The practical case for worker power can be summed up in a single word: scale.
Since the Industrial Revolution began in the 1800s, the most dynamic and productive sectors of modern economies have tended to benefit from either increasing returns to scale, as in manufacturing, or network effects, as in infrastructure, transportation, and communications grids. Big business may be unpopular with the public and small business may be romanticized. But in modern industrial capitalist economies, big firms, or startups capable of scaling up to become giants, are disproportionately important for employment as well as technological innovation. In 2024, firms with 250 or more employees made up less than 1% of private-sector firms but employed 56% of the private-sector workforce. The much larger number of small businesses employed only a minority of American workers.
While a blacksmith’s apprentice in a premodern village might have been able to bargain on his own for better pay or working hours, a single worker has little or no bargaining power vis-à-vis a giant national or international corporation. All the power is on the side of the firm, which can pay less than a living wage if workers are sufficiently desperate for a job to provide for themselves and their families. It is no accident that in the 19th and early 20th centuries, the most intense and sometimes violent labor struggles in the United States involved the earliest firms to achieve gigantic scale in industries like railroads and steel manufacturing.
Society has good practical reasons to ensure that employers do not set wages too low. For one thing, poverty-wage workers may not be able to survive without charity or government welfare. A low-wage, high-welfare society may benefit greedy employers who seek to minimize the share of profits going to their workers, but taxpayers or donors to charity are forced to rescue underpaid workers with subsidies.
To make matters worse, low wages are bad for technological progress. High wages give employers an incentive to invest in labor-saving technology, at the expense of employment in their industry in some cases, but to the benefit of national and global productivity as a whole. In contrast, low-wage economies tend to be stuck in a low-wage, low-tech, low-growth trap.
The problem is that in all modern democracies, policymakers tend to be more responsive to business lobbies than to the interests of the large but diffuse working-class majority. Laws establishing wage floors, benefits, and workplace protections are necessary. But laws alone cannot substitute for institutions that give workers an organized and continuing role in determining the standards that govern their working lives.
Collective bargaining is one proven way to provide that role. But the essential principle is broader than collective bargaining under any particular legal framework. Workers need representatives who are accountable to them and not dependent on political parties, employers, or nonprofit donors.
The goal is not to impose a single model on every sector, but rather to create durable forms of worker power to balance employers and enough flexibility to reflect the needs of different industries. The diversity of labor representation in modern democracies makes clear that his goal can be achieved in various ways.
The National Labor Relations Act (NLRA), also known as the Wagner Act, has provided the major framework for organized labor and collective bargaining in the United States since Congress enacted it in 1935 during the New Deal, 91 years ago. In 2026, the year 1935 is as far from us as the year 1844 was from the New Deal reformers of 1935.
Any major legislative framework that is nearly a century old would need updating in the 21st century. But the NLRA is not only old but also decrepit. In 1947, the Labor Management Relations Act, known at the Taft-Hartley Act, crippled the NLRA by allowing reactionary state governments to enact anti-union “right to work” laws. From a peak of roughly 1/3 of the workforce1 in the 1950s, private sector union membership has declined to little more than 6% today.
To make matters worse, the inherited system of organized labor in the United States rests chiefly on so-called “enterprise bargaining,” that is, the unionization of one workplace at a time. That focus on workplace organizing made sense when the core of the American economy consisted of immense steel and automobile factories engaged in mass production.
But most American workers have been in the service sector for generations now. And the jobs that are growing the fastest in absolute numbers tend to be in health care, elder care, and hospitality. These industries, along with professions in which telecommuting is growing in importance at the expense of the traditional workplace, cannot be organized by the same methods that benefited mass-production workers in a giant assembly site.
A strategy that treats traditional workplace-by-workplace collective bargaining as the only legitimate form of worker power therefore leaves much of the modern workforce without an effective voice. Rather than judging every proposal by how closely it resembles the antiquated Wagner Act system, reformers should ask whether it gives workers meaningful influence over the standards that shape their lives.
There is no shortage of alternatives to consider. Some democracies, like Germany and the Nordic countries, with higher levels of unionization use sectoral bargaining, also called multi-employer bargaining, in which representatives of labor and business in an industry set standards that apply to all of the firms in an industry.
In France, few workers belong to labor unions, and yet collective agreements with employers that are reached by organized labor can benefit all workers in a field. The French model might be of particular interest in the United States because it achieves widespread coverage. All workers could take part in workplace elections to determine which organizations will represent them, and those organizations would not necessarily be traditional labor unions.
Yet another alternative to the dilapidated Wagner Act system is provided by wage boards and similar industry-level standard setting bodies. Devised more than a century ago to represent workers in low-wage industries that were hard to unionize, wage boards bring together representatives of workers, business, and government or civil society. In recent years, several states, including New York, California, Massachusetts, and Arizona have used wage boards or related structures to raise wages or standards in industries like fast food and rideshare.
These institutions are sometimes criticized as second-best substitutes for collective bargaining. That is a mistake. Their value should be judged by whether workers have a meaningful role in choosing or holding accountable the people who speak for them, whether the institution has the power to produce real improvements, and whether the standards it establishes reach workers who would otherwise have little individual leverage over their employers.
Ultimately, the replacement or modernization of the Wagner Act system may not be a single new system of labor relations, but different labor regimes suited to different industries within the United States.
Collective bargaining remains one of the most important ways to create that power, but it should not be confused with the larger goal. Sectoral bargaining, wage boards, worker councils, elected representatives, or other structures may work better in others. They can succeed, however, only if the organizations or individuals who represent workers are accountable to the workers themselves, through mandatory workplace elections, mass membership, or other democratic means. A body that claims to speak for workers without giving workers a real voice in choosing their representatives risks becoming merely another form of top-down policymaking.
What the United States needs is a modern system of worker power that raises wages, gives workers a role in setting workplace standards, incentivizes technology-driven productivity growth, and spares taxpayers the costs of rescuing low-wage workers from poverty. Giving workers more power in the economy is what the United States needs, now more than ever.
Michael Lind is a contributor to Unherd and author of “Hell to Pay: How the Suppression of Wages is Destroying America.”
