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The Ghent system—an arrangement whereby trade unions help deliver government-supported unemployment insurance—exists in its truest form only in a handful of countries, including Sweden, Belgium, and Denmark. However, the United States has a number of Ghent-like policies where unions deliver or help people access governmental benefits—including workforce training, retirement benefits, and enforcement of workplace laws. Expanding upon these models would increase union membership and improve the quality of public programs in the United States.

The United States has a different history than that which created the unemployment insurance system in Sweden and other Ghent countries. However, unions in America do assist workers in analogous ways. For example, they have partnered with state and local governments to improve training for health care workers in Washington state and city employees in Toledo, Ohio. Unions and worker organizations have also engaged in co-enforcement with municipalities in San Francisco and Los Angeles to boost compliance with state and local labor laws. And in several cases, they have helped workers navigate retirement and health benefit plans. These models have proven successful at improving the quality of government services and at providing an opportunity for union recruitment. They could be significantly expanded to build a robust Ghent-like system in America.

Boosting union membership and delivering better public services are critical planks of any progressive agenda. Unions play an essential role in ensuring that working people have a fair place in the U.S. economy and a voice in its democracy.¹ But, after decades of conservative attack, union density has shrunk to its lowest level in more than 50 years.²

Similarly, for decades, the U.S. government has been so weakened by free market ideologues that it now struggles to perform many of its vital tasks, from basic enforcement of the law to providing support and opportunity for workers. For example, estimates suggest that roughly a quarter of low-wage workers are paid less than the legal minimum wage.³ Moreover, less than 30 percent of unemployed workers end up receiving unemployment insurance,⁴ and a significant amount of workforce training does little to help workers.⁵

Involving unions more heavily in the delivery of certain government programs could help raise standards for workers by addressing both declining union membership and low quality or underutilized public services. For unions, such a system would help with recruitment and retention of members because it would ensure visibility, provide access to workers, create incentives for workers to join, and pave the way for greater recognition of the important work that unions do to support a fair economy.⁶ Research shows that the Ghent system boosts unionization rates by about 20 percentage points compared with non-Ghent countries.⁷

But implementing the Ghent system alone will not do enough to strengthen U.S. unions; many other policy changes are also required, including basic rights for all workers, stronger penalties for employer violations of the law, and elimination of “right-to-work” laws. These steps are called for in legislation such as the Protecting the Right to Organize Act, the Workplace Democracy Act, and the Public Service Freedom to Negotiate Act, all of which would represent a critical step forward.⁸ Still, the incentives for membership that the Ghent system provides are important. Indeed, countries with the Ghent system are among the few in the world with high, stable union density.⁹

Union involvement can also improve the quality of public programs. Unions have the unique ability to advocate for workers, communicate complicated economic information, provide trustworthy advice, and afford employees some protection from employers. Unions have a mission and democratic structure to help workers, as well as an incentive to deliver benefits so that they can recruit additional members. These attributes can be vital in making many government programs work properly. Unions, working in partnership with businesses and government, can help tailor training to better meet workforce needs and carve out pathways to advancement in a way that business or the government rarely do on their own.¹⁰ Unions also have unique access to workers and their trust as well the ability to protect them from retaliation. These features can improve enforcement of workplace laws and help workers navigate important public programs such as retirement plans, health insurance, and even unemployment insurance.¹¹

Creating a robust Ghent-like system in the United States where unions help people access benefits from a range of governmental programs—such as workforce training, enforcement of workplace laws, health and retirement benefits, and others—would be a significant change from current policy, which suppresses union membership and too often poorly funds government programs. Future policy needs to affirmatively encourage union membership and adequately support government programs as well as the union’s role in them. There is a strong need to boost union density and increase the quality of several governmental programs, and there are also several successful models on which to build.

The rest of this report provides more details on what the Ghent system is; how it improves the quality of public programs and strengthens unions; and how its principles are working well in a few areas in the United States and could be expanded.

The Ghent system—named for the city in Belgium where it originated—relies on labor unions to administer unemployment benefits. Most countries, including the United States, have a system of unemployment insurance administered by government, but for a variety of historical reasons, unions have been heavily involved in administering the unemployment systems of several other countries. Today, variations of the Ghent system exist in Denmark, Finland, Sweden, Iceland and Belgium. While each country’s system works slightly differently, the underlying logic is the same: The Ghent system provides worker organizations with a formalized role in delivering unemployment insurance that is subsidized by the government. In some versions of the Ghent system, workers are required to join the union to access the benefits, but in other versions, unions use the insurance sign-up process and the relationships built through this process to recruit and retain members.

