Secretary Elaine Chao


Two Steps Back on Labor Rights

The Obama administration’s zeal to not “waste a good crisis,” as Secretary of State Hillary Clinton put it, has been stunning even for Washington insiders to behold. In the first 50 days of Barack Obama’s presidency, Congress approved $1.2 trillion dollars in new spending, or $24 billion a day. That’s $1 billion every hour. The national debt now is $11 trillion and climbing.

The Democratic Party’s governing elite has long believed there is no problem that European-style policies cannot cure. This is why President Obama’s agenda centers on vastly expanding entitlement programs, strengthening unions, and increasing government control over the private sector.

The stimulus bill contains multiple provisions that burden the already strained unemployment insurance system with new entitlements, such as paying workers who choose to leave the workforce for “family-related” reasons. Imposing such entitlements on an insurance system designed to support workers who are laid off compromises the integrity of the program. To sustain the expanded system in the future, states will have to levy higher unemployment insurance taxes on employers. And raising taxes on jobs will only lead to fewer job opportunities. That is why some governors such as Rick Perry (R., Texas) and Bobby Jindal (R., La.), are taking a pass on stimulus money that would broaden their states’ unemployment benefits.

In a move that certainly pleased unions, within days of taking office Mr. Obama issued executive orders rescinding requirements for workers to be informed of their right not to pay portions of union dues attributable to political activities with which they may disagree. These orders are mere prelude to the forthcoming congressional debate over the “Employee Free Choice Act,” which should more accurately be called the “Employee No Choice Act.” This bill will deprive workers of their right to secret ballot elections in unionization efforts, and impose a 120-day deadline for companies to sign a labor contract—after which government arbitrators would dictate labor contracts.

Efforts are also underway to cut the budget of the lone federal agency charged with protecting union members’ rights and ensuring union integrity. In January, the Department of Labor’s Office of Labor-Management Standards implemented a rule requiring that relevant information on union finances be provided to rank-and-file union members to better ensure transparency and accountability, as required by the Labor-Management Reporting and Disclosure Act of 1959. In the rush of actions after the inauguration, the Obama administration delayed the effective date of this rule. It remains to be seen if other union transparency and accountability rules will be gutted or revoked.

Americans should also be concerned about the protectionist impulses—as evidenced by the “Buy American” provision of the stimulus package—of those now in charge, which run counter to one of the painful lessons of the Great Depression. Impeding international trade will ignite retaliation by America’s trading partners, deepening and prolonging the economic downturn. Policy makers should also resist closing America’s doors to skilled workers from overseas, many of whom are educated in our universities and whose talent can help make our economy stronger. Yet provisions like the “Employ American Workers Act” in the stimulus package limits banks that receive government funding from employing skilled foreign workers.

European-style interventions to which the Obama administration is inclined will not make America more competitive in the world-wide economy. Such policies will not increase growth, will not decrease unemployment, and will not increase wages for workers. Evidence of this has been apparent for decades in Europe’s declining growth rates, higher unemployment, lower per-capita income, and longer durations of unemployment. America has problems; Europe’s are worse.

Yet despite all of this, the Obama administration seems intent on radically expanding government’s role. This is because, as White House Chief of Staff Rahm Emanuel has stated, “crises are opportunities to do big things.”

It was telling that in his recent address to Congress, the president downplayed the credit crisis’s culpability for the recession and swiftly segued to implicating oil, health care and education. Why would the president draw a line between the recession and these other issues, unless he wants to exploit the current situation to advance an agenda unrelated—and even antithetical—to fixing the economy?

Perhaps spending trillions of taxpayers’ yet unearned dollars seems trivial when socialized medicine and rewarding political allies are your priorities. But it is not the change most Americans had in mind.