U.S. Opposition to Breast-Feeding Resolution Stuns World Health Officials

A resolution to encourage breast-feeding was expected to be approved quickly and easily by the hundreds of government delegates who gathered this spring in Geneva for the United Nations-affiliated World Health Assembly.

Based on decades of research, the resolution says that mother’s milk is healthiest for children and countries should strive to limit the inaccurate or misleading marketing of breast milk substitutes.

Then the United States delegation, embracing the interests of infant formula manufacturers, upended the deliberations.

American officials sought to water down the resolution by removing language that called on governments to “protect, promote and support breast-feeding” and another passage that called on policymakers to restrict the promotion of food products that many experts say can have deleterious effects on young children.

When that failed, they turned to threats, according to diplomats and government officials who took part in the discussions. Ecuador, which had planned to introduce the measure, was the first to find itself in the cross hairs.

The Americans were blunt: If Ecuador refused to drop the resolution, Washington would unleash punishing trade measures and withdraw crucial military aid. The Ecuadorean government quickly acquiesced.

The showdown over the issue was recounted by more than a dozen participants from several countries, many of whom requested anonymity because they feared retaliation from the United States.

Health advocates scrambled to find another sponsor for the resolution, but at least a dozen countries, most of them poor nations in Africa and Latin America, backed off, citing fears of retaliation, according to officials from Uruguay, Mexico and the United States.

“We were astonished, appalled and also saddened,” said Patti Rundall, the policy director of the British advocacy group Baby Milk Action, who has attended meetings of the assembly, the decision-making body of the World Health Organization, since the late 1980s.

“What happened was tantamount to blackmail, with the U.S. holding the world hostage and trying to overturn nearly 40 years of consensus on best way to protect infant and young child health,” she said.

In the end, the Americans’ efforts were mostly unsuccessful. It was the Russians who ultimately stepped in to introduce the measure — and the Americans did not threaten them.

The State Department declined to respond to questions, saying it could not discuss private diplomatic conversations. The Department of Health and Human Services, the lead agency in the effort to modify the resolution, explained the decision to contest the resolution’s wording but said H.H.S. was not involved in threatening Ecuador.

“The resolution as originally drafted placed unnecessary hurdles for mothers seeking to provide nutrition to their children,” an H.H.S. spokesman said in an email. “We recognize not all women are able to breast-feed for a variety of reasons. These women should have the choice and access to alternatives for the health of their babies, and not be stigmatized for the ways in which they are able to do so.” The spokesman asked to remain anonymous in order to speak more freely.

Although lobbyists from the baby food industry attended the meetings in Geneva, health advocates said they saw no direct evidence that they played a role in Washington’s strong-arm tactics. The $70 billion industry, which is dominated by a handful of American and European companies, has seen sales flatten in wealthy countries in recent years, as more women embrace breast-feeding. Overall, global sales are expected to rise by 4 percent in 2018, according to Euromonitor, with most of that growth occurring in developing nations.

The intensity of the administration’s opposition to the breast-feeding resolution stunned public health officials and foreign diplomats, who described it as a marked contrast to the Obama administration, which largely supported W.H.O.’s longstanding policy of encouraging breast-feeding.

During the deliberations, some American delegates even suggested the United States might cut its contribution the W.H.O., several negotiators said.

Washington is the single largest contributor to the health organization, providing $845 million, or roughly 15 percent of its budget, last year.

The confrontation was the latest example of the Trump administration siding with corporate interests on numerous public health and environmental issues.

In talks to renegotiate the North American Free Trade Agreement, the Americans have been pushing for language that would limit the ability of Canada, Mexico and the United States to put warning labels on junk food and sugary beverages, according to a draft of the proposal reviewed by The New York Times.

During the same Geneva meeting where the breast-feeding resolution was debated, the United States succeeded in removing statements supporting soda taxes from a document that advises countries grappling with soaring rates of obesity.

