Research Handbooks in Law and Economics series
Edited by Cynthia L. Estlund and Michael L. Wachter
Chapter 7: Evaluating the effectiveness of National Labor Relations Act remedies: analysis and comparison with other workplace penalty policies
The National Labor Relations Act (NLRA) has been one of the most controversial pieces of labor legislation passed during the New Deal era. From management’s perspective, the original form of this law, the Wagner Act of 1935, gave labor unions an easy method of organizing the firm’s workforce using the government’s enforcement mechanism and the legitimacy of a federal statute to promote union organizing. During the years following the passage of the Act, unionization grew markedly in the United States. In contrast, the 1947 Taft-Hartley Amendment to the Act was viewed by labor union leaders as a “slave labor act,” because it stated that unions could also be found guilty of unfair labor practices that were similar to those that management might commit, and it included substantial monetary fines for potential restraint of business activity (Wagner 2002). These provisions were deemed so abhorrent from labor’s perspective that former AFL-CIO president Lane Kirkland called for the repeal of the whole Act as amended, saying labor could do better without provisions of the NLRA (Apgar 1984).1 Workplace regulations – whether the NLRA, the Occupational Safety and Health Act, or any of the other major federal statutes – attempt to change private behavior so that it conforms with public policy objectives. Regulations provide for a means of monitoring behavior and providing incentives or penalties to move the regulated party in the desired direction. One way of evaluating the adequacy of any regulatory system is assessing how significant those incentives are in light of the benefits of maintaining status quo behaviors.
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