Center for Economic Freedom | Competitive Enterprise Institute

Corporate Campaigns: How Unions Take the Secret Ballot Away from American Workers

Christine Hall — Fri, 18 May 2012 09:48:36 +0000

Washington, D.C., May 18, 2012 - Labor unions are resorting to imtimidation strategies called "corporate campaigns" to strong-arm companies into eliminating the secret ballot in union elections, a new report shows. The Labor Watch report, "Corporate Campaigns: How Unions Take the Secret Ballot Away from American Workers," is authored by CEI labor policy experts, Trey Kovacs and F. Vincent Vernuccio and published by the Capital Research Center.

AFL-CIO President Richard Trumka once called a corporate campaign the “death of a thousand cuts.” He was referring to a type of union organizing strategy that uses an arsenal of legal, political, and public relations attacks to wear down a company’s resistance to unionization. These tactics are intended to impose financial and legal liabilities on the target company, sully its reputation with its suppliers, shareholders and customers, and hurt its standing in the community by subjecting corporate officers to personal embarrassment.

The report goes on to highlight instances in which unions have pressured companies to sign "neutrality agreements" to take away the right of employees to a secret ballot, used an anti-immigration bill against foreign auto companies hiring American workers, and engaged in shocking activities such as putting plastic cockroaches on food and claiming hospital food was contaminated.

So, what can be done?

The authors recommend some specific actions to fight back. Mainly, passing ballot measures to guarantee secret ballot union elections, passing a federal bill to do the same, and getting Congress to pass legislation allowing workers to re-elect their union every three years.

> View the CRC Labor Watch report, Corporate Campaigns: How Unions Take the Secret Ballot Away from American Workers

Christine Hall

Fri, 2012-05-18

Sub Title:

New Report on Union Tactics to Intimidate Companies

Give a Man a Fish

Iain Murray — Fri, 18 May 2012 11:25:41 +0000

Full Document Available in PDF

Some policy makers and environmental advocacy groups are beginning to realize that the solution lies not in further government regulation, but in investing fishermen with property rights. However, government bureaucrats are also attempting to utilize this insight to gain even more power over fisheries, threatening to derail the momentum toward a more rational allocation of ocean resources. That would be bad news for both fish populations and the people who depend on them for their livelihood.

The oceans are an important source of food and income for people around the world. In 2007, proteins from fish accounted for 15.7 percent of the total global animal protein supply. In 2008, an estimated 44.9 million people were directly engaged in the fishing industry (both marine capture and aquaculture). However, the world’s fish stocks are not limitless, and are being depleted rapidly.

Two principal factors are at work. First, the billions of dollars in subsidies bestowed on the fishing industry by many governments makes overfishing profitable, even as per capita fishing yields decline. Second, the absence of property rights over fish in most countries means that there is no incentive for any party to husband this resource. In fact, the absence of property rights, combined with subsidies, creates a perverse incentive to deplete this scarce resource.

Attempts to prevent overfishing by promulgating regulations (which are often at odds with subsidies) have proved both ineffective and impossible to enforce. As long as the incentives are skewed by bad government policy, many fishermen will continue to work around regulations or simply neglect to report some of their catches—a practice known as “black” fishing that is all too prevalent. Ending subsidies and extending genuine property rights to fisheries will help solve these problems.

Iain Murray

Roger Abbott

Fri, 2012-05-18

Sub Title:

The Case For a Property Rights Approach to Fisheries Management

Overregulation Shackles Next Facebook

John Berlau — Fri, 18 May 2012 20:59:02 +0000

Today, Facebook finally goes public with a market capitalization of $104 billion. Its initial public offering (IPO) is the capstone of its amazing ascent that changed the way the world communicates.

By contrast, other top American companies went public at much earlier stages in their growth. Barely anyone outside of the Atlanta area had heard of Home Depot when it went public in 1981 with just four stores in its name. The difference? Much of it has to do with the layers of regulation from the past decade that have made going and staying public so costly for smaller companies.

