As Chamber Lobbies, Its Paid Expert Says: No Unions, No Minimum Wage Law Needed

This week, the Chamber of Commerce launches its most forceful lobbying effort yet to kill the Employee Free Choice Act and to end talk of compromise on Capitol Hill.

The Chamber is donning the masquerade of championing workers' rights by railing over the myth that the bill would take away the secret ballot -- it actually just gives workers the choice of whether to select a union through majority sign-up or "card check." The business coalition, also working through such front groups as the Alliance to Save Main Street Jobs, promotes bogus claims that it would cost the economy jobs.

But now the real truth behind the hostility of the Chamber of Commerce and other major business groups to unions has been revealed by one its most admired experts, prolific University of Chicago libertarian law professor Richard Epstein, whose Big Business-funded research has been touted as the definitive critique of the Employee Free Choice Act.

His arguments against the arbitration provision of the legislation that aims to end employer stalling in bargaining has also persuaded such iconoclastic liberal bloggers as Slate's Mickey Kaus ( full disclosure: he's a former editor of mine whom I admire although I don't always agree with him).

Yet in a new In These Times article, "Shilling on the Corporate Dollar," Epstein confirmed to me his earlier writings that the country would be better off without labor unions, labor protection laws or the minimum wage law. "I'm unrepenant," he says, while also conceding that his corporate funders asked him to omit some of his earlier arguments against labor laws as potentially political damaging.

They had good reason to be worried that his radical views could discredit their claims that these corporate leaders somehow care about protecting workers' rights. One of his harshest critics, David Brody, a professor emeritus of labor history at Berkeley, observes, "I'm amazed the business side is using him. He thinks collective bargaining itself is a bad thing, while they claim to be defending the sanctity of the secret ballot."

At the heart of much of Eptstein's current theoretical attacks on the bill is his longstanding libertarian view of employer and employee relations as achieving a perfect balance because of market forces. That makes him the labor market equivalent of Candide's Dr. Pangloss: if employers could just be left alone, all things work for the best in this best of all possible worlds. If there were no minimum wage laws, for instance, Epstein told me, "Wages would go up because productivity gains would offset any short-term losses [to workers]." And Epstein's ivory-tower "at will" world view is still on display in his new Hoover Institution paper: "To be sure, some firms do not have enlightened managers. But in a competitive market, the firm that does not do right by its employees will not attract or retain the most productive workers."

But while this and other anti-union assertions may sound reasonable to a tenured professor like Epstein, it simply doesn't take into account the real world of employment -- and the justifiable fear of being fired. For instance, David Madland, a labor expert at the Center for American Progress Action Fund, notes, "What really discredits his arguments is his claim that employer intimidation isn't a significant cause of union decline."

Most strikingly, he doesn't even think there ought to be workforce regulations or minimum wage laws, even for sweatshops here or abroad. As my article points out:

In the past Epstein, an extreme libertarian, has attacked minimum wage and unemployment benefits, denouncing such New Deal legislation as unconstitutional "takings" that violate the Fifth Amendment. That is no surprise. Epstein has argued that, historically, sweatshop conditions can only be ameliorated by market forces, not by laws or unions. He told In These Times: "The level of wages will be determined by the intersection of supply and demand...the escape from that system is not driven by unions, which cannot increase productivity."

The In These Times article further debunks the statistical sophistry of the business-funded economist Anne Layne-Farrar whose claim that the bill would cost at least 600,000 jobs in its first year has gained wide currency. No doubt Chamber of Commerce lobbyists and members are citing this week that statistic and her authoritative-seeming report. But by interviewing top economists, including John DiNardo of the University of Michigan, I was able to deconstructed her oft-touted use of "regression analysis" she uses to make the claim that rising unionization rates cause unemployment:

Layne-Farrar massages the data using a complex "regression analysis" to connect the dots between card check, higher unionization rates and more unemployment, putting the loss at between 600,000 and 2.6 million new American jobs in the first year.

"That's bullshit," says Canadian labor economist Charlotte Yates, now the Dean of Social Sciences at McMaster University in Hamilton, Ontario. "I don't know of any credible economists who say [now] there is a direct correlation between unionization and the rise in unemployment."

