The Rise and Fall of Labor Unions In The U.S.
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From the 1830s until 2012 (but mostly the 1930s-1980s)by G. William Domhoff
The heart of this document focuses on the unlikely set of events leading to the passage of the National Labor Relations Act of 1935 (NLRA). The NLRA was a major turning point in American labor history because it was supposed to put the power of government behind the right of workers to organize unions and bargain collectively with their employers about wages, hours, and working conditions.
Whatever the NLRA"s shortcomings and long-term failures, it changed the American power structure for the next 50 years. In telling this story, the document shows that corporate moderates had more of a role in creating the legislation than is usually understood, even though they fiercely opposed its final form. Then the document goes on to explain how and why the act was all but dead by 1978 due to an all-out and unrelenting battle against it by the entire corporate community from the day it was passed, and then finally killed in the 1980s. The account ends in 2012 through a quick overview of a failed legislative issue initiative in 2009 and information on the declining figures on "union density" (the percentage of wage and salary workers in unions). By then the figure was as low as it was in 1916.
But why do workers want unions in the first place, and why do business owners resist them so mightily? Workers originally want unions primarily for defensive purposes -- to protect against what they see as arbitrary decisions, such as sudden wage cuts, lay-offs, or firings. They also want a way to force management to change what they see as dangerous working conditions or overly long hours. More generally, they want more certainty, which eventually means a contract that lasts for a specified period of time. In the United States, as we will see, the early trade unionists also wanted the same kind of rights at work that they already had as independent citizens. And if unions grow strong, then, well, they try to go on the offensive, by asking for higher wages.
Business owners, on the other hand, don"t like unions for a variety of reasons. If they are going to compete successfully in an economy that can go boom or bust, then they need a great deal of flexibility in cutting wages, hiring and firing, and adding extra hours of work or trimming back work hours when need be. In fact, wages and salaries are a very big part of their overall costs, maybe as much as 80% in many industries in the past, and still above 50% in most industries today, although there is variation. And even when business is good, small wage cuts, or holding the line on wages, can lead to higher profits. More generally, business owners are used to being in charge, and they don"t want to be hassled by people they have come to think of as mere employees, not as breadwinners for their families or citizens of the same city and country.
Thus, the nature of the economic system means that there is going to be at least some degree of conflict over a wide range of issues between owners/managers and employees/workers. These conflicts are therefore best described as class conflicts because the two sides have many conflicting objectives even though they have to cooperate to keep the company going. The conflicts that these disagreements generate can manifest themselves in many different ways in a step-by-step escalation: workplace protests, strikes, industry wide boycotts, massive demonstrations in cities, pressure on Congress, and voting preferences. All this soon leads to more general disagreements over the rate and progressivity of taxation, the usefulness of labor unions, and the degree to which business should be regulated by government. Employees want businesses to pay higher taxes to government, and they often want government to regulate businesses in ways that help employees. Most businesses reject these policy objectives -- they are for low taxes on businesses, minimum regulation of their businesses, and no government help for unions.
Despite the greater power of employers, sometimes workers are able to form unions and win contracts for two reasons. First, protests and strikes by workers in some occupations succeed because the "replacement costs" for bringing in strikebreakers and replacement workers are very high (Kimeldorf 1999; 2013). Sometimes replacement costs are high due to skill barriers, as in the case of printers in decades gone by or professional sports players today (who have some of the strongest unions in the country, which is why they make big money, not just because they are sterling athletes). Replacement costs also can be high for companies that have fast turn-around times, such as shipping and railroads in the past, or UPS today, which is why UPS drivers have been able to maintain a strong union and keep their wages high. And in the past it was often impossible to recruit strikebreakers and replacement workers due to the geographic isolation of the workplace (e.g., mining, logging, and other extractive industries). For example, you could get killed by strikers for being a replacement worker in a coal mine in unfamiliar hill country far from your urban upbringing.
If replacement costs are high, then sometimes the use of violence can play a role in organizing a union, but mostly as a means of keeping replacement workers from entering job sites, not as a primary strategy. Most of this violence is between strikers and scabs, or police and strikers, with destruction of equipment and other forms of sabotage relatively rare even though it is sometimes threatened. However, some skilled workers, such as construction workers of various kinds, were able to do a lot of damage if they decided to sabotage equipment or destroy what they had partially built.
The second way workers can have success in creating unions through sit-downs, strikes, and other forms of disruption is if the government imposes restrictions on violence by employers, of which there was plenty between 1877 and 1937. In this case, the government may be acting to keep the economy from going into depression, or more likely, to make sure that the government has the war materiel it needs, as during World War I and World War II. But the government usually doesn"t side with the workers if the workers don"t have some political power through their involvement in a political party.
If workers do succeed in unionizing, as a little over one-third of wage and salary workers did between 1935 and 1945, then there"s one kind of contract that corporations really came to despise in the 1960s and 1970s. It"s one that runs for several years and has an annual cost-of-living-adjustment ("COLA") built into it. Employers dislike COLA"s because they create inflationary spirals if some separate factor, such as increased demand for products, or unexpected increases in the cost of raw materials, triggers inflation. When there"s no COLA, inflation is partly tamed by holding wages steady, or even cutting them, but employers can"t do that when there are COLA"s.
Hopefully, this quick overview of why there"s a big battle over unions should make the story that unfolds fairly easy to understand, even though there"s always some further details or unexpected events. But before we get to the passage of the National Labor Relations Act in the 1930s, and the aftermath of that unique legislation, it"s necessary to have some historical context on the pitched battles of that era, so the story begins in the 1830s. Along the way, it makes a few comparisons with successful unionization efforts in many European countries, which provide the context that is needed to explain why unionization had so little success in the United States, except from the late 1930s to the mid-1970s.
