Freedom of association in union representation elections requires that workers be able to cast an informed vote. Workers must have access to both pro- and anti-unionization arguments. We can count on union organizers vigorously to present pro-unionization arguments. They start doing so long before any representation election is scheduled because they must get 30 percent of eligible workers to sign cards requesting unionization before the National Labor Relations Board (NLRB) will order an election.

We usually can count on employers vigorously to present anti-unionization arguments, but they have less time than union organizers have to make their case. They often don’t know about union organizing efforts until the union has collected the requisite signatures. The time between the NLRB’s order to have an election and the actual election is crucial if workers are to be able to hear the employer’s side of the story and thus be able to make an informed choice about how to vote.

In 1947 Congress amended Section 7 of the National Labor Relations Act (NLRA) to make explicit the right of workers to refrain from unionization. To give effect to that right, Congress added Section 8(c), which affirmed the right of employers to engage in free speech during election campaigns. Congress wanted workers to hear both sides of the debate over whether to unionize so that they could make informed decisions.

In 1948 the NLRB endorsed this intent of Congress by declaring, in General Shoe Corp., that its primary duty under the new law was to support workers’ right to “make a free and fair choice” on the question of whether to unionize. Absent force or fraud, election debate is, the Board asserted, the best way to enable workers to do so.

In Linn v. United Plant Guard Workers (1966) the Supreme Court noted approvingly that the NLRB does not “police or censor propaganda used in the elections it conducts, but rather leaves to the good sense of the voters the appraisal of such matters, and to opposing parties the task of correcting inaccurate and untruthful statements.” The Court went on to affirm that “debate . . . should be uninhibited, robust, and wide-open, and that it may well include vehement, caustic, and sometimes unpleasantly sharp attacks.”

Notwithstanding the clear intent of the 1947 Congress, and the eager endorsement of that intent by the 1948 NLRB, and the 1966 Supreme Court, the present NLRB demurs. It takes its orders from unions, and unions seek to silence employer speech.

The failed card-check bill would have silenced employer speech because it would have forced an employer to recognize a union as the monopoly bargaining agent over his employees if it collected the signatures of at least 50 percent of them on cards requesting such recognition. There would be no election campaign during which employers could give their side of the debate.

Card Check by Fiat

Union cronies in Congress failed to deliver on card check, but on August 26, 2011, the pro-union NLRB troika—Mark G. Pearce, Craig Becker, and Wilma B. Liebman—created a limited form of card check by regulatory fiat. In its Lamons Gasket decision the troika overturned the Board’s 2007 decision in Dana Corp.

The NLRA permits an employer voluntarily to recognize a union as the monopoly bargaining agent over his employees if the union collects the signatures of at least 30 percent of them on cards that request such recognition. In Dana Corp. the NLRB ruled that when an employer chooses to grant recognition to a union without first letting the employees vote on whether to be subjected to union rule, the affected employees could immediately demand an election to challenge the employer’s voluntary recognition.

In Lamons Gasket the troika declared that the affected employees would have to wait for at least six months, and in some cases up to one year, before they could hold a challenge election. This means that union rule over workers, lasting at least six months, can be achieved by a 30-percent card check rule.

Why would an employer choose to turn his workers over to union rule without a secret ballot election? Because he fears a “corporate campaign.” Following Saul Alinsky’s Rules for Radicals, a union picks a target enterprise to unionize and demands that the target not resist. If the target chooses to defend itself and its workers against unionization, the union forms coalitions with leftist community-activist groups to try to destroy the target’s standing in the community and its relationships with lenders, suppliers and customers. The union and its allies smear the target and its officials as monsters who want to take away their employees’ freedom of association. The union and its allies, often including benighted clergy, claim the moral high ground. But employers who choose to resist really occupy the moral high ground. They promote their employees’ freedom of association.

Shortened Election Process

In another attack on employer campaign speech, in June 2011 the NLRB troika decided to cut the representation election process from its present median of 38 days to ten days. With less time to speak, employers will speak less.

There are several reasons for workers to choose to be union-free. For example, union-free enterprises offer more job security than their union-impaired counterparts because the latter are too sclerotic to frequently changing global market conditions. Union-free firms can reward workers on the basis of productivity. In union-impaired firms pay is based on job classifications and seniority. Union-free workers are free to excel, while union-impaired workers are chained to a contract. Unions promote an adversarial relationship between workers and employers, while union-free employers are free to enlist workers as partners in building durable and growing value.

The NLRA illegitimately forces workers into representation elections. To make matters worse, the current NLRB seeks to obstruct the access of workers to arguments in favor of remaining union-free. Employers are the most reliable conveyors of those arguments. Employers must be free to speak.

Hilda Solis, Obama’s secretary of unions – oops, labor – thinks a bit like Lenin. She thinks labor unions are so obviously virtuous that any worker who votes against unionization does so only because evil labor relations consultants have conspired with the worker’s malevolent employer to muddle the worker’s brain.

Public comments on Solis’s proposed rule to impede labor relations consultants who advise employers on how legally to avoid unionization ended on September 21. Despite an overwhelming preponderance of comments against the proposed rule, Solis seems intent on proceeding.

The 1959 Landrum-Griffin Act was enacted to try to clean up union corruption like that portrayed in the 1954 film On The Waterfront. The principal malefactor in the film was union boss and thug Johnny Friendly who ran his union for his own benefit at the expense of rank-and-file members. The Act specifies a bill of rights for rank-and-file union members, and it imposes reporting requirements on both unions and employers.

