Follow-up on Yesterday's R.C. Blog Post

The Heritage Foundation published the following blog entry on its site this morning. It echoes my sentiments from yesterday's R.C. post regarding unions...

Will Unions, Again, Kill Our Economic Recovery?

One of the great untold stories about the Depression is that there were really two of them. By the mid-1930’s the U.S. economy was well along the road to recovery with the number of unemployed dropping from 13 million in 1933 to 7.6 million in 1936. The Supreme Court, bowing to the court packing pressure of FDR, approved the Wagner Act and the economy tanked again. The reason? National Right to Work Committee’s Mark mix explains:

“This measure, which is still the basis of our labor relations regime, authorized union officials to seek and obtain the power to act as the “exclusive” (that is, the monopoly) bargaining agent over all the front-line employees, including union nonmembers as well as members, in a unionized workplace.”

As Amity Shlaes observed in her recent history of the Great Depression, “The Forgotten Man,” within a few months after the Wagner Act was upheld, industrial production began to plummet and “the jobs started to disappear, with unemployment moving back to 1931 levels,” even as the number of workers under union control was “growing astoundingly.”

Given the reality of unions in the workplace, the law meant that efficiency and profitability were compromised, by forcing employers to equally reward their most productive and least productive employees. Therefore subsequent wage increases for some workers led to widespread job losses.

Now the left wants to enact the Orwellian named “Employee Free Choice Act” which effectively eliminates the secret ballot in union organizing elections. The Corner’s Peter Kirsanow explains what this means to average Americans like Joe the Plumber:

“The Union targets Joe’s employer for unionization. There are 100 employees in the proposed bargaining unit, so under EFCA the union only needs to convince 51 of them to sign authorization cards for the union to be certified as the collective bargaining representative for all 100.”

The Union leaders are pretty sophisticated at organizing. After all, it’s what they do. Pretty quickly they identify both the employees most receptive to unionization as well as those most opposed. Joe falls into the latter group so the Union never even attempts to get him to sign a card. In fact, since most of the pro-union employees work a different shift, Joe’s not even aware a union drive is going on.

The Union gets 51 employees to sign cards and gets certified by the NLRB as the collective bargaining representative for all employees — including Joe, who had absolutely no say in whether he wanted a union.

The Union and Joe’s employer begin negotiations but can’t get an agreement within 120 days. Under EFCA, a government-appointed arbitrator then writes the “contract”. The arbitrator puts a union security and dues check-off clause in the “contract”, thereby requiring Joe’s employer to deduct $45 a month from Joe’s paycheck and remit the amount to the union. The arbitrator also orders Joe’s employer to pay a 5% wage increase — an amount that squeezes the employer’s margin. The employer considers lay offs to avoid losses. Joe is near the bottom of the seniority list.

Under EFCA, the arbitrator’s order is binding for two years. Joe and his co-workers can’t reject it. Joe’s company can’t reject it.

Let’s review: Joe had no choice in being represented by the union.

He had no choice in paying union dues. He had no choice in accepting the arbitrator’s order that might lead to his lay-off.