US Department of Labor governs worker safety, wage requirements and an assortment of other pressing concerns of American workers. Trump’s original pick, Alex Acosta resigned after details of his obscenely lenient plea deal with billionaire sex offender, Jeffrey Epstein came to light. His replacement, Eugene Scalia, has spent his tenure undermining the safety and security of the working class.
It should come as no surprise as Scalia, a lawyer by trade, has spent the bulk of his career in private practice defending corporate clients against their employees. As a private citizen his clients included Wal-Mart and Boeing. He railed against ergonomics in the workplace, fought against protections for workers at risk of repetitive injury and a law that would require large corporations (more than 10,000 employees) to spend 6% of payroll on healthcare. Scalia has essentially continued in this line of work from within the federal government, on the taxpayer’s dime, to the detriment of the nation’s labor force.
The Department of Labor’s response to the Covid-19 pandemic has been almost nonexistent, and a tragic example of Scalia’s negligence. OSHA, a DoL subdivision is responsible for drafting and enforcing rules designed to create and maintain safe workplaces. Scalia has publicly stated the agency should play no role in managing the pandemic, even as his boss in the White House rushed to re-open the economy, sending workers back into hazardous environments. Amazon warehouses and the meatpacking industry at large have been especially problematic in this realm.
The case of Smithfield Food is representative of Scalia’s maladministration. The company, which is responsible for 5% of all pork production in the US, has been troublingly lax in shielding workers from infection. Conditions inside their plants dictate line workers stand shoulder to shoulder over 11 hour shifts. Little or no protective equipment has been provided by the company and employees maintain there is not time in their day to regularly wash their hands. The Sioux Falls, South Dakota facility, employs 3,700 people. In April the plant closed after 300 workers tested positive for the coronavirus. Smithfield faces multiple lawsuits alleging similar negligence at plants in other states. Not until September, did OSHA issue its first and only fine related to Covid-19 safety violations. Smithfield, the largest producer of pork products on the planet, was fined a whopping $13,400 for brazen disregard for worker safety during the deadliest public health outbreak in a century.
A comfortable retirement was once a cornerstone of the American Dream. With pensions becoming more scant, Social Security nearing insolvency and 401K’s proving insufficient, retirement is more aspirational than it had been. Eugene Scalia has made the proposition increasingly more doubtful in a string of recent decisions. 1974’s Employee Retirement Income and Security Act gives the Department of Labor broad control over the retirement plans of ‘’Main Street Investors.’’ It previously served as a safeguard of corporate plundering of worker’s retirement funds. Scalia has stripped a key protection which greatly expanding the kind of funds plan managers may access. Money managers overseeing retirement plans may now access high-risk, high-fee private equity funds. Said funds have not been shown to outperform low-risk mutual funds indexes. Most Americans are dependent on savings for long-term financial planning, which necessarily dictates an ultraconservative strategy. The change to ERISA is diametrically opposed to that bit of common sense. Scalia’s decision opens up roughly $8.9 trillion in capital from the 401K market. In short the move incurs great risk on the part of retirees while offering no discernible benefit. Wall St. however has a great deal more capital with which to play.
Retirement plans may not be used to advance environmental, social or policy changes at the expense of financial considerations. This was Scalia’s rationale in restricting retirement investing in Environmental Social Governance. The policy applies regardless of the wishes of a given retiree. ESG’s have gained increasing popularity in the financial sector, representing roughly a quarter of all US investment dollars. Apart from any altruistic motivations, ESG’s have proven to slightly outperform traditional investment strategies in robust times and lose less in the event of economic downturn. The data seems to fly in the face of Scalia’s ostensible fiduciary concerns. His hypocrisy is manifest.