A year ago, I suggested renaming Labor Day, which is associated with unions, to simply End of Summer Day. I also urged, in the interest of improving the economy and raising employment, that the federal government deregulate private labor and states end the recognition of public employee unions.
In the past year, some states, including Wisconsin, have begun addressing the problem of public employee unions. Federal regulation of labor, however, has only worsened, and the Department of Labor has encouraged public employee unions and poor “jobs” programs.
National Labor Relations Board
The NLRB conducts elections concerning the formation of unions, and investigates and addressed unfair labor practices. It has jurisdiction over most private employers and the U.S. Postal Service. As I wrote last year:
Unions are simply a special interest favored by the government. Federal labor laws force private employers to recognize and bargain with unions, and for workers to accommodate them. Absent this protection, private employers and workers could freely decline to deal with unions. From a libertarian standpoint, it is immoral for the government to coerce the accommodation. As a matter of economics, government’s interference is destructive.
In a notorious case, the NLRB sued Boeing Company for opening a non-union plant in South Carolina. A Wall Street Journal editorial observed:
When CEOs or entrepreneurs fear political intervention that might impose higher costs, they are more reluctant to invest or to hire new employees. That’s especially true when the economy is already growing slowly, or emerging from recession.
The NLRB’s assault on Boeing has been especially damaging because it violates what most Americans consider to be a core tenet of U.S. capitalism—the ability to move capital or business where you think it has the best chance of success.
The NLRB also proposed rules to 1) expedite elections on the formation of unions, and 2) expand companies’ disclosure concerning advice obtained in responding to union drives. As attorney Eugene Scalia noted, the rules are “meant to change election outcomes by limiting speech and helping one side get a jump on the other.”
Most recently, the NLRB has issued a rule requiring employers to put up large posters informing workers of their right to unionize. Diana Furchtgott-Roth recognized that the requirement burdens employers already suffering under regulatory paperwork, and “is yet another message to employers that the administration regards them with hostility and suspicion.”
Department of Labor
The DOL now describes its mission as follows:
To foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.
In other words, the DOL administer laws and regulations that interfere with the marketplace for labor, to the detriment of the economy in general and workers in particular. The DOL also collects labor statistics. This has necessitated its being a bearer of the bad unemployment news that has resulted from the current administration’s poor policies, including the favoring of unions.
The Cato Institute’s Downsizing the Federal Government Project suggests major cuts in the DOL’s role and budget. I favor the most drastic cuts possible.
It is instructive to review the DOL’s role as a propaganda arm for the administration. This reveals the political nature of the department, and reflects its use as a tool for unions.
The Secretary of Labor remains Hilda Solis. Ms. Solis was a representative to Congress from California from 2001-2008, and her record made her a good fit with this administration. The National Taxpayers Union gave her an “F” for her votes affecting taxes, spending, and debt every one of her years in office.
Private Sector Unions
Ms. Solis is an apologist for government forcing employers to engage in collective bargaining, calling it “sitting at the table.” This charming image, however, is misleading. A more accurate description would be “government’s using the threat of violence to force employers to negotiate with unions.”
Ms. Solis sees unions as a source of prosperity:
During my two years as labor secretary, I’ve seen firsthand time and time again how unions make remarkable contributions to the strength and prosperity of our nation. In workplaces from my home state of California to Washington, D.C., where I spend most of my time now, and everywhere in between, organized labor is helping businesses improve their bottom line, make workplaces safer and more productive, and ensure that all Americans have the opportunity to achieve the middle class.
If unions were really a blessing, there would be no need for government coercion of employers to engage in collective bargaining. In fact, Ms. Solis’s claims are belied by the fact that membership in private sector unions has steadily declined. Further, states with right-to-work laws, which allow workers to decide whether or not to join a union, are more attractive to people and more economically successful. Economist Richard Vedder concluded:
People move in extraordinary numbers to right-to-work states from states where union pressure has prevented the adoption of such laws. Moreover, the greater flexibility for workers and employers offered where right-to-work exists has contributed to higher rates of economic growth rates in the right-to-work environment.
Public Employee Unions
While the DOL lacks jurisdiction over state public employee unions, Ms. Solis has joined the White House in speaking out in favor of their retaining their privileges:
Their collective voice gives them the opportunity and the right to actually improve public education, public heath, and public safety and security. They deserve the right to have their voices heard when they speak out for job security and safe workplaces. Unions fight for better wages and benefits, not just for their members, but for everyone.
It is laughable that public employee unions are a force for improving services. If they were, they would advocate ending state and municipal monopolies in favor of free markets. Unions serve the interests of their members, not those of the public. Teachers unions, for instance, fight reforms that would allow the termination of bad teachers and the expansion of educational choice.
As to unions fighting for better wages and benefits “for everyone,” this is an odd assertion. As Chris Edwards of Cato wrote, “Unionized public sector workers have much higher average wages and benefits than nonunionized public sector workers.” The union members’ generous compensation comes at the expense of taxpayers, and underfunded pensions and unfunded retirement health benefits are fiscal time bombs.
“Jobs” Plan
Ms. Solis has faithfully endorsed Pres. Obama’s pending jobs plan, citing the extension of the payroll tax cut, giving incentives to companies willing to hire the unemployed, and “investment” in infrastructure. She explained:
“We are in need of extending some good programs that I think work… This whole economic situation has taken many people by surprise. But I think there’s still a lot of confidence and support in the president’s work.”
In reality, the programs did not work and will not work. The economy is suffering from “regime uncertainty”—economist Robert Higgs’s concept—created by an administration hostile to capitalism. Further, governments do not “invest”—they spend. Rather than government spending on infrastructure, it should privatize it.
The “economic situation” may have “surprised” Ms. Solis and others in the administration. It has not, however, surprised all of us. Some of us warned that Pres. Obama’s policies, including his favoring of unions and aggressive spending and regulation, would prolong the recession.
Finally, the level of “confidence and support in the president’s work,” as reflected in polls, naturally has been crashing. The Hill reported on Sept. 1st:
Voter dissatisfaction with the president is surging as the economic recovery falters. A new poll released Thursday found that public disapproval of Obama’s handling of the economy is at an all-time high.
The CNN/ORC survey found that 65 percent of Americans disapprove of the way Obama is handling the economy, while 62 percent disapprove of his work to battle unemployment.
Conclusion
The White House has acknowledged that the unemployment rate likely will remain above 9% through the November 2012 election. This means that next year’s Labor Day will be another troubled day for millions of people. The “union label” on the holiday can remind us of the cost to our well-being of policies that unfairly favor organized labor.
