The Secret’s Out: Employers Don’t Like Unions

Less than 7 percent of American workers belonged to a labor union last year, which is a new low since comparable federal statistics were first kept in 1983. With more than one-third of government workers unionized, the overall rate is just under 12 percent, another record low.

Sounds like workers are becoming almost as persuaded as their employers that union dues buy them little in the way of long-term job security, career opportunities or economic advancement.

But that is not the way things look to unions or to their supporters in the Obama administration. They seem to be locked into thinking that whatever employers want must be bad for employees, and that if employees only knew how much their bosses want to keep them out of unions, workers would flock to sign up. It’s as though they believe nobody in the American work force knows how to Google a phone number for the AFL-CIO.

This mindset explains a proposed rule change from the Department of Labor that would force employers to provide more details about the consultants they hire to help them counter real or potential union organizing drives.

The proposal addresses a section of the 1959 Labor-Management Reporting and Disclosure Act. The Act requires employers to file disclosure reports when they pay a third-party consultant to persuade employees against organizing, but exempts them from filing if the consultant simply dispenses advice to the employer.

Traditionally, the distinction between persuaders and advisers has been fairly clear. Those who communicate the pitfalls of organizing to employees are persuaders, while those who communicate strategic and legal information to employers are advisers. The recent DOL proposal, however, seeks to classify much of what is currently considered advice as persuasion, as though employers needed to be persuaded to try to avoid unions.

The new definition of persuasion would cover a “consultant’s providing material or communications to, or engaging in other actions, conduct, or communications on behalf of an employer that, in whole or in part, have the object directly or indirectly to persuade employees concerning their rights to organize or bargain collectively.” A press release from the DOL specifies that planning campaigns to avoid organization would qualify, even when the plans are actually implemented by employers.

Naturally, union leaders are untroubled by the proposal’s somewhat creative redefinitions. “This is a common-sense proposal to close a gaping loophole,” an AFL-CIO official said in a statement quoted by The Wall Street Journal.

The proposal is just one item on a long list of recent union victories handed down by the DOL and by the National Labor Relations Board, which is now controlled by Obama appointees. Just a day after the DOL made its proposal, the NLRB released a separate plan to streamline union election procedures. With the new rules, the organizing process could move from petition to election in 10 to 21 days, compared to the current 42 to 45 days. This would give employers far less time to make a case against unionization and would give employees less time to consider arguments from both sides.

The pro-union bias in the proposal was no real surprise coming from the same organization that, in March, took the position that Boeing could not open a new aircraft factory in South Carolina to avoid work stoppages caused by strikes in Washington state.

The DOL’s proposal seems like a minor issue, overshadowed by the NLRB’s. Under the new rules, consultants could still speak directly to workers and assist employers with formulating strategies and creating materials; only the paperwork would change. However, Michael Eastman, executive director of labor law policy for the U.S. Chamber of Commerce, told The Wall Street Journal that the proposal was “probably the most significant handout to organized labor that we’ve seen in this administration.”

I think that is an overstatement. Today’s workers have seen too many heavily unionized industries fall into decline. They know their own fortunes are tied to their industries’ and companies’ successes, and they know American unions are helpless to stop work from being relocated or displaced by competition from imports. Unions can sometimes win short-term improvements in pay or benefits, but ultimately no job is secure unless it is worth at least as much to the employer as the employer is forced to pay for it. Workers understand this just as well as their managers do.

Workers’ own preferences, not employer persuasion efforts, account for the decreasing unionization of the U.S. labor force. According to the Bureau of Labor Statistics, last year’s 11.9 percent unionization rate compares to 20.1 percent in 1983.

But that 11.9 percent of the employed population votes, and it votes Democrat. The current administration is therefore willing to pass a few more or less meaningless rule changes to help them in their last ditch effort to get the other 88.1 percent of workers to do something they have little interest in doing.

Unions and their allies remain locked in a century-old, oversimplified view of how society and the economy work. While they see labor-management issues as a tug-of-war in which every inch gained by one side must be taken from the other, the real world is one in which everyone in an enterprise ultimately wins or loses together. They don’t win equally, and the inequality causes undeniable resentment, but that resentment alone does not change workers’ own economic interest in seeing their employers succeed.

Workers are not abandoning unions because workers are stupid, or ill-informed, or because they have been manipulated by “persuaders” who are hired guns for their bosses. Workers are abandoning unions because, mostly, unions don’t work for workers. It does not matter who does the persuading when everyone is already persuaded.

About Larry M. Elkin 525 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

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