big labor

Constipated Colombia Pact

by Michael Fumento on April 8, 2011

in Economy, International, Trade

Post image for Constipated Colombia Pact

Pres. Obama has made expanding U.S. exports a centerpiece of his economic plan. In his January State of the Union Address, he noted that “95% of the world’s customers and fastest-growing markets are beyond our borders” and that export-related jobs “pay 15% more than average.” At a time when jobs are in short supply, he later said, “building exports is an imperative.”

So naturally, he’s done everything possible to ease passage of the Colombia Free Trade Pact, which the Bush Administration negotiated and the then-Democrat controlled Congress battled up. Right? Wrong.

As I write in Investor’s Business Daily, the Pact is lopsided towards the U.S. in that Colombia’s exports to us are already tariff-free, while our products sent there carry duties of up to 25 percent — an estimated $3.2 billion total since the agreement was reached.

Those tariffs would disappear and, according to the U.S. International Trade Commission, expand opportunities for a broad array of U.S. sectors, increase our gross domestic product by about $2.5 billion, lower our massive trade deficit and create J-O-B-S.

[click to continue…]

Will UAW Seek Foreign Help to Unionize American Workers?

by Ivan Osorio on January 18, 2011 · 2 comments

in Bailout Watch, Economy, Employment, International, Labor

America has a vibrant and successful auto industry — just largely outside of Detroit. For years, many foreign automakers’ American divisions have been successful at making cars profitably, while creating thousands of well-paying jobs. One reason for the foreign automakers’ success has been their ability to work without the burdensome work rules faced by the Big Three under their contracts with the United Auto Workers (UAW) union.

Apparently, UAW President Bob King doesn’t like that one bit. In fact, he seems to feel so strongly about it that he recently announced that for companies that resist its organizing efforts, the UAW “will launch a global campaign to brand that company a human-rights violator.” What might such a campaign entail?

One indication can be found in the Obama administration’s report to the bad joke known as the U.N. Human Rights Council — whose members include such human rights champions as China, Cuba, Libya, and Saudi Arabia. In the report, submitted in August 2010, the State Department strongly suggests that the degree to which the law facilitates unionization should be a human rights matter — and that the U.S. falls short in that area.

The UAW — or any other union, for that matter — likely would cite the State Department document in any complaint filed to the International Labor Organization, World Trade Organization, or any other international body — maybe even the ridiculous U.N. Human Rights Council. And King’s recent remarks indicate this is an option the UAW might well pursue.

King also recently acknowledged that the UAW is in trouble. Speaking to an audience of 1,000 union members at a Washington political action conference, he said, “If we don’t organize these transnationals, I don’t think there’s a long term future for the UAW — I really don’t.” With those kind of stakes, it would be surprising for the UAW not to take some drastic action.

The upshot of all this is that we could end up seeing the UAW ask international bodies composed of foreign governments — including some undemocratic ones — for help in unionizing American workers. Stranger things have happened.

For more on labor, see here and here.

Unions’ Shifting Lame Duck and NLRB Agenda

by Ivan Osorio on November 22, 2010

in Bailout Watch, Economy, Labor, Regulation

With Democrats losing control of the House of Representatives and a substantial number of seats in the Senate, organized labor’s hopes of seeing its legislative agenda enacted are fading fast. But that won’t keep union bosses from trying, in two ways. First, a last-ditch push in the current lame-duck session of Congress; and second, shifting efforts away from the legislative to the regulatory process, specifically in the National Labor Relations Board (NLRB). Thankfully, this shift in union strategy is getting some public attention — and more is needed.

In Congress, Big Labor’s allies are most likely to focus on passing bills bailing out underfunded union pensions and forcibly unionizing state and local government public safety employees. As my colleague F. Vincent Vernuccio and I noted recently in Forbes regarding the proposed bailout:

During the lame duck session, the main Big Labor priority to watch out for is a union pension bailout. Introduced in the House (Create Jobs and Save Benefits Act, H.R. 3936) by Rep. Earl Pomeroy (D-N.D.) and in the Senate (Create Jobs and Save Benefits Act, S. 3157) by Rep. Robert Casey (D-Penn.), this legislation would create a new fund within the Pension Benefit Guaranty Corporation ( GRTYA.PK - news -people ) (PBGC), through which it would direct taxpayer dollars to shore up some underfunded union pension plans. The use of public funds to insure private pension plans is a first for PBGC and stark departure from the way it has operated since its creation in 1974.

