History of Labor Unions
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Summary & Analysis
- Key question in labor history: Is labor just a commodity?
- Industrial Revolution changed work, reducing individual workers' power and prompting some to seek unions
- Early growth of unions led to frequent violent clashes between workers and employers; government often intervened to crush strikes by force
- New Deal changes to labor law allowed rapid union growth after 1930s
- Unions entered long decline by 1960s, struggled to adapt to modern economic conditions
What Is Labor?
- Business view: employers have a right to make key business decisions; labor is a commodity like any other
- Union view: workers have a right to a say in their wages and working conditions; labor is not just a commodity but is a special part of a person's identity
In general terms, business owners have answered: Labor is a commodity. It is something that a worker can sell for whatever the market will bear. The price of labor— that is, wages— will be dictated by supply and demand. The hours and conditions of work will be set by the employer or reached by some agreement between the employer and individual workers. That is the employer's right.
Workers have generally offered a different definition: Labor is an integral part of a person's life. Employees might recognize that supply and demand will influence wages, but they feel that labor has a special moral dimension that makes it different than a simple commodity. After all, a person's labor cannot be separated from his or her life. Workers have rights on the job and rights to decent wages.
The ideological dispute has also involved individual versus collective rights. Did an individual always have the right to bargain with his employer? Or did an association, a union, have the right to speak for all workers? Employers pushed individual rights. They insisted on their right to deal with any individual worker. Unions pushed for group rights. In collective bargaining, a critical concept in labor history, the union came to an agreement with the employer and that agreement then became binding for all.
The Industrial Revolution Sets the Scene
- The Industrial Revolution changed work, reducing individuals' power to influence conditions of work
- Early industrial working conditions were poor: low wages, long hours, low safety
- Unions arose in response to these problems
The conditions that came with the big factories were shockingly different. Workers had to be disciplined in order to keep the enterprise operating efficiently. No more drinking on the job. No more setting their own hours or pace of work. A say in how the work was done, a traditional prerogative of craftsmen, was reserved solely for the boss. Regimentation was not easy for Americans to swallow, but business owners considered it the key to productivity and profit in the industrial age.
Working conditions were often brutal and dangerous. Mines caved in, workers breathed toxic dust or were mangled in machinery. Factory workers were rigidly controlled and often fined for making the least mistake. Even bathroom breaks required the boss's permission. Outside the workplace, frequent financial panics left millions unemployed.
In the face of all these problems, workers increasingly began to organize. Many skilled workers had already formed craft unions, which predated the industrial revolution. But faced with the rapidly growing scale of industry and power of employers after the Civil War, many workers felt they needed an organization that was national in scope and big enough to stand up to Big Business.
The Knights of Labor
- First large national labor movement
- Broad aims of social transformation (called for unionization of all workers in all industries, hoped to create new cooperative businesses); modest methods (opposed most strikes)
- Grew rapidly from 1877-86
- Led by Terence Powderly
Terence Powderly took over as the leader of the Knights in 1878 and discarded secrecy. The organization—open to any trade, to both skilled and unskilled workers, to women and to blacks—grew rapidly, from 19,000 workers in 1881 to more than 700,000 by 1886.
Powderly and the Knights were opposed to the wage system. Instead, they wanted to develop cooperative enterprises that would give workers real power, not just more money. In this, they were the first proponents of the idea of a social labor movement with broad goals, as opposed to a business movement aimed mainly at improvements in hours and pay. Their tactics were mild; they were not enthusiastic about strikes (which often led to violence), preferring instead to boycott the products of a target business.
One of the demands of the Knights was for an eight-hour workday to replace the twelve- or fourteen-hour shifts common in many industries. As one labor ballad put it:
We mean to make things over;
We're tired of toil for naught
. . . Eight hours for work, eight hours
For rest, eight ours for what we will.7
Employers disagreed. They saw a business as a private enterprise in which the owner—who was, after all, paying the freight—should rightfully control workplace conditions. When railroad workers held the biggest strike yet seen in America in 1877, the volatile nature of labor-management relations became clear. The strike exploded into violence, hundreds of workers and their supporters were killed, and millions of dollars in damage was inflicted on the railroads.
