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March 2009 Archives

By Diana Furchtgott-Roth

This piece originally appeared at Real Clear Politics, 3-12-09. Diana Furchtgott-Roth is a senior fellow at the Manhattan Institute.

Stock markets are near their lowest levels in years, the federal budget deficit has shot to an all-time high, consumer confidence is at a record low, the unemployment rate has been rising and hit 8.1% in February, and over four million jobs have disappeared in the past year. Yet on March 10 congressional Democrats introduced in the House and Senate the misnamed Employee Free Choice Act.

Contrary to its name, the bill's main thrust is not to widen employees' choices, but to narrow them. It eliminates the secret ballot for union elections. Under the law now, if a sufficient number of workers petition the National Labor Relations Board to join a union, the Board conducts an election--by secret ballot--to see if a majority wants a unionized shop.

The Employee Free Choice Act would allow workplaces to be unionized without secret ballots. If a majority of the employees sign a card that says an employee wants to join a union, a process known as "card check," the workplace can be unionized. This process strips workers of the protection of a secret ballot and exposes them to coercion by union organizers and leaders.

With card check, workers can check in but they can't check out. For workers to leave the union, a secret ballot would still be required. This is the height of hypocrisy--that the so-called benefits of "employee free choice" only apply to join a union but not to leave it.

Equally harmful is the bill's little-publicized mandatory arbitration provision, which short-circuits collective bargaining. If the union and the employer fail to reach an agreement on pay and benefits after 90 days of talks, the bill would require them to submit to binding arbitration, with a mandated contract that would hold for the next two years.

That requirement would be unprecedented in American labor law. It would revoke the basic principle of free collective bargaining--that employers and unions may disagree unless they voluntarily accept arbitration.

The union-sponsored bill is intended to help unions reverse a long-term decline in membership. It would harm the economy by increasing unemployment, potentially making the economies of Texas and Oklahoma look more like those of Ohio and Michigan. And, despite his talk of fiscal responsibility, President Obama has promised to sign the bill if it reaches his desk.

Chairman George Miller of the House Education and Labor Committee offered this defense of the bill: "If we want a fair and sustainable recovery from this economic crisis, we must give workers the ability to stand up for themselves and once again share in the prosperity they help to create."

The problem is that the Employee Free Choice Act, if passed, would do just the opposite. It would slow economic recovery by increasing unionization, artificially raising wages, and therefore raising unemployment. It would turn states with below-average unemployment rates, primarily in the South, into states with high unemployment rates.

What Mr. Miller is asking for American workers is less than what he once sought for Mexican workers. In a letter dated August 29, 2001, coauthored with 15 other congressmen, Mr. Miller wrote to the arbitration council in Puebla, Mexico, "We feel that the secret ballot is absolutely necessary to ensure that workers are not intimidated into voting for a union they might not otherwise choose."

Why would Mr. Miller strip American workers of that protection? With union membership declining and now at a weak 7.6% of private sector workers, building up dues-paying membership is the unions' paramount goal, despite the harm it would do to the economy.

In the 2008 election cycle, unions gave millions to Democratic candidates for Congress. Now they want to collect on their investment.

But the deep slump in the economy has eroded support for the Employee Free Choice Act among members of Congress. The bill will pass the House, even though its number of cosponsors has slipped from 230 to 223.

The Senate, however, is a different story. Whereas the bill had 46 cosponsors in the Senate in 2007, it now has 40. If the bill does pass, President Obama has said that he will sign it.

Organized labor made repeal of the secret-ballot requirement a high priority because the intrinsic rationale for unions has been weakening.

Fewer workers see the need to belong to unions because basic health and safety conditions have become standard. Many unions price their workers out of jobs, sending jobs overseas or to more efficient nonunion firms, while taking dues from members to spend on political campaigns and high salaries for union officials. Workers can see that unionized domestic auto companies, notably GM and Chrysler, are in worse shape than foreign companies with nonunion American plants, such as Toyota, Nissan, and Honda.

Nonunion firms have more flexibility to adapt to changing conditions than do unionized firms. States with laws protecting workers from being compelled to join unions saw increases in nonfarm employment of 47% over the past 20 years, double the 21% increase in states with no such worker protection.

With jobs at risk now and personal assets shrinking, people are scared. To enact a bill that is likely to make economic conditions worse would be both foolish and irresponsible.

