Card Check Is Not the Solution for Pension Mismanagement

06/13/2009 05:12 am ET | Updated May 25, 2011
  • Gary Shapiro President and CEO, the Consumer Technology Association

At a time of unprecedented economic uncertainty, the union promise of jobs and better wages is deeply alluring -- but their mechanism to securing them, so-called "card check," is fundamentally flawed. The basic premise of card check, the focal point of the Employee Free Choice Act before Congress, is that once labor leaders get a majority of workers to endorse a union, then a union is certified.

With union membership falling to less than 10 percent of the private sector workforce, "card check" has become the Holy Grail for organized labor. Unfortunately, in doing so they are trampling over the rights of workers to a secret ballot when deciding whether to form a union. The secret ballot was a critical part of union reform in the 1970s to clean up corruption and worker coercion.

Union leader James P. Hoffa's goal to return to the bad old days of his father's reign would be laughable if it didn't threaten to devastate the American economy. Take the high-tech sector for example. It's the most vibrant and well-paid sector in the United States. On average, high-tech workers received raises of 4.6 percent last year.

The high-tech sector is also largely non-union. Imposing the union model through the coercive tactics such as card check on the technology industry would be disastrous.

But the damaging effects go well beyond the high-tech sector. It would have a devastating impact on workers from all industries by affecting retirement plans.

A detailed analysis last year by the Hudson Institute, a nonpartisan think tank, found that union-negotiated retirement plans were not as sound as those provided by private companies to non-union employees. Nearly all of the major plans were behind on payments, and overall, the pension plans of union officers were better funded than those of rank-and-file workers.

The Hudson study, written by a former chief economist at the Department of Labor, went on to find that 21 of the largest multi-employer union pension funds had only 67.7 percent of the reserves needed to meet their obligations, seven were in critical condition, and not one was fully funded. In this group of 21 are some the most vocal, deep-pocketed supporters of card check, including the SEIU and Unite Here.

Perhaps that explains the urgency of imposing card check on U.S. workers. It would be a way for union officials to tap a new funding source to meet federal requirements that they fully fund pension funds by 2011. A fresh crop of unionized employers would subsidize past union pension plan mismanagement and, at the same time, fund the demand for defined benefits from the latest union members.

Today more than 10 million workers and retirees benefit from 1,500 different multi-employer pension plans. Unionized companies pay into these funds as part of collective bargaining agreements.

Is the true union motivation behind card check to get a host of new employers into the pension pool with the cash to correct the problems of past union mismanagement? If so, the legislation, as it is written, allows union pension fund managers to carry on their current course without any additional government oversight or reasons for increased prudence.

If this is the union strategy, politicians and the workers whose companies may be unionized don't deserve to be fooled. And these concerns alone reinforce why workers must retain their right to a private ballot to decide unionization - union organizers intimidating workers to sign cards or petitions are unlikely to disclose that they have teetering pension plans.

If card check is such a good idea, union leaders should be asked to testify before Congress about the financial condition of their pension plans and the impact that card check would have on shoring them up. Union leaders may not favor transparency, but certainly Congress must.

Gary Shapiro is the president and CEO of the Consumer Electronics Association, which represents more than 2,200 U.S. high-tech companies.