In recent years, sectoral bargaining took a prime spot on the list of Nordic-style reforms progressives wanted to import, right next to single-payer healthcare, paid family leave and sexy murder mystery novels. The strategy, wherein labor union representatives negotiate work standards with entire industries rather than individual employers, held massive promise: more union members, better compensation and true power for workers.
But with the idea gaining popularity among leaders in Silicon Valley in the wake of Prop 22, a ballot initiative that overturned labor protections for gig workers in California, a number of progressive thinkers and activists signed an open letter issuing a warning: Without proper stipulations, sectoral bargaining could be a backdoor strategy to gut traditional employment standards.
In the letter, posted this week to Medium, a long list of academics and activists warned that gig economy companies like Uber, Lyft and DoorDash have created a separate employment model for themselves, one that “threatens to extend into other sectors and states, undermining employment status, statutory entitlements, [National Labor Relations Act] unions, and wages and worker standards well beyond what we now understand as the gig economy.”
“The crucial point is that the gig economy is not a sector so much as a segment of the labor market carved out of pro-worker regulation,” reads the letter, whose signatories include pro-labor scholars like Zephyr Teachout, Jane McAlevey, Veena Dubal and Marshall Steinbaum. “What is at issue is how large law and regulation permits that segment to be.”
Big labor and big tech: strange bedfellows
When sectoral bargaining initially gained popularity, it was with union leaders and other advocates for economic equality and worker power. Part of the benefit of the strategy, the letter explains, is as a possible solution to the problems of “fissured” workplaces, where dominant companies are able to keep workers at “arm’s length” and avoid responsibility for issues like collective bargaining or recovering lost wages.
“The idea is that that would be solved by sectoral bargaining. I would say that’s convincing for one sentence length,” said University of Utah Professor Marshall Steinbaum, an economist and signatory of the letter. “But then the question is: How exactly would it be solved by sectoral bargaining? What would sectoral bargaining involve? And I don’t think, even to date, we’ve gotten a clear answer to that question.”
A core issue at play is the creation of a “third category” of workers, a concept instituted by Prop 22 whereby gig economy workers would not be classified as employees or independent contractors, exempting them from certain labor standards. Tech companies have subsequently floated sectoral bargaining as an alternative to formal employment classification and unionization, which could preserve the “third category” and avoid intervention by a newly invigorated federal Labor Department.
Despite those potential blows to workers, both the Teamsters and the SEIU, two of the biggest unions involved in the fight for gig workers, have also expressed interest in finding a peace settlement with Silicon Valley. Were the tech companies to agree to hold uncontested union elections, groups like SEIU and the Teamsters could see a huge growth in membership; Steinbaum fears that this attempt to get labor’s foot in the door could backfire.
“I would be open to that if I were given a compelling narrative about how that process would actually play out, but I think the opposite is everything we’re seeing,” Steinbaum said. “The gig companies, especially in the aftermath of Prop 22, taking their advantages and eating them and cutting down labor standards even further.”
Steinbaum also fears that the “third category” designation could bleed into other sectors of the economy such as the construction industry, where workers jump between employers and jobs but are nonetheless classified as employees.
Bidenville may hold all the cards
While Prop 22 was a major blow to gig worker organizing in a state that represents one of the world’s largest economies in and of itself, decisions by the federal government could determine the future of employment status in both California and the rest of the country. The National Labor Relations Board and Labor Department under President Donald Trump were both widely seen as some of the most anti-worker in history, with the new administration promising to reverse the trend.
As Blue Tent has previously reported, tech companies alienated many Democrats in recent years and have subsequently found themselves somewhat on the outs in Bidenville, at least compared to the Obama administration. One tech-adjacent member of the new White House, however, may help to push Biden back into the arms of Silicon Valley. Seth Harris, a former acting labor secretary, has taken a position as deputy assistant to the president for labor and the economy. In 2015, Harris co-authored a proposal for creating the “third category” of workers, specifically citing gig companies as an example of an industry whose workers should neither be seen as contractors nor full employees.
In an administration that has already been a mixed bag for labor, Harris’s appointment is a potential blow to gig workers. After calls for Biden to come out in support of a union drive at an Amazon warehouse in Bessemer, Alabama, the president indeed issued a statement, but merely announced his support for a fair vote free of company influence, not making a formal endorsement of the effort. Biden also backed away from supporting a $15 minimum wage in the COVID relief package after the Senate parliamentarian advised that the measure did not qualify for reconciliation; other Democrats are urging the Senate simply to ignore the opinion. Biden has also expressed interest in breaking up major tech companies, and on Friday, named Columbia Professor Tim Wu, an outspoken advocate for antitrust enforcement on the tech industry, to the National Economic Council.
If gig company workers and major unions are uncertain about federal support for their efforts, striking a sectoral bargaining peace may be the least bad option. Alternatively, if Bidenville kicks it into high gear to support unions or even reclassify gig workers, California could very well remain the battlefield in an emerging labor war.
