Today in The Wall Street Journal, Kimberley Strassel dissects the shifting political prospects for the Employee Free Choice Act (EFCA), commonly known as the “card check” bill. (”Card check” is a unionization procedure whereby union organizers circumvent the secret ballot process by getting workers to sign union cards in the open, exposing them  to aggressive, hard-sell intimidation tactics.)

It hasn’t been much noticed, but the political ground is already shifting under Big Labor’s card-check initiative. The unions poured unprecedented money and manpower into getting Democrats elected; their payoff was supposed to be a bill that would allow them to intimidate more workers into joining unions. The conventional wisdom was that Barack Obama and an unfettered Democratic majority would write that check, lickety-split.

Instead, union leaders now say they are being told card check won’t happen soon. It seems the Obama team plans to devote its opening months to important issues, like the economy, and has no intention of jumping straight into the mother of all labor brawls. It also seems Majority Leader Harry Reid, even with his new numbers, might not have what it takes to overcome a filibuster. It’s a case study in how quickly a political landscape can change, and how frequently the conventional wisdom is wrong.

Paradoxically, it’s Mr. Reid’s bigger majority that is now hurting him. In 2007, he got every Democrat (save South Dakota’s Tim Johnson, who was out sick) to vote for cloture. But it was an easy vote. Democrats like Mr. Pryor knew the GOP held the filibuster, and that Mr. Bush stood ready with a veto. Now that Mr. Reid has 58 seats, red-state Democrats in particular are worried they might actually have to pass this turkey, infuriating voters and businesses back home.

Indeed, it’s much harder to stand behind a vote when it may lead to tangible consequences, so it’s not that surprising that the prospect of card check actually passing should scare some of its former alleged supporters away — especially with an election being over. But the business community and Senate Republicans need to look beyond card check at EFCA’s other provisions, which would impose other kinds of burdensome labor regulation: binding arbitration and increased “unfair labor practice” penalties on employers.

Binding arbitration would oblige the federal government to appoint an arbitrator, who would impose a contract in a labor dispute, if a union and an employer did not reach an agreement after 120 days. This would allow one side to wait out the 120-day period before having a contract imposed — and since an imposed contract would bring the union closer to its demands relative to conditions under the expired contract, the union would be more likely to use this provision to its advantage. So much for freedom of contract.

In addition, increased penalties for employers over alleged “unfair labor practices” would give unions yet another club to threaten employers with during organizing drives.

As Strassel notes, “Credit for this new environment [of loss of support for card check] goes to a business community that has been uncharacteristically unified in a sweeping campaign against the bill.” However, even as card check begins to lose support, the business community needs to focus on EFCA’s other provisions, which are also extremely harmful — and should be no less radioactive.

According to the Associated Press, President-elect Barack Obama is about to name Rep. Hilda Solis (D-Calif.) as Secretary of Labor. If Rep. Solis’s voting record is any guide to how she plans to run the Department, it is not encouraging — it consistently shows her voting in favor of greater government spending programs  favored by organized labor (including the auto maker bailout).

In addition, her apparent closeness to organized labor should be cause for concern. Labor unions, which she should be tasked with overseeing, are among her biggest campaign contributors. According to the Center for Responsive Politics, during the last election cycle, her top four donors — and 14 of her top 21 donors — were labor unions. Her relationships with union leaders are a legitimate topic that Senators should address in her confirmation hearing.

Rep. Solis’s voting record is ranked at:

• 96 percent by the Drum Major Public Policy Institute (a group which bills itelsf as “providing ideas that fuel the progressive movement“);
• 53 (”House Hero”) by the liberal Americans for Democratic Action;
• 2.00 percent (lifetime) by the American Conservative Union; and
• 4 percent, a letter grade of “F,” by the National Taxpayers Union.

So how could it have been worse? If Obama had actually named Mary Beth Maxwell, who heads the pro-union lobby group American Rights at Work, and whose name had been floated prior to today. Maxwell is a professional pro-union advocate whose organization agitates for the kind of labor regulation that has brought the Detroit Big Three (as well as some steel companies and airlines) to their current dire state — hardly what the American economy needs at this time.

