October 1994 | Volume 45, Issue 6
The great, heroic American labor movement—how it became obsolete
This spring one of the largest unions in the country, the Teamsters, called a nationwide strike against the trucking industry. Much of the nation’s freight moves by truck, and its continuing to do so is vital to the economy.
Therefore, any latter-day Rip Van Winkle who had been asleep since the fifties might have expected blanket news coverage of the negotiations, presidential prodding to reach a settlement, and, finally, if no quick agreement was reached and the emergency deepened, the invoking of the Taft-Hartley Act of 1947, in some cases requiring an eighty-day cooling-off period while the workers returned to their jobs and government negotiators entered the talks. That’s the way big strikes were handled.
But none of that occurred in 1994. In fact, hardly anyone noticed the strike at all. Before long the strike was settled on terms the trucking companies could live with, the truckers went back to work, and the vast American economy rumbled on, none the worse for wear. No one even mentioned Taft-Hartley. Indeed, since 1970 the index of The New York Times has scarcely listed the act.
How could something that organized labor called the Slave Labor Act and that was a major issue as recently as the Johnson administration have so completely vanished from the political landscape?
Welcome to capitalism.
In the continuing ebb and flow that characterizes a dynamic, capitalist economy, winners and losers are inevitable. And yesterday’s winners are often today’s losers.
The Great Depression and the New Deal lifted the American labor movement on high after years of struggle. But the unintended consequences of much of the legislation of the period and then the emergence of the global economy brought it right back down.
Labor unions are a product of the Industrial Revolution as much as is inexpensive clothing or the automobile. In the pre-industrial world enterprises were small and family-owned; indeed, it was only in the second half of the nineteenth century that management and labor became so distant from each other, and their interests so much at variance, that the modern era in labor relations began in a series of bloody clashes, such as the Homestead Strike of 1892. By 1897, 440,000 workers were organized, but that was only about 1.5 percent of the total labor force. Labor unions remained very weak.
The problem was simple enough. Management preferred to deal with workers on an individual basis because each worker, individually, was nearly powerless. Realizing this, many workers wanted to organize and negotiate collectively for better wages and conditions. Management fiercely resisted their efforts, and the natural inertia of society to fundamental change was on their side.
Still, by 1920 union membership had increased to more than five million, 18.4 percent of the labor force. Then, during the 1920s, as prosperity and a tight labor market helped workers increase wages without union help and as adverse court decisions hurt organizing efforts, membership declined again. By 1930 it was down to a mere 11.6 percent of the total labor force.
Then came the Great Depression. If it was an unmitigated disaster for the average worker, it was the salvation of the American labor movement as a whole. As jobs disappeared by the million (unemployment was nearly 25 percent by 1933), management dominated the workers that remained.
By 1934 corporate profits were rebounding smartly, as were stock prices on Wall Street, but unemployment remained above 20 percent. The National Industrial Recovery Act (NIRA), the centerpiece of Roosevelt’s early efforts to combat the Depression, was a failure. Its provisions designed to give labor a place at the table were circumvented by management, which set up company unions to keep out independent ones.
Liberals, utterly dominant in Congress after the elections of 1932 and 1934, passed the Wagner Act in response. It amounted to a labor-union bill of rights and, even more important, a management bill of wrongs. Hesitantly, and only after the Supreme Court had thrown out the NIRA, President Roosevelt signed the Wagner Act (officially called the National Labor Relations Act) into law.
The Wagner Act banned company unions. It guaranteed labor’s right to organize and forbade employer interference with the process. It created the National Labor Relations Board to oversee elections, certify winners, and hear complaints about unfair labor practices. Significantly, while the act listed numerous unfair practices, they all were practices that had been used by management. As far as the Wagner Act was concerned, there were no unfair labor practices used by unions. Reaction to its sharp tilt in labor’s direction was inevitable.
Thanks to the Wagner Act, union membership exploded in the last half of the 1930s, even while unemployment stayed stubbornly high. In 1934 union members were less than 12 percent of nonfarm workers, many of them in company unions. By 1940 they were 26.9 percent. By 1945 they were fully 35.5 percent of the nonagricultural work force.
But by 1945 the world, and American politics, had changed profoundly. During the war the unemployment rate was virtually zero. Further, wages and prices were frozen and strikes were forbidden.
Postwar politics forced the rapid dismantling of most of these wartime regulations. Too rapidly, in fact. The regulations, of course, had not prevented the inevitable interplay of supply and demand during the war; they had just suppressed the effects. With the cork of regulation suddenly out of the bottle, the dislocations that had built up during the war exploded.
Had Roosevelt lived, he might have used his by then vast prestige to stretch out the dismantling of wartime controls and brought about a relatively smooth transition to a peacetime economy. His successor, however, a virtual unknown to most Americans, was helpless to do so. Before long “To Err Is Truman” was a national joke.
It is not hard to see why. When price controls were suddenly ended, inflation soared. Farm prices shot up no less than 14 percent in a single month and were 30 percent higher by year’s end. Meanwhile, corporate profits increased 20 percent and labor unions demanded their share of the pie. Strikes multiplied. In January 1946 fully 3 percent of the labor force, including workers in the automobile, steel, electrical, and meat-packing industries, were striking. Never before (or since) has anything like that many workers been on strike simultaneously. To many, labor unions now seemed far too powerful.
In the congressional elections of 1946, the Republicans ran on the slogan “Had enough?” The people apparently had and, for the first time since 1928, elected a solidly Republican Congress. Truman would later call it the “do-nothing Eightieth Congress,” but one thing it most certainly did was pass the Taft-Hartley Act.
Its proponents said that Taft-Hartley did for management only what the Wagner Act had done for labor. Its opponents called it a “deliberate and monstrous movement . . . to cripple if not destroy, the labor movement.” Truman, dependent on the political support of organized labor, fought it tooth and nail. But the temper of the times was on Taft-Hartley’s side.
The act allowed employers to fully express their opinions on whether the workers should elect a union to represent them or not, as long as they used no threats in doing so. It allowed management to call for an election on its own. It forbade unions to coerce workers or refuse to bargain, just as the Wagner Act had forbidden management to do so. The closed shop (where workers have to be members of the union before they can be hired) was outlawed.
And Section 14(b) allowed states to outlaw the union shop, where all workers are required to join the union after being hired. Many states where organized labor was weak, especially in the South, promptly did so. Labor would spend more than two decades fighting to repeal Section 14(b), expending vast political capital in attempt after unsuccessful attempt.
Truman vetoed Taft-Hartley, calling it “shocking—bad for labor, bad for management, and bad for the country.” Congress overrode his veto, and it became law. But as so often happens, the problems that had brought the legislation about in the first place now began to ebb. While 125 million man-days had been lost to strikes in 1946, only an average of 40 million man-days was lost in the ensuing three years. (By 1992 fewer than 4 million man-days were lost to strikes.)
In the 1950s, with the American economy still largely immune to competition from other countries, management became more willing to ensure worker contentment by offering cost-of-living adjustments and wage increases. Both unions and management learned how to be less confrontational, to enlarge on their common interests.
But larger trends were working against labor. Manufacturing, always the heart of the union movement, remained as large a part of total GNP as it had been, but it used a steadily shrinking percentage of American workers, as ever more sophisticated equipment increased productivity, and as more and more unskilled jobs moved offshore to low-wage countries.
Today the percentage of union workers in the work force is nearly what it was in 1920. The everyone-doing-the-same-job production line, labor’s most fertile recruiting ground, is rapidly disappearing. That’s why the Wagner and Taft-Hartley acts today seem as much ancient history as the Homestead and Pullman strikes with which the labor movement began a century ago.