Labor Gains: Reforming Employment Law

By Mcmenamin, Michael | Reason, February 1995 | Go to article overview

Labor Gains: Reforming Employment Law


Mcmenamin, Michael, Reason


Advice to the new Congress on labor law reform: Be bold. Empower individual employees. Don't be co-opted by the Chamber of Commerce. Eliminate entrenched privileges. Don't compromise with organized labor.

Above all, don't be intimidated by the alphabet soup created during the past 60 years of increasing government regulation of the employment relationship--NLRB, FLSA, OSHA, EEOC, OFCC, ADEA, ADA, FMLA, etc. You don't have to dismantle, brick by brick, six decades of federal employment legislation. And you shouldn't try. If you do, the Democrats will beat you over the head with anti-employee labels while they continue to take hard and soft campaign contributions from organized labor.

Rather, consider three simple reforms which, taken together, will be revolutionary in their impact on the American workplace.

1) Abolish the Davis-Bacon Act.

2) Eliminate the National Labor Relations Board's restrictions on employee-involvement committees in the workplace.

3) Require all employment disputes involving federal law to be handled by neutral third-party arbitration under the Federal Arbitration Act.

These three reforms will:

* Decrease government spending by many billions of dollars at federal, state, and local levels;

* increase meaningful employment opportunities at entry level and more skilled positions for inner-city and other disadvantaged youths;

* increase U.S. productivity by encouraging more individual employee initiative and involvement in the workplace;

* dramatically decrease litigation expense for employment-related disputes;

* reduce the total number of government employees, especially at the federal level;

* create more effective protection for individuals against wrongful termination without cause;

* decrease job opportunities for lawyers while actively encouraging the use of lay persons in employment dispute resolution.

All this can be accomplished in the legislative equivalent of an afternoon, i.e., before the fall of 1995, when the presidential campaign commences in earnest. I have consciously left out, for political reasons, abolishing or reducing the minimum wage. I know there are excellent economic reasons for eliminating it. I know that it disproportionately hurts the poor and black inner-city youths. But until the Congressional Black Caucus has the political courage to endorse the concept, no responsible Republican who wants to recapture the African-American vote that belonged to the party from the Civil War though the 1920s should touch it. Never mind that the minimum wage has been racist in its impact since the 1950s; it wasn't conceived in racism, merely ignorance and 1930s populism. All of which leads to:

Reform #1: Abolish the Davis-Bacon Act. Unlike the minimum wage, Davis-Bacon has racism at its ugly little heart. It was conceived in 1931 in response to an Alabama contractor winning the bid for a veterans' hospital in Long Island using black labor who had been shut out of New York's lily-white construction trade unions. Aided by southern Democrats denouncing "cheap colored labor," Herbert Hoover, his generation's George Bush, signed the law in March 1931, turning his back on the black voters who had supported his party since Reconstruction.

Davis-Bacon and its progeny require that any construction project that receives federal funds must be paid the local "prevailing wage," which generations of Department of Labor bureaucrats have interpreted to mean the prevailing union wage in a given area, even if the percentage of union workers is only 50 percent. Gene Methvin, Washington editor of Reader's Digest, reports in a recent article that the federal government could save more than $3 billion in construction costs in the next few years by repealing Davis-Bacon. In Philadelphia, for example, electricians are paid nearly $38 an hour on federal projects, while private contractors pay slightly less than $16 an hour.

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