Unions must report how they use the union dues they extract from workers and fees taken from nonmember employees. Elaine Chao,  George W. Bush’s secretary of labor, forced unions to give details of their expenditures. Secretary Solis rescinded those requirements and now permits unions to lump their expenditures into broad categories designed to keep the rank-and-file, well, muddled.

Reporting Requirements

Under Landrum-Griffin employers must report their expenditures on labor relations consultants and others who “persuade employees to exercise or not to exercise” their right to unionize. The Act specifically exempts those (like attorneys and public relations firms) who give “advice” to employers on how to handle labor relations.

Until the Obama administration took power, persuaders were understood to be people hired by employers to have face-to-face encounters with workers to convince them to vote against unionization.

Secretary Solis wants to shrink the definition of “advisor.” She proposes that only those who give  “an oral or written recommendation regarding a decision or course of action” be considered advisors. The  Department of Labor document that outlines the rule change explains:

The current “advice” standard … treats as advice not only the situation in which a lawyer or consultant reviews drafts of persuasive material at the employer’s request to determine whether the statements in the material are permissible under the National Labor Relations Act, but also covers a lawyer or consultant’s preparation of persuasive material to be disseminated or distributed to employees. . . . [I]n the Department’s view, the latter example appears to be quintessential persuader activity – one that has an object to persuade employees. (27)

So a lawyer or a consultant who helps an employer to compose a pamphlet that argues against unionization is a persuader who must report detailed financial information to the Department of Unions. Any persuader who fails to file accurate information would be guilty of a crime. Solis has boasted that she is looking forward to making the first persuader do a “perp walk.”

Crushing Costs

I think Solis has at least two goals in mind. I suspect she hopes the imposition of financial costs and criminal penalties on persuaders will shrink the supply of those who are willing to help employers resist unionization. It is likely she also hopes to provide unions with a hit list of those who continue to do so. Think of it as Johnny Friendly’s revenge.

There are many good reasons why workers should say no to unionization. Here are two: Because they are better able to adjust to constantly changing market conditions, union-free firms provide workers more job security than union-impaired firms do. And sclerotic union-impaired firms inevitably decline and shed workers.

When union dues and lost wages during strikes are taken into account, union-impaired firms do not pay workers any more (and they frequently pay less) than union-free firms do.

Employers should be free to seek whatever help is necessary in their attempts to make a legitimate case against unionization. Far from being captured in false consciousness, employees are smart enough to evaluate the merits of the arguments presented by both sides.

Franklin Roosevelt, a dedicated crony of private-sector unionism (PSU), believed that government-sector unionism (GSU) was “unthinkable and intolerable.” In 1955 George Meany, the first president of the modern AFL-CIO, opined that “It is impossible to bargain collectively with the government.” This sentiment against GSU was almost universally shared, but it could not withstand the realities of electoral politics.

The first government-sector union was created in New York City in 1958 at the behest of Mayor Robert Wagner—son of Senator Robert Wagner, the principal author of the 1935 National Labor Relations Act (NLRA), which imposed PSU. Mayor Wagner and union boss Jerry Wurf agreed that as many city workers as possible should be assembled into unions and forced to pay union dues. Wagner saw that a well-organized and well-funded union could be a formidable force in future elections by providing him with disciplined boots on the ground as well as other in-kind and pecuniary support. Wurf saw that he would get a special place at the table around which public policy is formed. Their scheme bore fruit in Wagner’s 1961 reelection effort. (In 1959 Wisconsin became the first state to authorize GSU.)

President Kennedy noticed the role government-sector unions played in Wagner’s 1961 victory, Fred Siegel of the Manhattan Institute writes. In January 1962, with an eye to his expected 1964 reelection campaign, Kennedy signed Executive Order 10988, which imposed GSU on many groups of federal workers. Thereafter GSU spread to as many as 30 states.

A Fourth Branch of Government

All federal and state statutes that authorize GSU are patterned on the NLRA. A key section of the NLRA imposes on employers a duty to bargain in good faith with unions. Thus a union can force an employer to bargain with it over all questions involving wages and other terms and conditions of employment. In practice the “good faith” part of the duty to bargain means that the employer must be willing to compromise during the bargaining process.

In ordinary contract law each party must consent to bargain with each of the other parties. All parties are free simply to walk away at any time, and any contract that emerges from forced bargaining is null and void. Not so with unions. Every collective bargaining (CB) contract emerges from forced bargaining, yet every CB contract is considered legal and is enforceable in the courts.

Elected government office holders are routinely lobbied by organized interests such as the Sierra Club and the Chamber of Commerce. But neither they nor any other ordinary lobbyist can force any elected or appointed government official to bargain with them, much less compromise with them. In contrast union officials have the power to force government officials to bargain and compromise with them on what burdens will be placed on taxpayers. In effect government-employee unions (GEUs) are a fourth branch of government with which the legislative and executive branches must bargain and compromise on matters of public policy.

Wages and other terms and conditions of government employment are matters of public policy. They are paid for by taxpayers. Taxes are supposed to be determined in the open by elected legislatures together with elected presidents and governors. Moreover, taxpayers are supposed to have access to and a voice in the legislative process.

