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Employment

Return to Common Sense

December 3, 2014

Section: Domestic – Employment

“Increase union accountability and effectiveness by requiring re-certification elections every five years to ensure unions continue to meet member needs and unions continue to represent their members.”

Government's role should be only to keep the playing field level, and to work hand in hand with business on issues such as employment. But beyond this, to as great an extent as possible, it should get the hell out of the way.” Jesse Ventura.

 

Philosophy (Background, Issues, Objectives):

Department of Labor is a U.S. Cabinet level department responsible for:

Americans work more, enjoy their work more, and are happier than any other country.

o   No difference in satisfaction found between those with above or below average incomes.

o   Two thirds of working people would continue to work, even after having money to stop working.

o   Happy people work more hours per week than unhappy people.

o   Happy people work more in their free time as well.

o   People with more hours per week to relax outside their jobs are not happier.

o   Employment is merely one part (albeit an important part) of your broader work during your life on earth.

o   It includes teaching your children, volunteering, working on your house or yard, spending time with a community organization, serving your church, becoming an informed citizen, or working on your mind and soul by studying and praying.

Organized labor was successful in the 1930s long after many workplace conditions were implemented already, based on company best interests and employee retention.

o   An eight hour day meant the plants could run three shifts, 24 hours a day, speeding production and reducing costs.

o   In 1922, Ford shortened the workweek from the industrial standard of 50 hours, including half a day on Saturday, to a five-day, 40-hour week.

o   With overtime, Ford could run full shifts on the weekend and keep his plants busy 24/7/365.

o   “Prevailing wages," as determined by the federal government, were in error 100% of the time.

o   Davis-Bacon wage rates are on average 22% higher than the standard wage rate in an area.

Union membership continues to decline, except in the public sector, and is at an overall low.

o   In 2011 6.9% of private sector workers are union members.

o   Corruption (pension fund abuse) continues to plague union leadership.

o   Unions have begun to merge internationally as a way to increase membership and power.

o   Public “card check” agreements are misrepresented and misused to recognize unions.

o   Misuse of member funds for political activism, instead of member support, is undermining support.

o   Right-To-Work laws allow private-sector workers to opt out of joining unions.

o   24 states have passed right-to-work laws.

§  Right-to-work states were enacted by states on the Great Plains and in the South.

§  Right-to-work states have the lowest U.S. unemployment rates.

§  New Hampshire is the first New England states to propose a right-to-work law.

§  Indiana and Michigan are the latest to pass Right-To-Work laws.

§  The share of employment in the right-to-work states has increased from 24% of employment in 1955 to about 3% in 2011.

§  When companies decided to produce autos in the United States, they chose to locate in right-to-work states, including Kentucky, Texas, Mississippi, and Alabama.

§  Foreign companies now produce about 50% of autos manufactured in the United States, and this production share will likely increase in coming years.

o   Deregulation and free trade have made the economy more competitive.

o   Unionized companies cannot pass higher labor costs on to the consumers, since cheaper alternatives will underbid them.

o   Modern human resource management practices treat employees as a valuable resource, resulting in high satisfaction.

o   Many employees and employers would like employee involvement (EI) programs to discuss workplace issues.

o   60% of workers prefer EI programs to improve working conditions over either government regulations or labor unions.

o   The time for unions may be over; they have run their course and usefulness.

o   Public sector unions are a monopoly, whose product, by law, can’t be refused.

§  There has been considerable research on the effects of collective bargaining on wages, and consensus estimates are that unions raise wages by about 10 to 15% above the rate that would prevail in their absence.

o   In 1959, Wisconsin became the first state to allow its public employees to unionize, and other states followed suit.

o   In 2011 37% of public-sector workers are union members, including:

§  Service Employees International Union (SEIU).

§  American Federation of State, County, and Municipal Employees (AFSCME).

§  American Federation of Government Employees (AFGE).

o   51% of all union members are in the public sector – federal, state, or local.

o   Federal employment pay gap between public and private sector employment is increasing at breakneck speed. 

§  Public employees are earning an average $13.38 per hour in benefits, while private sector workers earn only $7.98.

§  Government benefits rose three times more than those in the private sector.

o   Congress has exempted itself from laws allowing staff to unionize.

o   During a typical workweek, private-sector employees work about 41.4 hours, while federal workers put in 38.7 hours, and state and local government employees work 38.1 hours.

o   In a calendar year, private-sector employees work the equivalent of 3.8 more 40-hour workweeks than federal employees and 4.7 more weeks than state and local government workers.

