Research Briefing

Obama And Dems Want To Set The Rules Of Competition To Make Sure Their Union Backers Come Out On Top Of Small Business

OBAMA SIGNED EXECUTIVE ORDER STEERING TAX DOLLARS

TOWARDS LARGER, UNIONIZED CONTRACTORS

Obama Signed Executive Order Allowing Agencies To Require That Federal Contractors On Construction Projects Use Unionized Workers. “The revisions to the Federal Acquisition Regulation implement a February 2009 executive order in which President Obama encouraged agencies to consider requiring PLAs for construction projects worth more than $25 million. The final rule provides agencies with the discretion to decide if using the agreements would reduce costs and result in a more efficient contract… The agreements require project employees to receive union-approved wages and benefits, even if they do not belong to a union.” (Robert Brodsky, “Senator Rips Collective Bargaining Agreements On Federal Construction Projects,” Government Executive, 4/20/10)

This Will Hurt Small Businesses By Making It “Harder [For Them] To Win Government Work.” “Smaller businesses will find it harder to win government work.  Even if they put in better bids, many can’t match the benefits offered by big companies, or always meet the government’s plans to impose a new ‘livable wage’ standard for employees of its contract firms.  This is like putting the Davis-Bacon Act on steroids … the 1931 legislation that continues to distort federal spending by establishing ‘a prevailing wage’ standard for public works projects, which in practice means the top local union wage.” (Editorial, “Procuring The Union Agenda,” The Wall Street Journal, 3/9/10)

It Will Also Raise Construction Costs And Discriminates Against 85 Percent Of Construction Workers “Who Choose Not To Join A Union.” “Building trade groups said pushing contractors to agree to such agreements with unions could drive up the costs of public construction by nearly 20% and discriminate against what they said are more than the 85% of the U.S. construction workforce members who choose not to join a union.” (Melanie Trottman, “Unions Win Public-Contract Row,” The Wall Street Journal, 4/13/10)

NEXT, DEMS’ “CARD-CHECK” BILL WILL FORCE UNIONIZATION, CRUSHING SMALL BUSINESSES

So-Called Employee Free Choice Act Would Kill 1.5 Million Jobs In One Year. “The precise effect on unemployment will depend on the degree to which EFCA increases union density, but for every 3 percentage points gained in union membership through card checks and mandatory arbitration, the following year’s unemployment rate is predicted to increase by 1 percentage point and job creation is predicted to fall by around 1.5 million jobs.” (Anne Layne-Farrar, “An Empirical Assessment of the Employee Free Choice Act: The Economic Implications,” SSRN.com, 3/4/09)

“Binding Arbitration” Provision In EFCA Would Cover “Literally Every Issue,” Increasing Union Control Over Workplace. “[A] company forced into binding arbitration will be frozen for two years (the duration of the initial contract) from making any changes to any aspect of its business that is covered by the contract. Literally every issue -- from its 401(k) contributions to its reliance on outside labor -- could potentially become subject to review by a government panel that has neither the company-specific knowledge nor the incentive to turn a profit.” (Shikha Dalmia, “The ‘Free Choice’ Act And Binding Arbitration,” The Wall Street Journal, 7/11/09)

“Because EFCA Has No Meaningful Small Businesses Exemption, It Would Authorize Federal Control Of Up To 4 Million Small Businesses Employing 39 Million Americans.”  (James Sherk, "EFCA Authorizes Government Control of 4 Million Small Businesses," The Heritage Foundation, WebMemo #2341, 3/12/09)

Binding Arbitration Revokes Any Incentive For Unions To “Bargain In Good Faith” And Puts Government “In The Wage Control Business.” “But by far the most economically destructive provision in EFCA is one that imposes binding arbitration if the parties fail to reach agreement within 90 days… This, in effect, means unions have zero incentive to bargain in good faith. They do have an incentive to make over-the-top demands, knowing they would be the starting point in arbitration hearings… And worse yet, it puts government in the wage control business and has the potential to destroy companies - particularly smaller businesses.” (Editorial, “Congress should eliminate EFCA,” The Denver Post, 3/26/09)

And Even If EFCA Doesn’t Pass, Obama Recess Appointed Union Lawyer Craig Becker To The National Labor Relations Board To Ensure “Much Of What Organized Labor Hopes To Accomplish Via EFCA Will Be Realized Through The Rule-Making Power Of The NLRB.” (Dmitri Iglitzin and Steven Hill, “Obama’s Pro-Union Nominations to Labor Relations Board Stalled,” The Huffington Post, 01/25/10)

SO WHY ARE OBAMA, DEMS GOING SO FAR TO HELP THEIR UNION FRIENDS?

AFSCME And SEIU “Will Spend Close To $100 Million On The 2010 Election.” “At least two influential unions will spend close to $100 million on the 2010 election, with most of those funds going to protect incumbents. Union officials told The Hill they plan to help endangered members — particularly freshmen — who made politically difficult votes in a year during which an anti-incumbent mood has filled the country. … The American Federation of State, County and Municipal Employees (AFSCME) plans to spend in excess of $50 million during the 2010 campaign, part of which will fund “a massive incumbent protection program,” according to Gerry McEntee, president of the union.” (Kevin Bogardus and Sean J. Miller, “Unions To Spend $100M In 2010 Campaign To Save Dem Majorities,” The Hill, 5/21/10)

• The Two Unions Combined To Spend Over $150 Million In 2008 Elections. “AFSCME spent roughly $67 million on its political activities in 2008. … The money will go to help defend the union’s top tier of eight Senate seats and 34 House members. … The Service Employees International Union (SEIU) plans to spend $44 million in total on its 2010 election program. The union spent $85 million on its 2008 campaign, according to union officials.” (Kevin Bogardus and Sean J. Miller, “Unions To Spend $100M In 2010 Campaign To Save Dem Majorities,” The Hill, 5/21/10)

And The AFL-CIO Will Surpass “$53 Million Spent In 2008 To Help Elect President Barack Obama.”  “The AFL-CIO plans to roll out its biggest political campaign ever, surpassing the $53 million spent in 2008 to help elect President Barack Obama, to try to avert a repeat of the 1994 midterm election when Democrats lost a majority in Congress.” (Kris Maher, “AFL-CIO Plans to Spend Record Sum During Election,” The Wall Street Journal, 3/23/10)

Because As Vice President Biden Put It To Union Bosses: “[W]e Owe You.” (Michael O’Brien, “Biden To Labor Group: We Owe You,” The Hill, 5/12/09)