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Source link: http://archive.mises.org/16701/why-unions-oppose-pay-incentives/

Why Unions Oppose Pay Incentives

April 29, 2011 by

When unions oppose the general policy of extra pay for extra work, as under incentive or piecework payment, they are merely extending the practice of featherbedding. FULL ARTICLE by F.A. Harper


Frank April 29, 2011 at 8:54 am

Your spot on. Great article.

“based on the notion that workers will not perform an ‘honest’ day’s work unless they are ‘bribed’ by the promise of ‘extra’ money,”

This is such a wrong way to see it. How about

”the way to get more production is to push them in producing valuable EXCHANGEABLE goods and services in exchange for higher pay”.

Notice the word exchangeable. It means that working is not ”doing time”. It’s making or giving stuff that other people demand and will EXCHANGE FOR, ie. People demand cleanliness for health&aesthetic reason. Thus the janitor gets money in exchange for his services.

You cannot pay someone when he doesn’t produce exchangeable goods&services. Straight up. Yea it’s easy to say ”what about the unable, the not-so-smart’s and the sick”.

First, this is not the majority of society. The majority of society works and if they got payed more if they produced more, a good chunk of them would work more. With sticky wages through unions, i can sit on my ass while everyone does the job for me. What kind of messages does that send to other? Other workers seeing that i will get payed as much as them, will also sit on their asses. And thus you start to get a huge non production.

”Yea, what if everyone starts working a lot? How am i going to pay all these peoples!” Hello? If they are truly working more, then you will get more money and you will be fine to pay these employee’s. If the janitor does his job very well(lets say at a store), people will notice how clean that store is and are more likely to enter then the dirty store next to it.

On the sick and ”unable” -
I can assure you, a grand majority of the sick and unable would start working if we stopped holding their hands. When the cash stops coming in, they would get working, even if it’s a terrible job, it’s better then not working at all and leaching on others.

Good article FA. Harper.

Daniel April 29, 2011 at 10:21 am

Frank, most of the language employed opposing these measures are the fruit of learning about society not as a system of cooperation where all benefit from freely interacting with others, but as an adversarial system where those who benefit do so only at the expense of others.

So it’s really no wonder those who decry pay incentives describe voluntary exchanging labor as a form of penance, which must be bribed out of the worker.

Frank April 29, 2011 at 11:39 am

Good point daniel. Especially your 2nd paragraph! The idle who doesn’t work, will be outraged by a more meritocratic system of pay, because their existence of laziness would be endangered!

Andy April 30, 2011 at 4:26 am


You’ve never been threatened with unemployment as an “incentive” to perform?

I agree that the notion of being “bribed” to produce is completely wrong. However, your rosy view of how society works is slightly off as well. (I know, run away from my problems and find another job with better incentives). I believe a more accurate description would be that productive employees very often find themselves at odds with adverserial employers and co-workers alike.

Bill May 2, 2011 at 7:44 am

You realy shouldn’t see incentives as a bribe; they’re your boss’s kindly way of showing he cares about you. He could, and maybe should, just fire your ass

Andy May 3, 2011 at 3:30 am

Lol…he rubs my belly everyday…And I kindly keep showing up for my paycheck.

That’s what you get from rent seeking workers that don’t deserve minimum wage. Do you honestly believe that I would have a positive reaction to allowing the market to pay me what I’m worth? Unskilled workers don’t physically leave their jobs, but rather barely do their jobs instead. This is all that is expected, and this is what you get. Please tell me how anyone in their right mind would expect high productivity from this person.

Tony Fernandez April 29, 2011 at 10:20 am

Less work for more pay. The unions are great, aren’t they? Especially since they are strongest in government and corporations with government aid, so they can do whatever they want.

Andy April 30, 2011 at 4:27 am

Incorporation IS government aid.

Andy May 3, 2011 at 3:43 am

Hey, Tony, I did not realize that UCLA was a private college. It’s good to see a young man that is internally consistent with his political views.

Jeff April 29, 2011 at 12:53 pm

Unions don’t oppose incentive pay for extra work. It’s called overtime

Anthony April 29, 2011 at 1:14 pm

That’s extra time, not extra work…

billwald April 29, 2011 at 3:21 pm

Most jobs are not production jobs. Merit pay becomes a popularity contest. How would a police officer or fire fighter be judged for merit pay? A teacher? How can one judge the work of a teacher unless first analyzing the parents?

Inquisitor May 1, 2011 at 6:22 am

By the way that people analyse the services of, I dunno, just about… any service sector employee in the private sector? Let the market decide?

Hard, I know…

Andy May 2, 2011 at 4:24 am

Lol. Have you been to a restaurant or retail store lately? The market apparently yields readily to apathy and incivility. Your optimism is inspiring.

Daniel April 29, 2011 at 4:00 pm

Cops on commission or under pressure from quotas just screw people over for spurious bs laws

Wait. What’s that? The state can’t calculate? Oh. THAT’S why we get antisocial laws and antisocial police to enact them.

But hey, you’re bw, so something like what I just wrote is akin to heresy in your eyes

Iain April 29, 2011 at 4:13 pm

Unions are the bane of our economy even at their small membership. I was listening to Thomas Woods talk about them here:http://www.youtube.com/watch?v=tlX-QORf1KY&p=7AA520F7F48777F9
He cited a source saying that over a half century unions have cost the economy 50 trillion dollars.

John Breslau April 29, 2011 at 5:00 pm

As a public school teacher of students with disabilities, I am quite qualified to state why professional organizations oppose incentive/merit pay. They are unfair, and they increase workplace friction.

