This isn’t entirely new. Some periods in American history have indeed been more favorable to workers. For example, when unionization rates were at their highest during the mid-20th century, unions helped redirect profits toward wage increases, subsequently narrowing inequality. Over the past several decades, however, CEO pay has increased by 1,322 percent, while worker pay has risen just 18 percent. In the meantime, the percentage of unionized workers in the United States has fallen from 20 percent in 1983 to 10.8 percent last year.
The pandemic certainly opened our eyes to the critical role essential workers play in times of crisis and may have tipped the balance of power between employees and employers. But do workers really have more power today than they did before the pandemic? Simply put, they don’t — despite the recent boomlet in perks designed to lure and retain them. But the pandemic does help point to ways that workers could extract more concessions from employers, concessions that might well transform workplaces for the better.
At core, power is the ability to influence the behavior of others, whether through persuasion or coercion. It derives from control of access to valuable resources. Thus, you have power over others if you control access to something they value, and they have power over you if they control access to something you value.
Today, workers control a highly valuable resource — their own labor — which employers are dependent upon for their businesses to run. With the highest number of job openings since the turn of the millennium (10 million vacancies) and businesses struggling to attract employees, today’s labor shortage gives those who are looking for employment more choice and bargaining power.
With all this in mind, it’s understandable why some claim that workers have more power now than they did before the pandemic.
But the reality for workers inside most organizations is much dimmer. Though companies may have an incentive to retain workers at a time when replacing them is challenging, one-off signing bonuses or pay increases in high-turnaround industries are no guarantee that workers will prevail in the long run.
In fact, power remains highly unbalanced in most American workplaces. In non-unionized, hierarchical organizations, it is still concentrated in the hands of top executives and shareholders who control all company decisions and priorities, from pay levels to hiring (and firing), and company strategy and policies. Workers continue to have no representation on most corporate boards of directors and have no or very little say over any of these decisions even though they affect their work lives and livelihoods. This lack of control has detrimental effects on worker health and well-being: It has been associated with job dissatisfaction, greater mental strain and damaged physical health. The philosopher Elizabeth Anderson has written that American “workplaces are small tyrannies,” resembling dictatorships more than democracies.
It doesn’t have to be that way. Our workplaces can be more democratic and share power rather than concentrate it. This requires moving beyond one-off incentives and Band-Aid solutions to attract workers in the short-term, as we’re seeing now, and moving toward real power-sharing in organizations.
In Germany, a system of “co-determination” that grants workers representation on the board of directors has been dominant since the end of World War II. Today, many other European countries, such as Austria, Denmark, Norway and Sweden, similarly allocate to workers seats on corporate boards, increasing their power to weigh in on their employers’ strategic decisions.
Cooperatives are another model of power-sharing that has a rich history in the United States. There are more than 30,000 cooperatives in the United States, operating in a host of sectors, from electricity provision to credit unions and farmer and insurance cooperatives. In a subset of these cooperatives, worker-owned cooperatives, workers are entitled to a vote and a voice over the key decisions that affect them. These rights are embedded in the organization’s bylaws. Just as citizens have a vote in a democracy, those who invest their time, talent and energy into the organization have a vote over its development.
Whatever the method, giving workers more power means giving them the right to collectively validate or reject important decisions that affect their work lives, including the choice of the CEO, how profits are shared, what strategies to pursue and what to prioritize in the face of a health crisis like the pandemic.
The pandemic has put into stark relief how essential certain workers are to the resilience of society. In the process, it has opened a window to change the balance of power between workers and those at the top. In this context, aware as they are of the imperative to seize and consolidate the power shifts that are temporarily favoring them, workers across sectors have engaged in unionization efforts to defend their rights. Earlier this year, employees at Alphabet created one of the first unions at a major tech company, while in the United Kingdom, a union of Uber drivers is the first to be recognized by the tech giant following a Supreme Court case that reclassified drivers as workers (and not mere independent contractors), in what could be a landmark decision for the future of gig economy workers.
The time may be ripe for such unionization efforts, but they still won’t come easy. The recent experience of Amazon workers in Alabama confirms how difficult it has become to organize and gain a measure of power in the face of overwhelming corporate force, especially in a legislative and judicial environment that has steadily curtailed union rights. (Amazon founder Jeff Bezos owns The Washington Post.)
To bring about a change that challenges entrenched power hierarchies, people must form collective movements with three critical roles: agitators who articulate grievances and bring them to the forefront of public awareness; innovators who create actionable solutions to address the grievances identified by agitators; and orchestrators who coordinate action to put in place the solutions envisioned by the innovators. A movement of this sort will neither happen nor succeed overnight: Increasing worker power and embedding it in corporate structures will require the concerted and sustained actions of workers, unions and public authorities, as well as top executives and shareholders alike.
Instead of resisting the change, executives and shareholders need to understand that it is in their interest, too, to reduce the extreme power imbalance that so clearly puts workers at a disadvantage. Indeed, when the distribution of rewards in an economic system is so unequal as to appear blatantly unfair, those with less power are more likely to upend the current system entirely. Although those at the top may benefit wildly from their power advantage in the short term, over time, extreme levels of inequality result in less productive economies and lower rates of economic growth, which create negative consequences for the powerful, too.
The confluence of the pandemic’s effects on the economy, labor shortages, evolving demographic trends and expanded unemployment benefits have momentarily swung the pendulum in favor of workers. But these conditions are not long likely to last, nor are they inevitable. The increased power that workers have on the job market today will not necessarily translate into them gaining more power inside companies. For that to happen, they need to have a real say in their company’s strategic decisions. This is where power lies.