American Labor on the Eve of the Millennium


This is the first in a series of articles on the
history of rank-and-file labor struggles over the past 25 years. It is drawn from the new
concluding chapter Jeremy Brecher has written for the 25th anniversary edition of Strike!,
just published as the first book in the South End Press Classics Series.


Periods of mass strike don’t last forever. If they don’t
lead to fundamental social change, they are likely to be followed by a truce between
workers and employers, by a gradual erosion of workers’ gains, or by cascading
defeats. Gradually or rapidly, workers’ assertiveness, autonomy, and solidarity
diminish. Some turn to more individual solutions to their problems: "getting along by
going along" and "looking out for number one." Others may pursue their
interests as members of occupational, racial, ethnic, national, gender, or other groups,
even at the expense of those with whom they previously sought to advance together. Under
these circumstances, working people’s common interests, past achievements, and
potential power can fade to nearly forgotten dreams.

The quarter-century that followed the end of the Vietnam War surely
resembles less a period of mass strike than the periods of working-class retrenchment and
disorganization that have often come between periods of mass strike throughout U.S.
history. In 1995, large strikes in the United States hit a 50-year low. The U.S.
government recorded only 32 strikes involving 1,000 or more workers—one-eighth of the
number 2 decades before—many of them ending in devastating defeats. The proportion of
workers belonging to unions fell to 15.5 percent—the lowest level since 1936.

But individual and narrow group strategies rarely succeed for long.
The basic structures that render workers powerless as individuals but powerful
collectively remain. Even in times of economic growth, workers who are weak and
unorganized are rarely offered a share of the gains. In hard times, the burden of
involuntary sacrifice is placed on those who can’t, or don’t, resist.

Surely this has been the case for the past quarter-century. American
workers have seen a 15 percent reduction in real wages; the rise of the 12-hour day and
the 7-day week; loss of health, pension, and social safety net protections; downsizing,
outsourcing, and the erosion of job security. Young people have been hardest hit: there
has been a nearly 30 percent reduction in the real income of young families.

From the failure of old strategies comes the search for new ones.
The recovery of working people’s lost history can make a contribution to that search,
but finding out what works under new conditions requires experimentation. In periods of
defeat, demoralization, and suffering, some people try new approaches, while others watch
and wait. The experiments often end in defeat, but they also serve as the basis for
learning, drawing conclusions, and formulating new strategies. In them the seeds of
movements yet to come can sometimes be discerned.

The Attack on Working People

The quarter-century that followed World War II has often been called
the "Golden Age of Capitalism." Governments used economic regulation and
Keynesian economic techniques of government fiscal and monetary policy to stimulate
economic growth and even out the business cycle. The global economy sustained an
unprecedented annual growth rate of 5 percent from 1947 to 1973. The United States
dominated much of the world militarily, politically, and economically. Workers shared in
prosperity: U.S. workers’ incomes doubled in a generation. Much of business accepted
organized labor and saw orderly collective bargaining and rising incomes for workers as
constructive elements of the economic system. Employers accepted, in short, an
institutionalized class compromise. As Henry Ford II put it in 1946, "We of the Ford
Motor Company have no desire to ‘break the unions,’ or to turn back the
clock." Instead, Ford said, "We must look to an improved and increasingly
responsible [union] leadership for help in solving the human equation in mass
production." <D>

The end of the "Golden Age" was signaled in 1973 when the
United States entered its deepest recession since the Great Depression. By the start of
1975, nearly a quarter of all United Auto Workers members at Ford, General Motors, and
Chrysler were on indefinite layoff. The mid-1970s saw a sharp decline in the wildcat
strikes, contract rejections, on-the-job resistance, and mass popular insurgency that had
marked the Vietnam War era. As one study notes, "After about 1974, workers believed
less and less that militant action could improve wages and working conditions. In part,
higher unemployment levels forced workers to think in terms of job security instead of
wage increases." Companies hard hit by the recession began asking unions for
concessions, which were often granted on the grounds that they were necessary for company
survival. Many workers accepted almost any concessions rather than striking.

The 1973 recession turned out to be only the start of a historic
crisis of the global economy. Global economic growth fell to half its former rate. Profit
rates in the 7 richest industrialized countries fell from 17 percent in 1965 to 11 percent
in 1980; in manufacturing, profit rates fell from 25 percent to 12 percent. In the United
States, the years from 1973 to 1997 represented by some measures the longest period of
weak economic growth since the Civil War.

