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Business Gets Carded

The business world is up in arms about the Employee Free Choice Act. EFCA would make it easier for workers to unionize, by obliging companies to recognize a union once a majority of workers sign verified union cards. This would replace the more common practice of voting in union representation elections, which take several months and are conducted by secret ballot. The Wall Street Journal calls this “antidemocratic,” but it’s the employers, not union organizers, who flex the muscle in union elections. The reality lies in two words: “You’re fired.”

In a recent report, the Center for Economic and Policy Research calculated that employers fire an impressive one in five union activists during union election campaigns. Using a conservative calculation method developed by University of Chicago economists, the report concludes that pro-union workers in general have a one-in-fifty chance of being fired by their employer during a union election campaign, but employers “are unlikely to fire workers randomly, or simply for expressing pro-union views. Employers maximize the return to illegal firing by focusing on union activists.” The Journal leaves out exactly how secret ballots will protect workers once they’ve been canned for supporting unionization.

And before we dismiss this as fuzzy math from some liberal smarty-pants, it should be said that this has been common knowledge in the business world for some time. BusinessWeek, not known for pro-union dogma, reported several years ago that union supporters were being fired in 25% of union representation elections, in agreement with the CEPR’s figure. Now, firing workers for being pro-union is against federal law under the 1935 Labor Relations Act, and the magazine evenrefers to them as “illegal firings.” But the penalty for illegally firing workers is quite low for companies, amounting to back pay and reinstatement, much less than the firm saves by firing organizers and preventing unionization.

Of course, this kind of broad illegality would be greeted with shock and outrage if it was anyone but the corporate community. In fact, the business press has been covering this law-breaking for some time, reporting back in 1994 that “Few American managers have ever accepted the right of unions to exist, even though that’s guaranteed by the 1935 Wagner Act…U.S. industry has conducted one of the most successful antiunion wars ever, illegally firing thousands of workers for exercising their rights to organize… when managements obey the law, the don’t defeat unions nearly as often. Union membership in the public sector, where federal, state, and local officials don’t try so desperately to break or avoid unions, has risen.” Who exactly is running antidemocratic elections here?

But it doesn’t end there. In addition to the firings, corporate America has put together a deep toolbox for throwing wrenches into union elections. Even newspaper of record New York Times refers to the “lengthy, expensive, adversarial” campaigns where “companies often fire union supporters and use videos, large meetings, and one-on-one sessions to pressure employees to vote against unionizing.”

BusinessWeek describes in more detail that “Heightened corporate power has checked union growth…Unionization elections are typically so lopsided today that most unions have all but given up on them,” hence the drive for card check recognition. “Most employers pull out the stops when labor organizers appear, using everything from mandatory antiunion meetings to staged videos showing alleged union thugs beating workers, backed by streams of leaflets and letters to workers’ homes.” Still, “most of these tactics are legal” and on top of the illegal firings they have a “chilling effect” on the workforce. In this way, “companies are often able to turn employees against a union, even though a rising number of Americans have said in national polls over the past two decades that they would join one.”

Most interesting of all, the journal then breaks down the anti-union tactics employers use during the run-up to union elections, including “mandatory antiunion meetings for employees” in 92% of elections, having “supervisors meet individually with employees to disparage the union” in 78% of elections, and so on. And should these fail, the bosses can always break out the firing stick, since the penalties are so small compared to the savings from breaking the union.

Other tactics have developed as capital has become more mobile. Kate Bronfenbrenner of Cornell University found in a study of several hundred union elections that “more than half of all employers made threats to close all or part of the plant during the organizing drive…The election win rate [for unions] associated with campaigns where the employer made plant closing threats is, at 38 percent, significantly lower than the 51 percent win rate found in units where no threats occurred.” So globalization has added a new arrow to the corporate quiver of union-busting bullying.

Writing in the Harvard Law Review, professor Paul Weiler observed that “Such a widespread pattern of employer intimidation has ramifications that reach far beyond the units in which discharges actually occur. It fosters an environment in which employees will take very seriously even subtle warnings about the consequences of joining a union.” Weiler describes recent years as a “spiraling increase in coercion by employers.”

These coercive tactics prove that the labor movement’s drive for card-check recognition is in fact likely to make union elections more democratic, since they avoid the long run-up period to the election where businesses concentrate their intimidation, holding people’s livelihoods over their heads. Tossing the secret ballot—which employees can still choose if a majority wants it—is too bad, but it amounts to electoral self-defense. It’s hard to argue that pressure from organizer co-workers is a bigger threat to fair elections than your boss’s ability to bring the hammer down. Peer pressure doesn’t stand up to pink slips.

The economic effects are serious. The business world considers itself to have been successful in its “anti-union war,” as the hoped-for labor movement comeback has stalled. This has probably contributed heavily to the widening difference between productivity and pay—the difference between the wealth workers generate and the amount they receive in return has grown over recent decades. Unions have declined in the same period, and the Economic Policy Institute notes in its State of Working America 2008-09 that while there was no gap between the growth rates of productivity and worker compensation through the 1970s, from the early 1980s the difference has widened in each economic recovery. In our last expansion, from 2002-2007, the gap was 2.2% —productivity grew by 2.2% and compensation failed to grow. This period of compensation failing to keep up with productivity correlates to the “anti-union war” and its coercion and illegal firings, and the decline in American union representation.

This business-driven decrease in the union density keeps wages and benefits down, but also deprives society of the additional benefits of unionization. Unions can provide a venue for people to come together, and share experience and extend solidarity to one-another. It’s no surprise that the business press reports that growing numbers of American non-management workers say they would vote for a union, reaching 47% of the work force several years ago. Americans have enough common sense to see the value of an organization for regular people to counter the organization of the owners. Unionization can also encourage economic growth, as income is redistributed down to people who will spend it, rather than speculating on currencies or flipping real estate.

In the end, corporate America’s crocodile tears over secret balloting keep attention away from the “lopsided” elections where “heightened corporate power” can put a gun to workers’ heads. EFCA is in legislative limbo for now, until the Republican filibuster can be overcome. In the meantime the business world will insist that card-check is an obstacle to free elections, and as always its voice is quite amplified. But if union elections are undemocratic, it owes to employers breaking the rules and making an example of organizers. Fixing the vote with the “chilling effect” of firings and intimidation is what makes workers hold their union cards close to the vest.

 

ROB LARSON has fifteen minutes to clean out his desk and vacate the building. He’s assistant professor of economics at Ivy Tech Community College in Bloomington, Indiana and blogs at http://theprofitmargin.blogspot.com.

Wall Street Journal, Business Beats Card Check—For Now, March 26, 2009.

Center For Economic and Policy Research, Dropping the Ax: Illegal Firings During Union Election Campaigns, 1951-2007, March 2009.

BusinessWeek, Can This Man Save Labor? September 13, 2004.

BusinessWeek, Why America Needs Unions But Not the Kind It Has Now, May 23, 1994.

New York Times, After Push For Obama, Unions Seek New Rules, November 8, 2008.

BusinessWeek, Can This Man Save Labor? September 13, 2004.

Kate Bronfenbrenner, Uneasy Terrain: The Impact of Capital Mobility on Workers, Wages, and Union Organizing, September 2000.

Harvard Law Review, Promises to Keep, June 1983.

Economic Policy Institute, State of Working America, 2008-09, 2009.

BusinessWeek, Can This Man Save Labor? September 13, 2004.

Wall Street Journal, Labor May Be Open to Changes to Union Bill, March 25, 2009.

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