Reading for Discussion 2.1 Topic: Read andCommentLabor Law Is Broken, Economist SaysBy Steven…

Reading for Discussion 2.1 Topic: Read andCommentLabor Law Is Broken, Economist SaysBy Steven GreenhouseIn a new paper, Richard B. Freeman, a labor economist atHarvard, said he had some harsh and impolitic news for theNational Labor Relations Act on its 75th anniversary. He declaredthat the law has become an anachronism irrelevant for mostworkers and firms.Mr. Freeman released his paper in Washington on Thursday at asymposium that marked the anniversary of the New Deal lawoften known as the Wagner Act that gave American workers afederally protected right to form unions. He called his paperWhat Can We Learn from N.L.R.A. to Create Labor Law for the21st Century?Mr. Freeman, one of the nations foremost labor economists,wrote that the act was passed to replace the costly unionizationfights of yesteryear often involving strikes, lockouts, violentconfrontations with a laboratory conditions elections processfor ascertaining workers attitudes toward union representationthat would be free from employer pressures or dishoneststatements by employers or unions. He said unionizationelections in the private-sector have turned into massiveemployer campaigns against unions.That, he wrote, is a major reason the percentage of private-sectorworkers in unions has fallen to 7 percent, down from nearly 40percent in the 1950s.He argued that the penalties in the National Labor Relations Actwere weak and have failed to deter firms from illegal actions toprevent unionization. He wrote that in the early 1950s firms firedabout 0.5 workers for every 100 workers who voted in N.L.R.B.elections, but in the 1980s and early 1990s, firms fired 4.5workers for every 100 union voters, with that percentagedropping slightly in recent years.Far from a laboratory conditions experiment in democracy, hewrote, the N.L.R.B. process turned into the same costly fightbetween unions and firms that union organizing was before theact, albeit in a different venue with different weapons. He wrotethat the N.L.R.B. process has failed to make it easy or natural forworkers who want union representation to achieve this goal.He noted that there was a 20 to 30 percent gap between thepercentage of workers who said they wanted unionrepresentation and those who had unions the largest gapamong advanced English-speaking countries.Professor Freeman pointed to one study that found that unionsfound it so hard to organize workers under the N.L.R.B. processthat around 80 percent of new organizing in the late 1980s and1990s occurred outside that process. This usually happenedamong government employees who were not covered by theNational Labor Relations Act, or by private-sector unions thatmounted pressure campaigns to persuade employers to acceptunions through the card check process under which unions arerecognized when a majority of workers sign cards favoring aunion.Professor Freeman said it was hardly surprising that thepercentage of public-sector workers in unions was five times ashigh as the percentage of private-sector workers.One big reason for this, he wrote, is that private-sector employershave sizable monetary incentives to oppose unionism, and thepenalties that N.L.R.B. has at its disposal are too limited to offsetthese incentives. He noted that government officials, unlikecorporate officials, have generally not fought unionizationbecause they have little to gain and much to lose from fightingunions.Unions, he added are an important ally in helping politiciansand public-sector management convince voters to increase taxesor borrow money through bonds for schools, police or other publicgoods.For instance, if a company illegally fires the three employeeleaders of a unionization drive, the law requires the company topay back pay, minus whatever earnings the workers had afterbeing fired. The law does not call for fines or punitive damagesfor such firings.Mr. Freeman pointed to a case involving a unionization effort atYale-New Haven Hospital, where an independent arbitrator ruledin 2007 that the hospital had violated an agreement calling forboth sides to respect principles aimed at guaranteeing a fairelection. The arbitrator wrote that the workers were threatenedwith more onerous working conditions and even loss of their jobsif the union were selected.She said the workers were victimized and ordered the hospital topay the 1,700 workers a total $2.2 million the amount thehospital had paid to antiunion consultants. She also ordered thehospital to repay the union its $2.3 million in organizingexpenses. Professor Freeman noted that this $4.5 million penalty,which was ordered outside the National Labor Relations Act, was20 percent more than the $3.6 million that the labor boardawards on average each year to all workers nationwide for allback pay for being retaliated against for supporting a union. Hecited a paper by Morris M. Kleiner and David Weil stating thatthe Act for decades has been ineffective in curbing behaviorsthat are antithetical to its fundamental aims.Professor Freeman wrote that the failure of the N.L.R.A. processto meet the needs of workers and firms moved the U.S. close tothe union-free world that many opponents of trade unions havelong desired.He suggested that if unions were stronger, the United Statesmight not have the highest income inequality in the developedworld or stagnant real earnings for all but the highest paid. Healso said that if unions were stronger, a liberal coalition wouldpresumably have greater countervailing power to Wall Streetand have helped push through stronger financial reforms.In conclusion, Professor Freeman had four recommendations. Hecalled for strengthening the penalties against illegal actions bymanagement and unions, recommending penalties againstindividual managers or union leaders who break the law. Second,he said labor laws should be amended to protect supervisors frombeing fired or punished if they want to remain neutral or silentand not have to express their firms anti-union views during anorganizing drive.Third, he called for early voting at neutral venues instead ofhaving unionization elections held at the work site on a singleday. Borrowing from an idea of Benjamin Sachs, a professor atHarvard Law School, he wrote that the idea resembled earlyvoting in regular elections. The labor board could set up a pollingplace where workers could vote at any time during the organizingdrive or could set up a confidential mail-in procedure.He said this should reduce intimidation or pressure frommanagement or union activists on workers to vote for againstunion representation by allowing employees to vote outside theconfines of the workplace at a time of their own choosing. Manycorporations oppose a more rapid electoral process, arguing thatit would not give them adequate time to communicate their caseagainst unions.Lastly, Professor Freeman recommends an idea that union leadershate allowing employers to set up employee committees thataddress not just productivity, but also issues that deal withworkers well-being, like hours or pace of work. Throughout theadvanced world works councils perform this function, usually withmembers elected by employees, independent of collectivebargaining, he wrote.He added that American employers who want their workers tohave some representation at their workplace that falls short ofcollective bargaining should be able to do so without having tobreak the law. He said that a similar system in Canada works well.He noted that many American employers were already doing thiseven though the law bans it. Moreover, it would help give unionless workers more of a voice on the job. But unions oppose thisidea, asserting that it could lead to management-dominatedcommittees and could convince many workers that they do notneed a union.The symposium was cosponsored by the National Labor RelationsBoard and George Washington University.

 

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