Even so, Layne-Farrar invokes her use of "regression analysis" as a sort of holy totem to ward off criticism of her work from other economists who cite what she says are "simplistic correlations." These include studies showing that countries such as England, Denmark and Norway have higher unionization and lower unemployment rates than the United States. She says, "This is empirical analysis, not an opinion piece, with results based on publicly available data and using well-accepted econometric tools. You can't rig these."

John DiNardo, a labor economist at the University of Michigan and author of the textbook Econometrics retorts, "Just because she calls it 'econometrics' and 'regression analysis' doesn't mean that it makes any sense." While some earlier research had found a link between unionization and unemployment, more rigorous, recent research in Europe and the United States has found no connection between unionization and unemployment. In fact, Layne-Farrar's study concocts a negative jobs impact from unionization that is 200 to 300 percent higher than even the most critical anti-union research.

No matter that her and Epstein's findings are built on flimsy data and extremist views. This week, they'll be no doubt marshalled to convince Senators to back away from the Employee Free Choice Act.

As The Hill reported:

According to a schedule obtained by The Hill, executives are visiting Sen. Dianne Feinstein (D-Calif.) [this] Wednesday as part of a lobbying push against the Employee Free Choice Act (EFCA), legislation that would make union organizing much easier if passed. Business leaders from 12 different states, organized by the U.S. Chamber of Commerce, are flying into Washington next week to lobby against the bill.

Feinstein has emerged as a key voice on the legislation. At first, her support for EFCA wavered since she is not a co-sponsor of the bill this Congress, unlike two years ago when she also voted for cloture on the bill. But now, Feinstein has floated a compromise for one of the bill's provisions to help garner support from Senate centrists who are worried about angering the business community by voting for the bill...

Along with Feinstein, business leaders are also scheduled to meet with Sens. Evan Bayh (D-Ind.) and Tim Johnson (D-S.D.) -- centrists who could decide the fate of EFCA. They both co-sponsored the bill last Congress but Bayh is not doing so this year.

Union officials have been somewhat open to changes in the bill but business groups have lobbied against any compromise, saying the legislation would hurt industry revenue by leading to more strikes and work stoppages. They have hammered Feinstein's proposal [to allow mail-in ballots instead of majority sign-up or "card check"] because they believe it would still lead to intimidation of workers by union organizers.

Of course, the intimidation canard has been challenged by the most rigorous research on the issue, including a new study that found not a single incident of union intimidation in public sector jobs where majority sign-up is permitted.

Yet despite what solid research says, it's not at all clear that conservative opponents of the legislation will let facts stand in their way. As I concluded in my piece on the two top anti-union scholars:

While Epstein's more radical views are left off the table, his intellectual firepower adds to the impact of his arguments against EFCA. Both Epstein and Layne-Farrar see an idealized world waiting to be born where unions don't exist, and where workers and businesses thrive without them.

The question remains, will Washington politicians still listen to business interests that use these researchers' dubious claims to argue, as Epstein does: "Unions are a bad deal for most workers." 

Comments

[lightningbolt]

The Chamber of Commerce is clearly run by incompetent businessmen. They do not realize that unions actually benefit businesses and their owners. A worker who has a union will be a happier worker and will work harder because the employer treats them well. A non-union worker will not be happy and will only do the bare minimum to keep his job, and will definitely not be loyal to the company. Another benefit unions give businesses is increased consumer spending. When a union successfully gets the minimum wage raised, it increases consumer spending because the consumers have more money from their increased wages. Its very simple. Any good businessman should not have any trouble understanding that unions are good for business.

[musselmanm]

Start by boycotting Starbucks and all Starbucks products and supporters.

[musselmanm]

Well, no customers for the Chamber business' sound about right to me.
When will We the People join together to fight the anti people outlook of these people.
I will be the first to boycott , contribute and march on the Chamber business'.
I do not have the savy to form an online group of radical Americans that refuse to be marginalized and abused with our wages and health coverage and laws regarding our employment­.Americans must force not only the Chamber and the Christian Taliban to change but President Obama and our elected leaders at every level.

