Why has private sector unionization fallen from 35 percent of the work force during World War II to less than 7 percent today? The main reason is that unions raise a firm’s labor costs, leaving fewer resources for things like job creation, capital improvements and research and development. Unions also make it much harder for owners and executives to make practical business decisions.
A memo leaked from the National Labor Relations Board makes clear that President Barack Obama and the labor advocates he put on it are embarked on a campaign to make unionized firms even harder to manage. The NLRB’s recent suit against Boeing Aircraft Co. is merely the first step.
The board sued Boeing for opening a new factory in South Carolina, a right-to-work state. Boeing’s main plant is in Washington, a state where employees have no choice but to join unions. It’s also where the International Association of Machinists have struck Boeing five times in 30 years, most recently in 2008. That strike cost Boeing $2 billion and prompted longtime customers like Virgin Airways chief Richard Branson to make plans to take his business elsewhere. With the new plant, 1,000 new jobs were created in South Carolina, but no union jobs in Washington were lost.
The NLRB calls that decision “an unfair labor practice” that violates the National Labor Relations Act (NLRA). The Supreme Court, however, said in its 1981 First National Maintenance Corp. v. NLRB decision that the NLRA “limited the mandate or duty to bargain” of unionized firms to matters of “wages, hours, and other terms and conditions of employment.” The Court also held that that Congress had no expectation that the elected union representative at First National would become “an equal partner in the running of the business enterprise.” Firms must be able “to reach decisions without fear of later evaluations labeling its conduct an unfair labor practice,” the Court concluded.
Not only is Obama’s NLRB standing firm in its Boeing suit, but the leaked memo, which was obtained by The Heritage Foundation’s Hans von Spakovsky and James Sherk, also shows that the board seeks to elevate union officials to equal partnership with executives in corporate boardrooms of all unionized firms.
The memo instructs NLRB regional operatives to flag all cases in which unionized firms made relocation decisions without submitting detailed economic justifications to their unions. The board plans “case-by-case” reviews, followed by prosecutions of selected cases. The intended consequence is that all major business decisions will become subject to approval by unions.