Looking at Labor
In the past 100 years the labor movement has come full circle. In 1886 the famous Haymarket Riot in Chicago signaled the rising power of labor in American society. In the 1930s the union movement received official recognition and protection from the federal government, and by 1948 the power of organized labor was such that C. Wright Mills wrote a book, “The New Men of Power,” arguing that labor leaders had the clout to influence the direction of American society. However, since the 1970s organized labor has been in decline, and in the 1980s the downward spiral has accelerated.
From the 1930s until 1979 there was a tacit pact, based on Keynesian economics, between American business and labor. Within this understanding, government and business recognized that consumption was as important as production. The lesson of the Great Depression was that workers had to be paid good wages in order to afford the products being sold by the corporations. In return for continual increases in pay, the big unions became less militant and did not try to move the American political system to the left.
But in 1980 the rules of the game suddenly changed as the Reagan Administration and big business decided that investment had a higher priority than consumption and that the way to secure capital was to hold down wages. The new approach was signaled by the breaking of the air controllers’ union, the 1981 tax cut and the 1982 recession. During President Reagan’s tenure it has become increasingly common for unions to be forced to give back wages in exchange for job security; actually average weekly earnings, adjusted for inflation, fell between 1979 and 1987.
As the stock market boomed and a new wave of corporate mergers swept the land, plant closings in the industrial heartland followed one after another. From 1979 to 1987 nearly 2 million manufacturing jobs were lost. When the union movement was strong, America had a strong middle class. Now that the labor movement is waning, America is increasingly becoming a polarized society--with low-paid service workers on one side and high-paid business and professional people on the other. During 1973-79, 75% of new jobs were in the $11,100-$44,400 range. During 1979-86, only 50% of new jobs were in this middle range.
Labor’s fundamental problem today is that while business has fully engaged the post-industrial era, labor has yet to come to terms with the new environment of high-technology work and intense international competition. Instead of organizing the new industries, American labor has fought a rear-guard action trying to save jobs at the old plants. Labor unions are in difficult straits partly because business enjoys an enormous advantage over labor. In the new integrated world economy, multinational corporations can keep wages down and profits up by pitting one national work force against another.
For many in the labor movement the best thing about this Labor Day is that President Reagan will be leaving office in January. The former leader of the Screen Actors Guild has been one of the most anti-labor Presidents of this century. But the rough times experienced by the labor movement during this decade cannot be blamed solely on the Republican White House. They are just as much the result of structural shifts in the economy and a lack of vision and leadership by labor’s leaders.
