Jack the Plumber on the Realities of the Skills Gap

Jack Hope, owner of Hope Plumbing in Indianapolis, recently spoke to the Ready Indiana Advisory Council about his experience with the skills gap in the plumbing industry.

He explained the biggest issue he faces as an employer is finding qualified help. The candidate pool lacks applicable skills, and he said this problem is widespread among all skilled trade industries.

“Every time I talk to someone about plumbing, they comment on how gross it must be and every time I reply, ‘That is why they pay us the big bucks,’” Hope explains in his blog. “People, of course, think I am kidding, but the average starting salary for a licensed plumber in our shop is $45,000 per year with full health benefits, life insurance, a paid cell phone, a take home vehicle and matched retirement savings.”

You can learn find information about the plumbing industry in Indiana, including number of job postings broken down by region, most requested skills and average salaries, at www.IndianaSkills.com.

Court Strikes Down Controversial NLRB Poster Requirement

This issue has been kicked back and forth in the court system in the last couple of years. There finally appears to be some closure, much to the relief of America's business community. The Hill reports:

Industry groups, which quickly challenged the rule after it was issued, cheered the ruling. Jay Timmons, the president and chief executive of the National Association of Manufacturers, pledged to remain vigilant against the “rogue” NLRB.

“The poster rule is a prime example of a government agency that seeks to fundamentally change the way employers and employees communicate,” Timmons said in a statement. “The ultimate result of the NLRB’s intrusion would be to create hostile work environments where none exist.”

Judge A. Raymond Randolph, who wrote the decision for the U.S. Court of Appeals for the District of Columbia, suggested the rule was a clear violation of free speech rights because the government “selected the message and ordered its citizens to convey that message.”

Freedom of speech, Randolph wrote, “includes both the right to speak freely and the right to refrain from speaking at all.”

The court did not rule on whether the union poster regulations were constitutional, deciding only that the NLRB exceeded its legal mandate…

Business groups argue the NLRB has favored unions under President Obama's administration and pointed to the poster rule as one of the most egregious examples.
 
“Today’s decision is a monumental victory for small-business owners across this country who have been subject to the illegal actions of a labor board that has consistently failed to act as a neutral arbiter, as the law contemplates,” Karen Harned, executive director of National Federation of Independent Business's Small Business Legal Center, said in a statement.

The advocacy group National Right to Work called the NLRB’s poster rule an “outrageous effort to transform itself into a taxpayer-funded arm of union organizing.”

This is the second major court defeat for the NLRB in recent weeks. The same appeals court ruled in January that Obama’s recess appointments to the board were illegal and therefore invalid. The independent agency is tasked with prosecuting unfair labor practices and conducting union elections.

“Stopping the NLRB’s burdensome agenda of placing itself into manufacturers’ day-to-day business operations is essential to preventing further government-inflicted damage to employee relations in the United States,” Timmons said.

Union Landscape Continues to Change

More than twice as many union members now work for the U.S. Postal Service than in the domestic auto industry. Given that and other facts of declining union membership, the Heritage Foundation notes that labor laws need to be updated. Indiana Congressman Todd Rokita's efforts are mentioned.

Unions Resist Recognizing Achievement

Such sharp drops in union membership indicate that U.S. labor laws are out of step with the modern economy. Traditional unions no longer appeal to workers the way they did two generations ago. Outdated restrictions in labor laws are now seen as holding back both employers and employees.

For example, union wage rates are legally both minimum and maximum wages: A unionized employer may not pay employees more than the union rate without the union’s permission. While unions happily accept group raises, they often resist individual performance pay. They typically insist that employers base promotions and raises on seniority instead of individual recognition.

In 2011, Giant Eagle gave individual raises to two dozen employees at its Edinboro, Pennsylvania, grocery store. These raises were in addition to the union wages. United Food and Commercial Workers Local 23 nonetheless argued that the pay increases violated their collective bargaining agreement. They objected to the fact that some entry-level employees made more than senior union members. The union filed charges. Last November, the Federal District Court for Western Pennsylvania ordered Giant Eagle to rescind the pay increases. Nationwide, union members are less than half as likely to receive performance pay as non-union employees.[8]

This holds back union members. A one-size-fits-all approach was workable when all employees brought essentially the same skills to the bargaining table. But the nature of work is changing. Employers have automated many rote repetitive tasks. At the same time, employers are also flattening the job hierarchy. The line between management and workers is blurring. Employers increasingly expect workers to exercise independent judgment and take initiative on the job. Employers want to reward—and employees want to be rewarded for—individual contributions that no collective contract can reflect.

