Labor bill still a bad idea

So-called “card check” legislation may be dead — and that’s good news. But Democrats in Congress continue their push to stack the deck in favor of unions desperately trying to reverse a decades-long trend of declining private sector participation.

Big Labor has apparently given up on card check — which would have essentially killed secret ballot elections, instead allowing unions to organize a workplace by simply getting a majority of workers to sign a card in support — because even some liberal Democrats were squeamish about this brazen and unpopular power play.

But the “compromise” bill that unions and their congressional allies hope to present soon isn’t much better, even without that poison pill. It still includes a provision demanding that a government arbiter step in if labor and management can’t reach agreement on their first contract within four months.

Binding arbitration has been a disaster in the public sector, driving up costs virtually everywhere it is in place and removing incentives for labor to negotiate. It would be even worse if applied to the private sector. Do we really want some panel of federal “contract czars” writing and imposing the terms and conditions of a labor deal without the approval of either management or the workers?

“A company forced into binding arbitration will be frozen for two years (the duration of the initial contract) from making any changes to any aspect of its business that is covered by the contract,” noted Forbes columnist Shikha Dalmia in a recent Wall Street Journal op-ed. “Literally every issue …. could potentially become subject to review by a government panel that has neither the company specific knowledge nor the incentive to turn a profit.”

Business interests have vowed to fight the new bill over the arbitration issue. Good. And any Republican who might be tempted to jump ship and support a measure without card check should take a serious look at how binding arbitration will cripple the ability of businesses to innovate or react to changing market conditions.

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