For libertarian think tank Niskanen Center’s series on how best to leverage current organizing momentum to grow the influence of unions and workers, EOP Fellow Liba Wenig Rubenstein and Roundtable chair Roy Bahat offer an alternative to a zero-sum view of the business-labor relationship.
Over the past year, there has been a notable influx of energy surrounding the labor movement, with tight labor markets giving workers a greater ability to demand better wages. At the same time, popular support for unions reached highs not seen since the 1960s. To take full advantage of the moment, a comprehensive policy rethink is needed.
Organizing successes by Starbucks and Amazon workers drove home the message that workers are ready for a new set of employment standards. However, it is yet to be determined whether those dynamics have or will translate into durable increases in union membership and national influence.
We now have our first indication of what to expect going forward. After a solid year of union filings, comparable to levels from the mid-2000s, the Bureau of Labor Statistics today released its union participation estimates for 2022. Despite what was heralded as a seminal year for organizing, the proportion of workers represented by unions actually decreased. While more workers belong to a union now than a year ago, the uptick failed to keep pace with national job growth.
The past year may indeed be a starting point for a resurgence of organized labor. Still, the disconnect between the enthusiasm for unions and actual union participation is unmistakable. A surplus of available jobs may have established favorable conditions for workers to form unions, but cannot be single-handedly relied on to reverse the chronic, 50-year decline in union strength.
The long-running approach to building up labor power is not working and needs to be fixed. Laws and regulations must be overhauled, and unions must embrace new strategies.
We reached out to labor experts from a range of ideological backgrounds to get their input on the best ways to grow the influence of unions and workers with a central question in mind: how can we capitalize on recent successes?
Here are their ideas.
Essays
Could organized labor be good for business? – Roy Bahat (Bloomberg Beta) and Liba Wenig Rubenstein (Aspen Institute) for Niskanen
A recipe for worker power – Brian Callaci, Open Markets
Reforming unemployment insurance is essential to build labor power – Jenna Gerry, National Employment Law Project
Peace through strength: the promise of sectoral bargaining – Chris Griswold, American Compass
Two ideas to make America union again– Dustin Guastella, Teamsters Local 623
Labor unions and the “double-helix” of America’s workforce development future– Brent Orrell, American Enterprise Institute
The Need for the PRO Act– Lorena Roque, Center for Law and Social Policy
Could organized labor be good for business?
Roy Bahat (Bloomberg Beta) and Liba Wenig Rubenstein (Aspen Institute) for Niskanen
Most business leaders believe they should avoid unions forming in their companies at almost any cost – they’ve had, or heard of others having, bad experiences with unions slowing down the pace of change, or they fear loss of control over the destiny of the company, or unions are simply unfamiliar. It’s understandable that most business leaders have never had to think much about unions, since unions have been slowly declining in membership in the private sector for decades. “You get the union you deserve,” is one warning many managers heard at GE – implying that if you lead poorly, your “punishment” will be a union.
Maybe this narrative is broken: As more of the public supports unions in particular, and organized labor in general, more unionization may be inevitable. Maybe there’s a way this could be good for business?
We’ve been speaking with business leaders, working people, organizers, and labor leaders about the rising wave of labor organizing. Most sound locked in an old struggle: decades-old stereotypes about what unions are like, or what “the boss” does.
Some of those stereotypes are grounded in experience. The problem is that, because so few new unions have formed in the U.S. during the lifetime of any person still working today, most of the experience is ancient. Union membership has dropped almost by half just in the last 20 years, and the decline started in the 1950s.
Labor leaders also tell us there have also been too few examples of innovative new worker organizing approaches. Most sectors of modern life have reinvented themselves in the last decades more than unions have. For the last 20 years, only about two dozen new unions have formed each year, though of course many existing unions have experimented with new methods.
There are cases where unions were a threat to a business, of course. And there are plenty of labor leaders who are happy to harm the boss. For some, both in business and in labor, the conflict is the point.
But it doesn’t have to be this way: In many industries, and for many years, organized labor and business managed to work things out and be productive. There are plenty of examples: Hollywood, the auto industry’s “Treaty of Detroit” that spread to set the template for modern employment in America, the usually-productive collaboration between labor and management teams at companies like Kaiser Permanente. We business leaders have lost the muscle memory of how to collaborate with an organized workforce, and we can rebuild it.
Evidence on whether unions are actually harmful to companies is difficult to parse. (Of course, there’s clear evidence they’re good for workers.) What seems clear is that experience varies widely depending on how labor and management conduct themselves. So there’s room for business leadership to act to make things better – when they talk about labor organizing, many business leaders sound like victims, and we’re not. To make change, we’ll all need to experiment with many new and sometimes uncomfortable ways of collaborating – and that process of trial and error is how we’ve always moved forward in America.
The approach will vary by industry. In some industries, a company might be so competitively secure – say, a monopolist – that it would take more than the most obstructionist labor union to cause it much harm, so management has more freedom to find constructive ways to collaborate. In others, say where the goods or services only compete locally (e.g., restaurants), unionization in one company and not others could be bad for everyone – so there’s a push for industry-level “sectoral bargaining,” where the idea is to have unions negotiate with a whole industry at once. (This happens in several industries in the U.S. – for example, Hollywood – with reasonably functional labor-management relations. And California has just passed legislation to try to step toward this in fast food.)
