Vermont Labor Goes for the Brass Ring

It's widely expected that 1997 will be the Year of Property Tax Reform in Montpelier. While that issue fills the headlines, the legislature is moving quietly but steadily to enact a special interest policy agenda that will do far more than any property tax "reform" to shape the long term economic future of Vermont.

That agenda is that of the 24,000 members of Vermont's organized labor movement. It is sharp and clear; it is far reaching; it has enormous implications for Vermont's economy of the future; and virtually no one but Labor and its legislative friends is paying much attention to it.

Not since 1988, in a session dominated by weeks of wrangling over Act 200, has Labor been in such a favorable legislative position. Throughout this decade the Senate, at least, had an effective majority not interested in, or actively opposed to, Labor's agenda. No more. Now both House and Senate have a strong pro-Labor majority, and at last Labor sees its chance to push through its entire accumulated wish list.

The first item on the wish list was raising the minimum wage for the second year in a row. On January 28 the House voted to increase the state minimum wage another 25 cents, to $5.25/hour in 1998. Historically the labor movement has favored a high minimum wage to push up the wage scale generally, with little concern for the unskilled workers thus priced out of the job market.

The House also eliminated the sub-minimum "training wage" allowed in the law to encourage employers to hire workers who are not initially cost effective at the minimum wage level. Both of these steps are relatively easy to achieve now, when Vermont's strong job market has lifted most entry wages above the legal minimum.

Labor's allies the "Peace and Justice Center" and Rural Vermont have already appeared at the State House to urge legislators to enact a mandatory "living wage" of as much as $14 an hour. That won't happen this year (a Progressive effort to push the wage to $6/hour was roundly defeated) but it is clear the campaign has begun. What sort of economy the state would have with a $14 minimum wage is apparently not a question that troubles the price-fixing hawks.

Here is what's next on Labor's list:

* "Little Davis-Bacon": this bill, long a major goal of Labor, would require contractors building government-funded projects to observe union-dictated work rules and pay "prevailing wages" far above market levels - probably at levels dictated by Boston construction trades contracts. Such a bill would parallel the federal Davis-Bacon Act of 1931, which over the years has added untold billions to the cost of taxpayer-funded construction projects.

* Expanded employee leave: this bill would require all covered employers to give employees unpaid (at first) leave for a wide variety of reasons, regardless of the needs and competitive position of the enterprise.

* The strikebreaker bill: another cherished labor goal, this bill would require employers who hired replacement employees to keep running during a strike to fire those workers and hire the strikers back when the strike is over - regardless of how well the new employees performed, or what the strikers engaged in during the conflict.

* Worker's comp: this bill would allow an injured worker not only to receive the insurance benefits from the worker's compensation system, but also to sue the employer for even more - even though the purpose of worker's comp is to eliminate lawsuits for on-the-job injuries.

* The Union Commission: As if all this isn't enough, Rep. Steve Howard (D-Rutland Town) is said to be readying the introduction of a bill to create a taxpayer-funded Commission to Encourage Union Growth in Vermont. Its purpose would presumably be to think up and advocate even more labor price fixing and employer-bashing schemes for the benefit of the Labor movement.

Are these people serious? Well, one pro-business legislator reports that the lobbyists for the AFL-CIO are "the first ones here in the morning and the last ones to leave at night." What about their business counterparts? Another legislator says "They show up around 10 and are gone by 3. They aren't focused and they aren't effective."

Enactment of Labor's agenda will eventually make Vermont look like a struggling Latin American economy: higher taxes, mandated costs on business, government-dictated wages, government-dictated work rules, and government-dictated hiring and firing. Oh yes, and very little foreign investment.

It would be a spectacular political triumph for an interest group that now comprises less than eight percent of the state's work force. A triumph, that is, until uncompetitive Vermont businesses started to disappear, their workers started losing their jobs, and their communities began to look like ghost towns.

How will Governor Howard Dean greet this flood of anti-competitive legislation if it arrives on his desk? Obviously no one can say for sure, but when Gov. Dean was seeking reelection in 1992 he opened his remarks to the state AFL- CIO conference by declaring " I've always gone 100% down the line with Labor."

If this radical agenda passes and wins Howard Dean's signature, it may well be Vermont's economy that goes down the drain with Labor.

February 1997