The ChamberPost

Legislative Options for Health Care Reform

by Randy Johnson

Yesterday I participated in a Senate HELP* Committee roundtable on legislative options for health care reform. With the president pushing the Congress to deliver a health care bill before the August recess, we are reaching a critical moment in the national debate. I appreciated the invitation to participate on behalf of the business community, which provides a large portion of the nation's health benefits to citizens. One of the options being discussed is a mandate that would force almost all employers to sponsor health insurance. From my written statement:

The Chamber does not believe that a mandate on employers to sponsor health insurance will make serious headway to cover the uninsured, but rather could lead to a loss of jobs. Employers who can afford to sponsor health insurance typically provide generous benefits -- and most large employers do. Employers who cannot currently afford to offer health insurance benefits will not be able to do so simply because they are mandated to do so -- small employers and businesses that operate on very small profit margins will still be unable to afford to provide benefits.

Moses could change the Nile to run red but we cannot wave a wand and create profits. If employers are required to provide some level of healthcare benefits or pay an undetermined civil penalty, the payments will come off the bottom line in some way such as lower wages and job loss and perhaps ultimately result in driving the employer out of business. That helps no one.

Another major concern within the business community is the so-called "public option"--a government-run health insurance program that would compete with private insurance. Again from the statement:

Proponents claim that a government-run plan can compete on an equal playing field with private plans, but this would put the government in the position of being both a team owner and the referee; inevitably the government would move to give unfair advantages to the "public option," just as they are considering doing now with the public financing of student loans. Even the op-ed page of the Washington Post has cited the "public option" as a backdoor way to bring the nation to single-payer, socialized medicine.

Finally there's the question of process. It's crucial that the nation move forward to help contain health care costs and improve the national quality of life, but it's just as important to take the time to get the solution right. Congress is considering imposing this new health care mandate in less than four months. I was on the Hill when Mrs. Clinton's plan was being considered and she came under much criticism for drafting the plan behind closed doors and then presenting the plan to Congress. However, there were many hearings on that bill and I would argue that it was a model of transparency and a full deliberative process compared to the absurdly accelerated process we are apparently facing now.

You can read my full written testimony online for many more details on the opportunities and dangers before us in this effort.

* The Senate Health, Education, Labor and Pensions Committee

 

Testifying before the Senate HELP Committee.

EFCA - Piercing The Union Rhetoric

by Randy Johnson

The leading arguments in favor of the misnamed-Employee Free Choice Act (EFCA) are based on shrill rhetoric castigating employers. However, facts do matter -- the more people learn about EFCA, the less they like it. As the Senate’s leading EFCA supporters push for a vote on the bill, we have issued today a comprehensive analysis* of how it would dramatically change existing labor laws without justification.

This analysis provides an important contribution to the debate over EFCA by taking a measured and analytical approach demonstrating that this bill is not justified and is not in the best interest of employees or employers.  Supporters of EFCA have been quick to demonize employers and mischaracterize existing law, but oddly enough you don’t find union leadership discussing the details of the bill, if they can help it. This is because it represents the most radical threat to balanced labor law in decades.

The Employee Free Choice Act: Piercing the Rhetoric critiques of each of EFCA’s three provisions: Card check certification for union organizing, compulsory interest arbitration of first contracts, and increased penalties on employers. It is written for non-lawyers, because it’s important that everyone understands the consequences of these issues.  While there are many discussions about potential compromises on EFCA, these alternatives are largely derived from the original version of EFCA and this analysis will remain crucial to evaluating the merits of these proposals.

* Prepared with help from Martin F. Payson, Michael J. Lotito, and Harold R. Weinrich with the law firm Jackson Lewis LLP.

Wellness in the Workplace

by Randy Johnson

In November 2007, following the publication of Leading by Example, the U.S. Chamber co-founded the U.S. Workplace Wellness Alliance with Partnership for Prevention.

The mission of the Alliance is to improve the health status of the U.S. workforce by increasing the number of U.S. businesses that incorporate sound employee health management initiatives that include worksite health promotion/wellness programs into their corporate and health care strategies.  Since 2007, the Alliance has more than tripled initial membership, and now has more than seventy-five members.

Keeping employees healthy are vital to the well-being of businesses as research demonstrates that healthy employees have fewer medical claims, are less absent, and have greater on the job productivity when compared to employees who have less healthy behaviors such as obesity, physical inactivity and tobacco use.

In 2008, the Alliance was instrumental in passage of a House resolution co-sponsored by Representatives Stephanie Herseth Sandlin (D-SD) and Charles Boustany, Jr. (R-LA) that recognizes the first full week of April as "National Workplace Wellness Week" and a similar Senate resolution sponsored by Senator Harkin (D-IA) and then Senator Gordon Smith (R-OR), recognizing the importance of workplace wellness as a strategy to help maximize employee’s health and well being.  

To celebrate National Workplace Wellness Week, the Alliance has taken out an advertisement in CongressDaily A.M., and later today, will hold an event on Capitol Hill with Senator Harkin (D-IA) and other Members of Congress, where Senator Harkin is expected to re-introduce the Healthy Workforce Act. 

