks and dishwashers… reduc[ing] wage disparities among all workers who contribute to the customers’ experience.”

But this achieved not at the expense of those running the business but at the cost of others employed there.

In a 2019 analysis, EPI estimated that allowing employers to pocket workers’ tips would save the former more than $700 million a year – and cost the latter the same amount. That, and doing away with the “80/20″ rule,” would also encourage those employers to rely more heavily on tipped labor. Why pay cleaning staff the federal minimum wage of $7.25 an hour when tipped employees, who cost a fraction of that, can be asked to perform the job instead?

“It’s really, really clear this is about the interests of corporate executives and shareholders. Like that is what’s driving this,” Shierholz said. 

“If there really was a strong interest in reducing inequality and raising the wages of the lowest-paid workers, they would be pushing tooth and nail to raise the minimum wage,” Shierholz added.

Indeed, “there is a direct way to do this,” Shierholz argued, “instead of saying, ‘Oh, we’re going to raise the wages of the lowest-paid workers by taking from the wages of the second-lowest paid workers.'”

It is notable that it was not advocates for labor but rather their bosses that lobbied for the change. 

Read more: EXCLUSIVE: Jared Kushner helped create a Trump campaign shell company that secretly paid the president’s family members and spent $617 million in reelection cash, a source tells Insider

“The foodservice industry supports the department’s proposed rule,” lawyers for the Restaurant Law Center and the National Restaurant Association said last year when the change was being developed. They billed it as an act of deregulation – and end to bureaucrats “trying to micromanage restaurant work.”

The new rule, however, does not take effect for another 60 days – that is, until the next administration. It is possible, but not clear, that President-elect Joe Biden and his team could postpone its implementation while working to rescind it.

A spokesperson for the Biden-Harris transition team did not return a request for comment.

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