Tuesday, September 15, 2009

The union's humble servant

"I am proud and humbled to be your humble servant as labor secretary," she said humbly.

"She" is Secretary of Labor Hilda Scolls, and the "your" she serves is the AFL-CIO.

It strikes me as unfair and unsavory that the federal government should have such an intimate relationship with labor unions. According to Wikipedia, the United States Department of Labor oversees "occupational safety, wage and hour standards, unemployment insurance benefits, re-employment services, and some economic statistics." In other words, with the exception of collecting statistics, the Labor Department exists to protect workers (mostly union workers) from their employers. I think this is unfair and unhealthy.

Calvin Coolidge said, "The man who builds a factory builds a temple, that the man who works there worships there, and to each is due, not scorn and blame, but reverence and praise." I think Coolidge has it right. The employer-employee relationship is a symbiotic, not an adversarial, one. Each benefits the other. It's a win-win.

When billions of government dollars, in addition to millions more union dollars, are set aside to favor one side against the other, it creates a hostile atmosphere. It upsets the natural balance and rigs the game. When you rig a win-win game, everyone loses. In this case, when we force employers, for example, to pay a wage or provide a benefit that is higher than the parties would arrive at without government interference, the employer responds by hiring fewer workers and by increasing prices to cover the added cost of labor. When prices go up, workers, who are also consumers, get hurt. Those who are unemployed because of the artificial hike in wages are especially hurt.

There's no question that our system tips the playing field in favor of labor. Workers are free to organize and conspire, even across industries, while employers are expressly forbidden by "anti-trust" laws from doing the same. This leads to damaging, unintended consequences, as we've seen in the auto industry, where the United Auto Workers have succeeded in securing contracts for their workers which are unsustainable and are a large reason why American car companies are in such bad shape. It's no coincidence that the failing companies are union-dominated companies.

Now, liberals are trying to rig the game even more. Democrats have begun pushing legislation misleadingly called the "Employee Free Choice Act." This act undercuts the use of a secret ballot to determine whether a workplace will be unionized. No longer protected by the secret ballot, workers will be forced to declare openly, quite likely under intimidation, their support for unionization. It's easy to see how this invites corruption into the process, and difficult to see how taking away the secret ballot offers a worker "free choice." It's telling that the legislation tosses aside the vote to create a union but still requires a vote to dissolve one. I guess "free choice" only works one way.

Another requirement of the EFCA is that if labor and management can't reach a contract within a specified time period, they would be forced into binding arbitration. The danger here is that this binding arbitration will be conducted by the Department of Labor. This creates a huge incentive for a union to simply stall negotiations until the clock has run out, at which time the DoL will step in and mandate a labor-friendly contract. For there can be no reasonable pretense or expectation that a department whose job it is to favor one side will render a fair outcome.

One is left to wonder how many other industries will ultimately fail due to the government taking sides and converting a win-win into an everybody-loses.

Update: Some good news:
Meeting with reporters, [Senator Arlen] Specter said the [labor bill] compromise would drop a controversial provision ["card check"] that would give workers the right to form unions by signing cards instead of holding a secret ballot election.
Followed by bad news:
But union leaders now indicate they are willing to drop the "card check" demands in favor of other provisions that would help unions fill their depleted ranks.
Wonder what they're up to now. One thing's made clear by this: This was never about giving workers free choice. It was about taking away their voting rights so that unions could "fill their depleted ranks."

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