Employee Free Choice Act: From Beltway to Main Street

Should small businesses fear labor unions?


If you have a real thing for wonky Beltway policy debates, then you know about the Employee Free Choice Act, a bill hailed by the left as an essential step to rolling back poverty and decried by the right as an affront to healthy capitalism. The bill passed in the House but stalled in the Senate last summer, but now people outside Washington are going to hear more about this issue as states are going to consider passing their own version. The Small Business & Entrepreneurship Council recently announced that any state that enacts something like the Free Choice Act will get negative points in the SBE Council's yearly index of how healthy the climate in certain states is for small businesses and entrepreneurs to thrive.

The Employee Free Choice Act would allow employees to vote on whether or not to unionize with an open system of signing cards, as opposed to the secret-ballot process that is the status quo. It sounds arcane, but the basic debate when it comes to small business is this: Is a process that would effectively increase union members a good thing? The SBE Council gives some reasons to think not:

Card-check, which eviscerates the current right employees have to cast a private vote regarding whether they want union representation or not, enables abusive organizing tactics. This mandated approach to union organizing—where everyone in the workplace would know how each individual feels about union representation—will only serve to establish an environment that is ripe for harassment and underhanded tactics. This unfair, turn-key approach to forced unionization will be especially burdensome and costly for small businesses.... The 'card-check' bill would boost the level of unionization, increase costs, and restrain productivity. That, of course, means that businesses become less competitive. Of course, in the long run, both business owners and employees would suffer.

A problem with considering just how much something like the Employee Free Choice Act affects small business is that the subject of union membership in small businesses seems like a critically understudied issue. I gave the Bureau of Labor Statistics a call, and it said it doesn't collect any data on whether or not union members work for small businesses, and if they don't do it, probably no one else does, either. If we can't know that, it seems equally hard to predict just what would change if card-check was allowed.

Maybe the only answer is to see what the actual people on the ground think. Any small-business people out there, what are your thoughts on unionization? Do the proposals in this bill worry you?

small business

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