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Affluent Investor | June 26, 2017

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Should Union Organizing Be A Civil Right?

Civil Rights Act

In an article I posted back in March, I argued that the United States has very bad labor laws, the National Labor Relations Act in particular. The NLRA tramples all over the rights of employees and employers in its eagerness to confer Power and Privilege (to borrow the title of a book by Professor Morgan O. Reynolds) on unions.

But the NLRA sometimes comes in for criticism from leftists, who argue that it doesn’t do enough to tilt the playing field in favor of unions and collective bargaining. The common complaint is that although the NLRA does make it illegal for employers to discriminate against workers because of union advocacy, the legal processes under that statute are too slow and weak to deter employers from telling workers, “I don’t want to deal with a union and if I find you agitating for one, you’ll be fired.”

To remedy that purported defect in the law, Representatives Keith Ellison (D-MN) and John Lewis (D-GA) recently introduced a bill that would amend the Civil Rights Act of 1964 to allow anyone who charges that he was fired because of his union advocacy to sue under the Civil Rights Act.

Writing on The Hill, Richard Kahlenberg and Moshe Marvit explain, “Even if employees win a judgment from the National Labor Relations Board, they just receive back pay and reinstatement in their jobs….By contrast, our civil rights protections are relatively strong and include compensatory and punitive damages, as well as the right to engage in legal discovery and win attorneys’ fees, when one prevails in federal court.”

The Ellison/Lewis bill would write into law the ideas advanced in Kahlenberg and Marvit’s 2012 book Why Labor Organizing Should Be a Civil Right. One of their key arguments is that income inequality has increased in the U.S. because labor union membership has been waning for decades. (While that’s true for the private sector, public sector unions have steadily grown at the same time.) “Progressives” can’t resist the notion that we’d have a far more equitable society if only more workers (better yet, all) were represented by unions, which redistribute wealth from the rich business owners to the underpaid workers. Therefore, the law should do more to help unions.

But the idea that unions raise compensation for labor in general is just as faulty as the twin leftist belief that raising the minimum wage makes all lower-skill workers better off. What raises wages is increased production. Long before unions had any impact in America, worker pay was rising, due to technological breakthroughs and improved efficiency in the use of resources – both of which unionization tends to hinder.

Now, it’s true that on average, workers in unions earn more than do workers who are not, but it’s fallacious to reason that because on average workers who unionized in the past make more, all workers who unionize now or in the future will reap similar gains. Many decades ago, unions established themselves in those industries where there was little competition and high fixed investment, and extracted all the advantages they could – the auto industry for instance.

That was then. Today, there are few if any of those “opportunities” remaining, and when the unions do come knocking, workers often weigh the tangible costs against the promised but speculative benefits and say “no,” as in the VW Chattanooga case noted above. Moreover, most of the sectors where unions are pushing hard, such as fast food, are ones where high competition and the prospects for automation make unionization foolish.

Unions can’t bring about a general increase in prosperity for workers – some gain but many others lose – and the only clear winners from increasing unionization are the union officials and their political allies. The Supreme Court’s recent decision in Harris v. Quinn was enlightening in that regard. As I pointed out in my article on that case, the union brass was simply siphoning away money from home health-care givers to fatten their coffers.

Even though the economic premise of the Ellison/Lewis bill is flat-out wrong, what about its provisions? One might argue that even if more unionization won’t have the wonderful, redistributive effects that progressives assume, it would still be a good legal change to strengthen protection for workers who want to unionize — or to put it the other way around, the law should do more to deter employers from trying to squelch unionization.

Let’s assume that it is true that the NLRA and NLRB enforcement is too slow and weak to scare anti-union employers into neutrality. Is the Ellison/Lewis bill a proper fix?

I think not. Putting more “teeth” into the law by bringing union organizing under the Civil Rights Act would encourage abusive litigation where workers who were not hired or were fired for good cause to claim that the employer had been motivated by anti-union animus. The Civil Rights Act has proven to be a two-edged sword with regard to alleged racial discrimination in employment and would be the same for alleged hostility to pro-union workers.

If enacted, this bill would no doubt lead to many harassing suits based on claims that a worker was terminated only because the employer wanted to get rid of a union advocate. And bad workers would discover that if they become union zealots, the company will fear to take any action against them.

And yet, there is something wrong with the status quo. It can be a trap for workers who are led by union leaders to think that they can safely talk up unionization because the law protects them, only to soon find themselves unemployed. The union’s determination to proceed with an unfair labor practice complaint and possible back-pay and reinstatement is not a good substitute for a job.

There is a solution to that problem, but not the further politicization of labor relations that progressives demand. The solution is to deregulate labor relations.

In particular, employers ought to be free to tell workers that they do not want to bargain with a union (or equally, that they insist on a union) so that workers will know where they stand. We should repeal the Norris-LaGuardia Act, which prohibits firms from making employment contracts with a no-union clause and repeal the NLRA, which compels firms to negotiate with unions. We should return, in short, to the common law rules of contract that existed before the federalization of labor relations.

In his superb book Simple Rules for a Complex World, Professor Richard Epstein argues for a return to common law in an array of heavily regulated fields, including labor relations. “The present legal arrangements,” he writes, “frustrate the process of civil, nonproblematic negotiations. Rather, people on both sides engage in bluster and bluffing, force, deception, and, in some cases, coalition or intrigue.”

Before the federal government eviscerated the common law and replaced it with a maze of coercive statutes and regulations, employers were just as free as anyone else to contract only on terms they found agreeable and only with parties they wanted to deal with. They could say “no” to unionization and union adherents. Some, but not all, did so.

But wouldn’t unions be impotent under a common law regime? Not at all. There are other means besides legal coercion (which the current model of unionization entails) to expose and counter employers who mistreat workers, or can plausibly be accused of doing so. If Acme Corp. exercises its freedom of contract by declining to hire anyone who won’t agree to a no-union contract, labor and other groups are free to exert pressure against it through information campaigns. Socially minded consumers might easily be induced to boycott Acme, while its good employees might be poached by other firms that maintain such good working conditions that they don’t feel any need to attempt deterring unionization.

American labor law does need to change, but not by encouraging the labor movement to rely even more on the antiquated tactics of legal coercion.

 

Article originally published on Forbes.com.

 

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