Labor Union Bill Raises Broader Capitalism Issues

Sen. Tom Harkin (D-Iowa) talks to reporters on Capitol Hill after a news conference to announce the introduction of the Employee Free Choice Act.
Sen. Tom Harkin (D-Iowa) talks to reporters on Capitol Hill after a news conference to announce the introduction of the Employee Free Choice Act. (By Susan Walsh -- Associated Press)
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By Alec MacGillis
Washington Post Staff Writer
Sunday, March 15, 2009

The Employee Free Choice Act seemed destined to be a relatively narrow clash between unions and employers. But amid the economic downturn, it is turning into a debate over fundamental questions of American capitalism.

After years of girding for this fight, labor supporters and business groups are scrambling after the bill's reintroduction last week to adapt their long-established arguments to suit the crisis. For those opposed to the bill, which would make it easier to form unions, the new message was that it would be a disaster for businesses reeling from the recession.

"In a time when we have an economy that's already struggling, we can't put more burdensome regulations on employers," said Sen. John Thune (R-S.D.). "This is a job killer for our economy when we really don't need it."

The bill's supporters are pointing to the downturn as the ultimate proof of their arguments that labor's decline has helped put the economy out of balance and that only by restoring workers' purchasing power can the nation return to broadly shared prosperity.

"In 1935, we passed the Wagner Act that promoted unionization and allowed unions to flourish, and at the time we were at around 20 percent unemployment. So tell me again why we can't do this in a recession?" said Sen. Tom Harkin (D-Iowa), invoking the pro-labor changes of the New Deal. "This is the time to do it. This is exactly the time we should be insisting on a fairer playing field for people to organize themselves."

The bill, first introduced in 2003, gives workers the choice of whether they want to organize by getting a majority of workers to sign pro-union cards, instead of having to hold secret-ballot elections. As it stands, it is up to employers to decide which method is used, and most require elections. The bill increases the penalties for employers who retaliate against employees and mandates binding arbitration when employers do not agree to a contract within three months after a union election.

Unions say the bill is needed because employers intimidate or retaliate against workers before elections, making the votes something less than true democracy; and because employers often merely go through the motions of negotiating, nearly half of new unions fail to get a first contract. Employers say that forming unions without secret ballots violates American notions of democracy and exposes workers to union coercion. Mandatory arbitration, they assert, is an intolerable intervention.

But the environment in which the bill is being debated has further ratcheted up the rhetoric, revealing a divide as wide as that on any other major issue on President Obama's agenda. The two sides put forth starkly different versions of both history and present-day reality, making it hard to imagine how the two sides could compromise.

The pro-labor version of history starts during the New Deal with the Wagner Act (better known as the National Labor Relations Act), which expanded the rights of private-sector workers to unionize. The Fair Labor Standards Act of 1938 established the minimum wage and 40-hour workweek.

"The truth is that Franklin Roosevelt passed those laws under similar circumstances, and from 1945 to 1974, we had an era where workers' wages and productivity was joined together," said Andrew Stern, president of the Service Employees International Union. "It was probably the most tested economic stimulus of any public policy that has worked for us."

In the telling of labor supporters, the decline in private-sector union membership -- from a peak of 36 percent in the early 1950s to 7.5 percent today, a level not seen since 1900 -- is a result not only of economic shifts but also of an increasingly pro-employer tilt in labor policy. As they see it, the decline of unions has contributed to the growing income inequality over the past three decades, when economic productivity has outpaced wage growth.

Lawrence H. Summers, the National Economic Council director, has long been regarded warily by unions, but in a speech Friday at the Brookings Institution, he made roughly this case for boosting organized labor.

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