[WorkingClass]

American workers have their back against the wall. They have serious, real world, real time money problems. As much as we don't want to do it we are going to have to organize to defend ourselves. Traditionally, unionism is the American way forward for the working class. If the Democrats give us card check we will be loyal to the party and the chamber will have to deal with us. If the Democrats don't give us card check we will have no choice but to organize politically. The new AMERICAN LABOR PARTY will be the Democrats worst nightmare. 70% of Americans who work, work for wages. When we are sufficiently pressed and goaded we WILL UNITE. And united, no power can stand against us. Make up your mind. You can pay us now or pay us later.

[RedneckDem]

I wish 70% would vote for it, but history has concluded that at least half of that 70% will vote against their own self-interest baed upon single issues such as abortion, religion, race or hardcore party affiliation.

[WorkingClass]

Things change. If they did not there would be no history.

[Realization]

Actually, the country would be better off without:

strong union job classification rules so a company got 8 hours work for 8 hours pay,

excessive executive salaries and bonuses,

MBAs with no practical experience in the firms they work for,

single payer health care,

an industrial policy to rejuvenate manufacturing and keep jobs and tech at home,

a highly regulated financial sector that stuck to basics and used less leverage,

an industrial development bank to put capital where it is needed,

decent trade policy.

And it could use a very high marginal income tax rate as in the Eisenhower years. And a high estate tax on the rich.

I could go on.

I am a former Republican with considerable experience in international trade. I used to respect the Chamber of Commerce. No longer. Following their vision would result in a class society. I have been to countries like that. Don't like them.

[mikefina]

Really. Don't like 'class' society?

OK, how about clasless societies? Workers control the means of production? Worker's Paridise? Seize the means of Production? Sound familiar?

Well, I've seen a few of these--don't like them either.

PS Take a look at that 'classless' No. Korean peninsula. At night. From space.
Can't find it? It's because they have no electricity. No class, but no electricity.

[musselmanm]

How about workers that are in a union for a partnership with business and recieve a fair wage and benefit package?
Once the corporations control all, like now, the working classless go straight to the bottom, like the last 30 years.
The corporate clan go straight to the top, like the last 30 years.
Enough!

[LeftRight]

Several of these make sense, but I'm wondering why you are opposed to single payer health insurance, which will cost less and provide coverage to more people.....

[musselmanm]

A nation wide strike for about 1 week would go a long way towards waking up our President and Congress.
Job actions are needed now and have been needed for many years. I was always a union member that was an advocate of job actions and civil disobedience.
Most of our union leaders are opposed to strong actions to move the playing field to a level surface.
i understand that our union shops are partners in the profit we create. I do not wish to do harm to them.
I do however say that enough is enough.
A march on Washington DC by labor, both union and non union would say it loud and clear.

[mikefina]

It will 'wake up our President' allright. America too. STRIKE.

You will, in seven days (sorry 4 or 5 days--depending on your furlough status) confirm the suspicions of most Americans (the 88% whom don't belong to a Union), that you are not particularly missed. In fact, if we shut down the Govt non-essentials (DMV, welfare office, etc.) and left it closed say, Thursday - Tuesday, you wouldn't have to strike at all. You could just do in your own homes what you do at our office--stare blankly at your fellow citizens while the 'big girls' debate who's turn it is to fetch donuts.

And what, with the automakers pushing up flowers, you'll not be particularly missed on the coffee break (er, assembly line). SO March, and on your way to Washington, pass through all the fully operational auto-plants in right-to-work states--you know, the states where working people are actually working.

By all means, march on Washington. Visit the trough where you and your bretheren are fed from.

[Art Levine - Huffpost Blogger]

Are you willing to repeat those ugly comments to the policemen, firemen, and nurses who are also unionized and help protect the public every day?

[LeftRight]

First, he said NATIONWIDE, not national union wide.

Second, were all the public sector unions to strike (which they will not, that being an illegal act for them.....) trust me, you would notice within MINUTES, because you'd lose police, fire, air traffic control, etc....