These rules are always justified as needed to go after “fat cats.” When George W. Bush signed Sarbanes-Oxley in 2002 and Barack Obama signed Dodd-Frank in 2010, both men cited scandals involving large corporations. After the JPMorgan Chase loss of $2 billion, the Beltway elites are painting any criticism of financial regulation as siding with the “big banks.”

But it’s smaller firms and smaller investors who have been the most burdened by these costly and complex rules, including the firms that could be the next Facebook or Home Depot. Home Depot co-founder Bernie Marcus has said many times the company likely never could have gotten off the ground if Sarbox, Dodd-Frank, and other of today’s regulations had been in effect. “We could never succeed today,” Marcus bluntly told radio host Hugh Hewitt last June.

Even a firm as big as Facebook had difficulty navigating this regulatory maze, stating in its initial IPO filing that “compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on our systems and resources.” But what’s “not seen,” in the words of classical economist Frederic Bastiat, are the innovations from the number of firms that could never have launched due to the prohibitive costs of these rules.

These regulations have also robbed ordinary investors of the opportunity to grow wealthy with Facebook in its early stages. Ditto with other recent IPOs like LinkedIn, Pandora, and Zynga.

IPOs of the past few years can be called “Cheers IPOs” because to paraphrase the theme song of the 1980s television sitcom, everybody knows their names. But what a healthy economy needs is IPOs of companies you have never heard of, which go public not to realize market value for the shares of their founders, but to raise money to expand operations and jobs.

Unlike the case with the Cheers IPOs and similar to that of Home Depot, no one outside of certain regions had heard of Starbucks and PetSmart when these retailers went public in the early 1990s. These firms used the money raised from the IPOs to become the dominant national chains they are today, creating thousands of jobs along the way. The relative ease for companies to go public in the 1990s helped the economy power out of its recession early in that decade and move toward the boom in the latter part.

But as Marcus has noted, firms as small as Home Depot in 1981 could never go public today with the costs of Sarbox and Dodd-Frank weighing them down. The SEC has calculated that the average annual costs of one Sarbox provision alone — the “internal control” mandates of Section 404, come to $2.3 million.

Statistics on both the reduced number and increased size of IPOs show the dramatic effects of these regulatory costs. In the years since Sarbanes-Oxley was passed in 2002 — a span that included good economic times as well as bad — not once has the number of IPOs come close to the numbers recorded during the slow-growth years of the early 1990s, let alone the boom years of the later part of that decade.

As I noted in February testimony to the House Energy and Commerce Committee, there were about 50 more IPOs in 1991 than there were in 2006 or 2007, relatively good years for economic growth.

The decline is especially severe among small firms. Even Obama’s Council on Jobs and Competitiveness has noted that “the share of IPOs that were smaller [in market capitalization] than $50 million fell from 80 percent in the 1990s to 20 percent in the 2000s.” In fact, in addition to Facebook, LinkedIn, Zynga, and Pandora all had market capitalizations that exceeded $1 billion when they went public.

But there is some good news. Since the slightly deregulatory Jumpstart Our Business Startups (JOBS) Act passed Congress and was signed by President Obama in early April — after much stalling from statist liberals in the Democrat-controlled Senate — there has been a trickle of smaller firms returning to the IPO market.

Among other things, the JOBS Act creates a five-year “on-ramp” for most firms going public in which they are exempt from the Sarbox internal control mandates, the Dodd-Frank proxy provisions and other burdensome regulations.

Despite Obama’s signature, the JOBS Act has been bashed by the usual suspects to whom regulation is religion — i.e., The New York Times editorial page and Rolling Stone’s Matt Taibbi — as somehow benefiting giant corporations and the “big banks.” But the data show the first firms taking advantage of this law are the very emerging growth firms supporters of the law had pointed to as beneficiaries. ClearSign, a Seattle-based firm that makes energy-efficient furnaces, launched an IPO with a market cap of just $12 million and cited the JOBS Act as allowing it to do that.

