Sherk: Reward Workers With Better Laws

Posted May 14, 2009 at 2:08pm

Over the past generation, the labor market has changed profoundly. Computers have automated many manual and repetitive tasks. The share of American workers employed as operators, fabricators and laborers or in precision production craft and repair occupations has fallen by 10 percent. Robots have relieved many workers of the tedium of the assembly line.

Today’s employers need workers who can do jobs that computers can’t — workers who can think on the job and act independently. Consider which sectors have collectively increased their share of employment by 10 percent: executive and managerial, professional specialty and technical and sales. The economy has created more jobs for computer systems analysts, registered nurses, and engineers and financial specialists. Increasingly, employers hire workers for their brains, not for their brawn.

The new jobs pay more than the jobs that they are replacing. The three fastest-growing job sectors over the past generation also pay the most. They are safer jobs, too. Far fewer workers get hurt at their desks than on the assembly line.

Most workers also find these jobs more rewarding. Studies show that workers enjoy their jobs much more today than in the past. Performing the same rote tasks on the assembly line leaves little room for individual expression. The United Auto Workers insisted on the “30-and-out— pensions because many members hated their jobs. Today, however, employers increasingly value workers’ individual skills, talents and abilities. Most workers find it much more satisfying to be rewarded for the fruits of their labors than to be cogs in the corporate machine.

Nor do many employees today expect or want to work for the same company their entire working life. When they find a better job, workers rarely hesitate to switch employers.

The recession has accelerated this transformation from widgets to digits, with the manufacturing and construction industries enduring the heaviest job losses. While some knowledge sectors, especially in the financial sector, have contracted, for the most part the service sector has experienced much milder job losses. As General Motors prepares to file for bankruptcy, Google has replaced it as the iconic American firm.

This transformation of the economy has undermined the labor movement. Collective bargaining works when workers’ individuality doesn’t matter. But general representation makes no sense for workers who bring individual talents to the bargaining table. Few workers today want a contract that ignores their individual contribution and lumps them in with their co-workers. Collective contracts fail to reflect fully the value that modern workers bring in the workplace.

Small wonder that only 9 percent of nonunion workers tell pollsters they want to unionize. Imagine the organizer tasked with unionizing Google. What could he offer Google’s employees? Union membership has plummeted in the private sector because most workers don’t want what unions are selling.

Rather than adapt, organized labor wants to change the law to make it difficult for workers to refuse their services. Unions want workers to organize in public with “card check— voting so they can come back again and again to workers who say “no— to pressure them to change their mind.

Congress should bring labor law into the 21st century instead of stripping workers of their privacy. Under current law, unions set not only a wage floor but also a wage ceiling. Employers may not pay individual workers more than union rates without bargaining with the union. However, unions typically oppose individual raises, preferring seniority systems that treat all workers — both the industrious and the slackers — identically.

Consequently, employers who want to reward hardworking employees usually cannot pay them more than the group union rates. No matter how hard union members work, they can never get ahead. The “seniority ceiling— holds them back.

It’s one thing for unions to raise workers’ pay, but why should collective bargaining cap the pay for productive employees? Why should the law prevent employers from rewarding the labors of individual employees?

Congress should amend the National Labor Relations Act to allow employers to pay individual workers more than the union rates. Collective bargaining agreements would set only the minimum, instead of the maximum, that union members earn.

Economic research shows — unsurprisingly — that employees work harder when their employers reward them for their efforts. Workers become more productive and earn higher wages while their companies earn more profits. If Congress allowed merit raises, the typical union member would earn $2,600 to $4,300 more a year through his own hard work. Instead of fighting over how to redistribute wealth, employers and employees would work to create more wealth.

Congress should pass this type of legislation that adapts outdated labor statutes to the modern economy. Congress should help workers increase their skills and take advantage of opportunities, instead of pressuring them into antiquated labor institutions.

James Sherk is the Bradley fellow in labor policy at the Heritage Foundation.