American competitiveness is under threat

American competitiveness is under threat
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First Published: Mon, Mar 12 2007. 12 06 AM IST
Updated: Mon, Mar 12 2007. 12 06 AM IST
Are you at all concerned about American competitiveness in the future?
Srikanth Raghunathan, Irwin, Pa
Yes. But not for the standard “the-sky-is-falling” reasons, like the twin deficits, low-cost Chinese manufacturing or intellectual property piracy. We believe those challenges will largely be ameliorated by market, political and legal forces. No, we’re as worried as can be that American competitiveness is about to be whacked by something no one seems to be talking about: the Employee Free Choice Act, which is currently weaving an insidious path through the US Congress toward becoming law. If it does, the long-thriving American economy will finally meet its match.
You didn’t read wrong. We know it must sound strange to oppose legislation that promises something as motherhood-y as “free choice.” But the title of this bill is pure propaganda. It won’t introduce liberty or self-determination into the workplace. More likely, it will introduce intimidation and coercion by labour organizers who, after a long slide into near-oblivion outside the public sector, finally see a glorious new route to millions of dues-paying members.
Their campaign could trigger a surge in unionization across American industry—and in time, a reversion to the bloated economy that brought America to its knees in the late 1970s and early 1980s and today cripples much of European business. If you want to be reminded of what that looks like, drive through Pennsylvania’s Lehigh Valley, as we did last weekend, and take a look at all the shuttered factories. The steel industry—such as coal, auto and so many others—paid the inexorable price of unionization in a global economy.
Make no mistake. We don’t unilaterally oppose unions. Indeed, if a company is habitually unfair or unreasonable, it deserves what it gets from organized labour.
But the problem with unions is that they make a sport out of killing productivity even when companies are providing good wages, benefits and working conditions. It is not uncommon in a union shop to shut down production rather than allow a non-union worker to flip a switch. Only a union or millwright electrician can do that job!
Come on, companies today can’t afford such petty bureaucracy, nor can they afford the other excesses unions so often bring, like two people for every job and a litigious approach to even the smallest matters. Yes, managers and employees will sometimes disagree. But in the global economy, they have to work through those differences, not as adversaries but partners.
The Employee Free Choice Act undermines that. Here’s how. Currently, when labour organizers want to launch a unionization effort, they ask each worker to sign a card as a show of support. If 30% or more of employees do so, a federally-supervised election can be called, conducted with one of the most revered mechanisms in democracy, the secret ballot. Employees can vote their conscience, without fear of retribution from either the union leaders or management.
By contrast, with the Employee Free Choice Act, all organizers have to do to start a union is get 50% of employees, plus one person, to sign cards. That’s right —no more secret ballot. Instead, employees will likely get a phone call with a pointed solicitation, or worse yet, a home visit from a small team of organizers. You can just imagine the scenario. The organizers will sit around the kitchen table and make their case, likely with a lot of passion. Then they will slide a card in front of the employee with a pen. Who would say no—who could?
Now, union supporters will tell you that they won’t intimidate employees for votes, and regardless, management intimidates all the time by threatening to fire employees who vote union. Without doubt, that can happen. But the system, as it exists, has safeguards against it, including heavy fines against companies that misbehave and automatic new elections. Still, the steady advance of the Employee Free Choice Act continues unabated. And so, pretty soon, if enough business leaders and legislators don’t stand up, it may well be hello again unions, and so long American competitiveness.
The change won’t happen instantly, of course. Companies will fight unions as if their lives depend on it, because they do. But given the logistics of the Employee Free Choice Act, any management campaign is hobbled. If you can’t be at the kitchen table with the union organizers and their long stares, you probably can’t win.
It’s too bad; in fact, it’s terrible. And ironic too. First, because the ability to unionize already exists in America, thanks to the secret ballot. And second, because the Employee Free Choice Act ultimately only provides a free choice that nobody would ever want: how to spend a government-issued unemployment cheque.
(Jack and Suzy Welch are the authors of the international best-seller, ‘Winning’. They are eager to hear about your career dilemmas and challenges at work, and look forward to answering some of your questions in future columns. You can send your questions at Please include your name, occupation and city.)
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First Published: Mon, Mar 12 2007. 12 06 AM IST
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