Our guest author today is David Madland, Senior Fellow and the Senior Adviser to the American Worker Project at the Center for American Progress. This post is part of a series of posts by speakers at our 2016 conference, "The Challenge of Precarious Labor," videos of which can be found here.
My goal is to provide a long-term vision of how we can address the fundamental economic and democratic challenges faced by our country, as well as to discuss some realistic steps for state and local governments to take to move us toward this vision.
Today’s economy does not work very well for most people. Wages have been stagnant for decades and inequality is near record highs. Many voters blame politicians for these problems – for doing the bidding of CEOs while leaving workers with too little power to get their fair share. Voter anger and the politicians fortified by it have put our democracy in real trouble.
There are of numerous reforms necessary to ensure that workers have sufficient power to raise wages, reduce inequality, and make democracy work for all Americans – including those that reduce the influence of money in politics and that promote full employment. But among the most important reforms are those that give workers a way to band together and have a strong collective voice. Collective voice enables workers to negotiate with CEOs on a relatively even footing and to hold politicians accountable. When workers have a strong collective voice, not only can they increase their own wages, but also improve labor standards across the economy and provide a key counterbalance to wealthy special interests, making politicians more responsive to the concerns of ordinary Americans.
But we need new and better ways for workers to achieve that strong collective voice. Fewer than 7 percent of workers in the private sector are members of a union – meaning that 93 percent are left out of the current system.
Current labor law has several critical problems that make it nearly impossible to join a union. The law was designed to work in a bygone economy when most firms were vertically integrated and did all their work in-house. But as work has been increasingly outsourced and contracted out, the law has given fewer and fewer workers a real ability to negotiate for better wages and working conditions. The law also forces workers through a tortured process that has virtually no repercussions for companies that break the rules. Most importantly, the law channels most negotiations to the firm level or below, causing unionized firms to have higher costs than their competitors. This encourages many business owners to oppose unions and fosters conflict between workers and management.
In a previous paper -- “The Future of Worker Voice and Power” – I laid out a broad vision for how to modernize labor law to address these failings and to build a system that works better for workers and would result in a larger economy. In this new system, most bargaining would take place above the level of the firm, at the region or industry level. This would not only help raise wages for union and non-union workers alike, but it would also provide a wage structure that boosts productivity by ensuring similar work receives similar pay and would resolve some conflicts outside of the firm, resulting in relations between workers and their managers that would be more cooperative and productive. The modernized system would foster new kinds of workplace organizations that facilitate collaboration, such as works councils. Workers would be provided with incentives to join worker organizations, helping address the free-rider problems that plagued our old system. Finally, basic rights would be enhanced and protections increased.
In short, under this new system, workers would have more power and their power would be channeled in more fruitful ways.
Even though achieving this full vision would require federal legislation, state and local governments could begin to take critical steps towards modernization now, since some of the most important elements of reform are not pre-empted by federal law. Indeed, state and local governments have significant powers to affect two of the most important channels of modernization: raising standards across entire industries or sectors, rather than just individual firms, and helping to build up worker organizations.
State and local governments could also take a number of steps to raise wages at the industry level and support worker organizations, including using tripartite commissions, prevailing wages, improved enforcement, sectoral training, program navigation, government purchasing, licensing and permitting, and facilitating membership. Though new legislation may be required to achieve the ideal policy, there are numerous precedents for cities and states to build upon. Further, most policy areas allow for some executive action. For example, in 2015 the state of New York used an existing wage board to raise wages for fast food workers to $15 dollars an hour – helping raise wages across a sector in a manner similar to tripartite, industry-wide bargaining.
With the current makeup of the federal government, national efforts will sadly be focused on defending workers’ rights instead of passing national legislation to modernize labor law. Which is why state and local governments have an obligation to lead the way toward strengthening worker voice and power.