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U.S. Labor Unions: Bane or Benefit?

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Introduced in March 2009 and then referred to the Subcommittee on Health, Employment, Labor, and Pensions in April, H.R.1409 – Employee Free Choice Act of 2009 Act (aka “card check”) is a bill intended to establish an efficient system to enable employees to form, join, or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes. It would make it easier for workers to join unions and would tighten penalties for employers who try to stop them. Supporters such as Human Rights Watch and the NAACP say the bill provides important protections for the middle class.


With only 12% of American workers in unions, why should the rest of us care? Experts say a revived labor movement could benefit workers both in and out of unions and cite a need for forces that promote a fairer sharing of wealth. They also note that the gap between America’s rich and poor is the largest it’s been since 1928. Over the last 75 years, unions helped secure benefits like unemployment insurance, Social Security, and the 40-hour workweek.

Under the bill, workers would be able to decide whether to hold a secret ballot vote on union formation after a majority of employees have signed union authorization cards, or to have the union certified based on the cards alone. Under the current rules, employers have the power to make that decision. The bill also designates a time line for first contracts to be drawn up between unions and employees and stipulates that if no deal is reached within 120 days, an arbitration panel will render a decision that will be binding for two years. Finally, it would increase the fines employers must pay if found guilty of violating their employees’ right to unionize.

This bill is organized labor’s number one legislative priority, and it is vigorously opposed by the business lobby. Democratic leader are expected to bring it to a vote in the Senate sometime this summer. The big question regarding its passage is whether or not the Democrats can find 60 votes in favor of breaking an inevitable Republican filibuster. The Senate version is S. 560.

Opponents like the U.S. Chamber of Commerce and the National Restaurant Association say it increases labor costs and hurts the bottom line. Both sides have spent millions on lobbyists and advertising to make their case.

Supporters such as Human Rights Watch and the NAACP say the bill provides important protections for the middle class. Opponents like the U.S. Chamber of Commerce and the National Restaurant Association say it increases labor costs and hurts the bottom line. Both sides have spent millions on lobbyists and advertising to make their case.

Others contend that unions have outlived their usefulness. “The workplace is much better today,” says Michael Eastman of the U.S. Chamber of Commerce. “Employers know they need to offer certain benefits and good wages to keep good workers.”

Professor Daniel says Card Check likely would not increase union membership until the economy improves, since workers are currently more concerned about job security than wages and benefits. “ Today, most workers are too fearful to take a risk for unions,” he adds.

Looking at the numbers

As of March 5, 2007, a UAW represented assembly worker’s wage rate at GM/Ford/DaimlerChrysler are as follows:

AssemblerHourly rate COLATotal
GM$26.09$1.77$27.86
Ford$26.10$1.83$27.93
DAIMLER-CHRYSLER$26.86$1.77$28.75

When Congress debated the bailout package for Detroit, Senate Republican leader Mitch McConnell and other Republicans had demanded that wages and benefits for employees of U.S. automakers needed to be renegotiated to match the lesser overall compensation that foreign carmakers like Toyota, Honda and Nissan pay at their U.S. plants.

The Japanese automaker has fewer retirees in the U.S., and its health care benefits and pensions are less generous than those negotiated between Detroit and the UAW. Another key point is that health costs and pensions for auto workers in Japan – worth billions – are subsidized by the Japanese government. Not so in the U.S.

In December 2008, The Detroit Free Press reported that it had obtained an internal Toyota report which said the company should align its hourly wages with the prevailing manufacturing pay in the state rather than those of competitors in the auto sector, with the goal of cutting an expected $900 million increase in worker compensation by 2011 by one-third.

On average, other manufacturing jobs pay less. In Kentucky Toyota workers in Georgetown earn about $30 per hour, while the median wage in the state for manufacturing jobs, according to the Department of Labor, is $12.64.

Gov. Arnold Schwarzenegger points to generous union-negotiated benefits packages as being a burden to America’s auto industry,

“You know, if you pay the auto workers or the benefits and all of those things, are maybe too high. … We have, like, in America, you sell a car, and you have $2,000 of each car just goes to benefits. So I think that there’s a way of reducing all of that, make them more fiscally responsible.”

Sen. Jim DeMint:

“Some auto manufacturers are struggling because of a bad business structure with high unionized labor costs and burdensome federal regulations. Taxpayers did not create these problems and they should not be forced to pay for them.”

Sen. Jon Kyl:

“For years they’ve been sick. They have a bad business model. They have contracts negotiated with the United Auto Workers that impose huge costs.The average hourly cost per worker in this country is about $28.48. For these auto makers, it’s $73. And for the Japanese auto companies working here in the United States, it’s $48.”

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Written by Ben

November 27, 2009 at 10:16 am

Posted in Labor Unions, Politics

Tagged with ,