The State of the Union is good ... and getting better

As President Trump prepares to deliver his first State of the Union address, there is plenty to suggest that the state of the union is good.

Landmark tax reform that will make U.S. companies more competitive in the global market, help businesses create jobs and put more money into the pockets of middle-class families took effect just a few weeks ago. The unemployment rate is at a 17-year low and consumer confidence is just short of its highest level in the same period. Retail sales grew 5.5 percent during the holiday season — the strongest growth since the end of the Great Recession — and all signs are that consumers will continue to increase their spending in 2018.

All of this has happened on Trump’s watch — and has been a welcome relief from the eight years of economic inertia and barriers to job creation and growth since the recession. With the president set to lay out his agenda for the coming year, we hope to see him build on these accomplishments and continue to champion policy positions that help American businesses, American workers and the American economy continue to prosper.

Here are five important agenda items we hope to work with the White House on in the coming year and hope to see included in Trump’s address to Congress:

Rebuild our crumbling infrastructure
Trump and Congress need to develop a major plan to rebuild the nation’s transportation infrastructure. Retailers are among the nation’s largest shippers, moving hundreds of billions of dollars’ worth of merchandise via the nation’s ports, railroads and highways each year. But decades of underinvestment has left much of the transportation system crumbling, creating bottlenecks that increase costs and make it increasingly harder for American companies to expand their businesses. Trump has previously promised a $1 trillion plan fueled by $200 billion in federal funding intended to spur state, local and private-sector investments, and we hope to hear more details of how that plan will work.

Modernize NAFTA but don’t hamper trade
Retailers agree with the president that the time has come to modernize the North American Free Trade Agreement, which has boosted trade with Canada and Mexico for more than two decades. NAFTA should be updated to reflect today’s business environment, including issues such as digital trade. But NRF believes the priority should be to “do no harm” and that threats by the White House to pull out of the agreement should be a non-starter.

Retailers rely heavily on a global supply chain to provide Americans with affordable products, and we have been deeply concerned by Trump’s protectionist statements, including his threats over NAFTA and his rejection of the much-needed Trans-Pacific Partnership. It’s worth noting that his concern is focused largely on the trade deficit, which has been partially driven by decades of tax policy giving U.S. companies an incentive to book profits overseas or establish operations in other parts of the world. Under tax reform, those rules have changed, and the trade deficit may look significantly smaller when the numbers are recalculated and factors such as digital exports are considered. We would urge the president to look carefully at those revised numbers before erecting any new trade barriers — he may find less cause for alarm. Moreover, it would be a grave mistake to undermine the numerous economic benefits of tax reform by needlessly provoking a global trade war that would cost consumers more and slow job creation.

We have a good story to tell. Imports support more than 16 million U.S. jobs, including nearly 7 million in retail and restaurants alone, and trade goes far beyond retail merchandise — imported parts are vital to many “made in America” products, while many “foreign made” products support a wide variety of U.S. jobs in design, marketing and other fields.

Base immigration on merit
We also agree that immigration policy should be based on merit, although proposed caps for visas may be too low. But we believe policymakers should think broadly about what merit means. Merit certainly includes the best and brightest regardless of national origin. But a willingness to work hard and a strong entrepreneurial spirit are also true-blue American values that should qualify lower-skilled workers from the poorest parts of the world for inclusion in a merit-based system. At the end of the day, U.S. immigration policy must be guided by a principal of inclusion, not exclusion.

Don’t discourage job creation
Whether native-born or immigrants, workers need to find jobs. And the government needs to refrain from erecting roadblocks that keep American companies from creating jobs. We were pleased, for example, to see the Trump Department of Labor set aside Obama-era plans to more than double the wage threshold for exemption from overtime rules and instead begin looking at a realistic approach to overtime that will be better for employers and workers alike. And we were also pleased to see the National Labor Relations Board reverse itself on rulings that allowed the creation of “micro unions” and exposed employers to more lawsuits over labor disputes by expanding the definition of “joint employer.” We hope to see the board also reverse its Obama-era ruling allowing “ambush” union organizing elections.

Make Obamacare more manageable
Despite repeated attempts at repeal, Obamacare remains the law of the land. But until that changes, Congress and the administration need to work on making the law more manageable. If nothing else, the definition of “full-time” when determining which workers must be provided with coverage should be restored to the widely accepted standard of 40 hours a week rather than the 30-hour threshold that has forced companies to cut back many workers’ hours.

Many of the policy decisions made in Washington come down to one issue — jobs. And retailers care about jobs because we are the largest private-sector employer in the nation, supporting one out of every four positions, or 42 million workers. Our industry is constantly growing, and we strongly support policy initiatives that support job growth, both in retail and the industries that provide employment for our customers.

In the past year, Washington has brought American families lower taxes, reduced regulatory burdens for American businesses and encouraged job creation for American workers. We hope that this is a sign of what lies ahead.