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"The labor problem" is the economics term widely used toward the turn of the 20th century with various applications. [1] It has been defined in many ways, such as "the problem of improving the conditions of employment of the wage-earning classes." [2]
The labor problem encompasses the difficulties faced by wage-earners and employers who began to cut wages for various reasons including increased technology, desire for lower costs or to stay in business. The wage-earning classes responded with strikes, by unionizing and by committing acts of outright violence. It was a nationwide problem that spanned nearly all industries and helped contribute to modern business conditions still seen today. Possible causes include the failure to account for the negative externality of reproduction in the face of finite natural resources which results in over-supply of labor and falling living standards for wage-laborers, depersonalization by machines and poor working conditions.[ citation needed ]
A popular debate about the labor problem is the time that it encompasses. Some characterize it back as far as the 1860s, which is when many unions and groups began to form. However, there wasn't a problem present at this time with the formation of these unions. Also, the first strike was a result of the problem between wage earners and union officials, not employers and unions or employers and wage-earners, which was the main conflict of this time. [3]
Since the problem was within unions and not between unions and employers, the Labor Problem had not yet become an issue. Many also attribute the end of the problem to the end of the 1920s. This has some merit but is also open to interpretation. Reforms began to pass to correct many of the problems but reforms continued to pass well into the 1930s, 1940s and 1950s. The civil rights movement took over in the United States, which brought about even further legislation. Many attribute the end of the labor problem to the late 1920s because it marks a significant drop in strikes and violence and an increase in passed legislation aimed at correcting the labor issues.
At the turn of the century, machines were beginning to take a stronger footing in the economy, which drove costs down. Always trying to maximize profits, employers saw fit to lower wages for two main reasons. Machines were making the production process cheaper meaning wages took up a bigger percentage of costs, and when times were particularly tough, it made sense to cut wages to stay in business. [4]
This depersonalization of the production process meant that people essentially became expendable. People were not eliminated but there was a significant job loss. This led to lower wages in the long run because fixed costs decreased (with increased technology) so employers saw fit to cut wage expenses for this now partially expendable labor force. Although the problem spanned many industries, they were not all concerned with the same problems. For example, the steel industry was mainly concerned with being phased out due to technological advances while other industries, namely textiles, had problems with child labor and working conditions. The variety of problems and concerns led to legislation being passed, which covered different areas and led to greater reform.
Riots broke out in Baltimore in 1877 due to the negligence of union officials. It began as a railroad strike but eventually formed riots that lasted four days and killed fifty people. [3] The first strike due to depersonalization by machines was the Homestead Strike in 1892 on the Carnegie Steel Company by the Amalgamated Association of Iron and Steel Workers (AA). [5] This ultimately resulted in the attempted assassination of Henry Clay Frick, Chairman of The Carnegie Steel Company, and a crushing blow in the attempt to unionize steel workers.
Another example is the Pullman Strike in 1894, where almost 4,000 workers who were members of the American Railway Union (ARU) went on a strike without permission of the union to protest wage cuts by the Pullman Company. [6] One extreme example occurred when train engineers and laborer stopped a train before it reached the station in New York City, stranding men, women and children alike in the heat. [7]
Legislation like the Wagner Act (1935) and the Fair Labor Standards Act (1938) were passed which forced employers to participate in collective bargaining and presented a minimum wage respectively. [8] Child Labor laws have also been reformed, limiting the age at which children can begin work and what type of work they can perform. The Department of Labor was established in 1913. [8]
While some pieces of legislation like the aforementioned Wagner Act and Fair Labor Standards Act were not passed until the 1930s, their roots trace back to this Labor Problem at the turn of the century when demand for reform was growing in popularity. Many aspects of modern business like an established 40-hour work week, overtime pay, collective bargaining and safer working conditions among numerous other reforms can all trace their roots back to this time period and the legislation passed to correct it. [8]
A trade union or labor union, often simply referred to as a union, is an organization of workers whose purpose is to maintain or improve the conditions of their employment, such as attaining better wages and benefits, improving working conditions, improving safety standards, establishing complaint procedures, developing rules governing status of employees and protecting and increasing the bargaining power of workers.
Labour laws, labour code or employment laws are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, employer, and union.
Strike action, also called labor strike, labour strike in British English, or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became common during the Industrial Revolution, when mass labor became important in factories and mines. As striking became a more common practice, governments were often pushed to act. When government intervention occurred, it was rarely neutral or amicable. Early strikes were often deemed unlawful conspiracies or anti-competitive cartel action and many were subject to massive legal repression by state police, federal military power, and federal courts. Many Western nations legalized striking under certain conditions in the late 19th and early 20th centuries.
The nature and power of organized labor in the United States is the outcome of historical tensions among counter-acting forces involving workplace rights, wages, working hours, political expression, labor laws, and other working conditions. Organized unions and their umbrella labor federations such as the AFL–CIO and citywide federations have competed, evolved, merged, and split against a backdrop of changing values and priorities, and periodic federal government intervention.
The American Railway Union (ARU) was briefly among the largest labor unions of its time and one of the first industrial unions in the United States. Launched at a meeting held in Chicago in February 1893, the ARU won an early victory in a strike on the Great Northern Railroad in the summer of 1894. This successful strike was followed by the bitter 1894 Pullman Strike in which government troops and the power of the judiciary were enlisted against the ARU, ending with the jailing of the union's leadership for six months in 1895 and effectively crushing the organization. The group's blacklisted and dispirited remnants finally disbanded the organization via amalgamation into the Social Democracy of America (SDA) at its founding convention in June 1897.