Analyst: RTW Opponents Use Flawed Math

Citing research by James M. Hohman of the Mackinac Center, Michigan Capitol Confidential takes issue with the claim that right-to-work states feature lower wages. Hohman's conclusion is that, after all the facts are in, right-to-work states actually have the higher per-capita incomes.

Scores of right-to-work critics ranging from politicians to economists have cited lower per-capita incomes in right-to-work states as why the new law is not good for Michigan.

However, not factoring in cost-of-living exposes a flaw in that analysis, said Mackinac Center for Public Policy Fiscal Analyst James Hohman. Once that is considered, Hohman said the per-capita income is higher in right-to-work states than non-right-to-work states.

For example, Texas per-capita income was $37,098 but would have a purchasing power of $49,700 in the state of New York in 2007, according to Hohman’s analysis. New York’s per-capita income was $47,852.

Hohman found that in terms of Michigan dollars in 2000, right-to-work states had 4.1 percent higher per-capita personal incomes than non-right-to-work states when factoring in cost of living. Michigan was considered a non-right-to-work state because the law was passed in late December 2012. Hohman said the right-work-states didn’t surpass non-right-to-work states until 2003.

“One of the most basic arguments repeated time and time again by right-to-work opposition is that Michigan is going to lose income by passing this law,” Hohman said. “That just isn’t the case. When you adjust for what a dollar can get you, the difference reverses itself."

Hohman used the cost of living index done by political scientists William Berry, Richard Fording and Russell Hanson. They adjusted for cost-of-living in every state from 1960 to 2007.

Pennsylvania Legislators Introduce Right-to-Work

The Washington Free Beacon reports that legislators in the Pennsylvania legislature want to bring right-to-work to their state, citing its passage in Indiana and Michigan and the need for job growth and desire to attract businesses.

Six GOP lawmakers on (Jan. 22) introduced a proposal to make Pennsylvania, the “Keystone State,” the nation’s 25th right-to-work state.

The legislation, which would end the longstanding practice of forcing employees to join unions as a condition of work, has stalled several times over the past decade. The bill’s sponsors say new laws in Michigan and Indiana forced the state’s hand.

“The needs of our economy dictate that it must be adopted at some point in time,” said state Rep. Daryl Metcalfe. “The victory of right-to-work in Michigan and Indiana certainly thrust the spotlight on it and made the General Assembly look it more seriously than the past.”

Pennsylvania is one of the most heavily unionized states in the country with more than 700,000 workers belonging to organized labor groups. That is nearly 100,000 more union members than in Michigan.

The advent of right-to-work in the traditionally labor-friendly Midwest and Rust Belt has left policymakers scrambling to catch up, said Nate Benefield, director of policy analysis at the free-market Commonwealth Foundation.

“Indiana and Michigan are states that we directly compete with,” he said. “We’re going to have to evolve to remain competitive and it’s also a great opportunity for us to outcompete the northeast.”

If Pennsylvania passes right-to-work, it will be the first state to do so in the northeast. That could give it an economic advantage over neighboring New York and New Jersey, which lead the nation in union membership as a percentage of the workforce, advocates of right to work legislation said.

“We’re playing catch-up to Indiana and Michigan, but our immediate neighbors, New York, New Jersey, and Maryland are even less competitive than Pennsylvania is,” Benefield said. “I think right-to-work is a big part to improving our business climate.”

Restricting the use of compulsory union dues also could deal a blow to union influence.

Double Standard Approach Not Helping Teamsters

Having worked in Democratic politics, my take on labor in America has certainly been influenced. Without getting too deep in the woods, I think there is definitely a time and place for organization in some industries — and a functional coexistence between a union and an employer can be a healthy thing if both sides act responsibly. The unfortunate aspect of that, however, is that sometimes union tactics become so aggressive — and even hypocritical – they hinder their relevance and hardly endear anyone to their cause. Red State takes a look at a recent Teamsters strategy that even had the National Labor Relations Board irritated. As the author of the post points out, their actions seem to punish the very workers they purport to help.

Now, a Teamsters union local in Memphis is fighting its two clerical workers from unionizing with the Steelworkers and–again, the Obama labor board is having none of it.

In November, the regional office of the NLRB held a hearing to determine whether or not two clerical workers employed by Teamsters local 667 should be allowed to unionize by the United Steelworkers International Union.

Like the vast majority of employers, the Teamsters hired an outside lawyer.

In the NLRB’s Decision and Direction of Election [PDF], the Acting Regional Director notes that the Employer [the Teamsters] tried to claim that one of the two clerical employees the Steelworkers is trying to unionize should be ineligible because she is confidential.

