Tuesdays are EFCA Update Days

I’ll start off with a whopper today:  Both the Communist Party USA and the Democratic Socialists of America are strong supporters of EFCA.  After thinking about it, we shouldn’t be surprised, but still, it’s discomforting to see it in black and white.

Mickey Kaus, famed blogger on Slate.com, Harvard Law School Grad, and son of former Democratic California Supreme Court Justice, opined that card check is worse then originally thought.  According to Kaus, “The arbitration parts of the card check bill are so vaguely drawn that nobody knows who the arbitrators will be.  The job appears to be delegated entirely to the Federal Mediation [and Conciliation] Service.  The FM[C]S might decide to use its own employees.  It might decide to use arbitrators from the private sector selected along more traditional lines…. Since thousands of arbitrators might quickly be needed for the expected explosion of mandatory arbitration, it’s unlikely they would all be newly hired GS-12s.”  Kaus continues, “The bill would have the effect of freezing in place hierarchies and job categories both across industries and withing individual firms.  You want to start an innovative job structure that, say, collapses six gradations of pay and authority into one?  You think workers will be happier and more productive if they’re delegated authority in this more non-hierarchical arrangement?  Sorry-if the union objects, then the arbitrator is likely to uphold the old regime on the grounds that that’s the way it’s always been done (and the way everyone else does it).  A recipe for rigor mortis!”

According to economist Anne Layne-Farrar, who studied the card check system in Canada, EFCA would result in 600,000 lost jobs following every 3% gain in union membership.  With this statistic, Ms. Layne-Farrar agrees with me that EFCA will make it harder for the unemployed to find jobs.  Binding arbitration will erase the union’s desire to bargain for a contract, but rather, the union’s unreasonable demands will be the starting point for the arbitrator.  Since FMCS (i.e. the government) will likely be the arbitrators and will impose wage and benefit levels for a 2-year period regardless of the economic consequences, a neo-Nixonesque government wage and price controls on private companies is not too far away.

Another academic found that unionized companies suffer not only lower profits but lower investment in physical and intangible capital and slower growth.  According to economic  Professor Barry Hirsch of Georgia State University, unionized firms tend to lose market share to nonunionized firms, whether foreign or domestic.  Furthermore, companies can survive unionization as long as every other competitor faces the same "tax" or if markets are notcompetitive at all.  “This is why government is the only area where unionization has been growing.”

Following up on Prof. Hirsch’s analysis that unionization only works if it’s the only game in town, Professor Gary Chiason, professor of industrial relations at Clark University in Massachusetts, speculated that if EFCA passed, unions would focus on organizing low-unionization states, i.e. right to work states, making those states less attractive to businesses.  Accordingly, “it’s in Michigan’s interest that Alabama become more unionized.”  Conversely, the Mackinac Center for Public Policy believes that EFCA would likely strengthen unions in Michigan more than other states.  According to the Mackinac, EFCA is bound to lead to the establishment of unions in workplaces where union support is weaker and weaker union support in the workplace means more union opponents who would probably opt out of joining the union and paying union dues, an option that is available in right to work states but not Michigan.  for unions, there will be a strong incentive to focus on states like Michigan where they can be assured of receiving dues from all workers, even if support in the workplace is weak.  “Secondly, because card check is vulnerable to abuse, unions will be tempted to resort to intimidation to secure signed authorization cards.  Intimidation is both easier to engage in and more tempting when one has the advantage of numbers.  Intimidation tactics are also harder to resist when one cannot be sure that the powers that be will protect you.  Michigan, with its sizable number of labor officials and politically entrenched unions, is prime territory for rough recruiting methods.”  I tend to agree with the Mackinac analysis.  How about you?

The Chambers of Commerce in Right-to-Work States agree with Chaison (and not Mackinac).  Specifically, they have 181 Chambers in right to work states have banded together to urge Congress not to pass EFCA.  According to this group, “While some have suggested that businesses in right-to-work states would not be significantly affected by EFCA, nothing could be further from the truth…  Even though workers in right-to-work states do have the right to refuse to pay union dues, if the workplace is organized, they must give up their right to deal directly with their employer.  Likewise, employers would be forced to accept arbitration agreements that may impose conditions inconsistent with established business models and impede the ability to compete.”

I started this post with reminding us all that EFCA is favorable to communists and socialists, so I’ll end it with a little levity.  Last week the AFL-CIO claimed that “Union members aren’t the only ones supporting the Employee Free Choice Act.  This week in Wisconsin, Milwaukee-area business owners got together to talk about why they support EFCA.”  The AFL-CIO’s blog hypertexted “Milwaukee-area business owners,” just like how I hypertext words in this blog that you can click on for more information.  So I clicked on those words on the union’s website and was directed to the below picture.  Correct me if I’m mistaken, but there’s 7 people on a panel and only 1 person in the audience!  So much for that non-union support! 🙂

WI: Business Panel by aflcio2008.

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2 Responses

  1. Efca is good for the middle class because union members earn higher wages and enjoy better benifits. Profits have gone to the top at an increasing rate, and we see where that has left the American family. Bankrupt

  2. I do not think that the people who invested in General Motors would agree with you. Unions have not caused the problems at General Motors as much as the management who gave into the UAW’s demands to the point that General Motors had so much labor cost burden it could no longer compete. So many American families have been devistated by the job losses at the US Auto industry that I do not think anyone really believes that a Union, in and of itself, is a good idea. Those higher wages and benefits you talk about also make the company less and less competitive. This is why today only 7% of the private sector is unionized. Thirty years ago, 80% of construction in this Country was union. Now 80% is non-union. The simple fact is that the Union companies cannot compete. EFCA would just drive more companies out of business.

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