Conservative Populism and the Future of the Right’s Relationship with Organized Labor

Marco Lloyd: Hello everyone and welcome to this Federalist Society virtual event. My name is Marco Lloyd and I'm assistant Director of Practice Groups with the Federalist Society. Today we're excited to host a FedSoc Forum webinar on "Conservative Populism and the Future of the Right’s Relationship with Organized Labor" featuring Jonathan Berry, Richard Epstein and Alexander McDonald. Jonathan Berry is a Managing Partner at Boyd and Gray. He's also headed the Regulatory Office of the US Department of Justice and served at the Department of Justice's office of Legal Policy. Oren Cass is the founder and Executive Director of American Compass and the author of "The Once and Future Worker, A Vision for the Renewal of Work in America." Richard Epstein is the Lawrence A. Tisch Professor of law, and the founder and Director of the Classical Liberal Institute at New York University School of Law. Alexander McDonald is a Shareholder at Littler Mendelson and a core member of the Workplace Policy Institute team. He's a frequent contributor to many publications.

Finally, our moderator today is Roger King. Roger King is Senior Labor and Employment Council for the HR Policy Association. He's also served as a partner at Jones Day, a captain of legal services officer in the United States Air Force and a professional staff council for the US Senate Labor Committee. He has testified before Congress and represented employers in many high profile labor and employment law cases, including co-counseling the winning side and the landmark Supreme Court case NLRB v. Noel Canning. The full bios of all of our accomplished speakers can be found on our website fedsoc.org, and I recommend checking that out as I have cut their bios egregiously short for the interest of time. If you have a question at any point in today's program, please enter it into the Q&A function at the bottom of your zoom window and we'll do our best to answer as many as we can. Finally, I'll note that as always, the Federalist Society takes no position on particular legal or public policy issues and all expressions of opinion are those of the speakers. With that, Mr. King, thank you for joining us today and the floor is yours,

Roger King: Thank you very much Marco, and thank you everybody for joining us this afternoon. My message is online over the last three days, we're quite active on this subject and I know we're going to have a very interesting discussion, a lot of developments to cover. So let's just get right to it. And I want to start with Oren Cass, and I'd ask each of our panelists to spend five to seven minutes about a big picture perspective as to our topic. So Oren, many people believe you are the originator of this subject, at least in part, but also looked on with some degree of skepticism, certainly by organized labor. They know that you are not a big fan of where organized labor is today, but correspondingly on the employer side, many employers are very leery of your so-called labor law reform initiatives, particularly in the sectoral bargaining area. So let's level set our conversation starting with you. What's your perspective on this topic and where do we go in the future?

Oren Cass: Well, thank you and thank you to FedSoc for putting this together. I think I love speaking on campuses and in my experience, it is the one FedSoc students are also most excited to jump into. So I think it's definitely a very fertile area and one I certainly wouldn't take credit for originating. I would say maybe I helped to resuscitate it, and that's really where I would start is that the political tradition in the United States was not one of a Democratic Party linked arm-in-arm at all times with labor and a Republican Party sort of irreparably hostile to it. That's sort of a phenomenon of the Gingrich Republicans. And thereafter, if you go all the way back to Adam Smith and John Stuart Mill and so forth, they of course recognized quite clearly that an individual worker versus his employer was in a very unfair position and wrote very favorably about collective worker action.

John Stuart Mill specifically challenge the morals of anyone who would not want to see workers organized in a manner to fight for the highest possible wage. Of course, Catholic social teaching also places a very heavy emphasis on solidarity and worker organizing. In particular Robert A. Nisbet in "The Quest for Community" specifically celebrates unions as both an organization in civil society and as importantly a real bulwark for democracy and capitalism to function at all. And so it seems to me that at the sort of conceptual level, organized labor, the idea of workers having power should be one that conservatives are very comfortable with. We should prefer a market in which workers are compensated as well as possible rather than looking to redistribute after the fact. We should prefer a workplace where workers are able to stand on a level playing field and protect their own interests over one where we're asking Washington to regulate everything all the time.

And then of course, we do speak, I think quite passionately and rightly about the importance of civil society and mediating institutions. And often we then sort of have to shrug and say, yeah, we wish more people would go to church. We don't have a lot of public policy levers to pull in that respec. When it comes to labor. We do have policy, labor levers to pull and organized labor. And the presence of unions has historically and to this day been closely tied to measures of community health, better outcomes for kids and so forth that I think we should be very interested in. And so I think what went wrong and why we needed this resuscitation was two things which I'll try to touch on here. One is the market fundamentalism that dismissed the existence or relevance of workers at all. And people sometimes accuse me of overstating this, so I like to refer them to a debate I did with Steven Moore, a longtime Wall Street editorial board, Heritage Foundation, et cetera.

 Last year we did a debate on immigration and wages and he actually said at one point in the debate, cheap labor and a booming stock market, everybody benefits from that. It was in fact the view of the right of center for several decades that labor is labor, workers were irrelevant. That labor was an input like electricity or steel and the cheaper and more abundant it was the better. And therefore we would get prices as low as possible and people could consume as much as possible. And I think what you see being rejected on the right of center broadly now is that. Where conservatives are turning is back to a recognition that work matters, that people's identity as workers matter, and therefore that worker power matters.
And once you take those steps, the position that the Republican party took roughly from mid 1980s through the mid 20 teens is just not wise or sustainable. And so I think that's one important thing to recognize. The second, which remains a huge challenge and we're at a fascinating political moment now, is that of course what everyone thinks of the substance. You have a major political problem, which is that big labor is an arm of the Democratic Party and really functions more as a partisan political force than an economic force today. And that's not good for workers. It is not what workers want both generally, workers of all partisan stripes say they don't want their worker organizations to be political. And it is a problem now specifically because especially in the private sector context, working class voters are, if anything, to the right of center of the median voter.