The Americans also sought, unsuccessfully, to thwart a W.H.O. effort aimed at helping poor countries obtain access to lifesaving medicines. Washington, supporting the pharmaceutical industry, has long resisted calls to modify patent laws as a way of increasing drug availability in the developing world, but health advocates say the Trump administration has ratcheted up its opposition to such efforts.

[The New York Times]

CFPB chief Mick Mulvaney disbands consumer protection board

The Trump administration is disbanding a panel of experts focused on protecting consumers from financial abuse.

Members of the panel, called the Consumer Advisory Board, say Consumer Financial Protection Bureau Acting Director Mick Mulvaney has dissolved the group, which includes consumer advocates, financial industry representatives, community leaders and others. The board advises the CFPB, a federal agency formed after the housing crash to prevent financial abuse.

Mulvaney, told the board’s 25 members that they are being replaced and the panel overhauled, according to two of the members. These people requested anonymity since the announcement was not official yet.

“By both right-sizing its advisory councils and ramping up outreach to external groups, the bureau will enhance its ability to hear from consumer, civil rights, and industry groups on a more regular basis,” the CFPB said in a statement.

Under Dodd Frank, the 2010 financial reform law that created the CFPB, the consumer panel is required to meet twice a year. But meetings were repeatedly cancelled since Mulvaney took the helm at the bureau in November.

Nearly a dozen members of the consumer board have expressed concern about the direction of the CFPB.

“As the Bureau unilaterally shifts its mission from one prioritizing consumer protection and upholding fair market practices to one focused on industry regulatory relief, we see families, once again, being left behind,” Ann Baddour, the consumer panel’s chair and director of the Fair Financial Services Project at Texas Appleseed, said in the statement posted by the National Consumer Law Center.

[CBS News]

Trump cancels Philadelphia Eagles visit to the White House

The Super Bowl champion Philadelphia Eagles’ White House visit has been canceled due to the controversy over standing for the National Anthem at NFL games, President Donald Trump announced Monday.

“The Philadelphia Eagles are unable to come to the White House with their full team to be celebrated tomorrow,” Trump said in a statement. “They disagree with their President because he insists that they proudly stand for the National Anthem, hand on heart, in honor of the great men and women of our military and the people of our country. The Eagles wanted to send a smaller delegation, but the 1,000 fans planning to attend the event deserve better.”

It’s an unprecedented move by Trump. The NBA champion Golden State Warriors declined an invitation from the President to visit the White House after winning the 2017 championship, but presidents typically honor their invitations to championship teams. Players also have refused those invitations in the past — Boston Bruins goaltender Tim Thomas declined to visit the White House in 2012 over disagreements with President Barack Obama’s policies.

The President typically invites the champions of major professional and college sports to the White House for a visit as a part of their victory celebrations.

Last month, the NFL announced it would require athletes to stand during the National Anthem in response to players who took a knee as protest to what some players see as the systemic oppression of people of color, including by police.

The movement was initially started by Colin Kaepernick, who was formerly with the San Francisco 49ers. He drew national attention for refusing to stand during “The Star-Spangled Banner” prior to kickoff.

“I am not going to stand up to show pride in a flag for a country that oppresses black people and people of color,” Kaepernick told NFL Media in August 2016.

Trump has repeatedly criticized players for not standing for the anthem and has gone as far as to say team owners should fire players for doing so.

The new NFL policy gives players the option of remaining in the locker room during the playing of the anthem if they do not wish to comply.

Players on the Eagles are some of the most outspoken social justice activists in the NFL, and multiple players took part in the protests during the anthem over the last two seasons. Many players from the team were not planning on attending the ceremony as a protest of Trump, his policies and his outspoken criticism of players who chose to kneel during the anthem.

The Eagles were originally invited to the White House after their win in February’s Super Bowl over the New England Patriots. It was the first Super Bowl championship in franchise history.

In response to Trump’s announcement, former Eagles receiver Torrey Smith, who was a member of the championship team and was traded during the off-season, called the move “a cowardly act.”

