I Changed My Mind on Employee Free Choice

Berkeley is filled with bumper-stickered cars. One of a Berkeleyite’s favorite hobbies is telling everyone what his socio-political opinions are by declaring them on the bumper of his car. That car is most likely either a Toyota Prius (with its increased gas mileage, it saves the planet) or the Subaru Outback (which not only gets good mileage, but every model has all-wheel drive: great for the Berkeleyite’s frequent trips out to nature).

One of my favorite bumper stickers is: “Unions: The folks who brought you the weekend.” And it’s true. In this country, we can thank labor unions for a lot of the things we take for granted today in our jobs. Before labor unions, there was no redress for employees who were working long days in unsafe conditions. Upton Sinclair’s 1906 novel The Jungle was supposed to be about the horrible working conditions that slaughterhouse employees had to endure, but as Sinclair famously said, “I aimed at the public’s heart, and by accident hit its stomach.” The Jungle is famous not for its exposure of deplorable working conditions, but for its graphic depiction of unsafe food preparation.

It wasn’t until 1935 that Congress passed the National Labor Relations Act, which affirmed government support of unions, collective bargaining, and placing restrictions on what employers could do. At the turn of the century, businesses viewed unions with a combination of suspicion and disgust. Unionizing was socialism, and socialism was antithetical to the United States and its tradition of capitalism. Eventually, though, the country grew up and realized that the employer-employee relationship was hideously skewed in favor of the employer. In an industrialized economy — that is, an economy where people work for others instead of themselves — employers have tremendous power to enhance or destroy the lives of employees by hiring or firing them. And because an employee is a single person, he has little recourse when faced with the considerable power of an entire company.

Enter the union, the job of which is to leverage the power of all the workers in a firm against the firm, should it become necessary. Unions today enter into legally-binding agreements with firms. These agreements specify things like benefits and wage rates. When a union agreement is about to expire, it needs to be renewed. At this time, the union and the management each tries to re-negotiate the contract to get the best deal. If the two sides don’t come to an agreement by the time the contract expires, then the union members go on strike. They will refuse to work without a contract specifying exactly what their benefits will be.

But you’ve got to have a union first. According to Robert Reich, formerly Secretary of Labor in the Clinton administration and now a professor of public policy at the University of California, Berkeley, 1/3 of working Americans belonged to a union in 1955. In 2009, only 8% of workers belong to a union. Part of this trend has to do with the loss of manufacturing jobs in the United States. But even this doesn’t entirely explain the decline in unionization: Toyota, the most profitable auto manufacturer in the world, is a non-union shop. Its workers are not unionized, but they have good wages and benefits. Toyota is a benevolent employer. Wal-Mart is quite the opposite. Its workers make a little above minimum wage and they largely have no benefits. Wal-Mart is famously and virulently opposed to unions, engaging in practices that, if pursued by the National Labor Relations Board (NLRB), would probably be prosecutable in court. Wal-Mart has closed entire stores rather than suffer the possibility of unionization. We cannot always rely on the benevolency of employers in order to get good wages and benefits — hence the existence of unions and a national framework that supports them.

I have written before about the current process of unionization, as have other Demockracy writers, and I will not go into it here. Again, we come around to the Employee Free Choice Act (EFCA), which would augment the current system of union creation. Again, I have before explained how it would work. In my previous pieces, I came out against EFCA because it does not have a secret ballot. How, I said, can we get an accurate assessment of whether or not people want to unionize without a secret ballot? I neglected another factor: employer pressure between the initial petition and the actual election. During this period, which usually lasts between 30 and 60 days, employers dramatically increase pressure on employers not to form a union. This pressure can vary from the benign (”workshops” in which union-busters explain to employees why unions are actually bad for them) to the criminal (openly threatening employees with termination if they join unions). Starbucks was found guility of the latter when it fired some employees at a Manhattan store who tried to unionize.

It is this pressure period that causes the disparity we see between the numbers in the initial petitions and the actual elections. An apocryphal 1989 AFL-CIO organizing document declares that, according to its statistics, 75% of employees at a firm need to sign the intitial petition in order to get 51% in the final election. There has not been a study (that I have access to!) that examines the causality of this phenomenon. It could be attributed to peer pressure; that is, when employees’ names are visible, employees will say they want to unionize, even when they don’t. In the privacy of the secret ballot, they are free to vote against the union. But there is another possibility: that employees really do want to unionize, but after two months of propaganda and open threats, employees decide that they don’t want to unionize, after all, due to the possibility of losing their jobs. We have no way of knowing what employees truly want, since there is no test we have that is free from bias, whether from the employer or other employees.

