Carl Wimmer’s Attack on Labor Organizing

So, true to his word, Carl Wimmer has proposed HJR008 – House Joint Resolution 8, which reads in its entirety:

Be it resolved by the Legislature of the state of Utah, two-thirds of all members elected to each of the two houses voting in favor thereof:

Section 1. It is proposed to enact Utah Constitution Article I, Section 30, to read:

Article I, Section 30. [Secret ballot.]
The right of the people to vote by secret ballot is fundamental. The right to vote by secret ballot in an election under state or federal law for public office, on an initiative or referendum, or to designate or authorize employee representation may not be infringed.

Section 2. Submittal to voters.
The lieutenant governor is directed to submit this proposed amendment to the voters of the state at the next regular general election in the manner provided by law.

Section 3. Effective date.
If the amendment proposed by this joint resolution is approved by a majority of those voting on it at the next regular general election, the amendment shall take effect on January 1, 2011.

There’s an old saw about legislation: if you want to know what its really about look for the passage concerning the red-haired, one eyed man with a cane and a a limp. Wimmer’s red-haired man is in the final line his proposed amendment:

to designate or authorize employee representation

Wimmer is staging a pre-emptive attempt to block a portion of the Employee Free Choice Act (an act, mind you, which has not passed yet). Like the second part of Amendment 3, Wimmer’s line about employee representation is really the crux of the issue.

Unions, as Robert Reich argued, are good for America:

: Go back about 50 years, when America’s middle class was expanding and the economy was soaring. Paychecks were big enough to allow us to buy all the goods and services we produced. It was a virtuous circle. Good pay meant more purchases, and more purchases meant more jobs.

At the center of this virtuous circle were unions. In 1955, more than a third of working Americans belonged to one. Unions gave them the bargaining leverage they needed to get the paychecks that kept the economy going. So many Americans were unionized that wage agreements spilled over to nonunionized workplaces as well. Employers knew they had to match union wages to compete for workers and to recruit the best ones.

Forming a union is almost impossible today. Mismanagement at the Federal agencies responsible for Labor Law combined with deliberate regime of laws designed to weaken labor have reduced unions to less than 10% of the total labor force.

Although America and its economy need unions, it’s become nearly impossible for employees to form one. The Hart poll I cited tells us that 57 million workers would want to be in a union if they could have one. But those who try to form a union, according to researchers at MIT, have only about a 1 in 5 chance of successfully doing so.

The reason? Most of the time, employees who want to form a union are threatened and intimidated by their employers. And all too often, if they don’t heed the warnings, they’re fired, even though that’s illegal. I saw this when I was secretary of Labor over a decade ago. We tried to penalize employers that broke the law, but the fines are minuscule. Too many employers consider them a cost of doing business.

The Employee Free Choice Act – EFCA for short – is aimed at increasing penalties for employees who violate workers’ rights, as well as making it easier to form unions through a process called “Card Check.”

Here’s how it works:

In our current system, if 30% of employees sign a card stating they want a union, the process of forming a union begins. During this process, employers often hire consulting firms who specialize in defeating union organizing attempts – experiences that can include mandatory sessions lead by specialists in anti-union propaganda, various forms of intimidation and a host of sleazy tactics that result in terminations (for instance, WalMart has been known to change employees’ work schedules for the next day after they leave work – so when they show up at what they thought was their scheduled time the next day, they are late for work, or they are early and have to leave then come back; other companies will set productivity goals that only a small portion of the workforce can meet and hold everyone equally accountable for meeting them). Under the current system, employers can drag out the process of forming a union for months, even years and face little or no penalty.

The legal environment favors employers who negotiate in faith, who actively fight unions, even engaging in illegal acts to do so.

Under EFCA, if a majority of employees sign union cards, the union automatically becomes the designated negotiator for employees – this is called Card Check. It negates the need for a secret ballot election to form a union. (Which I’ll come back to.) Consider this analysis of EFCA:

For all the controversy, EFCA is a surprisingly modest bill, with provisions aimed at strengthening existing labor laws rather than altering them substantively. Under EFCA, if Rite Aid had been found guilty of making illegal threats or of spying or of intimidation, it could have faced a monetary penalty—up to $20,000 per incident in cases of repeated violations. If Rite Aid had been found to have illegally fired a union supporter, it would have been required to pay not just the back wages, but three times the back wages. And if contract negotiations were being conducted without results, either party could seek federal mediation after ninety days. If, after thirty additional days, negotiations were still stalled, then an arbiter would be able to impose a contract settlement that would last two years. This would prevent employers (or employees) from running out the clock with bad-faith talks.

