From the Ashes of the Old: American Labor and America's Future Hardback - 1998

Excerpt from Chapter One

1 * Riding the Wave of Postwar Prosperity The fall of 1945 was a heady and anxious time for America. Since most victors and vanquished had been equally devastated by the war, the United States became the most powerful nation in the world. Still, many Americans wondered whether the economy would be able to absorb eleven million members of the armed forces. Economists grimly predicted the return of the Great Depression. With a sense of foreboding, the Seventy-ninth Congress had, the year before, passed the G.I. Bill of Rights, to provide income and housing for veterans while the government figured out what to do with them. And workers and their unions braced for layoffs. They didn't come, nor were the problems of readjustment as grave as expected.

No section of American society seemed in a better position to gain from the economic, military, and political strength of the post- war United States than the labor movement. By the end of the war almost a third of paid employees were in unions, though few white- collar workers in the public and private sectors were organized. Labor's power had been acquired through hard struggle. The New Deal provided a legal framework for union organizing and collective bargaining. But from the 1933 apparel workers' and miners' strikes to the 1937 Supreme Court's decision on the constitutionality of the National Labor Relations Act, it took mass strikes, factory occupations, and demonstrations to convince large and small employers alike that the majority of industrial workers wanted unions.

Labor had come into its own during the war. Desperate to raise industrial production to supply the necessary quantities of military equipment, Roosevelt pledged to assist labor to overcome the resistance of many employers -- especially Ford and some steel companies -- to union organization. As it turned out, the wartime no- strike pledge to which, with the notable exception of the Mineworkers, nearly all of labor had agreed, was soon made permanent. Unions therefore insisted on a contractually mandated grievance procedure to address working conditions. To avert strikes, many contracts introduced the practice of impartial arbitration as the final step when the parties could not agree.

After Japan surrendered, unions lost little time in putting their demands on the public agenda as well as on the bargaining table. Thwarted by the no-strike pledge, which had left their wages and benefits stagnant for four years, and, at the war's end, by inflation, which depressed their living standards, many workers were furious. And employers were reaping near-unrestricted profits. By the summer of 1946, workers staged strikes against most of the leading industrial corporations, strikes that represented the largest outpouring of militant workers in any one year in American history. They were begun by longshoremen and oil workers, and they took on the aura of a crusade when the United Auto Workers demanded of GM a 30 percent wage increase. Soon the strike wave spread to the steel, electrical, and rubber industries.

The settlements fell short of the target: most employers agreed to 18 percent or eighteen-cents-an-hour increases, and Auto Workers' Walter Reuther's radical proposal that the increases be safeguarded by an employer agreement, to avoid price "pass alongs" to consumers, failed for two reasons. Despite some favorable public sentiment for the plan, General Motors and other leading corporations were determined to reassert the management "prerogatives" they believed had been eroded by wartime labor shortages and union power. And the Steelworkers union, next to the Auto Workers the most important force in the strike movement, permitted the industry to raise prices. Reuther tried another ploy: if General Motors insisted on price boosts to pay for the wage increases, he demanded the company "open the books" to union and public scrutiny to prove it needed the extra income. Again he was rebuffed.

Most union leaders drew different lessons from these struggles. The strikes demonstrated labor's power to improve the living standards of millions of members and, by example, the entire workforce. Some on labor's left read the signs to mean that the time was ripe for political independence and shop-floor militancy. But Reuther himself and the Steelworkers president, Philip Murray, who was also CIO president, were convinced that the well-being of American labor depended on its forging a new social compact with the largest corporations: the strike weapon and other confrontational tactics would be used only sparingly. Even though Reuther soon learned that, to ensurre industrial peace, the government, even under a Democratic administration, was likely to be on the corporations' side, union leaders expected Congress and the president to enact universal health care and a massive housing program. What they did not foresee was that, after thirteen years of the New Deal, the Republican Party and its business allies were not about to roll over for a new wave of reform.

Riding the backlash against the unions' economic power, the GOP in the 1946 midterm elections took both houses of Congress and wasted little time in putting the brakes on labor's forward march. No sooner had Congress convened than it passed, with many Democratic votes, the Taft-Hartley amendments to the National Labor Relations Act. These restraints forbade sympathy strikes where a contract was in effect; enabled states to outlaw the union shop, which required workers to maintain union membership as a condition of employment; emulated the earlier Railway Labor Act by giving the president the right to ban strikes for eighty days if the administration thought the walkout would jeopardize the national interest; gave employers the right to hire permanent replacements for striking workers; and outlawed the so- called secondary boycott, that is, forbade workers to refuse to cross a picket line when they themselves were not directly involved in the dispute. Under that provision unions could be fined for directing their members to refuse to handle "hot cargo" -- goods intended for, or emanating from, struck plants. Also, Communists were banned from holding elective union office. With an eye to the upcoming 1948 election President Harry Truman, who had publicly complained about labor's inordinate power, vetoed Taft-Hartley, but Congress overrode his veto and the bill became law.

