In the recently released 2020 Democratic Platform, the party led by Joe Biden has made clear their intent to crack down on workforce flexibility and the small businesses that make up the backbone of the American economy. Ranging from a drastic minimum wage hike, to overturning state Right to Work laws, repealing the Tax Cuts and Jobs Act, and devastating small businesses and the independent contracting industry, a Biden presidency would promise to assail nearly all worker rights as we know them.
Among the first promises made by Democrats would be instituting a $15 per hour federal minimum wage. This would have a significant impact on lower income Americans who would be put out of work. In 2016, the Heritage Foundation concluded that raising the federal minimum wage to $15 would leave 7 million Americans out of a job, and the loss would be felt most in low cost-of-living areas. Fast food companies and grocery stores have already begun replacing workers with self-serve kiosks and check-out lines to cope with higher costs in cities and states that have mandated higher wages. As business across the country are struggling to survive the Covid-19 pandemic, forcing business to lay off even more workers due to increased labor costs will prolong any economic recovery.
Beyond arbitrarily mandating a national wage standard, the Democratic Platform goes further in harming workers through the central provision of passing the “Protecting the Right to Organize” (PRO) Act in Congress. The bill would effectively invalidate state right-to-work laws, and open the door for the forced unionization of millions of American workers.
Right to Work laws have been a major driving factor for private sector employment growth in the states that have passed the laws to protect worker freedom. In 2015, National Economic Research Associates published a report showing that states with Right to Work laws had private sector employment growth of 27% compared to 15% in states without them. If the PRO Act were to be signed into law, returning overseas manufacturing jobs to the United States would be rendered far more difficult with the forced nationalization of mandatory unionization that has a proven effect on employment growth. Compounded by the Covid-19 pandemic, which has affected businesses of all sizes, a Biden presidency would punish workers and employers with slower income growth and decreased manufacturing output across the country.
The Democrat Platform’s anti-worker provisions continue by violating the privacy of workers by eliminating the secret ballot in union elections. This Big Labor bailout would force employers to provide unions with contact information of their workers without the consent of these worker. These protections were put into place to avoid coerced unionization that can come as a result of harassment and intimidation by union thugs.
Ultimately, the two most damaging provisions of the PRO Act are the criminalization of independent contracting and codifying the joint employer standard. Through the PRO Act, the independent contracting industry that generates income for over 13 million Americans and comprises 8.5% of the national GDP would be dismantled. With a codified joint employer standard, 44% of private sector employees would be affected and cost more than $33 million a year for the franchise business sector.
Finally, the most egregious part of the Democratic Platform is their call to repeal the Tax Cuts and Jobs Act (TCJA), which would ultimately increase taxes for Americans at every tax bracket. American families earning a median income of $73,000 would be hit with a $2,000 annual tax hike, while single parent households making $41,000 would see a $1,300 tax hike. For 22 million Americans families that utilize the child tax credit, their deduction would decrease from $2000 to $1000, a $1,000 annual tax hike per child on every parent.
The effects of the TCJA were not limited to individuals, with small businesses seeing massive benefits in the wake of its passage as well. Joe Biden and the Democratic Party have long tried to conceal their agenda as impacting only “big businesses, ignoring the fact that 99.7% of businesses are small business and employ nearly 50% of the American labor force. Nearly all of these businesses are impacted by the Democratic Party’s anti-growth economic agenda.
Biden explicitly lied when he claimed, “Taxes on small businesses won’t go up.” By repealing the TCJA he would eliminate the 20% small business deduction, increase the marginal income tax for all small businesses, and increase the corporate tax rate to 28%. Over 30 million entities in the United States that utilize the small-business deduction, and nearly 85% of all corporations have fewer than 20 employees.
The Republican-passed TCJA was a significant contributing factor that led to the phenomenal success of the American economy before the impact of Covid-19. That included a 50-year low unemployment rate, with record low rates for African-Americans, Latinos, and other key groups. Cost-savings provided by the TCJA allowed small businesses to better deploy capital, with direct effects on their employees. Some of those benefits included 26% of businesses increasing employee compensation and 16% hiring additional employees, according to a 2018 survey from by the National Federation of Independent Business. Many of those success stories can be found here.
The 850 recent deregulatory actions undertaken by the Trump Administration since Covid-19 struck the nation have also been key in helping the American economy stay afloat during the Covid-19 pandemic. Medical deregulation was vital in fighting the pandemic by allowing out-of-state healthcare professionals to provide service across state lines, cutting the red tape on PPE and ventilator production, and eliminating the defective CDC testing services by allowing private testing centers. The Biden campaign has not taken a position on whether he would make these important deregulatory actions permanent or repeal them if elected.
The Democratic Party Platform’s anti-worker provisions that explicitly call for raising taxes, increasing regulations, and destroying small businesses are a near guarantee that the millions of working-class Americans will continue to suffer even after the worst of the pandemic resides. The Platform of the party led by Joe Biden should concern independent contractors, freelancers, families, businesses, and entrepreneurs of all stripes.