Month: December 2019

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Press Release: Report shows possible benefits to workers, employers, and unions from increased competition in representation

December 30, 2019

FOR IMMEDIATE RELEASE

Media Contact:
Eric Fruits, Ph.D.
(503) 242-0900
eric@cascadepolicy.org

PORTLAND, Ore. – Research published by Cascade Policy Institute concludes workers, employers, and unions could benefit from increased competition among labor unions. Competition among unions and workplace freedom would lead to improved choice and representation for workers, reduce costs for employers, and may lead to increased union membership.

Introducing competition among unions can be accomplished in several ways. States, such as Oregon, could pass legislation allowing for competing bargaining units and forbidding “no raiding” pacts among unions. In addition, litigation challenging exclusive representation on First Amendment grounds would present a logical next step after the U.S. Supreme Court’s Janus decision.

Inter-Union Competition and Workplace Freedom: Ending Exclusive Representation was authored by Eric Fruits, Ph.D., a Portland-based economist. Fruits is president and chief economist at Economics International Corp., a consulting firm specializing in economics, finance, and statistics. He is also Vice President of Research at Cascade Policy Institute and an adjunct professor at Portland State University.

Fruits says, “First principles of freedom of association dictate that workers should be allowed to choose whether to be represented by a union and should be allowed to choose which union represents them. Aside from first principles, workplace freedom provides individual employees the opportunities to negotiate the wages, benefits, and working conditions that work best for him or her as an individual.”

Labor unions exist to improve compensation and working conditions for their members. While unions themselves benefit from increased membership, individual workers see varied levels of benefit from the services provided by a union. In particular, the one-size-fits-all nature of most collective bargaining agreements—along with the take-it-or-leave-it vote to approve the agreement—means that many employees are covered by contracts that do not reflect their preferences.

Under current collective bargaining practices, employment arrangements are negotiated between an employer and a union with the union acting as the exclusive representative for the workers. As a condition of this exclusive representation, the union has a duty to fairly represent all workers subject to the agreement it negotiates.

Because all employees presumably benefit from the duty of fair representation, this duty has been invoked to justify the imposition of union fees on non-union employees whom unions deride as “free riders.” At the same time, exclusive representation by a single union unjustly reduces freedom of speech and association for workers and stifles individuals’ ability to negotiate employment agreements in both parties’ economic interests. The U.S. Supreme Court in Janus highlights this tension between the unions’ view of a “free rider on a bus headed for a destination that he wishes to reach” versus an employee’s opinion that he or she is “a person shanghaied for an unwanted voyage.”

Unions could avoid the duty and costs associated with representing members and non-members alike by giving up exclusive representation and allowing additional unions to compete for members. Since each union would represent its own members’ interests, individual unions would escape the obligation to represent the differing interests of other unions’ members or of non-union employees. Individual workers would have the freedom to join any one of several competing unions or to negotiate directly with his or her employer.

Empirical analysis indicates states with compulsory collective bargaining in the public sector have higher per-person government spending. This suggests that mandatory collective bargaining may drive up the costs of government. Thus, the elimination of mandatory collective bargaining and the introduction of inter-union competition and freedom of association for public employees may slow the growth of state and local spending.

Inter-union competition and workplace freedom can be implemented via several avenues, including lawsuits challenging exclusive representation on First Amendment grounds, the voiding of “no raiding” pacts, or the implementation of state-level legislation allowing for competing bargaining units.

The full report, Inter-Union Competition and Workplace Freedom: Ending Exclusive Representation, can be downloaded here.

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Contact Eric Fruits by email at eric@cascadepolicy.org for more information or to schedule an interview.

About Cascade Policy Institute:

Founded in 1991, Cascade Policy Institute is Oregon’s free-market public policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Inter-Union Competition and Workplace Freedom: Ending Exclusive Representation

By Eric Fruits, Ph.D.

EXECUTIVE SUMMARY

Labor unions exist to improve compensation and working conditions for union membership. Consequently, unions act to increase their own members’ wages and benefits. While unions benefit from increased membership, workers themselves see varied levels of benefit from the services provided by a union. Workers recognize the tradeoff between wage gains, benefits, employment opportunities, working conditions, and the nature of the political activities in which the union engages. The one-size-fits-all nature of a collective bargaining agreement, along with the take-it-or-leave-it vote to approve the agreement, means that many employees are covered by contracts that do not reflect their preferences. The exclusive representation by a single union in collective bargaining unjustly reduces freedom of speech and association for workers and stifles individuals’ ability to negotiate employment agreements in both parties’ economic interests.

Under current collective bargaining practices, employment arrangements are negotiated between an employer and a union acting as exclusive representative for the workers. As a condition of exclusive representation, the union has a duty to fairly represent all workers subject to the collective bargaining agreement. The benefit all employees theoretically gain from this duty of fair representation has been invoked to justify the imposition of agency fees on non-union employees. Janus, however, prohibits public sector unions and employers from collecting agency fees from non-union employees.