So maybe the talk about Maxwell should make us thankful for small favors — very small favors. But American workers should hold on to their wallets just the same. If Rep. Solis’s labor allies were to have their way, more and more workers would be paying compulsory union dues — which then go on to support candidates the union leaders favor.

Last night, the Detroit Big Three bailout package crashed and burned for the best of reasons. To their credit, Senate Republicans refused to abide the United Auto Workers’ cavalier attitude toward further, drastic concessions. Reports The New York Times:

Late Thursday, the Senate did not take up an assistance measure passed by the House, after hours of negotiations between Senate Republicans with the auto companies and the U.A.W. The sticking point apparently was the union’s refusal to agree to lower wage and benefit rates as soon as next year.

Representatives for the union, which had already accepted a series of cuts in its current contract, sought instead to push any more concessions back to 2011, when the U.A.W.’s contract with Detroit auto companies expires.

And the UAW’s stated reason for wanting to take so long? The union put out a statement:

“Unfortunately, Senate Republicans insisted that this had to be accomplished by an arbitrary deadline. This arbitrary requirement was not imposed on any other stakeholder groups. Thus, the U.A.W. believed this was a blatant attempt to make workers shoulder the lion’s share of the costs of any restructuring plan,” the statement said.

Isn’t it inconvenient how an emergency can impose an “arbitrary deadline”? The UAW’s argument of “Make them do more!” cannot obscure the fact that the union itself still needs to make further concessions, no matter what.

If the Detroit auto makers’ situation were truly as dire as they and the union claim, they’d be renegotiating contracts now.

A recent Washington Times editorial rightly calls the bluff on organized labor’s dubious claim that millions of American workers would eagerly join unions if not for employers’ ability to “browbeat the workers.”

Union leadership seems to believe that mandating card check and removing the employer’s right to request a secret-ballot election will somehow reflexively grow their numbers now and into the future to the 35 percent national representation they enjoyed in the 1970s. “We believe that it is integral to fixing the economy,” said William Samuel, legislative director for the AFL-CIO in a meeting with editors and reporters at The Washington Times this week. “We hope it will be among the first bills to move through Congress. I have no doubt that it will pass and it will be signed.”

Card check won’t do anything to fix the economy, and the reality is most unions are created through the secret ballot process, not because the employer objected to the card check but because union members prefer the outright legitimacy of the NLRB election.

Which is the major reason why EFCA is bad policy. The Act would in effect deprive workers of access to a secret ballot election once a majority of workers sign enough union cards — often under pressure from union organizers. The Act states:

If the Board finds that a majority of the employees in a unit appropriate for bargaining has signed valid authorizations designating the individual or labor organization specified in the petition as their bargaining representative and that no other individual or labor organization is currently certified or recognized as the exclusive representative of any of the employees in the unit, the Board shall not direct an election but shall certify the individual or labor organization as the representative described in subsection (a). [Emphasis added.]

That EFCA would undermine secret ballots could not be more clear from the Act’s own language. This bill’s other provisions — imposing both binding arbitration and stiffer penalties on employers for “unfair labor practices — are also troubling, but denying workers the secret ballot so blatantly is bad enough.

In his CBSNews.com column today, CNet’s Declan McCullagh makes a good case against bailing out the Detroit Big Three. As he rightly points out, decades of extremely generous union contracts have yielded huge liabilities in what have become known as “legacy costs,” which include such things as pensions and retiree health insurance.

In recent years, these legacy costs have become an enormous burden on GM, Ford and Chrysler, who face increased competition from foreign automakers, most of whom have lower labor costs thanks to much lower levels of unionization. One particularly lavish benefit is the United Auto Workers’ employer-funded “Jobs Bank,” which pays laid-off auto workers get paid their full salary for not working. McCullagh writes:

A beneficiary of that program was someone named Jerry Mellon, who worked for GM until his division merged with another in 2000 and he was no longer needed. Except for a brief period in 2001, Mellon received his full salary for not working, which reached $64,500 a year by 2006. Include benefits, and the annual cost to GM exceeds $100,000.

Nice work — or lack thereof — if you can get it! McCullagh goes on:

Read the full story

Today’s Washington Post and Los Angeles Times both endorse passage of the U.S- Colombia free trade agreement, which many Democratic politicians, pressured by organized labor, have refused to endorse. House Speaker Nancy Pelosi has ducked the issue by refusing to bring it to a vote. President-elect Obama got considerable help in his campaign from labor unions that oppose the deal, but no political debt is worth undertaking such a disastrous course as scuttling this trade deal.