Attacks on card check miss the point. Union elections in many workplaces are hardly the picture of what most Americans would consider a healthy, open election. Employers determined to derail unionization are able to undermine, attack and alter the process. The problem is simple: in a fair and open election, both sides want a vote. In union elections, employers don’t want a vote – the longer they delay the vote, the more likely they are to defeat a union effort. Card Check is a way around that – allowing a majority to form a union with an “official” vote. It’s important to note that EFCA doesn’t eliminate secret ballot voting, it creates a circumstance under which it becomes one way of forming a union, while Card Check is another.

Given that card check is substantively minor, why has it come to define the entire debate about EFCA in Washington? Because it is the one element of the bill that its opponents can object to and still seem principled—it’s easier to stand up for “democracy” than for the right of companies to break labor laws without consequence.

HJR 08 is an attempt not to preserve elections but to pre-empt card check. The real test of this bill is simple: Would Rep Wimmer accept a substitute without the line about employee representation? If not, then you know he has no real interest in clean elections or secret ballots, just in attacking unions. I hope some reporter asks him the question.

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  1. #1 by Richard Warnick on January 29, 2009 - 4:23 pm

    I read somewhere that the biggest problem is that even when employers are caught in illegal anti-union tactics, there are no penalties under current law. Wal-Mart is the classic example. This is what the Employee Free Choice Act is intended to fix.

    I wonder if Utah politicians are familiar with the Supremacy Clause. Federal statutes override state law, even state constitutions.

  2. #2 by Glenden Brown on January 29, 2009 - 4:58 pm

    EFCA actually increases the penalties for illegal anti-union tactics, but yeah, for the most part under the current system penalties are minimal if not non-existent. Employers basically treat it as “cost of doing business.”

  3. #3 by Tyler on January 29, 2009 - 4:59 pm

    Glenden,
    A couple of questions for you.

    I recognize that the “card check” portion of the legislation is a small portion; however it seems to be significant. I have asked many supporters their position on the issue and I usually get one of two answers:

    1. Unions are good
    2. Employers are bad

    I agree that some unions are good and that some employers are bad; however the card check provision seems like a terrible way to handle it. Unions may be good, but the right to choose a union is just as important. Employees should not be coerced into joining one just as they should not be coerced into not joining one. Is there an answer beyond this?

    Also, would you support allowing a union to be disbanded through the same procedure? If not, why?

    I also understand that a majority of union elections are won by the unions. Am I incorrect? This would undercut your employers are evil but union bosses are angels rhetoric.

    I am all for preventing intimidation, but employers should have the right to explain the downsides of unionizing just as unions should have the right to explain the positive situation. Is there a way this can be made possible?

  4. #4 by Glenden Brown on January 29, 2009 - 5:25 pm

    Tyler –

    A union organizing effort has a 1 in 5 chance of succeeded according to research from MIT so no, a majority of union elections are not won by the unions.

    The problem with anti-union efforts is found in their one-sided nature – employers do everything in their power to block pro-union information from reaching employees. Instance of union corruption are actually quite rare – the Teamsters under Jimmy Hoffa were the exception not the rule. Employees are significantly more likely to encounter coercive tactics discouraging them from joining unions than they are encouraging them to join. Polling shows that huge number of American workers want to join unions and can’t (I saw a number that estimated that number at 57 million). The answer of course is a fair process, not one weighted in favor of employers as is our current system. The US has the lowest unionization rate of any major industrialized nation – that is a function of US law.

    What exactly are the downsides of joining unions that you think people don’t already know and they need their employers to explain to them?

    Unions have a huge investment in maintaining their credibility through being honest, through being upfront. They are run by the members. They fight for workers rights. They benefit the economy as a whole. I think the current economic downturn is a good argument in favor of unions.

  5. #5 by Tyler on January 29, 2009 - 6:12 pm

    Glenden,
    Thank you for answering my question about organization.

    Businesses also have an interest in keeping credibility.

    In answer to your question, I think employees of union companies are in employment by litigation. Its partially a subcontract situation. There are consequences of this that employers should be allowed to enumerate (limited pay increases, minimized merit pay, slowed innovation, etc.). Unions often make political contributions employees do not necessarily agree with. These are some of the issues employers should be allowed to mention.

    The thrust of my question remains a process one:

    If we are trying to generate a process where employees can hear both sides and make an uncoerced decision, then shouldn’t that decision be made by secret ballot such that nobody can know what was done? Whether or not unions are good is immaterial to this question.

    I am all for giving teeth to the NLRB, so long as those teeth cut both ways.

