(Trey Kovacs, Competitive Enterprise Institute) On Thursday the White House released an outline of its 2018 budget. The Trump administration requests a 21 percent decrease to the Department of Labor’s budget, a reduction of $2.5 billion.
The budget finds savings, in part, through eliminating or cutting back ineffective or duplicative training programs.
One area in which the budget outline recommends cuts is Occupational Safety and Health Administration (OSHA) grants:
Eliminates the Occupational Safety and Health Administration’s unproven training grants, yielding savings of almost $11 million from the 2017 annualized CR level and focusing the agency on its central work of keeping workers safe on the job.
Hopefully, this calls for the elimination of the OSHA Susan Harwood training grants, which dole out around $10-11 million per year.
In 2016, the House Appropriations Committee questioned the effectiveness of the Harwood grants. In comparison to other job training programs the Harwood grants are “inefficient and ineffective in achieving its intended purpose, at least in part due to a lack of effective oversight of grantee performance.”
Another concern is that Harwood grants have been diverted from its intended purpose of issuing “training” grants to “capacity building” grants. The committee explains that the capacity building grants have “effectively done little more than supplant the infrastructure needs of the grantees.”
A report issued during the George W. Bush administration notes issues with how grant recipients are chosen:
Some Federal programs deliver further unfair advantage to previous Government grantees by building a bias into the application process. DOL’s “Susan Harwood Training Grant” program funds groups to train employers and employees to recognize, avoid, and prevent workplace safety and health hazards. The program requires applicants to demonstrate not only topical and managerial experience but also either past receipt of a Government grant or a firm commitment of collaboration from an organization that has managed Government funds previously. The awards process for the Education Department’s “Fund for the Improvement of Education” gives extra prior experience points to applicants who operated a program during the previous funding cycle.
An additional deficiency in the Harwood grant program is its history of being inappropriately used to subsidize political allies of Democrats. For example, in 2016, labor unions received a nearly $2 million in grants, distributed nearly evenly with half in capacity building and training grants, which represents 21 percent of the grant funds.
As a Heritage Foundation report notes, “Giving this money to such groups [i.e., unions] frees dues money for the lobbying activities of a few select organizations.”
Besides subsidizing union business that dues payments from members should finance, some of the grant money goes toward unions that are not appropriate choices to provide the desired training.
For example, in 2016, the SEIU received $139,600 in Harwood training grants to “provide 2-hour worker training and 3-day train-the-trainer on hazards in healthcare industry. The target audience will be limited English speaking healthcare workers.”
The problem is that the SEIU is notorious for skimming dues from the Medicaid checks of healthcare workers who normally are taking care of a family member. In many cases, the healthcare workers didn’t even realize they had been unionized and dues were being deducted from their checks. In Michigan alone, the SEIU’s stealth unionization scheme was able to extract at least $34 millionfrom care providers.
SEIU is also a poor choice to train healthcare workers for another reason. As I previously wrote:
SEIU union boss Tyrone Freeman, president of a Los Angeles-area local representing 190,000 home-care workers, recently was found guilty of 14 counts of embezzlement. According to the Los Angeles Times, the low-wage caregivers also sued Freeman – who made $200,000 per year – demanding restitution of more than $1.1 million in dues money he reportedly [spent] on high-end liquor, parties and expenses from his Hawaii wedding in 2006.
It is questionable whether SEIU’s track record in the healthcare industry makes them suitable to receive such grants.
Labor unions are not the only Democratic political allies that benefit from Harwood grants. Worker centers are frequent recipients, receiving over a $1 million in 2016.
Mackinac Center Labor Director Vinnie Vernuccio describes workers centers as “stalking horses to help organize workers into traditional unions. Their goals are to make organizing easier by intimidating employers into taking away the secret ballot from workers and to further the political agenda of traditional union leaders.”
One worker center, the Restaurant Opportunities Center (ROC), has received over a half a million in OSHA grants from 2006-2011. One such grant for $275,000 to ROC tasked the organization with creating “an employer education program as well as developing local health and safety committees for ongoing workers and employer education.”
There is one slight problem. ROC has had serious accusations and violations levelled against them relating to their own restaurant, COLORS. I recounted their mishaps running COLORS in a Townhall.com article:
ROC’s New York restaurant, Colors, has been described by former employees as, “one of the most abusive in the city,” profiting from hundreds of hours of free labor. According to one employee, “ROC-NY used us and many others to perform hundreds of hours of unpaid work. They even had us kick back our tips when we worked at parties and events as cooks and waiters.”
After promising these workers a stake in the business after many hours of toiling, ROC unilaterally changed its agreement with them. Workers would not get any stake until at least five years of work in the restaurant, and even then their share would be dwarfed by that of investors and management.
ROC’s record on sanitation is hardly any better than the treatment of its workers. Its New York restaurant was cited by the city’s Department of Health for multiple health violations, including evidence of rodent infestation in food areas, kitchen surfaces not properly washed, and food improperly stored.
Programs like the Susan Harwood grants should be scrutinized and their elimination included in the 2018 budget. It is a good sign that the administration is trying to find savings by getting rid of ineffective and politically motivated grant programs.