“So many lies smh Here are some facts 1. Not many people were going to go 2. No one refused to go simply because Trump ‘insists’ folks stand for the anthem 3. The President continues to spread the false narrative that players are anti military,” he said in one tweet.

Smith continued: “There are a lot of people on the team that have plenty of different views. The men and women that wanted to go should’ve been able to go. It’s a cowardly act to cancel the celebration because the majority of the people don’t want to see you. To make it about the anthem is foolish.”

Sen. Bob Casey, a Pennsylvania Democrat, said he’s skipping the White House event, and instead invited the team to take a tour of the US Capitol.

“I’m proud of what the @Eagles accomplished this year. I’m skipping this political stunt at the White House and just invited the Eagles to Congress. @Eagles How about a tour of the Capitol?” Casey wrote on Twitter.

Philadelphia Mayor Jim Kenney released a statement, where he said Trump’s decision “proves that our President is not a true patriot.”

“The Eagles call the birthplace of our democracy home, so it’s no surprise that this team embodies everything that makes our country and our city great. Their athletic accomplishments on the field led to an historic victory this year,” Kenney said.

“Disinviting them from the White House only proves that our President is not a true patriot, but a fragile egomaniac obsessed with crowd size and afraid of the embarrassment of throwing a party to which no one wants to attend,” he later said in the statement.

“City Hall is always open for a celebration,” he added.

Trump said in Monday’s statement that the fans are still welcome to come and partake in a “different kind of ceremony.”

“One that will honor our great country, pay tribute to the heroes who fight to protect it, and loudly and proudly play the National Anthem,” he said.

White House Director of Legislative Affairs Marc Short told CNN’s Erin Burnett he was unsure who canceled on whom.

“It’s unfortunate when politics gets in the middle of this,” Short said.
Trump said he will be at the ceremony alongside the United States Marine Band and the United States Army Chorus at 3 p.m. Tuesday to “celebrate America.”

[CNN]

Trump tears into Canada for treating U.S. farmers ‘very poorly’

President Donald Trump attacked Canada on Friday morning, seemingly offering a defense of the controversial tariffs he imposed this week and accusing America’s northern neighbor of treating U.S. agricultural industries “very poorly.”

“Canada has treated our Agricultural business and Farmers very poorly for a very long period of time. Highly restrictive on Trade!” the president wrote on Twitter. “They must open their markets and take down their trade barriers! They report a really high surplus on trade with us. Do Timber & Lumber in U.S.?”

Trump has made resetting U.S. trade relationships around the globe a key priority for his administration, most notably with China, but also with top U.S. allies and trade partners like Mexico and Canada. He has complained previously about Canada’s treatment of the U.S. lumber and dairy industries, among others.

His attack against Canada came just hours after tariffs on imports of steel and aluminum from three key U.S. trade partners — Mexico, Canada and the European Union — went into effect at midnight Friday, after the administration said on Thursday that exemptions would not be extended.

Canadian Prime Minister Justin Trudeau offered a blistering rebuke to Trump during a news conference on Thursday.

“Let me be clear: These tariffs are totally unacceptable,” Trudeau said. “Canadians have served alongside Americans in two world wars and in Korea. From the beaches of Normandy to the mountains of Afghanistan, we have fought and died together.”

The tariffs have proved to be a controversial step that has also drawn the ire of prominent Republicans who have long supported free trade policies.

House Speaker Paul Ryan (R-Wis.) said in a statement that “I disagree with this decision” and that “instead of addressing the real problems in the international trade of these products, today’s action targets America’s allies when we should be working with them.” Sen. Ben Sasse (R-Neb.), a regular and outspoken critic of the president’s, said the tariffs were similar to the policies that he said sparked the Great Depression.

“This is dumb. Europe, Canada, and Mexico are not China, and you don’t treat allies the same way you treat opponents,” Sasse said. “‘Make America Great Again’ shouldn’t mean ‘Make America 1929 Again.’”

