Ben Zipperer, Economic Policy Institute
The research on the minimum wage contributes insights into claims raised in legal arguments that employers and workers have equal power and that an employer’s management power must be unrestricted lest the firm or the economy suffer. Mandated minimum wages, the conventional argument goes, will force firms to pay a wage higher than the market rate, resulting in job losses and, potentially, bankruptcy. But evidence from minimum wage increases and expansions finds that the policy can improve labor market conditions without causing harmful side effects because of such “channels of adjustment” as reduced worker turnover, consumer price increases, and the reallocation of low-wage workers to higher-paying establishments. In general, employer mandates can increase the prevalence of good jobs. By altering the mix of firms and reallocating workers across them, the minimum wage creates or at least shifts the composition of jobs toward those that are more productive and pay higher wages.
Suresh Naidu, Columbia University, and Michael Carr, University of Massachusetts Boston
One common metric of monopsony power is the quit elasticity, measuring how much more likely a worker is to quit a job in response to a wage change. Experimental and quasi-experimental variation in wages across workers within a given job results in quit elasticities in the 2–3 range, implying that a 10% reduction in wages increases the probability of quitting by 20–30%. In a model with monopsonistic employers, a quit elasticity of 2–3 also implies that workers are paid about 80–85% of the value they produce. These results indicate that employer power is pervasive. We present observational evidence that historically disadvantaged groups have systematically lower quit elasticities, indicating they face even greater employer power. Because monopsony power comes from an inability of workers to voluntarily switch jobs, the quit rate and especially the quit elasticity can be a useful metric for judging the health of the labor market. Pervasive employer power alters the analysis of labor market policy in a number of important ways.
Kathryn Edwards, Rand
Worker mobility—the ability to find and take another job—is at the core of worker power, and, conversely, worker immobility is at the core of employer power. But how easy is it for a worker to leave a job and look for another?
In this paper, we present evidence of barriers to worker mobility along two dimensions: labor market considerations (can a worker find another job?) and financial considerations (can a worker afford to transition to another job?).
With regard to labor market barriers, we assess each step in the job search and job match process and find that worker mobility is greatly limited by the availability of jobs to which workers can move; the time it takes to search for and secure another job, if it’s available; and the quality of the available jobs and quality of the new job, if secured. Moreover, limitations in labor market mobility are often dependent on the current job: Does it have hours or working conditions that make on-the-job search difficult? Does it have the scheduling or time-off policy that supports interviewing? Does it provide a positive or negative signal about the worker? The existence of these kinds of constraints suggests that worker immobility can be a reinforcing process. Finally, mobility is contingent on the degree of labor market discrimination. We illustrate, in a stylized model, how a Black worker would need to devote nearly four times the effort to receive the same number of offers as a similar white worker.
With regard to financial barriers to mobility, we find that, even in a job-to-job transfer—the best-case scenario for worker mobility because unpaid time off is minimized—workers can experience gaps in benefit coverage or compensation. Even noncompensation aspects of a new job can carry financial costs, such as commuting, and a change in job location can require a new child care arrangement. Workers facing unemployment spells between jobs must usually finance the spells on their own, a major hurdle for the huge share of U.S. households whose savings add up to just several hundred dollars. Workers willing to enhance their labor market prospects by moving must not only pay the costs of the move but also have access to considerable savings to cover advance rent and security deposits or to cover expenses while awaiting the sale of a home. And much like in the labor market, there is persistent and well-documented discrimination in the housing market that raises these costs for people of color. Finally, access to credit can smooth out job transition costs, but it is not universal and reflects clear racial differences. Black and Hispanic Americans also have considerably less wealth to tap into than white Americans.
Our assessment of these and other labor market and financial considerations illustrates the extent to which barriers to mobility can make moving jobs a luxury, rather than a right. The theoretical context of these findings is dynamic monopsony: the harder it is for a worker to leave, the more power an employer has over that worker’s wages.
