LaborPains.org

Yesterday, Hawaiian Governor Linda Lingle vetoed House Bill 952, the state version of card check.

Like it’s ugly older sibling, the Hawaiian version of EFCA would “have taken away the right of workers to vote by secret ballot on whether or not they would want to join a union, replacing it with authorization cards. … [I]f a majority of a company’s workers signed the cards, the union would automatically be recognized and free to bargain with management.”

Gov. Lingle vetoed the bill along with four other bills and issued a statement:

“It is important that government not send the wrong message to employers and not make it harder or more expensive for them to keep and retain good staff,” she said in a statement. “In addition, it is important for government to respect the rights of employees who are in the work force.”

We won’t know exactly what happened at yesterday’s closed-door meeting between President Obama and the dozen top labor bosses, but based on various accounts from the gathering, it doesn’t appear as if the White House is too eager to throw its political capital behind EFCA.

President Obama said - as expected – that he still supports EFCA, but “did not offer any timeline.” Not the exact answer that the labor bosses wanted to hear, considering it is their top priority. Responses from labor bosses emerging from the meeting left much to be desired:

UAW Secretary-Treasury Elizabeth Bunn attended the meeting instead. She said it was a “great” meeting but declined to elaborate as she exited the White House.

Here’s the list of attendees (h/t ABC News). I can only imagine what the tension was like between the warring labor bosses who had to make niceties and sit next to each other:

• Change to Win Chair Anna Burger
• AFL-CIO President John Sweeney
• National Education Association President Dennis Van Roekel
• Service Employees International Union President Andy Stern
• United Food and Commercial Workers President Joe Hansen
• Laborers International Union of North America President Terry O’Sullivan
• International Brotherhood of Teamsters President Jim Hoffa
• American Federation of State, County and Municipal Employees President Gerry McEntee
• American Federation of Teachers President Randi Weingarten
• United Auto Workers Secretary-Treasurer Elizabeth Bunn
• United Steelworkers President Leo Gerard
• International Brotherhood of Electrical Workers President Ed Hill
• Communication Workers of America President Larry Cohen
• American Rights at Work Chair David Bonior

Overstock.com CEO Jonathan Johnson warned of EFCA’s consequences on business, focusing on the harmful effects of binding arbitration:

“The government should make it easier for people to get hired, not harder,” Johnson said. “Binding arbitration says to me we are going to have federal agents come in and determine what the labor contracts are going to be.”

The end result of binding arbitration would be the “nationalization of small businesses by the federal government,” he said.

Johnson raises a troubling point with binding arbitration. And it’s entirely valid if you think it through. If federal bureaucrats are called repeatedly (which is likely since why would any union negotiate in good faith if they know they can get what they want through binding arbitration) to dictate the terms of how a business should be run, a standard will likely emerge, resulting in what Johnson refers to as the “nationalization of small businessed by the federal government.”

Johnson said draconian measures like EFCA weren’t necessary for businesses with good standing, citing his own employees as an example:

“We feel that by empowering employees and treating them well, they treat our customers well,” he said. “One example is last year my senior executives came to me and said they didn’t want a bonus so that rank and file employees could get a bonus.”

But Johnson warned that passing EFCA would do irreparable harm to the business climate and their operations, which could very well lead to increased outsourcing:

But if a law like card check were to pass, Overstock.com would probably begin to outsource as much work as possible.

“From our experience dealing with unions is not a deal worth doing and I’d rather deal with a third party in a business relationship, rather than a union that’s in a strong arm position.”

Sorry I’m a little late on this one, but last weekend The Wall Street Journal featured an op-ed by Shikha Dalmia’s, which focused on the negative effects of binding arbitration. Dalmia’s research provides compelling arguments against the measure by utilizing examples of how binding arbitration has hurt state economies like Michigan and Massachusetts.

Michigan has suffered from passing a  nearly-identical version of binding arbitration, so much that even its original author regretted his decision and role:

In 1969, the Wolverine State embraced a form of compulsory arbitration nearly identical to the one proposed in EFCA to resolve disputes with its police and firefighters. Years later, Detroit mayor Coleman Young — who had authored the original law as state senator — rued what he had done. “We now know that compulsory arbitration has been a failure,” he lamented to the National Journal in 1981. “Slowly, inexorably, compulsory interest arbitration has destroyed sensible fiscal management and has caused more damage to the public service than the strikes it was designed to prevent.”