There’s plenty of reason to believe that unions could be allies here. Many of the new generation of labor leaders tell us they’re organizing because they care deeply about their company. They want to hold the company accountable to its stated values – being a great place to work, or doing right by the environment. Sometimes they’ve lost faith in the current CEO’s ability to lead the company, but not in the company itself. Many labor leaders know that if unions harm the competitive standing of the companies where they organize, then those companies may, over time, shrink – harming both the workforce and the shareholders.
The timing for change might be right. Investor groups are starting to point out the ways unions might be good for shareholders. Microsoft announced they’ll now be neutral toward employees’ unionization. Even HR trade publications are writing about how unions might be beneficial.
As a former CEO and former head of corporate social impact teams, we’ve both imagined ways that having an organized counterparty, democratically and legitimately representing the workforce we helped lead, could have been valuable. (And, in many ways, the stronger that counterparty might be, the more effective they might be as a partner.)
Unions can make it easier for CEOs to lead by handing choices that matter to workers directly to their elected representatives. For example: deciding on benefits. If a company sets (in negotiation with a union, perhaps) what it can pay in health care benefits, then the union can select and negotiate the plan. (This is, in fact, what many unions, including the union representing New York Times journalists and others, already do today.) In general, functions led by HR – training, most importantly, and also handling grievances, ensuring employees get the information they need, elements of equity and inclusion, etc. – could instead be taken by a union.
Unions can help workers do better at their jobs. What’s good for workers is, in a sense, good for business. There’s already evidence that unions might drive greater employee morale and easier retention. Some unions invest heavily in training (something businesses themselves are doing less and less). See this glittering training center for carpenters, unlike anything a single business could do. Worker organizations can also surface problems and introduce and implement ideas – as in the long-term partnership between Kaiser Permanente and its unions, and many others. Having workers involved at all levels of governance, as happens in many countries around the world, can make for more informed decision making. Consider how much richer this all might be than the current state-of-the-art HR “pulse survey.”
At times, a union may even be necessary – like when employees need to act in concert to save a business, as with this paper mill in Wisconsin. When else might it be valuable to the competitive success of a company for its employees to act together? When introducing new innovations into a business, CEOs often dance a delicate dance with their workforces: trying out a new idea on a few, testing it with a few more, and eventually hoping it works when it rolls out to everyone. What if, instead, company leadership could cooperate with a worker organization to introduce new innovations? The company and union that figure out, together, how to use a worker organization to actually speed innovation could become a powerhouse.
Of course, plenty of choices will lack any win-win solution – companies will have to make sacrifices, as workers have done for a long time.
And actually realizing these possibilities will be Very Hard. Companies will need to lead differently, of course. Unions will need to evolve, and most big unions struggle to experiment, let alone reinvent themselves. Views, deeply held, will give way slowly, or only once generations of leadership turn over. We’ll need to invent new ways of sharing power between management and workers. We’ll need unions that better, and more consistently, represent their workforces (principal-agent problems abound in every organization above a certain size, though the frequent management complaint that a union is a “third party” is usually nonsense). Workers will continue experimenting with new kinds of unions (e.g., independent ones that aren’t part of a big national union) or with a worker organization that isn’t a union at all. We will also need changes in law and regulation, which business lobbies have steadily eroded for years, to allow less formal labor organizations to thrive and to fully enforce the law.
Everyone – business and labor – has to change for this to work, and there are no guarantees it will happen. But we may have to solve these problems if we’re going to get our economy and society to thrive. Many workers want to be represented by a labor organization – as is their right under the law – so more organized worker power might be inevitable. And it might just be good for all of us.
All the more reason to get started.
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A recipe for worker power
Brian Callaci, Open Markets
The historically low unemployment rates of 2021 and 2022 spurred a once-in-a-generation moment of increased worker bargaining power. Wages rose at their fastest pace in a generation, with gains at the bottom outpacing those in the middle and at the top. Unfortunately, a few months of inflation (mistakenly blamed on a “too tight” labor market) was all it took for the Federal Reserve and influential economists to abandon their brief commitment to maximum employment and increased worker power.
They are making a mistake. We have had 40 years of policies biased toward disempowering workers. The labor share of national income has declined and wages have lagged productivity for decades. Without wage increases in excess of the inflation rate, how will workers ever catch up? Transferring power from capital back to the working majority would result in a better economy for all, but doing it requires sweeping reforms to empower workers. Most importantly, it demands institutionalized collective power for workers on the job. That means labor unions wielding real clout within firms, industries, and supply chains, as well as in the corridors of political power.
Unions are essential to counter the wage-suppressing power we now know is pervasive across labor markets, in which virtually all employers enjoy monopsony power. Wages are not set by impersonal forces of supply and demand. Rather, employers have some unilateral power to set wages, due to factors like search frictions, commuting distance, and employer concentration. Under these conditions, collective wage bargains with employers can create a more fair and efficient economy. In addition to countering employer power in labor markets, unions also limit the arbitrary power of employer discipline within the boundaries of the firm, through “just cause” provisions and internal disciplinary procedures that limit the authority of supervisors to fire workers. These mechanisms result in more secure jobs and an enhanced role for employee voice over exit, which facilitates more open communication and even stronger ties between employers and employees. In the U.S., with at-will employment governing terminations in almost every state, union-negotiated grievance and arbitration procedures are the only check on arbitrary dismissal.