Earl Pomeroy lost his reelection bid, which makes the prospects for his legislation dim. However, just because unions lost one champion of this legislation does not mean they cannot find another. Pomeroy was an odd sponsor of such legislation anyway; unions are not exactly political powerhouses in North Dakota, which is a right to work state.

The so-called Public Safety Employer-Employee Cooperation Act (S. 3194, H.R. 413) would corral public safety — police, firefighter, and EMT personnel — into unions. For organized labor, this may be its best option for a long-term growth strategy, now that more union members works for governments than for private businesses. But states and cities struggling to balance their overstretched budgets, higher labor costs is the last thing they need. As National Right to Work Committee President Mark Mix notes in The Washington Examiner:

Last year, even as the nation’s economy endured a severe recession, state and local employee real compensation rose by nearly 3 percent. Meanwhile, businesses whose revenues were plummeting had no choice but to cut back real compensation for private-sector employees by 4 percent.

Incredibly, Reid and many likeminded senators and representatives now appear eager to put an even more onerous burden on private-sector employees and employers so that already bloated unionized government payrolls can keep expanding.

The Public Safety Employer-Employee Cooperation Act would force countless policemen, firefighters and emergency medical technicians to accept as their monopoly-bargaining agent a union they never voted for, and want nothing to do with. All contrary state laws and local policies would be overridden.

Even in many states that already authorize public-safety union monopolies, the bill would widen their scope. That’s why the vast majority of the 50 states will be forced either to rewrite their public-sector labor statutes, or hand over control of their public-safety officers to the federal government, if it becomes law.

Moreover, as former Service Employees International Union second-in-command Anna Burger has boasted, it would “create a national collective,” i.e. monopoly, “bargaining standard for all [state and local] public workers.”

Meanwhile, the fight over card check and other pro-union legislation is shifting to the NLRB, where Board members Craig Becker and Mark Gaston Pearce — both recess-appointed by President Obama — are likely to push Big Labor’s agenda. As Katie Gage of the Workforce Fairness Institute notes in The Daily Caller:

Recently, the NLRB has taken action to favor labor bosses over employees and employers. Obama’s appointees to the board are carrying Big Labor’s water, and our freedoms and jobs are at risk.

Cases that have been decided and closed for years are now being reopened by these new board members, who aim to change pro-worker and pro-small business decisions into pro-union boss ones.

For example, most recently, the board backed unions in their practice of holding protest signs at small businesses who use contract workers, claiming that the signs are not coercive.

In addition, the NLRB is now considering implementing electronic voting services for remote elections as opposed to worksite elections where physical ballots are both cast and counted, a move that would open elections to potential fraud and workers to intimidation.

And now there is discussion that this “independent federal agency” will shorten the amount of time for workplace elections even though most take place within a month. While Big Labor bosses could begin planning and organizing months ahead of an election being called, small business owners could be caught unaware and have only a few days to make their case to their own employees.

The lame-duck session ends next month, but Becker’s and Pearce’s recess appointments run through the end of the next session of Congress, so they’ll be on the Board through 2011. The NLRB bears watching.

For more on labor, see here and here.

Will the NLRB Push Big Labor’s Agenda?

by Ivan Osorio on November 4, 2010

in Agenda for Congress, Economy, Employment, Labor, Regulation

Organized labor expended enormous amounts of resources and effort to give Democrats control of Congress in 2006 and the White House in 2008. For this considerable investment, union leaders hoped to get a rich return in enactment of the so-called Employee Free Choice Act (EFCA) — which, in its current form, would:

  1. Effectively eliminate secret ballots in union organizing elections;
  2. Enjoin federally appointed arbitrators to impose contracts on newly unionized companies that could not reach agreement with the union after 120 days; and
  3. Increase employer penalties for unfair labor practices, which include actions resisting unionization that would be legal in other contexts, such as promising to raise wages.

Now, with the Republican takeover of the House of Representatives and the Democrats’ Senate majority considerably narrowed, the clock is running out fast on Big Labor’s legislative agenda. As a result, Democrats in Congress will probably try to enact as many items on their union allies’ agenda as possible during the lame duck session. As I noted yesterday, we could see:

  1. A version of EFCA without its politically toxic card-check provision;
  2. A version of EFCA with card-check replaced with a different organizing mechanism favorable to unions, such as expedited elections or electronic voting;  or
  3. EFCA’s three sections being split off and attached to other legislation.