    I would disagree with your survey because we have independent polls (secret ballots) that aren’t subject to the bias that traditional polls are.

  6. #6 by Glenden Brown on January 29, 2009 - 8:47 pm

    Tyler – businesses have an investment in maintaining credibility but they also have a different set stakeholders. In a publicly traded company, they are accountable to shareholders who demand that companies maintain high stock prices – much of the bubble economy of the last decade has been driven by that dynamic. At the same time, corporations often race to the bottom – they have no loyalty to their employees or customers – if they can squeeze an extra few dollars of profit, they’ll try unless someone holds their feet to the fire to behave as responsible corporate citizens. In Reason, Robert Reich argues that it’s a mistake to try to race to the bottom – we can’t sustain our economy by trying to pay the lowest wages in the world, we can’t sustain our economy by trying to be the cheapest producer. We can sustain our economy by emphasizing education and training, technology, research. We have to build things, yes, but ultimately we have to be the leaders in the world in a lot of areas – that will build our economy.

    Unions work for their members – advocating for what is best for its members. Union companies actually produce an interesting pattern of pay raises – lower paid workers actually get larger raises (to get them up to union standard faster), while higher paid workers get smaller raises comparatively but overall make more money than non-union workers (I think it’s almost 30% more). The argument that unions lead to less innovation doesn’t make sense when you consider that nations like Japan have higher unionization than the US – in fact by many measure, heavily unionized Europe is ahead of the US in many areas of innovation and technology.

    Card Check isn’t the end of secret ballot – if employees want a secret ballot they can still get one. Card Check, however, short circuits the anti-union activities many companies use. Card Check however doesn’t create a union unless a majority of employees have signed.

    I don’t think we need to protect corporations – they have the resources to protect themselves, to hire armies of lawyers and lobbyists. Employees need something to level the playing field with regard to corporations. That’s what history has taught us – corporations won’t protect their workers by their own volition (fwiw, many corporations do treat their employees well and with dignity but I think they’re the exceptions not the rule).

    Given a fair chance, American workers like Unions. My grandfather was a union welder and his union membership was hugely important to him and to my grandmother. Unions aren’t just about what they do in the workplace. Unions provide social capital for working class Americans, they help create community leaders, and they build connections within communities.

  7. #7 by Tyler on January 29, 2009 - 10:48 pm

    Glenden,
    I think the employees that don’t want a union deserve a secret ballot too. That doesn’t happen if you get rid of card check. You are still assuming that every employee wants a union or at least should want one.

    I agree that the employees in bad organizations (the American automakers) should have a union, but some employees do not want the animosity that unions create.

    I don’t think you can stereotype all of our corporations as being a “race to the bottom.” America’s best corporations have an interest in keeping employees. The cost of replacing someone is incredibly high. Companies like General Mills, Disney, Johnson & Johnson, and Fed Ex treat their employees incredibly well. These employees don’t want unions.

    American unions are different from Japanese ones. American unions ask for more money and less work–Japanese ones equate increased production with increased living standards. You are comparing apples and oranges here. The culture of honesty and hard work in Japan is not matched in America.

    I honestly see unions as creating a race to the bottom. They destroy the culture of cooperation in a business and make discussions about “what can I get?” The result is UAW preventing technological advancement and the Big 3′s management giving themselves outrageous salaries/perks. This culture, more than the money alone, has caused the downfall of these giants. Compare the non-unionized foreign plants in the southern united states. Employees make a little less but enjoy their jobs. Management makes less too, and is far more responsive to employee concerns. This simply doesn’t cut it anymore in a competitive marketplace.

    Americans need to realize that in an era of globalization, blue collar work is going to pay less and less. We should be educating people and helping them get quality education.

  8. #8 by Glenden Brown on January 31, 2009 - 7:55 pm

    The argument that US car companies have failed because of Unions is unsupported by evidence. Unions don’t stop companies from investing in new technology or convince American car companies to build giant SUVs and not plan for a future when gas prices were higher – that was management all by itself. Union insistence on things like safe workplaces, fair wages, retirement plans don’t create a race to the bottom – that’s what happens when employers spend all their energy to cut wages and prices and do things like send jobs to countries with few if any labor and environmental laws. Workers in the non-unionized plants in the south don’t make a little less than workers in Detroit – they make a lot less, half as much on average (one issue republican lawmakers proposed was forcing the UAW workers to accept the same wages as a condition for helping american automakers last year).

    Unions played a key role in creating the broad middle class economy in the US beginning in the late 40s and lasting until the early 70s. Unions boosted incomes – which allowed consumers to buy goods which drove economic growth, which benefited companies. Yes, there were other sources of that era’s economic growth but unions played a key role.

