President Obama Accepts Reality on Collective Bargaining

by News on December 13, 2011

in Surveys and Reports

Americans for Tax Reform

Josh Barro has a great piece in NRO today about the President embracing private sector compensation reform rather than layoffs. Obama cites Marvin Windows and Doors, a Minnesota company that cut pay and benefits but avoided any layoffs during the economic downturn. It’s worth reading in full, but here’s an excerpt:

But let’s take a closer look at the Marvin model that Obama is praising. The president noted that Marvin’s workers “agree[d] to give up some perks and some pay,” but there wasn’t really an agreement — the workers’ options were to take the pay cut or quit. As one incensed FireDogLake contributor notes, Obama is praising a non-union company for unilaterally cutting its workers’ pay.

Barro goes on to make the case that this is the exact type of choice that is not available in the public sector where collective bargaining exists. Unions time and again choose layoffs over compensation reform, because entrenched union members would avoid the brunt of the layoffs but share the pain of any reductions in wages or benefits.

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