Moreover, as hopes for organized labor’s agenda fades in Congress, unions and the Obama administration are likely to shift the fight toward the National Labor Relations Board (NLRB). With Craig Becker and Mark Gaston Pearce, both recess-appointed by President Obama, sitting on the Board, the unions have a good chance of getting administratively what they couldn’t get legislatively.

Becker, a former associate counsel with the Service Employees International Union (SEIU),  failed to get Senate confirmation, largely due to previous writings in which he stated that employers should have no say in the organizing process.

Pearce hasn’t been as controversial, but he recently gave indication of being as dismissive of employers’ free speech rights — and of what the Board might try to accomplish. On October 21, at a labor law conference in Boston, Pearce said that he believed that the time period between the filing of an organizing election petition and the actual election should be “as brief as possible.” Shorten that period enough, and you end up with “ambush” election, in which employers barely get an opportunity to respond to a union organizing campaign.

Pearce’s comment suggests the possibility of the NLRB doing an end run around Congress. EFCA opponents in Congress should take the threat seriously, and counteract it if needed.

For more on labor, see here and here.

Election 2010: Union Losses, Worker Gains

by Ivan Osorio on November 3, 2010

in Agenda for Congress, Bailout Watch, Deregulate to Stimulate, Economy, Employment, Labor, Regulation

Yesterday’s election results will make it much more difficult for organized labor to advance its agenda in Congress. This is good news for the American economy, especially struggling businesses and workers who do not wish to join unions.

The deceptively named Employee Free Choice Act (EFCA) remains at the top of the union agenda. It failed to become law when Democrats controlled both houses of Congress and the White House, so its chances of gaining any traction in its current form now are nil. However, during upcoming Congress lame duck session, EFCA supporters could alter the bill in various ways in order get at least parts of it through.

One possibility is jettisoning the bill’s card check provision, which would in effect eliminate secret ballots in union organizing elections. This provision generated the most opposition and is now politically toxic. EFCA supporters could either replace that provision with one mandating expedited elections or push EFCA without an organizing provision. Either option is bad.

Expedited elections very likely would function as ambush elections, in which employers get very little time to respond to union organizing campaigns, and thus give the union a significant advantage.

Meanwhile, EFCA’s other provisions are also very bad policy. The Act’s binding arbitration provision would enjoin a federally appointed arbitrator, who would have no knowledge of the business, to impose a contract on a newly unionized company if the management and the union cannot reach an agreement after 120 days. Such an imposed contract could include obligations to pay into severely underfunded union pension funds. Thus, employers could find themselves facing millions of new liabilities practically overnight, without having much of a say in the matter. (As Brett McMahon of Miller & Long Construction describes it, for a newly unionized company, that would be “a good time to start liquidating.”)

EFCA’s last provision would increase penalties on employers for “unfair labor practices,” which can include actions resisting unionization that would be legal in any other context outside of the bizarre world of U.S. labor law — such as raising wages or promising to do so. Increased penalties for such actions give unions a bigger club with which to browbeat employers during organizing campaigns.

EFCA opponents in Congress — mostly Republicans but also a few Democrats — should be on guard against EFCA supporters attempting to attach the bill’s binding arbitration and increased employer penalty provisions to other legislation. In short, they should be vigilant against EFCA-minus-card-check and EFCA-in-pieces.

Another Big Labor priority to watch out for is the companion union pension fund bailout bills, introduced in the House (Create Jobs and Save Benefits Act, H.R. 3936) by Rep. Earl Pomeroy (D-N.D.) and in the Senate (Create Jobs and Save Benefits Act, S. 3157) by Rep. Robert Casey (D-Penn.). The Pomeroy-Casey bailout would create a new fund within the Pension Benefit Guaranty Corporation (PBGC), an agency chartered by Congress that insures private sector pensions. As my colleague Vinnie Vernuccio and I explain in a recent op ed:

PBGC is funded through premiums paid by private companies to insure retirees if a plan sponsor were to become insolvent. Casey’s bill would direct taxpayer dollars to shore up some underfunded union pension plans. The use of public funds to insure private pension plans is a first for PBGC and stark departure from the way it has operated since its creation in 1974.

Casey’s bill would create a new fund to the PBGC called the “fifth” fund. The legislation states that the new fund’s obligations would be “obligations of the United States.” In other words, taxpayers, not just by PBGC premium payers, would be on the hook. Money in the “fifth” fund would go to “orphans”—employees whose employers have stopped contributing to their plan—of certain existing pensions.

The taxpayer liability could be huge, extending to cover the PBGC’s existing, already-large deficit.

