Literature Review Memo [Clean Slate IA – Levels of Bargaining]*
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Rebalancing Economic and Political Power: A Clean Slate for the Future of American Labor Law Literature Review Memo [Clean Slate IA – Levels of Bargaining]* Table of Contents 1. Introduction .................................................................................................................................. 2 2. The Problem ................................................................................................................................. 4 3. U.S. Historical and Industry-Specific Parallels ............................................................................. 8 4. Supply Chain Bargaining ............................................................................................................ 15 5. Synthesis of International Sectoral Bargaining Models ............................................................... 22 6. Case Study: Mechanics of Sectoral Bargaining in Norway and South Africa ............................... 34 7. Survey of Bargaining Schemes Abroad ....................................................................................... 43 * This report was researched and drafted by Jared Odessky and Will Dobbs-Allsop in consultation with, and with contributions from, members of the Clean Slate IA group. 1 Research Draft prepared for Clean Slate Project - Not for Circulation, Citation, or Attribution 1. Introduction The overall mission of “Clean Slate” is to increase worker power in the United States. To achieve that mission, it is essential to extend collective bargaining coverage, now at the low end of industrial democracies. Over the last 65 years, U.S. private sector collective bargaining coverage has decreased from 35% to 6%. While public sector coverage has increased to 30%, it remains at the low end compared to other nations—and is under threat in the aftermath of the Supreme Court’s decision in Janus. A legal system in which working people can gain a right to bargain only at the enterprise level is a significant cause—perhaps the most significant cause—of employer opposition to organizing and intransigence in collective bargaining in the U.S. Each employer fears that if its employees organize, it will be placed at a competitive disadvantage by the results of collective bargaining. This intransigence has been abetted by the financial markets and management compensation schemes that discount long term economic performance and social responsibilities, as well as by global product and labor markets. A persistent aspiration of the labor movement has been to “take wages out of competition.” In other words, the labor movement seeks to prevent employers from competing by cutting wages or benefits or worsening working conditions. In a market economy, unless unions can take wages out of competition, there will be steady downward pressure on wages and benefits and employers will resist efforts to raise economic standards and working conditions, particularly through enterprise-level collective bargaining. Stable collective bargaining leading to rising wages and expanded benefits and job security has existed in the U.S. when unions have found mechanisms to take wages out of competition. Historically these mechanisms have been multi-employer bargaining and pattern bargaining. More recently, unions have sought to use master agreements, common expiration dates, “trigger agreements” (agreements conditioning application of economic terms on reaching a set percentage of signatories in a geographic market), and the revival of tripartite wage boards (leading to government-mandated minimum or living wages). In other counties, particularly Western Europe, bargaining has historically taken place at a “higher” level, both national and sectoral. In some of these countries, collectively bargaining agreements are “extended” across a sector when specified conditions are met. The key question for our group is what are the legal mechanisms that would facilitate a form of collective bargaining that would effectively take wages out of competition and permit working people in the U.S. to organize, have stable representation, and effectively improve wages, benefits and working conditions for all workers? More specifically, we will investigate: • In what countries and historical time periods have bargaining systems been most successful, when, and by what metrics? What models have achieved the greatest collective bargaining coverage and expanded worker power in the economy and in politics? What historical factors enabled the establishment of sectoral or other higher-level bargaining bargaining? 2 Research Draft prepared for Clean Slate Project - Not for Circulation, Citation, or Attribution • How have structural characteristics—including fissuring, precariousness, isolation of workers, lack of a single physical worksite, and globalization—posed a barrier to successful collective bargaining? • How did law historically facilitate or inhibit sectoral or supply chain bargaining in the U.S.? • How has composition of the workforce (race, national origin, immigration status, gender) posed a barrier to successful collective bargaining in the United States? [NB: Possibly for another group]. In countries where sectoral bargaining exists: • To what extent does the law mandate such bargaining? To what extent is the government involved in facilitating or mandating bargaining, or in extending the fruits of bargaining? • Who represents workers in bargaining? Who represents employers? Who decides? How are nonunion workers represented? • How are sectors defined? Who decides? What sectors are covered? What mechanisms exist to make bargaining inclusive of all sectors? • What bargaining occurs at national level, regional level, sectoral level, or worksite level? That is, who participates in the different levels of bargaining and what subjects are bargained over at each level? How does sectoral bargaining interact with worksite bargaining? • Where has supply chain bargaining been achieved? What legal mechanisms can encourage or require it? How does it interact with sectoral or worksite bargaining? • What other reforms aimed at increasing workers’ collective economic power, including organizing rights and strike rights, are need in order for higher levels of bargaining to succeed? 3 Research Draft prepared for Clean Slate Project - Not for Circulation, Citation, or Attribution 2. The Problem “As an increasing number of scholars and commentators have recently argued, worksite-or firm- based bargaining is often insufficient to protect workers’ interests and to redress problems of economic and political inequality.”1 Enterprise collective bargaining in the United States has contributed to some of the structural failures that plague the larger labor law regime: ● Distributional effects: Firm- and enterprise-based bargaining incentivizes companies to “compete to keep labor costs down, whether by setting wages at a low level, skirting legal obligations, or avoiding unionization.”2 ● Workplace democracy: Worksite-level bargaining can provide workers a voice at work, but it also limits worker-voice. “Non-unionized workers typically have no way to participate in decisions around wages and benefits or other questions important to their daily lives … even unionized workers are outmatched against continental-scale corporations.”3 ● Policy alternatives: Administrative substitutes to large-scale collective bargaining, such as “federal and state minimum standards laws, are fairly blunt tools, as they impose identical obligations on nearly all covered companies.”4 They have proved hard to adjust and do not account for differences across industries or, in the case of the federal minimum wage, geographic region. ● Outsourcing & diffused supply chains: “Firm-level bargaining has become even less effective in recent years as companies have contracted out work and directly employed fewer people.”5 “Work that was once done in-house is increasingly scattered across multiple employers interconnected by a chain or network of contracts. This disintegration … has many baleful consequences, including the swelling of the precarious, low-wage labor market.”6 One solution to these problems is for the U.S. to transition to some type of sectoral bargaining system, whereby workers negotiate at the “at the sectoral level—for example, among all fast food workers, all retail workers, all hotel/motel workers, all janitors—either nationally or in a given 1 KATE ANDRIAS AND BRISHEN ROGERS, REBUILDING WORKER VOICE IN TODAY’S ECONOMY 26 (The Roosevelt Inst. 2018), https://www.scribd.com/document/385584703/Rebuilding-Worker-Voices-In- Today-s-Economy#download&from_embed. 2 Id. 3 Id. at 27. 4 Id. 5 David Madland, Wage Boards for American Workers, CTR. FOR AMER. PROGRESS (last updated Apr. 9, 2018), https://www.americanprogress.org/issues/economy/reports/2018/04/09/448515/wage-boards-american- workers/. 6 MARK BARENBERG, WIDENING THE SCOPE OF WORKER POWER 3 (The Roosevelt Inst. 2015), http://rooseveltinstitute.org/wp-content/uploads/2015/10/Widening-the-Scope-of-Worker- Organizing.pdf. 4 Research Draft prepared for Clean Slate Project - Not for Circulation, Citation, or Attribution geographic region.”7 There are a few mechanisms scattered throughout U.S. labor law that enable workers to organize at a scale larger than workplace-by-workplace, but in practice these tools have been rarely used or have largely proved to be unworkable. For example, in theory multi-employer bargaining is possible, but multi-employer bargaining typically requires the assent of the companies