First – What is a Union?
According to the Heritage Foundation:
Unions function as labor cartels. A labor cartel restricts the number of workers in a company or industry to drive up the remaining workers’ wages, just as the Organization of Petroleum Exporting Countries (OPEC) attempts to cut the supply of oil to raise its price. Companies pass on those higher wages to consumers through higher prices, and often they also earn lower profits. Economic research finds that unions benefit their members but hurt consumers generally, and especially workers who are denied job opportunities.
What do unions really do for the people who join them now?
The average union member earns more than the average non-union worker. However, that does not mean that expanding union membership will raise wages: Few workers who join a union today get a pay raise. What explains these apparently contradictory findings? The economy has become more competitive over the past generation. Companies have less power to pass price increases on to consumers without going out of business. Consequently, unions do not negotiate higher wages for many newly organized workers. These days, unions win higher wages for employees only at companies with competitive advantages that allow them to pay higher wages, such as successful research and development (R&D) projects or capital investments.
Unions effectively tax these investments by negotiating higher wages for their members, thus lowering profits. Unionized companies respond to this union tax by reducing investment. Less investment makes unionized companies less competitive.
But they do win higher wages for some right? Isn’t that a good thing?:
Some unions win higher wages for their members, though many do not. But with these higher wages, unions bring less investment, fewer jobs, higher prices, and smaller 401(k) plans for everyone else. On balance, labor cartels harm the economy, and enacting policies designed to force workers into unions will only prolong the recession.
What allows these people, who are a minority, and a shrinking one at that, wield so much power?
Labor union officials enjoy many extraordinary powers and immunities that were created by legislatures and the courts. Union officials claim to rely on the support of rank-and-file workers. Yet, they clamor in the political arena to secure and expand their government-granted powers, including the powers to shake down workers for financial support and even to wage campaigns of violent retaliation against non-union employees.
The following list of special privileges reveals the extent to which union bosses have rigged our nation’s labor laws in their favor.
Privilege #1: Exemption from prosecution for union violence.
The most egregious example of organized labor’s special privileges and immunities is the 1973 United States v. Enmons decision. In it, the United States Supreme Court held that union violence is exempted from the Hobbs Act, which makes it a federal crime to obstruct interstate commerce by robbery or extortion. As a result, thousands of incidents of violent assaults (directed mostly against workers) by union militants have gone unpunished. Meanwhile, many states also restrict the authority of law enforcement to enforce laws during strikes.
Privilege #2: Exemption from anti-monopoly laws.
The Clayton Act of 1914 exempts unions from anti-monopoly laws, enabling union officials to forcibly drive out independent or alternative employee bargaining groups.
Privilege #3: Power to force employees to accept unwanted union representation.
Monopoly bargaining, or “exclusive representation,” which is embedded in most of the country’s labor relations statutes, enables union officials to act as the exclusive bargaining agents of all employees at a unionized workplace, thereby depriving employees of the right to make their own employment contracts. For example, the National Labor Relations Act (NLRA) of 1935, the Federal Labor Relations Act (FLRA) of 1978, and the Railway Labor Act (RLA) of 1926 prohibit employees from negotiating their own contracts with their employers or choosing their own workplace representatives.
Privilege #4: Power to collect forced union dues.
Unlike other private organizations, unions can compel individuals to support them financially. In 28 states under the NLRA (those that have not passed Right to Work laws), all states under the RLA, on “exclusive federal enclaves,” and in many states under public sector labor relations acts, employees may be forced to pay union dues as a condition of employment, even if they reject union affiliation.
Privilege #5: Unlimited, undisclosed electioneering.
The Federal Election Campaign Act exempts unions from its limits on campaign contributions and expenditures, as well as some of its reporting requirements. Union bigwigs can spend unlimited amounts on communications to members and their families in support of, or opposition to, candidates for federal office, and they need not report these expenditures if they successfully claim that union publications are primarily devoted to other subjects. For years, the politically active National Education Association (NEA) teacher union has gotten away with claiming zero political expenditures on its IRS tax forms!
Privilege #6: Ability to strong-arm employers into negotiations.
Unlike all other parties in the economic marketplace, union officials can compel employers to bargain with them. The NLRA, FLRA, and RLA make it illegal for employers to resist a union’s collective bargaining efforts and difficult for them to counter aggressive and deceptive campaigns waged by union organizers.
Privilege #7: Right to trespass on an employer’s private property.
