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Senator Rubio Urges Support for RAISE Act

June 19, 2012

Senate votes today on Rubio-sponsored measure to allow union workers to earn performance-based raises and bonuses

Don’t Let Union Bosses Stand In The Way Of Higher Pay For A Job Well Done

By Senator Marco Rubio

The basis of the American Dream is that one can work hard, play by the rules and realize their potential. But big government policies deny this freedom to millions of Americans. One of these policies can be fixed when the Senate votes on the RAISE Act later today.

Under federal law, private-sector union contracts do not just set the minimum wage employers pay, they also set the maximum wage. Businesses may not pay more than the union rate without negotiating it.

Unfortunately, unions often say “No” when employers propose rewarding productive workers. Unions prefer contracts that, to quote Teamsters President Jimmy Hoffa, “create uniform standards for all employees”—no matter how hard they work. Only about one-in-five union contracts permit performance pay.

If unionized companies go ahead and pay productive workers higher wages, the National Labor Relations Board (NLRB) will strike them down. This precedent goes back decades. In NLRB vs. C & C Plywood Corp. (1967) a business had agreed to pay up to $17.00 an hour (in today’s dollars). The company announced, over union objections, that everyone would get $18.50 an hour if they met productivity goals. The NLRB ordered the company to stop paying the raises, and the Supreme Court upheld the decision. In sum, companies were forbidden from paying more than the union rate without the union’s permission.

Even small individual bonuses are illegal. The Brooklyn Hospital Center in New York gave its best nurses $100 gift cards as a token of appreciation. The NLRB ordered the hospital to cease and desist.

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