Diary

Is Corporate America Really this Suicidal?

According to the Wall Street Journal, three major retailers are caving on Card Check:

Three big retailers are expected to back an alternative proposal next week on a hotly contested bill that would make it easier to unionize workplaces, a move some experts said would bolster the legislation’s chance of passage.

Costco Wholesale Corp., Starbucks Corp. and Whole Foods Market Inc. are supporting the alternative proposal, according to someone familiar with the effort. Ray Krupin, a management labor lawyer in Washington said the most likely compromise would allow employees to unionize if 70% of them sign union-authorization cards, as opposed to 50% as currently proposed in the Employee Free Choice Act.

On Saturday, a person close to the discussions denied that the proposal backed by the three companies included a plan to let unions organize workers if 70% sign cards.

It’s unclear whether the proposal addresses a thorny section of the bill that would have a government arbitrator draw up a contract if unions and companies can’t agree to terms within 120 days…

The anticipated proposal was condemned by some business groups. “These huge companies are selling out hundreds of thousands of small ones under the guise of making some phony and misguided compromise with Big Labor,” said Mark Mix, president of the National Right to Work Committee, which has been campaigning against the bill. “We believe we have this draconian bill defeated outright, so these actions may well lead to the bill’s passage.”

Let’s stipulate at the outset that it’s not certain that the three companies have agreed to a compromise. If they have however – whether it’s one that has a 70 percent threshold for unionization or not – it demonstrates they still don’t understand how Washington works.

It’s clear that proponents of Card Check are spooked. Democrat ‘moderates’ are running away from it like scalded dogs. They know that they must face the voters next year and defend a huge increase in the federal deficit, a dramatic expansion of the scope of government, and (in all likelihood) an economy that shows little improvement. The last thing these Democrats want is to defend a massive payoff to America’s labor unions. How worried are the Democrats about the Obama agenda? They may just have killed cap-and-trade.

Prior to this report, it looked quite possible that Card Check could be defeated on a straight up-or-down vote. While the unions might have been able to muscle through a win, the greatest danger seemed to be a compromise that preserved the worst elements of Card Check. And now we learn that three of the companies most affected by the legislation are prepared to give the unions half a loaf.

Perhaps CostCo, Whole Foods and Starbucks are new to how Washington works. It seems they don’t realize that the unions and the Democrats will take every inch they’re given, sit back for a little while, and then do everything they can to take the rest. If these three firms endorse a deal that requires 70 percent of workers to sign for unionization, then in 2 years the unions will push to drop it to 50 percent – and when that day inevitably comes, it won’t be a high profile fight that draws public attention and creates controversy. It will come as a minor provision in some major legislation – too small an issue for the business community to stir the public on.

Further, the business community today benefits from the presence of a Republican party more or less united on this. Virtually every Republican will vote against Card Check as it stands now; and almost as many would vote against any compromise that may be proposed – as long as the business community also stands together. If Card Check opponents split however, some Republicans will decide to throw a bone to the unions, and vote with them on this.

A Card Check compromise will also take away an issue in the midterm elections. If Democrats today appear likely to face a challenging environment next year, a compromise would take away Card Check as an issue that hurts them no matter how it is resolved. Absent a compromise, Democrats have to anger either the unions or the business community. The quislings who broker a deal make it easier for Pelosi and Reid to hold onto strong majorities for another two years.

And lastly, a compromise today will teach Card Check opponents a valuable lesson: don’t invest heavily in protecting corporate America from the unions; they’re bound to cave at the end of the day. Republicans in Congress, talk show hosts, bloggers, opinion leaders and others will remember that lesson when health care reform is debated, and when the unions come to take the rest of the Card Check loaf. They won’t care all that much next time, when they recall that any efforts to frustrate the union agenda are likely to be undone by corporate cowards.

I won’t embed this, but perhaps the lobbyists at Whole Foods, CostCo and Starbucks could learn a lesson.