And as we've seen with the teamsters just last week, releasing their surveying, Teamsters members, for instance, are about 25 points to Trump's side for Harris. And so in that context, you can't have a successful labor movement, you can't have bipartisan support for a labor movement when the labor movement insists on just being progressive anyway. And so I think the reforms that we need to focus on are ones that both advance a conservative vision of greater worker power that also still supports a dynamic economy. And then on the political side, one where unions are far less politically engaged, I mean in a sense we have a model in C(3)s, we have all sorts of nonprofit organizations that can do all sorts of stuff, but they can't politic. And I think if that's more what our unions looked like, workers would be a lot happier with them and better served, and frankly, conservatives would be a lot more comfortable with them too.

Roger King: Oren, great stuff. I have a number of questions I'm going to come back to you for sure. Next we'll go to Jonathan Berry. And Jonathan, you were very active in the Trump organization. You were in the United States Department of Labor as a policy maker. How do you view the landscape, particularly from a Trump perspective?

Jonathan Berry: Yeah, thanks Roger, and thank y'all for having me. So I want to pick up where Oren left off. He was talking at I think one level higher up mainly on the principles of the things. I want to talk a little bit about some of the shifts that I'm seeing that I think a lot of people are seeing in specifically Republican circles, shifts that I think I saw some of the beginnings of in my time at the labor department in 2018 to 2020 and continuing to see unfolding in bigger and bigger ways today. One big question, particularly if Donald Trump is reelected in November, is which Republicans are going to show up, who within the Republican coalition is going to be influencing and shaping labor policy? I think we have some interesting recent data points on this suggesting a political shift to align with at least aspects of the policy shift that Oren has been advocating for.

One is - a very recent thing - is that Right to Work is absent from the Republican platform, which is a pretty new development. There was of course Sean O'Brien, the Teamsters president, who gave a big speech the first night of the RNC and a speech that would've been received, I think much less warmly in prior, at prior conventions. That was broadly speaking, well received, even if some of his specific points about unions and unionism I think were more tepidly received. But in broad strokes, I do think it was fair to say it was a well-received speech bashing, rootless globalist, multinational corporations, which is a real crowd pleaser in Republican circles these days. And then of course, the selection of Senator Vance as President Trump's running mate. This is someone who, as a candidate, Senator JD Vance has joined picket lines. He has worked with the teamsters to criticize and go after certain business practices of Amazon, and he's expressed an openness to things along the lines of sectoral bargaining and other relatively sweeping labor policy shifts.

He's not alone, of course. We've also got Senator Rubio who joined in supporting Amazon unionization and has advocated and introduced the TEAM Act which promotes work councils including a modest amount in the recent incarnation, a modest amount of co-determination of worker representation on corporate boards. He did that alongside, now-Congressman likely future Senator Jim Banks of Indiana, Roger Marshall of Kansas has joined in on some of the Teamsters initiatives. And of course, Senator Josh Hawley has been very vigorous, very active in this space as well. So that's on the call it the pro-worker, sometimes pro-labor side of the ledger for Republicans. There's also at the same time a cooling or diminution of the level of reflexive receptivity to business interests. So you have a growing amount of uncertainty about the Chamber of Commerce. For example, Kevin McCarthy, I believe when he was campaigning for a speaker, said he would not meet with the Chamber. House Ways and Means under Jason Smith has launched an investigation into the Chamber's foundation and their nonprofit status, I think unthinkable in the early days of the Gingrich Revolution for Republicans to do something like that.

And then of course, famously, Senator Cotton summarized this in an antitrust hearing where an employer's DEI practices had come under scrutiny, and he talked about how businesses will come to Republicans for relief from the Democrats, but when those businesses are posturing on DEI issues and other cultural things anathema to most Republicans, Cotton indicated that they're not going to get such a welcome reception anymore, those business voices. I think also very significant, I want to touch briefly on the news out of the teamsters that they're not endorsing either side a little bit asymmetrically. There was not, was it, I think majority support for Kamala Harris or universal support for Donald Trump was the way they put it. And one very interesting thing about that was, well, first of all that they released polling at all the United Auto Workers maybe Orem can talk later about his colloquy with the UAW comms director on that. But the one very interesting thing there was that in earlier polling had President Biden stacking up very favorably compared to Donald Trump and then this huge swing in Trump's favor when the dyad proposed was Trump-Harris instead of Trump-Biden.

Given, while there are potentially some differences between Biden and Harris on matters of labor policy, they're not big ones. I think that is illustrative of, for lack of a better way to put it, a vibes shift that comparatively speaking, Donald Trump comes across as someone who cares more about where workers are coming from than Kamala Harris in a way that Joe Biden had the inside track on, but he's of course less relevant to that going forward. I think the other relevant piece here, and likely we don't get the cross tabs with the teamsters, I don't think, or a deep dive into their polling, but I think another piece of that is that Donald Trump is the first Republican preside president or presidential candidate in quite some time to advocate really rather directly for tighter labor markets. I would distinguish labor market reforms from labor relations reforms. Obviously the two relate to each other, but on things like immigration and trade most obviously. But I would also say things like seeking to fight back against DEI excesses, even deprioritizing college degrees, a policy push that really started under President Trump, though President Biden's administration has continued that. I think those are all reflective of a policy attitude that means a real shift and shift on grounds that are potentially pretty palatable to broad swaths of conservatives as well. So far, I think we've seen the Trump campaign do less to signal on core labor and employment policy like labor relations issues, whether process on collective bargaining or substance on employment mandates of various kinds.

