Economics: The American Labor Movement

Figure 1.---This photograph was taken in Chicago during the 1904 Stockyards Strike. Chicago was emerging as America's most important industrial city and the stockyards were at the center of the city's economy. The stockyards wer owned by the Union Stock Yard & Transit Company and were located in the New City community. As in many early strikes, the wives and children often joined with their striking fathers and husbands. Notice all the broken wndows here. Source: Chicago Daily News negatives collection, Digital ID: ichicdn n000987. Chicago Historical Society.

he American labor movement traces its history from the post-Civil War era when American begn its industrial expansion. America at the time was a still largely agricultural country in the mid-19th century, but considerable industrial development had occurred in the Northeast and this was significantly stimulated by the Civil War (1861-65). The first American labor union was the the National Labor Union (NLU) founded in 1866. The most powerful early union was the Knights of Labor. It achieved considerable power, but was destoyed in the aftermath of the Haymarket Riot (1886). Industrialists backed by the courts and the goverment showed n ability to break unions. Ths occured in both the Homstead and Pullman strikes diring 1892. Public opinion seemed to assciate the industrial unions with more radical groups like Anarchists and the IWW. Gradually after World War I, labor unions in most Western European countries and America won collective bargaining rights. In America this was one of the achievements of Franklin Roosevelt's New Deal. The Depression put workers at great disadvantge because there were so many unemployed seeking jobs. One of the pillars of the New Deal was the The National Labor Relations Act (1935).

The Industrial Revolution in America

It was Britain that led the way in the Industrial Revolution. One historian writes, "Great Britain was the pioneer and a portent for the world's future economic organization." [Ashworth, p. 7.] America in its own industrialization benefitted greatly by its linguistic and cultural ties even after separting politically as a rsult of the Revolutionary War (1776-83). Belgium was the forst Continental country to experience the Industrial Revolution. Gradually similar developments spread to the Netherlanmds, Switzerland, France, Austriam, and the German states as well as America.

Early Organizing Efforts

The American labor movement traces its history to the post-Civil War Era. Americawas a still largely agricultural country in the mid 19th century, but considerable industrial development had occurred in the Northeast and this was significantly stimulated by the Civil War (1861-65). The first American labor union was the the National Labor Union (NLU) founded in 1866. The NLU in only a few years had 0.6 million members. The NLU persued social reform. It succeeded in achieving an 8-hour day for government workers. The Knights of Labor were founded in 1869. It was initially organized as a secret society, but soon opened membership to all workers. The Knights like the NLU sought both economic and social reform, including safety and health legislation. The Knights championed the idea of producers' cooperatives. The Knights wee led by Terence V. Powderly, the leader of the Knights. They alsp puhed for an 8-hour day. The Knights development into a powerful national force. They assistee unions around the country. They achieved some success, but in 1886 several important strikes failed. The Knights had about 80,000 members in Chicago. The situation in Chicago became increasingly viloent. The police were called out to supress a labor rally at Haymarket Square (May 4, 1886). A bomb wa detenated, prbably by anarchists unassociated with the Knights. Public opinion associated the Knights with violence and national and local officials supressed the organization.


The efforts of industril workers to organize were opposed by employers, usually supported by government officials. Employers object to the principle of collective bargaining, seeing it as an infringement of basic property rights. Businessmen recrited private security forces to cntrol their workers. Many public officials sw labor unions as vilent threats to public order and thus when important corporations could not control theor worjers, officials used force to support corporations and supress strikes.

The Homestead Strike (1892)

