chapter 2 evolution of labor-management relationships

Copyright © 2009 Cengage Learning. All rights reserved.Copyright © 2009 Cengage Learning. All rights reserved.

PowerPoint Presentation by Charlie CookThe University of West Alabama

PowerPoint Presentation by Charlie CookThe University of West Alabama

Evolution of Labor-Management Evolution of Labor-Management RelationshipsRelationshipsEvolution of Labor-Management Evolution of Labor-Management RelationshipsRelationships

Chapter 2Chapter 2

© 2008 Cengage Learning. All rights reserved. 2–2

1869 to World War I1869 to World War I• The Industrial Revolution (1850s)The Industrial Revolution (1850s)

Markets and firms expanded due to:Markets and firms expanded due to: New mass-production technologiesNew mass-production technologies—factory systems—factory systems

Improved road and rail transportation systemsImproved road and rail transportation systems

Effects on workersEffects on workers Increased competition created pressures on employers to Increased competition created pressures on employers to

minimize labor costs through lower wages.minimize labor costs through lower wages.

Movement from rural to urban caused labor surpluses.Movement from rural to urban caused labor surpluses.

Demand was principally for low or semi-skilled workers.Demand was principally for low or semi-skilled workers.

Employers unconcerned about working conditions or Employers unconcerned about working conditions or benefits.benefits.

Few laws were available to protect workers.Few laws were available to protect workers.


1869 to World War I (cont’d)1869 to World War I (cont’d)• The Knights of Labor (KOL), 1869-1917The Knights of Labor (KOL), 1869-1917

Founded as a secret society (to protect members Founded as a secret society (to protect members from discharge for union activities)from discharge for union activities)

First union with a national base of membershipFirst union with a national base of membership Adopted a “one big union” philosophyAdopted a “one big union” philosophy

Accepted both employees and employersAccepted both employees and employers

First union to win concessions from employersFirst union to win concessions from employers

Focused on social and economic reformsFocused on social and economic reforms Reducing mass-production’s adverse impact on workersReducing mass-production’s adverse impact on workers

Fostering the moral betterment of workers and societyFostering the moral betterment of workers and society


1869 to World War I (cont’d)1869 to World War I (cont’d)• Strategies of the Knights of Labor (KOL)Strategies of the Knights of Labor (KOL)

Political action by voting workersPolitical action by voting workers

Encouragement of producer and consumer Encouragement of producer and consumer cooperatives (employee-owned establishments)cooperatives (employee-owned establishments)

Use of voluntary arbitration and avoidance of strikes Use of voluntary arbitration and avoidance of strikes to obtain its goalsto obtain its goals

A preference for education of workers over economic A preference for education of workers over economic pressure tactics (job actions—strikes and boycotts)pressure tactics (job actions—strikes and boycotts)


1869 to World War I (cont’d)1869 to World War I (cont’d)• Reasons for the KOL’s Failure and DemiseReasons for the KOL’s Failure and Demise

Failure to capitalize on initial strike victoriesFailure to capitalize on initial strike victories

Overestimation of the shared interests of employees Overestimation of the shared interests of employees and employersand employers

Overestimation of interests shared in common by all Overestimation of interests shared in common by all workersworkers

Lack of legal protection from employers discharging Lack of legal protection from employers discharging workers for engaging in union activitiesworkers for engaging in union activities

Inability of KOL leadership to identify with rank and Inability of KOL leadership to identify with rank and file membership goalsfile membership goals


1869 to World War I (cont’d)1869 to World War I (cont’d)• The 8-Hour Workday Movement and the The 8-Hour Workday Movement and the

Haymarket Riot (1886)Haymarket Riot (1886) Movement’s purpose for reducing 10-hour day to Movement’s purpose for reducing 10-hour day to

8-hour day was to increase overall employment.8-hour day was to increase overall employment.

Seven policemen were killed by a bomb explosion at Seven policemen were killed by a bomb explosion at a mass meeting of movement supporters in Chicago.a mass meeting of movement supporters in Chicago. Rioting ensued in which several striking workers were killed Rioting ensued in which several striking workers were killed

and hundreds were wounded.and hundreds were wounded.

Eight alleged riot leaders were “tried” and four were hung.Eight alleged riot leaders were “tried” and four were hung.

The violence turned public opinion against the KOL The violence turned public opinion against the KOL and labor movement.and labor movement.


