In Which I Side With George McGovern

by Pejman Yousefzadeh on May 8, 2009

The former Democratic Presidential candidate and I probably have almost nothing in common, policy-wise. But his condemnation of card-check legislation is courageous and on-target. As McGovern rightly points out, not only does card-check legislation eliminate the secret ballot, it also imposes compulsory arbitration in a manner that incurs devastatingly bad policy consequences:

Currently, labor law maintains a careful balance between the rights of businesses, unions and individual employees. While bargaining power differs depending on individual circumstances, the rights of the parties are well balanced. When a union and a business enter negotiations, current law requires that both sides bargain “in good faith.”

In a contract negotiation, each party typically perceives the other as too demanding. But no one loses their right to contract willingly or suffers being forced to agree to anything. Employees can strike if they feel that they have been dealt with unfairly, but it is a costly option. Employers are free to reject labor demands they find to be too difficult to accept, but running a business without experienced employees is itself difficult. Both sides have an incentive to press their demands, but they also have compelling reasons not to press their demands too far. EFCA would disrupt that balance by enabling government-appointed lawyers to decide what they believe is fair or reasonable.

A federally appointed arbitrator cannot be expected to understand the nuances specific to each business dispute, the competitive market position of the business, or the plethora of other factors unique to each case. Yet fundamental decisions on wages and benefit costs, rules for promotions, or even rules for exiting an unprofitable line of business could fall to federal arbitrators under EFCA.

Many labor contracts can run over 100 pages with their requirements of each party. Compulsory arbitration is, in one sense, government dictating to employees what they will win or lose in the deal, with no opportunity to approve the “agreement.” Why should employees pay union dues to get such a contract?

My critique of card-check can be found here. Glad to see that for once, I can be allied with George McGovern.

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