[Politico]

Trump wants a total ban on German luxury car imports

US President Donald Trump wants to escalate his trade war to include a total ban on German luxury cars, says a report in WirtschaftsWoche. According to the German publication, which says its report results from talking to several unnamed US and European diplomats, during French President Macron’s recent visit to Washington Trump told him that he would “maintain his trade policy until no Mercedes models rolled on Fifth Avenue in New York.”

This news follows news last week that Trump had already asked Commerce Secretary Wilbur Ross to launch an investigation into the national security threat posed by imported cars, trucks, and auto parts, as well as wanting to add 25 percent tariffs on imported vehicles. WirtschaftsWoche‘s article points out that just prior to his inauguration in 2017, Trump railed against the Mercedes-Benz vehicles he saw in New York.

When you walk down Fifth Avenue, everyone has a Mercedes-Benz in front of their house.” But that’s not reciprocity. “How many Chevrolets do you see in Germany? Not too many, maybe none at all, you do not see anything over there, it’s a one-way street,” said the real estate billionaire. Although he is for free trade, but not at any price: “I love free trade, but it must be a smart trade, so I call him fair.

The US market is extremely important for luxury German automakers, and a ban on importing new vehicles would be devastating for brands like Audi, BMW, and Mercedes-Benz. But even if Trump gets his wish, an import ban is highly unlikely to have the effect he’s looking for. Both BMW and Mercedes-Benz maintain large manufacturing presences here in the US, in part because any vehicles they build and sell here are exempt from existing import tariffs.

BMW’s factory in Spartanburg, South Carolina, employs over 10,000 workers and produced more than 371,000 cars in 2017. The Mercedes-Benz factory in Tuscaloosa, Alabama, builds a similar number of vehicles, and just last year parent company Daimler invested $1.3 billion expanding the facility. Daimler also has a new factory in Charleston, South Carolina building Sprinter vans.

Daimler declined to comment on the proposed ban, but a spokesperson pointed out that the company supports more than 150,000 jobs here, and 22.8 percent of Daimler’s shareholders are from the US. Audi and BMW had not responded to a request for comment by the time of publication.

[Ars Techina]

Trump eases firing of federal workers, cracks down on unions

President Donald Trump on Friday signed three executive orders designed to make it easier to fire federal government workers and to crack down on the unions that represent them, drawing immediate criticism from a group representing federal employees.

Administration officials said the orders would give government agencies greater ability to remove employees with “poor” performance, get “better deals” in union contracts and require federal employees with union responsibilities to spend less time on union work.

“Today the president is fulfilling his promise to promote more efficient government by reforming our civil service rules,” said Andrew Bremberg, director of the White House’s Domestic Policy Council, in a conference call with reporters.

“These executive orders will make it easier for agencies to remove poor-performing employees and ensure that taxpayer dollars are more efficiently used.”

The American Federation of Government Employees said in a statement that the moves intended to “strip federal employees of their decades-old right to representation at the worksite” and would hurt veterans, law enforcement officers and others.

“These executive orders will make it easier for agencies to remove poor-performing employees and ensure that taxpayer dollars are more efficiently used.”

The American Federation of Government Employees said in a statement that the moves intended to “strip federal employees of their decades-old right to representation at the worksite” and would hurt veterans, law enforcement officers and others.

[Reuters]

Trump working with Chinese president to help China’s ZTE ‘get back into business’

U.S. President Donald Trump said on Sunday that he and Chinese President Xi Jinping are working to give Chinese telecom company ZTE Corp “a way to get back into business, fast.”

“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!” Trump wrote on Twitter.

The Chinese technology company earlier this month suspended its main operations after the U.S. Commerce Department banned American supplies to its business.

As one of the world’s largest telecom equipment makers, ZTE relied on U.S. companies such as Qualcomm Inc and Intel Corp for components.

[Reuters]

ZTE is banned from selling devices in the US because they violated our own sanctions and sold equipment to Iran. Remember, just this week Trump thought sanctions on Iran are so important he left the Iran deal to impose new sanctions on the country.

