California Takes the FAST Union Track to Europe

U.S. labor leaders now want government to impose industrywide collective bargaining

By Michael J. Lotito and Michael Saltsman. Excerpts:

"Labor leaders, including Service Employees International Union President Mary Kay Henry, are endorsing sectoral bargaining, a type of collective bargaining that imposes standards across industries—rather than company by company—for workplace conditions, benefits and wages." 

"Surprisingly, European countries often provide greater freedom to employees and employers alike in their bargaining schemes. A U.S. Chamber of Commerce report reviewed the sectoral bargaining systems of several European countries, including Denmark, France, Germany, Italy and the Netherlands. They share key features: Employees typically aren’t required to join the union; the government is rarely involved in the bargaining; and sectoral agreements don’t necessarily prevent workplace-level bargaining.

Consider the German model. Sector-wide agreements on wages and working conditions are negotiated on the national and regional level between labor unions and employer associations. Separate work councils can address items not covered in a sectoral agreement."

"Many do. German employees and employers are voting with their feet and running away from sectoral bargaining. According to a recent report from the International Center for Law and Economics (which was supported by a German law firm affiliated with Mr. Lotito’s employer), the percentage of employees covered by a sectoral agreement in western and eastern Germany has plummeted over the past quarter-century by 25 and 24 percentage points, respectively.

The ICLE authors detail some of the reasons for the contraction: Sectoral agreements are inflexible; they saddle companies with complex work rules; and they require “uniform compensation” regardless of an employee’s work performance. This means that employees and employers are avoiding union-negotiated agreements in Germany for the same reasons they are avoiding these agreements in the U.S.

SEIU and its labor allies have no intention of providing U.S. employers with the opt-out freedoms that their German counterparts have. California’s FAST Recovery Act provides the state labor commissioner with the power to investigate and cite companies that don’t follow the fast-food council’s dictates. That makes the SEIU’s scheme looks less like German-style sectoral bargaining and more like a Venezuelan-style government takeover of a disfavored industry."