By the European Union’s own admission, its competitiveness and prosperity are foundering and rapidly falling behind the U.S.’s. It’s hard to imagine it wise for the United States to embrace any portion of Europe’s economic model, especially when it involves inserting the government into union contract negotiations.
The Faster Labor Contracts Act bypassed committee for a floor vote on Tuesday on the strength of 210 Democratic votes. It now moves to the Senate. The rapid move through Congress should raise serious questions. At the top of the list: Would it be wise for America to import key features of European labor policy?
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Supporters portray the legislation as a way to strengthen employees’ bargaining power by requiring faster contract negotiations and allowing federal mediators greater influence when employers and unions reach an impasse. But FLCA moves the U.S. further away from American-style, decentralized workplace negotiations and toward Euro-bureaucratic, government-directed labor relations. Perhaps that is why they are hustling to pass before the public has a chance to grasp its dangers.
THE RHETORIC EUROPE NEEDED TO HEAR
For generations, America’s economy has thrived on flexibility, entrepreneurship, and the ability of private-sector employers and employees to interact for mutual benefits. This approach produces arrangements that both preserve company health and ensure good compensation and conditions for employees. When labor unions step into the picture, the process can become messier and more unpredictable. The unions’ tendency to emotionalize negotiations to gain value in the eyes of their members frequently brings unnecessary complications. And employers don’t always make the best moves. Since the Garden of Eden, humanity has always wrestled with its fallen nature. High-stakes negotiations can be tough.
Yet utopian labor activists are increasingly pushing policies that resemble Europe’s top-down, centralized labor systems in which compensation and working conditions might be set for entire industries or sectors rather than by individual employers and employees. While common in Europe, the model often ignores vast differences between businesses operating in different markets and communities.
The FLCA is a first step toward sectoral bargaining, which is a mainstay of the European labor model. FLCA would require newly unionized employers and unions to negotiate under a federally mandated timeline. Bargaining must begin within 10 days, mediation would kick in after 100 days without an agreement, arbitration at day 130, and at day 144, a binding arbitration panel would take over and impose the terms of a two-year contract. FLCA is based on the premise that government intervention will yield better labor outcomes than direct negotiations between employers and employees.
As we celebrate our nation’s 250th birthday, we would do well to remember that the Founding Fathers embraced local decision-making and limits on centralized authority. They certainly would have been skeptical of a system that allows a centralized bureaucracy to dictate the terms of contracts between private parties.
While FLCA does not establish sectoral bargaining, it moves labor relations to a necessary first step: the creation of a centralized apparatus to determine the terms of private labor contracts. And, to be sure, Big Labor and its allies have their eyes on sectoral bargaining as a means of boosting union rosters. But either way, FLCA signals a significant departure from the traditionally decentralized American model with voluntary bargaining — and toward a more centralized, Euro-bureau approach to labor relations.
In so doing, it risks creating a puppeteer’s crutch and an ideological, one-size-fits-all approach. This can seriously disadvantage small businesses and local employers — the very backbone of the American economy. That, in turn, can cause reductions in hiring, delayed expansions, higher consumer prices, and business failures. As with many theory-driven schemes that are really designed to bolster unions, policies promoted in the name of helping employees can end up hurting them.
TRUMP’S FOOLISH REBUKE OF ITALY’S MELONI
Advocates claim that “Greedy corporations will stop at nothing to keep employees from getting a fair first contract.” To them, that apparently means government bureaucrats should be able to impose contract terms to which neither side agreed in labor negotiations. It means a distant bureaucracy’s take should be able to trump local concerns. It means that the world’s strongest economy should emulate its former economic peers who are rapidly slipping behind. Plus, there is no evidence that unions first contracts are taking any longer to achieve than they have for decades.
If Europe is struggling to compete with the U.S., why would we choose to become more like Europe? Congress should avoid treating European labor policy as a blueprint and start recognizing it as a cautionary tale. And we should trust employees and employers to negotiate their own agreements, without big government intervention.
Russ Brown is president of the Center for Independent Employees (CIE), a 501(c)(3) nonprofit legal organization that provides representation and aid to employees opposed to unions in their workplaces.
