• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • American Workers Deserve a RAISE

    LIFTING THE PAY CAP ON 8 MILLION WORKERS

    Unions Cap Their Member’s Pay

    • 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 bargained contract.
    • 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 less.
    • 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 productivity.

    Why Would Anyone Oppose Higher Wages?

    • 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.”
    Posted in Economics [slideshow_deploy]

    One Response to American Workers Deserve a RAISE

    1. Pingback: » Financial News Update - 06/04/09 NoisyRoom.net: “Extremism in the defense of liberty is no vice. Moderation in the face of tyranny is no virtue.” Barry Goldwater

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×