Valerie Wilson, Economic Policy Institute, and William Darity Jr., Duke University
The assumption of a perfectly competitive labor market is central to some of the most widely accepted theories in the field of labor economics. But the persistent threat of unemployment means that workers often cannot change jobs or employers easily and without cost. This imbalance of power disproportionately disadvantages black workers: One of the most durable and defining features of the U.S. labor market is the 2-to-1 disparity in unemployment that exists between black and white workers. The economic theories most often invoked to explain racial differentials in labor market outcomes—human capital theory, taste-based models of discrimination, and statistical models of discrimination—fall short in their attempts to explain long-standing racial disparities in unemployment and pay while blatantly denying the persistence of discrimination. A better framework is stratification economics, which argues that, while discrimination is unjust, it serves the functional role of preserving hierarchy. Identity can be structured so that investing in, or associating with, a group identity can lead to economic returns and benefits.
Simon Jäger and Shakked Noy, Massachusetts Institute of Technology, and Benjamin Schoefer, University of California, Berkeley
How does codetermination—entitling workers to participate in firm governance, either through membership on company boards or the formation of works councils—affect worker welfare and corporate decision-making? We critically discuss the history and contemporary operation of European codetermination arrangements and review empirical evidence on their effects on firms and workers. Our review suggests that these arrangements are unlikely to significantly shift power in the workplace, but may mildly improve worker welfare and firm performance, in part by boosting information-sharing and cooperation and in part by slightly increasing worker influence.
John Evans and William Spriggs
The claim that labor market flexibility—the lack of regulations and collective bargaining constraints on employers—is essential to maximizing employment, minimizing unemployment, and obtaining growth simply does not have empirical support. That the claim lacks evidence can be seen by tracing how the market fundamentalist assertions made in the initial OECD Jobs Strategy in 1994, conducted with limited external evidence, has been reversed by the OECD and by other international financial institutions in the years since. The OECD now notes that new evidence “shows that countries with policies and institutions that promote job quality, job quantity [maximum employment rather than minimum unemployment] and greater inclusiveness perform better than countries where the focus of policy is predominantly on enhancing market flexibility.” It has also rejected the argument that collective bargaining defends the interest of “insiders” against “outsiders” in the labor market. While OECD reports previously made almost indiscriminate calls for lowering labor standards to increase labor market flexibility for employers, they now caution that irregular work can be a danger.
Lawrence Mishel, Economic Policy Institute
The “freedom of contract” view that employment arrangements negotiated between employers and employees are necessarily optimal exchanges between equal parties willfully ignores the fact that workers rarely enjoy full employment, and without full employment employers enjoy plentiful access to willing new workers while employees face difficulties and costs in finding alternative comparable jobs. Many groups of workers, particularly Blacks and those without college credentials, have higher-than-average unemployment, and never enjoy a full employment environment even when the aggregate economy is thought to be at full employment. Excessive unemployment matters a great deal: When unemployment is high, voluntary quits and the ability to switch jobs diminish, unemployment spells are longer, finding a good job is harder, and, correspondingly, wage growth is subdued for low- and middle-wage workers. Employers, on the other hand, are able to fill vacancies with qualified workers more quickly and with less effort. Simply acknowledging the persistent absence of full employment for many workers renders the freedom-of-contract framework a flawed basis for assessing employment relationships.
Larry Mishel and Josh Bivens, Economic Policy Institute
There is now widespread acceptance across the political spectrum that the typical worker’s wages have grown very slowly or been stagnant for several decades but a consensus narrative explaining wage stagnation has not developed yet.
The frequently invoked conventional explanations attributing wage problems primarily to automation and, somewhat, to globalization, cannot actually explain key wage developments over the last several decades. Moreover, portraying wage stagnation and growing wage inequality as the unfortunate byproduct of inevitable, positive forces such as automation that one neither can nor would want to alter is deeply misleading and, sometimes intentionally, is meant to absolve those with the most power—corporations and the most wealthy people—from their responsibility for the outcomes of their actions and to ignore the impact of racism and sexism.
This paper offers a narrative and supporting evidence on the mechanisms that suppressed wage growth over the last four decades since the late 1970’s. We label this wage suppression rather than wage stagnation because it was an actively sought outcome—engineered by the political power and organizational strategies of corporate management and its political and judicial allies to suppress labor costs and wages and maintain gender and racial hierarchies—and was not the passive, unavoidable outcome of a ‘bad economy’ or the byproduct of positive forces such as automation.