Dalmia argues that binding arbitration helped push local governments into bankruptcy:

Compulsory arbitration also nudged other Michigan cities, including the working-class towns of Hamtramck and Highland Park, into bankruptcy. In 1999 an arbitration panel awarded Hamtramck police officers $2.1 million in pay raises and back pay, pushing it into state receivership. Under receivership, which is only used in extreme situations, the state government takes over the city’s finances and appoints its own manager to run the city. Hamtramck was ultimately forced to impose a combination of service cuts and tax increases, all of which accelerated the exodus of its residents. Highland Park, wishing to avoid similar arbitration, gave its public safety officers raises it couldn’t really afford and was also forced into receivership.

Research from a 2006 task force backed by MI Gov. Jennifer Granholm showed that binding arbitration also increases the cost of local government:

A 2006 task force convened by Gov. Jennifer Granholm, who supports compulsory arbitration, found that local government costs in arbitration states are 3%-5% higher compared to nonarbitration states. “While small in percentage terms, the impact in dollar terms is huge,” the task force concluded. Given that local governments in Michigan alone spend over $23 billion annually, this works out to over a billion in extra spending for them.

Dalmia raises another interesting historical factoid; former MA Gov. and 1988 Democratic presidential candidate Michael Dukakis oppposed binding arbitration:

Former Massachusetts Gov. Michael Dukakis also tried to limit public-sector compulsory arbitration during his first term. In 1977, Mr. Dukakis argued that compulsory arbitration “has removed legitimate management prerogatives in the area of staff assignments, (and) transfers from the control of municipal officials at a time when they are under severe pressure to improve their management and make savings.” Mr. Dukakis failed to stop compulsory arbitration, but two years later Massachusetts voters approved a ballot initiative that effectively scrapped it.

Dalmia concludes her piece with a succinct case against binding arbitration and EFCA:

In a dynamic economy, a business’s survival depends upon its ability to constantly cut costs and innovate. But a company forced into binding arbitration will be frozen for two years (the duration of the initial contract) from making any changes to any aspect of its business that is covered by the contract. Literally every issue — from its 401(k) contributions to its reliance on outside labor — could potentially become subject to review by a government panel that has neither the company-specific knowledge nor the incentive to turn a profit.

Businesses are not the only losers in compulsory arbitration. Currently, any contract negotiated by union officials has to be ratified through a vote of rank-and-file members. Under compulsory arbitration, workers do not get this vote. In other words, EFCA will take away the right of workers to vote to form a union, and then binding arbitration will take away their right to vote on a contract.

The only clear winners under this law would be the union bosses, who will obtain new powers without any new accountability. If Michigan’s experience suggests anything, it’s that rank-and-file workers, businesses, and the American economy will suffer.

The New York Times has a good article summarizing labor’s nasty infighting, which I have covered over the past few months. It’s worth reading in order to get a broader perspective on how extensive the union disputes have been.

The article makes it clear that much of the conflict stems from, like the union push for EFCA, a desire for power:

For the most part, the battles don’t involve grand philosophical differences, as many labor union disputes have in the past. Instead, they often reflect power struggles, with some unions jockeying to take others’ members at a time when unions are having a hard time gaining members at companies that are not organized.

The article highlights the numerous skirmishes, battles, and outright wars that unions have fought against each other:

The feuding has taken many forms: intraunion, between unions and by several unions joining forces against another union.

Obviously, the UNITE HERE civil war comes to mind:

For instance, five years after the nation’s main apparel union merged with the hotel and restaurant employees’ union, the combined union, Unite Here, erupted into a civil war. The apparel workers’ president, Bruce S. Raynor, declared the merger a failure and asked for a divorce, saying “we can’t be held captive by a bunch of thugs.” The merger was supposed to produce more organizing, but he complained that it was producing less, despite stepped-up spending on organizing.

Opposing the divorce, the head of the hotel workers’ side, John W. Wilhelm, insisted that the merger was a success and lambasted Mr. Raynor, asserting he wanted to undo the merger because he was a dictator who was losing a power struggle.

With Mr. Wilhelm blocking a split, more than 100,000 members of Unite Here broke away and merged into the Service Employees International Union. Soon the service employees were spending millions to persuade members of Unite Here to quit and join them. And soon after that, Mr. Wilhelm was accusing the service employees of a heinous labor sin, raiding another union to steal members.

And then there is the SEIU battle against the NUHW in California, where the SEIU sent more than 500 organizers to squeeze out a 233-vote margin win against the dissident union:

Mr. Stern is also engaged in an all-out battle with Sal Rosselli, the former president of a union local representing 140,000 health care workers in Northern California. After Mr. Stern ousted him and other leaders, accusing them of financial misconduct and defying the parent union, they founded a rival union. Denying any wrongdoing, they said they were expelled because they were fierce critics of Mr. Stern.