- Violent 1886 riot in Chicago's Haymarket Square led to anti-union backlash
- Knights of Labor quickly fell into decline
The climate in the country shifted abruptly toward management on 4 May 1886. That day a demonstration was held in Chicago's Haymarket Square to support a strike at the McCormick Reaper works. As the rally was winding down, someone threw a bomb into a group of police officers, who responded with by firing wildly into the crowd. Eight policemen and an unknown number of workers died. The violence rattled the nation and gave labor a black eye.
The Haymarket backlash, the employer counteroffensive, and the Knights' own lack of support for strikes all helped hasten the rapid decline of the Knights of Labor. They had also come into increasing conflict with trade unionists, skilled workers who did not share the Knights' enthusiasm for organizing unskilled workers or their lofty goals of transforming businesses into workers' cooperatives.
The American Federation of Labor
- Advocated craft unionism rather than industrial unionism
- Saw themselves as labor's elite
- Led by Samuel Gompers
- Failed to organize Carnegie Steel in 1890s
The Knights, though they faded rapidly in the 1890s, did have a point. Industry was growing ever larger, and unions, to be powerful, had to rally all workers. The idea of unions bringing together all workers across an industry and aiming at broader goals would keep coming back, as we shall see.
Craft unions too reeled under the management counterattack of the 1890s. One of the largest was the Amalgamated Association of Iron, Steel and Tin Workers. Steel workers had been highly skilled in earlier decades, but new technology was undermining their bargaining clout. One of the most advanced steel plants in the country was Carnegie Steel's huge Homestead complex near Pittsburgh. It was there that Andrew Carnegie, and his supervisor Henry Clay Frick, decided to confront labor.
In early 1892 Frick told the union to accept a steep pay cut or he would refuse to recognize their organization. In July he locked out his employees and said he would operate the plant with nonunion workers. Workers surrounded the plant, which Frick had fortified with a twelve-foot fence and barbed wire—"Fort Frick" they called it. Frick hauled in a private force of 300 armed Pinkerton guards by barge. A violent twelve-hour pitched battle— the workers even made use of a small cannon—left dead and wounded on both sides.
Following this skirmish, Frick requested the state to intervene with 8,000 militia. Ostensibly there to "restore law and order," these soldiers helped escort "scab" replacement workers into the plant.8 This pattern of the state siding with management was a common one in early labor disputes. The courts also accommodated Frick by bringing charges against many of the union leaders. By September the plant was back up and running and the union was broken. In November the Amalgamated called off the strike and soon lost two-thirds of its members.
"Our victory is now complete and most gratifying," Frick telegraphed his boss after the lockout. "Do not think we will ever have any serious labor trouble again."9 He was just about right; the steel industry would operate union-free for almost a half century afterward.
Progressive Era Gains for Labor
- Unions gained greater popular support during Progressive Era
- Changes in government policy favored union growth
- Unions and management fought over the principle of "freedom of contract"
- Courts used antitrust law against unions
But the power struggle continued. Business owners claimed that every worker should be free to deal with his employer directly, rather than be bound to a union. In 1901 a baker named Joseph Lochner challenged a New York law that set a ten-hour limit on the hours of bakery employees. The Supreme Court agreed that the state could not interfere with Lochner's "right to free contract," his freedom to agree with individual employees about their working conditions. The principle cut to the core of the ideological differences between management and labor.
Workers generally scoffed at the "freedom" the right of free contract promised. "There is no hesitancy on the part of our country to grant us certain rights," Gompers said in 1908. "For instance, the right . . . to work as long hours for as low wages as the employer can impose."10
Unions fought for the "closed shop," where workers were required to join the union before getting a job in a particular factory. This, they said, was the only way to ensure workers had the clout to deal effectively with their bosses. Employers argued just as vehemently that the closed shop coercively forced workers to support unions, whether they wanted them or not, and infringed unnaturally upon the free market. They wanted an "open shop" where workers could join a union or not as they chose.
