By discouraging raises, unions discourage incentives rewarding merit

President Obama correctly observed:

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 that they create

Remarks on Departure fo Costa Mesa, California, and an Exchange with Reporters (Mar. 18, 2009), in I Public Papers of Barack Obama (2009). Unfortunately, Democrats in Congress seemed to have missed the message, as the RAISE Act (S. Amdt. 2166) was defeated 45-54 along party lines. The bill’s opponents claim the legislation was “aimed to do one thing only – strip unionized workers of their fundamental right to bargain collectively over wages.” (link).

This argument is false. The raise act would have “amend[ed] the National Labor Relations Act [(“NLRA”)] to permit employers to pay higher wages to their employees.” S. Amdt. 2166 Bill Status and Summary, Library of Congress. The text of the provision, in toto, would have added four lines to the NLRA:

Notwithstanding a labor organization’s exclusive representation of employees in a unit, or the terms and conditions of any collective bargaining contract or agreement then in effect, nothing in either–

section 8(a)(1) or section 8(a)(5), or

a collective bargaining contract or agreement renewed or entered into after the date of enactment of the RAISE Act,

shall prohibit an employer from paying an employee in the unit greater wages, pay, or other compensation for, or by reason of, his or her services as an employee of such employer, than provided for in such contract or agreement.

Text of Proposed Amendments for S. Bill 3787 (June 6, 2012), Library of Congress (click ‘Printer Friendly Display’ link). It is tough to see how permitting an employer to pay her employee greater wages because of his services strips unionized workers of their right to collective bargaining.

More likely, the unions want to maintain their labor cartel, and are threatened by employees being paid what they actually contribute.

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One thought on “By discouraging raises, unions discourage incentives rewarding merit

  1. Pingback: Two Contemporary Examples Indicating the Growth of Anti-Capitalist Sentiment | Capitalist Tendencies

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