    The fear of intimidation in workplaces is a very real one but the source is almost always management, not unions. There are more industries than manufacturing that can be unionzed – hotel workers, mining, airline pilots, flight attendants, farm labor, grocery stores, industrial distribution, warehouses, IT and other technical industries. What is the Bar Association other than a professional union? Not all labor issues are solely about pay – they can be about ethical standards, conduct, training and skills.

    The japanese model is also radically different in terms of management perspective on Unions. In the US, many employers regard unions as the enemy. Japanese companies, by contrast, see unions as partners. The issue isn’t about unions creating an adversarial environment – it is about a set of business assumptions that create a very different environment. If employers were equally dedicated to treating workers with dignity and paying a living wage, there’s be no need for unions at all but that’s not the case.

    The system of corporate compensation is completely broken – apparently dissociated from outcomes in many US companies. Given our current economic state and the way in which the high paid managerial employees managed to screw up almost everything they’ve touched, that high pay isn’t a guarantee of good decisions. In many companies (still) that are teetering if not in fact already toppled into bankruptcy employees are still getting massive bonuses – that makes no sense. We’ve seen this in the US before – in the 1920s with a similar bubble economy. I also think there’s a case to be made that strong unions actually weaken the political and economic clout of large corporations which is good for the community, for the economy. By holding corporations accountable to workers and to the broader community, by holding them accountable to being good corporate citizens, Unions create a better economy. Corporations no longer see themselves as able to pay their way out of trouble. Again, look at Europe and Japan where unions are much stronger and you see in fact a much more vibrant community life and involvement than we have. I don’t think that’s accidental.

  9. #9 by John M on January 31, 2009 - 8:12 pm

    In too many states, such as Utah, employees can be fired for any or no reason. What recourse do these employees have? In a non-Union job, they can go look for another job or they learn to kowtow to their managements whims. If one works in a union shop, one gains some security and one has some recourse if one is dismissed out of hand. Additionally, non-union employees working in unionized businesses benefit because they get the pay and benefits of their unionize co-workers more times than not.

    I would also point out that many union members are not blue collar, or at least not in the sense of working in a manufacturing plant, many are in the service industries. These are jobs that cannot be outsourced or moved off-shore.

    Additionally, as unions have declined in their power the average wage in this country has declined. This could be coincidence or it could be a result of management holding down wages and benefits of the employees while increasing the profits to the shareholders and the bonuses to the executives.

    I’m glad you brought up the auto industry and the UAW and compared them to the foreign owned plants in the south. When you look at the both sides, you discover that the foreign owned plants are not more innovative, even though they claim they are. Their cost savings come from paying slightly lower wages and significantly lower benefits and more importantly, they are not paying pensions and health care for their retired workers because they don’t have any yet. Ford and GM have been building cars in this country for 100 years and have numerous retirees who collect a pension and have their health care provided because they were in the UAW. If you wish to return to the 1920′s when retirees, for the most part, lived with their extended families or they lived in abject poverty until they died, then go with the notion of no pensions and no health care. These people kept their end of the deal that they made with management and management is doing it’s best to keep their end because they know if they don’t the UAW will walk out.

    American unions and Japanese unions are very much the same. They work to insure that their members are taken care of. In terms of the ratio of pay between the average employee and the executives the Japanese companies pay their employees a much better wage. Also since Japan has a National Health Care plan, the companies don’t have to pay health care costs. Likewise retirement is in large part taken care of by the government. When you consider that the CEOs of most Fortune 500 companies make in excess of 500 times the average wage of their employees. And if you use the median income that difference really balloons.

    Sorry about the tangent but I felt that some of Tyler’s points needed to be addressed. A company that I used to work for dealt with union organizing in a very simple method. They made it known that they would fire anyone who mentioned forming a union or anyone who had any material at his or her workstation that mentioned a union or forming a union. This was during the last big economic slow down and no one was willing to take the chance of being fired. It didn’t matter if it was legal or not, the employees were intimidated into not even considering a union. Inflation was running 5% or so, pay raises were 2%, “if you could walk on water”, to quote the CEO. Employees took whatever the boss wanted to hand out because their really wasn’t an alternative.

    My first “real” job was working for a movie theater chain as a manager. Our projectionists were union and they could not only run the the projects but everything necessary to keep them running, as well as set up and tear down movies, attach the trailers, etc., all while the show is running. These guys average a slightly higher wage than nonunion workers and they got benefits something the other theaters didn’t offer. They were very creative and innovative. I notice that the theaters here are not unionized and use employees who are 18 and have no training to set up films, which is why so many film here have scratches and burn marks, along with the voice being out of sync with the picture. The theaters also have to hire contractors to come in an fix a broken projector.