Even though it’s illegal for an employer to fire — or even threaten to fire — an employee for unionizing, it happens routinely. As is pointed out in this sourcebook on EFCA from the UC Berkeley Center for Labor Research and Education, employers treat NLRB fines (the punishment for violating labor law) as just another operating cost. They will gladly fire employees and then pay the fines, since, in the long-term, paying the fines is cheaper than dealing with a union. Fortunately, one of EFCA’s provisions is to increase the penalties for violating labor law, but even then, the fines are still not so large that the world’s large anti-union companies — Wal-Mart, Starbucks, and Whole Foods among them — cannot write those fines off as operating costs and call it a day.

The only way to forestall those threats is to allow union creation immediately, which is the point of EFCA. It assumes that the initial petition is the gold standard for union desirability and declares that, if a majority of employees state on the petition that they want to unionize, then a union is immediately formed. This way, employer interference in the unionizing process is minimized.

Contrary to anti-EFCA propaganda, the legislation does not “eliminate” the secret ballot. If a union petition garners greater than 30% but less than 50% of employees’ approval, then the secret ballot process is initiated. EFCA does only what makes sense: namely, if at least half of the employees in a firm support a union, then the union is created. The in-between time is often useful only for anti-union employers, who will use the time either to persuade or to threaten.

So, I’ve totally changed my opinion of EFCA. All else equal, making union formation easier is not a bad thing.

The Case for the Obesity Tax

Recently, New York Governor David Paterson promoted a plan for legislation that would have levied a 15% tax on sodas and other drinks with high sugar content and containing less than 70% fruit juice. Proponents of the ‘Obesity Tax’ argued that the measure would help reduce the prevalence of obesity in New York State. The revenue generated was to be reinvested into public health programs and obesity prevention measures. Citing the success of other similar public health initiatives, including anti-smoking measures such as hefty sales taxes placed on the purchase of cigarettes, supporters were optimistic that this policy would have comparable effects in terms of reducing the consumption of soda and other high-sugar beverages, particularly in children.

Responses to the proposed ‘Obesity Tax’, however, were mostly negative and likely compounded by the Governor’s current negative approval ratings. The tax faced opposition from individuals, associations, and other organizations, including the New York State Restaurant Association and the National Restaurant Association. Disapproval took the form of the expected outrage over legislation which would dictate personal habits and beliefs that the ‘Obesity Tax’ would prove to be an ineffective public health measure. Others felt that, in contrast to successful cigarette taxes that have progressively increased the price of cigarettes by larger margins, a 15% tax on soda would fail to produce any changes in consumption. This latter criticism helped paint the Governor’s legislation as merely a disingenuous attempt to meet New York State budget shortfalls under the guise of a compassionate public health policy. And maybe that is exactly what it was, as the Governor recently performed an about face and replaced the “Obesity Tax” and other revenue measures with money from the federal stimulus package.

Yet the current political climate and unpopular governors notwithstanding, there is a larger point that can be gleaned from this debate. Public health measures that attempt to dissuade unhealthy behavior, whether through consumer tax or mandatory disclosure of nutritional information, are economically, politically, and morally justified. In addition to the promotion of healthy individual living, the basic goals of public policies like the ‘Obesity Tax’ include decreasing both the incidence of chronic illnesses and the amount spent on health care treatment for preventable diseases. In fact, as I will discuss below, reducing health care expenditures on the treatment of preventable chronic diseases should be a critical element of any plan aimed at improving the current health care system in the United States.

Independent of political, geographic, or economic backgrounds, many will agree that one of the tenets of improving the quality of and access to health care in United States is a decrease in rising health care costs. Health care spending has been trending upward and now makes up 17% of US GDP. This rise in spending is not necessarily problematic, particularly if it coincides with an increase in the total number of people receiving health care coverage. However, the percentage of individuals receiving health care benefits in the United States has been moving in the opposite direction. There are many contributing factors to this rise in health care spending, including, medical liability costs and superfluous medical procedures, an aging population, and an increase in the incidences of (and, hence, resources allocated to) chronic disease.

