Archive for the ‘Right To Work’ Category

How the Boeing case poisons investment.

The Wall Street Journal         august 13, 2011

A union election is a decisive event in an employee’s life, and new rules limit the information employees get before voting.

The Wall street Journal      August 9, 2011

Turn Your Sound On

http://www.youtube.com/watch?v=6W07bFa4TzM&feature=player_embedded

The Wall Street Journal                JUNE 22, 2011

Labor Board Proposes Speeding Up Organizing Votes; Employers, GOP Cry Foul

By MELANIE TROTTMAN And KRIS MAHER

The National Labor Relations Board Tuesday proposed the most sweeping changes to the federal rules governing union organizing elections since 1947, giving a boost to unions that have long called for the agency to give employers less time to fight representation votes.

The NLRB’s proposals would likely compress the time between a formal call for a vote by workers on whether to join a union, and the election itself. It is the latest in a series of actions by the board and other agencies controlled by Obama administration appointees that respond to labor leaders’ calls for more union friendly federal labor policies.

The rules governing organizing are the focus of a power struggle between unions and employers after decades of declining union membership. Only 6.9% of private sector workers belonged to unions in 2010, and just 11.9% of all U.S. workers, according to the Labor Department. In 1983, unions represented 20.1% of all workers.

“This is another not so cleverly disguised effort to restrict the ability of employers to express their views during an election campaign,” said Randy Johnson, the U.S. Chamber of Commerce’s senior vice president of labor, immigration and employee benefits.

Some companies say cutting the lead time before an election would make it harder for them to build a case for opposing a union, because union campaigns often begin months earlier without an employer’s knowledge.

Unions praised the proposal, although Richard Trumka, president of the AFL-CIO, called the board’s step a “modest” one that doesn’t address “many of the fundamental problems with our labor laws.”

Unions failed during the years when Democrats had control of Congress to win passage of a remake of union organizing rules known as the Employee Free Choice Act. Since Democrats lost control of the House in 2010, union leaders have stepped up pressure on the Obama administration to use its rule-making powers to achieve some of the same goals as the EFCA.

• NLRB Proposals: Reactions

 The NLRB said its proposed changes aim to curb unnecessary litigation; streamline procedures before and after elections; and enable the use of electronic communications, such as requiring employers to give union organizers access to electronic files containing workers’ addresses and email addresses when available.

Even with more favorable rules, unions could face challenges winning contested elections at a time when even union officials say many workers are more concerned about their own job security. Unions have tried and failed for years to organize workers at Wal-Mart Stores Inc., Target Corp. and the U.S. operations of big foreign-owned auto makers, among others.

The Union Agenda

Unions were counting on advancing their priorities after the election of President Obama. A scorecard on their progress:

Passage of Employee Free Choice Act to ease union organizing. Failed in Senate.

Getting former union lawyer Craig Becker on the NLRB. Accomplished through recess appointment.

Making it easier for airline and railroad workers to unionize. Approved by the National Mediation Board.

Enabling airport screeners to unionize and collectively bargain. Authorized by Transportation Security Administration.

On Friday, the United Food and Commercial Workers union lost an election 85-137 at a Target store in Valley Stream, N.Y. The union immediately accused the company of illegally intimidating workers.

“The team members rejected the union,” said Target spokeswoman Molly Snyder. “We are pleased that we are going to be able to work directly with our team members and continue to make Target as great a place as it can be.”

“Target believes that we have followed all of the laws and regulations of the National Labor Relations Act,” Ms. Snyder added. She said the company “doesn’t have anything to share at this point” about the changes proposed by the NLRB.

A Wal-Mart spokesman said the company didn’t have a reaction “at this time” to the proposed NLRB rules changes.

The International Association of Machinists and the Association of Flight Attendants lost elections last year involving 50,000 Delta Air Lines Inc. workers. Since then, the National Mediation Board, which oversees elections in the airline industry, opened investigations into allegations that the company unfairly pressured workers to vote against the unions. The NLRB rule changes wouldn’t affect the airline industry, whose labor relations are governed by the mediation board.

NLRB Chairman Wilma Liebman, in a statement Tuesday, predicted the proposals would be controversial, and business groups and Republican lawmakers quickly proved her right.

Rep. John Kline (R., Minn.), chairman of the House Education and the Workforce Committee, urged the board to scrap what he called a reckless and job-destroying agenda.

