The EconomistSeptember 14th 2019 United States 411J
udging by recentheadlines, America’s
unions appear stuck in time. Consider
one of the biggest, the United Auto Workers
(uaw). Its 400,000-odd members include
nearly 150,000 who work at Detroit’s “big
three” carmakers—gm, Ford and Fiat
Chrysler. Theuaw’s boss, Gary Jones, was
busy this week hammering out a four-year
labour contract for them, starting atgm,
before the current one expires on Septem-
ber 15th. If not, strikes loom.
Yet he is likely to feel distracted. Mr
Jones has endured intense scrutiny since
federal investigators in late August raided
his home, those of former bosses and a un-ion resort in Michigan. The feds have been
busy exposing bribery at the uawin a case
that has rumbled on for years. So far nine
union leaders have been charged and eight
convicted for taking dodgy payments and
gifts, including pairs of $1,000 shoes.
Mr Jones has not been charged, but fel-
low bosses’ graft casts a poor light. If mem-
bers lose trust in him, they might strike
rather than take whatever deal he extracts
from carmakers. That reputational hit
could weaken union efforts elsewhere. The
uaw and others long dreamed of organis-
ing workers at southern, foreign-owned
“transplants” whose car factories are likeli-
er than Detroit’s to grow. Scandal makes it
harder to imagine winning them over. At
the same time, overall union membership
has been declining. Just 6% of private-sec-
tor employees are in unions, from a peak of
35% in 1954. Last year the Supreme Court
reduced unions’ ability to take levies from
public-sector workers.
Beyond recent headlines, however, the
likes of the uaw have some reasons to
cheer. As unions have weakened the pub-
lic’s sympathy for them has grown. A Gal-
lup poll on August 28th suggested 64% of
Americans approve of unions, close to a 50-
year high (see chart). Similarly a Pew study
last year said 51% see less unionisation as
“mostly bad” for working people.
This uptick probably has many causes.
For one, workers are in a jauntier mood
thanks to a tightening labour market, with
rising wages, in the past few years. Harry
Katz of Cornell University suggests unions
are also helped by their “remarkable suc-
cess” in promoting higher minimum
wages in many states.
Politics may be shifting attitudes, too.
Donald Trump won votes of 43% of union
households in 2016, a historically high
share that was only slightly behind Hillary
Clinton’s 51%, poor for a Democrat. This
year Democratic candidates—not just the
leftiest ones—are falling over each other to
praise unions and labour rights such as
paid parental leave, sick days and holidays.
Among the public, youngsters look the
most supportive, points out Steven Green-
house, author of a book that traces unions’
changing fortunes. An earlier poll shows
65% of 18- to 34-year-olds approve of un-
ions. He argues the young are spurred on by
worries over income inequality and bur-
dens of student debt. Mr Katz sees other
drivers, such as the rise of informal “affini-
ty groups”, when workers organise over a
particular issue rather than pay bargain-
ing. For example last November 20,000
Google staff walked out to protest against
the way bosses handled charges of sexual
harassment. Such groups, Mr Katz thinks,
might stir interest in unions proper.
Industrial unions have also spent the
past few decades hunting for professional
members. Overall white-collar unionisa-CHICAGO
Beleaguered unions find new members
in some unlikely placesState of the unionsHighbrow
organising
I
n a jolt to California’s gig economy, the
state’s lawmakers approved on Septem-
ber 11th a landmark bill, AB5, that will force
many firms to classify independent con-
tractors as employees. California’s gover-
nor, Gavin Newsom, a Democrat, had
pushed hard for the change. As he argued in
a Labour Day op-ed in the Sacramento Bee,
firms must no longer be allowed to “shirk
responsibility” and should cough up for
things like medical benefits, unemploy-
ment insurance and paid sick days. The
bill’s sponsor, Democratic assemblywom-
an Lorena Gonzalez, has argued it will help
workers, “not Wall Street and their get-
rich-quick IPOs”.
Whether that is true or not is fiercely de-
bated. Firms that rely heavily on contract
workers argue that a requirement to treat
them as employees will put many out of
work. The bill’s authors seemingly admit-
ted as much, inserting dozens of exemp-
tions for workers including accountants,
architects, dentists, doctors, engineers and
estate agents. Missing from the exemp-
tions are drivers for ride-sharing firms like
Uber and Lyft—since, the bill’s authors ar-
gue, the ride-sharing platforms impose
rules on their drivers which mean that they
are not truly self-employed.
Only “a small fraction” of Lyft’s roughly
325,000 drivers in California will keep
working if the law takes effect as expected
on January 1st, says Adrian Durbin, head of
policy communications for the San Fran-
cisco-based firm. Some experts reckon ride
fares could rise by as much as 30%. De-
mand for trips could therefore slip. Beyond
that, Lyft drivers will lose the ability to
work, or not work, whenever they want, Mr
Durbin notes.
Unions such as Teamsters pressed hard
for the legislation, which promises to make
recruiting members easier. One big backer
of the bill, the Service Employees Interna-
tional Union, reckons other states will fol-
low suit. A day before the bill passed, New
York’s governor, Andrew Cuomo, a Demo-
crat, lauded California’s push and said it
got his “competitive juices flowing”. Demo-
crats running for president who have en-
dorsed California’s bill include front-run-
ners such as Kamala Harris, Bernie Sanders
and Elizabeth Warren.
Lyft and Uber have lost roughly a third
of their stockmarket values since July but
both are gearing up for battle. The firms
now hope to strike an alternative deal withunions and lawmakers by offering drivers
certain benefits including reimbursement
for some expenses and guaranteed earn-
ings that exceed the minimum wage.
Should that fail, Uber, for its part, reckons
it may still manage to keep its drivers as
contractors. In a conference call following
the bill’s passage, Uber’s top lawyer, Tony
West, said the idea is to argue in court that
its main business is being a technology
platform. That distinction could waive the
requirement to treat drivers as employees.
A final option, both firms say, is to gath-
er petition signatures to kick-start a ballot
initiative that would sidestep California’s
lawmakers. Last month Lyft and Uber each
put $30m into a joint campaign fund for
that effort. “If we need to, we’ll take it to the
voters,” says Lyft’s Mr Durbin. Uber has al-
ready begun to hire a campaign team. 7SANTA BARBARA
A new labour bill stands to harm
ride-sharing firmsEmploymentThe gig is up in
California