Jim West/Report Digital-REA/Re​dux

Time for a New Grand Bargain with American Workers

by jeremy avins, megan larcom and jenny weissbourd

jeremy avins is an associate principal with Redstone Strategy Group, a philanthropic and nonprofit consultancy. megan larcom is a management consultant. jenny weissbourd is a senior project manager in the Aspen Institute’s Economic Opportunities Program. This article synthesizes their working paper, released by the Institute for Work and Employment Research at MIT Sloan School of Management in 2018. Views expressed do not necessarily reflect those of their employers.

Published January 6, 2020


The story of unions’ decline has taken decades to play out in the United States. But something surprising happened on the way to the final act.

Public approval of unions is near a 50-year high, and the number of workers involved in work stoppages in 2018 reached its highest point since the 1980s. A recent survey led by MIT’s Tom Kochan found that roughly half of non-union workers want to unionize — up from a third in 1995 — and the vast majority of unionized workers would vote to unionize again.

Not all workers, moreover, are waiting for a union resurgence to make their views heard. Restaurant workers have used online platforms to petition management for improved wages. Tech-sector workers have organized to push their employers to exit defense contracts, mitigate climate change and address gender inequities, among other steps. Retail workers have won severance pay from private-equity investors in the face of bankruptcies.

Is all this merely a blip on an unstoppable trend that began decades ago? Or are we glimpsing a new frontier of a more inclusive capitalism? The answer, we believe, will depend on whether institutional reform facilitates a new grand bargain with workers.

A Great Divide Demands a Bold Bargain

Today’s stark economic inequality parallels disparities experienced by Americans on the eve of the Great Depression. Responding to what was rightly seen as unsustainable inequality, a coalition of stakeholders came together in the 1930s to build what Harvard historian Alex Keyssar describes as “an institutional framework to balance the needs of the American people with the vast inequalities of wealth and power wrought by the triumph of industrial capitalism.” This “grand bargain” between big business and the public was pressed by voices across American society and accepted by business not as a means to destroy capitalism but to ensure its survival.

That social contract created the best tools we have to this day to ensure worker welfare and voice. These include unemployment insurance, a minimum wage, mandatory overtime pay, Social Security and — because experience revealed that workers need countervailing market power to hold their own with larger employers — the right to bargain collectively.

But the grand bargain wasn’t complete and didn’t hold in the face of changes in the economy and polity. It put many women and people of color at a disadvantage by excluding domestic work and agriculture from key labor laws — two sectors in which, not coincidentally, those workers historically have been concentrated.

Likewise, for workers who were able to benefit, systematic attack on the social contract eroded their bargaining power. The increasing cultural acceptance of shareholder primacy led employers to contract out even jobs that seem central to business operations like front desk staff at hotels or drivers for package delivery companies — excluding workers from basic labor law protections. The more recent emergence of the “gig economy” further atomized the workplace, depriving many of opportunities to engage with colleagues and to build social capital.

As a result, for millions of Americans, work is now defined by precarity. Median wages have been largely stagnant since the 1970s, despite growth in productivity. Working parents face unpredictable schedules and insufficient sick and family leave protections. Structural inequity continues to put women and people of color at greatest risk.

Getting Their Voice Back

Emerging attempts at a new grand bargain stress worker voice — that is, mechanisms for employees to influence the nature of the jobs they do and the conditions in which they do them. Working with MIT’s Kochan and Barbara Dyer and Harvard’s Holly Fechner, we surveyed the landscape of worker-voice efforts operating outside the confines of traditional collective bargaining agreements. These endeavors are sometimes called “alt-labor” and include initiatives by non-profits, private companies and labor unions alike. We learned that workers are doing their part to adapt the grand bargain by finding ways to expand and reimagine worker representation in ways suited to today’s economy.

To start, workers are responding to two fundamental shortcomings of the first grand bargain: the exclusion of marginalized workers and the failure to create an evergreen policy framework that could sustain worker voice over time. Community-based groups known as “worker centers” that support workers through direct services, organizing and advocacy are amplifying the voices of employees in insecure low-wage jobs who are disproportionately women, immigrants and people of color. The National Domestic Workers Alliance and Coalition of Immokalee Workers are winning victories for workers in sectors excluded from the original grand bargain.

