Labor Pains

by Pejman Yousefzadeh on February 2, 2009

Ask a random group of people what they believe the Obama Administration’s chief domestic policy objective to be, and chances are that the overwhelming majority of them — if not all of them — will respond “fixing the economy.”

Ask a random group of people what they believe the Obama Administration’s second most important domestic policy objective to be, and chances are that most of them will respond “health care reform.”

Ask a random group of people what they believe the Obama Administration’s sleeper domestic issue to be, and you will probably get a lot of blank stares.

It’s a pity that more people are not aware of just how consequential the Administration’s labor policy activities will be. The Administration aims to implement a whole host of changes in labor policy that will radically alter the relationship between unions and employers. These policies will have a dramatic effect not just on the lives of individual Americans, but on our economy as a whole. Discussions of labor policy usually make eyes glaze over, but it is high time we paid close attention to how Washington treats this important issue. The Obama Administration is cheerfully working to craft and implement disastrous labor policies that will only serve to reward unions with greater political power at the expense of genuine workplace fairness and economic growth itself.

Any discussion of labor policy under the Obama Administration begins with the terribly misnamed “Employee Free Choice Act.” Pursuant to current law, an employer does not have to recognize a union until its employees have voted to unionize in a secret ballot. Secret ballot elections are triggered under the National Labor Relations Act when 30% of the workers at a place of employment sign cards in support of a vote. Thanks to secret ballot elections, when workers vote to unionize, we can be assured that they have not been intimidated into saying so by unions that employ thuggish violence in order to get their way in the workplace.

The EFCA, or “card check” legislation would change the law so that organizers will be able to collect public pledges of support from workers. These public pledges would involve having workers fill out cards stating that they want to organize. Once a majority return cards checked in favor of unionization, the union will gain recognition. Naturally, this most un-secret of ballots exposes those who decline to check their cards in favor of unionization to harassment and intimidation from unions, not to mention from co-workers who are either genuinely in favor of unionization or who have themselves been intimidated into supporting unionization and have been told that they ought to persuade the recalcitrant, or else.

A secret ballot, of course, prevents anyone, on either side, from unfairly influencing the voting decisions of the workers whose jobs are at stake. But try telling this to the Obama Administration, Congressional Democrats and unions themselves, all of whom argue that absent card check legislation and thanks to the current state of the law, unions have atrophied, and will only continue to be marginalized into a state of political impotence. This contention, of course, is nonsense. As James Sherk has pointed out, the National Labor Relations Board itself has unions winning 60% of the time under the current rules when organizing elections are held, thanks to the fact that present law actually favors unions when it comes to organizing elections. Sherk also points to findings from the Bureau of Labor Statistics showing that for the second year in a row, union membership has increased. The sob stories of union bosses notwithstanding, the unions they head are actually quite powerful and quite capable of holding their own — and then some — in maintaining and increasing their membership rolls and in winning organizing elections.

The political power of unions oftentimes crosses the line. Union leaders and members scoff at the portrayal of organized labor as an instrument and instigator of workplace violence, but the facts tell us that unions and workplace violence go together hand in glove. Reports of union skulduggery and coercion are legion and can be easily found via a simple Google search. Indeed, union involvement in workplace coercion and violence is a time-honored tradition in the labor movement and stretched back long enough in time to convince Friedrich von Hayek himself to opine on the matter and the consequences that follow from allowing unions to engage in violence and intimidation in the workplace.

Unions like to draw public attention away from the mountain of evidence behind claims of union thuggery by arguing that employers engage in intimidation tactics too. Specific to the debate concerning card check legislation, unions claim that organizing elections are adversely affected by management threats to either fire workers, or to reduce worker pay, worker hours, and the quality of worker conditions in the event that workers vote against management’s wishes when an organizing election occurs. As a result, they claim, employees do not feel comfortable voting their minds, even in a secret ballot. The fact, however, is that organizing elections are federally supervised and are not nearly as prone to abuse as unions like to suggest.

