Amy Payne at the Heritage Foundation offered an interesting little lesson in the perils of collective labor negotiation on Tuesday morning: Union bosses are excited that they have prevented their members from getting raises. It???s a bit mind-boggling, but that???s what happened.???
???Last week,??? Payne explains, ???the Service Employees International Union (SEIU) celebrated defeating a bill in the Senate that would have allowed raises, declaring that the legislation would have stripped workers??? ???fundamental rights.??? The union???s blog encouraged tweeting and sharing the ???good news??? on Facebook.???
The defeated bill, introduced by Senator Marco Rubio (R-FL), was pointedly called the ???RAISE Act.??? The acronym stood for ???Rewarding Achievement and Incentivizing Successful Employees Act.??? What made union bosses angry was the provision that allowed employers to pay exceptional employees more than the union contract stipulated. The Heritage Foundation???s research suggested this could have led to a salary increase of between $2,700 and $4,500 per year for the average union member.
Why on Earth would anyone object to that? Because the union bosses want to negotiate raises collectively. Every member of the union follows the same pay scale, which is generally based more upon seniority than performance. If a salary increase is given, it is awarded to every union member, not just the exceptionally skilled and hard-working employees.
Merit raises distributed at the discretion of employers would compromise union power. It takes a good bit of the ???collective??? out of collective bargaining, and the Borg don???t play that way.
Also, merit raises can be interpreted as a sanction against the less productive union members, who do not earn them, and collective bargaining is supposed to provide a shield against such sanctions. Payne notes that performance pay increases job satisfaction, and boosts the productivity of firms. That is anathema to organized labor???s upper management. They want to control the value of labor. A labor union is a corporation that sells a product ??? the labor of its members ??? to other corporations. They don???t like end-user modifications of that product.
The theory, and history, of the labor union is quite a bit different than its modern application. Those SEIU members who hesitated to share the ???good news??? about the defeat of the RAISE Act might be reflecting upon those differences today. Big Labor brings many benefits to its members, but it also brings limitations, which are usually ??? but not always ??? borne by employers, their customers, and non-union employees.