Do you realize how insane this is?

The company reached a settlement in March 2017 with the Commerce Department and Treasury Department for $1.19 billion and the promise to terminate several employees and punish others.

ZTE disclosed earlier this year that while it had gotten rid of several employees, the company hadn’t properly reduced the bonuses of some workers, or issued letters of reprimand. The inaction wasn’t consistent with a progress report ZTE issued in July. It’s because of those false statements that the Commerce Department decided to act.

Trump challenges Native Americans’ historical standing

The Trump administration says Native Americans might need to get a job if they want to keep their health care — a policy that tribal leaders say will threaten access to care and reverse centuries-old protections.

Tribal leaders want an exemption from new Medicaid work rules being introduced in several states, and they say there are precedents for health care exceptions. Native Americans don’t have to pay penalties for not having health coverage under Obamacare’s individual mandate, for instance.

But the Trump administration contends the tribes are a race rather than separate governments, and exempting them from Medicaid work rules — which have been approved in three states and are being sought by at least 10 others — would be illegal preferential treatment. “HHS believes that such an exemption would raise constitutional and federal civil rights law concerns,” according to a review by administration lawyers.

The Health and Human Services Department confirmed it rebuffed the tribes’ request on the Medicaid rules several times. Seema Verma, administrator of the Centers for Medicare & Medicaid Services, conveyed the decision in January, and officials communicated it most recently at a meeting with the tribes this month. HHS’ ruling was driven by political appointees in the general counsel and civil rights offices, say three individuals with knowledge of the decision.

Senior HHS officials “have made it clear that HHS is open to considering other suggestions that tribes may have with respect to Medicaid community engagement demonstration projects,” spokeswoman Caitlin Oakley said, using the administration’s term for work requirements that can also be fulfilled with job training, education and similar activities.

The tribes insist that any claim of “racial preference” is moot because they’re constitutionally protected as separate governments, dating back to treaties hammered out by President George Washington and reaffirmed in recent decades under Republican and Democratic presidents alike, including the Clinton, George W. Bush and Obama administrations.

“The United States has a legal responsibility to provide health care to Native Americans,” said Mary Smith, who was acting head of the Indian Health Service during the Obama administration and is a member of the Cherokee Nation. “It’s the largest prepaid health system in the world — they’ve paid through land and massacres — and now you’re going to take away health care and add a work requirement?”

Tribal leaders and public health advocates also worry that Medicaid work rules are just the start; President Donald Trump is eyeing similar changes across the nation’s welfare programs, which many of the nearly 3 million Native Americans rely on.

“It’s very troublesome,” said Caitrin McCarron Shuy of the National Indian Health Board, noting that Native Americans suffer from the nation’s highest drug overdose death rates, among other health concerns. “There’s high unemployment in Indian country, and it’s going to create a barrier to accessing necessary Medicaid services.”

Native Americans’ unemployment rate of 12 percent in 2016 was nearly three times the U.S. average, partly because jobs are scarce on reservations. Low federal spending on the Indian Health Service has also left tribes dependent on Medicaid to fill coverage gaps.

“Without supplemental Medicaid resources, the Indian health system will not survive,” W. Ron Allen — a tribal leader who chairs CMS’ Tribal Technical Advisory Group — warned Verma in a Feb. 14 letter.

The Trump administration has allowed three states — Arkansas, Kentucky and Indiana — to begin instituting Medicaid work requirements, and at least 10 other states have submitted or are preparing applications. More than 620,000 Native Americans live in those 13 states, according to 2014 Census data. And more states could move in that direction, heightening the impact.

Some states, like Arizona, are asking HHS for permission to exempt Native Americans from their proposed work requirements. But officials at the National Indian Health Board say that may be moot, as federal officials can reject state requests.

