Lenny Peña, from Lawrence, Massachusetts, has been driving for Uber since 2017. At the beginning, he says he was able to make nearly $3,000 every week, by working seven or eight hours a day. But the payment structure for drivers has changed. “Now, to make the same amount of money, it’s extremely difficult,” he says, speaking through a translator. He has to drive 12 hours for Uber, and sometimes another four hours with Lyft, seven days a week. A ride that used to get him $60, he says, now pays him only about $25.
He’s tried to raise the issue with the company, but without much impact. “You can talk to Uber, and we do talk to Uber, but you really don’t have a voice or a vote with this company,” he says. “They pay what they want to pay, and that’s it.” So now, Peña is banding together with other rideshare drivers to push for a Massachusetts bill that would ensure a guaranteed minimum wage, paid sick time, and the right to organize a union, among other benefits—standards that wouldn’t just benefit those who drive for Uber, but all rideshare workers, industry wide.
For drivers like Peña, it’s crucial to take on the entire industry rather than just fight for changes at Uber or Lyft on an individual company level. “It’s like they’re the same company with different names,” he says. “The problem is, there’s one way both these companies work.” Bringing workers together from across the industry also means more voices speaking out about these issues, and more voices pressuring rideshare companies to change.
By fighting for industry-wide change, Peña and other Massachusetts rideshare drivers are trying to engage in something more like sectoral bargaining, says Sharon Block, a Harvard Law School professor and executive director of the school’s Center for Labor and a Just Economy. Sectorial bargaining can refer to a variety of systems, but all involve some sort of collective bargaining in which workers within an industry negotiate together with all the employers of that sector at the same time. In some cases, a council or representatives from each side facilitates those negotiations; the key, though, is that workplace standards are set across an industry, instead of only at one employer.
That’s different from the system most prevalent in the U.S., Block says, “which is bargaining that happens at the workplace level, or actually often a sub-part of the workplace.” Sectoral bargaining “is the dominant form of collective bargaining in the world,” she adds; it’s commonly associated with Europe and particularly prominent in Scandinavia, but it’s also a right baked into the labor laws of countries from South Africa to New Zealand. Though sectoral bargaining does not currently exist in U.S. labor law, workers across the country are trying to find ways to introduce it.
Importing sectoral bargaining
Rideshare drivers are just one example of attempts to install sectoral bargaining across the country. Nail technicians in New York are pushing for a council, including stakeholders from government workers to salon owners, that would create industry-wide standards. A similar movement is taking place among fast-food workers in California, and also in that state, a a recently introduced bill would give home-care workers statewide bargaining power to improve their work conditions. Across the U.S., domestic workers are fighting for bills of rights to cement workplace protections, and Block says she’s seen a rise in efforts from workers to set such industry-wide standards—but enacting the laws is complicated.
The main reason is that federal labor law preempts state and local laws. In other words, states can’t say that, for example, the National Labor Relations Act (NLRA) isn’t working for them, and they’re going to decide on their own set of rules on how workers can form a union.
In some cases, local attempts at sectoral bargaining aren’t technically butting up against federal law: rideshare drivers, for example, aren’t classified under federal law as employees. Some workers may be misclassified as contractors instead of full time, Block says, but “now you’re seeing states, and to some extent cities, step in and say, ‘Okay, in this sort of netherworld, we’re going to at least step in and try to create new forms of collective bargaining.’”
That’s happened with agricultural workers, who are excluded from the federal protections of the NLRA, including the right to unionize without being fired; California passed a farmworker labor bill in 2022, allowing those workers an easier way to unionize without intimidation through mail-in voting.
For workers who are full time, like those in the fast-food industry or at nail salons, the path to some form of sectoral bargaining is through councils that would help decide work standards. Workers wouldn’t be bargaining for changes with their employers. Instead, a council that includes workers, employees, and government officials would make recommendations on minimum wages or work standards, which then go to the government or a regulatory body to pass. In the case of the nail salon council, for example, recommendations for minimum standards would be submitted to the New York State Labor Commissioner. “It creates a system in which government also plays a role, and that’s what allows those kinds of legislation to not run afoul of the federal labor law preemption,” Block says. The government’s authority is being exercised “in a way that’s informed by representatives of employees and representatives of employers.”