Brett McMahon, vice president for business development at Miller & Long, a privately held, nonunionized construction company in Bethesda, Md., said the NLRB’s proposal “provides a totally unfair advantage to labor and it deprives employees of a full set of information.” Mr. McMahon, whose company employs about 1,100 people, said the NLRB proposal, combined with a Labor Department proposal Monday to require employers to disclose more information about labor consultants they hire, is “a two-fold attack” on employers.

Republican lawmakers were already attacking the NLRB for its decision in April to accuse aircraft giant Boeing Co. of illegally building a 787 Dreamliner production line at a new nonunion plant in South Carolina, a state where unions are weak, instead of in Washington state where union employees are already building such planes.

Unions reacted positively to the NLRB’s proposal. “At a time when corporations have lawyers and lobbyists speaking for them on Capitol Hill, it’s a good thing when a federal agency wants to allow working people to have a say,” said Mary Kay Henry, president of the Service Employees International Union.

The NLRB’s Democratic majority has the votes to adopt the rules. Ms. Liebman said the board would approach the process with “open minds” and has invited public comment. There will be a public meeting on July 18th and 19th about the proposal.

Union organizing efforts often take years. In 2008, the UFCW won an election to organize 5,000 workers at a Smithfield Foods Inc.’s hog-slaughtering plant in Tar Heel, N.C., after a campaign that consumed 15 years. The union lost a 1997 vote, spurring seven years of litigation. In 2006, the U.S. Court of Appeals for the District of Columbia ruled that the company had threatened workers and ordered it to reinstate four union supporters the court found were illegally fired.

The cost of organizing efforts has led unions to seek fewer votes. Last year, unions won 1,036, or 66%, of 1,571 elections conducted by the NLRB, according to the agency. In 1990, unions called for 3,536 elections and won 1,773, or 50%.

The NLRB said it couldn’t calculate how much shorter the time could be between when a union files a petition for an election and the election itself. The median time is now 38 days.

Michael Lotito, a partner in San Francisco at law firm Jackson Lewis LLP who advises employers, said the lead time could be shaved to between 19 and 23 days under the proposal.

The power struggle between employers and unions promises to be a factor in the 2012 elections. Unions were significant contributors to President Barack Obama’s 2008 election campaign and played a crucial role in drumming up votes for him and congressional Democrats.

In the 2010 election cycle, labor unions overall contributed $73.4 million to federal candidates, parties and outside groups, down from $74.55 million in the 2008 cycle, according to the Center for Responsive Politics’ calculations of the 20 biggest union contributors at the time. In both cycles, at least 90% of the unions’ party-related contributions were to Democrats. Unions also spend money on political efforts not directly tied to a candidate.

Unions are heading into the 2012 election cycle facing moves in several states to curtail collective-bargaining rights. Labor leaders have turned to the Obama administration for help, and warned that union members would withhold campaign contributions for Democrats who don’t  support the union cause.

Townhall  By Kyle Olson March 26, 20110

Apparently Gov. Scott Walker knew exactly what he was doing.

Before he signed the bill limiting collective bargaining privileges, teachers unions throughout the state were slow to respond to calls for salary and benefit concessions.

They believed their members should be held harmless during a period of necessary cost-cutting. They didn’t seem to care that Wisconsin schools were operating with multi-million dollar deficits that were forcing the layoffs of younger teachers and the cancellation of student programs.

Their only answer was to raise taxes at a time when few people could afford it. They didn’t want to sacrifice anything, despite the fact that schools spend about 80 percent of their budgets on labor costs.

But now, with Walker’s legislation set to become law once it clears legal hurdles, the unions are suddenly coming to their senses. They are jumping at the chance to extend their collective bargaining agreements, in exchange for meaningful concessions that will help schools survive the financial crisis.

In Madison, the teachers union has suddenly agreed to a wage freeze and increases in health insurance and pension contributions. The concessions will save the district an estimated $15 million next year, which would almost make up for the expected cuts in state aid.

In Oshkosh, the union has agreed to a wage freeze, increased contributions toward benefits and a change in the employee insurance carrier, which will save the district more than $5 million per year.

In the Slinger district, the union has agreed to commit 5.8 percent of teacher pay to pension costs and increase contributions toward health care costs. The concessions will save the district about $1.3 million per year. What are the unions gaining by accepting concessions at the last possible minute? Plenty.

They are salvaging things like automatic annual salary increases for teachers, a generous number of paid sick and personal days off, reimbursement for unused sick days, salary and benefits for union officials who do not teach, retirement bonuses, overage pay for teachers with a few extra students, and many other items.

Those contractual perks would have gone by the wayside if local collective bargaining agreements had been allowed to expire. Under the new law, the unions will not have the power to negotiate for many of the items listed in current contracts.