Tribal officials say their planning process has been complicated by HHS’ refusal to produce the actual documents detailing why Native Americans can’t be exempted from Medicaid work requirements. “The agency’s official response was that they couldn’t provide that [documentation] because of ongoing, unspecified litigation,” said Devin Delrow of the National Indian Health Board. HHS did not respond to a question about why those documents have not been made available.

While the tribes say they hope to avoid a legal fight, their go-to law firm — Hobbs, Straus, Dean & Walker LLP — in February submitted a 33-page memo to the Trump administration, sternly warning officials that the health agency was violating its responsibilities.

“CMS has a duty to ensure that [Native Americans] are not subjected to state-imposed work requirements that would present a barrier to their participation in the Medicaid program,” the memo concludes. “CMS not only has ample legal authority to make such accommodations, it has a duty to require them.”

Meanwhile, tribal leaders say the Trump administration has signaled it may be seeking to renegotiate other aspects of the government’s relationship with Native Americans’ health care, pointing to a series of interactions they say break from tradition.

“This doesn’t seem to be isolated to the work requirements,” said McCarron Shuy of the National Indian Health Board.

The Trump administration also targeted the Indian Health Service for significant cuts in last year’s budget, though Congress ignored those cuts in its omnibus funding package last month, H.R. 1625 (115). The White House budget this year proposed eliminating popular initiatives like the decades-old community health representative program — even though tribal health officials say it is essential.

Tribal officials noted that both HHS Secretary Alex Azar and Deputy Secretary Eric Hargan skipped HHS’ annual budget consultation with tribal leaders in Washington, D.C., last month. The secretary’s attendance is customary; then-HHS Secretary Tom Price joined last year. However, Azar canceled at the last minute. His scheduled replacement, Hargan, fell ill, so Associate Deputy Secretary Laura Caliguri participated in his place. That aggravated tribal leaders who were already concerned about the Trump administration’s policies.

Another point of contention for the tribes is that HHS’ civil rights office — while rejecting Native Americans’ Medicaid request on grounds that they’re seeking an illegal preference — simultaneously announced new protections sought by conservative religious groups.

HHS further stressed that the administration remains committed to Native Americans’ health.

“Secretary Azar, HHS, and the Trump administration have taken aggressive action and will continue to do so to improve the health and well-being for all American Indians and Alaska Natives,” according Oakley, of HHS.

But tribal leaders and public health experts say the administration’s record hasn’t matched its rhetoric. “Work requirements will be devastating,” said Smith, the former Indian Health Service acting director. “I don’t know how you would implement it. There are not jobs to be had on the reservation.”

[Politico]

Ivanka Trump’s clothing company will be spared from tariffs, thanks to her dad

The steel and aluminum industries in China will soon be slapped with tariffs up to $50 billion by President Donald Trump. On Thursday, after China announced their intentions to retaliate against the United States with $50 billion in tariffs of their own against U.S. goods, Trump warned that his administration would respond with another set of tariffs, this time targeting $100 billion worth of Chinese goods.

Exempt from the proposed tariffs against China, however, is the clothing manufacturing industry.

U.S. officials say they used an algorithm to determine which goods to exclude from new tariffs. According to the Washington Post, the list was drafted to achieve “the lowest consumer impact,” ensuring goods like clothing and toys were excluded so as not to raise the cost on domestic consumer goods.

Exempting clothing from the tariffs provides a big break to American clothing companies that hold trademarks in China. One of those clothing companies belongs to the First Daughter of the United States, Ivanka Trump.

A recent report by the Huffington Post found that the president’s daughter and closest adviser rakes in a total of $1.5 million a year from the Trump Organization while still working at the White House.

Her dual role as adviser to the president and private business executive has continuously raised ethical red flags. No one can be entirely sure that public policy by this administration isn’t being driven by business motives, or whether countries may pursue business deals with the Trump family as a means to curry political favor with the administration.

The clearest example of this ethical line-blurring comes from early in the Trump presidency, when Ivanka dined with Chinese President Xi Jinping at the Trump family’s resort in West Palm Beach on the same day China approved three new trademarks for Ivanka’s company.