Worse, Casey’s bill would also bail out a dysfunctional agency. The PBGC’s premiums are set by Congress, not the market. As a result, years of too-low premiums, combined with the moral hazard that creates for companies under Chapter 11 to shunt off their pension obligations to the agency, have left the PBGC with severe deficits of its own. The PBGC faces a deficit of $22 billion, which is projected to go as high as $34 billion by 2019, according to its own 2010 annual management report. Taxpayers could also be on the hook for this deficit. A provision in the “fifth fund” allows it to transfer money to others funds in the PBGC, which could use that money to reduce its deficit.

And that’s not all. The Pomeroy-Casey legislation would increase the pension liabilities of companies that already face those obligations, before those pensions wind up as wardens of the state in the new taxpayer-funded PBGC. As Vinnie and former CEI Brookes Fellow Jeremy Lott explain, it would allow multi-employer — i.e. union — pension funds to create “alliances” — that is, combine into larger funds.

Multiemployer union pension alliances might sound innocent enough, but consider what that actually means. Moody’s Investors Service recently warned of a vast underfunding problem with multiemployer pensions. Many employers fear being shackled into them. Even though the funds are controlled by unions, employers are liable not just for their own employees, but for every worker in the plan regardless of how the plan is managed or mismanaged.

The so-called last-man-standing rule holds that if every other company in a multiemployer pension plan goes bankrupt, closes or pulls out of the plan, the one survivor is responsible for every single employee covered by the plan, even those who never worked for him. UPS paid $6.1 billion in withdrawal fees just to escape the Teamsters Central States pension fund.

Earl Pomeroy lost his reelection bid yesterday, and soon will no longer be in Congress, which makes the prospects for his legislation dim indeed. However, just because unions lost one champion of this legislation doesn’t mean they can’t find another. Pomeroy was an odd sponsor of such legislation anyway; unions aren’t exactly political powerhouses in North Dakota. Still, given enough support from the national Big Labor establishment, another unlikely lawmaker could take this up. In addition, Pomeroy himself could try to push this legislation during the lame duck session, which could gain him favor with the Obama administration — and its major labor supporters — and improve his chances for an executive appointment.

Finally, organized labor’s reduced clout in Congress may clear the way politically for the long overdue ratification of free trade agreements with Colombia, Panama, and South Korea. Colombia and Panama are promising emerging markets. South Korea is one of the world’s leading economies. All three countries are U.S. allies. America’s trade agreements with all three deserve prompts ratification.

For more on labor, see here and here.

Killed by Pension Accounting

by Ivan Osorio on October 18, 2010

in Bailout Watch, Deregulate to Stimulate, Economy, Employment, Labor, Regulation

Think accounting rules are a boring topic? You wouldn’t if the fate of your business rested on it. Indeed, a rule change may be coming soon that may expose the huge liabilities many companies face as a result of their participating in some grossly underfunded union pension funds. In a straightforward, non-boring manner, Washington Examiner columnist Mark Hemingway breaks it down.

On Nov. 1, the Financial Accounting Standards Board (FASB) ceases to take public comment on a new rule requiring that companies more accurately report liabilities they have from participation in multiemployer pension plans. Unless FASB is persuaded otherwise, the rule takes effect Dec. 15.

There are some 1,500 multiemployer pension plans in the United States, which are unique to unions. In these plans, multiple companies pay into the pension plan, but each company assumes the total liability.

Under “last man standing” accounting rules, if five companies are in a plan and four go bankrupt, the fifth company is responsible for meeting the pension obligations for the employees of the other four companies.

What this means is that companies with union labor often have pension liabilities that are several multiples higher than the pension expenditures they report — the Kroger grocery store chain shocked analysts last year when it disclosed its multiemployer pension liabilities more than doubled in a year to $1.2 billion.

Ratings agencies such as Moody’s and Standard and Poor’s have been highlighting the lack of transparency in union pension plans. Now Wall Street wants union businesses to be upfront about their liabilities.

FASB’s new rule could effectively wipe out the paper worth of many companies, especially in the trucking and construction industries. Once banks and creditors are aware of these staggering pension liabilities, it will make it nearly impossible for union businesses to get loans, credit lines or bonding.

If forced to report their true liabilities, hundreds — perhaps thousands — of companies will scramble to get out from under their union obligations.

UPS did precisely that three years ago, opting to pay $6.1 billion to withdraw from the Teamsters Central States Fund. That’s right, UPS decided that $6.1 billion was less costly than the Central States Fund’s liabilities! The last-man standing rule made the situation especially bad. As Bloomberg reported at the time, “The Central States Fund has suffered as several unionized trucking companies have failed or been acquired during the past decade, leaving UPS and other remaining employers to bear greater liability for retirees covered.”

