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The Employee Free Choice Act: An Economic Catastrophe for U.S. Small Business

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Published: 09Aug2009
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As a CPA in practice in Southern California, I see business of all shapes, sizes, and types. I have seen firsthand the effects of globalization and our current recession on the small businesses in our area. I have seen many good businesses close their doors because they can no longer compete with overseas labor. According to the SBA Office of Advocacy data, small businesses are job creators. Their data and research shows that small businesses represent 99.7 percent of all firms; they create more than half of the private non-farm gross domestic product; and they create 60 to 80 percent of the net new jobs.

To say that anything that hinders the effectiveness of American small business affects America is not an understatement. Currently, legislation is being debated in the Senate called, "The Employee Free Choice Act". Implementation of this act as currently presented would effectively eliminate the ability of small business to compete in a global labor market by favoring unionization at the small employer level. In my mind, anything that further hamstrings small business in this recession affects America at a fundamental economic level.

That's why I went with the Fullerton Chamber of Commerce this past week to lobby against this legislation in Washington D.C. There were delegations representing small business across the country, including chambers from all over California, Indiana, South Dakota, Florida, and Texas. It was a whirlwind trip of two days. It began Tuesday evening with a reception at the US Chamber of Commerce building where we briefed on the details of the bill, along with who the current supporters of the bill were. Wednesday nearly 200 hundred of us were bused to the capital where we met with our Congressmen and women and the State Senators to voice our opinions. It was a tremendous experience that I think everyone should experience once in their life.

Here's what we communicated with our legislators:

This act, if implemented as currently written, would dramatically increase the way in which union organizers can establish a union in a work place. Currently, when a group of employees indicates that they might want to unionize, the National Labor Board is brought in to hold a secret ballot election. This proposed legislation eliminates that step. Additionally, if passed, the union would be permitted to automatically form once 50% plus one of the employees is signed up.

The most disconcerting part of this process is that the sign-ups could take place in the workplace or at the employee's homes, allowing union organizers going door-to-door urging people to sign up. We communicated to our legislators that we believe that the decision to join a union or not should not be one that is made under intimidation, be it from the employer or the union! We let them know that that decision should be made secretly; in the same way we elect our government officials to represent us.

Another clause in the act would require the union and the employer to come to an agreement within 120 days. It provides that if an agreement is not reached during this time, a government official would step in and pick between the proposals of both sides. We feel that it is inappropriate for the government bureaucrats to dictate to business owners and employees their work rules, pay, and benefits.

Anything that makes American labor less efficient is almost always a bad idea. In our current economic downturn, it could be catastrophic. Union favoritism as expressed in "The Employee Free Choice Act" will force more jobs overseas, positioning American labor to be even less competitive in a difficult global market. Increasing the speed at which jobs leave America will only encourage us to create short-term solutions that do not fix long-term problems, jeopardizing the foundation that small business provides our economy.

Make your voice known today. Contact your U.S. Senators and Representatives and remind them about the detrimental effect this legislation will have on U.S. small businesses, the backbone of the American economy.

Nick Hodges, President of NCH Wealth Advisors, provides US expatriates with the best tools, strategies and planning techniques to help expats manage their tax and financial goals and dreams on a day-to-day basis regardless of their location. To claim your free gift, ExPat Life Portfolio Kit, visit his site at =======> ExPatCFO.com

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