Wednesday, October 15, 2008

Labor and the Economy: The Employee Free Choice Act

Yesterday, ACS and the Federalist Society presented Labor and the Economy: The Employee Free Choice Act, a debate between Richard Epstein and Mitchell Rubenstein.

Leading off, Mr. Rubenstein described the three main features of the Employee Free Choice Act: the legalization of card-check elections for union recognition, mandatory arbitration of the first contract reached by the union, and stricter penalties for violations of the Labor Relations Act. Card-check elections, where a union can win representation by obtaining he signatures of a majority of workers rather than through a formal election, dominated the debate. Mr. Rubenstein stressed the ability of employers to campaign against union representation, on company time, as a significant abuse that requires card-check elections as a remedy. Additionally, he stressed that 45% of new unions are unable to reach agreements with their new employers, leading to the new first-contract arbitration requirement.

Mr. Epstein in response argued for the repeal of the Labor Relations Act, and a return to the pre-1935 common-law rules on union organizing. Specifically, allowing employers to condition employment on employees not joining unions (formerly known as yellow-dog contracts). His argument stressed economic reasons – the (alleged) greater efficiency of non-union companies creates an economic argument that unions tend to destroy companies and industries they have traditionally dominated, using the American steel and automotive industry as examples. Unions, in Mr. Epstein’s view, should be required to create a win-win situation for the employer in order to win recognition – the unions ought to create incentives for the company to recognize them. Additionally, he charged that card-check elections, since they could be conducted effectively in secret, would force companies into permanent warfare mode against unions, wasting everyone’s time and greater amounts of money.

Mr. Rubenstein’s rebuttal focused on the distinction between economic arguments – that unions impair overall economic efficiency – with social arguments; that the social gains from unions, in equality, expanded power to the middle class, and the like override economic concerns. The argument between the two was essentially one of economic goals vs. societal goals, with Mr. Rubenstein arguing that the societal gains from unions outweigh the economic gains, and Mr. Epstein arguing that societal gains are essentially indefinable, and that the economic gains from greater efficiency makes everyone better off.

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