[jazzman]

Think of the change you're not getting. First of all, no EFCA. A bankruptcy bill with the Cramdown provision removed. The credit card bill with the usury provision stripped. A health care bill that leaves the private insurers right in place, no public option, and the phony 'trigger' option but on top of that health cost dollars will now be taxed.

Meanwhile tax dollars siphons right off to bail out banks and their cushy executives, automobile companies, and continue to fund the never ending wars overseas. The tax break you got ends in 16 months but the 'temporary' tax breaks the rich got still have not been rescinded.

This is all happening after the people rose up, threw out the Republicans and put the Democrats in charge. Feel disillusioned yet? If not, wait a few months. Right now, I do.

[WorkingClass]

BRAVO!

[jsgaetano]

The Chamber of Commerce needs to be disolved. They are one of the biggest America-hating groups in America.

[tonymtn]

Unions are indeed necessary to prevent worker abuse. However Union abuse (see UAW) is definitely a drain on the economy. We need to find a balance, but as usual, nobody is brave enough to stand alone in the middle of this issue. Both sides are raving lunatics, IMHO.

[LeftRight]

Union abuse????? Explain to the rest of us just what the hell that is please!!

[patricksmom]

Advice to members of Congress inc Mitch Mcconnell of Ky.
I wouldn' so much worry about business being mad. The American voter sees this for what it is and won't be fooled again by the sophistry of these arguments against unions, min wages and etc from people who are comfortable with tenured positions. It is time to afflict the comfortable and comfort the afflicted.

[WorkingClass]

Good Advise.

[research]

.1% robber Barons, dominating the 99.9% serfs, that's corporatism and conservatism.

Choose: Democracy or Plutocracy.

[mommadona]

The Chamber of Commerce is an INTERNATIONAL group with no fealty to ANY country or border.

They are the face of the military/industrial complex wrapped up in a package of country club golf dates after NetJet connections, and "ciao-let's do lunch".

BUSHCO, Inc is one of their oldest minions.

The Chamber of Commerce is UN-American.
Period.

Prove me wrong.

[bobwalters]

Clearly, the objective of the CofC is the re-institution of slavery in the US. I'm surprised that Epstein doesn't use that era in his economic analyses to show how much more competitiv­e/profitab­le/yada-ya­da/peacefu­l the economy was back then. The guy is just another shill, just as Martin Feldstein, et al, of the "free market" mythology. Same as the "Masters of the Universe" who have brought the economy to its present idyllic level, doncha know. Wonder how much of the CofC budget for this abortion is paid in from recipients of the Great Bank Bailout?

[JusticiaParaTodos]

Bobwalters hit it right on the head! The radical right, the Chamber of Commerce, corporate America in general would love to return to the days of slavery where labor was cheap!

At present in my homestate of Texas the bosses can fire you without just cause because of a law called "employment at will." In other words the plantation owner can kill, sell or otherwise rid himself of you when he sees fit without fear of a grievance or other basic due process! (and who said that the real agenda of conservatives isn't out and out fascism?)

Where I work we desperatley need a union. Most of the workers I speak to about this are in agreement that a union is needed! However even the most uneducated know that until the laws are real and fully enforced organizing a union is like committing suicide!

EFCA is needed as is single payer healthcare. How these needed reforms come about is up to us! The time for passive non controversial action is long past! I believe Marx said it all when he stated; "Workers of the world unite, you have nothing to lose but your chains!" In the case of U.S. workers the chains were manufactured in China and sold at Wal-Mart!

[patricksmom]

Fantastic comment justice for all.

[sunshinerain]

I agree.

[WorkingClass]

WILD APPLAUSE! I love the truth and the tone of this thread.

[annie g]

The Chamber need not worry about anyone receiving a decent living wage by having any unions representing workers All of our jobs are being sent over seas and it seems the only "openings" are for foreigners. So be happy, don't worry.

[Oldchef]

Thanks to the Chamber of Commerce and their paid lobbyists, the average millionaire CEO has gone from making 20-30 times the average wage and paying over 80% taxes on $1M salaries (in Eisenhower's time) to making 475 times the average wage and only paying under 40% in taxes.