PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

“PRO Act”: A BIG Threat to Small Business Workers, Entrepreneurship and Gig Work

By at 6 February, 2020, 8:24 am

U.S. House Vote on February 6

By Karen Kerrigan-

Legislation being voted on by the U.S. House on February 5 would crush entrepreneurship and self-employment in its tracks. Democrats are all in on the  “Protecting the Right to Organize Act” (PRO Act), H.R. 2474, as its many provisions would boost labor union bosses and their struggle to increase shrinking membership rolls. But this heavy-handed legislation would come at the expense of small businesses, entrepreneurs and their workers, along with the flexibility, opportunity and innovative culture advanced by the gig economy.

House Speaker Nancy Pelosi (D-CA.) says the bill is all about protecting the rights of Americans to join a union, but the PRO Act is really about coercing Americans to join or subsidize labor unions through intrusive government measures.

As SBE Council noted recently in a blog post about the 40-year decline in labor union membership: “According to unionstats.com, the number of union members came in at 23.54 million in 1979. Forty years later that declined to 14.57 million. The private sector accounts for the bulk of that decline. In 1979, the number of private-sector union members stood at 15.12 million, dropping to 7.508 million in 2019. As a percent of employed, the decline was from 21.2 percent in 1979 to 6.2 percent in 2019.”

Labor union bosses somehow think “the system” is working against them and are looking to vastly alter government rules and power to bolster membership rolls. They fail to connect their vastly dwindling market share to the fact that, in our modern economy where workers are empowered and can negotiate on their own, the high cost and low value of labor union membership are not appealing and the terms and costs of negotiated agreements oftentimes restrict worker flexibility and undermine the competitiveness and viability of the very firms that employ workers.

The PRO Act reverses and destroys many positive attributes of working, living and pursuing opportunity in the modern economy. It undermines efforts in the states to improve competitiveness, would destroy jobs and businesses, and violates the privacy of workers. The bill:

● Would effectively ban state right-to-work laws by permitting “fair share” fees, meaning all private sector workers would be forced to pay labor union fees.

● Codifies the costly and business-destroying Obama-era joint employer rule (where the small business community is making positive headway through, for example, a recent Department of Labor rulemaking), as it undercuts and harms the franchise business model and the ability of businesses to freely work with each other.

● Codifies California’s new “ABC” test (AB5) to determine who is an independent contractor and who is an employee. This test makes it harder for employers to hire independent contractors, for businesses to collaboratively work with other businesses, and for people to be an independent contractor or start a business. This would kill the gig economy, which it is doing in California right now. Californian’s are rebelling against AB5, and rightly so. (Read FCC Commissioner Brendan Carr’s Op-ed on AB5 here.)

● Codifies the Obama-era ambush elections rule, which shortens the time frame of union elections (to unionize workers) and would provide the personal contact information of workers to labor unions without employee consent.

The PRO Act is a backwards piece of legislation. It’s anti-jobs and anti-worker. It will undermine employee empowerment and our modern economy. Rigid and restrictive employment rules and utilizing the power of government to favor labor unions is not pro-worker. The PRO Act hurts their ability to work flexibly, independently and freely. Small businesses will be significantly burdened with new costs, reporting requirements and restrictions.

Most workers do not see the value in labor union membership. That is a big problem for labor union bosses who obviously need to do something very different to keep their antiquated model alive. But turning to government to force people to join or subsidize unions  – through the regulatory and statutory provisions of the PRO Act – is tyrannical and will wreck our vibrant economy.

The U.S. House will likely pass the PRO Act on a partisan basis. The good news is that the bill is going nowhere in the U.S. Senate. The White House has also issued a Statement of Administration Policy opposing the legislation: “Unfortunately, H.R. 2474 contains provisions that would kill jobs, violate workers’ privacy, restrict freedom of association, and roll back the Administration’s successful deregulatory agenda. …. If H.R. 2474 were presented to the President in its current form, his advisors would recommend that he veto it.”

While the enactment of the PRO Act is not a threat in 2020, some states are implementing its various provisions and many of the Democrat candidates for President are “all in” on helping labor unions increase membership through the coercive power of government and the violation of worker privacy.  This is an issue for entrepreneurs to raise awareness about during this election year so that small business owners and workers understand just what they are possibly getting into with a candidate who supports the PRO Act’s radical and intrusive measures.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.

 

 

 

 

 

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