Democratic presidential candidate Sen. Bernie Sanders reaches out to supporters before a recent rally in Houston. (Brett Coomer/Houston Chronicle via AP)

On May Day, assessing what a Sanders presidency would mean for labour

The 2020 Democratic primary race is a crowded field. However, the latest polls suggest it’s likely to be a battle between Bernie Sanders and former vice-president Joe Biden.

With Biden’s troubling voting record, Sanders remains a clear choice for progressives and labour advocates. Sanders’ stump speeches and campaign platform reiterate many of the themes and policies that in 2016 transformed him from someone relatively unknown outside the Northeast into one of the most popular politicians in the United States.

With May Day upon us, it’s a good time to consider what a Sanders presidency could mean for workers. So far, Sanders is once again putting economic equality and workers’ rights front and centre, skewering “the billionaires” and “special interests” and spotlighting striking workers. As well, Sanders continues to promote a living minimum wage, policies to make unionization easier and various paid leaves.

While recognizing how important these policy changes would be if enacted, labour advocates need also to reflect on what governmental functions would have to be strengthened, not only to promote and secure Sanders’ program, but also to ensure labour standards compliance more generally.

At a time when union membership is at a historic low and employer violations of basic workplace rights are pervasive and systemic, it would be crucial for a Sanders administration to develop the policy tools to both enhance and enforce workers’ rights.

Economic restructuring, worker vulnerability

With unions in decline, the service sector at slightly over 80 per cent of the workforce and many low-wage and insecure jobs at the bottom of the income ladder, the Department of Labor’s Wage and Hour Division, with its mandate to enforce the Fair Labor Standards Act (FLSA), has its hands full.

First, the average size of businesses has been shrinking since 2000. This effectively means that labour inspectors now have more businesses, each with fewer workers, to keep watch over. Researchers studying labour standards in the United States and other common-law countries consistently find that small firms are far more likely to break the law.

However, shrinking firm size is but an indication of a broader pattern of economic restructuring. Increasingly, lead firms in various sectors have reduced their number of direct employees considerably, producing what David Weil, former Department of Labor official under former president Barack Obama, refers to as “fissured workplaces.”

Focusing instead on their “core competencies,” many businesses now rely on independent contractors, sub-contractors and temporary help agency workers to meet labour needs.

This has generated significant increases in employer non-compliance with the law. For many contracted suppliers, reducing labour costs is their primary means of cost containment, which routinely means violating labour standards pertaining to pay, working time and other basic standards.

These changes in the economy also disproportionately affect the most vulnerable workers. Immigrant workers in particular are highly concentrated in industries rife with labour violations. The foreign born, 17 per cent of the U.S. population as of 2017, are more likely than their native-born counterparts to work in the service sector, to earn low wages and to thus have their labour rights violated.

Demonstrators march for immigrant and workers rights in a May Day parade last year in Seattle. (AP Photo/Ted S. Warren)

Inadequate enforcement, pervasive law-breaking

If the U.S. labour department was dealing with all this with steady funding and staff levels, the situation would be challenging enough. However, as professors Janice Fine and Jennifer Gordon report, in the last 30 years the number of workers without a union contract, and who therefore rely solely on the Fair Labor Standards Act for workplace protection, has increased by 55 per cent.

At the same time, the number of establishments that the Department of Labor’s Wage and Hour Division should be covering has jumped by 112 per cent.

Over the same period, the number of labour inspectors precipitously shrank from a high of just over 1,300 at the beginning of Ronald Reagan’s administration down to 709 when Obama took office. Although Obama’s Department of Labor hired an additional 300 inspectors, this still left approximately 1,000 people overseeing 7.3 million workplaces and over 135 million workers.

The likelihood of a business being inspected to ensure labour standards compliance is therefore remarkably slim, and low-wage employers know it.

Employers violate basic standards extensively, especially those dealing with overtime pay, working off the clock and rest periods. Among low-wage workers in New York, Chicago and Los Angeles, researchers found that in the previous work week, fully 75 per cent had worked unpaid or underpaid overtime, 71 per cent worked “off-the-clock” without pay, nearly 82 per cent had been denied a break and one in four was not paid the legal minimum wage.

Additionally, employers looking to evade labour standards frequently misclassify workers as independent contractors. In sectors such as trucking, construction, in-home care and cleaning services, employee misclassification impacts anywhere from 10 to 20 per cent of workers.

Although Obama made improvements that saw both inspections and awards to workers increasing, this barely made up for what was lost over the years between the Reagan and George W. Bush administrations, and could be eviscerated under Trump.

What could a Sanders administration do?

At minimum, to strengthen enforcement, a future President Sanders would need to invest heavily by expanding the Department of Labor’s resource base and hiring many additional inspectors. But there is also a need to overhaul the Fair Labor Standards Act to reflect changes in American workplaces that are unlikely to ever be addressed through unionization.

Sectors with high numbers of violations are generally characterized by large firms at the top and an ecosystem of contractors and labour service providers who compete for their business.

As David Weil suggests, strategic enforcement should utilize this network of business connections, perhaps taking a cue from Australia, where the Fair Work Ombudsman instituted a program that made big firms more responsible for the labour standards of their contractors.

Importantly, the Department of Labor must increase targeted, proactive inspections and rely less on worker complaints. As the Closing the Employment Standards Enforcement Gap research project in Ontario has demonstrated, proactive inspections are able to target persistent violators and high-risk sectors, can often uncover substantive employer noncompliance and generally do a better job correcting future business behaviour.

Finally, unions and other worker advocates could be more involved with the enforcement of labour standards. Projects in California that allow unions to partner with labour inspectors to police labour standards compliance in the construction sector show that such relationships can be quite effective.

Robust changes are needed to address the negative social consequences resulting from the growth in nonstandard work. And although revitalizing the labour movement is undoubtedly necessary, policy changes are required to address the sizable problems at the bottom of the labour market.

Of all Democratic primary candidates, Bernie Sanders is the most likely to undertake this project. A future Sanders administration could improve conditions for millions of workers by reforming basic labour standards and ensuring the necessary resources to enforce the law.