December 6, 2022

Bloomberg just busted Trump’s Labor Department in a sinister scheme to stiff tip workers

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The U.S. Department of Labor, with approval from Trump’s White House, willfully hid the true impact of a proposed rule-making that stands to cost restaurant workers and others billions of dollars in tips which could then be skimmed off by management, reports Bloomberg Law. 


An analysis showing the true impact of the change proposed in December which some called “a wonderful Christmas gift to employers” was not by design not included when the plan for the regulation change was announced.

The progressive Economic Policy Institute has estimated the real impact of the change “would lead to $5.8 billion changing hands from workers to businesses,” reports Bloomberg Law.

The Labor Department under Trump-appointee Secretary Alexander Acosta “ordered staff to revise the data methodology to lessen the expected impact” of repealing a rule put in place by the Obama administration in 2011, reports Bloomberg, that guaranteed low wage workers would be able to keep their tips and not have to hand them over to restaurant owners and operators. 

Other analysis indicated the number might be lower but even then Acosta is said to have been “uncomfortable with including the data in the proposal,” writes Bloomberg, adding that, “They wound up receiving approval from the White House to publish a proposal that removed the economic transfer data altogether.”

The disclosure of how Acosta hid the truth gives credence to angry complaints from worker advocates when the change was announced that it would “permit management to essentially skim gratuities by participating in the pools themselves.”

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Bloomberg reporters spoke to former career and political official at the Labor Department and the White House Office of Management and Budget, who all agreed that “scrapping a completed analysis from a significant proposal would mark a troubling departure from the government’s mission,” reports the news service.

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David Weil, Wage and Hour Division administrator under President Obama, described the new rule as a “boon for the restaurant industry.”

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“I think it is simply a statement of fact that Secretary Acosta and the people in the political side of the Labor  Department who pushed that rule,” Weil told Bloomberg in December, “which was a wonderful Christmas present to the National Resturant Association, didn’t want the public to understand what kind of transfer we’re talking about.”

That was before the news broke about the analysis being hidden, which means people who have until Feb. 5 to comment had to do so without key information.

“To punt on that and say we’ll let the public come up with the economic analysis,” Michael Hancock, a former assistant administrator with the Wages and Hours Division (WHD) told Bloomberg, “that’s really not how the process was intended to work.”

“The agency has an obligation to provide its best judgment on what the likely impact is economical,” added Hancock.

Hancock, who spent 20 years at the WHD under three presidents from both parties told Bloomberg that “he never once witnessed the agency excluding the cost-benefit analysis from a significant regulation, Lack of data accuracy is no excuse.”

The only excuse is that under Trump it is acceptable to withhold the truth, fudge the facts and put out phony information in order to find more ways to transfer money from working people to the bosses who make campaign contributions and can afford to have an army of lobbyists in Washington, D.C. 


Benjamin Locke

Benjamin Locke is a retired college professor with an undergraduate degree in Industrial Labor and Relations from Cornell University and an MBA from the European School of Management.

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