Taking the Right Path to Job Growth

Monday, October 24, 2011 - 10:54
Glenn Spencer

Glenn Spencer

Ask just about anyone in America today what they view as the top issue facing the country and you’re likely to hear one word: jobs. With an unemployment rate stuck above nine percent, the question of how to create more jobs is indeed a pressing one.

Although many different proposals have been batted back and forth, the U.S. Chamber of Commerce has put forward specific steps that can be taken right now to spur private sector job growth. Critically, these are initiatives that will boost the economy without adding to the deficit and exacerbating our swiftly mounting burden of debt.

First, we need to open up overseas markets for American businesses, which will create new jobs here at home. Congress took a big step forward in October by passing the trade agreements with South Korea, Panama and Columbia. The South Korea agreement alone has the potential to create as many as 280,000 new jobs, and the three agreements combined will prevent hundreds of thousands more from being lost to our competitors. To build on this progress, the administration should enact its proposed export control changes, allowing American businesses to expand exports without jeopardizing national security. In addition, the administration should complete work on a trans-Pacific partnership agreement, and work with the European Union to eliminate tariffs on goods trade. Ninety-five percent of the world’s customers live beyond our borders – we need to sell them American goods and services.

Second, we need to recognize an obvious reality – our modern economy depends on energy. And it should be no secret that we need to produce more of it domestically. To reach this goal, permitting in the Gulf of Mexico should be returned to pre-moratorium levels while energy production off the coast of Alaska should be opened up. Oil and gas exploration on federal lands should be expanded. We should promote the development of domestic natural gas resources, taking advantage of America’s massive shale gas deposits. And finally, we should approve construction of the Keystone Pipeline, which would support 250,000 jobs, boost investment in the United States by $20 billion, and generate new government revenues.

Third, infrastructure. Government at all levels is standing in the way of badly needed infrastructure projects. For example, core transportation bills are awaiting multi-year reauthorization in Congress, and there are at least 351 energy projects being held up by regulations, zoning restrictions and lawsuits. In addition, regulatory roadblocks are standing in the way of unlocking $250 billion worth of private capital that could be invested here in the United States on infrastructure projects.

Fourth, there are specific things that can be done to make the United States a more welcoming place for tourists and business visitors. Not only can we remove the hassle of travelling to the United States by expanding the visa waiver program, reforming our visa application processes, and implementing a trusted traveler program, but we can also do more to aggressively implement the Travel Promotion Act.

Fifth, small and large businesses alike have cited excessive regulations, the litigation spawned by those regulations, and fears about what government regulators might do to them as significant factors hampering new job creation. Some $1 trillion-$2 trillion in private capital could be moved into business expansion if the burden of excessive regulation were lifted. To this end, the administration should streamline and expedite the permitting process and prevent duplicative reviews by state government and the federal government. The President should issue an executive order directing agencies not to issue discretionary regulations that would have a significant impact until the economy has improved, and insist that agencies fully follow the rules when it comes to promulgating regulations, such as cost-benefit analysis, the use of sound science, and reliance on quality data. Congress also has a role to play here, by making greater use of the Congressional Review Act, passing legislation requiring an up-or-down vote on major rules, and mandating a higher standard of proof to justify major regulations. For example, the Regulatory Accountability Act of 2011, which was recently introduced in the House and Senate with bipartisan support, is designed to bring balance back to the regulatory system without undercutting needed public health and safety protections. The legislation would ensure that regulations impose as little burden on the economy as possible and that they are justified.  The bill would require regulators to publicly demonstrate the need for rulemakings backed by hard evidence and sound science. 

Sixth, we need comprehensive, pro-growth tax reform coupled with serious efforts to rein in spending and bring down the deficit. The congressional super committee should exceed its mandate and reform the tax code. It should also address unsustainable entitlement programs that threaten to push our nation into bankruptcy – to put it simply, we must reform them in order to save them. 

These are positive ideas that can be acted on now to boost job growth. Unfortunately, not all segments of the government have caught on. While there are a number of offenders, one of the more notorious culprits is the National Labor Relations Board (NLRB), a relatively obscure government agency that, over the past two years, has attempted to punch well above its weight.

With the failure of the Card Check bill, the NLRB seems to have taken as its mission the fulfillment of the core purposes of that legislation: to lower the bar for union organizing and to make it more difficult for employers to exercise their rights. The tactics used have been new regulations, overturning of existing precedent and litigation. All of this has raised alarm bells among employers and adds to a climate of uncertainty.