Roger King: Jonathan, I'm going to pop in here. I want to make sure we have time - but some very thoughtful comments. Certainly very thoughtful comments. But before we go to Alex, I want to jump over, Oren, to your colloquy with the UAW and compare that to what the Teamsters did. I think very significant.

Oren Cass: Yeah, sure. As I've dug into it, I've found it's a surprisingly deeply held view on the labor left, that it is not actually the role of labor leadership to represent members. It is the role of labor leadership to instruct them. I had heard this once before at a conference where a labor leader had sort of bragged about how there used to be this share of wrong thinking members in the union, but through a lot of intensive work, they squeezed it down to this lower share. But then it was really striking. I was just on Twitter as I am want to be, and noticed a union later ranting about genocide in Gaza and said, I wasn't sure if this is what the International Painters Union was really most concerned with. And the communications director for the UAW hopped to compare this to telling an athlete to shut up and dribble, which I thought was just fascinating in how inapt an analogy it was because of course shut up and dribble is telling an individual person to not communicate their personal view.

You can see why that's not a very nice thing to say. If someone wants to communicate their view, they should be able to, but the union leaders seem to feel that being told, stop saying things that have nothing to do with your role as a union and what the people you represent and want you to be doing that the union leadership was more like the individual athlete that should surely be out there saying whatever it wanted. And then further, as we were sort of discussing this, then also suggested that the union leadership was like a think tank fellow who shouldn't be consulting donors before expressing an opinion. And so at other people from the left sort of jumped in. Likewise, and now Steven Greenhouse has a very interesting piece on this at Slate sort of emphasizing that in their view labor leaders, they are essentially chosen to make these decisions and they are the ones who can understand who does or does not support workers. And it is their job to essentially via endorsement, tell their workers who the workers should be supporting rather than reflect and represent their workers' preferences. So I think that's totally wrong and we can spend a long time on why it's wrong and also what it has caused, how it weakens labor. It makes it much harder for labor to organize these workers who do not want them to be behaving this way. But it is the view, I think as I've encountered it anyway, on the progressive labor left.

Roger King: No, absolutely. And we're going to come back to that. Alex McDonald. Your perspective from the employer viewpoint. Alex, do we have you? I know you were on and our prep.

Richard A. Epstein: Unmute the microphone.

Alexander T. MacDonald: Can you hear me now?

Roger King: Yes. Yes. Much better. Thank you.

Alexander T. MacDonald: Life in 2024. No, thank you. And this is a really interesting debate, and it's fascinating to see some of the changes we're starting to see in some areas of the conservative community, but I think there are helpful and unhelpful ways to talk about and think about the phenomenon. You could think about it in terms of values, which I would describe as unhelpful. I mean, I think we share the values, right? Nobody's going to come on here and say, we don't want to do what's best for workers. We all want what's best for workers. The values are the same. It's more a question of policy, which is the more helpful way to frame this, what actually is best for workers? And that question itself breaks down into two buckets. The first bucket would be, well, is current policy working for workers? Is current policy doing what it's supposed to do? And the second question would be, if it's not, are the proposed replacements going to do any better?

To start with the first question, I think it's easy. More than a hundred or almost a hundred years on after the National Labor Relations Act was passed in 1935, our principal labor law, to forget that the original purpose of the NLRA was not to promote unionism for unionism's sake, it was to prevent labor strife. It was passed in an era where we had much more tumultuous labor relations. We were coming out of a time when you had massive strikes that disrupted large swaths of interstate commerce. You had things like the Pullman strike where federal troops were called out. There were 30 deaths, millions of dollars in property damage. And this was the idea behind labor law. The idea was to channel disputes between workers and employers into peaceful negotiation, a private negotiation that would help us regulate the workplace in a way that would prevent these spillovers.

And we can debate whether the original Wagner Act was successful in that. After it was passed, you actually saw an uptick in labor strife. You saw an uptick in major work stoppages. You saw an uptick in unionization at the same time. The correlation is pretty strong there. It may not be one-to-one, but you saw those numbers rise until about 1950. 1952 is when both union density and labor major work stoppages peaked. And then what we had was a major reform. We had the Taft Hartley Act, and shortly after that we had a law called the Landrum Griffin Act. And those acts did some very important things. They gave people the right not to engage in union activity. They allowed states to pass Right to Work statutes, which have already been mentioned here today. It banned certain secondary activities, secondary boycotts, which without going into that too much, it's essentially a way that unions can expand a labor dispute beyond the four walls of a dispute within an employer.

And after that, we saw a decline in, a steady decline in work stoppages across the second half of the 21st century. Coming to 2020, we went from 470 in 1950 to just eight. Now, it has ticked up a little bit since then. But what we're seeing today is a broadly peaceful labor market where things like the Pullman strike are distant memories. Most people don't remember that labor stoppages could disrupt major parts of the economy. And if we're just judging current policy by its own stated goals, it appears to have been a wild success. We have an extremely peaceful labor market. So the question becomes, if that's no longer our goal, if we're not after a peaceful labor market, if what we want to do is start rolling back some of the reforms that we had in the mid-century in the Taft-Hartley Act, for example, Right to Work laws.
What are we going to replace that with? And we're seeing on some of the replacements, the more popular replacements that have been bandied about in certain circles are things like labor standards boards or sectoral bargaining. A labor standards board for those who are not familiar, is essentially a what's called a tripartite group. We bring in people who ostensibly represent workers and people who ostensibly represent the industry, and then some representatives of the government. We all sit down and we hammer out standards that apply to a whole industry. That sounds a lot like collective bargaining, but in fact, it operates more like a regulation. It applies to everyone, not just people who had any say or participation in the process, but to anyone who's in the industry. And it's much less responsive to the workers themselves. The workers don't get to choose their representatives on a labor standards board.

