Economics

Obama and Big Labor: Look for the Union Label

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In case you're wondering about President Obama's relationship—and political debt—to Big Labor, take a long, disturbing read through Sean Higgins' recent article in Investor's Business Daily. Snippets:

The debt-ridden state [California] had sought to trim $74 million from its budget by reducing its contribution to home health workers' pay from $12.10 an hour to $10.10.

The Obama administration subsequently told them in an April 15 conference call that if the wages were cut it could endanger $6.8 billion in federal stimulus funds.

Also on the call were the Service Employees International Union's associate general counsel and two California union officials, one a lobbyist.

The SEIU had lobbied the administration to step in. Many of the workers are SEIU members….

The administration has also acted to change policy in various ways that benefit unions. Among the first bills that Obama signed into law was the labor-backed Lily Ledbetter Fair Pay Act, which eliminates deadlines for workers to sue employers for wage discrimination.

He also backed legislation sought by the Teamsters that scrapped a program that would have let Mexican truckers operate in the U.S. The action so angered Mexico that it imposed retaliatory tariffs on $2.4 billion worth of industrial and agricultural U.S. goods.

The administration has rolled back transparency rules that require unions to more extensively report their finances, executive compensation and potential conflicts of interest every year. The Labor Department said "it would not be a good use of resources" to require this.

The Obama administration's first proposed budget calls for cutting the budget of the Labor Department's Office of Labor-Management Standards, which investigates unions on behalf of workers, to $41 million, down from $45 million last year….

The administration has gone to bat for labor in other ways. When it announced Chrysler's bankruptcy, it did so only after guaranteeing the pension plan for members of the United Auto Workers.

It also worked out a deal that would give the UAW's pension fund a 55% stake in Chrysler in exchange for $10.6 billion in obligations to the fund.

While it remains to be seen if that deal will stand up in court, it was far better than the 30 cents on the dollar that Chrysler offered senior bondholders for their $6.9 billion in obligations. When several creditors rejected the deal, Obama scorned them as "speculators."

Read the full article here.

I remain convinced that union power will continue to diminish for the simple reason that the sort of work that unions have traditionally represented is going the way of, well, auto-assembly jobs. For unions, the action is in the public sector, especially health care and education. But even there, both taxpayers and workers themselves are getting fed up with rigid work rules and pay that is ultimately pegged to your least-productive co-worker. Which isn't to say that new rules rigged in favor of labor can't cause problems in the short- or even mid- run.

Another reason why unions are doomed? Because of ads like this one, which I think would make Joe Hill hisself bust a picket line:

Bonus link: Bob Dylan's great, if virtually completely incoherent (and I don't mean that as a criticism), early 1980s' tune "Union Sundown," which suggests the going global rate for labor is "30 cents a day" and includes this fantastic verse:

The unions are big business, friend,
And they're goin' out like a dinosaur.
They used to grow food in Kansas
Now they want to grow it on the moon and eat it raw.
I can see the day coming when even your home garden
Is gonna be against the law

It's 5.26 minutes of wonder, joy, and a great pronunciation of Malay-z-ee-a.