This week the government reported several statistics that indicate that the $7 trillion Uncle Sam has committed to economic stabilization is having little real effect. On Wednesday, the Labor Department reported that the four-week average of initial requests for unemployment benefits was at its highest level since January 1983. The Commerce Department reported that consumer spending plunged by 1 percent in October. Commerce also reported that orders for big ticket manufactured goods plunged in October by the largest amount in two years. Orders for durable goods dropped by 6.2 percent which was more than double the decline economists expected. Lastly, the unemployment rate hit a 14 year high of 6.5 percent.
So, with all of this grave news and the seeming ineffectiveness of the government to spend our way out of depression, unbelievably Washington with an increased Democratic majority in Congress and a Democratic president-elect is planning a bevy of new pro-union measures when they take office in January. It is unbelievable because the last thing we need right now, other than a tax increase, is for Washington to increase costs on business. After all, it is business that is being relied upon to supply the jobs that will eventually lead us to recovery.
What are the measures the new administration is considering imposing on business? They are essentially the same old left-wing schemes that have been pushed for years. They include: mandatory paid sick leave, ergonomics regulations, and expansion of the Family and Medical Leave Act.
These measures that the president-elect and his socialist buddies in the Congress are considering are of course unconstitutional. I know I sound like a broken record, but Congress has no authority under Article 1 Section 8 of the U.S. Constitution to legislate benefit packages for workers of private business. There is a good reason for this. The founders realized the only way for a people to be truly free was by guaranteeing their economic freedom. It works both ways – freedom of individuals to use private property as they see fit and freedom of workers to use their labor as they see fit. Forced regulation puts business at a competitive disadvantage because it usurps the power of the market to make the most efficient decisions possible. These measures seem just, but how does Congress know what the ramifications will be for the health of American business? They don’t and remember again that we are relying on business to reinvigorate the economy with jobs.
One thing is certain each of the measures will increase the costs of doing business. Cost estimates for the ergonomics regulations alone total about $100 billion a year to implement. The proposal to expand the Family and Medical Leave Act includes small firms and applies to events such as parents attending school conferences with their child’s teacher. It is naïve to think that businesses can or will simply absorb the increased costs of production due to government regulations. These costs will be passed on to workers through less job growth and higher prices for products and services. If Washington truly believes that consumer spending will get us out of our current economic mess then policies that increase business costs will be counterproductive to that effort.
The cornerstone of the pro-union, anti-business measures is the card-check legislation. Card-check is Obama’s reward to his union supporters like the Department of Education was Jimmy Carter’s reward to the National Education Association’s for their support in 1976. It would force companies to recognize a union if a majority of its workers signed cards. This is different from today’s law which requires a month-long campaign ending in a secret vote and would make unionization of a business much easier to attain. Government meddling in this matter is ridiculously unconstitutional. Beyond that obvious fact, why is government still supporting a dinosaur whose historical record is filled with hooliganism, and putting whole industries out of business in the U.S. (see steel and automobiles)? Has Congress learned nothing from its recent study of how the UAW has contributed to the collapse of the Big Three?
It is illegal for Congress to enact the above measures anytime, but is particularly irresponsible for them to do it now while we are headed for a depression. Having already committed close to $7 trillion we do not have to fix our economic problems, now they want to compound our difficulties by placing unreasonable regulations on the sector that is charged with reviving our economy. Congress has reached new depths of stupidity.