JOB KILLER:

Obama's Welcome Silence On The Employee Free Choice Act (Richard A. Epstein, 02.10.09, Forbes)

Today President Obama, who has moved hard on many fronts, has maintained a wise and judicious silence on the EFCA. Thankfully, the current bill has garnered somewhat less political support in Congress than it did a year ago when it sailed through the House only to die for the want of 60 votes in the Senate.

In principle, I believe that the NLRA is manifestly inferior to the common law system of open contract that it displaced. One of its chief weaknesses, most evident in bad economic times, is that the rigidity of collective bargaining agreements hampers any much-needed downward adjustments in wages and benefits. That rigidity in turn has led to the hemorrhaging of jobs in the unionized part of the automotive industry.

EFCA does not address job losses in unionized industries. Instead, it hopes to promote union organization by two key steps that in fact pose a mortal threat to the job creation so desperately needed today. No economic wizardry is needed to recognize that the more costly it is to create jobs, the fewer the jobs will be created.

Unfortunately, EFCA is a job killer of the first magnitude, as I have shown in an extensive monograph funded--full disclosure--by the Alliance to Save Main Street Jobs.

EFCA's first mistake is to adopt a card-check system that allows a union to sidestep at will any secret ballot election supervised by the National Labor Relations Board. Today, that election takes place only after a highly regulated political campaign in which both the employer and dissident workers have their say about the proposed union. Today, unions win about as many of these elections as they lose. And they often lose because the campaign points out the dangers that unions pose to firm growth and worker job security.

Under EFCA, however, the union is certified so long as it gathers, even in secret, cards signed by a majority of workers. The ability of workers to hear both sides is effectively throttled. The union may keep the signed cards even if workers ask for them back. EFCA does nothing to guard against the evident risks of intimidation and misrepresentation by such simple safeguards as card notarization.

The harm from the deeply unpopular card check is compounded by an untested and convoluted process of compulsory interest arbitration that kicks in only 10 days after the union is certified. In those negotiations, the union has the huge advantage of surprise.