A professional civil service was created to deliver good government through two salient characteristics: able bureaucrats are selected by competitive examination, and tenure protects workers from political interference in doing their jobs.  

o   Such systems tended to minimize corruption, keep government employment costs reasonable, and maintain stability.  

o   The professional Civil Service was corrupted to reward members of politically favored groups.  

o   Executive Order 10988 in 1962 allowed unionization of the federal work force.

o   When you legally protect public unions, it sets up a client relationship among the civil servants, their unions, and the politicians that guarantees corruption.  

o   Government workers cannot use their time to promote one political party over another (federal ruling on Cook County, Chicago).

o   Public sector unions have become one of the biggest sources of political donations, primarily to Democrat candidates.

o   It's undeniable that these programs increased the cost, lowered the qualifications, and made the Civil Service more responsive to the politicians. 

Right to work generally refers to section 14b of the 1947 Taft-Hartley Act, which allows states to bar union shop collective bargaining agreements in which paying union dues is required for many jobs.

States provide unemployment insurance (UI) benefits to involuntarily unemployed workers.

o   Extended UI benefits cause some unemployed workers to take longer to find new work.

o   Extending either the amount or the duration of UI benefits increases the length of time that workers remain unemployed.

o   Roughly one-third of workers receiving UI benefits find work immediately once their benefits expire.

o   Workers’ skills deteriorate when they are unemployed, and by encouraging longer unemployment, extended benefits will reduce workers’ wages.

o   Workers fund accounts with paycheck deductions.

o   Unused funds become available for withdrawal at retirement

Outsourcing is not a zero sum game.

o   In 2006 employment has declined near 12,000 jobs a month in the manufacturing.

o   Employment has declined near 1,000 jobs a month in construction.

o   Job gains have averaged 167,000 per month in the service providing sector.

o   Between 2000 and 2003, number of workers in manufacturing declined by 2.8 million.

§  Low skilled jobs have been automated, while higher skilled jobs are in demand.

§  Skilled construction workers such as plumbers, electricians, welders are in high demand.

o   Overall unemployment rate has shrunk to 4.5%.

o   In 2006 manufacturing output and Return on Equity reached an all time high.

o   In 2006 manufacturing revenue and profit reached an all time high.

o   In 2006 value of U.S. manufacturing exports reached an all time high.

o   U.S. leads world in labor productivity at $63,885 of wealth per year, or $35.63 per hour.

Minimum wage is ineffective as a poverty tool, because of inefficient targeting of the poor.

 

Principles:

USA participates in a global economy and jobs move to where they are most efficient.

Incent unemployed to become employed.

Unions that outlive their usefulness should de-certify to release their members from dues.

 

Recommendations:

Short Term, Decrease government control and interference in employment practices.

Eliminate Job Corps residential job training program ($3.1B).

De-federalize the minimum wage:

Reform unemployment insurance:

Reform pension calculation to stop pension spiking based on last two to three years earnings.

Increase union accountability:

o   Require Congress employees to conform to labor organization policies.

o   Union members must vote on use of union dues for political activism.

o   Ensure continued full funding for the Office of Labor Management Standards, the union watchdog agency.

Pass a National Right-to-Work Law.

Measure employment accurately:

Long Term, Remove federal interference in private sector employment.

Abolish the federal Department of Labor as not covered under enumerated powers ($209.3 billion annually).

o   Offer voluntary Personal Unemployment Savings Accounts, funded by employees.

Repeal the National Labor Relations Act (NLRA) of 1935.

Repeal Executive Order 10988 authorization for federal work force unionization.

Repeal the Davis-Bacon Act to allow market to set prevailing wage rate (saves $9B annually).

 

References:

Does the Minimum Wage Reduce Poverty” by Richard K. Vedder and Lowell E. Galloway dated June 2001 published by The Employment Policies Institute on http://www.epionline.org/studies/vedder_06-2001.pdf .

And Away They Go” by Bruce Stokes dated March 26, 2004 published by National Journal.

Ten Myths about Jobs and Outsourcing” by Tim Kane, Brett Schaefer, and Alison Fraser, dated April 1, 2004, published by The Heritage Foundation on http://www.heritage.org/Research/TradeandForeignAid/wm467.cfm .

Outsourcing Debate Tainted by Myths, Misconceptions” by Radley Balko dated April 22, 2004 published by Fox News at http://www.foxnews.com/story/0,2933,117820,00.html .

