Why is labor freedom important?

One of America’s greatest economic strengths is individuals’ and businesses’ ability to adapt to changing conditions. However, in the case of labor markets, many workers and employers remain subject to an array of obsolete New Deal-era labor regulations. The old adversarial model of labor relations has little to offer to the 21st century workforce, which is characterized by horizontal corporate structures and significant job mobility.

Since when has the federal government been involved in labor regulation?

The Davis-Bacon Act, passed in 1931, ushered in an era of federal labor regulation. The Act was the culmination of four years of activism for “prevailing wage” legislation by politicians who were supported by unions seeking to exclude African Americans. Today, unions no longer discriminate against African Americans, but union-backed “prevailing wage” laws, by artificially raising labor costs, discriminate against low-skilled or unskilled workers, taking them out of competition for many jobs.

What is the most extensive labor law in the United States?

The 1935 National Labor Relations Act (NLRA), also known as the Wagner Act, largely carried on the labor provisions of the 1933 National Industrial Recovery Act, which the U.S. Supreme Court struck down as unconstitutional the same year. The Act enshrined monopoly bargaining—that is, a union, once certified, became the sole bargaining agent for all employees at a given company. It also created a new juridical body, the National Labor Relations Board, which, as the late economist Hans Sennholz noted, “became prosecutor, judge, and jury, all in one.” And, said Sennholz, “Anything an employer might do in self-defense became an ‘unfair labor practice’ punishable by the Board.” The 1948 Taft-Hartley Act mitigated some of the NLRA’s worst effects, by allowing states to enact right-to-work laws, which prohibit making union membership a prerequisite for employment, but many of the Act’s problems persist today.

Does minimum wage legislation help or hurt workers?

Politicians love the minimum wage. It is a perfect issue on which to demagogue, since it promises benefits to the public while requiring no tax dollars to be spent, because the costs fall entirely on private businesses. And its costs on workers are hidden—there is no organized political pressure group of people who would have occupied jobs that the minimum wage kept from coming into being. It is especially harmful to workers possessing few or no skills. “Minimum wage laws restrict the employment of low-skill workers when the wage rate exceeds the worker’s marginal productivity,” notes George Mason University economist Thomas Rustici. “By doing so, the law prevents workers with the least skills from acquiring the marketable skills necessary for increasing their future productivity, that is, it keeps them from receiving on-the-job training.” It also makes it more difficult for workers to enter the job market for the first time.

What is “card check” organizing?

Traditionally, unions tried to organize workplaces through secret ballot elections supervised by the National Labor Relations Board. But in recent years unions have been winning only about half of the elections they hold, so now they are trying to change the rules. Card check circumvents secret ballot elections because it requires only that a majority of employees sign cards showing that they support union representation. Employees are often urged to sign cards publicly and in the presence of union organizers, which exposes them to high-pressure tactics which the secret ballot is designed to avoid.

Should trade agreements include labor standard provisions?

Free trade creates new opportunities, jobs, and value for consumers. It allows nations to focus on those goods and services over which they enjoy a competitive advantage and can produce most efficiently at lower cost. Organized labor and their political allies oppose free trade, claiming that it forces countries to weaken their labor laws to obtain a comparative advantage. This view of trade agreements is not only misguided, but dangerously wrong. Burdening trade agreements with additional baggage in the form of labor standard provisions could undermine the very goals of higher labor standards. It is with rising wealth, and rising productivity, that wages rise and labor conditions improve. Mandating and enforcing more stringent labor standards would price workers in developing countries above what their labor will earn in the market—thus shutting them out of the market altogether.