The Employee Free Choice Act, which represents fundamental reform of labor laws, is ostensibly dead – for now. It will soon re-emerge because it remains a priority for unions and many Democrats. For average workers, however, it constitutes a real problem.
“Card check,” as the legislation is known, would eliminate workers’ right to secret-ballot voting to confirm a union as their exclusive representative. Today, 30 percent of workers need to sign union cards, followed by a secret-ballot election overseen by the National Labor Relations Board. EFCA would automatically certify unions when 50 percent, plus one, of workers in that shop signed union cards.
The act also imposes a two-year contract through government arbitration when an employer and newly recognized union cannot agree to a first contract. The incentive for any newly installed union is to push for enormous concessions by the employer, given the likely receptiveness of labor-friendly, Obama-appointed arbitrators. Increases in labor disputes and strikes are likely.
The bill would also dramatically alter the balance between the right of workers to organize collectively and their right to reject such a choice. It also generally shifts the balance of power away from workers and employers, and to unions. This has larger ramifications than just a single company or union. Professors Timothy Besley and Robin Burgess, both at the London School of Economics, concluded in a 2004 paper that moving the balance of power toward unions resulted in less employment and investment, and lower productivity.
These finding were recently confirmed in an economic analysis of the Employee Free Choice Act that appeared on the Social Science Research Network. The study concluded that the private-sector unemployment rate would increase between 1.5 to 3.5 percentage points, representing an additional 2.3 million to 5.4 million unemployed workers.
These findings are further corroborated by the experience of Canada, which has used similar laws extensively and is now moving away from them because they inhibited investment and job creation.
The Canadian provinces of Ontario and British Columbia, for example, eliminated secret-ballot voting and introduced card check. The negative consequences quickly became evident in reduced investment, higher unemployment and less job creation. Both provinces reinstated secret-ballot voting. That helped reverse the economic losses and restore a sense of balance in union-employer relations.
Research summarized by University of Chicago law professor Richard Epstein suggests that union arguments for the Employee Free Choice Act are not supported by evidence. Unions often rationalize the proposed legislation to counter inappropriate pressure and, perhaps, even the firing of employees. Unions also decry lengthy election periods for voting on union representation.
An examination of the NLRB data indicates that over a three-year period the likelihood of an improper firing by an employer during a union drive was 2.7 percent. This is a far cry from the 25 percent figure cited by unions.
Similarly, NLRB data shows a fairly successful ability to hold union votes in a reasonable amount of time. For example, in 2007, 93.9 percent of all elections were completed within 56 days of filing. The notion that employers drag out elections for years is simply not supported by the NLRB data.
The Canadian experience again affirms these results. Employer intimidation of workers during a union campaign, defined as unfair labor practices, was quite small. Indeed, one prominent study found no overall significant effect of employer opposition on union success rates. It is far more likely that increased union success under card check comes from increased worker intimidation by unions.
The ongoing debate about the Employee Free Choice Act and labor reform should include more evidence and less rhetoric. The empirical evidence clearly shows that laws such as card check harm investment, curtail job creation and increase unemployment. These are not remedies for what ails the U.S. economy, and indeed would make things much worse.
The Opposing View
In Thursday’s Chronicle, David Bacon, a Bay Area author who often writes on labor issues, argued that workers need the Employee Free Choice Act to keep unions strong. You can read it at You can read it at www.sfgate.com/ZGSJ.
Jason Clemens is the director of research at the Pacific Research Institute in San Francisco (www.pacificresearch.org). He spent more than 10 years in Canada at the Fraser Institute.
This article appeared on page A – 17 of the San Francisco Chronicle