Please join us in our celebration of National Workplace Wellness Week.  For more information, visit our website: http://www.uswwa.org.

E-Verify: Hands Off the Handbrake

by Randel Johnson 

As we've emphasized already, if the Congress is going to be successful at stimulating the economy, it needs to get out of the economy's way. Each new mandate or regulatory hurdle that makes it into the stimulus package will act like a handbrake just as we're trying to accelerate. The Wall Street Journal today highlights a handbrake that so far the Congress has resisted pulling: requiring any company receiving stimulus funds to participate in the Department of Homeland Security's E-Verify program.

E-Verify, if you're not familiar, is an electronic system for verifying that the Social Security number and the name given by an employee match those in the government databases. This is a proper and important role for the government, but the system must work well to be effective. The WSJ editorial highlights some of the problems with E-Verify:

In 2007, DHS commissioned an independent study of E-Verify, which concluded that "the database used for verification is still not sufficiently up to date to meet the requirements for accurate verification." The error rate was almost 10% for foreign-born U.S. citizens. E-Verify's vulnerability to identity fraud is also problematic. A person using a valid Social Security card that doesn't belong to him would go undetected by the system. Mandating use of E-Verify could provide a nice boon to an already thriving document-fraud industry.

On top of that, and perhaps even more troubling for a nation trying to move quickly, there are questions about the progam's scalability.

[T]wo weeks ago Homeland Security Secretary Janet Napolitano said the Administration would delay the rule until May 21 "to see what needs to be done to increase the capacity for the E-Verify system." If the Obama Administration is concerned that the program will buckle under the demands of 168,000 or so federal contractors, E-Verify certainly doesn't belong in a stimulus package that would require the system to determine the job eligibility of tens of millions of new hires.

It's crucial that we get employee verification right. Now is not the time to rush into a questionable program, making it harder for companies to hire.

// Responses to comments: Isolationism - Popular and Wrong; Immigration and Effectiveness

An Introduction to Hilda Solis

by Brad Peck

The Chamber's Randy Johnson was on NPR's Morning Edition today as part of their story on Hilda Solis. You can listen to the piece here.

Chapter 3: The Union Representation Process Under the National Labor Relations Act

by Randy Johnson

As part of our set of white papers on the reality of the American workplace I have covered "Chapter 1: The Truth About American Workers" and "Chapter 2: Is Unionization the Ticket to the Middle Class?" Now on to Chapter 3.

The National Labor Relations Act (NLRA): Maintaining Employee Free Choice for over 70 Years

The NLRA is an important federal law that is carefully designed, tested by time, and results in an accurate measure of employee sentiment regarding union representation, and should not be discarded.  Congress’ intent of the Act is clear to not only to protect employees’ rights to join or not join a union, but to protect the country’s commerce as well. 

After the original NLRA, also known as the Wagner Act, unions prospered and grew, often because employers were not legally allowed to persuade employees not to join a union. Twelve years after the Wagner Act, however, Congress sought to curb the growing influence, corruption, and physical violence that plagued union elections. A congressional committee report stated that many employees were forced to make payoffs to the union for a job, join a union against their will, or give money to causes or political campaigns they didn’t personally support. 

In response to such problems, Congress passed the Taft-Hartley amendments, which guarantees employees have a right not to join a union, guarantees employers the right to express their views concerning unionization, and sets forth correlative union unfair labor practices. 

The current NLRA, however, still provides unions more flexibility than employers by:

• allowing unions to set the time tables for unionization;
• not requiring any notice be given to employers as to when unionization may occur;
• giving the right to unions to freely make promises to employees regarding benefits resulting from representation; and
• permits unions to approach employers to sign neutrality agreements, which in reality are often products of a union’s corporate campaign against the company. 

Chapter 2: Is Unionization the Ticket to the Middle Class?

by Randy Johnson

Yesterday we released a set of white papers to demonstrate that the reality of the American workplace looks nothing like the version depicted by union propaganda. "Responding to Union Rhetoric: The Reality of the American Workplace" highlights the inaccurate arguments used by labor leaders to support an agenda that upsets the delicate balance in labor laws and would hinder the recovery of our economy. In Chapter 1 we looked at America's workers; Chapter 2 looks at the middle class.

The Real Economic Effects of Labor Unions

Even if there is credibility to organized labor's claim that the American worker is worse off now then any previous time in our nation's history, evidence shows that unions and more unionized workplaces are not the answer. For example, the ten states with the highest percentage of a unionized workforce, on average, had a job growth rate of half that of the ten states with the lowest percentage of a unionized workforce. In addition, the ten most economically competitive states (as determined by a host of broad economic variables including taxes, regulations, legal standards, educational freedom, government debt, and right-to-work status) have a lower percentage of union membership among its entire workforce (6%), than the ten least economically competitive states (16.4%).

