Between the 1930s and the 1970s, unions and collective bargaining helped to power the creation of America’s vast middle class. Unions smoothed the distribution of wealth over the entire economy, constraining the percentage of wealth and income concentrated at the top of the economy while lifting up the bottom and the middle. But union strength has been on the wane since the 1950s and, beginning in the 1980s, suffered a catastrophic free fall in the private sector that continues to this day. The ability to form a union and bargain collectively is inaccessible to more than 93 percent of private-sector workers—a major reason why working people have experienced 40 years of wage stagnation even as the economy grew and the rich got richer.
Most progressive economists, scholars, think tank analysts, and centrist or left-of-center politicians in the United States agree: The scale has tipped too far in favor of business and away from workers. Generally, they support government measures to rebalance the power of capital and labor by improving the conditions for union organizing. Such measures include banning the permanent replacement of striking workers, increasing penalties for labor-law violations by employers, allowing workers to achieve union representation more quickly and simply, requiring binding arbitration in labor contract disputes, and repealing the 1947 Taft-Hartley Act (which restricted or banned many effective union tactics and permitted states to go “right to work” and thereby cripple many unions financially).
But these sorts of federal legislative strategies, which attempt to augment or restore America’s collective-bargaining framework, have failed repeatedly for the past 50 years: Unions have never been able to secure both a majority in the House and the required supermajority in the Senate, even when both bodies have had substantial Democratic majorities. And as union density fades with each passing year, the probability of gaining support from senators in states with no real union presence declines accordingly.
Underlying this failure is a more fundamental problem: American enterprise-based collective bargaining is an inherently weak model of industrial and labor relations compared with the possible alternatives.
Under America’s current “enterprise bargaining” framework, agreements are reached between a single union and a single employer. Under enterprise bargaining, the right to a voice in the workplace is considered an optional right that workers must opt into on a workplace-by-workplace basis via a majority vote. This means that only a minority of workers is ever likely to benefit from collective bargaining, a fact that weakens political support for unions and worker bargaining rights. It also means that employers are highly incentivized to avoid unions before they form or to crush them once they exist. Where unions do form and exist, employers who agree to union demands often perceive that they have been placed at a competitive disadvantage on price or flexibility within their industries—unless a supermajority of their competitors is also unionized. In addition, under the current system of enterprise bargaining, unions can’t require that employers negotiate over some of the most important factors in worker prosperity, such as the overall strategic direction of a firm; worker equity in a firm; or worker control of health, pension, and training funds.
The confluence of these facts means that unions are hard to form, difficult to maintain, and limited in the scope of their bargaining. It means they face constant workplace and political opposition from employers. That political opposition in turn leads to the repeated failure of labor-law reform in Congress. As Marx once speculated about capitalism, we can now say with some certainty about our system of collective bargaining: It sowed the seeds of its own destruction.
Organized labor’s legislative strategy since the 1950s—restoring the old model of union bargaining—is unlikely to prevail in the 21st century. That model thrived in an era of standardized industrial production, long-term or even lifelong employment in an industry or firm, and the relative geographic immobility of both workers and capital. This was also a period that witnessed mass worker militancy, industrial strikes, and rampant inter-union competition—overlaid with fears of communism abroad. Added to this mix was a domestic Communist Party that trained skilled anti-capitalist organizers; organized-crime syndicates that cynically promoted unions so they could loot union treasuries and extort employers; and a federal government broadly committed to using collective bargaining to maintain industrial stability during world wars, cold wars, and depressions. One could no more bring back such a unique set of historical factors and conditions than one could repeal refrigeration, globalization, or the Internet (each of which also in its own way helped hasten union decline).
But workers still need mechanisms to exercise power and to do so at a scale that improves the lives of millions of workers. They need to build organizations that can sustain worker bargaining power for the long haul. If 20th century–style unions as we knew them aren’t going to play that role, we’ll need to invent new forms of powerful, scalable, sustainable worker organizations if any effort to rebuild the middle class is going to succeed.
Such organizations might take several forms. Borrowing from labor law in other countries, from U.S. history, and from promising experiments happening in the United States today, there are several potential overlapping strategies for how future forms of worker power might operate and that suggest what U.S. labor policy might eventually look like.
Geographic and/or sectoral bargaining. With changes in federal law, unions could represent workers throughout an entire industry and not on a firm-by-firm basis, eliminating much of the dysfunction of firm-by-firm bargaining. But even without federal statute changes, cities or states could develop stakeholder or tripartite (government, company, and union) bargaining by geography or by industry. Wage-setting boards, for example, were commonplace at the state and municipal levels in the early 20th century. Representatives of workers, employers, and government could determine legally binding standards for wages and benefits throughout an industry or within a geographic area. This is similar to the stakeholder process we used in Seattle for the minimum-wage negotiations, and is exactly how New York’s fast-food workers achieved a $15 wage policy in 2015.
Co-determination. Common in Europe, co-determination allows employees a greater role in the management of a company, increasing worker voice and aligning incentives for quality and productivity between labor and management. Germany is home to the most successful example of this model, but a variation is used in the United States by health giant Kaiser Permanente. Under co-determination, labor agreements are made at the national level by unions and employer associations, and then local plants and firms meet with “works councils” to adjust the national agreements to local circumstances. In Germany, large firms are required to have worker representation on their boards of directors and workers elect works councils to solve problems at each worksite.
Since 1997, Kaiser and its 28 unions, which represent more than 100,000 workers, have partnered to give unions and individual workers a seat at the table in management decisions over quality, efficiency, and performance. Bargaining over employment conditions happens nationally. And in each facility, managers, unions, frontline workers, and physicians form thousands of Unit-Based Teams empowered to make patient-care decisions together. Two goals of the Kaiser Labor Management Partnership are to continuously improve the quality of health care Kaiser delivers while also becoming the employer of choice in the health-care industry.