So the unions will save some time-honored perks and schools will save a lot of money. This type of compromise would not have occurred without pressure from Gov. Walker and his supporters in the legislature.

Perhaps the governor knew exactly what he was doing by creating a crisis and forcing the unions to face financial reality. Nothing else seemed to be working and schools were drowning in deficits.

Ironically, the loss of collective bargaining privileges would not have been necessary if the unions would have come to their senses months ago and started offering meaningful concessions. They lost most of their privileges by remaining stubborn for too long.

Townhall March 8, 2011 By John Hawkins

At one time in this country, there were few workplace safety laws, few restraints on employers, and incredibly exploitive working conditions that ranged from slavery, to share cropping, to putting children in dangerous working conditions. Unions, to their everlasting credit, helped play an important role in leveling the playing field for workers.

However, as the laws changed, there was less and less need for unions. Because of that, union membership shrank. In response, the unions became more explicitly involved in politics. Over time, they managed to co-opt the Democratic Party, pull their strings, and rewrite our labor laws in their favor.

As Lord Acton noted, “Power tends to corrupt,” and that has certainly been true for the unions. Unions have become selfish, extremely greedy, and even thuggish in their never-ending quest to take in as much as they can for themselves, at the expense of everyone else who crosses their path.

That’s why today, unions have changed from organizations that “look out for the little guy” into the largest, most rapacious special interest group in the entire country. Where unions go, disaster usually follows. Just to name a few examples:

1) Unions are severely damaging whole industries: How is it that GM and Chrysler got into such lousy shape that they had to be bailed out? There’s a simple answer: The unions. The massive pensions the car companies paid out raised their costs so much that they were limited to building more expensive cars to try to get their money back. They couldn’t even do a great job of building those cars because utterly ridiculous union rules prevented them from using their labor efficiently. America created the automobile industry, but American unions are strangling it to death. Unions also wrecked the steel and textile industries and have helped drive manufacturing jobs overseas. They’re crippling the airline industry and, of course, we can’t forget that…

2) Unions are ruining public education: Every few years, it’s the same old story. The teachers’ unions claim that public education in this country is dramatically underfunded and if they just had more money, they could turn it around. Taxpayer money then pours into our schools like a waterfall and….there’s no improvement. A few years later, when people have forgotten the last spending spree on education, the process is repeated.

However, the real problem with our education system in this country is the teachers’ unions. They do everything possible to prevent schools not only from firing lousy teachers, but also from rewarding talented teachers. Merit pay? The unions hate it. Private schools? Even though everyone knows they deliver a better education than our public schools, unions fight to keep as many kids as possible locked in failing private schools. In Wisconsin, we’ve had whole schools shutting down so that lazy teachers can waste their time protesting on the taxpayers’ dime. Want to improve education in this country? Then you’ve got to take on the teachers’ unions.

3) Unions are costing you billions of tax dollars: Let’s put it plain and simple: Government workers shouldn’t be allowed to unionize. Period.

Why?

Because you elect representatives to look out for your interests.

It’s obviously in your interest to pay as little as possible to government workers, to keep their benefits as low as possible, and to hire as few of them as possible to do the job. However, because the Democratic Party and the unions are in bed with each other, this entire process has been turned on its ear. Instead of looking out for your interests, Democrats try to hire as many government workers as possible, pay them as much as possible, and give them benefits that are as generous as possible, all so that union workers will do more to get them re-elected.

In other words, the Democratic Party and the unions are engaged in an open conspiracy to defraud the American taxpayer. There’s no way that the American people should allow that to continue.

4) Unions are fundamentally anti-democratic : How in the world did we get to the point where people can be forced to join a union just to get a job at certain places? Then, after they’re dragooned into the union, they have no choice other than to pay dues that are used for political activities which the unwilling dues-paying member may oppose.

Add to that the fact that the Democrats and the government unions collaborate to subvert democracy at the expense of the taxpayer and it’s not a pretty picture. Worse yet, unions have gotten so voracious that they even want to do away with the secret ballot, via card check, so they can openly bully people into joining unions. The way unions behave in this country is undemocratic, un-American, and it should trouble anyone who cares about freedom and individual rights.

5) Government unions are bankrupting cities and states: Government unions have bled billions from taxpayers nationally, but the damage they’re doing on the local level is even worse. We have cities and states all across the country that are so behind on their bills that there have been genuine discussions about bankruptcy. There are a lot of irresponsible financial policies that have helped contribute to that sorry state-of-affairs, but unquestionably, the biggest backbreakers can be directly traced back to the unions.

