Obamas Potential Labor Union Woes

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With the inauguration of President Barack Obama, you might be forgiven for thinking that the campaign is over. But in Washington, a barrage of political ads still crowd the airwaves. One, sponsored by a conservative outfit named Americans for Job Security, features grainy and menacing footage of leading Democrats like Nancy Pelosi and Chuck Schumer. A narrator intones, “Democratic leaders want to deny workers the right to a secret ballot in union-organizing elections. Maybe it’s a payoff to the union bosses.”

Another, sponsored by American Rights at Work, a pro-labor group, shows a surprised office worker meeting with his supervisor, who gleefully informs him, “We’re giving you health benefits, a pension, and a nice big raise.” Alas, the worker wakes up. “If you think this is going to happen by itself, you’re dreaming,” the narrator says.

The ads set the stage for what will most likely be the first major confrontation between the Obama administration and business—and it could get ugly. At stake is the Employee Free Choice Act, which would make it much easier for unions to organize. The bill is a top priority of the labor movement, and since labor helped get Obama elected, it expects the bill to become a top priority for him too.

Obama has been cheered by many in the business community for appointing moderates like Tim Geithner to Treasury and Larry Summers to the National Economic Council. The new president, notably, hasn’t brought many labor-affiliated economists and activists onto his economic team. But what is about to play out in Washington will no doubt be an early reminder that despite Obama’s good intentions and promises of a kumbaya era of coming together, he won’t be able to sidestep the classic conflict between business and labor.

The U.S. Chamber of Commerce is calling the coming war over the bill “Armageddon.” Such corporate titans as former General Electric head Jack Welch, outgoing Wal-Mart C.E.O. Lee Scott, and Home Depot co-founder Bernie Marcus are denouncing it. At the World Business Forum, Welch was apoplectic: “If business leaders are not aware of this terrible piece of legislation, they should be. It would hurt us dramatically in our ability to be competitive globally.” Political veteran Mark McKinnon, a former media adviser to George W. Bush, says he’s “never seen business this fired up.”

On the other side, Andy Stern, president of the Service Employees International Union, tells me the legislation “is essential for workers to be able to share in the wealth of their employers.” Stern matters, and he will continue to matter during the Obama administration. With 2 million members, the S.E.I.U. is the largest and fastest-growing union in North America, and its endorsement of Obama gave the first-term senator’s campaign a big lift during the Democratic primaries in 2008.

There is no question that Obama favors the bill; he was one of its many co-sponsors in the Senate. But now he has to make a choice. If Obama wants the law, he can get it passed, but he’ll have to fight for it—and spend valuable political capital early in his term—when he has other priorities, like pushing health-care reform, clean-energy efforts, and an economic-stimulus measure. In 2007, the E.F.C.A. was passed by the House but was filibustered in the Senate and did not pass. This time, though Democrats enjoy a larger majority in the Senate, some in the caucus—especially new senators from conservative states, like Mark Begich of Alaska—might not stand up against a Republican filibuster.

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