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hirley Reyes tucked herself next to her 17-year-old son on the couch, peppering him with questions about unions as he googled the cost and benefits of collective bargaining on his phone. Reyes, a Filipina single mother, was inquisitive — and a little anxious. Some labor representatives had already knocked on their cramped in-law unit in Daly City, a majority Asian community south of San Francisco. She wondered if she was risking one of her jobs cleaning hotel rooms simply by talking to them.
Her son’s findings began to put her at ease. Unions aim to negotiate higher wages and better benefits for workers. It’s likely the surgery she had six years ago would have cost her less under union-negotiated health insurance. After months of hushed discussions at work, Reyes was handed an official secret ballot. It was a yes or no question.
Do you wish to be represented for purposes of collective bargaining by UNITE HERE Local 2?
It’s a question a vast number of California workers, a third of whom make $15 an hour or less, haven’t had the opportunity to answer. Union participation is at historic lows and collective bargaining is less prevalent in retail, restaurants and hotels — segments of the private sector with high concentrations of low-wage jobs.
California wants to change that. The Future of Work Commission, convened by Democratic Gov. Gavin Newsom to think of moon shot goals for lifting millions of working Californians out of poverty, proposed getting more workers represented as part of the solution to stemming the state’s staggering wage gap. The commission, which included labor and business leaders, asserted in their final report released earlier this year that while a college degree reduces the chance of a low-wage job by 33%, union membership reduces the chance by 39%. That could go a long way in a state where 1 in 3 households with working adults struggle to afford basic necessities, while the top 2% control 20% of the wealth.
The commission urges employers and employees to reach agreement on a new social compact that would foster quality jobs over the next decade. But first that requires building consensus around the basic principle of giving workers a greater voice, whether through unions or worker organizations.
That hasn’t happened yet.
Diminished voices
The rapid growth of high-skilled tech jobs and the loss of industrial jobs to global labor markets have significantly widened the gap between rich and poor people. At the same time, worker organization has diminished: The share of California workers in a union has steadily declined from about 40% in the 1950s to 16% last year.
Union participation is especially low in the private sector, which makes up 84% of the state workforce. Today, 1 in 10 private-sector workers belongs to a union, compared to 1 in 2 in the public sector.
Yet these private-sector workers are most in need of a voice.
Numerous reports have documented the pandemic’s disproportionate impact on essential workers, many of whom are immigrants and women of color. Many low-wage workers are employed in the service economy, such as retail, hospitality and tourism. They are the ones making and delivering food, producing and packaging goods, and cleaning and caring for others but unable to keep up with their own bills.
For Reyes, who works at the Marriott Waterfront, voting yes to a union worked out for the better. After the contract was signed Aug. 4, Reyes’s wage will rise from $19.80 to $24.30 over the next year. Her health insurance premium dropped from $250 a month to $35. Dental insurance and the option of a 401(k) or pension plans were added.
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eyes began putting $200 a month toward her son’s college tuition, pulling back on her long work days and, her favorite part, cooking dinner for her son. Though Reyes was laid off during the pandemic, the union contract gave her priority to return. When the company began rehiring, Reyes was among the first back.
“I’m not scared anymore,” Reyes said. “We have a contract now. We have job security.”
A group of MIT researchers surveyed workers nationally in 2017 and found that about half of nonunionized workers would vote to join a union. That’s up from 32% in 1995.
Of course, not all workers agree.
Sylvia Beltran, who was formerly unionized as an usher at the SAP Center in San José and now does freelance photography, isn’t looking for collective bargaining. Dues are high, and she enjoys her freelance schedule unconstricted by a contract. A few unions have been beset by power struggles and leadership scandals lately.
“[Unions] feel more like a corporation,” she said. “I think they are more in it to make money and less interested in workers.”
Unions can reduce inequality — at a cost
Some researchers say the decline in union membership has contributed to at least 10% of the wealth divide, according to a 2018 study published in the National Bureau of Economic Research. Henry Farber, an economics professor at Princeton University who co-authored the study, said because wealth inequality is linked to stagnating wages that hurt the lowest-paid workers, unions can act as a counterbalance by lifting up the bottom through wages and benefits.
Union workers in California are more likely to receive health care through their employers and to earn nearly 13% higher wages than nonunionized workers in similar industries, and they are 50% more likely to have an employer-sponsored retirement plan, according to a report by the UC Berkeley Labor Center. Those advantages put an estimated $18.5 billion annually into the hands of lower-income Californians, reducing their reliance on public safety nets and helping to stave off poverty.
Unions, however, come at a cost to businesses, which argue that the loss of profits will lead to fewer jobs, and the rigidity of union contracts will make it hard to adapt to change. Research from the ‘90s found that unionization slows the rate at which a company adds new jobs by 4 percentage points a year. Another study published more recently in The Quarterly Journal of Economics looked at the market value of publicly traded companies before and after they were unionized. It found that a union election victory led to a roughly 10% decrease in the company’s market value. And, thanks to a tight labor market, wages have been increasing for workers in typically lower-paying leisure and hospitality jobs, despite low union density.
