The Boom-Bust Cycle

Employers tend to have greater bargaining power when the economy is in a decline; unions tend to have the upper hand when the economy is on the rise. In the 1800s, these cycles occurred in roughly twenty-year intervals. If we analyze major confrontations in labor history, during downturns in the economy, employers tended to go on the offensive. During upturns (when the economy was thriving and unemployment was comparatively low), unions tended to go on the offensive.

The first national unions in this country were formed in the early 1860s when the economy was booming. When the economy went to decline between 1867 and 1877, we saw employers go on the offensive against these new unions. The destruction of the coal-miners union in northeastern Pennsylvania (and the subsequent hanging of the "Molly Maguires") and the defeat of the early railroad unions during the rail strike of 1877 are two examples of employers taking advantage of favorable economic conditions.

From roughly 1877 to 1887, the economy again grew strong and unions regrouped. It was during this period that the American Federation of Labor (AFL) was formed and that the Knights of Labor's membership reached into the hundreds of thousands. However, when the economy, again, went into a downturn between 1887 and 1897, employers regained the upper hand and became much more aggressive in fighting unions. The defeat of the steelworkers in Homestead, Pennsylvania at the hands of Andrew Carnegie and Henry Clay Frick in 1892 (Homestead Lockout) and of the workers who manufactured Pullman cars in 1894 (Pullman Strike) was the result. Looking back at each of the events mentioned above, it is clear that the government influenced the outcome, either by directly intervening or choosing not to intervene. The appearance of the new national unions in the 1860s occurred during the presidency of Abraham Lincoln. While Lincoln's attitudes toward slavery are well known, it is less well known that he was also supportive of working people and their efforts to organize collectively. By not taking the side of employers during his presidency, he contributed to the growth of unions during the 1860s.

In the 1870s, government sided openly and actively with employers. For example, the railroad strike of 1877 was broken by use of the Philadelphia militia and Federal troops who were called to Pittsburgh to put down the strike by force. And again, in the 1890s, the government joined hands with the Carnegie Steel and Pullman Car companies by supplying troops and law enforcement officials who protected the interests of the employers and forced the workers back to work.

As you read about the evolution of labor-management relations from the 1800s through the present, keep in mind the role the economy and government (particularly Congress and the courts) play in helping to determine which party will have the greater bargaining power at any given time.