During the Progressive Era, public opinion was generally sympathetic toward workers, and politicians passed new laws limiting child labor, improving workplace safety, and establishing some compensation for injuries received on the job. Unions continued to fight for a standard 8-hour day. They also pushed Congress to limit immigration, which they saw as a threat to American jobs—an issue that remains contentious today.
One of the major reforms of the Progressive Era was to rein in trusts, the huge monopolies that financiers and businessmen formed to gain a measure of control over market forces. But the companies soon turned these same laws, which banned any "restraint of trade," against unions. A 1914 law exempting unions from antitrust law again went to the core of the ideological issue - was labor subject to the same laws as any other product or commodity? "The labor of a human being is not a commodity or article of commerce," the Clayton Act read.11 Workers hailed the law as labor's "magna carta" (after the ancient English charter of freedoms). Businesses, though, continued to assert that labor should not be protected in this way. And like-minded judges soon issued a series of court decisions that rendered the Clayton Act toothless.
Unions Fade During the Roaring Twenties
- Rapid economic growth during 1920s made unions seem irrelevant
- Businesses adopted "welfare capitalism," offering their workers many of the benefits unions provided in order to prevent unionization of employees
- Unions lost one-third of their membership
At the same time, the legal advantages unions gained during the Progressive Era—including limits on child labor, and minimum wages laws—were weakened by the courts. The labor movement, predictably, fell into decline.
Businesses helped grease the skids for organized labor's slide. The National Association of Manufacturers, a pro-business organization founded in 1895 in part to resist unionization, organized an advertising and public relations effort known as the "American Plan" to convince workers that unions were poor representatives of their interests. Business leaders attacked the closed shop as un-American and pushed for the open shop. They organized American Plan clubs around the country. The American Bankers Association declared that a worker should "not . . . be bound by the shackles of organization to his own detriment."13
At the same time, many businesses adopted what was known as "welfare capitalism." First used by steel companies, this was an effort to give workers incentives to avoid unions; if the companies themselves provided many of the benefits traditionally promised by unions, workers would have no desire to unionize. Companies thus enticed workers with profit sharing plans, bonuses, improved safety, pensions, housing, even recreational programs. The only catch was that workers gained no real power in the workplace. Still, as long as times were good, most workers were more than happy to make that tradeoff. If everyone was able to enjoy the fruits of industrial production, who really cared who ultimately called the shots?
Organized labor had started the decade strong, with more than 5 million workers in its ranks. By 1929, that number had shrunk to 3.4 million and the labor movement was on the ropes.
A New Deal for Labor
- The Great Depression turned public opinion against business and in favor of workers
- Franklin Roosevelt's New Deal imposed many pro-union policies
- Wagner Act of 1935 changed labor law to make it much easier for unions to organize workers
- Unions grew rapidly from 1930s through 1940s, despite split within labor movement between craft AFL and industrial CIO
The Roosevelt-backed Wagner Act of 1935 guaranteed unions' right to organize workers, granting unions federal legal status for the first time. The National Labor Relations board was set up as an independent referee to protect unions' rights and to oversee the collective bargaining process.
Unions took advantage of their new legal protections and set about organizing America's largest industries. In spite of a split within the AFL—unions that focused on organizing whole industries broke off to form the rival Congress of Industrial Organizations (CIO)—union ranks surged in the 1930s. In fact, the competition between the AFL and CIO spurred organizing. More than 3 million workers joined unions in 1937 alone. By the end of the decade, the AFL had 4 million members and the CIO counted 3.5 million more.
A good chunk of these new workers came from the auto and steel industries, neither of which had been unionized before. Ford, Chrysler and General Motors were all staunchly opposed to unions. Organizing the workers of a mammoth corporation like GM, which had 110 plants and a quarter million workers, was a daunting task. In 1937 a group of activists from the United Auto Workers staged a sit-down strike at a huge General Motors plant in Flint, Michigan. Aware that the company could replace them with strikebreakers if they walked out, the organizers simply refused to leave their work posts, stopping production throughout the whole plant. They sang:
When the bosses won't talk,
Don't take a walk,
Sit down! Sit down!14
The sit-down strike tactic was an effective ploy. It allowed workers to pressure management without a mass walkout. General Motors managers labeled the strikers radicals and trespassers (the U.S. Supreme Court later ruled sit-down strikes illegal), but found it impossible to break the strike without resorting to violence, which would have been a public-relations nightmare. After 44 days, the company gave in and agreed to recognize the union and engage in collective bargaining. Chrysler soon followed suit, and Ford gave in to a strike four years later. The ranks of the UAW, along with those of other national unions, swelled. The American auto industry would remain heavily unionized into the twenty-first century (and many would argue that many of Detroit's biggest problems today stem from the industry's relationship with the UAW).
