Is Barrack Obama the President of the United States or the President of the AFL/CIO?

(This is an update of a previous posting)

In the first year of this presidency, the current administration has displayed deference, almost subservience, to organized labor. Deference would not be surprising, since organized labor is the single largest contributor to the Democratic Party. Organized labor is now getting treatment which discriminates against non-union workers and those policies are now forming a disturbing trend.

First, the automobile industry bailout: Money was given to prop up General Motors and Chrysler instead of allowing the companies to reorganize under a Chapter 11 bankruptcy. In fact, the US government now owns the majority stake in the companies. In bailing out these companies, public money was taken, in the form of taxes, from auto workers in the south whose average salary is about forty three dollars an hour and given to United Auto Workers members in Michigan whose average salary is about seventy one dollars an hour. The Obama administration portrayed the action as helping the General Motors and Chrysler corporations. In fact, a chapter 11 bankruptcy would have been much more advantageous to the companies as it would have allowed renegotiation of the labor contracts and would have relieved the pressure of legacy costs to the companies. Additionally, it would not have cost tax money. The money was really a bail out of the United Auto Workers, not the companies. It hasn’t worked and the two companies have shown no signs of changing fortunes. At a recent auto show, all of the awards for vehicle of the year in all classes were swept by Ford Motor Company, the company that refused the bail out.

Second, the school voucher program in Washington, DC: The voucher program in Washington, DC cost about $7600 per student. The schools at which the voucher students attended had 90% higher scores in language skills tests and 95% higher scores in mathematics testing. The interesting paradox is that the Washington, DC public school system spends about $13,000 (almost twice as much) per student. The omnibus spending bill removed funding for the school voucher program. The Democrats, in their infinite concern for children, cancelled a program which cost taxpayers half as much and resulted in markedly better school performance. Why would they do that? The answer is easy. The teachers union has been paid off for supporting Democratic candidates in the election. The Democrats are willing to harm poor children and their families in order to pay off the union.

Third, the stimulus construction projects: The stimulus bill passed by the Democratic Congress and the Obama administration has a provision that stipulates that stimulus construction projects have to pay union wages to workers on stimulus projects. Why would that provision be in the bill? After all, it would result in less money to do projects and the ones that are completed would cost more. The reason is easy. Governments don’t build roads and bridges, private contractors do. Those contracts are awarded by bid. A non-union company can submit a lower labor cost bid than a union company. The raw materials cost will be the same. Therefore, the non-union bid will generally be lower. This provision in the bill is expressly for the benefit of union contractors to receive stimulus money contracts for infrastructure. The unions will receive money but the taxpayers will get less and more expensive infrastructure projects completed for their money.

Fourth, the “Employee Free Choice Act”: This piece of legislation is close to criminal. The rules would change and take away the right of workers to a secret union election ballot. To organize a union, all that organizers would need is 51% of employees to sign a card and the union would be installed. The cards would be public and the period of time to have them signed in unlimited. This is like the mob protection racket in Chicago in the 1930s. Union thugs intimidating workers is not progress. The intimidation may not even be the worst part of the bill. In the event of non-resolution of a union contract, after a set period of time the federal government will set wages. Hmmm… with the Democrats in power, I wonder whose side would be favored? Therefore, people who are intimidated into a union will have their wages set by the federal government. This is an economic disaster of the highest magnitude just waiting to happen. It will lead to companies closing because they are no longer profitable and revival of the union thugs who have essentially gone away (with the exception of the Service Employees International Union) due to people's reluctance to embrace unions. South Carolina just won the competition for the new Boeing 787 assembly plant largely based on Boeing not being forced to deal with labor unions.

Fifth, the health care proposal currently before Congress: More than sixty years after his death, the United States is still being hurt by Franklin Delano Roosevelt’s financial policies. When FDR froze wages as part of his recovery policy, the only way to compete with compensation packages for employees was to add benefits. This was particularly true in collective bargaining agreements. Subsequently, since they could not raise wages, labor unions developed expensive and comprehensive health care benefits for their members. The current Democratic mantra is always to pay for everything by “taxing the rich”, despite the fact that it is not fiscally possible to do that. Then again, they never let logic or facts get in the way of policy. The problem with “taxing the rich” is that a significant portion of higher income earners are actually small businesses which file tax returns as individual returns and the people with large benefit packages tend to be union members. Since the unions put the Democrats in office, they expect some pay back. It was announced yesterday that the conference bill (which in the Senate version was supposed to be financed partly by taxes on “Cadillac heath plans”) now has an exemption for organized labor. In other words, if you are not in a union, you pay higher taxes but if you are in a union, you do not. Not only is that a blatant pay off to labor unions, it is likely not to pass a constitutionality challenge. As an aside, I think the pop-up timer is out on the current health care bill. Put a fork in it, it is done.

In all five examples, it is easy to see the pay off to the various unions by the Democratic Congress and the Obama administration. It is brazen and open. It is also going to massively harm the United States economy and prevent recovery. Most people in the United States don’t regularly follow politics, but they certainly recognize dishonesty and graft when they see it. A recent poll which asked people if they desired to have their jobs converted to union jobs had only 9% say yes and a resounding 83% say no. Since union membership is at an all-time low, preferential treatment for labor unions at the expense of the majority of the population is not very smart politically, as well. This is the Democratic version of the organized crime “protection” rackets and is disgusting. The current administration’s poll numbers are tanking and the mid-term elections may become disastrous for Democrats should the course not be adjusted.