Why EFCA? Why now?

Earlier this week, I wrote about the provisions of the Employee Free Choice Act (EFCA), what they change and what the current law on union organizing is. One thing I didn’t look at in that post is why EFCA may just be an idea whose time has come.

The obvious answer is that the Democrats are now in power in both houses of Congress and in the White House. This is true, but it’s hardly a sufficient answer. The Democratic Party has long been the party of unions by default, rather than by policy. For at least the last couple decades, Democrats have been very friendly to businesses.

Instead, I think it’s time to refer to Bill Clinton’s famous campaigning motto. “It’s the economy, stupid.”

In times of relative economic prosperity, it’s easier for a worker to forget how many of our countries laws and protections apply to capital and how few apply to production. Sure, a job may not be a certain thing, but there are more. And barring skills restricted to a few industries that are always in trouble, aren’t we all at least above average in our ability to out-compete if the time comes to find a new job?

When the recession hits, it becomes much harder to remain blinded by our optimism. When an economic event of the magnitude of the one we’re experiencing now comes along, it’s impossible to miss the fact that the people who have no say in deciding the future of a company suffer the worst in the decisions that are made.

There are the layoffs:

In a single day, on Jan. 26, at least 50,000 new layoffs were announced at companies as varied as telecom giant Sprint Nextel (S), construction equipment maker Caterpillar (CAT), semiconductor manufacturer Texas Instruments (TXN), and pharmaceutical house Pfizer (PFE).

It was a stark reminder of how rapidly the recession is claiming jobs. Already 170,000 jobs have been lost in January. The U.S. economy lost 2.6 million jobs in 2008.

The worst news, though, may be that some economists say in their most optimistic view the U.S. has only reached the halfway mark in terms of the layoffs expected for this recession. A growing number of economists also say that the U.S. economy is not just shedding jobs temporarily, but may be undergoing a painful restructuring process that will eliminate some types of jobs for good. “We are seeing very large layoffs—the kind you get when companies don’t expect to be re-employing any time soon,” says Peter Morici, a professor at the Robert H. Smith School of Business at the University of Maryland. “They [represent] structural, not cyclical, changes to the economy. We’re looking at a permanently smaller economy with prolonged unemployment at an unacceptable level.”

Many of those who are keeping their jobs are still seeing pay cuts (including unpaid leave) and other reductions in benefits, particularly in 401(k) matches:

A couple of months ago, I started getting e-mails from readers curious about the announcements of plans reducing and/or suspending their matching contributions.

As the weeks passed—and the number of reports grew—so did the inquiries. Those first inquiries were clearly seeking assurances that the announcements did not constitute a trend, that this was still just something a (very) few employers were embracing. Indeed, that was my sense of things, borne out not only by one of our weekly surveys, but also in a couple of industry reports as well—and I was happy to provide those assurances (and links to those surveys) to any and all who asked.

However, in recent weeks, those inquiries have taken on a different tone; this new wave of inquiries seems to be seeking validation, if not vindication. Now, not in every case—and not enough to persuade me that we were on the verge of a match-suspension tsunami—but enough to suggest that such a thing could be possible.

Pension plans aren’t taking quite so much of a hit at the moment, perhaps because they’ve been declining for several years, but the Wall Street Journal says it’s only a matter of time (sorry, paywall), which means that companies have now been given permission to say everyone’s doing it.

Admittedly, many of these changes might still be happening if these employees were represented by a union. In particularly hard-hit industries, like auto manufacturing, unions are making pay and benefit concessions.

However, because these employees work under a contract, they have a voice in the process. They can negotiate to make these changes are temporary. They can negotiate the form of their concessions, receiving, for example, unpaid leave instead of wage reductions for the same work they’re already performing. They can negotiate concessions from the company in exchange for their own sacrifices.

Also, making it easier for employees to organize offers benefits for more than just represented employees. The standard (legal) advice to companies that don’t want to deal with unions is simple: Keep your employees happy.

There are a number of steps facilities can take if they wish to avoid unionization. These include the following:

* Develop a policy on unionization.

* Train supervisors to deal effectively with employees.

* Maintain effective communication with employees.

* Keep wages, benefits and other working conditions up to area standards.

* Provide periodic supervisor training.

* Enforce company rules uniformly.

* Establish/maintain company-sponsored committees, delegations, etc.

Or to put it more broadly:

First, if you are routinely taking care of the business I mentioned above, then you probably have little to worry about.

Let me put a finer point on it: if you have taken care of your employees as well as you have taken care of yourself, Mr. CEO, then you have little to fear from a union. It’s unlikely your employees will see much value in paying an intermediary to deal with you.

Second, if you are not routinely taking care of the business I mentioned above, it’s never too late to start. Right now, job security is everyone’s top priority so maybe you can start there.

Whatever you do, it must reduce the gap between what your workers get and what you want to give … before an intermediary steps in on their behalf and reduces the gap for you. You don’t need to close the gap entirely, just reduce it to the point where the difference is not worth the union dues to them. And if you are not sure how to proceed, try asking them how they would like you to proceed.

Doesn’t seem like much of a “burden” for the EFCA to lay on employers, does it? But it certainly has the potential to ease the way for employees as they deal with the current economic downturn. Given that, what better time is there for EFCA than right now?

Tags: , ,

2 Responses to “Why EFCA? Why now?”

  1. March 20th, 2009 at 3:45 pm

    AK says:

    Some great points.

    I’d like to reiterate one point I made in response to your article at almostdiamonds, since you didn’t include it here: due to technology (especially improved automation) a lot of those laid-off jobs that are skilled or semi-skilled aren’t going to come back when the economy improves; instead there will be new jobs most of which will be unskilled (beyond running a bar-code scanner). Given how much easier it is to replace unskilled workers than skilled, union protection will be more important.

  2. March 20th, 2009 at 4:49 pm

    Stephanie Zvan says:

    I was going more for the reasons created by the current economy, but that’s a fair point about replacing skilled versus unskilled workers, AK.

SEO Powered by Platinum SEO from Techblissonline