LABOR POLICIES ARE KEY TO A STABILIZED ECONOMY
Phil Kerpen, contributing Editor for National Review Online, offers a concise summary of factors that led to our current economic situation: “a federal reserve that kept interest rates too low while a bubble inflated; unscrupulous lenders; people who bought homes they couldn’t afford; wall street wizards who overleveraged and wrote derivatives they couldn’t pay; and a congress that set the policy goal of universal home ownership and recklessly grew Fannie Mae and Freddie Mac to pursue that goal.” Further, Kerpen provides an important warning: “with so many real culprits out there, we cannot afford to blame the fake culprits of free trade, low taxes, and flexible labor markets. These are the fundamentals of a free economy. If we undermine them we risk repeating the mistakes that followed another financial panic and ushered in the Great Depression.” Specifically, concerning policies to allow for flexible labor markets, many economist have determined that President Franklin Roosevelt’s anti-competition, pro-union polices prolonged the Depression seven full years by creating artificially expensive products that discouraged consumer spending and artificially high wages that prevented employment from recovering. It is important today that we avoid these policy errors, not just for the sake of prosperity, but for our survival. The Great Depression, after all, did not end until the advent of World War II.
Everyone agrees that the urgent challenge confronting America today is to initiate policies that stabilizes our markets and revives our weakening economy to benefit the needs and dreams of all Americans. Unfortunately, supported by Labor Coalitions that contributed over $1 Billion to campaigns for the 2008 elections, President Elect Obama and Congressional Democrats are prioritizing policies that include the misleadingly named Employee Free Choice Act. Shamelessly promoted as at no cost to the tax payers and to ensure an economy that works for everyone, the Employee Free Choice act is built around two objectives: silence employers so that employees will only hear the union’s voice and have union representation rights determined by a “voluntary” card check, as opposed to a secret ballot election.
The employee Free Choice Act is a piece of legislation that was introduced in Congress last year that would be the most enormous change in labor law since 1935. The legislation would take away the fundamental right to vote from employees who are deciding whether or not they want to be represented by a union. Ever since the National Labor Relations Act was introduced, that has been the cornerstone of the way employees make a decision. The unions are required to file a petition with the National Labor Relations Board after getting at least 30% of a “unit” of employees (i.e. Carpenters) to sign “authorization” cards. The NLRB verifies the unit and the cards and a vote, administered by the NLRB is scheduled. A campaign period exists where both sides get to make their presentations. The employees listen to both sides and then make a decision on how to vote in a secret ballot election. Under the proposed legislation employees who sign cards would in effect be voting. No more verification of cards, no election. 51% of cards signed, the union is certified. Unions are simply running unopposed. They can use all sorts of tactics to get cards signed. Employees may be entertained, provided incomplete, misleading information about the union benefits, and work opportunities. Employees may sign cards not completely aware of the card’s significance. Under the current law there is the opportunity for more complete representation of the facts from both sides and the secret ballot election that provides employees a second chance to make a more informed decision. Under the proposed legislation 51% of cards signed and the union becomes the bargaining agent for the employees. Further, in the proposed legislation 10 days after a union is certified, negotiations must begin. Negotiations will last for an artificial deadline of 90 days. At the end of 90 days, if no agreement, mediation is introduced, the mediation process last will last for 30 days. If no agreement is reached through mediation an arbitration board is established and both sides present their sides and the arbitrator determines the labor agreement. The agreement is binding and must stay in effect for two years. Under current law the two sides meet until an agreement is reached, or not. There is no artificial deadline and only those that truly understand the company and the union’s operations are involved in the negotiations.
The fact is that the Employee Free Choice Act is not an initiative to ensure that we have an economy that works for everyone. At a time when all Americans need to truly work together and words like hope, change and bi-partisanship captured the interest of the majority of voters, the unions are brazen enough to promote this self-serving legislation as being in the interest of our nation’s economic health. It is the health of unions and their market recovery that has prompted the introduction of the Employee Free Choice Act. For years union membership has been in decline, from more than one third of America’s workforce 50 years ago to about 7.5% of private sector workers today. The lack of union organizing success is due in no small measure to the effectiveness of employer relationships with employees. Contrary to the union propaganda in support of labor law reform, like the Employee Free Choice Act, the employer/employee relationships are not based on coercion, discharges, intimidation and threats. Rather, they are grounded on positive employment practices, competitive wages and benefits, job security and educating employees on what unions are, what they can and cannot do, and what they can or cannot offer employees. Simply, when employees understand the truth about union benefits, they are happy with their current relationship and prospects for continued job security.
With the likely introduction and very possible passage of the Employee Free Choice Act it is extremely important that employers continue to develop and maintain effective programs that will create a workforce that is resistant to the appeals of union organizers that will be made in secret and, often before the employer is aware that their employees are being approached by an organizer. If the law passes there is likely to be a tremendous volume of organizing activity. Perhaps even more than the unions have people in place to manage. In effect they will be going after the “low hanging fruit.” Employers who have an “inoculation” program in place, who have talked to their employees about what is going on, what is likely to happen, and given advanced information, may be passed over. The union may not stay around trying to get cards signed if they are meeting resistance; they are going to go someplace else. Every company should also be training management and supervisors to understand the card signing process, how to identify early signs of organizing activity and make certain they maintain effective communications and relationships with employees. Under the Employee Free Choice Act if the union gets the cards signed, its over, done, you are unionized.
Employers must understand why an employee would consider union representation and neutralize the appeals of union organizers.
Wages & Benefits:
Employers must compensate employees competitively. Where employers slip up occasionally is in not doing an adequate job of determining what competitive wage and benefit levels are. Employers must be confident in the wages and benefits (including percentage of employee contribution to insurance premiums) and make certain they match up well against unionized competitors in the employment market.
Respect:
Employees must feel respected. Work related problems must be taken seriously by supervisors and other human resource contacts. Unions sell respect and employees who feel they need it are easy consumers.
Unfair Treatment:
Unfair treatment of employees by supervisors is an ever present theme in union campaigns, “hire us and we will make certain that your supervisor will not be able to do anything to you without just cause and will never be able to play favorites.” Perceptions of unfair treatment are often due to the failure of employees to understand the background or reasons for the actions taken.
Communications:
Effective communication programs are the life blood of a non-union workplace. They connect the employees to the company and give them the reasons for why things have or will happen. When the mystery is gone, suspicions disappear. There are several forms of communications, including -
- Global Communications - Broadcast to the entire company (i.e. newsletters, mass meetings),
- Small Group Communications - Day to day operational communications to work groups or teams
- Personal Communications – One-on-one communications usually between supervisors and employees.
There may be no other aspect of the workforce that will be more directly affected by changes in the law to make union organizing easier than the content and frequency of supervisory training. Supervisors must translate often difficult messages to employees and report back to senior management what is going on in their areas. Supervisors must be trained in how to effectively communicate with employees and employees should be comfortable raising concerns without fear of retaliation.
All business and a stabilized American economy are dependent on flexible labor policies that promote competitive wages and benefits, efficient work rules and productivity. The Employee Free Choice Act is not only a violation of a fundamental right, the ability to vote in a secret ballot election, but it will promote a misleading process that could result in inflationary labor policies and prolonged economic hardship for everyone. In preparation for the possible passage of this legislation all employers should make certain they are doing everything they can to create an environment that will counter the efforts of union organizers. More than ever, employer practices and the preservation of free enterprise principals and open competition are ‘key’ to an efficient, productive workplace and a healthy economy.