3 Actions by Biden Administration Could Cost Millions of Jobs

Virginia Allen /

Three actions by the Biden administration could put nearly 10 million American jobs at risk, says Alfredo Ortiz, president and CEO of the Job Creators Network. 

Ortiz joins “The Daily Signal Podcast” to discuss the economic implications of the Biden White House’s canceling the Keystone XL oil pipeline, rejoining the Paris Agreement on climate change, and raising the federal minimum wage to $15 an hour. 

We also cover these stories: 

Listen to the podcast below or read the lightly edited transcript. 

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Virginia Allen: I am joined by Alfredo Ortiz, president and CEO of the Job Creators Network. Mr. Ortiz, thank you so much for being here.

Alfredo Ortiz: Absolutely. Thank you for having me.

Allen: All right. So before we dive in and talk about several of President [Joe] Biden’s actions and what they could mean for the economy, could you just quickly share a little bit about the mission and work of the Job Creators Network for those who might not be familiar with your organization?

Ortiz: Sure, Virginia, absolutely. Well, it’s a great organization. It was founded about 10 years ago now. This is actually my eighth year, which is crazy how time flies.

It was founded by one of our greatest American dream stories, greatest entrepreneurs, Bernie Marcus, who founded the Home Depot. And he really did it because he remembered what it was like to be a small business owner with just two stores in Atlanta. And then of course becoming the giant success that it is today, employing over 400,000 Americans across the country.

But he remembered how tough it was back then. And under the Obama administration there was a very dark period of entrepreneurialism and we called it negative entrepreneurialism in which more businesses were closing than were opening.

So Bernie believed that it was necessary, really, to start an organization that did real, true advocacy work, not just lip service to it, but actually got out there and did stuff.

And so that’s kind of the genesis of Job Creators Network. We have tens of hundreds of thousands of members actually at this point or over the years. And we’ve got hundreds of other associations that are part of our coalition of associations, all representing free enterprise and, in particular, small business, which as all of you know, it’s the backbone of our country. It’s the backbone of our communities.

Just before COVID hit, two-thirds of new job growth was in the hands of small businesses. There are 30 million small businesses out there that have employed over 60 million people.

Now that’s going to be changing a lot, especially as the lockdowns continue, and especially as some of these onerous policies continue. And then also the onslaught of some of these new policies that the Biden administration [is] putting out and contemplating, small businesses is truly under attack.

But Job Creators Network is there to really defend those small businesses out there and to really represent the needs and voices of those who really, in many cases, just don’t have the time nor the resources to do it themselves.

Allen: We’re so thankful for the work that you all do because that is so critical to be that voice for small businesses. Quite frankly, they don’t have the time to be focused on doing as much of the policy work that you all do. So I know it’s a huge blessing for so many small businesses across America.

I want to chat a little bit about a backgrounder that you all recently explained, and you explained in that background that there are three actions by President Biden that could ultimately result in the loss of up to 10 million jobs across America.

So let’s talk a little bit about each of these three actions, beginning with the Keystone pipeline. On Day One, President Biden canceled the pipeline. Could you just explain the implications of the president’s action?

Ortiz: Yeah, well, that was huge. And when you look at the actual numbers … it was about 11,000 jobs, literally overnight, that just stopped, that went away.

And the Biden administration, quite frankly, you saw the press secretary yesterday very flippantly answer a question that the reporter had, which is, where do these folks go for these green jobs? And she basically says, “We’ll get back to you.”

Well, that’s not a great answer for those 11,000 folks who literally lost their jobs overnight, and that doesn’t even take into account the impact on the towns, and the localities, the communities that were really counting on those jobs.

I mean, the downstream effect of that, we estimate it’s probably 3- or 4-to-1. So, for every one job loss, there’s probably another three or four that are being impacted.

This could be an impact of over 40,000 people that are being impacted, 11,000 we know are just jobs lost right off the top. But there could be at least maybe up to 20,000 jobs that are lost when you look at the whole downward stream impact.

When you think about, these were great union jobs. I’m not sure if you just heard yesterday, … the AFL-CIO head, [Richard] Trumka, the president there, was not too happy and in not so few words basically said that Biden should really rethink this kind of cancellation because those were great union-paying jobs.

And not only the ones on the pipeline itself, but think about all the steel workers that were actually making the pipes, those were impacted as well, again, more union jobs.

It’s just tremendous that just literally overnight that he would take that kind of action. I mean, you know, Virginia, things are bad when you’ve got the Canadians actually suing us. It’s probably a bad, bad day.

