Key takeaways
As more employers adopt AI-powered technologies, workers will need greater control over how new technology affects their jobs.
During past technological advancements, workers who negotiated collective bargaining agreements enjoyed better employment and wage outcomes, prevented or minimized layoffs from automation or outsourcing, and secured employment protection and retraining benefits.
Workplace-by-workplace bargaining systems often enable new entrants in a sector to take advantage of technological changes to undercut negotiated standards, weakening bargaining power for workers in the sector and sometimes causing negotiated standards to collapse altogether.
Sectoral bargaining models, which cover all employers in a sector and can thereby prevent new employers, contractors, or subsidiaries from circumventing agreements, would help workers in the United States deal with weaknesses in American labor law that limit their ability to negotiate technological change.
Policymakers must look to labor law reform and sectoral bargaining models, in addition to other reforms, to help workers deal with the effects of AI.
Introduction and summary
Collective bargaining can be an effective way for workers to deal with technological transitions, and sectoral bargaining—a system that brings together workers and employers to bargain standards across an entire sector at once collectively—can help ensure all working Americans enjoy the upside benefits of technological advancements while preventing the undercutting of strong collective bargaining agreements.
This report looks at empirical research and case studies of how collective agreements played out during past periods of technological change to show how workers used collective bargaining to prevent outsourcing and the automation of jobs covered by collective bargaining agreements. It also illustrates how, in the past, sectoral bargaining helped address many of the weaknesses inherent in a workplace-by-workplace bargaining system like the one predominantly used in the United States.
Strong unions have often empowered workers worldwide to negotiate collective bargaining agreements that give them greater control over how new technology affects their jobs. Nobody knows just how much artificial intelligence (AI) will affect workers. But during past technological advancements, workers who negotiated collective bargaining agreements enjoyed better employment and wage outcomes, prevented or minimized layoffs from automation or outsourcing, and secured employment protection and retraining benefits. In some cases, such as the film and shipping industries, workers with strong unions in a sector even negotiated across multiple employers at once, upholding high standards across a sector rather than limiting benefits to specific workplaces.1
Yet today, only 6.8 percent of private sector workers in the United States have collective bargaining coverage.2 As a result, few Americans have the protections or negotiating power to maintain job stability as new technologies threaten displacement across broad categories of work and ensure workers benefit from the productivity gains promised by AI.
Furthermore, U.S. workers operate under a bargaining system that limits their ability to negotiate over technological change, even in sectors with relatively high union density. In a workplace-by-workplace bargaining system such as the one used in the United States, technological changes often enable new entrants in a sector to undercut negotiated standards, weakening bargaining power for workers in the sector and sometimes causing negotiated standards to collapse altogether.3 This is a problem sectoral bargaining systems can solve because negotiated agreements cover all employers in a sector and can thereby prevent new employers, contractors, or subsidiaries from circumventing agreements. For example, when workers have faced technological change in countries such as France, Italy, and Germany, sectoral bargaining helped prevent layoffs and secured strong severance and retraining agreements.4 Further, AI will likely be adopted by nearly every sector, regardless of union density, meaning sectoral bargaining can establish standards in industries that currently lack strong agreements—something that is already happening in states experimenting with new sectoral bargaining models for rideshare drivers.5
These experiences highlight why policymakers concerned about AI’s impact on the labor market should support policies that strengthen organizing rights and create sectoral bargaining systems. States are experimenting with sectoral bargaining models to extend collective bargaining coverage to more workers, especially in difficult-to-organize jobs such as rideshare driving.6 Because AI’s disruptive potential extends across virtually every sector of the economy, sectoral bargaining would ensure that workers in every sector can bargain collectively to protect themselves from the adverse effects of AI.7
Sectoral bargaining: What makes it different from most bargaining in the United States?
