Don't Buy Specter's EFCA "Compromise"

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In Pittsburgh on Tuesday at the AFL-CIO convention, Senator Arlen Specter, the Pennsylvania Democrat who left the Republican Party last spring, produced a new version of a favorite piece of union legislation in the guise of a "compromise."

The original labor-sponsored legislation, the Employee Free Choice Act, would allow workers to choose to join unions by checking a card circulated and retained by the union-hence the name "card check"-rather than through a secret-ballot election, as required for almost 75 years by the 1935 National Labor Relations Act.

An arbitration provision would require the Federal Mediation and Conciliation Service to appoint arbitration panels to write contracts between newly-unionized workers and firms, if their negotiators fail to agree on an initial collective bargaining contract within 120 days. The arbitrators' contracts would, by law, hold for two years.

Several Senate Democrats opposed the card-check provision, including Mr. Specter, Blanche Lincoln of Arkansas, and Dianne Feinstein of California. They cited the risk of union intimidation, that is that organizers would coerce employees to sign the cards.

With a tough reelection fight coming up next year, Mr. Specter's opposition to the Employee Free Choice Act was potentially costing him votes. So he announced-at an AFL-CIO convention in his home state-support for an alternative to the card-check provision that has been endorsed by the Federation's newly retired president, John J. Sweeney. Mr. Specter's announcement was greeted with raucous applause. He says his new bill can pass the Senate.

Instead of card check, Mr. Specter would limit the time between the announcement of a union election by the National Labor Relations Board and the workers' vote. In addition, employers would have to allow union organizers to attend company-sponsored meetings held to tell employees why they should not join the union. The object, according to the senator, is to make it more difficult for employers to pressure workers to reject union membership.

In addition, Mr. Specter proposes to modify the mandatory arbitration provision. Rather than giving the arbitrators the power to start from a clean slate, they would use "baseball arbitration" and pick one of the last offers from one of the two parties.

This "compromise," however, is just as bad as the original labor-backed bill approved by the House Democratic majority in 2007 and certain to be approved now if brought to the floor.

Take the limits on timing of elections. On average, 42 days-six weeks-elapse before workers vote whether to join unions. Say the time is cut to seven days, as anticipated by Stewart Acuff, the AFL-CIO's organizing director. This means that unions will need to lobby workers intensively for one week to make the case for union representation. As a practical matter, employees will not be permitted to hear both sides of the issue and will be rushed into decisions without receiving full information.

And take baseball arbitration. In Major League baseball, with neutral arbitrators required to choose an offer by either a club or a player, both sides have incentives to be reasonable. If one side makes an outrageous proposal, the arbitrators likely will choose the other side's proposal.

But if the arbitrators are political appointees, chosen by the director of the mediation service, himself a presidential appointee, neutrality may be compromised. Unions will know that the arbitrators are more likely to take their side in a Democratic administration, and employers will know that their offer is more likely to be picked in a Republican administration. Neither case encourages true compromise.

Most important, free choice as a result of free collective bargaining would be lost. Neither the union nor the employer would have the option of walking away from a contract imposed by the arbitrators. This, a crucial flaw in the original EFCA bill, has not changed. Congress would revoke for newly-organized firms the traditional principle, in law, of free collective bargaining, namely that employers and unions may refuse to sign a contract they find unsatisfactory.

Under Mr. Specter's "compromise," the panel would not have to include industry or regional experts familiar with the firms in a particular part of the country. The bill is unclear on how the arbitration panel would acquire the information it needs to decide on employee compensation-not only wages, but also vacation, sick leave, and promotion opportunities. Arbitrators would even have the power to put workers into underfunded pensions.

Mr. Specter's "compromise" does not mean the end of card-check, or of mandatory arbitration. Any bill passed by the Senate has to be reconciled in conference with the House bill-which contains card check and mandatory arbitration. With Chairman Tom Harkin of the Senate Health, Education, Labor and Pensions Committee and Majority Leader Harry Reid among likely Senate conferees, it's a good bet that the Senate would accept card check and mandatory arbitration in the conference report that goes back to the Senate and House for a final vote.

Pittsburgh was once a great industrial city, emblematic of hard-working American manufacturing. No more. Today, Pittsburgh is enjoying a sparkling renaissance (the G-20 meeting will be held there next week) as a city of service workers, no thanks to union organizers. Manufacturing has been driven away in part by excessive union demands. Mr. Specter can champion an EFCA "compromise" in Pittsburgh, but his plan won't help workers there, or anywhere else in America.

Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is senior fellow and director of Economics21 at the Manhattan Institute. Follow her on Twitter: @FurchtgottRoth.   

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