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Econwatch
May 28, 2009 6:49 PM

Romney Calls Union-Backed Bill "Catastrophic"

By
Stephanie Condon
Topics
Economy
(AP)
As Democrats and Republicans stand increasingly at odds over measures to help improve the economy, one bill under consideration highlights how critical party loyalty could be in determining policy measures.

Mitt Romney, a likely contender for the 2012 Republican presidential nomination, joined a forum of business advocates in Northern Virginia on Thursday to denounce a union-backed bill, the Employee Free Choice Act, as little more than political payback from Democrats that would worsen the nation's economic footing.

The bill would be "catastrophic for the economy," Romney said. "The impact long term is people start less businesses here. It's not great for the people who start businesses today, but it's even worse for the employees of tomorrow."

The act would make it easier for workers to form a union. Most notably, it would allow workers to automatically form a union if more than a half of them sign a card indicating they want to join one. This method is currently an option for employees so long as their employers approve it; otherwise, workers can form a union through a secret ballot and election process.

Romney on Thursday echoed one of the main complaints of the business community, which has said the increased costs of unionization would drive businesses out of the United States and potentially cripple those left here.

"If you want to start a high tech business, there's no requirement you have to start it in America," Romney said. "That's the risk here."

Mary Beth Maxwell, the executive director of labor group American Rights at Work, told Hotsheet earlier this year that EFCA will in fact help businesses by giving workers higher wages, allowing them to spend more.

"For business to succeed in the United States, we need a strong middle class where workers are working hard and earning wages where they can support their families and buy goods and services and continue to grow American businesses," she said. "People need to be able to make a decent wage and be able to spend that money – that's what's going to get this economy back on track."

The Obama administration has painted its policies, like the stimulus package, as pro-business, but Republicans have criticized Democrats for taking a heavy-handed approach to industry.

"There's nothing wrong with well thought-through regulation that makes it more predictable to do business," Romney said. "Sometimes regulation can be counterproductive."

While the Employee Free Choice Act has given Romney an opportunity to flesh out his potential policy proposals before another bid at the White House, it could also prove to be a litmus test for moderate senators, most notably Sen. Arlen Specter (D-Penn.).

The former Republican has waffled on the bill and remained opposed to it after switching to the Democratic party in late April. In mid-May, however, he indicated he could envision supporting a revised version of the legislation.

Specter has shifted slightly left on some issues as it has become clear he will need to earn the trust of his new party in order to keep his seniority in the Senate. He could very well be the deciding vote on the Employee Free Choice Act.

Romney, noting that Sen. Mark Warner (D-Va.) has a background in business, said, "It's hard for me to conceive of Sen. Warner voting for the bill." Warner is the newest Democratic senator in the recently-turned swing state of Virginia.

The bill, however, may not even make it to the full Senate for a vote. After passing in the House of Representatives before languishing in the Senate last year, it was reintroduced in March and now sits in committee.

Romney and the other speakers said the consequences of the legislation would take time to come to bear, but they would be significant.

"If you look at the auto industry, we don't want that to be the norm for the manufacturing industry," said Brett Vassey, president of the Virginia Manufacturers Association. "There's not enough bailout money" to deal with such a situation, he said.

Add a Comment See all 37 Comments
by renojmc May 31, 2009 2:37 PM EDT
Let there be no mistake about it, it this bill passes it bring about the loss of untold thousands (or millions) of jobs. You fools who support this truly catastrophic bill better be careful what you ask for as you just may get it. You'll be sorry!
Reply to this comment
by fucchina May 30, 2009 2:42 PM EDT
cdegolier is right on target

One thing he did not mention is that we are working toward having the minimum wage for everyone who works in the USA. It doesn't matter what your job is you will be paid the minimum wage.

All those who voted for the current Administration know that. The only people who will be making more than the minimum wage will be managers and of course Party Members.

But don't worry the Minimum wage will be a Living wage. All the workers will be able to live on their minimum wage.

All will.

The study of labors relationship to profits always uncovers that if we can convince people to work like machines then we can make a bigger profit.

Now that we have some excellent case studies with China and Russia, We can see what happens when we start with people who are working for equal wage and we try to have those people labor at an organization that wants to make a profit.

Until recently all workers live on the same wage in China. Before all the contracts that Foreign companies made with the Chinese government put a kink in the production chain, the wage was wonderful and all were happy.