1869 to World War I (cont’d)1869 to World War I (cont’d)• The American Federation of Labor (AFL), 1886The American Federation of Labor (AFL), 1886

Formed by skilled craft unions expelled from the KOLFormed by skilled craft unions expelled from the KOL A federation of unions that each independently A federation of unions that each independently

represented a unique skilled craft or occupationrepresented a unique skilled craft or occupation Decentralized authority to national and local unionsDecentralized authority to national and local unions Adopted the principle of Adopted the principle of exclusive jurisdictionexclusive jurisdiction Endorsed the use of economic pressure tacticsEndorsed the use of economic pressure tactics Favored the pursuit of equitable treatment and economic Favored the pursuit of equitable treatment and economic

betterment for workers (betterment for workers (business unionismbusiness unionism)) Utilized a “pure and simple” approach to unionism within the Utilized a “pure and simple” approach to unionism within the

capitalist system; did not adopt a social reform agendacapitalist system; did not adopt a social reform agenda Focused on collective bargaining to settle labor disputesFocused on collective bargaining to settle labor disputes


1869 to World War I (cont’d)1869 to World War I (cont’d)• Strategies and Tactics of the AFLStrategies and Tactics of the AFL

The use of strikes and other economic pressures to The use of strikes and other economic pressures to attain union goalsattain union goals

Active involvement in the political arena without Active involvement in the political arena without forming a political partyforming a political party

Improving the image of organized labor and collective Improving the image of organized labor and collective bargainingbargaining


1869 to World War I (cont’d)1869 to World War I (cont’d)• The Homestead Incident (July 6, 1892)The Homestead Incident (July 6, 1892)

The lockout of employees at the Carnegie Steel The lockout of employees at the Carnegie Steel Works in Homestead, Pennsylvania.Works in Homestead, Pennsylvania. Pinkerton detectives and unionized workers clashed violently Pinkerton detectives and unionized workers clashed violently

until National Guard troops secured the town.until National Guard troops secured the town. Management maintained the lockout, breaking the strike after Management maintained the lockout, breaking the strike after

five months.five months. The company’s success bolstered the anti-union efforts of The company’s success bolstered the anti-union efforts of

other employers.other employers. The press faulted the company for provoking the incident.The press faulted the company for provoking the incident. Unions gained status and public sympathy for their cause.Unions gained status and public sympathy for their cause.


1869 to World War I (cont’d)1869 to World War I (cont’d)• The Pullman Strike (1894)The Pullman Strike (1894)

American Railway Union (ARU)American Railway Union (ARU) Struck the national railroads to put pressure on the Pullman Struck the national railroads to put pressure on the Pullman

company to reach an agreement with the union.company to reach an agreement with the union.

Railroad OwnersRailroad Owners Placed federal mail on the trains and obtained an injunction Placed federal mail on the trains and obtained an injunction

prohibiting the union from interfering with the trains.prohibiting the union from interfering with the trains.

Had federal troops protect trains and strikebreakers.Had federal troops protect trains and strikebreakers.

The strike failed and Eugene Debs, president of the The strike failed and Eugene Debs, president of the ARU, was sent to jail for violating the injunction.ARU, was sent to jail for violating the injunction.


1869 to World War I (cont’d)1869 to World War I (cont’d)• The Industrial Workers of the World (IWW)The Industrial Workers of the World (IWW)

Initial goal was to overthrow the capitalist system by Initial goal was to overthrow the capitalist system by any means necessary.any means necessary.

Wanted to remove any societal aspect or group that Wanted to remove any societal aspect or group that supported capitalism.supported capitalism.

Believed that the AFL had sold out to capitalism.Believed that the AFL had sold out to capitalism.

Failed to establish an effective organization.Failed to establish an effective organization. Lack of permanent membership and financial baseLack of permanent membership and financial base

Inability to satisfy member’s interestInability to satisfy member’s interest

Identification with sabotage and violenceIdentification with sabotage and violence

Alienation of the news media and government officialsAlienation of the news media and government officials


World War I to World War IIWorld War I to World War II• Union Organizing after WWI: Problems and Union Organizing after WWI: Problems and

ProspectsProspects Recognition of labor’s power during wartime:Recognition of labor’s power during wartime:

To guarantee uninterrupted war production, government To guarantee uninterrupted war production, government contracts enforced union standards.contracts enforced union standards.

Congress restricted immigration to reduce the labor supply.Congress restricted immigration to reduce the labor supply.

