Once again, the Obama administration is bending over backward — and disregarding decades of precedent — to prop up its friends in big labor at the expense of small business.
Recently, the National Labor Relations Board declared McDonald’s is a joint employer with its franchisees. It’s a cynical move meant to give unions a much-needed boost in membership and increase pressure on employers and elected officials to accept calls for a 40-percent increase in the federal minimum wage.
In plain English, the government has decided McDonald’s franchisees no longer own their own businesses. The NLRB argues the stores are co-owned by McDonald’s Corp. It’s a dubious claim that would make it easier for unions to organize fast-food workers.
Until now, unions had to approach each franchisee as a separate business. If the labor board’s “joint employer” rule is allowed to stand, unions would need the support of a relatively small number of employees to unionize every McDonald’s in the country.
And it wouldn’t stop at McDonald’s. Unions would try to organize everything, from other restaurant chains to cleaning services and hardware stores — any industry with a franchise model.
What makes the NLRB’s latest move so offensive is that, once again, the Obama administration is trying to bypass our government’s system of checks and balances. Without any opportunity for public debate and no input from the legislative branch, this administration is trying to rewrite rules and overturn decades of established law regarding franchisees.
The fact is, no matter what the NLRB claims, franchisees are small-business owners who do their own hiring and firing and have their own employer taxpayer IDs. Know why McDonald’s says deals are available only at “participating” stores? It’s because franchisees have final say in whether their stores will participate.
Then there’s the question of raising the minimum wage.
Organized labor has been a big supporter of the Obama administration’s efforts to raise the federal minimum from $7.25 an hour to $10.10. On its website, the AFL-CIO says, “Raising the minimum wage is a critical and simple way to help repair the underlying weakness in our economy.”
According to economists at the University of Georgia and San Diego State University, most of those earning minimum wage aren’t family breadwinners, and most aren’t poor. What’s more, the nonpartisan Congressional Budget Office has said raising the federal minimum wage to $10.10 would result in the loss of 500,000 jobs as employers eliminate positions to offset the cost of higher wages.
So, who would a raise help? For starters, the unions themselves.
In the Wall Street Journal, Richard Berman of the Center for Union Facts said collective-bargaining agreements filed with the U.S. Department of Labor reveal that at least some union contracts call for automatic pay increases when there’s an increase in the minimum wage.
Unions in this country are in trouble. Membership has crashed. In the early 1980s, about one in five hourly and salaried workers were union members. Today, it’s closer to one in 10. Historically, organized labor has supported Democrats, so it’s no wonder the Democratic president wants to support them.
This summer, the U.S. Supreme Court said President Barack Obama’s recess appointments to the NLRB were unconstitutional. Obama tried to circumvent the congressional appointment process and seat three pro-union advocates on the board. These illegal appointments played key roles in several pro-union policy decisions, including the so-called ambush election rule, which greatly simplified the process for union organization votes, and a rule requiring employers to display union posters in the workplace.
When the labor board’s latest boondoggle reaches the courts, I hope the courts shoot it down, too.
Kyle Jackson is Georgia state director of the National Federation of Independent Business.