The key forces driving wage suppression have been changes in management practices/strategies and shifts in public policy, including both policy actions and omissions, that systematically undercut individual workers’ options and ability to obtain higher pay, job security and high quality jobs, along with a lack of action to counteract the racism and sexism that undercut the prospects of particular groups of workers. These dynamics are primarily located in the labor market and the strengthening of employers’ power relative to their white-collar and blue-collar workers. It is ‘as if’ a team of corporate executives, lobbyists and lawyers designed corporate strategies, reset government policies towards labor standards (e.g. minimum wage) and unions, shaped judicial opinions and the legal environment and weakened enforcement of existing labor standards and laws with the goal of limiting workers’ options in the labor market, limiting wage growth and undercutting workers’ individual and collective bargaining power relative to their employers. These decisions were most adverse for workers with low and moderate wages, especially for African-Americans so situated, thereby generating wage inequality whereby high earners and, especially those in the top 1.0 and 0.1 percent, fared far better than those in the bottom 90 percent.
We offer empirical assessments of the impact of particular factors on wage growth and wage inequality to demonstrate that their aggregate and cumulative impact can readily explain wage suppression and wage inequality. In particular, we examine the wage impacts of factors such as: excessive unemployment, resulting from faulty monetary (and budget) policies; eroded collective bargaining, resulting from corporate practices and adverse judicial and policy choices; weaker labor standards, resulting from a declining minimum wage, eroded overtime protections and weaker enforcement of standards leading to greater ‘wage theft’; globalization, resulting from policy choices that undercut wages and job security of non-college educated workers; gender and race/ethnic discrimination; shifts in corporate structures such as fissuring (or domestic outsourcing), industry deregulation, privatization, dominant buyers affecting entire supply chains, and increases in concentration of employers.
We estimate that three factors—the impacts that are largest and best measured, i.e., excessive unemployment, eroded collective bargaining, and corporate-driven globalization—explain 55% of the divergence between growth in productivity and median hourly compensation, and specific other factors included above—a diminished overtime salary threshold, employee misclassification, employer-imposed noncompete agreements, and corporate fissuring-subcontracting and major-buyer dominance—explain another 20%. Together, the factors for which we have been able to assess their impact on the median wage can account for three-fourths of the divergence between productivity and median hourly compensation growth from 1979 to 2017. Our analysis also seeks to account for the falling wages at the 10th percentile and the growth of the wage gap between the 10th percentile and the 50th. We find that these are readily explained by excessive unemployment and the failure to maintain the real value of the minimum wage, factors that have lowered the earnings of the bottom third.
Peter Dorman, Evergreen State College, and Les Boden, Boston University
A small but dedicated group of economists, legal theorists, and political thinkers has promoted the argument that little if any labor market regulation is required to ensure the proper level of protection for occupational safety and health (OSH), because workers are fully compensated by higher wages for the risks they face on the job and that markets alone are sufficient to ensure this outcome.
Nancy Folbre, University of Massachusetts-Amherst
Empirical research on the causes of the surprisingly persistent earnings gap between women and men often takes the form of statistical models that control for as many variables as possible—race, ethnicity, education, labor force experience, job tenure, hours of work, occupation, industry—but ignore any measures of bargaining power other than unionization.
This paper challenges this neoclassical approach, focusing instead on how the institutional landscape of unequal bargaining power of employers and workers and men and women has created costly trade-offs that perpetuate gender inequality. Attention to the history of patriarchal and capitalist institutions—as well as efforts to mitigate or modify them—is crucial to an understanding of a persistent gender pay gap. From this perspective, outright discrimination represents only the tip of a larger iceberg that has frozen women into economic disadvantage, assigning them responsibility for tasks whose value is indispensable yet difficult to measure or monetize.
Because social institutions solidify differences in collective bargaining power, institutional change is difficult to achieve. Yet the choice to collaborate with others to challenge unfair social institutions is among the most important choices people make. Such commitments can be risky, but they also yield rich rewards for everyone. Like other disempowered groups, women are often able to overcome their differences, find allies, and bargain for change, and their history of hard-won but cumulative successes challenges mainstream economic thinking and validates the rallying power of appeals to social well-being rather than private profit.