[ThinkProgress]

The Trump administration wants to let bosses keep their workers’ tips

The Trump administration has kept its promise to let companies do business with less government oversight. From the Environmental Protection Agency to the Department of Health and Human Services, the administration has rolled back rules on oil companies, banks, and health insurance companies.

Trump’s efforts could soon reach your neighborhood restaurant, barbershop, and nail salon. One of the administration’s major deregulation efforts is currently underway at the Department of Labor — and if implemented, it could potentially hurt millions of American workers who get tips as part of their jobs.

The agency is considering a new rule that would give employers unprecedented control over what to do with a worker’s gratuities. The rule, which the agency proposed in December, would repeal an Obama-era regulation that made official what had been the common view for decades: that tips are the sole property of the workers who earn them. It would essentially allow employers to use their workers’ tips for tip-pooling arrangements, provided their workers make the minimum wage.

If the new rule is finalized, it would be a boon to the restaurant industry, which has been fighting for years to control how servers’ tips are distributed.

“This is a major departure from how the DOL has always interpreted the law,” said Judith Conti, the federal advocacy coordinator for the National Employment Law Project. “It sets policy for all tipped workers: parking attendants, car washers, airport valets, taxi drivers, hotel bellhops.”

The rule would have an immediate effect in at least six states, including Arizona and Nevada, where employers are required to pay the full minimum wage to all tipped workers. (Under federal law, the minimum wage for tipped workers is only $2.13; the full minimum wage is $7.25.)

But even states that don’t require the full minimum wage for tipped workers will be affected. Workers who earn the full minimum wage but still count on tips to supplement their pay — such as barbers and nail technicians — could see their take-home pay affected. (According to one estimate, there are 4.3 million tipped workers in the US.)

The rule would also create an incentive for some restaurant owners in those states to pay servers the full $7.25 hourly minimum wage. That might sound like good news for servers who make only the tipped-worker minimum wage of $2.13 per hour — but if those workers normally make enough tips to push their pay above $7.25, the new rule would allow their employers to take any tips they earn above minimum wage, effectively lowering their take-home pay. Including tips, the average hourly wage for restaurant servers in the United States was $11.73 in 2016.

The new rule would allow restaurant owners to do two things in particular. First, it would let employers collect the servers’ tips into a pool that would be shared with back-of-the-house workers — dishwashers, cooks, etc. — who have to be paid the regular minimum wage and aren’t typically tipped. Restaurant owners say that back-of-the-house workers should get a share of the tips because they contribute to a customer’s overall experience, but labor rights groups and servers argue that restaurant owners should just pay those workers better, instead of using servers’ tips to subsidize their pay.

But the second way employers could use the tips goes even further than expanding this type of tip pooling. The rule lists examples of how else employers could use a worker’s gratuities: to renovate their restaurants, lower menu prices, or hire more workers. In other words, it allows restaurant owners to keep the tips for themselves.

The proposal immediately triggered outrage among restaurant servers and labor rights groups, who flooded the Department of Labor with thousands of comments.

The Economic Policy Institute, a left-leaning think tank, estimates that the rule would likely transfer about $5.8 billion in tips each year from workers to their bosses — about 16.1 percent of all their tips. Labor Secretary Alexander Acosta reportedly tried to hide an internal analysis showing that the rule could take $640 million from workers (an initial analysis showed it would actually take billions of dollars), according to a Bloomberg investigation. Now the agency’s inspector general is investigating the allegations.

“It’s really, really troubling,” said Sharon Block, a law professor at Harvard who worked at the Department of Labor under the Obama administration and who helped develop the Obama-era rule clarifying that tips were the property of the workers who earned them. “This is no small thing for people who really can’t afford to be subsidizing their employers.”

Despite the backlash, the Department of Labor is still considering implementing the new rule. A spokesperson for the department said the agency is currently in the process of reviewing more than 375,000 public comments it received.

[Vox]

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