Chapter 2 - The historical evolution of the U.S. industrial relations system. The main contents of the chapter consist of the following: The colonial and preindustrial era, early unionism, the need for national unions, the rise of the AFL, the evolution of management in industrial relations, the rise of industrial unionism, the new deal labor policy, the Post-World War II evolution of the new deal system.
Chapter The Historical Evolution of the U.S. Industrial Relations System McGrawHill/Irwin An Introduction to Collective Bargaining & Industrial Relations, 4e Copyright © 2008 The McGrawHill Companies, Inc. All rights reserved 1 3 2 3 The Colonial and PreIndustrial Era • MasterServant From colonial times to the Revolutionary War, employment principles were dominated by this British common law Many early settlers were indentured to a ship owner, who sold the servant to an employer for up to seven years Many were forsaken husbands and wives, runaway children, kidnapped, or criminals 1 4 2 4 The Dominance of Agriculture • Colonial employers were eager for workers Shortage of workers on farms and plantations Indentured servants supplemented by slaves 1609: first slaves imported into Virginia 1808: slave trade outlawed • At the same time, there were a growing number of artisan services and manufacturers such as: shopkeepers, toolmakers, blacksmiths 1 5 2 5 A Shortage of Skilled Labor • Colonial employers complained of “excessive rates” for skilled labor • Employers and communities tried to lure workers away from each other Massachusetts Bay Colony tried to regulate competition for workers by putting a limit on wages Efforts failed due to a growing demand for labor 1 6 2 6 Labor Force Diversity • Ranged from indentured servants, slaves, immigrants, skilled artisans, shopkeepers, and farmers of both sexes and color • Diversity reduced the class consciousness that helped unions develop in Europe • Expanding opportunity meant little interest in unions in the preindustrial 18th century 1 7 2 7 Early Unionism • Developed with the industrial revolution • Early mills imposed strong discipline and socialization on immigrants • Rules of the Lawrence Manufacturing Co: “No person can be employed whose known habits are or shall be dissolute, indolent, dishonest, intemperate, or who habitually absent themselves from public worship or who may be addicted to gambling of any kind” 1 8 2 8 The First Trade Unions • First groups were skilled craftsmen • First modern trade union in the U.S. was the Federal Society of Journeymen Cordwainers (shoemakers) in Philadelphia in 1794 • Later joined by printers, carpenters, and other artisans in New York and large cities 1 9 2 9 Why Workers Formed Unions • John Commons: Competitive pressures spurred unionism Expansion of markets, innovations in transportation, and unity of production decreased the need for artisans and lowered wages Unions were a reaction to lower wages and deteriorating working conditions 1 10 2 10 Early Court Reaction to Unions • Employment relationships were governed by common law • No state or constitutional provisions addressed the rights of workers or obligations of employers • Most courts were hostile toward collective action by labor organizations 1 33 2 33 The Rise of Industrial Unionism • As small shops moved to largescale production, semiskilled and unskilled workers had little help in organizing • The AFL’s emphasis on crafts also hurt • Strike against the steel industry in 1919 failed due to a lack of coordination by the 24 different unions • Still, the AFL opposed industry organizing 1 34 2 34 The CIO Challenge to the AFL • The debate over craft or industry organizing came to a head in 1935 • John Lewis of the United Mine Workers lost a crucial vote to organize the auto and rubber industries • Lewis formed the more militant rival Congress of Industrial Organizations (CIO) 1 35 2 35 The National Industrial Recovery Act • Labor unrest was rising with the Great Depression • The National Industrial Recovery Act (NIRA) of 1933 encouraged organizing • By 1934, union membership and strike activity increased to levels of post WWI • In 1935, the Supreme Court ruled that NIRA was unconstitutional 1 36 2 36 The New Deal Labor Policy • The Depression caused a new era in federal labor policy • Many blamed President Hoover’s policies for the economic and social crisis following the stock market crash of 1929 • Franklin D. Roosevelt was elected in 1932 • FDR’s “New Deal” included unemployment insurance, jobs, social security, and the minimum wage 1 37 The National Labor Relations Act (NLRA) • The NLRA was the cornerstone of a new national labor policy • Enacted in 1935 • Also called the “Wagner