As the strength of laws governing labor relations and collective bargaining has diminished across most of 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 labor standards 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 paper1 uses comparative case studies of three major Democrat-controlled U.S. cities—Seattle, Los Angeles, and New York—in Democrat-controlled states between about 2010 and 2020 that not only expanded their employment protections but also established a local agency and directed substantial resources toward the enforcement of local employment laws. Drawing on public comments in city council hearings, mayoral statements, media coverage, city government documents, campaign donations from employers and employer organizations, and interviews with enforcement office leaders and staff, other city government officials, labor standards advocates, and employer advocates outside of government, we examine (1) the strategies used by employers and employer organizations to attempt to shape all parts of the process of enacting, implementing, and enforcing local employment standards, and (2) the ways city government officials construed business interests and the role of government accommodation of business concerns.

We pay special attention to forms of employer influence that appear related to the employers’ instrumental power—derived from direct influence through deploying resources in order to secure favorable decisions from politicians—and to their structural power—derived from the ability to withdraw capital and jobs and thereby affect the economy. The concept of structural power includes both the ability of business to affect the economy directly and an ideational component: how policymakers and bureaucrats think about the structural power of business. This ideational component involves beliefs among elected officials that if businesses disagree with political decisions, the businesses will act in a way that significantly harms the state of the economy.

In the three cities, we observed four common mechanisms by which employer influence functions:

• Employers win legislative concessions not due to greater resources but through being repeat players in the policymaking process, either by representing (in Seattle and Los Angeles) an enduring interest group that legislators feel they must be responsive to as part of the everyday functioning of local government, or by representing (in New York) a powerful constituency (large businesses) or a constituency in need of protection (small businesses).
• Even when minimum wage and paid sick laws passed with lopsided majorities, mayors, city councilors, and sometimes agency leaders were nevertheless strongly attuned and responsive to the ideational structural power of business. The form of structural power that most worries politicians is not fear of divestment and capital moving to other jurisdictions, but rather a fear that businesses know what they’re talking about when they claim they will be bankrupted and have to close in response to employment standards reforms. As mayoral and city council staff as well as labor advocates repeatedly pointed out, this has become the automatic response by business to any proposed employment policy improvement, and it is automatically taken seriously as a legitimate threat without employers even having to provide much evidence in support of their claims.
• Politicians have a sincere concern for small businesses that is reflected in widely circulating narratives. But while these narratives are certainly deployed strategically, they also speak to deeply held beliefs on the part of politicians in each of the cities.
• In addition to sincere concern for the fates of small businesses, mayors were also concerned with how robust enforcement of employment standards might impact their future political careers.

Thus, while we see some evidence of instrumental power in the process of enforcement, the invocation of structural power—especially the dimensions of ideational influence—is an important barrier to robust implementation. To counter this endemic advantage that business enjoys, we suggest four key areas for worker advocates to attend to:

• Attention to cleavage within the business community. In each city, business was not a monolith. For worker and community advocates, before beginning a campaign, it is important to disaggregate the business community and do a thorough power analysis of each of the players. But power is often hard to see: Business influence is not always easy to track because sometimes businesses are intentionally trying to stay off the record, not testifying at hearings but instead communicating directly to mayors or their political consultants. In all three cities, we heard accounts of specific carve-outs that were accomplished this way.
• Attention to ideational power using narratives and frames. The ideational aspects of structural power are extremely powerful in shaping the enforcement of employment standards. Narrative and cultural strategies are essential to challenging the hegemonic power of business and the laissez faire narrative. Liberal and progressive elected officials in deep blue cities favor employment reforms but still worry about policy impacts on business and feel a need to be open to concessions.
• Attention to the fundamentally conflicted role of small businesses. In each of these cities, small businesses play a fundamentally contradictory role. Many of the elected officials involved in passing these policies and establishing these offices and the agency leaders who staff them feel badly that the majority of violations coming in are against small business, many of which are in immigrant ethnic enclaves and are often owned by immigrants and people of color. The organizations that mobilized to pass these policies do not believe that they are going to drive structural change by going after small businesses, but they also know that small businesses are frequent sources of violations for their constituents. There is room for progressive organizations to enter the policy arena in support of high-road small businesses.
• Pressuring of elected officials specifically on enforcement. There is a tendency on the part of worker advocacy organizations to trade off enforcement and funding in order to get a policy on the books. But worker advocates should budget and design campaigns around enforcement rules, practices, and budgets, in addition to waging the legislative battles over policy.

Introduction

Asymmetric power relations between business and labor have led to a radical decline in employer accountability over the past several decades, leading in turn to lower rates of private-sector unionization; the erosion of wages, benefits, and employment standards; and a fractured, fragmented, and precarious labor market for many workers (Appelbaum and Schmitt 2009; Bernhardt et al. 2013; Doussard 2013; Gautié and Schmitt 2010; Kalleberg 2009; Weil 2012, 2014; Weil and Pyles 2005). At the same time, the ability of federal labor law to evolve and address these conditions has been stifled by gridlock and polarization, thus locking large swaths of the U.S. workforce into jobs with stagnant wages, inadequate and costly benefits, increasingly erratic schedules, and poor working conditions.

Yet as the strength of laws governing labor relations and collective bargaining has diminished across most of 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, including low-wage workers (Galvin 2019).

While federalism is generally understood as being better for business’s structural power (e.g., Hacker and Pierson 2002; Peterson 2012) than for labor’s, in the past few decades it has also provided a significant opportunity for labor and its allies to improve employment standards. During the last decade, state and local policy entrepreneurs have succeeded in passing laws establishing minimum wages higher than the federal level in over 29 states and 44 localities2; enacting paid sick leave in 13 states, 19 cities, and three counties3; passing domestic workers’ bill-of-rights legislation in nine states and one city (Fernández Campbell 2019); winning “ban the box” laws removing conviction history questions on job applications across 35 states and more than 150 cities and counties (Avery & Lu 2020); passing predictive scheduling laws in six cities; and passing “just cause” employment protections for parking employees in Philadelphia and for fast-food workers in New York City. It is also of great significance that several cities have established new labor standards agencies to carry out enforcement of these laws.

In this paper, we examine the observable role of employer power and strategies in the creation of specific labor standards ordinances and in the implementation of those ordinances through administration and enforcement. By examining forms of business power and influence in the process of establishing employment standards and their implementation, we explicitly link forms of business power in the policy and administrative arena to the nature and extent of business power in workplaces.

As significant as the shift in employment policy to the local level is—as with any kind of policy change—the potential for these changes to fulfill their purpose to improve conditions and bolster workers’ rights is contingent on two crucial but often overlooked factors: implementation and enforcement (see Luce 2004). Higher minimum wages and paid sick and safe time ordinances that are unique to a municipality necessitate regulations and a city-level administrative apparatus to administer and enforce them. Political players can reshape a policy by blunting or expanding its reach (who is covered), affecting implementation (how long it will take for the policy to be phased in), and shaping the monitoring of compliance (e.g., practices regarding citations, investigations, fines, and penalties). The predominant model of enforcement of employment rights is complaint-based, and complaint-based enforcement assumes that workers have full information about their rights, that they feel equipped and empowered to report violations, and that they are not deterred by employer reactions to their reports of violations. Given the imbalance of power between employers and employees within workplaces, none of these assumptions hold true in practice (Weil and Pyles 2005). In a 2009 national survey (Bernhardt et al. 2009), 43% of workers who complained to their employers about pay and working conditions were victims of illegal retaliation. When employers have more power in workplaces, such as during recessions, we find that violations increase and that complaint-based enforcement becomes even less effective (see Fine, Galvin, Round, and Shepherd 2020). Effective enforcement practices therefore depend on expanding beyond the narrow limits of complaint-based enforcement to practices that promote compliance independent of specific complaints.

The city of San Francisco in 2001 was the first in the country to establish a full-time agency for enforcing employment standards. After enactment of $15/hour minimum wage and paid sick time ordinances over a decade later, Seattle, New York, and Los Angeles followed suit, establishing offices that now also boast significant staff and resources. Setting up and running each office required decisions such as which agency to house it within or whether it should be independent, how much money the office should receive, who should lead the office, what the other positions should be, and how staff should be recruited. Through the drafting and passage of minimum wage and paid sick and safe time ordinances as well as ordinances setting up the new offices, city councils can play a major role in determining the legal authority of the offices with regard to intake, investigation, remedies, subpoena power, collections, and appeals and settlements. Mayors appoint agency leaders and oversee their decisions. Mayoral staff and agency leaders have a say in the legal powers of the agencies through administrative rulemaking and in establishing agency practices, including investigation protocols, application of fines and penalties, partnerships with community organizations, and use of “name and shame” practices in publicly identifying violators and their activities. City attorneys also play a role through their interpretations of the laws and the decisions they make about which cases to take to court and which decisions to appeal.

In this paper, we use comparative case studies of three major Democrat-controlled U.S. cities (Seattle, Los Angeles, and New York) in Democrat-controlled states between about 2010 and 2020 that not only expanded their employment protections but also established a local agency and directed substantial resources toward the enforcement of local employment laws. Drawing on public comments in city council hearings, mayoral statements, media coverage, city government documents, campaign donations from employers and employer organizations, and interviews with enforcement office leaders and staff, other city government officials, labor standards advocates, and employer advocates outside of government, we examine (1) the strategies used by employers and employer organizations to attempt to shape all parts of the process of enacting, implementing, and enforcing local employment standards, and (2) the ways city government officials construed business interests and the role of government accommodation of business concerns. We do not assume, as Hacker and Pierson (2002) caution against, that we can infer employer power necessarily from the alignment of employer positions and outcomes. Instead, for each city, after charting changes in the policy and implementation proposals and practices over time, we spoke with the key political actors involved in the process to understand their accounts of what produced those changes, and then we compared these accounts. This approach provided evidence beyond what types of employer actions could be observed in public forums and available records. We also attend to points where there is open conflict over employment standards and points at which there is little open contestation. As Pierson (2015) argues, the lack of contestation can reflect unequal power between parties and the operation of other forms of influence such as agenda control, non-decisions in response to anticipated reactions, and cultural manipulation. Consequently, instances when policymakers changed policy proposals to align with employer interests, in the absence of specific employer actions or advocacy, are informative. These types of changes illustrate the manner in which employers—and ideas about employers and business among elected officials and city bureaucrats—impact the outcomes of these employment protection efforts.

We pay special attention to forms of employer influence that appear related to the employers’ instrumental power—derived from direct influence through deploying resources in order to secure favorable decisions from politicians—and to their structural power—derived from the ability to withdraw capital and jobs and thereby affect the economy, a power that exerts pressure on government officials (see Block 1987). Hacker and Pierson (2002) posit that structural power is most important in setting the public agenda and ruling out policy options that are unpalatable to business, while instrumental power determines the design of specific legislative proposals. Here, we first examine how these types of employer power in politics are manifest at the local level in cities with very particular economic profiles, and second, we extend the analysis of employer power beyond the legislative process to the process of implementation and enforcement. We attend to when these forms of employer influence appear in the process.

The concept of structural power includes both the ability of business to affect the economy directly and an ideational component: how policymakers and bureaucrats think about the structural power of business. This ideational component involves beliefs among elected officials that if businesses disagree with political decisions, the businesses will act in a way that significantly harms the state of the economy. Decision-makers actively construct an interpretation of the structural power of business (Bell 2012). This ideational component includes what Hacker and Pierson (2002) refer to as structural power as a signaling device: Threatened capital withdrawal is a signal that policymakers weigh relative to other concerns in pursuing a policy agenda.

In addition to these ways of thinking about the structural power of business already represented in the literature, the ideational aspect of structural power might be refined to include three other considerations:

• The ideational aspect of structural power can operate through hegemonic beliefs—widely circulating and shared beliefs— about the value of employer interests that policymakers and bureaucrats hold, along the lines of what is often referred to as the third face of power (Lukes 2004; Gaventa 1982).
• Policymakers can develop anticipated reactions—beliefs about what business might do in response to particular employment policies—that shape their actions. Policymakers might expect that employers and their advocates will be critical of their policy choices and speak out publicly against them.
• Political leaders may believe that the reactions of business to policy and implementation choices can impact the politicians’ political fortunes.

These beliefs about the structural power of employers may come from employers explicitly raising the specter of capital withdrawal or from other sources that reinforce the hegemonic power of business in political decision-making.

Based on extensive evidence from these three cases, we make two points relevant to the literature on employer power in the political process.

1. The value of being repeat players: Concessions to employers through the policy and implementation process are largely not the product of campaign donations and the deployment of resources as typically described in accounts of the instrumental power of business. Instead, employers secure concessions through being repeat players in the policymaking and governance processes. Employers represent an enduring interest group to which mayors, city councilors, and agency officials feel they must be responsive (e.g., Hansen 1991), largely, in Seattle and Los Angeles, as part of upholding a deliberative political process and, in New York City, as paying heed to a powerful constituency (large businesses) or a constituency in need of protection (small businesses).

2. The manifestation of structural power: Three themes emerge about the nature of structural power in these cities during these periods:

• First, instead of being worried about capital flight, as described in previous literature on the structural power of business, the mayors and city councilors in these three cities were particularly susceptible to claims about businesses having to close in response to regulations. Employers and their advocates explicitly raised the specter of bankruptcy, but they were also aided by widespread hegemonic beliefs about employment policies like minimum wage increases and paid sick leave protections hurting businesses; for this reason, these arguments did not need to be made explicitly for policymakers and bureaucrats to be vigilant about the possible impact on business. 
• Second, the structural power of and attention to small business concerns is particularly evident through the process of implementing local employment standards protections. In each of these cities, narratives about the value and valor of small businesses were widespread. The political invocation of small business can be thought of as a “spanning concept” (Hackworth 2007)—a concept with multiple meanings that are politically useful because different constituencies hear what they want to in those narratives.
• Finally, in each of these cities, mayors saw their stance on implementation of minimum wage standards and/or paid sick leave as having significant implications for business support of their political careers. Consequently, they often made decisions in the implementation process that weakened coverage and administration.

We now turn to the three cases. In Appendix A, we provide an overview of the technical issues at stake regarding these employment laws and their implementation. A detailed account of the specific changes to the ordinances for each city is provided in Tables 1 and 3. Details about the final statutory enforcement authority of each office—one dimension of the outcomes we are interested in—can be found in Table 4. Information about the political and economic context of each city is provided in Table 5, and information about the organization of business interests in each city appears in Table 6. We elaborate on our claims after we review the evidence from each of the cities. Given space constraints, the evidence we present below focuses on employer involvement in the implementation of these laws, but our argument is based on our analysis of the evidence of employer involvement in the legislative process as well.

Seattle

Between 2011 and 2015, led by Service Employees International Union (SEIU) Local 775 and a coalition of union, worker center, immigrant rights, and community organizations, Seattle became one of the first cities in the nation to adopt a municipal paid sick and safe time policy (2011), the first city to legislate a $15 minimum wage (2014), and the second city to establish a powerful municipal employment standards enforcement agency (2015), which included significant funding to community organizations for outreach and education. Seattle’s successful campaigns demonstrated that labor could win, but that winning always required concessions to business not only on policy but also on the implementation of enforcement authority and its exercise. These local policies represented a new frontier: They were complex, and the city was figuring out how to administer and enforce them in real time.

Mayoral support was instrumental to these policies moving forward. In 2013, in order to win the mayor’s race against an incumbent who was considered to be considerably to his political left, Ed Murray needed to project himself as a progressive, even though his political profile during his many years in the Washington State Senate was as a moderate. When he ran for mayor, he allied with SEIU and campaigned hard for a $15 minimum wage and the creation of an Office of Labor Standards; he was also endorsed by the Seattle Chamber of Commerce. From his years in the Washington State Legislature (1996–2013), he had many preexisting relationships with business and labor. Once in office, he continued to support the $15 minimum wage while also stressing that he wanted to ensure that business would not suffer.

“The main thing I saw in how the business community operated from 2012 to 2015 was how disorganized it was,” said a director of a city-funded community outreach and legal support organization.4 In order to pursue a progressive local labor policy agenda and address business concerns, the mayor set up and supported deliberative stakeholder committees and privileged the concerns of employers who came to the table and remained throughout the process. Large employers such as Amazon and Microsoft were not part of this process, but the Seattle Chamber of Commerce, through which those companies sometimes pursued their agendas, was actively involved (see Table 6 for more information about the organization of business interests). Many restauranteurs who were active and engaged in civic life had relationships with elected officials, and these connections yielded particular attention to their needs in the policymaking process. One staffer speculated, “It is not because of donations that restauranteurs were influential, it is the interpersonal relationships that develop.”5

The depth of interest in employment standards legislation among sectors and businesses also varied based on the degree to which the business or sector was impacted by a particular policy, largely resulting from its size and predominant business and employment models. For example, while restaurants were most exercised about the minimum wage increases, the retail sector got up in arms about the city’s fair scheduling ordinance. Fair scheduling—which we do not examine here—brought big companies and others who had been somewhat indifferent to paid sick leave and the minimum wage ordinance into open warfare with the Office of Labor Standards.

Types of employer influence over employment standards legislation and implementation

Seattle during this period had a progressive mayor and an overwhelming progressive majority on the city council, and public opinion in favor of employment standards policies was sky high (Rolf 2016). Nevertheless, major concessions were made to business both during and after the legislative process. Some of those concessions occurred through the exercise of instrumental power on the part of business, particularly through behind-the-scenes lobbying. Most individual businesses, particularly the larger ones, consistently avoided the spotlight and did not want to go on the public record. In the words of one city government employee who was close to the process:

Businesses don’t like going in front of council to protest these employment standards—that is just not their style. They will go into council members [offices] and schedule meetings once a week and visit each one, and they do that and will press and press and press and press….They keep at it.

Another mayoral staffer said, “Sometimes business went out of their way not to be on the record. You can’t find any testimony because Starbucks never testified on anything. They would send letters directly to the mayor.”6 In contrast, labor, community organizations, and liberal allies actively lobbied the council and testified in public, in addition to engaging in behind-the-scenes politicking. Both sides felt they had direct personal access to the mayor. A mayoral staff member put it this way: “The mayor was seen as the moderating voice over the very progressive council, so we had more access to business. [Employers and employer advocates] would say, ‘Oh we can’t even talk to the council.…’”7 The mayor engaged in private deal-making behind the scenes with key individual companies, negotiating carve-outs and accommodations. Ironically, these carve-outs also made the laws far more complicated, which became a source of business complaints.8 Both sides were financially competitive in terms of contributions (total independent expenditures across Seattle elections exploded from $556,385 during the 2013 election cycle to over $4.4 million in 2019; labor had an edge in independent expenditures in 2013 but business had an edge in both 2017 and 20199), and labor provided endorsements and volunteer muscle during elections. The abundant use of advisory councils composed of employers and worker representatives was crucial both for paving the way for these employment regulations and for concessions to employers. It was through these advisory councils that employers had a much more visible role in the process, allowing for many legislative changes.

But instrumental power alone cannot account for the types of concessions to employers in legislation and enforcement. The structural power of business—in particular a deep-seated narrative about the potential impact of employment protections on business solvency—conditioned every policy and enforcement practice beyond what can be explained by campaign contributions or lobbying efforts. A senior mayoral aide who was closely involved in deliberations at the mayor’s office provides a sense of how these beliefs operated:

They [employers] wield a huge amount of power and don’t have to do much. The business perspective is kind of the default even in progressive elected officials. It is the starting point of concern….They say, ‘Yeah, I want to do the right thing, but how do we address business concerns?’ This is the first thing on the top of their minds that gives business a lot of power….I see them being harder on their allies than business in some ways. The expectation is that if progressives want the policy, you have to come with your studies and your numbers and your hard data about why it is not going to harm business, and business can just rail and say, ‘I am going to go bankrupt,’ and that is taken as just as valid.10

The quote above highlights how businesses’ claiming they would be forced to close, rather than threatening to move, was a key way that structural power operated—becoming the default in political decision-making. Although it did not prevent the bills from passing, it conditioned coverage and implementation of the ordinances in significant ways. Mayor Murray had built a reputation as a pro-business moderate in the legislature before he ran for mayor with strong labor support, and although he campaigned on the $15 minimum wage and delivered on that pledge, he worked to preserve his public profile as a moderate, governing through tripartite commissions with strong business participation and promoting complex carve-outs and phase-ins. Based on our evidence, we conclude that the mayor’s protection of especially small business interests was due both to personal conviction and to future electoral ambition. As discussed above, the mayor and city councilors’ personal relationships with particular well-known small business owners and their concern for immigrant- and minority-owned small businesses (illustrated below) also contributed to modulation of implementation of employment standards.

Paid sick and safe time, minimum wage, establishment of OLS, and ‘harmonization’

In September 2011, the Seattle City Council passed a paid sick and safe time ordinance (PSST), guaranteeing all employees, whether full time, part time, temporary, exempt, or nonexempt, access to paid time off to care for themselves or a family member as needed. Enforcement was assigned to the Seattle Office for Civil Rights (OCR), with the intention that basic procedures would be modeled on those of the existing Seattle anti-discrimination ordinance. This choice of basing sick leave on civil rights enforcement had important ramifications for how this law and the minimum wage law that came after it were enforced. The administration pledged to do a “soft launch” of the law that would be focused on education and outreach, and this process became the norm for the other laws as well. The leadership of OCR was unfamiliar with employment standards enforcement but wanted the assignment in order to remain the premier enforcement agency. At the same time, OCR decided not to put many resources into enforcement of PSST: Management assigned a single person who was working 32 hours per week to enforce it. Personnel within OCR decided that, due to limited capacity, they would take an “advisory letter” approach.11 Upon receipt of a complaint, a letter would be sent to the employer that reminded it of its obligations under the law and said that, if it were in violation, OCR would work with it to come into compliance. Despite being advised of the need to go further, the agency embraced the advisory letter approach and also rejected the suggestion that it engage in companywide investigations. If a complainant wanted to settle and also remedy violations affecting all aggrieved workers, then OCR could pursue a companywide remedy as a settlement term, but if the worker just wanted to get paid and move on, OCR would remedy the case only for that one person. As a consequence, OCR collected a very limited amount of back wages and penalties from violators. This process was in place until 2014.

After taking office in January 2013, Mayor Murray formed a tripartite committee, the Income Inequality Advisory Committee (IIAC), and charged it with coming up with an actionable set of recommendations for increasing the minimum wage by mid-April. The committee was co-chaired by the president of SEIU Local 775, which was leading the fast-food-worker strikes, and the founder and chief executive officer of the Seattle Hospitality Group, a major developer and hotelier that owned the Space Needle, Seattle’s most prominent landmark. While the IIAC was the public forum for deliberations between stakeholders, some of the most consequential work was really taking place behind the scenes (with, for example, Starbucks and restauranteurs) as the mayor worked to accommodate key businesses so they would support the $15 minimum wage. The accommodations included a health care carve-out that allowed businesses to count their spending on health care toward the minimum wage, a small business cutoff number set at 500 employees, and tip credits. On the other hand, over the objections of business representatives, labor and community advocates won joint employer liability, which enabled the city to hold multiple entities, including those that were not necessarily the employer of record, liable for violations. They also won the option of expanding from seeking redress for a single complainant to conducting a companywide investigation and providing remedies to all affected workers. One key city council staffer said, “I would say that the center of the business community felt pretty good. This process stuff works: Ed Murray was a good mayor who used this kind of consensus-based process and got some really big political wins.” Murray’s proposal was heard by the city council’s Select Committee on Minimum Wage & Income Inequality on May 19, where it passed unanimously and was then adopted by the full council in a 9–0 vote. Mayor Murray signed it into law on June 3, 2014.

Another tripartite body with a similar mix of labor, business, and community and public interest groups set up by the mayor early on was the Labor Standards Advisory Council (LSAC). Although the mayor did not invest as much authority in it as in the previous advisory body, members worked hard developing detailed recommendations on how the city would administer PSST and the $15 minimum wage. In the initial discussions, SEIU 775’s two primary demands were to create an office of employment standards and to fund worker outreach. The Seattle Restaurant Association responded that it needed time to get used to the law, that there should not be fines right away, and that it didn’t know whether it wanted an employment standards office. According to a former senior staff member at a union, “We got what we wanted with the office, but we had to scratch and claw for outreach [to employers and employees about the laws]. We had to frame it around education, not enforcement.” At the end of the day, the LSAC recommended the establishment of a single entity that would house, implement, and coordinate all compliance, education, outreach, and enforcement functions. It advocated for a strong focus on education and supported an extensive outreach program through partnerships with organizations that would tailor their work to specific audiences and demographic groups. It called for strong and effective enforcement powers and practices that would focus investigations and penalties on habitual or egregious violators and systemic violations.

Mayor Murray proposed the establishment of the Office of Labor Standards (OLS) within the Office of Civil Rights in mid-September 2014; it would be empowered to “investigate and pursue administrative enforcement actions when wage-theft complaints are made by workers, with the aim of restoring any back wages and benefits they earned but were unpaid” (Murray 2014). The mayor pledged to take an approach to employment standards that emphasized “outreach and education.” A few sentences from an internal mayoral staff memo give a good sense of the stance the mayor’s office was taking:

Emphasis this first year is about education and outreach. If employers make mistakes in these initial months, OLS’s mission is not to penalize employers for their misunderstanding of the law, but only to instruct them and to ensure workers are properly compensated. It is envisioned that only where it can be shown that employers continued with a bad practice after instruction from OLS or other egregious situations where an employer will be penalized. OLS should be looked at as a resource for employers, not an adversary.12

The mayor’s concern with the well-being of business during the enforcement process was evident, reflecting the ideational structural power of business either in terms of hegemonic beliefs, the power of small business narratives, or calculations about implications for his future political fortunes.

The Greater Seattle Business Association thanked the city for the opportunity to help shape how it would implement and enforce its employment standards ordinances and supported the mayor’s choice to establish the OLS within the Office of Civil Rights. The United Food and Commercial Workers (UFCW) Local 21 supported the proposal but urged stronger penalties to strengthen deterrence. The mayor’s early preference for education and outreach over enforcement was also manifest in the budget allocations13—OCR and then OLS would have more non-investigative positions on staff than investigators for 2014 and 2015, only tipping the balance in favor of investigators in 2016—and only by one.

On November 24, 2014 the council voted to create an OLS that would “provide a centralized focal point for the City’s efforts on labor standards” and that would have three main functions: the promotion of compliance with labor standards through outreach and education, collection and analysis of data on the city’s workforce and workplaces, and administration of the city’s labor standards ordinances.14 A month before the vote to establish OLS at OCR, the city auditor15 presented findings from an audit of OCR’s initial PSST enforcement, which as discussed above relied primarily on a non-adversarial advisory letter process rather than formal investigations and sanctions. The city auditor found that while some advisory letters resulted in business owners taking corrective actions such as agreeing to pay back wages owed to employees for sick and safe time leave, OCR did not routinely address individual employee or companywide remedies, such as back pay and penalties for workers for paid sick and safe time requests that were denied by employers. A more robust investigation capacity, the auditor advised, would require increased enforcement staff. In effect, the city auditor was putting pressure on OCR to increase the efficacy of its employment enforcement practices.

The auditor’s report had a significant impact on the council’s OLS proposal. The council advocated staffing up the enforcement side more quickly than the mayor’s office had been recommending, and asked the mayor’s office to prepare legislation that would increase penalties and remedies for violation of employment laws. In a major win for SEIU and the larger labor/community coalition, the council also supported significant funding for partnerships with community organizations to engage in outreach to workers, identify violations, and make referrals to OLS. While the mayor’s budget proposal provided modest funding for business outreach ($100,000 in 2015 and $50,000 in 2016), the council allotted a million dollars over two years ($300,000 in 2015 and $700,000 in 2016) to conduct outreach to workers through partnerships with community-based organizations, a proposal first put forward by labor and worker advocates.

In November 2015, the mayor’s office proposed an ordinance that would harmonize the city’s four existing employment laws being enforced through the OLS (paid sick and safe time, job assistance, minimum wage, and wage theft) in terms of penalties and enforcement procedures. The bill was initially undertaken to appease business concerns because, although the paid sick/safe time and job assistance ordinances had been originally modeled on the city’s anti-discrimination laws, the four policies had different enforcement powers and remedies. The mayor’s office, the city council, business, labor, and community groups all agreed that the legal practices and administrative procedures needed to be streamlined. The 175-page harmonization ordinance developed by Dylan Orr, the dynamic first director of OLS, and Karina Bull, OLS policy manager, who worked closely with the mayor and city council staff, did create a uniform set of enforcement procedures for all four policies, but it also significantly strengthened the agency’s legal powers. Over strong objections from the main business associations and repeated threats to blow up the entire ordinance, the harmonization bill granted workers a private right of action to sue their employers for violations. Early in the process the mayor’s office explored many strategies. “Business was against so much of it,” a policy advisor recalled, “but the [proposed bill] was so big, the policy was huge…five hundred pages, so they had to focus on the most important things to them.” When asked to elaborate, the advisor offered the example that business was able to get the office to drop a proposal for a “hot goods” provision, modeled on the Fair Labor Standards Act, that would have allowed the city to seize goods manufactured in violation of the minimum wage law. “They had a fit about [the hot goods provision], and we were like, in the grand scheme of things, this isn’t the sword to fall on.” The bill was passed unanimously by the city council just over a month later.

Employer influence in implementation

In Mayor Murray, we see a tension between strongly supporting employment standards and weighing the concerns of the business community; such continuous balancing reflects forms of the ideational structural power of business. Murray used the language of “soft launches” and “education and outreach” because he believed in the practices and because they were tactically effective. But he received strong pushback from the city council, which wanted to engage in more robust enforcement, and from the city auditor, whose studies provided evidence of the need for such enforcement. The mayor walked a fine line: proposing to establish OLS as its own standalone office in the executive department (passed by the city council in November 2016) and selling it as necessary to support business compliance. He put significant funding into the business education and outreach work, but his staff also developed and advocated for strong employment policies as well as enforcement. OLS had the support of the mayor, but his administration was also keenly sensitive to the concerns of business—especially small business.

We see both the influence of direct employer intervention in shaping enforcement and the influence of small business narratives. For example, in the early days of becoming an independent agency, OLS staff had to recreate the entire intake, complaint, and investigation protocols from scratch; they had been using the existing Office of Civil Rights’ enforcement tools. Based on the city auditor’s report and their own views, the city councilors most involved in implementation pushed for a much more robust enforcement approach, and this was reflected in the system established by OLS. For example, businesses named in complaints were mailed a charge letter that looked like a legal document or subpoena. Several business organizations complained to the mayor that the approach had the effect of presuming guilt, and the mayor’s office subsequently ordered the OLS director to undertake a thorough revision of the forms. In his tacking back and forth to accommodate business concerns, we see the ideational power of small business narratives both in terms of how they influenced the mayor’s personal views as well as his sense of what would be good politics for his career.

OLS enforcement managers were particularly concerned about the disproportionate numbers of cases they were opening against minority-owned small businesses: “The thing I struggle with most is the complaints that are coming to us from small minority-owned businesses,” an OLS enforcement staff member said. Another enforcement staff member worried about this as well: “One of the things that makes me feel most guilty about the work done so far is that the vast majority of respondents are small businesses owned by people of color or immigrants. It feels like most of our cases are pointed at people who didn’t know about the ordinance, didn’t know how to implement it, or didn’t know how to run the business….” Both staff members pointed to the city’s Racial Equity Toolkit, which requires agencies to scrutinize their work from a racial equity lens.16 The agency staff empathized with small minority- and immigrant-owned businesses and were struggling to balance this concern with the need to ensure that the employees received the wages and benefits they were owed. In other words, narratives about the value of small businesses, especially minority- and immigrant-owned businesses, translated to worry about protecting employers even among agency staff committed to worker protections.

OLS has funded several of Seattle’s ethnic chambers of commerce to conduct education and outreach with their constituents, but the initiative has gotten a mixed reception. And staff members’ dual briefs as educators/outreach workers on the one hand and enforcers/punishers on the other often leave them often feeling stuck in the middle. A former OLS official pointed to the “schizophrenic mission” of the agency:

We are both the trusted teacher and the cop on the beat, and it is a huge challenge because of the obvious reason. Businesses don’t feel supported when they know you can lower the hammer on them. They want us to be, especially small and medium-size businesses…their HR department and employment lawyer.17

While working for the agency, this official had managed to persuade Mayor Jenny Durkan’s office of the importance of “naming and shaming” (publicizing employers who violated employment standards laws) as a deterrence strategy, and OLS often mentioned employers’ names in press releases about major settlements. But after the employee left the office the city discontinued this practice.

Summary

The debates over paid sick and safe time, minimum wage, harmonization, and Office of Labor Standards ordinances in Seattle highlight several important themes about business influence. Business won major concessions in the paid sick and minimum wage policy process but had to accede to the general policies. It won comparatively few concessions in the harmonization policy, although some of the employment standards rules were revised to give business more time to produce information. It exerted direct influence through the advisory councils as well as through off-the-record meetings with Mayor Murray. Elected officials’ concern for the interests of the business community—a reflection of the ideational structural power of business—was reflected in the approach to enforcement as one of education and outreach instead of punishment and deterrence. A concern among agency staff about the impact on small, minority-owned businesses also propelled an interest in directing resources to education and outreach in particular. At the same time, while there was a catechism of sorts around publicly and repeatedly acknowledging the importance of business to Seattle, it seems that paying heed to this dogma provided cover for elected officials and worker advocates to move their policy agenda.

Los Angeles

As Peter Dreier, John Mollenkopf, and Todd Swanstrom document in Place Matters (2014), a feature of deindustrialization across the country has been the erosion of the concentration of local, elite business power. In Los Angeles, local business power is no longer unified and coherent; for example, the organizing body responsible in the past for shaping so much of the city, the Committee of 25, is no longer an important political force, and attempts to reorganize the group have fallen short. Now, business elites in the city largely work for employers that are not headquartered in Los Angeles, and, since their time in the city is part of their journey up the corporate ladder, they have far less of a stake in what happens locally than did business elites of earlier generations. Business power in Los Angeles continues to be strong; for example, the Central City Association, which represents developers, has been very successful in stymying various housing and zoning-related reforms. However, these business interests are now fragmented and divided among various lobbying groups that often do not coordinate with one another. One lobbyist for an employer organization during the minimum wage and paid sick leave ordinance debates characterized the situation in L.A. as “organized labor and unorganized business.”18

Without a unified businesses community advancing a coherent set of priorities, new political space emerged in Los Angeles for progressive labor-related organizing (and for far-right political activity). While tenants’ rights reforms have fallen short due to the political strength of the real estate industry, Los Angeles has become an extremely favorable city for workers’ rights, as reflected in strong public support for labor protections from recent mayors and city council members.

One business sector that has remained influential in Los Angeles city politics is the restaurant industry. A labor advocate noted that the California Restaurant Association continues to be extremely well-organized and effective in shaping statewide legislation—often by claiming that it represents small businesses, particularly minority-owned small businesses.19 Another labor advocate maintained that restaurant industry representatives in L.A. were deeply involved in the minimum wage fight both in public testimony and behind closed doors,20 an assertion affirmed by a senior city council staffer.21 Restaurant associations consistently made the case that restaurants were largely small businesses that were just scraping by, an argument that garnered a lot of sympathy from elected officials. 

Types of employer influence over employment standards legislation and implementation

Despite relatively weak employer organization, employers and employer groups in L.A. were able to use the legislative process to win concessions on provisions of the minimum wage and paid sick leave ordinances, and they secured significantly delayed phase-in periods for employment standards and no exemption of collective bargaining agreements from the law. As one worker advocate put it, “they tried to slow it down—death by a thousand cuts—because they knew they didn’t have the [political] power to defeat it.”22 A former mayoral staff member observed that business lobbyists have enormous influence in city hall, with direct lines of communication to elected officials—lobbyists had the officials’ cell phone numbers and used them. Business advocates were successful when they were reasonable and asked for concrete changes, as opposed to a wholesale rejection of proposed legislation.23 For example, the restaurant industry, while it did not get all of what it wanted, was important to introducing a distinction between small and large businesses for the phase-in of minimum wage increases. As in Seattle, the use of narratives about protecting small businesses was a core strategy for shaping employment standards policy during the public hearings, and it made salient the structural power of business in a politically palatable way.

Implementation of the law in L.A. has been weak, due in part to bureaucratic idiosyncrasies and in part to a lack of political will for more aggressive enforcement. While Mayor Eric Garcetti proposed the minimum wage increases and supported the paid sick leave initiative, his support did not translate into political backing for enacting robust enforcement practices in the Office of Wage Standards (OWS) once it was established. A combination of forms of ideational structural power, including a general concern among both elected officials and agency leadership about ticking off business, affects the day-to-day enforcement practices within the office.

The following section describes the passage of the minimum wage and paid sick leave ordinances in Los Angeles, then turns to the story of how administration and enforcement proceeded.

Employer influence in implementation: Minimum wage and paid sick leave policy

In 2014, Mayor Garcetti proposed raising the minimum wage incrementally to $13.25 by 2017, after which it would be indexed to the regional consumer price index. By the time the minimum wage ordinance was passed in 2015, employers in Los Angeles had won two key provisions: separate minimum wage schedules for employers with 25 or fewer employees and those with 26 or more, and an extended phase-in period. According to one senior city council staff member closely involved in the negotiations, the small versus large business distinction, with different phase-in schedules, was the “restaurant accommodation.”24

When the Los Angeles City Council began considering paid sick leave legislation in the city, it was against the backdrop of a recent California state law requiring three days of paid sick leave a year to go into effect on July 1, 2015. Business associations used the existence of the state law to argue that there was no need for a city ordinance, particularly since employers would already be dealing with the new costs associated with the L.A. minimum wage and state paid sick laws. The council ultimately passed an ordinance, modeled closely after the state law, that entitled employees to 48 hours (i.e., six days) of leave per calendar year; this was a compromise from a proposed nine days supported by labor advocates. A separate motion to provide a slower phase-in for small businesses passed unanimously.

At the time of the hearings on increasing the minimum wage, in June 2014, Councilmembers Gil Cedillo and Paul Koretz submitted a motion to draft a wage theft prevention ordinance that would criminalize wage theft and provide for enforcement mechanisms. While representatives of worker centers and other community organizations defended the need for strong enforcement measures in public hearings about the minimum wage ordinance, business owners and associations were far less likely to bring up enforcement, and, when they did, it was briefly. Two business organizations—the Los Angeles Area Chamber of Commerce and the Central City Association—mobilized to shape enforcement using the legislative process, both before and after the passage of the enforcement ordinance. The Central City Association was the only business association to register lobbying activity specifically on enforcement issues, and it paid a consulting firm $13,000 to assist.25

Both of these organizations, while arguing that they supported enforcement, suggested that any enforcement division must be careful to punish only bad actors and not “well-meaning” businesses. Ruben Gonzalez of the L.A. Area Chamber of Commerce argued that the proposed enforcement ordinance laid out a system that was “rife for abuse” and argued that the appeals process was limited, that the amount of power given to hearing officers was too large, and that small business owners would be disadvantaged because they wouldn’t have the resources to pay attorneys to go to court for months to challenge findings. None of these points were reflected in the Economic Development Committee’s recommendations about the drafting of the ordinance. Also, though the L.A. Area Chamber of Commerce and the Central City Association called for a working group of advocates, including the business community, to figure out the best system for enforcement, the request was not formally realized.

After the passage of the minimum wage and enforcement ordinance in June 2015, the Bureau of Contract Administration (BCA), the executive agency responsible for contract compliance in the city and the one where the living wage enforcement mechanism had finally settled after moving among executive agencies, submitted an implementation plan for the new Wage Enforcement Division (later to be renamed the Office of Wage Standards). The BCA anchored its procedures and practices on precedent from agencies in San Francisco and Seattle, and it crafted its staffing and funding recommendations to focus on four key components: the informing of the community, intake concerns, investigation of complaints, and implementation of corrective actions. After submitting their first implementation report, leaders from the BCA met with the Los Angeles Coalition Against Wage Theft, the central organization established in 2009 advocating for wage theft enforcement in the city, and then with a number of employers and employer organizations: the Los Angeles County Business Federation; Mercury LLC (a firm representing the California Restaurant Association, which registered to lobby about the minimum wage ordinance); the Central City Association (which registered to lobby against the minimum wage ordinance and the enforcement ordinance); and Veronica Perez and Associates, a consulting firm representing McDonalds and the Central City Association (and which registered to lobby on wage and worker policies). After these meetings, the BCA submitted an updated implementation plan that shifted its recommendations for full staffing from four years to three. The updated plan also increased the number of staff, the administrative classifications of staff, and the budget for education and outreach (from $700,000 to $1 million annually, justified by “additional needs for services in the areas of translation services, labor law consulting services, and collections assistance when employers fail to make timely payments on wage and penalty assessments”).26

A lobbyist who worked at a key employer advocacy organization during this period said that business “got rolled” on the employment standards legislation but not on enforcement. The lobbyist described direct pathways of communication both to John Reamer at BCA and to the chief of staff of the mayor and the city attorney. In initial conversations with Reamer, the lobbyist had emphasized the need for outreach:

Our biggest concern was that the companies know about these laws and changes, understand ways to remedy mistakes….Labor…got their big trophy [legislation], so I don’t think they were quite as concerned about that [enforcement]. We were pushing for bringing people in to educate businesses on their rights and responsibilities.

The lobbyist was interested in a commitment from Reamer to answer businesses’ questions regarding implementation of the law: “Members are going to have a lot of questions—how are we going to get them answers in a timely way?” He characterized the communication and access to the BCA as good compared to other city agencies.27 In addition, an early legal interpretation by the city attorney’s office that an employer’s failure to pay overtime could not be enforced as a minimum wage violation was viewed as a significant victory for business.

The choice of specific enforcement practices in the OWS was shaped in part by political influence from the mayor’s office. The mayor, though occupying a structurally weak position in city government relative to the city council, is charged with enforcement oversight. According to a labor advocate, the mayor “runs the agency, but the city council still has its hooks in the agency.”28 When asked about the OWS implementing proactive investigations of target industries, one staff member stated that the office and BCA leader Reamer were “waiting for some direction from the city council and the mayor’s office.”29 Staff of the mayor’s office reported the office had been “very involved” in the outreach campaign of the OWS and reviewed the materials and general strategy. These staffers also said that the mayor, whose office was “big on data-driven management,” looked at quantitative reports from the OWS of the number of complaints, questions and inquiries received about the law, and the turnaround time on complaints on a weekly basis.30

Employers pushed back against the specific enforcement practices of OWS. For example, a BCA staff member reported that in meetings between OWS and BCA leaders and employer organizations, including the Valley Industry and Commerce Association, about the offices’ minimum wage enforcement practices, BCA leaders were “beat up” because the employers’ groups were “very upset with what we were doing.”31 The mayor’s office has been closely involved in the work of the OWS—for better or worse, according to advocates. For example, the mayor’s office conducted roundtables with restaurant owners to better understand the impact of the minimum wage increase on restaurants (as a form of “outreach that really comes more from our [the mayor’s] office to industries that are impacted in ways that we didn’t foresee”), and feedback from those roundtables went back directly to the OWS. One labor advocate noted that, while the mayor’s public support for employment standards was important, there was not sufficient political support for an aggressive approach to enforcement: “John Reamer is right that he knows the mayor does not have his back in some of these enforcement strategies.”32 Another labor advocate argued that the mayor construed business reactions to these employment standards as relevant to his political fortunes: “[Garcetti] is trying not to piss too many people off on his way to higher office; he is not leaning into wage theft enforcement, because that means he has to cross swords with the business community.”33

The consolidation of power by then-City Council President Herb Wesson—who played a pivotal role in passing minimum wage, paid sick leave, and enforcement provisions—posed an insurmountable obstacle to the efforts of other councilmembers to push for robust enforcement because, according to a labor advocate, it was not at the top of Wesson’s crowded agenda. Another advocate noted that the city council could have a good deal of power over enforcement, but that it is “not gonna do it unless we go to them and say you need to make sure [BCA] does this.”34 The mayor’s staffers reported that enforcing the minimum wage while balancing the needs of the economy is a “delicate dance, which is why we’re having difficult conversations with business owners, but the mayor has made clear that an honest day’s work deserves honest wages.”

Attention to the “delicate dance” has translated into a general orientation within the BCA toward the OWS maintaining neutrality and appeasing both sides—employers on one and labor unions and worker advocates on the other. As one BCA staffer put it, “Our office’s [BCA] gift to the city is walking the tightrope [between employer and employee] well. We were fair to both [union and business] about assessing penalties or doing restitutions, and we worked hard at being fair so that our decisions didn’t favor one or the other.” The staffer went on to say, “That behavior worked out for us in implementing minimum wage as well because we didn’t side just with the activist groups, the CBOs [community-based organizations] who wanted a lot more enforcement, and we didn’t just listen to businesses; I feel like we went down the middle ground.”35 Deference to business, particularly through an ethos of neutrality, within the enforcement agency itself is the backdrop of day-to-day decisions about enforcement practices.

Summary

A lack of coordinated effort against the minimum wage and enforcement and strong support for the policies in the city council and from the mayor translated into relatively few legislative gains for employers and their advocates. They did, however, secure a slower phase-in period for the minimum wage, differentiation in the timeline by size of the employer (though with a much lower threshold for small businesses than in Seattle), and a number of carve-outs.

Various forms of employer influence profoundly shaped the administration and enforcement of the laws. Employer involvement through lobbying and existing relationships meant that elected officials were very willing to provide accommodations to business, both during legislation and implementation, and translated into an emphasis on education of employers during implementation. Elected officials’ high levels of trust in the leadership of the BCA has meant that the city council is less involved in implementation than it might have been. And elected officials have failed to provide political support for robust enforcement practices and, according to some, have even exerted pressure against them, a stance that some key actors interpret to be the result of a mayoral calculation about how business might impact his political fortunes.

New York City

In New York City, following the 1963 case Wholesale Laundry Board of Trade, Inc. v. City of New York, municipal minimum wage protections have been interpreted by courts as preempted by the state minimum wage law. So, worker advocates focused instead on paid sick leave.

An important part of the story of paid sick leave standards in New York City involved the transition in January 2014 between Mayor Michael Bloomberg, who had served three terms as mayor from 2002 to 2013, and Mayor Bill de Blasio. Bloomberg, a Democrat before and after his term, was the founder, majority owner, and former chief executive officer of Bloomberg L.P., a financial information firm, and had deep ties to large, elite employers in the city. De Blasio spent seven years as a city council member and served as New York City public advocate from 2010 to 2013. In both roles he championed the causes of small businesses, especially immigrant- and minority-owned businesses, making it part of his political identity. As a mayoral candidate, he ran on a platform of addressing persistent economic inequality, and as mayor he promised to make “NYC the fairest big city in America.”

In contrast to Seattle and Los Angeles, large employers in New York City, largely under the aegis of the Partnership for New York City, an organization composed of several hundred business leaders and companies, including large corporations headquartered in New York (e.g., Bloomberg, Bank of America, Citigroup, Deloitte, J.P Morgan Chase, and the New York Times) and headed by Kathryn Wylde, played a much more active role in the trajectory of employment standards legislation and implementation. In particular, they helped organize small and medium-sized businesses against the paid sick leave legislation.

Types of employer influence over employment standards legislation and implementation

The passage of paid sick leave protections in New York City highlights several important themes about employer power. First, the mayor’s orientation to and perception of the business climate of the city is an essential element in shaping legal protections for workers. Under Mayor Bloomberg and City Council Speaker Christine Quinn, paid sick leave protections were stalled, and employer advocates gained many concessions that significantly weakened the proposed legislation; the bill that passed under Bloomberg and Quinn was a watered-down version of that first proposed by Councilwoman Gail Brewer in 2009. An alliance between big business organizations and small businesses and their organizations facilitated the pushback against the more robust protections. However, after de Blasio’s election and the election of progressive advocate Melissa Marc-Viverito as speaker, the council in short order passed a new version of the law that restored most of the protections of the original 2009 proposal. The second theme emerging about employer power is how large businesses use the rhetoric and political cover of small businesses to their advantage. Though big businesses were largely unaffected by the proposed legislation (many of them already provided sick leave, and they had the resources to accommodate paid sick leave), they saw the fight as a referendum on the business climate in New York City, and thus were closely involved in the process. The third theme to emerge is that attention to the needs of small businesses from the mayor and other city government employees can be important in shaping the administration of employment protections, as indeed it was within the Office of Labor Policy and Standards (OLPS).

It is important to note that even in the significantly altered political climate under de Blasio and Marc-Viverito, employers still won concessions. For example, in his revised paid sick leave legislation, de Blasio failed to include a private right of action for employees—something that business organizations strongly opposed during the several rounds of city council committee hearings under Bloomberg/Quinn. With regard to enforcement, while de Blasio’s choices for leadership of the agency demonstrated a commitment to robust enforcement of employment standards, his concern with reducing regulatory burdens on small businesses translated into instructions to both the enforcement agency and the administrative tribunal that adjudicates decisions for the agency that made enforcement less robust.

Employer influence in paid sick leave policy implementation

The paid sick leave ordinance (the Earned Sick Time Act) passed in June 2013 and was amended in February and March 2014, after de Blasio’s inauguration, and again in November 2017. The ordinance creating the Office of Labor Policy and Standards passed in November 2015. Along the way, employers and employer organizations mounted challenges to how the law would be enforced and by whom. Some concessions to employers about enforcement were made in the process of negotiating over legislation. Other concessions were longer term: Arguments business raised years earlier became embedded into new drafts of legislation and into how implementation occurred. Importantly, some of the ways in which enforcement authority fell short of the goals of labor advocates stemmed from choices guided by Mayor de Blasio. Employer challenges focused on five key issues: the Department of Health as the administering agency, the severity of fines, the administrative cost and burden of recordkeeping, the private right of action, and the burden of employment protections for small businesses and the need for resources for outreach to these businesses.

Employers and employer organizations strenuously advocated against housing enforcement of the law in the Department of Health, which had a negative reputation among businesses given its role in conducting business inspections. Beginning in 2013, with an amendment that located enforcement authority within the Department of Health, business barraged the city council with objections. Linda Baran, president and chief executive officer of the Staten Island Chamber of Commerce, speaking on behalf of the 5 Boro Alliance (​​an alliance of borough chambers of commerce formed out of opposition to the paid sick leave bill36), argued:

What does the Health Department have to do with regulating labor issues? This is a Department who many of our Council Members claim overregulating and charging exorbitant fees at restaurants to the tune of $52 million in 2012. Business will be subject to audits, inspections, onsite investigations by the Health Department and this bill will provide costly penalties up to $5,000 and we have a Department of Labor, and it is at the state level.37

Baran, in illustrating the nature of the Department of Health’s reputation among businesses, echoed a common business refrain that enforcement should be conducted at the state level. Another member speaking on behalf of the 5 Boro Alliance—John Binizio, a Bronx business owner and chamber member—took issue with “the Department of Health[’s] very intrusive fining power over every business in the city,” claiming it was a mechanism for the city to make money on the backs of small businesses.38

Councilmember Dan Halloran, Republican from Queens, suggested that the enforcement power might be better situated in the Department of Consumer Affairs (DCA), the city executive agency tasked with monitoring violations of consumer protections. Labor advocates, who had originally supported locating enforcement in the Department of Health, were not opposed to moving it to the DCA, and ultimately it was.

The choice of the DCA was not, however, without controversy, in particular from de Blasio himself. In June 2013, the Daily News published an “expose” of the DCA’s use of fines, claiming that the agency had a “secret quota system for violations” that “slaps business owners with sky-high fines” (Gonzalez 2013). While the DCA vehemently denied this, the article cited a study conducted by de Blasio, as public advocate, in February of that year that found a 70% increase in the number of DCA inspections between fiscal years 2002 and 2012—from 40,724 to 77,481. Importantly, the department’s enforcement seemed skewed against small, minority-owned businesses, as evidenced by the fact that the number of inspections spiked in all the outer boroughs but declined 14% in Manhattan, where most high-end businesses are located. The article quoted de Blasio as saying, “Before an inspector even walks through the door, the fix is in.” This orientation toward the DCA as biased against small businesses would inform a number of de Blasio’s enforcement-related decisions.

When de Blasio introduced the revised paid sick leave legislation after his inauguration, he kept the enforcement powers in the DCA (though with a provision that he could move it to another agency if he chose) and expanded the explicit authority of the DCA to initiate investigations and issue notices of violation based on those investigations. In defense of locating enforcement in the DCA, the new deputy mayor of housing and economic development, Alicia Glen, argued that it was the best agency for the job because it was the one that most directly engaged with, and had a productive and supportive relationship with, small businesses.39

In response to business community pushback on the enforcement provisions of the new bill, it was amended to include relatively minor concessions while leaving the basic enforcement provisions intact. The amendments clarified that the department and employer must agree on a time of day to review records during an inspection, waived penalties for the first six months for “newly implicated” businesses (those with under 20 employees and manufacturers), and reduced the statute of limitations for filing a complaint from three years to two.

