Scheduled for publication by the Hoover Institution of Stanford University,
The Case Against The Employee Free Choice Act enumerates the countless
risks to job creation, small businesses, and overall economic growth that
would result from this misguided legislation.
Prof. Epstein�s detailed study addresses the Employee Free Choice Act's
three major provisions:
Prof. Epstein summarizes the economic impact by suggesting that �the
passage of EFCA will create huge dislocations in established ways of doing
business that will in turn lead to large losses in productivity.�
On the Real Impact to American Workers:
�In the end new job creation will swamp whatever distributional gains
the EFCA promises for some select group of workers. Increased coercion
never leads to increased productivity. EFCA will surely exert an overall
negative effect on the wages and job opportunities of employees.� (Epstein
p. 91)
��the consequences of unionization for small firms should not be evaluated
solely in terms of the number of workers who are unionized in each year.
Rather the key question is the extent to which unionization of small firms
inhibits the potential for growth so that these firms do not realize their
full economic potential.� (Epstein, p. 40)
On the Decline of Unions in the Private Sector:
�Some likely candidates for the observed decline include the expansion
of free trade across national borders, more intensive global competition
for employees, the reduced appeal of unions to younger workers, the entry
of smaller decentralized firms, the rapid turnover of workers in a relatively
open economy, the better wages and working conditions that nonunion employees
can command in an open economy, the rise in government regulation that
confers certain protections (i.e. against discrimination) that no longer
are subjects of bargaining, ineffective union organizing, and the rigidity
of the internal governance structure of unions themselves.
Most important perhaps is the fundamental switch in the political economy
of the United States. The 1930s marked a corporatist period, in which monopoly
unions shared power with regulated monopoly industries, shielded from competition
by a powerful state.24 More recently, the economic environment has switched
by allowing the free entry of smaller firms whose vitality and growth has
gone a long way in undermining the old monopoly models, posing more challenges
to established firms and their long?standing labor unions. No account
of the decline in unionization is complete without taking these changes
in account, which defenders of EFCA blindly refuse to do.� (Epstein, p.
15)
On Replacing the Secret Ballot with Card Check:
�But in [the unions�] zeal to condemn the employer they never explain
why it is necessary to leap to the card-check outcome without figuring
out how to expedite or improve union elections within the current framework�Nor
do EFCA supporters address the allegation that union organizers, or overzealous
pro-union employees, are also capable of coercive behavior during a union
election.� (Epstein, p. 30)
On Replacing First-Contract Collective Bargaining With Compulsory
Binding Arbitration:
�This new innovation [interest arbitration] marks a complete departure
from the current law which provides that once a union has been certified,
both the union and the employer fall under an obligation to bargain in
good faith.� (Epstein, p. 50)
�The prospect of arbitration could easily lead one side to hold out�if
it thinks that the arbitration panel will come out its way. Thus
the likelihood of a voluntary agreement could easily go down under this
system, which puts greater pressure on the still unknown arbitration process,
as unions may have a strong incentive to hold out for a strike it rich
settlement, especially if they think the decisive arbitrator is on their
side.� (Epstein, p. 62)
On Employer Speech:
�The critics of employer speech sidestep these arguments. Their
chief objection to employer speech is not that it is illegal but that it
is effective.� (Epstein p. 25)
�� so long as illegal routes are not taken, no speech becomes coercive
solely because it is effective.� (Epstein, p. 25)
��the implicit union premise is that an employer behaves improperly
during an election by making known its preferences, even when there is
nothing illegal about the presentation of their views.� (Epstein, p. 25)
On Organized Labor:
�They do not act as sales representatives who offer firms goods and
services that their customers are only too happy to buy. Rather, they engage
in multiple front wars that involve litigation, resort to administrative
harassment, boycotts, pickets and public denunciation to achieve their
goals. The implicit claim in all this behavior�widely practiced but rarely
acknowledged frankly�is this: you can be less worse with the union than
in the throes of an open-ended organization campaign. That strategy
is no way to forge good relationships or increase productivity.� (Epstein,
p. 103)
On the Relationship Between Workers and the Unions that Represent
Them:
�The key point to remember is that there is, going forward, no identity
of interest between the unions who profit from EFCA and the workers whose
job opportunities are limited by its passage. A far better strategy
for helping worker interest is to opt for a more competitive labor environment
at home. In the end new job creation will swamp whatever distributional
gains the EFCA promises for some select group of workers. Increased coercion
never leads to increased productivity. EFCA will surely exert an overall
negative effect on the wages and job opportunities of employees.� (Epstein
p. 90)
On Opponents of EFCA:
�They do not believe that all employers are insensitive dolts, who would
rather fire a worker than learn from what he or she has to say. They believe
that sound management practices and forward looking workplace relationships
can stave off unionization in any free and fair election.� (Epstein,
p. 103)
�[EFCA opponents] treat the decline of unionization in the private sector
as stemming from the increased realization by workers that they are not
on balance and in the long run made better off by unions, whose fortress
mentality cripples workers� prospects for advancement in today�s global
economy.� (Epstein, p. 103)
�Professor Epstein�s study exposes the real story behind the grossly
misnamed �Employee Free Choice Act.� For the U.S. lodging industry,
EFCA�s affect would be devastating,� said Marlene Colucci, AH&LA executive
vice president of public policy. �This bill does not help the economy
create jobs. This bill will only increase operating costs on lodging
businesses, many of which depend on thin margins to stay profitable.
The conclusions found in this first study about this radical proposal should
give Congress and the Administration a sharp pause before they consider
making major changes to our nation�s labor laws.�
The Alliance to Save Main Street Jobs includes numerous trade associations
such as the Retail Industry Leaders Association, the American Hotel &
Lodging Association, the U.S. Chamber of Commerce, the Associated Builders
and Contractors, and the Real Estate Roundtable. The Alliance, which funded
Prof. Epstein�s study, is chaired by the HR Policy Association.
The full 127-page The Case Against The Employee Free Choice Act is available
online and can be downloaded from www.hrpolicy.org/portal_efca.aspx.
The study and its executive summary are also available at www.ahla.com.