Sectoral bargaining is a type of collective bargaining system in which workers and firms set minimum standards for all workers in an industry or occupation.8 In a sectoral bargaining system, a single contract sets baseline standards that apply to every employer while allowing individual unions to pursue their own contracts that build on these baseline standards. In some countries with sectoral bargaining, such as France and Italy, the baseline standards also extend automatically to new businesses that enter a sector.9 Sectoral bargaining is widely used in developed countries, especially in Europe.10
In the United States, most industries do not use a sectoral bargaining system. Instead, collective bargaining for most private sector workers occurs on a workplace-by-workplace basis under the federal National Labor Relations Act, whereby unions representing individual workplaces negotiate contracts with their employer.11 Agreements do not automatically extend to other workers in the same sector, even if they are also unionized or work for the same employer.
While most bargaining in the United States happens on a worksite level, there are some exceptions. Workers in some sectors, such as the film industry, built unions strong enough to bring together all the major employers and negotiate for the whole sector at once.12 Currently, several states are taking advantage of gaps in federal labor law to create sectoral bargaining systems for rideshare drivers.13
Collective bargaining reduces job displacement for workers during technological transitions
Higher collective bargaining coverage prevents many of the negative outcomes workers experience during periods of technological change. New technologies power productivity growth, which can lead to higher wages for workers with sufficient bargaining power to negotiate. But new technology can also result in greater use of automation or make it easier for jobs to be outsourced to new workforces, both of which lead to job losses.14 When workers come together in unions, they not only win higher wages, capitalizing on productivity gains from new technology, but can also negotiate how new technologies such as AI are implemented at their workplaces and secure protections or retraining for workers at risk of losing their jobs.15 Workers can also negotiate the novel ways that new technologies affect working conditions, such as algorithmic management or increased surveillance.16
Collective bargaining coverage has been shown to benefit workers affected by new technology in both workplace-by-workplace bargaining systems such as those used in the United States and in sectoral bargaining systems used most in Europe. However, some of the best outcomes for American workers came from industries where workers built strong unions that negotiated with the largest employers in a sector at the same time.
Empirical research shows that higher collective bargaining coverage and greater union density reduced job losses and minimized wage decreases from automation while making it easier for displaced workers to find new jobs. Although increased automation is associated with higher unemployment, high union density has been shown to reduce the impact of automation on unemployment.17 One U.S. study found that union membership reduced the likelihood of a worker in a routine occupation becoming unemployed by 5 percentage points.18 In another study, workers whose tasks are more predictable and repetitive—such as machine operators or office clerks—saw less decline in their earnings, though higher union density was also associated with a decrease in the share of employment performed by workers engaged in very routine tasks.19 Data from South Korea showed that unionized establishments were less likely to shift their employment toward younger workers because of automation.20 While automation can result in greater use of part-time or short-term work arrangements, unions also mitigated these impacts in a study of 13 EU countries; by comparison, employment protection laws had no measurable effect.21 Evidence from the Netherlands in the early 2000s and 2010s showed that workers in industries undergoing technological changes took more time to find new jobs but that job search time was lower in more highly unionized industries.22 The authors suggested that because unions “enhance training, and re-education, and facilitate work-to-work transitions,” higher density may reduce search times by making displaced workers more employable.
In sectors with high union density in the United States, such as in film production and at docks, workers have occasionally coordinated bargaining across employers. In a workplace-by-workplace bargaining system such as the one used by most private sector workers in the United States, workers typically negotiate contracts covering only their employer’s workplaces. However, with high enough density, workers in some industries can negotiate contracts that hold multiple employers to similar standards, which prevents these businesses from undercutting one another on labor standards.23 Such an arrangement falls short of full sectoral bargaining, since not every employer is held to these collective bargaining agreements, and requires workers to organize at every employer.24 Still, these agreements can help uphold uniform high standards across most of a sector.
Even without the legal framework to facilitate sectoral bargaining federally in the United States, American workers who negotiate for multiple employers at once—representing much of an industry in a given area—can win contracts that offer wage guarantees for displaced workers and ensure new jobs created to operate and maintain new technologies remain unionized.
