I am writing with great concern regarding the Employee Free Choice Act (EFCA) or "card check" legislation. Effectively eliminating over 70 years of precedent established under the National Labor Relations Act(NLRA) of 1935, the EFCA would radically overhaul current labor law by replacing the use of secret ballots in union organizing efforts with a "card check" system.
Currently, workers decide to unionize by a private ballot election, allowing them to vote anonymously without fear of intimidation or retaliation. Under "card check," however, union organizers would only have to gather a majority of signed cards from workers to claim union representation, which would then be made public to the employer, union organizers and coworkers. "Card check" would not only undermine a worker's right to secret ballot elections, but also hinder economic growth and threaten our economy's ability to create jobs.
There would be no private ballot election and no freedom of choice.
This legislation contains equally concerning language that would force binding arbitration on employees and employers. This provision undermines the system of collective bargaining. Government imposed binding contracts on employees and employers would weaken a business's ability to effectively control their operation, while also eliminating an employee's ability to vote on or ratify their contract terms of employment.
All workers deserve the fundamental American right to a federally supervised private ballot election. This right is guaranteed when you vote in political elections and there is no reason why it should be surrendered in the workplace.
I urge you to VOTE NO on CARD CHECK, and instead focus on protecting and maintaining the existing standards of NLRA laws.
Wednesday, January 28, 2009
Tuesday, January 20, 2009
Boscov's Bailout is Bad for Business
Boscov's Bailout is Bad for Business
Nathan A. Benefield
01.19.09
With bailout mania sweeping the nation, it is hardly a surprise to see the struggling Boscov's department store with its hand out. But the current proposal to give Boscov's $35 million in taxpayer backing for a loan is bad economic policy.
While county commissioners from a handful of counties have agreed to go along with this scheme, Snyder County officials have rejected it outright, and officials in Blair and Butler counties are still considering putting their taxpayers on the hook. Pennsylvania state officials are pressuring the counties to go along, arguing the loan would be "risk free" and guaranteed to revitalize Boscov's and the local economy.
However, if the loan is risk free, why doesn't the private sector put up the money? Investors are always looking for a no-risk, guaranteed return. However, state (along with federal and local) government officials might be assessing the level of risk a little differently—since they are "investing" other people's money.
In fact, an Allegheny County economic development official recently admitted to a WTAE reporter that taxpayer loans are frequently granted to businesses after private lenders reject their business plan. It should be noted that he made this statement explaining why so many government loans had never been repaid.
Boscov's must find a sustainable business model, using bankruptcy to restructure and develop a plan private lenders will support. This restructuring does not mean all employees, or every supplier of products, will lose their jobs. Even if Boscov's went out of business, Pennsylvania's economy would survive. Consumers will still shop, and other businesses will step in fill the void left by Boscov's.
Here in Pennsylvania, almost 52,000 businesses closed shop in 2007, but 54,000 new ones were created. Governor Rendell stated that these "start-ups" would never have received the loan Boscov's did—yet small businesses now employ over half of all workers in Pennsylvania. Furthermore, all of the job growth from 2002-05 occurred among small businesses; large employers lost workers. Our state economy is not dependent on Boscov's to survive.
Decisions such as whether to bail out Boscov's are almost always based on political, rather than economic grounds. That Mr. Boscov is a well-regarded figure in the Pennsylvania community (not to mention a major campaign donor) is a much greater factor for county officials than Boscov's restructuring model. The intense lobbying effort of Boscov's and the Rendell administration will likely weigh more heavily on this decision than a consideration of the economic effects of supporting—or rejecting—the loan.
Boscov's is hardly alone in this scheme. Many big businesses and sports teams often extort money from government, threatening to move or shut down if they don't get taxpayer funds. Yet these threats—along with news releases from Governor Rendell celebrating the "jobs created" from taxpayer gifts—are deceitful.
Mario Lemieux admitted last August that he never thought of moving the Pittsburgh Penguins (during a groundbreaking ceremony for the new $290 million hockey arena.) Yet his threats and ransom demand earned him and the Penguins a great deal in which state taxpayers pick up the bulk of the cost of his arena.
Likewise, filmmakers have recently benefited from the corporate welfare mentality, partaking in both a grant program and a tax credit. Yet some of the filmmakers admitted they would film in Pennsylvania even if they hadn't received state aid. In other words, no new jobs were "created" by taxpayer subsidies, but wealthy team owners and businessmen profited heavily from the lobbying efforts.
Even when government grants and loans do attract new businesses, they do so at a cost (i.e. higher taxes) to existing businesses and residents. At the end of the day, the process of rewarding politically selected firms is bad long-term economic policy. There is little to no evidence of its benefits.