However, the most important effects of stronger unions are likely to be found in politics and policy — even more than in labor markets and firms. Without unions as a bullhorn to express their collective interests, workers’ policy preferences do not weigh as heavily as those of corporations, financiers, and wealthy individuals in state capitols, courtrooms, and Washington, D.C. As a result, policy is biased toward the rich and powerful, with dire consequences for economic efficiency and even our democracy. With the labor movement in its weakened state, a large array of foundation-funded nonprofit advocacy groups and think tanks have filled the vacuum, speaking for workers in vital policy debates. Without disparaging the good work these institutions do (I work for a think tank), they lack the democratic legitimacy of elected labor leaders. With a financially secure, democratic, and politically powerful labor movement, workers will be able to train or hire more of their own experts, lobbyists, and technocrats, and speak with their own voice in policy debates instead. This would rebalance the political economy in a more fair and democratic manner.
However, for us to actually enjoy these benefits, our political economy must adjust to tolerate a real redistribution of power. Two of the critical remedies are ably explained elsewhere in this collection: Making it easier to join a union in the first place, and allowing unions to bargain on a sectoral basis, setting bargains that bind all employers in an industry..
But any meaningful modicum of union power also depends on the right to strike. Moreover, strikes as PR or street theater are not enough: Unions must have the ability to inflict economic harm on employers. While no one enjoys the disruptions accompanying labor disputes, even peaceful labor relations, if they are to be balanced, depend on the credible threat of worker strikes. Workers must have the right to strike, which means the right to inflict economic damage, and the right to return to their jobs. (This threat is reciprocal — employers have the right to lock workers out as well.) That means no permanent replacement of striking workers.
What’s more, union power must extend beyond workers’ payroll employer. Due to outsourcing, franchising, and related “workplace fissuring” strategies, the payroll employer of workers is often not the firm actually in control of wages and working conditions. Joint-employer rules allowing workers to bargain with the firm that really controls their wages and working conditions, even if it is not their payroll employer, are one policy to address this harmful dynamic. In addition, we must restore secondary boycotts to the status they had before the Taft-Hartley Act outlawed them in 1947. In a secondary boycott, workers at a franchised Subway restaurant would be able to take collective action against the Subway corporation that controls their working conditions, rather than the franchisee that is their employer on paper. Similarly, workers at outsourced automotive parts suppliers would be able to take collective action against the giant manufacturer that ultimately controls their working conditions.
Were workers to wield more power, it is true that the sort of wage-price spiral that some political figures and pundits have incorrectly blamed for recent inflation would indeed become a possibility. However, the wage-price spiral of the 1970s in key respects reflected union weakness rather than strength. In fact, in many cases the chaotic, leapfrogging wage increases of the 1970s were facilitated by the fragmented nature of U.S. labor law, which pushes bargaining to the company or even plant level. For example, the Teamsters Union had previously used the informal sectoral bargain of the National Master Freight Agreement to compress wages within the trucking industry across the country, moderating wage demands in the high-wage regions to bring up wages in the low-wage regions. But these types of sectoral bargains were never formalized into law. The breakdown of the NMFA after Jimmy Hoffa’s imprisonment encouraged local and regional unions to compete with each other to get increasingly generous contracts. Spiraling wage settlements resulted, creating political pressure for trucking deregulation.
Sectoral unions would be far better at exercising wage restraint in cases where it is warranted. But that requires powerful unions and an activist state that disciplines employers into sharing power. Neither is likely to happen without new laws that let unions bare their teeth once again.
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Reforming unemployment insurance is essential to build labor power
By Jenna Gerry, National Employment Law Project
The right to form a union with our co-workers and the power to speak up when there are problems at work without risking economic security are essential components of a well-functioning democratic society. But, for decades, these rights have been under assault. An often ignored but key part of this assault is legislators’ undermining of the nation’s unemployment insurance system at the state and federal levels.
Since the inception of the unemployment insurance (UI) system in the 1930s, most of the U.S. workforce has been left out of it. When it was enacted in 1935, it excluded the 65 percent of Black workers who worked in agricultural or domestic jobs that were carved out of the program entirely.[1] For the 30 years prior to the pandemic, unemployed Black workers were 24 percent less likely to receive unemployment benefits than their white counterparts,[2] and Black and Latino workers are substantially less likely than white workers to even apply.[3] These statistics are even more glaring when you take into account that in that same time period, nearly 70 percent of unemployed workers did not receive UI at all.[4]
The failure of the nation’s UI system to provide benefits to most unemployed workers, particularly Black workers — who are also more likely to be underpaid due to systemic racism and occupational segregation in the labor market — undermines attempts to build labor power. That’s because UI empowers workers to take collective action by providing an economic safety net. Because employers can generally fire workers for almost any reason — or for no reason at all — workers are often deterred from speaking up about poor workplace conditions or from taking collective action to improve matters. Widespread economic insecurity makes the threat of losing one’s job particularly catastrophic.