Big Business and Big Labor: Uneasy Co-Existence
- From 1940s through early 1960s, roughly one-third of all American workers belonged to unions
- Huge strike wave in 1946 turned public opinion against unions; Taft-Hartley Act of 1947 rolled back many advantages unions gained in 1930s
- By 1950s, unions became more and more bureaucratic
- Businesses, facing little international competition in wake of WWII, could afford to make generous concessions to union workers… for awhile
But a series of strikes right after the war brought a backlash. The year 1946 saw the most strikes of any year in American history as auto, steel, rubber, and other workers pressured employers for increased pay and benefits. But labor's arrogance—and the hardships imposed on ordinary citizens by frequent strikes—brought a public backlash. A pro-business Republican Congress passed the Taft-Hartley Act in 1947, throwing cold water on many of the structural advantages labor had obtained during the New Deal. The new law banned the closed shop and let states dictate open-shop rules.
In 1952, a plumber's union official named George Meany took over the presidency of the AFL, where he would remain the nation's top labor leader until 1978. Meany bragged that he had never walked a picket line or led a strike in his life. He was a bureaucrat. Reluctant to rock the boat, Meany oversaw a period of relatively peaceful coexistence between labor and management.
At the center of the power-sharing arrangement was the collective bargaining system, a structured approach by which management and labor hammered out their differences. Union shop stewards enforced the details of labor contracts on the job. Workers who felt they had been treated unfairly could use a formal grievance process to seek redress. Seniority became an important worker right—managers could not dismiss workers arbitrarily, but had to give deference to those longest on the job.
These arrangements brought peace but they also brought problems. While in the early days of the labor movement, labor-management disputes had mostly revolved around core issues of wages and hours, now collective bargaining swelled to incorporate a dizzying array of rules and procedures. What followed was a kind of bureaucratization of work; managers (and maybe workers too) lost the ability to be flexible, to innovate in the workplace. Over time, as market competition from overseas and from non-unionized plants heated up, unionized businesses found it harder and harder to adjust and compete.
The relatively long period of labor-management accord—and some businesses' willingness to accept the collectively bargained bureaucratization of their operations—was based on the unusual prosperity of the postwar years. American businesses faced few viable competitors around the world (most of those competitors in Europe and Asia had been blown up in World War II and it took them a long time to get back on their feet). Spared from cutthroat competition, those businesses could afford to be generous with workers. In this healthy economy, big companies generally didn't compete with each other on labor costs; when one firm came to an agreement with a union, the rest typically followed suit. More and more union contracts contained "cost of living adjustments" (COLAs), which guaranteed automatic raises in the face of inflation.
It was a "live-and-let-live" period. Workers received decent wages and plenty of "fringe benefits" like health insurance and vacations. Business enjoyed a lull in the long power struggle. But the problems that would lead to a general economic decline in the 1970s were already building.
Labor Begins to Decline
- Unions began shrinking by 1960s
- Labor's failure to unionize the South led to creation of alternative union-free economic model
- By 1970s, old unionized industries were in crisis, while economic growth occurred mostly in non-union industries in non-union locations
- Unions mostly did not adjust to changing times, instead fighting to try to keep conditions as they had been in 1950s
But in reality, whether or not George Meany and company knew it, the labor movement had already entered into a period of serious decline. Complacency had long since set in, and union officials often seemed more interested in maintaining their bureaucracy than in collaborating with management to allow innovation—or even in winning new benefits for their workers. Many labor leaders were pulling down lavish salaries—paid for by workers' dues, of course—and were more interested in nostalgia for the "good old days" of the 1930s than they were in figuring out how to keep labor relevant in the new globalized era that was just around the corner. The AFL-CIO calcified into a status quo—or even reactionary—institution.
