Why Unions Are Picking on Home Builders

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

Amidst rising foreclosures, falling home prices, reluctant buyers, and a severe credit crunch, there is a new adversary adding to the woes of home builders nationwide: organized labor.

The Laborers International Union is leading the charge, opposing legislation that would allow home builders and other businesses to “carry back” their financial losses over four years. Current tax laws only permit losses to be carried back for two years. With the housing market’s volatility and many regional home builders going out of business, Congress appeared ready to approve the tax change — until the Laborers got involved.

According to a recent report in the Wall Street Journal, the union has aggressively opposed the bill, sending 1,800 letters to Capitol Hill, publishing white papers, and running print and television advertisements. Union protestors even stood outside recent shareholder meetings at home builders dressed in pink pig suits with dollar bills hanging out of their mouths.

The Laborers are major contributors to Democratic campaign coffers, dispensing more than $1 million in contributions in this election cycle alone, with 93% of the donations going to Democratic candidates. Eager to please such important donors, the “carry back” provision is unlikely to be passed at all now.

Presently the Laborers union represents less than 2% of residential construction workers. So why does the union care so much about a relatively obscure tax provision that would not negatively affect industries where the Laborers do have representation? Why is a union with no real stake in the legislation playing such a pivotal role in its derailment?

The Laborers’ strategy follows a familiar pattern in today’s union-management battles. The fact that only a very small portion of residential home builders are unionized is the exact reason why the Laborers are attacking home builders. Here’s how it works:

It’s well-documented that organized labor’s membership numbers have dropped dramatically in the last 40 years. Only about 12% of the overall work force and 7% of the private workforce belong to a union today. In order to reverse that trend, unions have started to target primarily non-unionized industries and companies. There is nothing inherently wrong with that, but organized labor’s tactics are tantamount to corporate blackmail.

For 50 years, the National Labor Relations Board has conducted secret-ballot elections to determine if employees truly desire union representation. Even when they are approached by a labor union, many companies would gladly welcome a secret-ballot vote on unionization. Companies are confident that they can win over their employees, or, at the very least, the true desires of their workforce will be respected.

Labor unions, however, prefers the “card check” method. This method allows union organizers to claim victory if a simple majority sign a card publicly stating their intention to join a union. Union pressure and intimidation corrupt this process and many employers rightly oppose it.

But companies that insist on secret-ballot elections pay a price. Organized labor will often times launch a nasty, brutal, and ruthless corporate campaign, with the goal of destroying the company’s image and reputation. The most notable and successful target thus far is Wal-Mart, but plenty of smaller companies have also been attacked for not submitting to labor’s blackmail, including Smithfield Foods, Wackenhunt, UNICCO, Simon Property Group, Angelica, Catholic Health Care, First Student, and many others.

What’s striking about these campaigns is that the facts and truth simply don’t matter. Unions will say and do anything to hurt the company. For example, in their campaign against laundry cleaner Angelica, UNITE-HERE attacked one of Angelica’s customers, Sutter Health, by sending a postcard to expectant mothers, claiming, with no evidence whatsoever, that the sheets cleaned by Angelica and used at Sutter Health facilities were contaminated by feces and blood. A California jury awarded Sutter Health $17.3 million dollars in a suit over the intentionally deceptive statements.

As part of their attacks, unions label companies that oppose their unionization designs as “anti-worker,” but that’s nothing more than an Orwellian phrase. Companies are not “anti-worker” for simply opposing labor blackmail techniques and insisting on secret ballot elections for their employees.

If there is any small consolation for the home builders, it’s that they are certainly not alone. When trying to crack a company or industry with little unionization, the labor playbook these days calls for either capitulation by the employer or a public war against the company. A key part of this war is often times using Capitol Hill connections, driven by campaign donations, to scuttle favorable legislation. This is precisely what is happening now with home builders.

While it’s important that everyone is aware of labor’s real motives, it’s also about time that legislators start to push back against these power grabs and stop being used as labor puppets. Legislation such as the “carry back” provision should be debated on its actual merits. It should not become a bargaining chip in a deceptive organizing campaign by a labor union.

For their part, labor unions should also abandon these types of bush-league attacks. Instead of brow-beating employers, blocking legislation that doesn’t affect their members, and trying to change the law to unfairly advance their interests, labor should instead focus on fundamental, long-term reform that will make their organizations more attractive to employees — free of coercion.

This type of reform will not involve dramatic public protests, angry letter writing, and pig suits, but it might actually make labor unions relevant again in an honest and ethical way.

Mr. O’Keefe is a labor policy consultant in Washington, D.C.


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