However, if UI was universally accessible and provided sufficient benefits, workers would know that they had economic support if they were to lose their jobs and would feel more empowered to report workplace violations and demand better conditions. Past research looking at union-administered UI systems in other countries found a connection between more generous UI benefits and stronger labor movements and worker organizing.[5] In analyzing survey data from the first year of the pandemic, Alexander Hertel-Fernandez and Alix Gould-Werth found that workers who felt more confident in being able to access UI were much less likely to say that the fear of losing their job was an obstacle to collective action.[6] In a recent survey, more than half of working Californians said that concern about employer retaliation, such as reducing hours or terminating their employment, would influence their decision to report a workplace violation in the future.[7] Black and Latino workers were more likely than white workers to say that was the case.[8] This research supports the conclusion that reliable access to strong UI empowers workers to exercise their rights to collective action by reducing the risks of losing one’s job. This is particularly important for Black and Latino workers who, due to historic exclusions from wealth-building opportunities over generations, are less likely than white households to have sufficient personal wealth or savings to cushion the economic blow of unemployment.>[9]
A strong UI system and strong unions are also mutually reinforcing. Workers who are in a union are more likely to receive UI benefits.[10] This is particularly true for less educated and Black and Latino workers.[11] Additionally, by bargaining for higher wages and better schedules that promise a set number of hours, unions can ensure that workers meet monetary eligibility criteria for UI in the first place. Unions can also act as “navigators” to help their members and other workers successfully apply for and access UI.
As elected leaders, advocates, and workers strive to build labor power, they must make reforming the UI system part of that work. Unemployment insurance should be a program that ensures workers maintain economic security when they are in between jobs. With systemic changes, the unemployment insurance system could sustain consumer demand and protect against wage suppression during economic downturns. A well-functioning unemployment insurance system would empower workers to find the best matched job to sustain long-term employment.
Workers must demand and Congress must enact bold, structural reforms to the unemployment insurance system, including expanded coverage, a longer minimum benefit duration, increased benefit amounts that are in line with basic living expenses, and more funding for state administration.
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[1] Larry Dewitt, “The decision to exclude agricultural and domestic workers from the 1935 Social Security Act,” Social Security Bulletin 70(4) (2010): 49-68, https://www.ssa.gov/policy/docs/ssb/v70n4/v70n4p49.pdf.
[2] Elira Kuka and Bryan A. Stuart, “Racial Inequality In Unemployment Insurance Receipt And Take-Up,” National Bureau of Economic Research (2021), https://www.nber.org/system/files/working_papers/w29595/w29595.pdf; Austin Nichols and Margaret Simms, “Racial and Ethnic Differences in Receipt of Unemployment Insurance Benefits During The Great Recession,” Urban Institute, June 2021, https://www.urban.org/sites/default/files/publication/25541/412596-Racial-and-Ethnic-Differences-in-Receipt-of-UnemploymentInsurance-Benefits-During-the-Great-Recession.PDF.
[3] Alix Gould-Werth and H. Luke Shaefer, “Unemployment Insurance participation by education and by race and ethnicity,” Monthly Labor Review, Bureau of Labor Statistics, 2012, https://www.bls.gov/opub/mlr/2012/10/art3full.pdf.
[4] United States Department of Labor, Employment & Training Administration, Unemployment Insurance Chartbook, “Regular Program Insured Unemployment as a Percent of Total Unemployment,” https://oui.doleta.gov/unemploy/chartbook.asp.
[5] Matthew Dimick, “Labor Law, New Governance, and the Ghent System,” North Carolina Law Review 90 (2012), https://digitalcommons.law.buffalo.edu/cgi/viewcontent.cgi?article=1082&context=journal_articles; Bruce Western, Between Class and Market: Postwar Unionization in the Capitalist Democracies (Princeton University Press, 1997).
[6] Alexander Hertel-Fernandez and Alix Gould-Werth, “Labor organizations and Unemployment Insurance: A virtuous circle supporting U.S. workers’ voices and reducing disparities in benefits,” Washington Center for Equitable Growth, 2020, https://equitablegrowth.org/labor-organizations-and-unemployment-insurance-a-virtuous-circle-supporting-u-s-workers-voices-and-reducing-disparities-in-benefits/.
[7] Tsedeye Gebreselassie et al., “How California Can Lead on Retaliation Reforms to Dismantle Workplace Inequality,” National Employment Law Project, November 2022, https://www.nelp.org/publication/how-california-can-lead-on-retaliation-reforms-to-dismantle-workplace-inequality/.
[8] Ibid.
[9] Angela Hanks et al., “Systemic Inequality,” Center for American Progress, 2018, https://www.americanprogress.org/article/systematic-inequality/.
[10] Gould-Werth, Washington Center for Equitable Growth
[11] Ibid.
Peace through strength: the promise of sectoral bargaining
Chris Griswold, American Compass
President Ronald Reagan famously believed that weakness does not reduce conflict, but invites it. Drawing on a long tradition stretching through George Washington and Alexander Hamilton as far back as the Roman Emperor Hadrian, he stated his philosophy bluntly and memorably: “peace through strength.” Only when strength countervails strength, he thought, can a peaceable detente be reached, a balance of power achieved, and the hope of mutually beneficial cooperation made possible. Whether Reagan was right on foreign policy may be a matter for debate. But as it applies to labor relations, the principle is clearly apt.