In Belgium, the government is responsible for funding the unemployment insurance system, and people can either choose to go through the government or a union to access the benefits. The union receives government funds to help administer the program; however, it has to keep that money separate from other union finances.¹² Workers do not have to be union members in order to receive the benefits, but many still choose to go through the unions because they find it easier and the service better. Unions make it easier to navigate bureaucracy by providing help with paperwork and ensuring that workers receive their payments and enroll in training.¹³ On top of supplying a needed public benefit, the system also gives unions a chance to interact with workers outside the workplace.¹⁴ In short, the Ghent system creates a framework that incentivizes and encourages union membership.

By giving labor organizations a formalized role in the unemployment insurance system, the Ghent system has ensured relatively high union membership in countries using the system even though they are effectively right-to-work states, as workers cannot be required to pay for costs of collective bargaining.¹⁵ Indeed, union density in Sweden and Finland was 67 percent and 65 percent, respectively, in recent years.¹⁶ Furthermore, the Ghent system tends to lead to reasonably stable membership rates that are less likely to decline during economic or industry downturns, as they are not bound to a single job or firm.¹⁷ In Iceland, union density has increased, from 66 percent in 1980 to roughly 80 percent in 2013. Belgium’s union membership rate has hovered around 55 percent for nearly four decades.¹⁸ Estimates suggest that the Ghent system boosts union density by almost 20 percentage points and explains much of the historic differences in density between countries such as Sweden and Belgium, which have the Ghent system, and their neighbors Norway and the Netherlands, which do not and have lower membership rates.¹⁹ Unfortunately, Sweden and Finland have recently taken steps to make union-provided unemployment insurance more expensive and thus less attractive; as a result, both countries have seen some decline in union membership.²⁰

The benefits of the Ghent system can extend to the public as well as unions. There is some research to suggest that, despite the voluntary nature of the Ghent system—as opposed to the universal nature of most countries’ unemployment insurance systems—takeup rates in Ghent countries are actually higher than in other European countries or the United States. For instance, one study found that in both Denmark and Sweden, 85 percent of unemployed people received unemployment insurance in 2005, compared with only 47 percent and 20 percent of unemployed people in Germany and the United Kingdom, respectively.²¹ What’s more, research notes that the Ghent system can help achieve much higher coverage in an efficient and cost-effective manner.²² Other research suggests that the key role that unions play in the Ghent system helps make it work well.²³

Europe’s experience with the Ghent system shows that involving unions in the provision of benefits can empower unions by significantly increasing their density while also raising takeup rates and quality for the public.

Unions play an essential role in ensuring that working people can adequately participate in an economy that is fair and in the nation’s democracy. They have the power to raise wages for all workers, especially low- and middle-income workers. Analysis shows that, on average, union workers earn roughly 12 percent more than their nonunionized counterparts, with the premium rising for noncollege graduates.²⁴ Collective bargaining can also help close racial and gender wage gaps.²⁵ In addition, research shows that unions increase the likelihood of children moving up the economic ladder later in life; areas with higher union membership have higher intergenerational mobility, and children who grow up in union households have higher incomes as adults. In fact, a community’s union membership level is as strong a predictor of low-income children’s adult earnings as high school dropout rates.²⁶ Finally, unions ensure that democracy works in the interests of ordinary people by acting as a check on corporate interest groups and the wealthy.²⁷ Political scientist Martin Gilens finds that unions are one of the few advocacy groups that consistently lobby for policies supported by low- and middle-income Americans.²⁸ Union-led mobilization efforts also increase voter turnout, especially among Latino and Asian American voters and the working class.²⁹

In recent years, however, attacks by conservative lawmakers and the courts have undermined worker organizations and led to a sharp decline in union membership.³⁰ Whereas almost 25 percent of U.S. workers were part of a union in 1973, union density today has fallen to less than 11 percent.³¹ And as unions have been weakened, the middle class has suffered. Indeed, researchers estimate that declining union density accounts for one-fifth to one-third of the increase in U.S. wage inequality among women and men, respectively.³²

