Organized labor has been busying trying to reverse its long decline in membership by rewriting the rules governing union organizing, and that has kept James Sherk, Senior Policy Analyst in labor economic at The Heritage Foundation, pretty busy. Sherk recently conducted a “labor boot camp” for congressional staffers. We asked Sherk three questions:
InsiderOnline: Organized labor is trying to reverse the decline in its membership by pushing for changes in labor laws and regulations so that organizing is easier. But is it really the rules that are to blame for organized labor’s decline?
James Sherk: The rules, which have changed little in the past two generations, have little to do with the decline in union membership. Rather, the union movement has two main problems: (1) The economy has become more competitive, making it more difficult for unionized businesses to stay afloat with the higher costs they bring employers, while (2) polls show that very few nonunion workers want to join a union. So the union movement is losing more members with unionized firms shrinking or going bankrupt, and they cannot recruit enough new workers to replace those they lose. This is why union membership remains strong in government – government has no competitors, so union inefficiencies do not cause government unions to lose members/jobs to more efficient competitors.
IO: You have written about the RAISE Act, which would allow employers to give performance-based raises without negotiating them with the union. Why would unions not want their members to receive performance-based raises?
JS: Unions want workers to see the union and collective bargaining as the reason they get ahead, not their own individual performance. If the union rate is $15 an hour, but the union member is making $20 an hour, then he will soon start asking why he is paying union dues. He is also unlikely to go on strike to get $16 an hour. Individual performance pay undermines union influence over their own members, so they generally oppose it. Some collective bargaining agreements do allow recognition of individual performance—unions do not universally oppose it—but these are a small minority of all collective bargaining agreements.
IO: You suggest tying federal pay to market rates and market signals. How do you bring market signals into a situation where the employer (the government) doesn’t really have any competitors—in the economic sense—and the bottom line of the enterprise is obviously not the foremost concern of those running it?
JS: There are several market signals that can be used, even in those cases. Job applications are a sign that potential employees view a job as desirable, or not. Similarly with voluntary quits. If few workers are applying for a position at an agency, and the agency is having difficulty retaining workers in that job, it is probably undercompensated. Conversely, if few employees voluntarily leave a position and vacancies are swamped with job openings, it is a sign it may be overcompensated. You can also use market pay for jobs that require similar skill levels as a guide.
For a primer on current federal labor law issues, see the series of Web memos Sherk wrote for The Heritage Foundation’s “labor boot camp” seminar:
• Who Pays for “Official Time” and Why Americans Should Be Concerned
• Understanding Mandatory Paid Sick Leave
• The Workplace Democracy and Fairness Act
• Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act
• Why the Davis–Bacon Act Should Be Repealed
• Federal Compensation: Why Government Pay Is Inflated
• Extended Unemployment Insurance Benefits.