In contrast the CB process is carried out behind closed doors. Taxpayers employ government workers but have no seat at the table. Government officials at the table do not represent the interests of taxpayers; they seek to expand the scope of their power and influence. To them bigger budgets are always desirable. GEUs seek better wages, benefits, and conditions of employment for government employees so they can justify raising dues. GEU bosses seek more perks and power for themselves. The two sides of the government-sector CB table are cronies. They both seek to pick the pockets of taxpayers.

Concentrated Benefits and Diffused Costs

Other things equal, no one likes having to pay higher taxes. But when everyone pays higher taxes the extra tax receipts are disproportionately spent in ways that benefit government-sector workers. Their wages go up, or other terms of employment are improved, or the budgets of their agencies expand so their prominence and power increase—perhaps all of the above. Private-sector employees pay the higher tax and get little or nothing back, but since the costs are widely dispersed, the per-person burden is not high enough to spark taxpayer resistance. (The revolt against GEUs in Wisconsin and elsewhere suggests that in some venues the per-person cost is getting high enough to create significant resistance.)

GEUs support their friendly politicians out of dues taken from the workers they represent. All taxpayers pay the wages of government employees, and some of those wages end up as union dues that become campaign donations to big-government politicians. In short all taxpayers, even those who favor smaller government, are forced into making campaign donations to big-government politicians. Meanwhile, the politicians, bureaucrats, and GEUs happily dance around their closed iron triangle, taxpayers be damned.

Keeping It All Going

In February 2009, using the Great Recession as cover, President Obama signed the American Recovery and Reinvestment Act (ARRA). It was a benighted Keynesian scheme based on the popular superstition that a recession can be cured by increasing government spending and handing out temporary lump-sum tax cuts. ARRA increased government spending by $499 billion and cut $288 billion in taxes. What was the result? Research done by Timothy Conley (University of Western Ontario) and Bill Dupor (Ohio State University) reveals that ARRA “created/saved 450 thousand government-sector jobs and destroyed/forestalled one million private-sector jobs” (“The American Recovery and Reinvestment Act: Public Sector Jobs Saved, Private Sector Jobs Forestalled”). In short most of the money went to bail out several states so they could avoid laying off GEU dues payers.

Another crony antic of the Obama administration was to impose a GEU on 40,000 TSA officers (TSOs), who thus become union dues payers. The TSA was created after the 9/11 attacks. At its inception most politicians, at least publicly, said that the job of officers was to react rapidly and flexibly to unpredictable security threats. Even politicians know that union-impaired workplaces don’t work like that. Unionization was banned until February 2011, when John Pistole, the Obama-appointed administrator, lifted the ban. Congress tried to intervene, but the effort was defeated in the Senate. The American Federation of Government Employees and the National Treasury Employees Union fought over which would get monopoly bargaining privileges over the officers. The Federation won. Now that they are union-protected, the officers will likely morph from grossly abusive to crudely invasive.

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.

The 112th Congress is not likely to enact the sort of changes to American union law preferred by the bosses of the Service Employees International Union (SEIU), but Obama is very likely to try to do so through administrative and executive fiat. As Shelby Steele says, Obama’s “policymaking has been grandiose, thoughtless and bullying.” Two non-union examples (mine not Steele’s): Obama, when faced by Senate opposition to his grandiose cap-and-tax war against carbon, deliberately went around Congress to his thoughtlessly green appointees in the EPA to attack carbon through administrative fiat. Again, when faced by two court decisions that told him he could not shut down offshore oil drilling in the Gulf of Mexico, he deliberately went around the court decisions to his EPA and his Interior Department effectively to prevent drilling by holding up the permitting process.

The five-member National Labor Relations Board (NLRB) is appointed by the president, with concurrence of the Senate, to five-year terms. At this writing there are only four members. Three of them—Wilma Liebman, Brian Hayes, and Mark Pearce—are serving Senate-approved terms. Liebman, the chairman of the Board, is a former union lawyer with a long record of serving the interests of unions. Her term expires August 27. Obama may reappoint her, but the new Senate may not go along. While in private practice Hayes represented management interests in labor disputes. His term expires in 2015. In private practice Pearce represented union interests in labor disputes. His term also expires in 2015.

Becker Versus Workers

The other member, Craig Becker, was never approved by the Senate. He is on the Board because in 2010 Obama used his recess appointment power to get around Senate confirmation. He may have to do the same to keep Liebman on the Board when her term expires. Becker is unique in his pro-union, anti-worker sympathies. As I will show below, he is an Obama kind of guy. While a package deal between Obama and sufficient Senate Republicans involving Liebman and a Republican appointee to fill the fifth seat may be put together, there is no way Becker can avoid a Senate filibuster against his appointment to a regular term.

Right now there are three reliably pro-union votes on the NLRB. They can do what they want in each case that comes before them. The imminent danger to worker freedom is best understood by examining the views of the most articulate and forceful of the three—Becker. When he was appointed, Becker was associate general counsel to the SEIU. Earlier, as a professor of law, he published many articles in scholarly journals in which he promulgated his pro-union vision.

He doesn’t think any worker should be allowed to be union-free. In his own words, “Just as U.S. citizens cannot opt against having a congressman, workers should not be able to choose against having a union as their monopoly-bargaining agent.” Apart from the obvious rejoinder that unions are not governments, Becker, like Obama, doesn’t believe in the consent of the governed. They are Mountaintop people—that is, elitists.