As the Washington Times has noted, union pensions are crushing budgets all across the country.

Yet it comes as little surprise that the same profligacy that pervades the corridors of federal power infects this country’s 87,000 state, county and municipal governments and school districts. By 2013, the amount of retirement money promised to employees of these public entities will exceed cash on hand by more than a trillion dollars.
So, what happens when these pensions can’t be paid? They will come to the taxpayers with their hands out. When they stroll forward with their beggar’s bowl in hand, the American people should keep their wallets in their pockets. That may not seem fair, but the public sector union members have gotten a great deal at everyone else’s expense for a long time and if somebody has to take a haircut, and they do, it should be the union members instead of the taxpayers they’ve been bilking for so long.

By Ron Ross on 3.4.11 @ 6:07AM

The Democrat party is an amalgam of special interest groups — environmentalists, trial lawyers, minorities, college professors, and labor unions, for example. All of these groups, however, are not equally crucial to the survival of the party. Far and away the most important, of course, is organized labor.

The British equivalent to our Democrat party is the Labour party. If there were truth in labeling, that would be the name of the Democrat party. Only the spelling would change.

The Democrat party has numerous reasons to be worried. Possibly the biggest is the degree to which it is dependent on organized labor for its continued success and possibly even its existence. Where would Democrats be without unions, and vice versa? As much as they trumpet the value of diversity, Democrats are dangerously under-diversified.

Only labor unions have the ability to automatically and involuntarily extract campaign funds from their members. Unions have become the equivalent to a guaranteed income for the Democrat party.

Automatic payroll deduction makes unions qualitatively different from any other Democrat support group. Republican governors are currently making great progress in rescinding automatic payroll deduction for public employees in several states.

There is little or no difference between the goals of labor unions and the Democrat party. Their political philosophies are indistinguishable. Both, for example, view people not as individuals but rather as members of groups, all of whom are to have equal incomes, regardless of effort or merit. Although both Democrats and unions would vigorously deny being socialists, both are strongly sympathetic to socialistic ideals.

Much of the most destructive legislation of the past eighty years has been the products of the unholy alliance between the Democrat party and organized labor. Besides being far and away the greatest source of campaign funds, unions have provided a dependable army of disciplined foot soldiers for the Democrat party.

Their alliance has been a major factor in the success of both. The unions rely on the Democrats to bend the rules in their favor – being exempted from anti-trust and restraint of trade regulations, for example. Everyone else and the economy end up worse off. Unions are rarely prosecuted for widespread corruption, threats of violence, and blatant intimidation. They have been allowed to play by a different set of rules.

Democrats need unions to deliver money and votes, unions need Democrats to deliver legislation that works in their interest. As both organized labor and the Democrat party decline in power, what each can deliver for the other will diminish. Each side of the symbiotic relationship must have power and vitality in order to keep the relationship working.

If the Democrat party finds itself in the minority for an extended period of time, it will be unable to deliver the legislation. The energy necessary to propel the system will peter out. In fact, it’s already begun. Democrats were unsuccessful in passing “card check” even when they had majorities in both the House and Senate. Unions are not happy about that.

Organized labor is 100 percent devoted to the Democrat party. Neither should be at all surprised that Republicans are now working to diminish the power of unions. It is only natural for Republicans to be seeking to weaken their opponents’ basic support apparatus. Someone should remind Democrats, “Live by the sword, die by the sword.”

Less than seven percent of private-sector workers now belong to unions. That is a number that probably scares the hell out of Democrats. Thirty-six percent of government workers are unionized. If public-sector history repeats private-sector trends, the implications are profound. As Washington Post columnist, Robert Samuelson, put it, “Big Labor became Little Labor. If public-sector unions fail, Little Labor could become Mini-Labor.” I would only add — and the once powerful Democrat party will become the Mini-Democrat party. It’s way too soon to know for sure, but for Democrats it could be that the party’s over.

MARCH 3, 2011 By KRIS MAHER And AMY MERRICK
Ohio state senators narrowly approved a bill that would prohibit public-employee unions representing 400,000 state and local workers from bargaining over health benefits and pensions, while also eliminating the right to strike.

Supporters and opponents of Senate Bill 5 demonstrated outside the Ohio Statehouse on Wednesday.
While national attention has focused for weeks on a similar battle in Wisconsin, the vote, by 17-16 in Ohio’s Republican-controlled Senate, virtually ensured that the Buckeye State will become the first to strip collective-bargaining rights from public employees as states grapple with recent gaping budget deficits.

The move is especially significant because Ohio is larger than Wisconsin, and like its fellow Midwestern state, is both a stronghold of public-sector labor unions and a swing state politically.

