After what seems like two years of constant campaigning and over $1 billion in advertising, we are exactly where we were after the 2010 elections: Democrats control the White House and Senate, and Republicans control the House of Representatives. Unless something drastic changes, this remains a recipe for continued gridlock—a conclusion Wall Street came to the day after the election, as the Dow dropped 313 points.
So don’t expect any major labor legislation to come out of the 113th Congress. In his first term, President Barack Obama’s labor agenda fell prey to healthcare reform; now it will take a backseat to tax reform. The unions that worked so hard for his reelection will have to be satisfied with vigorous administrative activity. Expect the NLRB, EEOC, DOL, IRS, and the rest of Washington’s alphabet soup of employer watchdogs to continue the activist enforcement that was characteristic of the first Obama administration.
The job market is on a slight rise, though we won’t get a true picture until the end of the seasonal retail hiring season. And any current gain in employment numbers is fragile, reversible by surprise news ranging from economic instability in Europe to natural disasters at home. We need to maintain a positive gambler’s mentality in which hiring people and buying equipment looks like a better bet than sitting on your chips.
For 42 of the past 44 months, the unemployment rate was above eight percent, and no incumbent president had ever been reelected with unemployment so high. Nor did the last two months truly buck that trend, as the recent dip to 7.9 percent was more a function of discouraged applicants leaving the workforce than a true gain in jobs. But like so many thing in life, humans generally choose what we like, not what we need. America liked Obama more than it did Mitt Romney, so even if Romney was better suited to the job-building task, the country gave President Obama the chore of coaxing more jobs out of our economy. At this point, enlightened self-interest forces blue states and red states to root for him to succeed.
Both campaigns promised to create new jobs after the election, and we should put both—winners and losers—to that task. We have enough broken roads and bridges, enough aging and outmoded utilities, to create the millions of new jobs about which both candidates spoke. But that requires politicians who remember their promises after the election is over.
We also need a legislative and regulatory atmosphere that encourages hiring in the private sector. It remains to be seen whether Obamacare—and its requirement to either provide medical insurance or pay a penalty—will discourage that hiring. Similarly, our governmental enforcement agencies must not act as a damper on new employment. Finally, it would be great if job stimulus money were actually directed to job creation and not pork-barrel spending.
A second-term president often shows his true colors because there is no chance of a third term. Will we see the moderate Obama who responsibly engages in rebuilding our economy or a political partisan who caters to his supporters at great cost? The answer to that question may well define what Obama’s domestic legacy turns out to be.
State initiatives: smoke on the water
There was one state regulatory trend seen from coast to coast. Massachusetts became the 19th state to approve medical marijuana, while Colorado and Washington went one step further, becoming the first states to legalize recreational use of the drug. The explosion of “legit” pot use is the cover story in Newsweek. Social issues aside, there will be serious workplace issues associated with the ever more prevalent use of pot.
As Colorado Governor John Hickenlooper reminded everyone after the election, marijuana use remains illegal under federal law. For that reason alone—and even under compelling facts showing medical need—the California Supreme Court held in 2010 that an employer need not keep an employee whose pot use violates federal law. Federal supremacy was a convenient way for California to duck the issue, and each state will decide that issue on its own. We’ll see whether Obama’s Justice Department continues its tough stance on medical pot.
Dealing with substance abuse at work will get harder and harder as marijuana use grows, navigating workplace performance, drug-testing restrictions, and a patchwork of state decriminalization laws. We are watching the birth of a new area of law and practice that won’t be settled for years. Look out for a legalization initiative coming to your state soon!
Wanted: a ‘legislator’
The United States has a two-century tradition of national government, which includes a good working relationship within and among Congress. Democrats control for a while until the people throw them out, and then Republicans take over until they stall and get the boot. We are a fairly evenly divided country, and the swing voters swing back and forth—12 presidents since World War II, six Dems and six Reps, never agreeing on how to tax and spend.
But despite core disagreements, they at least agreed to a process for resolution, for legislation, for governance. Important votes were held. Budgets were passed so government could be funded. Debt ceilings were approved that recognized our actual liabilities in order to avoid harm to our international fiscal standing and rating. Sabotaging the legislative process was not an option.
In recent years, that congressional tradition has eroded, and there is nothing in Tuesday’s election that suggests any change in that dynamic. Last year, America lost its solid-gold credit rating when Congress played games with the debt ceiling, and the debt ceiling will likely come up again before the end of the year. Keep an eye on that process, and root for legislators who seek early bipartisan resolution rather than macho brinksmanship.
How should Congress make the right decisions? Well, first, have them all agree to engage in a rational, public-spirited, good-faith lawmaking process.
Mark I. Schickman is a partner with Freeland Cooper & Foreman LLP in San Francisco and editor of California Employment Law Letter. You can reach him at 415-541-0200 or email@example.com.