These people are promoted, or excuse me, they're appointed by some government official. They're essentially representatives of the government. Everybody is. This is top down policymaking as opposed to bottom up. So to the extent we think workers' voices are important in this process and they ought to have a say in what their working standards and conditions look like, that's not the kind of policy that would align with that traditional view. And we can talk about sectoral bargaining too, which is another one that gets thrown out a lot. And the paradigm for sectorial bargaining usually from a policy standpoint is Germany. And I'm not going to represent to be an expert on German labor relations, but what I can tell you is there's been a lot of studies about this recently, and the German sectoral bargaining system is no panacea. Today, your average American worker is about $10,000 more productive than your average German worker.
And that gap has been growing for decades. Now, whether that's caused by sectoral bargaining, it's very difficult to disentangle one given policy from an entire economy wide symptom. But what we do know is that German firms in the last few decades are increasingly opting out of sectoral bargaining. In 1996, you had 70% of Western German firms who participated in some kind of sectoral bargaining, and by 2020, that fell to 45%. So you just saw a drop of 35% just over that period. And why are they leaving? They're leaving because when you have a sectoral bargaining system, a group of employers and association bargains with one union for one contract that covers everybody in the sector, that may be efficient from a bargaining standpoint, we're all using the same bargaining representatives, and so we can just bargain for one contract that's cheaper, but it's also much less flexible.

You're setting one set of standards for an entire industry. There's no differentiation for local conditions or workplace priorities. What you're getting is a one size fits all system. And German firms are increasingly saying, this doesn't work for us. We don't have enough flexibility. And that point in and of itself highlights a difference between the German system and what has been proposed in the United States because the German system, again, is voluntary. Firms can opt out when this gets proposed in the United States necessarily required of employers. And because today under current law, under the NLRA, if employers wanted to and a union agreed they could bargain at a sectoral level, multi-employer bargaining has been legal from the beginning. So we all benefit.

Roger King: You're right, Alex. I mean it's happening in certain geographic areas of the country today and has been. I want to get to Richard in just a minute, but give us some quick soundbites about the article that's coming out this week that you just authored on redistribution.

Alexander T. MacDonald: Oh yeah. And I want to thank FedSoc for partnering with me on this. We took a bit of a deeper dive into some of these proposed systems. There's a longer discussion for those of you who are interested in the labor standards boards. These things have been proposed. I mean, California is the most obvious and eye-catching example. They recently passed a law that created the Fast Food Council. This is one of these tripartite boards that gets together and bargains for wages and or benefits and sets it for the entire industry. And the way that board was structured sort of highlights the points we're talking about here. The SEIU essentially broke this bill and pushed for it and lobby for it and got it. Well, lo and behold, when the governor decided to appoint the people who represented workers to these boards, all of them were associated with the S e's Fast food union.

It is not an accident. The SEIU bought itself a seat at the table. It's an anti-democratic process. And we also talked a little bit about sectoral bargaining. There's actually, this election cycle there will be a proposal on the ballot in Massachusetts to create a sectoral bargaining system for rideshare drivers. This system operates in much the way I was describing. It is mandatory for every firm in the state. And if an agreement is reached, that agreement will bind every driver in the state, not just the ones who voted for the union, but everyone who decides to provide services on that kind of app-based platform.

Roger King: Well, it's an excellent paper. I read it last evening on the plane. Richard, very distinguished career. You've written extensively, you are teaching many of the subjects that we are discussing today, or at least you've covered them in your past work. What's your observation? What's your thought from an academic neutral perspective? I think you're on mute.

Richard A. Epstein: No, I'm not. I'm here.

Roger King: All right, there you are. Good.

Richard A. Epstein: I regard all of these proposals as unmitigated disasters, the one word that nobody has used to describe them is "cartelization", but that's what essentially all of them do. Cartels raise prices, reduce entry cause immense harms to everybody who's not a union member. Back in 1983, I wrote an article which I still stand by, which said that the basic reform of the National Labor Relations Act was wrong and that the older regime that basically allowed for yellow door contracts, namely contracts in which workers would agree not to join a union or promised to join a union so long as they were working in the business was the appropriate way. The other major reform that I think is clearly needed is you have to get rid of the prohibition against company unions because a company union has the following advantage. It allows you to reach workers to get information from them, to cooperate with them without having the fear of monopolization.
One of the things that the current labor law does, which I regard as unforgivable, is that no worker can talk to management without a labor boss with them if it turns out that the firm is unionized. So the whole thing creates this wall of separation between the two, which makes it difficult to get information across to get sensible internal promotions and the whole sort of thing. Competitive markets still outperform our monopoly markets. And in the long term, this is how the difference works. If you get unions, what you do is you get an immediate boost for the workers from the form of a monopoly. But since they're massive inefficiencies, those things solely dissipate because every firm that I'm aware of is vigorously opposed to unionization and we'll do whatever they can in order to undermine their force. So there's no legitimacy on the employer side. Even if the trade associations try to say, "Oh, we're going to be very nice." If you ask people what they think about unions, the only time an employer is in favor of a union by laws if they're unionized and they're now seeking to get their competitors unionized when the right solution is to go the other way, which is to ban these unions from running these things altogether. Now, if you have a competitive market, what will happen is the wages may go down in the short run, but unlike firms that have monopoly power, competitive markets managed to achieve higher wages through higher productivity, those are sustainable because there's no employee who wants to shortchange his workers. If in fact, by giving them higher wages, they get higher profits and a better share in durability in the market. And so if you look at the current situation, the clear implication is that even with the enormous subsidies that are given to unions by these various things, the rapid decline in the private sector represents one and only one phenomenon.