American workers secured strong contracts for the introduction of new technology, including AI, in the film and television industry, where unions negotiate for industrywide standards across a single organization representing many production companies and studios: the Alliance of Motion Picture and Television Producers (AMPTP). The Writers Guild of America (WGA) negotiated contracts with AMPTP in 2023 and 2026 that included a number of clear limitations on AI use.25 The agreement makes clear that writing created by AI or generative AI cannot be “considered literary material” under WGA contracts.26 The contract ensures that the output of AI is not a substitute for the work of actual WGA writers, and even when AI is used as a starting point for WGA writers, writers are still entitled to the payment, credit, and appropriate rights for their work. The 2026 contract also requires written notice if a producer licenses a member’s work for training new generative AI.27 The Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA), representing actors on television, streaming, and theatrical productions, negotiated a 2023 contract with AMPTP that stated AI-created performances can only be used with the clear and specific consent of actors. Moreover, it requires the payment of wages and residuals for days on which an actor being digitally reproduced would otherwise have been present for shooting.28 A 2021 International Alliance of Theatrical Stage Employees contract covering studio electrical lighting technicians allowed producers to implement technological changes but required workers be retrained to fill available jobs and receive severance pay.29
Dockworkers and shipping industry employers negotiate across most of the sector at once. Workers at every West Coast port negotiate simultaneously through the International Longshore and Warehouse Union (ILWU) with shipping industry employers represented by the Pacific Maritime Association to reach a single contract covering longshore workers at all 29 ports in California, Oregon, and Washington.30 Their 2022 agreement explicitly acknowledged that the introduction of automated terminals “necessarily displaces traditional longshore work and workers” and, as a result, incorporated new jobs for maintaining and repairing new cargo handling equipment into ILWU’s jurisdiction.31 It also provides guaranteed weekly income to registered longshore workers unable to find full-time work because of technological changes while the contract is in effect.32
Similarly, at East Coast and Gulf Coast ports, the International Longshoremen’s Association negotiated a 2025 master agreement covering longshoremen, clerks, checkers, and maintenance workers with the United States Maritime Alliance, which negotiated on behalf of foreign ocean carriers, direct employers, and port associations.33 In addition to securing a 62 percent raise for workers—who struck for three days to win the contract34—the agreement banned the development of fully automated terminals and container-handling equipment for the six-year duration of the contract. In addition, it prevented the implementation of new technologies that alter manning or job functions without either mutual agreement between the union and employers or arbitration. The contract also details a procedure mandating employers and workers to consider the potential adoption of new technologies together.
UNITE HERE, a union representing workers in casinos, hotels, and industrial food service, has successfully won provisions in most of its contracts requiring bargaining before employers introduce new technology. These provisions cover “all of the major employers in each of the industries” in which it represents workers, covering an estimated two-thirds of its members.35 UNITE HERE’s contract language includes a “broad definition of technology,” “a requirement for advanced notification of up to 6 months,” “a requirement to negotiate,” “job capture and training,” and “recall and severance language for jobs that are eliminated.” The contractual language empowers workers to negotiate over technology even while the contract is in effect. Workers have utilized the language to bargain over new technology since 2019 and continue to use midcycle bargaining to negotiate over a range of new technologies, including algorithmic management, automated drink dispensers, and vehicle monitoring.36
During periods of technological change, these coordinated agreements helped workers secure strong outcomes globally. In Israel, for example, strong worker power in the banking industry allowed the Israeli labor federation to negotiate agreements linking contract terms across the largest banks.37 Even though there was no sectoral agreement covering the banking sector, the five largest banks—making up 95 percent of the banking industry—are all unionized, and unions succeeded for decades at effectively preventing layoffs related to technology. Even as regulatory changes beginning in 2011 increased digitization of bank services and decreased the banking workforce by 15 percent as banks closed physical branches, unions negotiated voluntary retirement benefits to achieve downsizing with minimal compulsory layoffs. Voluntary retirement packages offered early pensions or severance and training for workers at risk of displacement, including retraining existing employees for high-wage technology jobs within the banks; subsidizing training for workers who took voluntary retirement packages; and funding fellowships for academic degrees.