But when labor stopped growing, it started dying. Just after World War II, the CIO had launched "Operation Dixie," an attempt to organize the mostly non-unionized workers of the South. Operation Dixie failed miserably. The main problem was race; with Jim Crow still in full effect, many southern workers simply didn't want to join the same unions as blacks. But racism wasn't the only factor at play; the South was simply a more conservative place than the North, with a more fiercely individualistic culture. Lots of people there—both businessmen and workers—just didn't like unions much, especially the left-leaning unions of the CIO. The failure of "Operation Dixie" left much of the South a union-free zone, a status southern state legislatures ensured by passing "right-to-work" laws that made it harder for unions to gain power by making it illegal for union membership to be required for employment in any workplace.
At first, unions in the North weren't much affected by the failure of unionization in the South. But southern-based corporations—Wal-Mart would be the classic example—began to develop effective new business models based on non-unionized labor; by the 1970s, when the old New Deal industrial economy in the North fell into stagnation, the new southern model would become a compelling alternative model for the entire country. And the era of mass unionization in the American economy would soon come to an end.
But we're getting ahead of ourselves. Before the labor movement began to collapse in the 1970s, the underlying economic conditions that had allowed its earlier growth began to change in the 1960s. Europe and Asia finally finished rebuilding from World War II, and overseas firms began to offer meaningful competition to American corporations for the first time since the 1920s. Meanwhile, back home, the ever-more-onerous bureaucratic rules and regulations—not to mention automatic pay increases and generous benefits—embedded in union contracts began to take a toll on American businesses. The easy profitability of the 1940s and 1950s went away; suddenly businessmen began to question whether they could afford union labor if they wanted to remain competitive. The stage was set for a new era of labor conflict.
For the most part, the unions fought desperately against change. Seeing foreign businesses as a threat to their comfy relationships with many American employers, labor turned protectionist. Abandoning decades of support for the principle of free trade, the AFL-CIO began lobbying the government to increase tariffs—taxes on imports—in order to protect American companies (and American workers) from foreign competition. Often industrial businesses joined the unions in this advocacy for protectionism; the past several decades have often seen dying businesses (like GM) and fading unions (like the UAW) join forces in hopes of bringing back the glory days of the 1950s by getting rid of international competition. But free trade brings cheaper (and often better) goods, and in recent decades American consumers (and the American government) have generally favored lower, rather than higher, tariffs. The AFL-CIO's protectionist turn couldn't save the unions—or the old industrial industries—from the rigors of international competition.
And even within the United States, it became harder and harder for unionized businesses to compete. Unionization imposed serious costs on business—not just in higher wages and benefits, but also in the lack of flexibility inherent in union work rules. As the American economy as a whole slid into hard times in the 1970s, the non-union labor force in the South began to look more and more appealing to many struggling businesses. The heavy industries that had been ground zero for unionization in the 1930s—auto, steel, mining, manufacturing—all fell into steep decline; people began calling America's traditional industrial heartland around the Great Lakes region "the rust belt." Whether or not the unions actually caused that decline is a matter of fierce historical debate; your answer will probably depend upon your political views. But there is no question that those industries did decline, and that the unions declined with them.
Meanwhile, growth and dynamism in the American economy and society relocated to the South and West—the so-called "Sun Belt." Arkansas-based, union-free Wal-Mart grew rapidly from one small store into the world's largest retail operation. The fastest-growing sectors of the economy—high tech, finance, services—all saw little unionization. Rates of union membership among workers in the American private sector began falling precipitously.
A few unions adjusted to the new realities and thrived. In the early 1970s, Southwest Airlines entered into a profit-sharing agreement with its unions; with a financial stake in the company's success, the unions resolved to work with management rather than against it to ensure the company's ongoing profitability. Southwest has long had a higher proportion of its workers unionized than most other airlines, but those union workers have tended to help the airline maintain its competitive edge rather than undermining it. Southwest, by running a lean operation with nearly no organizational fat, has become America's most profitable airline and has never had to impose layoffs on its employees.
