Union Misdeeds, Part II: Maximum Wages Prevent Individual Awards

Categories: Business News


Employers attempting to reward union employees for jobs well done are being prohibited from doing so by union contracts. This post asks: Why should unions have the power to turn down a raise on a worker’s behalf? Heritage’s The Foundry blog explains:

Union contracts do not just set the minimum compensation that workers can earn; they also set maximum wages.

Employers may not pay employees more than their union has negotiated. Unions typically base pay on seniority and job classifications—not individual effort or productivity. Workers cannot bargain individually for more. By law, hard-working union members get the same pay as those who slack off.

The National Labor Relations Board (NLRB) strikes down attempts to raise wages without union permission. The Brooklyn Hospital Center rewarded its best nurses with $100 gift cards. The NLRB told the hospital to cease and desist. The Register Guard Publishing Company gave a bonus commission to employees who sold advertising contracts that the company wanted to promote. The NLRB also ordered them to stop.

Union contracts should not prevent workers from earning raises. The Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act corrects this problem. It amends the National Labor Relations Act to eliminate the wage ceiling. The RAISE Act allows employers to pay deserving employees higher wages for their work without facing unfair labor practice complaints. The Senate may vote on the RAISE Act as an amendment to the farm bill.

The RAISE Act would benefit employers and employees by allowing companies to offer performance pay to reward productivity. Unsurprisingly, employees work harder when their employers reward their hard work. Research shows that the average worker’s earnings rise 6–10 percent when they can get performance pay. Companies pay these higher wages out of the higher revenue their productivity generates. Both sides win.

Forbidding employers from paying individual union members higher wages makes no sense in today’s economy. Workers want their achievements recognized, and employers want to reward productivity. The RAISE Act lifts the seniority ceiling and allows union members to get ahead. Why should unions have the power to turn down a raise on a worker’s behalf?

One thought on “Union Misdeeds, Part II: Maximum Wages Prevent Individual Awards

  1. Unionization does not prevent incentive awards for performance. Failure of management to strive to negotiate objective instead subjective processes for them does prevent them. Leaving them to management’s discretionary whim in large organizations means leaving them to supervisors who have their own personal agenda. So-called incentive awards tend to be of token amounts that tend to cause more divisiveness amoung employees than they contribute to general incentivization. There are, however, cases of effective, and union desired high incentive pay; for example many union contracts have “piece work” contracts or partial piece work contracts where the pay is based on production of certain kinds. Piece work based pay may or many not be abusive of employees, depending on whether or not it is based on appropriate standards and rationales. Incentive awards without negotiated objective processes for awarding them leaves them open to being used to bust union participation, leads to supervisors practicing crony-ism and personal biases for their own ends, temps supervisors to award them to employees who do not stand up for their union rights, may even harm organizational effectiveness and efficiency by rewarding the wrong things and the wrong people by the wrong people, etc., and is just sloppy business.

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