Monday, July 04, 2011

Why Unions Are About To Make A Resurgence

I know what you're thinking. You are thinking this is going to be another of the thousand or so commentaries on the recently proposed "quickie election" regulations by the National Labor Relations Board (NLRB).

But you would be wrong.

What has been said about Craig Becker and AmeriKa's new NLRB are true, except the allegations that Becker and his buddies are "socialists." They are not. Real socialists would take offense to the moniker. Rather, they are more aptly described as fascists, meaning they view their role much as President Obama views his -- government and business in a grand partnership, with the first directing the grand plan to the second.

Ignoring a clear and unequivocal rejection of eliminating democratic elections in the workplace by Congress, the NLRB did the next worst thing -- take the right of one party, i.e., the employer, to respond to the representations and promises of the other, i.e., the union, vis a vis an election period so short that there is no time to prepare an intelligent response.

Making matters even more bizarre, the NLRB has given employers four (4) days to offer themselves up to testify, or forever hold their tongues. The proposed comment period more or less mirrors the proposed election period. No problem, they say, we're the government and we know what is best for you.

Today I want to focus not on regulation but on basic economics and my assumptions about the economy going forward which plays into the hands of organized labor, to-wit:

First, wages are likely stuck in neutral for the foreseeable future. (In May, annual real wages fell 0.6% over the year, having decelerated for 5 of the 7 months since November 2010. Real wages may pick up, but it takes time and jobs growth much faster than the 0.67% annual pace in May 2011.) It is unlikely this will happen anytime soon.

Second, wealth effects caused by a rebound in the stock market are slowing - the trajectory of the S&P has decelerated and housing prices continue to fall.

Third, inflation in commodities are being felt by those whose grocery prices matter. The government can cook the books on inflation all it wants but the average American family knows better when they buy, well, anything, other than a house, that it cost more than last month.

All totaled this means the American worker is feeling poorer, mostly because, with real inflation he is poorer and he is finding his obligations harder to meet.

Enter someone, anyone, who can make a credible claim to get him/her more money. Enter organized labor.

Are their claims credible? Not really, although there are a lot of businesses out there sitting on a mountain of cash that will be hard to explain away in a union campaign not to mention executive compensation which in some cases has become obscene. This will especially be tough on employers if the NLRB has its way, because the opportunity for an employer to address the issues with its employers will end just about the time it begins.

Advice? Explaining economic reality (sometimes referred to as "campaigning") should no longer be viewed as something that is done when a union shows up.

Success will be defined by effective preemption.

More as this unfolds . . .



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