Now, there are problems. In capitalist nations such as China is becoming there is a desire for profit. With a desire for profit came a breakaway from the universal forced belief that all me are actually equal. Because in reality very few people are equal. So, now some people doing the same job make more money than others in China.
Reply to this comment
by mypatch May 30, 2009 12:05 PM EDT
I don't think the unions had anything to do with the fall of the big auto industries. I think that was poor management and greed did them in. The unions have not gotten much and they have very little power when it comes to strikes as this gov. will let the business fold up and move or break the strike as Reagan did years ago with the air lines.
Reply to this comment
by mypatch May 30, 2009 11:56 AM EDT
They also need to bring back the import tariff. Tax those big companies to death at the border so they have to bring the business back here. it will cost us more to purchase items but then that will change if they move business back. If they don't then they can use the tariff money to support all of us out of a job.
Reply to this comment
by the74blaster May 30, 2009 11:48 AM EDT
OK , So let me get this straight. We don't want unions because they run the companies out of the US.. So, we are all willing to work for minimum wages or less and live on the streets so w will be able to work and make the Rockafella's and big money richer. Sound right to you?
Posted by mypatch at 7:41 AM : May 30, 2009

Unfortunately, when the government gets bought out by lobbyists who are paid by big money that what happens.

The government could put an end to this is they ever decided to represent the interests of the people. If the government used taxation based on total U.S. sales and only allowed deductions based on total percentage of U.S. citizens its a starting point.

For example, if the company employs 100 % U.S. citizens they pay no income tax. However, if the company only has a distribution center and corporate offices located in the U.S., they would pay 40% of their total sales as taxes with no deductions.

I admit its on the extreame side, but it would force the companies to bring the jobs back or be uncompetitive in the U.S. markets.
Reply to this comment
by mypatch May 30, 2009 10:41 AM EDT
OK , So let me get this straight. We don't want unions because they run the companies out of the US.. So, we are all willing to work for minimum wages or less and live on the streets so w will be able to work and make the Rockafella's and big money richer. Sound right to you?
Reply to this comment
by honestindividual May 29, 2009 8:48 PM EDT
Unfortunately, unions are a response to autocratic and abusive employers, starting about two centuries ago; they gained great favor in the U.S. from the 1930's through the 1950's, and undoubtedly increased the living standards of millions of workers (mostly industrial production jobs) for many years. I belonged to one myself for 19+ years in the public transportation sector, and I probably made at least 30% more than similar employees in non-union companies.

The basic problem is that the "bills come due"; the actual term is "it's not a market situation". In other words, the job was paying more than it's worth on an honest basis, due to the union influence. Essentially, the bill is coming due in almost every industry, due to world-market conditions, and the latest "victim" of this is the auto industry. No one can stop it, no matter how hard you try; there could come a day when the "market value" of a low talent job such as room maids, restaurant bus boys, etc. will be below minimum wage, and no matter what anyone says, the going wage level will reflect this. A sad state of affairs, but you will see that it is true. It has nothing to do with "what's fair", etc.
Reply to this comment
by cdegolier May 29, 2009 5:46 PM EDT
sjc_1 Some Union Facts for you. Look at GM/Chrysler.
From the Heritage Foundation

Studies typically find that unionized companies earn profits between 10 percent and 15 percent lower than those of comparable non-union firms.

Some unions win higher wages for their members, though many do not. But with these higher wages, unions bring less investment, fewer jobs, higher prices, and smaller 401(k) plans for everyone else.

Final union contracts typically give workers group identities instead of treating them as individuals. Unions do not have the resources to monitor each worker's performance and tailor the contract accordingly. Even if they could, they would not want to do so. Unions want employees to view the union--not their individual achievements--as the source of their economic gains.

Consequently, union contracts compress wages: They suppress the wages of more productive workers and raise the wages of the less competent. Unions redistribute wealth between workers.

A better summary of the economic research is that unions do not increase workers' wages by nearly as much as they claim and that, at a number of companies, they do not raise wages at all.

In essence, unions "tax" investments that corporations make, redistributing part of the return from these investments to their members. This makes undertaking a new investment less worthwhile. Companies respond to the union tax in the same way they respond to government taxes on investment--by investing less.

Research shows that unions directly cause firms to reduce their investments. In fact, investment drops sharply after unions organize a company. One study found that unionizing reduces capital investment by 30 percent--the same effect as a 33 percentage point increase in the corporate tax rate

The balance of economic research shows that unions do not just happen to organize firms with more layoffs and less job growth: They cause job losses. Most studies find that jobs drop at newly organized companies, with employment falling between 5 percent and 10 percent.
Reply to this comment
by rememberthis May 29, 2009 5:28 PM EDT
"workers of the world unite" ... IS NOT an American slogan
BUT
it does explain why liberals like unions so much
Posted by libRidiots at 12:27 PM : May 29, 2009



Sounds more like jealousy than an issue -- the Republicans are split including REPUBLICAN Senator Cornyn from Texas (ROWDY's SENATOR) calling the attacks on the nominee UNFAIR.
Reply to this comment
by nottellin1 May 29, 2009 4:59 PM EDT
Tell it like it is Mitt, you and your Republican friends just want to hire Illegals, so you can repress all the little people. You probably tell the illegals, just be glad you're here in the USA, because it would be a lot worse where you came from.
Posted by laffman99 at 7:07 AM : May 29, 2009

NOT-Unions love illegals and are currently more concerned with their new amnestied members than US citizen members now.
Reply to this comment
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