Meet your new boss: Uncle Sam

COMMENTARY Jobs and Labor

Meet your new boss: Uncle Sam

Jul 28th, 2008 3 min read

Research Fellow, Labor Economics

As research fellow in labor economics at The Heritage Foundation, James Sherk researched ways to promote competition and mobility.

Do you like your boss?

Would you like a new boss?

If Congress passes the misnamed Employee Free Choice Act (EFCA), it might not matter - the government could make every important decision for your company.

The government would decide how much you're paid, what health and retirement benefits you get, your work assignments, and how - and if - you get promoted. Government bureaucrats would have the power to dictate business operations. They would decide how much your company invests in what projects - even the machines you use for your job.

And you, as a worker? You would have no say. You must live with whatever the government gave you.

If that sounds ridiculous, that's because it is. But when has that ever stopped Congress? The EFCA is famous - or infamous - for one feature: It would strip workers' right to vote in secret ballot elections before joining a union. The act would force workers to publicly sign union cards in front of union organizers. Workers who tell Teamsters organizers to their face that they really don't want Jimmy Hoffa's services would face pressure to "reconsider." Taking away secret ballots is outrageous, and almost all the press coverage about the Employee "Free" Choice Act has focused on that. The media has done little to explain the rest of what it does.

Currently, once workers join a union, both workers and management bargain freely to reach a contract. Both use their leverage to get the best terms they can. Workers can threaten to strike, and management can threaten a lockout - and sometimes those actually happen. At the end of the day, however, the business operates under a contract forged by both sides.

The EFCA, however, would radically change this for newly unionized companies. For workers who have just joined a union - probably under pressure from union organizers - negotiations would last four months.

After that, the union could ask the Federal Mediation and Conciliation Service (FMCS) to write the contract instead. At that point the FMCS steps in and imposes a two-year contract on both workers and management. Neither workers nor employers could appeal the verdict. Federal bureaucrats would dictate the contract, covering every major facet of business operations.

If you work for a company that unions organize and EFCA passes, the government will decide how much you earn and who gets promoted. The government will decide how many co-workers you have. The government will choose your health-care and retirement plans for you, and your work assignments. Government bureaucrats will set business operations for you and your employer. They have the power to decide how much your company invests in what projects. The government would control every major aspect of your work life and your employers' business strategy.

Given Uncle Sam's deft managing of the financial crisis and Hurricane Katrina, this might not be best for your company - or for your job. The bureaucrats dictating your company's operations have no idea how to run a company. They have no expertise in your market or your company's business model.

Innovative companies would find themselves in a straitjacket. Many businesses would go out of business when the government imposes unworkable contracts. Thousands of workers at companies large and small would lose their jobs. This law does not exempt small businesses. Four million small businesses, employing 39 million workers, would be exposed to federal command and control.

But the bureaucrats themselves won't have to work under the contract they write. They are entirely unaccountable if their decisions put your employer out of business. This proposal has all the downsides of bureaucratic central planning without the minimal upside of a coherent central plan.

The Employee Free Choice Act takes away all employee choice in the workplace. As a union member, you couldn't vote on ratifying the contract. You couldn't strike for better terms. You are stuck with what the government imposed. And your employer must obey those terms to the letter. You couldn't even ask for a raise. Your boss would break the law if he paid you more than the bureaucrats say you're worth, no matter how hard you worked. So meet your new boss. His name is Uncle Sam.

James Sherk is the Bradley Fellow in Labor Policy at The Heritage Foundation.

First appeared in McClatchy's Washington Bureau