When high union density isn’t enough to prevent displacement, workers need sectoral bargaining
Although collective bargaining leads to fewer job losses from automation and outsourcing during periods of technological change, even in a workplace-by-workplace system such as that used in the United States, evidence suggests that high union density alone cannot guarantee good results. When new businesses entering an existing sector are not held to collective bargaining agreements, employers can find ways around existing negotiated standards to undercut competitors, especially when new technologies make it possible to automate existing work or shift work to new labor forces not covered by collective bargaining agreements. By contrast, when workers bargain across multiple employers in a sector, they can prevent a race to the bottom among employers who undercut negotiated standards and outcompete based on lower wages. Although every country has its own labor laws and market dynamics that also affect workers’ ability to secure strong agreements, historical examples from different countries using different bargaining systems during periods of technological change can illustrate how different bargaining systems produce different outcomes.
While high union density reduces automation’s impact on unemployment, some empirical evidence suggests that the kind of bargaining system—whether sectoral or workplace by workplace—affects how workers can shape the impact of new technologies on their jobs. One study of the effects of automation on unemployment found that countries with weak unions showed a stronger association between automation and unemployment, while countries with centralized bargaining systems reduced that association.38
Under a sectoral bargaining system, employers across a sector must meet negotiated baseline standards, preventing them from taking advantage of new technology to undercut competitors. The historical experience of dockworkers in the United Kingdom during the transition to containerized shipping shows how new technologies enabled businesses to successfully evade a collective bargaining scheme because it did not extend to new ports, where shippers could install new technology that reduced the number of workers needed while hiring a new workforce not covered by collective bargaining agreements.39 Dockworkers at U.K. ports worked for decades under an employment regulation system known as the National Dock Labour Board, established by Parliament in 1947 following dockworker strikes.40 This system brought worker and employer representatives together to negotiate employment protections. Though it omitted some ports from the scheme immediately following World War II because they were “not significant,” by 1989, it covered ports that handled 70 percent of national trade.41
Beginning in the 1960s, the introduction of containerized shipping reduced the number of dockworkers needed to load and unload ship cargo. In response, dockworkers used the existing bargaining framework to negotiate a full-employment Dock Labour Scheme that prevented compulsory redundancy and guaranteed offers of dock work to workers with other employers if a port employer went out of business and the worker was unwilling to take a voluntary severance package. While the Dock Labour Scheme successfully protected employment and offered workers severance packages at covered ports, shippers installed equipment at the port of Felixstowe, England, which could handle containers and was not covered by the agreement.42 Felixstowe quickly grew from one of the smaller ports in the United Kingdom in the early 1960s to become the largest container port in the country. As a result, the agreement collapsed in 1989, resulting in the closure of existing ports and the redundancy of more than 7,200 dockworkers.43
The scheme was not a total loss for workers: By slowing the pace of layoffs while it was in effect, the employment protection scheme mitigated the unemployment, occupational mobility, geographical movement, and mortality impacts of the port closures for workers during and after the period of the scheme. However, it illustrates how the entrance of new businesses using new technology into a sector can jeopardize the success of collectively bargained standards meant to protect workers. This is something sectoral bargaining can specifically prevent by requiring new entrants to adhere to existing negotiated standards.
Sectoral bargaining can help workers achieve better outcomes during periods of technological change, even in sectors with low union density. The experience of telecommunications workers in the United States and in several European countries during a period of workforce reductions caused by greater outsourcing and automation related to technological improvements shows that, despite strong union presence under different bargaining systems, collective bargaining agreements that applied to existing workforces and workers at subsidiaries and contractors prevented compulsory layoffs and helped workers secure good retirement and retraining options.
Unionized workers at AT&T in the United States faced large-scale involuntary layoffs when new technologies enabled the expansion of automation and outsourcing.44 The company had a union density of more than 80 percent thanks to the strength of the Communications Workers of America (CWA), which had a long history of securing contracts for technicians and call center workers. Improvements in technology and industry consolidation in the 2000s and 2010s made nonunion outsourcing possible and led to workforce downsizing, especially call center staff, globally. The CWA used large-scale strikes to secure termination payments, guarantee job offers, implement no-layoff clauses for certain groups of workers, and introduce some voluntary separation options. However, new technology pressured existing workers by allowing work to shift to new call centers opened in lower-wage areas or to nonunion contractors. As a result, workers still lost tens of thousands of jobs and had to accept lower wage tiers to prevent further outsourcing or incentivize the company to bring work back in-house.