Unions in no sense whatsoever are going to be efficient in the way they run their businesses. So how is it that we can get out of the frying pan and jump into the fire? Well, there's several of them. One is them to think of the German situation. That was something that Alexander referred to the system turns out to have certain modest advances, but terrible long-term consequence. The good thing is that, well, you could kind of get rid of short-term disputes on the floor by having a management board that is adverse to labor. But the moment you put the labor unions on the top board, what happens is you cannot have mergers, acquisitions, divestments of any force unless you buy off the union workers. So that structural reorganization, which can take place more rapidly in the United States, although unions are trying to stop that is absolutely stopped. So if you're trying to look at the way in which German firms, for example, organized, there is no major firm inside the EU which has had anything like the success that American firms have had because they're hobbled from birth with a completely archaic type system. And the general presumption that having workers in unions is better. Now people say, well, do you care about union workers? I don't care about them getting high wages or low wages. I do not think it is my job as a professor to tell any firm or any worker what kinds of offers they want to accept. But I do think it is our job to say, let's create a situation in which mobility of labor and mobility of capital is going to be great. And that in the long run, if we create that system, we will not have any dislocation.

Think of what's going to happen if you go the other way, if you tried to say that what we have to do is to artificially raise wages so that workers have some kind of benefits, you're going to run the risk of major disruptions. The most recent illustration of that is the holdup of the Boeing company, which a union now says we are going to strike, put them out of business unless they get a higher wage. They will get a higher wage and the firm will become weaker in consequence of the way in which it goes. And you will take other firms like General Electric and rather not General Electric, General Motors, and Ford and reduce 'em to a shadow of themselves because of the extremely high labor compensation that they get so that these things are literally a pension fund for their retired workers at enormous cost for the way in which these things work.
Then it's going to create a disaster because what you have to do to keep the wages high domestically is to put high tariffs on foreign products coming into the United States in competition with local workers. And at that point, the costs are going to be born by everybody, all the consumers and all the firms that work not only in the domestic market but in the export market. Because one of the things that we know and why it is that the Trump tariffs, for example, are so utterly dangerous, is that if you have real restrictions on import, it will reflect itself in your inability of your firms to get the needed equipment that they need in order to successfully work in the domestic market and in the export market. And so you'll get, although you don't want to call it that, is a return to Smoot-Hawley tariffs where international trade will start to drive up as petty animosity starts to take over Everything that we have, if you actually look at the position of labor in the United States and anywhere else, by far the greatest success in American labor measured, most importantly, not by wages, but by life expectancy occurred in the Lochner era, roughly the end of the Civil War to the beginning of the Second World War, wages went up and life expectancy went up.

There were strong patent protections. There were basically very strong statutes against forced unionization and collective bargaining. That is in fact the only thing that will survive. I'm not trying to be fashionable. I don't care if there's a single person in politics who wants to do what I say. But I think in effect, if you want to have the road to ruination, take over everything that's being done in America, all you have to do is to think of one of these clever proposals and to recognize that unless they allow for the flexibility of labor and for management so that workers are not bound by their union and could deal directly with their firms, quit if they don't like and move it, you're going to get it very bad indeed. And look at the sectors that grow. None of them have strong union precedents in the areas in which they take place. So what we should do is regard organized unions that are not voluntarily accepted by employer as the most dangerous, most reactionary, most destructive force that we can possibly have. And when I see the Biden Administration and increasingly Trump starting to say that we have to make peace with these unions, what I will predict is a total collapse in the labor market to the extent that these programs succeed.

Roger King: So Richard, did the Teamsters do the right thing in polling their members?

Richard A. Epstein: Well, I mean, look, polling their members, it's tricky because they're polling them about everything, not just about wages in the workforce. And so a lot of what they're responding to the workers is the social stuff. And they know they're blue collar workers. They have a certain empathy with respect to Trump on these issues because of the way in which he projects himself. And they know in effect that Biden and Harris represent the kind of dangerous elites that they simply don't like in any way. So I think what's going on there is a revulsion on the part of these workers to the sort of superior left-wing progressive politics that are taking place, but I don't know whether it's because they actually believe that unions are either a good or a bad thing. The leader essentially was a demagogue. He gets up there and he attacks employers. What's the definition of greed? Any employer who earns a competitive rate of return, and by a definition that large, the whole system starts to collapse. So the rhetoric has to change. And it turns out the real question is, can you improve on a competitive equilibrium on both sides of the market? To which the answer is an emphatic no.

Roger King: So Oren, could you find some common ground with Richard, perhaps the TEAM Act?

Oren Cass: Well, I agree with Richard's point about company unions. I think there are a lot of relationships between workers and management that don't look like a conventional NLRA union that we should absolutely want to foster. So that's one thing. Can I introduce a couple of facts into the discussion?

Roger King: Oh, absolutely.

