General Discussion

I believe Bernie Sanders, possibly along with Elizabeth Warren and Madame Secretary, Janet Yellen still have a lot of work to do on worker/human rights, especially with the passing of Secure 2.0.

Secure 2.0(1) was seemingly presented to "help" US workers. In fact, it appears to mostly benefit corporations and lawmakers, and provides almost no provisions for consumer choice, control of employee's hard-earned income/savings, or protections from corporations acting in their own self-interests from tanking the value of mandatory, employer-directed retirement/investment plans.

Employer Expenses Paid by Employees in Construction Industry

One example is my former employer, a construction company, whose executives are friends of Trump. They manipulate about $40/hour, per employee, of Davis-Bacon per diem dollars that were supposed to be for the benefit of the employee. The employees also get wages, but Davis-Bacon is to help defray huge mostly unreimbursed expenses employees have to pay to work on many out-of-State projects. Hotel costs can be over $2,000 per mo., and transportation costs driving several thousands of miles per month, and convenience/fast food items are also expensive. Only a fraction of those costs is ever reimbursed, and Trump's Admin. took away IRS Income Tax deductions for workers who pay their employer's expenses.


Trump's Admin. Spiked Income Tax For Employees Forced to Pay Employer Expenses

Employees using their wages to pay a substantial part of travel expenses out of town pay both hotel/dining rates of sales tax, but also income tax on money that should be an employer expense. This puts many employees in a higher tax bracket, paying 22% to 30% in income taxes, but also >10% of sales tax on hotel/transportation/food costs to work. When combined with SS/Medicare, construction employees could be paying 47.65% of income tax on what are actually employer expenses. If the construction employers instead paid those business expenses (like some HVAC or IT contractors do), the employee would have lower income, but also much lower income tax, and almost no sales tax on their income.

Workers can thank the Trump Admin. from removing employees paying employer expenses as an income tax deduction. That decision benefited Trump's construction company friends.


No Employee Rights in How Employers Handle/Keep Davis-Bacon Wages

In addition, Davis-Bacon provides some employee wages should also be set aside for health insurance & retirement. This construction company even manipulates the health insurance that comes out of Davis-Bacon employee benefits by "keeping" the money if an employee doesn't smoke. At my employer, the HI premium per paycheck of each employee is withheld at the same premium payment, even though the health insurer "collects" less in premium payments for employees who don't smoke. The Corp. keeps the difference, and puts in the Corporation's stock, that most employees never see/receive.


Secure 2.0 Doesn't Address Consumer Choice/Retirement $'s Going to Employer

This Construction Corporation, who has well over over 10,000 (mostly new) employees nationwide manipulates both the health insurance and retirement portion of Davis-Bacon in:

1. Mandatory 401(k)

About $30/hour/employee is put into a mandatory "employer-driven" 401(k) program, or ends up in the Corporate stock as "excess"--one way or the other.

The employees don't get to choose if they even want 401(k), or which funds. Employees don't get a choice if/when they want to pull their money out (even if the employer-directed 401(k) fund, or ESPP is losing a lot of money). The only way they can receive money from their 401(k)/ESPP is if they quit/retire. If they are one of the few employees who've been there many years, they will also get their employer-paid vested amount, but like all employees, they have to wait to withdraw even their own contributions to 401(k) without penalty. In this scenario, when employees have NO control over which funds they invest in, that 401(k) could have tanked, losing retirement savings(4). Secure 2.0 does not appear to have even considered this.

a. When I looked at the mandatory 401(k) funds offered to employees, many had investments that would benefit that Construction industry, or stocks "funded by" funds that also traditionally donate to Politicians (per Open Secrets). I believe Secure 2.0 should have recognized that corporations/lobbyists/lawmakers would use mandatory 401(k) as free money, to benefit their industry/corporation, & their politician friends. Instead, employees should have a choice into which funds they invest in.

2. The Corporation also offers/manipulates ESPP

a. This Spring, before the >10,000 new employees started working for the season, most all Executives of the Corp. pulled out all of their stock because they maxed their profit in the stock, (stock capped). In theory, executives only pull all of their stock when they no longer have confidence stock will grow. As executives, they should have interest in their stockholders value of stock.

b. Then, within a couple of weeks after pulling their stock, Corporate executives set policy to divvy up much of employee's Davis-Bacon per diem into employer-driven 401(k) & Corporate stock, knowing that even if all of the executives were smart enough to pull out all of their stock, they could "force employees" to make up that difference by mandatory allocation of employee's unused Davis-Bacon per diem.

Per stock records, in the 6 mos. these executives held stock, they received an 80% rate of return. In the 6 mos. after these executives sold their stock, and directed and diverted much of employees Davis-Bacon retirement to the corporate stock, those employees/investors only earned a 10% rate of return. Executives used inside information to control their stock, to their own personal benefit.

c. It appears in Q1, Q2 2024, this corporation may still be allocating employee's Davis-Bacon benefits as a business expense to reduce income tax. If so, this violates 2023 Statute updates by US DOL that do not allow Davis-Bacon contractors to do this.

IfTrump/Project 2025 imply/say they will gut or eliminate SEC/DOL/Consumer Protection agencies, I am very much concerned about what a Trump Dictatorship could mean for workers and their families. That describes almost a Feudal society.


3. Secure 2.0 Enables Corporations to Do This/Damages Rights of Employees

Aren't employees Consumers?

Presumably, if any consumer sought to buy stock on the Market, they would have free control of their own decisions to invest. They could decide if they want to invest at all, how much, when to invest, when to change to a new investment, and when to pull that stock.

Secure 2.0 makes investment in 401(k) mandatory. If you look at most articles on this (2, 3 & 4), they say employees should have a choice, that Secure 2.0 is manipulative to benefit wealthy/lawmakers, and that 401(k)'s benefit the wealthy/corporations.

Many lawmakers (& my President, Joe Biden) said Secure 2.0 will increase participation. The goal should never have been participation. Instead, the goal should be whether or not employees can save meaningful hard-earned money for retirement, without it being tanked by their employers. Congress also doesn't tell you that employer-driven (or administrator-driven) 401(k)'s have many times tanked employee 401(k) funds/retirement, and they don't give employees choice. There have been several Court cases employees have won on this, but very little in the media. Congress cared about wealthy shareholders in Enron, but apparently not about the majority of US workers.

With Congress threats to limit Social Security on top of this, their added control of employee's hard-earned income, that very often only benefits corporations or lawmakers, it appears to me employees have been swindled.

I would love to see Senator Warren's, Senator Sanders' and Madame Secretary, Janet Yellen's review on these issues that affect workers and their families.

Reference:

1. Secure 2.0 Bill:
[link:https://www.finance.senate.gov/imo/media/doc/Secure%202.0_Section%20by%20Section%
20Summary%2012-19-22%20FINAL.pdf]

2. Related Social Security cuts, Opinion by Nancy J. Altman to The Hill, 7/26/2024:
[link:https://thehill.com/opinion/4794442-republican-cuts-social-security/]

3. Politico Report, "The 401(k) Industry Owns Congress," by Benjamin Guggenheim, Politico, 4/13/2024:
https://www.politico.com/news/2024/04/13/how-your-401k-ate-the-federal-budget-00150319

4. Many Accounts, or Cases Won by Employees on Employer-Driven, or Fund-Driven 401(k)'s Losing Employee's Retirement. Here is an accounting from a CPA, 11/1/2019 Article from CPAPracticeAdvisor:
https://www.cpapracticeadvisor.com/2019/11/01/3-reasons-employees-shouldnt-let-their-employer-choose-401k-investments/35517/