Post-war problems for unions:Post-war problems for unions: Poor economic conditionsPoor economic conditions

Failed national strike in the steel industryFailed national strike in the steel industry

Lack of organizing successLack of organizing success

Aggressive employer opposition to unionsAggressive employer opposition to unions


World War I to World War II (cont’d)World War I to World War II (cont’d)• Counteractions by EmployersCounteractions by Employers

Open Shop Movement (American Plan)Open Shop Movement (American Plan) Employees did not have to be or become members of a union Employees did not have to be or become members of a union

to get or keep a job.to get or keep a job. Mohawk Valley Formula for an open shop.Mohawk Valley Formula for an open shop. Closed ShopClosed Shop

– An agreement requiring that an individual must be a An agreement requiring that an individual must be a member of the union before being hired by the employer.member of the union before being hired by the employer.

Other actionsOther actions Hiring spies to ferret out union supporters for blacklistingHiring spies to ferret out union supporters for blacklisting Offering increased benefitsOffering increased benefits Establishing company unions (Employee Representation Establishing company unions (Employee Representation

Plan)Plan)


World War I to World War II (cont’d)World War I to World War II (cont’d)• Factors Contributing to Labor’s Inability to Factors Contributing to Labor’s Inability to

Overcome Antiunion SentimentOvercome Antiunion Sentiment

Employees’ reluctance to join unions and forfeit their Employees’ reluctance to join unions and forfeit their paycheckspaychecks

Unions’ image as corrupt organizations controlled by Unions’ image as corrupt organizations controlled by socialists, radicals, and communists socialists, radicals, and communists The V technique used to dominate union meetingsThe V technique used to dominate union meetings

Union leadership that negotiated Union leadership that negotiated sweetheart contractssweetheart contracts to line their own pocketsto line their own pockets


World War I to World War II (cont’d)World War I to World War II (cont’d)• Rise of the Congress of Industrial Organizations Rise of the Congress of Industrial Organizations

(CIO) and Industrial Unionism(CIO) and Industrial Unionism

Production workers were becoming an increasingly Production workers were becoming an increasingly larger percentage of the labor force.larger percentage of the labor force.

Most AFL unions resisted inclusion of production Most AFL unions resisted inclusion of production workers in their unions and the AFL.workers in their unions and the AFL.

AFL unions expelled for dual unionism (in support of AFL unions expelled for dual unionism (in support of industrial unions) form the CIO under the leadership industrial unions) form the CIO under the leadership of John L. Lewis.of John L. Lewis.


World War I to World War II (cont’d)World War I to World War II (cont’d)• Factors Accounting for the CIO’s Success as a Factors Accounting for the CIO’s Success as a

Labor OrganizationLabor Organization Strong leadershipStrong leadership

Realistic goalsRealistic goals

Effective use of sit-down strikesEffective use of sit-down strikes

Passage of the National Labor Relations Act (1935)Passage of the National Labor Relations Act (1935)

Changes in employee attitudes toward independent Changes in employee attitudes toward independent unionsunions


World War II to the PresentWorld War II to the Present• During WWIIDuring WWII

Unions pledged no strikes during the war.Unions pledged no strikes during the war.

The imposition of wage and controls (“Little Steel The imposition of wage and controls (“Little Steel Formula”) limited wage increases but prices Formula”) limited wage increases but prices increased.increased.

Wartime strikes resulted in strong negative public Wartime strikes resulted in strong negative public sentiment towards unions.sentiment towards unions.

Unions’ postwar economic demands (full employment Unions’ postwar economic demands (full employment and wage increases) were strongly reinforced with and wage increases) were strongly reinforced with numerous strikes.numerous strikes.


World War II to the Present (cont’d)World War II to the Present (cont’d)• Developments in Organized Labor Since WWIIDevelopments in Organized Labor Since WWII

Increased concern over collective-bargaining issuesIncreased concern over collective-bargaining issues Guarantees of job securityGuarantees of job security

Employee benefitsEmployee benefits

– Health-care cost shifting (higher deductibles, co-payments Health-care cost shifting (higher deductibles, co-payments and increased premiums)and increased premiums)

Real wage protection from inflationReal wage protection from inflation Wage concession bargaining demands of managementWage concession bargaining demands of management

– Two-tier pay plans for current and new employeesTwo-tier pay plans for current and new employees

– Lump sum performance paymentsLump sum performance payments


World War II to the Present (cont’d)World War II to the Present (cont’d)• Developments in Organized Labor Since WWIIDevelopments in Organized Labor Since WWII

Organizing drives aimed at white-collar and public-Organizing drives aimed at white-collar and public-sector employeessector employees Increased attention to large groups of government workersIncreased attention to large groups of government workers