Allen: Yeah, yeah. Wow. Well, as you alluded to, I’ve heard that argument of, “OK, yes, these many jobs were eliminated, but we’ll have even more green jobs created.” What is your response to that argument?

Ortiz: Like I said, that’s great, but what happens to those 11,000 folks who lost their jobs yesterday, right? Because today they don’t have checks and they don’t have jobs. …

For someone to basically say, “Don’t worry, those jobs are coming,” well, that really is not too great for all those families that are out of jobs. It’s basically taking action with no plan. And I think it’s just to placate the climate levers that are out there, the radical left, the AOCs of the world, Biden’s just trying to placate them across the board.

I mean, just as a little tangent, look at what’s happening with schools. He says that he cares about the school issue, but really, it’s about teachers first and not about schools first. And that’s leading to huge employment issues as well, as parents can’t go back to school, especially moms who really seem to be the ones that are gaining the brunt of that.

But going back to your question on the pipeline, I mean, these are the actions that, frankly, are done just to basically placate the folks on the left that voted him into office.

Allen: Wow. Let’s chat a little bit about the Paris climate agreement because you all have also pointed out that this is really bad news for the economy. This was really bad news for American jobs. Why does the Paris climate agreement threaten so many American jobs?

Ortiz: Yeah. And Virginia, if I could, could I spend just two more seconds kind of going back to a related issue, which is the cancellation of the oil and gas leases on federal land? Because I kind of throw that into the whole energy focus as well, what’s going on.

That could impact almost over 400,000 jobs. Wyoming, for example, would be impacted severely. I think I read just 60% or 70% of Wyoming land is actually federally owned land. And so a lot of the operations are on federally leased land.

So that’s another part there that just, again, overnight it could lead to the loss of over 400,000 jobs, almost an entire state potentially being impacted, like Wyoming. So I just wanted to throw that in there to make sure we hit on that as well.

Allen: Yeah, no, thank you for clarifying and adding that.

Ortiz: In terms of the Paris accord, I mean, this is a direct hit in terms of the energy independence that we have so worked so hard to achieve over the years that the Trump administration was able to put in, so that we could really have not only economic security and safety, but just overall domestic and international security and safety.

But this is all being threatened with rejoining the Paris accord and the impact, for example, on energy cost that this is going to have—and quite frankly, the only way this would all work, if you’ve got China, if you got India, if you’ve got all these other countries who basically drop their emissions to zero.

… I’m not one of those that doesn’t believe that there’s an issue. But I also don’t believe that the world’s going to end in 12 years and that we have to take these radical steps to really address what is really kind of an issue that I think the Democrats are really blowing out to the point where it just doesn’t make sense and are just threatening literally millions of millions of jobs.

Our estimate and the estimates out there is that it could be up to about 6.5 million jobs lost because of the Paris accord, again, with the focus on clean energy and stuff like that.

Allen: And how quickly would those jobs be lost?

Ortiz: Well, when you look at the Paris accord, I mean, you’re talking probably over a span of seven to 10 years would be the majority of those jobs.

And again, he comes back and says, “Oh, but those will be replaced with green jobs.” Well, I would really would like to see that plan because when you’ve got energy cost soaring, the reality is that what’s going to replace it, it’s not cheaper energy, it’s actually more expensive energy.

So I’m not really quite sure how they’re going to start addressing the realities, for example, of inflation, which is really going to impact the inputs of our goods and services across this country and across the globe, quite frankly.

Allen: Yeah. And certainly speaking of inflation, one of the other issues that you all address is the $15 minimum wage. There’s a lot of concern about inflation just going crazy if all of a sudden small businesses across America are required to pay workers a $15 minimum wage.

Ortiz: Yeah, that’s right. And [Sen.] Bernie Sanders tried to kind of make people feel a little bit better about it by saying, “Don’t worry, it’s going to be something that we’re going to be phasing in over five years.”

But if you look at the specifics of what he was proposing of that $15 minimum wage, it actually would increase to $9.50 from $7.25 where it is today, June of 2021.

That’s a 31% increase, Virginia, just this year. And labor cost for these small businesses and the people that are actually going to be hurt the most are actually your lowest-skilled wage workers, your youth of today.

I mean, you’re going to end up having what Greece had several years ago of youth unemployment that’s 70%, 80%, because guess what? All those entry-level jobs that really do require that entry-level wage [where] the output doesn’t justify the $15 minimum wage per hour for those—they’re literally kids with their entry-level jobs that are just starting off in the workforce—those are going to go away.

