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.

A Free Choice? Making the Case for American Workers

Over the past week, there has been substantial media coverage of the public rancor over A.I.G. bonuses, the Obama administration’s ballooning deficit spending, and Timothy Geithner’s plan to buy up toxic debt. And while Washington’s economic policies certainly deserve to be on everyone’s minds, there is another issue that could affect millions of workers that is getting far less play in the news but definitely a lot of heated debate among union leaders, corporations, and Congress—“card-check” voting.

Its official name is the Employee Free Choice Act and it would amend the National Labor Act of 1935 to essentially make union organization much easier for workers. The legislation would allow workers to form a union if a majority signs pro-union cards and would forgo the current practice of secret ballot elections. Other provisions would impose binding arbitration when employers and unions fail to reach a contract after 120 days and would substantially increase fines on employers who jeopardize union activities.

Proponents of the plan are many Democrats and large unions (including AFL-CIO and SEIU) who say that the current restrictions for unions put their members’ rights at a disadvantage. Many advocates for the change in the law, such as the union coalition Change to Win, say that private voting encourages intimidation and coercion of companies’ employees who wish to unionize. The act would also encourage a speedier and more thorough process in contract disputes and would triple the damages imposed against companies who do not adhere to union standards.

There are many opponents of this measure—both corporate and political—who view this legislation as an ends-to-justify the means type of regulation. The Chamber of Commerce has been very outspoken in its disapproval of the Act and notes that it could disenfranchise both parties (employers and workers) in the long run.  Under the proposed new rules, union organizers would be under no obligation to notify their employers that they are going to launch a union drive.  In addition, the “card check” policy would abolish secret-ballot elections even if many workers wish to have them. Also, in the instance that the companies and the newly formed unions fail to reach an agreement within a limited time frame, a federal government arbitrator must step in to mediate the contract so that a deal is reached—even if the outcome is not ideal for either party.

On Tuesday, Arlen Specter (R-Pennsylvania) said he would oppose the union “card-check” measure and, without his support, the legislation would likely fail in the Senate. Noting that he may very well be the “deciding vote,” Specter, who was the only Republican to vote for cloture in the previous Congress, says he is against the Act because it “will result in further job losses.” Wal-Mart, Starbucks, Costco, and several other large corporations agree. (It should be noted that Specter faces a stiff primary challenge from his right flank in 2010.) Whole Foods CEO John Mackey told the Washington Post on Sunday that the binding arbitration clause is “not the way we normally do things in the United States” and that allowing workers to organize without a secret ballot “violates a bedrock principle of American democracy.”

While corporations certainly are justified to feel threatened by this Act, ultimately, the workers are the ones who should receive some long overdue benefits. While Specter may consider the legislation a possible hindrance to labor and Mackey even deems it un-American, the rebuttal should be what is more beneficial to the labor movement than empowering workers and what is more American than appealing to the government for the rights of its citizens? According to Change to Win, low-wage workers only earn 83 cents on the dollar of what they were earning 35 years ago. What’s more is that Pennsylvania State University’s Poverty in America Project concludes that “in 2003, almost 25% of the nation’s counties had low per-capita incomes below one half the national average or less, high unemployment, low labor force participation rates, and a high dependency on government transfer payments-all measures of economic distress.” Most of these counties are located in areas with a relatively low levels of union penetration, such as the Deep South.

According to MSNBC, the vote on the EFCA might get pushed back to 2011 and  the Obama administration will be “quietly” happy since they support it but don’t really have the energy to fight for it at the moment. However, if this bill does come to vote and fails in the Senate, then compromised legislation will undoubtedly be pushed through that could do more harm than good for both employers and employees. To avoid that from happening, corporations worried about the Employee Free Choice Act should reach out to their employees and hold forums where both parties can speak their minds and try to understand each other’s positions. One of the reasons this issue has become a Congressional matter is because many large companies have at times failed to look out for the interests of their workers and put fiscal profits ahead of human capital. If these large corporations truly want to temper these regulations, then they must have an open dialogue with their employees and offer some solutions such as health care, transportation vouchers, child care benefits, higher wages, organizational tranparency, and more employee input into the decision-making processes of the organization. The only way to curb workers’ desire to unionize is to provide similar financial and non-financial benefits under a corporate business model. And, with low-wage workers who are unionized ultimately earning an average of 44% more than their non-union counterparts, even in these hard economic times it going to be a hard bargain to sell non-represented workers anything short of that improvement.