The Norris-LaGuardia Act of 1932 (and state anti-injunction acts) give union activists immunity from injunctions against trespass on an employer’s property.
Privilege #8: Ability of strikers to keep jobs despite refusing to work.
Unlike other employees, unionized employees in the private sector have the right to strike; that is, to refuse to work while keeping their job. In some cases, it is illegal for employers to hire replacement workers, even to avert bankruptcy. Meanwhile, union officials demonize replacement workers as “scabs” to set them up for retaliation.
Privilege #9: Union-only cartels on construction projects.
Under so-called project labor agreements, governments (local, state, or federal) award contracts for construction on major projects such as highways, airports, and stadiums exclusively to unionized firms. Such practices effectively lock-out qualified contractors and employees who refuse to submit to exclusive union bargaining, forced union dues, and wasteful union work rules. So far, just three states have outlawed these discriminatory and costly union-only pacts.
Privilege #10: Government funding of forced unionism.
On top of all of the special powers and immunities granted to organized labor, politicians even pour taxpayer money straight into union coffers. Union groups receive upwards of $160 million annually in direct federal grants. But that’s just the tip of the iceberg. In 2001, the federal Department of Labor doled out $148 million for “international labor programs” overwhelmingly controlled by an AFL-CIO front group. Federal bureaucrats spend approximately $2.6 billion per year on “job training programs” that, under the Workforce Investment Act, must be administered by boards filled with union officials. Union bosses also benefit from a plethora of state and local government giveaways
Some people claim that the unions don’t get involved in politics, i.e. any particular candidate.
This is one claim that is laughable. This is like foods claiming that they are natural and yet you look at the ingredient list and find that there are still tons of chemicals inside the food.
This is where the neat little phrase “not endorsed by any candidate” comes up – like in the Virginia Gubernatorial race – ads pounding the conservative by a group for “refusing to help unemployed Virginians” is not endorsed by the dem candidate, but he is named as the guy who will help Virginia. So in essence – he isn’t getting paid advertising because he doesn’t own or ask the group to do it, but he benefits.
Follow this logic – when you watch elections now, almost every candidate receives PAC money from the unions, though the Democrats receive more. Democrats receive all the ads from the unions, all the backstage support, and as the following explains, they aren’t doing this clean either:
It is unlawful for a labor union to take money from your paycheck for contributions to a federal PAC or for the federal PAC to accept such contributions without your written authorization. Recently, the Federal Election Commission has audited some well-known national union PACs to see if they had written authorizations from employees for the contributions the PACs were receiving. The results were astonishing. One national union PAC, according to the FEC audit, could not produce written authorizations for 93% of PAC contributions the FEC examined. Another national union PAC was unable to show authorizations for at least 67% of the contributions the FEC examined. This suggests a widespread problem: union PACs are making political contributions to federal candidates with employees’ money taken without their written authorizations.
Although it is illegal for a labor union to take money without your authorization for a federal PAC or to contribute money from dues directly to a federal candidate, a labor union may use the dues money of members to engage in a host of other political activities ” such as non-partisan get-out-the-vote drives, political “education” campaigns directed only at members and their families, issue campaigns, lobbying, PAC administration costs, etc.
What is so important about the EFCA, card check or whatever other name you’ve heard this called by? According to the National Right to Work folks:
Under the Card Check Forced Unionism Bill, the provisions of the National Labor Relations Act (NLRA) that refer to the secret ballot election would be rendered a dead letter, even though they are not technically stricken from federal law.
Big Labor spin artists can claim all they want that the workers can still “choose” to have a secret ballot election, but there simply is no way by which workers can force union bosses to file for a secret ballot election — and it is union bosses, not workers, who are in possession of the cards. Reporters who repeat this union boss talking point owe their readers a correction.
The simple fact is that professional union organizers hold tremendous power in a unionization drive. If this forced unionism power grab becomes law, workers will only be privy to the information union bosses disseminate.
The text of the bill clearly states that once union bosses collect a simple majority of signed cards, “the [National Labor Relations] Board shall not direct an election but shall certify the individual or labor organization as the representative” or monopoly bargaining agent of all employees in the unit.
As former NLRB member John Raudabaugh told U.S. Senators last year,
Were the union to come up short of 50+ percent signed cards, would it really proceed to file a petition for an election? No, the secret ballot would not remain an option under the EFCA proposal.
