LER434:

Lesson 2

Labor Relations Overview: History and Law

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Overview

This lesson will examine the historical development of collective bargaining in the United States as well as the legal framework upon which this process was built. Understanding how collective bargaining first arose and how it evolved over the last 200 years is necessary if one is to understand the current collective bargaining process.

 

Commentary

History and Background

The readings in the text provide a chronological account of some of the most important events, organizations, leaders, and laws that shaped the history of collective bargaining in the United States. The information in the readings provides a kind of roadmap of the evolution of labor-management relations in this country.

Once you have read this material, try to step back and look at the “big picture” (i.e., the manner in which the players and processes described have changed over time). Go back to the end of the 1700s and the beginning of the 1800s and think about the nature of the relationship between employees and employers. How has that relationship changed over time? What role has the government played in the relationship and how has that role changed over time? Why did unions arise and how have they evolved in the last 200 years? Being familiar with these issues will help you understand the contemporary labor-management relationship.

Ultimately, the study of the past is helpful in understanding the present because it reveals certain themes and patterns that occur time and time again. This is why the famous quote by Mexican historian Santayana rings so true: “Those who forget the past are condemned to repeat it.”

In labor history, one of the themes we see repeatedly is that the balance of power in the labor-management relationship is cyclical in nature and varies depending on the state of the economy and the public policy in place at the time. In other words, if we look back over the last 200 years, we see that, at some points, unions seemed to have greater bargaining power than employers, and at other points in time, employers had the upper hand. In either case, certain economic and political factors had a big impact on the bargaining power of the parties.

In terms of the economy, employers appear to have the advantage vis a vis unions during recessions when the unemployment rate is growing. High unemployment  provides a ready pool of excess labor that employers can turn to for replacement workers if their employees go out on strike. Unions readily recognize this fact and understand that their members are reluctant to withhold their labor when there is a high likelihood they will be replaced by unemployed workers. Employers are also aware that their employees are far less likely to risk a strike when unemployment is high. And without the ability to back up threats of a strike with action, unions have little leverage to force the employer to improve wages, benefits, and working conditions.

On the other hand, if there is very low unemployment, almost everyone has jobs, and few workers are readily available to serve as strikebreakers. In this situation, unions and their members know that they are unlikely to be replaced if they go out on strike. If they can convince the employer that they are, indeed, willing to walk out, the threat itself will probably give the union some advantage in bargaining.

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.