Even a member of the Future of Work commission who signed his name to the report recommending the state “empower worker voice and organization” notes that unions aren’t the only way to quality jobs. Lance Hastings, president and CEO of the California Manufacturers and Technology Association, says his organization focuses on workforce development and training.
When it comes to the commission’s proposal of increasing union representation to decrease inequality, Hastings says: “Where we can find the balance where that helps in the workforce, we’re all for it.” But, he adds, the conversation about improving workers’ lot can’t begin and end with just paying everyone more.
Will Swaim, president of the right-leaning California Policy Center, takes it one step further. Broadly speaking, he says, a union’s goal is simply to raise wages for its members at whatever cost. And that cost, ultimately, is passed along to all Californians who use the products and services union members make.
Unionized labor agreements for construction projects, for example, can drive up the cost of housing. In 2016, Los Angeles voters passed a $1.2 billion bond for housing for unhoused residents. The city council required that developers constructing over 65 units must use a mostly unionized workforce. The effect, according to research from RAND, a nonpartisan research organization headquartered in Santa Monica, was that projects cost an additional $43,000 per unit and disincentivized developers from building projects with more than 65 units.
Based on a simulation, the researchers estimated that 800 more units would have been built were it not for the labor agreement.
That time labor and gig companies failed to compromise
In many ways, California’s wrangling over the employment status of gig workers has been a proxy battle for unionizing an emerging crop of low-wage jobs.
In 2019, as labor groups pushed California to classify freelancers as employees through a bill, some large unions, including Service Employees International Union and International Brotherhood of Teamsters, took part in private negotiations with the gig companies. In a San Francisco Chronicle op-ed, ride-share executives wrote they’d be willing to work with labor groups and lawmakers on providing some benefits to drivers, some information on driver pay and supporting the formation of a nonunion drivers association. Perhaps it would have looked something like the Independent Drivers Guild Uber recognized in New York, an association without the full powers of a union, which has faced criticism for being funded directly by Uber.
It didn’t hurt to sit down and see whether there was a deal to be worked out, says Rome Aloise, secretary-treasurer of Teamsters Local 853, who took part in the negotiations.
The hope, he said, was to secure the right to collectively bargain for gig workers and ultimately improve their livelihoods. But, he said, the labor movement as a whole was adamant that the workers become employees. And the companies “weren’t really able to get themselves to the point” where they would accept unions negotiating on workers' behalf over wages and benefits, said Aloise.
That made it impossible for the Teamsters to move forward.
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here was also pushback from within labor’s ranks. Some argued that unions should not compromise on gig workers gaining employee status, established under a landmark state Supreme Court ruling in 2018. Negotiations stalled.
In September 2019, the Legislature passed the bill and Newsom signed it.
Uber, Lyft and other gig companies quickly put a measure on the ballot in 2020 that exempted gig workers from the new law — and prevented drivers from unionizing. After companies spent $205 million, nearly 59% of Californians voted to approve the ballot measure, Proposition 22. Drivers, they decided, would remain freelancers.
After the passage of Proposition 22, Lyft’s president, John Zimmer, told The Chronicle and The Los Angeles Times that the company was still willing to negotiate with labor to increase benefits for drivers while maintaining their independent contractor status. Zimmer also said he was open to sectoral bargaining, when employers and workers negotiate baseline compensation and safety standards that cover most or all of the workers in an industry, not just a single workplace.
Lyft spokesperson CJ Macklin confirmed that remains the company’s position today. “We continue to remain open to working with labor to further strengthen benefits and protections for drivers in ways that also maintain their independence and flexibility,” wrote Macklin in a statement.
Uber’s position for further negotiations is less clear. “Uber remains committed to making independent work better — including supporting policies that provide access to new benefits while protecting the flexibility drivers value most,” wrote Uber spokesperson Austin Heyworth.
Labor leaders remain divided on whether to compromise.
There are still two schools of thought within the labor movement on the path forward for organizing gig workers, says Steve Smith, spokesperson for the California Labor Federation. There’s a camp that says, “No way, no how,” to organizing workers without employee status. Then, says Smith, there are folks who look at the current situation and say: “These folks are without any basic protections. How can we give them not only protections that other workers have in law, but also the right to organize?”
Proposition 22 guaranteed some driver benefits and compensation, including 30 cents per mile toward expenses, and 120% of minimum wage for their minutes of engaged time driving passengers. That could work out to as little as $5.64 per hour or as much as $27.58 per hour.
The issue of gig worker classification isn’t dead yet. In late August, a state Superior Court judge found that the ballot measure was unconstitutional and could not be enforced. The judge noted the language aimed at banning drivers from unionizing ought to be considered separate legislation.
A coalition that represents the gig companies pledged to appeal.
If Proposition 22 is overturned in the courts, and gig workers are able to unionize, Smith says that the organizing that has been ongoing since the passage of the proposition will “become more vigorous and urgent.” Whether or not labor would be willing to head back to the negotiating table with gig companies isn’t yet determined.
Newsom’s former chief of staff, Ann O’Leary, tweeted that these skirmishes won’t really end until labor and business reach a broader pact for workers.