Unions could avoid the duty and costs associated with representing members and non-members alike by giving up exclusive representation and allowing additional unions to compete for members. Since each union would represent its own members’ interests, individual unions would escape the obligation to represent the varied interests of other unions’ members or non-union employees. Individual workers would have the freedom to join any one of several competing unions or negotiate directly with his or her employer.

  • Research indicates unions exert greater effort to attract and retain members when they are competing with other unions. Competition and the threat of membership “raids” provides an incentive for union leadership to be more responsive to its members’ demands.
  • Because of the moderating effect on wages, inter-union competition is expected to be associated with increased employment.
  • Evidence points to ambiguous effect of inter-union competition on union membership. In the United States, competition was associated with increased union membership. In New Zealand, the introduction of competition along with the ability for workers to negotiate directly with their employers was associated with decreased union membership.

Empirical analysis indicates states with compulsory collective bargaining in the public sector have higher per-person government spending. This suggests that mandatory collective bargaining may drive up the costs of government. Thus, the elimination of mandatory collective bargaining and the introduction of inter-union competition and freedom of association for public employees may slow the growth of state and local spending.

Inter-union competition and workplace freedom of choice can be implemented via several avenues, including lawsuits challenging exclusive representation on First Amendment grounds, the voiding of “no raiding” pacts, or the implementation of state-level legislation such as Tennessee’s Professional Educators Collaborative Conferencing Act.

READ THE FULL REPORT

Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., a consulting firm specializing in economics, finance, and statistics. He is also Vice President of Research at Cascade Policy Institute and an adjunct professor at Portland State University, where he teaches in the economics department and school of business.

 

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Don’t Pop the Champagne on Oregon’s Job Numbers

By Eric Fruits, Ph.D.

Oregon is at near full employment. That’s good news, but don’t break out the champagne just yet. Our fizz may soon go flat. Job growth is slowing. And this year, the number of working-age people moving to the state was lower than predicted. In addition, Oregon is the state with the third highest level of people who want to work full-time but are forced to work part-time because they can’t find full-time work.

All of this is troubling. And we’re running the risk that our policymakers will make things worse.

Over and over, I’m hearing politicians tell us that because we have full employment, we can afford to load businesses with ever-higher taxes. They say we can afford to mandate expensive paid time off policies. They say we can afford a costly cap-and-trade program. They act as if full employment gives them the freedom to ignore the consequences of their policies.

These reckless policies assume the party will never end. But the party will end someday, and we will wake up with a nasty hangover in the next recession when an army of unemployed struggle to find work in a state that spent the boom years snuffing out employers.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for PDF version:

12-18-19-Don’t_Pop_the_Champagne_on_Oregon’s_Job_NumbersPDF

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Why Wapato Is the Right Facility for Portland’s Homeless Crisis

By Rachel Dawson

On December 2, I had the opportunity to tour the Wapato Corrections Facility, along with about 100 others. It sits at the heart of a debate raging between the owner, who wants to transform it into a homeless facility, and elected officials who would rather see it destroyed.

 

I previously conducted research on criminal justice reform and have toured correctional facilities around the world, most of which were not inviting spaces. Bolstering my skepticism were criticisms from Multnomah County commissioners who claimed this was inappropriate for a shelter because it contained cells, lacked Wi-Fi, and was too isolated.

 

After the tour concluded, I was confident that every critique I’ve heard about the facility was absolutely baseless. The overwhelming opinion from others on the tour was that demolishing this structure was absurd. It was not like any jail I’d ever visited; the building had nine dorm-like wings with gyms and showers instead of cells, a large kitchen, a theater room, and a medical wing. Bruce Warner, TriMet’s board president, also raised the prospect of TriMet providing bus service between Wapato and downtown Portland.

 

We have a crisis. We have a facility. Now all we need are elected leaders to put the two together.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for PDF version:

12-11-19-Why_Wapato_Is_the_Right_Facility_for_Portland’s_Homeless_CrisisPDF

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T2020 is the transportation measure that Metro wants—not Portland residents

By Rachel Dawson

Is it possible to spend billions of dollars on transportation to make congestion worse? According to Metro, the answer is “yes.”

More than 75% of residents in the Portland tri-county region commute to work by car. Therefore, it should come as no surprise that a similar percentage of voters surveyed by Metro consider traffic congestion a serious problem (73%) and say that improving roads, bridges, and highways to ease traffic should be a regional goal (78%).

Share of respondents who answered each issue is an “extremely” or “very serious” problem.

Next year, Metro wants to raise at least $3 billion in taxes for its transportation package (informally known as “T2020”). That $3 billion is just for what Metro calls its “Tier 1” projects; it still has a long list of “Tier 2” projects that could significantly increase the price. To pay for all that, Metro is considering bonds that would increase property taxes, an additional vehicle registration fee of up to $59, an income tax, or possibly a sales tax. Conservatively, Metro’s transportation package would cost the average household an additional $530 a year in taxes and fees and would be the largest proposed tax increase in Metro’s history.

