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Silicon Valley’s Offer of Sectoral Bargaining Is a Trick

If national union leaders acquiesce to the creation of a third category of worker in exchange for sectoral bargaining, collective begging will replace collective bargaining.

By Jane McAlevey

March 3, 2021

Drivers demand job security and livable incomes at a protest at Uber and Lyft’s New York City headquarters in May 2019. (Johannes Eisele / AFP via Getty Images)

Any objective power structure analysis of the United States today reveals that we are teetering closer to the 1920s than during any decade since. In the 1920s and early ’30s, extreme racism was firmly entrenched thanks to Jim Crow laws, Southern plantation economies, and nonfunctioning voting “rights”; the US Supreme Court was wildly pro-big business; and the biggest employers of the era—auto, steel, coal, and their associated production industries—tolerated few to no unions. These companies were effectively killing workers without worry and terrorizing those who were attempting to unionize. Everyday occupational hazards frequently led to death and dismemberment, and regular employment for many was hard to find.

There is abundant academic literature detailing just how bad things were before the autoworkers launched massive sit-down strikes—occupying their workplaces, determined to forge unions until they won. One such academic report on conditions in the automobile industry states that “in the early years of the Depression, autoworkers were fortunate to work irregularly; and when they were employed, they were coerced into operating at increasingly fast rates for declining rates of pay. The alternative, suffered by an enormous number of workers, was unemployment with little to no public assistance.”

Sound familiar?

Before workers managed to build power though collective action and form the United Auto Workers in 1935, abysmal conditions in auto plants weren’t much different from the ones in today’s Amazon warehouses. Workers who fought to build strong unions turned auto-factory jobs into the kind of employment that became the backbone of the American dream. Today, situations that policy-makers, pundits, and the media give fancy labels to—such as precarity, or the gigification of work—have long been a core feature of American capitalism. It’s only if and when workers decide to harness their only real power—coming together in a union—that their lives will improve. But there’s a catch: If they are to be allowed to do so, the law first has to consider them to be “real” workers. (In order to be covered by the National Labor Relations Act and Fair Labor Standards Act, a worker has to be an “employee,” as opposed to an “independent contractor.”)

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Exactly what constitutes work, what defines a worker, and whether workers have any real rights to collective self-determination is the subject of an open letter released on Monday that calls attention to deliberations taking place in state capitols and inside the new administration in D.C. Although it is easy to miss alongside the day’s screaming headlines—about a scandal involving a prominent state governor, federal charges against insurrectionists, and the sudden removal of a proposed $15-per-hour national minimum wage—these lesser-noticed discussions about “who is a worker” have as much to do with the future of democracy as the attempts in Georgia, and elsewhere, to roll back voter-access essentials such as mail-in ballots and early voting.

As a signatory to this letter, which has the somewhat bookish title “Sectoral Bargaining: Principles for Reform,” I want to boil it down to its urgent message: There is a massive power play taking place right now, being led by some of the biggest titans of industry—particularly in Silicon Valley—who seek to avoid having to contribute to society at all by rewriting the legal status of their workers. The current debate about who is a worker, who is an independent contractor, and who is legally eligible for things like Social Security and unemployment insurance centers around the question of whether state and federal policy makers accept or reject what is referred to as a “third category” of worker. The tech-industry proposals unfortunately picked up steam on the heels of Proposition 22 in California, which made a mockery of democracy when Uber and Lyft spent upwards of $220 million dollars to convince voters, against their interest, that the ride hail drivers and food-delivery workers toiling under their platforms are somehow not real workers.

Although the technicalities of the debates are different today, the dynamics and implications of the discussion are similar to ones that took place back in 1930s, when the National Labor Relations Act was passed. To achieve the act’s passage, racist employers created a legal fiction that domestic and agricultural workers were not deserving of protections. The result is that farmworkers and nannies 87 years later are toiling under much the same conditions as their counteparts did before 1935. Today’s debate about whether to create a third category will result in the relegation of millions of workers, overwhelmingly people of color and immigrants, to the status of farmworkers and nannies. In exchange for establishing this third category, the gig-economy employers are dangling a carrot called sectoral bargaining. Sectoral bargaining can be summed up as unions sitting down with employers across an economic sector—such as hotels, hospitals, fast food, and retail—and creating standards for wages and benefits (but in this case, with no minimum protections).

While sectoral bargaining sounds enticing, its theoretical advantages disappear when workers aren’t regularly organized to such a degree that they walk off the job and regularly strike. Its proponents point to nations such as Germany and Sweden, where workers have sectoral bargaining, implying that this single-policy formula is why workers there have the standard of living they enjoy today, with universal health care, robust paid sick leave, amazing paid parental leave, and salary maintenance at full or close to full pay while sheltering-in-place during the pandemic. Such comparison are either disingenuous or ignorant—either way, accepting third-category status in exchange for sectoral bargaining would be a disaster for US workers.

As a signatory to the letter, which demands adherence to core principles of worker participation and democracy in any sectoral bargaining regime, I can attest to a simple fact: In Germany or Sweden, or anywhere else in the world, workers didn’t achieve their decent living standard because of sectoral bargaining. They achieved it because they fought like mad, including with revolutions in the earlier half of the past century, to achieve an overall détente with capital. It took worker power to win the standards workers enjoy in every country that currently has sectoral bargaining. And today, while those gains in living standards and working conditions may look great to any worker in the United States, those same standards, in those countries, are under attack—and being eroded with sectoral bargaining. Whether you are a worker in Germany or in Alabama, the only way you win a decent life is by building enough power to create a crisis for the capitalist class. That means the power to forge supermajority unity, striking, and causing profits to nosedive until the bosses remember that workers—whatever we call them—make the profits the 1 percent thrive on today, while everyone else suffers.

While the issues can seem complex and technical—which renders the debates about them byzantine and hard to follow—it all comes down to power. If national union leaders acquiesce to the creation of a third category of worker in exchange for sectoral bargaining, we can kiss collective bargaining good-bye and surrender to collective begging. Read the letter and get into the debate before it is too late.

Jane McAleveyJane McAlevey is The Nation’s strikes correspondent and the author of A Collective Bargain: Unions, Organizing, and the Fight for Democracy. She is a senior policy fellow at the University of California’s Institute for Research on Labor and Employment.


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