The politics of President Clinton's executive order precluding the government from doing business with companies that hire permanent strike replacement workers is obvious enough. With his re-election on the line, Mr. Clinton wants to heal his relations with organized labor, which were wounded severely by his principled battles for ratification of the NAFTA and GATT trade agreements over the fierce opposition of the AFL-CIO.
What is not so obvious is the legal or economic justification for such a move. Since a Supreme Court decision in 1938, businesses have been empowered to hire permanent replacement workers. But until President Ronald Reagan hired such employees to break the air traffic controllers strike in the early 1980s, employers were chary about doing so. Highly publicized labor disputes at Caterpillar and Bridgestone-Firestone have lately shoved the issue high on the AFL-CIO agenda.
Last year, Mr. Clinton tried to overturn the 1938 Supreme Court decision with broad striker replacement legislation. But it died via a Senate GOP filibuster. This time, the president is attempting to bypass Congress with an executive order that will apply only prospectively and only to companies with $100,000-plus federal government contracts that attempt to hire permanent replacements.
His move immediately precipitated an attempt to attach a killer amendment to a defense appropriation bill by Sen. Nancy Kassebaum, R-Kans., who chairs the Senate Labor Committee and is one of the more moderate members of the GOP caucus. It quickly ran into a Democratic filibuster that is likely to hand the Republicans their second straight Senate setback (after defeat of the Balanced Budget Amendment.) In addition, the U.S. Chamber of Commerce is going to go to court to block the presidential order.
Organized labor contends that if employers have a right to quickly hire permanent replacements when hit by a strike, this strips workers of their chief weapon in labor disputes. Business responds that Mr. Clinton is seeking to change labor law unilaterally in order to curry favor with the unions by giving them power to break a company.
This is an issue that will spark much heat but not much light -- and even less concrete action -- during the political season ahead. Our feeling is that neither labor nor business has much to gain from confrontations that cause lingering ill-will and undercut the earning power on which both profits and employee compensation depends. In a globalized economy with fierce competition across international borders, the only real answer is employer-employee cooperation that contributes to the self-interests of both parties.