The rise in health care spending for chronic illness is staggering and can be attributed to just a handful of conditions. Although the scientific data varies, one study by Kenneth Thorpe, PhD, Chair of the Department of Health Policy and Management at Emory University and former Deputy Assistant Secretary for Health Policy in the Clinton Administration, found that just five medical conditions accounted for a 31% increase in health care spending in a period spanning from 1987 to 2000. All five of these – heart disease, pulmonary disorders, mental disorders, cancer, and hypertension – are conditions associated with obesity. Furthermore, a related study found that an increase in the prevalence of obesity accounted for a 12% growth in health care spending during a similar time period. It stands, then, that any public health policy attempting to reduce the prevalence of a chronic health condition – especially obesity – should be granted serious consideration. The policies’ potential benefit of reduced spending on preventable conditions is economically and morally compelling since resources could be redistributed to efforts such as improving access, quality improvement, and patient safety. Bearing these potential benefits in mind, critics of the ‘Obesity Tax’ should shy away from criticism based on futility and aimed at legislative defeat and instead focus on removing potential roadblocks, pitfalls, or imperfections within the policy in order to facilitate the policy’s desired outcomes.

Overall, despite the political realities surrounded Governor Paterson’s proposed tax, decreasing the amount of health care spending on preventable chronic conditions is required if current efforts at health care reform are to achieve goals such as raising the number individuals with affordable access to health care and improving the overall quality of care. Ideally, a measure such as the “Obesity tax” would reduce the cases of preventable chronic disease and contribute to the diversion of limited resources away from the treatment of preventable chronic disease to other critical areas, thereby making health care more cost effective and efficient. While Governor Paterson’s “Obesity Tax” as written may or may not effectively achieve these goals, as long as public health measures such as this one have reasonable and shared objectives – in this case, a decrease in health care spending through a reduction in overall obesity – criticism should be more constructive and aimed at improving a specific policy’s effectiveness rather than merely defeating it in the name of narrowly defined interests. We should not be satisfied with defeating a public health policy that has a laudable goal, but rather in ensuring that a public health policy effectively works to achieve that goal.

Obama’s Progressive Street Cred

The selection of Rick Warren for the invocation at Barack Obama’s inauguration is troubling, to say the least. Many progressives are rightly outraged at the selection of a man who is virulently anti-choice and homophobic. Yet, this is only the latest in a series of Obama decisions that has left many progressives wondering who it was, exactly, they voted for. Apparently, “change” looks a lot like the Clinton administration. Rahm Emanuel is back. So is Eric Holder, formerly Deputy Attorney General. Most conspicuous of all, Hillary Clinton will be Secretary of State. A bevy of liberal-but-not-quite-progressive apologists have tried to explain away all of Obama’s decisions. Here is a list of some of their justifications:

• Obama is pursuing Abraham Lincoln’s “team of rivals” approach. Authors of this justification also cite Lyndon Johnson’s phrase: it’s better to keep one’s enemies “on the inside, pissing out” rather than “on the outside, pissing in.” By keeping his enemies in the White House, those enemies are not in Congress or on K Street trying to defeat his plans.
• Remember how we all said for six months that Obama’s qualifications don’t matter? Not so much. As such, he’s surrounding himself with a group of people who have experience working in a presidential administration, and the last Democratic presidency was Bill Clinton’s, so it only makes sense that he would choose people from there.
• Obama is sneakier than he seems (think I, Claudius, I suppose). He’s putting a lot of center-left (and, in some cases, center-right) Washington establishment politicians in key positions to pay lip service to that establishment. Don’t worry, it’s only a front. The real reforms are going to happen, but from behind a veil of mainstream non-reform. That’s the only way he can get things done down there.
• Obama does not want to continue the divisive politics of George W. Bush. Even though it might anger those on the hard left, Obama would rather heal and reconcile than punish.  Turn that cheek!

Some of these justifications are disturbing. The last one, that Obama should be conciliatory instead of punitive, is put forth by people who believe that the crimes of the George W. Bush administration should not be investigated. The country needs to heal, they say. It’s time to get on with the business of the United States, where “business” is defined so as to exclude investigations of the previous administration. Of course, this logic ignores the fact that the law has been broken. As Glenn Greenwald has observed, politicians are more than ready to throw the full force of the law at marijuana dealers, but when it comes to prosecuting their own, politicians are equally ready to be lenient, even though the marijuana dealer harmed no one and the politician may have, oh, I don’t know, been responsible for torture, extraordinary rendition, and warrantless wiretapping at the least. When crimes are committed, they should be investigated and prosecuted – not just for poor people, but for everyone, including politicians. For Barack Obama to suggest that Bush administration criminals should go free is to suggest that politicians live in a special class above the reach of the law. It also encourages more illegal activity in the future, once it is known that the government won’t prosecute those activities.