The whole architecture of American labor law is premised on the belief that equalizing power between workers and employers does not encourage strife so much as forestall and mitigate it. The 1935 National Labor Relations Act (NLRA) established America’s current enterprise-level collective bargaining regime, in which unionization is a workplace-by-workplace decision. It emerged in the wake of decades of labor-related conflict that was both economically disruptive and very bloody. Organized labor sometimes resorted to violence in the absence of institutional power, and state and federal authorities in alliance with business routinely deployed deadly force against workers with impunity. Not without reason, then, was the NLRA designed to quell violent conflict — conflict it diagnosed as stemming from a structural power imbalance. According to the statute,
The inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract, and employers who are organized in the corporate or other forms of ownership association substantially burdens and affects the flow of commerce …Experience has proved that protection by law of the right of employees to organize and bargain collectively safeguards commerce from injury, impairment, or interruption, and promotes the flow of commerce by removing certain recognized sources of industrial strife and unrest, by encouraging practices fundamental to the friendly adjustment of industrial disputes…and by restoring equality of bargaining power between employers and employees.
To Reaganify the theory of the case: economic peace through worker strength. Contrary to the claims of history-averse libertarians, Adam Smith and John Stuart Mill would have probably agreed.
The NLRA’s approach proved workable, for a time. The postwar “golden age of capitalism” was characterized by labor’s ability to wield “countervailing power,” which made it possible for capital and labor to negotiate mutually acceptable settlements. The result was a thriving, innovative, industrially strong economy that widely distributed prosperity, at least to those with full legal access to it at the time.
The NLRA’s system of workplace-level bargaining, however, has not been fit for purpose for a long while. No one can reasonably claim that the current regime of workplace-level unionization meaningfully channels the collective voice and will of America’s workers. Only 6 percent — slightly more than one in 20 — of private-sector workers in America are union members, despite their strong and growing interest in organized workplace representation. Union membership has diminished steadily for years.
The libertarian right has largely cheered this demise — believing, one must assume, that the decimation of worker power is the ideal path to economic “peace.” Remove the friction that worker agitation causes, and the Holy Grail of perfect market efficiency seems that much more attainable. Organized labor’s current insistence on politicizing itself into irrelevancy, it must be said, has only aided the libertarian cause. But as observers from the progressive left to the populist right have pointed out, a workplace in which workers have no power is simply a form of privatized tyranny — and, as Americans are generally wont to do when presented with tyrants, workers will inevitably revolt. So much for a peaceable arrangement.
Much of the institutional left, meanwhile, seeks to double down on our current workplace-level system. Union advocates are correct to decry the relative impunity employers enjoy for their variously illegal, barely-legal, and legal-but-immoral methods of aggressive union-busting. Such behavior should indeed be punished, and severely. But exclusive attention to bolstering the current regime can miss the forest for the trees. The problem is much deeper.
Unproductive conflict is baked into the structure of the NLRA. In the wake of declining union membership, that structural flaw has widened into a wide rupture. The American system of workplace-level bargaining — an outlier among industrialized democracies — creates a series of perverse incentives that fracture both workplaces and industries. Workers must battle themselves in winner-take-all elections: Even if 49 percent of employees in a workplace want representation, they have no access to any form of collective voice, power, and mutual support if 51 percent of the workers vote against a union.Industries in which some workplaces are unionized and others are not confront employers with a strong economic incentive to union-bust and thus avoid the competitive disadvantages of incurring higher labor costs than their competitors.
The answer to this dilemma is neither the false promise of efficiency via private tyranny nor the mistaken belief that eternal workplace-level conflict can somehow lead to widespread prosperity. A more promising approach would elevate labor conflict out of the workplace to the industry or regional level, where it can be conducive to agreements that benefit all concerned. In sectoral or broad-based bargaining systems, like the ones most European nations use, representatives of the workers in a given industry, occupation, and/or geographic region negotiate with representatives of all the employers in the same industry or region.
Sectoral bargaining holds the promise of a much better deal for both employers and workers. It can result in agreements closer to government regulation than union contracts, with the immense advantage that they are negotiated by the parties concerned rather than dictated by unaccountable bureaucrats or politically interested politicians. For workers, the ability to wield industry or regional-level bargaining power will eliminate the internal workplace conflict promoted by the current regime and increase their power to advocate their own interests. This should be a basic goal of any American policymaker sincerely interested in pro-worker economics.
An American sectoral bargaining system could also free employers to negotiate more flexible rules better suited to their industry than current federal one-size-fits-all regulations, with the cooperation and consent of the workers those rules affect. Individual workplaces would more easily be sites of mutual cooperation rather than zones of conflict. It would deflate the current race to the bottom on wages, since compensation and working conditions would be agreed across all workplaces in the industry, thus freeing and requiring employers to compete on innovation and quality rather than wage costs.
Sectoral bargaining is not a perfect solution. Norms will not change overnight. The structures needed to facilitate sectoral bargaining in the United States will need to evolve over time, as institutions — state and local governments, for example — debate, experiment with, and refine the approaches best suited to the American context. But the pursuit of an American sectoral bargaining regime would be a vast improvement over the status quo, in which workers are effectively disenfranchised in the workplace, and employers incentivized and permitted to keep them powerless. As thinkers from John Paul II to Martin Luther King Jr. have understood, such a state of affairs not only betrays the primary purpose of economic policy, but is destabilizing and ultimately unsustainable for a democratic society. Mitigating current and future labor —and perhaps social — conflict will require, in the language of the now-outdated NLRA, restoring the equality of bargaining power between workers and those who employ them.
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Two ideas to make America union again
Dustin Guastella, Teamsters Local 623
Our democracy is strongest when the labor movement has power. The labor movement is strongest when we build stuff.