This is good news, because every dollar a smaller firm can raise by going public is one less dollar that firm has to beg and grovel for from a bank. This extra cash can be used to expand the business faster with many more employees added to the firm. As the Obama jobs council and others have noted, 90 percent of a public company’s job creation occurs after it goes public.

For ordinary investors, small-cap stocks are high-risk but potentially high return. And these high returns shouldn’t be restricted to the 1 percent of wealthy investors by burdensome regulation justified ironically as going after the “big guys.”

Facebook’s stock market launch should be celebrated, but the mini-IPOs enabled by the JOBS Act are the wave of our entrepreneurial future.

John Berlau

Fri, 2012-05-18

Citation Source:

NewsMax

http://www.newsmax.com/JohnBerlau/Overregulation-Next-Facebook-IPO/2012/05/18/id/439568

Why Is Team Obama Making it So Hard to Hire Highly-Skilled Foreign Workers?

David Bier — Fri, 18 May 2012 19:45:53 +0000

Sen. John Cornyn (R-Texas) introduced a bill Tuesday that would allow more Ph.Ds, scientists, and other high-skilled workers trained at U.S. universities to remain in America. The bill (S. 3185) would increase the H-1B visa quota by 55,000, but for some, the proposal doesn’t go far enough.

Speaking at a California economic conference this month, former-President Bill Clinton proposed taking “the lid of the H-1B Visas”—to finally remove the decades-old quota system entirely. “It’s easier to start a business here,” he said. “And we’re still the center of [research and development] in the world.”

The former-president is right—to remain on top, America needs access to the skilled talent its businesses need. The current H-1B program is woefully inadequate to meet the highly skilled labor needs of a country that wants to compete internationally.

On April 2, the U.S. Citizenship and Immigration Service started receiving H-1B applications for next year, and they are already more than half gone. Trends indicate that by June 25, the Master’s degree quota will be filled, and by July 12, the regular quota will be exhausted. All this indicates that the economy is ready to grow, but quotas and restrictions hinder growth. As Microsoft founder Bill Gates told Congress back in 2008, “The jobs are going to exist somewhere, and the jobs around them are going to be created wherever those uniquely talented people are, so even though it may not be realistic, I don’t think there should be any limit [on H-1Bs].”

Gates knows firsthand how immigration restrictions can send jobs elsewhere. Back in 2007, H-1B restrictions forced Microsoft to open a campus in Vancouver, British Columbia, calling it a “home to software developers from around the world.”

Microsoft employees aren’t the only highly skilled workers heading north. Canada has also claimed thousands of other skilled U.S. workers over the last decade.

From 1998 to 2008, Ottawa alone has seen the number of U.S. skilled workers double from 1,969 to 4,085. And in 2008, Alberta made H-1B visa holders automatically eligible for permanent residency. By contrast, America expels foreign skilled workers after just six years.

Simply put, America cannot cut itself from the international labor market and succeed.

In 2009, the Technology Policy Institute (TPI) found that restrictions forced 300,000 H-1B visa holders out of the country during 2004-2007, lowering GDP by $23 billion in 2008 and cutting tax revenues by about $5 billion. In addition, TPI found that 182,000 science, technology, engineering, and math students left due to restrictions, costing the economy an additional $13.6 billion in lost GDP and $3 billion in uncollected taxes.

These workers are not taking American jobs—they are helping companies expand and pull the economy out of a recession. A 2009 National Foundation for American Policy study found that, “each H-1B request in labor condition applications was associated with an increase of employment of 5 workers.”

And that’s just for large firms.

For small firms with less than 5,000 employees, NFAP found a 7.5 employee increase. In other words, companies don’t use H-1Bs to downsize and replace American workers—they use them to grow.

Burdensome regulations are making access to H-1B visas even more difficult. The Obama administration recently raised the H-1B fee from $325 to over $2,000 for large employers.