Most progressive economists, scholars, think tank analysts, and centrist or left-of-center politicians in the United States agree: The scale has tipped too far in favor of business and away from workers. Generally, they support government measures to rebalance the power of capital and labor by improving the conditions for union organizing. Such measures include banning the permanent replacement of striking workers, increasing penalties for labor-law violations by employers, allowing workers to achieve union representation more quickly and simply, requiring binding arbitration in labor contract disputes, and repealing the 1947 Taft-Hartley Act (which restricted or banned many effective union tactics and permitted states to go “right to work” and thereby cripple many unions financially).But these sorts of federal legislative strategies, which attempt to augment or restore America’s collective-bargaining framework, have failed repeatedly for the past 50 years: Unions have never been able to secure both a majority in the House and the required supermajority in the Senate, even when both bodies have had substantial Democratic majorities. And as union density fades with each passing year, the probability of gaining support from senators in states with no real union presence declines accordingly.
Underlying this failure is a more fundamental problem: American enterprise-based collective bargaining is an inherently weak model of industrial and labor relations compared with the possible alternatives.
Under America’s current “enterprise bargaining” framework, agreements are reached between a single union and a single employer. Under enterprise bargaining, the right to a voice in the workplace is considered an optional right that workers must opt into on a workplace-by-workplace basis via a majority vote. This means that only a minority of workers is ever likely to benefit from collective bargaining, a fact that weakens political support for unions and worker bargaining rights. It also means that employers are highly incentivized to avoid unions before they form or to crush them once they exist. Where unions do form and exist, employers who agree to union demands often perceive that they have been placed at a competitive disadvantage on price or flexibility within their industries—unless a supermajority of their competitors is also unionized. In addition, under the current system of enterprise bargaining, unions can’t require that employers negotiate over some of the most important factors in worker prosperity, such as the overall strategic direction of a firm; worker equity in a firm; or worker control of health, pension, and training funds.
The confluence of these facts means that unions are hard to form, difficult to maintain, and limited in the scope of their bargaining. It means they face constant workplace and political opposition from employers. That political opposition in turn leads to the repeated failure of labor-law reform in Congress. As Marx once speculated about capitalism, we can now say with some certainty about our system of collective bargaining: It sowed the seeds of its own destruction.
Organized labor’s legislative strategy since the 1950s—restoring the old model of union bargaining—is unlikely to prevail in the 21st century. That model thrived in an era of standardized industrial production, long-term or even lifelong employment in an industry or firm, and the relative geographic immobility of both workers and capital. This was also a period that witnessed mass worker militancy, industrial strikes, and rampant inter-union competition—overlaid with fears of communism abroad. Added to this mix was a domestic Communist Party that trained skilled anti-capitalist organizers; organized-crime syndicates that cynically promoted unions so they could loot union treasuries and extort employers; and a federal government broadly committed to using collective bargaining to maintain industrial stability during world wars, cold wars, and depressions. One could no more bring back such a unique set of historical factors and conditions than one could repeal refrigeration, globalization, or the Internet (each of which also in its own way helped hasten union decline).
But workers still need mechanisms to exercise power and to do so at a scale that improves the lives of millions of workers. They need to build organizations that can sustain worker bargaining power for the long haul. If 20th century–style unions as we knew them aren’t going to play that role, we’ll need to invent new forms of powerful, scalable, sustainable worker organizations if any effort to rebuild the middle class is going to succeed.
Such organizations might take several forms. Borrowing from labor law in other countries, from U.S. history, and from promising experiments happening in the United States today, there are several potential overlapping strategies for how future forms of worker power might operate and that suggest what U.S. labor policy might eventually look like.
Geographic and/or sectoral bargaining. With changes in federal law, unions could represent workers throughout an entire industry and not on a firm-by-firm basis, eliminating much of the dysfunction of firm-by-firm bargaining. But even without federal statute changes, cities or states could develop stakeholder or tripartite (government, company, and union) bargaining by geography or by industry. Wage-setting boards, for example, were commonplace at the state and municipal levels in the early 20th century. Representatives of workers, employers, and government could determine legally binding standards for wages and benefits throughout an industry or within a geographic area. This is similar to the stakeholder process we used in Seattle for the minimum-wage negotiations, and is exactly how New York’s fast-food workers achieved a $15 wage policy in 2015.
Co-determination. Common in Europe, co-determination allows employees a greater role in the management of a company, increasing worker voice and aligning incentives for quality and productivity between labor and management. Germany is home to the most successful example of this model, but a variation is used in the United States by health giant Kaiser Permanente. Under co-determination, labor agreements are made at the national level by unions and employer associations, and then local plants and firms meet with “works councils” to adjust the national agreements to local circumstances. In Germany, large firms are required to have worker representation on their boards of directors and workers elect works councils to solve problems at each worksite.
Since 1997, Kaiser and its 28 unions, which represent more than 100,000 workers, have partnered to give unions and individual workers a seat at the table in management decisions over quality, efficiency, and performance. Bargaining over employment conditions happens nationally. And in each facility, managers, unions, frontline workers, and physicians form thousands of Unit-Based Teams empowered to make patient-care decisions together. Two goals of the Kaiser Labor Management Partnership are to continuously improve the quality of health care Kaiser delivers while also becoming the employer of choice in the health-care industry.
by David Rolf, American Prospect | Read more:
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[ed. See also: A New Type of Labor Law and Saving the Labor Movement with a Facebook for Unions]