A key pro-worker provision missing from de Blasio’s bill was a private right of action, and its omission was one of the most significant concessions to business interests. In hearings about the proposed legislation under Speaker Quinn, a representative of the 5 Boro Alliance argued that having a private right of action would cause “frivolous private actions which would further add to the court system’s backlog,” a regular refrain throughout the hearings from, for example, representatives of conservative think tanks and the New York State Restaurant Association. After the new administration took over, the new, progressive city council, led by Speaker Mark-Viverito, challenged the lack of a private right of action in hearings on the revised bill, but Deputy Mayor Glen argued that a private right of action was not necessary because “DCA is confident that [it] will successfully mediate complaints when they come into the agency.”40 In interviews, people familiar with de Blasio’s thinking felt that he did not see a private right of action as important to the protection of employment standards, regardless of the appeals of labor and worker advocates to the contrary. One suggested that for de Blasio, it was an easy concession to business advocates. To underscore how central enforcement staff saw the option for a private right of action, when one OLPS staff member was asked about the legal authority the office would need to pursue effective enforcement, a private right of action for paid sick leave was the first provision to come up.41 

The new council, while supporting the bill and grilling agency officials on the lack of a private right of action, repeatedly raised the issues of small businesses throughout the hearings. Councilmembers’ emphasis on the need for outreach to small businesses was echoed in Glen’s portrayal of the DCA as sympathetic to small businesses and in the proposed direction of resources toward outreach and the proposed outreach partnership with the Department of Small Business Services. The DCA commissioner at the time, Alicia Pico, noted the DCA’s focus on mediating with businesses and struck a conciliatory tone about the approach the agency would take to the enforcement of paid sick leave: “…we are really good at mediating. So when, if somebody happen[ed] to come in and complain about business, we use our mediation tools. We don’t issue violations. We mediate, go back and forth. If the business makes it right for the person that is complaining, no violations are issued.”42 

According to those familiar with the DCA, reforming the reputation of the agency, especially among small businesses, was an important goal of the new mayor. This attention to the concerns among small business owners was also reflected in the mayor’s choice for DCA commissioner. In announcing the appointment of Julie Menin, a regulatory attorney and former small business owner herself, de Blasio emphasized the economic benefits of small businesses and an approach to them that was not centered on fines: “Julie understands that small businesses are the key to economic growth in our city—and I know she will apply regulations with public safety, not city revenues, in mind” (Office of the Mayor 2014a; emphasis added).

The rhetoric regarding a conciliatory approach to enforcement of paid sick leave from the DCA was pervasive and slowed down initial enforcement of the law. Menin’s appointment was followed by an announcement of more than 20 reforms to DCA practices to reduce the burden on small businesses (Jonas 2014). These included reducing the number and size of fines, improving transparency, and providing inspections in a preferred language. De Blasio’s proposed budget indicated that the city planned to collect 8% less in total fine revenue over fiscal year 2015 than it collected in 2012 ($789 million versus $859 million) (Office of the Mayor 2014b). Labor advocates noted that there was a significant delay in the actual enforcement of the paid sick leave legislation, as the DCA spent the first six months on employer and employee education instead of on enforcement, with the result that initial violations were not punished. Labor advocates had a series of meetings with Menin to inform her that the strategy was not working and that workers were not being heard or compensated.43

Office of Labor Policy and Standards and implementation

The later legislative effort to establish a designated office for enforcing employment standards— the Office of Labor Policy and Standards—faced no public business or employer opposition, and de Blasio signed the legislation into law on November 30, 2015. In stark contrast to the conciliatory tone toward business struck by DCA leaders in hearings around the creation of the office, OLPS messaging about the agency’s job and responsibilities explicitly affirms the purpose of the office as protecting the rights of workers. As one OLPS staff member put it:

This office is not neutral, I tell people that all the time, in meetings….I appreciate the instinct to say that “this is government, we have to be fair,” but when you have an affirmative protection, enforcing law that affords rights to a group that is vulnerable, when you’re reversing a power dynamic, being fair is enforcing the law.…It isn’t an employer saying, ‘Oh, you should’ve gotten sick time, sorry, next time’; that’s not how it works. [They were] supposed to have given the sick time already….This is a legal right.44

De Blasio’s appointments were crucial to fostering such an orientation toward enforcement of employment protections, given that the background of DCA and OLPS leadership and staff was in worker protection and advocacy, in contrast to the Los Angeles OWS, where leadership and staff did not have such a background. In May 2016, de Blasio appointed as DCA commissioner Lorelei Salas, a housing, immigration, and employment lawyer who worked for years on behalf of immigrants and refugees, was a former senior manager at the New York State Department of Labor, and served as an administrator at the U.S. Department of Labor’s Wage and Hour Division under President Obama. In August 2016, de Blasio appointed Liz Vladeck, labor lawyer and advocate, as deputy commissioner of OLPS, under Salas, adding to the labor advocacy personnel. The appointment of Vladeck was, as one labor advocate put it, “a signal from the administration to take this seriously by appointing someone like her; not just someone to warm the chair, but someone looking to do good work.”

Yet despite the very public championing of worker rights as part of the de Blasio administration—the DCA was even rebranded as the Department of Consumer and Worker Protection—and the strong support for worker standards at all levels of the DCA as the result of the de Blasio appointments, OLPS has been hamstrung in various ways.

For example, bureaucratic reforms45 changed the administrative court for OLPS cases from an internal DCA court to a citywide tribunal, the Office of Administrative Trials and Hearings (OATH). OLPS staff have noted the extreme difficulties they have had with cases at OATH, in part because OATH was set up to deal with violations, not to hear trials, and in part because the judges had no experience in complex labor law. Agency staff repeatedly lamented what they felt to be legally inappropriate decisions within OATH that limited their enforcement powers. In an interview with a government employee, we learned that a commissioner of OATH who is appointed by the mayor provided guidance that the judges should “be good on supporting small businesses,”46 in part because of de Blasio’s concern with small businesses. This suggests that the rulings are not necessarily neutral decisions.

Another institutional feature limiting enforcement practices at OLPS is the size of its budget, which is small relative to the size of the city. In June 2020, DCA Commissioner Salas noted that OLPS had a budget of about $1.5–2 million, within the DCA’s budget of about $40 million. In contrast, the equivalent agency in San Francisco—with a population less than one-tenth that of New York City—had a budget of about $8.5 million. When asked about perceptions of what employers won in the fight over employment standards enforcement, a labor advocate noted: “The money—there’s just no staffing. It’s a tiny team that’s trying to do creative things. So the resources are awful.”47 The small budget does not reflect political choices, according to one government official, but is rather a feature of budgeting in NYC executive agencies.

Summary

In New York City under de Blasio, a champion of raising employment standards in order to combat inequality, and under a progressive city council, the ideational structural power of small business has played a key role in shaping both the legislation and, even more profoundly, the implementation of worker protection ordinances. The structural power of small businesses, through threats that they will either leave the city or go bankrupt; the strategic deployment of small business organizations and narratives by larger employers and their advocates, such as the Partnership for New York City; and the persistent attention to the concerns of small business by the mayor—in part because of how central small businesses are to his political identity—have all loomed large over the story of attempting to balance the power of workers relative to their employers. 

Employer power across the three cases

In each of the cities, concessions to employers during the legislative process informed the speed and nature of implementation. Employers and their advocacy organizations secured concessions in implementation, such as the soft launch of policies—a reduction in fines and penalties and a focus on education and training for a period after the ordinance took effect—and the allocation of resources to employer outreach instead of enforcement. Seattle, where political support for minimum wage policy was overwhelming, ironically settled on the longest phase-in period for small businesses (seven years) and the highest threshold for the number of employees that counted a firm as a small business (500 or fewer employees worldwide). In contrast, the cutoff for small businesses in Los Angeles was 25 employees, and for paid sick leave in New York it was four. In each city, employers secured various exemptions, carve-outs, and phase-ins from certain provisions of the laws.

Ultimately, the impact of employer influence over the implementation of these laws interacted with the focus and relative influence of advocates, other relevant government institutions, and city bureaucratic processes to shape what enforcement of these employment standards looks like in practice. In Seattle, enforcement is supported by extremely strong statutory authority, an attention to the relationship between enforcement and the building of worker power, and creative enforcement practices, while at the same time enforcement practices are focused on and pay heed to the impact on small business, and many agency resources are directed toward building relationships with businesses. In Los Angeles, statutory enforcement authority is strong, but enforcement practices are severely constrained by civil service hiring rules, which create high turnover in the Office of Wage Standards; by the very hands-on, legally conservative guidance from the city attorney’s office; and by an agencywide sense of the importance of balancing the needs of employees and employers. The extremely positive reputation among elected officials and advocates of the leader of the Bureau of Contract Administration has led to less pressure from officials who might otherwise encourage and pressure OWS to engage in more robust enforcement strategies. And in New York City, despite incredibly strong agency leadership and commitment to robust enforcement, and despite relatively strong statutory enforcement authority, the agency is under-resourced relative to the size of the city, its parent agency has not been equipped for the kind of enforcement practices needed for proactive enforcement, and both have been legally constrained by rulings from administrative tribunal judges.

While there were some instances of employers explicitly threatening to use their structural power to move away and thus withdraw capital from the city, and while political leaders often expressed concerns about the economic consequences of businesses exercising this power if they were unhappy with the policies being considered, there was also something else important happening. In all of the cities, there is a strong ideational influence favoring business. It is particularly manifest in narratives about small businesses and in mayoral calculations about the impact on their political fortunes of business reactions to robust enforcement; these impacted both the legislative process and the enforcement of employment standards. Big business knows that it can reap rewards from letting small business stand for the whole and taking advantage of the narrative of small business valor.

We observe four common mechanisms by which employer influence functions. First, in all three cities, powerful unions and extensive campaign finance reform have meant that employers win legislative concessions not due to greater resources, which might enable them to put favorable candidates into office and secure favorable votes through campaign contributions. Instead, they gain concessions through being repeat players in the process of policymaking, either by representing (in Seattle and Los Angeles) an enduring interest group that legislators feel they must be responsive to as part of the everyday functioning of local government, or by representing (in New York) a powerful constituency (large businesses) or a constituency in need of protection (small businesses). In Seattle, this occurred both through behind-the-scenes appeals to the mayor and through advisory councils—a longstanding institution in Washington State’s political culture for involving stakeholders in decision-making. In the Seattle case, we observe that worker and labor advocates who have substantial political and economic power may have little to gain, and much to lose, by participating in a deliberative process with employers. In Los Angeles, the degree of access that business lobbyists have to elected officials, and city officials working to accommodate “reasonable requests” from repeat political actors in order to facilitate future policymaking, has meant that some business advocates receive outsized attention. In New York City under Bloomberg, who was ideologically opposed to these kinds of employment standards policies, employers and employer advocates succeeded in whittling away at proposed paid sick leave protections, leaving the final bill a shadow of its former self. Most provisions were restored in the version introduced by de Blasio after he became mayor. 

Second, in these three cities, even when minimum wage and paid sick laws passed with lopsided majorities, mayors and city councilors, and sometimes agency leaders, were nevertheless strongly attuned and responsive to the ideational structural power of business, in the more expansive sense that we outlined above. “Better business climate” concerns were present and accommodated48 through choices about policy details, administration, and enforcement practices. We see evidence of the ideational structural power of employers being transmitted through arguments that legislation will chill business opportunities. The economies of these three deep-blue progressive cities are characterized by strong competitive advantages and high levels of profitability, thus making businesses less inclined to move (Dreier, Mollenkopf, and Swanstrom 2014). Additionally, each of the cities has important place-based economies such that capital mobility is far less common for the largest employers and often not economically feasible for the smallest ones. We observe most frequently that the form of structural power (realized or perceived) that most worries politicians is not fear of divestment and capital moving to other jurisdictions, but rather a fear of a different form of capital withdrawal from the city economy—businesses and business organizations claiming they will be bankrupted and have to close in response to employment standards reforms. As mayoral and city council staff as well as labor advocates repeatedly pointed out, this has become the automatic response by business to any proposed employment policy improvement, and it is automatically taken seriously as a legitimate threat without employers even having to provide much evidence in support of their claims. Ultimately, ringing the bell about threats to the “business climate” sets in motion a Pavlovian-like response on the part of elected officials such that the bell no longer needs to be rung at all for them to be concerned about hurting business or to be perceived as hurting business. The widespread incorporation of neoclassical economic assumptions and principles into policymaking (Hirschman and Berman 2014) also contributes to this dynamic.

Third, in all three cities, politicians have a sincere concern for small businesses that is reflected in widely circulating narratives. As Waterhouse (2015) has documented, the political uses of small business narratives are legion in 20th century U.S. history. Beginning in the 1970s, small business narratives were incorporated into a larger pro-business, anti-regulation narrative. We observed strong ideational influence of these small business narratives, and we think of the invocation of small business in these cities as a “spanning concept” (Hackworth 2007)—a concept with multiple meanings that are politically useful because different constituencies hear what they want to hear. We can identify four distinct narratives of small business in the three cities: as representative of core moral values of self-sufficiency and hard work; as engines of growth, entrepreneurship, economic vibrancy, and community; as vehicles for economic mobility for immigrants and people of color; and as quintessential victims of government overregulation. In some of these cities, big business wants small business to stand for the whole of employers because of the sympathies it evokes. But while these narratives are certainly deployed strategically, that is not the whole story. They also speak to deeply held beliefs on the part of politicians in each of the cities. The source and nature of the resulting acquiescence to business concerns varies by city; the struggle over the dividing line between what constitutes a small versus a large employer exemplifies this issue.

Finally, in all three cities, in addition to sincere concern for the fates of small businesses, mayors were also concerned with how robust enforcement of employment standards might impact their future political careers. In Seattle, Murray’s attention to the requests—both explicit and presumed—of business was part of how he preserved his public profile as a moderate. In L.A., some worker and labor advocates suggested that the political aspirations of city mayors to higher office make them particularly attuned to avoiding a reputation as “anti-business” and to preserving their ability to secure future campaign contributions from business. In New York, de Blasio’s previous championing of small businesses created conflict with some aspects of robust enforcement practices.

Thus, the structural power of employers shapes the way policies are perceived, and instrumental power shapes how specific policy changes come to be made in legislation—as Hacker and Pierson (2002) observe in the case of welfare reform at the federal level. While we see some evidence of instrumental power in the process of enforcement, the invocation of structural power—especially the dimensions of ideational influence—is an important barrier to robust implementation. In these cities, enforcement powers are granted statutorily in the legislation itself, through administrative rulemaking and also through organizational practices. The structural power of business is evident in shaping enforcement in all three arenas, largely through decisions made by the mayor and agency staff regarding whether and how to use their enforcement authority.

The extent of structural and instrumental power of employers and the relative distribution of structural versus instrumental power vary across time and place. We see variation in the dynamics of employer power among the cities based on two key dimensions and the interaction between them: the structure of city government (Table 5) and the organization of business interests (Table 6). The institutional arrangements of the cities—in particular the relative balance of power between the mayor and the city council and the relative influence of different government institutions in the process of legislation and enforcement, shape the degree to which the mechanism of employer influence over enforcement was largely through structural or instrumental means. Additionally, in all three cities, employers vary in their degree of involvement in legislation and implementation (e.g., by industry, size, net worth, public profile, and, most of all, the degree to which they believe they will be impacted by a particular policy) and in the extent to which they were organized in their opposition to (or support for) legislation and enforcement approaches. These differences informed the degree of involvement of different types of employers and employer organizations in the process, the stage in the process at which they engaged, and the various forms of engagement their involvement took.

In our three cases, political contributions, an important aspect of instrumental power, are relatively balanced between labor and business; in some years in some cities, they favor labor. Instrumental power plays some role in these cases, but not nearly the role it might play in other cities with different demographics, ideological compositions, and less organizing capacity. Despite this relatively unique balance in the resources of business and labor, we observe legislative concessions and significant implementation barriers, many of which can be traced to the structural power of business. Given the economic conditions of cities due to fallout from the Covid-19 pandemic, we already see even more political defaulting to the preferences and needs of business, especially small business.

Recommendations for worker advocates

We close this paper with a set of recommendations for worker advocates based on what these cases illustrate about the actions of employers, local government officials, and labor and worker advocates. We suggest four key areas for worker advocates to attend to: business community cleavages; ideational power using narratives and frames; the fundamentally conflicted role of small businesses; and the pressuring of elected officials specifically on enforcement.

1. Attention to cleavage within the business community

In each city, we see that business is not a monolith. Different sectors, companies, and individuals may have some common interests but also divergent ones. Divisions inside of business associations and boards are important to understand and exploit. Likewise, businesses and business associations have varying levels of interest in specific policies, and this must be carefully parsed by worker advocates. Many of the largest employers in some of these cities did not see the policies as a threat and did not become deeply involved in opposing them. Some were nominally involved through their participation in business associations but did not heavily invest in the fight. In the case of minimum wage and paid sick time policies, it was seldom the largest companies that were leading the opposition. Sometimes this role was a pragmatic choice, in the sense that they were already paying above the minimum wage and providing paid sick days, and sometimes it was strategic, in the sense that they knew their involvement would make them good targets for worker advocates—better to leave the arena to the more sympathetic spokespersons of small businesses, local chains, and beloved restaurants. Although beyond the scope of this paper, we note that predictive scheduling policies in these cities brought some larger employers more fully into the scrum, as did business tax proposals. In all three cities, there was consensus that the most powerful business players were real estate developers, and they tended not to become involved in debates about employment standards. Also, their instrumental power had been reduced by campaign finance reforms.

In every city, business associations engaged to varying degrees. Some engaged during the policy process but did not remain involved over the fine details of enforcement powers, while others were involved throughout. Mayoral staff and policy insiders in the cities pointed most often to the restaurant associations as the ones that stayed engaged in the minutia throughout the rulemaking and implementation processes. (Indeed, we did observe an important role of the National Restaurant Association and similar state or local associations, suggesting that worker advocates should pay particular attention to these organizations.) The interests of repeat players were more likely to be recognized and accommodated in some way.

For worker and community advocates, before beginning a campaign, it is important to disaggregate the business community and do a thorough power analysis of each of the players. This analysis must not be based solely or even primarily on what one thinks one knows; advocates must formulate clear questions and identify multiple sources for seeking answers. Power is often hard to see. As Pierson (2015) has argued, in many situations we are only able to see the tip of the iceberg; mechanisms of power are even harder to pin down. It is important to have clear criteria for evaluating power and to triangulate one’s way through incomplete information to what will most often be correlation, not causality. Business influence is not always easy to track because sometimes businesses are intentionally trying to stay off the record, not testifying at hearings but instead communicating directly to mayors or their political consultants or other private intermediaries. In all three cities, we heard accounts of specific carve-outs that were accomplished this way.

2. Attention to ideational power using narratives and frames

The cases we have presented here make clear that there are instrumental and structural elements to business power, and that the ideational aspects of structural power are extremely powerful in shaping the enforcement of employment standards. Along with institutional strategies like employment policy reforms coupled with strategic enforcement and co-enforcement, narrative and cultural strategies are essential to challenging the hegemonic power of business and the laissez faire narrative. As we have seen, liberal and progressive elected officials in deep-blue cities favor employment reforms but still worry about policy impacts on business and feel a need to be open to concessions.

The ideational structural power of small business takes different forms in different cities, and the sources of these narratives are diverse. For the Seattle and New York mayors, the power was explicitly connected to narratives of immigrant and Black and brown entrepreneurship. This form of power operates in large measure through the admiration of elected officials for the work of the entrepreneurs and “makers” who make the city special as well as through personal relationships with the businesses themselves. Local elected officials, including progressive local officials, look at small business sympathetically and very differently than they do big corporations. Being “pro-small business” is not just a pragmatic stance; it is a deeply held sentiment. Seattle progressives understood the appeal of small business for elected officials and organized well-known small businesses into the Main Street Alliance; the tactic helped progressives project a counter message that not all small businesses opposed higher minimum wage and paid sick time policies and that a “high road” path was available for small businesses. In fact, there is growing interest in some progressive circles in understanding the interests of small business as compatible with the economic justice agenda and in organizing small business back into the progressive community (Mitchell and Holmberg). While some small businesses are already active on LGBTQ+ rights, immigrant rights, environmental policy, and racial justice, small business participation around economic justice and worker rights policy is still marginal. But co-opting existing narratives about the importance of small businesses is not sufficient, as it might further reinforce the structural power of business. Progressives must develop their own small business narratives and decouple the narrative about small business viability from labor costs and connect it instead to, say, the cost of rent. Such a strategy could provide pathways to a broader political terrain that includes the financialization of the urban economy, absentee investors, and corporate landlords.

Advocating for business outreach and education has been effective framing for employee advocacy organizations to win the creation of employment standards offices and co-enforcement. This framing has been successful because it implies that businesses would comply if they understood their obligations—what is needed is education rather than deregulation. Framing the job of these enforcement agencies as one of ensuring compliance has also proved to be effective. It is hard for business to argue that it should not follow the law, and the frame is supported by good governance advocates and city auditors. It places business in a tough spot if the problem of wage theft has been documented and agency policies and procedures are viewed as reasonable. Just as the “unfair competition” frame—that those businesses that compete on underpaying their employees have an unfair advantage—is hard for business to argue with, so too is the frame that businesses want to comply and just need information about their obligations. In most instances, whether they liked it or not, most business organizations ended up accepting the framing and settling for dedicated outreach and education staff rather than putting forward a straight-up anti-regulation argument.

3. Attention to the fundamentally conflicted role of small businesses

In each of these cities, small businesses play a fundamentally contradictory role. Many of the elected officials involved in passing these policies and establishing these offices and the agency leaders who staff them feel badly that the majority of violations coming in are against small business, many of which are in immigrant ethnic enclaves and are often owned by immigrants and people of color. On the one hand, officials and staff feel strongly that all businesses should follow the law. On the other hand, they feel that these laws are complicated and that many small businesses lack human resources capacity and make honest mistakes. Likewise, the organizations that mobilized to pass these policies and to establish these offices are themselves more interested in going after the big corporations that drive the economy and are responsible for some of the worst elements of employment relations today. They do not believe that they are going to drive structural change in these industries by going after small businesses, but they also know that small businesses are frequent sources of violations for their constituents (indeed, some advocates in these cities represent both employees and small business owners). There is room for progressive organizations to enter the policy arena in support of high-road small businesses—reinforcing the message about unfair competition and rental costs. Cities could be much more creative in their strategies for promoting and supporting small businesses, including by providing them common back-office accounting and human resources support.

4. Pressuring of elected officials specifically on enforcement

An additional caution: In each city examined here and in many other cases with which we are familiar, there is a tendency on the part of worker advocacy organizations to trade off enforcement and funding in order to get a policy on the books. Likewise, soft launches may be good for messaging and negotiations, but if allowed to become long-term enforcement practices they can end up undermining the actual implementation of the policies organizations fought so hard to pass. While we understand the political calculus, we have observed that organizations do not always have the same political conditions, power resources, or focus to circle back and later win the necessary enforcement powers through statutes, administrative rulemaking, or funding. Worker advocates should budget and design campaigns around enforcement rules, practices, and budgets, in addition to waging the legislative battles over policy. Many worker advocates we spoke to were extremely familiar with the shortcomings of each of the enforcement offices, and they noted that there was not enough organized pressure on elected officials to support strategic enforcement practices. As one worker advocate in New York City put it, fairly sheepishly, because of resource shortages “we organize to win but we never organize to sustain the victory and make it as strong as possible.” Continuing oversight over the enforcement process is instrumental to realizing the full policy victory.

Acknowledgments

This research has been funded by a Russell Sage Foundation grant, number 85-18-01, to Shepherd and Fine. Lexi Gervis and Jacob Barnes, our talented Ph.D. students, provided invaluable research assistance for this research project and Jenn Round—expert in all things enforcement-related—provided extraordinary legal expertise, advice, and editorial support (including constructing Table 4). Although they are anonymous in the paper, we owe a huge debt of gratitude to the elected officials, mayoral and city council staffers, agency leaders and staff, labor and community leaders, organizers, worker advocates, and business lobbyists who have taught us so much and who have connected us to others. We could not have written this paper without their help. We owe a special thanks to the leaders and staff of all of the labor enforcement offices for their generosity with their time and insights over many years. We are also grateful to Daniel Galvin and Alex Hertel-Fernandez for their excellent advice and suggestions on this paper.

About the authors

Janice Fine is a professor of labor studies and employment relations at the School of Management and Labor Relations, Rutgers University, and director of the Workplace Justice Lab. Fine researches worker organizations, historical and contemporary debates within labor movements regarding immigration, labor standards enforcement, privatization, and government oversight. She works across the country with government agencies and organizations to research labor violations in their jurisdictions and implement innovative labor standards enforcement strategies, including partnerships between government agencies and organizations. Prior to becoming a professor at Rutgers, she worked as a community, labor, coalition, and political organizer for more than 20 years.

Hana Shepherd is an associate professor of sociology at Rutgers University. Her work focuses on realizing employment protections for low-wage workers and employee power in low-wage workplaces. She asks how social networks, social norms and culture, and organizational practices shape behavior, and thus facilitate or impede social change. She is working on projects on how local government agencies enforce employment protections; how to create supportive online communities for retail workers; and how organizational practices shape networks in low-wage jobs, with implications for collective action. Her work appears in outlets such as the Proceedings of the National Academy of Sciences, Social Psychology Quarterly, Social Science Research, and Sociological Science.

Appendix A. A roadmap to the main policy and implementation issues

In order to orient the reader to some of the technical nuances involved in the debates over employment standards legislation and implementation, we provide the following list of the main issues businesses and business associations raised during the legislative debates. A detailed account of the specific changes to the ordinances for each city is provided in Tables 1 and 3.

1. Size and phase-in: The single most important policy detail for business interests regarding both the paid sick and minimum wage ordinances was the specific cut-off number for what counted as a small versus a large business. Business size dictated the number of years a firm had to phase in both the paid sick leave and minimum wage ordinances and the number of hours a worker could accrue under the paid sick leave ordinance (as well as how many hours could be carried over per year). Additional issues connected to size included whether individual franchisees would be considered small businesses or part of larger integrated enterprises.
2. Joint employer and integrated enterprise: Widespread subcontracting in many low-wage sectors has led to situations in which the direct employer of record has extremely limited financial resources or has gone out of business or cannot be found, making it difficult for agencies to prosecute violations and collect wages owed to workers. Thus, there is an imperative to be able to go beyond the employer of record and hold other entities liable for wages owed. Businesses were concerned about whether city statutes would include joint employer liability and thus give the agency the ability to hold more than one entity liable for violations based upon a finding that two separate entities exercised some control over the work or working conditions of the employee. Businesses were also concerned about how city statutes defined when two or more separate entities would be considered an integrated enterprise and considered a single employer for purposes of liability; such a definition was relevant to establishing the size of the businesses and thus whether a business counted as a small or large business.
3. Who is covered? There were debates in all three cities over whether paid sick leave and minimum wage ordinances would cover part-time, temporary, and exempt employees, with businesses trying to limit coverage to full-time employees.
4. What counts toward meeting the minimum wage? Business interests in both cities with a local minimum wage law (Seattle and Los Angeles) tried to have as many sources of nonwage income count toward their wage obligation as possible, including tips, spending on health care benefits, commissions, and bonuses. In some cases, they succeeded in having some of these count for a prescribed period of time (another phase in). They also lobbied hard for the right to levy service charges on customers to cover some of their obligation under the minimum wage.
5. Private right of action: A private right of action allows workers, in addition to filing complaints with a government agency for violations of the law, to be able to take their employers to court to sue for violations under that law. The threat of a class action suit can also be leveraged in the settlement of an agency investigation, as the employer may agree to better terms to avoid additional litigation costs. Business strongly opposed it in every ordinance in all three cities.

Additionally, employers were concerned with a number of issues regarding administration and enforcement authority and practices. Details about the final statutory enforcement authority of each office—one dimension of the outcomes we are interested in—can be found in Table 4.

1. Location within the bureaucracy: In each city there were debates about which existing agency should house the new employment standards enforcement functions. Some business associations strongly expressed their preferences, weighing in against agencies they charged with having been overly zealous in enforcement—issuing citations for minor infractions either as a means of burnishing their reputations or generating income, or both. Worker advocates favored certain agencies over others as potential homes for administration and enforcement of these new policies, and others preferred agencies to be independent.
2. Onsite investigations and inspection of company records: Agencies must be accorded the statutory or administrative power to carry out onsite investigations. In some cases, the law specifies whether there must be prior notification of the employer, and in other cases the law is silent. Business associations usually prefer to limit investigatory powers and require prior notification. Worker advocates object to prior notification because they want to avoid companies altering the workplace or coaching employees to say or do certain things.
3. Power to compel information and mandatory deadlines: When an agency receives a complaint against an employer, the process usually begins with notification and a request for information. This power can be accorded through statute, administrative rulemaking, or agency practice. Businesses object to short turnaround times and advocate for longer periods to produce information. Agencies have had their investigations slowed when companies produce incomplete information or take a long time to provide it. Worker advocates try to require faster production so that agencies can carry out their investigations more efficiently and companies do not have time to falsify records.
4. Directed and complaint-based companywide investigations: Many jurisdictions require statutory language or administrative rules that give permission to extend an investigation beyond an individual complainant to the entire workforce (companywide) or initiate an investigation without a complaint (directed). Some business associations object to these practices because, in the case of companywide investigations, they require time-consuming production of records; in the case of directed investigations, they give agencies too much power. Worker advocates support them for three reasons: There is a strong likelihood that more than one worker has experienced the violation; companywide investigation protects the identity of the complainant; and higher costs are more likely to deter employers from committing future violations.
5. Statute of limitations: Businesses generally push for shorter periods of time during which an employee is able to come forward with a complaint. Worker advocates generally push for longer periods of time because many vulnerable workers who fear retaliation wait until they leave the job to file wage theft claims.
6. Assessing penalties: The power to impose damages, fines, and civil penalties on an employer that violates the law, repeatedly misses deadlines to provide information, interferes in an investigation, or makes no attempt to correct violations identified during an investigation is considered by many agencies to be essential to effective enforcement and to the deterrence of future violations. Not all agencies have these powers: Fines and penalties must be set through statute or administrative rulemaking. Businesses often try to confine their obligation to back pay alone and to minimize fines and penalties.

Tables

Table 2

Table 5

Table 6

Notes

1. Authorship is equal.

2. Economic Policy Institute, Minimum Wage Tracker.

3. National Partnership for Women and Families.

4. Personal interview with director of community organization, October 23, 2020.

5. Personal interview with mayoral aide, October 22, 2020.

6. Personal interview with mayoral aide, October 22, 2020. Although beyond the scope of this article, some of Seattle’s most prominent employers who had remained on the sidelines during the Fight for $15 and Paid Sick and Safe Time policy fights (and a few who supported these policies) were extremely exercised about the Secure Scheduling Bill proposed in 2016, and they wrote detailed letters to the council and the mayor. These employers included the Seattle Mariners and Costco.

7. Personal interview with mayoral aide, October 27, 2020.

8. Personal interview with labor advocate, September 16, 2020.

9. Seattle Ethics and Elections Commission.

10. Personal interview with mayoral aide, October 22, 2020.

11. Interviews with enforcement staff, May 30, 2017.

12. Mayoral talking points, untitled, from senior mayoral aide files.

13. 2015–2016 Seattle Office of Civil Rights Budget.

14. Overview and Initial Issues Identification, Office of Labor Standards and Minimum Wage staff Patricia Lee and Dan Eder, date prepared October 22, 2014.

15. Office of City Auditor, “Seattle’s Paid Sick and Safe Time Ordinance Enforcement Audit.” The independent office of the city auditor was established in 1991 through a voter initiative that amended the city charter. The auditor is appointed by the city council to four-year terms.

16. Interviews with enforcement staff, May 30, 2017.

17. Interview with OLS official, October 30, 2019.

18. Personal interview with former employer organization lobbyist, November 30, 2020.

19. Personal interview with senior staff of worker advocacy organization, August 20, 2020.

20. Personal interview with senior staff of worker advocacy organization, December 21, 2020.

21. Personal interview with senior city council staffer, December 22, 2020.

22. Personal interview with senior staff of worker advocacy organization, August 20, 2020.

23. Personal interview with former mayoral staffer, December 22, 2020.

24. Personal interview with senior city council staffer, December 22, 2020.

25. Los Angeles City Ethics Commission.

26. Report from Bureau of Contract Administration, October 2015.

27. Personal interview with former employer organization lobbyist, November 30, 2020.

28. Personal interview with senior staff of labor advocacy organization, November 30, 2020.

29. Personal interview with OWS staff member, August 15, 2018.

30. Personal interview with mayoral staff members, August 16, 2018.

31. Personal interview with OWS staff member, August 15, 2018.

32. Personal interview with senior staff of worker advocacy organization, August 20, 2020.

33. Personal interview with senior staff of labor advocacy organization, November 30, 2020.

34. Personal interview with senior staff of worker advocacy organization, December 8, 2020.

35. Personal interview with staff of BCA, August 15, 2018.

36. Manhattan Chamber of Commerce press release, September 10, 2009.

37. Committee on Civil Service and Labor hearing transcript, March 22, 2013, p. 56.

38. Committee on Civil Service and Labor hearing transcript, March 22, 2013, pp. 220–21.

39. Committee on Civil Service and Labor hearing transcript, February 14, 2014, pp. 41–2.

40. Committee on Civil Service and Labor hearing transcript, February 14, 2014, p. 45.

41. Personal interview with OLPS staff member, June 4, 2019.

42. Committee on Civil Service and Labor hearing transcript, February 14, 2014, pp. 56–7.

43. Personal interview with former senior staff of union, November 18, 2020.

44. Personal interview with OLPS staff member, June 4, 2019.

45. Executive Order 18 in 2016.

46. Personal interview with city government employee, November 2020.

47. Personal interview with leader of labor advocacy organization, August 13, 2020.

48. While beyond the scope of this article, it is worth noting that from their earliest days, business elites played a central role in city administration. As Judd and Swanstrom (1998, 38) argue, “Local boosters assumed the lead in organizing public services when the absence threatened the economic vitality of the city….In the early 19th century, when confronted with a problem, the city’s aristocratic and merchant class would typically organize a committee to decide what to do.”

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Over the last two decades, nonprofit “alt-labor” groups—a diverse lot of organizations consisting of community-based worker centers and other social and economic justice groups whose primary missions include fighting for workers’ rights—have emerged in numerous cities around the nation to help nonunionized, low-wage workers combat exploitation. During this time they have become increasingly adept at using public policy, rather than collective bargaining or direct economic interventions, to achieve their goals and to strengthen basic workers’ rights. Despite their small numbers—there are only about 250 alt-labor organizations scattered across the United States—they have led dozens of successful policy campaigns to combat wage theft, strengthen health and safety laws, fight discrimination and sexual harassment, create domestic workers’ and temporary workers’ bills of rights, defend immigrants’ rights and women’s rights, end bias-based policing, and advance economic and racial justice.

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. Specifically, they have worked assiduously—and carefully, given legal restrictions on political activities by tax-exempt organizations—to build new electorates (registering new voters, naturalizing citizens, and expanding their base to new geographic locations); broaden the issue agenda (organizing and mobilizing voters around new issues, incrementally building on policy gains, and seizing opportunities to expand the range of ideas deemed legitimate); and alter electoral dynamics (ramping up organizing activities during election cycles and, through new 501(c)(4) organizations, explicitly endorsing candidates and intervening directly in electoral campaigns).

Because these interventions affect political incentives and discourses, rather than manifest in campaign contributions or other more readily measurable indicators, they have tended to fly under the radar. But they are no less consequential for their subtlety. Across a wide range of political contexts, alt-labor’s 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. Most are small, resource-poor, financially dependent upon philanthropic foundations, and operationally constrained by their nonprofit status. Their members, most of whom are low-wage immigrants and Black, Indigenous, and people of color, are socially, politically, and economically marginalized, with many unable even to vote. In contrast, their adversaries are often well organized, well funded, socially dominant, and enjoy easy access and influence in government. Moreover, their model seems to compare unfavorably with the traditional labor union model of political engagement.

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: Rather than try to replicate the union model of building a critical mass of organized workers in certain sectors of the economy, alt-labor groups seek to go deep with a smaller base of workers anchored in geographic and often racial or ethnic communities.

• Power with: Rather than mobilize around a single issue, alt-labor groups often fashion policy agendas that reflect an intersectional, “whole worker” approach to organizing that extends their purview beyond wages and working conditions to include racial justice, immigrant rights, women’s rights, and other issues affecting their communities while leading them to forge coalitions with a wide range of allies.

• Power to: Alt-labor groups compensate for their lack of resources with resourcefulness, doing more with less. Notable capacity-building experiments include organizing models built around new technologies, “sister” 501(c)(4) social welfare organizations that permit overt electioneering, and novel resource-sharing umbrella groups.

Well aware of their many weaknesses and constraints, alt-labor groups are working to leverage and augment their distinctive strengths: their deep roots in local communities and the racial and ethnic bonds that unite their members; their positions within larger ecosystems of progressive-minded groups; and the flexibility of their organizational forms. By tapping into, harnessing, and developing these strengths, alt-labor groups are building sources of power that they can draw upon in their efforts to alter their political environments and advance their policy goals.

Given the diminutive stature of most groups and the myriad ways in which the American political economy is stacked against low-wage workers, the groups’ system-changing ambitions may seem somewhat surprising, or even quixotic. But these activist workers and organizers are not shrinking violets. Many have been deeply influenced by radical organizing traditions, including Latin American and Black liberation movements, and they do not view inherited, status quo power arrangements as fixed or immutable. Their entire disposition is to try to change the system in which they operate.

Their accomplishments to date demonstrate the political capacities of marginalized, low-wage workers who organize collectively to combat their exploitation and oppression. Although race-class-subjugated communities are often depicted solely in terms of their disadvantages, and although they are, indeed, sites of vast inequalities, they should not be understood in terms of their “political deficits.” In many cases, these are sites of dynamic political activism.

Alt-labor’s political and policy work, however, faces several limitations and constraints. First, not every group has pivoted toward politics and policy. Younger and more under-resourced groups have tended to remain more focused on casework, individual services, and community organizing. Among those that have pivoted, different groups prioritize different aspects of political engagement; some devote more resources to policy campaigns than others; and each group faces myriad idiosyncratic and context-specific challenges.

Second, most groups are geographically constrained, with most work taking place at the city, county, and state levels. It is not confined to blue states and urban areas—groups in red and purple states and in rural and suburban areas are doing the same kinds of power-building, political engagement, and policy-centered work as those in blue areas. But wherever they are, their strength is rooted in their local bases of support, a situation that limits a group’s reach and makes expansion to new states and regions challenging.

Third, the scope of alt-labor’s policy goals has thus far been rather limited. Most often they have fought to secure only the most minimal standards of fairness, decency, health, and dignity on the job—not the transformation of industries or the institutionalization of worker voice in corporate decision-making.

Finally, it is worth noting that public policy is itself limited as a pathway to workers’ rights, and employment laws are not always the best way to make workers’ rights real. Yet, until an overhaul of national labor law becomes possible, employment laws represent low-wage workers’ last best hope of combating exploitation and recovering some protections in the workplace.

In sum, with little other recourse, a growing number of alt-labor groups have turned to politics and policy to combat the systemic exploitation of low-wage workers. To increase their probabilities of success in the policymaking arena, they have sought to alter the political environment in which policy decisions are made. Taking this path has required that they build up their own sources of power, which they have done by harnessing and leveraging their unique strengths. Organizers see this 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.

Introduction

When we talk about labor activism and the defense of workers’ rights, we usually think of organized labor, whose mission of course is to represent and collectively bargain for the interests of workers. But over the last two decades a new array of players—nonprofit “alt-labor” groups1—has become increasingly adept at using public policy, rather than collective bargaining or direct economic interventions, to combat exploitation in the workplace and strengthen basic workers’ rights. Despite their small numbers—there are only about 250 alt-labor organizations scattered across the United States—these groups were cited by journalists as leading advocates in 73% of all successful minimum wage, paid sick leave, and fair workweek laws enacted in 93 cities and counties between 2003 and 2019.2 They also led dozens of successful policy campaigns to combat wage theft, strengthen health and safety laws, fight discrimination and sexual harassment, create domestic workers’ and temporary workers’ bills of rights, defend immigrants’ rights and women’s rights, end bias-based policing, and advance economic and racial justice.

Alt-labor groups have strategically laid the groundwork for these policy victories by making subtle but important changes to the political environment in which policy decisions are made. Specifically, they have worked assiduously (and carefully, given legal restrictions on political activities by tax-exempt organizations) to:

• Build new electorates by registering new voters, naturalizing citizens, and expanding their base to new geographic locations, effectively creating new constituencies of support for their favored policies and candidates;
• Broaden the issue agenda by organizing and mobilizing voters around new issues, incrementally building on policy gains, and seizing opportunities to expand the range of ideas deemed legitimate;
• Alter electoral dynamics by ramping up organizing activities during election cycles and—if the group had a social welfare, 501(c)(4) side organization—explicitly endorsing candidates and intervening directly in electoral campaigns.

Because these interventions affect political incentives and discourses, rather than manifest in campaign contributions or other more readily measurable indicators, they have tended to fly under the radar of many observers. But they are no less consequential for their subtlety. Across a wide range of political contexts, alt-labor’s political work has paved the way for policy victories that have created new rights and protections for vulnerable workers where none previously existed.

The ability of alt-labor groups to alter local political landscapes and raise labor standards through public policy presents something of a puzzle. By conventional metrics, these nonprofit workers’ rights organizations are remarkably weak. Most are small, resource-poor, financially dependent upon philanthropic foundations, and operationally constrained by their nonprofit status. Their members, most of whom are low-wage immigrants and Black, Indigenous, and people of color, are socially, politically, and economically marginalized, with many unable even to vote. In contrast, their adversaries are often well organized, well funded, and socially dominant, and enjoy easy access and influence in government.

Moreover, alt-labor’s model seems to compare unfavorably with the traditional labor union model of political engagement. Whereas unions historically derived their political clout from their associational and structural power (their power in numbers and their members’ strategic position in production processes), alt-labor groups have neither managed to grow a mass base of dues-paying members nor developed the ability to significantly affect production processes or supply chains. Alt-labor groups thus find themselves in the peculiar position of trying to build and exercise power in the political arena without the concomitant associational or structural power that has long propelled the traditional labor movement (Wright 2000; Silver 2003).

How, then, are alt-labor groups managing to make headway for their members in the political and policymaking arenas?

Part of the answer involves structural features of the American political system—such as its highly decentralized form of federalism and its largely inattentive public—that enable well-organized minorities to make advances by strategically selecting favorable local governing venues and seizing windows of opportunity when they arise (Baumgartner and Jones 1993; Kingdon 1984). As Janice Fine (2005, 187) recognized early on, these features have long enabled low-wage immigrant workers, despite their disadvantaged status in American society, to build and exercise greater political than economic power. In her groundbreaking scholarship on worker centers, Fine (2005, 2006) also emphasized how these workers rely on organization, alliance, and public empathy to win unlikely policy victories. I endeavor to build on Fine’s first two insights here. Most subsequent scholarship has tended to emphasize the third—the public empathy aspect—showing how across a range of contexts, marginalized workers have gained political traction by using “symbolic leverage,” drawing upon their “moral authority,” and bringing public awareness to their plight to build empathy and popular support for policy change (Chun 2011, xiii; Bobo 2009; Fine 2011; Agarwala 2013; Choo 2016; Mattoni 2016; Rhomberg 2018, 253; Rosado Marzán 2017, 411).

But most alt-labor organizers are loath to rely on the vicissitudes of public opinion to advance the cause of workers’ rights. And they are not particularly eager to reinforce a narrative in which low-wage workers are framed as helpless victims or dependent on the goodwill of others. Although workers’ stories of exploitation are critical ingredients in most successful policy campaigns—they are particularly helpful in generating favorable media coverage and in persuading legislators to support policy change—they are not especially empowering to members outside of that context. As Marcela Diaz, executive director of Somos Un Pueblo Unido in New Mexico, explained, “Right now there’s a public narrative about immigrants being incredibly vulnerable victims. But our members don’t feel that way. In everything we do, we ask: Where are we coming from? How can we get people to support the strength in our community and to support organizations like ours and people like us who are actually moving things forward?”

For a growing number of alt-labor groups, resolving this puzzle has become a central preoccupation: How to build and exercise power in the political arena without relying on the moral/empathy frame? How to build and leverage workers’ collective strength?

To learn how they are approaching this difficult task, I conducted in-depth, semi-structured interviews with leaders and members of 28 alt-labor groups scattered about the country, using a “diverse case” selection strategy to maximize variance along multiple dimensions of group characteristics and political contexts (Gerring 2006; Seawright and Gerring 2008).3 The groups are listed in Appendix Table 1. Leveraging this heterogeneity, I seek to highlight patterns common to all.

I find that alt-labor groups of all types are working to build three types of power:  

• Power within: Rather than try to replicate the union model of building a critical mass of organized workers in certain sectors of the economy, alt-labor groups seek to go deep with a smaller base of workers anchored in geographic and often racial or ethnic communities. Their base-building efforts emphasize individual empowerment, community building, and transformational organizing (Han 2014). This work is not expensive, but it is time-intensive and has proven difficult to grow to scale. It has, though, generated deep bonds of solidarity, buoyed the groups during tough times, and facilitated adaptation to changing conditions (Han, McKenna, and Oyakawa 2021). 

• Power with: Rather than mobilize around a single issue, alt-labor groups often fashion policy agendas that reflect an intersectional, “whole worker” approach to organizing (McAlevey 2014). This approach extends their purview beyond wages and working conditions to include racial justice, immigrant rights, women’s rights, and other issues affecting their communities while leading them to forge coalitions with a wide range of allies. This outward-reaching, purview-expanding, coalition-building work can spread the groups thin and trade off other priorities. But it also enables them to broaden their reach, generate synergies with others, and gain strategic benefits and efficiencies. 

• Power to: One way alt-labor groups compensate for their lack of resources is with “resourcefulness,” to borrow from Marshall Ganz’s (2000) well-known formulation. Through organizational innovation, they try to do more with less. Notable capacity-building experiments include organizing models built around new technologies, “sister” 501(c)(4) social welfare organizations that permit overt electioneering, and novel resource-sharing umbrella groups. 

Well aware of their many weaknesses and constraints, alt-labor groups are working to leverage and augment their distinctive strengths: their deep roots in local communities and the racial and ethnic bonds that unite their members, their positions within larger ecosystems of progressive-minded groups, and the flexibility of their organizational forms. By tapping into, harnessing, and developing these strengths, alt-labor groups are building sources of power that they can draw upon in their efforts to alter their political environments and advance their policy goals.4

To be sure, alt-labor groups have long engaged in these activities as a matter of course—base building, coalition building, and organization building are elemental to the strategy and practice of organizing (e.g., Ganz 2006)—and not every group conceives of this work as building power that can be deployed in the political sphere. But in recent years, as groups have become frustrated by the limits of what they can accomplish through casework and direct economic actions alone, a growing number have turned toward policy and politics as a means of scaling up their efforts, and their power-building work has taken on an increasingly political cast. Many have found, for example, that their base-building and leadership development work lends itself rather naturally to electorate building and to grooming candidates for elective office. Their coalition-building work, likewise, helps them to project a larger presence in local politics and signals a breadth of support for their expansive issue agendas. And their organizational innovations enable them to intervene in electoral and legislative politics in new ways. But there is no formula: The links between their power-building efforts and their creative interventions in the political arena are varied and wide ranging.

Given the diminutive stature of most groups and the myriad ways in which the American political economy is stacked against low-wage workers (Hacker et al. 2021), the groups’ system-changing ambitions may seem somewhat surprising, or even quixotic. But these activist workers and organizers are not shrinking violets. Many have been deeply influenced by radical organizing traditions, including Latin American and Black liberation movements, and they do not view inherited, status quo power arrangements as fixed or immutable. Their entire disposition is to try to change the system in which they operate.

Although their policy successes to date have been modest by historical standards and enforcement is still a work in progress in many locations, they have been accumulating fast and spreading to states and localities across the nation, demonstrating the plausibility and efficacy of the political path to recovering workers’ rights. Moreover, they demonstrate the political capacities of marginalized, low-wage workers who organize collectively to combat their exploitation and oppression. As Soss and Weaver (2017) and Michener (2020) have written, although race-class-subjugated communities are often depicted solely in terms of their disadvantages, and although they are indeed sites of vast inequalities, they should not be understood in terms of their “political deficits.” In many cases, these are sites of dynamic political activism.

As this paper demonstrates, these workers have built and harnessed political power through their assiduous base-building, coalition-building, and organization-building efforts. They have deployed this power in the political arena, making subtle but important shifts to the political landscape—building new electorates, broadening the issue agenda, and altering electoral dynamics. These shifts have laid the groundwork for far more impressive policy victories—raising labor standards, improving working conditions, and creating new rights and protections for their communities—than most observers would have thought possible, given the groups’ small size, limited resources, and the relative strength of their adversaries. “What makes worker centers special,” said Sophia Zaman of Raise the Floor Alliance, “is that they punch above their weight. They deploy resources in really scrappy and brilliant ways to expand their reach and deliver more sophisticated results for low-wage workers.”

Alt-labor’s political and policy work, however, faces several limitations and constraints, and the groups’ many achievements ought to be viewed in proper perspective. Before turning to the evidence and analysis, some caveats and qualifications are in order.

First, as noted, not every group has pivoted toward politics and policy: Although all engage in the power-building activities described above, younger and more under-resourced groups have tended to remain more focused on casework, individual services, and community organizing. Among those that have pivoted, different groups prioritize different aspects of political engagement; some devote more resources to policy campaigns than others; and each group faces myriad idiosyncratic and context-specific challenges. But variation in group behavior does not seem to correlate with some of the bigger structural factors such as partisan context, sectoral focus, or network affiliation; rather, it seems best explained by each group’s distinctive history, its members’ countries of origin, its mix of personalities, its organizational culture, its “strategic capacity” (Ganz 2000), and the like. Those are the keys to understanding how each group operates, what each group is fighting for, and why, in any given instance, a particular group might deviate from the broader patterns identified here. Such factors are important in their own right and should be attended to—as existing scholarship has done exceedingly well (e.g., Milkman, Bloom, and Narro 2010; Milkman and Ott 2014). But the purpose of this study is different—it is to use this rich heterogeneity to draw out patterns common to all.

Second, most groups are geographically constrained: Most of their work takes place at the city, county, and state levels. It is not confined to “blue” states and urban areas—groups in “red” and “purple” states and in rural and suburban areas are doing the same kinds of power-building, political engagement, and policy-centered work as those in blue areas, as we shall see. But wherever they are, their strength is rooted in their local bases of support, a situation that limits a group’s reach and makes expansion to new states and regions challenging. It also means that local policies are inherently vulnerable to state preemption and that enforcement is an ongoing problem, due to the typically limited enforcement capacities of subnational governments, as discussed below.

The third limitation involves the scope of alt-labor’s policy goals. Although many alt-labor groups share the ideological commitments and long-term aspirations of social-movement-oriented labor unions and see themselves as constituent parts of the labor movement (and not as alternatives to it, as the moniker alt-labor might imply), most often they are fighting to secure only the most minimal standards of fairness, decency, health, and dignity on the job—not the transformation of industries or the institutionalization of worker voice in corporate decision-making. Although they do ultimately seek social, economic, and political transformation, their policy work, thus far, has focused overwhelmingly on preventing exploitation, discrimination, harassment, abuse, wage theft, and dangerous working conditions. Although their policy ambitions have grown decidedly bolder in recent years (e.g., to include policies like just-cause termination and more, as discussed below), their goals have tended to be more defensive than transformative in nature. As Tom Juravich (2018) writes, rather than compare their work with that of unions, they ought to be understood as operating largely “in distinct arenas of power against fundamentally different adversaries.” Indeed, rather than view alt-labor as filling the gaps left by eroded unions, it would be more accurate to see alt-labor as fighting for workers’ basic human rights while incrementally working to raise the floor on labor standards. In other words, what unions no longer do, alt-labor does not replace (Rosenfeld 2014), and enormous structural problems in the American political economy remain (Mishel 2021; EPI 2021).

Finally, it is worth noting the limitations of public policy as a pathway to workers’ rights. As compared with unionization and collective bargaining, employment laws contain no built-in mechanisms for generating collective action and voice in the workplace; they are blunt instruments that feature high barriers to access and often reproduce inequalities; they are geographically dispersed across states and cities; their implementation is contingent upon budgetary politics, administrative will, and the embrace of “strategic enforcement” by government agencies; many employers nevertheless fail to comply with the law; and many workers remain unaware of their rights or fearful of asserting them (Weiler 1990; Berrey, Nelson, and Nielsen 2017; Galvin 2019; Weil 2005; Fine, Lyon, and Round 2021; Fine and Bartley 2018; Galvin 2016; Gleeson 2012; Hertel-Fernandez 2020). Employment laws, in other words, are clearly not the best way to make workers’ rights real. But until an overhaul of national labor law becomes possible, they represent low-wage workers’ last best hope of combating exploitation and recovering some protections in the workplace.

In sum, with little other recourse, alt-labor groups have turned to politics and public policy to combat the systemic exploitation of low-wage workers. To increase their probabilities of success in the policymaking arena, they have sought to alter the political environment in which policy decisions are made. Taking this path has required that they build up their own sources of power, which they have done by harnessing and leveraging their unique strengths. The bulk of this paper is devoted to examining the component parts of alt-labor’s power-building work and how it has been deployed in the political sphere. But first, let us discuss some of the problems alt-labor groups emerged to address, some of the factors motivating their turn toward politics and policy, and some of the challenges they face. 

Background: Wage theft, the rise of worker centers, and the turn to policy

Over the last several decades, a convergence of several major economic, social, and political developments has transformed the nature of work in the United States. Heightened global economic competition, deindustrialization, the “financialization” of the economy, and the rise of supply chains and production processes predicated on subcontracting, outsourcing, offshoring, and franchising have resulted in a “fissured” workplace and an abundance of poor quality, low-wage jobs (Weil 2014; Kalleberg 2011; Davis and Kim 2015). Meanwhile, as millions of low-wage immigrant workers have entered the workforce and private-sector labor unions have declined, conservative politicians have deliberately weakened labor and employment standards, leaving millions of low-wage workers increasingly vulnerable to exploitation in the workplace (Estlund 2002; Milkman 2006; Bernhardt et al. 2009; Galvin 2019; Mishel, Rhinehart, and Windham 2020).