Julia Tomassetti, City University of Hong Kong
Many rules and statutory interpretations in U.S. work law that entrench employers’ power over workers rely on unproven economic assumptions. This article explores three. First, courts assume that the individual employee and employer have relatively equal bargaining power, an assumption often framed and defended within the circular logic of “freedom of contract.” Second, courts assume that the employer’s authority over the enterprise—its managerial prerogative—must be near absolute to promote efficiency in the enterprise and economy. Third, courts assume that the costs of maintaining the status quo of managerial prerogative and an employer’s at-will authority are less than the costs of altering it. Courts use these assumptions to give employers broad rights to terminate employees, to impose arbitration agreements, and to limit worker collective rights.
Charlotte Garden, Seattle University School of Law
“At-will” employment is sometimes shorthanded as employers’ rights to fire employees (and employees’ right to quit) for a bad or arbitrary reason, or for no reason at all.
Among the bad or arbitrary reasons that employers sometimes fire workers: something the worker said, or something they didn’t say. Employees have been fired, often without legal recourse, for criticizing their companies on social media, for running for office, or even for having a bumper sticker supporting a political candidate whose election the boss opposes. The freedom of speech that so many Americans valorize is in practical effect illusory for many American workers.
This report traces the legal rules governing freedom of speech at work. Following a summary that emphasizes the scope of the problem and gives examples, it begins by discussing the background rules of at-will employment, which establish that employers may generally terminate workers for what they say. This rule has its limits—for example, employers may not fire workers in contravention of a state’s explicit public policy—but judges tend to apply these exceptions in a patchy and inconsistent fashion. Further, because the First Amendment does not constrain private actors, private-sector workers cannot fall back on the constitution at all; even public-sector employers are often free to fire or discipline workers for their speech.
Beyond common law rules, the report also discusses federal, state, and local statutes that protect certain types of employee speech. These laws tend to apply only to specific subjects and manners of expression. For example, the National Labor Relations Act protects employees’ conversations about their working conditions—but only as long as those conversations occur at the right time, in the right place, and in the right manner. For example, among other limits, the NLRA protects only those conversations or meetings that occur during “nonwork time,” and the Trump NLRB has recently held that the NLRA does not protect employees’ use of their work-issued email addresses. Likewise, some states and localities forbid employers from retaliating against employees for their political views. But each of those laws has serious limitations in coverage, enforcement, or both. Worse, employers sometimes challenge even limited protections for workers’ expression on the grounds that those protections violate the employer’s own rights under the First Amendment.
Finally, some workers have meaningful contractual protections that curb the effects of the at-will doctrine, including as it applies to their speech and expression. But workers cannot achieve these protections without either individual or collective power, both of which have eroded for many workers over the last 80 years. The result is that one real source of protection for workers who speak out—collective bargaining agreements in which employers agree to discipline or fire workers only for good cause—are increasingly out of reach, especially for private-sector workers.
This report aims to help readers understand the legal landscape that effectuates the “freedom of speech” at work. It shows how employers have come to monopolize that freedom for themselves, and why workers experience speech control instead of speech freedom.
Ann Rosenthal, former Associate Solicitor for Occupational Safety and Health at the Department of Labor
This paper focuses on the legal constraints on employers created by the Occupational Safety and Health Act of 1970 (OSH Act) and use some common examples to explore how, despite these constraints, employers retain considerable powers over their workers’ abilities to protect themselves from injury, illness, death, and loss of human dignity.
From being able to decide when—or whether—to use the bathroom to protecting themselves from toxic substances, refusing to perform particularly hazardous tasks, learning about the hazards at their workplaces, or obtaining appropriate medical care for occupational injuries, workers are at the mercy of potentially dictatorial employers.
The consequences to employers for harming their employees may be much less severe than the consequences would be for harm occurring outside of the employment relationship. The costs to workers for standing up for themselves are likely to be far greater than the pain their actions would cause their employers.
Workers who opt to quit as a way to protect themselves lose not only their paychecks but also their eligibility for unemployment insurance, frequently at a time or place in which there are few other employment opportunities. These structural imbalances are amplified by the fact that many of the most dangerous jobs in this economy are disproportionately held by some of the most vulnerable and lowest-paid workers.