If union bosses can’t get a majority through card check — a process during which many workers sign cards not due to actual support for the union but due to lies and intimidation by union organizers — they obviously won’t be able to win through the more fair and private secret ballot process. As James Sherk of the Heritage Foundation and Paul Kersey of the Mackinac Center for Public Policy note,
An election would occur only when union organizers submit cards signed by a minority of workers; but union organizers do not call for an election without signed cards from a majority of workers. They know that unions usually lose these elections. The AFL-CIO’s internal studies show that unions win only 8 percent of elections that are called after less than 40 percent of workers have signed cards.
Less obvious, however, is that union bosses don’t think they can win secret ballot elections even if they collect a simple majority of cards. Sherk and Kersey explain (emphasis mine):
Consequently union guidelines call for organizers to collect cards from 60 to 70 percent of workers in a company before going to the polls. Unions openly state that they do not go to an election without a supermajority of cards:
1. International Brotherhood of Teamsters: “The general policy of the Airline Division is to file for a representation election only after receiving a 65 percent card return from the eligible voters in a group.”
2. New England Nurses Association: “Have 70-75 percent of members sign cards; if unable to reach this goal, review plan.”
3. Service Employees International Union (SEIU): “[T]he rule of thumb in the SEIU is that it’s unwise to file for an election when fewer than 70 percent of the workforce has signed interest cards.”
The secret ballot is much better than the alternative in workplace unionization drives because of what monopoly unionization actually means in practice under the law. Once a union is in place, it is virtually impossible to remove it. More importantly, independent-minded workers who would prefer to represent themselves, or even workers who would prefer a different union’s representation, are forced to accept the certified union as their monopoly bargaining agent. And unless those workers live in one of 22 states with Right to Work protections, they will be forced to pay dues to an unwanted union.
In other words, an individual worker’s desire to belong to a particular union — or indeed the collective desire of a simple majority of workers in a unit — is different from an individual’s desire to belong to any other private organization. The decision forces one’s coworkers — current and future — to also accept the “representation” of this particular union. A secret ballot can’t overcome this fundamental violation of individual rights, but at the very least, the secret ballot provides workers with a degree of protection against intimidation. And that protection will be lost under EFCA.
What happens to wages after unionization?:
Wage Changes After Unionization. Studies tracking individual workers also do not prove that unionizing necessarily raises wages. Individual data do not account for firm-specific factors, such as large firms both paying higher wages and being targeted more commonly for organizing drives.
To discover the causal affect of organizing on wages, researchers compare wage changes at newly organized plants with wage changes at plants where organizing drives failed. Such studies look at the same workers and same plants over time, thereby controlling for many unmeasured effects. These studies come to the surprising conclusion that forming a union does not raise workers’ wages. Wages do not rise in plants that unionize relative to plants that vote against unionizing.
Several of the authors of these studies have endorsed EFCA, but their research argues that expanding union membership will not raise wages. This should not come as a complete surprise. Unions in competitive markets have little power to raise wages because companies cannot raise prices without losing customers. Additionally, some unions– such as the Service Employees International Union–have expanded by striking deals promising not to seek wage increases for workers if the employer agrees not to campaign against the union.
What effects can this have on your business? Could it be similar to the steel, textile, airlines, auto makers and their problems?
Effect on Businesses. Union wage gains do not materialize out of thin air. They come out of business earnings. Other union policies, such as union work rules designed to increase the number of workers needed to do a job and stringent job classifications, also raise costs. Often, unionized companies must raise prices to cover these costs, losing customers in the process. Fewer customers and higher costs would be expected to cut businesses’ earnings, and economists find that unions have exactly this effect. Unionized companies earn lower profits than are earned by non-union businesses.
Studies typically find that unionized companies earn profits between 10 percent and 15 percent lower than those of comparable non-union firms. Unlike the findings with respect to wage effects, the research shows unambiguously that unions directly cause lower profits. Profits drop at companies whose unions win certification elections but remain at normal levels for non-union firms. One recent study found that shareholder returns fall by 10 percent over two years at companies where unions win certification.
These studies do not create controversy, because both unions and businesses agree that unions cut profits. They merely disagree over whether this represents a feature or a problem. Unions argue that they get workers their “fair share,” while employers complain that union contracts make them uncompetitive.
What can unionization do to investment in a company? Can it actually hurt self investment in a corporation? One person has claimed that lower wage costs (the largest cost in most businesses) does not mean that corporations will grow – they’ll just sit there and get fat and happy at the cost of the workers.
