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OpenMarket: Labor and Employment

  • A State-Level Counter to Card Check

    January 13, 2009 2:42 PM

    As disappointing as the 2005 Kelo v. New London ruling was for supporters of strong property rights, the ensuing months saw a healthy -- and heartening -- backlash at the state level, as lawmakers in several states, responding to contituent outrage, enacted legislative curbs on eminent domain. Now it would be good to see a similar state-level reaction to organized labor's push to corral more workers into unions by undermining the secret ballot process in organizing elections.

    Today, soon after the pro-union advocacy group American Rights at Work launched a major ad campaign in favor of the so-called Employee Free Choice Act (EFCA), which would allow unions to easily circumvent secret ballot elections in organizing drives, former Congressman Ernest Istook (R-Okla.) announced a new state-level effort to enshrine secret ballots in all elections -- including union elections -- in state constitutions.

    Istook, who is now at the Heritage Foundation, where he made the announcement, is Chairman of Save our Secret Ballot, which is launching its state efforts in five states -- Arizona, Arkansas, Missouri, Nevada, and Utah -- with other states to follow. He noted that, contrary to what many people might think, secret ballots are not protected in the U.S. Constitution -- but state constitutions can expand on those rights protected at the federal level. The proposed amendment reads:

    The right of individuals to vote by secret ballot is fundamental. Where state or federal law requires elections for public office or public votes on initiatives or referenda, or designations or authorizations of employee representation, the right of individuals to vote by secret ballot shall be guaranteed.

  • SEIU's California Scheming IV -- and Illinois, too

    January 9, 2009 7:16 PM

    Service Employees International Union (SEIU) finalized a contentious merger of several California locals into a statewide "superlocal." Sal Rosselli, the head of one of the locals that was dissolved in this process, has fought the centralizing efforts of SEIU President Andy Stern, but, as evident not, to no avail. SF Weekly's Matt Smith notes:

    The move is seen in U.S. Labor movement circles as a ploy to neuter Sal Rosselli, president of United Healthcare Workers - West.

    Rosselli has clashed with Stern over  a 2004 agreement with nursing home chains in which the union supported legislation curtailing patient rights in exchange for permission to allow the union to recruit members at certain facilities. Today's move erodes Rosselli's clout by two-fifths, and paves the way for a new nursing home lobbying/organizing agreement.

    This mega-merger of California local unions comes at what should be an awkward time for SEIU, considering its recent high-profile scandal in that state -- and nationally. The head of a Los Angeles SEIU local was recently forced to resign after the Los Angeles Times broke the story on a corruption scandal there. And Stern himself may soon face some embarrassing questions regarding his relationship with disgraced Illinois Governor Rod Blagojevich.

  • Card Check Loses Support, but Threat Isn't Over

    January 5, 2009 6:16 PM

    Today in The Wall Street Journal, Kimberley Strassel dissects the shifting political prospects for the Employee Free Choice Act (EFCA), commonly known as the "card check" bill. ("Card check" is a unionization procedure whereby union organizers circumvent the secret ballot process by getting workers to sign union cards in the open, exposing them  to aggressive, hard-sell intimidation tactics.)

    It hasn't been much noticed, but the political ground is already shifting under Big Labor's card-check initiative. The unions poured unprecedented money and manpower into getting Democrats elected; their payoff was supposed to be a bill that would allow them to intimidate more workers into joining unions. The conventional wisdom was that Barack Obama and an unfettered Democratic majority would write that check, lickety-split.

    Instead, union leaders now say they are being told card check won't happen soon. It seems the Obama team plans to devote its opening months to important issues, like the economy, and has no intention of jumping straight into the mother of all labor brawls. It also seems Majority Leader Harry Reid, even with his new numbers, might not have what it takes to overcome a filibuster. It's a case study in how quickly a political landscape can change, and how frequently the conventional wisdom is wrong.