Merger of the AFL and CIOMerger of the AFL and CIO Death of long-time presidents of both unionsDeath of long-time presidents of both unions

Recognition of the ineffectiveness of union raidingRecognition of the ineffectiveness of union raiding

Sharing of common goals to influence the political Sharing of common goals to influence the political environmentenvironment


World War II to the Present (cont’d)World War II to the Present (cont’d)• Formation of the Change to Win FederationFormation of the Change to Win Federation

Several national unions left the AFL-CIO to form a Several national unions left the AFL-CIO to form a new federation called the Change to Win federation.new federation called the Change to Win federation. Dispute over extent of resources to be devoted to organizing Dispute over extent of resources to be devoted to organizing

new union members.new union members.

CTW still shares same basic principles and philosophies as CTW still shares same basic principles and philosophies as unions affiliated with the AFL-CIO.unions affiliated with the AFL-CIO.

CTW will spend less time and money on political parties and CTW will spend less time and money on political parties and more on grass-roots organizing.more on grass-roots organizing.


World War II to the Present (cont’d)World War II to the Present (cont’d)• Aspects of Organized Labor Unchanged Aspects of Organized Labor Unchanged

Since WWIISince WWII The principle of exclusive representationThe principle of exclusive representation

The concept of collective bargainingThe concept of collective bargaining

The use of grievance procedures and arbitrationThe use of grievance procedures and arbitration

Non-intervention by the governmentNon-intervention by the government

Continued involvement in the political processContinued involvement in the political process

Difficulty in maintaining consensus among member Difficulty in maintaining consensus among member unionsunions

Pursuit of short-term economic and job security goalsPursuit of short-term economic and job security goals


U.S Labor History Time-LineU.S Labor History Time-Line

1750 1900

Agrarianto

IndustrialEconomy

LaborInjunctions

HaymarketSquare Riot

PullmanStrike

LocalCraft

Unions

Commonwealthv. Hunt

1800 1850

Knights of Labor

American Federation

of Labor (AFL)

ErdmanAct

IndustrialWorkers of the World (IWW)

United Hatter’sUnion

Triangle WaistCompany fire

Departmentof Labor

HomesteadStrike

1925

RailwayLabor

Act

Norris-LaGuardia

Act

National Labor Relations Act

Council ofIndustrial

Organizations(CIO)

Labor Management Relations Act

19501940


U.S Labor History Time-Line (cont’d)U.S Labor History Time-Line (cont’d)

1950 1960

ExecutiveOrder 1088

Employee Retirement Income Security

Act (ERISA)

AFL and CIO

mergerEqual Pay

Act

Industrial-based to Service-based

Economy

Occupational Safety and Health

Act (OSHA)

GlobalCompetition

Civil ServiceReform Act

1980

Labor Management

Reporting and Disclosure Act

CivilRights

Act

1970 1975


Key TermsKey Terms

• Knights of Labor (KOL) Knights of Labor (KOL) • Terence V. PowderlyTerence V. Powderly• One Big UnionOne Big Union• Haymarket RiotHaymarket Riot• American Federation of Labor (AFL)American Federation of Labor (AFL)• Samuel GompersSamuel Gompers• Pure and simple unionismPure and simple unionism• Exclusive union jurisdictionExclusive union jurisdiction• Decentralized authorityDecentralized authority• Homestead IncidentHomestead Incident• Pullman StrikePullman Strike• Industrial Workers of the World (IWW)Industrial Workers of the World (IWW)• William ‘‘Big Bill’’ HaywoodWilliam ‘‘Big Bill’’ Haywood• Open-shop movementOpen-shop movement• American PlanAmerican Plan• Industrial spiesIndustrial spies

• BlacklistedBlacklisted• Mohawk Valley FormulaMohawk Valley Formula• PaternalismPaternalism• Employee representation planEmployee representation plan• Company unionCompany union• Sweetheart contractSweetheart contract• V techniqueV technique• Congress of Industrial Organizations Congress of Industrial Organizations

(CIO)(CIO)• John L. LewisJohn L. Lewis• Sit-down strikeSit-down strike• National Labor Relations Act (NLRA) of National Labor Relations Act (NLRA) of

19351935• Concession bargainingConcession bargaining• AFL-CIOAFL-CIO• Change to Win federationChange to Win federation

chapter 2 evolution of labor-management relationships

Business

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industrial workers

unionized workers

education of workers

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contd strategies

semiskilled workers