Employers usually need to hire a lawyer—typically for about $3,000 per applicant—to ensure that the application is submitted correctly, and then wait three to four months to hear if it’s been approved, which it often is not.

In other words, the government forces businesses to take risks with thousands of dollars just to get these workers to come to the United States. Then, if the worker is dismissed—even in cases of negligence—employers must pay for the worker’s return trip.

America’s job market has changed a lot in the four decades ago since the quota system was first created. Manufacturing employment has given way to software engineering, finance, education, and health care.

Today, America’s most important resources don’t come from the Earth, but from the human mind. The president who occupied the White House during the prosperous 1990s is right. To continue to prevent American employers from obtaining this human capital wouldn’t just be a policy mistake—it would be an economic disaster.

David Bier

Fri, 2012-05-18

Citation Source:

Fox News

http://www.foxnews.com/opinion/2012/05/18/why-is-team-obama-making-it-so-hard-to-hire-highly-skilled-foreign-workers/

NLRB's Ambush Rule Overturned For the Moment

F. Vincent Vernuccio — Fri, 18 May 2012 17:57:52 +0000

From Bob Adelman's article at the U.S. Chamber of Commerce Small Business Nation:

According to labor policy specialist Vincent Vernuccio at the Competitive Enterprise Institute, union efforts to persuade employees to join a union begin months in advance of any formal demand for a vote.

F. Vincent Vernuccio

Thu, 2012-05-17

Citation Source:

Small Business Nation

http://www.uschambersmallbusinessnation.com/article/nlrbs-ambush-rule-overturned-for-the-moment

Let's Lose LOST

Iain Murray — Wed, 16 May 2012 16:36:12 +0000

The Law of the Sea Treaty would drastically undermine American sovereignty, giving massive powers to the U.N. (aka the Dictators’ Club of New York), but the Senate is actually considering passing it — get this — as a tribute to Dick Lugar, whose voters unceremoniously dumped him last week. Seriously, couldn’t they just give him a medal? This is enough to make me think the House of Lords is a good idea.

In any event, Let Freedom Ring has an action site up on this — Let’s Lose LOST.

For further background, here are two studies from CEI on the subject of LOST that we issued when the George W. Bush administration was thinking about getting it ratified to curry international favor.

Iain Murray

Wed, 2012-05-16

Citation Source:

National Review

http://www.nationalreview.com/corner/300120/lets-lose-lost-iain-murray

New Smartphone App Gives Labor Union Info in Real Time

Christine Hall — Wed, 16 May 2012 18:15:50 +0000

Washington, D.C., May 7, 2012 - CEI and Workplacechoice.org have launched a new smartphone application that gives citizen activists real-time information on labor union news and how their lawmakers have voted on labor legislation. The easy-to-use app allows people to quickly look up labor union news, along with congressional votes. News can be broken down by topic, making mobile research on particular unions, states, and issues easy. App users can access Workplacechoice’s much acclaimed Congressional Labor Scorecard and Big Labor vs. Taxpayers Index right from their phone.

“We are very excited about the launch of the new Workplacechoice.org mobile application," said Vincent Vernuccio, CEI Labor Policy Attorney. "The app puts CEI on the cutting edge of mobile news. More importantly, it empowers activists to know exactly how their congressmen voted, busy HR professionals to keep tabs on the latest labor issues, and state legislators to know how to improve their state’s union laws, all from their phone!”

Key features of the WorkplaceChoice App

Know what unions and policy makers are doing in real time with news compiled for workplacechoice.org.
Research topics by state, company, union, industry and more.
Find out if your state favors unions or taxpayers with the Big Labor vs. Taxpayer Index.
Follow your representatives in Congress, in real time, to see if they voted with special interests or with workers in the Pro-Worker Congressional Labor Scorecard.
Keep track of individual unions, Big Labor bosses, industries, legislation, and politics with our topical index.
Read the latest free market labor policy analysis from CEI and think tanks across the country.