1. In the Beginning: The 1800s
The early forms of labor organization in the United States were largely mutual aid societies or craft guilds that restricted entry into a craft and enforced workplace standards, as was also the case in Western Europe. It didn"t raise too many hackles or cause too many hassles because craft workers were relatively few in number and most companies were small. But industrial development in the early nineteenth century slowly widened the gap between employers and skilled workers, so the workers began to think of industrial factories as a threat to both their wages and status. They soon formed fledgling craft unions in an attempt to resist sudden wage cuts, longer working hours, and unsafe working conditions, while also protecting their political, social, and economic rights. Most of these unions were local in scope, but as both labor and product markets became more national due to improvements in transportation, and as employers continued to decrease wages and de-skill jobs, workers came to believe that they would have to organize on a wider basis if they were to be effective. But they faced enormous resistance from employers and had little success until the 1890s.
The first halting steps beyond separate craft guilds at the local level occurred between 1833 and 1837, when workers in a wide range of skilled jobs (including railroading, mining, canal building, and building construction) formed citywide labor organizations in and around Boston, New York, and Philadelphia. Their goal was to resist the longer hours and wage cuts that were being demanded by employers. Union leaders from these cities met yearly under the name General Trades" Union, but in fact there was little coordination beyond the city level. However, the new labor leaders did speak out against increasingly frequent claims by publicists of the day (building on the ideas of Adam Smith) that the new economic conditions were simply due to abstract and neutral economic laws, which of course became a familiar refrain for employers and all those social scientists who think that it"s all about free markets and not at all about power (e.g., Lambert 2005, for a fine account of how the early craft unionists viewed the world).
In contrast to the story told by free-market advocates, the union activists asserted that they had been dispossessed, which they cast as a threat to the United States as a Republic because it stripped them of their rights and independence as free white male citizens. The defense of labor was thereby equated with the defense of American republican government (Voss 1993, pp. 29-36). Although there were strikes by carpenters, shoe binders, textile workers, and tailors in defense of what they claimed to be their republican rights, the attempts to organize in any serious way ended abruptly with the onset of the nation"s first industrial depression in 1837. After all, workers in a slack economy stand even less of a chance than workers in a strong economy when few people are unemployed. Many local craft organizations were disbanded. The efforts at unionization were not revived until after the Civil War.The rise of violence
Fast-forwarding by 35 years, the rapidly industrializing economy created in the post-Civil War boom gave skilled workers an opening to resuscitate the past craft unions and start some new ones as well, and they seemed to be building a national labor organization that might have some staying power for the first time. This national labor organization, the Noble and Holy Order of the Knights of Labor (usually shortened to the Knights of Labor) was founded in 1869 as a secret society by a handful of Philadelphia garment cutters, who had given up on their own craft union as having any chance to succeed. Their credo emphasized citizenship rights, action in support of general social progress, cooperative forms of organization for the society as a whole, and, significantly, the inclusion of workers of all crafts and races in one union for the first time (Voss 1993, pp. 73-82). They also started reading rooms, held parades, and supported local labor parties. The top leaders were ambivalent about strikes because disruptive actions alienated both employers and the general public, so at first they tended to focus on education, persuasion, and legislative changes. Although they emphasized their openness to unskilled as well as skilled workers, to women as well as men, and to African Americans as well as whites, they were in fact mostly white male craft workers when the union grew to a few thousand members nationwide between 1869 and 1877.
Four months after a big political bargain called the Compromise of 1877 handed the Republicans the disputed 1876 presidential election, and just weeks after the last of the federal troops were removed from the former Confederate states as part of the deal that gave the presidency to the Republicans, labor relations suddenly took a violent turn. This violence turned out to be the start of a new era that lasted for decades and reshaped the nature of the American union movement. It began when the Baltimore and Ohio Railroad announced in mid-July that it would impose an immediate 10% pay cut, the third for that year. In the face of an ongoing depression that had lingered since 1873, other railroads had already made draconian wage cuts without major protest, but in Martinsburg, West Virginia, the announcement by the Baltimore and Ohio led to a spontaneous strike in the company"s rail yards that did not end quickly.
|Pittsburgh"s Union Station burns, July 1877|
City officials called out the local militia, but its members were reluctant to use force against workers who were part of their own community. The governor asked for federal troops, leading to a clash in which workers stopped trains and destroyed railroad property. The strike rapidly spread to other nearby cities. The violence was especially extensive in Pittsburgh, already a growing industrial center based in the iron and steel industry. When militia brought in from Philadelphia fired at the demonstrators, killing several people, the angry mob burned down 39 buildings and destroyed 104 locomotives and 1,245 freight and passenger cars. The strike became national in scope, drawing in nearly 100,000 workers and at one point stopping half the nation"s rail freight from moving (Bruce 1959; Foner 1977). In all, governors in seven different states had to call out their militia.
Traveling from city to city via trains, government troops finally quelled the uprising after two weeks of effort. In the process, over 100 people had been killed and many more were imprisoned (Stowell 1999, for the most recent account). Based on the traditional, more tolerant responses to strikes, the extent of the violence came as a shock to both workers and employers. Up until that time, as just noted, strikes usually had been called in an effort to reduce the long working hours that increasingly had been imposed upon workers, and somewhat less often to protest sudden wage cuts. Americans generally had viewed strikes as a legitimate form of action because employees had an independent stature that reflected both their valued work skills and their belief in republican values (Lambert 2005). Courts had sometimes condemned strikes as conspiracies or restraints of trade, but fines were usually small and there were no imprisonments, and in any case the Massachusetts Supreme Court had rejected the conspiracy and restraint of trade charges in 1854 (Dubofsky and Dulles 2004, pp. 59-61). The only previous known deaths from strike activity -- two in number -- had occurred in New York City in 1850 when police shot into the crowd to break up a strike by tailors who were protesting wage cuts (Lambert 2005, p. 22).
