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History of Labor Unions Summary & Analysis

Key Points

  • Historical conflict between unions and management has centered on struggle for power in the workplace
  • Unions expanded before WWI, shrank in 1920s, grew rapidly in 1930s-40s, peaked in 1950s, and declined after 1960s
  • Americans have long had a love-hate relationship with unions

Who Rules?

  • Business viewpoint: employers should have freedom to run businesses as they see fit, without undue interference from workers; labor is a commodity to be bought and sold at market price; this is the core of free enterprise
  • Union viewpoint: labor is not a mere commodity, but a special part of the human experience; workers deserve a say in the conditions of their labor; the right of workers to organize in their own self-interest is a basic human right
During the 1950s, the American economics professor Clark Kerr observed that "organized labor and management are primarily engaged in sharing between themselves what is, at any one moment of time, a largely given amount of income and power."3 Kerr's words point to the crux of labor history: This is a power game. Who will rule in the workplace?

On that single question rests all the others: Who's going to get the biggest slice of the economic pie? Who will give the orders? What will conditions in the factory or on the job site be like? How many hours will workers put in, and how much will they be paid? Who will make decisions about the pace of production? Who will have health insurance and other benefits, and who will not?

Some employers have taken the position that managers, as representatives of business owners, should have all the power. They should be able to hire and fire workers at will, for any reason or no reason. They should pay only the wages dictated by supply and demand. They should set the hours, pace and conditions of work for maximum productivity. If workers don't like the terms of their employment, they're free to quit and seek another job elsewhere. The freedom of employers to freely negotiate the terms of employment with individual workers is, in this pro-business worldview, the heart of the free enterprise system. Infringe upon that and you'll rip the heart out of the economy, ultimately harming everyone by slowing down economic growth.

Unions have always had a very different conception of the workplace, one rooted in the belief that labor is not a mere commodity. Work is not merely something to be bought or sold, unions argue, it is a critical—perhaps the critical—aspect of the human experience. As such, workers should have some say in the conditions under which they labor and should be paid enough to allow them to live in comfort and dignity. They should have a safety net in case they are injured or laid off or become sick. And they should not be left eating cat food when they become too old to work anymore. The right of workers to organize in their own self-interest, in this pro-labor worldview, a fundamental human right.

This basic conflict between workers and employers has shaped our labor history. At times, the conflict was wild and woolly; some of the worst incidents of violence in our nation's history occurred during labor disputes. At other times, labor and management settled their differences through difficult (but peaceful) negotiations, with neither getting all of what they wanted. The fundamental question—who should rule in the workplace?—has never been completely resolved.

Conflicting Interests

  • Unions arose as response to industrial factory system
  • Key principle of unionism is solidarity: collective action
  • Businesses tend to oppose unions as threats to individual freedom and economic efficiency
Over the course of the nineteenth century, as industry grew and workplaces became larger and employees' relationships with their employers became less personal, individual workers lost power. There was little that one worker could do to pressure a large industrial business to increase his wages, shorten his hours, or provide better working conditions; workers who became too demanding were likely to be fired and replaced by someone else desperate enough for a job to accept harsh treatment. Heavy immigration throughout the period constantly replenished the supply of unskilled workers, making it hard for individuals to attain any leverage in negotiations with their employers.

Thus workers began to embrace the idea of collective action. One worker might be powerless vis-à-vis the factory boss, but all the workers, acting together, might be strong enough to gain a say in workplace decisions. If the labor movement had a watchword, then, it was "solidarity." Only united, joined together in a union, could they have hope of winning concessions from employers. "'Each for himself' is the bosses' plea; Union for all will make you free," read a banner at a nineteenth-century Detroit labor parade.4

The way to create solidarity, to deal with the employer as a united body, was to organize—to join workers into some kind of formal association. Organizing became the key union activity, and the term organized labor meant workers who had banded together in order to exert their power. Solidarity had a price, of course — individuals had to be ruled by the decisions of their fellow workers. They had to pay dues and give up their right to cut their own deal with their employer. But, union supporters argued, this price had to be paid; a union simply would not work effectively unless all workers joined.