Though there have been some notable successes under the OSH Act, the lack of adequate resources and political support, combined with structural weaknesses in the statute and the changing nature of work in the 21st century, have resulted in dashed hopes and a continuing stream of powerless, injured, and ill workers.
Jenny R. Yang and Jane Liu
The promise of our nation’s anti-discrimination laws has not been fully realized because our current enforcement and legal system has failed to confront the fundamental power imbalance underpinning the employment relationship. At the root of the problem is a system that places the primary responsibility for enforcing anti-discrimination laws on individual workers, who must file complaints with their employer or a government agency.
Julia Tomassetti, City University of Hong Kong
This paper examines the consequences of designating at-will employment a “contractual” relationship. When employment is “at will,” both the employer and employee have a right to quit the relationship for any or no reason, at any time.
This paper shows that at-will employment is not a contractual relationship and argues that courts must stop trying to construe it as such. Affixing the contractual label tends to deter needed regulation by signaling that at-will employment reflects the parties’ “freedom of contract.” Further, trying to impose a contractual framework on at-will employment does little to benefit employees. It does not really limit the employer’s at-will power or otherwise disturb the imbalance of power between employers and employees. Treating at-will employment as a contractual relationship does not even afford employees the most basic benefit that a contract has to offer: enforceable expectations about the future conduct of another. Instead, the formal governance of at-will employment by contract law tends to legitimize as legal authority the employer’s largely unchecked, arbitrary rule over the employee. Because of the incompatibility between contract law and at-will employment, courts are unable to both preserve the main features of at-will employment and apply contract law coherently. This creates a paradox: In trying to construe at-will employment as a contractual relationship, the law rationalizes the employer’s anti-contractual power—its power to terminate employees at will and to invent the terms and conditions of employment as it pleases, without having to act honestly or rationally toward employees.
Samuel Bagenstos, University of Michigan
In the early 20th century (the “Lochner era”), courts invalidated numerous labor and employment laws for violating a supposed constitutional “freedom of contract.”
The Lochner-era decisions rested on a key premise—that workers and employers were equally free to enter into bargains, or not enter into bargains, with each other. Most lawyers think that the courts killed off Lochner during the New Deal. But Lochner’s principles have persisted—not in constitutional law, but in the law of labor and employment. Key foundational doctrines of labor and employment law continue to rest on the premise of equal bargaining power. And the Roberts Court has increasingly relied on the same premise in a series of anti-worker opinions. That premise has significant, concrete, and insidious consequences. Like the old Lochner, it operates to deprive workers of the rights they won in political battles. This paper demonstrates that Lochner never truly died. It just shape-shifted.
Chetan Cetty, University of Pennsylvania • Preface by Elizabeth Anderson, University of Michigan
Elizabeth Anderson’s book, Private Government, and associated preceding publications, has generated an important debate about the lack of freedoms in and out of the workplace due to the severe imbalance of power between workers and employers. This paper identifies the economic claims made in philosophy debates on private government to justify the presumption of equal power between employers and employees.
There have been numerous written and in-person forums where these issues have been debated. This paper reviews and catalogs the economic claims made by intellectual opponents of Anderson about the working of the labor market and the extent to which market forces liberate workers from individual employers’ authoritarian control.
Janice Fine and Hana Shepherd, Rutgers University
As the strength of laws governing labor relations has diminished across the private sector, a wave of labor policy change has swept over states and cities, with the result that employment ordinances and public enforcement have become the predominant labor market institutions protecting workers. But how are these ordinances successfully crafted, implemented, administered, and enforced, and what role does business, with its outsized economic power and political influence, play in shaping, amending, or blocking these efforts? This paper uses comparative case studies of three major Democrat-controlled U.S. cities—Seattle, Los Angeles, and New York—that not only expanded their employment protections but also established a local agency and directed substantial resources toward enforcement. The findings from these successful efforts reveal how pro-business (particularly pro-small-business) narratives are deeply woven into perceptions, even among progressives, of what public policy can and should accomplish, and they offer specific lessons for worker advocates undertaking new campaigns.
Daniel J. Galvin, Northwestern University
Rampant exploitation and discrimination across many industries belies the conventional assumption of equal bargaining power in the workplace.