America needs a revitalized labor movement. There is no shortage of grim statistics that prove this: Real wages have been stagnant or declining since at least the 1980s;, productivity has skyrocketed while workers continue to work long hours; low-wage and part-time jobs have proliferated; health insurance costs are soaring and the idea of a “defined benefit pension” seems as distant a memory as the burning of Rome. A union in your workplace could go a long way to fixing each of these problems. Yet fewer Americans than ever are members of such organizations. And it’s not for lack of interest — labor unions today are more popular than ever, with some 70 percent of Americans approving of them.
Unfortunately, the obstacles the labor movement faces are far greater than a simple popularity contest. To get from the small and weak union organizations we now have to the big and powerful institutions of a bygone era will be no mean feat. Organized labor faces tremendous legal obstacles that make each fight for workplace unionization a Herculean task. And workers, dependent as they are on employers for income, health insurance, and more, are not so easily convinced to risk their livelihoods for the cause.
Naturally, policymakers interested in boosting unionization tend to advocate legal reforms to level the playing field between employers and workers, and social policy reforms (like Medicare for All or other forms of social insurance) that help lessen the dependence of workers on their employers. These reforms should undoubtedly be encouraged. But, I think another –– potentially more potent –– set of goals should also inform labor’s agenda: the conquest of political power and the reindustrialization of America.
Unions must have power
If we look at Congress as a representation of who has power in the United States, what we learn is that unions have practically none.
While the legislature has become increasingly racially diverse (with about 23 percent of members reported as “nonwhite”) and significantly more female (about 28 percent women) it has not budged in terms of its class composition. Out of 535 seats, union members only hold 11, or about 2 percent of the total. Around the same percentage of members of Congress report coming from working-class backgrounds. That’s a striking underrepresentation of both unions and workers. Of course, the exact opposite is true for lawyers, businesspeople, administrators, and other elite professionals, who are significantly overrepresented on Capitol Hill. The professional class and the financial elite, the wealthy and the well-educated, dominate in American politics. Their ideas are the ruling ideas. And among the competing factions of American rulers, union power is at best met with ambivalence and at worst open hostility.
In order to change this dismal state of affairs, organized labor should raise up and field candidates of our own. And especially candidates that represent the largest portion of American workers locked out of politics: those without college degrees. In research done by the Center for Working Class Politics, we’ve found that candidates who come from blue-collar backgrounds are much more likely to be elected than those from elite backgrounds. Not coincidentally, these candidates are also more likely to support and advocate a progressive jobs agenda and support labor’s legislative goals. Working-class trade-union candidates are also more likely to have deep roots in the economically stressed regions of the country where labor’s allies in the Democratic Party have struggled mightily to retain voters.
Of course, politics is about more than a candidate’s profile, and winning political power for the union movement also requires a winning program. And for that I think the union movement should remind Congress that while lawyering, computer coding, administering, and all the other professions that dominate our politics and culture today are undoubtedly very important, our democracy, and our labor movement, is strongest when we build stuff and make things.
Manufacturing matters
Of all the threats, challenges, and obstacles to union power, the loss of our manufacturing sector looms largest.
Manufacturing is, in fact, special. And this isn’t because these jobs are for macho white men.[1] It’s because manufacturing, unlike services or agriculture, is the only major industry that has consistently provided unions the ability to build their ranks on the backs of a high-wage bargain. There are at least a dozen economic models that prove the central importance of manufacturing for broader wage growth and another hundred or so arguments for why this sector, unlike others, has so consistently produced strong unions and powerful welfare states. But the easiest way to prove the point is to simply look at the damage wrought by deindustrialization in every economy that has suffered its wrath. From the United States to Brazil, Germany to China, as factories close, wages stagnate and unions shrink.
The truth is that no other sector –– not services, not tech –– has yet emerged to replace the immense social rewards unions can wring from an economy that builds stuff and makes things.
Still, despite the obvious necessity of rebuilding our industrial heartlands, many sympathetic commentators in both conservative and liberal circles have argued that anyone interested in reviving this kind of work is living in the past. Some fringe progressives can imagine a future society without police, prisons, families, work, or want. And a faction of conservatives sees a dire future where only an authoritarian, possibly theocratic, strongman can reestablish order. But no one can seem to fathom bringing manufacturing back. Yet, absent a major reindustrialization of the United States, the union movement may remain in a perpetual state of stagnation and decline –– unable to wring greater wage concessions from low-productivity, low-profit-margin industries, and subsequently unable to organize the immiserated masses of workers toiling in these sectors.
It follows from this analysis that the labor movement and its allies should advocate for massive coordinated investment in renewing our industrial sector. As private investors are unwilling or incapable of making these investments –– instead doubling down on finance and tech –– the funds needed for these projects will only come from the federal government.
The union movement, and our candidates, should advocate for massive public works projects and jobs programs that aim to rebuild infrastructure, expand rail and highway production, improve our public schools, unify and upgrade our electric grid, and manufacture new vehicles, trains, ocean liners, etc. Each of these goods, and the list is not exhaustive, meets some significant social need, most especially in depressed parts of the country long overlooked by financial and political elites. Each of these goods require forging steel, mixing concrete, pressing, bending, welding, and assembling parts on a massive scale. And each of those activities means … jobs. And high-wage jobs, too. Jobs that are often unionized or very prone to unionization.
A blue-collar Congress and a reindustrialized Rust Belt. These should be a major component of labor’s ideas for the future. Lucky for us, these ideas are also quite popular with voters.
