WASHINGTON, Sept 24 (Reuters) - Workers' and retirees' wages and pension benefits would be protected in corporate bankruptcies under a bill to be introduced on Tuesday by Democratic U.S. lawmakers with support from labor unions.
House of Representatives Judiciary Committee Chairman John Conyers, a Michigan Democrat, said in a statement he will offer the bill to "make it more difficult for the companies to use bankruptcy as a way to gut workers' wages and benefits."
Conyers said he will be joined at a news conference on the bill on Tuesday by Richard Trumka, secretary-treasurer of the AFL-CIO labor coalition, and labor leaders for airline pilots, steelworkers, auto workers, flight attendants and machinists.
This is a bad idea.
Who is going to protect it? The federal government? This means higher taxes and would actually encourage bad faith by firms who will grant more generous packages because they wouldn't have to bad responsible.
If you put the onus on the firms themselves via payments into an escrow account or pushing employee rights ahead of creditors then the effect will be to drive more jobs overseas.
It will be a good day for the Republic when Conyers retires.