I live partly here in Georgia and then also in Virginia. And for example, the McDonald’s down the street from me has completely replaced all of the cashiers with kiosks, basically. And there’s only two folks there that are handing out the orders once they’re ready.

What’s going to end up happening is that as technology continues to get cheaper and cheaper, the inflection point between using labor and using technology, it’s just going to get that much easier for small business owners to say, “You know what, I’d much rather just buy this one-time purchase, put in some technology, and get rid of this fluctuating labor issue.”

They don’t have to worry about people calling in sick. They don’t have to worry about COVID. They don’t complain. They don’t sue, right? And so that’s just the reality. …

Quite frankly, the [Congressional Budget Office], which issued just, I think, yesterday the report says that up to 2.7 million jobs could be lost because of this federal minimum wage of $15 per hour. And frankly, as I read through the thing, they gave lip service to the technology issue, Virginia.

But I am telling you being, first of all, I actually came from the restaurant industry, so I know that industry well, but having so many of my members [that] are small business owners that are in the restaurant industry, this is a killer. And they will put in technology and they will remove labor because guess what? There’s only a finite profitability that these restaurants work with. In many cases, it’s 2% to 3%.

So there is going to be that point of they’re going to be like, “You know what? It just doesn’t make sense for me to have labor at $15 per hour, entry level at work that technology can, quite frankly, do. My payout can be in two or three years.” And so this is a reality. We’re very, very concerned about it.

I know Bernie Sanders is doing everything he can to try to make sure it can go into budget reconciliation. The late assessment is a $54 billion hit over 10 years to the deficit, which, according Bernie Sanders, justifies it to be under reconciliation.

He says, “We’ve got tons of lawyers trying to make sure that they make the parliamentarian understand who has the final say on this one, that it is a budget impact.”

But, again, we were very concerned about it. We hope that Sen. [Joe] Manchin, out of West Virginia, sticks to his guns. He says he opposes the $15 minimum wage and they will be voting against it, so we hope that he does stick to his guns.

Allen: Ultimately, who are the winners and losers if the minimum wage goes to $15 an hour?

Ortiz: Yeah. So, according to the CBO report, it says almost a million people get pulled out of poverty. That’s obviously a great thing because the more we can do that, the better this country is. But you have, like I said, almost 2.7 million people losing their jobs.

And the thing is, Virginia, that there are programs out there. And frankly, one of the things that’s in the COVID relief bill that we do support, and we think has a lot of merits, is the expansion of the earned income tax credit.

It achieves the same objective without killing our small business owners. It’s actually one of the most effective and efficient … government programs that we have out there.

Are there problems with it? Yes. Every single government program has problems with it, has people that are trying to cheat the system. But in terms of its effectiveness and its efficiency, it’s actually pretty darn good.

So we’d much rather, for example, see and support that expansion of the earned income tax credit.

… Quite frankly, it has a very wonky name to it. We like to call it the “working Americans credit.” But I think an expansion of that would achieve the same impact that they’re trying to achieve. But that’s the problem with folks like the CBO and for folks like Bernie Sanders, they’re just so worried about trying to basically pay back the unions.

The [Service Employees International Union], for example, has spent something like $80 million on the “Fight for $15” campaign. And so this is a big push to try to get more people unionized and to, quite frankly, answer the request of the SEIU to really push something like this through. …

But again, it’s going to hurt our small business owners tremendously, especially the smallest of small.

I noticed that Amazon … was out there promoting the $15 minimum wage. Interestingly enough, though, they’re actually already above, their average wages are already both $15. What a convenient way of eliminating all of your competition, basically, by promoting something that smaller businesses can’t afford to do.

Allen: Wow. That is telling.

So, we know right now that within Biden’s proposed $1.9 trillion stimulus package he had originally been advocating for the $15 minimum wage within that and then sort of pulled back and said, “OK, I recognize that’s probably not going to go over right now.”

Of course, as you mentioned, Sen. Sanders is continuing to really, really push for this $15 minimum wage. He’s talking with lawyers, he’s trying to see how it can be implemented as quickly as possible.

So talk a little bit about the timeline of when, OK, if this is pushed through, what would that timeline look like? And then just how likely do you think we will see this eventually get passed of a $15 minimum wage for all small businesses across America?

Ortiz: Yeah. Well, Bernie Sanders, as the new chair of the Senate Budget Committee, I mean, he’s going to do everything possible to make sure that this gets incorporated into the $1.9 trillion COVID relief bill.

So, that’s something that’s literally being discussed right now. It just passed into the reconciliation process. They did all the rule-making that they had to do to get it there. And so really over the next week or two we’re going to see the final elements.

