Primer: The Big Battle Between Business And Unions

(AP/D. Hinshaw, Charlotte Observer)
A major fight between unions and big business kicks into high gear today with the introduction in the Employee Free Choice Act (EFCA) in both chambers of Congress. Here's a primer on the bill, the arguments on both sides, and the potential implications of the legislation, which, if passed, could revitalize the long-declining U.S. labor movement.

What Is It?

EFCA is legislation that would make it far easier for employees to form a union. It would, first and foremost, create rules specifying that a union is automatically formed if a majority of employees sign cards saying they want to join up – a method of organizing commonly known as "card check."

It's worth noting that the so-called "card check" option is actually already allowed, but with a crucial caveat – it is up to employers, not employees, whether or not it can be used. Under the current law, employers can choose to mandate that union organization take place not through card check but via a secret ballot and then an election. That option is generally preferred by businesses that would rather not see their employees unionized.

The EFCA legislation would also stiffen penalties for companies deemed to be violating employee rights and gives workers and employers the option of going to mediation and then arbitration if negotiations break down.

The View From Business Groups

Business interests strongly oppose EFCA. "It will be a boot on the throat of business and it will compound exponentially the economic difficulties that American businesses are suffering today," Mark McKinnon, spokesman for the anti-EFCA business group the Workforce Fairness Institute, told Hotsheet.

McKinnon argues that the bill will increase unemployment because of increased labor costs brought on by stronger unions. He says the "card check" system for signing up workers, which takes place in the open, is undemocratic because workers lose the right to make their preferences known in secret and could be influenced by their peers. And he complains that instead of allowing businesses and employees to work out their differences, it forces a "federal bureaucrat into the process."

"It's a hostile takeover of American business," he said. McKinnon also argued that most workers oppose the legislation – they "understand that we're in global competition, and they know if they unionize they're not going to be as competitive." He also notes that Warren Buffett, whom the Obama administration has lauded for his business acumen, opposes the legislation.

The View From Organized Labor

(AP Photo/Charles Rex Arbogast)
On the other side are labor groups like the AFL-CIO, led by John Sweeney (left), and American Rights at Work. Mary Beth Maxwell, American Rights at Work's executive director, told Hotsheet that EFCA will actually help businesses by giving workers wages that will allow them to pour money into the economy.

"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."

Maxwell points to a statement (PDF) from 40 leading economists backing the legislation as evidence that it will ultimately be good for the economy. Though she declines to specify how much the legislation could expand union rolls, she says "there are millions of workers in this country that would form a union today if it were easier to do so and they didn't have to fear getting fired for exercising their rights."

As for the claim that card check could lead to improper peer pressure, Maxwell says workers are far more likely to be intimidated by their boss in union negotiations than by their coworkers – "that's who has the power," she says.

According to the AFL-CIO, union members are 52 percent more likely to have health care from their employer, three times more likely to have guaranteed pensions and earn 28 percent more than their non-union counterparts. With the exception of a small uptick last year, union membership in America has been in decline for decades. The Bureau Of Labor Statistics reports that 12.4 percent of workers were union members in 2008. It's also worth noting that workers in the public sector are far more likely to be unionized (36.8 percent are) than those in the private sector (7.6 percent).

Millions Poured Into Fight

Both sides are lobbying hard around the legislation, which was introduced last year but died in the Senate. Business interests spent $30 million last year on ads opposing the legislation, and American Rights at Work has spent $10 million on ads backing it since Labor Day, according to the Wall Street Journal.

Backers point to a report noting "a steep rise in illegal firings of pro-union workers" this decade, while opponents note a study finding that "every 3 percentage points gained in union membership through card checks and mandatory arbitration would result in a 1 percentage point rise in the unemployment the following year."

Unions spent millions of dollars on behalf of then-candidate Barack Obama during the presidential campaign and undertook a massive organizing effort on his behalf, and it paid dividends - the liberal American Prospect, in a pro-EFCA editorial, notes that 57 percent of white male union members favored Mr. Obama even as white males in general broke for rival John McCain.

(AP Photo/Paul Sancya)
Last week, Vice President Joe Biden gave a speech to the AFL-CIO Executive Council suggesting the Obama administration was ready and willing to return the favor. In the Obama administration, he said, "it will not take divine intervention" for union leaders "to get invited to the White House," and argued "you can't have a middle class without a strong labor movement."

Both Biden and President Obama have said they back EFCA.

So What's Going To Happen?

While the present political landscape presents perhaps the best opportunity unions will ever have to pass EFCA, the legislation faces an uncertain future.

Though it is expected to easily pass in the House, the bill may not have the 60 votes necessary to avoid a filibuster in the Senate. There are now 58 Senate Democrats, including the ailing Ted Kennedy – there will be 59 if Minnesota's Al Franken is seated – but even if they all back the legislation, that's not enough for it to pass.

And they aren't all backing it: Nebraska Democrat Ben Nelson said Tuesday he does not support the bill, and other moderate Democrats, particularly Blanche Lincoln of Arkansas, have also expressed reservations. For EFCA to pass, all of these Democrats must come on board, along with one Republican – most likely Pennsylvanian Arlen Specter, who backed the bill last year but whose support this time around is far from certain.

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