Instead they evidence a vastly unequal employment relationship in which employers are seldom held to account for labor standards violations, and most workers lack adequate mechanisms for exercising voice and redressing grievances. This power asymmetry is especially problematic for low-wage workers, who are often doubly vulnerable to workplace exploitation on account of their race, ethnicity, gender, or citizenship status. Should they complain, there is little to protect them from further abuse, discrimination, harassment, retaliation, termination, or threats of deportation. Many have therefore concluded that the only way to redress their weak bargaining position is to move the conflict out of the shadows of employers’ “private government” (as described by political philosopher Elizabeth Anderson) and into the open, public, political arena, where they stand a fighting chance of influencing outcomes. If the conflict remains private, small in scale, and quiet, workers know they will always lose.
Over the last two decades, nonprofit “alt-labor” groups have emerged as central players in this effort. These groups—which include community-based worker centers and other social and economic justice groups whose primary missions include fighting for workers’ rights—support and organize low-wage workers who have found it exceedingly difficult to unionize under current labor law. Organizing and advocating for some of the most vulnerable low-wage workers, the groups have increasingly turned to politics and public policy—rather than collective bargaining or direct economic interventions—as an alternate route to combating workplace exploitation. In a relatively short amount of time, they have met with an impressive number of policy victories that have created new rights and protections for workers where none previously existed.
Alt-labor groups have laid the groundwork for these policy victories by making subtle but important changes to the political environment in which policy decisions are made. They have worked assiduously (and carefully, given legal restrictions on political activities by tax-exempt organizations) to build new electorates; broaden the issue agenda; and alter electoral dynamics. Across a wide range of political contexts, their political work has paved the way for policy victories that have created new rights and protections for vulnerable workers where none previously existed.
By conventional metrics, the organizations are remarkably weak. How, then, are they managing to make headway? This study reports on findings from in-depth, semi-structured interviews with leaders and members of 28 alt-labor groups. It uses a “diverse case” selection strategy to maximize variance along multiple dimensions of group characteristics and political contexts to highlight patterns common to all.
It finds that alt-labor groups of all types are working to build three types of power: power within their membership bases, power with allies in pursuit of expansive issue agendas, and power to undertake a wider range of activities through organizational innovation. Well aware of their many weaknesses and constraints, alt-labor groups are working to leverage and augment their distinctive strengths, building sources of power that they can draw upon in their efforts to alter their political environments and advance their policy goals.
To be sure, alt-labor’s political and policy work faces many limitations and constraints. Not every group has pivoted toward politics and policy; most groups are geographically constrained; the effects of the policies they have won have been modest; and their victories have been interspersed with setbacks. Their successes thus far should not be exaggerated. But workers’ rights are never “won”—they are always contested, and making them real is always a work in progress. Organizers see their power-building, political, and policy work as a never-ending fight: Their purpose is not to win every battle—it is to persevere, grow, remain nimble, continually build power, and make incremental gains whenever possible.
Kathleen Thelen, Massachusetts Institute of Technology
This paper traces the role of employer organization in shaping economic equality and shared prosperity.
This paper brings a comparative-historical perspective to bear to illuminate the distinctive features of American employers and to explore their implications for contemporary labor politics in the United States. A large literature on the rich democracies demonstrates that the structure and organizational capacities of employers are critical to the operation of the political economy. While it might seem intuitive to suggest that unions are strongest where employers are least well organized, the comparative literature makes clear that the strength of labor and employer associations are not zero sum; instead they rise and fall together. A high level of employer organization is important for labor both because strong employer associations support encompassing (typically industrywide) bargaining and because it allows firms to cooperate on other issues such as training that support the kind of high-wage, high-quality, high-value-added production strategies that are more characteristic of Europe’s “socially embedded” variety of capitalism.
