You are here

OpenMarket: Labor and Employment

  • Will Gov. Cuomo Kill the Economic Opportunity James Franco Extols?

    May 8, 2015 1:40 PM

    Kudos to actor, writer, and director James Franco for his Washington Post piece yesterday explaining an important benefit of McDonald’s and the fast-food and franchise industries writ large—they are there for you when you need them.

    James Franco explains that in his case the McDonald’s job was essentially a starting job after being fired from two others. Franco explains that that job sustained him when other avenues were not available. Furthermore, Franco tells how he used that time to develop skills that launched his current career.

    Franco demonstrates the value of a good work ethic and shows how he made the job fun and kept a good attitude.

    Franco’s story points out that in many cases the jobs are starting jobs as skills are developed. The story doesn’t end there though, because it makes the point that such jobs are there for you when nobody else is and at whatever stage of life you may find yourself.

    Women hold 73 percent of these fast-food jobs, writes New York Gov. Andrew Cuomo in an opinion editorial in the New York Times yesterday. Unfortunately, raising the minimum wage is going to do is keep a notable percentage of these women at home, making McDonald’s and other franchise jobs unavailable for them when they need them.

    There are jobs that are going to be lost, and disproportionately it’s the women who will be losing them. If someone has to be let go due to rising labor costs for employers, then there is a 73 percent chance it will be a woman fired from these fast-food jobs.

    About 80 percent of economists surveyed recognize the job-killing reality of minimum wage hikes and 85 percent of econometric studies demonstrate this job-killing phenomenon. 

  • Congress Gives Up Fight against NLRB Ambush Election Rule

    May 8, 2015 10:55 AM

    The Competitive Enterprise Institute planned on scoring the Senate’s veto override vote on S.J. Res. 8, a Congressional Review Act Resolution of Disapproval to void the National Labor Relations Board’s “ambush election” rule. Unfortunately, the Senate voted 96-3 to table the measure in order to focus on other business.

    While it was unlikely that Senate Republicans could have mustered the 67 votes needed to override President Obama’s veto, GOP members should have demanded a vote to put senators on the record on whether they support the special interests of labor unions or worker rights.

    The NLRB’s ambush election rule threatens workers’ freedom of association and privacy, while hampering employers’ abilities to educate employees on the impact of unionization in the workplace.

    Further, the ambush election rule is a regulatory solution in search of a problem that doesn’t exist. Labor unions already win 65.2 percent (FY 2013) of all union elections held. Labor unions win an even higher percentage of elections when employees have less time to educate themselves on unionization, and the main component of the rule is to drastically shorten the time period for union organizing elections, possibly to as little as 11 days after a union files a petition.

  • Theatrical Union Ignores Membership Vote to End Volunteering Exemption

    April 23, 2015 1:33 PM

    If a vote goes against you, ignore it.

    That is what a theatrical union did this week, when it announced it would ditch a longstanding plan that allowed actors to volunteer at small theaters.

    Actors’ Equity Association, which represents 50,000 actors and stage managers, recently held a non-binding referendum on whether to abandon a minimum wage exemption for theaters with less than 100 seats. Members voted against ending the exemption, known as the 99 Seat Theater Plan, by about a two-to-one margin. Granted, the referendum was non-binding, but it does show a union’s leadership going blatantly against the wishes of an overwhelming majority of its membership. 

    Some actors working in small theaters had asked for greater pay, reports Southern California Public Radio (SCPR), but Actors’ Equity’s proposed solution is about as heavy-handed a way to address the issue as could be. “I believe that there is an inequality inside L.A. theater and I think it should be fixed,” actor Ramon De Ocampo told SCPR. “But I don’t think it should be fixed with a sledgehammer. We need to scalpel it away to get that payment.”

    The sledgehammer metaphor is especially apt considering that many actors approach performing in small theaters as a job, but as a means to gain experience and sharpen their skills. As The New York Times reports:

    [H]undreds of union actors working in this city’s distinctive and thriving small theater scene are barely paid for their work. And, in an unusual twist to America’s economic fairness debates, many of them say they are O.K. with that.

    “None of us is here to make money,” Lynn Odell said recently as she rehearsed a science-fiction comedy at Theater of Note, a 42-seat theater that operates in a former auto-glass repair shop in Hollywood. “We are here for the experience.”

    The willingness of Los Angeles actors to perform for a pittance, hoping to hone their craft and, maybe, to catch the eye of an agent or manager, is now at the heart of an extraordinary rift in the union representing theater actors, and has opened a new front in the nation’s battle over the minimum wage.

