Giving workers fair warning
WHEN Ronald Reagan vetoed the Omnibus Trade Bill in May, he blamed its provisions requiring employers to give workers 60 days' warning of coming plant closures. But plant-closure notification, resurrected as a separate bill, has passed the Senate by an apparently veto-proof 72-23 and looks likely to pass overwhelmingly in the more heavily Democratic House next week.Skip to next paragraph
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The bill itself is not perfect, but the concept is worthy. Other industrialized nations have similar or stronger notification laws (Europe) or traditions (Japan). The argument that the bill would hurt American competitiveness rings somewhat hollow. And common sense would argue anyway for the kind of business planning that would enable employers to give advance warning of shutdowns and layoffs.
Plant closure notification has become a hot political issue. A number of Senate Republicans up for reelection have evidently seen which way the wind is blowing: Popular support for closure notification is strong, business opposition to this particular bill is divided, and in any case there are always more employees than employers. Moreover, continued expansion of the business cycle has employers feeling less concerned about what they see as crimps on their managerial prerogatives than would be the case during a recession.
A certain restructuring of the economy continues, with the devalued dollar leading to the emergence of manufacturing as the strongest sector. A cheaper dollar makes American exports more in demand, and manufactured goods are, of course, more exportable than services.
Restructuring means, however, some layoffs and plant closures, despite continuing economic expansion. In fact, sometimes such activity increases in good times, for reasons such as availability of financing for plant modernization or consolidation.
Despite all the job creation, some people are still being laid off. Voters know this, and they remember the layoffs of the last recession, too.
If the administration used the plant-closure issue as an excuse for a trade-bill veto or a bargaining chip, the strategy backfired. What looks likely now is a separate, veto-proof notification bill, and perhaps a second trade bill which the President will not be able to use closure notification as a grounds to veto.