Trickle-Down Economics, Labor Law & Hockey

Just as the NFL just got the real officials back, the NHL has cancelled all of its preseason games. Hockey fans are groaning around North America as talks between the owners and the National Hockey League Players Association (NHLPA) make little progress toward ending the lockout. The league locked the players out on September 16, and over the past weekend both sides have been discussing terms to end the lockout. As of Monday, October 1, however, it seems fairly imminent that at least some regular season games will also be cancelled. The regular season is slated to start October 11, but with many heated issues still to be resolved, it looks like the first few matchups will be cancelled.

Besides the basic revenue splitting and operations issues (such as safety and drug testing), the main cause of the lockout is the lack of a collective bargaining agreement (CBA) for the NHLPA. The NHL wants a six-year CBA, while the players want a four-year CBA. A CBA is essential to negotiating issues between the NHL and the union such as future salary cuts.  Reportedly, the NHL initially wanted to cut players’ salaries by 24%, but is now considering lowering that number drastically.

Obviously, the longer the lockout the more revenue is lost. In fact, both New Jersey US senators are urging both sides to end the lockout quickly. The New Jersey Devils went all the way to the league championship last year, which gave quite an economic boost to the state. Cutting out the preseason, and potentially cutting out regular season games, will prove to be a big blow to the economy of New Jersey and many other states as well.

This issue goes to the point that union-employer negotiations affect multiple layers of the American economy and society. Labor laws affect virtually every such negotiation, from the NHL to sanitation workers to teachers. The Republican Party and its conservative base, particularly in light of the heated 2012 presidential campaign, often view unions negatively. This negative association with unions, with a foundation of trickle-down economics, may play a part in the major strikes and lockouts the nation has seen recently.