    Ironically, a prominent defender the 99 Seat Theater Plan is Tim Robbins, an avowedly liberal Hollywood actor who happens to run a small theater.  

  • SEIU Support for Minimum Wage Hikes Based on Self-Interest

    April 13, 2015 10:17 AM

    Why is the Service Employees International Union funneling $15 million into the Fight for 15 campaign when the average private-sector union member makes $22 an hour and only 1 percent of the American workforce earns the minimum wage?

    Union rhetoric would tell you that they support wage hikes as a means to preserve the middle class and to lift low-wage workers out of poverty.

    However, what many do not realize is that unions’ self-interest is the primary motivation for their support of wage hikes, not altruism or concern for the well-being of low-wage workers.

  • The $7 Billion Slowdown

    February 12, 2015 11:12 AM

    The ongoing logjam at ports on the West Coast could cost American retailers around $7 billion this year, according to the consultancy Kurt Salmon. That’s a lot of money, and huge disruption to the nation’s economy. Of course, it’s impossible to prevent disruptions, including large ones, from ever happening. The problem is that this one was not only easily foreseen, but preventable.

    The recent shutdown, and continuing backlog, has followed a similar pattern as past West Coast port shutdowns. That’s because labor at the ports functions as a cartel that can disrupt commercial shipping easily.

    Shippers must negotiate with the union as a group, through a trade group called the Pacific Maritime Association (PMA). The union, International Longshore and Warehouse Union (ILWU), represents dockworkers at ports all down the West Coast. (Unionized port workers on the East and Gulf coasts are represented by the International Longshoremen’s Association.)

    Like railroads and airlines, maritime shipping is a network industry vital to commerce. However, while labor relations at railroads and airlines are covered under the Railway Labor Act (RLA), which was designed to avoid major disruptions to commerce, ports are covered by the National Labor Relations Act (NLRA), which enables disruptions that the RLA doesn’t allow.

    “Railroad crews cannot decide to stop working on the tracks, and airline crews cannot withhold fuel from planes,” explains Diana Furchtgott-Roth of the Manhattan Institute. “But [port] workers can simply not show up for shifts in Los Angeles and Oakland in order to hold out for higher wages.”

    A clear solution would be for Congress to shift jurisdiction of ports from the NLRA to the RLA, much as it extended the RLA’s jurisdiction to airlines in 1936, 10 years after the original Act’s 1926 passage.

    American Action Forum President Douglas Holtz-Eakin explains:

    A cornerstone of the RLA is that its purpose, as stated in the statute, is to “avoid any interruption of commerce” while providing for “the prompt and orderly settlement of all disputes” that arise in labor matters. Labor contracts under the RLA do not expire. Instead, they become “amendable” and remain in force until a new agreement is reached.

    If negotiations are not productive, then federal mediation is required before either unions or employers can engage in “self help” like slowdowns, strikes or lockouts. The National Mediation Board, which oversees the process, says that 99% of all of its mediation cases since 1980 have been handled without interruption.

  • Congress Takes First Shot at NLRB Ambush Election Rule

    February 10, 2015 9:56 AM

    Congress established the National Labor Relations Board as a body made up of neutral arbiters to represent the public in labor disputes. Under the Obama administration, the Board has strayed from its required impartiality to issue rules and decisions that outright favor labor unions over workers and employers.

    An example of the Board unfairly administering national labor policy to advance the interests of labor unions is the implementation of its “ambush election” rule. 

    Specifically, the amendments to union election procedures significantly favor unions by limiting debate and time workers have to learn about the pros and cons of union representation. It does so by shortening the time frame between the filing of a petition and the date on which the election is conducted to as little as 11 days from a median of 38 days.

    Another component of the rule, which inappropriately benefits special interests and jeopardizes worker privacy, compels employers to hand over employees’ private information—cell phone, email address, and work schedule—to union organizers. 

    As I note in the Competitive Enterprise Institute’s agenda for Congress, “Government should not have the power to force employers to disclose workers’ contact information to a special-interest group for any cause. That [ambush election] rule would almost certainly expose workers—who would not have the choice of opting out of union organizers’ obtaining their information—to harassment, intimidation, and much higher risk of identity theft.”

  • Study: Cutting Unemployment Benefits Boosted Hiring

    February 2, 2015 7:49 AM

    President Obama’s policies reduced employment and slowed America’s economic recovery by discouraging people from working. The Congressional Budget Office says Obamacare will shrink employment by around two million workers, which is not surprising, since it punishes some people for earning more money by suddenly taking away thousands of dollars in healthcare tax credits.