Bailouts—along with all corporate welfare—harm successful businesses. Stores competing with Boscov's have operated successfully, but Boscov's failure gets rewarded with taxpayer-backed loans. If policymakers continue to offer perverse incentives like this, there will be little reward for running an effective business, but a payoff for lobbying for taxpayer subsidies.
"Economic development" spending like the Boscov's bailout doesn't grow the economy. It is based on political merit rather than economic merit and represents a perverse incentive—redistributing funds from successful business to failing enterprises. When government tries to picks winners, it is taxpayers and the economy who lose.
# # #
Nathan A. Benefield is Director of Policy Research with the Commonwealth Foundation (www.CommonwealthFoundation.org), an independent, nonprofit public policy research and educational institute based in Harrisburg.
Nathan A. Benefield
01.19.09
With bailout mania sweeping the nation, it is hardly a surprise to see the struggling Boscov's department store with its hand out. But the current proposal to give Boscov's $35 million in taxpayer backing for a loan is bad economic policy.
While county commissioners from a handful of counties have agreed to go along with this scheme, Snyder County officials have rejected it outright, and officials in Blair and Butler counties are still considering putting their taxpayers on the hook. Pennsylvania state officials are pressuring the counties to go along, arguing the loan would be "risk free" and guaranteed to revitalize Boscov's and the local economy.
However, if the loan is risk free, why doesn't the private sector put up the money? Investors are always looking for a no-risk, guaranteed return. However, state (along with federal and local) government officials might be assessing the level of risk a little differently—since they are "investing" other people's money.
In fact, an Allegheny County economic development official recently admitted to a WTAE reporter that taxpayer loans are frequently granted to businesses after private lenders reject their business plan. It should be noted that he made this statement explaining why so many government loans had never been repaid.
Boscov's must find a sustainable business model, using bankruptcy to restructure and develop a plan private lenders will support. This restructuring does not mean all employees, or every supplier of products, will lose their jobs. Even if Boscov's went out of business, Pennsylvania's economy would survive. Consumers will still shop, and other businesses will step in fill the void left by Boscov's.
Here in Pennsylvania, almost 52,000 businesses closed shop in 2007, but 54,000 new ones were created. Governor Rendell stated that these "start-ups" would never have received the loan Boscov's did—yet small businesses now employ over half of all workers in Pennsylvania. Furthermore, all of the job growth from 2002-05 occurred among small businesses; large employers lost workers. Our state economy is not dependent on Boscov's to survive.
Decisions such as whether to bail out Boscov's are almost always based on political, rather than economic grounds. That Mr. Boscov is a well-regarded figure in the Pennsylvania community (not to mention a major campaign donor) is a much greater factor for county officials than Boscov's restructuring model. The intense lobbying effort of Boscov's and the Rendell administration will likely weigh more heavily on this decision than a consideration of the economic effects of supporting—or rejecting—the loan.
Boscov's is hardly alone in this scheme. Many big businesses and sports teams often extort money from government, threatening to move or shut down if they don't get taxpayer funds. Yet these threats—along with news releases from Governor Rendell celebrating the "jobs created" from taxpayer gifts—are deceitful.
Mario Lemieux admitted last August that he never thought of moving the Pittsburgh Penguins (during a groundbreaking ceremony for the new $290 million hockey arena.) Yet his threats and ransom demand earned him and the Penguins a great deal in which state taxpayers pick up the bulk of the cost of his arena.
Likewise, filmmakers have recently benefited from the corporate welfare mentality, partaking in both a grant program and a tax credit. Yet some of the filmmakers admitted they would film in Pennsylvania even if they hadn't received state aid. In other words, no new jobs were "created" by taxpayer subsidies, but wealthy team owners and businessmen profited heavily from the lobbying efforts.
Even when government grants and loans do attract new businesses, they do so at a cost (i.e. higher taxes) to existing businesses and residents. At the end of the day, the process of rewarding politically selected firms is bad long-term economic policy. There is little to no evidence of its benefits.
Bailouts—along with all corporate welfare—harm successful businesses. Stores competing with Boscov's have operated successfully, but Boscov's failure gets rewarded with taxpayer-backed loans. If policymakers continue to offer perverse incentives like this, there will be little reward for running an effective business, but a payoff for lobbying for taxpayer subsidies.
"Economic development" spending like the Boscov's bailout doesn't grow the economy. It is based on political merit rather than economic merit and represents a perverse incentive—redistributing funds from successful business to failing enterprises. When government tries to picks winners, it is taxpayers and the economy who lose.
# # #
Nathan A. Benefield is Director of Policy Research with the Commonwealth Foundation (www.CommonwealthFoundation.org), an independent, nonprofit public policy research and educational institute based in Harrisburg.
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