American Workers Deserve a RAISE: Lifting the Pay Cap for 8 Million Employees
Unions Cap Their Members'
- Setting a Wage Ceiling: Currently union contracts set
both a wage floor and a wage ceiling. Unionized employers may not
give productive workers pay raises outside the collectively
- Seniority-Based Pay: Unions usually demand that
employers reward workers for "time served" rather than "hard work."
No matter how good an employee does his job, he cannot earn higher
wages than what his union contract specifies.
- Holding Back American Productivity: This "seniority
ceiling" keeps union members from reaching their full potential,
since there is no incentive for outstanding performance nor ability
to move up the ladder.
The RAISE Act
Lifting the Ceiling: The RAISE Act (Rewarding
Achievement and Incentivizing Successful Employees) would allow
employers to pay individual workers more, but not less, than the
union contract specifies.
- Providing Incentives: The RAISE Act would provide
workers with the incentive to increase productivity. If passed, the
typical union member would increase his productivity and earn
between $2,600 and $4,300 more a year in performance-pay bonuses
and merit raises.
- Restoring Freedom in the Workplace: Current federal law
caps the wages of 8 million American workers. The RAISE Act would
restore the inherent American right to earn individual raises
through individual efforts to millions of union members.
- Merit-Based Pay Works: Economic research shows that the
average worker's earnings rise 6 to 10% when the pay is performance
based. This is an average figure--industrious and enterprising
workers will earn larger raises while lazy employees earn
- The Time for Change Is Now: With millions of American
families struggling to get ahead financially in the recession,
Congress should lift the ceiling on workers' pay immediately. This
is the right kind of stimulus that will add billions of dollars to
the economy and improve business earnings through increased
Why Would Anyone Oppose Higher
- Direct Dealing: Bonuses to hard-working employees have
been fought successfully by unions wishing to maintain control over
their members' income. It constitutes illegal "direct dealing,"
which collective bargaining law forbids.
- The RAISE Act Does Not Eliminate the Wage Floor: Unions
were originally established to protect workers from making too
little money, not too much. The RAISE Act would still allow union
contracts to set the minimum that workers can earn.
- Still Prevents Anti-Union Discrimination: Employers
could not selectively give raises to anti-union workers to
undermine the union, consistent with current federal law. Under the
RAISE Act, it would remain illegal to discriminate against workers
on the basis of union membership.
- President Obama Agrees: When criticizing AIG, President
Obama said: "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 they create."
To learn more about the RAISE Act, go to: http://blog.heritage.org/2009/06/04/american-workers-deserve-a-raise/