Secretary Elaine Chao


The Coming Assaults on America's Competitiveness

As the Congress gets underway in 2009, its leaders are going to be under enormous pressure to bow to the priorities of labor union leaders and other special interest groups.  But especially in this difficult economic environment, shortsighted fealty to liberal agendas could have ruinous consequences for American workers and our nation’s competitiveness in the worldwide economy.

Despite the overwhelming evidence that trade is a huge benefit to Americans and history’s painful teachings that protectionism prolongs economic downturns, the new congressional sentiment will be to choke off trade.  This will fly in the face of the fact that the second quarter’s 2.8 percent growth in the gross domestic product was primarily due to America’s ability to trade with other nations. Another important truth is that American jobs supported by exports pay 13 to 18 percent more than average.

Since the North American Free Trade Agreement, which was signed by President Bill Clinton, went into effect in the 1990s, manufacturing output in the U.S. has risen by more than 56 percent.  The 141 percent increase in manufactured exports over the past decade contributed to that rise.  One of every three acres of U.S. agriculture is now planted for export.  In 2007, America exported $513 billion in services, with a record $128 billion trade surplus in the service sector.  Service exports have increased 103 percent since 1994.  Eight out of every 10 jobs in America is in services so this is an especially positive result of multilateral trade negotiation. 

Trade has helped raise America’s gross domestic product by 48 percent in the past 13 years, and over that period 23 million jobs were added.  America should continue to lead the way in advancing free and fair trade in all the world’s economies so that we can further open foreign markets through additional trade agreements and negotiations that promote America’s interests.  But the momentum in the 2009 Congress will be for shortsighted protectionism that impedes international trade and kills American jobs.

Another top priority in the new Congress will be “card check” legislation to deprive workers of the ability to vote privately in workplace unionization elections, a vital worker protection that dates back over 60 years to the Taft-Hartley Act of 1947.  This push is on despite the fact that the vast majority of workers – including rank-and-file union members – want to keep the private ballot system in workplace unionization elections and do not want it replaced by a signature card process that will subject them to the pressures of solicitation and potential intimidation by union activists or management.  Even former Democratic presidential nominee George McGovern opposes the card check legislation.  Ironically, to decertify a union, union leaders insist on holding private ballot elections to protect workers from employer intimidation.

The second salvo in the card check bill establishes a system for government-dictated labor contracts in newly unionized workplaces.  Under the card check bill, if an initial labor contract was not agreed to within a congressionally-dictated timetable, federal bureaucrats could designate an “arbitration board” to write a labor contract that employers and workers would be forced to live under for two years.  This is not just a problem for employers.  Workers would not have any right to ratify, or reject, the contract.  This bill was passed by the House of Representatives last year and stopped in the Senate.  It remains the number one priority of organized labor for the new Congress.

Sadly, other likely congressional priorities will include gutting the Department of Labor’s Office of Labor-Management Standards (OLMS), which in the past few years finally began effectively enforcing a 1959 law to combat union corruption, ensure labor organizations’ fiscal integrity and protect the right of union members to fair and honest internal union elections.  OLMS, the lone federal agency charged with ensuring union democracy, transparency and accountability comprises just one-tenth of one percent of the Department of Labor’s budget.  Yet, OLMS was decimated by cuts during the Clinton Administration and it was the only Department agency targeted for cuts by congressional Democrats as they layered on nearly $1 billion in additional spending for enforcement programs against employers in 2007-2008.  OLMS will surely be on the chopping block again in 2009. 

And look for more workplace mandates as well as a retreat from recent efforts to make federal job training programs actually prepare workers for real world jobs instead of funding duplicative bureaucracies.

Legislation and regulation have consequences and on these issues the damage might be more than America’s economy and American workers can bear.