Managers, on the other hand, tended to view "solidarity" as little more than mob rule, and instead raised the banner of "property rights." The owner of a business, whether an individual or a corporation, should have the right to make all decisions about how it was run. That was the essence of "free enterprise." It was the most efficient way to run a business. And it was only fair; why shouldn't the person risking his money to run a business have the right to make the key decisions? Union interference in management's prerogatives was a coercive act of force, or even implied violence (since lingering behind every union demand was the threat of a strike), and had no legitimate place in the American economy.

With the basic philosophical ideas of unions and businessmen so fundamentally opposed, it shouldn't be too surprising that the history of American labor is a story full of fierce conflict and frequent eruptions of violence. At the most basic level, the struggle between labor and management is simply a clash of values; when they sit down at the negotiating table, the two sides bring with them very different preconceptions about how the world should work.

Rise and Fall of American Unions

  • Unions expanded in late 19th century despite violent conflict
  • Unions shrank during the Roaring Twenties
  • Changes to labor laws during the Great Depression led to rapid union growth
  • Unions fell into decline after 1950s
Unions rose to nationwide prominence in America after the Civil War as employees joined together to have a collective voice in dealing with employers. Employers worked just as hard to slow the growth of unions, making the late nineteenth century a time of fierce and often bloody labor conflict. At first, the government tended to side with the businessmen, frequently using court orders or even federal troops to shut down strikes. By the time World War I rolled around, however, unions won important legal rights and began growing noticeably. In the 1920s, however, organized labor fell into decline as the nation basked in widespread prosperity and unions no longer seemed so necessary.

The Great Depression of the 1930s changed the equation once again, as unions found a friend in President Roosevelt and changes in federal labor laws made it easier for unions to organize most of the large American industries. The proportion of American workers belonging to unions skyrocketed to unprecedented levels.

After World War II, however, many union leaders became complacent and corrupt, and organized labor lost direction. Riding high on postwar prosperity, labor leaders paid little attention to their eroding movement. During the 1970s that erosion began to accelerate and union power entered a decline that has lasted until the present day.

A Basic Contradiction

  • Historically Americans have held conflicted attitudes about unions; often specific union objectives have been supported, but most Americans prefer individualism and are uncomfortable with collective action
  • Union accomplishments include higher wages, greater benefits, reduced work hours, and improved work conditions
  • Union drawbacks include bureaucratization of work, economic inefficiencies, and corruption
Americans have always had a complicated relationship to organized labor. Some key freedoms that we take for granted today—the weekend, for example—were won by labor union efforts, but we have always been lukewarm about the movement. Most Americans value individuality over solidarity. The idea of a bunch of people banding together to pursue a set of collective demands has always made most of us feel a bit uneasy. Unlike Europeans, American workers have generally not identified themselves as a working class and have never formed a labor party.

This ambiguity was tied to a contradiction at the heart of our society: the basically antidemocratic workplace exists in the midst of a democratic society. You don't get to vote at work. Outside the workplace, we hold it self-evident that all men are created equal; inside the workplace, we usually accept that one person is the boss and another is the employee, and the relationship between the two is definitely not one of equality.

We both love and hate unions. Sometimes we may hiss at supposedly exploitative robber barons and cheer plucky underdog workers, but we also resent union bureaucrats and the ludicrously wasteful work rules unions sometimes impose. In recent decades, unions have declined in part due to a pervasive negative public attitude about their place in society. With free markets generating so much wealth, unions began to seem, to many, like nothing more than dead weight in the economy. At the same time, some of the unions' troubles may also, paradoxically, be a product of their own successes in the past. Long-forgotten union victories—from the minimum wage to workplace safety rules to old-age insurance—have helped make the world a decent place for most workers, meaning that many citizens no longer see any real need for unions today. Whatever the reason, there is no question that unions have spent the past several decades in freefall. Unions today find themselves in as marginal a position in American society as they have been in 100 years.

So what is the labor movement's legacy? Despite its current weakness, organized labor has played a critical role in shaping our society—for good or ill, or both. At times unions have stood in the way of social and technological change; at times they have formed productive partnerships with management to allow profitable innovation. At times they have reflected the racism and sexism of the larger society; at times they have helped immigrants, blacks, and women gain access to the American Dream. At times they have impeded economic progress, crippling businesses by insisting upon rigid adherence to stupid work rules; at times, they have won the wages and other benefits that enabled millions of workers to join the middle class.

Most of us don't belong to unions anymore. But unions have profoundly impacted—in ways both good and bad—the world we all live in.

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