    Paradoxically, it's Mr. Reid's bigger majority that is now hurting him. In 2007, he got every Democrat (save South Dakota's Tim Johnson, who was out sick) to vote for cloture. But it was an easy vote. Democrats like Mr. Pryor knew the GOP held the filibuster, and that Mr. Bush stood ready with a veto. Now that Mr. Reid has 58 seats, red-state Democrats in particular are worried they might actually have to pass this turkey, infuriating voters and businesses back home.

  • Bush Auto Bailout Illegal, Bailout Supporter Admits

    December 20, 2008 5:13 PM

    Clinton Administration Labor Secretary Robert Reich, who supports bailing out the Detroit automakers (whose unionized workers are paid $70 an hour), nevertheless points out that the Bush Administration's plan for an auto bailout, using financial-system bailout funds, is illegal and unconstitutional. We, the Heritage Foundation, and many others earlier reached the same conclusion.

    The Bush auto bailout is a waste of billions of dollars in taxpayers money. It will be less successful in restructuring the auto industry and restoring its competitiveness than it would be for the Detroit automakers to file for bankruptcy under Chapter 11.

  • The Real Auto Bailout: A Six Point Plan for Regulatory Relief

    December 19, 2008 2:49 PM

    Here's what the auto companies really need - a reduction in the regulatory burden placed on them by Congress. These burdens have placed Detroit at a competitive disadvantage because a lot of them are aimed at eliminating the sort of vehicles that Detroit has proved adept at designing and marketing.

    1. Repeal the CAFE requirements. They restrict consumer choice by insisting that fuel economy take precedence over safety, and impose restrictions on design that reduce the competitive advantage of Detroit automakers. If reduction in fuel use is a necessary policy goal - and CEI would contend that it is not - there are other policy vehicles to use that would not impose direct costs on the automakers or restrict consumer choice. Moreover, by reducing the weight of vehicles, CAFE removes the single most cost-effective safety design feature there is. It would also remove the ludicrous "two fleet" rule that uniquely hampers US automakers.

    2. Reduce the burden of safety legislation. There are too many safety rules on the books that are actually counter-productive, like mandated air bags. Consumers should be free to pick from a "menu of safety options," taking their own individual circumstances and preferences into account. This should not be taken as a suggestion that automakers should be free to build cars that explode on ignition, but that there is a range of safety considerations that range from safe to extremely safe, and at present we are mandating too many "extremely safe" features while at the same time perversely reducing safety though CAFE (see point 1 above). Again, the Detroit manufacturers feel these more intensely than other manufacturers because of the sort of vehicles they have specialized in.

    3. Halt the march of further design regulations. There are plenty of examples here.

  • Bush Bailout Beggars Belief

    December 19, 2008 11:36 AM

    If there's one provision in the GM/Chrysler bailout that I just don't get, it's the suggestion that the automakers must be financially viable by March 31st next year or they will have to repay the loans.

    Unless I'm missing something, if you're not financially viable, repaying $17.4 billion will be just a tad difficult. This will presumably force those automakers into Chapter 11, which is what the bailout was meant to avoid, at least partly to avoid the "ripple effect" that the much more responsible Ford is worried about. In these market conditions, it is hard to see any way that the companies can meet that condition without engaging in some sort of fire sale (which will in turn have ripple effects).

    It therefore looks like, rather than some pre-packaged bankruptcy, the Bush administration has handed its successor a pre-packaged crisis. On April Fools' Day, of all days, President Obama will be forced to extend the loans, provide more funds or otherwise cave to GM/Chrysler/UAW demands.

    However you look at it, this is not responsible government. This bailout beggars belief.

    (A further post will provide details of what sort of non-financial bailout could help).

  • Antitrust liberalization may avert need for bailouts -- outdated laws deter efficient mergers from GM-Chrysler to Whole Foods-Wild Oats

    December 14, 2008 5:57 PM

    In early 2007, the economy was humming along and General Motors was considered to be in the process of a turnaround. To help stabilize itself, the company was considering buying its smaller, money-losing rival Chrysler.

