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Employee Free Choice Act Will Stimulate the Economy

If Congress intends to rescue all Americans—and not just the banks, hedge funds, and insurance companies that got us into this economic crisis—it needs to move quickly to pass the Employee Free Choice Act. Much of the pain on Main Street stems directly from three decades of wage stagnation and decline, not just the reckless abandon of Wall Street. In our report, Income and Inequality, Americans for Democratic Action shows how over the last decade the wages of 80% of American workers fell behind both inflation and the productivity gains their work won for corporate employers. That means millions of workers had to borrow, not for “luxuries” but just to cover the costs of mortgages, education, and health care. Meanwhile, the financial gains from their increased productivity were flowing straight to managers and shareholders.

Passing the Employee Free Choice Act would make it easier for millions of people to join unions and collectively bargain for a fairer share of the profits created by their work. Why would this stimulate the economy? Union workers earn 30% more than their non-union counterparts, and are more likely to have employer paid health care and pensions. Putting more money into the pockets of people who will spend it—who must spend it--is the best, quickest, and most basic way to stimulate the economy. As much as Wall Street tried to have you think that credit default swaps, collateralized debt obligations, and other mind-bendingly complex financial transactions would make us all rich, what keeps our economy going is the buying power of millions of middle- and working-class Americans. Only when all Americans are on solid economic footing will our economy improve.

The fortunes of the richest one percent of the population grew exponentially during the Bush Administration, while the vast majority worked more and more for less and less--unless they belonged to a union. Yet, unions struggled to survive not just because of ever-increasing low-wage competition from abroad, but also because Washington has made it harder for struggling workers to form a union by making it easier for businesses to use intimidation and outright firing to deny the fundamental right to bargain collectively.  Polls report that a clear majority of Americans say they would join a union if one were available.

ADA’s study shows that CEO pay has grown over the past 30 years to 411 times the average workers’. CEOs got this great deal because they signed contracts guaranteeing compensation, benefits and retirement—the sort of contracts a majority of Americans would like to sign, but lacking collective bargaining power, can’t. There’s a question of fairness here: CEOs would never consider working without a contract, so why should anyone else?

Sixty percent of Americans support the Employee Free Choice Act.  They elected a new President and solid majorities in both houses of Congress who pledged to make it the law. Yet at this very moment, in lobbying offices and boardrooms across the country, corporate special interests are planning to spend nearly $200 million to defeat the bill by running misleading ads and pouring money into the campaigns of Senators and Representatives willing to vote the “right” way. Two hundred million versus the majority of Americans, their President and their Congress. That should tell you everything you need to know.

Times are going to get harder before they get better—we don’t need to make them harder still for millions of people by systematically encouraging more layoffs, more wage cuts, and more benefit losses so that the country’s biggest companies can pay bigger dividends and fatter bonuses to a few. Putting money in the pockets of people who will spend it will rebuild the nation’s hard-working middle and working classes. Passing the Employee Free Choice Act would do just that.

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