Few people know that union contracts do not just set minimum pay. The rates they stipulate are also maximum wages. Businesses may not pay employees more than they have negotiated with the union.
It may be surprising, but few unions allow individual raises. They prefer uniform group rates. Unions want workers to view them as the reason they are getting ahead. After all, why would a worker getting above the union rate pay dues? So unions usually (though not always) negotiate contracts that base pay on seniority and job classifications.
Consequently, union members often cannot get ahead through hard work. High-performers get the same pay as slackers. This makes no sense. Even countries with strong union movements, such as Australia or the U.K., allow individual union members to earn higher wages.
Representative Todd Rokita of Indiana has introduced legislation to fix this. The Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act would let employers pay productive employees more than the union rate. Unions could still set a wage floor, but they could not impose a wage ceiling. Under the RAISE Act, unionized employers could add performance-pay without the union vetoing it.
Conservatives should like the RAISE Act’s proposed policy. The American dream involves working hard to get ahead. Outdated labor laws should not deny union members this opportunity.
— James Sherk is Senior Policy Analyst in Labor Economics at The Heritage Foundation.