Although most low-wage workers technically have the legal right to unionize, precious few have been able to: In 2019, only 3% of low-wage workers in the private sector were unionized.5 This lack of union representation has been particularly problematic for workers who perform indispensable work but whose race, ethnicity, gender, and citizenship status renders them especially vulnerable to wage theft, discrimination, sexual harassment, unsafe or unhealthy working conditions, and other forms of exploitation. Indeed, it is a tragic irony that some of the hardest-hit, least-protected workers during the Covid-19 pandemic have been low-wage immigrant workers and people of color working in long-undervalued jobs that are now deemed “essential” (Kinder and Ross 2020; Gould and Shierholz 2020).

The most common and pernicious problem these workers face is wage theft, or the failure to pay workers what they are legally owed. In highly competitive sectors featuring many small subcontractors, thin profit margins, and slack low-wage labor markets, many employers seek to save on labor costs by evading minimum wage, overtime, and wage payment laws. With minimal government oversight and weak penalties, the structural incentives for noncompliance are strong (Ashenfelter and Smith 1979; Weil 2005; Galvin 2016). Analyzing Current Population Survey data, I find that about 15% of low-wage workers were paid less than their state’s minimum wage between 2009 and 2019, on average.6 These workers lost about $1.67 per hour on average, or 21% of the minimum wage to which they were legally entitled.7 The highest rates of minimum wage noncompliance were found in the private households (27%), personal and laundry services (23%), membership associations (22%), and agriculture (20%) industries. Noncitizens and Latinx workers were about twice as likely to suffer a minimum wage violation as U.S. citizens and white workers, respectively, and women and Black workers were about 1.5 times as likely than men and white workers.8 When the interaction of gender, race, and citizenship are taken into account, the effects of discrimination were compounded: Latina women who were not U.S. citizens, for example, were 2.8 times as likely to experience a minimum wage violation than were white women who were citizens; noncitizen Black women were 2.1 times as likely (Figure A).9

Figure A

Over the last two decades, alt-labor groups have emerged in numerous cities around the nation to help these nonunionized, low-wage workers combat these forms of exploitation. The groups are a diverse lot. They include organizations that self-identify as “worker centers” as defined in Janice Fine’s classic 2006 text; community-based organizations that do not consider themselves worker centers but whose primary mission includes fighting for workers’ rights; national and regional alliances of workers’ rights groups; and “amalgams” that include workers’ rights divisions within their broader organizational purviews.10 Worker centers, which Fine defines as “community-based mediating institutions that provide support to and organize among communities of low-wage workers” (2006, 11), constitute the organizational core of alt-labor.11 In their latest count, Fine, Narro, and Barnes (2018) identified 226 operational worker centers in the United States, a sign of dramatic growth in a short period of time, as only a handful were in operation in the early 1980s (Figure B).

Figure B

The number of worker centers is always in flux, however, for several reasons: Some of the smaller, poorer groups do not always survive; nationally federated organizations like the National Day Laborer Organizing Network (NDLON) periodically seed new groups in new locations; and preexisting groups that did not previously tackle workers’ rights issues often “evolve” to take on worker center functions in response to the needs of their members. Worker centers typically help workers document their grievances, file formal complaints with regulatory agencies, and sue unscrupulous employers; many also offer language and skills-training classes to help boost members’ job prospects; almost all emphasize community building, community organizing, and leadership development; and each also undertakes a wide range of other activities specific to that group’s context, culture, and membership needs.

Despite their central focus on workers’ rights, worker centers and kindred alt-labor groups are not, and have never been, unions. They do not serve as workers’ exclusive bargaining representatives or engage in collective bargaining; many do not require dues payments, and those that do tend to treat dues as a symbolic gesture of commitment and solidarity more than as a reliable source of income for the organization. Nor are they structured like typical nonprofit organizations: Although most provide direct services to needy workers, they have endeavored to go well beyond service provision. They also seek to empower workers, develop their sense of individual agency, mobilize them in collective action, and help them demand justice through a broad range of tactics and strategies (Fine 2005, 2006, 2011; Fine, Narro, and Barnes 2018; Eidelson 2013; Milkman, Bloom, and Narro 2010; Milkman and Ott 2014; Rosado Marzán 2017; Theodore, Gutelius, and Gonzalez 2019; Fisk 2020).

One of the most well-known strategies is the “workplace justice campaign,” also called “direct action,” in which groups of workers seek to bring maximal public attention to their employers’ abusive behavior and boost their leverage in demanding redress by orchestrating spectacular public demonstrations, disruptive actions, boycotts, and other types of public shaming strategies. Carefully targeted and strategically organized, direct actions are usually successful, achieving some form of recompense for aggrieved workers. These campaigns often advance movement-building goals as well, generating what sociologist Rachel Meyer has termed “collective efficacy” and Meyer and Fine call “grassroots citizenship” (Meyer 2017; Meyer and Fine 2017).

Confronting low-road employers one at a time, however, can be very costly in terms of the resources expended and opportunity costs incurred. Because the labor violation has already occurred, workplace justice campaigns are inherently reactive—they do little to deter exploitation in the future—and once the campaign is over, the employer retains its outsized authority and may well continue to exploit workers. The same is true for filing complaints with state agencies and initiating lawsuits: Many organizers call them “band-aids” because they are reactive fixes rather than proactive deterrents. To be sure, direct actions, complaints, and lawsuits are all critically important tools in the fight against worker exploitation—especially when used as leverage in combination with one another—but they often drain worker organizations of precious resources without making much of a dent in the underlying power imbalance in the workplace.

This, more than any other reason, is why alt-labor groups have increasingly turned to public policy—to state laws, local ordinances, and other uses of public authority—to combat workplace exploitation and strengthen workers’ rights. Like workplace justice campaigns, policy campaigns serve as rallying points for generating collective action, building solidarity, and empowering workers.12 But unlike workplace justice campaigns, public policies have the potential to raise the floor on labor standards across thousands of workplaces and entire geographic regions in one fell swoop. “That’s how we scale up our efforts,” explained Adam Kader, policy director and former longtime worker center director at Arise Chicago. “Our path to scale is via policy. We go over the heads of all these employers. Then, theoretically, we’ve changed every workplace in the entire region.” If properly designed and executed—e.g., with strong penalties and vigorous enforcement—employment laws can reduce the incidence of labor standards noncompliance (Galvin 2016). When low-road employers nevertheless continue to violate the law, policies provide mechanisms through which workers can petition the state to hold employers accountable.

Alt-labor organizers often describe public policy as an alternative way to recreate, one policy at a time, the semblance of a collective bargaining agreement that is enforced by the state. “We are trying to fill the holes of what a collective bargaining agreement can get workers, for the workers who don’t have a collective bargaining agreement,” Deborah Axt, former co-executive director of Make the Road New York (MRNY), told Jane McAlevey (2014, 185). “For the many workers in the informal economy, we are trying to put as many pieces together as we can to offer protections as if they had a contract.” But Axt and other organizers also understand fully the limitations of employment law. They tend to view it as a last resort in the context of declining unions and widespread exploitation of low-wage workers—a workaround solution to raise the floor on labor standards and recover some workers’ rights.

At their most aspirational—when asked to sketch their boldest vision for the future—many organizers paint a similar picture: Each new policy win contributes in a piecemeal way to building a different kind of state, one that views the employment relationship from the perspective of workers at least as much as from the perspective of employers and business owners, one whose operations are geared toward protecting workers’ rights and raising the floor on labor standards at least as much as toward promoting economic growth. Ideally, this reconstituted state regulatory apparatus will work hand-in-glove with a reformed national labor law and revived unions, with each helping to fortify the other (Block and Sachs 2020; Fisk 2020).

The rough outlines of this vision are, in fact, starting to appear in select urban locations. Consider the growing complement of pro-worker policy enactments that have accumulated over the last 10 years in Chicago, Cook County, and across Illinois. Alt-labor groups, in coalition with labor unions and others, have been instrumental in persuading city, county, and state lawmakers to enact multiple minimum wage increases, anti-wage-theft and wage protection laws, earned paid sick leave, fair workweek advance scheduling requirements, a temp workers’ bill-of-rights law, a domestic workers’ bill-of-rights law, an anti-retaliation ordinance, and whistleblower protection for workers who report discrimination and harassment. They have also created new state enforcement capacities via the new Office of Labor Standards in Chicago (founded in 2019) and the Workplace Rights Bureau in the Illinois attorney general’s office (founded in 2015), both of which are empowered to investigate employers and enforce the new employment laws. Chicago-area worker organizations view these accomplishments as only the beginning (e.g., Doussard and Lesniewski 2017; Oswalt and Rosado Marzán 2018).

But “deep blue” Chicago, where alt-labor groups work in solidarity with traditional labor unions and other powerful groups and where almost all elected officials are Democrats, is not the only city where alt-labor groups have made headway in recent years. As noted above, between 2003 and 2019 alt-labor groups were cited by local newspapers as leading advocates in 73% of all minimum wage, paid sick leave, and fair workweek laws enacted in 93 cities and counties throughout the United States (see Appendix Table 2 for detailed list). Alt-labor groups were hardly solely responsible for getting these laws passed, nor would any claim to be; as indicated in the appendix, they almost always worked in coalition with unions and other community-based groups. But they were high-frequency repeat players: While dozens of other types of advocacy groups were instrumental in particular times and places, only alt-labor and traditional labor groups were consistently on the front lines.13 A similar pattern can be observed in subnational anti-wage-theft policies. Doussard and Gamal (2015) found a strong and statistically significant relationship between the number of worker centers in a state and the introduction of 255 state-level anti-wage-theft laws in 2004–2012; Galvin (2016) similarly found that most of the 12 major wage-theft laws passed between 2006 and 2013 were the result of vigorous advocacy by worker centers and allied groups.

Impressive as these victories are, most organizers would hasten to note that they only scratch the surface of the problem. Many of the policies that manage to survive the legislative process are too watered down or limited in geographic reach to make much of a dent in the structural power imbalance in the workplace; most establish only minimal labor standards, provide only the most basic rights and protections, and promulgate only the most nominal standards of decency. Many laws are woefully under-enforced, and even under the best enforcement regimes, such as in San Francisco, worker exploitation remains a persistent, pernicious problem (Galvin, Fine, and Round 2020). Even straightforward minimum wage laws, as we have seen, do not guarantee that workers will actually be paid the minimum wage.14

These glaring limitations notwithstanding, many alt-labor groups view employment laws as low-wage workers’ last best hope until labor law is reformed. With limited labor market power and little other recourse, workers have turned to the state to protect their rights. “It is the loser who calls in outside help,” political scientist E.E. Schattschneider (1960) wrote frankly in his classic text. “It is the weak, not the strong, who appeal to public authority for relief” (16, 40).

But in moving the conflict out of the workplace and into the political arena, alt-labor groups have swapped one set of formidable challenges for another. Although the democratic process is theoretically open to all—in storybook pluralism, any group can compete for the chance to use public authority for its purposes—in practice, the political system features high barriers to entry. As political scientists have shown, the policymaking process favors well-organized groups with long time horizons, deep pockets, and personal connections with decision-makers—i.e., business groups. Such groups enjoy both policy responsiveness from elected officials and substantial agenda control: They are able to keep issues off the agenda, add their preferred issues onto the agenda, and reframe issues to favor employers’ interests. And as Fine and Shepherd (2021) show in their contribution to this series, business also wields multiple forms of “structural” and “instrumental” power in both the policy development and enforcement stages. In contrast, low-wage workers, who have historically lacked organized group representation, are among the least likely to enjoy policy advocacy or responsiveness from elected officials (Baumgartner and Leech 2001; Bartels 2016; Strolovitch 2008; Schlozman, Verba, and Brady 2012; Hojnacki et al. 2012; Gilens and Page 2014). Other barriers to equal participation include biases in the campaign finance and candidate selection systems, institutionalized voting restrictions, structural vote-dilution strategies, corporate rent seeking, “revolving door” lobbying, regulatory capture, and more. The political system, in short, is stacked against low-wage workers and structured in ways that sustain and reproduce existing power imbalances.

What is more, by standard measures, alt-labor groups are structurally very weak. Although a majority are now affiliated with national networks that lend them some additional capacity and scale (Fine, Narro, and Barnes 2018), most are small, poor, and lacking in institutional capacity. They tend to employ only a small number of modestly paid staff, and their membership numbers are low—typically in the hundreds. Gates et al. (2018) find that worker centers’ median annual revenue in 2012 was $410,000, with a modal revenue of only between $100,000 and $200,000. Most are registered as 501(c)(3) nonprofit organizations, a classification that imposes strict limits on the activities in which they can engage, a point I will return to later.

Because they lack a robust dues-paying membership base, most alt-labor groups have turned to external sources, like philanthropic foundations, government agencies, and wealthy donors, but this path has produced dependencies and inhibited the development of potentially more resilient and autonomy-generating dues-based funding structures (Fine, Narro, and Barnes 2018). Gates et al. (2018, 42) find that funding from private foundations accounted for roughly 80% of worker center revenue in 2012, with some reporting upward of 97%. This dependency has caused many groups to alter their activities to comport with foundations’ priorities, as set from on high. Although these priorities are usually complementary to the groups’ ongoing work—emphasizing civic engagement, leadership development, base building, and so on—and although funded groups are typically selected for their ongoing work in these areas, meaning they are already doing it—the grant-seeking process can also push groups in directions they had not previously intended to go, cause them to sacrifice some of their autonomy, and undermine their commitment to bottom-up decision-making processes (e.g., Smith 2017; Francis 2019).

Given the manifold constraints and pitfalls associated with the alt-labor organizational model, how have these groups managed to make headway for their members in the political and policymaking arenas? The following sections summarize the common trends I have observed in my study of more than two dozen alt-labor groups between 2018 and 2021.15 These groups were carefully selected to maximize diversity across a range of group characteristics and contexts (see Table 1 and Appendix Table 1 for further details), a common case-selection technique for the purpose of descriptive analysis (Gerring 2006; Seawright and Gerring 2008).

Table 1

Although the term alt-labor is sometimes used by journalists to describe any worker movement that is not explicitly tied to a labor union—including the (union-funded) Fight for $15 movement, online platforms like coworker.org, and the wildcat teacher strikes of 2018—I use the term more narrowly here. For the purposes of the present investigation, I treat alt-labor groups as registered nonprofit organizations whose primary purpose involves organizing low-wage workers to fight for workers’ rights. This categorization includes all worker centers, by definition; other community-based groups, alliances, and organizations that do not self-identify as worker centers but whose primary mission includes fighting for workers’ rights; and “amalgams” like Make the Road New York (McAlevey 2013) that have grown into large organizations that tackle a wide range of issues, yet workers’ rights remain central to their mission. Because these groups have assumed many different organizational forms, I sought to sample a diversity: stand-alone groups; groups that are affiliated with a major alliance; groups that are affiliated with more than one alliance; groups that serve, themselves, as umbrella groups, alliances, or federations of smaller groups; groups that are registered under the tax code as 501(c)(3) organizations; and groups that are registered as 501(c)(4) organizations (note that all (c)(4)s are affiliated with a (c)(3), and a few have other registrations as well).

Despite significant variation across groups and contexts, some clear patterns emerge. Although different groups are at different stages in their power-building projects, all are deeply engaged in efforts to build three related but analytically distinct sources of power: power within their membership base; power with allies; and power to undertake a wider range of activities. A growing number are drawing upon these sources of power to ratchet up their civic engagement and political activities—a strategy that has enabled them to forge an alternative path to strengthening workers’ rights through politics and public policy. 

Building power within: Base building

Although a few select groups have grown their membership rolls into the thousands, most have a small base of active members. Group leaders acknowledge that membership rolls may never be large enough to provide them with the kind of associational power upon which labor unions have long relied. Their strength, they believe, comes not from the size of their membership or the extent of their financial resources, but from the intensity of their members’ commitments to fighting for each other, their shared sense of community and solidarity, the depth of their personal relationships, and the creativity, courage, and tenacity they bring to their collective actions.

To build these less-quantifiable sources of power on shoestring budgets, the groups emphasize what the political scientist Hahrie Han has called “transformational organizing”: They work to transform the “motivations and capacities of their members to cultivate greater activism” (2014, 10; also see Theodore, Gutelius, and Gonzalez 2019). That is, rather than “going broad” by trying to build power in numbers, they “go deep” by empowering individual workers, raising a collective consciousness, and building strong bonds of community and solidarity. They train their members to be autonomous, motivated organizers, elevate them to leadership roles in the organization, and empower them to develop programming and lead collective actions. They try to build meaningful, authentic relationships among members and cultivate mutual accountability and a sense of collective identity across race, class, gender, and country of origin. When executed well, transformational organizing can be self-reproducing and generative: It can lend organizations resilience, flexibility, and adaptive capacities that enable them to operate amid uncertainty and carry out a wider range of unknown activities in the future, even in the absence of substantial financial resources (Han 2014; Han, McKenna, and Oyakawa 2021).

Worker centers and other community-based workers’ rights organizations attract members through two main channels: classic community organizing approaches (door knocking, one-on-one discussions with neighbors) and the provision of services and support to workers (English language classes and other skills training, know-your-rights trainings, assistance in filing wage claims, and initiating litigation). However workers find their way into the organization, the simple act of coming together and forging meaningful relationships is viewed as fundamental to base building. As the sociologist and organizer Marshall Ganz noted in conjunction with the Gettysburg Project, drawing on Tocqueville: “Through the process of coming together, individuals learn to move beyond their narrow self-interest. They move toward an enlightened self-interest and a broader understanding of common interests and common purpose.…equality of voice can translate into the power or the capacity to achieve common purpose” (Zitha 2014).

Ana Maria Archila, co-executive director of the Center for Popular Democracy and previously co-executive director of Make the Road New York (the group with the largest membership base in my sample), told me: 

Powerlessness is so inside people’s bodies—or like the glasses we can’t take off—and we practice it so much in our society that I think a lot of our work is actually like doing interventions, creating the space for people to peel away a little bit the layers of that so that they can get to a place of creativity and fearlessness, tap into courage….Basically just a room with someone to facilitate a conversation, some food and some space for socializing—that was the basic formula for building a membership organization [Make the Road New York] that is now 25,000 people or so. The space for people to take off the many layers of accumulated experience of not being powerful.

In coming together and building relationships, those who lack power can begin to reinterpret their experiences as unnatural injustices, as products of an unequal distribution of power in society and in the workplace—not just “the way things are.” As the political scientist John Gaventa (1982) writes, the first stage of rebellion is that “the powerless must be able to explore their grievances openly, with others similarly situated. They must develop their own notions of interests and actions, and themselves as actors” (257). Only then can they “mobilize upon” those issues and demand change.

Offering a safe, nurturing environment in which workers can build authentic connections, develop a collective consciousness, hone their leadership skills, and begin to tackle real, urgent problems—these are the key ingredients of power building within the organization. They lend the group resiliency and versatility, which it needs to weather ups and downs, and adaptive capacity, which it needs to seize opportunities when they arise (Han, McKenna, and Oyakawa 2021). As Jessica Vosburgh of the Adelante Alabama Worker Center in Birmingham says, building a strong, member-led organization that works to empower community members to act collectively is a critically important, if often overlooked, form of power: “There are things you can do that are like building alternative power structures…[around] personal-level, interconnectedness and relationships. That is building power—just not in a, ‘I’m going to go lobby the city council kind of way.’”

Most workers find their way into the groups after they have suffered wage theft, sexual harassment, verbal or physical abuse, injuries at work, discrimination, retaliation, and/or other forms of exploitation on the job. What they seek is practical support and advocacy. Many are unaware of their legal rights, unacquainted with the bureaucratic and legal processes they must navigate in order to vindicate those rights, or fearful of the consequences of reporting exploitation (Gleeson 2010). Most expect the group to help them sue their boss or complain to the authorities. “They think, ‘You are a nonprofit, you are here to help me,’” one worker-organizer noted. Ultimately, they want a judge or state agency to order their employer to pay back the wages they stole, give them their job back, or get their abusive supervisor fired.

All workers’ rights groups provide some amount of assistance to workers in contacting employers directly (writing “love letters,” as organizers at Worker Justice Wisconsin call them), filing complaints, or pursuing legal remedies, and some even spend the majority of their resources on these activities. But many have scaled back or outsourced their support services in recent years. To be sure, services have long served as crucial recruitment tools—and still draw many workers in to worker centers—and lawsuits can be very effective mobilizing tools in building social movements (e.g., McCann 1994). But many groups have come to see services as counterproductive because they effectively individualize workers’ experiences. Complaints to state departments of labor are made by individuals; the “private right of action” permits legal action by an aggrieved individual worker against his or her individual employer (as many states forbid class action wage-hour lawsuits); and forced arbitration proceedings are similarly dyadic. The individualized pathways of redress provided by employment laws can reinforce the isolation and alienation many workers already feel and undermine the groups’ larger goals of fostering a collective consciousness and generating sustained collective action.

Consequently, before most groups will meet one-on-one with aggrieved workers to discuss their situations, they require them to attend a workshop with other aggrieved workers and a subset of more experienced members, often on a weekday evening. Such workshops serve important agitation and consciousness-raising functions. Organizers try to accomplish a few things. First and foremost, they welcome newcomers and try to communicate that “you’re not alone; we’ve all been through the same thing; that’s why we’re here,” said Axt of Make the Road New York. Staff and trained member-leaders then try to deconstruct the individualistic premises and assumptions workers often bring with them. They try to help the newcomers see that what they perceive as a personal, individual grievance is actually a collective problem shared by others in the room, explained Kader: 

You think you’re individually aggrieved, it’s because of your individual identity alone, and you all want attorneys. Those are the three assumptions workers are bringing to the table. We quickly have to dismantle all three. First we say: OK, well look around—there’s more than one of you. So this is not a personal problem. This is a social problem. Number two: You said the reason you’re exploited is because your boss is Hindu and you’re not. Well, the brother next to you said his boss is Mexican and he’s been exploiting him too. So maybe your boss is racist against Mexicans, but that’s not the only factor. Clearly exploitation is bigger than simply prejudice against a certain nationality. And third, you can only get from the law what the law provides. With organizing you can get whatever you want. It’s a question of how much power you can build.

Organizers thus help workers to reinterpret their experience of exploitation as a symptom of the broader power imbalance in the workplace and in American society. It may well be true that their particular employer is unusually cruel and abusive, but that employer is not the real problem. The crux of the issue, groups try to communicate, is the vast inequality of power that exists in the workplace and in the broader society.

Organizers walk newcomers through the basics of federal, state, and local employment and labor law rights and protections, showing what kinds of things employers can and cannot legally do and what options workers have. At that point, many workers learn, to their great disappointment, that elements of their employers’ behavior that may be most offensive to them—especially verbal abuse, disrespect (belittling, name calling, shouting), and related offenses—are rarely illegal. They learn how policy decisions are made, how pro-employer biases and loopholes get inserted into laws during the policymaking process, how laws are not self-enforcing, and where power really lies in their communities. Some workers become interested in digging deeper into the power analysis and consider organizing strategies, while others are eager to move on to the complaint/litigation process.

At the same time, the groups recognize that too much orientation around individualized support services trades off the groups’ broader power-building goals. “If what you want to do is only resolve your wage case, then we’re going to support you, but in a very limited way,” explains Rachel LaZar, director of El Centro de Igualdad y Derechos in Albuquerque, N.M. “What we’re about is growing power. So if you want to join a movement to grow power with other low-wage workers, this is how you do that….Of course, people are at different levels of being politicized: Not everyone’s there, and so we try to recognize and work where people are at.…[But] our organizers should not be case managers. If that’s what they’re doing, we’re really not doing anything to end wage theft, or shift dynamics of power, and that’s what we need to be doing.” Some organizations downplay services for more ideological reasons—because they are more inspired by other models, such as Black nationalist and civil rights movements, or Latin American liberation and guerilla movements—or simply because they believe other models are more scalable than the service-based organizing and direct-action models.

Using Freire-style popular education and “train the trainer” methods, groups ranging from El Centro in Albuquerque to WeCount! in Homestead, Fla., to New Labor in New Brunswick, N.J., hold training sessions to empower workers to become, themselves, organizers and activists. They learn about the history of labor rights, organizing, and power and oppression in the U.S.; the history of domestic work, farm work, and other industries their members work in; and the nuts-and-bolts of community organizing, conducting power analyses, and countermobilizing. Trained “Defensoras Comunitarios” then go out into their communities and meet more workers at schools, churches, and other community spaces to conduct further community-building and leadership development trainings. Most groups also have committees focused on policy campaigns, civic engagement, and voter education.

These activities—the peeling away of the layers of powerlessness, the building and deepening of relationships among community members, popular education, power analyses, consciousness raising, and leadership development—are all fundamental elements of base building. Although only a limited number of workers remain active year-to-year, the groups’ base-building methods enable them to continually build and rebuild a core cadre of committed activist worker-members. These efforts to build a solid inner core of activist members lends the groups the resilience, versatility, and adaptive capacities they need to expand their issue agendas, develop strong coalitions, and launch the wide range of political and policy campaigns discussed below.

Building power with: Issue expansion and coalition building

Most of the issues around which alt-labor groups organize emerge organically from members’ lived experiences: the day laborer’s wage theft, the meatpacker’s unhealthy and unsafe working conditions, the domestic worker’s sexual harassment, discrimination in placing temp workers, retaliation against farm workers who dare to complain. Although these forms of exploitation are widespread and affect millions of workers, they are experienced individually by people who are usually isolated from one another and scattered across industries, geographies, and workplaces. Absent the efforts of alt-labor groups to bring these workers together and help them reinterpret their individual experiences of exploitation as collective problems that result from deeply rooted power asymmetries, those experiences would remain isolated incidents and individual problems. One of the functions of alt-labor groups, in other words, is to pay the costs of overcoming workers’ collective action problems by providing a place for workers to congregate, build personal connections, and formulate concrete issue agendas upon which to act collectively.

As they begin to construct their collective issue agendas, members invariably link the racism, xenophobia, and sexism they face inside the workplace to the same oppressive forces they, their families, and their neighbors face outside the workplace in their communities. Alt-labor organizers help them draw out these connections in much the same way that Jane McAlevey describes “whole worker” organizing: “Whole-worker organizing seeks to engage ‘whole workers’ in the betterment of their lives. To keep them consistently acting in their self-interest, while constantly expanding their vision of who that self-interest includes, from their immediate peers in their unit, to their shift, their workplace, their street, their kids’ school, their community, their watershed, their nation, their world” (2014, 14). Because alt-labor groups seek to be highly responsive to their members’ needs and concerns—and because many groups make decisions about which campaigns to pursue through bottom-up democratic processes—the result is often the formulation of broad, multifaceted issue agendas.

Rather than single-mindedly seeking to combat wage theft, in other words, alt-labor groups often construct issue agendas that also include fighting anti-immigration policies, racial discrimination, gender discrimination, and specific challenges facing their communities, such as housing, public education, environmental hazards, and more. In their view, each crisis flows from the same underlying problem, which is the outsized power of those who oppress them and their own lack of influence over the decisions that shape their lives. Each issue on their policy agenda thus offers a separate door onto the same fight: an opportunity to chip away at the power asymmetry.16

Agendas that transcend workers’ rights issues are also instrumentally useful: By tackling multiple issues simultaneously, groups can pivot from one fight to the next; adjust to the different tempos of different campaigns; mix and match bolder, more ambitious goals with smaller, more winnable fights; and shift focus from a demoralizing loss along one front to an uplifting victory on another. And to the extent that broader issue agendas facilitate coalition building with a wider range of groups, they effectively multiply the groups’ points of pressure on the political system.

Typically, policies are pursued by entering into coalitions with multiple partners. Some coalitions are more durable, featuring strong relationships and formal organizational ties; others are more ad hoc and instrumental. Practically speaking, pursuing multiple campaigns with multiple allies can make for some difficult choices about which campaigns to prioritize and which to put on hold; it can spread groups thin and deplete their resources; and it can strain alliances between groups and with their champions in government who may be friends on one issue but opponents on the next. Most organizers acknowledge these sorts of challenges and feel they must constantly make difficult tradeoffs. But they insist that “this is the work,” as it reflects the urgent needs of their members.

The incentive to build power with others is also a rational response to organizational weakness: Coalitions enable scrappy groups to share resources, generate efficiency gains, and magnify their collective influence; they also signal to elected officials the breadth and intensity of support for an issue, thereby reducing the political risk associated with adopting the coalition’s position (Schlozman and Tierney 1986; Hojnacki 1997, 1998; Mahoney 2008; Hojnacki et al. 2012; Heaney and Lorenz 2013). Coalitions also enable information sharing and trust building, which helps allied groups remove roadblocks to mobilization. On the flip side, coalitions can sometimes conceal adversarial relations between groups, paper over frictions, and obscure power differentials within the coalition.

Still, by far the most common way alt-labor groups seek to build collective power is “through the creation and nurturing of alliances,” as Bill Okerman of the Needham Area Immigration Justice Task Force in Massachusetts put it. There is perhaps no concept more fundamental to organizing than that of building “power with” or “relational power,” which Marshall Ganz describes as “the benefits of social cooperation and our capacity to accomplish together what we cannot accomplish alone” (Ganz 2006; also see Brookes 2013; Loomer 1976). Jo Rowlands (1997) similarly describes “power with” as “a sense of the whole being greater than the sum of the individuals, especially when a group tackles problems together.” The following examples illustrate some of the benefits as well as the challenges alt-labor groups encounter in their efforts to build collective power through coalition building.

One group that brings together a diverse set of low-wage workers in pursuit of multiple, overlapping issues within a single organization is the New Orleans Workers’ Center for Racial Justice (NOWCRJ). This group is organized into three distinct identity-based “projects.” The Congress of Day Laborers comprises predominantly immigrants from Honduras, Guatemala, and some Caribbean countries, and their industries range widely, from construction to home health care to domestic work. NOWCRJ’s Stand with Dignity project includes predominantly under- or unemployed Black workers, including many gig workers. The third group, Alianza de Trabajadores Oriscos y Pescados (Seafood Workers Alliance), comprises mostly workers with H-2B visas (temporary, nonagricultural jobs) predominantly from Mexico who organize up the supply chain to impact buyers of Louisiana-packed seafood. Although each project develops its own campaigns independently, all NOWCRJ members come together to conduct political education and power analyses and to provide mutual support. The key is to “find a common target, which requires constant learning, constantly renewing the politic,” explained Executive Director Ursula Price. “But if we do the work to dig down a layer, we find a common fight.” Centering the analysis on power in its multiple manifestations helps the group transcend its workers’ many diverse backgrounds and identify a common purpose.

Worker Justice Wisconsin (WJW) was founded in 2018 when two organizations—the Interfaith Coalition for Worker Justice of South Central Wisconsin and the Workers’ Rights Center—merged for the explicit purpose of pooling resources and reducing redundancies in their overlapping work in the city of Madison. WJW now serves as both a service-oriented worker center and a centralized hub for coalition building and generating collective action among interfaith, labor, and community groups. As Executive Director Rebecca Meier-Rao explained, “We’re aware that we’re small and by ourselves, we’re fairly powerless, especially as we devote a lot of our resources to taking care of workers that are coming to our worker center. The only way we get the word out is to build partnerships and coalitions….Our sense is that if we are not in coalition, our impact will be limited. And even if we grow, we won’t be powerful enough to go against strong forces alone.”

Although WJW is one of the smallest groups in my sample (with only $114,000 in income in 2019 and only four part-time staff members), the coalition-building imperative Meier-Rao perceives is not a function of WJW’s size or level of financing. The largest group in my sample, the Center for Popular Democracy (CPD), which reported almost $29 million in revenue in 2019, has 95 staff members in nine states and three large cities, and which nurtures 55 affiliated partner groups in 131 cities across 34 states, Puerto Rico, and Washington, D.C.—was founded on the same premise: to “aggregate institutional resources and relationships,” said Co-Executive Director Andrew Friedman. CPD sought to institutionalize linkages between base-building groups scattered about the country, establish routines for regularly disseminating resources and sharing best practices, and build collective political capacities to win a “pro-worker, pro-immigrant, racial and economic justice agenda.” Several of CPD’s larger affiliates maintain their own coalitions and networks—for example, Piñeros Campesinos Unidos Noroeste (PCUN) in Oregon, United for Respect (UFR, formerly OUR Walmart), Make the Road, and Casa de Maryland—which, through partnership, extends each group’s reach further still.

Although most alt-labor groups view themselves as militant agitators engaged in a long-term struggle to fight exploitative employers, white supremacy, patriarchy, and neoliberalism, groups that work predominantly within specific industries often seek to fashion political alliances with groups they might otherwise oppose in order to make progress in reforming industrial practices. High-road employers and business associations with an interest in leveling the playing field and rooting out unscrupulous employers who use wage theft to gain a competitive advantage, for example, can make useful partners for alt-labor groups in policy campaigns. Such partnerships can demonstrate to elected officials the breadth of support for reform. In politics, “you have to have unlikely alliances,” Price of NOWCRJ explained. “You have to find common ground with people you don’t agree with.”

The Restaurant Opportunities Center (ROC) United, for example, has put considerable effort into forging partnerships with high-road employers and local restaurant associations that support higher wages and other protections for restaurant workers in order to level the playing field. Making change in the restaurant industry, ROC leaders have come to believe, requires support from all: “Without allies it cannot work,” explained Fekkak Mamdouh, co-founder and former co-executive director. “You need the restaurant owner, you need the consumer, you need the city council people, you need the Congress people, and you need tourists, too.” ROC encourages its restaurant-owner allies not to leave their local restaurant associations but to “stay inside and fight from within….You have to be in it to change it,” said Mamdouh. “Our members should be on the board.” Saru Jayaraman, ROC co-founder and former co-executive director, agreed: “We’ve expanded our definition of who’s most affected—we’ve come to understand it’s not just workers, it’s employers—and built a broader social movement organization based on that.” Other examples include the National Domestic Workers Alliance’s (NDWA) partnership with Hand in Hand and PCUN’s participation in the Equitable Food Initiative, a coalition including corporate retail firms and farm owners that “certifies” companies that agree to abide by higher labor standards.

Alt-labor’s most common allies, of course, are labor unions and other nonprofit community-based organizations. Some alt-labor organizers dislike the term alt-labor because they see themselves as a constituent part of the labor movement—full stop—and not as an alternative to it, as the term might imply. In fact, many alt-labor groups and labor unions are formally allied. In 2006, the AFL-CIO launched the Worker Center Partnership to strengthen ties to worker centers, and its network has grown in intervening years. Informal alliances are also quite common. Within my sample alone, 10 of the 22 501(c)(3) groups have ties to labor unions that range in formality from memberships on local labor councils with voting rights to courtesy affiliations that merely recognize a solidarity relationship.

Despite these formal and informal ties, the relationship between traditional and alt-labor has been described as a “mismatch” in practice (Fine 2007). In part, the explanation is structural: Whereas traditional unions typically focus on organizing bargaining units within companies in targeted sectors for the purpose of engaging in collective bargaining, worker centers tend to focus on “raising labor standards community-wide…[and] building a grassroots social movement that can transform society.” Worker centers do often encourage their members to unionize, but they tend to see union organizing as a means, not an end, and are more concerned with “broader issues of social reproduction and economic and political incorporation” than most (but certainly not all) unions. There can be substantial cultural differences between unions and workers’ rights groups as well. Within some unions, discussion of immigration and worker centers are “still quite fraught” and “marked by misconceptions and misunderstandings” (Narro and Fine 2018, 70).

Some alt-labor leaders, in turn, feel that unions have long since lost their edge. “They forgot to be the Knights of Labor,” one told me. “Their fights are more around money.” Another stated plainly that although they work together regularly, “we’re small and scrappy and uninfluential in their eyes.” Another organizer explained that while alt-labor has “moved unions in a more radical direction, they take offense to the notion that we’re influencing their agenda. The power dynamic is definitely unequal.” Such frictions notwithstanding, many unions and alt-labor groups have built constructive, mutually beneficial relationships with one another. “We are all part of the same movement,” said Sophia Zaman of Raise the Floor Alliance. “We share the same goals: Healthy and dignified work for all.”

But whereas alt-labor groups are young and still growing, traditional labor unions have decades of experience and established networks from which alt-labor groups can benefit—a point stressed by the scholar and organizer Jane McAlevey, whose experiences and writings have influenced alt-labor and traditional labor organizers alike. In many cases, coalitions with labor unions may therefore more properly be viewed as “borrowing” unions’ power rather than building power together. There is no question that alt-labor groups often ride the coattails of more established, well-funded, politically connected labor unions, especially in state-level policy campaigns where state labor federations have established clout. But in city- and county-level policy campaigns, where alt-labor groups are building and exercising greater political power—as discussed further below—their partnerships are becoming more equal.

The same can be said for alt-labor’s alliances with more experienced community-based nonprofit groups. In Birmingham, Ala., for example, the relatively young Adelante Alabama Worker Center has found its alliances with more established groups representing the Black community to be essential. When Adelante launched a campaign to contest bias-based policing, end police coordination with ICE, and push for criminal justice reform, for example, its alliances with predominantly Black organizations that had deep community ties were very helpful. “Having well-known organizations that have been around for a lot longer and that have a much stronger base both with faith-based organizing and in the African American community—even if it’s just them willing to put their name on certain things, or if we do—it makes a difference….We couldn’t do the work we were doing if we weren’t both leading certain coalitions and participating in other ones,” said Jessica Vosburgh, Adelante founder and executive director.

In recent years, the cultural differences between labor unions and alt-labor groups seem to have dissipated a bit as their memberships have converged in terms of their demographics and worldviews. Some of the more diverse, growth-oriented labor unions, like the Service Employees International Union (SEIU), have publicly recognized that business-style unionism is no longer as effective as it once was and have experimented with campaigns like Fight for $15. In that well-known campaign, SEIU partnered with alt-labor and other community-based groups across dozens of cities and states while providing most of the funding for the massive protests. Unions increasingly recognize that the labor movement needs to be more bottom-up, led by empowered members and energized by dense networks of mobilized allies at the grassroots (McAlevey 2016; Tattersall 2008). In this spirit, a growing number of public-sector unions have advanced “Bargaining for the Common Good” initiatives, in which coalitions of unions and community groups seek to deepen ties and collectively push for improvements to their communities, employing a diversity of tactics and organizing models (Sneiderman and McCartin 2018). During the Covid-19 pandemic, many teachers’ unions with an interest in broadening their base of community support did the same. The union-rights organization Jobs with Justice serves a similar purpose, bringing local labor and community groups together in common action.

Coalitions of all types, of course, are difficult to form and maintain, and it takes significant effort to operate them in equitable ways (Van Dyke and McCammon 2010; Strolovitch 2008; Tattersall 2005). As Van Dyke and Amos (2017) note, five of the key factors scholars have identified as critical to coalition formation—social ties; organizational structures; ideology, culture, and identity; the institutional environment; and resources—are certainly not present in every case. This may help to explain why some of the coalitions in which alt-labor participates are short-lived (though many policy campaigns are short-lived by nature). However, some of the “emergent properties” scholars have observed to be critical to coalitional longevity—including commitment to the coalition, respectful interaction, and trust—are certainly found in the more successful and long-lasting partnerships established between groups in my sample (Van Dyke and Amos 2017; Levi and Murphy 2006; Hojnacki 1997). CPD’s Andrew Friedman explained the value of shared commitment, respect, and trust: “We can only propose things that make sense if we have roots. You have to think about ‘who do you have relationships with, what kind of power do you walk into the room with?’ That is like 98% of our time. Then you get in the room and you’re like: ‘We know each other, we trust each other. We’ve talked about this. We agree.’”

In all these ways, alt-labor’s outward-reaching, purview-expanding, coalition-building work involves “enlarging the scope of conflict” between low-wage workers and their exploitative employers. By forging coalitions with a wide range of groups, alt-labor groups are effectively socializing what “was once regarded as a purely private matter concerning only the employer and the individual workman” (Schattschneider 1960, 10). In so doing, they are shifting the conflict with abusive employers out of the shadows of “private government” (Anderson 2017) and into the public, political arena, where they stand a fighting chance of influencing outcomes.

Building power to: Organizational capacity building

Another way alt-labor groups compensate for their lack of resources is with “resourcefulness,” to borrow from Marshall Ganz’s well-known formulation (2000, 1005). Specifically, they look for ways to do more with less. Notable innovations in recent years include organizing models built around new technologies, launching sister 501(c)(4) social welfare organizations that permit overt electioneering (Fellner 2020), and establishing novel resource-sharing umbrella groups. Groups that lack the financial wherewithal or desire to expand in these ways tend to experiment with unconventional organizing projects and other creative tactics. Alt-labor groups are finding ingenious ways to enhance their organizational capacities and build the “power to”—a “generative or productive power” that enables “new possibilities and actions” (Rowlands 1997, 13).

Worker centers have always been organizationally innovative; Janice Fine describes them as “hybrid organizations” that combine elements of “social service agencies, fraternal organizations, settlement houses, community organizing groups, and unions to social movement organizations” (2006, 12). Alt-labor groups that do not consider themselves worker centers have similarly recombined organizational models in novel formulations and engaged in experimentation, improvisation, and entrepreneurial innovation (Oswalt 2016; Griffith and Gates 2019). The main impulse behind their experimental spirit is simply that the groups feel they are working in uncharted territory—building and exercising political power for low-wage, marginalized workers—and it is not obvious how that ought to be done, said Friedman of CPD: “It is not totally clear to us how, in a society organized around white supremacy, patriarchy, and money, you can actually build power for people who don’t have money, aren’t white, and aren’t men.”

The organizational development of United for Respect offers a case study in how alt-labor groups have developed through experimentation. Initially funded by the United Food and Commercial Workers Union to help Walmart workers organize and push for changes in the corporation’s infamously harsh labor practices, UFR now targets the entire retail sector and has morphed into a radically different kind of workers’ rights organization—both from its original form and from the more familiar community-based worker center model. As Dan Schlademan, co-founder and co-executive director, explained, “We don’t have the answer to the question of what we’re ultimately trying to build, but we feel like we’re on the path of building it.”17

UFR’s organization draws inspiration from the multileader, distributed-network “starfish” model as described in The Starfish and the Spider by Ori Brafman and Rod Beckstrom (2006). Schlademan likens UFR to a starfish: “If you cut a starfish in half, you get two starfish. You cut a spider in half, it’s dead.” In an industry where workers and organizers must always react to corporate management decisions regarding store closings, wages, benefits, and so on, UFR must be able to adapt and regenerate when its limbs are severed. When Walmart closed seven stores in Southern California in early 2016 as part of a “global restructuring”18 (arguably in response to worker agitation for improvements in wages and working conditions), “it had a huge impact on workers in LA but it didn’t destroy our national networks,” Schlademan said. “When a company attacks us it has an impact, but it doesn’t kill us.”

UFR relies heavily on online interaction to engage workers: It reports hundreds of thousands of retail workers in its online network who regularly interact, sign petitions, take surveys, and so on. It also reports thousands of “activists” who take part in UFR campaigns; hundreds of “leaders” who organize those campaigns; and about 15 paid staff organizers, about 10 of whom work primarily on training leaders (who then train activists). There are no physical offices: Most work is done remotely, leveraging online tools and apps. With its primary corporate targets (Walmart and Amazon) spanning multiple states and frequently on the move, an organizational model rooted in a particular geography would be counterproductive, they argue. UFR’s goal, therefore, is to remain nimble and make it less costly to swoop in when campaigns need to be organized in a hurry.

The recent response of laid-off Toys “R” Us workers to their unfair treatment offers an illustrative example (Lieber 2018). After the well-known toy store declared bankruptcy in 2017 and unceremoniously fired 33,000 workers without severance pay or benefits—while its executives made off with multimillion-dollar bonuses and payouts and private equity firms made hundreds of millions—UFR took a flier on organizing the laid-off workers, dedicating two paid staff to a month-long organizing effort. Using a combined online-offline strategy, UFR discovered thousands of workers who wanted to sign petitions and act collectively to demand severance pay, and it identified leaders at several Toys “R” Us communities who were eager to organize their coworkers. Whereas the traditional organizing model would have required staff to organize workers at locations around the country one store at a time, UFR’s strategy enabled it to build a network online, identify key people, and move quickly to take advantage of workers’ outrage while emotions were still high and the media were still attentive. Reflecting on how the group’s organizational model “lowers the price of taking risks,” Schlademan noted that its initial investment in the campaign was so minimal that if the campaign had failed, the cost to the organization would have been negligible. In the end, laid-off workers won a $20 million severance fund created by the private equity firms—an outcome widely seen as a major victory.

After the Toys “R” Us campaign, UFR urged lawmakers in New Jersey (where Toys “R” Us was headquartered) to enact a severance-protection bill to preempt similar crises in the future. The bill was successfully enacted in 2020. UFR is now working to pass similar laws in other political contexts—which points to an advantage of UFR’s flexible model: Whereas geographically rooted worker organizations are often dependent on having friendly Democratic governing majorities to get policies passed in their localities, UFR is able to venue-shop to achieve gains for workers wherever and whenever opportunities arise. Its corporate focus is an advantage as well, enabling it to make gains for workers in deep red states: When Walmart responded to pressure to raise wages (raising the base wage to $10/hour in 2015) and introduce more worker-friendly pregnancy policies, beneficiaries included thousands of Walmart workers in states where statutory minimum wage hikes would have been next to impossible to achieve.

It should be underscored, of course, that UFR is the only alt-labor group thus far to adopt an industry-specific, mostly virtual, distributed-network model while pursuing both public policy and industrial transformation through direct economic intervention. The other industry-specific groups in my sample—ROC United, WDP, CWC, NDWA, and PCUN—similarly pursue a combination of public and private actions, but most of their work is geographically rooted in their communities, and they generate most of their power and resilience from their base and the ties that bind their members together. Thus, what UFR gains in nimbleness and efficiency it may sacrifice in terms of human connection, mutual commitment, and community power. Conversely, what community-based groups gain in resilience and solidarity, they may lose in terms of scope and agility. Further comparative analysis of these two models is clearly needed.

Perhaps the most notable organizational innovation in recent years, however, involves the formation of sister organizations under the 501(c)(4) social welfare section of the Internal Revenue Code. This nonprofit status enables the groups to explicitly endorse candidates for public office, devote unlimited resources to legislative lobbying, and engage in overt electioneering, so long as the latter does not constitute the (c)(4) group’s primary activity. It also opens another fundraising stream, enabling groups to raise money for their explicitly election-focused activities from wealthy donors and political action committees. As Kim Fellner (2020) writes in her study of the emergent model, some groups are still figuring out how to “mesh” the (c)(3) model with the developing (c)(4) model, and she argues that in some cases the (c)(3) side’s “community organizing work” has suffered. Yet most groups report that “venturing into legislative and electoral politics seems like a natural next step, a sign of maturity and capacity” as they reached the limits of what they could accomplish under (c)(3) restrictions. 

The Workers Defense Action Fund (WDAF), for example, was launched in 2014 as the sister 501(c)(4) organization to Workers Defense Project (WDP), a 501(c)(3) organization founded in 2002 and headquartered in Austin, Texas. After more than a decade of organizing low-wage workers, predominantly in the construction industry, WDP organizers began to feel that the group’s (c)(3) status was leaving it on the sidelines while others exerted critical influence over candidate selection and policy platform formation. It created WDAF, therefore, to give its members greater voice in the political process and to provide a vehicle for expanding the group’s community engagement and policy advocacy work. The other 501(c)(4) groups in my sample followed a similar pattern of expansion.

All divide responsibilities between their “sibling” groups: Consider LUCHA in Arizona, whose (c)(3) organization, the Arizona Center for Empowerment, focuses on civic engagement, leadership development, individual empowerment, and community building, while its eponymous (c)(4) organization, LUCHA, coordinates the group’s more overtly political activities—candidate endorsements, electoral campaigns, lobbying, and policy campaigns (while also performing some issue education, leadership development, and other functions.) In pursuing all of these activities under the same umbrella, led by the same two co-executive directors, the group has managed to build power quickly and generate some big policy and electoral wins. In 2016, for example, LUCHA led successful campaigns to increase Arizona’s minimum wage to $12 by 2020 and create a right to paid sick leave; in 2020, it defeated the Republican governor’s top priority, a ballot referral that would have amended the state constitution to ban sanctuary city laws. Through its assiduous efforts to register and mobilize Latinx voters, LUCHA helped to dramatically drive up Latinx turnout in Arizona in 2018 (to 49%, up from 32% in 2014 and surpassing even the 47% turnout in the 2016 presidential year) and elect friendly state legislators and a Democratic senator. During the pandemic election of 2020, LUCHA was one of the only groups doing in-person canvassing. It registered 47,000 new voters and made almost 3 million calls: journalists credited LUCHA with helping Joe Biden win the battleground state by a small margin in November. More (c)(4) activities are discussed in the next section.

Experimenting with new organizational models, like UFR’s distributed-network model, and launching entirely new forms, like 501(c)(4) side organizations, are only two of the ways in which alt-labor groups pursue versatility through organizational innovation. Others include developing novel resource-sharing umbrella groups for coalitions of worker centers (like Raise the Floor Alliance in Illinois, founded in 2014, which unites all eight Chicago-area worker centers in common purpose, runs coordinated state-level policy campaigns, and provides a centralized mechanism for collective fundraising19), innovative revenue generation models, rapid response units, and other experimental initiatives. 

Acting politically: Altering the political environment

Previous sections discussed some of the ways in which alt-labor groups are building sources of power, or forms of strength, that they can draw upon in their many endeavors: They are empowering individual workers, building strength in community, building collective power with others in pursuit of broad and inclusive issue agendas, and building organizational capacity in pursuit of agility and versatility. In recent years, a growing number of groups have strategically drawn upon these sources of power to transform their local political contexts. Their base-building work, for example, has facilitated electorate building and candidate recruitment; their coalition-building work has helped them to broaden the issue agenda and expand the range of policy ideas that are deemed legitimate; and their organization-building efforts have enabled them to intervene in electoral and legislative politics in new ways—including running bolder policy campaigns and, under certain conditions, successfully replacing unsupportive incumbents with champions and “genuine friends” (Bawn et al. 2012). And each type of power building helps support multiple other types of political activities as well.

This section offers some illustrative examples of how alt-labor groups have altered their political environments, providing them with more leverage in the policymaking and policy enforcement processes. This, I would argue, helps to explain how alt-labor groups have been able to “punch above their weight” in politics and enact many pro-worker policies despite their diminutive size and the structural disadvantages they face in the political arena. 

Building new electorates

Most alt-labor groups are registered under the 501(c)(3) section of the tax code and do not have (c)(4) side organizations. Consequently, they are strictly prohibited from endorsing or even implying an endorsement of candidates for public office, they cannot explicitly campaign for or against particular candidates, and legislative lobbying cannot constitute a “substantial part” of their activities (IRS 2021). And yet, there are many ways in which (c)(3) organizations can act politically, so long as those activities remain nonpartisan. They can organize policy-centered issue education campaigns, hold public forums, organize public demonstrations, publish voter guides, field candidate questionnaires, commission polls, do limited direct lobbying, undertake leadership development, and engage in a wide range of civic engagement initiatives including voter registration, door-to-door canvasing, get-out-the-vote drives, naturalization campaigns, and more. These permissible activities leave considerable room for (c)(3) groups to shape the political context in which policy decisions are made without running afoul of IRS tax exemption requirements.

Let us consider a few examples of how (c)(3) alt-labor organizations have leveraged their greatest strength—their solid core of activist members (their “base”)—to build new electorates and expand their influence to new geographic locations, effectively creating new constituencies of support for their favored policies and candidates.

Consider the yeoman’s work undertaken by the Heartland Workers Center, which is headquartered in South Omaha, Nebraska, but has eight locations in the eastern part of the state, including in Schuyler, a very small city 73 miles west of Omaha. According to the 2020 Census, Schuyler had a population of 6,547, 73.2% of which was “Hispanic or Latino.”20 Its largest employer was the food corporation Cargill, with about 2,000 employees. In 2014, Heartland began organizing meatpacking workers in Schuyler. After about nine months of door knocking, Heartland had built a core team—a base—that was ready to undertake a program of civic engagement and voter mobilization ahead of the midterm elections. The team learned that of the 1,200 Latinos who were eligible to vote in Schuyler, only 14 had voted in the previous election: “Fourteen: one-four,” executive director Sergio Sosa said. Given time constraints, an extensive get-out-the-vote operation was not feasible, so Heartland resolved to “use the Latin American technique.” The Schuyler team pulled together a list of 250 friends and family who were eligible to vote and committed to going “with your family and your compadres to vote—to hold them to account.” In the election, the number of Latinx voters in Schuyler increased almost tenfold, to 136 voters. Turnout increased again in 2016, and by 2018 there were 900 Latinx people voting in Schuyler.

Heartland’s Schuyler group then mapped out the power structure in the city and discussed where it might be able to make inroads if community members chose to run for elective office. It identified two open seats on the city council, a board position on the chamber of commerce, seats on the board of education, and so forth. The group encouraged leaders from within its communities to run, aware that their candidacies would attract more voters to vote. The more Latinx voters who turned out, the more attractive it would be for quality candidates to run the next time. “It is a long-term strategy, voting and electing,” Sosa said. “But we got the first Mexican Latina elected to city council in the whole state, in Schuyler. We got the first Salvadoran Latino to become a city councilor in Schuyler, and we got two on the school board of education.” Building a new electorate from scratch and developing leaders from within, Heartland was altering the political landscape in eastern Nebraska one small city at a time.

Alongside its workers’ rights and leadership development initiatives, Heartland also runs a nonpartisan initiative called “I Vote for My Family” in the greater Omaha metro area to promote civic participation and education. Young volunteers—many the children of undocumented immigrants—canvass their neighborhoods to educate eligible voters on how to register and vote on behalf of their mixed-status families and mixed-status community. Some of the organizers are themselves undocumented: “But I voted maybe a hundred times!” one exclaimed after getting 100 eligible voters to register and commit to voting. In 2020, Heartland’s I Vote for My Family initiative reported knocking on 14,000 doors, making 120,000 phone calls, and getting over 12,000 people to commit to voting. Joe Biden’s 2020 victory in the 2nd Congressional District of Nebraska—thought to be a potentially pivotal electoral vote—was owed in part to Heartland’s efforts to register and mobilize thousands of first-time voters (Burbach 2020).

