Check Please

Just hours before he was set to give his first address to a joint session of Congress (essentially a State of the Union speech), President Barack Obama scored yet another major political victory with the confirmation of Secretary of Labor Hilda Solis by an 80-17 vote in the Senate.

The long and contentious battle about Solis’ confirmation undoubtedly served as precursor to what should prove an equally prolonged and bitter battle over key labor legislation supported both by Solis and Obama.

The bill in question is the Employee Free Choice Act, which aims to reverse the trend of declining union membership in the American workforce by streamlining the process by which unions can organize.

Accordingly, the bill provides for increased fines for labor violations, imposes government arbitration in the event that employers and unions fail to reach agreement within 130 days of union ratification and, most contentiously, replaces the current secret ballot system for organization with a simple “card check” of a majority of employees.

On the one hand, it’s hard not to sympathize with the position of unions and the middle-class workers they represent.

In the political climate of the last 30 years, employers have found countless loopholes by which to circumvent the existing National Labor Relations Act and prevent workers from unionizing; violations of existing labor law have gone largely unpunished by the National Labor Relations Board.

The result has been declining real wages and rising inequality between employees and their employers, even as the productivity of the American worker has steadily risen.

Yet the bill provides neither freedom nor choice to the American worker; its title is steeped in enough “doublespeak” to make George Orwell blush.

Of particular concern is the card check provision, which would allow organizers to approach employees in the workplace and inquire as to whether or not they wish to join a union – thereby eliminating the anonymity that workers currently enjoy – replacing employer coercion with union coercion.

Furthermore, the bill could not come at a more inappropriate time. Despite claims by proponents such as the AFL-CIO that unionization creates wealth and will benefit the economy as whole, nothing could be further from the truth.

Those supporting the Employee Free Choice Act ignore the inconvenient truth that economics is a zero sum game. Firms face budget constraints that are very real, and unlike the government, they can’t simply print money out of thin air.

Organization therefore necessarily benefits unionized employees at the expense of the non-unionized or at the expense of capital investment, which allows firms to increase production and create jobs.

If Obama is serious about job creation and rebooting the economy, ratifying the Employee Free Choice Act would prove a critical error. Firms might well decide that the cost of doing business in the United States is too cumbersome and choose to go elsewhere altogether.

Perhaps he should get somebody from Detroit on the line and see how the American auto industry’s marriage to the United Automobile Workers Union is working out.

Promoting equality and improving the lot of working and middle class families is essential for the social and economic health of the country. But if the Obama administration believes that the Employee Free Choice Act fulfills this promise, what they need is not a card check, but a reality check.