    While EFCA won’t completely do away with these sort problems, it gives the employees a fighting chance to do the form a union if they should desire to do so rather than being fired for even thinking about it.

  10. #10 by Tyler on February 1, 2009 - 12:40 am

    Since you both addressed the UAW/Big 3 issue, let me restate my position. Those businesses were not destroyed by higher union wages or higher executive wages-they were destroyed by the culture of greed that plagues any organization that moves to unionization. Big 3 execs make ridiculous wages, but that comes from the culture. Organizations that succeed have good employee relations. For that reason, many organizations try to build employee relations. Employment by litigation destroys this. That is why the most successful businesses in America have limited union activity. By the way, employees in the South have had union elections (as I understand) and they have (in a secret ballot election) decided they did not want to be unionized.

    The Big 3 were suffering long before SUVs went out of style. If anything, they were doing better when gas prices went up- GM turned a profit for the first time in years. Then the economy tanking compounded their already tenuous position. The Prius hasn’t made enough money to dominate the entire marketplace. Its one successful model. Car companies do not live and die because of one model. GM, by the way, has the most innovative green engine for buses. Green politics are still just politics. The only way they have influenced the car industry is through emissions standards. While it makes a nice political talking point for the left, it simply doesn’t track.

    Under your paradigm, we should pass card check (its the only provision I object to) because unions are good. However, this still allows for coercion. America should tighten standards and keep companies from inappropriately influencing union elections (though that doesn’t mean they should not be able to say anything) and then require a secret ballot. You keep saying management coerces, but I have yet to hear how removing the secret ballot prevents coercion from management or unions.

  11. #11 by Tyler on February 1, 2009 - 12:53 am

    Since you both addressed the UAW/Big 3 issue, let me restate my position. Those businesses were not destroyed by higher union wages or higher executive wages-they were destroyed by the culture of greed that plagues any organization that moves to unionization. Big 3 execs make ridiculous wages, but that comes from the culture. Organizations that succeed have good employee relations. For that reason, many organizations try to build employee relations. Employment by litigation destroys this. That is why the most successful businesses in America have limited union activity. By the way, employees in the South have had union elections (as I understand) and they have (in a secret ballot election) decided they did not want to be unionized.

    The Big 3 were suffering long before SUVs went out of style. If anything, they were doing better when gas prices went up- GM turned a profit for the first time in years. Then the economy tanking compounded their already tenuous position. The Prius hasn’t made enough money to dominate the entire marketplace. Its one successful model. Car companies do not live and die because of one model. GM, by the way, has the most innovative green engine for buses. Green politics are still just politics. The only way they have influenced the car industry is through emissions standards. While it makes a nice political talking point for the left, it simply doesn’t track.

    Under your paradigm, we should pass card check (its the only provision I object to) because unions are good. However, this still allows for coercion. America should tighten standards and keep companies from inappropriately influencing union elections (though that doesn’t mean they should not be able to say anything) and then require a secret ballot. You keep saying management coerces, but I have yet to hear how removing the secret ballot prevents coercion from management or unions.

    The reason wealth disparity is growing in America is globalization. There is no way for companies here to produce products here as cheaply as they can in Mexico, Singapore, Taiwan etc. So, companies move jobs overseas where they can pay employees $5 per hour instead of $30 here.

    There are many complaints about this; however, economists almost universally agree that free trade should be favored in almost any circumstance. This grows our economy.

    http://www.stlouisfed.org/news/speeches/2004/06_15_04.html
    http://query.nytimes.com/gst/fullpage.html?res=9F0CEFDA133DF934A2575AC0A965958260&sec=&spon=&pagewanted=all

    Moreover, citizens in third world countries dramatically improve their standard of living as a result of this. If you want proof, take a look at Singapore’s economic ruin resulting from our limited imports during this crisis.

    In short, the jobs that go overseas are replaced by better jobs here.

    I think we agree that businesses should treat employees well and that they have a right to unionize when they aren’t. However, I think we simply disagree on the process.

    Given that any process decision should be focused on making a fair decision and therefore neutral as to the outcome, would you then advocate allowing unions to be disbanded through a similar procedure? If not, I suggest your procedure is slanted toward unions and therefore a bad procedure. Let the people decide. We left England to get rid of a ruling aristocracy that makes beneficial decisions for their fellow citizens.

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