In a 1993 article in the University of Minnesota Law Review, Becker argued that existing union law can and should be interpreted to strip employers of any “legally cognizable interest” in the process by which their employees unionize. When faced with aggression, employers should be forced not to resist. Just after Obama’s inauguration, Becker composed executive orders that the President then imposed on workers and employers. For example, if a union-impaired federal contractor supplying services to the federal government loses a contract to a union-free firm, the latter must extend preferential hiring offers to the unionized workers of the former and recognize and bargain with the unions representing those workers.

Reversing Course

Last August 27, Becker, Liebman, and Pearce voted to reconsider two earlier NLRB cases that displeased union bosses. Existing law allows, but does not compel, an employer to turn his employees over to monopoly-bargaining unions on the basis of card check. In Dana Corp. (2007), the NLRB said that such workers had 45 days to request an election to void a card-check recognition. MV Transportation (2002) addressed the following: Suppose firm A is unionized and has to go out of business because it cannot effectively compete. Union-free Firm B buys A’s assets and hires workers, a majority of whom are former, unionized employees of A. Does Firm B have to recognize those workers’ union as a monopoly-bargaining agent for all of B’s employees? In 2002 the NLRB said that workers themselves should decide the question by an election.

In both cases the NLRB decided that a secret-ballot election, not administrative fiat, should determine the fate of workers. Now a majority of the Board wants to “reconsider” whether the two cases were correctly decided. It appears that Liebman and Pearce want to join Becker and Obama on the Mountaintop. When this NLRB reopens these two cases it is likely to reverse both, and those reversals will be the first steps on the road to compulsory private-sector card check without Congress. I have no doubt that Becker and the others will try to take the whole trip.

As voters across the country gave us the new Congress, voters in Arizona (Prop. 113), South Carolina (Amendment 2), South Dakota (Amendment K), and Utah (Amendment A) adopted amendments to their respective state constitutions that prohibit compulsory card check whether imposed by Congress or from the Mountaintop. States control the rules of unionism as they pertain to their state and local government employees, so these newly adopted amendments will protect those employees from card check. However, the National Labor Relations Act (NLRA) sets the rules for private-sector workers, and my guess is that federal courts will decide federal law preempts state law on card check.

In sum, David wins the bet, but workers are still exposed to the tyranny of the Mountaintop. The short-run consolation for workers who want to become and remain union-free is that a future NLRB can reverse what the existing Board does. The better, long-run, solution is the permanent repeal of the NLRA in favor of genuinely voluntary unionism.

Too many Americans have thought unions are necessary to assure that working people get fair compensation and reasonable working conditions on the job. Now more and more people are becoming aware of the harm unions do. For example, Fox News, CNN, and the broadcast networks have widely publicized a significant and growing compensation gap between the government and private sectors. One who enters “public sector pay vs. private” in the Google search box discovers 35,600,000 references. For example, on March 8 USA Today ran a major article titled, “Federal Pay Ahead of Private Industry.” There are similar gaps at the state and local levels.

Government-employee unions (GEUs) are largely responsible for such gaps. While only 7.2 percent of private-sector workers are union members, among state government employees the figure is 32.2 percent, and at the local level it is 43.3 percent. Private-sector unions have to temper their compensation demands because the employers they deal with face vigorous competition from union-free employers. In contrast, GEUs and the employing agencies with which they deal sit on the same side of the bargaining table. They have a common interest: to pick the pockets of taxpayers, and the taxpayers have no alternative suppliers to whom to turn.

In the Winter 2010 issue of the Cato Journal, Chris Edwards showed that in June 2009 total state and local government compensation exceeded private-sector compensation by 45 percent in three broad occupational groups. The gap in wages and salaries was 34 percent, while the gap in benefits, including pensions, was 70 percent. Adding the 50 states together, total state and local compensation in 2008 was $1.1 trillion annually. If that is 45 percent higher than it needs to be, bringing state and local compensation in line with the private sector would save more than $450 billion. By comparison, the sum of all state and local operating deficits in 2010 was $181 billion.

Similarly, a Heritage Foundation study found that for the same jobs the federal versus private compensation gap was 30–40 percent. Reducing federal compensation to comparable private compensation would save $47 billion in 2011.

This problem has long been understood by labor economists. The difference now is that these issues are receiving wide attention from the general public—even in left-leaning constituencies. On March 21 Rasmussen reported that 52 percent of California voters thought that the state’s GEUs “place a significant strain on the state’s struggling budget.” Although GEUs get to “bargain” in private over taxpayer money, the results of that charade are in plain view. In a time when their own budgets are under severe strain, taxpayers are increasingly outraged over government extravagance and the GEUs that cause it. When Jerry Brown was governor of California in the 1970s he signed legislation that gave California GEUs monopoly bargaining privileges. The 52 percent of California voters who think that those unions are straining the California budget will have a chance to vote against Brown in the November gubernatorial race.

Some other politicians who have long been in thrall to GEUs are having second thoughts. Willie Brown, the former speaker of the California Assembly and former mayor of San Francisco, said in an interview with the Wall Street Journal on July 9, “The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life. But we politicians—pushed by our friends in labor—gradually expanded pay and benefits . . . while keeping the job protections and layering on incredibly generous retirement packages.” He added, “When I was Speaker I was in charge of passing spending. When I became mayor I was in charge of paying for that spending. It was a wake-up call.”