Download the WorkplaceChoice App

Also available in the Apple App Store and through Google Play (Android)

Christine Hall

Wed, 2012-05-16

Sub Title:

Workplacechoice.org Keeps Citizen Activists Informed on Pro-Worker Votes in Congress, State Legislatures

Coalition Letter to Surface Transportation Bill Conferees

Marc Scribner — Wed, 16 May 2012 21:39:59 +0000

Full Document Available in PDF

CEI signed a coalition letter to House and Senate members of the conference committee of the surface transportation reauthorization bill in which we expressed our concern over provisions that limit states' ability to toll their highways.

Marc Scribner

Wed, 2012-05-16

The Flawed Case Against Immigration

David Bier — Fri, 18 May 2012 19:53:18 +0000

We all know the buzzwords--no amnesty, no unfunded mandates, no immigrant welfare. Opponents of sensible immigration policy repeat these lines so often you'd think that they really believed them. But when one examines their actual positions, it becomes clear that they are little more than intellectual cover for their real anti-immigrant agenda.

In 1986, President Ronald Reagan--revered hero of conservatives--signed the Emergency Medical Treatment and Active Labor Act (EMTALA), which required hospitals to provide "for such further medical examination and such treatment as may be required to stabilize the medical condition" of any individual regardless of ability to pay or immigration status (42 U.S.C. 1395dd).

The Act makes no provision for federal reimbursement, so it is rightly acknowledged as an unfunded mandate. Conservatives were right to protest this; the federal government shouldn't place financial burdens on the states or private institutions that it isn't willing to cover itself. But the leap to immigrants abusing the EMTALA isn't as easy to make.

Immigrants are more likely to be younger and male. They make fewer physician visits and have fewer health problems than the general population. In a massive study of over 44,000 Latinos, for example, "undocumented Mexicans had 1.6 fewer physician visits than U.S.-born Mexicans," and that "other undocumented Latinos had 2.1 fewer visits." (Archives of Internal Medicine, 2007)

A nationwide survey found that immigrants account for 55 percent fewer health care expenditures per person than native-born Americans. Even their children had 74 percent lower health care expenses. The authors conclude that their study "refutes the assumption that immigrants represent a disproportionate financial burden on the U.S. health care system" (American Journal of Public Health, 2005). Another major study of 12 major U.S. cities investigated the specific question of emergency department (ED) use and concluded that "noncitizens had much lower levels of ED use than citizens did (about 17 fewer visits per 100 people, on average), and the difference between poor citizens and noncitizens was almost twice as large" (Health Affairs, 2006).

Since immigrants don't impose disproportionate costs, the empirical case against immigration based on EMTALA's unfunded mandate holds no water. Moreover, immigration opponents aren't even consistent about unfunded mandates. Arizona's SB 1070 mandates local police to arrest individuals whom they have "probable cause" to suspect are undocumented. It forces local governments to pay all booking and jail fees. That is an unfunded mandate, as Mesa, Arizona, Mayor Scott Smith correctly noted. "This is not a cost-free endeavor," he said in 2010. "And depending on how it plays out, it could create significant financial costs to the city."

In fact, the vast majority of immigration laws impose unfunded mandates on businesses to act as de facto Immigration and Customs Enforcement agents under threat of fines or license suspensions. They require employers to monitor their employees and file reports on everything from their hours and wages to their housing, food, and travel situations. All this costs thousands of dollars. Just to hire one worker on an H-1B visa, for example, the employer usually pays around $3,000 for a consultant to help fill out the complicated paperwork correctly.

The online employment verification system E-Verify is an unfunded mandate that imposes significant costs on employers. Just last month, 60,000 Alabama employers missed their state's deadline to sign up for the program. But the state realizes it can't go after that many employers. Alabama Department of Homeland Security spokeswoman Katheryn Kennedy said, "Right now we're not penalizing businesses. We're trying to help them, to be a safe harbor." In other words, they're extending an "amnesty" to these businesses--an indirect admission of the law's unfeasibility and a direct contradiction of their "no amnesty" mantra.

