Why not give the better workers a raise?
The way to get ahead at most jobs is pretty straightforward: Work hard. Do not only what's asked of you, but a bit more. Make that extra effort, and an employer is likely to keep you around. Perhaps even give you a raise — if that's allowed.
"Wait a moment," you may think. "How could an employer be barred from giving productive workers a raise?" Well, if the worker is in a union, there's almost certainly a cap on his pay — no matter how productive or effective the worker is.
That may be about to change.
Sen. David Vitter, R-La., and Rep. Tom McClintock, R-Calif., have introduced the Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act. It allows employers to pay individual union members more — but not less — than their union contract calls for. Who could possibly oppose the goal of this common-sense measure? Labor unions, the very organizations that claim to speak for and represent individual workers.
Unions are exclusive bargaining representatives. They represent all the employees in a bargaining unit as a group, and they negotiate a collective contract that applies to all workers. Employers may not pay hard-working individuals more than the contract calls for without negotiating it with the union.
To protect their own interests, unions want their members to view the union — not their own hard work — as the source of any wage gains. If a union contract calls for $20 an hour but an exceptional employee's efforts earn him $25 an hour, why is he paying union dues? So rather than have workers ask such uncomfortable questions, unions typically negotiate contracts that treat all workers identically, basing pay on seniority systems and job classifications that apply to everyone no matter how hard they work.
Employers cannot pay more. Going outside the union contract and paying higher wages to individual workers — even if they deserve it — violates the law. As a result, the individual efforts of union members go unrewarded. The diligent union member putting in an honest eight-hour day and the slacker putting in half that both receive the same seniority-based raise. No matter how productive an individual union member is or how hard he works, he cannot earn more than the collective bargaining agreement calls for. The law prevents union members from fulfilling the American Dream of working hard to get ahead.
The RAISE Act is designed to fix this. It would change the law so that a union's status as the workers' representative and the terms of a collective bargaining agreement wouldn't prevent employers from paying individual workers higher wages.
Union contracts still would set the minimum that workers would earn, but workers could earn more through their own hard work. Employers could not selectively give raises to anti-union workers to undermine the union, however. Under the RAISE Act, it would remain illegal to discriminate against workers on the basis of their union membership.
It's a win-win for employers and employees. Studies show that workers become more productive when employers offer performance-pay. They earn higher wages and their companies earn greater profits. Instead of fighting over redistributing wealth, the RAISE Act encourages both workers and firms to work together to create more wealth. Under the RAISE Act, the typical union member could earn between $2,600 and $4,300 more per year through his or her own efforts.
This is the type of policy that President Obama called for when criticizing the executive bonuses paid by AIG: "We believe in the free market, we believe in capitalism, we believe in people getting rich, but we believe in people getting rich based on performance and what they add in terms of value and the products and services that they create," he announced.
The RAISE Act would enable enterprising workers to get ahead through their own hard work. It's an idea whose time has come.
James Sherk is the Bradley Fellow in Labor Policy in the Center for Data Analysis at The Heritage Foundation in Washington, D.C.