Sectoral Bargaining and Gig Workers

As the labor movement has continued to struggle, there’s been a greater turn to the idea of sectoral bargaining, by which we mean large-scale industry wide contracts that would bring a lot of workers into the labor movement at once. There’s a good reason for this. A couple actually. First, this is largely how things happen in Europe and unions are stronger there than here. Second, the cost and time it takes to win a union contract these days is exorbitant. The enormous anti-union industry makes it almost impossible to win the election and then if you do win, the entire system is set up for companies to delay for at least a year before signing a first contract, by which time they can force a new union election in a now-changed set of employees. All this to bring in, what, 100 or 1,000 workers? It just doesn’t make sense. There are critiques of this. It’s not particularly democratic. It eschews a lot of traditional organizing methods. It’s not really about worker empowerment. There’s something to all of this.

With gig workers, seemingly impossible to organize but with a lot of discontent about conditions, there’s been interest from both unions and companies in the possibilities of sectoral bargaining. Such things have always made sense from a corporate end because unions also serve to discipline workers and channel discontent into very specific. But because corporations are also shorsighted and filled with leaders who have giant egos and huge powertrips, they haven’t seen the logic. That might be changing in the gig industry.

New legislation creating collective bargaining rights for gig-economy workers is poised to be introduced in New York State in the coming weeks, according to the president of the Transport Workers Union. If passed, the proposal would represent the fulfillment of a long-sought goal for companies like Uber Technologies Inc. and Lyft Inc.: a compromise that stops short of making workers into full employees. types of actions.

TWU President John Samuelsen said the union is backing the proposal after criticizing past deal-making efforts elsewhere. “I had every intention of staying away from it, and now after seeing how much it’ll advance gig workers, I’m fully supporting it,” Samuelsen said Monday. “I actually think it becomes a national model.”

Gig companies like Uber and Lyft have won skirmishes against labor advocates in recent months, including Proposition 22, a major ballot proposal in California. But the industry has still faced calls to offer more employment benefits and the danger that the Biden administration will try to blow up their business model by backing rules that would make workers into employees instead of contractors. A compromise with labor groups could alleviate some of that pressure.

Samuelsen said he expects the new proposal to pass before the end of the New York legislative session on June 10. Gig economy companies and labor groups are close to reaching an agreement on the specific legislative text of a compromise, which could speed its passage through the legislature, according to people familiar with the talks who asked not to be identified discussing private information.

The new proposal will allow app-based workers to vote to form unions, Samuelsen said. The unions would then engage in “sectoral bargaining” with companies to hammer out standards governing the industry. Because antitrust law restricts direct collective bargaining by contractors, the new rules would take the form of recommendations to the state, which could then approve and impose them.

Samuelsen said the draft legislation, which has not yet been finalized, would also guarantee some specific benefits such as worker’s compensation and unemployment insurance, and would pre-empt local governments from passing some forms of workplace regulation of their own.

The union president has talked with representatives of gig delivery and transportation companies and said he is confident they will not oppose the legislation. Samuelsen also said the proposal was brought to his attention by the New York State AFL-CIO, whose executive council he’s a member of. That chapter and leaders from its affiliated unions have discussed the proposal multiple times, he said, and have not objected to it.

“It’s going to add tens of thousands of members into the organized labor movement,” Samuelsen said. Under the proposal gig workers would become “legitimate trade union members,” he said. “This is not some sort of fictitious cut-out.”

New York State AFL-CIO President Mario Cilento, when asked through a spokeswoman about the state of negotiations, said he was confident a deal could be reached. “This is obviously a very complex issue, and everyone is trying to work through the details,” Cilento said in an emailed statement. “Our goal remains the same, to ensure gig workers receive the same rights and protections as all other workers.”

I get it, but when you read about this, it’s also pretty clear a cave to the reality of work here. Uber and Lyft are going to support this because it means that legislation to classify these workers as actual employees will be undermined at the state level. Moreover, it’s likely to undermine efforts to do so at the national level as well because unions will become allies with the gig companies to preserve their negotiated model. As Sarah Jaffe writes in Vox, it’s not at clear that any of this actually good for, you know, the workers themselves.

In order to head off more Prop 22s, there’s been talk recently from companies, researchers, and some within the labor movement of a sort of grand bargain with Lyft and Uber, whereby drivers would accept that third-category worker status and, in return, be granted what’s known as “sectoral bargaining.” Workers would be granted the right to organize and bargain with the companies — something that, legally, independent contractors cannot do. But Dubal and labor economist Marshall Steinbaum of the University of Utah worry that the unions have latched onto sectoral bargaining as a quick fix in a moment where the labor movement is weak, hoping that a deal can bring numbers and ward off total war.

Sectoral bargaining, Steinbaum explains, is the idea that all workers across a given sector could be represented by a collective agreement, regardless of who their employer is. Labor historian Nelson Lichtenstein described it in 2019 as “social bargaining with the state on behalf of all workers,” where some public institution is created to bring together stakeholders in a given industry to bargain.

The gig economy, Steinbaum notes, is less a sector and more the part of the economy that is outside of labor relations. And what makes sectoral bargaining actually a terrible fit for gig companies, he explains, is that “where sectoral bargaining has a lot to offer, it’s exactly where you have a fragmented sector.” It works when it raises the floor for lots of different companies at the same time. In Germany, for instance, unions primarily negotiate with employers’ associations across many firms in a sector. But even there, the model has atrophied.

With Uber and Lyft, it’s the opposite situation: The two companies make up, essentially, a duopoly, and have used that power to avoid any kind of regulation. Without real worker power behind that bargaining regime, he says, it would simply solidify and legalize the existing lopsided power relationship between the companies and the drivers.

Locking the drivers into a third category — not really employees, not really independent — would wind up, Dubal says, replicating old patterns of inequality. “When they say that we need a third category of work for a new economy,” she says, “what they’re really saying is that they just don’t want to have to provide these basic protections and rights and safety nets and they think that people now should be willing to survive without all of these protections that we’ve long come to understand as being normal and necessary.”

I can genuinely see both sides of the situation here. Sectoral bargaining probably would provide these workers something concrete. It would also ensure they remain in a distinctly powerless position within the economy. Moreover, as we saw in California, even liberal voters are all-in with corporate leaders on issues such as this when they come to the ballot box, or at least they are easily swayed by corporate propaganda campaigns. So what do you do?