Guest post by Littler attorney Alex MacDonald on Sectoral Bargaining
Note: Massachusetts and California have already written sectoral bargaining into law for rideshare drivers, and a Harvard-drafted model bill would extend that framework to any industry. Littler attorney Alex MacDonald joined Phil Wilson on a recent episode of the Left of Boom Show to break down the state-by-state push and shared this piece as a companion piece focused on why the model legislation drops the usual pretext about worker choice, and what that admission means for employers. – Michael VanDervort
In most long-running debates, there comes a time when someone says the quiet part out loud. For the debate over unions’ role in America, that time came last month, when the Harvard Center for Labor and a Just Economy proposed “model” legislation for labor organizing. The proposal follows a “sectoral” model, which means that every worker in an industry would be represented by a single union. The proposal is stunning in its breadth, covering possibly every industry and, by its authors’ telling, tens of millions of workers. It is also perhaps the most honest proposal for labor reform in years. Rather than pretending to help workers realize their own choice, it transparently aims to get them into unions. It takes the position that unions are good for workers—and workers should have unions whether they want them or not.
That is, if nothing else, a refreshing dose of real talk. It shows where the lines of debate are today. Unions are no longer talking about empowering workers; they’re talking about empowering themselves. Policymakers should pay attention and think about who they’re really elected to represent—unions or the vast majority of non-union workers.
Labor’s Long Decline
It’s no secret why unions are looking for new models: the current one doesn’t work for them. Union density peaked in 1954, when about 35% of private-sector workers belonged to a union. But since then, unions’ market share has plummeted. Union density fell to about 20% in 1983, as mechanization and international trade eroded labor’s traditional base in the manufacturing sector. And density fell even further in the 1990s, hitting 13.9% by the end of the decade as the economy reoriented itself around the services sector. The decline didn’t stop there, extending into the new century as technology and knowledge work subsumed a growing portion of the workforce. The result is that today, unions represent fewer than 6% of private-sector workers—less than when the National Labor Relations Act (NLRA) was passed.
Though this decline has many causes, unions have mostly blamed the law. They say that the NLRA was written for a different era, when people reported to work in massive industrial mills and factories. In that kind of environment, it made sense to organize workplace by workplace. But today, when work has been fragmented into small retail outlets and offices, that approach to organizing makes no sense. It makes union organizing expensive and throws up barriers to collective action.
Unions also say that the current system encourages employers to resist. When an employer is unionized, it faces higher labor costs—estimated at 15% on average. In a competitive market, that kind of cost premium is an anchor: a unionized firm can be quickly undercut by non-union rivals. So employers naturally fight unionization with all the resources at hand. And when they still get unionized, the competitive headwinds either stagnate their growth or drive them out of business. Then the cycle repeats: unions must organize yet another firm, which itself faces the same competitive pressures.
Problems and Solutions
The solution, unions say, is sectoral bargaining. Sectoral bargaining differs from normal collective bargaining mostly in scale. Rather than representing employees in a single workplace, the union represents employees across an industrial sector. And rather than negotiating with individual firms, the union negotiates with every firm in the industry. The resulting agreement applies to all the sector’s employees and firms. The firms might also have workplace-level agreements, but the sectoral agreement sets the universal baseline.
To hear unions and their allies tell it, this approach solves the current system’s defects. Since bargaining happens at the industry level, unions don’t need to organize employees across atomized workplaces: they can organize one big unit in one big swing. And since every firm in the sector is covered by the agreement, no firm faces competitive pressures: everyone has the same labor costs.
But while that sounds nice in theory, there are practical problems. Start with organizing itself: how is a union supposed to organize employees across an entire industry? Under the NLRA, a union needs signatures from about a third of the employees to trigger an election. In a large industry, one-third could be thousands or tens of thousands of people. So the initial organizing hurdle may be insurmountable. And even if that hurdle can be cleared, bargaining is no easier. Again, under current law, there is no guarantee of an agreement. Though the parties have to bargain in good faith, they don’t have to agree to anything. They can insist on their own positions all the way up to impasse. And in sector-wide bargaining, where the union has to bargain with dozens or maybe hundreds of firms, the prospects of real agreement are remote.
That’s where the Harvard proposal comes in. The proposal would solve the organizing problem by setting extremely low thresholds. First, the union would have to collect signatures from 5% of the workforce or 200 individual workers, whichever was lower. Those signatures would get the union access to all the employees’ contact information. The union could use contact information to gather more signatures. It could then petition for recognition with signatures from 10% of the workers or 1,000 individual signatures; again, whichever was lower. In large industries, 200 and 1,000 signatures could be an infinitesimal slice of the affected workers. So, the union’s real support could be limited to a narrow set of disaffected people. But if the union got those people to sign up, it could represent everyone—no election necessary.
The proposal solves the bargaining dilemma with a similar sledgehammer. It would require all firms in the sector to bargain through an industry association. This association could agree to terms with them all. If the association still failed to agree, it could be forced into binding arbitration, where a panel of arbitrators would write the agreement. And if even arbitration didn’t work, a state-run board could dictate terms directly. There would be no doubt of getting to final terms, even if those terms could only loosely be described as an “agreement.”
The Missing Worker
Notice, however, what is missing from all this: worker choice. Since 1935, one of the chief goals of American labor law has been to empower “freedom of association” at work. The idea has been that workers should choose for themselves whether to join a union. But while the labor movement used to support that idea, the Harvard proposal discards it. The proposal makes no pretense about empowering workers to choose for themselves. Instead, it starts from a different premise: unions are good for workers, and they should get a union whether they want one or not.
That shift has been a long time coming. The labor movement has increasingly equated freedom of association with belonging to a union—not the choice whether to belong. It has supported ideas like “co-regulation,” which installs union representatives to set terms for all workers without an election, and “interest arbitration,” which imposes an “agreement” on workers without a vote. Unions say they support these proposals because organizing the old-fashioned way is too hard; it is too easy for worker choice to be frustrated by expense, opposition, and delay. But the Harvard proposal lets even that mask slip. It effectively admits that the goal is no longer to make sure workers get what they want. It is to make sure that workers get a union—and get one hard.
In that sense, the proposal is a demonstration of truth in advertising. It doesn’t pretend that it is trying to help workers choose. Instead, it parades its paternalism on its sleeve: Harvard knows what’s best for workers, and what’s best for workers is a union. That’s at least an honest, if not a persuasive, sales pitch. It may not convince many real workers. But it at least offers them what it puts on its label.
