Monopoly Bargaining Benefits Union Bosses

But Productive Unionized Workers Chafe Under ‘Wage Ceilings’

(Click here to download the April 2015 National Right to Work Newsletter)

At a press conference early in his first term in office, President Barack Obama articulated what he insisted was a key part of his philosophy with regard to economic policy:

“We believe in the free market, we believe in capitalism.

“. . . [W]e believe in people getting rich based on performance and what they add in terms of value and the products and services they create.”

Overwhelmingly, Americans would agree. Unfortunately, Mr. Obama’s theoretical support for businesses rewarding employees “based on performance” has from the beginning been at odds with his relentless advocacy for empowering union bosses to act as employees’ “exclusive” bargaining representatives.

The fact is, union officials routinely wield the monopoly-bargaining privileges handed them by federal and state labor laws to prevent employers from compensating employees “based on performance and what they add in terms of value . . . .”

Workers Who Don’t Want A Union Are ‘Often Actually Made Worse Off’

In a 1995 review article for the Comparative Labor Law Journal, Pennsylvania law professor Clyde Summers, who personally supported laws granting union bosses “exclusivity” status, was quite blunt about the detrimental consequences for many employees.

(Dr. Summers, who passed away in 2010, was widely regarded as one of America’s top legal scholars in labor relations.)

Agreeing with the book he was reviewing, Dr. Summers acknowledged that under monopoly bargaining workers who don’t want a union are “often actually made worse off” than they were before.

For example, Dr. Summers elaborated, “wage increases of the low skilled may be at the expense of the highly skilled.”

Of course, when businesses are unable to offer their front-line employees incentives for good performance, they often find fewer employees bother to perform well. Such firms become less competitive, and all employees suffer the consequences.

Under current federal labor law, unionized job providers can offer merit-based individual pay increases or bonuses only if union officials give their permission, or if federal authorities find bargaining between the employer and union officials has come to an “impasse.”

Except in star-driven industries like Hollywood movies and professional sports, union bosses typically veto requests by unionized employers to offer merit pay or bonuses. And employers risk costly strikes and legal trouble if they try to bargain to an impasse.

Consequently, unionized employers rarely try to reward employees on the basis of their individual performance, because they can expect only to suffer nasty repercussions.

‘Cease and Desist’ From Rewarding Good Employees Without Union Bosses’ Leave

One unionized enterprise that did try to reward its best employees without first obtaining union bosses’ permission is the nonprofit Brooklyn Hospital Center (BHC) in New York City.

In 2009, a National Labor Relations Board (NLRB) bureaucrat ruled the BHC had violated federal law by asking supervisors to identify the top 10% of employees in their departments, and then providing those employees with $100 gift certificates.

Even such modest incentives for good performance were not permissible, according to the NLRB bureaucrat, because the gift cards were furnished “without prior notice to the union, and without affording the union an opportunity to bargain with respect to this conduct.”

The bureaucrat ordered the BHC to “cease and desist” from “[u]nilaterally granting its employees a gift card or any other benefit without providing notice to the union and an opportunity to bargain.”

National Right to Work Committee President Mark Mix commented:

“‘Wage ceilings’ are a particularly outrageous consequence of the National Labor Relations Act, which authorizes and promotes union monopoly bargaining power over pay, benefits, and other working conditions.

“The best remedy for Big Labor ‘wage ceilings’ is simply to revoke union officials’ legal privilege to act as the ‘exclusive’ spokesmen for all of an enterprise’s employees, including those who do not belong to the union.

“However, even without such a fundamental reform, it is possible for the U.S. Congress to mitigate the harm.”

Measure Would Enable Firms To Raise Workers’ Pay Without Big Labor Permission

Mr. Mix continued: “For example, legislation recently introduced on Capitol Hill by Congressman Todd Rokita (R-Ind.) and Sen. Marco Rubio (R-Fla.) would allow unionized employers to pay more than a union contract calls for without having to get union bosses’ permission first.”

The Rokita-Rubio legislation was introduced in the House on February 12 as H.R.1003, and in the Senate on February 14 as S.507.

It is also known as the Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act. As this month’s Newsletter goes to press, it already has a total of 28 congressional sponsors.

If the RAISE Act became law, unionized employers would have only to establish that employees are receiving extra pay or bonuses based on their demonstrable accomplishments, and that all front-line employees have an opportunity to secure such rewards by meeting the same standards.

“The RAISE Act is clearly a step in the right direction, and the Committee and its members are now lobbying to build congressional support for this legislation,” said Mr. Mix.

“But the RAISE Act is not a panacea. Denying merit pay increases for the especially talented and assiduous is only one of several ways in which union bosses wield monopoly- bargaining power to the detriment of many employees.

“For example, union contracts often force employers to discriminate against low-seniority employees if layoffs are financially necessary, while the employer left on his or her own would prefer not to discriminate on that basis.”

Union-Label Politicians Can Be Expected to Fight the RAISE Act, Tooth and Nail

“Many workers will continue to be hurt economically by monopolistic unionism, even if the RAISE Act is passed into law. Preserving and expanding Right to Work protections for employees who don’t want a union will, of course, continue to be imperative,” Mr. Mix emphasized.

Modest as the reform implemented by the RAISE Act is, union officials and their army of forced union dues-funded lobbyists can all the same be expected to fight it, tooth and nail.

Three years ago, when Sen. Rubio brought up the RAISE Act as an amendment to the “Agriculture Reform, Food and Jobs” Act of 2012, he met with vociferous opposition from top union bosses.

Teamster czar Jim Hoffa’s explanation for why he was determined to kill the Rubio amendment was typical.

The RAISE Act, Mr. Hoffa bitterly complained, would “allow employers to grant wage increases unilaterally to employees of their own choosing.”

‘A Battle Worth Fighting’

“In June 2012,” recalled Mr. Mix, “union lobbyists twisted arms until every Senate Democrat, as well as Big Labor Independents Joe Lieberman [Conn.] and Bernie Sanders [Vermont] and pro-forced unionism Republican Lisa Murkowski [Alaska], voted to kill the RAISE Act.

“This year, undoubtedly, top union officials remain determined to prevent unionized employers from having the discretion to reward employees in a way that maximizes the business’s profits, productivity and value.

“It will be an uphill battle even to get the RAISE Act to President Obama’s desk, and securing his signature would be an even more daunting task.

“But this is a battle worth fighting. Any fair-minded person would have to acknowledge that the RAISE Act is significantly preferable to the status quo. And by stubbornly resisting this legislation, union bosses like Jim Hoffa effectively concede they are standing in the way of higher compensation for many unionized employees.

“What rationalization, then, do union officials have left for retaining laws that authorize Big Labor to force all unionized employees to pay union dues, or be fired?

“This spring, the Committee will continue to turn up the heat on U.S. senators and representatives to support the RAISE Act. One not insignificant point in its favor is that it exposes the hollowness of Big Labor pretensions of benefiting ‘all workers.’

“The debate over the RAISE Act makes it plain to all observers that many unionized workers are Big Labor’s captive passengers. Forcing such workers to pay union fees as a job condition adds insult to injury.”