Right-sizing the Departments of Labor and Commerce

This is a sixth in a series of opinion articles dealing with the necessity of reducing the size and cost of a bloated federal bureaucracy that has demonstrated its ineffectiveness and its inefficiency. These opinion articles are adapted from an original position paper, America’s Path to Prosperity, authored by the American Issues Policy Group.

The mission of the Department of Labor is “To foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.”[i]

The mission of the Commerce Department is “to create the conditions for economic growth and opportunity.”[ii]

President Lyndon Johnson asked Congress to consider reuniting the Departments of Commerce and Labor. Johnson made the argument that the departments had similar goals and consolidation would improve communication. Congress never acted on Johnson’s recommendation.

The Department of Labor is a sprawling bureaucracy as one can see viewing the department’s organization chart. The department employs 17,880 employs with a budget of $49.8 billion.[iii]  The department enforces 180 federal laws and thousands of regulations covering 10 million employers and 125 million employees.  Areas of coverage include wages and hours; workplace safety and health; workers’ compensation; employee benefit security; unions and their members; uniformed services employment and reemployment rights; employee polygraph protection; garnishment of wages; family and medical leave act (FMLA); veterans’ preferences; and government contracts, grants, or financial aid.

In contrast, the Department of Commerce has 45,549 employees with a budget of  $10.4 billion.[iv]  The department is comprised of 12 bureaus that work together to drive progress in four business areas:  trade and investment, innovation, environment, and data.

Conclusion.  The Department was originally created as the Department of Commerce and Labor in 1903. The main purpose of the organization was to create jobs, promote economic growth, encourage sustainable development and improve standards of living.  In 1913, the Department split into the Department of Commerce and the Department of Labor. Since then the departments have morphed into sprawling bureaucracies that perform similar duties and tasks. As a consequence, we propose eliminating both departments while saving some agencies and bureaus into a smaller government unit.


  • Contract with a major private sector consulting firm to plan and eliminate the Department of Commerce within one year, to include a 100% reduction in force, save for the following government organizations:
    • Move the U.S. Trade Representative, the Trade and Development Agency along with the SBA, to a new streamlined Business Development Agency.
    • Eliminate all corporate subsidies from the Commerce Department, the Economic Development Administration, the Advanced Technology Program, the Export-Import Bank, the Overseas Private Investment Corporation. Eliminate programs that promote ethnic and racial quotas, e.g., Minority Business Development Agency.
    • Shift the Census Bureau, Patent Office, Bureau of Economic Analysis, Bureau of Industry and Security and the Economic and Statistics Administration to a new small agency focused on Data and Statistics.
  • Contract with a major private sector consulting firm to plan and eliminate the Department of Labor within one year, to include a 100% reduction in force, save for the following government organizations:
    • Transfer the Bureau of Labor Statistics and the Wage and Hour Division to the new Data and Statistics Agency.
    • Transfer the Pension Benefit Guarantee Fund to the Treasury Department.
    • Eliminate the National Labor Relations Board and shift responsibility for monitoring the fairness of elections to the Justice Department.
    • Eliminate OSHA, as there is no evidence that the agency has improved workplace safety at a cost of between $11 and $34 billion annually.[v]

Ten-Year estimated Savings:  $205 billion

[i] Department of Labor, http://www.dol.gov/opa/aboutdol/mission.htm

[ii] Department of Commerce, http://www.commerce.gov/page/about-commerce#mission

[iii] Department of Labor 2016 Budget Request, “FY 2016 Department of Labor Budget in Brief,” http://www.dol.gov/dol/budget/2016/PDF/FY2016BIB.pdf

[iv] Department of Commerce, “The Department of Commerce Budget in Brief Fiscal Year 2016,”


[v] CATO, Departments of Labor and Commerce, http://object.cato.org/sites/cato.org/files/serials/files/cato-handbook-policymakers/1999/9/hb106-12.pdf

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