For Employees, It’s Time for RAISE

With fears of a double-dip recession growing, Americans are saving more and spending less. Economic uncertainty and stagnant wages are a bad combination for American families.

Image, for just a moment, the following situation:

You complete a very important project for your company, coming in on time and under budget. Your boss is ecstatic and the company’s profits are set to soar. In any economy, especially this one, that is great news. Here’s the catch, though; despite your contribution and your company’s renewed profitability, you are told you are not eligible to share in the financial windfall.

Such a scenario seems unreasonable and unlikely. But for more than 8 million union workers around the country, this is a harsh reality. What could possibly hold back such a stellar employee? The union!

Sounds implausible, doesn’t it? After all, union organizers and their defenders in the political class constantly tell us that unions exist to lift up middle class, blue collar workers. Union contracts do indeed set a floor on wages, meaning workers cannot be paid below a certain amount. But, they also set a ceiling on wages, meaning an individual worker cannot be paid above a certain amount.

Simply put, these union contracts make merit-based pay obsolete.

Unions have actually fought bonuses awarded to their own members. Amazingly, the National Labor Relations Board (NLRB) sided with the unions, not the workers. They claimed the bonuses constituted an illegal “direct dealing” with the workers, which was forbidden under collective bargaining law.

Why would unions, which are supposed to fight for their members, oppose merit-based rewards for them? Because it is about the union as a whole, not the individual worker.

The current system creates a perverse dynamic in which union members see the union as their true employer (and wage setter), not the company that actually employs them. As a result, hard workers are held back while less motivated workers are propped up. It runs contrary to the spirit and values that built America.

Fortunately, there is a legislative solution for those 8 million workers who are potentially being held back by their union. The Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act would simply allow employers to pay individual union workers more than the union contract specifies.

It is good policy and the economic effects of incentivizing successful employees are well documented. Performance-based pay allows the average worker’s earnings to rise by 6-10%. Hard working employees will be rewarded, while the ones that slack off will not. At companies that were allowed to provide performance pay, the typical union member received bonuses and merit-based pay increases worth $2,600 to $4,300 each year.

In an era of stagnant wages and enormous economic uncertainty, the RAISE Act seems like something politicians of all stripes could support. Unfortunately, lawmakers who are beholden to Big Labor are in no hurry to embrace the concept which the unions would characterize as “union-busting.”

As The Heritage Foundation’s James Sherk points out, “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.”

The RAISE Act would not undermine the original purpose of unions, nor would it allow employers from unfairly rewarding non-union workers with raises just to punish union workers. It is not union busting, it simply allows exceptional employees to be compensated as such.

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With every vote cast in Congress, freedom either advances or recedes. From reckless spending and stifling regulations to Obamacare, Americans see their freedoms – and those of their children and grandchildren – slipping away. We went to the polls last November to turn the tide. And while conservatives are winning the day on the message, the policy is lagging.

Later this week, Heritage Action will release our first legislative scorecard, which will show which Members of Congress are saying the right things AND doing the right things. Conversely, those who say one thing and do another will no longer be able to hide. This will be a revealing barometer of a lawmaker’s willingness to fight for principled conservative policies in Congress.

Allow me to pull back the curtain just a bit.

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Every expansion of big government starts with a lofty, often inspiring goal. Politicians and interest groups identify a problem, and in turn, identify a corresponding government solution. Of course, more often than not, those solutions fail – or even worse, cause further harm.

The Legal Services Corporation (LSC) is one such entity.

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Last week, President Obama played tough, scolding Congress as he tried to pivot the national political narrative to job creation. The President’s pivot, which he’s tried numerous times before, includes a host of excuses like “headwinds” and “uncertainty” but little in the way of real solutions.

A recent uptick in gasoline prices, gone largely unnoticed by the Washington crowd that was focused on raising America’s debt ceiling, will make job creation even more difficult. Since bottoming out toward the end of June, gas prices have been slowly rising. Last week, the average price for a gallon of regular stood at $3.71, up more than 13 cents since President Obama belittled Congress into cancelling their Fourth of July recess.

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Why Getting Our Debt under Control is So Important

America is at a crossroads. Will we embrace American exceptionalism or will accept a slow, managed decline? The outcome of the 2010 elections signaled that our nation’s founding principles still resonate with Americans of all stripes. The current struggle over whether and how to raise our nation’s debt ceiling is another battle in the long war over what sort of country we leave our children and grandchildren.

The debate has all but consumed Washington and Americans all around the country. For decades, raising the debt ceiling was a foregone conclusion, perhaps just an opportunity for political posturing. That is the way President Obama and his allies in Congress wanted it to be this year, too.

Instead, it has turned into a mechanism to get our dilapidated fiscal house in order. If you’re looking for a sign of just how strong the Tea Party movement remains and how much the freshmen in Congress have changed the tone in Washington, this is it.

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