IS SECTOR BARGAINING THE ANSWER TO REBUILDING AMERICA’S UNIONS?
In the 1950’s one out-of-three American workers belonged to a union. Today, only 10.7 percent are union members – in the private sector, the number is down to a pitiful 6.4 percent. The decline in union membership has been a prime factor in the rise in inequality, the declining voter turnout among low-income workers and the inability to provide a check on corporate and big money influence in Washington and state capitals.
Contrast this with European countries where labor unions are very strong. As of 2013, more than two-thirds of workers in Denmark, Sweden, and Finland were union members. In France and Austria, while a minority of workers are in unions, 98 percent are covered by collective bargaining contracts.
One of the factors hindering the growth of American unions, according to an increasing number of labor scholars and union activists, is that the American approach to collective bargaining contracts, one that has been in place for nearly a hundred years, is completely outmoded. The model of unionizing that dominates American labor has been in place since the 1935 National Labor Relations Act. At least 30 percent of workers in a workplace petition for a union election. The National Labor Relations Board sets a time and place for the election to be held. If a majority of workers vote to be represented, then they’re all unionized.
Because unionization happens in individual companies and workplaces, the system is known as “enterprise-level” bargaining. And if you’re covered by an enterprise-level union contract, the system works pretty well. Unionized workers in the US enjoy significantly higher wages and better benefits than non-union workers.
The problem with this is that many industries have multiple workplaces so that union organizing has to take place at each workplace separately. And because any increase in pay and benefits comes out of corporate profits, it gives an employer incentive to fight union organizing at many different locations, where they hire more workers than at union shops, engage in often illegal tactics like calling mandatory meetings where workers are subjected to anti-union arguments and threats, including threats to close the plant or eliminate jobs.
European unions have largely solved the problem by bargaining not at the company level but at the sector level — negotiating for all workers in an entire industry rather than just one company or workplace. In France, for example, an employers’ federation representing restaurants will negotiate with a union representing restaurant workers. They reach a deal, and then the government “extends” the deal to cover all restaurants and all restaurant workers. Everyone in the sector enjoys the pay and benefits that the union got employers to agree to.
Because every company, no matter how many of its employees are in a union, has to abide by the same pay and benefit deal, companies have less incentive to discourage union membership. Firms with more union members don’t have any competitive disadvantage relative to firms with fewer: They’re all paying the same wages and offering the same benefits. And employment growth doesn’t necessarily vary among firms based on how many workers are in unions, so in theory at least, there’s no reason for union membership to decay as firms with more union members don’t profit as much.
In the United States with its wide geographic disparity in population density and cost levels, it would be difficult to implement such a system nation-wide. But it could be implemented on a state-wide or geographic section basis. In some states like New York, where union influence have succeeded in gaining a $15 minimum wage for fast-food workers, it could be the beginning of state-wide sectoral bargaining.
But, there’s a downside to this model. Non-union workers in an industry who have benefitted from the wage and benefits won by unions have little incentive to join the union and pay dues. In France, this has created a situation where some 98 percent of workers are covered by a union-bargained contract but only about seven or eight percent of French workers belong to a union – a smaller percentage even than in the United States. Some labor scholars have proposed ways of getting around this problem, like having the unions manage welfare funds, unemployment insurance and the like, but it’s pretty much still theoretical and untested.
At any rate, it’s all part of trying figure out howto rebuild a labor movement that is instrumental in stopping the increasing slide of income inequality that is the source of major economic problems in our country. For a fuller discussion of this question, click on the link below.
