Taxpayer Relief in the Form of the Employee Free Choice Act

Mar 10 2009 Published by under Featured News

The Employee Free Choice Act is a bill that depending on your political leanings, you either love or hate, but it is the most significant piece of labor legislation introduced in the past 60 years, and if passed the EFCA will impact employee wages, healthcare, and the taxpayers for years to come.

The EFCA really isn’t that hard to understand. According to article in the Tampa Business Journal, it would make two small but impactful changes in labor law.

“TODAY: Employees must present to their employer the support of at least 30 percent of the work force to pursue unionization. The employer could choose to recognize a union if more than 50 percent have indicated support, or the company may call for a secret ballot vote regulated by the National Labor Relations Board.

IF BILL PASSES: Employers will be required to recognize the formation of a union if more than 50 percent of the workers sign cards indicating their support. The workers may still pursue a secret ballot election, but it will not be necessary for unionization.

TODAY: A union, formed and recognized, may be engaged in good-faith negotiations with an employer, but, if a contract is not forthcoming, the old contract stands as further negotiations continue.

IF BILL PASSES: If contract negotiations are at an impasse 90 days after a union is formed, either the employer or union may call for mediation. If that isn’t conclusive within the following 30 days, an impartial arbitrator will be appointed to come up with a contract that both sides will have to accept.”

What the bill does is restore equal footing between unions and management. Currently, most large retailers, intentionally violate labor law by engaging in campaigns to keep unions out of their workplaces. The rationale is simple. In the case of a giant like Wal-Mart, it is cheaper to pay the fine, then to allow the union. The dirty little secret as to why service industries have such a high profit margin is because most of the largest companies offer few benefits, and direct their employees to public assistance.

As I wrote last month, Burger King costs taxpayers $273 million a year, by not offering their employees benefits, which causes them to use public assistance. A 2004 report estimated that Wal-Mart costs taxpayers $2.5 billion a year in public assistance for their employees. One 200 employee Wal-Mart store can cost taxpayers over $420,000 a year in public assistance benefits.

This bill could save the taxpayers billions of dollars every year, which makes it logical that businesses will battle tooth and nail against this bill. Remember, this bill wouldn’t guarantee labor anything except an easier path to organization. Some employees won’t want to unionize, and they won’t have to. Conservatives see this bill as an intrusion on the free market, but aren’t the currently restrictive labor laws doing the same thing? I believe that a truly free market would give employees an equal right to unionize, and then let the two sides sit down and negotiate a contract. If one side negotiates a bad deal, then they have to suck it up and live with it.

Businesses are going to argue that this bill will raise prices or force them to cut jobs, but aren’t taxpayers paying a higher price already because they have to subsidize employee benefits for the service industry sector of the economy? The real shift is a potential moving of this burden away from the taxpayers, and back on to employers. Labor has been trying unsuccessfully to unionize the service industries for years, and if this bill passes it could lead to a surge in unionization, not seen since the New Deal. This is landmark legislation, the impact of which can’t be underestimated.

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