But that story has been more the exception than the rule. Many other unions have clung desperately to the past, hoping to restore the union-friendly environment of the 1950s (or even the 1930s) in a globalized world where it's just not economically viable. The classic example here would probably be the UAW, which fought hard for decades to ensure that the "Big 3" Detroit automakers would honor the worker-friendly terms of its contracts dating back to midcentury. The UAW won many of those fights but may, in the end, have killed the golden goose. Chrysler, GM, and Ford still employ hundreds of thousands of union workers, still pay generous benefits to millions of retirees. But they no longer seem to be viable businesses; as of early 2009, all three look likely to go bankrupt or require heavy subsidies from the government just to continue operation. The age of industrial unionism may be nearing its end.
But again, we're getting ahead of ourselves.
Labor's Decline Accelerates
- Unions rapidly lost power and membership after 1970s
- Political shift from liberal New Deal era to conservative Reagan Era accelerated labor's decline
- Failed 1981 Air Traffic Controllers strike signaled labor's weakness
The main force driving labor's slide was a fundamental restructuring of America's (and the world's) economy, as discussed above. But changes in prevailing political trends played a part as well. From the 1930s through the 1960s, American politics was dominated by a pro-labor Democratic Party that did its best to pass laws favorable to union interests. But from the 1980s through the early 2000s, it was a pro-business Republican Party that usually held the initiative in driving national politics. Unsurprisingly, the labor movement found the federal government to be less of an ally than it had been in the past.
In 1981, members of the Professional Air Traffic Controllers Organization (PATCO), who guided the nation's airliners in flight, walked off the job. One of their main complaints was the intense job stress that ended the careers of almost 90% of them before they reached retirement age. Having supported Ronald Reagan in his run for president the year before, union members thought they had a friend in the White House. They were wrong. The PATCO strike became a major landmark in the decline of America's labor unions.
President Reagan declared the air traffic controllers' action illegal—federal employees did not have the legal right to strike. He gave the union members 48 hours to return to work. When the strikers refused to give in, Reagan followed through on his threat to fire them all, ordering the government to begin hiring replacements. Shocked workers, used to receiving favorable treatment from the government, could only stand by and watch their jobs taken by others. The strike was a complete failure—for the air traffic controllers and for the labor movement in general.
Though the PATCO strike directly affected only one small union of public employees, Reagan's aggressive approach set the tone for private companies across the country. Workers who came in to take the jobs of striking workers were no longer "scabs" in the public imagination. They were "replacement workers." Companies that had been reluctant to deal harshly with strikes were given courage. Unions, seeing how vulnerable they had become to the new tactics, became far more cautious when calling strikes.
The National Labor Relations Board was the body, set up during the New Deal, given responsibility for enforcing labor laws and for making the collective bargaining process work smoothly. It was supposed to be a neutral body, but it rarely had been entirely neutral. For most of its history, it had been staffed largely by union-friendly officials appointed by Democrats. Unions tended to prevail in NLRB cases, and businesses were thus understandably predisposed to settle disputes before they reached the NLRB. This gave labor the upper hand. But Reagan reversed course by staffing the NLRB with his own pro-business officials. The board thus began responding tepidly to worker complaints. Businesses, confident that the NLRB would not take action against them, no longer felt such pressure to compromise. Unions, no longer reliably supported by the government, fell even farther into disarray.
Is Labor Bouncing Back?
- In 2008, the proportion of American workers belonging to unions increased slightly for the first time in decades
- Unions are now pushing for changes to labor law that would facilitate new growth in membership
- Effect of current economic crisis upon unions remains unclear
But recent figures have encouraged labor movement advocates. In 2008 unions added 428,000 new members, more than they had attracted in a quarter century. Unions now represent 12.4% of all workers, a slight increase from a low of 12.0% in 2006.15 Is this jump merely a blip, a statistical anomaly, or is it the beginning of a trend? Are new union organizing efforts paying off? Will the battle lines between workers and managers be drawn sharply again, as they were a century ago? Or will the contest take on some entirely new form in the twenty-first century? The future of the American labor movement—if it even has one—depends on the answers to these questions.