Union leaders claim that unionized jobs in heavy union density states provide higher wages than non-union jobs in low union density states. Such statistics, however, are misleading, because they are not adjusted for inflation, nor do they consider a worker's decreasing purchasing power in heavy union density states. That is, such statistics ignore the higher cost of living that workers face in heavy union density states like Michigan, or Ohio.

Chapter 1: The Truth About American Workers

by Randy Johnson

For several years, organized labor has embarked on a campaign to advance its legislative agenda using messages that demonize employers and pillory U.S. labor laws and those responsible for implementing and enforcing them. Listening to the union rhetoric would give the impression that radical changes are needed in laws governing union organizing. The facts tell a different story, and now is the time to set the record straight. 

The U.S. Chamber today is releasing a series of white papers to examine organized labor’s sound and fury while providing an alternative perspective. These papers demonstrate that the reality of the American workplace looks nothing like the version depicted by union propaganda. "Responding to Union Rhetoric: The Reality of the American Workplace" highlights the inaccurate arguments used by labor leaders to support an agenda that upsets the delicate balance in labor laws and would hinder the recovery of our economy.

First we will look at the truth about America's workers; they are satisfied, respected, and benefiting from productivity gains.

Unions claim that there is a "perfect storm" of layoffs, outsourcing, wage and benefit cuts, corporate tax evasions, etc., that have combined to destroy America’s working class.  While such rhetoric may create good publicity for union bosses, it misleads the public. Despite organized labor’s claims, American workers are highly satisfied with their jobs and employers. A 2008 Gallup Poll showed 90% of those surveyed were satisfied with their jobs; 96% were satisfied with their co-workers; and 79% were satisfied with their boss or immediate supervisor.

Organized labor’s constant message is that there is no worse time in our country’s history to be an American worker, yet over the last 40 years, according to the U.S. Census Bureau, the real median income for all households has increased by almost 31%, while poverty rates have been cut by almost half.  Further, the real median income statistics may even underestimate the growth, because it does not consider a variety of in-kind, non-cash payments and benefits that employers provide to employees. 

Unions claim that productivity rates have far outpaced employee wages, which in fact have stagnated or even declined.  In other words, workers are not reaping the fruits of their labor.  The truth is that employees’ total compensation (the proper measure against productivity rates), including health benefits, paid leave, contributions to retirement plans, and other financial gains have increased comparatively with productivity. 

Employers continue to seek innovative ways to provide employees with benefits, while unions generally oppose such efforts.  Employers understand that in order to retain good employees, they need to provide attractive incentives.  For example, employers have introduced health savings accounts which help employees save for future qualified medical and health expenses, tax free.  On the other hand, union leaders oppose such ideas, in favor of a centralized, single-payer concept. 

Find this whitepaper at http://www.uschamber.com/unionrhetoric

Labor Issues in Montana

by Randy Johnson

As Katie mentioned this morning, after very successful voter education efforts in Yellowstone National Park yesterday, in which we signed up citizens for our grassroots network and engaged in some serious policy discussions, we are now moving on to what will promise to be a lively event in Billings, Montana at the Billings Chamber of Commerce. 

Issues surrounding organized labor remain contentious in the state as the manufacturing and mining based economy declines.  As we've seen so far on this trip, we never know what pulling our bus into town will draw behind in its wake.  We've been having and will continue to have constructive discussions on labor and immigration and anticipate these issues, along with the planned energy agenda, will be hot on the minds of Montana's voters.

Stay tuned...the Denver bound bus will be back on the blog after our event this afternoon.  And since we are speaking of Denver and labor, as pointed out by the National Review:

Looking over the complete list of speakers at the Democratic convention, I note... that there is not a single businessman, entrepreneur, or private sector innovator speaking in the entire four nights, barring some last-minute addition.

Groups represented include the SEIU, the NEA, AFT, NARAL and Planned Parenthood. But not one representative of any company - just politicians, representatives of unions, and leaders of abortion groups.

Employee Benefits

by Randy Johnson

Research shows that many employees consider benefits as important as salary.  In a competitive labor market, businesses are challenged to offer benefit packages that attract and retain high-quality workers.  Employees are becoming increasingly aware of their benefits and how they compare with offerings from other companies.

For more than 50 years the Chamber has produce our annual Employee Benefits Study to help business owners and executives evaluate their companies’ benefits package, determine how it compares with others, and assess the costs of providing benefits.  More than 400 U.S. companies participated in the Study, and more than 30 different types of benefits were analyzed by industry, company size, geographic region, and for-profit or nonprofit status

Our recently released 2007 study shows that:

• Medical benefits accounted for the largest share of employer benefit costs at 12.1% and retirement benefits followed by 10.4%.
• Payments for vacation, holidays, and other paid time off resulted in 9.8% of costs.   
• Geography played an integral role in benefit costs.  Businesses in metropolitan areas spent $3,600 more per employee for medical care and $4,400 more per employee for retirement payments than companies in non-metropolitan areas.
• The average dollar amount in benefits received by employees from the participating companies increased from $18,489 in 2005 to $21,527 in 2006.

The full study can be purchased online.