Not only is Colombia the United States’ strongest ally in South America — a fact that would make scuppering the deal a slap in the face for Colombia and a political victory for the increasingly unhinged Hugo Chavez — but the last thing America needs in a time of economic turmoil is a Hawley-Smoot lite in the form of failed trade liberalization.

For all the bailouts and stimulus packages being batted around Washington, what the American economy really needs is greater opportunity to innovate and invest — in other words, less burdensome regulation and more open markets. As the Times‘ editorial argues:

The pact would balance and normalize a trade relationship that is now one-way. Colombia has almost unfettered access to U.S. markets — 91% of its goods enter duty free — but U.S. products face tariffs of up to 35%. Each Caterpillar truck sold in Colombia, for example, is taxed more than $200,000. This is a hindrance to prosperity for both countries. Currently, about 9,000 U.S. businesses export to Colombia, and were this deal passed, that number would skyrocket.

And, as the Post’s editorial says:

The main economic effect of the trade agreement would be to enable U.S. producers — automakers included — to export to Colombia tariff-free. This would simply level the playing field, because 90 percent of Colombian goods already arrive in the United States tariff-free under temporary trade preferences that Congress recently renewed. With U.S. goods exports to Colombia totaling over $8 billion per year, the pact offers a nifty dose of stimulus for U.S. businesses and workers.

Stimulus, indeed! As CEI’s Wayne Crews argues, to stimulate, deregulate. The same is true of liberalizing trade.

For more on the U.S.-Colombia trade deal, see here and here.

In City Journal, Claire Berlinski looks at the effects of the so-called Employee Free Choice Act (EFCA) by looking at a precedent of EFCA in reverse, in Great Britain early the Margaret Thatcher’s government.

Thatcher put reform of the trade union law at the top of her agenda. Among the key provisions of Britain’s 1980 Employment Act was a change in the way government would recognize unions. At the time, workers voted to join unions—or not—in public, by voice vote. Dissenters suffered harassment and physical intimidation. Henceforth, Thatcher decided, new union membership agreements would require approval by means of a secret ballot in order to protect rank-and-file workers from bullying by union organizers. If allowed to vote secretly, she believed, ordinary workers would not vote for policies against their long-term interests—such as pay raises so incommensurate with production as to render British businesses uncompetitive, or strikes so prolonged as to make even the Soviets unwilling to buy British goods.

Thatcher was right. As soon as the secret ballots were introduced, many workers began defying the trade union leadership and rejecting the unions’ ruinous policies. When she had taken power, Britain was the second-poorest nation in Europe. Her reforms led to the longest sustained period of British economic expansion of the postwar era. In the past decade, as a direct consequence of her augmentation of labor-market flexibility—in layman’s terms, her smashing of the trade unions—the Organisation for Economic Co-operation and Development has ranked Britain at the top in both output and inflation stabilization.

With unified Democratic control of government looming, America may be set to go back to the economic insanity Britain left behind. But that’s not all.

As if eradicating secret ballots weren’t bad enough, the EFCA contains a still more ominous provision: it vastly increases the role of government in settling labor disputes. The act stipulates that, if an employer and a union cannot agree on an initial contract within 90 days, either party may ask the Federal Mediation and Conciliation Service to intercede in the negotiations. If no deal is reached after 30 days of federal mediation, the feds will assign an arbitrator to work out an agreement. The arbitrator’s decision will be final and binding for two years. Workers will not get the chance to ratify the agreement, by secret ballot or otherwise.

In effect, the federal government will gain the power to dictate the terms of a contract and to set wages, benefits, hours, and work rules. Because negotiations for new contracts almost always take more than 120 days, this provision will ensure a significant expansion of government into the private sector. It’s absurd to imagine that even the most well-meaning government arbitrator would be sufficiently familiar with the day-to-day operations of a company, or the industry in which it operates, to make contract decisions as wisely as the company’s owners and employees would.

For more on EFCA and card check organizing, see here, here, and here. (Thanks to Iain Murray for the City Journal link.)