At first established remedies were tried: President Richard Nixon
declared himself a Keynesian and imposed wage and price controls. But the combination of
recession and inflation, which came to be known as "stagflation," confounded
dominant economic theories and signaled the failure of the Keynesian techniques that had
been used to address previous recessions.

Corporations experienced the economic crisis that began in the early
1970s as an intensification of international competition and a fall in their profits. As
Jacques de Larosiere, chair of the International Monetary Fund, noted in 1984, there was a
clear pattern of "substantial and progressive long-term decline in rates of return to
capital." Corporations increasingly saw Keynesian economic regulation and class
compromise as barriers to increasing profits.

During the mid-1970s, corporate and political leaders veered among
very different strategies for addressing the crisis, ranging from new forms of global
cooperation (advocated by the Trilateral Commission) to restored nationalist economic and
military mobilization (advocated by the Committee on the Present Danger). Gradually a new
corporate agenda emerged that aimed to replace nationally regulated capitalism with a new
"global free-market capitalism."

At the core of the new agenda was economic globalization. While in a
sense the economy had been global for 500 years, in the 1970s corporations developed an
unprecedented ability to move capital around the world with little regard for national
boundaries. Goods and services were increasingly produced by a "global assembly
line" in which different phases of production occurred in a series of locations in
different countries. Corporations promoted government policies designed to reduce barriers
to capital mobility worldwide. This included the reduction of protectionist measures and
the creation and/or expansion of global institutions such as the World Trade Organization,
the World Bank, and the International Monetary Fund and regional ones such as NAFTA (the
North American Free Trade Agreement) and the European Union to create a global governance
structure to protect and further their interests. Globalization allowed business to pit
workers, communities, and whole countries against each other worldwide, establishing what
has been called a "global hiring hall." Globalization was in some ways
comparable to the shift from local to national corporations and markets in 19th century
America—and had similarly drastic effects on unions and workers.

Globalization was accompanied by a new agenda for government.
Instead of encouraging government to manage social conflict through interventionist
economic and social policies, the new corporate agenda promoted deregulation,
privatization of government functions, acceptance of high unemployment, gutting of the
welfare state, and government encouragement for wage reductions and corporate attacks on

Finally, corporations reorganized themselves. From the "merger
movement" at the start of the 20 century, American corporations had aimed to
integrate the entire process of production and distribution from raw materials to the
consumer into one centralized enterprise. For most of the century, a handful of such
integrated enterprises dominated each major industry. In the face of increased
globalization, corporations reorganized into what Bennett Harrison has described as an
"emerging paradigm of networked production." They pursued "lean
production" by downsizing in-house operations to "core competencies,"
farming out other work to "rings" of outside suppliers. Corporations constructed
"strategic alliances among one another, both within and, especially, across national
borders." Harrison describes this "emerging paradigm of networked
production" as concentration of control combined with decentralization of production.
"Lean production, downsizing, outsourcing, and the growing importance of spatially
extensive production networks governed by powerful core firms and their strategic allies,
here and abroad, are all part of businesses’ search for ‘flexibility,’ in
order to better cope with heightened global competition." Privatization led to a
similar transformation in the public sector, with many government functions parceled out
among a ring of private (often non-union) subcontractors.

Overall, the new corporate agenda constituted an end to the class
compromise that characterized the period 1947-1972. As United Auto Workers president
Douglas Fraser put it in 1978: "The leaders of industry, commerce and finance in the
United States have broken and discarded the fragile, unwritten compact previously existing
during a past period of growth and progress. [That compact] survived in part because of an
unspoken foundation: that when things got bad enough for a segment of society, the
business elite ‘gave’ a little bit—enabling government or interest groups
to better conditions for that segment.

"But today, I am convinced there has been a shift on the part
of the business community toward confrontation, rather than cooperation. I believe leaders
of the business community, with few exceptions, have chosen to wage a one-sided class war
on this country."

Management abandoned the idea that stable employment created a
stable market for their products and that stable, industry-wide collective bargaining
prevented destructive forms of labor conflict and industry competition. Virtually all
elements of the new corporate agenda helped capital cut real wages, reduce workforces, and
speed up production, thereby helping to restore profitability. Some companies raised
profits through direct attacks on workers’ wages and benefits. Others benefited from
a changing balance of forces—for example, from increased unemployment and the threat
(or reality) of corporations moving operations to low-cost areas abroad.