Furthermore, it’s not even up to Barack Obama to decide what is or is not investigated. The cult of personality surrounding him is great (in fact, it contributed to getting him elected), but even though we like him we must not forget that, as the president, he has constitutional limitations. It was irresponsible for the media to even ask what Barack Obama thought about Joe Lieberman being kicked out of the Democratic caucus. On November 5, Obama’s life as a senator ended, even though he didn’t officially resign the position until three weeks later. The president has absolutely no say – none! – in the operation of Congress. It would be different if Obama were acting in his capacity as a senator, but after winning the presidential election, especially in a nation eager for a new leader, any notion of Obama acting solely in his capacity as a senator would be extremely naïve. Obama must repudiate the unconstitutional powers that George W. Bush has claimed for himself, either through complete fabrication or malicious misreading of constitutional law.

Given his opinion of things like same-sex marriage (he tactfully says that same-sex couples should not be allowed to “marry” as such, but then says that they should have the same rights as heterosexual couples), NAFTA/CAFTA, and Israel, no one could confuse him for a true progressive. Obama’s apologists rationalize his decisions by pointing out that Obama never claimed to be a progressive at all!

Or could they? George W. Bush’s method of saying-without-saying is well-documented. While he never explicitly said that Saddam Hussein was behind the September 11 attacks, there is definitely a reason why, in 2001, virtually no Americans thought Saddam Hussein was responsible, but in 2003, one third of Americans thought Saddam Hussein was responsible.

Could it be that Barack Obama, whose campaign P.R. was spectacular, performed the same saying-but-not-saying function? Yes, it is entirely possible that Obama clothed himself in the cloak of progressivism while still wearing the mainstream Democrat’s clothes underneath. He has suggested massive new spending on entitlement programs, but he wants to increase the size of the military. He wants to let the Bush tax cuts expire, but he voted in favor of retroactive immunity for telecommunications companies that assisted the administration in warrantless wiretapping. His foreign policy goals consist of using real diplomacy instead of threats, but he voted in favor of NAFTA. He wants to provide government health care for people who have no health care, but he stops short of suggesting a universal-payer system like Canada’s or Great Britain’s. Obama’s positions are a wash: for every progressive-sounding idea, there is another conservative-sounding one to balance it out.

Or, on the other hand, it could be that Obama never suggested anything, but that he was forthcoming about his non-progressive credentials. It could be that we, the progressive Americans, were so thirsty for a change that we latched onto the only candidate (outside of Dennis Kucinich) who even brought up the issue of health care reform (at those early Republican primary debates, not a single candidate brought up the issue of health care), social reform, and getting out of Iraq (Hillary Clinton and John Edwards failed on at least one of these). We projected onto him the candidate we wanted him to be, ignoring the fact that he was not that candidate. Did we set ourselves up for disappointment? Yes, that is possible, too.

And then there’s the argument that all this complaining is pointless, that Obama isn’t even the president yet, and we should all just wait and see what happens on Jan. 20. Well, Rick Warren will happen Jan. 20, and that gives me even less optimism that, at noon on that day, Obama will suddenly throw aside his centrist mask and shout, “You fools! You thought I was just like Bill Clinton! But you were wrong! Free health care for everybody!” Agreeing to take part in Warren’s Saddleback (which sounds dangerously like “bareback”) debate with John McCain, Obama could conceivably have been seen as paying lip service to evangelical Protestantism, just like every president since Nixon has had to do. But putting Warren on the bill for Inauguration Day? Imagine if George W. Bush had hired Hillary Clinton to give a speech at his second inauguration. Yeah, it’s like.

Most troubling in my opinion, though, is Obama’s own insistence, ever since March of 2007, when he announced his candidacy, that he is not an ordinary politician. His grassroots, fifty-state strategy was unparalleled in its success. His speech about the Rev. Jeremiah Wright was intelligent and it treated the American people as though they, too, could understand long speeches that contained nuanced thoughts, as opposed to the Manichean sound bites of George W. Bush. His political maturity happened after the Vietnam War era, and, as Andrew Sullivan has suggested, the very core of his being is not instilled with a reflexive fear of Republicans and conservatism.

