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Brooks Wilson's Economics Blog: The Employee Free Choice Act (Repost)

Tuesday, October 20, 2009

The Employee Free Choice Act (Repost)

Labor Unions are cartels like OPEC that have been granted legal privileges by the government. They are free from taxation and antitrust law. They can compel their employers to provide property for union use and nonmembers to pay dues.

Union workers earn higher wages by limiting employment at unionized facilities, forcing others with skills similar to union workers into nonunionized jobs. The increased supply of workers in the nonunionized facilities suppresses wages. Because the union wage is above the equilibrium, there are surplus laborers, and the unions must decide who is employed and who is not. Often race was used to exclude workers from unions.

Noncompetitive markets allow unions to thrive and often governments protect them from both domestic and foreign competition. If the protection disappears, the higher wage paid to union workers also disappears, or the industries that hire them fade away.

For generations, unions have supported Democrats over Republicans. Now that the Democrats hold the White House and large majorities in both chambers of Congress, the unions are expecting advantageous legislation. The Employee Free Choice Act (EFCA) is an example.

The "card-check" provisions of the EFCA have been widely debated. George McGovern appearing in a YouTube video for explains that he opposes the bill because it takes away the rights of workers to express their preferences for representation through a secret ballot, permitting union organizers to sign-up workers through forms authorizing union representation, the "card-check."

Groups like American Rights At Work, in "Lies and Distortion on the Secret Ballot," claim that charges made by McGovern and others about taking away the secret ballot are false.
Business special interest groups have launched a $120 million campaign to derail reform of the nation's broken labor law system by lying about the Employee Free Choice Act. Their only line of attack - that the bill somehow takes away so-called "secret ballot" elections for joining a union - is blatantly false.

The Employee Free Choice Act not only strengthens the current process for workers forming unions, but also provides for a more fair and democratic method for men and women to join unions.
By clicking the link, "more fair and democratic method," in the quote above the American Rights At Work explains their differences with groups complaining of the loss of a secret ballot.
Careful Democratic majority sign-up procedures are the most effective way to determine the wishes of a majority of employees. Under majority sign-up procedures, employers are only allowed to recognize a union if a majority of employees has signed valid written forms authorizing union representation. Any employee who does not sign an authorization form is presumed not to support union representation.
They believe that the card-check is more democratic than a secret ballot and go on a length explaining why.

For the curious, I have included wording from the Employee Free Choice Act of 2007 (Engrossed as Agreed to or Passed by House), which is presumably similar to the bill that will soon be introduced in Congress. The key paragraph of section 9 dealing with card-check supplanting secret ballots reads,
(6) Notwithstanding any other provision of this section, whenever a petition shall have been filed by an employee or group of employees or any individual or labor organization acting in their behalf alleging that a majority of employees in a unit appropriate for the purposes of collective bargaining wish to be represented by an individual or labor organization for such purposes, the Board shall investigate the petition. If the Board finds that a majority of the employees in a unit appropriate for bargaining has signed valid authorizations designating the individual or labor organization specified in the petition as their bargaining representative and that no other individual or labor organization is currently certified or recognized as the exclusive representative of any of the employees in the unit, the Board shall not direct an election but shall certify the individual or labor organization as the representative described in subsection (a).
The Congressional Research Service describes this portion of the EFCA.
Employee Free Choice Act of 2007 - Amends the National Labor Relations Act to require the National Labor Relations Board to certify a bargaining representative without directing an election if a majority of the bargaining unit employees have authorized designation of the representative (card-check) and there is no other individual or labor organization currently certified or recognized as the exclusive representative of any of the employees in the unit.
There are several reasons I don't like the bill. It supports cartels, who will demand higher wages that consumers will pay for through higher prices or lower quality goods. It supplants a secret ballot with a procedure that opens union formation to intimidation, and can anybody doubt that unions would fail to utilize that tool? It takes from entrepreneurs the management of labor, and how it will interact with capital and other resources, with scant empirical support for the notion that labor is somehow disadvantaged compared to management in wage negotiation. Does anyone doubt that research and development, innovation and product quality will decline? Finally, it places the federal government at the wage negotiating table. I do not want to see a presidential or senatorial campaign centered discussing the appropriate wage that should be granted by the National Labor Relations Board. Both Democrats and Republicans would bid up union wages to win votes. Wages would be based on political power and not productivity. Does anyone really want to see the politicization of wage negotiation?


