Constitutional Authority 2

Friends,
A few days ago I started a series looking at what I call “extra-constitutional” federal departments. Today I would like to continue that discussion by looking at the Department of Labor. As with the last Discourse, I will link Article 1, Section 8 of the Constitution here for your reference.

The Department of Labor came into being under Present Taft in 1913 with the enactment of The Organic Act of the Department of Labor. Prior to this enactment labor issues were under the purview of the Department of Commerce and Labor; this act split the two. “The purpose of the Department of Labor shall be to foster, promote, and develop the welfare of the wage earners of the United States, to improve their working conditions, and to advance their opportunities for profitable employment. [Public Law 426-62]” The mission statement of DOL is:

The Department of Labor fosters and promotes the welfare of the job seekers, wage earners, and retirees of the United States by improving their working conditions, advancing their opportunities for profitable employment, protecting their retirement and health care benefits, helping employers find workers, strengthening free collective bargaining, and tracking changes in employment, prices, and other national economic measurements. In carrying out this mission, the Department administers a variety of Federal labor laws including those that guarantee workers’ rights to safe and healthful working conditions; a minimum hourly wage and overtime pay; freedom from employment discrimination; unemployment insurance; and other income support.

This sounds great, giving the impression of a kindly grandfather making sure all of the kids play nicely together. But what happens when one of the kids is able to gain more influence over grandpa then the other kids, and what happens when grandpa allows that influence to make a difference in his judgment? You then have the same relationship as the US government (grandpa) and labor and management (kids). They will do all of this benevolent work on a budget of $10.5B with 16,848 full-time employees.

Let’s take a look at one situation in particular. With enough research I could undoubtedly fill a few volumes on the subject of union corruption but I will just look at the most recent one.

Last year the Bush administration advocated and initiated the bailout of the auto industry. This package has evolved a number of times in the last year, so many times that I am not sure I have the complete picture but I will try to put some of the larger pieces together.

As of 13 June of this year, the United Auto Workers’ health care fund was set to receive 17.5% of General Motors; the government was set to receive 60%; the Canadian government was set to receive 12.5%. That leaves only 10% for the only legitimate claimants to the company, the bond holders. I'm not going to give a blow-by-blow account of the rape and pillaging of the largest auto company in America by the government, but rather concentrate on the macro role played in this travesty by Big Federal Government (I’ll call it BFG), the DOL, and the UAW.

Looking at the DOL mission statement above, how does that square with participating in the destruction of a viable company like General Motors. There are three major players here; the BFG, the DOL, and the UAW. BFG forced the downfall of GM by placing unreasonable restrictions on auto manufacturing over a period of decades, causing the price and complexity of cars to skyrocket. I’m sure there may be a more regulated industry than the auto industry, but one does not come immediately to mind. These regulations cover everything from air bag safety requirements to tire manufacturing specifications, bumper crash survival rates, and gas mileage. Just managing the compliance paperwork alone must be a major cost of doing business.

The DOL is supposed to be looking out for the workers. Where was their advocacy to keep the company viable? I have not found any place where they have performed this function. They have taken on the mantle of surrogate for the UAW against the “big mean management team.” Where has DOL worked to ensure GM’s viability? This is the only way the workers will be able to maintain their jobs. Remember, if GM closes their doors, millions of people are out of work.

So, now we have a situation where we are throwing $10.5B at an agency of BFG that seems to be working for the destruction of jobs. Also, where in the Constitution is BFG given the authority to take such a hand, heavy or light, into matters of free enterprise? It is a historical fact that when BFG sticks its fingers into a situation, it invariably heads south; just ask the folks at Mustang Ranch (you can Google that one).

Why is DOL working so hard to paint big GM as such bad guys; because their masters at UAW have told them to do so. The unions hold such an iron grip over the DOL that they are sure to get their way; thus they will be receiving a big chunk of GM. But wait, remember BFG’s propensity to screw things up? With their 60% and given their track record, GM should be out of business within two years (I'm being generous here; I don’t think it will take that long). Where is the workers’ advocacy in this situation?

The DOL has not only existed in an extra-constitutional framework, it has actively worked to put American workers out of work. This is another BFG department that needs to go away and let the marketplace work. An adjunct to this is for BFG to let the marketplace determine the regulations placed on the industry. One lesson that BFG has never learned is that the consumer will ultimately determine what features they want and what they do not want.

As always, I welcome your comments and discussions.

Dan