If the NLRB found that the one employee was a confidential employee, she would have been excluded from being in a bargaining unit and the unit would have been inappropriate since there must be two or more.

The Acting Regional Director found that the individual was not confidential and, as a result, order an election to be held.

The case didn’t end there, however.

The Teamsters deployed their outside attorney to file a lengthy appeal (known as a Request for Review) to the NLRB in Washington.

On December 31, the union NLRB members in Washington denied the Teamsters request for review as it raised “no substantial issues warranting review.”

While the NLRB may not have found any substantial issues warranting a review, here are a couple:

Why is the Teamsters union spending thousands of dollars on hiring lawyers to fight unionization of their own workers?

Couldn’t the Teamster bosses just practiced what they preached and voluntarily recognized the Steelworkers and bargain a…you know…fair contract?

Note: Unions usually call these types of tactics “union busting”…Except, apparently, when it’s unions engaging in said tactics.

Worst of the Worst in 2012 Regulations

There’s room for one last "Bottom 10" list of 2012. With thousands of new government regulations each year, it’s difficult to select the worst new rules put into place. Two Heritage Foundation experts give it a try, starting with 1,099 pages of new mortgage disclosure rules that have the stated goal of simplifying home loans.

(10) Mortgaging the Future: New mortgage disclosure rules were released in July by the newly created Consumer Financial Protection Bureau, with a stated goal of simplifying home loans. The rules run an astonishing 1,099 pages. The net result of this and similar rules? Fewer consumer mortgage lending options and increased costs.

(9) Tracking Your Travels: In December, the Department of Transportation proposed that electronic data recorders, popularly known as "black boxes," be required in most cars starting in 2014. The stated goal is to collect more information about car accidents. But this spooks privacy advocates, who warn that federal bureaucrats could misuse this information.

(8) Essential Choice Cutbacks: Under the Obamacare "essential benefits" rule, health insurers will be forced to cover health care services that the government deems essential, whether you want to buy them or not. The net result will be to increase health care costs, increasing the burden on consumers, employers and taxpayers.

(7) Instant Union: In April, the National Labor Relations Board issued new rules that shortened the time allowed for union-organizing elections to between 10 and 21 days. This leaves little time for employees to make a fully informed choice on unionizing, threatening to leave workers and management alike under unwanted union regimes.

(6) Don’t Let Them Eat Cake: The Department of Agriculture in January published detailed new nutrition standards for school lunch and breakfast programs. More than 98,000 elementary and secondary schools are affected – at a cost exceeding $3.4 billion over the next four years. The new rules sparked protests, and even a few hunger strikes, from students nationwide.

(5) Cleaned Out: Regulators admit that the new Energy Department rules governing dishwashers will do little to improve the environment. Rather, proponents claim they will save consumers money. But they will also increase the price of dishwashers, and only about one in six consumers will keep their dishwasher long enough to recoup the cost.

(4) Soda Socialism: On Sept. 13, at the behest of Mayor Michael Bloomberg, the New York Board of Health banned the sale of soda and other sweetened drinks in containers larger than 16 ounces. New Yorkers apparently are still allowed refills, at least for now. No word on how many NYC cops will be moved from crime prevention to monitor the city’s soda fountains.

(3) Sticker Shock: Adopted in August, these new automobile mileage rules require a whopping average fuel economy of 54.5 miles per gallon by 2025. Sticker prices will jump by hundreds of dollars. Regulators argue that the fuel savings will make up these costs. Whether consumers want to make such a tradeoff doesn’t matter. The government has decided for them.

(2) Increasing Energy Costs: The Environmental Protection Agency in February finalized strict new emissions standards for coal- and oil-fired electric utilities. The benefits are highly questionable, with the vast majority being unrelated to the emissions targeted by the regulation. The costs, unfortunately, are certain: estimated to be $9.6 billion annually. The regulations are likely to undermine energy reliability and raise energy costs across the entire economy.

(1) Conscience Denial: The Department of Health and Human Services on Feb. 15 finalized its mandate that all health insurance plans include coverage for abortion-inducing drugs, sterilization procedures, and contraceptives. The mandate allows no exception for church-affiliated schools, hospitals and charities whose religious principles conflict with the mandate. To date, 42 lawsuits representing more than 110 plaintiffs have been filed challenging this restriction on religious liberty as a violation of First Amendment.

Despite Obama’s Objections, Job Growth in RTW States Likely Aided His Reelection

It’s no secret the Indiana Chamber supports right-to-work and was a driving force in its passage in Indiana. It’s also no secret that big labor and President Obama are not fans. However, an interesting blog from the National Institute for Labor Relations Research explains how right-to-work states have seen the bulk of job increases, and most likely helped inspire confidence in Obama’s economy during his reelection bid:

Exit polling conducted by the Associated Press indicates one important reason the President was able to win at all was that four in 10 voters believed the national economy was improving, while only three in 10 believed it was getting worse.