As a person who works in an industry directly influenced by company growth, I can assure people that 98% of companies will grow if they have an opportunity. They don’t sit on their haunches and let someone else sneak up on their market share by remaining stagnant. The death knell eventually sounds for any company who allows stagnation to remain for too long.
What effects do unions have?:
Unions Reduce Investment. In essence, unions “tax” investments that corporations make, redistributing part of the return from these investments to their members. This makes undertaking a new investment less worthwhile. Companies respond to the union tax in the same way they respond to government taxes on investment–by investing less. By cutting profits, unions also reduce the money that firms have available for new investments, so they also indirectly reduce investment.
Consider General Motors, now on the verge of bankruptcy. The UAW agreed to concessions in the 2007 contracts and has made more concessions since then. If General Motors had invested successfully in producing an inexpensive electric car, and if sales of that new vehicle had made GM profitable, then the UAW would not have agreed to any concessions. The UAW would be demanding higher wages. After the union tax, R&D investments earn lower returns for GM than for its non-union competitors such as Toyota and Honda.
Economic research demonstrates overwhelmingly that unionized firms invest less in both physical capital and intangible R&D than non-union firms do. One study found that unions directly reduce capital investment by 6 percent and indirectly reduce capital investment through lower profits by another 7 percent. This same study also found that unions reduce R&D activity by 15 percent to 20 percent. Other studies find that unions reduce R&D spending by even larger amounts.
Research shows that unions directly cause firms to reduce their investments. In fact, investment drops sharply after unions organize a company. One study found that unionizing reduces capital investment by 30 percent–the same effect as a 33 percentage point increase in the corporate tax rate.
So what is happening now with unions and the EFCA?
Right now, union membership is dropping. The number of right to work states is growing, and the people in power over unions are trying to work with government to reverse this. This is what EFCA is all about. This is to limit the ability for workers to vote down unions when they see the truth about what this will do for their company.
Unfortunately, like lawyers and tort reform, unions are backed by government because government is paid for by labor unions. In a very large way.
How else are they expecting to get this bill passed? Check this out:
The labor movement is taking square aim at Wall Street with a new tool in its fight to pass the Employee Free Choice Act: the hundreds of billions of dollars in pension funds it manages for union workers and retirees, some of it held by the same firms that are fighting the provision known as “card check.”
“Has your company made any public statements in support or opposition to EFCA?” asks one of nine pointed questions in a polite, detailed four-page questionnaire.
“If ‘Yes,’ please explain.”
The detailed questionnaire has three parts. The first asks about fund managers’ public positions, lobbying and political contributions. The second asks managers to “disclose any relationships during the past five years between your company and any organization(s) opposing the passage” of EFCA. The form lists 14 organizations, from anti-EFCA organizations like the Workforce Fairness Institute to trade groups that oppose it, like the U.S. Chamber of Commerce and the Roundtable.
A third passage asked whether other any trade association to which the fund managers belong has taken a position on the bill.
While the survey assures managers that it doesn’t intend to impose “requirements or limitations” on their political activity, a cover letter from Teamsters union leaders tells another story: The leaders are concerned, according to a copy of the local’s letter obtained by POLITICO, that Wall Street is “undermining the interests” of union retirees.
The letter, from the two top officials of Teamsters Local 507 in Cleveland, Albert Mixon and Carl Pecoraro, who are also trustees of the union’s health, welfare and pension funds, says some pension fund managers “are undermining the interests” of the union:
“It has come to my attention that some Wall Street investment managers are raising money, lobbying or contributing to the lobbying efforts of other organizations against the Employee Free Choice Act,” the letter began. “In so doing, I believe these managers are undermining the interests of the Cleveland Bakers and Teamsters Pension and Health & Welfare Funds.”
“As a trustee, I have an obligation to determine whether our fund’s asset managers are engaged in partisan political activity that could adversely affect our fund, its participants and beneficiaries,” said the letter, which also “call[s] on you to be a leader among the financial services industry” in supporting pro-labor legislation.
“We feel that our investment managers should be taking a neutral position on this,” said Galen Munroe, a spokesman for the International Brotherhood of Teamsters, who said fund managers with ties to EFCA foes wouldn’t necessarily be fired. “It’s just one of the facts that would go under their overall performance,” he said.
Munroe said the letter from Cleveland Teamsters leaders that POLITICO obtained was part of an effort spanning the entire Change to Win federation, which includes SEIU and five other major unions. (A Change to Win spokeswoman didn’t respond to questions about the campaign.)
Another labor official said the AFL-CIO, the largest labor federation, is set to ask its own pointed questions of money managers soon.
