Obama's Union Gift: A New Wagner Act

A great article in the WSJ today explains what the Wagner Act did to help prolong the Great Depression. The measure authorized union officials to act as the exclusive bargaining agent over all union and non-union employees in a unionized workplace. After a job recovery from 1934 to 1936, the Wagner Act helped throw the country back into high unemployment that matched 1931 levels, which added approximately 10 full percentage points to the unemployment rate.

Given the reality of unions in the workplace, the law meant that efficiency and profitability were compromised, by forcing employers to equally reward their most productive and least productive employees. Therefore subsequent wage increases for some workers led to widespread job losses.

Pre-Depression-era growth and prosperity did not return to the private sector until the early 1950s, when the spread of state right-to-work laws prohibiting forced union membership and dues greatly reduced the detrimental effects of the Wagner Act.

The Employee Free Choice Act, which Obama supports, would have a similar impact on the economy as the Wagner Act by eliminating the secret ballot and significantly increase union membership across industries.

"I owe those unions," Mr. Obama explained in his 2006 political memoir, "The Audacity of Hope." "When their leaders call, I do my best to call them back right away. I don't consider this corrupting in any way . . ."

If Obama wins next week, you've all been warned.