Emerging attempts at a new grand bargain stress worker voice — that is, mechanisms for employees to influence the nature of the jobs they do and the conditions in which they do them. These endeavors are sometimes called “alt-labor” and include initiatives by non-profits, private companies and labor unions alike.

To address policy gaps, coalitions of workers are coming together across industries to engage in grassroots organizing and consciousness-raising. The Fight for $15, for example, has achieved minimum wage increases across states and cities even as the inflation-adjusted value of the federal minimum wage erodes.

Independent contractors and self-employed workers who have no legal right to collective bargaining are finding workarounds to build power through ownership and governance. In Maine, hundreds of self-employed lobstermen facing depressed incomes in a globalizing, consolidating industry formed a marketing cooperative, purchased a wholesale lobster business and became Lobster 207, a local lodge of the International Association of Machinists and Aerospace Workers (IAM).

As worker-owners, the lobstermen now leverage their collective voice to improve their incomes and advocate for their priorities in the state legislature. Similarly, the IAM-backed Independent Drivers Guild (IDG) helps Uber’s gig workers gain a seat at the table with management. IDG’s Council of Drivers is an authorized voice at management meetings, advocating on issues critical to drivers’ well-being.

Finally, in response to increased isolation and employer monitoring, workers are using digital platforms to share experiences, collect data on working conditions and labor market benchmarks and raise their voices to consumers as well as management. Coworker.org, for example, provides workers tools to connect with colleagues and launch online petitions to change their work experience. Employees of companies that depend on strong consumer brands have achieved impressive successes through high-profile campaigns to increase wages and improve work environments.

They Can’t Do It Alone

Fundamentally, these approaches (and many others like them) are imperfect substitutes for a broken bargain that no longer protects worker voice. Alt-labor organizations are mostly small-scale efforts whose existence is as financially precarious as that of the workers for whom they advocate. Moreover, these groups now face the same sorts of systematic attacks that gutted the original grand bargain.

Alt-labor thus represents a valiant effort to pave the way to a better deal. But other institutions also need to adapt to make that deal possible. To this end:

Policymakers must reform labor law to make it easier for all workers to exercise their voice through old and new mechanisms. In January, Clean Slate for Worker Power, an initiative of the Labor and Worklife Program at Harvard Law School, will release concrete recommendations on how to do just that. In the meantime, policymakers at all levels can take immediate steps to advance likely priorities, such as combating misclassification of workers as contractors while setting up a legal framework that addresses the growing population of independent workers.

Business leaders must recognize that worker voice serves their interests, too. The Business Roundtable’s recent redefinition of the purpose of the corporation to serve stakeholders other than just shareholders is a start. But investors and managers need to find constructive ways to engage, rather than fight, worker voice.

The Harvard Business Review has published multiple perspectives pointing to how conflict — from and among workers — can be productive (e.g., in developing new products, managing risk and building inclusive work environments). As Coworker.org co-founder Jess Kutch explained recently, workplaces with the most active organizing campaigns are often the ones where workers are most invested in their jobs. Kutch notes that one of the companies with the most active Coworker.org networks has among the lowest voluntary turnover and highest productivity rates in its sector.

Philanthropies must provide more — and more innovative — funding for worker voice efforts, which in turn may require mindset shifts among their boards. Available grant data from Foundation Directory Online suggest that labor rights and organizing account for only 0.2 percent of U.S.-focused philanthropy. And over 15 percent of that comes from unions, not independent foundations. Funders have a crucial role in seeding, scaling and stabilizing alt-labor organizations — for example, by providing flexible, patient capital to support experimentation with worker cooperatives.

• • •

History suggests that worker voice grows in spurts, sometimes blossoming when its very survival seems most threatened. Public and private sector leaders have a choice in responding to the reawakening of worker voice. They can press the status quo, ensuring that inequality and insecurity continue to define the American work experience. Or they can embrace a new grand bargain that strengthens capitalism by improving work and sharing prosperity. For those interested in capitalism’s sustainability, that seems an easy choice to make.

main topic: Labor
related topics: Economy: U.S.