By Michael Barone

This piece is copyright Creator's Syndicate and originally appeared 3-21-09.

The Obama administration's budget is full of proposals that threaten to weaken our staggering economy. Higher taxes on high earners and reduced deductions for their charitable contributions and mortgage interests. A cap-and-trade system that will impose higher costs on everyone who uses electricity. A national health insurance program that will take $600 billion or so out of the private-sector economy.

But the most grievous threat to future prosperity may be off-budget -- the inaptly named Employee Free Choice Act. Also known as card check, the legislation would effectively abolish secret ballots in unionization elections. It provides that once a majority of employees had filled out sign-up cards circulated by union organizers, the employer would have to recognize and bargain with the union. And if the two sides didn't reach agreement in a short term, federal arbitrators would impose one. Wages, fringe benefits and work rules would all be imposed by the federal government.

It's not difficult to see why union leaders want this. Union membership has fallen from more than 30 percent of the private-sector workforce in the 1950s to about 8 percent today. Union leaders would like to see that go up. So would most Democratic politicians, since some portion of union dues -- unions try to conceal how much -- goes directly or indirectly to support Democratic candidates. The unions and the Democrats want to put up a tollgate on as much of the private sector as they can, to extract money from consumers of goods and services.

They have already set up such tollgates on much of the public sector. In the 1950s, very few public-sector workers were union members. Today, nearly half of all union members are public-sector employees. In many states and central cities -- think California and New York City -- public-sector unions channel vast flows of money, all of it originating from taxpayers, to themselves and to Democratic politicians. The unions use that money to promote some public policies that are not obviously in the interests of public-sector employees -- restrictive trade regulations, for example, which appeal to nostalgic union leaders who would like to see millions of unionized autoworkers and steelworkers once again.

In the previous Congress, the unions got the Democratic House to pass the card check proposal and got every Democratic senator not only to vote for it but to co-sponsor it, as well. But the votes of all Democrats plus that of Pennsylvania Republican Arlen Specter were not enough then to overcome a Senate filibuster. This year, there is little doubt that Speaker Nancy Pelosi could again jam card check through the House. But moderate Democrats from districts where unions are unpopular have gotten her to spare them a vote until and unless the measure gets through the Senate.

There, its prospects are not so good, now that there is no longer a Republican president to veto it. Card check supporters have a list of 15 Democratic senators who have expressed some manner of unease about the issue. Does Arkansas Sen. Blanche Lincoln, up for re-election in 2010, really want to pass a law strongly opposed by her state's biggest business, Wal-Mart, long a target of union organizers? Do Democratic senators from right-to-work states where employees can't be required to join unions want to go along?

As for Specter, union leaders have publicly said they'll support him if he backs card check. His public response has been to hail the importance of the secret ballot and the undesirability of mandatory arbitration.

Politicians can read numbers. Pollster Scott Rasmussen reported last week that 61 percent of Americans think it's fair to require a secret ballot vote if workers want a union. Only 18 percent disagree. Congressional Democrats used to believe that themselves -- in the course of a trade debate in 2001, they urged that Mexico hold secret ballot unionization elections.

Rasmussen also reported an interesting difference between current union members and non-members. Union members by a 47 percent to 18 percent margin thought most workers want to join a labor union. But non-members believe by a 56 percent to 14 percent margin that most workers don't.

Are non-union members deluded? Why don't they want the supposedly higher wages and job protections unions purport to give them? Maybe it's because the adversarial unionism promoted by the Wagner Act of 1935 is out of date. It made some sense when employers used time-and-motion study to speed up assembly lines and squeeze the last quantum of energy out of workers and could lay off workers at will.

But today's employees have unemployment compensation and are protected by various anti-discrimination laws. There is a whole raft of employment law that didn't exist in 1935, and corporate human resources departments are disciplined by that law.

As the Detroit automakers' troubles show, the adversarial work rules insisted on by the United Auto Workers -- a relatively enlightened union in this area -- made them unable to compete in quality or cost with foreign automakers who employ cooperative management techniques and treat their workers as intelligent partners rather than as dumb animals, the way the time-and-motion study managers did in the 1930s.

Card check would give coercive union organizers the chance to impose on large swaths of the private-sector economy the burdens the UAW imposed on the Detroit automakers. It would set up tollgates to channel the money of consumers as well as taxpayers to the Democratic Party. You can see how that would be good for union leaders and Democrats. But good for America?

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.