Card Check: How to Dig Out of a Crisis…Or Dig Deeper

By October 23, 2008Labor Unions

In a post Monday, “Buck Up, Lads,” we took note of reports that British manufacturers are discouraged, with their confidence level at the lowest point since 1980.  Back then, unemployment, labor unrest, the lack of even basic provisions following years of radical Labor leadership had driven the productive sectors of the economy into despair and disrepair.

But then Prime Minister Margaret Thatcher, elected in 1979, moved forward with deregulation, privatization and market-oriented reforms, which, when accompanied with a clear vision in foreign affairs, restored not just the British economy but British pride, too. (A rough outline, to be sure.) So much of that progress involved taking back control of the economy from the trade unions. Lessons to be learned, we suggested.

Claire Berlinski, writing at the Manhattan Institute’s City Journal, also recognizes the parallels with today’s financial crisis and describes in more details the steps taken by Thatcher’s government to revive Britain’s economy. From “Here Come the Unions“:

For obvious reasons, Thatcher put reform of the trade union law at the top of her agenda. Among the key provisions of Britain’s 1980 Employment Act was a change in the way government would recognize unions. At the time, workers voted to join unions—or not—in public, by voice vote. Dissenters suffered harassment and physical intimidation. Henceforth, Thatcher decided, new union membership agreements would require approval by means of a secret ballot in order to protect rank-and-file workers from bullying by union organizers. If allowed to vote secretly, she believed, ordinary workers would not vote for policies against their long-term interests—such as pay raises so incommensurate with production as to render British businesses uncompetitive, or strikes so prolonged as to make even the Soviets unwilling to buy British goods.

Thatcher was right. As soon as the secret ballots were introduced, many workers began defying the trade union leadership and rejecting the unions’ ruinous policies. When she had taken power, Britain was the second-poorest nation in Europe. Her reforms led to the longest sustained period of British economic expansion of the postwar era. In the past decade, as a direct consequence of her augmentation of labor-market flexibility—in layman’s terms, her smashing of the trade unions—the Organisation for Economic Co-operation and Development has ranked Britain at the top in both output and inflation stabilization.

And now U.S. organized labor seeks to destroy the secret ballot through enactment of the Employee Free Choice Act, the greatest power grab by labor since the Wagner Act of 1935. The passage of card check legislation is seen as the first of many steps: Expand union membership, used the increased income from membership dues for political purposes, and push for more legislative victories — legalizing secondary strikes, banning right-to-work laws, and more.

It will be hard to undo the damage. Berlinski:

The long-term consequences of EFCA passage are perfectly predictable: some companies will go out of business or relocate overseas. Some of the workers whom the legislation is designed to protect will lose their jobs. Nor will it be easy to undo the law once it’s passed, since no one who acquires power gives it up easily. In Britain, during the 1984 miners’ strike, wresting power from the unions nearly led to civil war. Thatcher ultimately crushed the National Union of Mineworkers, but the human and economic costs of the strike were staggering, and the violence of the conflict stunned the British public.

Coming to the United States if the Employee Free Choice Act is passed.


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