But after 1877 American labor relations were the most violent in the Western world with the exception of Russia (Mann 1993). It is one of those superficial paradoxes of history that the most democratic and the most despotic countries in the Western world would have the most violent labor clashes. The strongly held American belief in the right of business owners to have complete control over their property, along with business dominance of both political parties and a history of violence in dealing with Native Americans and slaves, not to mention the horrendous casualty rate in the Civil War, made the pitched labor battles seem as normal and expectable to most Americans as they were to Russians with their totally different history. Between 1877 and 1900, American presidents sent the U.S. Army into 11 strikes, governors mobilized the National Guard in somewhere between 118 and 160 labor disputes, and mayors called out the police on numerous occasions to maintain "public order" (Archer 2007, p. 120; Cooper 1980, pp. 13-16; Lambert 2005, p. 44).
In the aftermath of the summer of violence in 1877, a few railroad corporations began to consider the use of employee benefits, such as accident insurance and old-age pensions, to mollify workers. Generally speaking, though, very little changed in terms of employer/employee relations. Instead, corporate leaders put their efforts into creating stronger military forces to control workers when necessary, starting with reorganized militias and fortified local armories. In addition, militia units were often directly funded and supplied by corporate leaders: Cyrus McCormick, Sr., the founder of International Harvester (now called Navistar), equipped an Illinois National Guard regiment, and a group of Chicago businessmen funded five cavalry companies (Smith 2003). The regular army also developed close ties to the industrial companies in urban areas. Three business leaders in Chicago, for example, provided the money for a military base just twenty miles north of their city (Archer 2007, pp. 121-122; Cooper 1980, pp. 85-86). The use of private security forces in labor disputes also grew. Business leaders paid for and directed the activities of deputy sheriffs and deputy marshals, regularly employed Pinkerton Detective Agency strikebreakers (the company had 30,000 regular and reserve agents in 1890), and attempted to establish and control their own police forces (Norwood 2002; Smith 2003).
The violence of 1877 also led to a change of strategy by many local affiliates of the Knights of Labor, which decided that the strikes had failed because they lacked the proper leadership and organization. Reflecting the changing circumstances as businesses grew in size and power, the Knights decided to drop their semi-secret ways and take a more active role in creating the kind of organizations that could counter employers and even challenge the new industrial companies. They also emphasized again that their doors were open to membership by both skilled and unskilled workers as well as women and people of all racial and ethnic backgrounds. With the economy improving at the same time, the Knights claimed to have 50,000 members in 1883.
|Railroad magnate Jay Gould, as depicted in a cartoon in Puck magazine|
It was at this point that the Knights seemed to be on the verge of major success due to highly publicized strikes by railroad shop men in 1883 and 1884 against one of the most notorious Robber Barons of the day, railroad magnate Jay Gould. The successes only involved the restoration of wage cuts, but local activists saw them as evidence for the potential power of unions and their strike weapon, and more workers began to join: "In its wake, thousands of workers -- particularly semiskilled and unskilled workers -- joined the Order. By the summer of 1885, membership had doubled and a local assembly
Buoyed by their new hopes, many assemblies decided to join a general strike to force employers to grant the eight-hour day, an action first advocated by the Federation of Organized Trades and Labor Unions, which was another loose-knit national labor organization to which some of the Knights also belonged,. The strike was set for May 1, 1886. The top leader of the Knights opposed the idea, fearful that such a strike could not be won, but sociologist Kim Voss (1993, p. 77) concludes that large numbers of workers were taken with the idea that they could establish the eight-hour day on their own initiative, a step toward imposing their own work rules (cf. Lambert 2005, p. 56). As workers across the country prepared for the upcoming general strike, another Knights-affiliated union went on strike against another Gould railroad, this time in the Southwest, demanding a daily wage of $1.50 for unskilled workers and the reinstatement of a worker who had been fired for attending a union meeting. Workers across the country became members of the Knights out of sympathy for this strike, but Gould held firm this time.
As the railroad strike in the Southwest dragged on, the May 1 strike for the eight-hour day began with over 1,500 work stoppages throughout the country, involving several hundred thousand people. But the tide turned against them just two days later when police in Chicago fired into a crowd of 30,000 pro-strike demonstrators and killed two people, with several more wounded. At that point anarchists came into the picture by calling for a massive protest rally the next day, which attracted 50,000 people to Haymarket Square. After two hours of speeches and many reminders that the event was to be non-violent, and with the demonstrators starting to disperse, a major disaster suddenly erupted. A bomb was thrown at the police when they suddenly started to break up the gathering, killing one policeman and wounding 70 others. The police then began shooting, which killed one worker and wounded many more (Lambert 2005; Voss 1993).
The big industrialists and their allies in city governments across the country used what was quickly labeled as the Haymarket Riot as a pretext for a major counterattack by federal troops and private business armies. They now defined all union leaders as Communists, socialists, and especially, anarchists. The result of the corporate and government repression was a complete defeat for the Knights of Labor on both the eight-hour day and the railroad strike. Moreover, the organization gradually collapsed over the next few years, losing 90% of its membership in four years (e.g., Lambert 2005, p. 57). Four of the anarchists involved in organizing the Haymarket demonstration were hanged from the gallows in Chicago six months after the riot, even though there was no evidence that any of them were involved in planting the bomb. A fifth committed suicide in his jail cell before he could be hanged.