The Outsourcing Bogeyman” by Daniel W. Drezner dated June 2004 published by Foreign Affairs on http://www.foreignaffairs.org/20040501faessay83301/daniel-w-drezner/the-outsourcing-bogeyman.html .

Hard at Work: Why the Unemployment Rate Accurately Reflects the Strength of the Labor Market” by James Sherk dated June 15, 2006 published by The Heritage Foundation on http://www.heritage.org/Research/Labor/bg1942.cfm .

Minimum Wage Workers’ Incomes Rise When the Minimum Wage Does Not” by James Sherk dated July 28, 2006 published by The Heritage Foundation on http://www.heritage.org/Research/Economy/wm1181.cfm .

Who Earns Minimum Wage – Single Parents or Suburban Teenagers” by Rea S. Hederman Jr. and James Sherk dated August 3, 2006 published by The Heritage Foundation on http://www.heritage.org/Research/Economy/wm1186.cfm .

Low Income Workers May be Worse Off if Congress Increases the Minimum Wage” by Rea S. Hederman Jr. and Sam Hyman dated August 3, 2006 published by The Heritage Foundation on http://www.heritage.org/Research/Economy/wm1187.cfm .

Union in Decline and Under Review” by Tim Kane and James Sherk dated August 29, 2006 published by The Heritage Foundation on http://www.heritage.org/Research/Labor/wm1202.cfm .

Card Check Undermines Workplace Democracy” by James Sherk dated November 14, 2006 published by The Heritage Foundation at http://www.heritage.org/Research/Labor/wm1255.cfm .

Minimum Wage Hikes Hurt Unskilled and Disadvantaged Workers’ Job Prospects” by James Sherk dated January 2, 2007 published on The Heritage Foundation at http://www.heritage.org/Research/Labor/wm1294.cfm .

Easing the Pain: Let States Opt Out of a Minimum Wage Hike” by James Sherk dated January 2, 2007 published by The Heritage Foundation at http://www.heritage.org/Research/Labor/wm1295.cfm .

Tough times at the UAW” by George Will dated January 10, 2007 published by Town Hall at http://www.townhall.com/columnists/GeorgeWill/2007/01/10/tough_times_at_the_uaw .

Labor Unions Team With Liberals for Ambitious Agenda” by Mike Franc dated February 16, 2007 published by Human Events Online at http://www.humanevents.com/article.php?id=19448 .

Job Corps: A Consistent Record of Failure” by David B. Muhlhausen dated February 28, 2007 published by The Heritage Foundation at http://www.heritage.org/Research/Labor/wm1374.cfm .

Top 10 Labor Union Power Grabs” dated March 13, 2007 published by Human Events Online at http://www.humanevents.com/article.php?id=19793 .

In Defense of Income Inequality” by Peter Schwartz dated March 28, 2007 published by Capitalism Magazine at http://capmag.com/article.asp?ID=4940 .

Unions for a Global Economy” by Harold Meyerson dated April 26, 2007 published by Washington Post at http://www.washingtonpost.com/wp-dyn/content/article/2007/04/25/AR2007042502409_pf.html .

Curing the Blue-Collar Blues” by John Silvia dated May 23, 2007 published by National Review Online at http://article.nationalreview.com/?q=NjhhMGMxNmJkMDk2ZTc0NWYyZjYzZjllZDNlNjRiMTM= .

Outsourcing Myths” dated June 19, 2007 published by Investors Business Daily at http://www.ibdeditorials.com/IBDArticles.aspx?id=267145498195664 .

Happy for the Work” by Arthur C. Brooks dated June 20, 2007 published by American Enterprise Institute at http://www.aei.org/publications/pubID.26371,filter.all/pub_detail.asp .

Liberals Target Labor-Union Watchdog” by Robert B. Bluey dated August 20, 2007 published by Human Events Online at http://www.humanevents.com/article.php?id=22009 .

The State of the American Worker 2007: Attitudes About Work in America” dated August 21, 2007 published by American Enterprise Institute at http://www.aei.org/docLib/200408301_work14886.pdf .

Thriving in a Global Economy” by Daniel Ikenson dated August 28, 2007 published by Cato Institute at http://www.freetrade.org/pubs/pas/tpa-035es.html .

Upwards Leisure Mobility: Americans Work Less and Have More Leisure Time Than Ever Before” by James Sherk dated August 31, 2007 published by The Heritage Foundation at http://www.heritage.org/Research/Labor/wm1596.cfm .