The bill now goes to the House, where the Republicans have a 59-40 majority. If approved, as expected, it will move for signature to Republican Ohio Gov. John Kasich, who supports the bill.

Mr. Kasich believes it would help local governments control labor costs, spokesman Rob Nichols said.

Ohio’s labor leaders, while noting the narrow passage in the Senate, weren’t optimistic about stopping the bill in the House.

“We’re expecting it to pass,” said Jason Perlman, a spokesman for the Ohio AFL-CIO. But, he added, “We are hopeful those in the Ohio House will see this bill is nothing more than an attack on the middle class.”

Republican lawmakers say worker pay and benefit cuts are needed to offset projected budget shortfalls. “If we’re going to grow in Ohio, we cannot raise taxes,” Republican state Sen. Keith Faber said Wednesday.

William Batchelder, Republican Speaker of the Ohio House, said a House committee will begin holding extensive hearings on the bill next week. “I think the bill has a good chance of passing. What form it will take I would have to say will be unclear,” he said.

U.S. Labor Secretary Hilda Solis criticized the moves in Ohio and other states to curtail bargaining rights. “Some state leaders have gone too far,” Ms. Solis said Wednesday night, in a conference call with thousands of activists from the Communications Workers of America. “Budget sacrifices are one thing, but demanding workers give up their rights as union members is another.”

The Senate approval in Ohio of the controversial measure could send a sweeping message across the industrial heartland and in states with relatively high union density that the clout held by organized labor has weakened. Multiday protests by teachers and firefighters on the steps of state capitol buildings haven’t necessarily swayed Republican lawmakers who see labor contracts as expensive and inflexible.

Protests have been held over the past two weeks in state capitals across the country to protest proposed legislation to limit rights of public and private sector unions. The protests were sparked more than two weeks ago when Wisconsin Gov. Scott Walker presented his budget repair bill that included stripping unions of the right to bargain over pension and health care contributions. While the unions would retain the right to collective bargaining over pay, the bill would also cap wage increases to the rate of inflation.

In Indiana, Republican lawmakers proposed a right-to-work bill that would have allowed private-sector workers to opt out of joining unions, a move that prompted House Democrats to flee the state to avoid a vote.

All three of those states have a relatively large union presence. Ohio has 655,000 union members, both public and private, representing 13.7% of its workers. In Wisconsin, 355,000, or 14.2%, of its public and private workers belong to unions; in Indiana, 279,000, or 10.9%, of its workers belong to public or private unions.

In Ohio, Republicans have a 23-10 majority in the Ohio Senate, but six broke with GOP leaders and opposed the bill. “It was as close as it could be,” said Joe Schiavoni, the ranking Democrat on the Senate insurance, commerce and labor committee. He said he hoped House Republicans would “make sweeping changes if not throw the whole bill out and start all over.”

Union officials have conducted a coordinated effort to try to block bills in Wisconsin and Ohio that would curtail collective bargaining rights for public workers, and right-to-work legislation introduced in 13 states, including New Hampshire and Missouri. Those bills would allow workers in the private sector to opt out of paying dues or belonging to a union. Such legislation threatens the unions’ funding and their political clout heading into the 2012 elections.

Taking away collective bargaining rights for state public employees has occurred before. In 2005, Republican Indiana Gov. Mitch Daniels signed an executive order ending those rights for state workers.

In Wisconsin, Republican state senators on Wednesday passed a resolution fining 14 Democrats who left the state Feb. 17 to prevent a vote on Republican Gov. Walker’s bill restricting public employees’ collective-bargaining rights. The vote on the resolution didn’t require a quorum, unlike the budget bill that would curb bargaining.

The Wisconsin Democrats, who are in Illinois, will be fined $100 a day for their absence when the Senate is in session. Several of the Democrats went to Kenosha, Wis., Monday to meet with Republican Wisconsin Senate Majority Leader Scott Fitzgerald, said Fitzgerald spokesman Andrew Welhouse. But the fines seemed to set back efforts to break the impasse.

“Sen. Fitzgerald’s schoolyard-bully tactics aren’t productive to resolving the serious issues at stake,” Democratic Wisconsin Senate Minority Leader Mark Miller said in a statement. “His actions today undermine Democrats’ ability to have a professional relationship with him.”

Mr. Walker says his bill’s restrictions on bargaining rights, and a provision requiring employees to contribute more of their take-home pay toward pensions and health insurance, could be used to offset major cuts to school districts and local governments in the two-year budget he presented Tuesday.

