Economists Agree: Pass Employee Free Choice

Labor market in "serious trouble" from lack of bargaining power

The statement, signed by 39 of America’s top economists, including two Nobel Prize winners, points to the failure of U.S. labor laws to protect employees’ freedom to form a union and bargain as a major factor in our economic crisis.

The Economic Policy Institute has released a statement signed by 39 of America's top economists - including two winners of the Nobel Prize in their field - who say the imbalance in our labor markets is a major factor in the current economic crisis:

Indeed, from 2000 to 2007, the income of the median working-age household fell by $2,000- an unprecedented decline. In that time, virtually all of the nation's economic growth went to a small number of wealthy Americans. An important reason for the shift from broadly-shared prosperity to growing inequality is the erosion of workers' ability to form unions and bargain collectively.

Faced with declining wages and a rising cost of living, workers are more eager than ever to form unions, yet many will never get the chance. Even though the National Labor Relations Act has provided for a majority sign-up process since 1935, employers can veto that choice and force an election process they control:

The problem is that the election process overseen by the National Labor Relations Board has become drawn out and acrimonious, with management campaigning fiercely to deter unionization, sometimes to the extent of violating labor laws. Union sympathizers are routinely threatened or even fired, and they have little effective recourse under the law. Even when workers overcome this pressure and vote for a union, they are unable to obtain contracts one-third of the time due to management resistance.

The Employee Free Choice Act will level the playing field by doing three things:

1. Give employees the choice to use majority sign-up to form a union.
2. Triple damages against employers who break labor laws.
3. Ensure workers can get a first contract through arbitration after 120 days of unsuccessful bargaining.

The reforms the Employee Free Choice Act will bring are needed now more than ever, the economists say:

A rising tide lifts all boats only when labor and management bargain on relatively equal terms. In recent decades, most bargaining power has resided with management. The current recession will further weaken the ability of workers to bargain individually. More than ever, workers will need to act together.

From the AFLCIO blog:

Although current headlines are dominated by the crises in the stock market and the financial sector, working families have been struggling for years under the weight of an unbalanced economy. These economists say that restoring bargaining power and ensuring working people have a voice in their workplace, and in their health care, pensions and wages, is critical to rebuilding our economy.

The statement ran yesterday as a full-page ad in the Washington Post, which you can view here.