Big Bonus Bill Has Unions Super Spooked
Advocates for right-to-work policies are pushing a bill for reform of labor laws so that employers can reward employees without having to ask a union’s permission.
The Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act, which was introduced Thursday by Sen. Marco Rubio (R-FL) and Rep. Todd Rokita (R-IN), is designed to amend the National Labor Relations Act (NLRA) so that employers can give merit-based compensation increases to individual employees, even if those increases are not part of their collective bargaining agreement.
“Currently, if an employer wants to reward particularly hard-working employees, in almost all cases, the union can and will block any bonuses to those workers, which then makes it difficult to keep the best employees,” Patrick Semmens, the vice president of the National Right to Work Foundation, told The Daily Caller News Foundation. “The bill would stop unions from being able to block such merit bonuses.”
Senate labor committee Chairman Lamar Alexander (R-TN), who is cosponsoring the legislation, said in a statement, “This bill will give employers the freedom to pay their employees more for a job well done, for their dedication and hard work, rather than for their time spent in a union.”
Current law, which requires unionized companies to negotiate wage increase through the union, may actually bring down average wages for unionized companies. A study by Dr. Brigham Frandsen shows average wages fall for unionized companies because skilled and experience workers tend to leave for non-unionized companies.
“They suggest that union representation led to a decrease in establishment payroll, employment, and average worker earnings,” the study notes. “The decrease in payroll and earnings was primarily driven by changes in workforce composition in response to a union victory. Higher-paid workers were more likely to leave after a union victory, and younger, lower-paid workers were relatively more likely to come.”
The Heritage Foundation argues that this structure discourages hard working employees, because all too often they are not rewarded for going above and beyond compared to their colleagues.
“When you’re in a union, raises are usually all or nothing. They are not necessarily forbidden; the unions just have to sign off on them,” Heritage notes on an informational page.
“Only about 20 percent of union contracts permit performance-based raises, less than half the rate in nonunion firms,” they continued. “This means 80 percent of workers can’t get an individual raise for doing good work—a raise must be negotiated for everyone. That certainly takes away the incentive to go above and beyond, because there are no performance-based bonuses or even merit increases.”
The bill however is likely to face a prominent opposition. The Raise Act was originally introduced in 2012 but was quickly defeated by 45-54 vote. At the time, Democrats had a majority in the Senate.
As the Service Employees International Union argued at the time, the Raise Act was “aimed to do one thing only – strip unionized workers of their fundamental right to bargain collectively over wages.”
Semmens and the act’s supporters saw this argument coming, though, and they aren’t convinced.
“The fact that ‘Big Labor’ opposes this legislative fix shows that union bosses are interested in maintaining their iron-fisted control over workers at all costs, even if it means less money in the pockets of workers they claim to represent,” Semmens concluded.
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