To convince voters things were getting better, the Obama campaign pointed to the millions of jobs that have been created since the recession officially ended in June 2009.  Household employment data for the 50 states and Washington, D.C., do show an overall net gain of 2.59 million jobs through this September.

Ironically, the bulk of the increase occurred in the 22 states that have had Right to Work laws on the books since June 2009. Their aggregate household employment grew by 1.86 million, or 3.4%.  (Since Indiana did not adopt its Right to Work law until this February, the 19,000 jobs it added are not included.) Because Right to Work laws protect employees from being fired for refusal to pay union dues or fees, Big Labor bosses hate them. And the union hierarchy’s massive, forced dues-fueled campaign support is the single most important reason the President was reelected.

At the same time, Right to Work states (again excluding Indiana) were responsible for 72% of all net household job growth across the U.S. from June 2009 through September 2012 (see chart above).  If these states’ job increase had been no better than the 0.85% experienced by forced-unionism states as a group, the nationwide job increase would have been less than half as great. And the President wouldn’t have been able even to pretend the economy was in recovery.

During his first term, Barack Obama repeatedly expressed virulent opposition to Right to Work laws and enthusiastically supported “card-check” forced-unionism measures and other legislative and bureaucratic proposals designed to shove millions of additional workers under union control.  Fortunately, Right to Work proponents generally thwarted him.

Now a genuine national recovery depends on the President calling off his administration’s guerrilla attacks on Right to Work states for the next four years. Will Obama, his congressional allies, and his political appointees at last step aside and allow the 23 Right to Work states to serve as the bulwark of U.S. economic recovery? Or will they continue trying to deter employers and employees from setting up shop and expanding in Right to Work states?

Hat tip to our Political Affairs Coordinator Ryan McNicholas and the AEIdeas blog.

Make Sure NLRB Can’t Come Down on Your Social Media Policy

As if you needed more to deal with from the National Labor Relations Board, be sure that your social media policy is compliant with NLRB standards. Ragan offers this useful article, stating what you should keep in mind and how the NLRB has targeted one wholesale giant.

Here’s the deal. If a work rule has the potential to reasonably chill an employee’s right to organize or bargain collectively, it’s unlawful. Employees have the right to complain publicly if they think their employers’ labor practices are unfair.

So if I complain on Linkedin that someone else is making more than I do, and it’s unfair, that’s a protected activity. If you fire me for disclosing confidential salary information, you’re going to lose in court. It’s as simple as that, and if your social media policy prohibits it, you are opening your company up to a NLRB action.

Your social media policy cannot limit free speech

You don’t have to reference the National Labor Relations Act to violate it. If your social media policy uses language that restricts employees from using social media to "damage the Company, defame any individual or damage any person’s reputation" the NLRB sees it as restricting labor’s protected rights, because that social media policy it could have a chilling effect on what is seen a free-speech issue.

On the other hand, if the restrictions are subordinated to a clause on sexual misconduct or racial harassment, it would be allowed, as employees would be able to appreciate the rule in context. It’s the overly broad restrictions (often wrapped into social media policy) that the NLRB opposes. The best social media policies will be more exacting in their language. 

Advancing the Manufacturing Cause

We make things in Indiana — and America. So how are we going to excel at doing just that? The White House has some ideas. Or at least the Advanced Manufacturing Partnership steering committee does in the form of a report titled Capturing Domestic Competitive Advantage in Advanced Manufacturing.

AMP is a public-private partnership created by the Obama administration in 2011 with the goals of increasing investments in advanced manufacturing as well as new high-paying manufacturing jobs. The report offers 16 recommenations focused on three areas: enabling innovation, securing talent and improving the business climate.

Some of those recommendations:

  • Institute a national strategy that includes a systematic process to identify and prioritize critical cross-cutting technologies
  • Add a process to evaluate current/future technologies for research and development funding
  • Create a more robust environment for commercialization that connects manufacturers to university innovation
  • Develop a marketing plan to build excitement and interest in manufacturing careers
  • Implement a searchable national database of manufacturing resources
  • Increase community college level education investments to help develop a skilled workforce
  • Adopting tax reforms that level the playing field for domestic manufacturers, including lowering the corporate tax rate
  • Start new programs that include national manufacturing fellowships and internships

OK, there’s a plan with a lot of fancy words. Now the real work begins. It’s called IMPLEMENTATION.