Oren Cass: Well, I think it is important to recognize that these sort of absolutist blanket statements about what models work and don't work, maybe some of them would still pass muster in an Econ 101 class, but they don't bear much reality to the actual world. With respect to US versus German productivity and earnings. The Economist actually had a wonderful piece a little less than a year ago, I'll put it in the chat, where they looked at the data and said, yes, it does look like American workers earn a lot more than German workers. But if you convert for exchange rate differences with purchasing power parody, and more importantly, if you actually look per hour not per worker, the difference vanishes entirely. And in fact, German and French for that matter, productivity has been rising faster than US productivity in the past few decades. So it certainly is not true that the German system, and it's not perfect and we wouldn't import it wholesale, but it's not true that the German approach has hampered productivity or certainly industrial effectiveness.

German auto workers earn, until recently, it was almost twice as much as US auto workers. And obviously it was not the German automakers that were losing it. It was the American ones. And if you go all the way to this sort of meta-analysis of in which decades was America doing well or poorly, I mean the post-war period when union density was highest, roughly 1947 to 1973 is pretty unquestionably recognized as the heyday of pretty much everything we liked in the American economy. Whether you're talking about productivity growth, wage growth for the middle class, dominance in global markets, it is the current era of virtually no worker power where all of these things have fallen apart to the point where US manufacturing productivity has actually turned negative.

Richard A. Epstein: No, I think there are answers to this, which is it's not just the labor laws that determine productivity. The United States has vastly increased regulation in all labor markets by thousands of particular situations relating to disability, the anti-discrimination law, the minimum wage laws, thousands of other things, and all of those things have a negative impact on this as well.

Oren Cass: Oh, I agree that there's a lot more going on than just labor law, Richard, but let me just make one more point and then I'll be quiet. The flip side is we could look at the period from, what did you say, 1860 to 1940, and make a list of things like the introduction of antibiotics and public health. I mean, you can't just sort of pick and choose when to do your multivariate analysis and when to blame labor law.

Richard A. Epstein: I was not talking about multivariate analysis I was talking about other direct regulations of the labor law.

Roger King: Alright, Richard, alright, two minutes and then I need to get to Jonathan. So response to Oren, and we could go for hours. We will at some point.

Richard A. Epstein: Do you happen to have some kind of a theory to explain why it is that you think more regulation leads to greater productivity? And I just don't see that. And in fact, if you look at the degrees of freedom in the American labor markets, they're much more restrictive now at both the state and federal level. And it's all those things that work into the overall situation. And if you're trying to think about the earlier periods, our general expansion, labor unions were pretty large in some things, but all the growth sectors tended to move away from the unions. Just trace the failure of the automobile industry with its strict kinds of controls and how it is essentially plummeted under labor because by 1979, the whole model was unsustainable.

Roger King: Really great points. So Jonathan is the "Republican blue collar Senate caucus", my term, headed in an improper direction of getting closer to organized labor or at least exploring such overtures?

Jonathan Berry: So I think I can, I would state that I think they're definitely starting to focus on some of the right issues. I think there's a lot more uncertainty and a lot more experimentation with what the right policy solutions are in response to elevating the salience of workers' issues. The one that I would call out, and you alluded to this Roger, by mentioning the TEAM Act, is I think an area that is, I hope is unifying across this panel and unifying across a lot of conservative concerns, would be to essentially focus on improving worker agency that doesn't necessarily need to take the form of something particularly coercive, at least vis-a-vis businesses in particular. Two pieces of this come to mind. One is improving union accountability to membership. So the conversation about the teamsters in contrast, the UAW is striking. There's a host of potential reforms there that could make unions much, much more responsive to their membership.
That would be an unambiguously pro worker move that I think you could also get quite a lot of support for across the conservative spectrum. Then the other dimension of this is worker voice. You can have, I think that the team act clarifying that the Wagner Act does not forbid employer support for voluntary works councils for workers to have a representative to discuss, not negotiate, but discuss terms and conditions of employment, is also a tool to seriously increase worker agency through voice agency being something that so many people feel like they're lacking today, the ability to participate in some meaningful way in the direction of an enterprise, which has economic benefits in terms of distributed knowledge and the like, but it also has serious social and cultural benefits that are not measurable in the same way that are profound.

Roger King: No, I absolutely agree. I would think we could get consensus of everybody on our panel to support the TEAM act in some fashion and worker voice. I think we all would get close to agreement there and accountability by unions. I think we all could get close to that point for sure. So Alex?

Richard A. Epstein: Anything that works against union domination is a good thing if you're working against the status quo.

Roger King: Right. So the question is do we need labor law reform? If so, what type of reform? Alex, you hinted about some thoughts there. Can you give us some thoughts? Then I want to move to some Q&A if we can.

Alexander T. MacDonald: Yeah, for sure. And I would just reemphasize that before we leap into labor law reform, which can take forms and things. So for example, we've seen something called the PRO Act kicked around. The PRO Act is essentially a plan to take labor law back to the 1950s before the Taft-Hartley Amendments and to add a bunch of other, it is basically a Christmas tree for organized labor. What we ought to be careful about is remembering why labor law is structured the way it is in the first place, and to think about what some of the downstream effects on American competitiveness and American job growth are from some of these other proposals. For example, sectoral bargaining, the German model. Richard mentioned this earlier, and I think it's a really good point. It's not only the direct effect on workers that we have to worry about, it's also the effect on American competitiveness.

What's good for workers is more jobs and competitive, growing dynamic firms and what we have seen in Germany, I mean, look, we can splice the statistics all we want and pick from our pet sources, but the bottom line is what we know is German firms are fleeing the sectoral system in droves in the last several decades. And they're doing that because there are competitive disadvantages to using that model. So it strikes me as strange that we would want to import a model that the folks who are living with it right now are abandoning. That's the kind of thing we need to be looking at and examining and seeing what's happened, where it's been put into place before we leap into something that is unprecedented in the American economy.

