Washington, D.C. — A new report from the Center for American Progress calls for a major modernization of labor laws to create the right set of structures to raise wages and boost productivity, particularly given the changing nature of work and the workplace today. While the benefits of unions are well-documented—workers in the United States who bargain collectively earn wages that are about 14 percent higher than comparable workers, among other benefits—less than 7 percent of private-sector workers are in a union today, down from roughly one-third of the same group of workers in the 1950s.
CAP’s bold agenda to revitalize worker rights and the economy outlines four key elements to modernizing U.S. labor law: replacing enterprise wage bargaining with multiemployer bargaining for an industry or region; expanding workers’ voice in the workplace by including organizations such as works councils; encouraging membership in worker organizations; and safeguarding basic rights for all workers. Such an approach would increase worker power while better aligning the incentives of workers and managers.
“The need to raise wages and strengthen and grow the middle class is the central challenge facing the economy, but unions—one of the best catalysts for achieving these goals in decades past—are no longer what they used to be, and the economy is far different than the one that allowed unions to flourish,” said David Madland, Senior Fellow and Senior Advisor to the American Worker Project at CAP. “A more efficient labor relations system would give workers real power to raise their wages, while firms would benefit from a system that helps level the playing the field, increases productivity, and enables companies to grow, while fostering collaborative relationships between workers and management.”
The United States’ current system of labor law is oriented toward small, fragmented units in particular firms or parts of a firm; such an approach can exclude many workers in an industry or region, as well as independent contractors in or outside of the gig economy, domestic workers, and managers. At the heart of CAP’s labor agenda is a new proposal to transform unions from individual, firm-level bargaining units into organizations or structures that negotiate for higher wages and benefits across an entire industry or sector. Worker productivity would increase under such a system as workers and firm managers would be more likely to work collaboratively to solve company problems. Along with industry-wide bargaining, new, firm-level organizations—such as works councils—would serve as on-the-ground centers for worker-management relations for workers and management at any given firm and provide an avenue for worker voice at the workplace.
The system that CAP outlines in the report is strengthened by a mechanism that encourages membership in worker organizations, such as giving those organizations a formal role in helping to deliver societal goods like unemployment insurance or worker training. CAP’s labor agenda also calls for federal legislation—such as the Workplace Action for a Growing Economy, or WAGE, Act—to fix broken elements of the current labor law system and to ensure that workers have adequate avenues for recourse when their rights are violated.
Click here to read “The Future of Worker Voice and Power” by David Madland.
For more information or to speak with an expert, contact Allison Preiss at [email protected] or 202.478.6331.