Americans Are World’s Most Productive Workers, UN Report Finds” dated September 3, 2007 published by Fox News at http://www.foxnews.com/story/0,2933,295556,00.html .

Joel Kotkin Debunks the Myth of Deindustrialization” by Bill Steigerwald dated September 4, 2007 published by Town Hall at http://www.townhall.com/columnists/BillSteigerwald/2007/09/04/joel_kotkin_debunks_the_myth_of_deindustrialization .

Trading Up – How Expanded Trade Has Delivered Better Jobs and Higher Living Standards for American Workers” by Daniel Griswold dated October 25, 2007 published by CATO Institute at http://www.freetrade.org/node/782 .

The Coming Crackdown with Public Labor” by Lewis M. Andrews dated March 12, 2008 published by Human Events Online at http://www.humanevents.com/article.php?id=25441 .

Extended Unemployment Insurance – No Economic Stimulus” by James Sherk and Karen A. Campbell dated November 18, 2008 published by The Heritage Foundation at http://www.heritage.org/Research/Economy/cda08-13.cfm .

Myths of Organized Labor” by Ronnie Schreiber dated December 16, 2008 published by Front Page Magazine at http://www.frontpagemagazine.com/Articles/Read.aspx?GUID=F740D12D-DB5D-46AF-9D28-53E7FFF08C74 .

From civil servants to the new nobility” by Harry Eisenberg dated February 15, 2009 published by World Net Daily at http://wnd.com/index.php?fa=PAGE.view&pageId=88886 .

Taxpayers on the Hook for New Government Benefit?” by Darrell Issa dated June 4, 2009 published by Human Events at http://www.humanevents.com/article.php?id=32141 .

Time for Congress to Work Under the Same Rules as the Private Sector” by James Sherk and ryan McDonnell dated October 13, 2009 published by The Heritage Foundation at http://www.heritage.org/Research/Labor/bg2326.cfm .

Beyond Card Check” by Kevin Mooney dated December 1, 2009 published by The American Spectator at http://spectator.org/archives/2009/12/01/beyond-card-check .

Public-sector Unions Bleed Taxpayers to Help Dems” by Michael Barone dated February 8, 2010 published by Town Hall at http://townhall.com/columnists/MichaelBarone/2010/02/08/public-sector_unions_bleed_taxpayers_to_help_dems .

How to Save $11.4 Billion This Year” by Steve King dated March 4, 2010 published by The American Spectator at http://spectator.org/archives/2010/03/04/how-to-save-114-billion-this-y .

Michigan a Right to Work State?” by F. Vincent Vernuccio dated July 16, 2010 published by The American Spectator at http://spectator.org/archives/2010/07/16/michigan-a-right-to-work-state .

Unionized into Bankruptcy” by Tait Trussell dated August 3, 2010 published by Front Page Magazine at http://frontpagemag.com/2010/08/03/unionized-into-bankruptcy/ .

Fourteen Ways to Reduce Government Spending” by Grover Norquist dated August 18, 2010 published by Americans for Tax Reform at http://www.atr.org/files/files/081810pr_14_Specific_Spending_Reduction_Ideas%281%29.pdf .

The New Face of the Union Movement: Government Employees” by James Sherk dated September 1, 2010 published by The Heritage Foundation at http://www.heritage.org/Research/Reports/2010/09/The-New-Face-of-the-Union-Movement-Government-Employees .

The Enemy Within” by Iain Murray and F. Vincent Vernuccio dated December 14, 2010 published by National Review Online at http://www.nationalreview.com/articles/255038/enemy-within-iain-murray-brf-vincent-vernuccio .

“Sen. Paul Proposes Serious Cuts” by Chris Edwards dated January 31, 2011 published by Cato Institute at http://www.downsizinggovernment.org/sen-rand-paul-proposes-serious-cuts .

Greece, Not Egypt” by Joseph Ashby dated February 18, 2011 published by American Thinker at http://www.americanthinker.com/2011/02/greece_not_egypt.html .

Extended Unemployment Insurance Benefits” by James Sherk dated February 22, 2011 published by The Heritage Foundation at http://www.heritage.org/Research/Reports/2011/02/Extended-Unemployment-Insurance-Benefits .

Examining the Department of Labor’s Implementation of the Davis-Bacon Act” by James Sherk dated April 28, 2011 published by The Heritage Foundation at http://www.heritage.org/Research/Testimony/2011/04/Examining-the-Department-of-Labors-Implementation-of-the-Davis-Bacon-Act .

