Bad Labor Law Is a Path to Economic Ruin

I recently said that America "would become France" if a certain bill now in Congress -- which would virtually guarantee that every company becomes unionized -- ever became law.

Deceptively named the Employee Free Choice Act, this bill would in most cases take away an employee's right to a secret ballot in a union election and give unions the option to have federal arbitrators set the wages, benefits, hours and all other terms and conditions of employment.

Countries other than France have suffered the consequences of bad labor laws. When I was CEO of Handy Dan, the precursor to Home Depot, I traveled to England in the 1970s to take a look at a chain of stores we were considering for acquisition. When I arrived in London, the airport workers, bus drivers and garbage collectors were all on strike. The major shareholder of the company asked me to interview three employees. He informed me afterward that he wanted me to hire them at Handy Dan "because the U.K. was finished." He explained that his tax rate was 75% and there were no incentives to grow.

When I asked what he and his company were doing about it, he told me that the media would attack the company if it got involved politically. I jumped all over him and the company's CEO for letting this happen without a fight.

Needless to say, Handy Dan did not buy these stores. Fortunately for Britain and thanks to the courage of Margaret Thatcher, both tax rates and the power of labor unions were reduced in later years.

My advice today about the Employee Free Choice Act is the same as I gave in England: You better fight to stop this undemocratic bill...

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