I know that Biden specifically says he doesn’t think it’s probably going to make it through because of the reconciliation and the Byrd rule. But like I said, Sen. Sanders is not giving up.

If there’s one thing I’ve learned from that guy is that he definitely doesn’t give up and I think he’s going to fight. And if it doesn’t make it into the COVID relief bill, I think … Biden will support a standalone bill on that as well.

And again, though, it really is, I think, coming down to Sen. [Kyrsten] Sinema out in Arizona and Sen. Manchin out in West Virginia to stand up and say no to the progressive left and this push that’s just going to decimate our small business community across the country.

If they cave, unfortunately, I think, Virginia, this thing has a pretty real chance of actually making it through. And as I said, the first impact would be June of this year where the minimum wage would go from $7.25 to $9.50.

Allen: At the end of the day, … we can all get behind the idea of economic growth. I think whether you’re you’re on the left or you are on the right, you want people to have the opportunity to get jobs if they want to have jobs to earn money for their families. But the left and the right definitely disagree on how we get there, how we get to that place of economic prosperity.

So just kind of totally removing politics from the equation, could you talk a little bit about what we have seen actually works in the past? What are the proven methods of economic growth?

Ortiz: Yeah. Well, kind of sticking a little bit on the theme of minimum wage, what I don’t understand is why the left is so busy arguing for floors when we should be talking about how do we raise ceilings, not raising floors.

There’s a program that we started putting out there about three years ago and we continue to support, and we can continue to try to get folks to look at this, but it’s the Fight for $50—the five-zero, not 15, which is $50,000 per year jobs. And it comes through in improvement in terms of the, basically, technical skills, technical abilities.

We think there’s a huge opportunity there.

I think a lot of these folks who have been in these minimum wage jobs, longer term—and again, it’s probably no fault of their own, they’ve been stuck in these jobs—I think some of them could really benefit from an ability to be able to enhance, basically, their output by increased abilities, and, again, skillsets that they, frankly, just don’t have there. And I think we should be pushing for that.

If you look at electricians, if you look at journeymen plumbers, etc., these wages of a lot of these folks entry-level are already about $50,000, $55,000 per year, which clearly is above the $15 minimum wage that these guys were shooting for.

But it’s a great soundbite. It’s a great tagline. But again, we like the idea of really trying to improve the skill sets of Americans, give them the opportunity, give them that ability.

There’s been some great programs globally, I think. Germany, quite frankly, is probably the [leader] in this, where government and private companies work together to be able to enhance through apprenticeships the skills and the outputs of a lot of these entry-level workers.

So, we are huge proponents of, again, skills training. I would love to see the investments put behind that. If we could take $5 billion a year, which is roughly the deficit hole that’s going to be created by the minimum wage, put that into skills training, I think we’d have a very, very successful economic growth in this country that would be unmatched versus the minimum wage increasing.

Allen: And you all are so much so on the front lines of this issue. I know you’ve received a lot of pushback recently. Can you share a little bit about the situation with Twitter?

Ortiz: Yeah. Unfortunately, we must be doing something right because Twitter suspended us last week. It’s actually been about 10 days now. We quickly responded within 24 hours with a letter from our attorney to them, no response yet. We had two reporters call them, no responses from that either.

What they claimed was that we somehow were breaking their spam policy, which is complete bull, if you ask me. And there was nothing there—we went back, we did our own internal audit. There was nothing that we did that broke their policy.

But interestingly enough, we were promoting, basically, that Twitter and other companies like Amazon, AWS—which is the website services, their hosting platforms and stuff—they’d be regulated like a utility.

And interestingly enough, right after that, we somehow got shut down for this bogus breaking of their policy, again, with no response and not even, quite frankly, any specifics that they could point to as to where we broke that policy.

Allen: Wow. Incredibly frustrating.

Ortiz: It is, it is, it is. But we got to keep on speaking out, which is why programs like what you have [are] just so critical because this is basically our voice now. This and radio effectively is what we have left.

But we’re going to keep on putting out what we can. And I urge all of your listeners to go to jobcreatorsnetwork.com because t’s a great source of information. We try to keep it as relevant, as current as possible and as handy as possible for all small business owners out there.

Allen: Well, I will say, I certainly appreciate getting your emails. I find the information incredibly helpful just for staying up on, OK, what is going on? What are those pieces of legislation that are being pushed forward? What would they mean for us as Americans, for small businesses? So, truly, thank you all for the work that you’re doing.

Ortiz: Absolutely.

Allen: So appreciate you joining this show.

Ortiz: Thank you very much. Thank you for the time and have a great day.

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