    Another example is unemployment benefits, whose excessive duration under the Obama administration retarded economic growth until 2014, when benefits were finally cut back to normal levels over Obama’s objections. A recently-released National Bureau of Economic Research study finds that cutting unemployment benefits caused the lion’s share of America’s job growth in 2014.

    According to that January 2015 working paper, cuts in unemployment insurance caused “nearly all” of 2014’s employment growth, as illustrated by “the abrupt reversal in the relative employment growth trend of high benefit states and border counties in December 2013, right at the time when the benefit durations were cut.”

  • Tossing Free Trinkets—Obama’s Mandatory Paid Leave Proposal

    January 20, 2015 8:51 PM

    Standing high at the rostrum in the House of Representatives during his State of the Union speech, President Obama acts like he’s throwing free trinkets off a tall Mardi Gras parade float. The problem is that the shiny doubloons he throws are not free but rather surreptitiously billed to taxpayers. And so it is with the President’s proposal to mandate paid leave.

    On January 14, 2015, on a blog post on the business networking site LinkedIn, Senior Obama adviser Valerie Jarrett unveiled the President’s “Healthy Families Act.” She said she strategically targeted LinkedIn as “the world's largest online audience of professionals” for the announcement, because, Jarrett claimed, “These are the policies that will attract the best new talent. They are the policies that will make the employees you hire more productive—and encourage them to stay longer.”

    Jarrett announced that, “the President will sign a Presidential Memorandum that will ensure federal employees have access to at least 6 weeks of paid sick leave when a new child arrives…” The Guardian reports that this is part of a strategy “by the White House to kick-start legislative efforts…” President Obama is expected to challenge Congress to apply the same six weeks of paid sick leave to its own staff.

    Financially, the biggest part of the President’s proposal is $2 billion of federal tax dollars to be appropriated to states for establishing paid leave mandates. The President is looking at a total of $1 million in existing funds for grants to states and municipalities to conduct feasibility studies for paid-leave mandates.

  • Free to Prosper: Top Priorities for the 114th Congress

    January 14, 2015 9:29 AM

    With the start of the 114th Congress comes a fresh opportunity to address the challenges created by a broken government. To kick off this new congressional session, the Competitive Enterprise Institute (CEI) recommends numerous reform proposals to strengthen the U.S. economy, increase transparency, and foster fair and open competition instead of favoring special interests.

    CEI’s top policy proposals center on substantive regulatory reforms needed to improve America’s economic health. In 2014 alone, 3,541 new regulations hit the books, and the burden is constantly growing. If federal regulations were a country, their cost would amount to the world’s 10th largest economy.  

    In addition to reining in burdensome regulations, CEI recommends that Congress continue to conduct fundamental oversight to protect Americans from executive overreach. Over the last six years, federal agencies have sought to usurp power from the legislative branch. Congress has a responsibility to demand honesty and accountability from our leaders and defend the rule of law.

  • 20 States Raise Minimum Wage: Happy New Year?

    January 6, 2015 3:30 PM

    The minimum wage is one of the most popular policies for fighting poverty, and proposed increases to it usually poll very well. The $7.25 per hour federal minimum wage hasn’t increased since 2009, so now many states are enacting their own minimum wage hikes. Twenty states are inaugurating 2015 with new increases.

    Danielle Paquette’s recent Washington Post opinion piece, “20 states just raised the minimum wage. It wasn’t enough,” rounds up many of those increases, which range from Florida’s 12-cent hourly hike to as much as $1.25 per hour. Already, the New Year increases are “fattening the wallets of about 3.1 million Americans,” Paquette argues. A similar December 31 New York Times opinion piece by Rachel Abrams carries the headline, “States’ Minimum Wages Rise, Helping Millions of Workers.”

    That sounds about right, as far as it goes. Roughly 2 to 3 percent of U.S. workers earn the minimum wage. With a late 2014 labor force of 156 million people, 3.1 million fatter wallets is in the right ballpark. Yet, these minimum wage increases will not help reduce poverty. Why? The reason is tradeoffs.

    Paquette and Abrams only tell half the story. Millions of workers are getting a raise, but those raises come at a cost. Other workers directly pay for those raises through reduced hours, firings, benefit cuts, and other harms. Those workers and would-be workers have few defenders. My colleague Iain Murray and I recently compiled some of the many costs to these neglected souls:


Subscribe to OpenMarket: Labor and Employment