On June 29 the Washington, D.C., city council took on the powerful American Federation of Teachers when it ratified a revolutionary union contract supported by Schools Chancellor Michelle Rhee. The contract includes a voluntary performance-based salary system; weakens tenure rules, thus making it easier to get rid of bad teachers; and specifies that teacher performance will be based on student achievement and evaluations by non-union professionals appointed by Rhee who are permitted to make surprise classroom visits. Such a contract would have been unthinkable anywhere before this year, much less in Washington, hitherto a model of subservience to unions.

Some politicians and voters are also taking on private-sector unions. In early July the Chicago city council unanimously approved the construction of a giant Walmart store in the Pullman Park area of the city. That park is the hallowed union site of the beginning of the famous Pullman strike of 1894. Moreover, the Council authorized the development of 24 new Walmart stores in the near future. Walmart is union-free and has long been the bête noir of the SEIU and the UFCW. Union opposition has excluded and/or restricted Walmart development in many union-friendly jurisdictions such as Chicago. Nevertheless, even Mayor Richard Daley supported the council’s decision against the unions and in favor of the new Walmart jobs and the thousands of shoppers whose access to Walmart will increase.

Meanwhile, back in California, the voters in two San Diego County cities—Chula Vista and Oceanside—banned project labor agreements (PLAs) in any construction project paid for with city money. Moreover, the Coalition for Fair Employment in Construction collected enough signatures to put a PLA ban on the November ballot in the city of San Diego. When a government imposes a PLA every contractor, even those who are union-free, must operate according to union work rules and compensation levels. Employees of union-free firms must pay union dues and pay into union retirement funds for as long as they work on a PLA project. A PLA nullifies any competitive advantage that a union-free contractor may have over a union-impaired counterpart. PLAs increase the cost of government projects on which they are imposed by an average of 12–18 percent. In times of government budget crises they are an obeisance to unions that voters cannot afford and against which they are increasingly willing to vote.

These and other examples of taking on unions, such as Blanche Lincoln’s June primary victory over union-supported Bill Halter in Arkansas, give me hope that unions, as we know them in America, will become increasingly irrelevant.

Involuntary Unionism

Correctly understood, freedom of association is each person’s right to affiliate with any group pursuing legal ends that is willing to associate with him. Logically, this implies that each person is free to abstain from affiliation even if the group is eager for him to join. American unionism under the National Labor Relations Act is not based on freedom of association because where there is a certified union, individual workers may not abstain from associating. Moreover, American union law violates employers’ freedom of association by mandating good-faith bargaining. American unionism is involuntary unionism. Hazlitt put it this way:

In accordance with the principle of freedom of peaceful association, the law should not prohibit unions, but neither should it go out of its way to encourage them. Certainly the government should not continue, as it does in the United States, to turn itself in effect into a union-organizing agency and to force employers to negotiate with unions.¹

Voluntary unions would, according to Hazlitt, have legitimate functions to perform:

There are, no doubt, areas in which the activities of unions, wisely directed, could be on the whole beneficent—in negotiating with individual employers, for example, concerning hours of work and such conditions of work as light, air, sanitary arrangements, rest rooms, coffee breaks, shop rules, grievance machinery, and the like.²

In 1946 he stated that the legitimate functions of voluntary unions would include assuring “that all of their members get the true market value of their services.”³ That is, any worker who felt that he wasn’t being paid the full value of his services should be free to designate a willing union to bargain for him with an employer who was willing to bargain. He then went on to state that it is highly unlikely that most workers would be in such a situation because underpaid workers are a profit opportunity for other employers to bid wages up.

Government-Employee Unionism

Hazlitt thought that the principle of freedom of association also justified voluntary government-employee unions. However, he advocated strict limits to the scope of collective bargaining in the government sector.

They [civil servants], like private employees, should not be prohibited from joining unions. They, too, should enjoy the right to freedom of peaceable association. But no government unit for which these public employees work should be under any legal obligation whatever to recognize or negotiate with such unions. . . . It is . . . an absurdity for the public authorities to make agreements or “contracts” with these unions. The terms of employment should be set by the government directly with the individual employee.⁴

Hazlitt also held that third-party arbitration was never proper in the government sector.

If the government authorities “bargain collectively” with unions, and if the union leaders refuse to accept the final terms offered, must the authorities then turn to third parties and let them decide the terms? The elected representatives of the people have been elected to make these decisions. They cannot delegate them to private “arbitrators,” or be overruled by them. It is they, and they alone, who must take final responsibility for whatever terms of employment are set.⁵

Hazlitt held that “No public employee has the right to strike.” He quoted Calvin Coolidge to make the point: “There is no right to strike against the public safety by anybody, anywhere, any time.“⁶

The “Grand Illusion” of Labor Solidarity

Unionists contend that all workers have interests in common against employers, and that every worker is therefore duty bound to honor all picket lines and to join labor unions. In fact, as Hazlitt eloquently explained, unionism almost always pits the interests of some workers against other workers, both as workers and as consumers. In Economics in One Lesson he constructs an arithmetic example, assuming that all workers are unionized, to illustrate the logical fallacy of labor solidarity.⁷ His argument is based on relative real wages. Space does not permit me to quote him here, but I commend it to you. In 1973 he summed up his thinking on this issue:

Once it is clearly recognized that the strike-threat gains of each union are at the expense of all other unions in forcing their members to pay higher prices for products, the whole myth of “labor solidarity” collapses. It is this myth that has kept the strike-threat system going. . . . The mass of the working population has been taught to believe that all workers should support every strike . . . to “respect the picket lines” because “Labor’s” interests are unified. The success of any strike is thought to help all labor and its failure to hurt all labor.