U.S. employers have developed powerful lobbying organizations (e.g., the Business Roundtable and the Chamber of Commerce), but they lack the kind of strong, centralized trade and employer associations that are crucial to the operation of Europe’s more egalitarian (“coordinated”) variety of capitalism. The purpose of this article is to elucidate the role of the law in shaping these outcomes. Specifically, I zero in on legislative and legal developments in the late 19th century, to document the impact they had on the organization, goals, and strategies of American employers and, with that, on the political-economic architecture of contemporary American capitalism as a whole. Based on a comparison with Germany, the paper shows that one of the most consequential legacies of judicial politics in the U.S. in the late 19th and early 20th centuries was to actively disarticulate emerging efforts at coordination among small- and medium-sized firms, and to confound efforts to develop the kinds of coordinating capacities that were emerging at this time in Europe. The prevailing legal framework in Germany allowed the strongest and most competitive such firms to spearhead the construction of strong coordinating capacities not so much to confront unions but to discipline marginal producers engaged in ruinous, cutthroat competition. In the United States, by contrast, the very different rules governing competition allowed marginal firms to shape the terms of the emerging labor regime, as low-cost producers were able to turn to the courts to assist them in dismantling nascent forms of coordination that posed a threat to their survival. Where employers could defeat unions in court, they had little need to coordinate among themselves in the market, since the efforts of even small numbers of players—winning key judicial decisions—resonated widely and affected all actors subject to the prevailing regulatory regime. The kinds of low-road firms that prevailed in these contests could then rely on the discipline of the market to bring other firms in line.
Larry Mishel, Economic Policy Institute, Lynn Rhinehart, Economic Policy Institute, and Lane Windham, Georgetown University
A full appreciation of the need for comprehensive labor law reform requires an understanding of the serious shortcomings in current law and how they have been exploited over the years by employers resisting efforts by their workers to form unions.
The go-to argument among the punditry and economists is that the decline is a simple manifestation of globalization and automation, essentially using the decline of manufacturing employment as the primary narrative for union decline.
In fact, automation and globalization affecting manufacturing can only explain a small share of the decline in union density. It is simple to note that union decline occurred in every sector within the private sector. The demand by workers for collective bargaining has mostly gone unmet, meaning the decline was not due to an erosion of interest by workers. The demand for collective bargaining is now at its highest level in many decades. Nor was union discrimination against women or minorities a factor, though such discrimination certainly existed in certain sectors. Nevertheless, there was an upsurge in interest in collective bargaining by black workers following the civil rights struggles and progress of the 1960s. By 1979, 34% of black workers benefited from collective bargaining, substantially greater than the 25% of white workers. Women were underrepresented in unions in 1979, but there were substantial efforts by women in retail and other services to organize in the 1970s that failed primarily because of employer opposition.
The narrative that needs to be told is the emergence of intense employer opposition and the development of new employer tactics abetted by changes in legal interpretations. The paper reviews the shifting landscape that led to the substantial decline in successful union organizing, which included: widespread use of anti-union consultants; threats of facility closings; the rise of illegal firings of union activists; the increasing inability to obtain a first contract even after a successful organizing campaign; the use of captive-audience meetings and screening of new hires to avoid union sympathizers; the empowering of “employer free speech”; and other developments. Other developments weakened union leverage in collective bargaining, such as: increased use of striker replacements; shutting down of union secondary boycott activity; increased use of offensive lockouts by employers; and artificial constraints on bargaining topics.
Alexander Hertel-Fernandez, Columbia University
Scholars have long recognized that the workplace is not just where workers carry out their jobs. It is also a place where individuals can learn and exercise civic skills and move to political action.
While the political potential of the workplace is well understood, we know much less about how the shifting terrain of power between workers and employers has changed civic opportunities for workers. This paper examines the contemporary landscape of civic engagement in the workplace, focusing on two changes to worker economic power—declining unionization and changing employer and worker labor market power—to investigate whether greater employer clout has affected civic opportunities for U.S. workers in the workplace.
The paper examines an original, nationally representative survey of over 1,200 employed U.S. workers from the pre-Covid period. The findings in this paper thus suggest that changes in workplace power over the past several decades have not just reshaped economic conditions, like pay, working conditions, and inequality. These changes may have also seeped into the political system, corroding opportunities for political skill building and civic participation for millions of American workers—and disproportionately those with less formal education and lower incomes who have fewer chances to engage in politics outside of the workplace. Without other places to build civic skills, engage in political discussions, or learn about opportunities to participate in politics, many American workers may have less political voice—and representation in government—as a result of declining workplace power. Weaker workplace voice has left us with a weaker democracy.