What’s Old for US Labor Is New Again

We’re in the midst of a twenty-first-century Gilded Age. To end it, we can turn to some of the radical policies designed to democratize the world of work, empower a multiracial working class, and reel in the worst excesses of robber barons nearly a century ago.

Striking McDonald's restaurant employees lock arms in an intersection before being arrested, after walking off the job to demand to demand a $15 per hour wage and union rights during nationwide 'Fight for $15 Day of Disruption' protests on November 29, 2016 in Los Angeles, California. David McNew / Getty

Everything old is new again. If American workers are ever to emerge from the economic insecurity and political powerlessness that are so characteristic of our second, contemporary Gilded Age, they are likely to rediscover some of the innovations in labor policy and corporate governance that emerged more than a century ago in that first era of social inequality and capitalist excess.

That’s because the structure of capitalism today, and the legal framework that sustains it, evokes many of the same social and economic pathologies that made Americans of that bygone era question the future of US democracy itself.

It has never been just a question of inequality: robber barons then, and the rise of a politically potent billionaire class today. Rather, the two Gilded Ages are similar because at both times a new and disruptive reconfiguration of American capitalism has made necessary a radical set of policies designed to democratize the world of work and empower a multiracial working class.

A bold and comprehensive report from Harvard’s Labor and Worklife Program, “A Clean Slate for Worker Power: Building a Just Economy and Democracy,” offers twenty-first-century reformers an innovative set of policy ideas challenging corporate power in our time. If any of the carefully crafted proposals put forth in this ninety-one-page report make it into the nation’s laws, working people and their rights will take a giant step forward across the country. And in states like California, which are already innovating above and beyond federal labor law, we will be empowered to do even more to protect and encourage worker power across the economy.

One of the most important proposals envisions a new era of “sectoral bargaining.” Back in the first Gilded Age, workers knew who their boss was. Andrew Carnegie, John D. Rockefeller, and Henry Ford owned and controlled a set of giant enterprises, running them in a feudal, authoritarian fashion. President Franklin Roosevelt saw these “economic royalists” who had “created a new despotism” as a threat to the republic.

The 1935 Wagner Act was therefore designed to empower workers by providing a set of legal rights and administrative mechanisms by which the employees of a Ford or Rockefeller could collectively organize and then bargain with the boss on behalf of all who worked in one or more factories, mills, and offices. Detroit unionists put out a leaflet right after FDR’s sweeping victory in 1936: “You voted New Deal at the polls and defeated the Auto Barons. Now get a New Deal in the shop.”

And so they did, and for two generations we had a robust and powerful trade union movement in this country. But the twenty-first-century future for traditional, enterprise-based unionism in the United States looks bleak. That’s not just because so many employers, politicians, and jurists are hostile to trade unionism, but because a transformation in law and corporate organization has made it increasingly difficult for workers to know who the boss really is. The rise of “fissured” employment — subcontracting, franchising, and the corporate transformation of millions of workers into “independent” contractors — has obscured where power, money, and responsibility actually lie in the employment relationship.

Inspired by the Fight for $15 in the fast food industry, the authors of the Clean Slate report want sectoral bargaining to help set wages and working conditions for millions of American workers who aren’t covered by a traditional union contact. Sectoral bargaining brings to bear the power of the state on an entire occupation or industry, and not just in one state or city, but as the Clean Slate report envisions, on a national scale as well.

The Secretary of Labor would be empowered to set up a series of panels at which representatives from employee groups and employers would hammer out a code covering all workers in an occupation or industry. Just as civil rights laws apply to all US workplaces regardless of the attitude of workers or employers, so too would one of these new wage panels promulgate a set of work standards that are equally universal, within the industry and region over which the board has jurisdiction.

A variant of this idea worked well during the Progressive Era when Massachusetts, Oregon, California, and nearly a dozen other states deployed a set of wage boards, sometimes called industrial commissions, designed to set labor standards for those workers, mainly women, without full citizenship rights or union representation. These boards investigated both the “minimum subsistence budget” necessary for single women to exist and the “financial condition” of the business or industry in which they worked in order to arrive at a pay rate promulgated by a “wage decree.” By 1919 in Massachusetts, there were separate pay grades for candy, laundry, retail stores, women’s clothing, men’s clothing, canning, and office cleaning industries.

And they can still work. In New York in 2015, a wage board composed of representatives from labor, business, and the general public held an extensive series of hearings over a forty-five-day period in cities all across the state. Workers mobilized by the Fight for $15 movement were well represented.

As the New York Times reported of one hearing, “organizers … turned out a large and vocal crowd that included pizza makers, cashiers, unionized graduate students, economists, a venture capitalist from Seattle and at least one rabbi.” On July 21, 2015 the New York State Board announced its decision: $15 per hour for fast food restaurants that are part of chains with at least thirty outlets, to be phased in over the course of six years, with a faster phase-in for New York City. 

Such state-mandated standards are not just for low-wage workers: in the construction trades, “prevailing wage” laws ensure that on big government projects occupational wages of up to $80 an hour are paid to skilled craftsmen, union or not. And the same idea could and should cover cab drivers, warehouse workers, home health care aides, college teachers, retail clerks, and hotel cleaning staff.

To end our own Gilded Age, America needs to hike the wages of all those in the bottom half of the working class and give them the power to keep those wages high. And California should be able to set the standard, not be held back by broken federal standards. This country solved the problem of massive inequality once before; the Clean Slate for Worker Power report charts a path forward to do it for good.

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Nelson Lichtenstein teaches history at the University of California, Santa Barbara. His most recent book is Beyond the New Deal Order: American Politics from the Great Depression to the Great Recession, edited with Gary Gerstle and Alice O’Connor.

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