This is the modern Great Illusion. In fact, each union’s extorted “gains” by raising a specific industry’s cost and therefore its prices, reduces the real wages of all other workers. The interests of the unions are mutually antagonistic.⁸

In 1971 Hazlitt wrote that employers should not be allowed to discriminate, in hiring, against workers on the basis of their affiliation or nonaffiliation with a union.⁹ In my view, truly voluntary unionism implies that employers must be free to operate on a union-only or union-free basis. The market will sort out what works from what doesn’t work on a case-by-case basis. Hazlitt agrees with Hayek on the point,¹⁰ so I guess I shouldn’t be too dismayed.

Notes

1. Henry Hazlitt, The Conquest of Poverty, Chapter 13, “How Unions Reduce Real Wages” (New Rochelle, N.Y.: Arlington House 1973), pp. 141–42.
2. Ibid., p. 141.
3. Henry Hazlitt, Economics in One Lesson (New York: Arlington House Publishers, 1979 [1946]), p. 141.
4. Henry Hazlitt, chapter in The Strike: For and Against (New York: Hart Publishing Co., Inc., 1971), pp. 80–81.
5. Ibid., p. 81, emphasis in the original.
6. Ibid., emphasis in the original.
7. Economics in One Lesson, pp. 143–45.
8. The Conquest of Poverty, pp. 135–36.
9. The Strike, p. 78.
10. F.A. Hayek, The Constitution of Liberty (Chicago: University of Chicago Press, 1962), p. 278.

Table 1 shows the percentage of Americans who gave unions favorable and unfavorable ratings in the years 2001, 2005, 2007, and 2010. These results are consistent with earlier Gallup polls that showed that in 2008, 59 percent of Americans approved of unions while in 2009, only 48 percent approved. They are also consistent with a Rasmussen poll released in March 2009 that showed that only 9 percent of union-free workers would prefer to unionize.

Table 2 shows the percentage of Americans who agreed and disagreed with the proposition that “unions are necessary to protect workers” in the years 2003, 2007, and 2009. While the figures for 2009 show that more study is needed on this question, the trends are encouraging.

Table 1: Americans’ Opinions of Unions
Year    Favorable    Unfavorable
2001    63%             28%
2005    56                33
2007    58                31
2010    42                41

Table 2: “Unions are necessary to protect workers.”
Year    Agreed    Disagreed
2003    74%        23%
2007    68           28
2009    61           34

Table 3 shows the percentage of Americans who agreed and disagreed with the proposition that “unions have too much power” in the years 1999 and 2009. This trend is also encouraging. The perception that government has too much power is growing. Since government-employee unions (GEUs) are becoming the dominant face of American unionism, I expect even more people to conclude that unions have too much power.

Table 3: “Unions have too much power.”
Year    Agreed    Disagreed
1999    52%         40%
2009    61            33

The Winter 2010 issue of The Cato Journal provides excellent reading on this matter. It consists of 12 articles addressing the question “Are Unions Good for America?” The authors argue persuasively that the answer is no. In the concluding article I imagine what might replace the National Labor Relations Act (NLRA) when unions have lost enough respect to make it possible to repeal that law. What follows are some highlights of the other papers.

Armand Thieblot surveys American union history and concludes that, because labor law bestowed coercive powers on unions, “many individual union members simply found themselves beholden to a different set of bosses, who took part of their pay for dues.” Under current union law, unions have almost run out of rent-seeking opportunities in the private sector. They now have turned to two types of political rent-seeking. They have diverted most of their organizing energy to the capture of government employees (51.3 percent of all union members are now government employees), and they lobby for even more coercive power over private-sector workers—for example, card check. Thieblot wonders “whether there can be any way to stop or divert substantive union control over the economic activities of the entire country.” In my view, President Obama’s appointment of Andy Stern, former president of the SEIU, to his National Commission on Fiscal Responsibility and Reform makes Thieblot’s point.

Project labor agreements (PLAs) and prevailing-wage laws are two other forms of political rent-seeking. PLAs are schemes to strip away any advantages that union-free construction firms have over their union-impaired rivals when bidding on construction projects by requiring union-free firms to pay union wages and benefits, use union hiring halls to obtain workers (even workers who are already their employees), and submit to union work rules. PLAs also force all workers to pay union dues and to contribute to union pension plans. They are usually imposed by state and local governments, but by executive order Obama has forced them on federal construction projects. David Tuerck critically examines the arguments unions use to justify PLAs and finds them all spurious. On average they raise the cost of government construction projects 12–18 percent.

Prevailing-wage laws also apply to taxpayer-funded construction projects. The federal Davis-Bacon Act (1931) was the first such imposition. Since then 31 states have adopted their own versions. These laws require all firms that work on government construction projects to pay union wages and benefits. Thus union-free firms cannot compete on the basis of worker compensation. Freeman book review editor George Leef dissects all the arguments that unions have used to lobby for such laws and examines the historical record of their effects. He concludes that they all should be repealed.

Randall Holcomb and Jim Gwartney explain how American labor law has resulted in significant declines of economic freedom and prosperity. The authors explain the precipitous decline of private-sector union density and the disastrous effects of American unions in the auto and railroad industries, and they provide useful international comparisons.

Opportunistic behavior by private-sector unions eventually results in capital flight from heavily unionized cities. Capital flight causes declines in both population and real income in such cities. Stephen Walters analyzes the carnage, paying particular attention to Detroit.