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[1] Today, despite what you might hear, manufacturing and other blue-collar industrial work employs more women and minorities than ever before, I would bet that your average auto-plant in the South is far better integrated than your average professional/creative/media/NGO office in NYC.
Labor unions and the “double-helix” of America’s workforce development future
Brent Orrell, American Enterprise Institute
The role of labor unions in the future of American workforce development depends largely on how we conceive of the needs and demands facing workers and the economy. Traditionally, we’ve thought of workforce development in terms of formal, technical skill development and the so-called “skills gap,” the difference between the credentials and skills our training and workforce development programs produce and what business and industry needs.
But formal skills are only half of the challenge we face. The true picture of our workforce development needs is like a double-helix that weaves together both formal technical skills and the noncognitive soft skills that help ease workflow and underpin education and training broadly. Labor unions have an important role to play in both regards.
First, the technical-skill side.
Rapidly advancing technology continues to accelerate technical-skill demands. Whether it’s turning wrenches on an assembly, making dumplings, or checking groceries, new combinations of artificial intelligence and robotic processes are combining to reduce the amount of human labor required to produce products and services dominated by routine skills. New business models are reengineering tasks and entire chains of production and delivery, replacing both human technical understanding and labor with algorithmic management and robotics. To stay ahead of the curve, workers need to find ways to move up the value chain, away from easier-to-automate routine and repetitive tasks toward more bespoke and human-facing tasks.
Economists argue that technological change is a plus for growth and income since it boosts productivity. Higher productivity brings higher wages, and higher wages increase aggregate demand for new products and services that create new tasks and jobs. This new demand means that the future of work is unstable and, to a large degree, unknowable. For instance, in 2018, the Institute for the Future estimated that 85 percent of jobs that will exist in 2030 had not yet been invented and even among the jobs that remain, the skill mix required to do them is likely to change dramatically as elements of the work are automated.
But even this relatively hopeful and historically grounded view has significant gaps. To say we shouldn’t worry about worker displacement because innovation will generate new, higher-paying jobs in information technology overlooks the transition costs that fall mainly on workers. For instance, a grocery store clerk replaced by computerized checkout cannot automatically become qualified to work in back-office IT. If we assume the clerk in this scenario has interest and predisposition to become an IT designer or manager, what institutions can provide the training conduits to help them gain the needed skills and, equally important, how will the training be financed? If they lack interest and disposition to become programmers, the question remains: How will this worker find their way to new employment?
Unions can be an important part of the answers to these questions. We are in the midst of an explosion of apprenticeship training opportunities, both traditional, registered apprenticeships and industry-recognized apprenticeship programs. In the year that just ended, 214,000 people aged 16 to 24 were enrolled in apprenticeships, more than double the number from just a decade ago. These programs cost money to design and operate but, because they pay wages during training, they significantly ease the transition costs for workers by letting them earn while they train. Unions, especially those in the trades (e.g., electrical, carpentry, and plumbing) have always played a significant role in shaping and delivering registered apprenticeship programs. As investment in apprenticeship programs grows, the importance of unions in delivering those programs will also grow.
As noted above, however, technical skills are only one strand of the workforce development helix. When business owners and managers are asked about what they see as the deficits in the American workforce, they usually provide a list of social capacities and behaviors that relate only loosely (and sometimes not at all) to the technical skills needed for a particular job. These noncognitive or soft skills (which also go by a number of other names like portable skills, professional skills, social-emotional skills, and interpersonal skills) include behavioral assets like conscientiousness, perseverance, collaboration, and empathy that form the foundation of technical skill development.
Generic skills competency model
These are the kinds of skills that are more likely to be “caught” than “taught” and some of the important institutions for their “transmission” are the “little platoons” of American society — the faith, voluntary, and civil society organizations that help people develop and maintain connections to one another and their communities. Such organizations, including labor unions, help to aggregate social and economic interests, mediate between the individual and government, generate social capital in local communities, and foster the so-called “weak ties” – the friend-of-a-friend connections – that help link people to new jobs, training, and careers. A union hall and the professional and social activities they deliver help to build these kinds of ties.
For the past 70 years, American participation in civil society has been “thinning out”, with many civil society institutions – everything from houses of worship to PTAs to bowling leagues – seeing sharp drops in participation. The American Enterprise Institute’s recent survey found that a minority of American workers ever attend religious services, volunteer with civic organizations, take part in reading or hobby groups, or participate in community athletic teams.
Though they are not always thought of this way, unions are part of the web of nongovernmental institutions that bind communities together and teach sociability to their members. These socializing mechanisms and the noncognitive skills they both impart and strengthen have always been critical to effective learning, workforce development, and on-the-job performance. This is doubly true as the premium on skill development rises along with the demand for non-routine, human-facing, noncognitive skills. The main challenge we face is not from automation, but in helping workers to gain both the technical and soft skills new and emerging occupations require. The services and support that unions provide are vital elements in preparing workers for this new social workplace.
The role of labor unions in the future of American workforce development is crucial in terms of providing workers with both formal technical skills and noncognitive soft-skills that are essential for success in the workforce. Potential legislation that could support this role could include measures that support the development and expansion of apprenticeship programs, provide funding for training and education programs, and protect the rights of workers to organize and form unions. This type of legislation could help to ensure that labor unions have the resources and support they need to help strengthen both their economic and social missions.