Roger King: Yeah, absolutely agree. We have a question about what is the TEAM act, and I glossed over any definition there. Oren, you want to give us a quick definition of how you view the team act?

Oren Cass: Sure. The TEAM act actually originated back in the nineties and was focused specifically at the point that Richard raised, which is that under the NLRA, Section 82, which defines unfair labor practices, defines what's traditionally called a company union or a worker organization that is dominated by the employer as an unfair labor practice. And the idea was in the 1930s, company would see an organizing campaign coming and would say, 'Okay, nevermind. Look, we created a union for you. Here you go, come hang out in it" without actually sort of letting it do anything. The problem is that as Richard notes, the NLRB interprets that as therefore precluding any sort of arrangement that allows workers and management to collaborate together in a constructive way. And so the TEAM Act would, in its simplest form, just strike Section 82, it would say it's not an unfair labor practice to create a worker management committee. The more recent version that Jonathan was describing, which was introduced last year or a couple of years ago by Senator Rubio and Congressman Banks basically brought back that concept but added with it the provision that if you do set one of these things up, you also have to let the workers on it appoint a representative to the corporate board. And so it would be a non-voting member, but it would have essentially the sort of voice and representation function that the works council would be intended to have within the organization at the board level as well.

Richard A. Epstein: That's a terrible mistake because these boards have to be able to maintain confidentiality in negotiation and they can't do it when they have a potential fifth columnist amongst their rank. And I would like to correct one thing, at least many of these committees are not formed in anticipation of a union. They've been around for years and you're forced to disband.

Roger King: So Richard, what if we remove the Rubio proposal for corporate board involvement? Is the TEAM Act a go from your perspective?

Richard A. Epstein: Look, there are two Richards. There's the first principle Richard, and there's the incrementalist Richard, and you're asking the incrementalist Richard what he would do, and I think this would be an improvement. And so if that's the only thing on the table, yay or nay, I would vote to support it very strongly. I have my first principle, but in politics, it turns out that last I looked, I don't think I had a dominant view across the United States. And so when we talk about particular projects, I will give my support to those things that move me in the direction that I think appropriate.

Roger King: So Jonathan, there was criticism just I believe yesterday on the campaign trail of the Teamster non endorsement and a questioning whether the Teamster president had courage on political matters in the presidential election. Your reaction, Jonathan?

Jonathan Berry: So I think any kind of breaking from the labor leadership group think on this is pretty darn courageous, is pretty bold. So I would not associate myself with those criticisms. I think O'Brien is showing, Sean O'Brien at the Teamsters is showing real leadership. I personally would tend to view even more courageous to show like, all right, there's a 25 point spread in support for one candidate. Maybe that means we should support the candidate who got the decided majority, but considering the context of where big labor leadership's group think tends to be, I do think it was a pretty bold move on O'Brien's part.

Roger King: Oren Cass. Would you agree?

Oren Cass: Yeah. I mean he is clearly less so with respect to his workers or members than with respect to his sort of buddies at other labor unions shaking things up. And I think that is all to the good and speaks generally to what we should be expecting of all labor union leaders and what I think workers want to see from labor leaders, which is an effort to focus on the interests of the members, not on the interests of the labor leaders as their own little clique.

Roger King: Right. Agreed. Richard?

Richard A. Epstein: I mean, my attitude on short-term politics is essentially like everybody else's pragmatic. I regard this as generally a departure from the rigid defense of the Democrat, but on the other hand, I somewhat distressed by the fact that he is moved to the Republican Party in effort to support the populist wing rather than the market wing. So I don't have quite the same enthusiasm about it. I think in effect that unless we get more flexibility and deregulation, the steady decline will continue to rise at pace. And remember they're very, the statutes may be the same, but enforcement under Trump was rather different from what it is under Biden and what it was with respect to Obama. And so I think you have to be careful about that. In fact, one of the dangers of having a very heavy structure with immense government discretion is that be a lot of flip flops as you move from Democrats to Republican changed the head of the National Labor Relations Board and so forth, which contributes to the kind of instability that you don't hang up if you got rid of the whole structure, which as I note is not today quite on the table.

Roger King: No, agreed. Alex, the FTC has been increasingly moving toward a relationship with organized labor. We saw recently the United Food and Commercial workers convincing the FTC to oppose the Kroger-Albertsons merger. Your thoughts on the FTC and the monopoly power of unions?

Alexander T. MacDonald: Well, that could be its own webinar. The thing I'll say is there's some deep irony to using antitrust and competition law to regulate the labor market. In fact, the whole basis for national labor policy today started with an attempt to get courts out of the business of regulating the labor market using antitrust law. That was the history of the Norris LaGuardia Act and the Clayton Act. The idea was that we shouldn't have courts jumping in and changing the balance of power between workers and unions using ostensibly a law that is aimed at preventing monopoly and cartels. What we should do is, and right or wrongly decide that we would introduce this countervailing distortion to the market, the countervailing distortion being collective bargaining. That's how we were going to regulate the relationship between workers. And now from the organized labor side, we can't decide whether or not employers are too big or too small. A couple of years ago we were hearing about fissure workplaces. Now we're hearing about monopolies. It really can't be both. It has to be one of the other. So there's some cognitive dissonance happening here on the labor side, and it's potentially very dangerous,

Richard A. Epstein: By the way, the single most misguided movement in recent years is to find that there are all sorts of labor monopolies on the management side with no evidence whatsoever. What happens is, in the product market, if you're making gasoline, there are relatively few alternatives, but if you're a guy who works for a gasoline company, what you could do is get jobs everywhere else inside the economy. And so this constant effort on the part of the FTC at the block mergers because of so-called "labor monopolies", is yet just another thorn in the side of advancement taking place and it has to be stopped. There's no reason whatsoever to do that. The only time you have any danger in labor markets is when you have highly concentrated healthcare situations where there's a product monopoly as well. But I mean, when I looked at our law school faculty, I asked my dean, where did the 10 last workers go? Who resigned from you? And then went all over the country doing all sorts of different things. The thought that there's a monopoly in labor markets, which parallels say the monopoly in law school markets is sheer fantasy.