As Hemingway notes, it is largely to shore up such failing pension funds that organized labor worked so hard for passage of the so-called Employee Free Choice Act — its card-check provision would enable unions to organize new members without the hindrance of a secret ballot election, while its binding arbitration provision would make it easier to impose pension liabilities on employers. He also rightly notes that the fight over EFCA isn’t quite over yet, and Republicans need to be on guard during the upcoming lame duck session of Congress.

Businesses should be even more on guard. As Brett McMahon of Miller & Long Construction (whom Hemingway also cites) described it, for a business, facing millions in new multi-employer pension liabilities would be “a good time to start liquidating.”

For more on union pensions, see here.

Senators Challenge Administration’s Big Labor Giveaway

by Ivan Osorio on September 17, 2010 · 1 comment

in Deregulate to Stimulate, Economy, Employment, Labor, Regulation

Despite all they have gotten from the Obama administration, many union leaders have vented their frustration over Democratic lawmakers’ failure to enact the unions’ top legislative priority: the so-called Employee Free Choice Act (EFCA).

As a result, they are seeking to do a run around Congress by trying to get something similar to EFCA’s unpopular card check provision imposed through the regulatory process. This provision would amend the National Labor Relations Act to effectively eliminate secret ballots in organizing elections.

Last May, unions and their Democratic allies did a similar end run by amending the Railway Labor Act (RLA), which regulates labor relations for railways and airlines, to skew voting rules in unions’ favor. The change was enacted through the National Mediation Board, which oversees labor negotiations under the RLA.

Under the previous interpretation of RLA voting rules — which dated back to 1934 — a union needed to get a majority of all members in the bargaining unit — that is, the majority of all members the union sought to represent — to vote for unionization.

Under the new interpretation, unions only need to get a majority of votes cast, which can lead to a union being certified as the monopoly bargaining agent for a group of employees with only a minority of those employees having voted for the union. For example, if union is trying to organize a company that has 1,000 employees and on the day of the election only 500 show up to vote, the union would then need only 251 votes to win.

Fortunately, some Republican Senators are confronting this Big Labor power grab, through a resolution (S.J. Res. 30) sponsored by Sen. Johnny Isakson (R-Ga.). They are doing so by dusting off a needed law that, if used more, could help curb many government excesses: the Congressional Review Act of 1996, which allows Congress to review — and repeal — agency-promulgated rules.

The Act has only been used once, in early 2001, to repeal a Clinton-era ergonomics rule. It’s good to have it back. It would be even better still for new regulations to meet this kind of scrutiny on a routine basis.

Two Health Care Unions Battle Each Other for Members

by Ivan Osorio on September 13, 2010 · 2 comments

in Economy, Employment, Labor

Voting began today in one of the most disputed union elections in recent years. The contest pits the powerful Service Employees International Union (SEIU) against the upstart National Union of Healthcare Workers (NUHW), which was created last year by former officials of a SEIU affiliate in Oakland, California. At stake are 44,000 at Kaiser Permanente health care facilities throughout Northern California.

SEIU’s national leadership placed its Oakland affiliate, United Healthcare Workers-West (UHW), in trusteeship in January 2009, alleging “financial wrongdoing” by then-UHW President Sal Rosselli. In response, Rosselli accused then-SEIU President Andrew Stern of using trusteeship to forcibly seize his local and merge it with a scandal-ridden Los Angeles-based local, whose president, Tyrone Freeman, had stepped down amid serious corruption allegations.

SEIU suffered a loss to NUHW in Southern California in January, so the current contest is major test for SEIU’s new national president, Mary Kay Henry, who took over from her notorious predecessor Andy Stern last May. Henry seems committed to this fight, and for good reason. She worked alongside Stern during his tenure as president, and helped to implement some of his more controversial policies, including his efforts to create a handful of giant mega-locals, through mergers such as the one imposed on SEIU’s California health care affiliates.

Union power struggles are nothing new, and, as in most, the dispute between SEIU and NUHW has its share of egos. But this fight also centers on the future of unionism in the private sector, where organized labor is a fading force. To revive unions’ sagging private sector numbers, SEIU, under Stern’s leadership, has pursued a strategy of increasing union “density,” which entails increasing the number of union members in the overall workforce to gain greater clout in negotiations. This often has meant compromising on contract terms to lessen employer resistance.