The Homestead Strike was the first major industrial action following the suppression of the Knights of Labor (1886). The strike began at Andrew Carnegie's steel plant in Homestead, Pennsylvania, the most important industrial complex in the United States. When the company cut wages, workers who belonged to the SteelWorkers Union went on strike. Carnegie was in Scotland at the time. The strike was managed by his associate Henry Clay Frick. He closed the Homestead plant and ringed it with armed guards to protect it from the workers. The Homestead workers were outraged when they saw that Frick was going to reopened the plant with strikebreakers who they called scabs that were going to replace them permanently. The workers saw their jobs as a vested property rights. They attacked the guards and drove them out of the plant. The Pennsylvania governor ordered the state militia to restore peace, meaning expel the workers from the Homestead plant. Backed by the militia, Frick proceeded to hire the strikebreakers. Authorities also procecuted the strike leaders rioting and murder. Frick succeeded in breaking the union. Public reaction was mixed. There was some sympathy with the strikers, but this changed dramatically after an attempt to kill Frick by Anarchist Alexander Berckman. The violence that occurred was largely blamed on the striking workers and the Anarchists tarred the image of the labor movement. The suppression of the workers, however, affected Carnegie's public image and he spent the rest of his life attempting to rehabilitate that image through philanthropy. One of the most intreagueing figures coming out of the Homestead Strike was Emma Goldman, the lover of Frick assasin Alexander Berckman.

Public Opinion

The early unions faced some serious obstacles. Many union members were new emmigrants from Europe. Many Americans were fearful of the emigrants as dangerous foreign influences. The fact that some of the emigrants were influenced by radical social movements like Socialism and Anarchism was also troubling. (European readers will not see Socialism as a radical social movement. But remember we are discussing American punlic opinion here and in the United States in the late 19th century, it was viewed as radicl. In fact even in the 21st century, socilist is still a term with generally negative connotations in America.) The American public tended to blame the violence resulting from strikes on the workers and considered this a threat to public order. Perhaps the gretest obstacle was a philosophical one. Many Americans seemed to feel that each worker should freely to sell services on an individual basis and not as part of a collective. They saw union organizers as inferering in what should be a free market place. Not only was this seen as interfeering with a worker's rights, but it was seen as a impairment of the owner's property rights by interfering in his ability to manage his company.

The Pullman Strike (1894)

Another important late 19th century was the Pullman Strike. George Pullman was another important American industrialist. He invented the sleeping car with came to be called a Pullman. He built housing for his employees in what was a model town. It was located near Chicago, a major railway center. The United States experienced a Depression (1893). Pullman to maintin profits in the economic downturn, cut the wages of his employees 25 percent. He did not, however, cut the rent or charges for other services. Railway Workers Union leader Eugene V. Debs cautioned Union members to remain non-violent. Violent disorders did occur (May 11, 1894). The railroads were very important at the time. It was the principal way of traveling a moving goods. Thus the national economy, already weaknened by the Deression was weakened. President Cleveland decided to intervene, using the justification that the strike was affecting mail deliveries. The President is noted for saying, "If it takes the entire army and navy of the United States to deliver a postal card in Chicago, that card will be delivered. The military was ordered to force workers back on the job. When this filed, the railroads obtained a court injunction against the American Railway Union whoch prohibited it from interfereing in railway operations. The Government arrested Debs for violasting the injuntion. Many thought that the Pullman Strike was another example of union violence. The growing Populist Movement saw the suppression of thecstikers as one more example of an "un-holy alliance" between big businesses and the courts.

The Chicago Stockyard Strike (1904)

The Amalgamated Meat Cutters and Butcher Workmen led by Michael Donnelly conducted a strike in the Chicago Stockyards. Many of the workers were emigrants having a difficult time surviving on the low wages paid. As a major industrial center the strike generated considerable press attention. The companies again succeeded in breaking the Union. Two important figures emerged from the strike. One was a young journalist, Upton Sinclair, who covered the strike for a Socialist magazine. Posing as a worker, he interviewed striking workers. The material he collected provide the basis for The Jungle (1906)with along with other Muckraking materials helped secure the passage of the Pure Food and Drugs Act. The other was Mary E. McDowell. She was impressed with Jane Adams' settlement work. She was sympathetic to the Railway Workers and set up a settlement house behind the Stock Yards (1894). Because of her settlement work she became known as the "Angel of the Stockyards."She was also interested in labor reform. She founded the Women's Trade Union League in 1903 and co-organized the Chicago Stockyards Strike. McDowell played a role in persuading President Theodore Roosevelt to order a Federal investigation of working conditions and wages for women and children.

