Congress should pass a long-term infrastructure bill to help improve the economy and job security for American workers, according to Chris Lu, US deputy labor secretary.
His comments came shortly after the Department of Labor announced that the unemployment rate remained steady at 5.3%, a seven-year low, after the US economy added 215,000 jobs.
“Infrastructure – roads, bridges, airports – creates good-paying jobs in the construction industry and manufacturing industry. It’s good for workers,” Lu said. “But it’s also, frankly, good for businesses that want to grow in this country, that want to bring more jobs back to the United States, and right now, in the absence of a long-term bill, there is not the predictability both for the workers and the companies.”
Congress has come under increased pressure to pass a long-term infrastructure bill after an Amtrak train derailed outside Philadelphia in May, killing seven people and injuring more than 200. The train that crashed was part of the Northeastern Regional service, one of the busiest in the US, running about 22 hourly departures every day. The Northeast Corridor saw about 11.6 million Amtrak passengers in 2014 and had more than 2,200 trains operating on the Washington-Boston route, on which the crash occurred.
“We are a growing country, with a growing economy,” Obama said at a press conference, days after the accident. “We need to invest in the infrastructure that keeps up that way – and not just when something bad happens, like a bridge collapse or a train derailment, but all the time. That’s what great nations do.”
Instead of investing in infrastructure, the Republican-led Congress voted to cut Amtrak’s funding by 18% less than 24 hours after the crash.
Besides openly lobbying for the passage of the long-term infrastructure bill, there is little that the Department of Labor can do.
The department’s hands are not tied on all issues, however. Recently, the Obama administration announced that it would increase the salary threshold for employees eligible for overtime pay to $970 a week by 2016. Previously, only employees making $455 or less a week, equivalent to about $23,660 a year, qualified for overtime.
“The overtime rule would absolutely help wages and provide benefit of potentially higher wages to upwards of five million people in this country,” Lu said.
One of the main areas where the recovery has lagged is wage growth. Over the past year, wages have grown by just 2.1%. For the US recovery to be felt by average Americans, the wage growth would have to be closer to 3% to 4%.
“Wages are the unfinished business of this recovery,” Lu said.
And while the overtime rule might lead to higher wages for some Americans, many more would benefit from a higher federal minimum wage. The Obama administration has been campaigning for $12 an hour, but it has been thwarted every time the bill has come up in front of Congress.
“The current political climate has made passing a federal minimum wage increase less likely, but what has been gratifying to see is the number of local and state governments that have increased the minimum wage,” explained Lu. “For the first time in our nation’s history, a majority of states in the country have a higher minimum wage than the federal minimum wage. That shows that in the absence of federal action, state and local governments are stepping up and raising the wages.”
Lu went on to say that the Department of Labor believes that the US Congress could pass an infrastructure bill when it returns from the summer recess.
“Infrastructure is sort of a different issue. Infrastructure has always been a traditionally bipartisan issue,” he said. “There is nothing partisan about building roads and bridges. We are optimistic that Congress can come together around a long-term extension that provides greater predictability for businesses and workers.”
Despite some lawmakers on both sides of the aisle willing to invest in infrastructure, the US Congress has struggled to come to a consensus on what such a bill would look like.
When in March of this year the Vermont Senator Bernie Sanders introduced a budget amendment that called for $478bn in new infrastructure spending over six years, the amendment was defeated in a 52-to-45 vote. Sanders has also introduced the Rebuild America Act of 2015. According to GovTrack, the act has a 4% chance of being implemented.
“It is disgraceful. No one denies our roads, bridges, waste water plants, water systems and rail are in a state of collapse. We used to lead the world in infrastructure, but now we’re in twelfth place,” Sanders said in March when the Senate blocked his budget amendment.
“This amendment proposed $478bn over a six-year period, which would not only rebuild our crumbling infrastructure but would put some nine million people back to work for the creation of new jobs. That’s a big deal at a time when real unemployment is at 11%.”
The 11.2% unemployment rate cited by Sanders includes missing workers – Americans who have given up on finding a job and so are not accounted for by the Department of Labor when calculating the US unemployment rate.
At the time of the vote, Illinois Senator Richard Durbin said that infrastructure – once “the easiest bipartisan issue before the Congress” – had “unfortunately become a topic for debate of the Tea Party”.
“It’s a sad day for the party of Dwight David Eisenhower and the interstate highway system to have reached this point,” said Durbin.