  1. This is what called discrimination they are discrimnating who have the rights to be employed by union jobs. In near future things will change due to the Democratic party because they are for the poor,discrimnation and equal rights. How passing this bill is taking away employer right so it's ok for to continue to discrimnate no it is not right and the unemployment rate will continue to grow. I feel like as long as you not a convicted felon with a bad history we should not decide who can work where.

  2. I always had the impression that labor unions helped to provide better conditions for workers. Boy was I ever wrong. Seems to me that labor unions are using bullying and intimidation tactics to keep minorities (i.e. women, africa-americans, latinos, etc.) from receiving the same privileges. Labor unions were built on the ideal of helping hard-working employees receive the treatment that they deserve.Instead they are forcing employers to look overseas for cheaper labor. This not only hurts the employees but the economy as well.

  3. Laura Brown

    No, I do not think we want to see the politicization of wage negotiation. Productivity should drive wages. In discussing the Employee Free Choice Act, I want to ask how is this "free choice"? The terms and the affects of the Act almost seem illegal or should be. I think the Unions were necessary in the past, but I don't think we need them anymore. I think Unions hurt the economy. How is it good to pay a person not to work as some do. I believe other workers and employers are hurt by unions. The unions drive up the wages and cost of labor and production in this country pricing us out of the market. Then we lose domestic production to cheaper foreign production and lose jobs and unemployment rises. With Unions you have production employees in companies that make more and have better benefits than the management in the same company. This just doesn't make any sense...maybe the Union workers are "overprotected" at the expense of everyone else.

  4. Ashley Slaughter25/10/09 9:39 AM

    I would have never guessed that Labor Unions were not a equal opportunity program. Whenever I thought of Labor Unions, I always thought of the word "unity". Although from this article I can't think of that word at all. It seems as if the idea of what Labor Unions were built on has definately took on a change for the worst. Discrimination is a horrible crime in my opinion and I can't understand why a Labor Union would want to incorporate this thinking into their program. Passing this bill will only feed into the poor unemployment rate we have within our country now.

  5. Shanikqua Webster said...
    I will say that I am very shocked about what Labor Unions have turned into. I was always under the impression that the labor union fought for the fair treatment of the hardworking workers of America. Wages should be based on productivity not political power. And I do not want to see politicization of wage negotiation.

  6. libby sullivan26/10/09 11:15 PM

    Before getting into heated debate over one aspect of current labor union policy--the politicization of wage negotiation--let's not forget where laborers stood a relatively short while ago, at the beginning of last century. No form of representation, no legal recourse for any grievance, no way of negotiating with or even engaging management, and little say in working conditions or wages. While labor unions are not perfect, it is indisputable that they radically changed each of those conditions for the better. Does anyone want to see wages based on political power or preference? Save certain politicians, of course not. However, I still say that as long as wages can be linked to productivity and labor unions can be somewhat kept in line (i.e., kept from abusing their power), the flaws in the labor union system are far outweighed by the benefits.

  7. No, I do not want to see politicization of wage negotiation. An individuals wage should not be determined by a union or politician. A person's wage should be based on productivity and human capital. I believe we should do away with unions since all unions are doing is making the unemployment situation worse than it already is. When a union is paying several people at a higher rate that means less people will get to work and drive unemployment up.

  8. No, I do not want to see politicization of wage negotiation. The wage should be determined by the labor markets and not by the union. I think union are a good tool. Although with the high unemployment rate the unions might not be the best for our economy today.

  9. Kristina Vlajnic5/4/10 10:27 PM

    I think unions were created with a good purpose in mind however that purpose totally fell apart. Unions have caused a lot of problems with unemployment and I believe that wages should be based on productivity. Also, discrimination is something I have never been a fan of and won't be.

  10. brittnie white30/4/10 8:33 AM

    Wages shouldn't be determined by politicians and the way the economy's headed it shouldn't be determined by unions either atleast until the economy starts looking better