The IWW (1905)

The labor movement itself was split. Some radical unions were organized. Eugene V. Debs and other Socialists, Communists, Anarchists, as well as others organized the Industrial Workers of the World (IWW) (1905). The IWW was not committed to collective barganing, but rather with direct action and radical social change. The IWW was also known as the Wobblies. It was founded in America, but now an international union with a headquarters in Philadelphia, Pennsylvania. The destinctive IWW principle is that all workers should be organized within a single union. At the time the most important unions in America were independent trade unions. The IWW goal was much more radical, seeking the end of the class and wage system. The IWW attracted a considerable following, especially after World War I. The membership peaked at 100,000 men, but infuenced many more (1923). The IWW declined aftwards both because of its lack of commitment to collective bargaining, represive Government actions, and internal divisions.

The Springfield Garment Worker's Strike

The Great Depression (1929)

American workers experienced the worst economic downturn in American history during the Great Depression which began with the Wall Street Crash (1929). Soon plants began closing which led to a contraction of credit and further closures. Soon millions of Americam workers were left without jobs. At the time there were no Government programs like unemplyment insurance and welfare to cution unemployment. The Hoover Administration was convinced that ballancing the budget was the best approach to fighting the Deprssion. Ironically, Hoover who was noted for relief work in Europe during and after World War I was unwilling to adopt policies to address the needs of desperate unemployed American workers and their families.

The New Deal (1933-41)

Gradually after World War I, labor unions in most Western European countries and America won collective bargaining rights. In America this was one of the achievements of Franklin Roosevelt's New Deal. The Depression put workers at great disadvantge because there were so many unemployed seeking jobs. The New Deals respnse was National Recovery Act (NRA) which addressed theclabor movement. Section 7a requiring 'free choice' of representatives prived to be unexpectedly controversial. The Supreme Court soon declared the NRA unconstitutional. Presidebt Roosevelt's response was the National Labor Relations Act (1936) which becme one of the pillars of the New Deal. Senator Robert F. Wagner of New York shepered the bill through Congress and it became known as the Wagner Act. It went beyond the NRA 7a and created a legal basis for trade unions. It mandated collective bargaining as a matter of national policy. It required secret ballot elections for the choosing of unions and established protections from employer intimidation and coercion. The Labor Movement supported for the first time by the Federal Government grew during the New Deal, but was still divided. The AFL had existed for some time. When the AFL expelled CIO unions, they organized the Congress of Industrial Organization (1938). John L. Lewis was the outspoken leader of the CIO.

World War II (1941-45)

Labor played a key role in the American industrial miracle that produced weapons and armaments in unprecedented quantities. Tge quantities produced not only astinished the Axus, but the Allies and Anerican officials as well. The American labor movement continued divided. The AFL and CIO continued to disagree on major issues, but began to develop common ground for working together on areas affecting all workers. Philip Murray succeeded Lewis as CIO president. He and AFL President Green served jointly and cooperatively on a number of government commissions set up to coordinate the War effort. MLirrav ws born in Scotland in 1886 and emigratedcto America as a boy. He grew up in the coal field of western Pennsylvania. He proved to be a gifted negotiator talents and orator. He rise in the Mine Workers union to the vice-presidency. Murray headed the CIO's Steel Workers Organizing Committee (1936) and was elected president of the new United Steelworkers (1942). He retained that position whike leading the CIO.