Meanwhile, the government is failing to provide workers with the job training, workplace protections, and public benefits they need. The United States’ current workforce training system is uneven and outside of joint labor-management partnerships; it is too often of low quality and fails to lead to good jobs.³³ For instance, studies find that while certificate and subbaccalaureate programs generally yield some increase in earnings, returns vary significantly based on a student’s field of study, race, and gender.³⁴ Moreover, a lot of training is firm specific and leads to skills that are not transferable to other employers.³⁵ In addition, the United States spends less money on training than its competitors; it ranks at the bottom among Organization for Economic Cooperation and Development countries when it comes to spending on training.³⁶ In other words, there is a large gap between the training that is needed and the training that is provided.

Involving worker organizations more robustly in helping run the workforce training system could significantly improve training.³⁷ Unions already play a role in workforce training. They directly negotiate with employers to create labor-management training funds, and they participate in government-funded training in several roles, as both members of workforce boards and recipients of funding. But employers dominate the public system.³⁸ Rebalancing the workforce system to emphasize quality and ensure that unions and employers have equal power—as well as promoting joint labor-management programs—would help ensure that training leads to good jobs.

Research shows that when unions get involved, workers receive more training, and this training leads to better results, including jobs with higher pay.³⁹ Furthermore, workers in labor-management programs are more likely to complete their training, and they drop out at slower rates during economic downturns.⁴⁰ Completion rates in jointly run construction apprenticeship programs in Ohio and Kentucky, for instance, are 21 percent and 35 percent higher, respectively, than in nonunion programs in those states.⁴¹ Union-sponsored training programs in the building trades also have higher enrollment rates and participation among women and people of color than trainings that are not sponsored by unions.⁴²

While training can lead to good jobs with high standards, the standards of those jobs as well as all others must be enforced. Indeed, evidence suggests that wage theft—employers paying workers less than they are legally entitled to—and violations of workplace standards are pervasive. A report by the Economic Policy Institute, for example, estimated that low-wage workers in the United States lost more than $50 billion to wage theft in 2016.⁴³ Unfortunately, workplace violations could become even worse. Wage theft was a significant problem during the Obama administration, even though the U.S. Department of Labor aggressively enforced wage and hour laws and took some steps to make it more difficult to misclassify workers as independent contractors.⁴⁴ But there are indications that the Trump administration is pulling back from some wage enforcement.⁴⁵ Additionally, enforcement activity under the Labor Department’s Occupational Safety and Health Administration, which is meant to help ensure that employers provide safe workplaces, has declined under the Trump administration. At the same time, however, inspections related to workplace fatalities or catastrophes rose in fiscal year 2018, suggesting that serious injuries have increased.⁴⁶

The Labor Department, moreover, can only enforce federal labor laws. But many states and cities have wage laws, paid sick days, family leave, and fair scheduling requirements that go beyond the federal minimum requirements.⁴⁷ That leaves enforcement responsibility to the state and local levels of government. But even well-resourced state and local enforcement agencies cannot do their job alone. Surveys estimate that there are less than 1,000 state-level investigators nationwide, which—even if the roughly 1,200 federal wage and hour investigators are also counted—is hardly enough to enforce standards for the 87.7 million workers who are covered by these laws.⁴⁸ To more effectively enforce the law, policymakers must not only beef up governmental labor inspectorates but also include worker and community organizations—from unions to worker centers, religious organizations, and other volunteer groups—in their enforcement efforts.

Under a Ghent-like co-enforcement model, government could complement its traditional enforcement activity by partnering with unions and worker organizations, as Janice Fine of Rutgers University and Jennifer Gordon of Fordham University have explained.⁴⁹ These co-enforcers can act as trusted intermediaries between workers and government, as well as provide guidance to workers seeking to challenge labor violations in their workplace, since doing so often involves legitimate risks, such as retaliation from employers, for individual workers.⁵⁰ Co-enforcers also have contact with workers in more workplaces than even well-resourced government inspectors are likely to reach. The benefits of co-enforcement are numerous. Literature notes that co-enforcement initiatives improve short-term “compliance and enforcement”; generate “professional development, sophistication, and commitment of enforcement officials”; and produce “modest revenue increases, better legitimacy, and a strengthened institutional framework for groups working with, and composed of, low-wage workers most vulnerable to wage theft and other substandard working conditions.”⁵¹ Studies have also found that “when employees are represented by a union, … compliance with Fair Labor Standards Act overtime regulations is increased.”⁵²

Public programs—such as health care and retirement benefits—that are designed to help workers can be difficult to navigate alone, leading to underutilization. Evidence suggests that the public often fails to receive benefits, even where benefits do exist. For example, only about 40 percent of unemployed workers apply for unemployment insurance, and less than 30 percent receive it.⁵³ Improving these public supports will require partnering with workers and worker organizations in new ways.