The unfair part is pretty easy to show. In education merit pay, does the merit pay reflect the fact that a teacher may not even have a room or office, but instead float into others? In my 5 years of teaching, I’ve never had a year-long contract where I had my own room. Kinda hard to write the lesson on the board when you get there 3 minutes after most students do, right? Especially if the native teacher has been there for 20 and hates that you’ve taken “her” room. I’ve literally had to ferry hot plates with chemical down the hall with crowded students (I was teaching science at that point). Even with gains-based assessment like TVAAS, those who teach students with disabilities still will never get good scores. How about the students we teach who can’t read (common among where I teach) or who can’t understand most of your English? What if you have zero textbooks? Incentive-based pay designed by politicians who have never taught have the subtlety of a jackhammer, and don’t reflect those with disabilities, English Language Learners (ELL), or those who must travel like nomads from room to room. Does the average non-educator know that experienced teachers actively give the worst students to new ones? Not that I’ve seen.

Now for the friction part. Education isn’t an assembly-line. It’s more like a Lazy-Susan. Because of this, educators need collaboration, not competition. I used to wait tables at O’Charlies and Cracker Barrel. It annoyed me that established waiters got the good tables, whereas I’d only get 2 tables a night. That’s okay though… we weren’t working together, not really. In education, you do work together. I worked at a school where teachers would make fun of other teachers to the students’ face. Hardly professional… no wonder their graduation rate was 65%. When educators dislike one another (say, because, you’ve taken their room because you’re a floater), the product (that is, the student at graduation) is compromised. We exchange the product every 90 minutes or so (that’s how long classes are now). Because the product is so influenced by the culture of school, not just the teaching, friction needs to be reduced as much as possible. This is true of schools and churches: dissension kills the intended purpose.

Speaking of incentive pay, how has that worked out with waiters? There’s no bad waiters now that we have tipping, right? What about doctors who are paid to give prescriptions and tests, how’s that working? What about cops paid to give tickets? What about incentive pay to colleges… aren’t they all diploma mills now that they get paid to give diplomas?

Unions aren’t the enemy here. In fact, the best schools in the Western World are in Finland, where unionship is 100%. At the heart of incentive pay is probably a good idea, as is competition where people are competing over the right thing. But politicians aren’t informed or subtle enough to accomplish this. Teachers will be competing over who can have the least disabled, the least ethnic, the least behavior problem student they can get, and what’s worse, THEY WILL BE REWARDED FOR IT. Until an assessment arrives that can take into account biased student enrollement (and TVAAS and other gains based assessments do not), as well as if the teacher has to float, then it will only produce massive triaging of students. That’s my view at least.

Bill May 13, 2011 at 5:10 pm

So, John, how do you measure success? And who corroberates this judgement, your Mother or your employer?

You appear to be offended by the fact that the real world is not as promised during your formative years and that your job, perhaps chosen for altruistic reasons, is not a life filled with adulation and Hosannahs, but is just a job. It’s how you play the game that matters, you’re on your own and nobody, except perhaps your Mother, gives a hoot about you or your concerns.

Charlie April 30, 2011 at 8:52 am

We should consider the fact that collective bargaining is a problem today because of the distortion of power give to the unions. If unions had to demonstrate viability and had to deliver benefits for their members and the businesses or “go out of business”, they would be a different group. Unions negotiate and try to win all they can for their constituents. Without balancing economic forces, unions have distorted the landscape. The minimum wage is a good example, unions lobby for minimum wage to remove their competition for low skill work of their work force. They negotiate with businesses to secure as much as they can from a business, if their demands put that business out of competitive advantage, they both lose. They lobby for favorable legislation to mandate membership. In Gov. where there isn’t even a weak balancing force, the process is more distorted. Union legislation/bargaining should have to consider the inappropriateness of excessive economic advantage and lack of competition. What if there were 3 or 4 competing unions available in every workplace and workers were free to move between or not join? What if unions had to provide prove of value to a business or a gov agency and track a return on investment to bargain for a pay raise? If it worked, keep the $ if not give it back. What if large unions had to abide by the same monopoly rules that business do? how do you calculate a union Herfindahl index?

Bill May 13, 2011 at 5:17 pm

WTF, Charlie, it’s not the ‘power given to the unions’, it’s the weakness of the employers (and by extension, the human resources people who conduct the negotiations) that is the problem; if they had more cojones, then perhaps we’d suffer less of the BS that unions and their pals in Washington lay upon us.

nate-m May 13, 2011 at 6:32 pm

Unions have special legal privileges. If it was just a matter of groups of people trying to work together to deal with employers collectively it’s one thing, but Unions different.


Nowadays unions are not much of a problem in the private sector. They have long since driven the majority of their employers out of business or the employers have moved out of the country to get away from them. Unions are the reasons why the steel industry and such things are dead or dying in the USA. Often times they prevented investment in capital to undermine employment opportunities. Forcing companies to invest in labor rather then modernizing their facilities.

Besides steel workers and other things a obvious example of this is with the port industries in places like San Francisco. We have these companies that employee highly specialized and very expensive labor performing intense and/or dangerous work, were most major ports in the world have long since completely automated. Stuff like crane operators or managing short distance trains.

The major areas (that I see, I could be off base here) that unions remain to be a problem are:
* Industries highly subsidized and protected by USA government. These hide the destructive nature of the unions…. things like the airline industry or automotive industry.

* Public sector unions.

Basically I feel that due to the high level of specialized skill and technical know-how present in the USA (and being imported into the USA) we could still be a major manufacturing center of the world. We can make a small team of people perform the labor of a entire factory of workers from just 30 years ago if we wanted. We have the technology to run factories 24-7. No vacations, no sick days, no rest, no weekends… just continuous production.

Unfortunately this is not a reality that communists anticipated and the socialists will not allow to exist.

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