Heard about the labor law “reform” so harmful that both the U.S. Chamber of Commerce and the AFL-CIO are skeptical? It’s called “sectoral bargaining.” Last month, the nation’s largest labor federation stopped a bill that would have implemented this scheme for gig workers in Connecticut, and the Chamber released a report harshly critical of the concept.
Sectoral bargaining is a new and largely undefined concept in the United States, but it is familiar to European employers. In Germany, for example, sectoral agreements between unions and employer associations set industry-wide terms for wages and working conditions. In a twist that would leave American unions unhappy, most German employers have the freedom to opt out of these agreements — which they are doing in droves, according to a 2017 report from the Institute for the Study of Labor.
Determined to ignore lessons from Europe, the Service Employees International Union (SEIU) is leading the charge to import sectoral bargaining. (The SEIU is not a member of the AFL-CIO.) President Biden endorsed a commission to explore the idea, and a report issued by the Democratic-controlled House Education and Labor Committee urged sectoral bargaining on a national level as a way to expand unionization, particularly in the gig economy.