Munroe said the survey was inspired by the decision by the Financial Services Roundtable, a leading industry group, to lobby against the Free Choice Act. Another section of the questionnaire asks companies if they have any ties to a set of trade organizations and advocacy groups, including the Roundtable.
“We’re happy to openly debate the merits of any issue,” said a top lobbyist for the Roundtable, Scott Talbott. “What’s not up for debate is our Constitutional right to petition our government.
The EFCA, which has so far failed to find the 60 votes it needs to clear cloture in the Senate, would allow unions to recruit workers by signing cards as an alternative to voting with a secret ballot. The bill could also force employers into binding arbitration in contract negotiations.
“In the coming weeks, we will be rolling out initiatives from shareholders, investment groups and businesses in support of the Employee Free Choice Act,” said AFL spokesman Eddie Vale, who declined to discuss targeting Wall Street. “This issue isn’t just about workers; it’s about fixing our economy and growing the middle class.”
Financial industry officials took a darker view of the survey. “The fact that union bosses would try and shake down financial institutions by asking that they disclose information” about the bill “is beyond outrageous,” said an aide to one trade organization, who – like other industry officials rattled by the letters – refused to speak on the record. He also called it “troubling that Big Labor would use their pension plans as the bargaining chip.”
Unions and other large institutions, like universities, have long selectively used board seats and investment positions to advance causes from shareholder rights to democracy in South Africa and human rights in Sudan. Less common is for the institutions to target the behavior of their own money managers.
So far, it’s not clear than any of the unions have pulled their pension funds from firms supporting EFCA, or are close to doing so. But it’s also clear the threat — implied but not made explicit in the letters — has gotten the attention of the firms, who fear that’s the next step. So far, there’s no sign of firms backing out of the card-check fight because of the survey.
Labor backers have nonetheless cheered the new tactic in the no-holds-barred fight for EFCA.
“It’s entirely appropriate for the labor movement to say, basically, ‘Look, if you are working to kill our No. 1 legislative priority, we’re not going to help you make a buck by profiting from our investments, investments that come from the hard-earned money of union members,'” said Jonathan Tasini, the executive director of the pro-union Labor Research Association
Are all union members involved in this movement we see trying to create a tide across the nation?
No – absolutely not. Most are great people, who like a lot of America, don’t realize what is going on around them politically. It bores them.
That is what the bosses count on. That is what the politicians are hoping for. That is the apathy we need to fight.
Think about all the industries that labor unions are involved with that have escalated the cost so much in the last 30 years – FAR more than any other:
Wonder why a 2000 sq ft home has gone up so much? How about a car that is actually made from plastics instead of steel going up instead of down?
Unions also force union companies to work with union suppliers – talk about a pyramid scheme.
Look at the cost of a car and how much that has skyrocketed. Most people can’t easily afford a new car anymore. Look at the number of parts and think about how many union shops that car has actually passed through before it comes to you.
It is worse than a VAT as far as costs go.
And all that isn’t absorbed by a company – it gets passed along to us.
And on top of all this – education – the people who teach kids about all this (though they DON’T – not even in the interest of fair and balanced) are almost all unionized.
Wonder why the government doesn’t want free choice with vouchers allowing kids to go to non union private schools?
This isn’t a conspiracy theory, this is the reality confronting us today. A small minority controls key industries as a cartel, stopping work in multitudes of fields if they go on strike (blackmail), control government representatives that are supposed to support the majority of the people that vote them in (though they support the groups who pay the most), and cost normal people billions every year so they can live like the rich they want the government to soak.
The problem is – white collar middle class, social security, welfare, fixed income, part time, hourly workers – NONE of them have ANY escape from the higher wages bringing higher costs down on their heads. They bear the burden.
I have an idea – term limits on Union Officers. How about the government limiting the wages of the officers like they did to the people with Tarp money – remember unions get financial support from the government.
Let’s make the powerful union people suddenly lose a lot of personal wealth like the greedy corporate pigs they constantly rail on about in their 1200 suits getting out of their limos.
Let’s LEARN the truth – the government performs all the functions of the unions now as far as work weeks, safety, discrimination, etc.
Unions are unnecessary except to put money in the officers pockets, make them feel powerful and put politicians in office to protect their fiefdoms.
Phone, fax and email your representatives and let them know you aren’t ready for all the cost increases we will be looking at if EFCA passes. Unions are dying and being voted down for a reason.
Don’t give them CPR.
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