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Labor Pains: Unions And The DNC Hit Queen City

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In my almost 30-year finance career I’ve worked with literally thousands of companies, and I cannot think of one instance where union involvement has been positive for a business. Conversely, I can think of multiple examples of unions creating needless problems for businesses, and in some cases being a major contributor to business failure. Union involvement is a huge negative for banks, equity investors and other providers of capital to business, including small business.

Unions served a very important purpose in the early/mid 20th century – for example, unions contributed to the eradication of many atrocities levied on West Virginia coal miners by their employers. Today, with OSHA, state labor regulations, plaintiff attorneys, etc., unions are absolutely useless and outdated, and they are a medium for promoting and affirming mediocrity and incompetence in a workforce.

I have a close friend – a coach for one of my kids – whose local business recently failed partially because he lost government work to out of state union companies, despite his company having a great track record and being cheaper. This happened post Obama. My friend’s local company has closed and over time at least nine people lost their jobs. This has placed quite a strain on his family, and caused him to pursue a total career change. My friend’s very difficult experience further demonstrates that unions are part of the problem and NOT part of the solution.

The DNC And Unions

Should North Carolina citizens be concerned about the following clause in the Charlotte DNC contract?

“To the extent permitted by law, to the extent, if any, such labor is available in the region, and except as otherwise expressly agreed by the DNCC, all services, goods, equipment, supplies and materials to be provided or procured by the Host Committee hereunder shall be performed or supplied by firms covered by current union collective bargaining agreements with the unions which have jurisdiction for the work or services to be performed.”

Lawyerese to English translation – for the DNC, union companies will have priority over nonunion companies.

Here’s the real catch: according to this clause price doesn’t matter; quality doesn’t matter; speed doesn’t matter; track record doesn’t matter; promptness doesn’t matter. The only thing that matters is being union.

This requirement is likely to trump truly local companies from getting DNC work in some instances. For example, from a legal standpoint it takes about two minutes for, say, a Chicago union-dominated construction company to establish a NC-based subsidiary. Should that happen, my reading of the DNC contract indicates that the Chicago-based union company will trump our truly local nonunion companies and obtain DNC work due to this technicality.

Unions Aiming For NC And Charlotte Government?

Given the Democrats’ crushing election defeat statewide in North Carolina, but the continued Liberal dominance of the Charlotte City Council and the Mecklenburg County Commission, does this mean that the DNC is the first major salvo in union efforts to organize in Charlotte?

Let’s not kid ourselves – Anthony Foxx et. al. would love to see major union infiltration in Metrolina business and government to further solidify their political base and provide a major source of funding. For Charlotteans that is a very, very bad thing; the financial deterioration of many states and major US cities is largely due to the bloated pay and pensions of unionized public workers.

Public unions are obviously a huge conflict of interest. How can an elected official objectively negotiate/approve a public union contract when that union and its employees contribute (or not, as the case may be) to the elected official’s campaign? Plus, what if certain truly “critical” public workers (e.g. fire, police, air traffic controllers) go on strike?  What then happens to public safety and security?

That said, unions absolutely have a right to organize in the private sector.  What they DO NOT have the right to do is harass people and trespass on private property, as about 500 Service Employees International Union members did last year in Washington DC to a Bank of America executive and his family, including the executive’s teenage son who was alone in the family’s house at the time of this incident. Unions also do not have the right to coerce workers into voting for unionization by intimidation and thuggish methods such as  “card check.”

You can bet Fort Mill and Rock Hill are anxiously watching for any signs that unions are further infiltrating Charlotte.

Unions Are Bad For Economic Growth And Capital Flows

In the capital-raising arena – my expertise – providers of capital view unions very unfavorably. All things being equal, they will charge higher rates to a union-heavy business to compensate for increased business risk. At the extreme, certain financial organizations refuse to fund union-heavy companies – they don’t want the aggravation.

Businesses need capital to survive; unions discourage capital flow and thus discourage business growth, hiring, etc. Unions are a deterrent to economic growth.

I am truly not trying to rain on any parades regarding the DNC. I am thrilled to see any large group congregate in Charlotte if they will abide by our laws and provide an economic boost to the region. But it is important that “real life” business issues such as unionization come to the attention of our citizens with regard to the DNC.

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