Bills Try to Curb Reach of Unions” by Kris Maher and Amy Merrick dated May 9, 2011 published by The Wall Street Journal at http://online.wsj.com/article/SB10001424052748704810504576305642336428176.html?mod=WSJ_WSJ_US_News_5 .

Department of Labor: Proposed Spending Cuts” by Chris Edwards dated June 2011 published by Cato Institute at http://www.downsizinggovernment.org/labor/spending-cuts .

Freeing Labor Markets by Reforming Union Laws” by Charles W. Baird dated June 2011 published by Cato Institute at http://www.downsizinggovernment.org/labor/reforming-labor-union-laws .

Abolish the NLRB (and the NLRA)” by Chris Edwards dated June 20, 2011 published by Cato Institute at http://www.downsizinggovernment.org/abolish-nlrb-and-nlra .

Right to Work Increases Jobs and Choices” by James Sherk dated November 9, 2011 published by The Heritage Foundation at http://www.heritage.org/Research/Reports/2011/11/Right-to-Work-Increases-Jobs-and-Choices .

America’s Public Sector Union Dilemma” by Lee E. Ohanian dated November 26, 2011 published by The American Magazine at http://www.american.com/archive/2011/november/americas-public-sector-union-dilemma.

Unemployment Insurance is an Expensive Free Lunch” by Chris Edwards dated December 19, 2011 published by Town Hall at http://finance.townhall.com/columnists/chrisedwards/2011/12/19/unemployment_insurance_is_an_expensive_free_lunch .

“Unions Are the Political Dinosaur in the Room” by Ileana Johnson Paugh dated December 27, 2011 published by Canada Free Press at http://www.canadafreepress.com/index.php/article/43508 .

“Unions’ Declining Appeal Shows Need for Alternatives” by James Sherk dated January 27, 2012 published by The Heritage Foundation at http://www.heritage.org/research/reports/2012/01/declining-union-membership-shows-need-for-alternative-choices .

“Government Unions Lose” by Deroy Murdock dated June 8, 2012 published by National Review Online at http://www.nationalreview.com/articles/302117/government-unions-lose-deroy-murdock .

U.S. Civil Service How Progressives Prostituted Their Own Child” by Jack Curtis dated June 21, 2012 published by American Thinker at http://www.americanthinker.com/2012/06/us_civil_service_how_progressives_prostituted_their_own_child.html .

Government Employees Work Less than Private-Sector Employees” by Jason Richwine dated September 11, 2012 published by The Heritage Foundation at http://www.heritage.org/research/reports/2012/09/government-employees-work-less-than-private-sector-employees .

The Female Wage Gap Is a Major Economic Myth” by Dean Kalahar dated November 5, 2012 published by Real Clear Markets at http://www.realclearmarkets.com/articles/2012/11/05/the_female_wage_gap_is_a_major_economic_myth_99969.html .

The Underworked Public Employee” by Andrew G. Biggs and Jason Richwine dated December 4, 2012 published by The Wall Street Journal at http://online.wsj.com/article/SB10000872396390443854204578058660248073962.html?mod=hp_opinion .

A Guide to Understanding International Comparisons of Economic Mobility” by Donald Schneider dated July 29, 2013 published by The Heritage Foundation at http://www.heritage.org/research/reports/2013/07/a-guide-to-understanding-international-comparisons-of-economic-mobility .

Public Sector Unions Must be Abolished” by Michael Bargo Jr. dated October 5, 2013 published by American Thinker at http://www.americanthinker.com/2013/10/public_sector_unions_must_be_abolished.html .

Public Sector Unions are a Shadow Political Party” by Michael Bargo Jr. dated November 10, 2013 published by American Thinker at http://www.americanthinker.com/2013/11/public_sector_unions_are_a_shadow_political_party.html .

10 Programs to Eliminate in the January 2014 Spending Bill and Save $10.2 Billion” by Romina Boccia dated January 3, 2014 published by The Heritage Foundation at http://www.heritage.org/research/reports/2014/01/10-programs-to-eliminate-in-the-january-2014-spending-billand-save-102-billion .

Repeal Davis-Bacon” by Lamar Alexander dated July 30, 2014 published by National Review Online at http://www.nationalreview.com/article/384107/repeal-davis-bacon-lamar-alexander .

A Better Way to Work” by Zachary Gappa dated December 3, 2014 published by American Clarion at http://www.americanclarion.com/better-way-work-34891 .

 

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