Or consider how, in the red state of Iowa, the low-wage immigrant worker community in Iowa City has steadily deepened its political footprint through its community organizing around workers’ rights and by developing leaders from within. Historically, interactions between Iowa City’s city council and the minority immigrant community in Iowa City were few and far between. But in 2012, community organizer Mazahir Salih helped to co-found the Center for Worker Justice of Eastern Iowa. Salih worked with others at the center to empower and politicize low-wage immigrant workers, register them to vote, and encourage them to attend city council and county board meetings to make their voices heard. Their regular attendance at the normally quiet, sparsely attended meetings came as a shock to some incumbents and longtime residents, but over time elected officials began to respond to some of the citizens’ concerns. In 2017, the low-wage immigrant worker community urged Salih to run for an open at-large seat on the city council. She won easily, becoming the first immigrant to serve on the council and the first Sudanese-American woman elected to public office in the United States. She is now the mayor pro-tem of Iowa City.

Leveraging their strengths at the grassroots to build new electorates in new geographies, alt-labor groups can demonstrate to elected officials the breadth of support for their policy agendas. Broadening their membership base into rural and suburban areas, for example, can help to highlight the universality of the issues workers face. Somos Un Pueblo Unido, headquartered in the liberal, urban state capital of New Mexico, Santa Fe, has grown into a statewide political force by assiduously working to expand its presence in rural areas across the state.

“Not only were we not getting what we need in the Rio Grande corridor, but people are dealing with wage theft all across the state: in poor communities, in conservative communities, in high-Native-American-population communities, in Latino communities,” Marcela Diaz explained.

So over the last 10 years, Somos strategically established membership teams in the small, rural areas of the state—in the cities of Espanola, Clovis, Portales, and Gallup, as well as in the counties of Lea, Chaves, and San Juan. Now, with a diverse membership base that includes urban as well as suburban and rural workers, and Latinx, Hispanos (“Nuevomexicanos”), Black, Native American, and white workers, Somos has been able to challenge the notion that workers’ rights are mere “urban” issues: “We’ve been doing (c)(3) electoral work in those communities for years. And it’s small, but it’s ‘small but mighty!’ We’re building our base, we’re building the base of voters, we’re doing issue education in these communities—we’re building an electorate slowly.”

By fanning out and creating new constituencies in new geographies, alt-labor groups are literally creating new populations of voters, demonstrating the breadth of support for their agendas, and establishing additional points of leverage in the political system. Building new electorates is thus one of the primary ways alt-labor groups alter the incentives of elected officials.

Broadening the issue agenda

Alt-labor groups also work to alter the terms of debate by inserting ideas and policy proposals that were previously unthinkable or blocked from consideration (sometimes called moving the “Overton window”)(Astor 2019). The power to shape the agenda, the late great political scientist E.E. Schattschneider argues, is the ultimate instantiation of power: 

The definition of the alternatives is the supreme instrument of power; the antagonists can rarely agree on what the issues are because power is involved in the definition. He who determines what politics is about runs the country, because the definition of the alternatives is the choice of conflicts, and the choice of conflicts allocates power. (1960, 68; also see Bachrach and Baratz 1963)

Alt-labor groups seek to define the alternatives and shape the policy agenda in several ways. First, through their field work, the groups leverage (and further develop) their members’ organizing skills to canvass neighborhoods, listen to voters about their concerns, educate voters on the implications of policies currently being discussed for their communities, and encourage community members to become active and engaged. As discussed, many of the groups’ issue agendas percolate up from the community in this fashion.

For example, in Texas the new 501(c)(4) Workers Defense Action Fund, discussed above, used its new funding stream to hire and train more staff and volunteers to conduct comprehensive canvassing of predominantly Latinx, Black, and diverse working-class communities in and around the cities of Austin, Dallas, Houston, and San Antonio. WDAF began talking to thousands of residents who had historically been disengaged from the electoral process. Canvassers listened to community members’ concerns, discussed issues on the legislative agenda, encouraged them to envision an alternative agenda centered on their issues, and helped them organize to take collective action with their neighbors. As word of WDAF’s large field program spread, aspirants for elective office began to seek out information on what its canvassers were learning. By 2018, 21 of the 28 candidates for the Austin City Council signed WDAF’s policy platform (Figure C), which included a six-point plan to raise construction labor standards, implement and expand Austin’s “Freedom Cities” policies (to limit police cooperation with ICE), enforce the city’s paid sick leave law, provide support for immigrants in deportation hearings, and boost care for injured workers. Rather than endorse candidates and their prepackaged platforms, in other words, candidates were endorsing WDAF’s platform. “It’s really incredible to see how elected officials and people who either have power or are seeking power actually respond, and shift their own issue agendas to include the issues that are important to working families that have historically been disenfranchised,” said Co-Executive Director Emily Timm.

Figure C

The second way groups seek to broaden the policy agenda to include issues of importance to their members is through incremental policy victories that accumulate over time to expand the range of policies deemed legitimate. The Workers Defense Project’s first policy success, for example, was in 2005, when the group managed to prevent from becoming law in Austin an anti-solicitation ordinance that would have criminalized day labor. That defensive victory prompted the group to be more proactive and push for workers’ rights that did not yet exist—like rest breaks for construction workers, which their research showed would save lives, in 2010. The victory on rest breaks built momentum for campaigns to mandate Occupational Safety and Health Administration (OSHA) trainings for all city contracts and to close a major wage-theft loophole in state law. Each subsequent campaign led to bolder demands. By 2016, WDP had persuaded the Austin City Council to link permits for public construction projects to WDP’s “Better Builder” standards (living wage, workers’ compensation, OSHA training, and third-party onsite monitoring). In 2018, WDP led a successful campaign for earned sick leave in Austin, which grew into two successful parallel campaigns in Dallas and San Antonio in 2019. One policy at a time, WDP has been “expanding what peoples’ rights are,” said Emily Timm.

The third way groups broaden the agenda is by exploiting exogenous shocks and highly salient national social movements—from crises like Covid-19 to #MeToo to the Fight for $15 to the Movement for Black Lives—to advance new policies in their local political contexts. Although the groups would prefer always to be able to set the agenda on their own timetables, they often find themselves in a defensive posture or trying to take advantage of opportunities that arise independently of their organizing efforts to expand the range of what is considered possible in local and state policy arenas. Deborah Axt of MRNY explains it this way: 

The Fight for $15—we weren’t the ones who dreamed that up—but breaking through that [initial disbelief that $15 was realistic], and then taking to the streets, you can really put out much bolder, difficult-to-win things. And then it becomes the agenda—or at the very least, you’re shaping the poles of the argument. And that makes so much possible. Even if you don’t win the big bold thing that you’re putting out there, you really can shape the terms of the conversation.

Through their assiduous power-building efforts, alt-labor groups try to put themselves in a position to exploit opportunities when they arise. Saru Jayaraman of ROC explains: “We saw a big moment with #MeToo and Time’s Up, which elevated everything we’ve been doing for 20 years and opened the door to put it on the agenda in 16 states. Sixteen states introduced [the One Fair Wage policy to eliminate the “tipped” subminimum wage in 2019]—that wouldn’t have happened 15 years ago.” One Fair Wage was passed by ballot initiative in Maine, Flagstaff, Ariz., and Washington, D.C (later overturned by the D.C. City Council), and in the legislature in Michigan; and in July 2019 the U.S. House of Representatives passed a bill to do the same. Campaigns are currently ongoing in seven states and in Washington, D.C.

From the $15 minimum wage to paid sick leave to ending the tipped minimum wage to Raise the Floor Alliance’s current campaign to create just-cause dismissal in Illinois, alt-labor groups have been expanding the policy agenda and helping to legitimize dialogues around issues considered too extreme to contemplate only recently. In addition to the policy campaigns discussed above, a nonexhaustive list of envelope-pushing policy campaigns organized by groups in my small sample would include the successful campaign organized by the Chicago Workers’ Collaborative, Warehouse Workers for Justice, and the Raise the Floor Alliance to pass the Illinois Temporary Workers’ Bill of Rights (Responsible Job Creation Act) in 2017; NDWA’s successful campaigns to enact Domestic Workers’ Bills of Rights laws in nine states and the city of Seattle; the successful 2010 campaign by WeCount! in Miami-Dade County to pass an anti-wage-theft ordinance that grants hearing examiners subpoena and enforcement powers and provides for liquidated damages; El Centro’s successful campaign to get domestic workers coverage under New Mexico’s minimum wage law; the Heartland Worker Center’s successful campaign for a Nebraska wage collection law providing workers with a private right of action; Make the Road New York’s formative work on behalf of the landmark New York State anti-wage-theft law of 2010, paid sick leave in New York City in 2014, the blocking of major banks’ financial backing for private prison and immigrant detention companies, the stopping of Amazon from opening a headquarters in Queens, and more; Somos Un Pueblo Unido’s efforts to enact the first-in-the-nation citywide living wage ordinance in Santa Fe in 2003, statewide minimum wage increases and anti-wage-theft laws in 2007 and 2009, a state ban on bias-based policing in 2009, two-tiered drivers licenses for undocumented immigrants, and the securing of green energy jobs for rural workers in New Mexico’s Energy Transition Act of 2019; PCUN’s successful campaign to pass Oregon’s Voting Rights Act in 2019, end the use of toxic pesticides, and more; CPD, CPD Action, and UFR’s Fair Workweek initiative, which has produced advance scheduling laws in nine different states and cities thus far; the Center for Worker Justice of Eastern Iowa’s success in raising Johnson County’s minimum wage to $10.10, holding local employers to account for the higher wage floor after state preemption, and raising the minimum wage for Iowa City employees to $15 an hour by 2021; New Labor’s successful campaigns in support of New Jersey’s new $15 minimum wage, earned paid sick time, and anti-wage-theft laws, and its current campaign for a temp workers’ bill of rights; and bold Covid-19 relief efforts organized by Adelante, Somos, CWC, CPD, PCUN, New Labor, WDP, WeCount!, NDWA, El Centro, Heartland, CWJEI, Needham, and WJW.

Altering electoral dynamics

Another way alt-labor groups seek to alter their political environments is by ramping up their organizing activities during election cycles, as the examples above illustrate, and, when the groups have launched 501(c)(4) side organizations, by explicitly endorsing candidates and intervening directly in electoral campaigns.

Let us stick with the example of WDAF, which has managed to affect the outcomes of several legislative races. In 2016, for example, it successfully unseated conservative Republican Kenneth Sheets in Texas House District 107 after Sheets introduced a bill to preempt the ability of cities to condition public projects and tax incentives on higher labor standards—a key tool used by WDP and the Austin City Council to strengthen workers’ rights in a state where many other pro-worker initiatives were preempted by the state. His threat to undercut this key workaround raised WDAF’s ire, and the group resolved to defeat him in the next election. With WDAF’s help, Victoria Neave—a young Latina who grew up in a working-class family—defeated Sheets by a slim margin (and was reelected in 2018 and 2020 by wider and wider margins).

WDAF has also helped elect candidates to office who party theorists call “genuine friends”—not merely allies or supporters, but leaders who emerge from within the community and “have actually demonstrated their commitment through prior service” (Bawn et al 2012). Gregorio Casar, for example, worked at WDP before he was elected to the Austin City Council; another WDP staff member sits on the Austin Community College Board of Trustees; WDP co-founder Cristina Tzinzun placed a close third in the 2020 Democratic primary for U.S. Senate; and Co-Executive Director Jose Garza was elected Travis County district attorney in 2020.

Naturally, different political contexts call for different strategies. In predominantly Democratic states and cities, overt electioneering in primary campaigns can be counterproductive. In the Democratic city of Santa Fe, N.M., for example, Somos Un Pueblo Unido avoids primary campaigns for local and state offices, instead concentrating its efforts on canvassing, voter education, and get-out-the-vote campaigns. These activities demonstrate to elected officials that the group has the organizational capacity and willingness to do the hard work of voter engagement. When Somos then seeks elected officials’ support on controversial policies, the politicians know the group is capable of undertaking significant voter mobilization campaigns to back them up.

But in 2018, when Republican U.S. Representative Steve Pearce—who represented New Mexico’s 2nd District, covering the southern half of the state—announced his retirement, Somos launched its (c)(4) group, Somos Acción, in large part to help its favored candidate, Xochitl Torres Small, win the seat. The Democratic Party did not consider the open-seat race competitive, as it had been held by Republicans for 36 of the previous 38 years and Pearce had won the previous two elections with over 62% of the vote. Somos Acción organized an ambitious door-knocking campaign in deep red areas of southeastern New Mexico where its members were concentrated, alongside mail and digital media campaigns. Although the towns were majority Latinx, most Latinx residents had not previously voted. While the Torres Small campaign and other (c)(4) groups were turning out record numbers of voters in bluer areas of the district, Somos Acción was the only group canvassing voters in those rural areas. Many voters reacted with surprise, telling canvassers: “‘You’re the only ones that have come—not even the candidate has come,’” Diaz reported. “The only money that was being invested was being invested through us—and we had a medium-sized operation as a (c)(4) in those communities.” Torres Small won by 3,722 votes.

Unlike WDAF, Somos Acción has not yet become directly involved in candidate recruitment or endorsements in those rural areas of the state because it does not yet “have other forms of power in these communities—we have base and we have strategy and that’s about it,” said Diaz. Still, its (c)(4) operation has given Somos Un Pueblo Unido another channel through which to exert political leverage. “It puts us in a different position,” Diaz explained. “We feel that it’s a step in our power-building trajectory….We always say, everything is helping us build power.”

A similar pattern is evident in Oregon, whose political geography is similar to New Mexico’s, with some very liberal urban and suburban strongholds in the Northwest region of the state but the rest of the state is almost exclusively rural, conservative, and dominated by Republicans. In 2016, PCUN’s (c)(4) organization, APP, ran a “parallel” campaign on behalf of Teresa Alonso-Leon, a “genuine friend,” for state legislature, knocking on 16,000 doors and mobilizing predominantly Latinx workers and their families. Alonso-Leon won by just over 1,000 votes, becoming the first Indigenous, migrant Latina in the Oregon legislature. Over the next four years, APP ran more field programs on behalf of its favored candidates, mobilized voters around ballot initiatives affecting Latinx working families, and fought for several legislative changes. APP has since helped to elect and reelect several other Latinx and Latinx-friendly candidates to the state legislature, to the Woodburn School Board, and to the mayoralty of Woodburn.

Of all the groups in my sample, the (c)(4) groups Make the Road Action and the Center for Popular Democracy Action are perhaps the most vigorously engaged in electoral politics—likely a reflection of the size and resources of their combined (c)(3) and (c)(4) organizations and the extensive networks each maintains separately and collectively (every Make the Road organization is also a “partner” of CPD). MRA, for example, endorses candidates and mobilizes its formidable base to “hold electeds accountable by mobilizing the vote against them if necessary and supporting folks from our community and other allies to run for office as well,” said Axt. In 2020, MRA reported making over 2.3 million phone calls and sending over 1.8 million texts in Pennsylvania, Nevada, New Jersey, and New York.21 It also conducts extensive voter-education campaigns and seeks to generate maximal publicity around its campaigns for workers’ rights, immigrant rights, LGBTQ rights, affordable housing, public education, and more. MRA formulates a policy platform to flesh out its issue agenda, usually in alignment with the Working Families Party, with which MRA is a national and state affiliate.

Influencing outcomes

The desired payoff of all this power-building and political work, of course, is influence over policy outcomes and governing practices, and the most straightforward measure of influence is a tally of policy victories—did the groups achieve the legislative changes (or ballot initiatives, administrative changes, etc.) they sought? As Appendix Table 2 reveals, alt-labor groups are clearly making some headway in this regard. But this crude measure may obscure as much as it reveals, since it does not account for campaign failures or policy campaigns that were never launched due to lack of influence or anticipation of failure.

Political influence is notoriously difficult to measure, but one can catch glimpses of it in the altered behavioral patterns of candidates and elected officials. Even within my limited sample, for example, one can observe it in several instances—such as when three-quarters of the candidates for Austin City Council pledged to support WDAF’s policy platform in 2018, as noted above, or in the greater responsiveness of the Iowa City City Council to immigrant residents’ concerns. Another example involves Arise Chicago’s annual Faith-Labor-Action Breakfast. Every year, the group brings together hundreds of allies, including union representatives, immigrant rights advocates, faith leaders, other community leaders, and prominent elected officials to celebrate progress for worker justice (and fundraise) with awards, speeches, music, and food. In Democratic primary years, candidates for governor, attorney general, and many other elective offices make a point of attending the breakfast and indicating their support for Arise’s agenda. It is quite a scene to behold. But like most alt-labor groups, Arise downplays the extent of its political clout and is loath to claim more power than it actually has. Said Kader: “We can take a position on anything, but unless we’re working it, it’s meaningless….We’re not so powerful that if we put our name on something, suddenly all aldermen are going to pay attention.” That said, the Cook County commissioner from the 1st District sits on Arise Chicago’s board of directors, and the group is in regular touch with many Chicago aldermen, the mayor’s office, the Cook County board, and the new Office of Labor Standards (OLS).

But perhaps the most consequential measure of influence involves detectable shifts in governing operations. After all, alt-labor groups cannot rest content with policy enactments alone. Because policies are not self-enforcing, and because enforcement agencies make policy decisions too—for example, whether to respond only to complaints or also to undertake proactive, strategic enforcement—many alt-labor groups believe that it is at least as important to strengthen the state’s regulatory capacities and to influence government practices as it is to pass new laws. They view the orientation of government as “a political problem that requires organizing, power and a policy solution” (Fine 2017, 5). Let us therefore briefly discuss two types of efforts alt-labor groups have pursued along these lines: building new state capacities, and creating co-enforcement partnerships between government and worker organizations.

Since local wage-and-hour ordinances are not usually enforced by state and federal agencies, the proliferation of new municipal and county-level policies across the country over the last two decades has prompted the establishment of labor standards enforcement agencies in at least 20 cities and counties (Fine and Bartley 2018, 4). These agencies are responsible for enforcing many local employment laws, but their approaches can vary (Fine, Lyon, and Round 2021). Many alt-labor groups have therefore sought to influence their work, strengthen their mandates, ensure they are provided with more resources and staff, and assist them directly through co-enforcement partnerships and routinized communication about problematic industries and low-road employers.

Consider the Chicago Office of Labor Standards. Prior to its establishment in 2019, the city of Chicago’s enforcement capacities were severely limited. If employers did not pay their workers Chicago’s higher minimum wage or did not allow workers to use their earned sick time, workers’ only recourse was to complain to the Chicago Department of Business Affairs and Consumer Protection, whose main responsibilities were to issue business licenses and serve as a watchdog for consumer fraud. By 2018, it had become quite clear that the department did not have the capacity to enforce the newly enacted ordinances.

Arise Chicago took the lead in reassembling its coalition of allies from previous policy campaigns to wage a new campaign to create an OLS modeled on existing labor standards enforcement offices in Seattle and San Francisco. Successfully enacted on October 31, 2018, the new OLS’s charge was to enforce the city’s minimum wage, earned paid sick leave, and anti-wage-theft laws. It was given subpoena and audit powers, it could revoke the business licenses of employers found guilty, and it was charged with responding to complaints, proactively investigating, and collecting and distributing back wages owed. Half of the fines it collected from violators would go toward funding the agency’s operations.

The historical significance of establishing an Office of Labor Standards in Chicago—the site of Upton Sinclair’s The Jungle—cannot be exaggerated. And the relative ease with which the alt-labor coalition managed to beef up the city’s enforcement capacities (at least on paper) was a testament to the extensive political groundwork it had laid in the years prior. Staffing, funding, and operating the office would take more time, and effective enforcement remains a work in progress, but the strong relationships forged between the groups and the personnel in the OLS are proving to be critical (Oswalt and Rosado Marzán 2018; Rosado Marzán 2021).

The groups’ ability to alter the city’s regulatory capacities and reorient its priorities also had what political scientists call “policy feedback effects”—incentivizing the groups to pursue still further policies that the new agency could be tasked with enforcing in the future (Pierson 1993). In early 2019, Chicago-area worker centers and their allies began to lobby the city council for a Fair Workweek ordinance, to fall under OLS’s purview, which would mandate that workers be given advance notice in their scheduled work hours. It passed in July and was added to the OLS’s docket the following year. Likewise, the OLS was tasked with enforcing an anti-retaliation ordinance enacted in May 2020 to prohibit employers from firing, demoting, or retaliating against any employee who complied with the mayor’s public health emergency travel order during the Covid-19 crisis. And in 2020, Arise Chicago, the Latino Union of Chicago, NDWA, and other groups joined in an innovative partnership with the OLS to launch “Your Home Is Someone’s Workplace,” an initiative to promote and defend domestic workers’ rights.

The growth of the OLS and its expanding mandate signaled progress in the groups’ efforts to reorient government operations toward protecting workers’ rights and away from simply helping business comply with the law. Although these were only incremental steps, in Kader’s words they represented tangible movement toward the ultimate goal, which was: 

To assemble the kind of robust welfare state guaranteed by local governments that we typically never had, in a way that Western Europe has traditionally had, that isn’t negotiated through contracts, but is state-based….To me, that’s the end game of all this policy talk. I want, for example, paid paternity leave and maternity leave for every low-wage worker in Cook County. And I don’t care who is the guarantor of it. If it’s not the employer, fine—we’ll go on and we’ll make the county make you do it. That’s the aspiration. 

Another way alt-labor groups have managed to alter government practices is through the establishment of co-enforcement partnerships with state enforcement agencies. Co-enforcement is an innovative approach to labor standards enforcement wherein worker organizations, embedded in low-wage workers’ communities, help government agencies monitor, report, and enforce labor standards in high-violation sectors where vulnerable low-wage workers are less likely to complain. As Janice Fine has described, co-enforcement arrangements draw upon each partner’s “nonsubstitutable” capabilities, such as worker organizations’ strong, trusted relationships with workers and state regulators’ power to inspect worksites, demand information, and punish noncompliant businesses (Fine and Gordon 2010; Fine 2017; Patel and Fisk 2017; Fine and Bartley 2018). Co-enforcement partnerships exist or have existed in Seattle, New York, San Francisco, Austin, Los Angeles, Minneapolis, and the state of California, and are currently being developed in numerous other states, cities, and counties (Fine and Bartley 2018). Indeed, in early September 2021 the Chicago Office of Labor Standards took the first steps toward establishing a co-enforcement partnership with Arise Chicago, awarding the group a $100,000 grant to conduct outreach and education to raise awareness about workers’ rights and “increase access to the protections offered by the OLS” among workers in underserved communities.22 The primary benefit of co-enforcement, of course, is more effective and efficient enforcement of workers’ rights in hard-to-investigate, low-wage industries with high violations—which is precisely alt-labor’s goal. As an analytical matter, the proliferation of these arrangements further demonstrates alt-labor’s growing influence over the orientation and operations of government. 

Conclusion

Each alt-labor group has its own distinctive identity, organizational history, internal culture, and mix of personalities, and each faces different sectoral and contextual challenges. But in my examination of a diverse cross-section of groups, I have identified three types of power building in which all alt-labor groups are deeply engaged: building power within their membership bases; building power with allies in pursuit of expansive issue agendas, and building power to undertake a wider range of activities through organizational innovation. These forms of power can be deployed for political purposes or not, as each group chooses. Although not every group has become deeply politically engaged—some of the younger and less well-resourced groups have been reluctant to move beyond individual services and the basics of community organizing—all the groups in my sample readily acknowledge the general trend that has swept the alt-labor movement in recent years: A growing number of groups have turned to politics and public policy in order to forge an alternative path to combating workplace exploitation and strengthening workers’ rights. They have drawn upon their distinctive strengths to punch above their weight in the political arena, making subtle but important changes to the political environment in which policy decisions are made. In many cases, this work has paid off, giving their members greater voice in the policymaking process and paving the way for new workplace rights and protections where none previously existed. Starting as they have from a position of significant weakness, their accomplishments to date have been impressive.

Along the way, alt-labor organizers have learned a number of strategic lessons. Here are two of the bigger takeaway points: 

1. Rather than try to solve all their members’ problems, alt-labor groups must try to leverage those problems to build power. If alt-labor groups set out to help every worker achieve justice for every grievance, they would be organizations that performed valuable service functions but would be unable to do anything else. They would be stuck in a perpetually reactive pose—responding to symptoms rather than attacking the root causes of the problems. To be sure, individual member services, lawsuits, and workplace justice campaigns are important ingredients of base building, as discussed above: They are often the main point of entry for workers who become activists. But by themselves, they do little to alter the extreme imbalances of power in the workplace, in society, or in the political system. That is why alt-labor groups must try to pick their battles wisely and devote their limited resources strategically to actions that advance their larger goals. They must constantly assess their relative power and evaluate potential actions for whether they advance their power-building goals. As Marcela Diaz of Somos Un Pueblo Unido explained:

It’s not actually our job to solve all these problems. It’s our job to utilize problems to grow power. It’s how can we use these problems—exploit these problems—to continue to build power….You go to one of our meetings and the first thing people do is say OK, what’s our number-one goal? And it just rolls off the tongue of our members: Build power for immigrant families and low-wage workers. OK, so everything we do in this meeting has to meet that goal. So if we’re doing a vigil, we’re not doing a vigil just to do a vigil, we’re not doing an action just because it’s some kind of day of action somewhere. If we’re doing a fundraiser, if we’re doing a this, if we’re doing a that—who can explain how this is going to build power for us?

Similar sentiments were echoed by most everyone I spoke to. For example, Saru Jayaraman of ROC United: 

Choosing a campaign has to be both about what workers want and making sure that what we’re fighting for is getting at the heart of our ultimate mission, which is changing the power dynamic between the industry and the workers. If we choose an issue that doesn’t get at changing the power balance, it doesn’t actually fulfill our long-term mission. Workers want a lot of things—but among those things, what are the most strategic to get at the power dynamic?

Similarly, Adam Kader of Arise: “Our policy agenda [going forward] will probably be directed by how is it building our political power….It’s just a constant evaluation of how much power we have.” 

2. Shifting the balance of power between the powerful and the relatively powerless is a never-ending fight, and alt-labor groups are playing the long game. One of their primary objectives, therefore, is simply to persevere and grow while strategically husbanding their power resources. Their purpose is not to win every battle—it is to stay in the fight. As such, they must think constantly about how to stockpile their power resources, nurture their strengths, learn from setbacks, adapt, and, most of all, develop “grit,” says Andrew Friedman of the Center for Popular Democracy: 

It is a battle for power and it doesn’t stop. It’s not like: Oh, we won! It’s like: We won today. We are constantly fighting, and the fight isn’t going to go away, I don’t think. So we’re just trying our best and we’re trying to look around and learn. What I am more mindful of, with time, is how totally complicated it is, and the role of creativity, courage, persistence, and luck in this is. So we’re trying to build an institution that can stay in the fight, that gets a bunch of people who have those characteristics in the same fight—and then we’ve just gotta stay. And when we have a horrible, annoying disaster happen, we try and learn from it. It’s like when educators talk about grit: That’s the most important thing, more important than math, more important than reading. It’s the ability to learn and go on.

Developing grit requires awareness of the ephemeral and dynamic nature of power. Again, Diaz eloquently explains: 

The number-one job of the organizer is to help our members, in any given moment, assess our power at that moment. That’s it. Because it changes every day, depending on a whole host of issues that sometimes has nothing to do with us….The goal is continue to build as much power as we can—and it’s going to look different at different moments—so that we can continue to be able to alter the relations of power and be able to change things fundamentally over time, knowing that that’s a never-ending job, and also knowing that we can pass these really great policies that we worked hard for—and they can disappear!—if we don’t actually have the power to sustain them.

About the author

Daniel J. Galvin (galvin@northwestern.edu) is an associate professor in the Department of Political Science and a faculty fellow at the Institute for Policy Research, Northwestern University. 

Acknowledgments

First and foremost, I extend my deepest gratitude to the leaders and members of alt-labor groups for sharing their stories and insights with me and for being so generous with their time. I also thank Warren Snead and Sean Diament for their excellent research assistance, and Laura Bucci, Janice Fine, Katherine Glassmyer, Steven Greenhouse, Hahrie Han, Alexander Hertel-Fernandez, Benjamin Kreider, Larry Mishel, Mallory SoRelle, Joe Soss, Chloe Thurston, Patrick Watson, and workshop participants at Northwestern University, the University of Chicago, and the Russell Sage Foundation for their helpful comments on earlier drafts. This work has been supported in part by award #77-18-02 from the Russell Sage Foundation and the W. K. Kellogg Foundation. Any opinions expressed are those of the author alone and should not be construed as representing the opinions of either foundation.

Appendix Table 1

Appendix Table 2

Endnotes

1. The term alt-labor has grown dramatically in popular usage since labor reporter Josh Eidelson (2013) first coined it in The American Prospect. Lexis-Nexis shows 173 nonduplicate news stories using the term since Eidelson’s story was published (as well as 67 law review and journal articles and 52 briefs, pleadings, and motions).

2. Author’s calculations. See Appendix B for detailed list.

3. This report presents the initial findings of a larger study that will be published as a book. See further discussion of methods in the next section; see list of groups in Appendix A.

4. For more on the distinction between sources and forms of power, see Lacombe 2021.

5. “Low-wage” is defined as workers in the bottom quintile of their state’s income distribution. Statistics estimated by the author using CPS-ORG data (Center for Economic and Policy Research, 2020, CPS-ORG Uniform Extracts, Version 2.5, Washington, D.C.).

6. Statistics estimated by the author using CPS-ORG data. Note: these are conservative estimates of minimum wage violations: (1) calculations use the Center for Economic and Policy Research’s most consistent wage variable, “wage4,” which includes overtime, tips, and commissions, thereby inflating wage estimates; (2) for applicable minimum wage, we use lowest applicable wage rate (state rather than city/county, small business rate, etc.), except when state lacks own minimum, in which case we use federal rate; and (3) CPS is known to undercount Latinx and undocumented workers, low-income men tend to exaggerate their wages, and other measurement issues likely downward bias violation rates. See Bollinger 1998; McKay 1992; Roemer 2002; Bernhardt et al. 2009.

7. This does not take into account the possibility that many of the workers who were paid less than the minimum wage were likely promised wages higher than the statutory minimum.

8. Noncitizens are also far more likely to get hurt or killed on the job than U.S. citizens as well (see Grabell and Berkes 2017). Note that “noncitizen” refers to any person born outside the U.S. who is not a naturalized U.S. citizen (e.g., refugee, asylee, undocumented immigrant, legal permanent resident).

9. Some of the increased risk is due to the industries in which the respondents worked and the states in which they lived. When we control for industry and state, the estimates are as follows: Black, Latinx, and noncitizen workers were about 1.5 times as likely to suffer a minimum wage violation as white workers and U.S. citizens, respectively; Hispanic and Black women who were not citizens were about 1.9 times as likely as white women who were citizens. Neither industry nor state is necessarily independent of the workers’ race, gender, and citizenship, however; controlling for industry and state denies employment and residential segregation. Thus, the unconditional estimates are reported above.

10. “Amalgam” is from McAlevey 2013.

11. Also see Milkman 2007; Milkman, Bloom, and Narro 2010.

12. Some alt-labor groups view policy campaigns as primarily useful for movement-building purposes. Explained Tim Bell of the Chicago Workers’ Collaborative: “The policy campaigns are very useful for mobilizing workers. That’s the major use for them. The regulation that you get out of them can create tools for building power around enforcement of the regs. But the biggest use you get out of them is that it’s an opportunity for workers to have movement, and it’s an opportunity for them to have a voice in something….So what this does is it gives us a vehicle to bring all those workers together.”

13. On the role of unions, see Galvin 2020.

14. In many industries, exploitation of low-wage workers is an endemic feature that is engrained in business models and linked to macroeconomic conditions. These structural determinants of wage theft are overlooked in the “bad apple” theory of labor standards violations. On the stubborn persistence of wage theft across economic and political conditions, see Bernhardt et al. 2009; Cooper and Kroeger 2017; Galvin 2016; Galvin, Fine, and Round 2020; Galvin et al. 2021.

15. This report presents the initial findings of a larger study that will be published as a book.

16. This emergent understanding is reflected in new developments across the labor movement, from the “Bargaining for the Common Good” movement to the Fight for $15 to the Red for Ed teachers’ union strikes.

17. Also see Schlademan 2017.

18. See City News Service 2016.

19. Precursors to RTF include several “long coalitions” formed among groups in the same city or region with varying degrees of institutionalization: the Immigrant Worker Center Collaborative in Boston; the Workers’ Rights Community Collaborative in San Francisco; the Los Angeles Wage Theft Coalition; the Santa Clara County Wage Theft Coalition; the Coalition of Low-Wage and Immigrant Worker Advocates in California; and citywide coalitions in Minneapolis, Seattle, and elsewhere.

20. See U.S. Census Bureau, “QuickFacts: Schuyler City, Nebraska.”

21. See the Facebook page, “Make the Road Action.”

22. See “BACP Awards Grant to Arise Chicago to Raise Awareness of Chicago’s Labor Laws.”

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Though labor is the driving force in countries throughout the world in pressing for robust social protections and egalitarian wages, a large literature in comparative economics suggests that durable progress is likely to occur where unions are able to strike deals with strong employer associations that are organized on a broad industry-wide basis. Yet this opportunity is not available in the United States, the paradigmatic liberal market economy that is characterized by weak employer association and low capacity for strategic coordination in markets.

While U.S. employers have developed powerful lobbying organizations such as the Business Roundtable and the Chamber of Commerce, they lack the kind of strong, centralized trade and employer associations that in Europe allow employers to cooperate with each other and with unions in ways that support more egalitarian outcomes.

The distinctive features of the United States are best highlighted with reference to developments in other countries, particularly Germany. Just as the United States has been seen as the quintessential liberal market economy, Germany has long been considered the paradigmatic coordinated model—featuring higher levels of employer coordination and more cooperative engagement with strong and centralized industrial unions that play an important role in the management of the economy and even of individual firms. Indeed, Germany’s relatively high level of collective bargaining coverage (over 60% of workers are covered by union contracts) owes much more to high levels of organization among employers than it does to union membership (now below 20%).

When and why did this distinction arise? This paper argues that events of the late 19th and early 20th centuries—and specifically the way in which state policy and the courts in this period dealt with issues of competition and interfirm cooperation (antitrust)—played a key role in pushing German business toward a more coordinated variety of capitalism and American business away from collective action and toward strategies organized around political influence and, especially, litigation.

The closing years of the 19th century were a period of considerable economic tumult in the United States and Europe alike. Advances in communication and transportation had upset previously stable local markets by exposing firms to intensified competition from producers in other parts of the country and from abroad. A major financial crisis in 1873 triggered a severe economic downturn that enveloped Europe and North America and ushered in two decades of economic stagnation. One of the responses in the United States was passage of the Sherman Antitrust Act, a vague law whose ambiguities, including the question of whether union activities fell within its purview, were left to the courts to clarify. Germany, by contrast, moved toward a managed market in which competition would be organized and moderated. It legalized cartels—“communities of interest” in which member firms maintained their individual identities while coordinating on prices or production—and extended the concept to include unions.

In each country, these emerging competition policies and their interpretation by the courts had distinct impacts on the development of trade associations and employer organizations.

Trade associations. In Germany, the permissive competition policy provided a comparatively congenial context for smaller firms to cooperate among themselves by forming trade associations to stabilize competition and avoid ruinous cutthroat practices. Unions in these areas shared with employers a strong interest in increasing and expanding the supply of skills on which regional economies depended. In the U.S., the Sherman Act and the courts’ strict interpretation of horizontal cooperation among firms rendered such associations illegal, and forms of employer associationalism designed to manage and enhance competition struggled in the context of the Supreme Court’s unforgiving and undifferentiated approach to antitrust.

Employer organizations. By the end of the 19th century in the United States, trade agreements had been struck in a number of industrial sectors, allowing skilled unions to gain an unprecedented foothold in the labor market. Yet these agreements too fell victim to the Sherman Act as the American Anti-Boycott Association and the National Association of Manufacturers mobilized individual firms to turn to the courts and legislatures to ban coordinated union activity. The situation was very different in Germany, where prevailing competition law provided broad leeway for coordination among businesses but also among workers, including the express right (of both) to engage in activities such as boycotts and secondary strikes that in the United States were being enjoined under the Sherman Act. Indeed, the stance taken by the German courts robbed employers there of the most powerful legal weapon with which their American counterparts were armed—the injunction.

Beyond its impact on employer organization, the antitrust regime of the late 19th century shaped the strategies of American employer associations, encouraging them to focus on legislative and judicial activism as an alternative to the production issues more central to their German counterparts. One can draw a direct line from the American Anti-Boycott Association through its successors and to the present strategies of the Chamber of Commerce’s National Litigation Center and the National Right to Work Committee.

As long as U.S. employers are able to deploy the law to avoid unions, they have no incentive to develop the capacity for broad sectoral organization. In the 19th century the courts, by siding decisively with employers, relieved firms of the need to coordinate with each other to deal with labor collectively. Removing this crutch is thus critical to reversing the strong incentives firms now face to continue to rely on the easy avenue of the courts in lieu of more positive forms of coordination and negotiations with labor.

Introduction

A strong and robust labor movement is essential to achieving high levels of economic equality and shared prosperity in post-industrial political economies. But what role, if any, do employers play in sustaining such outcomes? In the United States, where the relationship between labor and employers tends to be adversarial, this may seem like an odd question, but a large literature in comparative political economy suggests that employers play a significant role, emphasizing that the most egalitarian countries feature not just strong unions but also strong trade and employer associations. While labor is clearly the driving force in pressing for robust social protections and egalitarian wages, durable progress seems to be possible only where unions are able to strike deals with strong employer associations that are organized on a broad industry-wide basis and are capable of aggregating the interests of their diverse memberships, setting collective agendas, and enforcing a measure of discipline on firms. For example, sectoral bargaining, which we know supports higher levels of wage equality, is possible only when organized labor has a counterpart on the employer side with which to negotiate. Beyond this, coordination among firms can facilitate cooperation on other issues, such as training, that sustain the kind of high-quality, high-value-added (and high-wage) production strategies that are more characteristic of Europe’s “socially embedded” variety of capitalism. Multifirm coordination in negotiations over wages and working conditions discourages competitive strategies based on local concession bargaining, while cooperation on issues such as research and development and training enables firms to pursue alternative strategies that emphasize quality, diversification, and innovation (Streeck 1991, 52).

The literature on the comparative political economy of the rich democracies characterizes countries in which employers possess these capacities as “coordinated” market economies (CMEs), and distinguishes them from the alternative “liberal” model of capitalism that prevails in the United States and other Anglo-Saxon countries. According to the influential varieties-of-capitalism literature, many of the social protections we associate with strong labor movements are not just (largely) accepted by employers in CMEs but are also functional to the production strategies they are pursuing. Strong trade associations and employer organizations in CMEs are part of a broader institutional ecosystem that supports competitive strategies based more on quality than price. Sectoral bargaining takes wages partly out of competition, and the associated wage compression holds back the wages of skilled employees while supporting a high wage floor for low-skill workers. In such a context, employers face powerful incentives to organize production in ways that take advantage of skill and to boost the skills (therefore also the productivity) of their low-skill workers (e.g., Acemoglu and Pischke 1998, 1999; Thelen 2004). Employers therefore have an interest in long-term employment to protect the investment they make in their workers’ training, and they benefit from arrangements that reduce turnover and support industrial peace through worker voice. The bottom line in this research is that employer coordination facilitates the provision of crucial collective goods that enhance firm competitiveness while also supporting higher wages and more generous social policies.

In liberal market economies (LMEs) characteristic of Anglo-Saxon countries such as the United States and the United Kingdom, by contrast, where firms have low capacity to coordinate with each other and with unions, firms face few incentives to adopt this kind of long-term perspective. Production strategies tend to emphasize price competition, and in such a context labor is a cost to be minimized. Where collective bargaining occurs at the level of the firm rather than the sector, unionization puts individual companies at a competitive disadvantage relative to their nonunion competitors, and industrial relations are highly conflictual. LME-based firms also tend to underinvest in training because it is irrational for individual employers to invest in worker skills that can easily be poached by their competitors. In consequence, the average firm’s attachment to its employees is minimal, so employment protections are low and firm-based social policies scant.

In the comparative literature, the United States is seen as the paradigmatic liberal market economy, one that is characterized by weak employer associations and low capacity for strategic coordination in the market (Hall and Soskice 2001, 27–33). While U.S. employers have developed powerful lobbying organizations such as the Business Roundtable and the Chamber of Commerce, they lack the kind of strong, centralized trade and employer associations that in Europe allow employers to cooperate with each other and with unions in ways that support more egalitarian outcomes. Indeed, American business is not just organized differently from its counterparts in European CMEs; it stands out even among its LME peers (see, e.g., Howell 2005; Hattam 1993).1 This paper asks why.

I trace the origins of the distinctive features of business organizations in the United States to the role the U.S. judiciary played in regulating economic organization in the late 19th and early 20th centuries. The role of the courts in shaping the architecture of the political economy has long been a central theme in American political development.2 Rapid industrial growth in the late 19th and early 20th centuries unfolded under the watchful eye of a powerful judiciary whose unabashedly pro-business orientation had an enduring impact on the relationship between the state and the market and on the character of economic interests. Forbath’s path-breaking (1991) study explored the role of the judiciary in explaining the structure and strategies of the American labor movement. Here I extend the argument to suggest that the courts also had a profound impact on the organization, goals, and strategies of American employers—discouraging and indeed actively disarticulating forms of business organization that paralleled those that were emerging in this period in Europe’s coordinated market economies.

The distinctive features of the United States are best highlighted with reference to developments in other countries. While a full comparative analysis is beyond the scope of the current study, comparison to Germany can serve to underscore important points of contrast. The German case provides a useful foil. Just as the United States has been seen as the quintessential liberal market economy, Germany has long been considered the paradigmatic coordinated model—featuring higher levels of employer coordination and more cooperative engagement with strong and centralized industrial unions that play an important role in the management of the economy and even of individual firms (Hall and Soskice 2001, 21–27). As in the United States, many of the core features of Germany’s political economy have their roots in the late 19th century, and in that case, too, courts played a central role.

Several key observations arise from this comparison of the U.S. and the German experience:

• Economic upheaval in both nations in the last quarter of the 19th century set off furious efforts by firms to band together, stabilize prices, and protect themselves from destructive competition. Germany took the step of legalizing cartels and expressly sanctioning other forms of collective self-help among independent firms. The U.S. moved in the other direction, implementing the Sherman Antitrust Act to curtail economic combinations.
• Germany’s positive view of economic organization had profound implications for the evolution of industrial relations. In sharp contrast to the United States, for example, boycotts, sympathy strikes, and sympathy lockouts were not prohibited, as courts declined to repress activities that cartels themselves were allowed to practice in the name of collective self-defense.
• Through the development of trade associations, German producers protected themselves against the threat of destructive bidding wars, providing relief from a race to the bottom. Those firms that relied on skilled labor faced incentives to maintain cordial relations with emerging unions, laying the foundation for collective bargaining and reinforcing competitive strategies based on quality rather than cost. In the U.S., the Sherman Act rendered horizontal cooperation through trade associations illegal.
• The antitrust regime shaped the strategies of American employer associations, encouraging them to focus on legislative and judicial activism as an alternative to the production issues more central to their German counterparts.

The paper proceeds as follows. Part I sketches out key differences in the contemporary landscape of business organization in the United States and Germany. Part II highlights similarities in the economic context in the late 19th century and describes the widely divergent responses of the courts in the two countries. Part III focuses on the impact of competition policy on the evolution of trade associations, while Part IV turns to the impact of judicial interventions on employer associations. A final section discusses the implications of developments in this period for the contemporary organization of American business and considers the public policy implications for future labor law reforms.

I. Business organization in the United States in comparative perspective

The landscape of business organization in Germany looks very different from that in the United States. German companies are organized into three types of strong and encompassing—and functionally differentiated—national business associations. First, every firm is a member of one of 79 national chambers of industry and commerce. The chambers are public statutory bodies with recognized responsibilities in some areas of the economy, for example, overseeing and administering the country’s national system for vocational education that offers standardized training in (currently) 325 certified occupations. Second, most companies also belong to industry-specific trade associations. These voluntary associations are organized on a broad sectoral basis (e.g., one such association covers the entire machine tool industry, another encompasses the entire electrical machinery industry), each with a national headquarters and regional branches. These trade associations represent the interests of member firms toward policy makers and often perform quasi-public functions (e.g., standard setting for the industry). They also provide member firms with a wide range of services, from marketing assistance to shared research and development to trade promotion. Finally, many though by no means all German employers are members of overarching employers’ associations, organized on a broad industrial basis, with regional branches that engage in coordinated collective bargaining with organized labor.

The landscape of organized business interests in the United States differs dramatically in both its organization and its strategic orientation. First, many though not all companies belong to one of the 10,000-plus local and regional chambers of commerce, organized to promote the interests of business in a particular locality. Each chamber is wholly independent of the others (i.e., there is no overarching hierarchy or coordinating structure), and individual chambers are typically entirely parochial in orientation, for example, providing opportunities for networking among local businesspeople and advocating for local investment and development.3

Second, American trade associations are weak and far more fragmented than their German counterparts.4 There are currently just under 4,500 national-level business and professional associations (Spillman 2012, 14). Unlike those in Germany, trade associations in the U.S. are organized around very narrowly defined sectors; for example: the Closure Manufacturers Association, the Envelope Manufacturers Association, the Mulch and Soil Council, the Pellet Fuels Institute, the Aluminum Anodizers Council, among many others even more obscure.5 While these associations range widely in size, most are tiny compared with their German counterparts. Median membership for associations composed of firms is 152, and for those associations that report having any staff at all the median number of staff is four, with a mode of two. Fewer than a quarter of associations employ more than 12 staff members (Spillman 2012, 85). Moreover, in sharp contrast to Germany, American business associations are mostly not organized around directly supporting the market or production strategies of their members (e.g., contributing to the improvement of goods and services) but rather are involved in what Spillman calls “information production” (e.g., through newsletters) and “cultural” functions (e.g., providing opportunities for social networking and the like). While often surprisingly long-lived, most are “small and weakly organized” and not “policy capable” (Spillman 2012, 270–71).6

Finally, there are no overarching employer associations in the United States that bargain collectively with labor unions. Instead, bargaining over wages and working conditions is conducted at the level of individual firms—or more often still, at the level of individual facilities or workplaces.7 Encompassing employer associations, as noted above, are a central feature supporting Europe’s coordinated market economies. Indeed, Germany’s relatively high level of collective bargaining coverage (over 60% of workers are covered by union contracts) owes much more to high levels of organization among employers than it does to union membership (now below 20%) (Behrens 2013, 475). By contrast, the basic rule in the United States is that, in order for workers to gain representation by a union, the union has to win a majority vote in a particular bargaining unit, typically a particular workplace.8 Here too, the difference between the United States and Germany (and indeed most other countries) is not a difference in degree, but in kind.9

What American employers do have—and what most CMEs lack—is a set of powerful and well-funded “general purpose” organizations with strong capacity to mobilize politically and, especially, to marshal legal resources on behalf of business interests. Associations such as the U.S. Chamber of Commerce and the National Federation of Independent Business are not focused on internal industry issues such as facilitating innovation or collective training. Instead, they are oriented toward influencing actors outside the industry, in particular, government (at all levels) and the courts. Indeed, these organizations are enlisted to mount campaigns against public policies or to sponsor litigation on behalf of firms and sectors that themselves are seeking to avoid negative publicity or scrutiny. The bottom line is that these associations are political actors whose main mission is to wage legislative and judicial battles oriented toward maximizing the discretion of individual employers rather than to facilitate collaboration on the production of collective goods such as training or research and development within individual sectors.

Germany also has a National Confederation of Industry (BDI) that, like the U.S. Chamber, engages in political lobbying, but the U.S. Chamber is far more involved in elections than its German counterpart, due partly to its orientation as well as differences in campaign financing. More importantly for present purposes, the U.S. Chamber is heavily involved in elections and appointments to the judiciary through its Institute for Legal Reform, as well as in direct litigation on behalf of business interests through its Litigation Center (Rahman and Thelen 2021). American firms also belong to other national associations that have no parallel in Europe. These include the National Right to Work Committee, which is entirely devoted to promoting anti-union legislation and to assisting firms in avoiding unionization in their own firms, and the American Legislative Exchange Council, which brings together state legislators and employers to mobilize for pro-business legislative reforms at the state level (see especially Hertel-Fernandez 2019).

While the varieties-of-capitalism literature typically characterizes U.S. employers as simply less able to coordinate their activities, these observations about the German and U.S. experiences suggest that we need to reformulate the way the question is posed. The question is not: Are business interests capable of coordinating among themselves? But instead: How are American employers organized, and, above all, what are they organized to do? The purpose of this paper, accordingly, it to understand what is distinctive about American employers, asking what kinds of collective action they are engaged in and what kinds of strategies and capacities they have developed in pursuit of their goals.

Here I argue that events of the late 19th and early 20th centuries—and specifically the way in which state policy and the courts in this period dealt with issues of competition and interfirm cooperation (antitrust)—played a key role in pushing American business organizations away from collective action in product and labor markets and toward strategies organized around political influence and, especially, litigation. I argue that state policy in the United States, as interpreted by the courts, played a key role in undermining nascent forms of coordination that flourished in Europe and that would later provide an associational infrastructure that proved more congenial to the emergence of a coordinated (also ultimately more “social”) variety of capitalism. The next section identifies a crucial turning point as the courts in the United States and Germany responded in radically different ways to economic turmoil in the late 19th century and to the emergence of new forms of business organization to confront this crisis.

II. Markets and courts in the late 19th century

The closing years of the 19th century were a period of considerable economic tumult in the United States and Europe alike. Advances in communication and transportation had upset previously stable local markets by exposing firms to intensified competition from producers in other parts of the country and from abroad. A major financial crisis in 1873 triggered a severe economic downturn that enveloped Europe and North America and ushered in two decades of economic stagnation (the “Long Depression”). These developments brought an abrupt end to the post-Civil War boom in the United States, and they shook the newly unified German state to its core.

In both Germany and the United States, manufacturing was hit especially hard. Overcapacity in a wide range of markets caused wages and profits to plummet, setting in motion vicious cutthroat competition and provoking considerable industrial strife. In this context, firms in many industries sought to stabilize prices by banding together into arrangements to protect themselves against this destructive competition. This was the context that produced the great trusts (United States) and cartels (Germany), as large firms in both countries (particularly those in capital-intensive industries) forged new arrangements to gain control of their markets in a period of economic turbulence. Similar strategies were by and large not available to smaller-scale, decentralized manufacturers (e.g., in the vast machine and metalworking industries) who engaged in more specialized batch production and who relied heavily on skilled labor. In these cases, alternative forms of coordination frequently emerged in which employers organized among themselves to stabilize competition and sometimes turned to unions to police these arrangements and punish firms engaged in cutthroat competition based on wage “chiseling.”

The experience in the United States

The fate of these arrangements was heavily shaped by the legal context. The key legislation in the United States was of course the Sherman Act—what Letwin characterizes as “a peculiarly American institution…expressing a policy that has nowhere been followed so long and consistently as in the United States” (Letwin 1965, 3). The context that produced this law was widespread public concern about the growing concentration of economic power in the American political economy. The Grangers led the initial agitation for antitrust legislation in the 1870s, but calls for action intensified in the 1880s as Standard Oil assumed control of much of the country’s oil refining and as new trusts cropped up in other (more consumer-facing) industries such as sugar and whisky.

Even as the public clamored for a law, the legal and scholarly communities were divided on the issue and responded timidly.10 The American Economic Association’s first meeting, in 1885, took up the question gingerly. While some delegates warned of the hazards of rampant competition and growing concentration in the hands of the powerful, most were loath to endorse state intervention of any sort, lest they be branded “socialist.” The legal community—still steeped in British common law tradition—believed that many of the emerging market behaviors should be prohibited, but it thought that the solution lay not in further legislation but simply in the vigorous enforcement of existing common law.

Elected politicians were apparently less conflicted, and the law sailed through Congress nearly unanimously. Though wildly popular, the resulting legislation was famously ambiguous, and it would fall to the courts to resolve those ambiguities. The results of the early years of its enforcement were thus highly uneven. “Loose” combinations—arrangements between independent firms—were held to be per se illegal, despite common-law precedents that had clearly long distinguished between “reasonable” (permissible) and “unreasonable” (enjoinable) restraints in trade (see Paul 2020, forthcoming; Roy 1997; Sklar 1988, 96–106; Thorelli 1955; Peppin 1940). By contrast, “tight combinations”—i.e., those formed by trust or merger—posed more difficult problems. The courts came to consider these cases differently; for such incorporated combinations, it required proof “that the ‘evident purpose’ of the combination was to restrain trade” (Lamoreaux 1985, 174). Posner’s analysis documents the resulting pattern. It shows that in the first two decades after the Sherman Act was passed, 50 of the 61 antitrust cases brought by the Department of Justice involved horizontal combinations or conspiracies (Posner 1970, 365, table 1, and 396, table 22).

