Tag: employment

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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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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.

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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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Income

Straightforward policy reforms can reverse Oregon’s lower-than-average incomes and high cost of living

By Eric Fruits, Ph.D.

Oregon’s economy seems to be chugging along, yet many of us feel like we’re losing steam. Employment and incomes are up since last year, but when we compare Oregon with other states, things don’t look so good here.

Oregon’s median family income is about the same as the national average. But according to the Census Bureau, we are 14 percent below our northern neighbor. Oregon’s per capita personal income—another measure—is more than 8 percent lower than the national average. Oregon is not a rich state.

At the same time, according to one widely used survey, Oregon’s cost of living is about 25 percent higher than the national average and 17 percent higher than in Washington. Oregon’s Consumer Price Index has increased 20 percent since 2007, while prices nationwide only increased 16 percent. Much of this disparity is due to Oregon’s increased cost of housing. In addition, prices for food, gasoline, and health care are also higher here.

It’s expensive to live in our state. When adjusting incomes for the cost of living, Oregon goes from the middle of the pack to the bottom of the bunch. Accounting for purchasing power, Oregon’s median family income is 20 percent lower than the nation and 27 percent lower than Washington’s.

While our incomes are lower, they are more evenly distributed. By various measures, Oregon has less income inequality than most other states. Our top one percent of income earners has a smaller share of total incomes, and our poverty rate is lower than the national average.

On the one hand, our state does not have enough deep pockets to feed soak-the-rich tax policies. On the other hand, our below-average incomes mean we don’t have the resources to feed soak-the-middle-class tax policies like the health insurance and provider taxes that a “no” vote on Measure 101 in the upcoming January 23 election would repeal.

It also means we don’t have the resources to feed soak-the-poor tax policies like the carbon tax the legislature is almost certain to take up next February.

Regulations regarding paid time off, employee scheduling, and occupational licensing increase the cost of employing people without directly adding money to workers’ paychecks. The result is reduced employment and lower wages.

Oregon’s land use laws—as well as regulations regarding design review, historic preservation, and inclusionary zoning—have stifled residential development. Demand for housing is outpacing construction, driving up housing prices. The Oregon Office of Economic Analysis estimates that over the past 10 years, the Portland area has underbuilt by 27,000 units.

The application of Oregon’s land use laws has also limited commercial development. While local areas are supposed have a 20-year supply of vacant industrial land, too often much of that land is not development-ready. Modern companies operate in globally competitive markets and cannot wait for a years-long planning process. Instead of waiting, they locate and expand elsewhere, taking jobs with them.

Anyone who drives through the Portland area knows that congestion has worsened over the past few years. It affects more than just commuters. The Oregon Department of Transportation concludes that congestion is affecting freight traffic and businesses throughout the state, threatening their national and international competitiveness. Higher transportation costs result in higher prices for consumers.

With the decline in water traffic in the Port of Portland and increased railway congestion, highway traffic is a key transportation mode for freight. As highway conditions worsen, Oregon is more likely to get crossed off the list of places to do business, resulting in a loss of potential middle-income jobs.

A recent study of income and cost-of-living data between states concludes: “Cost of living is clearly impacted by state policies [such as those noted above].” Oregon can move from being a poor state to a rich state through straightforward policy reforms. These must address our high cost of living as well as our lower incomes. Reforms to speed up and expand real estate development will relieve housing price pressures and attract employers. Construction to relieve congestion will improve our competitiveness while reducing roadway accidents and alleviating commuter stress. Labor market reforms will increase employment and boost Oregonians’ paychecks.

Do these things, and Oregon can meet its promise to all of us.

Eric Fruits, Ph.D. is an Oregon-based economist, adjunct professor at Portland State University, and Academic Advisor for Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was originally published by the Pamplin Media Group and appeared in the Gresham Outlook and The Portland Tribune.

Click here for the PDF version:

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