According to the Pew survey, the demographic group most supportive of unions in America is blacks. Paul Moreno gives an extensive account of how unions have long “used racial discrimination as an economic weapon.” While blacks are no longer excluded from unions, many of them are subjected to more subtle forms of discrimination through such union-based institutions as seniority rules.

The “high-wage doctrine” is the belief that unemployment comes from lack of spending, which is in turn the result of insufficient money wages. So when faced with unemployment the remedy is to increase money wages. Those who believe this silliness and also think that unions increase money wages are likely to approve of unions. Lowell Gallaway destroys the high-wage doctrine and in doing so eliminates one of the most effective arguments in favor of unions.

Unions used to endorse free trade because it lowers workers’ cost of living. Now unions oppose it ostensibly to protect American jobs. Daniel Griswold explains how free trade actually increases jobs and worker compensation. The problem for unions, of course, is that under free trade “unionized firms just fade away.”

Unions abhor right-to-work laws because in those states that have them, unions cannot force workers to pay union dues. Moreover, unions find it more difficult to organize in those states. Richard Vedder explains how right-to-work laws promote liberty, prosperity, and quality of life.

Increased government intervention in health care increases the number of health care workers who are, or who could be classified as, government employees. In a single-payer system all health care workers are government employees. When government increases its subsidies and regulation of nominally private health care facilities, they become much less private. Their employees derive more of their income from government and are subjected to government-dictated workplace rules. They become more and more like government employees. This gives government-employee unions grounds for trying to intrude where they do not belong. Politicians who receive organized pecuniary and in-kind election support from the unions are all too happy to comply.

Similarly, as individual private health care practitioners receive more of their income from taxpayers they become quasigovernment employees. At the behest of Andy Stern and his Service Employees International Union (SEIU), politicians in several states—including California, Illinois, Washington, and Missouri—are trying to classify home health care workers who are paid with taxpayer money as state government employees who may be unionized and forced to pay union dues. Home health care workers tend to disabled and chronically ill people, often senior citizens, in their homes rather than in health care facilities. Section 2589 of the AHCAA creates a “Personal Care Attendants Workforce Advisory Panel” on which labor unions are guaranteed representation. “Personal care attendants” is another name for home health care providers. Union representatives on this panel will inevitably push for forced unionization of such workers.

The conversion of private-sector workers into government workers benefits unions because government workers are easier for unions to capture than private-sector workers. The percent of government workers who are unionized far exceeds the corresponding percent in the private sector. In 2009 unionization in government was 37.6 percent while in the private sector it was only 7.3 percent. Moreover, government-employee unions now have more members than private-sector unions. In 2009 government-employee union members comprised 51 percent of all union members, although government workers were only 16.9 percent of all workers (www.unionstats.com).

The principal reason unions are more successful among government workers than private-sector workers is that government-sector employers have no reason to resist unionization. They and the unions with which they “bargain” sit on the same side of the bargaining table. They each seek more and more money from taxpayers. Bureaucrats seek larger budgets for their agencies, and the unions are helpful in organizing support for those larger budgets. Government employees know their paychecks are determined by political clout, and they recognize the value of unions as effective lobbyists against the interests of taxpayers. For example, in Canada, which has a single-payer medical system, almost all registered nurses are government employees. Sixty-two percent of Canadian registered nurses are unionized. The corresponding figure in America in 2008 was 19.8 percent. In brief, ObamaCare would create more government employees; and since government employees are receptive to the blandishments of unions, unions support ObamaCare.

AHCAA also helps private-sector unions because it imposes health care costs on union-free employers who otherwise may not offer medical benefits to their employees. It is elementary economics: If your competitor has a cost advantage over you, you can either cut your costs or lobby government to increase your competitor’s costs. AHCAA does the latter through employer mandates and tax penalties imposed on employers who do not comply. Compensation includes wages and nonwage benefits such as health insurance. A union-free employer can tailor compensation packages to fit the preferences of individual employees. He thereby obtains the services of his employees at the lowest cost. Unionized employers with union contracts that require uniform health care benefits do not have that ability.

One might think that federal oversight of the myriad details of American health care would make the medical provisions of collective bargaining contracts irrelevant. Not so. Union-owned politicians are loath to do anything to make any of the games unions play irrelevant. Section 254 of the AHCAA provides that “Nothing in this [legislation] shall be construed to alter or supersede any statutory or other obligation to engage in collective bargaining over the terms or conditions of employment related to health care.” Section 424 guarantees that any union-negotiated health plan automatically meets “health care participation requirements.”

There are other ways that the AHCAA benefits unions. Section 111 creates a $10 billion trust fund to bail out unions and employers that now have unfunded health care liabilities to early retirees between 55 and 64. The United Auto Workers (UAW), General Motors, and Chrysler are among the big beneficiaries of this “reinsurance” scheme. The government and the UAW have already taken over General Motors and Chrysler, but AHCAA would throw even more taxpayer money at them. Section 110 prohibits any postretirement health care benefit reductions in the private sector. Taken seriously, this would make the accumulation of future unfunded health care liabilities illegal. Inasmuch as the federal government itself continues to accumulate trillions of dollars of unfunded liabilities in Social Security and Medicaid, this is shameful hypocrisy.