Oren Cass: Sorry, Richard. You mean the last 10 professors who left the law school?

Richard A. Epstein: No, no, no. I'm not talking that exactly. The professors, they tend to stay professors and are often going into government, I'm talking about the assistant dean in charge of admissions or somebody who's working in the accounting office and so forth. They go all over the lot. Some of them go back to school to get retrained. Some of them move to other locations, some of them become teachers. The whole thing that is the pattern of labor shifts is completely different from the way in which a product market start to work. And if you have a very concentrated automobile industry, it doesn't follow that the people who work in that industry cannot work outside that industry, particularly in jobs which are related to computer and so forth with the knowledge to quote to code makes you much more flexible than otherwise. So I was just commenting on the general tendency to think that there's an antitrust overlay that labor markets have failed us because the antitrust enforcement has been too low. I think it's been a very destructive force. And if it stops the Albertson-Kroger merger, I think it's just another mistake. I don't know ultimately which way is right, but my instinct is if they're competing against businesses that are bigger than them, the efficiencies probably outweigh the market sources of control. And the labor issue is a complete non-starter in my mind.

Roger King: I couldn't agree more. Quick sound bites as we conclude. Jonathan?

Jonathan Berry: Goodness. So I think that the place that needs focus in the short term is to find those topics of, comparatively speaking, of common ground. There is a subtext that we haven't talked very directly about is the shifting coalitions. The conservatives are becoming increasingly much, much more working class in their orientation. And I'm not saying that means automatically pander to labor unions, far from it, but any labor policy that doesn't take into account those shifts and instead takes for granted that the GOP is going to reflexively do the bidding of business lobbies is, I think as a political matter is counterproductive. It tends to lead to bad public policy and it ignores the fact that we have principal agent problems in the corporate world that can be as profoundly problematic as those we've been talking about in the union world.

Roger King: Absolutely. Alex, closing thought?

Alexander T. MacDonald: Absolutely. The thing that gets lost in this debate often is goals versus tactics or policies. Is it a laudable goal to search for ways to find improvements in the labor market to help individual workers? Of course, we're all individual workers, but the question is how do we do that? Not what is the goal of a particular policy, but does that policy encourage or promote good results for the people we're trying to help? And most of the alternatives to current labor law on the table do not appear to accomplish that goal.

Roger King: Thanks much. Oren?

Oren Cass: I mean, I think this has been a great illustration of what's going on within conservatism, which is, and the labor question is one symptom of a much larger debate that's turning on two things. One is a recognition that the sort of blanket statements and blind faith in free markets that if just left alone, will work out well for everybody empirically has not been true for decades. And second, our recognition that private power as it's exercised by corporations can be, in many cases for the current economy, more concerning than the public power that conservatives have typically focused on. And so I think it's important to start from those two questions. If everything's going great in a free market and public power is the only thing to worry about, then of course the rest of this discussion seems odd. And you would assume that Richard's perspective would be the logical one. If you look at the market and say, actually the market has not been delivering as we've expected for a very long time, and private power as its operating has become quite corrosive in its own right then you start thinking that an awful lot of things need to change. And I think that drives a lot of this debate. And certainly as someone in the latter camp, I'm very encouraged to see a willingness by conservatives to figure out how to apply their principles to the issues we actually have today.

Richard A. Epstein: I do not think today that we have anything close to a competitive market.

Roger King: Richard, your closing comments? I think probably a response to Oren, please.

Richard A. Epstein: Yeah. Well, I think we are not close at this particular point to anything that looks remotely like a competitive market. There are all sorts of impediments, and I think the best thing to do is to get rid of them as fast as we can, and that includes many laws that are sacred things. And on the management side, I think in fact many of these companies have really gone over the top end. Fortunately, I think there's some kind of pushback against DER, particularly on the idea that somehow the purpose of a corporation is to maximize social welfare for stakeholders instead of for shareholders, which I think leads the corporations very much astray. So God knows I'm not a friend of a current business attitude on the part of the community, and I think essentially we have to start over on both sides of the market and we have to move both of them back to profit making, competitive opportunities, leaving charitable work not to these large firms, but the individuals who are made wealthier by their contributions to society and their ownership of stocks and bonds.

Roger King: Yeah. Also, great points, Marco, we have run over. We could literally go hours. I have all kinds of questions I'd like to ask. I know we have Q&A that we didn't get to, but I want to thank the panelists. This is just a great discussion. I think this is just the beginning, hopefully, of a series of FedSoc discussions on this point. Marco, I want to turn it back to you.

Marco Lloyd: Well, I want to second the thank yous to yourself and to all our fantastic panelists today. Thank you also to our audience for tuning in and for your participation. Please stay tuned for future programming at fedsoc.org and we are adjourned.