Although various factors seem to have contributed to the decline of the Knights, including tensions between craft and unskilled workers, Voss (1993, pp. 186-204) uses cross-national comparisons with Great Britain and France, and a close look at the rise and decline of Knight assemblies in New Jersey, to argue that the most important factor was the unusual strength and cohesion of American employer associations. These associations displayed brutal determination in combating the growth of labor unions, because they dominated local governments and political parties. Voss then draws an important contrast when she shows that the British and French governments in effect forced employers to compromise with workers (Voss 1993, pp. 238-239). For a combination of reasons, including the continuing power of land-based aristocrats and the greater strength of their national governments, the business owners did not dominate Britain or France (cf. Guttsman 1969; Hamilton 1991; Mann 1993).The American Federation of Labor
The repression of 1886 led to a rapid decline for the Knights of Labor, but the events of that year also gave rise to a very different kind of union movement, the American Federation of Labor (AFL), which took several lessons away from the failures of the Knights. These lessons eventually made it possible for the AFL to force business moderates to consider the possibility of collective bargaining as an acceptable compromise in the face of ongoing labor strife, which ranged from slowdowns to strikes to sabotage and the destruction of equipment. But a possible compromise was still more than a decade in the future.
The new federation was founded in early December 1886, a few months after the strikes of the spring and summer had ended in defeat. Convinced that previous forms of unionization were too diffuse and fragmented to withstand the violence that companies could bring to bear against workers, its leaders organized as a federation of narrow, self-interested craft unions that included iron molders, miners, typographers, tailors, bakers, furniture workers, metal workers, carpenters, and cigar-makers. It was the separate unions, not the AFL itself, that conducted the main activities of organized labor (such as recruitment, bargaining, and calling strikes) and the federation itself was always dependent upon its constituent organizations for finances. By 1892, the AFL included 40 unions, most of them with a few thousand members. The carpenters (57,000), typographers (28,000), cigar makers (27,000), iron and steel workers (24,000), and iron molders (23,000) were the five largest (Foner 1955, p. 171).
Craft unions, with exclusive membership jurisdictions and high membership dues, were able to grow stronger than the Knights" assemblies because they used new organizational measures to survive the combined onslaught of employers and government authorities when they called strikes and could fend off replacement workers. In order to secure the long-term loyalty of their members, they first provided sickness, unemployment, and strike benefits in addition to the burial insurance that had been a staple of craft guilds since the colonial era. Second, craft unions became more centralized, such that authority for strike action had to come from the national-level leadership. This organizational form reduced the potentially fatal consequences for a nationwide organization if there were independent strike initiatives by local affiliates. At the same time, as later events showed, a centralized form of organization provided a potential base for dictatorial union leaders, who ran the unions the way they pleased (Shefter 1994, p. 153). Organization, as always, was a double-edged sword.
|AFL founder Samuel Gompers in 1902|
Despite their considerable autonomy and independence, however, the national-level craft leaders ceded some authority to speak for them on general policy issues to the leader of the federation, who was voted into office for two-year terms by delegates from each union at national meetings. Samuel Gompers, the federation"s founding president, originally a leader of the cigar makers" union, served as president for all but two years from 1886 until his death in 1924.
With their organizational strategy in place, the craft unions then girded for the focused strike actions and boycotts they selectively employed in carrying out what the preamble to their original constitution described as a "struggle" that was going on "between the oppressors and the oppressed of all countries, a struggle between the capitalist and the laborer, which grows in intensity from year to year, and will work disastrous results to the toiling millions if they are not combined for mutual protection and benefit" (e.g., AFL 1901). This ringing general analysis was used against the AFL ever after by editorial writers and conservatives, but at the same time the federation also adopted a more pragmatic and less politically threatening strategy toward employers and the government. It emphasized higher wages, shorter working hours, and better working conditions, not class struggle. This narrow agenda (known as "pure and simple unionism") was supposed to be accomplished through direct actions against employers, so it is not like the AFL members were afraid of confrontation or unaware of how most employers would react. They knew what they were up against.
As part of this confrontational but narrowly focused approach, the AFL tried to avoid involvement in broad-based political organizations, especially at the national level. They feared that political activity might divide their unions in a context in which the nation"s electoral rules and the history of the two dominant political parties made it highly unlikely that workers could form their own political party. Believing that the political activism of the Knights of Labor, and especially the frequent disagreements between craft unions and various groups of socialists within the organization, had contributed to its downfall, the AFL kept anarchists and Marxists at a distance, and treated any claims they made with suspicion (Shefter 1994, p. 156). But as the union leaders expected, the employers nonetheless continued to resist the union pay scales, elaborate work rules, and apprenticeship limits that skilled craft workers wanted to retain in the workplace. This is important to underline for those new to thinking about rough and tumble power struggles, because it shows that employers" primary concern was full control of the workplace and the greatest possible profits, not fear of socialist ideas. In addition, the employers increasingly sought to speed up the labor process with new forms of work organization (e.g., Zieger and Gall 2002, pp. 27-28). They also employed growing numbers of unskilled immigrant laborers at lower wages in order to take advantage of the new machines and other technologies that were becoming available.
To counter these business initiatives, the craft unions within the AFL opposed the continuing influx of non-skilled industrial workers into the country because they saw the introduction of more workers and mass-production technologies as detrimental for their wages and social status. Instead of trying to fight industrialists by joining with the growing number of unskilled workers, as many assemblies of the Knights of Labor had attempted to do, they decided that their best hope was in limiting the number of available workers in order to keep their wages as high as possible. That is, they knew that the control of labor markets is the key power issue.
The fact that the newly arriving immigrants were mainly from Eastern and Southern Europe, and from Catholic and Jewish backgrounds, only heightened the resolve of these white male craftsmen, who were overwhelmingly Protestants of Western and Northern European heritage. Over time, as political scientist Gwendolyn Mink (1986, p. 17) has argued, "ethnic differences and skill differences converged within an expanding labor market to precipitate organizational and nativist anxieties among skilled unionizing workers of older immigrant stock." As the craft unions" objections to immigrant industrial workers mounted, "ethnic exclusion solidified craft-based exclusion, stripping union economic action of its class-based potential" (Mink 1986, p. 72). The result was a political division in the working class, with immigrant industrial workers tending to support the pro-immigrant Republicans from 1896 to the late 1920s, while members of the AFL were more likely to vote Democratic because urban political machines were more tolerant of unions (Mink 1986, p. 155).