In Sweden, for example, there isn’t actually a national minimum wage; instead, each sector sets a minimum-wage standard through collective bargaining between trade unions and industries. That means less incentive to fight unionization on the company level, and thus a higher unionization rate: In Sweden, about 70% of workers are members of a union. Sectoral bargaining also allowed workers to be a part of decisions during the pandemic. In the U.S., workers were at the mercy of whether or not their company decided to close and lay off workers. In countries with sectoral bargaining, workers had a say: In Denmark, unions, companies, and the government all together decided to provide paid leave for affected workers; and in Germany, sectoral bargaining groups created a policy to spread out reduced hours among workers, rather than laying people off.
In January 2020, Block cowrote a report recommending sectoral bargaining in the U.S. Since then, she says, “the need for it has gotten more urgent.” There have been labor wins at large companies including Starbucks and Amazon, but those workers don’t yet have contracts, and companies are fighting unionization efforts harder than ever, even though support for unions is the highest it’s been in decades. “All those things together say workers really want this, they want to have more voice and agency and control over their work lives; they want to act collectively, but the law is failing in its purpose to translate that desire into a reality,” she says. “We think that a sectoral bargaining system is a much better means of translating that desire into real power.”
How California fast-food workers came close
Angelica Hernandez, an 18-year-veteran of McDonald’s, is one of hundreds of fast-food workers fighting for increased standards for fast-food workers in California. Over her tenure at the company, she has experienced wage theft, sexual harassment, and “deplorable conditions” on the job, like when the plumbing broke and she had to work standing in sewage water.
“All of us are suffering the same things,” she says, also speaking through a translator, of why she’s fighting for change in the entire fast-food industry. “It’s not just happening at McDonald’s. Anyone working in fast food or restaurants is going through similar things. We all need change. We need dignity for all of us as workers.”
Hernandez is fighting for the FAST Recovery Act (AB 257), which technically passed the California Assembly and was signed by Governor Gavin Newsom in September 2022. The bill would set standards for minimum wages, maximum hours of work, and other conditions through the creation of a council, made up of a representative of the Department of Industrial Relations, a representative of the Governor’s Office of Business and Economic Development, and representatives of fast-food franchisors, franchisees, employees, and employee advocates. (The bill didn’t name specific chains, but defined “fast-food restaurant” as “any establishment in the state that is part of a fast-food chain.”)
But the law stalled the day after it was signed, when industry groups immediately filed for a a ballot measure that could delay or even completely kill the law, intended to create a council that sets minimum working standards over issues including wage, hours, and conditions. In January, a judge granted an injunction that keeps the FAST Recovery act on hold, potentially until it goes before voters in November 2024.
Hernandez says when the law initially passed, she was so happy she cried. The next day, everything changed—but she’s not giving up. “Now, we have to fight even harder,” she says. It may seem daunting to go against the entire fast-food industry, when it can be hard enough for workers to unionize and bargain with one individual company, but she finds strength in coming together with workers from Carl’s Jr. and Burger King. “We are half a million workers in the fast-food industry, and we’re going to keep fighting,” she says. “We shouldn’t have to strike restaurant by restaurant so that we can be listened to.”
Fighting for change in an entire industry could, paradoxically, also be easier for workers than just trying to change or unionize their own company. “What we have is where the bargaining happens employer by employer by employer, it’s just too much work,” Block says. “And it embeds an incentive for companies to fight unionization with everything they’ve got, and we see that playing out.”
Right now, if just one company in an entire industry tries to unionize, that company sees it as a competitive disadvantage: they may have to raise wages, while their nonunion competitors don’t. “If you have sectoral bargaining, you take wages out of competition,” explains Block. “So employers compete with each other not on who can drive wages down as much as possible, but on who can attract and retain a better workforce, who can produce a better product, who can manage their business better,” she says. “And so it, overall, just creates a much better environment for workers to be able to leverage real power and to remove some of the incentives for employers to fight that power.”
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