Post-War Era

World War II War and the full employment and high wages it brought had aajor impact on American workers. This and the increasingly high wages achieved by wirkers through the unions enabled union workers to enter thecmiddle class. Here the GI -Bill after the War was another major factor. The Labor Movement continued to be divided after the War. New ledership, however, grdually emerged. Walter P. Reuther was born im Wheeling, West Virginia (1907). He was was one of four sons of a socialist brewery worker. He moved to Detroit during the Depression and became a skilled worker in the auto industry. He vecame one of the principal organizers of the Auto Workers Union (UAW). After the War he won a pitched battle for the UAW presidency. Long-time AFL leadr Murray died (1952). George Meany emerged as the new AFL secretary-treasurer. By this time many of the old antagonisms between the two wings of the movement had died out. Major issue had been resolved. This laid the foundation for for unification. The reunited AFL-CIO was agreed to at a convention in New York (December 1955). The AFL-CIO would play a major in the Civil Rights movement durung the 1960s. Here Reuther was a paricularly commited advocate. The AFL-CIO also begn supporting the free trade union movement abord, undertanding the potntial impact of low wges abroad on Americam workers. It also became an important element in the Cold war. The Labor Movement became, however, a victim of its own success. American industry during the War had not only recovered from the Depression, but had expanded and reched record production levels. At the same time Europe and Japan was inshambels. American companies had little competition. This affected both management and labor. Unions demanded and got substantual wge increases and bebefit paxkages. At the same time first Europe abd Japan reciverd, but other countries such as thecasian Tugers began to establish economie basec on free market capitalism. Americn companies wit high built-in lbor cosrs fiund it difficult to compere even in domesric market. This was the beginning of tge undoing of industrial America and the creation of the Rust Belt. The Unions by pricing American labor out of the market in effect destroyed the base from whichbthey drew their membership. The result ws a long decline in industrial union membership abd the influence of unions. Another long term trend was the shift ofcthe economy south to states that had right to work laws. Faced with declining industrial membership, labor organizers began focusing on civil servants. The Depression and the War as well as expanding Government social programs, substantially increased the size of government and the number of government employees. Here union leadwes lent support to mostly Democratic candidates who once in office supported higher wage and imprived benefits. The result was expanding defecits in many states.

PATCO Strike (1981)

The Professional Air Traffic Controllers Organization (PATCO) walked off their jobs to strike the Federal Government (August 3, 1981). Mote than 12,000 PATCO menbers participated in the strike. It threatened to bring the country's air traffic systen to a stand still. As Federal employees, the air traffic controllers were prohibited by law from striking. This was not the first illegal strike by public-sector employees. Other such strikes had been mostly resolved through arbitration. This is not how newly elected President Ronald Regan decided how to handel the PATCO strike. He ordered the air traffic controllers back to work or they would be fired. The President proceeded to replace those who refused--in effect he proceeded to break the union. The strike proved to be a critical turning point in the history of the American labor movement. Essentgially the strike is the only really effective tool with which unions bargain. A union without the strike threat is an essentially toothless union. And such is generally the case for public sector unions. The importance of the PATCO strike, however, is that it appears to gave changed the dynamics of collective bargaining. Not only did the number of strikes decline after the PATCO Strike, but the willingness of corporations to atttempt to break the striking unions increased. The Bureau of Labor Statistics (BLS) reported 22 major strikes in 2005. This is a small fraction of the average number of strikes before the PATCO strike. BLS statistics show that in the post-World War II era there were an average of about 200 strikes annually, although this varied substantially from year to year. Abd very rarely did corporations set out to permanently replace striking workers. This became much more common in the aftermath of the PATCO Strike.

International Labor Market

The PATCO Strike did not take place in a vacuum. Wider economic trends are affecting American labor. Many unions had so effectively bargained with corportatiojs that wages and benefits were increased to extrodinarily levels. This occurred at the same time that American workers were increasingly competing with much lower paid workers in other countries. High American wages affected the ability of American workers to compete in wotld markets which in turn affected the ability of those corporations to succeed and create jobs or even maintain the jobs that already existed. This is a very difficult topic, but an assessment of age levels in industries like the auto workers show that workers with minimal skills and a high school education were earning much more than some professional employees like teachers with university educations. One has to ask, just what level of compensation is justifiable and ustainable for low-skilled workers. Now the failure of American car companies to compete with foreign car comanies like Toyota can not be blamed entirely on workers, after all Japanese auto workers are not low-paid workers. Management of the American car complanies has largely failed in both technical and mrketing areas. Even so, the wage and benefits difference that American managers have to overcome is very substantial. The issue here is not a simple wage and befefits calculation for workers. One has to assess the impact on job creation. Compare the American car companies with Japanese auto companies in America (which are not unionized) and Catepiller (which broke the union in a bitter strike). Japanese companies are expanding production and hiring workers while American car makers are closing plants and reducing their work force.


Buhle, Paul. Knights of Labor (1944).

Sinclair, Upton. The Jungle (1906).

Yellen, Samuel. American Labor Struggles.


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Created: 4:26 AM 8/4/2006
Last updated: 1:32 AM 3/18/2012