The question of whether union activities fell under the purview of the new law was also unclear. Unions had long enjoyed legal status as lawful combinations, and since Commonwealth v. Hunt (1842) peaceful strikes in pursuit of higher wages were also considered legal. While the Sherman Act left these conditions intact, the status of other union activities was left ambiguous (Letwin 1965, 155). Although the record of the congressional debates on the bill makes clear that the legislators’ intent was to exempt unions from the law, this was not made explicit in the bill itself (Letwin 1965, 98). Thus, these questions too were left to the courts to resolve. Over time, the courts proceeded to embrace an increasingly restrictive view of practices aimed at broad class-based forms of mutual aid such as boycotts and secondary strikes. As Forbath (1989, 1150) puts it: “Before the 1890s, courts had barely considered the legal status of many kinds of boycotting activities. By the early 20th century, common law and antitrust doctrine condemned in needlepoint detail virtually the entire spectrum of peaceful secondary actions aimed at ‘unfair’ (non-union) goods and materials.”

The experience in Germany

Germany went in a markedly different direction in the late 19th century, legalizing cartels and also expressly sanctioning other forms of collective self-help among independent firms. Although Germany came to be known as the “land of the cartels,” in fact this period represented a dramatic turn in the country’s development. Before 1870, the policies of many German states took Britain as the model for economic growth (Lehmbruch 2001). However, the Manchester consensus was shaken in the so-called Gründerkrise, the economic crisis that rocked the country in the first years of its existence after 1870. The financial crisis of these years brought intense competition across a range of nascent industries in Germany.

Social scientists and the legal community were crucial in steering the country away from the then-prevailing liberal developmental discourse toward an alternative “organized” market ideology. Economic policy in this period was shaped especially by the influential Verein für Socialpolitik, an organization of economists and legal scholars that enjoyed privileged access to the German bureaucracy by virtue of its influential research on pressing contemporary social and economic issues. Formed in 1872, the Verein provided an institutional bridge between political economy and legal science in support of a “third way” alternative to both liberals and socialists (Nörr 1995, 5–9). The organization’s guiding principle was that of a “managed market,” one in which competition would be organized and moderated. Given this orientation, the Verein viewed emerging efforts at employer coordination in an overall sanguine light. Indeed, the first German-language study of the impact of cartels, by the economist Friedrich Kleinwächter (1879), held Manchester liberalism responsible for the economic crisis and characterized cartels approvingly as a defense against unbridled (zügelos) competition (see also Richter 2007, 55; Polysius 1921, 6).

Kleinwächter was not alone: A chorus of economists viewed cartels as representing a more advanced state of economic development (Richter 2007, 98). The economic sociologist Albert Schäffle (who, though a German national, served briefly as Austrian minister of commerce in 1871) penned an influential essay in 1898 titled “On Cartels and Cartel Policy” (Zum Kartellwesen und zur Kartellpolitik) that painted a “bleak picture” of the free market as “a wild war of all against all,” waged with the most deceitful tools and resulting in “evil consequences” (Richter 2007, 188).11

In sharp contrast to the confusion and wrangling within the U.S. legal profession as to the proper bounds of the Sherman Act in this period,12 there was a high degree of consensus in the German legal community on this matter. The influential Juristentag (a national association of legal scholars and practitioners) explicitly endorsed cartels and the role of the courts in sanctioning these organizational forms and contributing to their stabilization (Nörr 1995, 5). The overwhelmingly dominant view at the association’s 1902 and 1904 congresses opposed legislation that would suppress cartels (Richter 2007, 201–7). Delegates certainly discussed the possible negative impact of cartels (e.g., on prices), and their need to be monitored and regulated. However, rather than ban them, the prevailing view was that the state should recognize them to facilitate such oversight. Insofar as cartels were viewed as a national response to destructive competition, supporting (and monitoring) them was the best defense against such abuse.

In these debates, speakers invoked the United States as a negative model. Thus, for example, at the 1905 convention of the Verein für Socialpolitik, economist and legal scholar Gustav Schmoller characterized the American case as a cautionary tale. Schmoller, who as co-founder and later long-serving chairman of the Verein had exercised outsized influence in the German political economy since the 1870s, delivered an extended defense of German cartels that bordered on rapturous (Richter 2007, 207–10; Nörr 1995, 78). Cooperative cartels of the sort that had been cropping up all across Germany were not only benign, they were ethical because they looked out for the collective interests of both their members and their workers. As such, they guarded against the short-sighted “Yankee” opportunism that was rampant in the United States (Richter 2007, 208). Schmoller argued that the trusts were founded by egoistic money grubbers out for private gain, while the founders of cartels are “educators who want to ensure the victory of the collective interest of a branch of trade over the egoistic interests of the individual” (Richter 2007, 208).

This positive view of economic organization also had profound implications for the evolution of industrial relations. Once unions and the right to strike were legally recognized—in 1869, through §152 of the Trade Regulations Law, or Gewerbeordungsgesetz (GewO)—Germany’s highest civil court (Zivilsenat des Reichsgerichts) viewed associations of workers in the same broad light as it did associations of firms (Schröder 1988, 244, 250–52). The moniker of “labor cartel” with which unions were persecuted in the United States took on a wholly different meaning in Germany, where cartels were legal. Acts of collective economic self-defense (genossenschaftliche Selbsthilfe) were seen as lawful—whether deployed by cartels or by unions—so long as the activities undertaken did not exceed customary rules of “proportionality” (Schröder 1988, 251–52, 264, 274–77).13 This applied not just to strikes (and lockouts) but also to boycotts, which were deployed by cartels to exert pressure on outsiders but also by labor in the context of industrial disputes (Schröder 1988, 252, 260, 265–69, 284).

In sharp contrast to the United States, therefore, the tool of the boycott (along with the sympathy strike and sympathy lockout) was not prohibited in Germany (Kittner 2018, G11; Schröder 1988, 266). Clearly, the overall political context still weighed heavily on organized labor. For example, some lower courts harassed unions by deviating from the stance taken by the Imperial Civil Court—though as Schröder notes, the latter also often overturned such rulings (Schröder 1988, 278–79; see also Kittner 2018). Criminal courts could also prosecute unions under the terms of §153 of the GewO, which had rendered the use of force, intimidation, and defamation punishable by up to three months in prison (Kittner 2018, G9). Here too, however, there was great variation in outcomes across the lower courts, and as Kittner (2018, G11) notes, over the period 1903–1914 employers lost almost as frequently as they won (48% of cases brought against workers or unions resulted in acquittals).14 In 1906 the Zivilsenat handed down a decision that confirmed longstanding doctrine with singular clarity in the context of a journeymen boycott against a baker who did not agree to their terms (Schröder 1988, 267–69). The baker had contested the action, but the court upheld the boycott under the principle of “parity in conflict” (Kampfparität) (Schröder 1988, 269). Under intense pressure from the legal community, the Imperial Criminal Court then felt compelled to clarify its position as well. It issued a rather convoluted, “face-saving” set of arguments to make explicit that the threat of strike or boycott was itself not generally subject to prosecution under §153 of the GewO (Kittner 2018, G11).

In sum, German courts took a very different position from their American counterparts on emerging forms of economic organization among firms and workers in the late 19th century. Germany not only made no effort to suppress cartels and emerging horizontal combinations among firms, it actively supported them. In the same year the Sherman Act was passed, Germany’s high court ruled that businesses were allowed to regulate markets by engaging in “self-help on a cooperative basis” in order to prevent disruptive hypercompetition (Nörr 1995, 7). In a crucial test case in 1897, the court held that cartel agreements only stepped outside the bounds of the law when their purpose was either to create a monopoly or to exploit consumers (Nörr 1995, 7). Cooperative arrangements including explicit price fixing among firms—already growing before the court’s decision—expanded rapidly after their legal status was clarified. Although the exact number of cartels is uncertain, figures reported by the Interior Ministry suggest that there were 385 by 1902 and over 500 by 1918 (Polysius 1921, 20).

Moreover, even though the country’s authoritarian government suppressed unwanted political organizations of workers until 1890 (in the anti-socialist laws), its top civil court took a remarkably forbearing position on organized labor as an economic actor. The criminal courts (along with some lower civil courts) were harder on labor unions even after the socialist ban was lifted, but the Imperial Civil Court steadfastly declined to repress activities (such as boycotts) that cartels themselves were allowed to practice in the name of collective self-defense.

III. Impact on firm coordination in product markets: The rise of trade associations

The different legal environments governing competition policy in the two countries strongly conditioned the organizational response of business to the turbulent markets of the late 19th century. In both Germany and the United States, large firms that were engaged in capital-intensive production with high fixed costs addressed the competitive pressures of the late 19th century by internalizing coordination. They did so, however, in different ways because of the differences in legal context. In Germany’s more permissive competition regime, firms coordinated openly though contracting. German cartels were “communities of interest” (“Interessengemeinschaften,” or IGs) in which member firms maintained their individual identities while coordinating on prices or production by dividing up markets so as to avoid head-to-head competition in particular segments. The result was a complex blend of coordination and diversification across different firms—all held together by open and indeed legally enforceable contracts.

In the United States, by contrast, such agreements were unlawful under the Sherman Act. Large firms avoided antitrust suits by merging with their former rivals and swallowing up smaller competitors who could not survive in the era’s ultra-competitive markets. In this way, competition policy in the United States strongly promoted a dramatic increase in industrial concentration. To give just one example, Du Pont formed a holding company with a large rival firm and together they proceeded to absorb smaller competitors (Spillman 2012, 50). The “great merger movement” of this period resulted in growing concentration in many American industries as thousands of smaller firms vanished into large corporations (see especially Lamoreaux 1985). As Sanders (1986, 159) points out, in 1899 alone over 1,000 companies disappeared in mergers, and just a few years later over 100 industrial fields were dominated by a single firm.

The origins of Germany’s trade associations

The impact of the different legal regimes on smaller, skill-dependent firms in Germany and the United States was, if anything, more consequential for the evolution of trade associations. In Germany, the permissive competition policy provided a comparatively congenial context for these smaller firms to cooperate among themselves to stabilize competition and avoid ruinous cutthroat practices. The arrangements they developed in the late 19th and early 20th centuries drew on older traditions in which small regionally based producers solved their collective-action problems through cross-firm governance arrangements, managed by trade associations and sometimes policed by unions.15 The hub of much of this activity was the decentralized industrial districts of the southwest (Württemberg), Saxony, and the Bergisches Land south of the Ruhr. Faced with intense market volatility, these firms banded together to socialize risks and reduce uncertainty by coordinating—on wages, on production strategies, on technology, and on training—not to eliminate but to manage competition among themselves in the market.

Depending on the character of the industry, these firms organized different types of cooperative arrangements to address the particular kinds of competitive challenges they faced, either on a formal or, very often, more informal basis (Herrigel 1996, 60–65). Thus, for example, in industries in which the main production cost was labor (such as cotton textile finishing and cutlery), price cartels operated to dampen cutthroat competition in downturns (see also Domansky-Davidsohn 1914, 78–79). In other sectors (e.g., the textile trades), term-fixing cartels established shared guidelines for payment and delivery schedules, thus preventing firms from “destroying one another by attempting to gain orders by offering to perform services on increasingly unreasonable terms” (Herrigel 1996, 62). In the machinery and other capital-goods-producing industries, specialization cartels (also known as finishing associations) involved arrangements in which member firms “agreed to specialize in one or several lines of a product (e.g., particular machine tool types, such as lathes) while ceding other lines to other members of the association” (Herrigel 1996, 63).16

Through such arrangements, these producers sought to protect themselves against customers (including state contractors) who sought to engage them in destructive bidding wars.17 For example, potential buyers sometimes imposed harsh terms of delivery or payment, to which firms would have to agree in order to win the contract. In other cases, clients would award the contract to the lowest bidder but then ask the firm to perform the work according to the plan that had been put forth by some other firm (for a higher bid). Furthermore, since company bids for contracts often included detailed production plans, firms were constantly exposed to the threat of intellectual property theft. Individual firms on their own were powerless to fight these practices. Such problems, as Polysius emphasized (1921, 64), could only be overcome through collective organization.

These cooperative arrangements served to stabilize competition in the face of turbulence, and they also provided a space within which it was safe for member firms to contribute to building and maintaining complementary institutions of collective self-help that would benefit all of them. Thus, these regions developed institutions designed to support cooperation in other areas as well (Herrigel 1996, Chapter 2). These included vocational schools to promote ongoing skill formation and to cultivate and expand the skill base of the local workforce (i.e., the opposite of the deskilling strategies taking hold in the United States at this time as companies competing on price sought to reduce labor costs through the adoption of mass production techniques that relied on unskilled labor), technical institutes (often with support from state governments) to facilitate the dissemination of the latest know-how and to promote ongoing adaptation to the latest technological developments, cooperative financial arrangements to assist firms in securing investment capital for growth and innovation, and arrangements for shared standard-setting and help to firms in bringing their diverse products to broader (also world) markets.18

The political-economic ecosystem in these regions allowed small firms to avoid destructive price wars while also encouraging them to collectively move up-market into higher value-added market segments. The powerful German Mechanical Engineering Association (VDMA) grew out of one such regional association that had originally been founded in 1890 to improve delivery and payment conditions, resist unreasonable demands of customers, and establish reasonable prices (Polysius 1921, 65–74). The association saw as its main task the elimination of abuses that caused “unhealthy” competition. To that end, it sought to promote accurate and uniform cost accounting among firms, to establish unitary delivery and payment conditions, and to develop collective strategies to protect proprietary drawings and ideas (Polysius 1921, 75–77).19 Dipl. Ing. Friedrich Fröhlich, who took over as managing director of VDMA in 1910, highlighted the association’s emphasis on quality over price; in his words, “Lieber teuer und gut, als billig und schlecht” (“Better expensive and good than cheap and bad”) (Polysius 1921, 74).

Germany’s largest companies (especially in heavy industry) fought against unions furiously (and usually very successfully), but these smaller manufacturing firms in skill-intensive specialized production found it necessary to maintain cordial relations with the skilled workers on whom they relied.20 Indeed, if anything their dependence on skilled labor grew as competition came to center on product quality rather than price. Thus, these regions formed the heart of the German union movement in the late 19th century, where they organized and bargained for a far larger share of the workforce than in the centers of heavy industry in the Ruhr Valley. As Schönhoven notes, in 1913 fully three-quarters of all German workers who were covered by collective agreements were employed in small and medium-sized firms with 50 or fewer employees (1979, 416).

Unions in these areas were overwhelmingly organized along craft lines, but unlike in the United States, where employers and unions were at war over skills, craft unions in Germany’s decentralized industrial districts shared with employers a strong interest in increasing and expanding the supply of skills on which the regional economy depended (Thelen 2004, 39–91). Regional training institutions actively supported the ongoing upgrading of worker skills and adaptation to the latest technical developments. Because these arrangements were organized collectively, they also promoted skill portability across the regional labor market, facilitating the movement of workers across firms and related industries. In this way, the arrangements supported multifirm bargaining and encouraged the development of encompassing labor organizations.21 In this context, multiemployer collective bargaining served as a further framework for socializing risk both for firms (by standardizing wages) and for workers (by promoting skill portability). Unions in Germany’s decentralized industrial order were thus part of a broader ecosystem of coordination; member firms experienced it not as constraining but instead as deeply enabling.

Constraints on American trade associations

These forms of associationalism met a very different fate in the United States. As in Germany, horizontal interfirm coordination was commonplace in the United States in the 19th century (e.g., Roy 1997), and the first American trade associations were established in the 1860s in response to increasing industrialization and the nationalization of markets. By the 1880s, trade associations such as the Writing Paper Manufacturers Association, the American Iron and Steel Association, and the National Association of Wool Manufacturers had “became part of the normal way of doing business in most American industries” (Chandler, quoted in Spillman 2012, 42). Like their German counterparts, these associations drew on older forms of (local) associationalism (see, especially, Spillman 2012, 44–45). They, too, sought to mitigate market volatility in the late 19th century through efforts at stabilizing competition through information sharing and, in the case of manufacturing, price and production agreements (Spillman 2012, 41–47; for an example, see Galambos 1966, 35, 37).

The Sherman Act of 1890 and the courts’ strict interpretation of horizontal cooperation among firms rendered the latter illegal. American trade associations did continue to operate but they could no longer coordinate their competitive strategies openly: “association announcements about price and production agreements at meetings disappeared after 1890” (Spillman 2012, 50). While their German counterparts could coordinate legally, American trade associations had to rely on informal voluntary cooperation. But such forms of coordination are inherently fragile, particularly in periods of intense and destructive competition when the incentives to engage in opportunistic behavior are almost irresistible. Many of these smaller producers were swept up by larger firms in the merger movement discussed above.

The plight of small producers and growing popular discontent with the growth of oligopolies and monopolies kept antitrust on the agenda long after the Sherman Act was passed. The early years of antitrust enforcement made it eminently clear that the Supreme Court’s rulings had only encouraged corporate consolidation while declaring all loose associations among independent proprietors unlawful because these organizational forms “did not fit neatly into the Court’s binary framework of corporate hierarchy versus market competition” (Phillips Sawyer 2018, 8). Critics pointed to the resulting inequities, as the “Supreme Court’s strict interpretation of market competition…forbade any contractual agreements [among small independent proprietors] as a violation of the Sherman Act per se,” even as it applied a far more lenient “rule of reason” standard to business activities that were clearly driving the growth of monopoly (Phillips Sawyer 2018, 17–18).

It was in this context that the American fair trade movement was born.22 As Phillips Sawyer notes, this movement had its roots in efforts at the turn of the century by small specialty producers to defend themselves through resale price maintenance agreements (RPMs) with the large retailers that sold their products.23 But the courts expressly outlawed RPMs with reference to prevailing antitrust rules (the key case was Dr. Miles Medical Co. v. John D. Park and Sons (1911)). Opponents of the ruling coined the more positive term “fair trade” and demanded that the court assume a more nuanced stand with respect to associations of small independent producers, similar to the “rule of reason” it was applying to large vertical combinations. Influential legal scholars, including notably Louis Brandeis, were keenly aware of the plight of small business and heartily endorsed the fair trade codes and advocated for the extension of the rule-of-reason doctrine to trade association rulemaking as well (Phillips Sawyer 2018, 18–19). In 1911, an American Fair Trade League (AFTL) thus “brought together a group of artisanal producers and specialty proprietors in pharmaceuticals, watch making, electronics and printing” seeking to “create trade networks strong enough to compete with the growing market power of large-scale manufacturers and discount retailers [and] to convince policymakers, jurists and consumers that codes of fair competition ensured quality brand names, encouraged entrepreneurial innovation, and protected consumer welfare” (Phillips Sawyer 2018, 18).

The movement gained a more secure footing after the establishment in 1914 of the Federal Trade Commission (FTC), whose early leaders were sympathetic to the plight of small employers and sought to assist them in order to “enhance and organize” competition rather than suppress it (Berk 1994; 1996). The U.S. Chamber of Commerce—called into existence in 1912 by Secretary of Commerce Herbert Hoover as a way to forge a link between the nascent administrative state and the business community—formed a crucial organizational link to the trade associations. Brandeis played a key role in importing ideas resembling what he had seen in Germany to promote the establishment of what Berk calls “developmental associations.” In these, small firms would be educated in cost accounting and would engage in information sharing and monitoring to steer competition away from volume and price and toward innovation, improvement, and competition based on quality (see especially Berk 1994).

The FTC’s early leaders were wholly on board with this agenda. The agency’s first commissioner, Edward Hurley, had become “an evangelist for cost accounting” (Berk 1996, 383), which he saw as crucial in deterring underbidding caused by faulty calculations and which he believed would spur innovation among producers who compared unfavorably with their competitors. The underlying idea was that price instability and unhealthy competition were fueled in part by the inability of small producers to accurately assess market conditions and by the propensity to systematically underestimate the cost of their own manufacturing and marketing—thus fueling a race to the bottom. Manuals produced by the AFTL provided basic instruction in uniform cost accounting so that firms could get a clear picture of the strengths and weaknesses in their own production processes.

These efforts at bolstering the role of trade associations got a boost in World War I (during which more trade associations were also founded) as part of the government’s wartime production controls (e.g., Galambos 1966, 66). After the war, trade associations cooperated with the FTC to initiate “trade practice conferences”—forums for members of an industry “together to set competitive and accounting standards and then to foster cost-based pricing before the vicious circle of price fixing and prosecution occurred” (Berk 1996, 383). As then-FTC chair Nelson Gaskill put it, the trade conference “implies a transition from the accepted conventions of free competition…a willingness to surrender somewhat of individual liberty for the benefit of the whole. It recognizes the individual self-interest as bound up in a community of interest” (quoted in Berk 1996, 384; italics in original).

However, the FTC and the courts were at odds with one another from the outset. As Gerstle (2015) has pointed out, the early administrative state that was being constructed in this period did not displace the courts but instead grew up around and on top of the pre-existing court-based policy-making regime. The situation was full of tension, as the judiciary viewed the emerging administrative state with deep suspicion and sought to defend its own privileged position in the governance of economic activity. The courts gave the trade associations a pass during World War I because of the key role they were playing in managing wartime production. However, as soon as the hostilities ended, the Supreme Court renewed its prosecution of practices cultivated by the trade associations and the AFTL under FTC auspices.

In 1921, the Department of Justice (DOJ) and the Supreme Court made an example of one such trade organization, the American Hardwood Association, with a decision that held that even the exchange of cost and production statistics was illegal under prevailing antitrust rules (Sanders 1986; Spillman 2012; see also Berk 1994).24 The decision was interpreted as a prohibition of all open-price association agreements through which producers sought to mitigate ruinous competition among themselves through transparency in how they had arrived at their pricing. This decision, and the stance of the courts generally, produced a “panicky feeling” among thousands of members of trade organizations, according to the head of the American Trade Association Executives. Business associations “that engage in statistical work of any character are greatly disturbed and uncertain as to the legal limits now imposed upon them” (quoted in Himmelberg 1976, 20).25

Trade conferences and other forms of coordination limped along in a context of high legal uncertainty and periodic harassment by the courts. As Berk notes: “Unresolved struggles of antitrust reemerged in a battle over the accountability of trade practice conferences and developmental associations” (1994, 31). The Clayton Act of 1914 had supposedly clarified the distinction between “constructive” and “destructive” competition, but the boundaries were unclear and transgressions severely penalized. Indeed, the ink had barely dried on the Clayton Act when the Supreme Court essentially told the FTC to stay in its lane with a ruling against even well-intended price setting (Spillman 2012, 63).

The court took a similarly dim view of the FTC’s trade practices. “No sooner had the commission routinized trade practice conferences than the Supreme Court gutted them” (Berk 1996, 391).26 The core problem was that although the Clayton Act called for a distinction between healthy and unhealthy forms of competition, “neither the Court nor the Department of Justice could make sense of economic governance structures between markets and corporate hierarchies” (Berk 1996, 392). Trade associations thus repeatedly found themselves in the crosshairs of the DOJ and courts, which were operating on the basis of a very strong distinction between pure competition and monopoly, one that left no room for “regulated competition.” So, while U.S. trade associations survived, they beat a retreat from the core economic functions increasingly pursued by their counterparts in Europe.

In sum, in the United States, forms of employer associationalism designed to manage and enhance competition that were flourishing in Germany struggled in the context of the Supreme Court’s unforgiving and undifferentiated approach to antitrust. But what about employers’ associations that organized collectively in response to the emergence of labor unions? In this case, the impact of the courts was subtler and less direct, but no less profound. Whereas the courts directly inhibited forms of employer association organized around coordination in product markets, the court’s interventions in labor relations operated more indirectly, to relieve employers of the need to form stable encompassing industrial organizations to confront labor. To understand how this unfolded, we need to return to the turn of the century, with a focus again on small independent proprietors who relied heavily on skilled labor. This is the subject of the next section.

IV. Employer coordination in industrial relations

Buffeted by the turbulent markets of the late 19th century and blocked by the Sherman Act from coordinating openly among themselves, independent proprietors who were heavily dependent on skilled labor sometimes sought to enlist unions to help them control ruinous competition among themselves. That “the golden age of trade agreements between 1897 and 1904 coincided with the great merger movement in American business,” as Thomas Klug observed (1993, 547), was no coincidence. This period saw a proliferation of employer associations of various sorts, including what Clarence Bonnett calls “negotiated” associations that relied on unions to encourage employer organization and police firm behavior (Bonnett 1922). Unions shared with their employers an interest in preventing cutthroat competition based on wage “chiseling.” Through their control of skills, unions were in a position to police firms’ behavior and punish defectors by depriving them of the skilled workers they needed for production. In such situations, cooperation with organized labor “held out the promise of comfortable profits for employers and wages for employees—a peaceable kingdom erected on the industry wide collective bargaining agreement” (Ernst 1995, 5).

Thomas Klug provides a detailed account of how this worked in practice using the example of Detroit, which was a center for machine production in the 19th century. Machine and metalworking firms there experienced the same repeated, devastating, boom and bust cycles as the more capital-intensive firms of which Lamoreaux (1985) writes. Between 1871 and 1904, they too suffered similar problems of overcapacity and destructive price wars. The stove industry was especially vulnerable to these cycles, and after repeated unsuccessful efforts to coordinate among themselves, the firms struck a broad and encompassing collective bargaining agreement with the union. As Klug put it, “unable to bring order and restore profitability to the stove industry by themselves, employers turned to the Iron Molders Union to do it for them” (Klug 1993, 482). Beginning in 1891 the union “was able to play a major role in rescuing stove manufacturers from destructive competition and falling profits” (Klug 1993, 7).27

Stove manufacturers were not alone. By the end of the 19th century trade agreements had been struck in a number of sectors, allowing skilled unions to gain an unprecedented foothold in the labor market in the 1890s (Klug 1993, 243, 505). Between 1895 and 1905, “19 employers’ associations and 16 unions had negotiated no fewer than 26 national or large district agreements,” and in almost every case, “manufacturers’ desire for market control of chaotic price competition” brought them together with unions to enforce wage floors and in this way inhibit “the outbreak of disruptive price wars” (Swenson 2002, 49).

The fate of these arrangements, too, however, was powerfully shaped by the prevailing legal regime, which allowed employers who were disadvantaged by such arrangements to seek relief in the courts. A key player in this was the American Anti-Boycott Association (AABA), which specialized in assisting firms in fighting unions, including by breaking out of arrangements through which employers sought market stability by negotiating with labor.28 The AABA was decidedly not an employer or trade association, and required virtually nothing in the way of organization or “coordination” on the part of client firms. It was instead basically a network of lawyers that set itself up as a “general purpose” organization, offering services to firms from all sectors.

Compared with employers’ associations organized on a regional or industry basis to negotiate with—or jointly oppose—unions, the mission of the AABA “was at once broader and more focused” (Ernst 1989b, 60). Rather than confront labor firm by firm, or industry by industry, or region by region, the AABA operated much like the Chamber of Commerce’s Litigation Center today, seeking to secure court decisions whose precedent-setting impact would resonate nationally. Likening the “labor trust” to corporate behemoths such as Standard Oil and American Tobacco, the AABA’s founders called for employers to fight unions through “the machinery of existing law” (Ernst 1995, 20). Their specific express goal at the time was “the destruction of the boycott through law and publicity” (Ernst 1989b, 60).

The identity of the companies that belonged to the AABA was kept confidential (Ernst 1989b, 74),29 but their dues financed the provision of association benefits and services—legal advice and sometimes direct legal representation and court costs. The organization operated in a highly disciplined and strategic way, choosing carefully the cases it agreed to take up. Thus, the association declined to take up weak cases that its leaders thought would not serve the “common good,” while actively pursuing cases that they saw as capable of establishing desirable new precedents. Above all, the organization sought out cases that would establish that unions too were subject to antitrust provisions in the Sherman Act and that an individual’s right to work was to be protected just as vigorously as a business person’s right to run his own business.

The AABA was wildly successful, winning every one of the cases it took on in its first five years (Ernst 1989b, 69).30 The most important of these was the landmark Danbury Hatters case (Loewe v. Lawlor), in which the Supreme Court explicitly extended the application of antitrust laws to labor unions, a decision that effectively precluded the development of broad sectoral bargaining in the United States. The conflict emerged in the context of a campaign by the United Hatters of North America, in an industry that was a typical case of regulatory unionism. As Ernst notes, the hat trade was dominated by small producers who together sought to contain the disruptive influence of low-quality, low-grade competitors—“unintelligent competition” of “lower, profitless grades” of hats (Ernst 1995, 13). After a failed attempt to form a holding company, they turned to the United Hatters union to help them bring order to the market. The hatters’ experiment in regulatory unionism had started in 1885, and the union played a key role in disciplining employers who defected from the prevailing rules. “In a competitively organized, labor-intensive, and geographically dispersed industry like hatting, employers and workers alike came to appreciate the promise collective bargaining held for stabilizing wages and blocking the entry of new, ‘cut-throat’ firms” (Ernst 1995, 14).

The Danbury Hatters case was brought by a low-wage, marginal producer of “soft” hats (D.E. Loewe & Company) seeking to escape union influence and facing a labor boycott. The AABA saw great promise in pursuing the case and in the trial made clear that this was not a struggle between “a man and the working people” (an unpopular position with many juries) but instead between one manufacturer and an unholy alliance between his competitors conspiring with a powerful national union (Ernst 1995, 160). Although the decision fell short of the AABA’s initial goal of outlawing the closed shop, it did result in a decision that declared labor’s boycott a conspiracy in restraint of trade, and authoritatively “confirmed what a majority of lower federal courts had held: that the Sherman Act applied to combinations of workers” (Forbath 1989, 1175).

The impact of the Danbury Hatters case resonated widely. Proprietary capitalists who before 1890 had not thought to turn to courts were suddenly schooled in how the judiciary could work for them (Ernst 1995, 55). While large employers had long possessed the financial clout to pursue expensive litigation against unions, the AABA now made such strategies available to smaller producers as well. As Ernst puts it, “what was needed was an organization to spread the costs of suing trade unions and developing legal experience on the labor problem, and this was what the AABA would provide” (Ernst 1995, 50).

Promoting the courts as a key arena for doing battle with unions, the AABA (later rebranded the League for Industrial Rights) began publishing a journal called Law and Labor to educate and inform employers of the latest legal developments (Merritt 1925, 96–99). The organization thus established itself as a “clearing house on all legal and constitutional phases of the labor problem” (Bonnett 1922, 449). It is no coincidence that sectoral employer and trade associations such as the National Metal Trades Association, the National Founders Association, and the National Erectors Association, which had been organized to facilitate collective bargaining, turned belligerent between 1901 and 1906 (Bonnett 1922, chapters 3–5).

This context and these developments had a profound impact on the early evolution of the National Association of Manufacturers (NAM), which was without a doubt the most influential national-level employers’ organization in this period. Founded in 1895, NAM was originally primarily concerned with tariff protection at home and promoting markets abroad, and had adopted a rather tolerant approach to labor (Brady 1943, 193; see also Steigerwalt 1964). But in 1902 (the same year the AABA was founded and just as the Danbury Hatters case was being launched), incoming NAM president David Parry abandoned the association’s earlier, more cooperative strategy to launch an aggressive campaign against organized labor. As Parry put it in his 1903 report to the membership: “It is true that the fight against organized labor is, in a measure, a departure from our former conservative policy respecting labor, but it is an inevitable departure if the Association hopes to continue to fill the full measure of its possible usefulness to the manufacturers and people of the country” (quoted in Saunders 1964, 139). In the organization’s new Declaration of Principles, courts and the judiciary figured prominently as an important forum for advancing its objectives. NAM had struggled to win members in its early years, but once the organization turned its sights on labor, membership grew, and indeed quite spectacularly in 1903–1904.31

NAM worked hand-in-glove with the AABA in the first decade of the 20th century. Parry invited AABA’s general counsel Daniel Davenport to address NAM’s 1904 convention, at which Davenport emphasized the critical services his AABA could provide to NAM members. Without such support, he argued, individual companies were not in a position to fight the legal battles necessary to secure favorable decisions. Even as the AABA’s case against the United Hatters union was winding its way through the courts (the case dragged on from 1903 to 1908), NAM provided critical backup, establishing a lobbying operation in Washington, D.C., aimed at blocking labor-sponsored legislation through which unions were seeking to secure an exemption for labor combinations from the constraints of the Sherman Act and to curb the injunctive powers of the federal courts in labor disputes (Steigerwalt 1964, 97–98).

NAM’s lobbying efforts centered on vigorously defending the role of the courts in industrial relations, not least because injunctions had become critical tools for employers in fighting unions (see also Sklar 1988, 254). Their use in labor disputes grew out of conflicts in the railway industry in the 1880s, in which Supreme Court decisions rested on the Interstate Commerce Clause. However, the passage of the Sherman Act in 1890 had opened for employers all sorts of new possibilities for the broader application of the injunction in labor conflicts (Forbath 1989, 1158). Already in 1893 “a federal district court held the Sherman Act applicable to labor organizations, and all similar opinions which followed added authority to the original decision” (Steigerwalt 1964, 131).32 Thus, although it was not until the Danbury Hatters case was actually decided (in 1908) that the Supreme Court explicitly upheld the applicability of the law to labor organizations, the use of the injunction in combination with the Sherman Act was longstanding practice and indeed a critical component of employers’ strategies to forestall union organization.33 Injunctions were employers’ most potent legal weapons against labor, and their use had grown spectacularly after 1890; thousands were issued between the 1890s and the 1920s (Gerstle 2015, 223).34

The relationship between the AABA and NAM, forged under Parry, if anything grew closer under his successor James van Cleave (NAM president from 1906 through 1908). Indeed, the partnership was sealed in the context of another important court case, one in which the AABA represented van Cleave’s own firm in a case that took aim at the cooperative arrangements between the stove industry and the Iron Molders Union discussed above. Van Cleave was president of Buck’s Stove and Range Company, but unlike other leading stove manufacturers who “applauded [the agreements between the union and the employers’ association] for banishing ‘unfair’ competition,” van Cleave was ferociously anti-union (Ernst 1995, 126). When confronted by a union “we don’t patronize” campaign, he turned to the AABA to fight his case, which ultimately resulted in another major blow against unions in Gompers v. Bucks Stove & Range Company (1911).35

As NAM president, van Cleave also oversaw the establishment in 1907 of a National Council for Industrial Defense, whose purpose was “to focus all manufacturing power, local and national, on behalf of mutual interests in general, but particularly with respect to legislation bearing upon the labor question” (Brady 1943, 201). The AABA was one of the 12 associations present at the meeting at which it was resolved that NAM’s officers should be allowed to form and finance this operation (Steigerwalt 1964, 124). Through this new council, NAM worked with local employers’ associations such as that in Detroit, which became an epicenter in conflicts over the open shop (Klug 1993, Chapter 17; also Meyer 1981). Thus, the Employers’ Association of Detroit (EAD) worked with local employers to assist them in their battles with labor, and sometimes picked up the tab for their legal expenses (Klug 1993, 727, 887). Among the services the EAD provided its members was to aid them in securing labor injunctions by rounding up affidavits from people who would testify to having witnessed threats and by hiring undercover men with cameras to “amass evidence that could be used in court” (Klug 1993, 827–28). As the EAD’s chief counsel, George F. Monaghan, put it: “Your courts are your greatest protection” (Klug 1993, 821).

In sum, the successes of these organizations, and their strategic use of the law in the late 19th and early 20th centuries, disrupted emerging strategies of collective self-help among firms and nascent multiemployer bargaining arrangements with labor. The prevailing antitrust regime put all forms of coordination among independent firms on tenuous legal ground, and unions that worked with employers to mitigate competition in bargaining over wages and skills found themselves on the receiving (and losing) end of antitrust suits.36 As Forbath notes, “trade unionists spoke and wrote about how they had agitated for legislation against the trusts and monopolies only to have the Sherman Act invoked most successfully not against trusts but against strikes and boycotts” (Forbath 1989, 1178).

From a comparative perspective, the important point is that the strategies that these employer organizations developed and perfected for waging legal battles if anything reduced incentives to develop the kind of coordinating capacities that were being constructed in Europe. Nascent forms of collective multifirm coordination—both among employers and between labor and capital—withered as the AABA and NAM encouraged firms to mobilize the courts and the legislatures in their battles with organized labor. Under these circumstances, there was little need or incentive for employers to construct strong associations, for, as one employer at the time remarked (with reference to the AABA), “we are getting more for our money out of this Association than any other” (Ernst 1989b, 83)

German employer associations and the contrast to the United States

The situation was very different in Germany, where prevailing competition law provided broad leeway for coordination among businesses but also among workers, including the express right (of both) to engage in activities such as boycotts and secondary strikes that in the United States were being enjoined under the Sherman Act. As discussed above, despite Germany’s authoritarian government, the nation’s highest civil court repeatedly sanctioned such union strategies, viewing the activities of associations of firms and of workers as analogous, and applying the same metrics to both (Schröder 1988, 252).37 It was taken for granted in the German context that economic actors could combine to defend their interests and that, in these contests, pressure could be legitimately applied against opponents and that some damage to property interests was virtually inevitable (Schröder 1988, 251–52). Just as the courts upheld the rights of employers to cooperate, Germany’s Imperial Civil Court saw unions as organizations of collective self-help engaged in legitimate self-defense against the free play of market forces (Schröder 1988, 251–52).

Most importantly, the stance taken by the German courts robbed employers there of the most powerful legal weapon with which their American counterparts were armed, namely the injunction—what Frankfurter and Greene call “America’s distinctive contribution in the application of law to industrial strife” (1930, 53). This tool, so widely and devastatingly wielded in the open shop campaign in the United States, was simply unavailable to German employers. More than any other weapon, the injunction was crucial in the American context in shutting down union strategies that sought to organize workers on a multifirm basis. Ex parte injunctions allowed even a single employer who could round up a few affidavits to quash union actions on a broad basis (and with no opportunity for defendants to respond) (Hattam 1993, 191; Witte 1932, 85). Moreover, securing temporary restraining orders in the United States was often simple and unbureaucratic. Witte notes that in some cases complainants would have their attorney draft such an order and deliver it to the judge (sometimes to his home). The judge would then either make a few changes to the draft or, often, just sign the order “as prepared by complainant’s attorney” (Witte 1932, 90).

Blanket injunctions were especially devastating, because a single restraining order could enjoin thousands of workers or even all trade unionists in a particular city or town (Hattam 1993, 161). The most sweeping injunctions applied even more broadly, to “all persons whomsoever acting in aid of or in connection with [the union],” prohibiting them from “interfering in any way with the complainants, their agents, or employees in the legitimate conduct, management or operation of their business” (Witte 1932, 96, 98). Unlike with criminal proceedings, equity injunctions in the United States did not involve a jury; instead, the judge determined “all questions of fact as well as law” (Witte 1932, 92). Temporary injunctions took effect immediately, and by the time the judge’s decision came down, strikers had often given up the fight (Witte 1932, 107). As Frankfurter and Greene (1930, 80) put it, “the preliminary injunction in the main determines and terminates the controversy in court. The tentative truth results in making ultimate truth irrelevant.”

For all these reasons, injunctions were deadly to the efforts of American unions to organize on a regional or industrial basis. The ease and frequency with which they could be deployed relieved American employers of the need to build their own strong and encompassing organizations to confront unions collectively. It is no coincidence that the use of the injunction ticked up considerably at the turn of the century in the context of labor’s efforts to organize on a broad multifirm basis. As Forbath points out, this weapon figured especially prominently in strikes in which industrial unionism, amalgamation, or federation was at issue. Injunctions increased as union actions became less localized and more collective, and as strikes and boycotts sought to mobilize broader national organizations or entire working-class communities against employers (Forbath 1989, 1152–53). Indeed, the problem for employers in that period “sprang from the fact that unions were organized collectively, while businessmen were not” (1989, 1153).

Combined with the strictures of the Sherman Act, the injunction allowed American employers to fight organized labor even as it also relieved them of the need to build their own encompassing organizations to confront unions collectively. The courts enjoined at least 15% of recorded sympathy strikes in the 1890s, and this figure rose to 25% in the next decade. By the 1920s, 46% of all sympathy strikes were met with antistrike decrees (Forbath 1989, 1151–52). Here too, the Clayton Act of 1914, meant to provide relief to unions, was instead “eviscerated by the courts”; in fact, cases against labor under federal antitrust actually rose after the law was passed (Hattam 1993, 164; see also Witte 1932, 69). In the very same year the Supreme Court handed down the Hardwood decision discussed above, it also issued a ruling (Duplex Printing Press Co. v. Deering [1921]) that held that interstate boycotts of nonunion materials could be enjoined, whether or not the means employed by unions were themselves lawful (Witte 1932, 72).38

To be clear: German employers were by no means less hostile to labor than their American counterparts. Large firms, especially, opposed labor organization ferociously (and largely successfully), hiring strike breakers and harassing unions in various ways. However, German employers’ main legal weapon, criminal prosecution (e.g., for intimidation) under §153 of the Trade Regulations Act, became less useful over time due to the permissive stance taken by many state courts and the Civil Senate of the Imperial High Court itself. In the same period in which the use of injunctions was ramping up in the United States, criminal convictions under §153 of the GewO were falling continuously in Germany, from a high point of 9.5 convictions per 1,000 workers involved in strikes and lockouts in 1890–1894 to 2.7 per 1,000 in 1895–1899 and to just 1.8 per 1,000 in 1909–1913 (Kittner 2018, G11). All attempts to sharpen these criminal laws in Germany at this time also failed (Kittner 2018, G11). In the end, Kittner (2018, G12) concludes that, when it came to realizing the goal of suppressing strike activity, §153 of the GewO had proved to be “a complete failure.” Over time, even the law’s symbolic value had faded, so much so that its eventual repeal (in 1918) was met with a collective “shrug” (Kittner 2018, G9).

In short, compared with their German counterparts, American employers had a far more reliable partner in the courts, and one that proved willing, time and again, to intervene immediately to put down encompassing, class-based forms of union organization. The injunction “terrorize[d] innocent conduct” and applied “the most powerful resources of the law on one side of a bitter social struggle” (Frankfurter and Greene 1930, 81)—and it did so well into the 20th century.

Lacking the same powerful legal weapons deployed so effectively in the United States, German employers adopted a different strategy to defeat labor, banding together into employer associations to defend themselves collectively (Erdmann 1966, 57; Leckebusch 1966, 128, 131–32). In the face of strikes, they no longer turned to the state or the courts, but rather mobilized their employer associations (Erdmann 1966, 57; Leckebusch 1966, 131–32; Spencer 1984, 102). The incentives to join such associations were strong, for they provided a range of benefits and protections. These included, among others, access to association-run labor exchanges, information on individual workers, and strike relief to member firms during labor disputes.39 Most importantly, perhaps, employer associations could mount powerful counteroffensives, answering strikes by organizing sweeping lockouts (Erdmann 1966, 58–59, 74, 82; Leckebusch 1966, 128).

These forms of reactionary coordination, or what Kuo (2010) calls repressive coordination, were sometimes able to forestall unionization, especially in large firms (for as we have seen, smaller skill-dependent firms had often already made their peace with labor). But in the present context, the operative word is coordination. In the late 19th and early 20th centuries, German employers built powerful employers’ associations capable of a high degree of very effective coordination. In this way, German firms were able to hold unions at bay, but through organization rather than injunction and litigation. While employers and business associations in the United States were lawyering up, German employers were building organizing capacities that could later be converted to negotiation once the political context shifted (Kuo 2010).

V. Conclusion

The developments of the late 19th and early 20th centuries analyzed here left an enduring imprint on the subsequent evolution of the U.S. and German political economies. In the United States, the courts’ interpretation of the Sherman Antitrust Act in many ways bequeathed to the country the worst of both worlds, having actively promoted industrial concentration without supporting any of the more beneficial forms of employer market coordination that developed in Europe.40 The result gave fuel to parochial, race-to-the-bottom corporate strategies that cleared the way for the powerful monopoly players in key markets today.41 American courts would later come under the influence of Chicago school economics and reverse the intolerance they had shown toward retail price maintenance agreements in the pre-New Deal period to embrace an increasingly permissive stance on vertical price fixing. But by this time, the change simply redounded to the benefit of dominant corporate actors who are able to control smaller firms through up- and downstream contracting (e.g., Callaci 2018).

Beyond its impact on employer organization, the antitrust regime of the late 19th century shaped the strategies of American employer associations, encouraging them to focus on legislative and judicial activism as an alternative to the production issues more central to their German counterparts. Indeed, one can draw a direct line from the AABA through its successor, the League for Industrial Rights, to the National Lawyers Committee of the American Liberty League (that wrote the brief to challenge the Wagner Act in the 1930s), to the present strategies of the Chamber of Commerce’s National Litigation Center. Likewise, the parallels between today’s National Right to Work Committee and the National Council for Industrial Defense formed in 1907 are unmistakable.

These developments, in turn, profoundly shaped labor relations in the two countries. While German courts supported collective action in pursuit of economic self-defense on both sides of the class divide, U.S. courts repeatedly intervened to dismantle or discourage broader class-based forms of mutual aid. And because American employers were unable to coordinate stably among themselves, they had powerful incentives to prevent labor from doing so as well.42 Although the Wagner Act of 1935 is frequently seen as an important turning point in the evolution of American labor relations, it hardly constituted a reversal. In fact, it is better understood as the culmination of the dynamics described above. After the defeat of the efforts to establish industrywide bargaining, American employers unified around the pursuit of a deregulatory agenda that continues to discourage coordination on both sides of the class divide by centering instead on individual freedom and choice. AABA founder and its counsel Daniel Davenport summarized the fruits of the AABA’s legal strategies in the first decade of the 20th century in this way: “The great effort of the Society has been with the help of the Judiciary, to write into the fabric of American jurisprudence [the principle of individual liberty]” (Bonnett 1922, 454). This principle forms the central theme around which American employers continue to organize—and it runs like a red thread through the history of American labor relations, from the open shop movement of the turn of the previous century to the right-to-work movement today.

The foregoing analysis highlights the central importance of reforming labor law to securing the future of the American labor movement, and it underscores as well the importance of broad sectoral organization. However, what the comparative literature shows is that the stability of such arrangements hinges not just on labor strength but also on the organizational capacities of employers.43 As long as employers are able to deploy the law to avoid unions, they have no incentive to develop such capacities. In the 19th century the courts, by siding decisively with employers, relieved firms of the need to coordinate with each other to deal with labor collectively. Removing this crutch is thus critical to reversing the strong incentives firms now face to continue to rely on the easy avenue of the courts in lieu of more positive forms of coordination and negotiations with labor.

Acknowledgments

Many thanks to Martin Chan and Angelo Krüger, who provided valuable research assistance, and to Alex Hertel-Fernandez, Chris Howell, Larry Mishel, and Sanjukta Paul for extremely helpful comments on an earlier version.

Endnotes

1. For example, even the U.K. has a central business confederation (the Confederation of British Industry) that can represent British business interests in tripartite deliberations with government and representatives of the trade union confederation—most recently during the COVID-19 crisis.

2. See especially Skowronek 1982, Gerstle 2015, and Horowitz 1992 on the crucial role of the courts in regulating economic activity in the early industrial period.

3. Some of the main functions are laid out here: https://secure.acce.org/about/chambers-of-commerce/.

4. The best available analysis of contemporary American business associations is Spillman 2012.

5. These examples are drawn from Spillman’s (2012, 15) representative sample.

6. As Spillman summarizes: “American business associations have flourished long term as stable, diverse, minimal, and multifunctional producers of cultural infrastructure—of cognitive categories, networking opportunities, fields, ‘industries,’ collective identities, normative and status orders, and camaraderie” (2012, 188).

7. Of course, there has been multiemployer bargaining in the United States in the past, for example, in the garment industry in the 1920s and in the auto and steel industries (pattern bargaining) in the 1960s and 1970s (see Cohen 2004 for further examples). But these arrangements have generally not proved robust and they never covered the same broad swathes of the economy as those in Europe’s coordinated market economies.

8. See Thelen 2019 for an extended comparative analysis.

9. Similar rules apply in Canada but with several crucial differences in that unions can demonstrate majority support much more easily (card check), employers are under more pressure to negotiate in good faith if the union does prevail (first contract arbitration), and employers have far fewer weapons to fight unions (no permanent replacements). U.S. employers also are allowed to wage much more aggressive counter-campaigns, often enlisting the services of lawyers or consultants who specialize in defeating union organizing drives. Enforcement is also an issue; wage theft is a major problem in many low-wage sectors (Galvin 2016).

10. This paragraph draws on Letwin 1965, 71–85.

11. Germans followed developments in the United States closely. An 1894 essay by Ernst Levy von Halle (presented at the 1895 convention of the Verein für Socialpolitik), titled “Kartelle in Deutschland und im Auslande,” described American antitrust law in detail and concluded that the American law was not effective in defeating the trusts and if anything had simply resulted in trusts being converted to new forms (through merger and acquisition). According to Richter, the essay had a profound effect on the German discussion, promoting the idea that it would be more effective to allow—but then regulate—cartels (Richter 2007, 181).

12. Letwin details the legal wrangling that produced rulings that were almost equally split and in which more than one opinion was submitted on both concurring and dissenting sides. See Letwin 1965, esp. chapter 5.

13. For example, boycotts that involved spreading falsehoods about one’s opponents or that attempted to drive a firm to ruin (as opposed to forcing specific actions, such as recognizing the union or reinstating fired workers) were seen as excessive and thus unlawful. This “proportionality” consideration applied to cartels as well as to unions (Schröder 1988, 264, 274–75. 281, 289), though as Kittner (2018, G10) points out, in practice the courts enforced the rules unevenly.

14. While certainly not minimizing the impact of the hostility of the German courts, Kittner’s empirical analysis reveals a more nuanced picture than some of the more classical accounts of “class justice” in Imperial Germany. Beyond the surprisingly high acquittal rate, he also notes that, even in the case of convictions, the sentences handed down overwhelmingly imposed penalties on the light rather than heavy side (in 40% of cases, the sentence called for less than four days in jail, and the maximum penalty of three months was handed down in fewer than 1% of cases) (Kittner 2018, G11).

15. See especially Herrigel 1996, chapter 2, which provides a deep and rich account of these decentralized industrial orders.

16. Domansky-Davidsohn gives the example for gas motor producers dividing the market between those producing motors above and below 200 PS. She also describes “submission cartels” in which firms agreed to register all orders they received to a central office that would assign the job to the firm that could do it most efficiently, with the firm that was awarded the bid paying compensation to the other members of the cartel. See Domansky-Davidsohn 1914, 79–81.

17. The following examples are drawn from Polysius 1921, 64.

18. On regional institutions for technical training, see also Hansen 1997, 180–96.

19. In one industry, competitors banded together to share licenses for production technologies, both to avoid the costs of litigation among themselves over patents and to collectively bear the legal costs of defending their patents against outsiders.

20. Heavy industry in Germany was largely organized into Centralverband für Deutsche Industrie (CVDI), whereas manufacturing firms that depended on raw inputs from these firms formed an alternative peak association—Bund der Industriellen (BdI)—to defend their interests vis-à-vis the CVDI. The BdI, whose members were more concentrated in skill-intensive manufacturing, was considerably less anti-union than the Centralverband. The VDMA, though a member of the CVDI, shared the BdI’s greater tolerance for unions, partly because even the big machine producers in the VDMA were themselves organized decentrally as “congeries of workshops” that specialized in different things, and because they too depended heavily on skilled workers (Herrigel 1996, 103). Harnisch (1917, 56) notes that a 1917 survey by the VDMA found that an average of 25% of total value of production went into wages (in some industry segments up to 30–35%).

21. Germany’s industrial unions grew by absorbing organizations of skilled workers into overarching organizations while also protecting their distinct craft identities. The largest industrial union, the German Metalworkers Union, negotiated completely separate agreements for the various occupations in this period (Thelen 2004, 49–50).

22. On the American Fair Trade movement, see especially Phillips Sawyer 2018.

23. Some proprietary manufacturers of specialty products sought to escape intense price competition through careful cultivation of brands known for their high quality. To defend the brands against lower-quality, lower-cost competitors, they sometimes established cooperative price-fixing networks with retailers to set prices, guarantee services, and arrange to buy back unsold goods. Large volume-discount retailers undercut these arrangements and diluted the brands by using steep discounts on these well-recognized products to draw customers into their stores (see especially Phillips Sawyer 2018, 214–15).

24. American Column & Lumber Co. v. United States (1921). Brandeis, now on the Supreme Court, voted with the minority in dissent.

25. On the legal uncertainty surrounding business association activities, see also Galambos 1966, 92–93, 127–28.

26. The key case was FTC v. Graz, a 1920 decision in which Associate Justice Brandeis dissented.

27. As one employer in the industry put it: “the only fault I have to find with the labor organization is that they are not able to regulate matters so that the entire thing would be uniform….the only drawback is that they are not strong enough” (quoted in Atkinson 1904, 207).

28. The best account is in Ernst 1995. In a 1989 Iowa Law Review article, Ernst characterizes AABA as “a legal defense fund sustained by the contributions of proprietors of small firms who faced many of the nation’s strongest unions” (see Ernst 1989a, 1151). On the AABA (later renamed the League for Industrial Rights), see also Bonnett 1922, 449–74.

29. Exact membership figures, therefore, do not exist but it was estimated to have about 1,000 members in 1915, up to 2,000 by 1921. See also Bonnett 1922, 449.

30. For an overview of the cases in which the AABA (later the League for Industrial Rights) was successful, see Bonnett 1922, 458–62.

31. Steigerwalt describes NAM’s initial membership drive in 1895–96 as “almost a complete failure” (1964, 36), but membership grew in these years under Parry, whom he credits with “rejuvenating” the association (p. 152).

32. This first application of the Sherman Act in the context of industrial strife was in a longshoreman’s strike in New Orleans in 1893 (Primm 1910).

33. For most of the 1870s and 1880s, employers had relied on the conspiracy doctrine in their battles with labor. But the use of injunctions quickly overtook conspiracy charges as employers’ go-to strategy after the 1890s. The injunction was a far more potent tool compared with conspiracy charges because an injunction offered immediate relief and, unlike criminal conspiracy charges, did not have to be tried before juries, which were often sympathetic to the cause of the workers, who were after all their neighbors (Hattam 1993, 161; Hurvitz 1986, 333).