Act” for its chief sponsor, Senator Robert Wagner • NLRA gave workers the right to organize, set standards for union elections, and specified unfair practices of employers 2 37 1 38 2 38 The Roots of the NLRA in American Practice & Experience • The NLRA embodied many existing principles that fit with American political values • In fact, railroads, clothing, and other industries had developed functioning relationships years before the depression • Still, employers objected to the NLRA until the Supreme Court ruled it constitutional in 1937 1 39 Post World War II Evolution of the New Deal System • Union membership expanded in the United States from 3.5 million in 1934 to 17 million, or approximately 35% of the nonagricultural labor force, by the mid 1950s • The 1940s: Institutionalization of Basic Principles The WWII War Labor Board (WLB) promoted wider acceptance of collective bargaining in a effort to maintain production and labor cooperation 2 39 1 40 2 40 The Postwar Strike Wave • After the WLB disbanded, a surge of strikes overtook the nation • In 1946, more production time was lost than ever before 2,970,000 workers involved in strikes in the first six months of 1946 • The strike wave, the Republican control of Congress, and a more conservative national attitude led to the amendment of the Labor Management Relations Act (also know as Taft Hartley) in 1947 1 41 2 41 The 1950s: A Return to Hard Bargaining • By the 1950s, few differences remained in the bargaining agendas of the AFL and CIO They merged in 1955 to become the AFLCIO • Collective bargaining spread in the early 1950s to key sectors of the economy including steel coal, rubber, meat packing, and transportation • The “scope of bargaining” expanded, including supplementary employment benefits, pensions, severance payments for technological dislocation, and plant closings 1 42 2 42 The 1960s: Rank and File Unrest • 1960s marked by strong economic growth and social upheaval • Civil rights movement, urban riots, and the Vietnam War fed militancy in the workplace growing demands, contract rejections & wildcat strikes • The “Space Race” spawned technology and white collar jobs which became the turning point downward for union membership 1 43 2 43 The 1970s: Stability and Atrophy • The 1970s may be the least distinguished period in the history of collective bargaining Management preoccupied with holding the line against further union gains Labor sought to preserve previous gains Despite pressures from foreign competition and domestic nonunion competition, union wages grew more rapidly than nonunion wages 1 44 2 44 The 1980s: Experimentation and Change • The election of Ronald Reagan reflected a strong conservative shift in the country The firing of PATCO strikers solidified the resolve of employers to seize the initiative Recession and the rise of the dollar further reduced competitiveness and led to concessions Union membership declined and unions experimented with concessions and job security 1 45 2 45 The 1990s: Polarization • Downsizing and reengineering led to layoffs, insecurity, and income bifurcation • Security concerns led to low wage hikes • Some participatory plans, but also conflictual relationships such as Caterpillar • The nonunion sector continued to grow • Outsourcing, contingent workers, and lax labor law enforcement hurt unions 1 46 2 46 2000 to the present: Challenges of the New Millennium • Recent economic pressures have spurred an increase in the variation of employment practices in the United States Some were caused by a decline in unionization and differences between union and nonunion sectors Most striking are the diverse array of employment practices even within these sectors 1 47 2 47 Summary • Relationships between labor and management are highly dynamic and adapt over time • Collective bargaining gained societal acceptance only recently as part of larger social reforms • History reveals the critical influence of law and public policy on the evolution of collective bargaining .. .Chapter The Historical Evolution of the U.S. Industrial Relations System McGrawHill/Irwin An Introduction to Collective Bargaining & Industrial Relations, 4e Copyright © 2008 The McGrawHill Companies, Inc. All rights reserved... Mid to late 1800s: Utopians proposed communities of citizens, workers, and managers to work together • Aimed to avoid the divisive factory system • Horace Greeley: Famous Utopian thinker • But rising wages and the westward movement limited ... Origins of Factory Management • The 1800s saw continual expansion of markets for manufactured goods due to growth of railroads, telephone, and other industry • Factory system allowed economies of scale and