The U.S. Department of Labor is grappling with unprecedented financial cuts that threaten its operational capacity and the welfare of workers both domestically and internationally. The agency is still reeling from a shocking $455 million cut to FY 2022 funding that the agency just endured. This decrease consists of $23 million from closing field offices and $192 million from cutting contracts and services. As a result, the department’s budget has dropped from $119 billion in 1980 in constant dollars – the equivalent of $2,318 per person – to only $54.3 billion last year. These reductions continue a multi-decade trend of decreased financial support.
These cuts’ deleterious effects are already being felt. In the last few months, the Department of Labor has seen attrition over 20% of its workforce. Nearly 2,700 employees retired, took early retirement, deferred resignation buyouts, or “fork in the road” departures. This unprecedented exodus has put the agency in a precarious place. Now it can barely hold the line on key labor protections, most notably in wage enforcement and workplace safety.
The impact of these Department of Labor funding cuts goes beyond the Department of Labor itself. State and local governments that depend on this funding from the feds are soon to be hobbled. Experts predict that these cuts will let foreign enterprises take an unfair advantage over American businesses. Outsourcing will necessarily get cheaper and easier as a result.
Public outcry over the cuts has been amplified by a troubling culture of fear at the Department of Transportation. Lori Chavez-DeRemer, the agency’s chief of staff, recently warned staff via email about potential criminal charges for discussing agency matters with journalists. This has created an atmosphere of fear within the workforce, with workers wondering when the next set of cuts will be announced.
“It’s become a hostile environment for folks.” – Employee working in a civil rights division
These cuts are drawing criticism from labor unions and other progressive advocates who are describing the cuts as “anti-worker.” In January the Trump administration released a related executive order that has further muddied the waters. It mischaracterizes diversity, equity, and inclusion efforts as discriminatory. Consequently, many across the department worry that essential civil rights enforcement will be seriously postponed.
“Generally, I would say civil rights enforcement is going to be extremely delayed.” – Employee working in a civil rights division
With much less staff to go around, the ones left holding spaces have a crushing caseload. Wage and hour investigators—and safety inspectors in OSHA—were among those saved from some of the cuts. These professionals now have to take on more responsibilities without any of the support.
“They’ve cynically exempted a lot of frontline positions, such as wage and hour investigators or safety inspectors, but of course those people will have to do a ton more work,” – Attorney at the labor department.
This sudden change in services has led to questions about the adequacy of medical services available to our nation’s workers. Attorneys across the department have complained that the policies place them in positions to be pushed beyond their job descriptions.
“We’re doing a lot more work, work that there is no reason attorneys should be doing. What it means is workers are going to get fewer services.” – Attorney at the labor department.
Now the ranks of the Department of Labor are collapsing. Insiders are becoming really worried about its capacity to carry out critical functions. Even one employee of the Bureau of Labor Statistics (BLS) recognized the short-term impact of the cut.
“The department has gotten 20% smaller before any formal reductions in force are announced. A lot of people headed for the exits because so many different components have been threatened by reduction in forces.” – Employee at the Bureau of Labor Statistics (BLS)
This worry is shared by other staff members who worry that such cuts will result in chaos within the agency.
“All of the core aspects of working life can no longer be assumed because the Department of Labor was chronically underfunded for a long time, and eliminating half the staff will cause it to be absolutely dysfunctional.” – BLS employee
The cuts are sure to exacerbate the troubling state of labor protections in the U.S. today. Others worry that these changes don’t bode well in the long run for American consumers. Consumer worries are especially acute with respect to items produced in circumstances of child labor or forced labor.
Independent contractors and gig economy workers are all on edge, unsure about what lies ahead. Labor advocates and employees at the OMB are already sounding alarms about what these cuts will mean to individual lives and the overall economy.