34. The courts enjoined at least 15% of recorded sympathy strikes in the 1890s, and this figure rose to 25% in the next decade. By the 1920s 46% of all sympathy strikes were greeted by antistrike decrees (Forbath 1989, 1151).

35. For a detailed account of the case, see Ernst 1995, chapter 7; also Bonnett 1922, 459–60.

36. As Crane (2017, 115) points out, only one of the first 13 successful antitrust cases involved a combination of capitalists; in all other cases it was labor combinations that were found in violation of the law.

37. Again, in both cases, within the bounds of customary rules of “proportionality.”

38. The decision was further reaffirmed later that year in a subsequent decision in American Steel Foundries v. Tri-City Central Trades Council. It was not until 1932, with the Norris-LaGuardia Act, that the courts placed meaningful restrictions on the use of court injunctions against union strikes, picketing, and boycotts. But by this time, unions had long since given up on secondary boycotts and broad sympathy strikes (Forbath 1989, 1178).

39. Access to employer-run labor exchanges came attached to an obligation to adhere to employment bans on blacklisted workers, and was enforced through threat of monetary penalties (Erdmann 1966, 58–59; Spencer 1984, 107–8). Later, employer associations represented firms in joint arbitration tribunals with unions in order to prevent strikes (Erdmann 1966, 77–78).

40. In Germany, the most notorious of the large-firm cartels that formed in this period were dismantled after World War II, but what survived was a vibrant associational landscape and the strong trade and employer associations.

41. In other work (e.g., Thelen 2018; Rahman and Thelen 2019), I have shown how business groups and trade associations in coordinated economies are often important allies in defending against would-be monopolies.

42. For the simple reason that if unions were organized and employers were not, unions could bring collective power to bear on individual firms.

43. This is borne out in the postwar history of U.S. labor as well. It is no coincidence that labor’s moments of greatest strength have been those in which employers have also been willing and able to act collectively (e.g., Mizruchi and Hyman 2014).

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Executive Summary

An increasing volume of research demonstrates that erosion of worker bargaining power and collective bargaining have led to wage suppression and the deterioration of labor’s share of income. At the same time, bold and robust policy proposals to strengthen workers’ bargaining power have risen to a new level of priority for the center-left. President-elect Joe Biden has produced an extensive proposal to strengthen workers’ ability to form unions, and a comprehensive reform of the National Labor Relations Act (NLRA) recently passed the U.S. House of Representatives.

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. Structural weaknesses in the law, exacerbated by anti-union amendments to the NLRA in 1947 and aided by a series of rulings by the National Labor Relations Board (NLRB) and courts, have allowed employers to interfere in and defeat efforts by their workers to organize unions and to face no real consequences for doing so. The full effect of these trends can be seen by analyzing how dramatically new unionization fell in the 1970s—a trajectory from which the labor movement has never recovered.

This paper explains what happened to private-sector unionization in the 1970s by examining data on union elections and workers’ ability to achieve an initial collective bargaining agreement. After showing that a dramatically smaller percentage of workers have been successful at forming a union and winning a first contract, the paper examines the changes in employer anti-union behavior that contributed to this result.

Among its key findings, the paper shows that in the 1950s and 1960s more than 1% of those employed participated in an NLRA election each year. In the 1970s that share fell to 0.78% and in the 1980s to 0.29%. In addition, workers began to lose elections at a higher rate in the 1970s in the face of increased employer resistance. In the 1940s, workers won a union in 80 percent of NLRB representation elections, but by 1977 workers were losing more than half of these elections. And, while 86% of workers who chose a union were able to win a first contract in the 1950s, that share declined to less than 70% in the 1970s. By the 1990s, it was down to 56%. Putting these three pieces together—participation in elections, successful elections, and winning a first contract—we show that while 0.46% of the workforce was able to make it across the unionizing finish line in the 1966–1968 period, only 0.17% of the workforce was able to do so by 1978–1980.

In addition, by the 1970s employers were charged with committing significantly more unfair labor practices (ULPs), such as firing union activists during organizing campaigns. ULP charges against employers rose sevenfold between 1950 and 1980. Starting in the 1970s, employers also made greater use of the “free speech” rights included in the Taft-Hartley amendments of 1947, holding mandatory “captive audience” meetings to voice opposition to unions and make thinly veiled threats about what could happen if workers organized. Employers also began far more extensive use of a growing “union avoidance” industry of consultants. While there were just a handful of anti-union consulting firms in the beginning of the 1970s, by decade’s end there were hundreds, and a management consultant told Congress in the late 1970s that his industry had grown tenfold over the preceding decade.

Employers were able to defeat unions so effectively because, over the years, labor law had become heavily tilted against workers and toward employers. Though these employer-friendly laws were on the books in the 1940s, 1950s, and 1960s, it was not until the 1970s that employers began to take full advantage of their power. Several key sources set the stage for this 1970s unraveling of workers’ bargaining power under the law. First, a Republican Congress largely neutered workers’ leverage in passing the 1947 Taft-Hartley Act over President Truman’s veto. Second, Taft-Hartley forced the NLRB to prioritize litigation against unions for engaging in so-called secondary activity over all other cases, including cases involving illegal firings of union supporters. Third, the law’s ineffective remedies became obvious, and the NLRB’s efforts to hold employers accountable for violating the law were stymied in the courts. Fourth, employers increasingly found an ally in the U.S. Supreme Court, which issued a series of decisions restricting workers’ rights and limiting employers’ bargaining obligations. Finally, employers started making greater use of replacement workers during strikes—a trend that grew in the 1970s and 1980s and significantly undermined workers’ right to strike. The cumulative impact of these factors meant that by the 1970s the law did not effectively protect workers’ bargaining power and gave employers a wealth of tools to resist unionization.

Legislative efforts to strengthen the law in the 1960s, 1970s, and 1990s were thwarted by an organized and united business community that stepped up to vigorously oppose and, through a filibuster by a minority of senators, defeat all attempts at legislative reform.

By telling the story through statistics, labor history, and the law about the various factors that resulted in the decline of unionization, this paper provides a more accurate accounting of the decline of unionization than do the frequent assertions of globalization or automation as the driving forces. Our empirical assessment of the role of globalization and automation focuses on the impact of the shrinkage on manufacturing employment. We provide detailed statistical analyses showing that at most one-fifth of the decline is due to manufacturing’s erosion, and provide evidence of the severe declines in union coverage in nonmanufacturing sectors (e.g., utilities, transportation, construction, mining, and communications) and in many nonmanufacturing industries (e.g., grocery stores, bus transportation, newspapers, metal ore mining, and building services). A review of various analyses of wage determination also casts doubt on a dominant role of automation and globalization on private-sector union decline. Last, an examination of international comparisons of union erosion also confirms a minor role for manufacturing decline, finding that the pace, intensity, and timing of union decline does not correspond to manufacturing’s decline.

Survey research confirms that working people want unions: Recent polling shows that nearly half of nonunion workers would vote to have union representation if given an opportunity to do so on their current job.

Labor law has not kept pace with workers’ interests and needs and provides a classic example of “policy drift,” the failure to update the law to reflect changing external circumstances, with the result that and the outcomes of the policy start to shift. Labor law’s support for workers’ ability to pursue union organizing and collective bargaining has declined over many decades, and efforts to remedy this drift have been blocked by a minority of senators despite majority support in both houses of Congress and presidential support for reform.

As policymakers and others concerned about the erosion of workers’ bargaining power and its impacts on today’s workforce debate measures to strengthen the ability of workers to organize, the background information and analysis in this paper should be of assistance in understanding the shortcomings in current law that need to be addressed if workers are to truly have the freedom to form and join unions.

Introduction

After decades of growing economic inequality, bold and robust policy agendas on labor and union policy have arisen on the center-left of American politics. The candidates in the 2020 Democratic presidential primaries, including the eventual nominee, offered expansive policies (Greenhouse 2019; Biden 2020), and an extensive reform of the National Labor Relations Act (NLRA) recently passed the U.S. House of Representatives (McNicholas 2020). On the research front, there is an increased appreciation of the prominent role that the erosion of union/worker power has played in generating wage suppression and inequality (Stansbury and Summers 2020; Fortin et al. 2019).

This paper provides background for the consideration of changes in labor law by addressing the question: Why have union membership and union coverage (membership plus those covered by collective bargaining, even if not members) declined so precipitously in the private sector? We argue that corporations took advantage of the weak labor law regime in the United States to legally and illegally thwart union organizing and robust bargaining, especially in the 1970s, thus closing off unions’ ability to bring in new members and grow along with the economy.

Also key to unions’ decline were corporate practices and legal changes in the 1970s, 1980s, and 1990s that eroded bargaining power. We use a broad historical context to show how this assault on organizing and bargaining power weaponized weaknesses in the NLRA as interpreted by the National Labor Relations Board (NLRB) and the courts. Examples include the weak penalties established from near the very start for employer violations; a 1938 Supreme Court ruling on striker replacements; and the Taft-Hartley amendments of 1947 recognizing “employer free speech,” allowing right-to-work laws, and banning secondary boycotts.

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Rebuilding Collective Bargaining Back Better

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As such, the decline of private-sector unionism provides a classic example of what political scientists call “policy drift”:

Drift occurs when a policy or institution is not updated to reflect changing external circumstances, and this lack of updating causes the outcomes of the policy or institution to shift—sometimes dramatically. (Galvin and Hacker 2020)

In the case of labor law, its support for workers’ ability to pursue union organizing and collective bargaining has declined over many decades, and the weaknesses began to be exploited by management extensively in the 1970s.i

Except for an expansion of coverage into health care in the 1970s, all of the legislative changes to the NLRA since its enactment in the mid-1930s have been changes that weakened unions. Efforts during the Great Society period, when Democrats were at their peak congressional power, and under each successive Democratic president—Carter in 1978, Clinton in 1993, and Obama in 2009—to strengthen the NLRA’s protections of workers’ rights to collective bargaining were all defeated, despite majority support in both the House and Senate and by the president. The tool employed in each defeat was the filibuster, spearheaded by a minority of senators representing an even smaller share of the population. The result has been policy drift in labor law, allowing outcomes to shift in favor of corporate employers and their allies.

We find these explanations for union decline more persuasive than the dominant narrative that unions were dinosaurs that did not fit a modern economy characterized by automation and globalization. Indeed, we find only a limited role for automation and globalization on private-sector union decline. We quantify specifically the impact of the decline in manufacturing employment on union membership and coverage and find that less than a fifth of the union decline can be attributed to the loss of manufacturing employment’s importance. The experience of other advanced nations confirms the limited role of manufacturing’s erosion on union decline.

Another common explanation for the decline in unionization is the contention that private-sector unions outlived their roles as workers decided they no longer needed unions, or that unions became complacent and stopped reaching out to organize new workers (Cowie 2010; Moody 1988; Davis 1986; McAlevey 2017). Though we do not substantively engage in this question in this limited forum, we find persuasive scholarship that highlights how union organizing activity and labor activism continued strongly through the key decade of the 1970s, even as success rates dropped. Moreover, the years between 1973 and 1977 represent the peak in absolute numbers of NLRB elections held (see the appendix), and women and people of color were at the forefront of much of this labor activism. Unions began to pull back dramatically from organizing campaigns only in the early 1980s, after facing over a decade of potent employer resistance to organizing (Windham 2017; Brenner, Brenner, and Winslow 2010). In the paper’s final section we review recent studies that reveal that a substantial share of the nonunion workforce desired collective bargaining during the pivotal 1970s, especially Black workers, and that this unmet demand for collective bargaining has escalated in recent years such that nearly half of nonunion workers, including those who are supervisors and ineligible, would vote to have union representation in their current jobs if given an opportunity to do so.

We also are not able to explore fully the argument that unions missed the opportunities opened by the civil and women’s rights movements to diversify their ranks, and that the individual rights framework that undergirded these movements proved stronger than the collective New Deal framework that built unions and labor law (Lichtenstein 2013; Frymer 2008). Labor law effectively excluded many women and people of color because it did not cover the jobs they were most likely to hold, such as in agriculture and domestic work. For decades many unions excluded Black workers from their ranks and were riddled with deep-seated sexism; men and women of color and white women had to use the Equal Employment Opportunity Commission as a tool to force open many unions (Katznelson 2005; Kessler-Harris 2001; Frymer 2008). Yet recent scholarship correctly emphasizes the complexity and diversity of the working-class people who sought to improve their lives through the labor movement. Despite unions’ racism and sexism, women and people of color were the most likely groups to unionize in the decades after the Civil Rights Act’s passage; they led many union organizing drives and inspired others to join them. Though it seemed that the promise of the New Deal and labor law would be open to everyone, when these workers tried to organize they ran into the wall of corporate resistance and weak labor law that we describe in the following pages. The fact that a new wave of women and people of color wanted unions but could not effectively organize in the 1970s is a major and often-overlooked piece of the puzzle of union decline (Windham 2017; MacLean 2006; Jones 2013; Cobble 2004; Deslippe 2000).

This paper also does not account for the increased numbers of workers who may have lost union coverage because their firms moved or closed or else terminated the collective bargaining arrangement for other reasons. The increased erosion in membership among already-represented workers reflects a variety of factors: the regular ebb and flow of facility openings, closings, shrinkages, and expansions; faster-than-average growth in nonunion industries and occupations; and the anti-union animus of firms that increasingly ghettoized their organized operations by closing unionized units and opening nonunion ones.ii Much of the erosion of currently represented union workers reflects the fundamental rules of labor law that establish as a default rule representation at the individual-unit level of enterprises and do nothing to facilitate representation rights at the occupation or industry level, making maintaining union coverage exceedingly difficult, We also do not account for the increase in the numbers of jobs in categories that often fall outside of collective bargaining coverage, such as supervisors and contingent, contractual, or temporary workers.

The paper proceeds through the following points and findings:

• The big picture of union decline is the dramatic drop in new unionization in both the manufacturing and nonmanufacturing sectors between the late 1960s and early 1980s, based on (1) fewer union elections, (2) a decline in union win rates in the elections that were held, and (3) the inability of the newly organized to obtain a first contract.

• Employer resistance to union organizing sharply increased over the course of the 1970s, effected through aggressive management opposition, some of it, such as the firing of union activists, illegal; increased use of anti-union consultants; the weaponization of shutdown threats; and delaying tactics.

• Decisions by courts and the NLRB, many of them emerging after passage of the anti-union Taft-Hartley Act of 1947, weakened bargaining power. These decisions include the prohibition against secondary boycotts; the banning by states of union security agreements; dramatically expanded management rights and the curtailment of the ability of unions to bargain with their employers about contracting-out decisions and plant closings; escalating use of striker replacements, especially after President Reagan normalized this employer behavior in the Professional Air Traffic Controllers Organization (PATCO) strike; the increased use of employer lockouts; and the exploitation of the toothlessness of labor law.

• Globalization and automation, and the concurrent decline of manufacturing, can explain only a small portion of the decline in unionization. Private-sector unionization eroded rapidly in major sectors and in many detailed industries in nonmanufacturing, frequently to a greater extent than in manufacturing, and detailed statistical analyses show that changing employment patterns across industries can account for less than a fifth of union erosion. Moreover, international comparisons show that manufacturing decline explains very little of cross-country differences in union decline.
• Polling data show that there has been a large unmet demand for collective bargaining, a finding that belies the argument that union decline has been the result of a lessened interest among workers in seeking collective bargaining.

The big picture of private-sector union decline

Union membership and union coverage (membership plus those covered by collective bargaining, even if not members) in the private sector has declined broadly in the United States. Our focus is on the private sector, since this is where unionization has dropped precipitously.

The long-term erosion of the share of union membership in overall private-sector employment (or “union density”) since 1929 is shown in Figure A. The line is broken at about 1972 because there are two series. The first, for 1929–1972, is based on a series developed from union revenue data by Troy and Sheflin (1985, Appendix A, and published in Hirsch 2008). The second series, based on an analysis of Current Population Survey data by Hirsch and MacPherson (2020), covers the 1973–2019 period.

The data in Figure A are sometimes erroneously interpreted as if there were a steady decline in union membership since the mid-1950s. This is not the case, as the decline greatly accelerated in the 1970s and 1980s.

Figure A

Table 1 provides metrics to assess the rate of decline, presented for the decades from 1950 to 2000 and then in the 2000s using the cyclical peak of 2007 as the dividing point; this distinction allows us to separately assess the business cycles of 2000–2007 and 2007–2019. Assessing the trends in the 1970s presents a problem because of the data discontinuity between 1972 and 1973, when there is an implied very large and implausible decline of 2.8 percentage points (if one assumes the series is continuous, which it is not). To deal with this problem, Table 1 presents the periods of 1970–1972 and 1973–1980 separately and constructs an “alternative 1970–1980” metric to reflect the trends in the whole decade using the 1970–1972 and 1973–1980 trends.iii

Table 1

For each period, Table 1 shows the absolute change in the union membership rate (column 1) and, to enable better comparisons across time, the annual percentage point change (column 2). These data tell us that the annual decline in private-sector union membership was far faster in the 1970s and 1980s (0.68 and 0.82 percentage points each year) than the relatively slow declines of the 1950s and 1960s (0.27 and 0.28 percentage points each year).

Yet these comparisons alone fail to tell the full story, because the same annual percentage point decline represents a differing scale of erosion when the starting point is, say, 34.6%, as it was in 1950, and when it is 11.9%, as it was in 1990. To account for the differing size of union membership at the start of each period, the metric presented in column 3 is the percent decline in the union membership rate as a 10-year rate of change. This metric reveals that the union membership rate declined by 7.8% and 8.8% in the 1950s and 1960s, respectively, and then the decline more than tripled in the 1970s (to 28.9%) and more than quadrupled in the 1980s (to 40.8%). The rate of decline in union membership slowed to about 25% in the 1990s and early 2000s, a rate still triple the pace of the 1950–1970 period.

What happened in the 1970s and 1980s that powered such a rapid decline in union density? A close look at union elections and first contracts in these years is revealing. In the United States, workers must clear three major hurdles if they want to form a union. First, unless workers can persuade their employers to recognize their union without going through the election process, at least 30% must sign union cards or petitions asking the government to hold a union election. Second, workers must win the government-sponsored election by a majority vote. Only then will the law require their employer to recognize the workers’ union and negotiate a union contract “in good faith.” The third hurdle is getting the employer to sign a first contract. Downward trends at each hurdle in the 1970s and later years relative to the1950–1970 period greatly help explain the dramatic decline of the inflow into unions and the associated erosion of the share of the workforce in private-sector unions.

Building on earlier work (Windham 2017; Goldfield and Bromsen 2013), we present data showing that the combined impact of substantive changes in the 1970s and early 1980s at each stage of this process, i.e., a smaller percentage of the workforce voting in union elections, lower rates of election victories, and reductions in the rate of unions achieving first contracts, greatly reduced the numbers of workers clearing the hurdles.

A smaller percentage of the workforce voting in elections

Figure B presents the trend in worker efforts to clear the first hurdle by participating in an election at their workplace. It shows the share voting overall in private-sector NLRB elections as well as the share voting in elections that were successful, presented as a share of total nonagricultural private-sector wage-and-salary employment (these series and a parallel one that shows trends relative to private-sector production/nonsupervisory employment are presented in the appendix).

Figure B

These data were developed from NLRB election data published in NLRB annual reports and employment data from the Bureau of Labor Statistics (see the appendix for details on the development of these NLRB election data and a discussion of measurement issues). By focusing on NLRB elections, these data understate the scale of organizing in the mid-1990s and later years because as many as 40-50% of newly organized workers were organized outside of the NLRB system, i.e., by “card check” or voluntary recognition by employers.

Figure B illustrates that the percentage of the workforce voting in union elections began to lessen between the late 1960s and the late 1970s (as well as in the 50s), plummeted to very low levels by the early 1980s, and remained at very low levels thereafter. In the 1950s and 1960s, more than 1% of those employed (1.2% and 1.0%, respectively) participated in an NLRA election each year. Participation in elections fell to 0.78% of employment in the 1970s and to just 0.29% in the 1980s (Table 2). In the early 2000s just 0.13% of the employed were involved in NLRB elections, 90% below the election rate of the 1950s.

Table 2

More workers losing their elections

Over the years fewer workers have been able to successfully clear the second hurdle and win the union election, further dampening the inflow of new union members in the private sector. We can measure union election win rates in two ways, by elections and by voters, and there was a decline in both cases. In the 1940s, workers chose collective bargaining in 80% of the NLRB representation elections (Goldfield and Bromsen 2013). By 1977, however, they were losing more than half of the elections that they themselves had asked the government to hold.

The percentage of eligible voters in NLRB elections who chose collective bargaining also shrank over this time (Table 2). In the 1950s two-thirds of the pool of workers voting in NLRB elections were able to win their union elections, but that rate fell to 55% among involved workers in the 1960s and to 40% in the 1970s, 1980s and 1990s.

Fewer workers ever getting a first contract

After a group of workers have made it over the first two hurdles—triggering an election and then winning that election—the final hurdle is to obtain a first contract with the employer. In the U.S. firm-based labor law system, if the workers are not able to obtain a first contract, then they don’t directly benefit from collective bargaining.

While employers are required by law to bargain in good faith with workers over the contract, under the weak U.S. labor law system many employers drag their feet or only make a show of bargaining, knowing full well they can get away with it without serious penalty. Employers often slow-walk the bargaining process because the lack of a contract within a year can trigger a decertification election, with the workers losing their union representation rights.

The number of workers who were able to obtain a first union contract after going through the NLRB election process has declined over the years. While 86% of workers who chose a union were able to win a first contract in the 1950s, that share declined to less than 70% in the 1970s. By the 1990s, it was down to 56%.iv

Far fewer workers clearing the three hurdles to unionization

By the late 1970s, far fewer workers than before were able to clear all three hurdles and cross the finish line to become union members with a contract. The inflow into unions became a mere trickle. Table 3, which compares the 1966–1968 period to the 1978–1980 period (assessing the years preceding and at the end of the pivotal decade), provides the relevant NLRB data and an analysis showing which factors drove the decline in workers obtaining new union contracts.v

Table 3

Table 3 shows that, while 0.46% of the nonagricultural wage-and-salary workforce were able to make it across the unionizing finish line in the 1966-1968 period, only 0.17% were able to do so by 1978–1980. Production/nonsupervisory workers experienced similar results These declines in the percentage of workers voting in elections, win rates, and first contract rates translate to roughly 210,000 fewer workers a year who were able to enter into the collective bargaining relationship by 1978–1980 than we would have expected if rates had held steady at the 1966–1968 level.

Table 3 also presents analyses of the contribution of each hurdle to the deterioration of union membership. Within the nonagricultural wage-and-salary workforce (results are similar for the production/nonsupervisory workforce), 44.2% of the decline in the numbers of newly organized workers was due to a reduced share of workers voting in elections, 40.4% to a lesser win rate, and 15.5% to the decline in the ability to secure a first contract.

The reduced flow of workers into union representation automatically led to a declining union share of employment because new membership is needed to offset the ongoing erosion of established collective bargaining units that occurs even absent anti-union animus (facilities and firms shut down, downsize, relocate, etc.) Narratives that focus on automation and globalization as drivers for union density’s decline ignore the more than 200,000 workers a year who, by the end of the 1970s, were no longer able to enter unions through the unionization process. This process, as we reveal in subsequent pages, became increasingly dysfunctional as employers increased their resistance to workers’ union organizing and first contract efforts in the 1970s.

The fact that workers began to lose their freedom to enter unions had enormous implications for labor’s ability to grow. Figure C portrays the impact of the decline in successful union formation by showing the contribution of elections to overall private-sector union rates (computed at 10-year rate of change) in each period. These data represent workers who survived the first two hurdles—having an election and winning the election—but don’t reflect whether the workers won a first contract. The scale of successful union elections in the 1950s effectively added 8.7 percentage points to the overall share of union members in the private sector, all else equal. The contribution of successful elections to increasing union membership declined rapidly in each ensuing period so that by the 1980s the contribution was only 1.2 percentage points and by 2007–2017 just 0.5 percentage points.vi Even taking into account workers who are newly organized through card check and neutrality agreements does not change the overall picture that entry into unions has been substantially reduced over the last four decades compared to the 1950s and 1960s.

Figure C

These data on union membership and election trends yield two key conclusions. One is that the developments that eroded unions and new unionization did not occur gradually since the mid-1950s; rather, private-sector union erosion greatly intensified in the 1970s and 1980s. Understanding what happened in that particular period is therefore key to explaining private-sector union decline. The second conclusion is that the number of workers who were able to win union elections and get first contracts rapidly declined over the period from the late 1960s and into the early 1980s so that new unionization was not able to contribute much to maintaining the overall rate of union membership in the private sector starting in the 1980s. Understanding the suppression of union organizing is key to understanding union decline. This topic is addressed in the next section, which examines the institutional, political, legal, and management practices and strategies developed in the 1970s and 1980s that can account for the barriers workers faced at each step in the unionizing process.

What happened to union organizing in the U.S. in the 1970s that accelerated unions’ decline?

In the 1970s, U.S. corporations greatly increased their resistance to unions and union organizing, exploiting the weaknesses of U.S. labor laws to effectively squash workers’ right to organize and obtain collective bargaining. Workers in the United States historically have faced more employer opposition and less government support than workers in other nations. Active employer challenges to organizing and strikes, often coupled with government-led strike breaking and injunctions, helped defeat class-based uprisings in the late 19th century. In the early 20th century employers united to break workers’ organizing efforts with an open-shop drive, and they resisted workers’ rights in the making of the New Deal in the 1930s (Fantasia and Voss 2004; Greene 1998; Phillips-Fein 2009). During a window in the mid-20th century, from the 1940s to the 1960s, labor and management in the United States found a kind of uneasy balance that more closely resembled labor relations in European nations. Even then, however, unions were not strong in the South, and millions of women and people of color in domestic work and agriculture were left out because they held jobs not covered by labor law (Lichtenstein 2013).

Starting in the 1970s, employers began to shift this balance once again. They became much more politically active than they had been in the mid-century years, and they began to push to limit government regulation on multiple fronts such as the environment, consumer rights, and labor (Hacker and Pierson 2010). As part of this renewed conservative activism, employers ramped up their resistance to established unions and new union organizing. They did so, in part, because they faced a new economic paradigm created by a variety of emerging trends. First, financialization shifted the locus of economic power from manufacturing to banks and investment firms. Second, U.S. corporations, which were the world’s economic leaders in the years after World War II, faced more global competition as countries like Germany and Japan got back on their feet. Third, the rate of profit for private business fell by 29% between 1965 and 1973, and among manufacturers it fell by more than 40% (Brenner 2006). And finally, U.S. employers were more heavily saddled by social welfare costs, like health care and pensions, than were their global competitors because of the U.S.’s employer-based social welfare system (Hacker 2002). To address social welfare costs, employers began to move to a lower-cost employment model in which they could avoid providing security and social welfare to their employees; these moves included hiring more temporary and part-time workers, shifting to subcontractors, and driving down wage and benefit standards. They also worked to limit new demands from the collective bargaining relationship, including by attacking new organizing efforts. “People began looking for ways to economize and found that…they had given it away in the contract,” remembers Douglas Soutar, co-founder of the Business Roundtable.vii Many corporations sought to limit the number of workers who could access collective bargaining and tried to keep workers from ever forming unions in the first place.

Employers ramped up their resistance to unions as they faced a new wave of union organizing in the private sector, especially among a newly diversified workforce. Worker interest in unions remained high through the 1970s, and working people continued to try to organize in both the private and public sectors. Workers began to try to form unions in traditionally nonunion sectors of the economy, like retail and service, and throughout the South.

Leading these drives were women and people of color who had long been excluded from many of the nation’s best jobs and were outside much of labor law’s purview. The 1964 Civil Rights Act gained them new access. Once they got the coveted jobs, they pushed to unionize (Windham 2017). Three million women joined unions’ ranks between the 1960s and 1970s, and by 1980 28% of union members were women (BLS 1980; Kistler 1984). Black workers were particularly interested in organizing. In 1977, 70% of blue-collar African Americans said that they would vote for a union (Quinn and Staines 1979). In fact, by the 1970s Black and Hispanic workers were the most likely demographic groups to be union members; in 1973, Black and Hispanic men’s unionization rates were 38%, far above the 24% rate of all workers (Table 4).viii Black women were the only group to increase their unionization rate in the 1970s; the peak of 22% in 1979 is double the rate for non-Hispanic white women. Because the question on union membership was changed in the Current Population Survey (the source of data in the table) between 1976 and 1977, the erosion of union membership is likely understated, and it is not possible to assess the understatement for particular race/gender groups (Hirsch, MacPherson, and Vroman 2001).ix

Table 4

Though people of color and women were particularly interested in unionizing, this diverse group of workers was increasingly unsuccessful in its organizing attempts because employers pushed to new heights their efforts to break and bend labor law. From 1970 to 1980, charges against employers for law breaking more than doubled, as did the number of illegal firings.x Employers also developed and honed a new set of techniques to fight union organizing, promulgated through business schools and the vastly expanded “union-avoidance” industry. This onslaught of resistance to union organizing shifted norms about what was right or fair when it came to workers’ rights. Employer law breaking was remarkably effective. While workers won roughly 80% of their union elections in the 1940s, by the late 1970s they won fewer than half (Goldfield 1987). By the time of the battle around labor law reform legislation during the Carter administration in the late 1970s, employers were using a new level of political activism to defend an emerging status quo that offered companies tremendous latitude to resist workers’ union organizing and establish a union-free environment.

How workers lost the freedom to organize

Over the course of the post-World War II period, U.S. workers’ right to organize in the private sector has evolved to the point where it is now stronger on paper than in practice. Though U.S. labor law guarantees most private-sector workers the freedom to form unions, that right has been effectively curtailed as constant conservative and employer opposition to organized labor swayed the government to gradually cede its role as referee. Legislative changes, court decisions, and judgments by the NLRB have diminished workers’ right to unionize. When employers faced a changed economic paradigm in the 1970s and 1980s, this process accelerated, and employers were able to effectively weaponize this legal regime to block new union organizing and to weaken unions.

Many private-sector workers first gained a right to organize unions with the passage in 1935 of the NLRA, also known as the Wagner Act. The Wagner Act established a national policy of encouraging workers to organize into unions and engage in collective bargaining with their employers.xi Congress mandated that workers had the “full freedom of association” and protected their right to “designation of representatives of their own choosing, for purposes of negotiating the terms and conditions of their employment….” Under the Wagner Act, if the government certified that the workers had a union, then the company was obligated to enter into collective bargaining. The act excluded some categories of private-sector workers, including farmworkers, domestic workers employed by a family in its home, independent contractors, and supervisors.

In its early years, the law’s enforcement agency, the NLRB, required employers to remain neutral on the issue of a union, leaving the choice on collective bargaining solely up to the employees involved. In 1941 the Supreme Court decided that employers could weigh in during elections as long as they were not “coercive,” but the board’s enforcement remained vigorous in this period and workers were still routinely able to form unions.

A Republican Congress, urged on by employers wanting to curtail unions’ power, successfully revised the Wagner Act with the 1947 Taft-Hartley Act, passing it over a presidential veto. The Taft-Hartley Act weakened unions’ power on many fronts, including making it more difficult for workers to form unions and enter into collective bargaining. For example, it added language that became known as the “employer free speech” clause, affirmatively stating that an employer’s expression of views regarding unionization is not prohibited unless the employer’s statement contains an offer of benefit or threat of reprisal if workers choose to unionize..xii Employers relied on this language to engage in anti-union campaigns in ways that were previously found illegal under the Wagner Act, for example through extensive use of forced-attendance company meetings against the union, or “captive audience” meetings, a practice that was professionalized (via a new anti-union consultant industry) and used extensively in the 1970s. Taft-Hartley also added new unfair labor practices against unions and made explicit that workers could refrain from organizing activitiesxiii (Gross 1981; Becker 1991–1993). Taft-Hartley also added provisions allowing employers to file representation petitions to determine whether their employees wanted union representation.xiv Previously, the petition process had only been available to employers faced with organizing drives by competing unions.

Employers tried again to further weaken labor law in the 1960s. A number of the leaders of the nation’s largest corporations, including General Electric, Ford, and US Steel, began in late 1965 an effort to roll back the laws protecting workers’ organizing and bargaining rights through a new alliance, the Labor Law Reform Group (LLRG). The executives circulated a study among members of Congress in 1967 detailing 23 changes in labor law that would benefit employers. The changes professed to strengthen employer “free speech,” insist on “meaningful” bargaining units, and “prevent improper remedies” for employer unfair labor practices during representation campaigns, for example (Gross 1995; Windham 2017). The LLRG aimed to win its changes after the 1968 elections, but the group’s hopes were dashed when Congress remained Democratic. The LLRG soon merged with two other employer groups in 1972 to form the Business Roundtable, which began to successfully win its proposed changes, largely through litigation before the NLRB.xv

The five-member NLRB is appointed by the president and generally reflects the party in power. Under President Nixon, the NLRB quickly began erecting more obstacles in the way of organizing. It allowed employers to tell organizing workers that signing union cards would be “fatal” and cause “turmoil,” that if they chose a union they could lose what they had because bargaining “starts from scratch” and “everything is up for negotiation.” The board decided that employers legally could predict that they would have to close up shop due to financial difficulties if the workers voted yes.xvi The NLRB under the Carter administration did little to reverse the trend of weakening labor law that would persist and deepen in the Reagan years (Gross 1995).

Employers won a major victory in the U.S. Supreme Court in 1974 that allowed them to deny recognition to a union even if a majority of workers signed cards or petitions indicating their support for forming one. The card check method of forming a union, also called majority signup or voluntary recognition, has been a standard feature in U.S. labor relations since before the passage of the Wagner Act, and it is expressly recognized in the act. But the Supreme Court ruled in Linden Lumber (1974) that employers may refuse to recognize unions based on a showing of majority support and insist on an NLRB election. This requirement undermined the ability of workers to form unions because it subjected them to the NLRB election process and the attendant delays and employer anti-union campaigns.

Over the decades, such decisions by the NLRB and the courts steadily increased employers’ power to weigh in on elections and curtailed workers’ right to form unions. Consider the way policy drift in the law created two separate standards for how employers and unions are allowed to communicate with workers. Prior to passage of Taft-Hartley, the NLRB had ruled that employers violated the law and committed an unfair labor practice when they held mandatory meetings of employees to express anti-union views.xvii Within a year of Taft-Hartley’s enactment, the NLRB decided that employers could legally force workers to attend such captive audience meetings. The NLRB announced that it would find the meetings unlawful only if the employers threatened workers or promised some new benefit. The NLRB also reversed its earlier rulings that employers who hold captive audience meetings must allow unions an opportunity to respond. As a result, employers got the green light to hold mandatory anti-union meetings, and unions were denied the legal right to enter the employer’s premises to respond.

The Supreme Court expanded the problem in 1956 when it ruled in NLRB v. Babcock & Wilcox that employers are not required to give union organizers access to parking lots to talk with employees unless the union lacks alternative means of reaching employees.xviii The decision exacerbated an existing imbalance in communications during union organizing campaigns that greatly restricts and limits union organizers’ access to employees and employees’ ability to hear from union organizers at the workplace.xix A series of subsequent decisions gave employers a free hand to ban union supporters from captive audience meetings and even ban employees from speaking during the meetings.

By the 1970s, employers began to put their legal prerogative to hold such meetings to increased use. They routinely cherry-picked the workers who were undecided about the union, forced them to attend coercive meetings against the union, and were never required to allow the union equal say (Becker 1991–1993). The number of employers requiring such meetings increased by a third in the 1970s through the 1990s.xx By the end of the 20th century, 92% of employers held these forced attendance meetings (Bronfenbrenner 2000). The result is that management became able to communicate to employees in one-on-one conversations between direct supervisors and workers and in mandatory group meetings at work sites while union organizers were required to meet employees offsite and after hours, greatly complicating their ability to communicate with employees.

Policy drift in labor law meant that over time employers also gained more freedom to threaten to shut down if the workers voted for a union. At first, the NLRB seemed to support workers on this issue; it softened Taft-Hartley’s impact soon after its General Shoe decision in 1948, requiring that union elections must take place in “laboratory conditions” free from a coercive atmosphere. Nevertheless, in the early 1950s the NLRB decided that an employer was within legal bounds when it predicted it would have to close to meet unions’ wage demands. The board reversed that rule in 1962, deciding that such predictions of company closure were actually threats. But the threats became more potent in 1965 when the U.S. Supreme Court held that a company does not illegally discriminate against union supporters when it shuts down its business entirely in order to avoid unionization.xxi Employers cannot lawfully close one facility in order to chill union organizing at another facility, or transfer work from a union shop to a nonunion shop to avoid the union (the “runaway shop”), but the burden of proving that the decision was motivated by anti-union animus and not business reasons has proven difficult.xxii The court handed management a powerful rhetorical weapon to suggest that if workers successfully unionize then the facility may be closed, diminished, or moved. In the 1970s, the NLRB went even further, making threats of closure legal again as long as the company did not threaten to close solely because of the union.xxiii Employers dramatically expanded their threats of closure in the 1970s, as discussed below. By the 1990s, half of all employers facing worker organizing campaigns threatened to shut down if the workers formed a union (Bronfenbrenner 2000).

Acceleration of employer attacks on union organizing in the 1970s

Even though U.S. labor law left workers vulnerable, most major industrial employers, especially in the more unionized Northeast and Midwest, more or less complied with laws protecting workers’ right to organize from the 1940s through the mid-1960s. Beginning in the 1970s, however, employers tried to limit labor costs, including by restricting workers’ ability to enter into unions and collective bargaining.

When workers tried to exercise their right to vote for a union, employers exploited these previously described weaknesses in the U.S. labor law regime and began to break and circumvent the law at new levels. They learned through experience that labor law violations carried no real penalty and no real public stigma. Employer threats, mandatory anti-union meetings, and illegal firings paid off. By 1977, unionizing workers began to lose more than half of their elections for the first time since the Wagner Act’s inception (Goldfield 1987).

Labor law still prohibits employers from firing or threatening workers for supporting the union, as well as spying on workers, threatening to shut down if the workers vote in favor of a union, or promising workers more money or perks if they reject a union. The NLRB considers such acts “unfair labor practices” (ULPs), and charges against employers for ULPs rose sevenfold between 1950 and 1980xxiv (Figure D). These were not empty charges. Indeed, in 1980 alone the NLRB required employers to pay workers backpay in more than 15,000 cases after illegally firing them or cutting their pay as retribution for union activity, a record level at that point (Goldfield and Bromsen 2013).

Figure D

Yet the penalties for labor law violations are scant. No fines are levied, no employer goes to jail, and any costs incurred are negligible. Typically, if the NLRB finds that an employer illegally fired a union supporter, for instance, that company simply has to rehire the worker, pay back wages (minus what the worker earned at another job, or could have earned, in the meantime), and post a sign in the breakroom explaining that it broke the law. Workers do not receive monetary damages to compensate them for the economic harms inflicted by their illegal treatment. Unlike other employment laws, workers have no right to bring a lawsuit against the employer for violating their NLRA rights; they are entirely dependent on the agency pursuing their case. In contrast, other employment laws, such as civil rights laws, provide much greater penalties and provide for a private right of action so workers can bring cases on their own and collect attorneys’ fees if they prevail (Weil 2005).

If the employer violates labor law multiple times during a campaign, then the NLRB can order a new election, but even a new election cannot erase the original threats’ effects. Occasionally the NLRB will order a labor law violator to bargain with its workers (a so-called “bargaining order”), but this process usually takes years, and the courts have been resistant to these orders. Bargaining orders issued by the NLRB have dropped from more than a hundred per year to a small fraction of that, and rarely result in a collective bargaining agreement (Brudney 1996, 1581–87).

The fact that labor law is so toothless means that employers have an economic incentive to violate it. The law really protects workers only when employers more or less voluntarily comply with it.

Starting in the 1970s, many more mainstream, large companies became far less willing to act in accordance with the law. Fortune 500 firms with longstanding bargaining relationships ramped up their resistance to union organizing; they skirted the law, delayed at every step, and increasingly spoke out against new union organizing, even when some of their workers were already covered by collective bargaining agreements. “It requires a certain nerve for those companies whose names you see in the batting order of big hitters in the bargaining game to try to keep plants unorganized,” a vice president of BF Goodrich told an industrial relations convention in 1978. “Management is more sophisticated and bolder…and the times ‘they are a-changing'” (Pestillo 1978). Union-busting tactics moved squarely into the industrial sector, the area where unions had traditionally been the strongest and which had long formed the core of the nation’s economy. An analysis of the ratio of the number of ULPs to the number of petitions filed within specific sectors is revealing. Not only did the level of lawbreaking per election shoot up in the 1970s, but industrial-sector workers were more intensely subjected to employer resistance than were workers in the service and retail sectors, which were traditionally less unionized, though resistance greatly increased in all sectors (Figure E).xxv

Figure E

Normalization of union busting by management consultants and business schools

Managers who had long begrudgingly accommodated unions faced a learning curve when it came to outright avoiding them. In response, a large anti-union consultant industry stepped up to lead the way in the 1970s. These anti-union firms, often hand-in-hand with the nation’s business schools, taught business that “busting” unions was acceptable behavior and that good management meant remaining union-free. Through an avalanche of seminars, trainings, books, and speeches, these new management consultants helped make mainstream a level of anti-unionism that had been extreme in the mid-century labor-management arrangement. “Any management that gets a union deserves it—and they get the kind they deserve,” was the mantra of one sought-after consultant (Hughes 1976). The consultants helped entrench the concept that managers could and should avoid unions in all arenas, and so helped further deactivate labor law’s worker protections.

Anti-union labor consultants weren’t entirely new; the nation’s first anti-union firm, Labor Research Associates (LRA), was formed in 1939 in Chicago. Yet management resistance to unions in the earlier decades was neither as widespread nor as accepted as it would be by the 1970s and 1980s. While there were just a handful of anti-union consulting firms in the beginning of the 1970s, by decade’s end there were hundreds. One management firm founder told a congressional hearing in 1979 that his industry grew tenfold over the preceding decade, and the AFL-CIO estimated that a full 70% of all campaigns involved some sort of management consultant (Logan 2006; U.S. Congress 1980).

Business schools and professors were also key in shifting management’s values on unions. By the 1970s, U.S. business managers were far more likely to have gone to business school than in previous decades, and they were far more likely to do so than managers in other industrialized nations (Locke and Spender 2011). Business schools in the 1970s began to teach students that unions were an unnecessary expense on the cost and balance sheet and tutored them in how to avoid unionization. One frequent contributor to Harvard Business School case studies, for example, instructed that since the NLRB response process to employer unfair labor practices was so lengthy and the penalties “quite mild,” “it is quite possible for management to effectively destroy an organizing effort or, at the very least, signal to employees the relative ineffectiveness of the union in dealing with management” (Fulmer 1982). One California State University business professor asserted that, “In all but the most unusual circumstances it is almost negligent for a company to allow unionization to happen….When one surveys all the things a nonunion employer can do to stay that way…the employer would almost have to try to get itself organized to end up with a union” (Kilgour 1981). Universities themselves began to host the myriad of anti-union seminars made available by union consultants. The University of Delaware, Denver University, the University of San Francisco, the University of Alabama, Clemson, and Wake Forest were among the schools hosting such seminars in the late 1970s. According to the AFL-CIO, one consultant boasted of having taught at 30 universities (McDonald and Wilson 1979).

Management consultants built their businesses by stoking fears based in racism and sexism and by teaching employers how to beat back their diversified workforces’ organizing efforts. One anti-union management consultant warned, “Danger: a union can muster a most potent campaign when it can take advantage of a ‘racial’ or ‘sexist’ theme” (Jackson 1981). Another told a Wake Forest University seminar in 1979 to try to limit the number of African American workers it hired in order to stay union-free. “Blacks tend to be more prone to unionization than whites,” he told the managers in the closed-door session. “If you can keep them at a minimum, you are better off.”xxvi In Confessions of a Union Buster, Marty Levitt spelled out how his firm, Three M (for Modern Management Methods), developed tactics to “awaken within the mostly white supervisor corps a hatred of blacks…contempt for women, mistrust of the poor…” (Levitt and Conrow 1993). Many of the consultants rang alarm bells for the mostly male management class about women’s interest in union organizing. “All indications are that women are now more inclined to vote union than men,” warned one anti-union specialist. “This is entirely consistent with the women’s movement, by whatever name…” (Kilgour 1982).

Anti-union consultants instructed clients in how to avoid unions completely, often by opening nonunion facilities, hiring people who were the least likely to unionize, and by being perfectly clear that the company philosophy was nonunion. The consultant Charles Hughes trained over 27,000 managers and supervisors how to “remain union-free” between 1974 and 1984 (Logan 2006). Stephen Cabot, a Philadelphia lawyer, helped firms decide where to locate in order to remain nonunion, sometimes even identifying specific areas of cities where workers were the least likely to unionize (Wall Street Journal 1979). By 1983, nearly half of firms identified remaining union-free as their most pressing labor relations goal (Freeman and Kleiner 1990).

Much of the anti-union consultants’ work, however, came after workers already showed interest in a union. Once employers realized that their workforces were signing union cards, they often called in consultants to usher them through the union campaigns, step-by-step, in order to defeat the workers’ organizing efforts. Consultants often spent weeks at the worksite, training supervisors and offering advice, though rarely appearing before the workforce.

Consultants made good use of the predictable patterns in an NLRB election process. First, at least 30% of workers had to sign union cards or petitions showing an interest in a union, after which they petitioned the NLRB to hold an election. Consultants advised employers how to discourage card signing. Alfred DeMaria, a high-profile management consultant, advised employers that, “The Board has approved some surprisingly strong employer statements.” As an example, he noted, “One employer was lawful when it told its workers, ‘Don’t sign any cards; they can be fatal to business'” (DeMaria 1982).

The next step in the election process was for the union and company to work out the “bargaining unit,” or the specifics of who could vote. Consultants urged employers to demand a protracted NLRB hearing to determine which workers got to cast ballots. “Always go to hearing…. I have yet to see a situation where time worked against the employers in an election,” urged management consultant Fred Long in an executive meeting captured on tape by a union infiltrator in 1975, a transcript of which surfaced in a 1979 congressional hearing. “Suffice it to say, you have at least 500 issues. So you litigate those issues….You could come up with them for almost a year, as we did in one case” (U.S. Congress 1980, 1:208). Such delays cost organizing workers dearly. One study found that each month of delay between the filing of the petition and the election decreased the workers’ chance of winning the election by 2.5% (Kistler 1984). Consultants also instructed employers how to manipulate the loopholes in the NLRB process in order to seed the voting group with as many no votes as possible. “Hire five of your relatives on a regularly scheduled part-time basis….You have 60 days to hire even a hell of a lot of people if you need to,” continued Long to the gathered executives.

Once the election was finally scheduled, employers launched intense campaigns against the workers’ unionization effort. Some firms developed elaborate systems to track and sway union sentiments among workers. One “highly confidential management document” instructed supervisors at Cannon Mills in 1982 to rate each worker in their department from strongest for the company to the weakest, and to profile employees by race, sex, and age.xxvii

Employers learned how to threaten unionizing workers with loss of benefits and strikes while skirting the legal prohibitions on such threats. Through letters, speeches, and flyers employers made clear to workers that the company would not really have to offer anything new if the workers won the right to collective bargaining. “The Hotel does not have to agree to a single thing the union proposes so long as we bargain in good faith,” asserted the Boardwalk Regency Hotel in Atlantic City.xxviii Warnings about strikes often featured prominently in the anti-union campaigns. “Tell employees that the law permits the hiring of a permanent replacement for anyone who engages in an economic strike,” urged Brandeis University to its supervisors in 1976 when librarians tried to unionize.xxix

Employers learned how to legally threaten workers with plant closure if the union won the election. For example, one General Electric facility in Goldsboro, N.C. faced a union drive in 1978, and issued the following thinly veiled threat: “Cleveland Welds…was represented by the IUE, as were a number of other plants that have closed, including Cleveland Lamp plant, Oakland Lamp plant….Don’t mistake me. I’m not saying we will automatically lose our business if the Union wins the election. But it’s clear that unions…can, and they do, hurt people’s job security.”xxx

The threat of plant closure held enormous sway in the climate of capital flight in the late 1970s and early 1980s. In fact, many U.S. manufacturers used globalization as a weapon against workers’ unionization efforts. For example, the financier David E. Murdock bought Cannon Mills in 1982, and when the workers then tried to form a union he used the threat of global competition in textiles to successfully beat back their unionization attempt: “If I determine that Cannon cannot operate competitively, I can and I will cease to operate Cannon,” he told them in mandatory-attendance meetings. “This is my decision, and mine alone, and no one can stop me—including this Union”xxxi (Windham 2017).

If the workers did manage to win a campaign, employers routinely delayed or avoided actually signing a collective bargaining agreement—the very relationship that the entire election process was designed to facilitate. One AFL-CIO survey found that among workers who won elections, only 63% ever actually got a union contract.xxxii If all else failed, consultants taught employers the ins and outs of decertifying a union already in place. While it is technically illegal for an employer to assist or promote a decertification petition by employees, employers routinely do so (Shawe 1979). The number of decertification elections doubled between 1972 and 1982.xxxiii

The labor movement tried to fight back, and in 1977–1978 it sought to strengthen workers’ rights to form unions and strike through the Labor Law Reform Act. Though the Business Roundtable was at first split on whether to oppose the bill, a broad coalition of American businesses ultimately mounted a massive, coordinated campaign to leave weak labor law unchanged (Stein 2010, 187; Waterhouse 2013). Ironically, some of the same businessmen who had wanted to change labor law as part of the LLRG in the late 1960s later defended the broken status quo because it so aptly suited their purposes. Business had become far more politically active than ever by the late 1970s, and the number of registered lobbyists for business firms increased by fourfold over the decade (Vogel 1989). Business put this new organized power to work against the bill. After a 19-day filibuster and five attempts to get the 60 votes needed for cloture in the Senate, labor and its supporters had to admit defeat. In an “Open Letter to American Business” in the Wall Street Journal, AFL-CIO President George Meany asked business, “Why? What is your motivation?…Where is the moral basis for your attacks? Is not the real intent of this attack the destruction of the uniquely American system of collective bargaining….Do you want to destroy trade unionism?”xxxiv United Auto Workers President Douglas Fraser denounced the “one-sided class war” that broke “and discarded the fragile, unwritten compact” between labor and business.xxxv

The employer campaigns against unionization in the 1970s were remarkably potent. On paper U.S. workers still had the right to organize, but by the end of the decade they were losing it in practice as they faced defeat in more than half of the elections that they themselves had triggered. The AFL-CIO’s assistant organizing director told Congress in 1984, “I’ve been involved in organizing off and on…since 1967 and can assert categorically that the state of the art in employer resistance to employees’ organizing efforts has achieved a level of sophistication and effectiveness far exceeding that of the late ’60s and early ’70s.”xxxvi Doreen Lavasseur, a union organizer who helped university and clerical workers organize throughout the decade, remembers the ground-level impact of the employer campaign on workers: “I would just watch these people go from feeling strong and like we need to do something to feeling like totally terrified to do anything, and paralyzed.”xxxvii The rise in employer law breaking, the spread of employer anti-union campaigns deep into the nation’s core industries, and the tutorials of union consultants coalesced to undermine workers’ freedom to form unions by the end of the 1970s, and it has never recovered.

The unraveling of workers’ bargaining power under the law

By the end of the 1970s, employers had fully exposed the shortcomings and weaknesses of the NLRA and learned how to exploit the union-restrictive provisions of the 1947 Taft-Hartley Act to undermine and defeat union organizing. Employers knew they could vigorously campaign against unions and even break the law by firing union activists without facing any real financial penalties or consequences. Yet employers did not stop there. They also attacked existing unions and curtailed the bargaining power of unionized workers. They began to replace strikers far more frequently, limited what workers could bargain about, began to lock workers out in disputes, and even began bargaining to impasse in order to force strikes. By the early 1980s, they began to demand across-the-board concessions in many contract negotiations. In addition, the shift of power from manufacturing to finance meant that the banks’ and shareholders’ needs often took precedence over those of workers. Though workers were going to the bargaining table with factory owners, the entity with the real power was often a financier on Wall Street (Davis 2009; Stein 2010; Applebaum and Batt 2014).

Employers were able to squeeze unions so effectively because, over the years, labor law had become heavily tilted against workers and toward employers. Though these employer-friendly laws were on the books in the 1940s, 1950s, and 1960s, it was not until the 1970s that employers began to take full advantage of their power. Several key developments set the stage for this 1970s unraveling of workers’ bargaining power under the law. First, a Republican Congress largely neutered workers’ leverage in passing the 1947 Taft-Hartley Act over President Truman’s veto. Second, Taft-Hartley forced the NLRB to prioritize, over all other cases, including cases involving illegal firings of union supporters, litigation against unions for engaging in so-called secondary activity. Third, the law’s ineffective remedies became obvious, and the NLRB’s efforts to hold employers accountable for violating the law were stymied in the courts. Fourth, employers increasingly found an ally in the U.S. Supreme Court, which issued a series of decisions restricting workers’ rights, expanding employer power, and limiting employers’ bargaining obligations. Finally, employers started making greater use of replacement workers during strikes—a trend that grew in the 1970s and 1980s and significantly undermined workers’ right to strike. The cumulative impact of these factors meant that by the 1970s the law did not effectively protect workers’ bargaining power and gave employers a wealth of tools to resist unionization.