Rosselli, by contrast, has preferred to drive a hard bargain to gain the best contract terms for existing members, even while trying to organize new ones. Throughout this conflict, Henry worked alongside Stern to pursue the goal of greater “density,” which Rosselli has derided as “organizing workers for the sake of numbers.”

Whichever strategy wins out, it’s safe to say that the leaders of SEIU and NUHW can agree on at least one thing: support for the so-called Employee Free Choice Act (EFCA), which can help both their goals. EFCA’s card check provision would both allow unions to organize members more easily by effectively eliminating the secret ballot in organizing elections, while its binding arbitration provision would allow union negotiators to drive a harder bargain in the expectation that after 120 days a federally appointed arbitrator could step in to impose an agreement that is bound to be no worse for the union than management’s final offer.

Voting ends on October 4 and the vote count begins two days later. This is a contest well worth watching.

For more on SEIU, see here, here, here, and here.

The War of the SEIU Succession Is Over, or Is It?

by Ivan Osorio on April 26, 2010

in Economy, Labor

The battle over who would succeed outgoing Service Employees International Union (SEIU) President Andrew Stern (picture above, next to President Obama) appears to be over, as several key locals lined up to support challenger Mary Kay Henry against Stern’s handpicked successor, Anna Burger, who served as Secretary-Treasurer during Stern’s presidency. The story got largely buried because it broke at the start of a weekend, but Liberty Chick, at Biggovernment.com, has some useful background on Henry.

Mary Kay Henry’s history with SEIU began in 1979, as she rose through the ranks and became a leader and chief healthcare strategist, then was elected to the International Executive Board in 1996.  Today, Henry serves as International Executive Vice President of SEIU, a step beneath Anna Burger.  Henry’s efforts have been very focused in the health care sector and on building labor coalitions and partnerships with hospitals and health care facilities.  That said, we can probably expect to see SEIU’s stronghold on this sector continue to grow stronger.

In addition to her posts at SEIU, Mary Kay Henry has also been a labor adviser to and member of the Subcommittee on Catholic Health Care of the U.S. Catholic Conference of Bishops, an organization that in itself has become a major political force, having brokered deals with the likes of Nancy Pelosifor crucial votes in the eleventh hour of major bills, most notably on health care reform.  Additionally, she is a member of the executive board of Families USA, a left-leaning non-profit group that serves as a think-tank for most of SEIU’s and other progressive organizations’ research and reports to support universal health care.

In other words, we should expect a change in style — mainly in not antagonizing other labor leaders as much as the Stern-Burger duo did — rather than substance.

For more on Stern and SEIU, see here, here, and here.

UPDATE: Outgoing SEIU boss Andy Stern isn’t giving up the fight for Anna Burger to replace him; he said today that the selection of his successor is not over. However, the Huffington Post reports that, “Aides at SEIU didn’t dispute that Henry, owing to support of local affiliates in New York, Los Angeles, Oregon, and Washington State finds herself in a strong position to take over for Stern.”

Taxpayers Take Another Hit from Obama; Administration Panders Yet Again to Big Labor

by Hans Bader on April 16, 2010 · 2 comments

in Economy, Employment, Labor, Politics as Usual, Regulation, Sanctimony, Stimulus to Nowhere, Zeitgeist

Taxpayers will pay billions more due to an executive order signed by President Obama that effectively restricts federal construction contracts to the minority of construction firms whose workers are unionized.  That will encourage them to jack up their prices, by shielding them from having to compete with lower bids from non-union construction firms.

As the Examiner notes, “President Obama signed Executive Order 13502 directing federal agencies taking bids for government construction projects to accept only those from contractors who agree in advance to a project labor agreement that requires a union work force. Obama’s new order applies to all federal construction projects with price tags of $25 million or more, and it means all such contracts will only be awarded to companies with unionized work forces.”

This will exclude the vast majority of contractors from bidding on government contracts: “Barely 15 percent of all construction-industry workers in the United States are union members, while the remaining 85 percent are nonunion.”

Obama’s $800 billion stimulus package also contains pay-offs for Big Labor, like prevailing wage regulations.  Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package would shrink the economy “in the long run.” The stimulus package has since destroyed thousands of jobs in America’s export sector, and subsidized countless examples of government waste and corruption.  The Obama Administration also pandered to Big Labor by giving ownership of Chrysler to the United Auto Workers Union at the expense of employee pension funds, taxpayers, and banks, in a maneuver that circumvented federal bankruptcy laws.

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