History of Labor Relations

One way to view the history of labor relations in the United States is as a series of actions, responses, and counterresponses by workers/unions, management/owners, and the government.  

Most workers today are employees selling their labor for a wage or a salary. Only 10% of U.S. workers are self-employed, and half of employees in the United States today work for large organizations with 500 or more employees. However, that has not always been the case. At the end of the 1700s, the majority of free Americans were self-employed (farmers, shopkeepers, blacksmiths, shoemakers). Businesses were small and local, and the “large” businesses that did exist were largely in the iron industry and employed around 25 employees on average.

By the end of the 1800s, the picture of employment in the United States had changed dramatically. U.S. Steel employed 170,000 employees. Ford’s Highland Park factory outside Detroit had 15,000 employees. For all purposes, the era of self-employment in the United States was over. Working for a paycheck became widespread, and workers now had fixed working hours, and punctuality and constant work effort replaced autonomous work habits. Business became big business, characterized by hierarchical, centralized control, and concentrated wealth and power.

With this shift from entrepreneur to employee, workers lost control of the means, methods, timing, and other terms and conditions of their work. In order to maintain some level of control, employees began to band together to protect their crafts. This led to the earliest unions representing craftspeople (craft unionism), with a focus on the methods of production (job control unionism).

In 1866, the National Labor Union (NLU) was formed. This “union” more closely resembled a federation of smaller unions, much like today’s AFL-CIO. The NLU emphasized political activity to bring reform and campaigned for an 8-hour workday.

In reaction to this burgeoning labor movement, employers turned to the courts for assistance. While President Lincoln supported workers’ right to organize and kept the federal government out of labor disputes, courts were not always as friendly to workers. Business owners reached out to courts to help them to prevent workers from organizing. Employers argued that unions of workers were criminal conspiracies or unlawful trusts, and many courts agreed. Workers were often jailed, and injunctions were also issued against organizing efforts. In 1806, the Philadelphia Cordwainers (shoemakers) were convicted of criminal conspiracy. Juries often consisted entirely of landowners, as to be eligible for jury duty, one had to own property at that time in U.S. history.

The macroeconomy also played a role in the development of the labor movement in the United States. During a depression in the 1870s, employers demanded steep wage cuts, while dividends and executive salaries remained unchanged. Employers in the railroad industry implemented 10% cuts across the board, and this led to a series of strikes across the country and across other industries. This strike wave became known as the Great Uprising of 1877. In response, employers hired Pinkertons and called on national guards and the militia to prevent the stoppage of trains and to help quell the uprising. 

Around the same time, work continued to shift from regional employers to large national employers, and the labor movement shifted with it. Labor unions also became national, first with the National Labor Union and later with the Knights of Labor (KoL). By the 1880s, the Knights of Labor was the most influential organization in the labor movement. It had 700,000 members, included a broad working class in its membership, and unlike other unions welcomed women into its ranks, with over 50,000 female members. The KoL adopted the concept of uplift unionism, with the goal of elevating the moral, intellectual, and social lives of all workers, including managers. They opposed militant actions, including strikes, and instead believed that education of those opposed to the labor movement was the best path to solving labor problems. The KoL primarily focused on the 8-hour day and decent pay.

The Haymarket Tragedy of 1886 led to the demise of the KoL. Two years earlier, the KoL had marked May 1, 1886, as the deadline for the implementation of an 8-hour day. Numerous strikes occurred in 1886 to support this deadline for the 8-hour day. The KoL encouraged members to write letters rather than strike. The strikes were largely repressed by police, and in Chicago’s Haymarket Square a rally was held to protest the police repression. During the rally, a bomb was thrown into the police, and the police fired on the protestors. Eight anarchists were found guilty of killing police officers in what could only be defined as a kangaroo court. Four of the convicted were hanged. The public backlash against the KoL led to its demise as the lead organization of the labor movement, even though it had no involvement in the protests or tragedy.

As the KoL lost influence and power, the American Federation of Labor (AFL) emerged. Twenty-five national unions came together in response to what was seen as the failures of the KoL and formed the AFL. Samuel Gompers, a leader within Cigar Makers Union, became the first president of the AFL. The AFL developed the concept of pure-and-simple unionism, or what is referred to as business unionism. This form of unionism is still a primary form—if not the primary form—of unionism in the U.S. labor movement today.

Under the AFL, the struggle between employers, like Carnegie Steel and Standard Oil, and employees continued. Strikes, such as the Homestead Strike of 1892 and the Pullman Strike of 1894, often led to violent confrontations between workers and company-hired guards and militia. One battle between Pinkerton guards and striking workers at Homestead led to seven strikers and three Pinkertons being killed. Clashes during the Pullman Strike led to 13 deaths. 