For all the AFL"s hopes, pure and simple trade unionism for skilled workers organized into craft unions did not enjoy much success against big industrial companies in its first decade. The problems are seen in the sudden collapse of the Amalgamated Association of Iron, Steel and Tin Workers, which provided the AFL with 10% of its members and had a contract with Andrew Carnegie"s steel companies. When the union refused to accept the introduction of highly profitable new technology and changes in wage rates in 1892, Carnegie and his executives in effect forced a strike by cutting wages by nearly 18% at the Carnegie Steel Works in Homestead, Pennsylvania.
|The 1892 Homestead riots, as depicted on the cover of Harper"s Weekly|
The ensuing confrontation led to the deaths of ten workers and three of the 300 armed Pinkerton Detective Agency guards that had been brought in to attack the strikers (Bernstein 1969, pp. 432-434; Scheinberg 1986, pp. 7-9). Eight thousand members of the Pennsylvania National Guard then occupied Homestead; the nationwide union was but a shell thereafter (e.g., Dubofsky and Dulles 2004, pp. 153-170). In 1893-1894, when an estimated 150,000 workers in the railroad industry went on strike to protest wage cuts in the midst of a severe depression, roughly 32,000 state troopers were called out in 20 of the 27 states affected, along with nearly 16,000 federal soldiers out of an available regular force of 20,000 (e.g., Cooper 1980, pp. 144-164; Lambert 2005, pp. 58-63).
In the aftermath of these dramatic defeats, however, the AFL did make some headway outside the manufacturing sector, where disruptive efforts could succeed because the "replacement costs" for bringing in strikebreakers (discussed in the introduction to this document) for some kinds of jobs were prohibitive. For example, the newspaper industry had to accede to the unionization demands of printers, typographers and pressmen"s unions because of the unique skills these workers had, and then came to appreciate the union"s businesslike attitude toward contract negotiations. Similarly, the building trade unions (e.g., carpenters, bricklayers, plasterers, and painters) grew from 67,000 in 1897 to 391,600 in 1904 because these skilled construction workers could capitalize on their disruptive capacities due to the decentralized nature of the construction industry and also their connections to the urban political machines (Brody 1980, p. 24; Zieger and Gall 2002, p. 22). It was in this context that an Era of Good Feelings began in the late 1890s, encouraging some AFL leaders to accept overtures from a new group of corporate moderates that are discussed in the next section.
2. Hopes, Then Setbacks: 1900-1932
The appearance of a reasonably cohesive group of corporate moderates just as the twentieth century began was due to two loosely related developments in the last three decades of the nineteenth century, a 30-year span that included major technological and transportation advances as well as the rise of a factory system that transformed the economic landscape. First, there were the several intensely violent conflicts between workers and employees that were discussed in the previous section. Second, there was a gradual adoption of the corporate form of ownership by business owners, which was originally intended to raise more capital, limit liability for owners, and allow businesses to continue after the death of their founding owners (Roy 1997).
This corporatization process began with textile companies and railroads in the early nineteenth century, then spread to coal and telegraphs companies after mid-century (Roy 1983). At the same time, commercial and investment banks on Wall Street took an integrative role in these developments through their ability to raise capital in Great Britain, France, and Germany. Bankers also contributed to the general leadership of the corporate community and provided large campaign donations to candidates in both political parties (e.g., Alexander 1992; Carosso 1970; Overacker 1932).
Until the late 1880s and early 1890s, however, industrial companies were not part of this gradual corporatization. Instead, they were organized as partnerships among a few men or families. They tended to stand apart from the financial institutions and the stock market. Detailed historical and sociological studies of their shift to the corporate form reveal no economic efficiencies that might explain the relatively sudden incorporation of industrial companies. Instead, it is more likely that industrial companies adopted the corporate form of organization for a combination of economic, legal, and sociological reasons. The most important of these reasons were a need to (1) regulate the competition among industrial companies that was driving down profits, and (2) gain better legal protection against the middle-class reformers, populist farmers, and socialists who had mounted an unrelenting critique of "the trusts," meaning agreements among industrialists to fix prices, divide up markets, and/or share profits (Roy 1997). There were further pressures on industrialists due to a new depression in the early 1890s, which led to another round of wage cuts and then strikes by angry workers. Furthermore, the Sherman Anti-Trust Act of 1890 had outlawed their resort to trust arrangements to manage the vicious price competition among them that was bringing them to potential collective ruin. This combination of events set the stage for industrialists to take advantage of the increasing number of rights and privileges that legislatures and courts were gradually granting to the legal entity called a "corporation."
It was at this point that a more integrated set of financial, rail, coal, and industrial companies began to develop. Between 1897 and 1904 alone, $6 billion worth of corporations were organized, six times the worth of all incorporations in the previous 18 years, leading to a situation in which the top 4% of companies produced 57% of the industrial output: "By any standard of measurement," concludes historian James Weinstein (1968, p. 63), "large corporations had come to dominate the American economy by 1904" (cf. Roy 1997). The result was the emergence of a corporate community that is defined by overlapping ownership patterns, interlocking boards of directors, a shared concern to limit the power of employees, and a common desire to keep the role of government at a necessary minimum (see Bunting 1983; Bunting 1987; Roy 1983. for network analyses of the emerging corporate community).The Era of Good Feelings: Corporate moderates rise
Due to the combination of a more integrated corporate community, continuing labor strife, and the return of prosperity after three years of depression, an "Era of Good Feelings" between employers and workers began to emerge. As a result, moderate conservatives in some of the new corporations began to differentiate themselves from their ultraconservative colleagues. They did so by indicating to union leaders that they might be willing to make bargains with them as a possible way to reduce industrial conflict. Then, too, some smaller businesses, especially in bituminous coal mining, thought that unions that could insist on a minimum wage might be one way to limit the vicious wage competition that plagued their industries (Gordon 1994; Ramirez 1978). Moreover, companies were urged by some of the expert advisers of the day to organize themselves into employer associations. These associations would make it possible for companies to enter into the multi-employer collective bargaining agreements that were thought to be essential if unions were going to be useful in helping to stabilize a highly competitive industry (Swenson 2002).
