Thanks to some prodding by Utah Sen. Orrin Hatch, the Senate moved the other day to make the controversial plant closing notification bill a bit more sensible. The senators did so by adopting a Hatch amendment providing that employers need not give strikers 60 days' notice they are being laid off.
But there are sharp limits to how much this bill can be improved just by amending it. In fact, the best plant closing bill would be no such bill at all.Consequently, even though Congress is on its way to approving the measure by margins large enough to override a veto, President Reagan ought to veto it again. The measure isn't sufficiently better now as a separate item than it was a few weeks ago when the plant closing provisions were part of the omnibus trade bill that prompted a Reagan veto.
With polls showing that four-fifths of the public favor the notification requirements on plant closings, it won't be easy for President Reagan to veto the measure without hurting his fellow Republicans at the elections polls next November. Still, a veto would put the public interest ahead of political expediency.
In essence, the bill would require companies with more than 100 employees to give 60 days' notice of a plant closing in which at least 50 people would lose their jobs. It also would require the two-month notice of any layoff affecting one-third of a workforce or 500 people, whichever is smaller.
Companies failing to give sufficient notice would have to give employees back pay and benefits for each day short of the 60-day limit and would have to pay affected communities $500 for each day of violation. Exemptions would be granted for unforseeable business circumstances and companies in dire straits.
Up to a point, it's easy to see why so many people favor such provisions. The more notice an employee is given about a future job loss, the better the chances are for seeking retraining and finding another job. That's why plenty of firms already give notice voluntarily.
The trouble is that such notice isn't always appropriate. And it isn't always easy to tell which firms deserve the proposed exemption and which don't. A struggling firm may not be sure of its prospects for the next six days, let alone the next 60. If it can sell off part of its operation or some of its assets, a struggling firm may be able to hang on and eventually even turn itself around. But how can such a firm get a good price for its assets if potential buyers know the company is about to close?
Understandably, a study by Robert R. Nathan Associates has concluded that the plant closing provision would result in more than $1.8 billion a year in extra costs to employers. Extra costs either make a firm more likely to close or are often passed along to consumers in the form of higher prices. The Nathan study also concluded that if the plant closing provision had been in effect since 1982 it would have resulted in 460,000 fewer hirings.
In other words, the plant closing notification bill could hurt many of the very people it is supposed to help. If a Congress that has persistently mismanaged the federal budget won't resist the temptation to tell private firms how to operate, President Reagan should veto this latest attempt to put business in a straitjacket.