In terms of new regulations, the NLRB has pushed out a final rule on posting notices, and has a few more potential rules in the works. The posting notice rule requires every employer subject to the National Labor Relations Act to put up a poster informing workers of their union rights. Not only would this require a physical posting, but employers who display other workplace notices on an Internet or intranet site would need to post the notice there as well. While there are a number of problems with this concept, one of the biggest concerns is that the mandated poster gives only cursory mention of a worker’s right to refrain from union activity. There is no mention of the right to decertify an unwanted union or to exercise Beck rights, for example. The Chamber has sued over this rule (a copy of the suit can be found at www.chamberlitigation.com) and the NLRB was forced to push back the effective date from November 14 to January 31, 2012. Rather than simply delay it, the rule should be withdrawn.

Aside from this final rule, the NLRB has some other harmful rules in the pipeline. This includes a proposed rule changing the procedure for union certification elections, the so-called “ambush election” rule. Under this proposed rule, the election window would be dramatically shortened, going from a median time of roughly 38 days to as few as 10. The process for pre-election filings would also be greatly abbreviated, and issues not raised in those pre-election filings stand little chance of being considered later on. The Board will also postpone dealing with charges of illegal campaign conduct and even the size and composition of the electorate until after the vote has taken place. The NLRB is said to be working feverishly to complete work on this rule before the end of the year.

One other potential rule is a proposal to institute off-site, electronic voting, or “cyber card check.” The Board has already issued a Request for Information, one of the first steps in the formal rulemaking process, asking vendors to submit ideas on how such a system could be designed and implemented. The intent here is clear – to put in place a voting mechanism that takes workers out of the privacy of the voting booth and subjects them to potential harassment when casting a ballot. This “cyber card check” concept mirrors a significant flaw of the Employee Free Choice Act.

There are numerous precedents the NLRB has overturned via case law, but perhaps the most significant is a decision issued in late August called Specialty Healthcare. This decision, on its face, simply established a new method of determining bargaining units in the non-acute health care industry. Of more concern to most employers, however, was the second part of the decision, which established a new standard for determining the composition of bargaining units across most of the economy.  Under this new standard, unions would be able to “gerrymander” the units they wish to organize, targeting even very small groups of workers at a facility. For example, rather than organize all dealers on the casino floor, a union could decide to simply organize the blackjack dealers. This would make it far easier for unions to gain inroads into workplaces where they have failed to gain majority support among a larger group of employees who share a community of interest. The Board’s misguided Specialty Healthcare decision presents a significant new challenge to employers trying to manage their workplace.

Finally, the Board has used the power of its enforcement authority to set new rules around basic management decisions. Perhaps the most notorious example of this is the lawsuit against the Boeing Company. 

On April 20, 2011, the NLRB’s acting general counsel, Lafe Solomon, shocked the business community by issuing a formal complaint against Boeing over its decision to locate a new assembly line for its 787 Dreamliner aircraft in South Carolina instead of Washington state. Not only did the theory behind the complaint make an aggressive statement about the type of conduct that would draw NLRB sanctions, but the requested remedy, that Boeing build a new factory in Washington state and move the South Carolina line there, is simply unprecedented. 

There are too many criticisms about the substance of the case to discuss in detail, but two facts stand out. First, the NLRB regional director who signed the actual complaint stated over a year ago that the case would be easier to prove if Boeing had moved existing work from Washington rather than opening a new production line. This is because no worker in Washington state has been laid off, suffered a loss in pay or benefits, or seen their hours reduced. Second, during a congressional oversight hearing, Solomon was forced to admit that he couldn’t identify a single worker who had suffered any actual harm. In fact, Boeing has added thousands of unionized workers to its Washington state workforce. 

The case is currently before an administrative law judge and is moving along slowly. It may ultimately be several years before all potential legal proceedings are completed. In the meantime, the case will continue to cast a shadow over a major employer – and send a strong, and unhelpful, signal to other companies at home and abroad about America’s business environment.

Although our economy continues to struggle, there is a clear path to stronger growth and more job creation. Let’s hope decision makers in Washington, DC, both elected officials and regulators, follow it.  


Please visit www.uschamber.com for more information.