What's Wrong With the Employee Free Choice Act?
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Description
The first one hundred days of the Obama administration have been marked by its determination to pass the revolutionary Employee Free Choice Act (EFCA), which was introduced in Congress on March 10, 2009. As of this writing, it looks as though the bill will not pass this year, given the unanimous Republican opposition to it in the Senate. But the issue is likely to be revived again during the Obama presidency, as it has been before, so it is important to examine its provisions because it raises important issues of principle. In addition, it has gathered an impressive level of political and intellectual support. In particular, the EFCA has received the endorsement of the Democratic National Convention Platform Committee of prominent economists, under the aegis of the Economic Policy Institute, and of President Obama and Vice President Biden. In a recent congressional hearing before the 110th Congress on February 8, the EFCA was defended as the means to return to the management-labor balance under the National Labor Relations Act of 1935 (the NLRA, in its original form is commonly referred to as the Wagner Act), said to be the surest way to revive the fortunes of a shrinking middle class. The reality, however, is otherwise. The EFCA would hamper the efficiency of labor markets in ways that make the road to economic recovery far steeper than necessary. Generally, it will severely hurt the very persons whom it intends to help. Dire consequences of this sort do not occur by happenstance. They are driven by a misconceived vision that strengthening union monopolies will improve the overall operation of labor markets. But monopolies are as socially unwise in labor markets as they are everywhere else. Shrinking the size of the social pie hurts many in the short run and benefits no one in the long run. Wages and productivity are inextricably linked in the economy as a whole. The central mission of sound labor policy is to grow the economic pie to create greater opportunities for all. Employers should not be demonized; workers should not be canonized. We want firms and workers to make the best deals for themselves by playing within the rules of the game. The key task of labor policy is to determine how to best structure those rules. Accordingly, part I of this chapter outlines the proper role for freedom of contract in organizing labor markets. Part II compares this vision with the modern collective bargaining regime under the NLRA as it is currently organized. Part III explains the overall decline in labor unions over the past fifty years. Part IV explores how the key provisions of the EFCA will further deteriorate our overall economic conditions, followed by a brief conclusion.
Source Publication
Reacting to the Spending Spree: Policy Changes We Can Afford
Source Editors/Authors
Terry L. Anderson, Richard Sousa
Publication Date
2009
Recommended Citation
Epstein, Richard A., "What's Wrong With the Employee Free Choice Act?" (2009). Faculty Chapters. 388.
https://gretchen.law.nyu.edu/fac-chapt/388