The impact of Taft-Hartley

The 1947 Taft-Hartley Act dramatically weakened workers’ bargaining power in several ways. As noted in the previous section, it strengthened employers’ influence on the organizing process by giving employers more leeway on speaking out against the union and allowing employers themselves to file representation petitions. Taft-Hartley also authorized states to ban “union security” agreements, under which employers and unions agree that all represented employees should share in the cost of union representation through either union dues or fair share fees. This change allowed states to pass laws (so-called “right-to-work” laws) allowing workers to obtain the benefits of union representation without contributing toward the costs, creating a free-rider problem designed to undermine unions.xxxviii Recent research has shown that right-to-work laws have had substantial direct and indirect impacts on wages and wage inequality (VanHeuvelen 2020).

Taft-Hartley also imposed new restrictions on “secondary boycotts,” the picketing of other employers to put pressure on the workers’ own employer, discussed next.

NLRB decisively ends union secondary boycotts

As soon as Taft-Hartley became law, employers saw the power and benefit of its new ban on employee secondary activity. Unlike other violations of the NLRA, under Taft Hartley violations of the prohibition on secondary activity against so-called “neutral” employers are subject to civil lawsuits and money damages by employers against unions. The NLRB is statutorily mandated to seek federal court injunctions against unions engaged in secondary boycott activity and to give these cases priority over all other cases, including those alleging illegal conduct by employers against workers forming unions.xxxix

The resulting enforcement disparity was stark and immediate. The ratio of unfair labor practice charges against unions compared to charges against employers grew from one in four in 1948 to half in 1956 (Figure F). Injunctions against unions for alleged secondary activity grew from 17 in 1948 (the first year such injunctions were authorized) to 127 10 years later. Injunctions against unions grew further to 219 by 1960, an astonishing 1,188% increase from 1948. During this same period, the NLRB pursued almost no injunctions against employers for unfair labor practices.xl Taft-Hartley quickly succeeded in shutting down one of workers’ most powerful economic weapons.

Figure F

In stark contrast to the mandatory federal court injunction procedure for violations by unions of the secondary boycott restrictions, no such mandatory injunction proceedings are available for retaliation or discrimination against workers for supporting a union. And while employers have the ability to sue unions in court and win money damages for violations of the secondary boycott provisions, workers have no similar ability to sue their employers for money damages for violating their NLRA rights (Human Rights Watch 2000).

Erosion of collective bargaining rights by the Supreme Court

The erosion of workers’ bargaining power was further exacerbated by a number of significant decisions by the U.S. Supreme Court. These rulings limited access to the workplace by union organizers; undermined the remedies available to the NLRB for violations of the law; greatly constrained the right of workers and their unions to bargain with employers over contracting, plant closing, and other decisions impacting the bargaining unit; and expanded employers’ economic leverage during labor disputes by allowing them to proactively lock out employees. Each of these decisions significantly weakened workers’ bargaining power. Taken together, they undermined an already weak law and tilted it away from workers and in employers’ favor.xli

Narrowing of the mandatory scope of bargaining

One line of Supreme Court decisions dramatically expanded management rights and curtailed the ability of workers and unions to bargain with their employers about contracting-out decisions, plant closings, and other issues affecting the bargaining unit. At the urging of employers wanting to narrow the scope of topics about which they were required to bargain with their workers’ unions, the Supreme Court deemed these topics “managerial” and beyond the scope of mandatory bargaining.

This series of decisions started with the Supreme Court’s 1964 ruling in Fibreboard Paper Products Corp. v. NLRB, which involved an employer’s decision to contract out the work performed by bargaining unit employees. The Eisenhower NLRB, which was considered employer-friendly, initially ruled that the employer was not legally obligated to bargain over what the board deemed a “basic management” decision. The Kennedy NLRB reversed that decision, and in the ensuing uproar the employer community went to Congress and the Supreme Court for relief (Gross 1995, 172–74). The Supreme Court affirmed the Kennedy NLRB’s ruling that the employer was legally required to bargain in this instance, which the court majority described narrowly as “contracting out of plant maintenance work previously performed by employees in the bargaining unit, which the employees were capable of continuing to perform.”xlii The court noted that requiring bargaining over the decision furthered the policies and purposes of the NLRA:

[A]lthough it is not possible to say whether a satisfactory solution could be reached, national labor policy is founded upon the congressional determination that the chances are good enough to warrant subjecting such issues to the process of collective negotiation.

Still, the Fibreboard majority limited the reach of its decision to the facts presented, explicitly noting that “[o]ur decision need not and does not encompass other forms of ‘contracting out’ or ‘subcontracting’ which arise daily in our complex economy.”

A concurring opinion in Fibreboard by Justice Stewart contained a statement that would come to frame the law governing managerial decisions that have an impact on employees’ jobs. He opined:

Nothing the Court holds today should be understood as imposing a duty to bargain collectively regarding such managerial decisions, which lie at the core of entrepreneurial control. Decisions concerning the commitment of investment capital and the basic scope of the enterprise are not, in themselves, primarily about conditions of employment, though the effect of the decision may be necessarily to terminate employment. If, as I think clear, the purpose of § 8(d) is to describe a limited area subject to the duty of collective bargaining, those management decisions which are fundamental to the basic direction of a corporate enterprise or which impinge only indirectly upon employment security should be excluded from that area.

Seventeen years later, in 1981, Justice Stewart’s views formally became the majority view in First National Maintenance Corp. v. NLRB.xliii There, the Supreme Court ruled that employers have no duty to bargain over a decision to terminate a contract for business—even when that decision results in the layoff of bargaining unit employees. The company involved in First National Maintenance provided cleaning and housekeeping services, and it terminated a contract to provide services to a nursing home without first bargaining with the union representing its housekeeping employees, who then lost their jobs. The Supreme Court characterized the decision made by the employer as “involving a change in the scope and direction of the enterprise,” which the court said “is akin to the decision whether to be in business at all.” The court concluded:

…the harm likely to be done to an employer’s need to operate freely in deciding whether to shut down part of its business purely for economic reasons outweighs the incremental benefit that might be gained through the union’s participation in making the decision, and we hold that the decision itself is not part of 8(d)’s “terms and conditions” over which Congress has mandated bargaining.

Under First National Maintenance, therefore, employers are required to bargain with their employees’ union over the effects of decisions to cancel contracts, restructure, or cease some or all operations, but not over the decisions themselves, which the courts view as “managerial” decisions. These decisions on the scope of bargaining obligations significantly undermine workers’ and unions’ bargaining power and deprive them of the ability to participate in and shape decisions and actions by their employers that affect the employer’s ongoing operations and employment.

Giving employers economic leverage in labor disputes

Allowing striker replacements. Under U.S. labor law, it is illegal for an employer to fire or retaliate against a worker for engaging in “protected, concerted activity” such as a strike, but in a twisted anomaly, employers are legally permitted to hire “permanent replacements” for strikers’ jobs. In an early decision from the first days of the Wagner Act, the Supreme Court indicated in dicta (language not part of the legal holding in the case) that an employer whose employees were engaged in an economic strike, as contrasted with a strike over unfair labor practices, could permanently replace striking employees without violating the NLRA.xliv This rule significantly undermines workers’ legal right to strike, because workers faced with deciding whether to strike over economic issues know that they can be permanently replaced by other workers and lose their jobs.

Until the 1970s, few employers used the practice of replacing strikers because it was considered so confrontational. But the practice of permanently replacing strikers “sharply increased” in 1975 and became a much more prominent practice in the 1980s (LeRoy 1995; Stelzner 2017; Logan 2008). This practice escalated after the very public example of President Reagan replacing striking air traffic controllers and breaking the PATCO strike. Although the air traffic controllers’ strike was illegal, Reagan nevertheless established a new norm for employer behavior (McCartin 2006). Major employers, including Greyhound, Phelps Dodge, Massey, Caterpillar, Colt Industries, Bridgestone/Firestone, and the Chicago Tribune Co., were emboldened to hire, or threaten to hire, permanent replacements during legal strikes.xlv One of the most prominent incidents of permanent replacements took place at International Paper in Jay, Maine and two neighboring plants. More than 2,300 workers participated in a 16-month strike that ended unsuccessfully after the company hired permanent replacements.xlvi The dispute divided a small town and created lingering bitterness between strikers, the company, and the community.xlvii

The General Accounting Office (now the General Accountability Office) reported that employers announced that they would hire permanent replacements in about one-third of the strikes in 1985 and 1989, and actually hired them in approximately 17% of all strikes (GAO 1991).

McCartin (2006) described the evolution of the tactic using LeRoy’s enumeration of casesxlviii:

LeRoy found forty-four cases involving permanent replacements decided under the National Labor Relations Act or the Railway Labor Act in the 1950s. This amounted to only one documented use of permanent replacements per 80 major work stoppages during that decade. In the 1960s, the rate was one per 83 major work stoppages. In the 1970s, a slight increase in employers’ tendency to use permanent replacements was detectable, as the rate rose to one per 66 major work stoppages. LeRoy argues that this shift began around 1975. But it was in the aftermath of the PATCO strike that employers aggressively seized upon the striker replacement tactic. In the first ten years after 1981, employers used permanent replacements in roughly one out of seven major work stoppages. A sea change had clearly occurred in employers’ willingness to replace strikers.

The regular threat and use of permanent replacements dramatically undermined workers’ legal right to strike and gave employers a powerful economic weapon to undermine and defeat unions. As Logan (2008) explained:

[The use of striker replacements] has allowed hostile firms to defeat numerous strikes, undermined unions during contract negotiations, provided powerful antiunion propaganda during organizing campaigns, and enabled firms to instigate strikes, then recruit permanent replacements as a means of unloading unwanted unions.

Legislation to curtail the practice of permanent replacements enjoyed the support of a majority of the House and the Senate, but failed because of numerous Republican filibusters, encouraged by the business community, in 1992 and 1994 (Logan 2008). Efforts to restrict the practice of permanent replacements through executive action in 1995 were struck down by the courts.xlix

Allowing employer lockouts. At the same time Congress and the courts were weakening workers’ leverage, the NLRB and the courts gave employers additional leverage by allowing them to proactively lock out (layoff) their employees, the equivalent of the employer going on strike. Prior to 1964, employers were permitted to proactively lock out employees (called an offensive lockout) in two narrow circumstances: (1) where the employer was part of multiemployer bargaining and the union was striking one employer in an effort to force other employers into agreeing with the union’s demands, a practice known as whipsawing, and (2) in situations where the employer reasonably believed a strike was imminent. But in a 1965 decision in American Ship Building Co. v. NLRB,l the U.S. Supreme Court ruled that employers could proactively lock out their employees once an impasse had been reached in bargaining “for the sole purpose of applying economic pressure in support of [the employer’s] legitimate bargaining position.” In other words, the employer did not need to show that it was at risk of being whipsawed in a multiemployer arrangement, or that a strike was imminent—an employer could proactively lock out its employees simply to create leverage in support of its bargaining demands. American Ship dramatically shifted bargaining power to employers and, not surprisingly, afterwards employers increasingly engaged in proactive lockouts to achieve their bargaining goals.

Lockouts became more prominent as strikes and union membership diminished. Though there are no data on lockouts for the period before 1990, two independent analyses show their increased importance. Marvit (2016), who employed various sources to track lockouts and strikes between 1990 and 2015, found that, though lockouts declined over the period, from 32 in 1990 to 13 in 2015, the decline in strikes was greater. As a result: “In 1990, lockouts represented less than 4% of total work stoppages, whereas in 2015 lockouts represented over 10% of total work stoppages.”

The Bureau of National Affairs has also documented lockouts and strikes since 1990.li In 2012 it found: “The huge plunge in union membership over the past two decades has meant a huge plunge in union-initiated strikes. Yet it hasn’t meant a huge plunge in employer-initiated lockouts” (Coombs 2012a). It calculated that there had been 221 lockouts per 5,431 stoppages in 1990–1999 (4.07%), 164 lockouts per 2,995 stoppages in 2000–2009 (5.48%), and 31 lockouts per 312 stoppages in 2010–2011 (9.64%).

It should be noted that the threat of a lockout, as with a threat of a strike, can have a substantial impact on bargaining outcomes.

The rise in the proportion of lockouts to strikes changed in recent years due to a wave of strikes in 2018 and 2019 (a trend that is likely to hold in 2020 as well). There were more than 150 strikes in each of those two years, while lockouts remained at similar levels as in the 2012–2014 period, around 10 each year.lii

Diminishing the duty to bargain in good faith. We’ve seen that by the 1970s there was growing awareness among employers that the NLRA lacked teeth, and a realization that, even if employers were found to have committed illegal, unfair labor practices, the remedies were weak and ineffective. Employers made use of these weaknesses to strip workers of bargaining power. Consider employers’ failure to bargain in good faith. In 1970, the Supreme Court ruled in H.K. Porter v. NLRB that the NLRB could not require any particular terms in a collective bargaining agreement and could only require that parties go back to the bargaining table—even though the parties in this case had been bargaining for eight years. The decision stripped the NLRB of a potent tool for getting employers and unions to bargain and reach agreement.liii Moreover, in earlier decades, the NLRB had ordered employers who had made frivolous objections to union certification and had failed to bargain in good faith to compensate workers for the wages and benefits they lost because of the bad-faith bargaining. But in 1970, the NLRB changed course and decided it lacked authority to order these remedies, on grounds that such remedies constituted “punishment” that is not authorized by the NLRA.liv With the absence of a meaningful remedy, the legal duty of employers to bargain in good faith with their workers’ union was severely undermined. Employers use this freedom to great advantage when dealing with newly formed unions. As noted above, workers at approximately half of all newly organized shops fail to reach an initial collective bargaining agreement with their employer (Fisk and Pulver 2009). Employers can string out the bargaining process and avoid reaching an agreement, creating a feeling of futility among workers who have recently chosen to organize.

Allowing employers to use the bankruptcy process to gut collective bargaining agreements. Another trend that emerged in the 1970s and undermined unions and bargaining was the practice of employers using the bankruptcy system to shed their wage-and-benefit obligations under collective bargaining agreements. Corporations seized on court decisions finding collective bargaining agreements to be “executory” contracts, meaning contracts that had not yet been fully executed, and they sought and received permission from bankruptcy courts to shed these executory obligations. The U.S. Supreme Court exacerbated the problem in its 1984 decision in NLRB v. Bildisco & Bildisco,lv in which the court affirmed the ability of employers to shed their contractual obligations under collective bargaining agreements. Bildisco & Bildisco had reneged on wage increases and health and welfare contributions that were due to workers under the terms of the collective bargaining agreement that the company had negotiated with the Teamsters. According to news reports, at the time the decision was pending 22 corporations, including major corporations like Continental Airlines and Wilson Foods, had attempted to avoid their collective bargaining agreements through bankruptcy, and 19 had succeeded (Townsend 1984).

Bildisco prompted a huge outcry, and Congress quickly responded by passing legislation to restrict the ability of employers to shed their collective bargaining responsibilities in bankruptcy, but the bankruptcy code still contains provisions allowing employers to void collective bargaining agreements where they make a sufficient showing of need (Sousa 2003).

Ceccotti (2007) notes that in the early 2000s there was a “wave of bankruptcy cases targeting significant reductions in labor costs, pension funding, and retiree health obligations that has surged through the airline industry, the steel industry, auto supply, and other heavily unionized industries in recent years….[D]ebtors have been able to extract substantial labor and benefit costs cuts, either through, or under the threat of, court-ordered relief under sections 1113 and 1114. Many have involved the termination of defined benefit pension plans as well.” Ceccotti notes that in these “transforming business restructurings,” “bankruptcy has once again become a deliberate strategy used to broadly target costs associated with collective bargaining agreements and collectively-bargained pension and retiree health obligations.”

One union president testified in 2013 that bankruptcy proceedings meant a “debtor (company) essentially had a gun to labor’s head—it was a take it or leave it proposition, not a negotiation.”lvi

Automation and globalization are a minor part of the overall picture

The contribution of automation and globalization to the decline of unions is prominent in most discussions, and the view draws on some commonly known facts. First, the rapid decline in union membership in manufacturing occurred at the same time as imports escalated and attention to competitive pressures from foreign producers, increasingly those from low-wage nations, became a prominent concern. Second, because automation has been faster in manufacturing than in other sectors of the economy, the manufacturing share of total employment has been declining. Given that manufacturing was a highly unionized sector, this development mechanically led to an eroded union share. That union erosion has also happened in other advanced nations supports an intuition that trends happening across nations, such as automation and globalization, are the true underlying factors.

In this light, any impact that eroded unionization is having on wage inequality or labor’s share of income, the argument goes, is just a reflection of globalization and automation. In economics discussions this means that union decline is a symptom, not a cause, of wage inequality, with globalization and automation the real culprits behind both wage inequality and deunionization.

This section examines the role of globalization and automation primarily by examining the role of manufacturing decline on unionization trends. The analysis does not examine the impacts of globalization on unions in sectors other than manufacturing because these impacts, like the outsourcing of call centers and white-collar work, primarily developed in the 1990s and later years and not in the turning-point decades for private-sector unionization of the 1970s and 1980s.

Trends in manufacturing versus nonmanufacturing sectors, 1977–2019

Figure G shows union coverage in the manufacturing and nonmanufacturing segments of the nonagricultural private sector in the United States (all references to the private sector hereafter are to the nonagricultural private sector) from 1977 to 2019.lvii “Union coverage” reflects those who are members of the union as well as those who aren’t members but are covered by a collective bargaining agreement. Note that although union coverage in manufacturing started at a higher level and fell more sharply than in the rest of the private sector, the decline was far from unique. Union coverage in nonmanufacturing fell from 17.6% in 1977 to just 6.8% in 2019, a 60% contraction. The manufacturing union coverage contraction was 74%.

Figure G

The data underlying Figure G allow us a first pass at assessing the role of manufacturing’s decline on union coverage. A simple shift-share analysis indicates that the erosion of the manufacturing share of employment from 1979 to 2019, a decline from 30.2% to 12.6%, is responsible for a decline of private-sector union coverage of 3.3 percentage points, or about a fifth of the overall 15.8 percentage point decline in the private nonagricultural sector.lviii This erosion of manufacturing employment presumably captures the impact of greater imports (and trade deficits in “goods”) and provides our first assessment of their impact: not trivial but not dominant. We will explore more rigorous assessments below that all find an even smaller impact of manufacturing’s erosion on union decline.

Union coverage erosion in major sectors and specific industries

We can obtain a clearer picture of globalization’s impact by examining the erosion of union coverage in specific broad sectors and in more detailed industries. Table 5 presents trends in selected major private-sector industries where the data are comparable for 1979, 1983, and 2019 (this methodology leaves out much of private-sector personal and business services).lix Adding the data for 1979 highlights the very sharp drop in union coverage emerging from an assault on unions amidst the deep recession and a sharp rise in imports in the early 1980s.

Table 5

Several nonmanufacturing sectors that had substantial union coverage rates in 1979, many comparable to or greater than manufacturing, suffered a larger or nearly comparable erosion of union coverage than manufacturing: They include mining, construction, communications, transportation/warehousing, and utilities. Other sectors such as wholesale trade and retail trade lost more than half their union coverage. Overall, union erosion was pervasive in sectors that had substantial union coverage, beyond just manufacturing, and every one of these sectors lost a large share of its union coverage.

Table 6 adds detail to the analysis by examining union coverage decline in 19 specific detailed industries over the 1979–2019 period.lx There were substantial declines in union coverage in a wide array of specific industries beyond manufacturing: mining, both metal and coal; fishing and hunting; transportation such as air, trucking, buses, and rail; hotels; grocery stores; hospitals; radio and television broadcasting; warehousing; newspapers; and electric power.

Table 6

Rosenfeld (2020) and Denice and Rosenfeld (2018) make a similar point by examining union decline in major blue-collar occupations. Rosenfeld compared union decline from 1973 to 2016 in two occupations greatly affected by automation and/or globalization—production and mining— and in two occupations that “either cannot be outsourced or haven’t yet borne the brunt of technological changes”—transportation and construction. Rosenfeld notes that union erosion was widespread in these occupations, with the decline in unionization within transportation and construction occupations falling from 50% in 1973 to less than 20% in 2016.

Statistically assessing the impact of the change in the industrial distribution of employment

It is possible to obtain more exacting analyses of the impact of shifting industrial employment patterns on union coverage trends by employing regression analyses.lxi The starting point is regression analysis explaining union coverage (members plus those covered by a union contract as the dependent variable) that considers many factors including and beyond a worker’s industry.lxii The goal is to assess the impact of the change in the industrial distribution of employment (primarily the shift from manufacturing to the service sector) on the 15.8 percentage point fall (from 22.8% to 7.0%) in private-sector union coverage between 1979 and 2019.lxiii We do this in two ways.

The first methodlxiv decomposes, or breaks down, the changes in union coverage into the role of the changes over time in (1) the “composition” of the workforce—its industrial distribution and its demographic and other characteristics—and (2) the separate effect that each of these characteristics of the workforce has on workers’ likelihood of being in a union.lxv If workers in a particular state are less likely to be in a union, for example, how much of the decline in unionization is due to the fact that there are more workers in that state now than was the case in 1979 (a composition effect) and how much is due to a change in the likelihood that workers in that state will be in a union today than in 1979?lxvi This exercise reveals that the changes in industry employment composition explain 2.5 percentage points of the overall 15.8 percentage point decline in union coverage from 1979 to 2019, or about 16% of the total change. The advantage of this computation is that it examines the impact of the changes in the industrial composition of employment while controlling for changes in the distribution of workers across states and occupations and across various demographic characteristics including gender, race/ethnicity, education, and age.

The second method uses the regressions for each year, 1979 and 2019, to simulate the level of union coverage that would have obtained if the industry structure were swapped between years.lxvii We present the results in Table 7. In 1979, 22.8% of private-sector workers were covered by a union. Our simulation finds that if in 1979 the economy had instead the same industrial structure as in 2019, but all other features of the 1979 economy were held constant, then union coverage would have been 20.3%. This exercise suggests that the changed pattern of sectoral employment lowered union coverage by only 2.5 percentage points. We get similar results when we do the simulation the other way around. In 2019 private-sector union coverage was 7.0%, but it would have been 7.4% had the sectoral composition in 2019 been identical to what it had been in 1979, suggesting that sectoral employment patterns only reduced union coverage by about 0.5 percentage points. The usual interpretation of these results is to bracket the actual impact as somewhere between these two estimates. In this case, the data suggest that the shift out of manufacturing employment has had an impact that accounts for less than a fifth of the overall decline of private-sector union coverage between 1979 and 2019.

Table 7

Union decline as an independent, not dependent, factor

The claim that automation and globalization have driven the erosion of unions means that automation and globalization, not unionism itself or collective bargaining, are what is responsible for the wage stagnation or wage inequality that have flowed from union erosion. In statistical terms, these claims are saying that union decline is not the true factor (independent of other factors) but rather is itself determined by other factors. Because we do not have blind trial experiments or even natural experiments focused on union decline, there is no dispositive evidence upon which to draw. The evidence presented here so far has focused on data indicating that union decline goes much beyond what has occurred in the sector most impacted by globalization, manufacturing.

More can be learned from some of the analyses of the union impact on wages. For instance, Denice and Rosenfeld (2018) quantify the impact of union erosion on the wage levels of nonunion workers. They find:

The size of the union effect is substantial, especially for men. We estimate that weekly wages would be approximately $61—or 6 percent—higher for nonunion private sector men if private sector union densities were as high in 2015 as they were in 1977. Over the course of a year, this would result in a wage gain of $3,172. Among women, the counterfactual predictions reveal that a nonunion worker would earn $18 more weekly had unions not declined since 1977, or $936 annually.

It is useful that Denice and Rosenfeld are examining the decline of unions within occupations as opposed to industries and that they directly control for the risks of automation (“the average routine task content of each occupation to control for that occupation’s risk of automation”) and manufacturing decline (the proportion of each occupation’s employment in manufacturing). They report that their results “are robust to the inclusion of controls for the risk of automation, offshoring.” This leads them to claim that their estimates reflect the “independent influence of private-sector union strength on nonunion private-sector pay.” For our purposes it is important to note that including measures of offshoring and automation risk does not diminish the estimated union impact on nonunion wages.

Newly developed union membership data back to the passage of the NLRA in the 1930s allow Farber et al. (2018) to examine whether the patterns of union rise and decline correspond to the expected patterns if changes in union density simply reflected automation. They do so in response to a set of papers (most prominently Acemoglu et al. 2001) that “argue that any empirical relationship between unions and inequality is spurious, driven by variation of an omitted variable [skill-biased-technological change, i.e., automation] that simultaneously reduces union density and increases inequality.”lxviii Automation, according to Acemoglu et al., is expected to erode “union density because as automation increases unskilled unionized workers become relatively more expensive to employ [i.e., priced out of market] and unions have, by construction, no option to organize the more skilled workers.” Farber et al. note that data from a point in time (i.e., a cross-section analysis of one year’s survey) do not allow a test of the claim that automation is the true driver of union decline, but that the new historical time series on union membership, tracking eras of both union expansion and union contraction, is well suited to examining the co-movement of union density, skill composition, and union premiums predicted by those claiming that automation is the true factor underlying union decline. Farber et al. conclude that “our data reject many of these predictions, suggesting that union density is not merely an artifact of skill-biased technological change,” i.e., automation.

Last, Ahlquist and Downey (2019) directly examine the impact of imports on unionization in manufacturing and overall, building on the influential work of Autor et al. (2013) examining the impact of Chinese imports on wages and employment (they also build on Pierce and Schott 2016).lxix

Ahlquist and Downey note that there has been “a substantial academic literature investigating the link between globalization and deunionization, with a particular focus on trade-related ‘deindustrialization’ and its effects on the relatively unionized manufacturing sector.” They conclude that, “This early literature generally found weak or inconsistent effects of trade on union density.”

Based on their own analysis, Ahlquist and Downey conclude:

We study how import competition affects union membership in the United States, adapting identification strategies from recent work on imports from China. Within manufacturing, union workers are slightly more affected than non-union ones, inducing modest declines in unionization. At the same time, total manufacturing declines are greatest among Right-to-Work states. We provide evidence that firms in Right-to-Work states tend to specialize in lower-quality products, making them more susceptible to competition with Chinese goods. However, while reducing unionization within manufacturing, import competition causes a robust increase in unionization outside of manufacturing, more than offsetting within-manufacturing declines. This appears to be driven by family members of would-be manufacturing workers shifting to higher-wage jobs: for less-educated women, the highest paying opportunities are often in healthcare and education, which are disproportionately unionized. Altogether, we calculate that the decline in US union density would have been 36% larger without Chinese imports.

So, at least in the case of the surge in Chinese imports, there has been an adverse impact of imports on union density in manufacturing, but it accounted for only one-sixth of the decline in manufacturing union density from 1990 to 2014.lxx More important, however, is that the decline in manufacturing unionization was offset by increases in family member unionization in nonmanufacturing. Obviously, this analysis addresses the key import trend of the late 1990s and 2000s but does not address the import surge in the early 1980s.

Overall, these studies cast doubt on the claim that trends in unionization are simply artifacts of the underlying factors of globalization and automation.

International comparisons

Collective bargaining has declined in many advanced nations over the last few decades, a trend that has given credibility to the notion that pervasive changes happening across countries, such as automation, the decline in manufacturing, and globalization, have led to the erosion of collective bargaining. What at quick glance seems obvious and intuitive, however, turns out not to be a primary explanation of union decline.

During the 1970s, the pivotal decade when union decline accelerated in the United States, many other nations saw the opposite trend. In fact, unions swelled across much of the globe, even as U.S. workers faced a wall of employer resistance to new organizing. Of 23 developed nations, 18 saw their union movements grow in that decade (Western 1997, 18-24).

The modest impact of manufacturing decline also emerges from a recent comprehensive analysis of union erosion by the OECD (2019). The report notes the declines in both union membership (from 33% in 1975 to 16% in 2018) and union coverage (from 45% in 1985 to 32% in 2017) among OECD countries, but concludes:

The drivers of the decline in union density are numerous and vary between countries and over time. Contrary to a commonly held belief, the combined contributions of demographic changes and structural shifts, such as the shrinking of the manufacturing sector, are small and leave most of this declining trend unexplained.

The OECD’s analysis reveals the complexity of the underlying trends:

This average downward trend, however, masks important cross-country variations in terms of initial unionisation levels, the actual direction of trends, and, in countries where it happened, the pace, intensity and timing of the decline. First, trade union density in the mid-1970s varied from around 75% in Sweden, to around 20% in France and just above 10% in Korea. Second, while union density declined in a majority of countries, it increased in Iceland and Belgium and was relatively stable over the last four decades in Canada, Korea and Norway. Third, decline was much faster and more abrupt in some countries than in others. In the 1990s, Eastern European countries, Israel, and New Zealand experienced a fall of at least 30% of union density (Turkey in the 2000s is another example) over a relatively short time-span. By contrast, decline was much more gradual (and much smaller) in countries like Denmark, Switzerland or Chile – where it was more akin, in fact, to a progressive erosion than to a drop. Finally, the timing of decline also differs: it starts in the 1980s in several countries, but already in the 1960s in the United States, Austria or the Netherlands, and much later—in the 1990s—in several Nordic countries. Changes in union density accelerated at various points in time over the period, with individual countries exhibiting specific spikes.

This leads to the bottom line:

This heterogeneity of the evolution of union density across countries suggests that it may be the result of a combination of country-specific factors rather than global forces—although some drivers might be common across countries or groups of countries.

The OECD study also presents a detailed statistical decomposition of the factors that led to union erosion in each nation, though differences in data availability make each analysis slightly different for each country. For the United States the OECD uses survey data of individual workers (specifically, Current Population Survey data for 1983 and 2018) to predict union membership using various factors such as demographic and job characteristics.lxxi The changing composition of job characteristics (across three occupations, five industries, and public vs. private sector) contributed 1.73 points of the 9.5 percentage point decline in the unionization rate over the 1983–2018 period, explaining 18% of the decline.lxxii Job composition, therefore, had a modest impact on the erosion of unionization, and the impact of automation and globalization—to the extent they manifest in a shrinking of manufacturing employment—would be even smaller.

Schmitt and Mitukiewicz (2012) in an earlier analysis examined changes in union membership and union coverage across 21 advanced nations between 1960 and 2010, and they also highlighted the heterogeneity of outcomes that suggest a limited role for automation and globalization:

Union coverage (the share of workers whose terms of employment are covered by a collective bargaining agreement) changed little and even rose slightly in a substantial number of countries, including the period since 1980. Union membership (the share of workers who are members of a union) fell in most of the rich economies, with the United States experiencing losses (from a low initial level of unionisation) near the middle of the distribution. These differences across countries exposed to broadly similar levels of globalisation and technological change suggest that neither factor mechanically determines national levels of unionisation. These findings are broadly consistent with other research on long-term trends in unionisation in the world’s rich democracies.

This initial review of the data raises serious doubts about the inevitability of union decline. While union membership rates fell in two-thirds of the sample, membership rates were flat or constant in the other third. While union coverage rates fell in just under half of the 21 countries, coverage rates were flat or rising in the other half. At least at face value, globalisation and technological progress do not appear capable of explaining these observed differences, primarily because all of these economies have been subjected to similar sets of forces in both regards.

Schmitt and Mitukiewicz (2012) point to the “[n]ational political traditions established in the period 1946 through 1980” as the best predictor of unionization trends:

Between 1980 and 2007, the social democratic countries saw coverage rates increase, on average, five percentage points. Over the same period, the continental market economies experienced a small decline in coverage that averaged four percentage points. Meanwhile, coverage rates fell in all of the liberal market economies, with an average decline of 26 percentage points (20 percentage points at the median).

Union decline was not the result of lessened interest of workers in seeking collective bargaining

Some commentary attributes the decline in unionization to an abandonment by workers who have lost interest in collective bargaining, as if the need for collective bargaining has diminished or does not apply to new sectors. It is worth a brief examination of the evidence of workers’ interest in collective bargaining.

Contrary to the claim that nonunion workers lost interest in collective bargaining, the available polling evidence suggests that there is a substantial unmet demand for collective bargaining and that many nonunion workers would rather be covered. This unmet demand has reached its highest levels in recent years. The issue then is to assess why so many workers’ desire for collective bargaining has gone unmet rather than assess any trend of workers refraining from collective bargaining.

Kochan, Kimball, Yang, and Kelly (2018) examined the level of interest in joining a union among unorganized workers, comparing 1977, 1995, and 2017, and found the “demand for unions” has risen substantially since the late 1970s. Kochan and Kimball (2019) summarized those results:

…the 1977 and 1995 results were nearly identical: approximately one third of the non-union workforce indicated they would vote to have union representation if given an opportunity to do so on their current job. In 2017 that number increased to 48 percent. This number translates into an under-representation of unions of approximately 58 million workers.

Freeman (2007) analyzed a different set of surveys and also found a large unmet demand for worker voice and, in particular, collective bargaining. Freeman examined the preferences of union and nonunion nonmanagerial workers and found that workers wanted greater say at their workplace as much or more than they did in the 1990s, and that they wanted unions more than ever before. Specifically, he found that the proportion of workers who wanted unions had risen substantially over the last 10 years at the time of the study, and a majority of nonunion workers in 2005 would vote for union representation if they could,lxxiii up from the roughly 30% in the mid-1980s and the 32-39% in the mid-1990s, depending on the survey. Given that nearly all union workers (90%) desire union representation, the mid-1990s analysis suggested that if all the workers who wanted union representation could achieve it, then 44% of the workforce would have union representation. The rise in the desire for union representation since then suggests that the share of the nonunion workforce wanting union representation in 2005 was 53%. These results, in turn, suggest that if workers were provided the union representation they desired in 2005, then the overall unioniza­tion rate would have been about 58%.

Freeman also examined Gallup polling back to 1947 and found that the majority of the public “approved of unions,” far more than those who “disapprove of unions,” over the entire postwar period. In 2005, 58% approved of unions while 33% disapproved (9% had no opinion). Union approval has increased since Freeman’s analysis, with Gallup (Jones 2019) reporting on its survey in 2019:

The current 64% reading is one of the highest union approval ratings Gallup has recorded over the past 50 years, topped only in March 1999 (66%), August 1999 (65%) and August 2003 (65%) surveys.

The Gallup data do show that the approval of unions deteriorated over the 1950s, 1960s, and 1970s, but even in a relative unfavorable time for unions—1979—55% of people approved of unions and 33% disapproved.

Conclusion

Workers have always had a high level of interest in forming unions at their workplaces to win better pay, benefits, and dignity on the job, and their interest now is higher than ever. The sharp decline of union representation and new union members in the 1970s—a decline from which workers and the labor movement have never recovered—was due not to worker disinterest but rather to a combination of employer tactics and weaknesses in the law that undermined worker organizing. Nor can the decline in unionization be explained by globalization and automation: These factors account for only a small percentage of the decline. The dominant explanation of eroded private-sector unionism is a policy failure, leaving workers and unions powerless to combat an increasingly aggressive set of legal and illegal employer practices. Such a policy failure, what the political scientists call policy drift, can be offset by better policy. Policymakers should take account of these lessons and conclusions as they debate measures to strengthen workers’ ability to organize and bargain in the months ahead.

Acknowledgments

Melat Kassa and Jori Kandra provided assistance with data gathering and analysis and preparation of tables and figures. John-Paul Ferguson provided computations of NLRB election data and advice on data matters and interpretation. We received helpful comments from Craig Becker, Jim Brudney, Alex Hertel-Fernandez, Dan Galvin, Mike Goldfield, Ellen Kurlansky, Celine McNicholas, Jake Rosenfeld, and John Schmitt.

About the authors

Lawrence Mishel is a distinguished fellow and former president of the Economic Policy Institute. He is the co-author of all 12 editions of The State of Working America. His articles have appeared in a variety of academic and nonacademic journals. His areas of research include labor economics, wage and income distribution, industrial relations, productivity growth, and the economics of education. He holds a Ph.D. in economics from the University of Wisconsin at Madison.

Lynn Rhinehart is a Senior Fellow at EPI, where she works on labor and employment policy, with a focus on collective bargaining.  She previously served as General Counsel of the AFL-CIO, a federation of 55 national and international labor organizations. While at the AFL-CIO, she was the executive director of the Lawyers Coordinating Committee (LCC). Rhinehart has authored publications on enforcement of federal workplace safety laws, the contingent workforce, and other topics. She earned a J.D. from Georgetown University Law Center and a B.A. from the University of Michigan.

Lane Windham is associate director of Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor and co-director of WILL Empower (Women Innovating Labor Leadership). She is author of Knocking on Labor’s Door: Union Organizing in the 1970s and the Roots of a New Economic Divide (UNC Press, 2017), winner of the 2018 David Montgomery Award.  Windham spent nearly 20 years working in the union movement, including as a union organizer. She earned an M.A. and Ph.D. in U.S. history from the University of Maryland and a B.A. from Duke University.

Appendix: Tracking organizing using NLRB election data

NLRB data, 1950–2009

Data on National Labor Relations Board elections are available in annual NLRB reports for each year from 1950 to 2009. The data include number of eligible voters and number of elections, and offer a comparable breakdown for elections only where workers chose collective bargaining. The data developed for this analysis build on the work of Windham (2017) and Goldfield and Bromsen (2013). The data differ in the years before 1964 from the data for the 1964–2009 years. In the latter period the data in NLRB tables directly presents data for “RC” representation cases (see below), which are what is employed in our analysis. The NLRB annual reports provide data for “collective bargaining” cases in the 1950–1963 period. According to the annual reports: “The term ‘collective-bargaining election’ is used to cover representation elections requested by a union or other candidate for employee representative or by the employer” and is the sum of “RC,” “RM,” and “R” cases. The 1952 NLRB annual report (p. 277) defines these different types of cases. RC cases are: “A petition by a labor organization or employees for certification of a representative for purposes of collective bargaining under section 9 (c) (1) (A) (i).” RM cases are: “A petition by employer for certification of a representative for purposes of collective bargaining under section 9 (c) (1) (B).” R cases are: “A petition for certification of a representative for purposes of collective bargaining with an employer under section 9 of the National Labor Relations Act, prior to amendment.” These are carryovers from pre-Taft-Hartley elections. The last R election was processed in 1951.

RM elections are just a small part of total collective bargaining (CB) cases, accounting for 2-3% of elections and eligible voters in most years, though RM cases were huge in 1950, accounting for 6% of elections but 32% of eligible voters (reflecting elections by the International Union of Electrical Workers (IUE) and United Electrical Workers of America (UE) represented bargaining units). So, CB cases are for the most part comparable to RC cases. The election data for the 1950–1963 years are based on the CB cases less the RM cases, which is simply the RC cases plus the R cases. These counts differ from a straight count of RC cases only in the 1950–1951 years. Thus, our data counts for all years except 1950–1951 are the same as those in Windham (2017), who tracks RC cases. The specific tables used for collective bargaining cases are Table 15 (1950), Tables 12A and 12B (1951), Table 10 (1952), and Tables 13 and 13A (1953–1963). The specific tables used for RM cases are Table 13 (1950), Table 10 (1951), Table 9 (1952), and Table 11 (1953–1964).

Voter and election counts in elections where workers chose collective bargaining are not available for RC cases in the 1950–1963 period but are available for all CB cases. Except for 1950 the “win rates” for CB cases are primarily the result of RC cases because the RM cases are a small fraction. So, for the 1950–1963 period we use the win rates (computed as the number of eligible voters and elections where workers chose collective bargaining as a share of all elections and eligible voters) for the CB cases and apply them to our counts of elections and eligible voters to obtain counts of eligible voters and elections in units choosing collective bargaining. That is, our computations assume that the win rate (per election or eligible voter) is the same in RC as in all CB elections. This is possibly problematic only in 1950, where RM cases are significant, including 32% of voters.

NLRB data, 2007–2017

John-Paul Ferguson of McGill University kindly provided tabulations of NLRB election data for the 2007–2017 period. The data are described in Ferguson (2018).

Scaling to employment

Because the scale of the number of NLRB elections and, especially, the number of eligible voters should be viewed relative to the size of the workforce, we scale the data using two measures of employment. The first employment measure (used in Figure B) is from the Current Population Survey household survey, the employment of wage-and-salary workers in the nonagricultural private sector (BLS series LNS12032189Q, tabulated as the average of the four quarters of each year). The second employment measure is from the establishment survey and is the number of private-sector production and nonsupervisory workers (roughly 82% of all workers). This is what Windham (2017) uses to scale the election data. For the years 1950–1963 we use the BLS series EEU00500003 and for 1964 and later years we use BLS series CEU0500000006.

We present the annual data scaled to both series in  Appendix Table A. The average for each decade are presented in Appendix Table B. Our findings are robust to the selection of the particular employment measure to scale eligible voter data.

Appendix Table A

Appendix Table B

Potential bias of NLRB data relative to all union organizing

There are three flows of new union members into private-sector unions that are not captured by NLRB statistics on private-sector union organizing. First, expanding union membership and new contracts in construction do not take place through NLRB elections. This has been the case the entire period under review, since 1951. So, our data do not reflect developments in construction.

Second, there are sectors in the private sector that are covered by the Railway Labor Act and not the NLRA; specifically, unionization in railroads and airlines takes place through elections overseen by the National Mediation Board (NMB). Annual reports of the National Mediation Board for the 1965–1980 period indicate that new unionization resulted in about 1,900 new member in the 1965–1971 period, falling to 1,540 new members each year in the 1972–1980 period, a 19% decline. We were also able to obtain election data from 2004 to 2011 and from 2013. In these later years there were 3,083 new members each year, though the average was particularly inflated by the 17,000 new members in 2013. Excluding 2013 the average number of new members obtained through NMB elections in the 2000–2011 period was 1,877. It does not appear that adding NMB elections to our analysis would materially change our results: the aggregate numbers are small and the NMB election trends also indicate a decline relative to employment.

Third, the most consequential omission from NLRB election data is the new membership obtained in card checks, frequently through voluntary recognitions, methods of organizing selected by unions to avoid NLRB procedures. Efforts to organize outside of the NLRB picked up in the mid-1990s. Therefore, organizing outside of the NLRB procedures has no bearing on our key results of the erosion of unionization that occurred between the late 1960s and late 1970s. How much does it change our assessment of new unionization since 1995? There is not much firm data on the scale of non-NLRB organizing. Schmitt and Zipperer (2009) identified three sources of data for the 1998–2003 period and found:

Since the data appear to be noisy and show no obvious trend, we take the average over all years of both sets of estimates and conclude that NLRB elections covered about 60 percent of potentially eligible private-sector workers over the period, leaving about 40 percent organized outside of the traditional NLRB-election procedures. We assumed that about 10 percent of workers had been organized outside these procedures in earlier years, and ended up with a scaling factor of 30 percent.

Brudney (2005) also provides an estimate of non-NLRB organizing in the 1998–2003 period, drawing on published information and correspondence from various union officials. Brudney (2005, page 11) notes the importance of non-NLRB organizing:

The Service Employees, Needle Trades Workers, Hotel and Restaurant Workers, and Autoworkers report that a plurality or majority of newly organized members have come in through contractual arrangements rather than traditional Labor Board supervised election campaigns. For these and other unions, neutrality plus card check account for more new recruits than NLRB election victories.

Brudney does not provide an estimate of the share of non-NLRB organizing as a share of all private-sector organizing.

The Schmitt and Zipperer calculations imply that actual combined organizing, inside and outside of NLRB process, was 66.7% (the 40% outside of NLRB relative to the 60% using NLRB) higher in the 1998–2003 period and that non-NLRB organizing raised organizing by 11.1% in earlier years. Adjusting our estimates accordingly to account for non-NLRB organizing shows the number of workers in successful union elections falling from 0.62% of employment (using all nonagriculture wage-and-salary employment as in Table 2) in the 1960s to just 0.11% of employment in the 2001–2009 period, just 17% as much. In contrast, our estimates presented in the paper show that new union members as a share of employment fell from 0.56% to 0.06%, a rate 12% as much. Including non-NLRB organizing does not alter the general picture of a drastic decline in new unionization over the last five decades.

Endnotes

i. Estlund (2002) and Brudney (2005) also detail the changes in legal interpretations and management practices that eroded the effectiveness of the NLRA in the absence of reforms to strengthen workers’ use of collective bargaining.

ii. This is detailed in two presentations: “What Is Needed to Achieve Density Goals in the Next Ten Years?” by Lawrence Mishel and John Schmitt at the AFL-CIO Commission on the Future of Work and Unions, December 17, 2018, and “Private Sector Union Density Dynamics, 1951–2017,” by Lawrence Mishel and John Schmitt at Columbia University, September 12, 2019. These analyses decomposed the changes in union coverage into that due to the inflows from organizing and the ongoing erosion of incumbent union representation, both of which accelerated in the 1970s.

iii. This is based on converting the nine years of available data (1970–1972 and 1973–1980) into a 10-year change (multiplying the nine-year change by 10/9). This simply assumes the 1972–1973 change is the average of what occurred in the other years of the 1970s.

iv. The Dunlop Commission Report (1994) reported a first contract rate of only 55.7% of unions between 1986 and 1993; Weiler (1984) shows a decline in first contract success rates from 86% to 63% from 1960 to 1980 (recent data from Ferguson 2008 cited by Liebman 2008).

v. The decomposition is based on the following relationship. The “share of workers with a new contract” equals the product of “share of workers in elections” times “union NLRB election win rates” times “first contract rate.” We simply take the natural log of each component in each time period and then subtract the earlier period (1966–1968) from the latter period (1978–1980) to obtain the changes. The percent contribution to the total change is obtained by dividing the change for that factor divided by the total change (share of workers with a new contract). All of the data for this calculation are provided in the table.

vi. The data for this period are based on computations of NLRB election data provided by Jean-Paul Ferguson of McGill University.

vii. Douglas Soutar, interview with Shelly Coppock, Litchfield, Ariz., November 16, 1990, transcripts #5843 OHT, NLRB Oral History Project II, Kheel Center for Labor Management Documentation & Archives, Catherwood Library, Cornell University, Ithaca, N.Y.

viii. Tabulations of the May surveys of the Current Population Survey from 1973 to 1980 for workers 16 or older and limited to those in the private sector.

ix. Hirsch, MacPherson, and Vroman (2001, p. 51) note: “the union membership question did not include the phrase ‘or employee association similar to a union.’ Absent any adjustment, union membership density in the CPS is measured as increasing from 22.4 percent in 1976 to 24.1 percent in 1977, despite the fact that membership was falling in years before and after 1977. BLS annual figures based on union financial reports, however, show a 0.4 -percentage point decline in union membership density between 1976 and 1977, from 24.5 percent to (coincidentally) the same 24.1 percent found in the CPS. Assuming that a time consistent CPS series would have fallen by 0.4 percentage points, a multiple of 1.094 is required to adjust upward pre-1977 figures to the post-1977 CPS definition including employee association members (that is, 1.094 times 22.4 percent equals 24.5 percent).”

x. NLRB annual reports, 1970-1980, Tables 2 and 4. See also Figure 1.

xi. 29 USC 151, “It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise.…”

xii. 29 USC 158(c).

xiii. 29 USC 158(b), 29 USC 157.

xiv. 29 USC 159(c)(1)(B).

xv. The other groups included a small group of politically active executives known as the March Group—founded by ALCOA and General Electric executives—and another employer organization, the Construction Users’ Anti-Inflation Roundtable (CUAIR).

xvi. Airporter Inn Hotel, 215 NLRB, 824 (1974); Stumpf Motor Co, 208 NLRB 431, 432 (1974); Birdsall Construction Company, 198 NLRB 163,163 (1972).

xvii. Clark Brothers, 70 NLRB 802 (1946). The decision read “[W]e must perform our function of protecting employees against that use of the employer’s economic power which is inherent in his ability to control their actions during working hours.”

xviii. NLRB v. Babcock & Wilcox, 351 U.S. 105 (1956).

xix. Following Babcock & Wilcox, the NLRB tried to develop an approach that recognized the importance of workplace communications to workers’ organizing rights, but the Supreme Court shut the NLRB down in its 1992 decision in Lechmere v. NLRB (Brudney 1996).

xx. The AFL-CIO estimated that 70% of employers held captive audience meetings in 1967; statement of William L. Kircher to the Special Labor Subcommittee to the House Education and Labor Committee on HR 11725, “A Bill to Amend the NLRA to Increase the Effectiveness of Remedies,” August 7, 1967, box 2, AFL-CIO ODR.

xxi. Textile Workers Union v. Darlington Mfg. Co., 380 U.S. 263 (1965).

xxii. Id., see also Estlund (1993) describing the inadequacy of current labor law in evaluating and addressing anti-union animus in investment decisions.

xxiii. Birdsall Construction Co, 198 NLRB 163, 163 (1972); Leggett and Pratt, Inc., 230 NLRB 463 (1977).

xxiv. NLRB annual reports, 1950-1990. For years 1954–1990, see Tables 2 and 4. For 1950, see Table 3A and Table 10. For 1952, see Tables 2 and 3.

xxv. Table 5, NLRB annual reports, 1950–1980. This chart is based on CA cases, charges of unfair labor practices against employers under section 8(a)1 of the NLRA. The union elections referenced in the chart are RC elections, those elections trigged by employees at a workplace who are trying to form a union.

xxvi. “Report on Union Buster (RUB)” sheet, September 1979, 8-9, box 11, Alan Kistler Papers, George Meany Memorial AFL-CIO Archive (GMMA). See also Wall Street Journal (1979).

xxvii. “Instructions for Use of the Block 30” sheet, Cannon Mills Supervisory Training Session, 1982, box 111, Acc 5619-017, Amalgamated Clothing and Textile Workers Union (ACTWU), Kheel Center for Labor-Management Documentation & Archives, Catherwood Library, Cornell University, Ithaca, N.Y.

xxviii. Boardwalk Regency Hotel, “Questions and Answer Fact Sheet,” September 1, 1980, master campaign file, box 6, The Papers of Earle K. Shawe, University of Virginia School of Law Special Collections, Arthur J. Morris Law Library, Charlottesville, Va.

xxix. “Guidelines for Supervisors and Managerial Employees During a Union Organizing Drive,” Brandeis University, January 12, 1976, folder 38, box 7, SEIU District 925 papers, Walter P. Reuther Library, Archives of Labor History and Urban Affairs, Wayne State University, Detroit, Mich. (hereafter WPR).

xxx. Speech by E.D. Smith, GA, Goldsboro, N.C., November 8, 1979, file 19, box 8, Alan Kistler Papers, GMMA.

xxxi. “Cannon Employee Questions Answered by Mr. Murdock,” n.d., 5619-017, box 111, Amalgamated Clothing and Textile Workers Papers, Kheel Center for Labor-Management Documentation and Archives, Catherwood Library, Cornell University, Ithaca, N.Y.

xxxii. Alan Kistler speech to secretary-treasurers meeting, St. Louis, Mo., March 1983, box 2, Alan Kistler Papers, GMMA. The survey was among units with over 100 employees.

xxxiii. “Decertification Activity,” n.d., c 1982, folder 10, box 4, Alan Kistler Papers, GMMA.

xxxiv. AFL-CIO News Release, May 4, 1978, box 85, series 6, Office of the President, George Meany files, GMMA.

xxxv. Douglas A. Fraser to Labor-Management Group Members, July 17, 1978, file: Labor O/A, box 231, Eizenstat papers, Domestic Policy Staff, Jimmy Carter Presidential Library & Museum, Atlanta, Ga.

xxxvi. Statement of Charles McDonald to the Labor and Management Subcommittee of the House Education and Labor Committee oversight hearings on the Landrum-Griffin Act, Labor Management Consultants, February 7, 1984, folder 2, box 2, Alan Kistler Papers, GMMA.

xxxvii. Doreen Levasseur interview by Ann Froines, February 23, 2005, Braintree, Mass., SEIU District 925 Legacy Project, oral history transcripts, WPR.

xxxviii. 29 USC 164(b).

xxxix. 29 USC 160(l).

xl. Authors’ analysis of data from NLRB annual reports, found at www.nlrb.gov.

xli. This shift has been quantified by scholarly research. Between 1940 and1969, the Supreme Court ruled in favor of the unions’ position nearly 80% of the time. After 1970, that percentage has dropped to only 50% (Brudney 1996, 1572-73).

xlii. Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203 (1964).

xliii. First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981).

xliv. NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333 (1938).

xlv. Id. at 176-77.

xlvi. Alan R.Gold, “Maine Paper Mill Workers End Bitter 16-Month Strike,” New York Times, October 11, 1988, https://www.nytimes.com/1988/10/11/us/maine-paper-mill-workers-end-bitter-16-month-strike.html.

xlvii. Id.

xlviii. McCartin’s documentation notes: M. H. LeRoy, “Regulating Employer Use of Permanent Striker Replacements: Empirical Analysis of NLRA and RLA Strikes 1935–1991,” Berkeley Journal of Employment and Labor Law 16 (1995): 169–207. Calculations on the frequency of striker replacement usage are based on the data in LeRoy’s appendix and Bureau of Labor Statistics data on work stoppages.

xlix. President Clinton issued an executive order to prohibit federal contractors from hiring permanent replacements in 1995, and it was challenged by the Chamber of Commerce and struck down by the D.C. Circuit as preempted by the NLRA; Chamber of Commerce v. Reich, 74 F.3d 1322 (D.C. Cir. 1996).

l. 380 U.S. 300 (1965).

li. Bloomberg Law’s Work Stoppages database covers strikes, lockouts, sickouts, and other instances of labor unrest of all sizes. Bloomberg Law researchers glean the information daily from published resources, including news sources, union publications, and government reports.

lii. Data on lockouts and strikes kindly provided by BNA’s Robert Coombs.

liii. H.K. Porter Co. v. NLRB, 397 U.S. 99 (1970).

liv. Ex-Cell-O, 185 NLRB 107 (1970), aff’d in relevant part, 449 F.2d 1058 (D.C. Cir).

lv. 465 U.S. 513 (1984).

lvi. “Oral Testimony of James Campbell Little: ACB Field Hearing Before the ABI Commission to Study the Reform of Chapter 11, at 35, Mar. 14, 2013 (ASM Transcript).

lvii. The analysis starts in 1977 because that is when the CPS data provided by Hirsch and MacPherson at www.unionstats.com begins having data on union coverage and not just membership.

lviii. The data for “1979” is the average of 1978–1980 to account for the volatility of the data due to relying on data from just one month’s CPS, the May CPS in those years. We multiply the change in manufacturing employment share by the average union coverage rate for the 1978–2019 period (18.8%) to obtain the 3.3 percentage point impact.

lix. The 1983 and 2019 data are from Hirsch and MacPherson (2020) tabulations of CPS data. The 1979 data are tabulations of the pooled May CPS surveys for 1978–1980. This allows us to gauge the sharp union coverage declines in 1979–1983. Communications in 2019 from aggregate of: radio and television and cable; internet publishing and broadcasting; wired telecommunications; and other communications. Hotels in 1983 are matched to traveler accommodations in 2019.

lx. These were chosen from among those detailed industries that had the same names in both 1983 and 2019.

lxi. John Schmitt suggested this approach.

lxii. We do so for “1979,” the pooled May CPS surveys of 1978–1980, and for 2019 (CPS-ORG data). The dependent variable is union coverage and the explanatory variables (mostly dummy variables) are gender (and marital status); occupation (22 categories); race/ethnicity; education (five categories); age (six categories); state (50 plus D.C.); and industry (12 categories). The sample is private-sector wage-and-salary workers.

lxiii. Means of the dependent variables, union coverage, in the regressions for 1979 and 2019.

lxiv. This method is a traditional Oaxaca decomposition.

lxv. In other words, changes in the coefficients in the separate regressions for 1979 and 2019.

lxvi. Specifically, the decomposition examines: (1) the changes in the coefficients between the 1979 and 2019 regressions evaluated at the mean of the variables in 2019; and (2) the changes in the mean of the variables between 1979 and 2019 evaluated with the coefficients of each factor in 1979.

lxvii. Specifically, we start with the regression results for each year. The mean of union coverage is the sum of each variable’s coefficient times the mean of that variable. We then substitute the means of the industrial sector dummy variable for the alternative year (i.e., the 2019 means plugged into the 1979 regression, keeping the coefficients for 1979 and the mean of variables for factors other than industry employment at their 1979 means). This gives us our counterfactual estimate for that year.

lxviii. As noted in Schmitt and Mitukiewicz (2012), “Acemoglu et al. (2001), for example, argue that skill-biased technical change (SBTC) is ‘at the root of deunionisation.’ SBTC ‘undermines the coalition between skilled and unskilled workers underlying unions’ by increasing the relative competitive-market pay of skilled workers, which ‘weakens their incentives to join the unionised sector’ (p. 231).”

lxix. The strength of Autor et al. is that in their identification strategy (how to isolate “causality”) they “use industry-level Chinese exports to other OECD countries as an instrument for industry-level exports from China to the U.S.”

lxx. “We estimate that exposure to import competition induced a 2 percentage point decline in union density within manufacturing, roughly one-sixth of the observed decline between 1990 and 2014.”

lxxi. “Multivariate decompositions analysis based on probit regressions including control for sex (female), age groups, education, migrant workers, job tenure, type of contract (part-time), contract duration (temporary jobs), occupation, industry, quintiles of the hourly earnings, sector (public sector) and firm size” (Annex Table 2.C.2.). For the United States there is no control for firm size or contract duration.

lxxii. Data drawn from Annex Table 2.B.3., Annex Table 2.C.2., and Annex Table 2.C.1.

lxxiii. The question asked was, “If an election were held today to decide whether employees like you should be represented by a union, would you vote for the union or against the union?”

