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Latest Jobs Report a Stark Reminder of Card Check’s Looming Cost
Bailed Out Auto Industry Sending Jobs Overseas: Will Small Businesses Suffer the Same Fate?

The U.S. Department of Labor this morning reported that the American economy shed 539,000 jobs in April, bringing the unemployment rate to 8.9 percent. Total job losses since the recession began in December 2007 stand at 5.7 million.

At the same time, The Washington Post is now reporting that beleaguered U.S. automaker General Motors plans to ship many of the company’s planned new jobs overseas:  

“The U.S. government is pouring billions into General Motors in hopes of reviving the domestic economy, but when the automaker completes its restructuring plan, many of the company's new jobs will be filled by workers overseas.

“According to an outline the company has been sharing privately with Washington legislators, the number of cars that GM sells in the United States and builds in Mexico, China and South Korea will roughly double. …

“As a result, the long-simmering argument over U.S. manufacturers expanding production overseas -- normally arising between unions and private companies -- is about to engage the Obama administration.”

Whoriskey, “Under Restructuring, GM To Build More Cars Overseas,” The Washington Post, 05.08.09 

There are plenty of reasons GM may be sending jobs overseas, but it’s impossible to ignore their notoriously costly and complex labor contracts as a factor in that decision. And it’s impossible not to wonder if small businesses would suffer a similar fate in an economy dictated by the rigid mandates of the card check plan.

A report released earlier this year calculated the economic cost of card check, examining how similar policies in Canada led to job losses and reduced productivity, among other negative consequences. An abstract of the report, “An Empirical Assessment of the Employee Free Choice Act: The Economic Implications,” explains— 

“The precise effect on unemployment will depend on the degree to which EFCA increases union density, but for every 3 percentage points gained in union membership through card checks and mandatory arbitration, the following year's unemployment rate is predicted to increase by 1 percentage point and job creation is predicted to fall by around 1.5 million jobs. Thus, if EFCA passed today and resulted in an increase in unionization from the current rate of about 12% to 15%, then unionized workers would increase from 15.5 to 19.6 million while unemployment a year from now would rise by 1.5 million, to 10.4 million. If EFCA were to increase the percentage of private sector union membership by between 5 and 10 percentage points, as some have suggested, my analysis indicates that unemployment would increase by 2.3 to 5.4 million in the following year and the unemployment rate would increase by 1.5 to 3.5 percentage points in the following year.”

Layne-Farrar, “An Empirical Assessment of the Employee Free Choice Act: The Economic Implications,” March 2009 

The last thing American workers need is an economic policy that will destroy more jobs and drive the unemployment rate up even further. Whether it’s the card check component of the bill – which does away with secret ballots – or the forced government contracts – which put federal bureaucrats squarely in charge of wages, benefits, and work rules – card check is bad news for an already struggling economy.

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