Organized labor vowed repeal, but within a few years it became apparent that several factors made it unable to mount an all-out campaign. Perhaps the most important was that many labor leaders believed that building consensus in labor relations was more important than maintaining an adversarial stance. By 1948, Reuther and Murray were declaring a new era of labor peace, in return for which they expected companies like GM and US Steel to agree to higher living standards for workers. And, as the Cold War against the Soviet Union and the Communist bloc gained momentum, the anti-Communists in the labor movement were in no hurry to give aid and comfort to their internal adversaries -- the American Communists, who emerged from the war stronger than ever in some industrial unions. In fact, they collaborated with the government to purge the Communists from their ranks. Finally, labor was still convinced that it had a reasonable chance to win an expanded social wage -- especially universal health care -- through congressional action and were wary of antagonizing lawmakers. Reluctantly, labor learned to live with Taft-Hartley.

By 1950 American labor was locked in an uneasy embrace with corporate America and the liberal state. In that year the postwar social compact was symbolically sealed when the Auto Workers signed a five-year agreement with GM and other auto corporations. The deal codified the wartime no-strike pledge, in return for which workers received regular annual wage increases and a cost-of-living hike to correspond to the consumer price index. In a period of substantial inflation, this "elevator" clause protected unionized workers against inflation-induced erosion of their living standards. Reuther's imaginative bargaining tactics were soon emulated by other unions, and the postwar pattern seemed set in stone. Labor agreed to give management the right to direct the workforce, invest in new labor- saving technologies, open new plants at the expense of older facilities, and set prices for its products at will. At the political level, labor was securely tucked in the folds of the Democratic Party and the bipartisan anti-Communist foreign policy. Perhaps most eventful was that Reuther and other leaders proclaimed their loyalty to capitalism as the best of all possible worlds.

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The New Deal's achievement went beyond the issue of workers' rights. Most trade unionists came to believe that the labor movement required government to secure workers' interests: labor needed a Labor Relations Act with full enforcement powers; collective bargaining, a symbol of cooperative relations with employers; and the protection of the Democratic Party to safeguard these gains. Far from being the radical break with the establishment that many in and out of the labor movement believed it to be, the rise of unions introduced a new level of industrial and political discipline. Labor, which had been an unwilling outlaw and cherished its independence from the state, began to enjoy the perquisites of political and industrial citizenship, which many of its leaders interpreted as bringing new responsibilities to maintain the status quo.

But even as wages were rising, all was not well on the shop floor. In many industries, management elevated delay to an art form. For example, under the "management prerogatives" clause -- another wartime innovation -- management retained the right to transfer workers from one job to another, install new machines or work processes, and impose discipline, including discharge, on workers who disobeyed direct orders. Discharged workers were deemed guilty until proven innocent. The aggrieved could do no more than file a complaint with a union official. The grievance process, encumbered by the management practice of piling up unsettled grievances, might last many months or even a year. Meanwhile, the workers were bound to stay on the job under what they believed to be unfair or onerous conditions. Labor's leadership may have determined that it was in their members' interest to cooperate with management by allowing the employer to set higher production norms and change work rules. But in the first decade after the war many rank-and-file union members resisted such arrangements by staging walkouts over issues of productivity and disputed managerial prerogatives. Disruptions of production became, in the postwar era, the subject of numerous legal challenges. Employers sought -- and often obtained -- court injunctions ordering workers to return to work on penalty of heavy fines and being held in contempt. Because of Taft-Hartley, union leaders feared the so-called wildcat strike, because it almost inevitably resulted in legal sanctions that, if defied, could threaten the union's existence by imposing heavy fines.

Most unions, as a result, adjusted their practices to the no- strike rule. Many shop-floor leaders became de facto contract lawyers; now their main job was to interpret contracts and plead workers' grievances before management and arbitrators who were increasingly viewed as friendly adversaries. With full-time union representatives spending most of their time at grievance and arbitration meetings, the task of organizing the unorganized often became a marginalized occupation reserved for staffers to whom the leadership owed political debts. In the postwar era, "service" and organizing functions grew ever more distant from each other. While these arrangements did not prevent occasional acrimonious bargaining and militant strikes, most workers were tied to the unwritten "social compact" to safeguard production.

By 1953 union growth ground to a halt, but not before the labor movement completed what it had started twenty years earlier. Collective bargaining was in place for the majority of workers in key industries; the right to strike had been reinstated, even though it was restricted both by contract and law; trade union organizing had been fully integrated into the Labor Relations law, which relegated the "recognition" strike to second place in favor of a government- supervised representation election; and nearly all of labor became affiliated with the Democratic Party. Once the era of the New Deal was ended by Eisenhower's election, unions were clearly on the defensive.

With more than 40 percent of the factory labor force in unions by the late 1940s, even nonunion employees gained from labor's power. There were still gaps in unionization, especially in the huge textile industry, and among white- and pink-collar employees, but American labor's strength was the envy of trade unionists in other industrialized countries. Mammoth corporations like IBM and Kodak, which kept their plants open shops, knew that in union-dominated electrical and metalworking industries they had to equal or surpass union wages and benefits. These corporations went so far as to guarantee lifetime jobs for their employees, a promise they could fulfill only in the era when labor costs were absorbed by relatively high prices for their products, many of which were underwritten by the military.

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-- From From the Ashes of the Old: American Labor and America's Future, by Stanley Aronowitz. Copyright (C) September 1998 by Stanley Aronowitz. All rights reserved. Used by permission of Houghton Mifflin Company.

"In a book that looks to the future, Aronowitz argues that labor must reclaim the good parts of its past, its willingness to crusade for economic justice and democratic values." The Village Voice