In contrast, workers at many telecommunications businesses in European countries with sectoral bargaining systems faced similar technological changes, yet had much greater success than American workers in preventing compulsory layoffs and often won better retraining and voluntary retirement arrangements.45 Some countries’ sectoral bargaining systems also allowed for “automatic extension” of existing collective bargaining agreements to new businesses, especially new contractors created for outsourcing work from existing employers. Workers in Sweden, Austria, France, and Italy had sectoral agreements that also applied to subsidiaries and subcontractors, which disincentivized businesses from replacing in-house workforces with lower-paid alternatives, and ultimately had greater success at preventing compulsory layoffs.
In Europe, when it came to empowering workers to secure better contracts, the type of bargaining system generally played a greater role than union density. During telecom industry transitions in Sweden, Austria, France, and Italy, workers did not have to make major concessions to retain their jobs or move work in-house because businesses lacked economic incentives to outsource large parts of their workforce.46 While these countries each have very different union densities—ranging from as low as 11 percent for the national union membership rate in France and slightly more than 20 percent at Telecom Italia in the late 2000s to more than 80 percent at Telia in Sweden—in all of them, subsidiaries and contractors were also held to sectoral agreements. Unlike in the United States, these workers were able to prevent compulsory layoffs. Instead, they managed workforce downsizing through job transfers, voluntary redundancy, and early-retirement options that gave workers control over how they transitioned into new jobs. They also enjoyed greater economic incentives for choosing to leave, such as bonuses and paid-for preparatory periods, typically lasting several years, to search for new jobs. At the same time, despite strong unions in the sector, workers in Denmark and Germany did not have automatic extension of agreements to telecom contractors and subsidiaries, so workers seeking to keep jobs in-house made significant concessions on worker pay. Still, in both Germany and Denmark workers had greater success than American workers in preventing or reversing outsourcing. In addition, German workers also prevented compulsory layoffs while Danish workers prevented compulsory layoffs only in earlier, less-aggressive rounds of downsizing.
Sectorwide bargaining has also worked in concert with social safety net programs to help some workers to use state resources while transitioning to new jobs. During Italy’s telecom transition, Italian workers were able to negotiate agreements that used national unemployment compensation funds to pay for retraining when workers moved into new roles. In addition, some Italian workers who were moved to short-term work arrangements had the equivalent of 80 percent of their monthly salary paid for by the state.47 The access to state unemployment funding as part of a collective bargaining agreement made possible an outcome that would likely be difficult to replicate in countries without a similarly strong social safety net.
Exceptions also existed to the general pattern of sectoral bargaining leading to better outcomes. Workers in Czechia, for example, operated under a sectoral bargaining system, though with low coverage and without automatic extension of agreements, which also limited workers’ outcomes compared with countries that had more robust sectoral bargaining systems and higher coverage. By contrast, workers in the United Kingdom managed to prevent compulsory layoffs despite their lack of a sectoral agreement. However, BT Group had a union density of more than 80 percent and a long history of management collaboration with the union. Other underlying legal structures and the social contract between businesses and workers also shape how workers can negotiate and secure strong contracts, which often worked to workers’ benefit in countries such as Denmark and France, where workers successfully mounted public-influence campaigns to support their negotiating goals.48
Sectoral bargaining can help policymakers build power among American workers worried about AI
Policymakers worried about the labor market impacts of widespread AI adoption should look to collective bargaining, especially sectoral bargaining, to empower more workers to negotiate strong contracts that ensure workers enjoy wage gains from productivity growth and can transition smoothly into new jobs. Expanding union membership in the United States would ensure more workers can negotiate strong contracts that protect existing jobs from AI and make it easier for workers to find new ones. However, a move to promote sectoral bargaining alongside workplace-level bargaining will lead to an expansion in bargaining coverage, and—given the expectation that AI will see widespread adoption across the economy, including in sectors with very low union density—will give workers in low-union-density sectors more immediate access to collective bargaining coverage to respond to AI adoption.49
At minimum, policymakers should implement policies that strengthen organizing rights and expand union membership and coverage. Currently, only 6.8 percent of private sector workers in the United States enjoy collective bargaining agreement coverage. Consequently, most workers have no means to bargain collectively for job security and better wages—without first going through the union election process—as their employers adopt AI.50 Workers must clear imposing hurdles to win a union election campaign and achieve a first contract, while contesting a union-avoidance industry that earns more than $1.7 billion every year by advising businesses on discouraging workers from organizing unions.51 The Protecting the Right to Organize (PRO) Act,52 which the House of Representatives passed in 2021,53 would address the major flaws in federal labor law that leave workers vulnerable when they try to organize and exercise their right to bargain collectively and ensure collective bargaining agreements cover more workers. But even these reforms may not be enough on their own unless they are paired with new models such as sectoral bargaining given the current levels of union membership.