Much of the new corporate agenda was already being implemented at
the end of the Carter administration. But its full implementation was achieved by Ronald
Reagan’s political alliance between big business and diverse "new right"
groups working to reestablish hierarchies and cultural conformities eroded in the Vietnam
War era. These groups represented a reaction against feminism, against gay liberation,
against autonomous youth culture, against the advances of blacks and other minorities,
against labor militancy, against the questioning of militarism and nationalism, and more
generally against the acceptance of social diversity. Their principal goal was to resist
the redistribution of power by scapegoating and repressing those they found socially or
psychologically threatening. These groups provided the mass electoral and activist base
for economic and social policies that benefited only the wealthiest individuals and most
powerful corporations.

On taking office in 1981, the Reagan administration deliberately
deepened the already serious recession, cut the fraying social safety net, and began
pulling the teeth out of agencies that provided some protection of workers’ rights,
such as the National Labor Relations Board and the Occupational Safety and Health
Administration. These measures made workers more vulnerable to the threat of
impoverishment and workplace injury and weakened unions’ bargaining power.

Soon after Reagan’s inauguration, the air traffic
controllers’ union, PATCO, struck. Reagan announced that if the controllers
didn’t return to work within 48 hours, the government would fire all of them. When
the strike continued, the government permanently terminated the striking controllers and
replaced them with supervisors, military controllers, and new hires.

The firing and replacement of an entire workforce had not been seen
since the Great Depression. If permitted it would mean a drastic shift in the balance of
power between unions and employers. There were widespread calls for job actions in support
of PATCO, but AFL-CIO president Lane Kirkland sent a letter to affiliates attacking the
idea: "I personally do not think that the trade union movement should undertake
anything that would represent punishing, injuring or inconveniencing the public at large
for the sins or the transgressions of the Reagan administration." Machinist president
William Winpisinger, whose members could have closed down the airline industry overnight,
wrote in The Boston Globe<D>, "Our attorneys warn us that if I, as
International president, should sanction, encourage or approve a sympathy strike under
these conditions, I would risk the IAM’s entire financial reserves." The fired
PATCO workers were barred from employment as flight controllers for more than a decade.

The early 1980s saw management demands for concessions in nearly
every industry. In deference to existing labor law and public opinion, corporations did
not demand the outright termination of union representation, but in other respects they
followed the pattern of earlier "open shop" movements. In essence, they demanded
the power to establish the conditions of labor unilaterally and as they pleased, with
unions merely ratifying what management had already decided.

Disastrous strikes and lockouts at Greyhound, Phelps-Dodge, Eastern
Airlines, and many other companies convinced both union officials and rank-and-file
workers that conventional strikes had lost much of their effectiveness. If corporations
could replace striking workers with permanent replacements, move operations to other
workplaces and even other countries, and continue making profits in their other operations
while starving one isolated group of workers into submission, conventional strikes
provided little bargaining power. Large-scale mobilization with mass picketing,
sympathetic strikes, disregard of injunctions, and international labor support might or
might not have shifted this balance of power, but in any case it was rarely attempted.
Given the intense repression it would have induced, it would have demanded heavy
sacrifices from rank-and-file workers and serious risks for unions and their leaders.
Strike activity fell continuously from 1980 to 1995.

Beyond demanding concessions, management pushed for a fundamental
shift in union goals. They proposed that unions should abandon any effort to remove labor
costs as a factor in competition—for example, through industry-wide contracts and
"pattern bargaining" that established the same labor conditions for all
companies in an industry. Instead, unions should aim to make American corporations as
competitive as possible against their foreign counterparts; employees should try to make
their employers as competitive as possible against other corporations; and workers should
strive to make their own workplace more productive than other workplaces in the same
corporation. Management and politicians argued that only through such measures could
people save their jobs in a competitive global economy.

Rather than engage in apparently futile resistance to concessions,
many unions embraced the idea of helping employers become more competitive as a strategy
to save jobs in their own workplace, company, and country. This went beyond particular
concessions to the abandonment of pattern bargaining and unified industry and company wage
rates, so that workers in the same union and sometimes even in the same company were in
effect bidding against each other for work. It also involved active participation in
"quality circles," "employee involvement," and "quality of
worklife" programs designed to stimulate workers’ cooperation with management in
the workplace. The logic of saving jobs through cheaper labor found expression in The
, which maintained that moderation in wage increases, rising productivity,
and favorable currency exchange rates made U.S. manufacturing workers a "best
buy" compared to workers in other industrial countries.

Many union officials blamed the bad labor climate primarily on the
Reagan administration and the Republican ascendancy, and portrayed the election of
Democrats as the key to the reversal of labor’s fortunes. In the early 1980s, the
AFL-CIO provided the Democratic National Committee more than a third of its operating
budget. Z

Next installment: "New Tactics for Labor"