New Rules Won’t Help US Labor

George Bush has finally found the answer to the massive fraud committed by Enron, Tyco and other corporate giants – tougher financial controls on unions.

Never mind that unions have not been implicated in any of the recent corporate scandals, or that financial misconduct by union officials is relatively rare and financially insignificant. Just as the solution to middle class’s financial problems is a tax cut for the rich, so the answer to corporate misconduct is to crack down on unions.

Having ignored the critical need for better financial regulation of corporations, the administration has proposed new accounting rules for unions. These rules would require every labor union to report all expenditures in excess of $2,000 to the Department of Labor. These reports would have to be made by computer, using software specified by the government. This requirement would apply not only to large national unions but also to the smallest local union.

How much will this cost America’s 13 million union members? The Department of Labor has no idea. It doesn’t know what accounting software unions currently use, much less how much it will cost to make that software compatible with the new software required by the government. How could it? The government hasn’t even designed the software yet. Labor doesn’t even know if local unions use computers.

Why? Because it never asked. The Department of Labor collected zero information from unions about their current accounting practices before writing the new rules.

The real cost to unions and their members, according to those who have the facts, is at least $300 million and may exceed $1 billion.

That won’t help cut down fraud in America, but it will hamstring unions. Funds for organizing, processing grievances, and working for new health and safety regulations will dry up. This may be music to George Bush’s ears, but it’s a sour note for workers.

Lewis Maltby is president of the National Workrights Institute.


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