But even if we seriously entertain the argument that secret ballot elections are coercive, are we to believe that public pledge drives will be any less so? Is it really the argument of labor unions that open and notorious card checks that expose workers to opprobrium from the side they opt against will somehow be freer from violence, intimidation, and recrimination than will a secret ballot election? How many Americans would be willing to give up the use of secret ballots when voting for candidates to city, state, and national office? How many Americans would be fine with allowing the people of the community in which they lived to know of their electoral choices? How many Americans would be prepared to face the unpleasant consequences that might follow from voting in a manner that differs from the votes of some, or many of their neighbors? Unions lust for the passage of card check legislation because it would allow them to exert social pressure on communities of workers. Do we really want to give them that kind of power over the workplace?

The truth of the matter is that card check legislation is pure political payback for the unions’ help in electing Democrats to Congress in the 2006 and 2008 and for their work in getting Barack Obama elected to the White House. Of course, the payback goes beyond pushing for card check legislation. As Carter Wood reports, the President has signed executive orders that included undoing a Bush Administration executive order requiring employers to post signs stating that employees had the right to limit their financial support of unions serving as their bargaining representatives, and preventing federal contractors from being reimbursed for expenses incurred for activities that were intended to influence worker decisions on union organization and collective bargaining. Wood discovered, by going through the metadata of the new executive orders, that one of the regulations was written by Craig Becker, who was and may still be part of the in-house counsel team for the Service Employees International Union. Quoth Wood, with just the right amount of sarcasm, “Remember all those headlines from eight years ago along the lines of ‘White House lets business lobbyists write the law?’” “Pound of flesh,” indeed.

In addition to card check and executive orders favorable to unions, the Obama Administration is preparing to stack the deck at the NLRB with the nomination of Wilma Liebman to chair the board. Liebman is fanatically in favor of placing collective rights in the workplace over individual ones; indeed, she has said that “an exclusive orientation toward an individual-rights regime could have troubling political and social consequences,” because workers in an individual rights regime “may fail to grasp common economic interests and the potential of collective action at work, as well as in the public sphere.” The shorter version of this argument is as follows: “Unions good because workers dumb.” This silly premise will likely serve as the foundation of much of the Obama Administration’s labor policy. We experienced a dysfunctional NLRB during the Clinton Administration. It looks like labor policy dysfunction is about to get a four — or eight — year lease on life under the Obama Administration.

The tragedy of the Obama Administration’s resolution to rubber stamp just about everything on Big Labor’s wish list is that unions act against macro public policy interests in so many ways. Unions impose monopoly wages in favor of their members at the expense of nonunion members and the public at large. The passage of the recent Lily Ledbetter Fair Play Act has gotten a lot of feel-good coverage in the media, but as Richard Epstein shows, in essentially getting rid of the statute of limitations in employment discrimination cases, the Act encourages a new tidal wave of litigation against employers that will cause those employers to put in place expensive preventive programs designed to protect them from lawsuits, programs that will take away from employer balance sheets, the ability to turn a profit and stay in business, and the ability to hire more workers and expand. Unions are unabashedly in favor of “Buy American” provisions that only serve to dilute the benefits of free trade while angering our trade allies and isolating the United States. If the Obama Administration listened more closely to the head of its own National Economic Council, it would understand that unionization leads to long-term unemployment, and that between 1970 and 1985, states with a 20% unionization rate experienced an unemployment rate that was higher than hypothetical states that did not contain unions. And if we look to Britain, we can see just how parochial and tyrannical unions can get when they have the opportunity to exercise functionally untrammeled power at the expense of economies that depend on the free flow of goods and labor to survive.

Unions have proven themselves to be coercive to the point of violence when their interests are at stake, dangerously dismissive of individual workplace rights, and supportive of policies that retard economic growth, encourage unemployment and increase protectionism at a time when we need to liberalize trade and the free flow of labor to contend with a parlous international economic downturn. Despite all of this, the Obama Administration is making it a priority to give unions more power, not less, in the American workplace. To stop the implementation of these harmful and antediluvian actions, the American people are going to have to get a lot more interested in the details of labor policy. The very future of the American economy may depend on it.

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