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Wednesday, May 25, 2011

Crony Unionism: Private Sector

In America competition from union-free enterprises is making private-sector unionism increasingly irrelevant. Only 9 percent of union-free workers desire to become union members. The last redoubt for unions is government employment, and they are increasingly in peril even there. However, the unions are fighting back by running to politicians and bureaucrats for help. Unions needed their political cronies to enact the National Labor Relations Act (NLRA) in 1935 in order to gain any significant power in the labor market. Notwithstanding the efforts of their cronies, union power gradually waned. Now unions and their cronies are trying to discover effective strategies to reverse union decline. Here I note some of what they have done, and are doing, in the private sector.

In January the Bureau of Labor Statistics released union data that are almost all bad news for union bosses. In 2010 only 6.9 percent of people employed in the private sector were union members. In 2009 the figure was 7.2 percent. Unions now have a smaller market share of private-sector workers than they did prior to the enactment of the NLRA. Cronies to the rescue.

One union crony, Secretary of Labor Hilda Solis, is trying her best to revive private-sector unions. Her Strategic Plan FY 2011–16 promises “good jobs for everyone.” She defines “good jobs” in nine bullet points that echo union organizing propaganda. Later in the document she openly declares that “union jobs are, by and large, good jobs.” While there may be a few good union-free jobs, most union jobs are by definition good. So at least through 2016 the Department of Labor (DOL) will act as the Department for the Propagation of Unions. The principal means for achieving this fevered vision are spelled out in an accompanying document that describes a “new approach” to deploying DOL’s six “labor protection agencies” (most importantly OSHA, the Office of Labor-Management Standards, the Wage and Hour Division, and the Office of Federal Contract Compliance Programs) to harass union-free employers. With scarce resources, Solis says, DOL can only closely monitor enterprises that are “most likely” to fall short of DOL standards. Since union jobs are defined as “good jobs,” one naturally infers that many union-free enterprises will be hit hard by “labor protection” enforcers determined to increase the cost of remaining union-free.

In my March column, I discussed another union crony, Craig Becker, who holds a recess appointment to the National Labor Relations Board (NLRB). Becker holds openly pro-union, anti-worker, and anti-management sentiments. He has even written that no worker should be able to refuse to be represented by a union. Two days after the State of the Union address, wherein President Obama urged us all to seize our “Sputnik moment,” he resubmitted Becker’s name to the Senate for confirmation to a full five-year term on the NLRB. He may have a point. Like Sputnik, Becker is a relic of the socialist past. I doubt the Senate will confirm the nomination, but Obama can simply keep Becker on the Board by another recess appointment at the end of this year. As I wrote, Becker and his two sympathizers (Wilma Liebman and Mark Pearce) on the five-member NLRB are determined to impose card-check certification of unions through creative interpretation of the labor law.

They are creative on other questions as well. For example, in the Roundy’s Supermarket case the Board is struggling to find something in the NLRA that will justify allowing union organizers to trespass on private property with the specific intent of herding unwilling workers into the ranks of union dues payers. The unions are arguing that because Roundy’s allows the Girl Scouts to sell cookies and the Salvation Army to collect contributions on its property, it must also allow union organizers to sell their snake oil on its property. That argument makes Becker tingle all over.

Prosecutions and Waivers

Yet another union crony is Lafe Solomon, the NLRB’s acting general counsel. (He is “acting” because Obama couldn’t get his appointment confirmed by the Senate.) The general counsel is independent of the NLRB. His job is to investigate and prosecute alleged unfair labor practices and to supervise the NLRB’s field offices in their processing of cases. Last November voters in four states—Arizona, South Carolina, South Dakota, and Utah—adopted amendments to their respective state constitutions to make card-check union certification illegal. Solomon immediately sued all four states, asserting that the NLRA preempts state voters. Another example of Solomon’s hyperactivity on behalf of union bosses is his General Counsel Memorandum 11-04, issued in January. He directed all field offices to put default language in all settlement agreements between unions and employers which stipulates that if the employer is alleged to have violated any part of the agreement, he is to be considered guilty of all the allegations brought against him in the initial complaint that led to the settlement agreement.

Health and Human Services Secretary Kathleen Sebelius is yet another union crony. Obamacare gives her power to determine the rules and regulations that are and will be imposed in the health care and health insurance markets. Her decision-making process includes the interests of unions. For example, Sebelius has the power to grant waivers to the burdens of Obamacare to favored supplicants. Forty percent of the approximately 1,000 waivers she has granted have been given directly to unions, and many more have been given to enterprises on which unions depend for dues revenue.

Of course, Obama is the unions’ most important crony. The “structured bankruptcies” imposed by Obama on General Motors and Chrysler in the spring of 2009 were little more than egregious bailouts of the United Auto Workers Union (UAW), which put taxpayers on the hook for $60 billion. The stockholders and bondholders of those two companies were sacrificed to keep the UAW viable. GM and Chrysler had to be kept going because the majority of UAW dues payers worked there. The government seized 60 percent ownership of GM and bestowed another 17.5 percent ownership on the union. With its principal crony in charge, the UAW knows GM will be run to maximize the flow of union dues. Thanks to Obama the UAW now owns 55 percent of Chrysler. Chrysler no longer employs workers to make cars; it makes cars to employ dues-paying workers. Another example of Obama as a union crony is the $53 billion he wants to spend on high-speed rail. Because of project labor agreements and the Davis-Bacon Act, most of the people employed in this silly, wasteful, and destructive endeavor will be union dues payers.

In 2010, 36.7 percent of government workers were union members. A year earlier the figure was 37.4 percent. While government employees are only 17 percent of all employed people, government employee union members now are 52 percent of all union members. Crony unionism works in the government sector as well as the private sector. That will be the subject of my next column.

  • Charles Baird is a professor of economics emeritus at California State University at East Bay.

    He specializes in the law and economics of labor relations, a subject on which he has published several articles in refereed journals and numerous shorter pieces with FEE.