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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.

Results from an original, nationally representative survey of over 1,200 employed U.S. workers from the pre-Covid period reveals several important facts about civic engagement in the workplace:

• In an era of intense political polarization and division, the workplace remains an important site for workers to interact with others who do not necessarily share their own political stands. Most workers do not pick their workplace on the basis of the political views of coworkers or managers, and over 60% of workers work alongside coworkers who do not share their political affiliations.
• The workplace additionally remains an important site for workers to learn and practice civically relevant skills (like working with others on teams or public speaking), to engage in political discussions, and to receive requests for political participation. Indeed, the workplace offers the most common social network for political discussions after friends and family members. Just as importantly, the workplace is also more egalitarian in its civic opportunities, with smaller inequalities across income and education than in other areas of life.
• Yet not all workers enjoy these civic benefits of the workplace, and nonunionized workers and workers who report lower levels of bargaining power relative to their managers are less likely to say that they have opportunities for political skill-building, political discussions, and civic engagement at their jobs.
• For instance, 58% of union members say that they have been engaged in politics at work by coworkers—for example, by having a coworker ask them to support a political cause, candidate or campaign; remind them to vote; or inform them about a new political issue—compared with just 36% of nonunion workers.

In another example, 28% of workers who say that they could find a comparable job to the one they currently hold report discussing politics or political issues with coworkers at least once a week, compared with only 16% of workers who said it would be very difficult to find a new comparable position.

This paper also considers whether workers who have lost economic standing in the workplace have found alternative sites for political discussions outside of their jobs. The findings suggest that the answer is no. In fact, union members and workers with greater labor market power were more likely to say that they had political discussions outside of work than were nonunion workers or less economically secure workers. This suggests that the loss of workplace political engagement has not been offset by greater political engagement elsewhere in workers’ lives—and if anything, erosion of worker power may have knock-on effects for political engagement outside of the workplace.

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.

Although these findings come from a pre-Covid-19 survey, they shed important light on the potential consequences of the crisis. This analysis suggests that the crisis will likely undermine civic opportunities in the workplace, especially for already marginalized workers, including low-wage workers, those with less formal education, and racial and ethnic minorities. The implication for policymakers is that a sustained response to manage the pandemic and support the labor market is justified on civic grounds, in addition to health and economic ones.

In addition, the results presented in this brief suggest that policymakers should be prioritizing Covid-19 responses that make it easier for workers to form and join labor organizations. As we will see, across outcomes, union members are consistently more likely to build and use civic skills in the workplace than are nonunion workers—and the union difference tends to be largest for workers with lower levels of formal education, helping to equalize civic skills across the workforce. A Covid-19 response that centers on labor organizing could thus help rebuild workers’ economic and civic standing.

Introduction

As millions of Americans found themselves out of work or working remotely from home for extended periods during the Covid-19 pandemic, the sudden break from normal employment routines underscored just how central work is in our society. Work provides the primary economic support for most Americans, with wages and salaries accounting for three-quarters of middle-class incomes (Mishel et al. 2012, chapter 2). In the distinctively American welfare state, employment also represents most families’ primary source of health and retirement security (Hacker 2002; Klein 2006). And, on a deeper level, work structures the rhythms, meaning, and connections present in our daily lives. Employed Americans regularly spend most of their waking hours outside of their homes at their jobs.1 Half of all workers say they draw a strong sense of identity and meaning from their jobs.2 And about three-quarters of workers report that they have at least one close friend from work.3 It is hard to think of another place in which we spend as much time, on which we rely for economic well-being, in which we derive self-meaning, and through which we are exposed to as many diverse individuals.

For all these reasons, it should come as no surprise that past research has documented a strong connection between workers’ civic lives and their jobs, describing the workplace as a “training ground for pro-democratic attitudes and political behaviors” (Budd, Lamare, and Timming 2018; see also Dahl 1986; Greenberg 1986; Greenberg, Grunberg, and Daniel 1996; Kitschelt and Rehm 2014; Pateman 1970). On a basic level, work provides financial resources individuals need to participate in many political acts (Verba, Schlozman, and Brady 1995). But beyond money, the skills that workers use at their jobs may also make it easier to participate in civic action in a variety of ways. Learning how to work in teams, manage others, speak publicly, interact with diverse individuals, and fundraise are all job-related skills that workers can use off the clock in political organizations or campaigns (Verba, Schlozman, and Brady 1995, especially chapters 10, 11, and 13). And more fundamentally, when workers exercise voice and input on the job, scholars argue, workers should gain a greater interest in doing so outside of the workplace in politics (see especially Greenberg 1986). Recognizing and challenging hierarchies of power in the workplace, for instance, might lead workers to do so outside of their jobs.

It is not just individual participation that might change through work. While on the job, many individuals also have an opportunity to meet a politically diverse network of coworkers (Conover, Searing, and Crewe 2002; Estlund 2003; Mondak and Mutz 2001; Mutz and Mondak 2006). That opportunity arises because unlike other places where we spend time—like churches or clubs—most workers do not choose where they work or with whom they work on the basis of political views (Estlund 2003; Hertel-Fernandez 2018). As a result, work offers a unique setting in which Americans can build ties to individuals with differing political outlooks and in the process build an understanding of—and tolerance to—opposing political views (Mutz and Mondak 2006; on labor views see Lyon 2018). Workplace political discussions can also move individuals to action outside of the job, as they learn about new issues, causes, or campaigns (Abrams, Iversen, and Soskice 2010; but see Adman 2008).

Lastly, work can be the site of political mobilization and recruitment by civic organizations situated around the workplace (Verba, Schlozman, and Brady 1995). Historically, these organizations have been part of the labor movement—like trade unions or worker centers (e.g. Fine 2006; Galvin 2019; Lichtenstein 2002). While they are often primarily focused on raising wages, benefits, and working standards, labor organizations also offer paths into politics for their members, conveying information about elections and issues and encouraging members to volunteer for campaigns, turn out to vote, contact elected officials, and even run for office (e.g. Bucci 2019; Feigenbaum, Hertel-Fernandez, and Williamson 2019; Kerrissey and Schofer 2013; Leighley and Nagler 2007; Rosenfeld 2014; Schlozman, Verba, and Brady 2012; Verba, Schlozman, and Brady 1995). On a deeper level, unions facilitate political action, both by serving as “schools of democracy,” where their members learn civic skills that they can apply in politics, and by changing the ways that members perceive their political and economic interests. These changes can include shaping how workers think about specific policies but also engendering a broader sense of community and solidarity (e.g. Ahlquist and Levi 2013; Frymer and Grumbach 2020; Hertel-Fernandez 2020a; Kim and Margalit 2017; Macdonald 2019; Mosimann and Pontusson 2017).

This much is known about politics in the workplace. But what is less well-known is how changes in the workplace have altered the political opportunities workers encounter on the job—and what that means for worker political voice more generally (Hertel-Fernandez 2020b). Many of the studies cited above draw on data from several decades ago. The ensuing years have seen a massive shift in the balance of market power between workers and employers driven by the erosion of policies and institutions that check employer behavior and boost the economic power of workers (Hacker and Pierson 2010; Stansbury and Summers 2020; Thelen 2015, 2019; Weil 2014).

As spelled out in more detail below, there are good reasons to think that these changes have eroded the political promise of the workplace—especially for Americans working in rank-and-file jobs. This paper begins to test that hypothesis, using an original survey fielded in November 2019 of 1,212 employed U.S. workers to study the connection between labor market developments and political skills, discussion, and mobilization on the job. More specifically, I focus on two components of changing power in the workplace: union membership and worker bargaining power relative to employers. I document how both factors are intimately linked to workers’ participation in politically relevant discussions, abilities to build politically relevant skills, and opportunities to engage in political mobilization of their coworkers.

These shifts in workplace power matter in different ways for workers’ political opportunities. I find that labor unions shape all three forms of workplace political voice that I study: Union members are more likely to report using politically relevant skills on the job, to say that they discuss politics with their coworkers, and to say that they have more political interactions with coworkers. Worker labor market power, on the other hand, mattered most for the political skills as well as the frequency of workplace political discussions—but not so much for political mobilization between coworkers.

I also consider whether workers who have lost economic standing in the workplace are finding alternative sites for political discussions outside of their jobs. I find that the answer is a resounding no. Nonunion workers and workers with less labor market power are no more likely to report alternative sources of political discussion beyond work. In fact, union members and workers with greater labor market power were more likely to say that they had political discussions outside of work than were nonunion workers or more insecure workers. This suggests that the loss of workplace political engagement has not been offset by greater political engagement elsewhere in workers’ lives—and, if anything, the erosion of worker power may have knock-on effects for political engagement outside of the workplace.

While far from the last word on these questions, my findings 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 broader society, corroding opportunities for political skill building and participation for millions of American workers—disproportionately workers with less formal education and lower incomes who have fewer chances to engage in politics outside of the workplace (Schlozman, Verba, and Brady 2012). Without other places to build these civic skills, have 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 (Bartels 2008; Gilens 2012; Gilens and Page 2014; Hacker and Pierson 2010; Jacobs and Skocpol 2005).

This paper proceeds as follows. First, I describe the Workplace Political Participation Study, the survey I designed to study these questions in fall 2019. The following section uses results from that study to map out the contemporary landscape of political views and participation in the workplace, documenting that work still remains a site of political diversity and interaction for many workers, especially for workers with lower levels of formal education and lower incomes. Having laid out these descriptive facts, I then show how changes in economic power relate to workplace political skills, discussion, and mobilization. The final section concludes by summarizing the implications of this analysis for understanding the civic consequences of the Covid-19 crisis and the labor market policy responses that government ought to pursue.

The 2019 Workplace Political Participation Study

To provide an updated picture of political engagement at work, I designed and commissioned an original nationally representative survey of non-self-employed U.S. workers. The 2019 Workplace Political Participation Study (WPPS), conducted in November 2019 by YouGov Blue, consisted of 1,212 interviews from YouGov Blue’s internet panel selected to be representative of the adult general population and weighted according to gender, age, race, education, region, and past presidential vote (or nonvote) based on the American Community Study and the Current Population Survey Registration and Voting Supplement. The sample was then subsetted to look only at respondents who reported they were employed by someone else (i.e., not self-employed). The margin of error for the full sample is plus or minus 3.1%. All results presented below apply survey weights.

Despite the strengths of this survey—especially the fact that it targets an employed sample of interest and includes extensive items on workplace political participation—there are some important limits. First, the survey was administered in English, meaning that it does not reflect the experiences of non-English-speaking workers and especially immigrants. This is an important population, but one that I cannot study with the current sample. Second, the survey is a snapshot of workplace relations and political participation. Although I am fundamentally interested in trends in civic engagement, worker economic power, and union membership, this analysis can speak only to variation at the moment of the survey. Lastly, the survey was conducted before the Covid-19 pandemic, meaning that it does not reflect the current labor market. That said, there are important lessons we can learn from a pre-Covid study of workplace power and civic participation, lessons that offer predictions of how the crisis might change the picture of political interest and participation I describe below. The final section explores these predictions in greater detail.

The current political landscape in U.S. workplaces

Despite rising levels of political polarization—including increasing political “teamsmanship”—most workers do not choose their workplace on the basis of the political views of their coworkers or employer (but see Mason 2018). As a result, the vast majority of American workers are in workplaces where they regularly encounter coworkers and managers with different political beliefs from their own. What is more, the workplace remains a site where many workers from diverse backgrounds can build politically relevant skills, engage in political discussions, and learn about opportunities for political participation.

Political diversity at work

Many observers have bemoaned the perception that political life is becoming more insular—with partisans retreating into their own media bubbles, neighborhoods, stores, restaurants, and schools (e.g. Bishop 2008; Hetherington and Weiler 2018). Has the workplace followed suit as others have speculated (Chatterji and Toffel 2019; McConnell et al. 2018)? Several WPPS items probed the extent to which workers are sorting into their jobs on the basis of politics. The first asked workers, “How much of a consideration were the political views and positions of your employer or your coworkers when you were choosing where to work?” Options included “very important,” “important,” “slightly important,” and “not at all important.”

Over half of workers said that the political views of their coworkers and employer were “not at all important” as they were considering where to work: 56% for employers and 59% for coworkers. Twenty-two percent of workers said that their employers’ views were slightly important, and 21% said the same about coworkers; 22% said that employers’ views were very important or important, and 19% said the same about coworkers (Figure A) Union members and workers who reported following politics more closely were both more likely to say that coworker and employer politics were important to them, but even these differences were not very large. The lesson from this survey item is that, for most American workers, politics does not feature prominently in why they might choose a particular workplace.

Figure A

Past research has indicated that this kind of involuntary association means that workers may be exposed to more individuals who might disagree with their political views (see especially Lyon 2018; Mondak and Mutz 2001; Mutz and Mondak 2006). To verify that this past finding still holds in our current era of polarization, I first asked workers if they were able to discern the political views of most of their coworkers or of their senior managers and supervisors. Thirty-eight percent of workers said that they did not know the views of most of their coworkers, and a higher share, 49%, said that they did not know the views of most of their senior managers and supervisors. (More highly educated workers and those in labor unions reported that they were more likely to know the views of both managers and coworkers.) These reports indicate that most workers have a good sense of how their coworkers think about politics and, while knowledge about senior managers’ views are less common, about half of all workers still have a sense of how the executives and supervisors in their organization might vote.

Of course, perceptions might not reflect reality. Workers could be incorrectly guessing the views of their coworkers and managers (on demographic misperceptions of who belongs to political parties, see e.g. Ahler and Sood 2018). Still, I am generally optimistic that workers will be mostly accurate in their estimates. First, past research has documented that individuals within specific companies and organizations tend to be accurate judges of their coworkers’ and managers’ political views (Hertel-Fernandez 2018; Mondak and Mutz 2001). Second, in the 2019 WPPS survey I found reassuringly that workers who reported more frequent discussions with their coworkers were more likely to say that they knew the views of those coworkers (Figure B). Also reassuring is that workers who reported longer tenures at their employer were substantially more likely to report knowing coworker and manager political views.4 This suggests that workers’ perceptions of the political leanings of their coworkers are rooted in reality. And lastly, political scientists have found that demographic characteristics and social activities—like church attendance, race, ethnicity, and education—are becoming increasingly predictive of partisanship, making it easier to potentially judge a coworker’s (or manager’s) partisanship even without extensive conversation (e.g. Mason 2018).

Figure B

Having established worker perceptions of the political views of their coworkers and managers, I next asked what those views were: “Would you say that they lean towards the views of Democrats, Republicans, or something else?” Responses included “mostly lean towards the views of Democrats,” “evenly divided between the views of Democrats and Republicans,” “mostly lean towards the views of Republicans,” and “don’t lean towards either Democrats or Republicans.” Thirty-eight percent of workers said that their coworkers were mostly Democrats, 28% thought that their workplace was evenly divided, another 28% thought that their coworkers leaned Republican, and 6% reported something else. By comparison, views about senior managers tilted Republican: 40% of workers reported that their senior managers leaned Republican, compared with 30% Democratic, 24% evenly divided, and 6% something else.

Using the responses to this item, I coded whether respondents worked in workplaces where their own partisan identification aligned with the majority of their coworkers and senior managers and supervisors. For instance, this measure captures whether a Democratic worker reported that most of his or her coworkers or managers and supervisors were also Democratic.

Far from the “big sort” of American life along partisan lines, feared by some, the workplace is still very politically diverse: Only 37% of workers reported being in a job where their partisanship lined up with a majority of their coworkers or managers, meaning that over 60% of workers are employed in jobs where they work alongside many individuals who do not share their partisan views. Political alignment is higher for Democrats and Republicans as compared with independents or third-party supporters (since there are very few workplaces where independents, third-party adherents, or nonadherents constitute a majority), but even so about half of partisans report being at a job where their party is not in the majority. What is more, nontrivial shares of workers report being in workplaces where they are in the political minority: 15% of Democrats and 18% of Republicans when looking at coworkers, and 30% of Democrats and 19% of Republicans when looking at senior managers and supervisors. Table 1 summarizes the distribution of workers by the political views of their coworkers.

Table 1

For the most part, there was not much variation across workers in whether they were in the partisan majority of coworkers at their jobs. Rather strikingly, the item asking whether workers chose their job based on the political views of their coworkers was only a modest predictor of workers’ alignment with coworker partisanship. So even though workers may say that they prefer a job working alongside Democrats or Republicans, they do not appear to have much control in practice.

The top panel of Figure C illustrates this relationship, showing the percentage of workers reporting partisan alignment with their coworkers depending on their responses to the item asking whether workers chose a job based on the views of their coworkers. The relationship is mostly flat, except for the workers who said that the political views of their coworkers were “very important.” Even among that group, however, over half still said that they were not in the partisan majority among their colleagues. The same is mostly true for workers’ choice of employers as well, graphed in the bottom panel of Figure C. Workers who said that they had the strongest preferences about their employers’ political views were more likely to report alignment, but the relationship is weak and inconsistent across the response categories.

Figure C

The 2019 WPPS indicates that we have strong reasons to think of the workplace as a site that continues to offer cross-cutting partisan exposure. Even when Americans would prefer otherwise, they tend to be working alongside coworkers and managers who do not share their political views and outlooks, underscoring the importance of the workplace as a site for “involuntary association” with a politically diverse set of individuals.

Use of politically relevant skills on the job

Past scholars have noted that the skills workers develop and use on the job, like talking to new people or running meetings, might be relevant for later civic action (see especially Verba, Schlozman, and Brady 1995). Drawing on this past work, I used the 2019 WPPS to probe how many workers regularly make use of skills that might translate into political activities. Because there are any number of skills that could be applicable in politics or civic action, I focus on those most relevant to organizational or associational involvements, as these offer some of the surest ways of developing political power, voice, and representation in American government (e.g. Hacker and Pierson 2010; Han 2014; Skocpol and Tervo 2020).

The 2019 WPPS asked respondents, “How often does your job require you to do the following?” and options included “at least once a week,” “a few times a month,” “a few times per year or less,” or “never.” The skills included “working closely with others on a team,” “public speaking,” “organizing and running meetings,” “convincing others of an argument,” “managing a team,” “delegating tasks or activities to others,” and “fundraising or asking people for money.” I make no claim that these are the only skills relevant for forming, running, and participating in political organizations (e.g. Andrews et al. 2010; Han 2014). Instead, they should be seen as a starting point for thinking about the translation of work skills into civic organizations.

Table 2 summarizes the responses to this question.5 There is wide variation both in the likelihood workers reported using any of these politically relevant skills and also in the frequency with which they reported using these skills. Most workers (nearly 90%) reported working closely with others on a team, indicating that this is how work is organized across many different industries and occupations. A large majority (nearly 70%) also reported some leadership activities, like delegating tasks or activities to others. Notably, this was true even for workers who said that they were not technically supervisors or managers; about half of rank-and-file workers reported that they still delegated tasks to others. About half of workers reported any experience with the next cluster of activities: managing a team, convincing others of an argument, and public speaking. The last activity—fundraising or asking people for money—is a mainstay of many civic and membership organizations, yet only about a quarter of workers said that they had experience doing this as part of their jobs.

Table 2

Looking at the use of political skills across education, I find that workers with less formal education (especially a high school degree or less) are less likely than college-educated workers to report using all of these skills, but especially public speaking (Figure D). The smallest gap across educational degrees was for fundraising. Nevertheless, large percentages of workers with high school diplomas or less still reported using many of these skills: Nearly 80% of these workers said that they worked closely with others on a team, nearly 40% said that they organized and ran meetings or managed a team, and about half said that they delegated tasks to others.

Figure D

Looking across income I found patterns similar to those across education: Higher-income workers were more likely to report using all of these skills, but even the lowest-income workers in the survey (with family incomes below $30,000) reported that they used many of these skills at least some of the time: About half had experience delegating tasks or activities to others, nearly 40% had experience managing a team, and nearly a third had experience with public speaking.

While I did not observe large racial or ethnic gaps in the use of political skills at work, there was a substantial gender gap, consistent with past research documenting persistent differences by gender in opportunities for careers that have knock-on effects for politics (e.g. Burns, Schlozman, and Verba 2001). Women were less likely to report all of these job skills with the exception of fundraising. The gap was especially large for managing teams (56% of women reported never doing this compared with 39% of men) or delegating tasks and activities to others (41% of women reported never doing this compared with 28% of men), consistent with gender differences in opportunities for managerial experience (Thomas et al. 2019). Even so, as with gaps by education and income, most women still reported using many of these politically relevant skills at their jobs.

Workplace political discussions

Apart from politically relevant skills, past research indicates that the workplace is an important site of political discussion—conversations about news, elections, and issues that can provide information, lend new perspectives, and motivate later action. How important is the workplace as a site for such conversations compared with other potential places in Americans’ lives? To tap into this question, the WPPS provided respondents the following prompt: “How often do you discuss politics, elections, or other political issues with individuals from the following parts of your life?” The options included “not applicable,” “never,” “a few times per year or less,” “a few times per month,” and “at least once a week.” The social networks included the workplace, family, friends, classmates, church or religious institution attendees, neighbors, union members, or members of civic or community groups (not unions). Table 3 summarizes the results of this item, and reveals several important facts.

Table 3

First, a significant proportion of American workers—about a fifth—said that they never discussed politics with people from school, church, the neighborhood, or unions or civic groups or did so only a few times per year or less. Moreover, across all categories, well over half of workers in all cases (and sometimes much more) said that they were not having political conversations at least weekly. This is an important reminder that politics is not as central in most Americans’ lives as it is for many political advocates or observers (see e.g. Carpini and Keeter 1996). Second, family and friends emerge as the most frequent partners in political discussion (Conover, Searing, and Crewe 2002). Not only did most workers (around 80% in both cases) report that they had at least some political discussions with these groups, they tended to do so more often than with any other group listed on the survey. But apart from family and friends, people from work appeared as very important political conversation partners, far more than any other group for this national sample of workers. About a fifth of workers reported having political discussions with coworkers at least weekly, and another fifth reported having such discussions a few times per month. This item underscores that the workplace remains a very important place for seeding politically oriented conversations. (Indeed, this item may understate the importance of the workplace to the extent that people are meeting friends at their jobs and reporting those conversations under the “friends” category instead of work.)

Looking across levels of education, I identify very large gradients in the frequency and intensity of political discussions between workers with at least a college degree and those with only a high school degree or less. In all, nearly 40% of workers with a high school degree or less said that they either never had political discussions or only did so a few times per year or less, compared with just 16% of workers with at least a college degree. These educational differences were largest for political discussions among friends and families: Among those with a bachelor’s degree or more, 43% said that they had political discussions with their family at least once a week, while only 30% of workers with a high school degree or less said the same (Figure E). While there was an education gap for workplace-based political discussion, it was much smaller than those we saw for discussions between friends and family members: 22% of college-educated workers said that they had weekly political discussions with coworkers compared with 18% of workers with a high school degree or less.

Figure E

Differences across workers by family incomes were sharper than those by education. About 60% of workers with incomes below $30,000 said that they never had political discussions at work compared with about 25% of workers making $150,000 or more. Nevertheless, about a quarter of workers with incomes below $30,000 still said that they discussed politics at work at least monthly, and even for these low-income workers the workplace was the most common site of political discussions after friends and families.

Racial and ethnic differences in political discussions were not so straightforward. While white workers were more likely than Black or Hispanic workers to report political discussions with friends and family, there was barely any gap in the frequency of political conversations at work across racial or ethnic lines. And looking at the other sites of political discussion, I found that Black workers were substantially more likely than white workers to have political conversations with classmates, fellow churchgoers, union members, and community group members. (Hispanic workers fell somewhere in between white and Black workers.)

As with the previous item on politically relevant skills, I found gender differences in workplace political discussion as well: Women were both less likely to report having any political discussions with coworkers and, when they did report discussions, those conversations tended to happen less frequently then for their male counterparts. Nearly half of female workers said that they did not have any political discussions with their coworkers, compared with around a third of men. And while 23% of men reported weekly political discussions at work, only 16% of women reported the same.

Opportunities for political action at work

The final aspect of the workplace I consider are opportunities for political participation that workers might receive from their coworkers, which the literature suggests play an important role moving Americans into civic action (Rosenstone and Hansen 1993; Verba, Schlozman, and Brady 1995). To measure the prevalence of such opportunities, I asked respondents to the WPPS to indicate whether they had ever received a series of political requests from their coworkers. Table 4 summarizes the responses to the item, which asked respondents, “Thinking about your coworkers at your main job, have any of the following things ever happened to you? Please select all that apply.” The list included five political actions, ranging from those related to elections (like registering to vote) to how people think about politics, including discussing new issues or changing one’s mind about existing issues.

Table 4

In all, nearly two-fifths of workers said that they had ever had political interactions with their coworkers. The most common of these interactions included learning about new political issues, indicating that the workplace can be an important way that people find new politically relevant information. Less common were political requests around elections (at 15%); support for particular candidates, campaigns, or issues (at 12%); and changing one’s mind about an issue or attending a political meeting or event (both at 9%). The battery also included two nonpolitical coworker requests to better understand just how frequently coworkers had any interactions with one another involving causes or issues outside work. These two nonpolitical items included requests to attend a nonpolitical event (at 24%) and volunteer requests for a civic organization or charity (11%). Requests to support civic organizations and charities were roughly as common in workplaces as appeals to support political candidates, campaigns, or issues. (Of course, there may be overlap in these categories, as different respondents may have varying definitions of what counts as a charity, civic organization, or political campaign.) Invitations to attend nonpolitical events were even more common than requests to attend political ones.

The WPPS indicates that workplaces with more nonpolitical participation also tend to be those where coworkers receive more political requests and information from coworkers, too. Workers who said that they had been asked to attend nonpolitical events and volunteer for civic organizations or charities were more than two-and-a-half times more likely to say that they had also received at least one political request from their coworkers. This suggests that some workplaces are simply more oriented toward sharing information and invitations to outside events and organizations than others.

As with the past two types of workplace political items, there was also a sharp educational gradient to coworker political opportunities, with workers with higher levels of formal education more likely to report all forms of coworker political interactions (Table 5). Even so, nearly a third (30%) of workers with a high school degree or less reported at least one political interaction with their coworkers, compared with 44% of workers with at least a college degree. Not all political actions were divided along degree lines, however. Workers with a bachelor’s degree or more were substantially more likely to report being asked to attend political events and meetings. But there were only small differences by education in whether workers reported learning about new political issues from their coworkers (19% for workers with a high school diploma or less versus 25% for workers with a bachelor’s or more) and changing one’s mind about an issue after talking with a coworker (7% for workers with a high school degree or less compared with 11% for workers with a bachelor’s or more).

Table 5

Changes in employer power—and consequences for worker political voice

Having laid out the landscape of civic engagement in the workplace, I next probe how two changes to the workplace may have shifted the economic power employers have relative to workers and their corresponding consequences for workplace political participation. Using the WPPS, I capture these changes in the following ways, recognizing that while I am studying long-term developments in the labor market, the WPPS survey data are available only for a single, pre-Covid-19 snapshot in time in fall 2019.

Decline of labor unions

I measure this change with a binary indicator for whether WPPS respondents reported that they were in a labor union. A little over 10% of workers reported union membership in the survey. Union membership rates were highest in education and public administration in the public sector and in mining, oil and gas extraction, utilities, and trade and transportation in the private sector. I expect that the decline of labor unions—a key driver of declining worker power in the workplace—will remove a crucial source of political information, socialization, and mobilization for workers. With unions disappearing from the labor force, we should thus expect lower levels of political engagement, discussion, and participation among workers. That includes engagement around elections as well as in the policy process.

Beyond their direct effects, I anticipate unions will also matter indirectly for workers’ civic engagement by boosting workers’ economic standing relative to their managers and providing more opportunities for workers to shape the terms of their working conditions (Freeman and Medoff 1984). The past literature on workplace democracy strongly suggests that workers who have greater control and voice over their jobs are more likely to carry that participation into other areas of their lives, including politics, because their experience on the job boosts their sense of self-efficacy, their politically relevant skills, and their interest and expectations in civic participation (see e.g. Greenberg 1986; Greenberg, Grunberg, and Daniel 1996). As workers have fewer options for such input and participation as unionization declines, I expect worker political participation to fall. Yet another mechanism might flow through workers’ sense of security: Past research has underscored that perceptions of economic risk and insecurity are materially and cognitively demobilizing, leading individuals to become less involved in politics (see e.g. Levine 2015; Ojeda 2018).6

Employer and worker labor market power

Important as deunionization has been, I also focus on another, related dimension of declining worker power: the labor market power that workers have relative to their employers. This factor is intended to capture the net result of the changes in labor market policies, institutions, and conditions that may have advantaged employers over workers (see e.g. Bivens and Shierholz 2018). These changes include deunionization but go well beyond it to count the erosion of the minimum wage and other labor market regulations, as well as the rise of employer practices like “fissuring” that involve employers shedding legal and financial responsibility for their workers through franchising, subcontracting, or reclassifying workers as independent contractors (Weil 2014).

This factor also captures labor market slack: local labor markets, whether due to national macroeconomic policy or more geographically specific reasons, that have higher levels of unemployment. Slack in the labor market in turn will make it harder for workers to find alternative work—and therefore grant employers more economic power while making workers less secure in their jobs. Independent of prevailing economic conditions, some employers—for instance, a hospital network or meat-processing plant in rural counties (i.e. static monopsony; Azar, Marinescu, and Steinbaum 2019; Benmelech, Bergman, and Kim 2018)—might have greater clout in the labor market because of market concentration. And workers themselves may have their own preferences over jobs that make it harder for them to find comparable work—for instance, preferences based on commuting time or child care arrangements—therefore giving employers greater leverage over the terms of their jobs (i.e. dynamic monopsony; Manning 2005).

In all of these cases, I anticipate that lower levels of worker market power ought to increase workers’ sense of insecurity—and therefore dampen their likelihood of participating in civic engagement and political interactions in the workplace. I also anticipate that lower levels of worker bargaining power will reduce the likelihood that workers have the voice and input into their working conditions that might lead to the sort of politically relevant skill development and use described above. And lastly, I anticipate that the greater insecurity these workers face will make them more cautious of doing anything that could potentially result in them losing their job, and that includes talking politics.

I measure this concept of worker bargaining power by asking respondents whether they felt they could find another job with about the same income and benefits they had at the time of the survey (“About how easy or difficult would it be for you to find a job with another employer with approximately the same income and benefits you have now?”). Ten percent of workers reported that it would be very difficult, 29% said somewhat difficult, 23% said neither easy nor difficult, 25% said somewhat easy, and 14% said very easy. This question is intended to capture the balance of worker and employer labor market power, since workers who feel they have stronger exit options should have more economic power relative to their employers (for similar uses of this survey item, see e.g. Hertel-Fernandez 2018; Kalleberg and Marsden 2013).

A substantial union difference that reaches fewer workers

I assess how workplace political interactions and skills vary across each of these two measures of employer power, beginning with union membership. Compared with their nonunion counterparts—and consistent with the long line of work I reviewed above—union members are substantially more likely to be politically active in the workplace and to report using politically relevant skills on the job. Unions, through their internal governance and operation, provide opportunities for members to use skills like public speaking, running meetings, fundraising, and managing teams for even blue-collar workers whose direct work might not involve those things. Table 6 compares how the use of politically relevant skills differs by union membership, and it shows that union members are more likely than nonmembers to use all of these skills but especially fundraising, managing teams, or convincing others of arguments.

Table 6

The union difference in politically relevant skills extends even to less-educated workers, especially those with a high school degree or less. Although we should be cautious of the small survey sample size of less formally educated union members, Table 7 reveals that unionized workers with a high school degree or less look much more like college-educated workers than other less-educated workers outside of the labor movement. In fact, Table 7 shows that unionized workers with a high school diploma or less are more likely than college-educated workers to report any experience with fundraising or asking people for money—no surprise given the importance of dues and contributions to political action committees for labor unions.

Table 7

One question is whether the union difference we observe in Tables 6 and 7 is due to what unions are doing with their members (a union effect), an underlying difference in the types of workers and jobs represented in the labor movement (a compositional effect), or the choice of particular workers to join unions (a selection effect). While I cannot definitively answer the question with these data, I can compare the use of politically relevant skills between union members and nonmembers while adjusting for a range of relevant worker and job characteristics including gender, race and ethnicity, age, education, family income, managerial status, and occupation and industry.7 The outcome of this analysis is an average for the frequency with which survey respondents report using each of the politically relevant skills, from “never” (coded as 1), “a few times per year or less” (2), “a few times a month” (3), and “at least once a week” (4). Across survey respondents, the average political skill score, on this scale of 1 to 4, was 2.16.

After adjusting for all of the other job and worker characteristics, union members scored about 0.12 points higher on the use-of-skills measure than nonmembers. That is about twice as large as the gap in skills use between a worker with a high school degree or less and a worker with some college experience. Although we cannot be certain that this difference represents a causal effect of unions on their members, it does suggest that the union difference is unlikely to come solely from demographic differences across members and nonmembers or the fact that certain types of occupations and industries are more likely to be unionized than others. (See Appendix B for full regression results.)

Next, we turn to union differences in political discussions at work. Again, we observe that union members are more likely to participate in political conversations with coworkers than are nonmembers: 42% of nonmembers reported never having conversations with coworkers, compared with 30% of members. The difference is even more striking when we consider political conversations with fellow union members, since the vast majority (over 90%) of nonunion workers reported never having political conversations with union members. By comparison, about 60% of union members said that they had political conversations with their fellow unionized workers.8

Just as with politically relevant skills, the union difference is largest for workers with the least formal education, as illustrated in Figure F, which compares frequency of political conversations by nonunion workers with a high school degree or less, unionized workers with a high school degree or less, and workers with a college degree or more. Among nonunion workers with a high school degree or less, more than half report never having political conversations with their coworkers, but that rate falls to about 30% for their unionized counterparts. The figure for all college-educated workers is identical, meaning that unionized workers with a high school degree or less look just like workers with a bachelor’s degree when it comes to having political discussions with coworkers.

Figure F

This picture does not change much when I adjust the union difference in political discussions for other worker and job characteristics (as I did above). In analyses where the outcome is whether a worker says that he or she never discusses politics with coworkers, union members are about 11 percentage points less likely to give that response than nonunion workers. That is roughly equivalent to the difference in political discussion rates between a worker with some college and one who has received a four-year college degree.

Lastly, I turn to coworker political opportunities and invitations. Here too we see a marked difference between union and nonunion workers, as reported in Table 8, with unionized workers being much more likely to report all forms of coworker political interactions. Thirty-six percent of nonunion workers reported any political interaction, compared with 58% of union members. The difference was especially large for attending political meetings, supporting political causes or campaigns, and learning about new political issues.

Table 8

As with the previous cases, the union difference was especially large for less formally educated workers, illustrated in Figure G, which compares political opportunities reported by nonunion workers with a high school degree or less, unionized workers with a high school degree or less, and workers with a college degree or more. Unionized workers with a high school degree or less report roughly the same—or even higher—levels of workplace political interaction as college graduates. In fact, looking across all interactions, unionized workers with a high school degree or less were more likely to report any political interaction than were workers with a college degree.

Figure G

These union differences remain after adjusting, as done above, for other worker and job characteristics: Union members were on average about 22 percentage points more likely to report any coworker political interactions than were nonunionized workers controlling for all the other workplace and worker characteristics. This was by far the largest difference I observed across the three political outcomes in the workplace, representing a difference greater than the gap between workers with a high school degree or less and those with a post-graduate education.

Across the board, then, union membership is related to greater political skill building and more political discussion and engagement—and union membership may be especially important for closing the gap between workers with more and less formal education (and incomes). These findings suggest that the decline of the labor movement may have made it more challenging for many workers, particularly workers who face social or economic disadvantage because of their education or income, to engage in politics in the workplace.

Worker labor market power and workplace civic engagement

The second economic change I consider is the labor market power that workers have relative to their employers. Table 9 compares the proportion of workers reporting that they never use any of the politically relevant skills at their job by how easy they say it would be to find alternative jobs with comparable pay and benefits. Table 9 separates responses for workers reporting the most and least difficulty doing so, and shows that, with the exception of working closely on teams, those workers who report that it would be very difficult to find another job say that they also are less likely to use any of these skills. Figure H similarly shows that across all skills, workers reporting higher levels of labor market power were also more likely to say that they used those skills at least weekly.

Table 9

Figure H

As before, we might wonder whether these differences reflect the kinds of jobs that workers hold or other worker characteristics, especially their formal levels of education. Yet even after adjusting for worker and job characteristics, I still identify a large gap in the average use of politically relevant skills between workers with more and less labor market power. The difference in the average use of all these skills (on the 1-4 scale, as above) between a worker reporting that it would be “very difficult” or “very easy” to find alternative work is 0.40, roughly the same size as the gap between workers with some college and a four-year college degree. The gap by employment arrangements also remains when I focus exclusively on the nonunion workforce. (See Appendix B for full regression results.)

Next, I consider the frequency of political discussions across workers with varying levels of labor market power. Here too I find clear differences: Nearly half of workers reporting that it would be very difficult for them to find comparable work said that they never discussed politics with coworkers, compared with around 35% of workers saying it would be very easy to find comparable work. Workers who reported greater labor market options also said that they were more likely to discuss politics more frequently too: 28% of workers reporting it would be very easy to find alternative work said that they discussed politics at work at least once a week, compared with 16% of workers who reported it would be very difficult. These differences remain even after adjusting for worker and job characteristics, as well as when I focus exclusively on the nonunion workforce.9

Finally, I do not identify a clear connection between worker labor market power and coworker political interactions. While there is a difference in the frequency of coworker political exchanges and opportunities by workers’ self-reported exit options—with workers in a stronger labor market position reporting more coworker mobilization—that difference disappears when I adjust for worker and job characteristics.

Are workers finding alternative sites for political engagement and discussion outside of the workplace?

The analysis presented so far implies that changes in the economy that have weakened worker power on the job may have also eroded opportunities for workplace-based political discussion, skill-building, and mobilization. One big remaining question is whether workers are finding alternative sites in their lives for political opportunities outside of their jobs. We might be less concerned about the patterns identified if workers can gain skills or participate in political discussions elsewhere in society—for instance, through churches, neighborhoods, or civic groups.

I cannot provide a definitive answer to this question for each of the political outcomes examined thus far, but I can focus on political discussions, since I asked workers to provide an accounting of their political conversations in the workplace and also across other sites in their lives, including churches or religious institutions, civic or community organizations, schools, and neighborhoods. If workers were finding alternative sites for political discussion outside of the workplace, we would expect that nonunion workers and less economically secure workers would be more active discussing issues in these nonwork sites. But this is not what I find. If anything, current union members and workers reporting greater labor market power are more likely than nonunion workers and less-secure workers to report engaging in political discussions outside of the workplace.

Figure I documents the predicted difference in the average level of political discussion that workers reported for nonwork social networks (those related to family, friends, schools, churches, neighborhoods, or community groups) by union membership and worker labor market power. These results adjust for other worker and job characteristics (and therefore are predictions, not actual frequencies). The figure shows the distribution of political discussion by union membership (in the left plot) and worker labor market power (how easy it would be for workers to find another comparable job, in the right plot). The solid line indicates the distribution of responses for nonunion workers or workers who would have a hard time finding another job, while the dashed line indicates the distribution for union members or workers who would have an easy time finding another job. The union member distribution is shifted well to the right of the nonunion curve, indicating that union members report more frequent political discussions outside of the workplace, even after adjusting for other worker and job characteristics. The same is true for the distribution of political discussion by worker labor market power: Those workers reporting that it would be easier for them to find another job are more likely to report more frequent political conversations outside of the workplace. Taken together, these results suggest that the decline of worker power in the workplace may have weakened political engagement not only on the job but also potentially beyond it too.

Figure I

Summing up—and lessons for labor market policy in the Covid-19 pandemic

The analysis presented here from the 2019 Workplace Political Participation Study suggests that the shifting balance of power in the workplace between rank-and-file employees and their employers may have had political as well as economic consequences. As workers have lost ground relative to the businesses and organizations that employ them, workers may have also lost opportunities for building political skills and voice at their jobs. Consistent with many prior studies, I show that unions boost political opportunities for workers, especially workers with less formal education. Union decline has thus meant that many workers—above all, more socioeconomically disadvantaged workers—lack opportunities for building civically relevant skills, discussing politics with coworkers, and learning about ways to get involved in political causes and campaigns.

Union membership, moreover, was the only one of the two economic measures I studied that led to increased political mobilization at work—with boosted opportunities to directly participate in the political process. This should not come as a surprise, since unions offer workers both stronger economic standing relative to their employers and an organizational structure through which they can exercise political voice (e.g. Andrews et al. 2010; Han 2014). Of the two changes in workplace power I consider, union decline is therefore the most significant. Still, a key contribution of this paper is to document how union decline, despite its importance, is only part of the overall story of changing civic engagement and political voice. I have also tracked whether shifts in employer labor market power matter independently of the weakening of the labor movement. Across the nonunion workforce, workers who reported greater labor market power were more likely to report using job routines and tasks that they could apply to politics and to report more frequent political conversations with their coworkers.

The results from the WPPS should be seen as a start, not an end, to a research agenda centered on workplace power and voice. Much more research remains to understand precisely how each of the mechanisms laid out here works in practice, and to explore how these mechanisms play out in different sectors and occupations. The WPPS provides a national picture on these patterns, but there are good reasons to expect that the link between workplace power and political participation varies depending on the nature of individual businesses and working conditions (e.g. Greenberg, Grunberg, and Daniel 1996). More too remains to be done to understand how these changes have unfurled over time, since my survey represents only a snapshot of the workforce. And while I attempted to adjust my comparisons for a variety of worker, firm, and job characteristics, we ought to see these results as being suggestive—not proof positive—of a causal link between worker power and political participation. Future work ought to identify opportunities for more rigorous causal identification, be it through exogenous variation in worker power (including workplace field experiments) or interviews and ethnographies.

Even with these caveats, however, there are troubling implications of the results presented in this paper. Most worryingly, there is no indication that workers who have lost economic standing in their jobs are replacing the political engagement that they might have otherwise found at work elsewhere in their lives. And if anything, I have shown that workers who retain power in the workplace—especially union members but also those who report stronger labor market options—are more likely to participate in politics outside of the workplace as well.

With fewer opportunities for political engagement and activism at work, the shift in economic power away from workers may have diminished the voice that workers, especially rank-and-file workers, can exercise in politics—and therefore the incentives that elected officials have to respond to their needs and preferences. Past research has documented how labor unions boost the responsiveness of elected officials to the policy demands of low-income and working-class Americans (e.g. Feigenbaum, Hertel-Fernandez, and Williamson 2019; Flavin 2016; Gilens and Page 2014; Hacker and Pierson 2010; Stegmueller, Becher, and Käppner 2018). The results presented in this paper provide detailed mechanisms for why labor unions matter for political representation, showing how unions can create civically relevant skills and opportunities among their members at work. But they also show how broader shifts in the labor force, namely heightened worker insecurity, may have also independently weakened the political clout of working-class Americans.

Although the WPPS survey data were collected before Covid-19, they offer some indication of the likely consequences of the pandemic on workplace civic participation. The picture is not good—and suggests that the Covid-19 pandemic may undermine the civic potential of the workplace, especially for already-marginalized workers, including low-wage workers, those with lower levels of formal education, and racial and ethnic minorities.

Perhaps the most immediate consequence of the crisis is the challenge it poses to regular workplace social interactions. With workers either working from home or working in socially distant ways, the Covid-19 pandemic makes it harder for workers to have the kind of daily social interactions that the WPPS identified as contributing to political engagement (see e.g. Moss 2020). Many workers with caretaking responsibilities also face daunting challenges navigating their jobs in addition to caring for children or other family members as schools and other caretaking facilities remain closed—responsibilities that might make it harder to engage in civic activities with coworkers over a sustained period (Alon et al. 2020).

Just as importantly, the surge in unemployment has meant many workers are simply out of work altogether, removing opportunities for civic interaction and exchange with coworkers. The unprecedented rise in unemployment has had knock-on effects for labor unions, too, with some longstanding unions losing many of their members and thus weakening an important workplace institution for civic engagement. The National Education Association, for instance, is projecting a loss of some 125,000 members due to Covid-related layoffs (Will 2020). Higher unemployment also means that workers who remain in their jobs face lower levels of bargaining power given weaker exit options, which this report suggests may well produce lower levels of civic engagement in the workplace. And the economic crisis has also meant that many workers—employed or not—face substantial economic insecurity from lost jobs or reduced hours and wages. Existing research suggests that such financial precariousness, apart from its connection to workers’ economic power in the workplace, has demobilizing material and cognitive effects on Americans’ levels of political engagement (Levine 2015; Ojeda 2018).

The effects of the pandemic have not been felt evenly across the workforce, and low-wage workers as well as racial and ethnic minorities have been especially hard hit by joblessness, income instability, and Covid-19 infection risk (e.g. Goldstein and Guskin 2020; Gould and Wilson 2020; Hertel-Fernandez et al. 2020; Parker, Horowitz, and Brown 2020). The worrying implication of these disparities is that historically marginalized workers will see the biggest erosion in workplace civic opportunities.

This discussion of the likely effects of Covid-19 on the workplace underscores the need for a large and sustained federal response to the crisis—one that manages the spread of the virus, that provides financial support to families, and that protects workers and rebuilds economic opportunity. Most importantly, it suggests that any effort at recovery ought to help workers build and sustain labor organizations. As this report has underscored, union members were consistently more likely than nonunion workers to report more civic engagement and skill-building in the workplace. As a result, building union representation and organization into a Covid-19 response will not only help workers’ economic standing, but could have very large political and civic implications for them as well. A revived labor movement can thus help revive our economy—and democracy.

Acknowledgments

Thanks to Laura Bucci, Janice Fine, Dan Galvin, Matthew Lacombe, Larry Mishel, and Nathan Wilmers for very helpful comments on the report. Thanks as well to Alissa Stollwerk and the YouGov Blue team for help designing and fielding the survey.

Appendix A: Control variable coding

Below are details of the control variables used in the regressions reported in the paper:

• Supervisor
  • Binary variable for answers to the following item: “At your job, do you supervise the work of other employees?”
• Gender
  • Binary variable for female
• Race/ethnicity
  • Binary variables for white, Black, Hispanic, and other
• Age
  • In years; I also include a squared term
• Education
  • Binary variables for high school degree or less, some college (including associate’s degrees), college, or more than college
• Family income
  • Excluding don’t knows or skips, continuous variable measuring the following groups: less than $10,000, $10,000-$19,999, $20,000-$29,9999, $30,000-$39,999, $40,000-$49,999, $50,000-$59,999, $60,000-$69,999, $70,000-$79,999, $80,000-$99,999, $100,000-$119,999, $120,000-$149,999, $150,000-$199,999, $200,000-$249,999, $250,000-$349,999, $350,00-$499,999, and $500,000 or more
• Industry
  • Binary variables for the following industries: agriculture, forestry, fishing, and hunting; mining, oil and gas extraction, and utilities; construction; manufacturing; wholesale trade; retail trade; transportation and warehousing; information; finance, insurance, and real estate; professional, scientific, and technical services; education; health care and asocial assistance; arts, entertainment, and recreation; restaurant, travel, and lodging; other services except government; government
• Occupation
  • Binary variables for the following occupations: management; business and financial operations; computer and mathematical; architecture and engineering; life, physical, and social science; community and social service; legal; education, training, and library; arts, design, entertainment, and sports; health care practitioners and technical support; protective services; food preparation and serving related; building and grounds cleaning and maintenance; personal care and service; sales and related; office and administrative support; farming, fishing, and forestry; construction and extraction; installation, maintenance, and repair; production; and transportation and material moving

Appendix B: Graphing regression results

Below are graphical summaries of the full regression results adjusting for other worker and job characteristics. I standardize explanatory variables to run from 0 to 1 to enable easier comparisons between coefficients. All models also include survey weights and apply robust standard errors. I include fixed effects for industries and occupations but do not graph them. I use 95% confidence intervals.

Regression models with union membership

Appendix Figure B1

Appendix Figure B2

Appendix Figure B3

Regression models with worker labor market power

Appendix Figure B4

Appendix Figure B5

Appendix Figure B6

Endnotes

1. See, e.g., https://data.bls.gov/timeseries/LNS11300000; https://www.bls.gov/news.release/atus.nr0.htm.

2. Meaning and identity finding from the Pew Research Center for the People and the Press May 2016 poll.

3. Friendship finding from author’s analysis of the “cowrkfrd” variable in the 2002 General Social Survey.

4 Fifty-one percent of workers who had been on the job for two years or less said that they didn’t know their coworkers’ views, compared with 29% of workers who had been working in the same job for at least 13 years. The same shares for managerial political views were 64% and 42%, respectively.

5. Comparisons with O*NET occupational job requirements suggest that WPPS respondents are relatively accurate in their assessments of these politically relevant skills. For instance, in 2018 61% of workers were in occupations where O*NET’s importance score for “communicating with supervisors, peers, or subordinates”—what might correspond to working closely with others on a team on the WPPS—is over 50 out of 100. Similarly, 29% of workers in 2018 were in occupations where “coordinating the work and activities of others”—what might correspond to “managing a team”—is over 50 out of 100.

6. I do not focus on the content of workers’ political preferences when exposed to greater employment insecurity, an important but separate subject (see e.g. Hacker, Rehm, and Schlesinger 2013; Rehm, Hacker, and Schlesinger 2012).

7. See Appendix B for full regression results. Specifically, the characteristics include worker gender, race and ethnicity (white, Black, Hispanic, or other), age and age-squared, education (in four categories), family income (in five categories), whether a worker reports managerial or supervisory duties, and the industry (in 16 categories) and occupation (in 23 categories) reported by workers roughly corresponding to the standard categories used by federal labor force surveys. Appendix A details how these variables are coded in more detail. I use these worker and job characteristics as controls in an ordinary least squares (OLS) regression along with the indicator for union membership.

8. It is not just political discussions: Union members also are much more likely than nonunion workers to say that they feel comfortable discussing “workplace issues and problems” with both coworkers and managers alike. This holds even after adjusting for other worker and job characteristics.

9. As with union membership, I find that worker bargaining power predicts workers’ comfort discussing nonpolitical workplace issues and problems with coworkers and managers, suggesting there may be a broader effect of worker power beyond politics on workplace discussions.

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