Sectoral Bargaining: The Benefits of the European Model for Collective Bargaining

In a historic win for workers, Amazon warehouse employees in Staten Island recently voted in favor of unionizing, making them the first of the company’s employees to unionize at a U.S. facility.[1] The tally at the warehouse was 2,654 votes in favor of joining the union, and 2,131 opposed.[2] The win is monumental for the labor movement in the United States, many even going as far as calling this win a true David beats Goliath moment.[3]

However, despite being the country’s second largest private employer,[4] Amazon Labor Union’s win will only affect 6,000 of Amazon’s 1.1 million employees in the country.[5] Though this unionization effort demonstrates to other Amazon employees that winning an election is possible, many more employees at the company’s 110 fulfillment centers must initiate their own organizing drive to be a part of a union.[6] This cumbersome process for workers demonstrates the enterprise-based bargaining system in the U.S.’s labor laws. In an enterprise-based system, workers vote, and unions negotiate with individual employers on behalf of a group of workers at a particular worksite. This system is one of the many reasons the United States has meager unionization rates compared to other countries.[7] As the Center for American Progress has found in their research, the current enterprise-based system makes joining a union and bargaining very difficult.[8]

Other countries utilize a sectoral bargaining scheme.[9] Sectoral bargaining mandates contract coverage among workers in a particular occupation or industry.[10] For instance, airline workers across a country or geographic region would negotiate for their contract together and would be covered by the same collective bargaining agreement. Sectoral bargaining is the dominant form  of  industrial  relations in Western Europe. [11] Sectoral bargaining is utilized in countries such as Denmark, Germany, and Sweden. In Germany, for instance, collective bargaining is set out in the Collective Agreements Act of 1949, which lays the groundwork for voluntary sectoral bargaining.[12] The Act mandates that bargaining agreements are to be negotiated in each sector between the employer’s association and that sector’s leading union.[13] In Germany, this kind of bargaining has had the greatest impact on sectors in public services, utilities and some core manufacturing industries, where workplaces have high and relatively stable bargaining coverage.[14]

The benefits of sectoral bargaining have been documented. Studies have found that bargaining across sectors allows more workers to receive higher wages and benefits, equalizes pay across race and gender, reduces economic inequality, and boosts economic productivity.[15] Typically, countries with sectoral bargaining practices have higher rates of unionization in their country. In this moment of increased labor organizing in the United States, policymakers ought to consider implementing sectoral bargaining to better empower workers.[16]

Shana Iden is a staff member of Fordham International Law Journal Volume XLV.

This is a student blog post and in no way represents the views of the Fordham International Law Journal.
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[1] See Ari Levy, Amazon workers just voted to join a union — here’s what happens next, CNBC (Apr. 2, 2022, 8:00 AM), https://www.cnbc.com/2022/04/02/amazon-workers-just-voted-to-join-a-union-heres-what-happens-next-.html.

[2] See id.

[3] See e.g. Jake Johnson, David Beats Goliath': Workers in New York Vote to Form Amazon's First-Ever Union in US, Common Dreams (Apr. 1, 2022), https://www.commondreams.org/news/2022/04/01/david-beats-goliath-workers-new-york-vote-form-amazons-first-ever-union-us.

[4] See Jason Del Rey, America finally gets an Amazon union, Vox Media (Apr. 1, 2022, 12:36 PM), https://www.vox.com/recode/23005336/amazon-union-new-york-warehouse.

[5] See id.

[6] See fba help, https://fba.help/list-of-amazon-fulfillment-centers (last visited Apr. 18, 2022).

[7] See Int’l Labour Off., Trends in Collective Bargaining Coverage Stability, Erosion or Decline? 1, 2 (2017), https://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---travail/documents/publication/wcms_409422.pdf.

[8] See David Madland & Malkie Wall, What is Sectoral Bargaining?, Ctr. for Am. Progress Action (March 20, 2020), https://www.americanprogressaction.org/article/what-is-sectoral-bargaining/.

[9] See id.

[10] See id.

[11] See Economic governance: sectoral collective bargaining. Inst. Of Employment Rights J. 3(1):24.

https://www.scienceopen.com/hosted-document?doi=10.13169/instemplrighj.3.1.0024.

[12] See Declan Ingham, Organized Labour Under an Organized System: An Introduction to Sectoral Bargaining in Germany, Monitor Magazine (May 7, 2021), https://monitormag.ca/articles/organized-labour-under-an-organized-system-an-introduction-to-sectoral-bargaining-in-germany.

[13] See id.

[14] Reinhard Bispinck & Thorsten Schulten, Wages, collective bargaining and economic

development in Germany: Towards a more expansive and solidaristic development? 191 (WSI-Diskussionspapier Working Paper, Paper No. 191, 2014),  https://www.econstor.eu/bitstream/10419/102693/1/797886435.pdf, 191.

[15] See David Madland & Malkie Wall, What is Sectoral Bargaining?, Center For American Progress Action (March 20, 2020), https://www.americanprogressaction.org/article/what-is-sectoral-bargaining/.

[16] See Int’l Labour Off., supra note 7.