    But it faced a stumbling block in the form of antitrust law. According to analysts looking at a potential merger, the government would consider a combined GM and Chrysler too big and powerful with the ability to drive competition out of the market. The Wall Street Journal reported in March 2007 that such a merger "would probably face difficulty gaining approval from antitrust authorities because it would give the combined entity a highly concentrated position."

    Today, with GM on the brink of bankruptcy, such a claim seems especially laughable. But even way back in 2007 it was clear that the Big 3 had more than their share of competition from foreign automakers. An analyst for Bear Stearns & Co. (boy, a lot has happened since the beginning of 2008!) told Bloomberg that while "barriers to entry in passenger cars are relatively low," the merger might hit the rocks because of the dominant position such a company would have in the "light truck" category that includes sport utility vehicles, minvans and pickups.

  • Deregulatory Bailout

    December 12, 2008 5:30 PM

    There are hundreds of regulations that Congress and agencies have imposed on the auto industry, driving up their costs unnecessarily. As an illustration, these are the new rules from the DOT identified by Wayne Crews in the 2008 edition of Ten Thousand Commandments:

    – Reform of the automobile fuel economy standards program.
    – Light-truck Corporate Average Fuel Economy standards (2012 model years and beyond).
    – Upgrade of head restraints in vehicles.
    – Rear center lap and shoulder belt requirement.
    – Monitoring systems for improved tire safety and tire pressure.
    – Automotive regulations for car lighting, door retention, brake hoses, daytime running-light glare, and side impact protection.

    Plus these from the EPA:

    – Rulemaking to address greenhouse gas emissions from motor vehicles.
    – Clean air visibility, mercury, and ozone implementation rules.
    – Review of National Ambient Air Quality Standards for lead, ozone, sulfur dioxide, particulate matter, and nitrogen dioxide.
    – National emission standards for hazardous air pollutants from ... auto paints.

    These rules and all those from previous years need to be reanalyzed in the light of the industry's troubles to see whether they should be repealed, suspended or weakened. In particular, attention should be paid to their aggregate effect on the industry. A deregulatory bailout would save the industry billions, and also save thousands of lives.

  • Auto Bailout - Destroying Detroit by 'saving' it

    December 11, 2008 6:07 AM

    In a famous quotation from his 1986 address to the annual White House Conference on Small Business, President Ronald Reagan quipped that "government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

    The Detroit bailout bill that passed the U.S. House of Representatives last night -- agreed to by the White House and Democratic leaders but at this point apparently without enough Republican support to survive a filbuster in the Senate -- is unique in that it fulfills all three of the government actions Reagan describes in one fell swoop. All it once it not only subsidizes U.S. automakers, it subjects them to heavy regulation as well that have nothing to do with profitability and everything to do with fulfilling "environmentally correct" objectives.

    Existing mandates can in part -- but only in part -- explain some of Detroit's downfall. As CEI's Sam Kazman wrote recently in the Detroit News, the Corporate Average Fuel Economy (CAFE) standards are a "$100 billion research and development burden" that "have long been a noose around the industry's neck. CAFE ignores the market, in which consumers balance their demands for fuel efficiency against other needs such as size, and forces automakers to sell models of cars, so that the "average" car meets a ceratain miles-per-gallon.

  • Claim of consumers' fear of auto bankruptcy a canard in bailout debate

    December 8, 2008 6:54 AM

    Eli, in answer to the blog post you phrased as a question, the argument from the individual you heard, echoed by other Big 3 execs, is not a valid point in support of a bailout.

    Their claim that consumers won't buy from an automaker in bankruptcy is a specious argument. Yes, some won't, but many consumers also are not going to buy cars from companies perceived to be so weak that they have to beg for a bailout from the government. A company's clutching to a government lifeline to keep from going bankrupt wouldn't be that much different for many car buyers than an actual bankruptcy.

    This is particularly true if the government forces the companies, as a condition of the bailout, to make "environmentally correct" cars that no one really wants. A company emerging from a Chapter 11 bankruptcy, by contrast, has a chance to win consumers back by making products that they want.

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