Sectoral bargaining offers a potential solution to expand bargaining coverage in the United States. Though the PRO Act would be a significant step forward for organizing rights, it does not fundamentally alter the workplace-by-workplace bargaining system implemented in federal law, which covers most private sector organizing. The Center for American Progress estimates that introducing sectoral bargaining nationwide could increase bargaining coverage to 29 percent of all workers, or about 42.4 million people, a dramatic increase in the number of workers covered by negotiated standards.54 Moreover, sectoral bargaining reform at the federal level would also enable workers from any sector to bargain collectively over the impacts of AI. This is crucial given the expectation that AI will be widely adopted across all sectors, not just those with existing strong unions in the United States.55 Additional reforms that support union organizing could further boost union membership and coverage.56
Even without federal reforms to implement sectoral bargaining systems nationwide, states are using sectoral bargaining and related models to empower workers. These models help workers set industrywide standards in sectors that are challenging to organize under the traditional model or for workers who are not covered by existing federal labor law. These sectoral models help workers counterbalance employer market power, including in industries with heavily “fissured” workplaces, such as fast-food franchises where workers are unable to negotiate directly with the businesses that set their wages, and in industries with irregularly structured work and no set worksites, such as the rideshare sector.57 Indeed, as one academic study explained, workers in occupations that are “inherently hard to organize are more likely to be organized in unions” under sectoral bargaining systems.58 Already, California, Massachusetts, and Illinois have passed laws empowering rideshare drivers to bargain for the entire sector, with hundreds of thousands of workers in California59 and 70,000 workers in Massachusetts set to begin bargaining as part of the largest new private sector bargaining units created since 1941.60 States and communities have also found success with industry standards boards—which bring together representatives from labor, businesses, and the government—to negotiate workers’ pay and working conditions and set minimum standards across an entire industry.61
Sectoral bargaining systems that ensure coverage across entire sectors can also help address challenges American workers face even in highly unionized sectors. Workers in some industries, such as shipping and filmmaking, have effectively achieved sectoral agreements managing the impacts of new technology, including AI. However, workers in these industries built high union density and pushed for sectoral arrangements decades ago, making this model difficult to replicate without legislative support that formalizes sectoral bargaining systems and strengthens the right to organize.
Additionally, workers in countries with sectoral bargaining systems generally enjoy more robust social safety net protections.62 AI poses some risk of massive job displacement—some analysts predict that up to 7 percent of workers are at risk of displacement during the AI transition.63 Coupled with the existing inadequacies of American labor law for protecting organizing rights, it seems all but guaranteed that workers will need better public unemployment and training protections than those currently available to blunt large-scale job displacement.64
Conclusion
Pro-worker policymakers who believe that AI will reshape the labor market must look to collective bargaining to increase worker power and ensure that job security and wage standards cover workers without prompting a race to the bottom among businesses.
History has shown that collective bargaining effectively protects workers during technological transitions. Policymakers, therefore, must take steps to expand organizing rights in the United States. This includes reforming collective bargaining law and using a sectoral bargaining model that can not only address weaknesses in American labor law that leave workers vulnerable to job insecurity and the threat of losing out on gains from AI productivity growth but also ensure workers in every industry can negotiate over how AI will affect their jobs.