Cory Booker has become the latest Democratic presidential candidate to back unionizing entire industries by supporting a concept called “sectoral bargaining.” The idea dates back to the 1930s and involves the federal government creating union-management committees that would set wages and other work standards.
The change, if adopted, would radically shift the business landscape across the United States. Under sectoral bargaining, unions would be granted enormous power over industries, while businesses would be strictly limited in the workplace policies they could adopt. All workers in an industry would be represented by the union officials on the committees.
The New Jersey senator backed the idea in an “opportunity and justice plan” his campaign issued this week. It called for bringing “multiple employers across an industry to the table, including through wage boards, that set wage and other workplace benefits and standards.”
Several Democratic contenders have backed versions of the idea. Vermont’s Bernie Sanders called in August to “establish a sectoral collective bargaining system” as part of his “workplace democracy plan.”
South Bend, Indiana, Mayor Pete Buttigieg has called for a similar idea, “multi-employer bargaining.” His version wouldn’t necessarily cover all employers in an industry but would allow multiple unions to “be allowed to decide to bargain on a multi-site or multi-employer basis, and their employers will be required to bargain” with them.
Sectoral bargaining would likely require amending both the National Labor Relations Act and the Fair Labor Standards Act, the main federal workplace laws, since only the government could force businesses to go along with it, noted Glenn Spencer, senior vice president for employment policy at the U.S. Chamber of Commerce. Most versions of sectoral bargaining involve creating committees in which a few representatives of businesses and unions set standards for the entire industry. Setting up the system would be complicated, since it would require determining who would represent all businesses and all workers for each industry.
“What Sen. Sanders seems to be supporting is setting up a 50-state wage board, which would presumably be housed in the Department of Labor. It would be tasked with negotiating between some combination of employer representatives, a group of union reps, and maybe neutral third parties,” Spencer said. “It would negotiate with those groups and then come up with a national wage standard for that sector.”
Sectoral bargaining is different from the current model of collective bargaining, which has unions negotiating directly for the workers they represent. “With the wage board-type system, you have a few union reps negotiating for all workers in all 50 states,” said Spencer, arguing that the arrangement would remove the “element of workplace democracy” in current labor law.
Liberals concede it won’t happen easily but argue the groundwork for it is already being laid at the state level, pointing to efforts to set $15 minimum wages in states such as New York and California. “Federal labor law preemption forecloses nearly all state and local labor law legislation, but employment law does not face the same hurdles. Several states, including California and New York, already have tripartite commissions vested with the power to set wages and other standards,” wrote Kate Andrias, professor of law at the University of Michigan in a spring article for the liberal journal Dissent. California has an entity called the Industrial Welfare Commission, which has set statewide minimum standards for various industries, though the commission has been inactive for more than a decade. New York can set up wage boards as well.
Unions like the idea of sectoral bargaining because it automatically puts them in charge of workers who haven’t joined, argued Pat Semmens, spokesman for the conservative National Right to Work Legal Defense Foundation. “Union officials seem to want to skip the step of convincing actual workers to voluntarily join unions and instead just have the government grant union officials monopoly bargaining power over millions of American workers despite the overwhelming majority of those workers never giving any indication that they want that so-called representation.”
Sectoral bargaining was used in the U.S. in the 1930s and 1940s when the country first passed the National Labor Relations Act and the Fair Labor Standards Act. At the time, the country was contending with the Great Depression and World War II, and industrial policies covering entire sectors were deemed necessary to deal with the crises.
The country abandoned the model in the 1950s following the end of the depression and the war. That, coupled with the nation’s rising economic prosperity, eliminated the original need for sectoral bargaining. Businesses, rural regions, and some unions, meanwhile, chafed under the limitations it imposed. The period marked the high point for unions, with about 1 in 3 workers belonging to one. Internal divisions within the labor movement led many to see sectoral bargaining as unhelpful. The country moved to the “enterprise” model of collective bargaining where businesses were organized one at a time.
The model has since been revived as a way to reverse the labor movement’s long stagnation. Unions now represent just 10.5% of the nation’s workforce, according to Labor Department data, less than a third of what they did when sectoral bargaining was dropped.
“Bargaining by industry, where workers from multiple companies sit across a table from the largest employers in their industry to negotiate for wages and benefits, is standard practice in almost every developed country in the world,” Service Employees Union International President Mary Kay Henry declared in an August speech in Milwaukee. “It should happen here, too.”