Unions say the benefit changes proposed for workers amount to an average 8% pay cut. Unions representing state workers have agreed to the governor’s proposed financial concessions.

On Wednesday in Indiana, B. Patrick Bauer, the Democratic House minority leader, traveled to Indianapolis and met with Republican House leader Brian Bosma for about an hour to discuss concerns the Democratic caucus has with several bills that would restrict union rights. Mr. Bauer and other House Democrats fled to Illinois last week to halt those measures.

“No negotiations took place,” said Tory Flynn, a spokeswoman for Mr. Bosma. “The speaker needs the Democrats to return to the statehouse to do their jobs.”

The Wall Street Journal

By CHARLES G. KOCH
MARCH 1, 2011

Crony capitalism and bloated government prevent entrepreneurs from producing the products and services that make people’s lives better

Years of tremendous overspending by federal, state and local governments have brought us face-to-face with an economic crisis. Federal spending will total at least $3.8 trillion this year—double what it was 10 years ago. And unlike in 2001, when there was a small federal surplus, this year’s projected budget deficit is more than $1.6 trillion.

Several trillions more in debt have been accumulated by state and local governments. States are looking at a combined total of more than $130 billion in budget shortfalls this year. Next year, they will be in even worse shape as most so-called stimulus payments end.

For many years, I, my family and our company have contributed to a variety of intellectual and political causes working to solve these problems. Because of our activism, we’ve been vilified by various groups. Despite this criticism, we’re determined to keep contributing and standing up for those politicians, like Wisconsin Gov. Scott Walker, who are taking these challenges seriously.

Both Democrats and Republicans have done a poor job of managing our finances. They’ve raised debt ceilings, floated bond issues, and delayed tough decisions.

Senior Economics Writer Stephen Moore critiques Washington’s pending budget deal.
In spite of looming bankruptcy, President Obama and many in Congress have tiptoed around the issue of overspending by suggesting relatively minor cuts in mostly discretionary items. There have been few serious proposals for necessary cuts in military and entitlement programs, even though these account for about three-fourths of all federal spending.

Yes, some House leaders have suggested cutting spending to 2008 levels. But getting back to a balanced budget would mean a return to at least 2003 spending levels—and would still leave us with the problem of paying off our enormous debts.

Federal data indicate how urgently we need reform: The unfunded liabilities of Social Security, Medicare and Medicaid already exceed $106 trillion. That’s well over $300,000 for every man, woman and child in America (and exceeds the combined value of every U.S. bank account, stock certificate, building and piece of personal or public property).

The Congressional Budget Office has warned that the interest on our federal debt is “poised to skyrocket.” Even Federal Reserve Chairman Ben Bernanke is sounding alarms. Yet the White House insists that substantial spending cuts would hurt the economy and increase unemployment.

Plenty of compelling examples indicate just the opposite. When Canada recently reduced its federal spending to 11.3% of GDP from 17.5% eight years earlier, the economy rebounded and unemployment dropped. By comparison, our federal spending is 25% of GDP.

Government spending on business only aggravates the problem. Too many businesses have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors at bay.

Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.

The purpose of business is to efficiently convert resources into products and services that make people’s lives better. Businesses that fail to do so should be allowed to go bankrupt rather than be bailed out.

But what about jobs that are lost when businesses go under? It’s important to remember that not all jobs are the same. In business, real jobs profitably produce goods and services that people value more highly than their alternatives. Subsidizing inefficient jobs is costly, wastes resources, and weakens our economy.

Because every other company in a given industry is accepting market-distorting programs, Koch companies have had little option but to do so as well, simply to remain competitive and help sustain our 50,000 U.S.-based jobs. However, even when such policies benefit us, we only support the policies that enhance true economic freedom.

For example, because of government mandates, our refining business is essentially obligated to be in the ethanol business. We believe that ethanol—and every other product in the marketplace—should be required to compete on its own merits, without mandates, subsidies or protective tariffs. Such policies only increase the prices of those products, taxes and the cost of many other goods and services.

Our elected officials would do well to remember that the most prosperous countries are those that allow consumers—not governments—to direct the use of resources. Allowing the government to pick winners and losers hurts almost everyone, especially our poorest citizens.

Recent studies show that the poorest 10% of the population living in countries with the greatest economic freedom have 10 times the per capita income of the poorest citizens in countries with the least economic freedom. In other words, society as a whole benefits from greater economic freedom.

Even though it affects our business, as a matter of principle our company has been outspoken in defense of economic freedom. This country would be much better off if every company would do the same. Instead, we see far too many businesses that paint their tails white and run with the antelope.