On the other side of this class warfare, several AFL leaders decided that unions could not defeat the burgeoning industrial corporations through strikes and spontaneous work stoppages. In addition, they long ago had abandoned any hope that elected officials or judges might aid them. They saw political entanglements as divisive and were convinced that the new corporate titans dominated government at all levels. They therefore decided it might make sense to react positively to the overtures from corporate moderates. In addition, a few trade union leaders were among the voices encouraging employers to form their own organizations, on the grounds that such organizations would make cooperation and multi-employer bargaining between corporations and labor all the easier (Brody 1980, pp. 23-24).
The most visible organization to develop in this changed atmosphere was the National Civic Federation (hereafter usually called the NCF). Formed in 1900 and composed of leaders from both big corporations and major trade unions, it also included well-known leaders from the worlds of finance, academia, and government. Building on this cross-section of leaders, it was the first national level policy-discussion group formed by the newly emerging corporate community. It therefore has been studied extensively from several different angles (e.g, Cyphers 2002; Green 1956; Jensen 1956; Weinstein 1968). The explicit goal of the NCF was to develop means to harmonize capital-labor relations, and its chosen instrument for this task was the trade union agreement (now called collective bargaining). The hope for the NCF rested on the fact that some of its corporate leaders stated publicly that the right kind of trade unions could play a constructive part in reducing labor strife and in helping American business sell its products overseas.
|Senator Mark Hanna|
In particular, the first president of the NCF, Senator Mark Hanna of Ohio, a mining magnate and Republican kingmaker, who had a major role in the election of Republican President William McKinley in 1896 and 1900, was respected by labor leaders for the fair-minded way he had dealt with striking miners on some of his properties. Hanna also worked to convince his colleagues that the improved productivity and efficiency that would follow from good labor relations would make it possible for American products to compete more effectively in overseas markets, because the finished goods would be of both a higher quality and a lower price. In exchange, labor would be able to benefit through employment security and the higher wages that would come with increased productivity and sales (Weinstein 1968, Chapter 1). In terms of present-day theorizing, Hanna and the NCF were trying to create a cross-class coalition or alliance that would be beneficial for both parties (Swenson 2002, pp. 143-144).
Nor did the NCF hesitate to seek the advice of experts, including some who were considered reformers or even liberals, which is another reason for thinking that the corporate moderates were somewhat different than the ultraconservatives. The most famous of these reform-oriented experts was an atypical economist, John R. Commons, who had been part of many reform efforts in the previous decade. Commons became a researcher and strike mediator for the NCF while managing its New York office from 1902 to 1904. He adopted the NCF emphasis on collective bargaining and championed the concept ever afterwards. When he left for a position at the University of Wisconsin, where he trained several of the economists who later worked for the New Deal in the 1930s, half of his salary was paid by moderate conservatives in the NCF that admired his efforts. Commons later claimed that his years with the NCF were among the "five big years" of his life (Commons 1934, p. 133).
At first glance, the NCF focus on collective bargaining may seem to reflect the corporate moderates" acceptance of an equal relation between capital and labor in a pluralistic American context, which would not fit with the theory of corporate dominance reflected in this document, and on this site more generally. But from a class-dominance perspective, collective bargaining is not about pluralism or values or decency, none of which had been in evidence in the periodic violence and use of repression by employers in the years following 1877. Instead, the concept of collective bargaining is the outcome of a power struggle that reflects the underlying balance of power in favor of the corporations. From the corporate point of view, a focus on collective bargaining involved a narrowing of demands by AFL unions to a manageable level. It held out the potential for satisfying most craft-union members at the expense of the unskilled workers and socialists in the workforce, meaning that it decreased the possibility of a challenge to the economic system itself. However farfetched in hindsight, the possibility of such a challenge seemed to have some validity in the early twentieth century due to the volatility of capitalism, the seeming plausibility of at least some aspects of Marx"s theory of inevitable collapse, and the strong socialist sentiments of a growing minority of intellectuals and workers. From the corporate moderates" point of view, which did not have the benefit of twentieth-century history as a guide, it is understandable that they preferred unions for skilled workers to periodic disruption by frustrated workers or constant political challenges from socialists, who incidentally won a growing number of city and state elections in the first 10 to 15 years after they founded a new political party in 1901 (e.g., Weinstein 1967).
From the labor standpoint, collective bargaining over wages, hours, and working conditions seemed to be the best that it could do at that juncture. Despite the growing agitation by socialists, most skilled workers apparently did not think it was worth the costs to organize a political challenge to capitalism, or even to continue to attempt to organize unions that included both skilled and unskilled workers, as the Knights of Labor tried to do between 1869 and 1886. They therefore decided to fight for what their power to disrupt forced the corporate leaders to concede in principle. This strategic decision to work toward unions based on bargaining for better wages, hours, and working conditions was embraced even by the committed socialists who predominated in a handful of unions, including the Brewery Workers Union and the International Association of Machinists (Laslett 1970). More generally, sociologist Howard Kimeldorf (1999, p. 149) has shown that both the leftist and apolitical unions that often fought each other very vigorously "relied on labor solidarity, mass mobilization, and unrestricted direct action to find their way across what was still a largely uncharted organizational landscape."