Studies suggest that union members are more likely than nonunion members to receive workers’ compensation and unemployment insurance than nonunion members.⁵⁴ Indeed, according to a 1997 study, blue-collar workers who were laid off from union jobs were about 23 percent more likely than comparable nonunion workers to receive unemployment insurance benefits.⁵⁵ Professors John W. Budd and Brian P. McCall speculate that unions drive higher takeup rates by acting as a “conduit of information.” They argue that unions reduce the “costs” of applying for benefits by providing information about how and where to apply, helping collect evidence in case of disputed claims, and providing representation in hearings over disputes. They found anecdotal evidence to support this theory.⁵⁶ University of Buffalo law professor Matthew Dimick argues that unions and employers collaborating on unemployment insurance policy led to efficiency gains and “reduce[d] employer resistance and workplace adversarialism.”⁵⁷ Using worker organizations as navigators could increase the effectiveness of government programs and would also provide an opportunity for worker organizations to build relationships with workers.

In short, a Ghent-like system could boost union membership and, thus, workers’ power to collectively bargain for improved wages and benefits. It could also help address critical gaps in public programs such as training, enforcement, and benefits navigation.

While the idea of using nongovernmental organizations to administer government services may seem unfamiliar in a U.S. context, it is actually quite common. Across the country, governments have partnered with unions and other nonprofit worker organizations to improve a number of government services, most notably worker training, labor standards enforcement, and benefits navigation. These programs provide evidence that a Ghent-like system is already working well in the areas where it is being used. These models could form the basis for building a more robust Ghent-like system in the United States.

Training

The construction trades have some of the biggest and most well-known training programs in the country. For example, brick layers, carpenters, plumbers, and other unionized trades in Wisconsin have formed as part of the Wisconsin Regional Training Partnership (WRTP), a relationship with area employers on apprenticeships that provide paid, high-quality training and a union job.⁵⁸ The WRTP is funded through a variety of sources, including employer contributions and charitable giving, but government support has been important to its success.⁵⁹

State and local governments also often partner with unions to deliver training programs, and doing so has improved public sector outcomes in relevant agencies and organizations.⁶⁰ For example, city employees in Toledo, Ohio, developed a program in which union members acted as peer trainers to promote safe work practices, leading to a decrease in employee injuries.⁶¹ In California, public safety unions have partnered with the Office of the State Fire Marshal to create a joint apprenticeship committee that enables training consistency by having firefighters from different departments train under the same umbrella organization. This consistency was critical in 2015 when coordinating hundreds of firefighters across the state for a monthlong firefighting effort.⁶²

Washington state’s SEIU Healthcare NW Training Partnership provides an excellent model for how joint labor-management training can be used to improve the quality of government services and simultaneously build worker power. Home care workers in Washington gained the right to organize in 2001 and have since unionized under Service Employees International Union (SEIU) 775.⁶³ That effort, along with two voter initiatives that expanded basic training requirements for home care workers, have transformed both the home care industry and the quality of long-term care.⁶⁴

The training partnership brings together SEIU 775, the state of Washington, and private employers to tailor training toward the needs of patients, workers, and employers. For union members, the cost of training is entirely covered by bargained employer contributions. But nonunion members can also participate. More than 45,000 workers receive training as part of new and continuing education programs.⁶⁵ And more than 90 percent of those who start basic training complete it. In addition to basic training, the program offers continuing education, registered apprenticeships for advanced home care, and nurse delegation trainings. Restructuring the home care industry has contributed to a more professionalized workforce, coincided with higher wages, and improved quality of care.⁶⁶ In 2017, Washington state led the nation in “supporting seniors, adults with disabilities and their family caregivers.”⁶⁷ The partnership has also provided visibili