There are more goodies for unions sprinkled throughout the 2,016 pages of the AHCAA, but the subterfuge is clear. In a 2008 campaign speech before the SEIU, Barack Obama promised Andy Stern and his subjects that “Your agenda is my agenda” (note: audio begins immediately at high volume). Whatever else may be said about the president’s attempt to take over American health care, it is obvious that he is keeping that promise.

In §25 of CV Benedict worries that “deregulation” of labor markets can be hazardous to the interests of workers. AFL-CIO chief John Sweeney and Service Employees International Union (SEIU) president Andy Stern interpret this as Benedictine support of regulations like the National Labor Relations Act (NLRA). However, Benedict neither cites any concrete examples of the deregulation he abhors nor endorses any specific labor regulation regimes. He is concerned that the pressures of global competition can diminish the ability of “workers associations” to protect the legitimate interests of workers. He explains:

Through the combination of social and economic change, trade union organizations experience greater difficulty in carrying out their task of representing the interests of workers, partly because Governments, for reasons of economic utility, often limit the freedom or the negotiating capacity of labour unions. . . . The repeated calls issued within the Church’s social doctrine, beginning with Rerum Novarum, for the promotion of workers’ associations that can defend their rights must therefore be honoured today even more than in the past. . . .

Of course workers should never be forbidden to join voluntary workers associations in support of worker rights. Nor should any government limit the ability of such associations to represent the interests of their members. Although Benedict did not describe workers associations as “voluntary,” his reference to Leo XIII’s 1891 Rerum Novarum (RN) makes clear that that is what he had in mind. In §54 of RN Leo warned that workers should not be forced to join labor unions that “do the utmost to get within their grasp the whole field of labor and force workingmen to join them or to starve.” A more fitting description of the EFCA, which would permit union thugs to terrorize any worker who refused to sign a union card, is hard to find.

Leo revisited the question of legitimate unions in Longinqua (1895). Such unions have “very important duties” among which are “not to touch what belongs to another; to allow everyone to be free in the management of his own affairs; [and] not to hinder any one to dispose of his services when he pleases and where he pleases” (§16). The NLRA violates each of these duties. Union security (forced dues) allows unions to touch and take what belongs to another; exclusive representation (forbidding individuals to decide on their own whether to be represented by a union) denies workers the right to manage their own affairs; and strike rules prohibit workers from disposing of their services when they please and where they please.

In §63 of CV Benedict writes that part of the definition of “decent work” is “work that permits the workers to organize themselves freely, and to make their voices heard.” Yet exclusive representation prohibits free organization and overrides individual voices. Individual choice in affiliation is overridden by mandatory submission of a numerical minority to the will of a numerical majority. Individuals are forbidden to represent themselves. Individuals are forbidden to discuss terms and conditions of employment with their employers without union permission. Employers are forbidden to reward individual workers for meritorious performance without union permission. Individuals have no voice. Only unions may speak.

Again in §63 Benedict writes, “The global context in which work takes place also demands that national labour unions, which tend to limit themselves to defending the interests of their registered members, should turn their attention to those outside their membership, and in particular to workers in developing countries where social rights are often violated.” Neither Sweeney nor Stern assents to this idea. They vigorously oppose even the Colombian Free Trade Agreement, which would abolish Colombian tariffs on U.S. goods in exchange for the U.S. continuing not to impose tariffs on Colombian goods. Free trade and the economic development that goes along with it are dependable means to foster the rights of workers in developing countries.

In §64 of CV Benedict reminds his readers, “The Church’s traditional teaching makes a valid distinction between the respective roles and functions of trade unions and politics.” In this he follows John Paul II in §20 of Laborem Exercens (1981): “[T]he role of unions is not to ‘play politics’ in the sense that the expression is commonly understood today. . . . [T]hey should not be subjected to the decision of political parties or have too close links with them. In fact, in such a situation they easily lose contact with their specific role, which is to secure the just rights of workers within the framework of the common good of the whole of society.”

The AFL-CIO and the SEIU, along with most other unions, especially those representing government workers, are deeply immersed in American politics. Stern brags that “We spent a fortune to elect Barack Obama—$60.7 million to be exact—and we’re proud of it.” It pays off. For example, Obama appointed Hilda Solis, the SEIU’s “top choice,” secretary of labor. Solis was a four-term member of Congress thanks in part to over $900,000 of campaign contributions from unions. And it is not just money. For example, on August 6 purple-shirted enforcers from the SEIU allegedly assaulted Kenneth Gladney at a town-hall meeting in St. Louis for passing out “Don’t Tread On Me” flags in opposition to ObamaCare. Unions and the American politicians they have bought need each other to survive.

In sum, Pope Benedict does not ally himself with the likes of Sweeney and Stern. In keeping with papal teaching on labor unions since Leo XIII, he is more in tune with Samuel Gompers, who founded the American Federation of Labor (AFL) in 1886. In the April 1916 issue of the American Federationist, the official AFL newsletter, Gompers wrote, “The workers of America adhere to voluntary institutions in preference to compulsory systems which are held to be not only impractical but a menace to their rights, welfare and their liberty.” He carried this belief through to the end of his life. In his last address as president of the AFL at its 1924 convention, shortly before he died, he said: “Men and women of our American trade union movement . . . I want to urge devotion to the fundamentals of human liberty—the principles of voluntarism. No lasting gain has ever come from compulsion. If we seek to force, we but tear apart that which, united, is invincible.”

Benedict XVI doesn’t, and Samuel Gompers wouldn’t, approve of the coercive features of the NLRA and the EFCA.