In this You Tube video, CWA Local 6320 Shop Steward Lewis Hankins explains that the Employee Free Choice Act is necessary because his employer, DirecTECH Southwest in Paducah, Kentucky, isn’t “giving us anything.” According to the Shop Steward, the company, which performs satellite TV installation and repair for DirectTV, has “fought day in and day out at the table,” but then he claims that “they” aren’t even returning the union’s phone calls and that the company should be “made to come to the table and made to give us a first contract.”

According to a report on the CWA’s website, DirecTECH employees voted 35-19 in favor of representation in a secret ballot election conducted by the National Labor Relations Board on June 1, 2006. The union achieved this overwhelming victory despite what it described as “ a campaign of lies and misinformation orchestrated by the union-busting law firm Jackson/Lewis .”

Contrary to the suggestion on the video, Local 6320’s website indicates that the company and union have met at on at least thirty different days since the election, and they are scheduled to meet again this week. On March 29, 2007, the union reported that tentative agreement had been reached on 33 of 56 items, including:

Company-Union Relations, Non Discrimination, Military Service, Temporary Transfers, Call in and Report in Obligation, Safety and Health, Bulletin Boards, Contracting Out, Management Rights, Probationary Employees, Group Leaders, Work Assignments, Employee Obligation to Inform, Effect of Law, Requirements of Employees, Job Opening, Leave of absence, Claims of Breach, Duration of Agreement, Union Security and Deduction of Dues, Hours, Seniority, Job class, New Rate Ranges, Work by Hourly Employees, Drugs and Alcohol, Certification, Agreement Complete, Part-Time Vs. Full-Time Status, and Wage Payment.

The March 29 report also indicated that the parties had reached agreement on all of the non-economic issues. The Company presented its economic proposal on April 18, 2007. Subsequent reports show agreement on funeral leave and sick leave.

So, it’s not so much that DirecTECH is refusing to come to the table or refusing to enter into an agreement, rather, the union is upset because the company has not agreed to wage increases. Since the company won’t “give” these increases, the Shop Steward believes that mandatory interest arbitration is necessary.

We’ve argued for some time now that the EFCA debate should be about whether card check and interest arbitration would be good labor policy and not about who has the best PR or who has donated to the right congressmen. The DirecTECH situation offers a good opportunity to examine whether interest arbitration is what is needed.

First, we note that there seems to be some notion on the part of the Shop Steward that joining a union means that the employer ought to give employees more money. Of course, he probably got that idea from the endless (and discredited) propaganda suggesting that unionization is a magical cure for one’s economic woes.

The fact is, unions don’t set wages. Neither do employers for that matter. In today’s system, wages are set by the labor market. DirecTECH’s pre-unionization wages were likely set at the level it deemed was necessary to attract and retain enough qualified workers to perform its customer’s installations. Sure, it might be able to attract or retain better qualified workers if it paid higher wages, but it is obviously satisfied with the applicant pool and turnover rate created by its current wage scale. Why should an arbitrator be empowered to order DirecTECH to pay more?

The employees, of course, can try to affect the labor market by withholding their labor and by encouraging others to do the same. If the employer feels that it has to pay more to service the customer, then it will either do so or go out of business. But the DirecTECH union apparently hasn’t gone on strike. It just wants the DirecTECH to “give” employees more money and dreams of the day when an arbitrator might order the company to pay above-market wages.

The issue then is where those above-market wages will come from. DirecTECH could raise its prices, but an arbitrator would not be able to order DirecTECH’s one and only customer to pay those higher prices. The customer would be free to find another company willing to perform the work at market rates. One might argue that the higher rates could simply be taken from the company’s profits, and that is true. But an arbitrator would not be able to order an investor to keep his or her capital in an enterprise that is not providing a desired rate of return. DirecTECH’s owners could simply decide to invest their money elsewhere.

Labor claims that many companies refuse to bargain in good faith with employees’ representatives. If this is true, and if the existing remedies are not sufficient to defer such conduct, then other remedies, such as civil penalties, should be considered. But legislation that would permit an arbitrator to “give” above-market wages would not be good for business or labor.