Obama Appoints Soros-Backed Wonk to Labor Department

Administration's new chief labor economist tied to Democracy Alliance

Heidi Shierholz / Economic Policy Institute
August 27, 2014

The new chief economist at the Labor Department is a far-left activist who has worked for a think tank funded by labor unions, founded by George Soros, and that is in league with the Democracy Alliance.

Obama named Heidi Shierholz to the labor post on Monday. Shierholz has spent the past seven years at the Economic Policy Institute (EcPI), a Soros-backed group and previous beneficiary of the Democracy Alliance, the shadowy group of liberal millionaires and billionaires.

Her most prominent research has focused on pet issues of the Obama administration. She has supported Obama’s $10.10 minimum wage proposal that the non-partisan Congressional Budget Office says will cut as many as 1 million jobs and has dedicated much of her work to solving income inequality through redistributing wealth.

"It’s not surprising that the president’s union-friendly Labor Department would hire as its chief economist an employee from Big Labor’s research wing," said Michael Saltsman of the Employment Policies Institute.

Shierholz's appointment gives unions another pivotal ally in the Labor Department. Leaders from 10 major labor unions sit on EcPI’s board, including the SEIU, UFCW, UAW, NEA, AFSCME, AFT, and AFL-CIO. The think tank also received more than $5 million from labor unions between 2011 and 2013.

EcPI has reciprocated with research used to support the union agenda.

Shierholz has argued that unions will reduce inequality and boost the economy and has also argued that the government should increase government hiring rather than decrease it to balance budgets. She coauthored a 2011 paper slamming right-to-work laws. While other research has suggested that right to work boosts economic growth, employee earnings, and productivity, Shierholz said such laws hurt the economy by diminishing unions.

"This provision directly limits the financial viability of unions, reducing their strength and ability to negotiate favorable contracts, higher wages, and better benefits. Similarly, by diminishing union resources, a RTW law makes it more difficult for unions to provide a workers’ voice," the paper says.

EcPI welcomed the appointment, and hopes that Shierholz’s role will bolster liberal economics ideology on the national front and direct policy toward a more "just" distribution of wealth.

"At the Department of Labor, Heidi will be involved in a variety of economic matters, including rulemakings on the minimum wage and overtime, identifying and interpreting workforce trends, and representing the Department in interagency economic policy discussions," the group said in a release.

Shierholz’s work at EcPI has given intellectual heft to much of the Obama administration’s agenda. She has warned that hundreds of thousands of people would lose jobs if unemployment insurance were cut in any way. President Obama has adopted such talking points into his rhetoric on the economy.

"Voting for unemployment insurance helps people and creates jobs, and voting against it does not," he said in a January speech.

The president has cited dubious EcPI research multiple times over the years to justify his political positions.

Obama cited an EcPI study claiming that the average minimum wage earner was 35 years old in an April radio address. The talking point earned a "mostly false" rating from left-leaning Politifact, which pointed out that more than 70 percent of minimum wage earners are younger than 30, according the Bureau of Labor Statistics.

The Labor Department’s chief economist plays an important role shaping employment-related policy. Shierholz’s research will help the department determine the potential costs of regulations.

Saltsman said that he expects her studies within the department to mirror the ideology that has informed her work at the think tank.

"Employers and employees hoping for a fair shake from the Labor Department will apparently have to wait a bit longer," Saltsman said.

Obama has drawn overwhelmingly from pro-union ranks to fill positions in labor posts.

He recess-appointed former union lawyers Richard Griffin and Sharon Block to the National Labor Relations Board during a 2012 Senate session. Both withdrew from the board in 2013 and the Supreme Court later ruled the appointments unconstitutional. Griffin was later appointed NLRB general counsel. Obama nominated Block to the board in July.