Seeking Choice, Not a “Perfect” System

| Sep 22, 2020

I agree wholeheartedly with Benjamin Sachs’s and Sharon Block’s proposal that we should start with a “clean slate” for American labor law. I’m with them in the beliefs that current labor law “is badly broken and outdated,” has its origins in reprehensible prejudices, and continues to present structural barriers to economic mobility. I, too, favor progress toward racial and gender equity and want to see “a diverse array of representational structures at the workplace.” That said, I find their specific proposals to be a decidedly mixed bag for which I can offer some sympathy but almost no unconditional support.

Let me start, however, on common ground: protections for immigrant workers. I think that Benjamin and Sharon make a good point in saying that employers use immigration status to divide their workforces in ways that benefit stockholders and management at the expense of less-skilled workers. That said, I cannot see a practical way to assure labor rights for all absent fundamental immigration reform that includes amnesty, a guest worker program, and more. Even if they had a statutory right to do so, what currently undocumented person would complain about a labor violation when doing so would draw the attention of authorities and risk deportation? In any case, I’m not sure that I can speak for much of the Right in this: while I can point to a proud conservative heritage for my views on immigration—they’re pretty much the same as Ronald Reagan’s—they aren’t in step with the current president or with most of the Republican Party.

As for sectoral or regional bargaining—perhaps the lynchpin of Benjamin’s and Sharon’s proposal—I think it would be an unmitigated disaster absent even more sweeping reforms reaching all corners of American labor and employment law. The well-functioning labor markets with widespread sectoral or regional bargaining—mostly in the Nordic countries—also operate without national minimum wage laws,  make business startup easier than we do, and generally don’t require union dues from non-members. Piled on top of a burdensome tort system, complicated employment law, and in some cases, mandatory union dues, sectoral bargaining could be a recipe for the denial of worker autonomy, stasis, reduced take-home pay, job destruction, loss of opportunity for the least skilled, and overall economic stagnation.

But life is complicated, and I could be wrong. Under the labor law waivers that former Service Employees International Union (SEIU) President Andy Stern and I have proposed, regional or sectoral bargaining would certainly be within the range of experiments that states or industries might try. I’d support an experiment with it under waivers that also permit policies that would do a lot more good for American workers— such as works councils, private-sector flex time, and collective bargaining agreements that depart from non-civil rights employment law.

I’m even less enthused about their proposal to implement the ABC test on a national level and thereby severely limit the number of people who can pick where and when they work. It’s a solution in search of a problem. Contrary to conventional wisdom, gig work, part-time work, and self-employment are generally becoming less common in the United States. Male workforce disengagement is a big problem, and better but still highly flexible gig jobs are a way to draw current non-participants back into the workforce. Moreover, gig work is what people want anyway. Most people working for the leading app-based ride platform look for these jobs precisely for the flexibility and ability to be their own boss. In the full-employment economy we had until the pandemic, all those who wanted W-2 jobs had them. “Bad” part-time and gig jobs are a key lifeline during economic recoveries. Imposing the strictures of full-time employment on these workers undermines their own desires, denies opportunities, and destroys the productive, creative business models they take part in. Over 80 percent of workers on this platform would prefer a sort of “third status” between contractor and employee, and such a status could even help to create new model labor organizations.  This makes a lot more sense than trying to force something desired by neither job providers nor workers.

My underlying disagreement, however, comes not from an appeal to the popular will but, rather, a difference of values: I’d rather have an economy that allows for more creativity, choice, and wealth creation even if it results in less equality. I’m personally thrilled that Jeff Bezos has become rich by creating so many jobs, so much wealth for others, so many opportunities, and such a beloved brand. Individual choice—not a search for a “perfect” system—should be the name of the game. Beginning with a clean slate, labor organizations, workers, and employers will do best when they all have an opportunity to experiment with and discover voluntary, innovative structures that maximize opportunities for human flourishing.

Eli Lehrer

Eli Lehrer is president and co-founder of the R Street Institute.