Electric Boat: ‘Adverse Impact’ of Unemployment for Striking Workers Bill

The following letter was sent May 2 by General Dynamics Electric Boat to Connecticut House Speaker Matt Ritter (D-Hartford), House Majority Leader Jason Rojas (D-East Hartford), and House Republican Leader Vincent Candelora (R-North Branford). It is posted here with permission.

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Electric Boat opposes HB 5164 (An Act Concerning Unemployment Benefits) because of the adverse impact it would have on businesses at a time when it is essential to stimulate job creation.

The current state statute, read in concert with long-standing employee protections under federal labor law, achieves the proper balance between the policy purposes of unemployment compensation and employees’ collective bargaining rights.

Workers who go on strike hurt business by not allowing work to be performed and cause harm to themselves by foregoing wages.

The economic loss, in some instances, is already mitigated by union-provided strike funds (some of these funds have several hundred million dollar balances).

Even when such funds are not available, this bill alters the balance by eliminating much of the wage loss for strikers which creates an incentive for protracted labor disputes.

Unions will feel less pressure to compromise aggressive bargaining positions because the financial impact to members has been greatly reduced.

“It’s a sneaky way to work around a discussion that was very public in nature,” said CBIA’s ⁦@ChrisDiPentima, who is calling on Gov. Ned Lamont to veto the bill as both bad public policy and a questionable legislative process. https://t.co/CV30aeLFUO

— CBIA (@CBIANews) May 4, 2024

Altering this delicate balance is why only two states in the entire country permit employees who have voluntarily removed themselves from the workforce to collect unemployment benefits.

We are also greatly concerned this bill will have a significant impact on small businesses in Connecticut, many of whom are part of the critical submarine industrial base.

Small business revenue streams are less resilient to any loss and protracted labor disputes can devastate chances for recovery from a strike.

We understand there are different options being considered to fund this benefit. If it is through unemployment, then it would create a new tax on employers because benefits are paid through employer contributions.

It also would put greater strain on the state unemployment insurance trust fund at a time when we are just starting to implement measures to ensure its future solvency. This is why California Governor Gavin Newsom vetoed a similar bill.

If the funding stream is through ARPA or some other measure, then we believe the money would be better suited to something that generates business growth in the state.

For these reasons, we respectfully oppose HB 5164.

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The intent of HB 5164 was incorporated into HB 5431, which passed the House May 3 and is currently awaiting action by the state Senate. For more information, contact CBIA’s
 Ashley Zane (860.244.1169) | @AshleyZane9.