Not only does the anti-immigration crowd not seem to care about unfunded mandates or amnesty when those suit their purposes, their claims that are trying to costs welfare are also dubious. Since Arizona's SB 1070 actually criminalizes work, or looking for work, even looking like you're looking for work in "a place where unlawfully present aliens are known to congregate," the law's actual effect is to create more destitute and needy families who might use public benefits. Of course, this may be the point--at least to bolster their flimsy case against immigration.

David Bier

Tue, 2012-05-15

Citation Source:

The Huffington Post

http://www.huffingtonpost.com/david-bier/flawed-case-against-immigration-_b_1515661.html

Labor Bosses Demand Their Dues

Matt Patterson, Trey Kovacs — Mon, 14 May 2012 15:35:11 +0000

Neither slavery nor involuntary servitude … shall exist within the United States, or any place subject to their jurisdiction.

- United States Constitution, 13th Amendment

Labor bosses are fighting to keep people in unions against their will, forcibly collecting dues from unwilling members and using those dues to line their own pockets. In effect, labor leaders have imposed their own system of “involuntary servitude” on recalcitrant union members.

In California, for example, Service Employees International Union (SEIU) bosses in Fresno are engaged in a war to keep disgruntled members from defecting. Worker disenchantment with SEIU representation began in January, when Fresno County officials were forced to cut public workers’ wages by 9 percent in light of the government’s dire financial straits. Outraged SEIU bigwigs reacted in typical fashion by calling for a three-day strike.

But rank-and-file SEIU members were less than eager to blame county officials for trying to right the government’s sinking fiscal ship. Union workers realized a return to financial stability required a shared sacrifice and took a dim view of their union bosses’ petulant agitations. Before long, Fresno County workers began to seek decertification from SEIU.

For their part, Fresno correctional officers created another union and petitioned for a union election. Eulalio Gomez, president of the newly created Fresno Sheriff's Correctional Officers Association, commented on his group’s decision to cut ties with SEIU: “I have an issue with a union telling you to go on strike in today’s double-digit unemployment. One out of five people are not working here. We have people in a lot of financial distress, and they’re out here with their whistles and their picket signs, doing what?”

Fresno Department of Social Services workers also have petitioned for a decertification vote from SEIU. Kandy Gonzalez, head of the new Fresno County Employees Association, compared cutting ties with SEIU to a “bad divorce.” But SEIU thus far has refused to sign the divorce papers, to Ms. Gonzalez’s dismay. “They’re going to invest whatever money they’re going to invest to keep us in this marriage,” she says. “And what’s sad is they’re probably going to be using our money to fight us. They’ll be using our dues to fight us.”

Indeed, the Fresno correctional officers’ decertification election, which had been scheduled for April, will be delayed for months because of an SEIU complaint with the Civil Service Commission. In the meantime, the workers literally are working for the union bosses against their will.

Even more outrageous, unions are maintaining that free-labor policies are the real perpetrators of modern forced servitude. In Indiana, for example, International Union of Operating Engineers (IUOE) union bosses have filed a lawsuit charging that the state’s new “right to work” law forces union members into “involuntary servitude.” IUOE claims the law forces unions to negotiate for nonunion (non-dues-paying) workers, violating the 13th and 14th amendments to the Constitution. But this is merely union chutzpah at its most egregious - IUOE is not obligated to negotiate for exclusive representation.

There is a reason why unions are fighting to hold workers against their will and challenging laws that bring greater freedom to the workplace. Union leaders need a monopoly on labor in order to bankrupt governments and corporations, and they require unfree markets to maintain their own power and wealth.

Rank-and-file union workers across the country need to ask themselves: What kind of organization thrives in an absence of freedom?

Matt Patterson

Trey Kovacs

Thu, 2012-05-10

Citation Source:

The Washington Times

http://www.washingtontimes.com/news/2012/may/10/labor-bosses-demand-their-dues/