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Option Play: Union/Government Conspiracy to Kill Jobs
By Chuck Muth
February 23, 2004

There's been lots of talk about "outsourcing" American jobs overseas lately. Naturally, the Democrats blame President Bush. And as usual, they're wrong. While admittedly some companies may indeed be relocating overseas simply and solely for cheaper labor, it's more than that. It's to protect their companies from two lethal business-killers: unions and government.

The fact is, business-hating unions are well-protected in this country by laws which often turn a blind eye even to violence and vandalism on picket lines and private property. Unions are able to get away with all sorts of lies and extortions in their selfish quest to bend every profitable business to their will. Until government stops pacifying these anti-business extortionists don't be surprised if more and more companies move out of the country to protect themselves from the search-and-destroy, scorched-earth tactics of today's labor leaders.

And speaking of government, Uncle Sam is at least as culpable as the unions in driving jobs overseas. Red tape, taxation, fees, affirmative action, environmental regulations, lawsuits, OSHA, parental leave, and on and on and on. Enough government mandates, restrictions and regulations to choke a horse. Who needs the aggravation?

The latest example is a government proposal to mess with American high-tech companies who use what are called "options" to attract the best-and-brightest talent to this highly competitive world-wide field.

As James Glassman of TechCentralStation explains, an employee is offered an "option" to buy stock in his employer's company at a pre-set price after he's worked there for a few years. If the employee and the employer do well over those years, the stock price will rise and the employee will make a nice little profit at the same time the company is making a nice little profit. It's a great and highly effective incentive program which has enabled many American start-up companies on shoe-string budgets to be at the forefront of high-tech innovation.

So naturally, the government wants to put an end to it.

And unions hate options, as well. Why, if the "workers" suddenly become "owners" by obtaining stock in the company, then the socialists who run the unions will have a tougher time sowing the seeds of class division and getting the poor down-trodden masses worked up in a lather over the injustice of it all. It's hard to get workers fired up at "the man" when "the man" includes those very same workers.

So a new accounting procedure known as "expensing" is being pushed on companies to kill employee option plans. It's a complicated issue, but here's probably all you need to know about it: Unions want to force American companies to switch to this new accounting procedure, and an unelected government board called the Financial Accounting Standards Board (FASB) is pushing for it, as well.

The biggest problem with "expensing" is that it's a hypothetical estimate of what *might* someday be an expense. In reality, options are just a piece of paper which *might* result in additional money for workers IF the company does well. But if the company never gets off the ground, the options are worthless. Either way, this isn't an "expense" until...well, the company actually expends money. Duh.

But this union/government-backed accounting gimmick seeks to force companies to estimate and report this non-expense as an expense when there really is no expense involved in an effort to make a company's financial picture look worse than it actually is. This, in turn, will make the company appear less attractive to investors who are needed to provide the capital to expand and grow the company so it can make more money and create more jobs.

If the unions and FASB (faz-bee) are successful in forcing this accounting scheme on businesses, what they will actually succeed in doing is driving even more companies out of America and into other countries which will be only too happy to allow employee stock options in return for all the jobs these companies create. American high-tech jobs will go the way of textile jobs.

But not to worry. The union leaders will still get their fat salaries, generous expense accounts and fancy cars while proclaiming yet another "victory" against corporate America for the working stiff. And, of course, no government employee or agency ever goes the way of the dinosaur, so they're safe as well.

In fact, the only folks at risk here are...the people who actually create jobs...and the people who actually fill them.

Go figure.

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Chuck Muth is president of Citizen Outreach, a non-profit public policy advocacy organization in Washington, D.C. The views expressed are his own and do not necessarily reflect the views of Citizen Outreach. He may be reached at chuck@citizenoutreach.com.

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Note -- The opinions expressed in this column are those of the author and do not necessarily reflect the opinions, views, and/or philosophy of GOPUSA.