But, Metro’s T2020 tax package is not the proposal residents in the region want. Close to $2 billion from the plan have been earmarked for transit. Of that amount, nearly $1 billion would go toward a light rail line to Bridgeport Village. Another $50 million would be spent on planning for a MAX light rail tunnel under the Willamette River—planning that most survey respondents did not support. Millions more will be spent devising potential MAX light rail expansions along Powell Blvd to I-205 and 99E from the Orange line’s last stop in Milwaukie to Oregon City.

In contrast, when voters were surveyed regarding the goals for additional transportation funding, more than twice as many people indicated that widening roads and highways to address bottlenecks (31%) was their first choice, compared with only 13% of respondents who preferred providing more frequent and faster bus and MAX service. Widening roads was by far the most popular choice, beating out retrofitting bridges to be earthquake resilient and improving pedestrian safety on streets.

Finally, when asked about specific types of projects that could be funded by a transportation ballot measure, repairing potholes had the highest percentage of support (86%), while upgrading MAX to run underground at a cost of $5 billion dollars was the only potential project mentioned to have support from less than half of respondents (only 44%).

Portland residents were clear about what they want: better roads and less congestion on roadways. They were equally clear about not supporting MAX upgrades.

Instead of crafting a measure that reflects what people want, Metro has chosen to allocate the majority of funds in their 2020 transportation measure to areas that received the lowest amount of support, such as public transportation and biking/walking infrastructure improvements. It is clear these are projects that Metro staff, not voters, want for the region.

Based on respondents’ answers, officials should consider adding auxiliary lanes on freeways and major arterials to address congestion in bottlenecks. For example, a new auxiliary lane on I-5 southbound from OR 217 to I-205 brought congestion levels down from five hours a day to only one; and an auxiliary lane added to 217 between 99W and I-5 S improved congestion from four hours to zero. Adding auxiliary lanes decreases the number of merges that occur at a given section. This in turn would lead to fewer vehicle emissions, as cars idling in congestion produce more emissions than driving in free-flowing traffic. Also, merging onto a freeway is a major cause of accidents, so decreasing the number of merges also improves safety.

Metro staff seem to forget their job is to serve the public. They are attempting to force their own transportation agenda on the region instead of providing the improvements residents say are most important. Portland metro residents should stand up to this bullying by voting “no” on Metro’s transportation bond measure next year. We need improved transportation, not more low-use government pet projects.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was published by Pamplin Media Group on November 27, 2019.

Click here for PDF version:

19-25-T2020_is_the_transportation_measure_that_Metro_wants—not_Portland_residentsPDF

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Oregon’s population growth: Slow and steady may not win the race

By Eric Fruits, Ph.D.

Oregon’s population grew by more than 41,000 residents last year, according to Portland State University’s Population Research Center. That may sound like a boom and lead some to conclude the state is doing great: “Look! People are still flocking to Oregon.”

But, in fact, the state’s population grew by about 1%, which is the slowest growth in the last six years. In contrast, Washington’s population has grown at a pace that’s about 50% higher than Oregon’s. Idaho’s and Nevada’s population growth have been about double the rate of Oregon’s. We may no longer be the first choice for people heading Out West.

Because job and population growth go hand-in-hand, employment growth tells a similar story. While the Oregon Employment Department says the state’s economy is in a “sweet spot,” Oregon’s employment growth has been eclipsed by Washington, Idaho, and Nevada. Indeed, it can be argued that Oregon’s employment growth is looking more like lackluster California than the rest of the Pacific Northwest.

Some might cheer Oregon’s slower growth. With the state’s land use and tenant laws constraining housing supply and sluggish residential construction driving up housing prices, slower population growth relieves some of the upward pressure. Although the state’s housing prices have rapidly increased, over the past five years Oregon home price increases (49%) have been much smaller than neighboring Washington (56%), Idaho (56%), and Nevada (64%). For the second month in a row, Portland-area rents have declined.

Slower employment growth means fewer commuters, thereby delaying the day of reckoning for Oregon’s no-more-roads policies. Even so, Portland is rated the tenth most congested city in the U.S.

However, no one should cheer slower growth. A growing population and growing employment are signs of a healthy economy. Over time, when Oregonians’ incomes were growing, so was its population. When job opportunity grew, so did population. The reverse is true, too.

Oregon politicians and policymakers tend to take population and employment growth for granted. Or, even worse, they ignore Oregon’s performance relative to other states. By their way of thinking, so long as employment is up and people are moving in, everything is A-OK. They see high-income Californians moving to Oregon and see the dollar signs of more tax revenue.

It’s not A-OK. Looking around the Northwest, Oregonians should ask: “Why are Washington and Idaho growing so much faster?” It’s not an accident. Over the years, state and local policies have made it harder to live and work in the state; and it’s showing up in sluggish growth and fewer job opportunities. Rather than micromanaging to “control” growth, the state should enact policies to foster growth: lower taxes, fewer regulations, and investments that benefit the people who live and work here—or want to live and work here.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization.

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19-24-Oregon’s_population_growth_Slow_and_steady_may_not_win_the_racePDF

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