Conservatism demands the acknowledgment of a false dualism in every aspect of life, with the promise that conservatism will lead people to the correct side of this duality. Democrats buy into this framework and then try to argue the opposite side. The true progressive would never let the Republicans frame the debate and then proceed to work within their ill-conceived framework. To the progressive, there is no debate about whether or not health care should be free, or if there should be a premium for minimum services, or if the government should control it. The answer is: the current system of privatized health care doesn’t work and it should not be repaired, it must be rebuilt from the ground up. Obama appeared unafraid to work outside the existing framework and create a new framework that works in the interests of everyone. “Should it be a public solution or a private solution?” is not the correct question. “What solution is best for the country?” Now that’s the right question. It’s a question that Obama appeared to be asking during the campaign, but one that is being substituted by justifications for increasingly conservative behavior.

Cabinet Rundown: AG, DHS, and HHS

With the exception of the Hillary-Clinton-for-Secretary-of-State flirt tease, the rest of President-elect Obama’s cabinet is starting to take shape. Here’s a look at three of those who have been tapped so far (some pending a background check):

Attorney General–Eric Holder, 57, New York

Eric Holder will become the first African American Attorney General in United States history. He was a deputy attorney general and U.S. Attorney for the District of Columbia during the Clinton administration and teamed with Caroline Kennedy as the lead vetter of Obama’s potential vice presidential selections. Holder seems to be a solid, non-controversial choice. He will certainly have a tough job ahead of him as the various abuses of the past eight years come to light. Hopefully, Mr. Holder can restore some credibility to the job of  top law enforcer. The funny thing about the attorney general position is that this was John Edward’s job for the taking if he would have kept his zipper up. Ah well, he can take solace with Bill I suppose.

Grade: B

Secretary of Homeland Security–Janet Napolitano, 50, Arizona

Governor Napolitano is immensely popular in Arizona and will become only the third secretary in the brief history of the department of Homeland Security. Before serving as governor of Arizona (she is now in her second term), she was a United States District Attorney for Arizona and was Arizona Secretary of State.  Napolitano is Obama’s first high-profile female selection (Hillary is not official yet). It is likely that both the Secretary of State and the Secretary of Homeland Security will be women.  The one downside to this move for Democrats is that Governor Napolitano was polling strongly in a potential Senate matchup with Senator McCain in 2010. McCain has given initial indication that he plans to run for reelection.

Grade: B+

Secretary of Health and Human Services–Tom Daschle, 60, South Dakota

Tom Daschle is a great selection for this post. I wrote a lot about this selection yesterday.

Grade: A

Treasury Secretary Candidates

As President-Elect Obama begins to piece together his administration, the most prominent post will likely be his choice for Treasury Secretary. Given the importance of the Secretary in shaping the course of the Economic Stabilization Act funds ($450 billion left if you are counting), we wanted to run down the most likely candidates:

Larry Summers

A leading Harvard economist, Summer won the John Bates Clark Medal for his research and served as Bill Clinton’s Secretary as well as heading up Harvard during a five year tenure. As a close Obama advisor well respected in academia and the financial sector, Summers is a strong candidate. Drawbacks include the “gender science” controversy that led him to resign from his administrative post at Harvard, as well as his close ties to hedge fund DE Shaw.

Timothy Geithner

Header of the New York Fed as well as Vice Chair of the Federal Open Market Committee which sets interest rates, Geitner has a background in international affairs, earning a graduate degree from SAIS and serving in a variety of positions from Under Secretary at the State Department to the Council of Foreign Relations and the IMF, as well as playing a crucial role in helping to orchestrate recent financial market interventions.

Paul Volker

Part of the “old guard”, Volker is seen as a stable pick who served as Federal Reserve Chairman in the 1980s under Presidents Carter and Reagan, where he helped “tame” inflation and earned respect on both sides of the aisle.

Robert Rubin

Currently a Director at Citigroup, Rubin served as Treasury Secretary in the Clinton Administration and is credited with helping shape “Rubinomics” policies that fostered economic growth and balanced deregulation.

Laura Tyson

A Berkeley economist, Tyson served as Chair of Bill Clinton’s Council of Academic Advisers as well as Dean of the London Business School and a member of the Council on Foreign Relations.

Jon Corzine

Currently serving as Governor of New Jersey, Corzine has a deep background in financial markets stemming from his work as a partner at Goldman Sachs.