At the turn of the 20th century, another labor union emerged—the International Workers of the World (IWW), or the Wobblies. The IWW, then as now, followed many of the concepts of the critical industrial relations school of thought. Unlike the AFL, they believed that unskilled workers needed to be included in the unions of the time. They believe in solidarity among all workers and the need to engage in concerted and militant actions to make gains for workers. At the time of the emergence of the IWW, the United States was seeing record levels of inequality as wages stagnated and the corporate profits of companies like Carnegie Steel and Rockefeller’s Standard Oil exploded. Taylorism, or scientific management, emerged, and rather than making work easier, it was used to make workers expendable. The IWW led one of the most successful strikes up to that time, the Textile Strike of 1912. However, as the U.S. entered World War I, the IWW was accused of being un-American and sympathizing with communists during the Red Scare. Hundreds of Wobblies, including Big Bill Haywood, were found guilty of opposing the war. Twelve hundred IWW union members were rounded up at one point and left for dead in the New Mexico desert. 

In the early 1900s, U.S. employers continued to push for the open-shop movement. Unions were depicted as violating individual freedoms, and employers fought against having to recognize or negotiate with any unions. This employer push again led to violent clashes, perhaps the worst of which ended in what is known as the Ludlow Massacre. In 1913, when workers at a Rockefeller gold mine in Colorado attempted to organize, they were forced out of their company-owned homes. The Ludlow workers set up a tent city outside of the company town. In April of 1914, the Colorado militia opened fire on the tent city, killing 10 workers. After the gun battle, the militia burned the tent city. Wives and children of the striking miners were hiding under the tents, and two women and 11 children were burned to death. In 1921, another battle over the open shop occurred at Blair Mountain, West Virginia. The battle between striking miners and deputies funded by the mine owners lasted for a week, and the workers were forced to give up as federal troops moved in to protect the mines. 

In the 1920s, perhaps in response to the publicity of the Ludlow Massacre, employers turned to a new method of avoiding unions. They created the personnel function and adopted what is known as welfare capitalism. This concept was marked by the concept of the company doing for workers what a union would charge them to do. Many of the employment practices mirror today’s HRM practices. Tactics also included the creation of company-run or -owned unions. Of course, as quickly as gains were given to employees under this concept, they could also be and often were taken away.  

The mid-1920s to mid-1930s were marked by two big events in the labor movement: the first national legislation directly addressing unionization and the right to concerted activity, and the emergence of industrial unions and the Congress of Industrial Unions (CIO). In 1926, Congress passed the Railway Labor Act (RLA). Given the importance of the railway industry to the U.S. economy, and understanding the impact of strikes on the industry, the primary purpose the RLA was to avoid strikes. However, the RLA was also the first law protecting employee rights to engage in concerted activity and collective bargaining. The RLA provides mediation services and establishes boards to resolve grievances and disputes between employers and workers in the transportation industry.

In 1935, Congress passed the Wagner Act, guaranteeing the right to form unions, engage in concerted activity, and collectively bargain for a wide swath of American workers in the private sector. Within 6 years, union membership had tripled to 8.4 million workers—a union density of 23%. As work continued to shift to being centered around an employer, with skilled and unskilled workers working for the same employers, with the same working conditions and the same workplace issues, industrial unionism emerged as an alternative to craft unionism. Under John Lewis’ leadership, seven unions formed a new Committee of Industrial Organization (CIO). The CIO unions were eventually kicked out of the AFL, and after helping to lead a successful sit-down strike at GM, the committee became its own union federation—the Congress of Industrial Organizations, formed in 1938.

The new rights under the RLA and Wagner Act (NLRA) led to the growth of labor union density and union power as the United States moved into World War II. However, due to concerns about the ability of the United States to produce the needed materials to engage in the war, the Roosevelt administration formed the National War Labor Board (NWLB) to prevent labor disputes. The NWLB led to increased job security for workers and the establishment of fringe benefits as part of total compensation packages. However, the NWLB also required a freeze on wages and prohibited negotiations over wages. This freeze on wages, while corporate profits surged, played a role in the strike wave of 1945–46 that followed the end of the war. 

After the war, the labor movement saw a number of positive moves for workers—the joining of the labor movement with the civil rights movement and the first public sector unions and public sector labor rights—as well as some steps back—the passage of Taft-Hartley  and the PATCO strike. However, from the passage of Taft-Hartley in 1947 to today, union density has declined, and at times the decline has been dramatic. In response to this union density decline, labor unions and federations have made a series of attempts to reverse the decline.

In the early 2000s, the AFL-CIO put greater emphasis on organizing. Despite this, a new labor federation—the Change to Win Federation—emerged with a promise of a greater emphasis on organizing and growing the labor movement. Amendments to the NLRA have also been consistently proposed under Democratic administrations, including the Carter, Clinton, and Obama administrations. Republican administrations at the state and federal levels have continued to push for expansion of the number of right-to-work states and the limitation of public sector bargaining rights. In 2018, the Supreme Court ruled that all public sector workers have the right to opt out of paying all union dues, making all public sector workers right-to-work employees. Despite these setbacks, the labor movement saw successes in the 2018–19 teacher strike wave, the successes of the Fight for $15, and the movement of workers in the fast-food and other service industries. New proposed amendments to the NLRA, known as the PRO Act, are active in both houses of Congress. A review of labor history might help U.S. to predict how and where the labor movement will go from here.