I am confident that businesses like ours will hire more people and invest in more equipment when our country’s financial future looks more promising. Laying the groundwork for smaller, smarter government, especially at the federal level, is going to be tough. But it is essential for getting us back on the path to long-term prosperity.

Mr. Koch is chairman and CEO of Koch Industries, Inc. He’s the author of “The Science of Success: How Market-Based Management Built the World’s Largest Private Company” (Wiley, 2007).

The Wall Street Journal By ROBERT BARRO
FEBRUARY 28, 2011

Collective bargaining on a broad scale is more similar to an antitrust violation than to a civil liberty.

In Wisconsin, the angry faceof union power

How ironic that Wisconsin has become ground zero for the battle between taxpayers and public- employee labor unions. Wisconsin was the first state to allow collective bargaining for government workers (in 1959), following a tradition where it was the first to introduce a personal income tax (in 1911, before the introduction of the current form of individual income tax in 1913 by the federal government).

Labor unions like to portray collective bargaining as a basic civil liberty, akin to the freedoms of speech, press, assembly and religion. For a teachers union, collective bargaining means that suppliers of teacher services to all public school systems in a state—or even across states—can collude with regard to acceptable wages, benefits and working conditions. An analogy for business would be for all providers of airline transportation to assemble to fix ticket prices, capacity and so on. From this perspective, collective bargaining on a broad scale is more similar to an antitrust violation than to a civil liberty.

In fact, labor unions were subject to U.S. antitrust laws in the Sherman Antitrust Act of 1890, which was first applied in 1894 to the American Railway Union. However, organized labor managed to obtain exemption from federal antitrust laws in subsequent legislation, notably the Clayton Antitrust Act of 1914 and the National Labor Relations Act of 1935.

Remarkably, labor unions are not only immune from antitrust laws but can also negotiate a “union shop,” which requires nonunion employees to join the union or pay nearly equivalent dues. Somehow, despite many attempts, organized labor has lacked the political power to repeal the key portion of the 1947 Taft Hartley Act that allowed states to pass right-to-work laws, which now prohibit the union shop in 22 states. From the standpoint of civil liberties, the individual right to work—without being forced to join a union or pay dues—has a much better claim than collective bargaining. (Not to mention that “right to work” has a much more pleasant, liberal sound than “collective bargaining.”) The push for right-to-work laws, which haven’t been enacted anywhere but Oklahoma over the last 20 years, seems about to take off.

The current pushback against labor-union power stems from the collision between overly generous benefits for public employees— notably for pensions and health care—and the fiscal crises of state and local governments. Teachers and other public-employee unions went too far in convincing weak or complicit state and local governments to agree to obligations, particularly defined-benefit pension plans, that created excessive burdens on taxpayers.

In recognition of this fiscal reality, even the unions and their Democratic allies in Wisconsin have agreed to Gov. Scott Walker’s proposed cutbacks of benefits, as long as he drops the restrictions on collective bargaining. The problem is that this “compromise” leaves intact the structure of strong public-employee unions that helped to create the unsustainable fiscal situation; after all, the next governor may have less fiscal discipline. A long-run solution requires a change in structure, for example, by restricting collective bargaining for public employees and, to go further, by introducing a right-to-work law.

There is evidence that right-to-work laws—or, more broadly, the pro-business policies offered by right-to-work states—matter for economic growth. In research published in 2000, economist Thomas Holmes of the University of Minnesota compared counties close to the border between states with and without right-to-work laws (thereby holding constant an array of factors related to geography and climate). He found that the cumulative growth of employment in manufacturing (the traditional area of union strength prior to the rise of public-employee unions) in the right-to-work states was 26 percentage points greater than that in the non-right-to-work states.

Beyond Wisconsin, a key issue is which states are likely to be the next political battlegrounds on labor issues. In fact, one can interpret the extreme reactions by union demonstrators and absent Democratic legislators in Wisconsin not so much as attempts to influence that state—which may be a lost cause—but rather to deter politicians in other states from taking similar actions. This strategy may be working in Michigan, where Gov. Rick Snyder recently asserted that he would not “pick fights” with labor unions.

In general, the most likely arenas are states in which the governor and both houses of the state legislature are Republican (often because of the 2010 elections), and in which substantial rights for collective bargaining by public employees currently exist. This group includes Indiana, which has recently been as active as Wisconsin on labor issues; ironically, Indiana enacted a right-to-work law in 1957 but repealed it in 1965. Otherwise, my tentative list includes Michigan, Pennsylvania, Maine, Florida, Tennessee, Nebraska (with a nominally nonpartisan legislature), Kansas, Idaho, North Dakota and South Dakota.

