The future of worker power can be found in Minnesota

Nursing home workers in Minnesota have been fighting for better pay since 2015. That’s when the state government started funding their employers based on average costs without dictating how much workers themselves should get. “It’s impossible to be a good employer,” notes Jamie Gulley, president of SEIU Healthcare Minnesota & Iowa. Any company that pays above the average loses money; the ones who make the most profit are those who short workers the most. “The incentives,” he adds, “are all wrong.”

Then Minnesota experienced some of the highest nursing home mortality rates in the country in the wake of COVID-19. “The state was unable to exert sufficient control over the quality and the things that were happening in the nursing homes,” Gulley explains. When the state gave nursing homes more money to pay workers, they used it for hiring bonuses. That created a counterproductive labor market with caregivers constantly switching employers to cash in. “It completely disrupted care,” Gulley says. It also failed to attract more workers to an industry that was in desperate need of them.  

So in the midst of the pandemic, his union started pushing for something novel: a standards council that would give both workers and the government more say in the working conditions inside nursing homes. Representatives of all workers would sit down with employers and government officials to hash out standards that apply to all.

This concept, where workers across different companies push for better conditions together, is broadly known as sectoral bargaining, and it’s common worldwide and goes hand in hand with the kind of workplace-specific bargaining enshrined in U.S. law. In some countries, unions are so strong and have covered so many workers in an industry that when they bargain, they essentially bargain for everyone. Other countries extend the standards set in union contracts to all nonunion workers. The idea is to bring all of the workers doing similar work together to bargain with their employers collectively for industry-wide standards. Union contracts, then, can go higher than that established floor and address specific, local issues.

But American states can’t enact sectoral bargaining regimes. They’re preempted by the federal National Labor Relations Act. What they can do is create something similar: standards boards or councils that bring together workers, employers, and the government.

With just 10% of American workers in a union and any federal labor law overhaul stalled in a gridlocked Congress, states are leading the way in giving workers more say over their working lives, just as they did in the last decade by passing higher minimum wages given the lack of a national increase. Standards boards represent “an essential way of raising standards for workers in the modern economy,” says David Madland, senior fellow at the Center for American Progress.

And guess what? They’re gaining traction—established in five states and a handful of cities since 2018—making them one of the most exciting new tools to build worker power.

Minnesota Nice

Minnesota nursing home workers just got their way: On May 18, as part of a sweeping labor bill, the legislature created a brand-new Nursing Home Workforce Standards Board that will be tasked with setting requirements for how nursing home workers are paid and treated. The board will have three representatives for nursing home employers, three for workers, and one from each relevant government agency, and it will issue its report on minimum industry standards by August 2024.

“Employers are always at the table when it comes to setting the rates, and their interests are always historically taken care of first,” Gulley says. “This will make sure the workers are at the table as well to talk about what they need.”

While the Minnesota law is a significant bit of legislation, the idea of creating standards boards has been gaining momentum, most notably when California passed the FAST Recovery Act in 2022 to raise pay and conditions for fast-food workers. (That law is on hold until an industry-backed ballot measure seeking to roll it back gets a vote next November.) Healthcare-related industries across the country have become rich soil for this concept to take root. Michigan has already created a council for nursing home workers, and Nevada has one for home care workers. Colorado lawmakers passed a standards board for home health aides in early May, and California lawmakers are considering something similar for the same workforce.

These boards can take on a broad range of issues—not just pay, but also hours, benefits, staffing, and training. “It ensures you raise standards for all workers in the industry, which creates a high floor,” Madland says. That creates “a good kind of competition,” where companies can no longer profit by shorting their workers and racing to the bottom.

This model could apply to any industry, but it’s particularly salient in healthcare. “The care industry provides an ideal testing ground because you have a really clear need to raise standards for workers,” says Madland. Low pay has led to high turnover, which hurts the quality of care patients receive. That “creates a strong desire by all parties to figure out a solution.”

Many workers in the industry have long been underpaid and poorly treated. They’ve been called on to do even more in the past few years. The resulting overwork and burnout has led to acute staffing shortages in settings like hospitals and nursing homes, and a lack of workers drives down the quality of care for everyone. State governments, therefore, have an interest in improving working conditions to attract and retain more people in the field and ensure residents are well taken care of.

The workforces are also often directly subsidized by the government: Public funding, particularly Medicaid, pays for the vast majority of care in nursing homes and for home health workers. There is a “big public interest,” says Madland, as well as a stake in improving how things are run.

Good for business

Employers themselves are also often worried about the staffing shortages, but they can’t increase pay without competitors undercutting them to make more profit. If all employers have to abide by new standards, however, they’re on equal footing. “There’s a common interest that everyone has,” Madland points out, and “you need all the players there because no one can do it on their own.”

A standards board for home health and personal care workers, meanwhile, is even more important. They frequently work either for an individual patient or for small agencies. In a “fissured economy,” as Madland puts it, with lots of small employers, franchisees, or independent contractors, it’s difficult or impossible to unionize in the traditional way. A standards board, though, creates a path toward collective action.

Minnesota’s model is a particularly strong example. In some places, the boards only make recommendations, and it’s up to lawmakers or an agency to approve them. But the state board has the authority to set standards on its own without going back to the legislature. Meanwhile, Minnesota requires nursing homes to charge private patients the same rates that it charges Medicaid patients, so what the state sets in the Medicaid program has a big impact.

It also proved that some employers might even support a standards board. One nursing home in Minnesota explicitly backed the idea, while the rest stayed neutral. They didn’t testify against the legislation and instead argued that they needed more funding in order to raise standards.

Minnesota workers want to inspire others. “Our hope,” says the SEIU’s Gulley, “is that other states will take a look at this.”