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The Need for the PRO Act
Lorena Roque, Center for Law and Social Policy
The hollowing out of the U.S. manufacturing sector combined with virulently anti-union corporate behavior have resulted in 50 years of steadily declining union membership. However, in response to stagnant wages, poor working conditions, and a harrowing two years of health-related work concerns, workers across the country are increasingly attempting to organize unions in their workplaces. According to the Bureau of Labor Statistics, union petitions have increased 57 percent in the first half of fiscal year 2022, compared to the first half of 2021.[1]
The large gap between union petition filings and union membership in 2022 can be directly attributed to the difficulty in officially unionizing at the workplace. Under current labor law, employers can act with near-impunity to deter union organizing or to delay workers reaching a first contract. The Protecting the Right to Organize Act (PRO Act) is central to strengthening labor law and providing greater protections for workers. To understand how it works, consider the example of Starbucks. Starbucks workers at a shop in the Memphis area expressed their desire to unionize to secure rights for themselves and their colleagues instead of leaving the job.[2] In retaliation, Starbucks wrongfully terminated the group, known as the Memphis 7, in February 2022. The National Labor Relations Board ruled that Starbucks was interfering with workers’ rights to organize and asked a federal court to intervene.[3] However, these proceedings usually last many months — the Memphis 7 were fired in February and were not reinstated until early September. The PRO Act would prevent this by requiring the NLRB to seek a court injunction to immediately reinstate workers if they have been illegally fired for union activity. Additionally, the PRO Act would enforce steep fees, from $50,000 to $100,000, for firing employees who try to unionize.
Over 400 unfair labor practice charges have been filed against Starbucks since January 2021, an analysis of NLRB data by the Center for Law and Social Policy found. Workers alleged anti-union actions such as being fired, threatened, interrogated, and unjustly disciplined for union activity.[4] The PRO Act would address such rampant employer abuse by imposing fines of between $50,000 and $100,000 on employers that use illegal anti-union tactics against employees who try to unionize their workplace.[5]
During union organizing campaigns, 90 percent of employers were found to use “captive audience” meetings — mandatory meetings employers hold to discourage union organizing — an average of 10.4 times a year.[6] The PRO Act would prohibit employers from holding “captive audience” meetings, which intimidate employees.
After workers successfully organize, the key to securing union membership and raising worker wages is solidifying a contract through the collective bargaining process. The PRO Act would set a timeline for the collective bargaining process between unions and employers. It would also prohibit the delay of union elections by having the NLRB and workers set union election procedures. Finally, the PRO Act would prohibit employers from forcing employees to enter into arbitration agreements, which waive employees’ rights to collective action and class action lawsuits.
As inflation continues pinching budgets, workers in low-wage jobs are attempting to unionize to increase their pay. In fact, full-time union workers had average weekly earnings of $1,169 in 2021 compared to nonunion worker earnings of $975.[7]
What’s more, unions help close racial disparities. On average, union membership provides wage premiums of 17.3 percent for Black workers, 23.1 percent for Latino workers, 14.7 percent for Asian workers, and 10.1 percent for white workers.[8]
Ultimately, workers should have the right to unionize their workplace and demand better working conditions without threats or retaliation from their employers. By empowering workers to organize their workplaces and protecting them from wrongful employer tactics, the PRO Act would open a path to raise wages, increase access to benefits, improve working conditions, and fight racial and gender inequity in the workplace. Congress must pass the PRO Act and ensure that protection of workers remains a priority in the United States.
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[1] Office of Public Affairs, “Union Election Petitions Increase 57% in First Half of Fiscal Year 2022,” National Labor Relations Board, April 6, 2022, https://www.nlrb.gov/news-outreach/news-story/union-election-petitions-increase-57-in-first-half-of-fiscal-year-2022.
[2] The Memphis 7. 2022. “Starbucks Violated Our Workplace Rights,” The Progressive Magazine, Starbucks Violated Our Workplace Rights – Progressive.org.
[3] Office of Public Affairs, “NLRB Region-15 Wins Injunction Requiring Starbucks to Rehire Seven Unlawfully Fired Workers, Post the Court’s Order, and Cease and Desist from Unlawful Activities,” National Labor Relations Board, August 18, 2022, NLRB Region-15 Wins Injunction Requiring Starbucks to Rehire Seven Unlawfully Fired Workers, Post the Court’s Order, and Cease and Desist from Unlawful Activities | National Labor Relations Board
[4] National Labor Relations Board, case search data, August 2022.
[5] Arika Trim, Protecting the Right to Organize Act – Fact Sheet, United States House Committee on Education and Labor, 2020, https://edlabor.house.gov/imo/media/doc/PRO%20ACT%20-%20Fact%20Sheet.pdf.
[6] Kate Bronfenbrenner, No Holds Barred: The Intensification of Employer Opposition to Organizing, Economic Policy Institute, 2009, https://files.epi.org/page/-/pdf/bp235.pdf.
[7] Bureau of Labor Statistics, Union Members – 2021, U.S. Department of Labor, 2022, https://www.bls.gov/news.release/pdf/union2.pdf.
[8] Liz Hipple, Unions Provide Major Economic Benefits for Workers and Families, Joint Economic Committee, 2022, https://www.jec.senate.gov/public/_cache/files/f46bc621-abb1-4cb9-9523-27029254e47b/union-issue-brief-final-final.pdf.