Thus, the process and content of collective bargaining is actually a complicated power relationship that embodies the strengths and weaknesses of both sides. Its existence reveals the power of labor, but the narrowness of the unions and the substance of what is bargained about reflect the power of capital. Collective bargaining is "both a result of labor"s power as well as a vehicle to control workers" struggles and channel them in a path compatible with capitalist development" (Ramirez 1978, p. 215). Drawing on Kimeldorf"s (2013) new formulation concerning the importance of replacement costs in union success in that era, Ramirez"s point can be generalized to say that unionization is possible when workers can exercise a disruptive potential that threatens profits. That is, the unions that were organized in the late ninetieth and early twentieth centuries had a high disruptive capacity that was rooted in the difficulty (and thus high costs) of finding replacement workers in the face of strikes. Sometimes these replacement costs were due to skill barriers, as in the case of the typographers and construction workers mentioned earlier, but replacement costs could also be high for companies that had fast turn-around times or had geographically isolated work sites that scared away potential replacement workers.
However, it is important to add that the unionization and collective bargaining that sometimes developed in industries in which workers had disruptive potential is not quite a standoff in which both sides have the same amount of power. They are close to equal when it comes to collective bargaining once the ability of workers to disrupt and organize has been demonstrated, but it is also the case that it is very difficult to sustain most unions if governments use their legal or coercive powers to support employers in their refusal to recognize unions. Thus, political power has to be added to the collective bargaining equation and it can serve as the tipping point if and when collective bargaining fails and one or both sides of an open class struggle resorts to organized violence. In this context, the matter of who controls key government offices, starting with the presidency, becomes critical.
Once again, it needs to be stressed that the unionism the NCF leaders were willing to support was a narrow one, focused almost exclusively on skilled or craft workers, to the exclusion of the unskilled industrial workers in mass-production industries. Furthermore, the corporation leaders in the NCF objected to any "coercion" of nonunion workers by union members and to any laws that might "force" employers to negotiate. Everything was to be strictly voluntary, although government could be called in to mediate when both sides agreed to arbitration. Indeed, there was precedent for such voluntary arbitration in federal legislation passed in 1898, which allowed for mediation between interstate railroads and those unionized employees that worked on the trains themselves (e.g., engineers, brakemen, conductors).
Within this limited perspective, the NCF and other corporate moderates seemed to be having at least some success in their first two years. Leaders in the new employers" associations not only signed agreements with their workers, but spoke favorably of the NCF and its work. None was in a major mass-production industry, however, and the new era did not last very long. As the unions" membership grew and they began making more demands, the employers" dislike of unions resurfaced accordingly. In other words, class conflict once again emerged, which soon led to organized opposition to unions within the very same employer associations that had been created to encourage trade agreements. This sequence of events reveals the difficulties of maintaining cross-class coalitions, which were to break down more often than not in future decades as well. Either the workers try to impose conditions that employers find unreasonable, or else some employers, known as "chiselers" in that era, try to gain market share or earn higher profits by undercutting the terms of the agreement.Bad feelings and violence return
The usual pattern was most dramatically demonstrated when the National Metal Trades Association, which included a wide range of manufacturers that made use of metal in their production processes, broke its agreement with the International Association of Machinists only 13 months after signing it in May, 1900. The turnabout occurred when the machinists tried to place limits on the number of apprentices in a shop and resisted piece rates and doubling up on machines (Swenson 2002, pp. 49-52). The angry employers announced in a Declaration of Principles "we will not admit of any interference with the management of our business" (Brody 1980, p. 25). The failure of the attempt to employ collective bargaining to resolves disputes is also demonstrated by the refusal of steel unions even to consider the terms offered in 1901 by J P. Morgan, the most powerful financier of the day, for his acceptance of already established unions in subsidiaries of his newly organized behemoth, U.S. Steel. Instead, the union actually "called a general strike against the corporation to force immediate agreements on its entire tin plate, sheet steel, and steel hoop operations, thus breaking current agreements in some of them" (Swenson 2002, p. 51). The corporation then crushed the strike and the union. More generally, at least 198 people were killed and 1,966 were injured between 1902 and 1904 in the other labor disputes that soon followed in a variety of industries (Archer 2007, p. 121). Nevertheless, union membership grew an average of 2% a year from 1904 to 1915 despite the renewed warfare (Nelson 1997, pp. 92-93; Zieger and Gall 2002, pp. 18-19).
The individual employer associations were reinforced in their anti-union efforts when the industry-wide National Association of Manufacturers (NAM) moved into their ranks. Founded in 1896 to encourage the marketing of American products overseas, its first president was also an early member of the NCF and tried to avoid any discussion of management-labor issues within NAM. However, when anti-union employers took over the association in late 1902 in a three-way race for the presidency, it quickly turned into the largest and most visible opponent of trade unions in the United States. It thereby became the core organization for the ultraconservatives in the corporate community, a role it has played ever since, but always buttressed by the organizations established by specific industries, such as the Iron and Steel Institute and the American Automobile Manufacturers Association.
The rise of the anti-union movement caused the NCF to draw back from its collective bargaining emphasis, but it continued to endorse collective bargaining as a principle even though it no longer pushed for it. At the same time, though, the organization began to put greater emphasis on urging employers to pay good wages and install welfare programs of the kind that had been tried by a few companies in earlier decades in an attempt to placate workers. "After 1905," says Weinstein (1968, p. 18), "welfare work increasingly was seen as a substitute for the recognition of unions." These widespread efforts were successful in many large corporations and were an important forerunner of the welfare-capitalism strategy to combat unions emphasized during the 1920s. In fact, the Welfare Department within the NCF played a large role in disseminating this perspective (Cyphers 2002). In present-day theorizing, these large-scale employers, many of them using advanced production technologies, were paying "efficiency wages" in an effort to increase profits through enhanced productivity and at the same time protect themselves against disruption, sabotage, and the destruction of equipment:
|Aftermath of the Los Angeles Times bombing, October 1910|
In spite of the efforts by the NCF and other corporate moderates to deal with labor conflict after 1904 through welfare and education programs instead of collective bargaining, there was another wave of industrial violence in 1910 and 1911. Dynamite attacks at many construction sites across the country, and on the Los Angeles Times" entire building, by what turned out to be apolitical but militant members of the bridge and structural ironworkers" union, were of particular surprise and concern. In reaction, President William Howard Taft sponsored legislation to create a Commission on Industrial Relations to examine the causes of industrial unrest and labor sabotage, which resulted in further legitimation for the collective bargaining agreements sought by the AFL.
