RELEASE: CAP Action Report Outlines Ways to Promote Sectoral Bargaining, Which Would Raise Wages and Boost Productivity

Washington, D.C. — The United States is facing more than four decades of stagnant wages, near-record levels of economic inequality, and large economic divides across gender and, especially, race and ethnicity. To address these fundamental economic challenges, many more workers need to be able to collectively bargain. In 2016, the Center for American Progress released a set of proposals calling for a major modernization of labor laws to create the right set of structures to raise wages and boost productivity, particularly given the changing nature of work and the workplace. Among those proposals was the concept of bargaining for higher wages and benefits across an entire industry or sector—also known as sectoral bargaining—to build upon and complement the existing U.S. worksite-based bargaining system. A new CAP Action Fund report released today builds on that effort by highlighting the policy reforms necessary to promote widespread sectoral bargaining in the United States.

“In order to address stagnant wages, extreme economic inequality, and large pay gaps across race and gender, policymakers need to support sectoral bargaining in conjunction with worksite-level bargaining. Sectoral bargaining is not only good at raising compensation, but it also encourages firms to compete based on productivity. Sectoral bargaining is also well-suited to an economy featuring firms that are increasingly contracting out work,” said David Madland, senior adviser to the American Worker Project at CAP Action and author of the report.

CAP Action’s report notes that achieving multiemployer collective bargaining that occurs at the sectoral or regional level in the United States will require a number of reforms. Increasing overall union density is critical to both supporting sectoral bargaining and boosting worksite-level bargaining; unions need a critical mass of organized workers to successfully bargain, and therefore, policies that strengthen unions are absolutely essential.

The report outlines three policy pillars necessary to promote widespread sectoral bargaining in the United States. These policies include:

  • Strengthening unions and giving them more tools so that they have the power to bring multiple employers to the bargaining table. This will require policies that enhance workers’ rights as well as enable unions to have a greater say in determining how bargaining is structured. It will also require providing strong incentives for union membership, such as those provided in other countries under the Ghent system.
  • Policymakers should support the use of contract extension, which would spread the gains from union contracts to similarly placed workers, such as through the expanded use of prevailing wage laws and the creation of a new policy to promote master contracts. Extension laws can help amplify union strength and ensure that all employers in a particular sector provide workers with similar wages and benefits in areas where unions have been able to maintain, or could reasonably be expected to achieve, a decent level of bargaining coverage.
  • Wage boards—governmental bodies that bring together representatives of workers, employers, and the public—need to be used more extensively to set minimum standards for jobs in particular regions and industries. In sectors where union density is too low and the sector too fragmented for independent collective bargaining to cover many workers, wage boards would ensure higher wage and benefit standards. They could also foster more traditional bargaining through features that build power for workers, as well as by forging a negotiating relationship between employers and worker organizations.

The report notes that broader-based bargaining would build upon and complement the existing U.S. worksite-based bargaining system. Under the new system, worksite-level bargaining would continue to be available, but workers would also gain new ways to engage in broader-based bargaining. As a result, unions could increase wages and benefits for more workers and do more to reduce economic inequality and close gender and racial pay gaps. Implementing the pillars of sectoral bargaining would go a long way toward addressing the fundamental economic challenges facing the United States.

Click here to read “How to Promote Sectoral Bargaining in the United States” by David Madland.

For more information on this topic or to speak with an expert, please contact Allison Preiss at  or 202-478-6331.