This spring, the service employees dispatched more than 500 allies to Fresno, Calif., at great expense, to help persuade 10,000 home care workers there not to join the rival union. By a narrow 233-vote margin, they agreed to remain in the service employees. Now come similar secession battles in San Francisco and Sacramento.

And of course, who could forget the other labor bosses’ choice words for Andy Stern and the SEIU? Based on this article, it appears the SEIU has managed to find itself in the middle of almost every union conflict:

“The S.E.I.U. is trying to hijack our union,” Mr. Wilhelm said. At the Unite Here convention last week, Mr. McEntee denounced the service employees for “piracy,” and Vincent J. Giblin, president of the operating engineers, called Mr. Stern, of the service union, the “Darth Vader of the labor movement.”

“Every division in the labor movement seems to have Andy Stern’s fingerprints on it,” said Leo W. Gerard, president of the United Steelworkers. “Andy ought to start working for unity and not division.”

With the level of attacks, smears, and tactics we’ve seen from the unions fighting amongst themselves, no wonder Americans won’t support EFCA. Why would anyone want to make it easier to join a union if this is what their dues from their hard-earned paychecks would go towards?

Labor’s scrambling to point out that Pope Benedict XVI “supports” card check:

Labor groups said the Roman Catholic Church leader’s new encyclical, “Caritas in Veritate” (“Charity in Truth”), released this week “supports the principles of [EFCA].”

Of course labor bosses aren’t in a hurry to tell people that Pope Benedict did not say anything about eliminating the secret ballot, and for good reason: the College of Cardinals famously elects the Pope through secret ballot. EFCA, as we all know, effectively eliminates the secret ballot for workers.

I did a quick search to find out exactly how secret ballot elections work in the Vatican:

The pope is elected by write-in vote on a secret ballot. Each cardinal is given a small rectangular ballot with the Latin words Eligo in Summum Pontificem, “I elect as supreme pontiff,” printed at the top. He silently indicates his vote by writing a person’s name with a pen below those words.

After writing his vote, the cardinal folds the ballot twice, holds it in the air, and carries it to the Sistine Chapel’s altar. He declares aloud, “I call as my witness Christ the Lord who will be my judge, that my vote is given to the one who before God I think should be elected.” He places his ballot on a paten (plate) that is resting on a chalice (cup), then uses the plate to drop the ballot into the chalice. He bows before the altar, then returns to his seat. The use of the paten and chalice for this purpose is significant in two ways: they are the vessels used to serve the sacred bread and wine in Mass and using the plate makes it hard for a cardinal to cast more than one ballot.

Maybe the unions will convince Dan Brown in his next thriller to write about how big business conspires to intimidate and harass the cardinals before they vote.

Richard Trumka, most likely the next president of the AFL-CIO, hinted that he will be a more militant and aggressive labor boss than his predecessors. Well, that’s a tough bar to clear, so it’ll be interesting to see what exactly the current AFL-CIO secretary-treasurer has in mind. I’m particularly curious to know what “innovative techniques” consists of:

“Here’s the deal,” the 59-year-old Trumka said. “For employers who want to work with us and want to work with workers, we’ll be the best friend they ever had. For those that want to abuse people, take benefits away, jettison retirees, then we are going to do everything in our power to stop that from happening.

“And we will use innovative techniques.”

If history is a guide, Trumka’s “innovative techniques” will certainly be interesting fodder for the media. But I suspect that people are more interested in finding jobs to pay the bills and put food on the table than staging media spectacles that will inevitably draw scorn and ridicule:

Hints may be visible in how the third-generation Pennsylvania coal miner harnessed civil disobedience and other tactics of the 1960s-era civil rights movement in leading successful strikes against the mining companies in the 1980s — sit-ins, blockades of roads, mine occupations, picketing of corporate headquarters, and ensuring media coverage of police dragging away protesting miners.

These types of tactics will only hasten the unions’ decline. As I said in the article, “in years past, people could name union leaders like Walter Reuther and Samuel Gompers. Sweeney and Trumka have followed the unions in their gradual descent.”

Was anyone shocked by this? Senator Al Franken’s (D-Minnesota) first co-sponsored bill was EFCA. It only took six hours after his swearing-in for Franken to announce that he had co-sponsored the bill:

“As of about a half an hour ago, I became the co-sponsor of my first piece of legislation in the Senate,” Franken told a gathering at the AFL-CIO headquarters this evening. “And it’s something called the Employee Free Choice Act.”

Franken, of course, had good reason to make EFCA his first bill:

Franken, a member of four unions, also told audience members that their support was crucial to his 312-vote win over ex-Sen. Norm Coleman (R).

“It is more than fair to say that if it hadn’t been for you, I wouldn’t have won,” Franken told the cheering crowd.