The national fiscal crisis and recession that began in 2008 had many ill effects, including the ongoing crises of pension and health-care obligations in many states. But at least one positive consequence is that the required return to fiscal discipline has caused reexamination of the growth in economic and political power of public-employee unions. Hopefully, embattled politicians like Gov. Walker in Wisconsin will maintain their resolve and achieve a more sensible long-term structure for the taxpayers in their states.

Mr. Barro is a professor of economics at Harvard and a senior fellow at Stanford University’s Hoover Institution.

Republican state senator from Wisconsin tells local TV station WTMJ state Senate Democrats have not only left the Capitol, but they have all boarded the same bus and left the state. And now those reports have been confirmed by at least one Senate Democrat.*

That same GOP state senator, Alberta Darling, also said she sent most of her staff home because she’s worried about their safety amid the growing protester unrest at the Capitol.

The Democrats are trying to avoid voting on an emergency budget measure that would strip state workers’ unions of most collective bargaining rights

UPDATE:

A Democratic aide confirmed to the Associated Press that state Senate Democrats have left the state:

As ever-growing throngs of protesters filled the Capitol for a third day, the 14 Democrats disappeared from the Capitol. They were not in their offices, and aides said they did not know where any of them had gone.

Hours later, one of them told The Associated Press that the group had left Wisconsin.

UPDATE II:

One of the missing Democrats has told the AP that they have, in fact, left the state:

One member of the group told The Associated Press that they had all left Wisconsin in an effort to force Republicans to negotiate.

*UPDATE III:

Democratic State Sen. Jon Erpenbach confirmed to Newsradio 620 WTMJ that he and all of his Democratic colleagues boarded a bus and left the state.

“We’re not in Wisconsin right now,” Erpenbach said.  “The reason why we‘re doing this is because there are some jurisdictional issues that we’d be dealing with.”

Giving Workers a Free Choice

One of the under-appreciated fault lines in the U.S. economy is between the 22 “right-to-work” states and the rest of the country. The for­mer have tended to do much better economically. Now some non-right-to-work states such as Indiana, Wisconsin and Michigan are thinking about joining this club that allows workers to opt-out of union membership.

Contrary to much union rhetoric, right-to-work laws don’t ban or bust unions. They sim­ply grant individual workers the right to join or not to join, even once a workplace is orga­nized by a union. Workers, who decline to join the union can’t be forced to have dues taken out of their paycheck and thus used to finance union political campaigns. Most right-to-work states are in the South and West, and only Oklahoma has adopted this freedom to choose in the last 20 years.

Right-to-work spates outperform forced-union states in almost every measurable cate­gory of worker well-being. A new study in the Cato Journal by economist Richard Vedder finds that from 2000 to 2008 some 4.7 million Americans moved from forced-union to right-to-work states.

The study also found that from 1977 through 2007 there was “a very strong and highly statistically significant relationship be­tween right-to-work laws and economic growth.” Right-to-work states experienced a 23% faster rise in per capita income over that period. The two regions that have lost the most jobs in recent years, the once-industrial Northeast and Midwest, are mostly forced-union states.

Indiana is a case study in the negative effects of forced unionism. Governor Mitch Daniels recently explained why his state lost a bid for a new Colgate factory that would have employed hundreds: “We did absolutely every­thing we could do… . We made an offer we believe was competitive in every other respect, but they [Col­gate] want to be in a right-to-work state.” Mr. Daniels adds that the lack of a right-to-work law “does hold us back economically. There is no doubt about it.” He estimates that when competing with Southern states for businesses, “a very large number perhaps as many as a quarter- of the deals we don’t get a shot at are for just this reason.”

This damage has motivated Indiana Repub­licans, who now control both legislature chambers, to announce that they want to pass a right-to-work law. Unions immediately went to Defcon 1, Democrats are up in arms, and Re­publicans could yet buckle under this union pressure. Even Mr. Daniels, who has stood up to union opposition in the past, seems hesi­tant. He told the Indianapolis Star that right to work “may be worth a look,” but he added it “is not on my agenda.” He’s worried that the issue so antagonizes unions that it could de­rail the rest of his legislative agenda.

We hope Republicans don’t flinch. Right-to-work laws make states more economically competitive, but the bigger issue is about in­dividual rights. Workers should have the right to join a union but also the right not to. Indi­ana and other states with new Republican ma­jorities have a rare opportunity to pass a ma­jor reform that will reduce union power, help to attract new jobs, and liberate workers from union coercion.   .