Although the National Civic Federation had abandoned its organizational emphasis on collective bargaining, several of its individual members nonetheless played the major role in the commission"s deliberations. The nine member commission, which was appointed by President Woodrow Wilson in 1913, consisted of three corporate leaders, all members of the NCF; three labor leaders, also members of the NCF; and three public members, two of whom, Commons and a well-known socialite and reformer of the era, Mrs. Borden Harriman, were members of the NCF. The only non-NCF member was the chairman, Frank P. Walsh, an attorney, reformer, and advocate for the poor. Walsh was more than a match for the other eight members, leading the commission into investigations, arguments, and pronouncements that angered the non-labor members (Adams 1966; Weinstein 1968, Chapter 7).
The commissioners could not come to general agreement after hearing hundreds of hours of testimony and debating numerous legislative proposals. However, it is important to note, in the light of the eventual passage of the National Labor Relations Act in the mid-1930s, that the weight of the members" several separate reports in 1915 favored greater use of the collective bargaining mechanism. As Commons noted in a report that also was signed by Mrs. Harriman and the business members, but not the labor members, the important issue was "whether the labor movement should be directed towards politics or toward collective bargaining" (Weinstein 1968, p. 202). Commons went so far as to recommend new legislation empowering government advisory boards to mediate capital-labor relations and channel protest into collective bargaining, clearly foreshadowing the kinds of solutions that eventually were tried during the early New Deal.
The outbreak of World War I changed the power balance between business and organized labor. Supplies of new labor from Europe virtually dried up, the war fueled an economic boom, and the federal government expanded its role in the economy. Many AFL unions took advantage of the situation by calling strikes to gain union recognition, leading President Wilson to support the right of unions to exist and bargain collectively in exchange for a no-strike pledge. To insure a smooth flow of production and secure the loyalty of workers in the face of the many socialist critics of the war, government officials, with the acquiescence of major corporate leaders, instituted a National War Labor Board in 1918 to mediate corporate/union conflicts. Composed of corporate and trade union leaders, it was co-chaired by former President Taft and Frank P. Walsh, the intrepid investigator who had served as chair of the recently disbanded Commission on Industrial Relations. AFL membership increased from two million in 1916 to 3.2 million in 1919, mostly in unions that had existed since 1897, with the ten largest national unions accounting for nearly half the increase (Dubofsky and Dulles 2004, p. 191). While all this was going on, anti-war dissenters from radical unions and the Socialist Party were put in jail.
|The Seattle Union Record announces the beginning of the general strike, February 1919|
Leaders within the AFL were hopeful that this renewed harmony and success would continue after the war, but such was not to be the case. In 1919 nearly four million workers (21% of the workforce) took disruptive action in the face of employer reluctance to recognize or bargain with unions. There were major strikes in the nation"s coalfields and among longshoremen in New York City and police officers in Boston, as well as a general strike in Seattle. The largest strike took place in the steel industry, in which nearly 350,000 workers went on strike in an attempt to gain the right to bargain. Led by U.S. Steel, the biggest and most powerful manufacturing company in the country, the employers launched a strong counterattack, branding the strike leaders as foreign radical agitators, this time linking them to Bolshevism, not anarchism. They also employed 30,000 African Americans as replacement workers, attacked picket lines, and broke up union meetings. With President Wilson appearing to favor steel executives, the defeat of the steel strike in December 1919 sealed the fate of collective bargaining in the ensuing decade (Zieger and Gall 2002, pp. 39-41).
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|Boston Police Strike, September 1919|
During the 1920s, unions lost strike after strike as employer opposition to unions reversed many of the wartime advances by organized labor. Due in good part to a union-breaking campaign led by the NAM, union strength dropped from about 20% of the nonagricultural labor force in 1920 to less than 10% at the beginning of the New Deal. Over the course of these lean years for organized labor, union membership declined from five million in 1919 to just under three million in 1933 (Bernstein 1960, p. 84). Still, total union membership never fell below 1917 levels, no major union organizations disappeared, and there were some gains for the building trades, railroad brotherhoods, and the Teamsters (Nelson 1997,pp. 98-99). But the United Mine Workers, which later took the lead in organizing during the 1930s, fell from 500,000 in 1919 to under 80,000 in the early 1930s. The garment unions were also devastated -- the Amalgamated Clothing Workers, another spearhead union in the 1930s, fell from 180,000 in 1920 to 60,000 in 1933 (with only 7,000 of those members paying dues) and the International Ladies" Garment Workers Union fell from 120,000 in 1920 to around 40,000 in 1933. The biggest unions were now in construction, transportation, entertainment, and printing, all of which had high replacement costs in the face of union demands (Zieger and Gall 2002, pp. 69-70). There were virtually no union members in mass production industries.
Nevertheless, there were a few corporate moderates who wanted to control labor by giving workers some representation and thereby avoid the kind of violent confrontations that the leaders of the NAM and other ultraconservatives were willing to undertake if necessary. These efforts were led by the richest man of that era, John D. Rockefeller, Jr., and they were to have a large impact on New Deal labor policy, although things did not turn out as Rockefeller intended them