LABOR UNIONS INCREASE UNEMPLOYMENT

From the desk of Stephen Cabot: During the current recession when unemployment hovers near 10%, President Obama and his hand-picked ideologues on the National Labor Relations Board are using all their wiles and power to effect a pro-union business landscape. The combination of Executive Orders (which I have written about in previous blogs) and the decisions of NLRB member, Craig Becker, (a decidedly radical pro-union advocate and former SEIU official), have resulted in union friendly policies that are injurious to Corporate America and are driving up unemployment. It has been a well-established fact that unions reduce the numbers of employed workers by mandating wages that move in an ever increasing upward spiral. (The average union wage is 28% higher than a non-union wage). In such situations, cash for hiring new workers diminishes as does cash for R&D and capital improvements. Furthermore, those high union-mandated wages result in increased prices for manufactured goods. It has long been an established fact that as labor costs increase, demand for consumer goods diminishes and the pool of consumers shrinks. Faced with such an economically unattractive scenario, corporations will choose to reduce their labor costs by outsourcing work, replacing workers with machines, and/or moving manufacturing facilities to low-labor-cost nations. One need only look at the iconic American manufacturer of motorcycles, Harley Davidson, which announced that it might have to leave its home town of Milwaukee, where it has been an essential manufacturing presence for more than 100 years. And why will it have to move? The simple answer is its union-mandated cost of labor.

While President Obama and his designated pro-union advocate, Craig Becker, would like to do all that they can to help unions, Harley Davidson and other manufacturers will have no choice but to move the states or countries where unions will have no influence. And if that happens, one will see a rise in unemployment greater than 10%, a further diminishment of consumer spending, and a worsening economy.

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THE COMING UNION ASSAULT

From the desk of Stephen Cabot: Without having to get congressional approval, President Obama is determined to give union leaders everything they want. It is apparent that unions will soon have many new opportunities to organize formerly unaffiliated workers, and governmental agencies will provide all possible assistance.

To begin, the National Mediation Board (NMB) has made a major alteration to its 75-year old rules so that workers at railroads and airlines can easily be organized. For three-quarters of a century, workers who did not vote in organizing elections had their non-votes counted as negative votes; now, under a new ruling, if the majority of votes are pro-union, the union will have won the right to represent workers. This would not have happened if President Obama had not appointed a pro-union advocate to the NMB

Next, all companies that do business with the federal government will have to be union friendly companies. That means that they have to pay union wages, and that rule applies to all federal agencies. If a company received stimulus funds for construction projects, that company must pay standard union wages to its workers. Such a ruling will, no doubt, drive up governmental costs, thus adding to an already burgeoning deficit.

Perhaps the most dangerous element of the new government paradigm is the recent appointment of Craig Becker to the National Labor Relations Board. Mr. Becker had been the legal counsel to the highly aggressive Service Employees International Union (SEIU). Since he claims that the NLRB can re-write rules, one can expect him to find a way to make “card checks” legal, thus obviating the requirement for secret ballot elections.

The president of the AFL-CIO, Richard Trumka, is optimistic that “card checks” will eventually become law, perhaps by attaching it to an innocuous piece of legislation, or having his ideological comrade in arms, Craig Becker, change the rules.

President Obama campaigned on “change we can believe in.” The changes he is making are ones that reality forces us to believe, but they are changes that will do significant damage to Corporate America and to the American economy.

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