A lockout is a work stoppage or denial of employment initiated by the management of a company during a labor dispute. In contrast to a strike, in which employees refuse to work, a lockout is initiated by employers or industry owners.
The Coal strike of 1902 was a strike by the United Mine Workers of America in the anthracite coalfields of eastern Pennsylvania. Miners struck for higher wages, shorter workdays, and the recognition of their union. The strike threatened to shut down the winter fuel supply to major American cities. At that time, residences were typically heated with anthracite or "hard" coal, which produces higher heat value and less smoke than "soft" or bituminous coal.
Labor unions represent United States workers in many industries recognized under US labor law since the 1935 enactment of the National Labor Relations Act. Their activity centers on collective bargaining over wages, benefits, and working conditions for their membership, and on representing their members in disputes with management over violations of contract provisions. Larger labor unions also typically engage in lobbying activities and electioneering at the state and federal level.
Katherine Philips Edson was an American reformer and social activist who had a key role in changing the labor conditions in California and across the nation.
The U.S. Steel recognition strike of 1901 was an attempt by the Amalgamated Association of Iron, Steel and Tin Workers to reverse its declining fortunes and organize large numbers of new members. The strike failed.
Amalgamated Association of Iron and Steel Workers (AA) was an American labor union formed in 1876 to represent iron and steel workers. It partnered with the Steel Workers Organizing Committee of the CIO, in November 1935. Both organizations disbanded May 22, 1942, to form a new organization, the United Steelworkers.
Labor relations or labor studies is a field of study that can have different meanings depending on the context in which it is used. In an international context, it is a subfield of labor history that studies the human relations with regard to work in its broadest sense and how this connects to questions of social inequality. It explicitly encompasses unregulated, historical, and non-Western forms of labor. Here, labor relations define "for or with whom one works and under what rules. These rules determine the type of work, type and amount of remuneration, working hours, degrees of physical and psychological strain, as well as the degree of freedom and autonomy associated with the work." More specifically in a North American and strictly modern context, labor relations is the study and practice of managing unionized employment situations. In academia, labor relations is frequently a sub-area within industrial relations, though scholars from many disciplines including economics, sociology, history, law, and political science also study labor unions and labor movements. In practice, labor relations is frequently a subarea within human resource management. Courses in labor relations typically cover labor history, labor law, union organizing, bargaining, contract administration, and important contemporary topics.
In the United States, the minimum wage is set by U.S. labor law and a range of state and local laws. The first federal minimum wage was instituted in the National Industrial Recovery Act of 1933, signed into law by President Franklin D. Roosevelt, but later found to be unconstitutional. In 1938, the Fair Labor Standards Act established it at 25¢ an hour. Its purchasing power peaked in 1968, at $1.60. In 2009, Congress increased it to $7.25 per hour with the Fair Minimum Wage Act of 2007.
The Davis–Bacon Act of 1931 is a United States federal law that establishes the requirement for paying the local prevailing wages on public works projects for laborers and mechanics. It applies to "contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair of public buildings or public works".
As the economy of China has rapidly developed, issues of labor relations have evolved. Prior to this reform, Chinese citizens were only allowed to work where they originated from. Since 1978, when China began labor force reforms, the overwhelming majority of the labor force were either working at State owned enterprises or as farm workers in the rural countryside. However, over time China began to reform and by the late 90's many had moved from the countryside into the cities in hopes of higher paying jobs and more opportunities. The only connection between the countryside and the city soon became that there was a huge floating population connecting them. Independent unions are illegal in China with only the All-China Federation of Trade Unions (ACFTU) permitted to operate. China has been the largest exporter of goods in the world since 2009. Not only that, in 2013 China became the largest trading nation in the world. As China moved away from their planned economy and more towards a market economy the government has brought on many reforms. The aim of this shift in economies was to match the international standards set by the World Trade Organization and other economic entities. The ACFTU that was established to protect the interests of national and local trade unions failed to represent the workers, leading to the 2010 crackdowns. However, these strikes were centered around foreign companies.
The 1992 Southern California drywall strike was a strike by Mexican and Mexican American drywall hangers, many of whom were undocumented, for fair wages and health insurance from contractors, who stole two billion dollars a years in income taxes, social security, and worker's compensation payments from the workers and collaborated with the local police to repress the organizers. Jesus Gomez, leader of the strike, received threats and had shots fired at his home, while key organizers were tailed by the police and even followed with helicopters. Eventually aligning with the United Brotherhood of Carpenters and Joiners, the strikers succeeded in getting union contracts that ensured fair wages and benefits. The strike left the residential construction industry in a different state. While the industry remained an open shop, contractors were forced to pay Mexican workers with wages and benefits closer to that of the white workers.
The Fight for $15 is an American political movement advocating for the minimum wage to be raised to USD$15 per hour. The federal minimum wage was last set at $7.25 per hour in 2009. The movement has involved strikes by child care, home healthcare, airport, gas station, convenience store, and fast food workers for increased wages and the right to form a labor union. The "Fight for $15" movement started in 2012, in response to workers' inability to cover their costs on such a low salary, as well as the stressful work conditions of many of the service jobs which pay the minimum wage.
Penal labor in the United States is the practice of using incarcerated individuals to perform various types of work, either for government-run or private industries. Inmates typically engage in tasks such as manufacturing goods, providing services, or working in maintenance roles within prisons. Prison labor is legal under the 13th Amendment to the U.S. Constitution, which prohibits slavery and involuntary servitude, except as punishment for a crime.
The labour movement is the collective organisation of working people to further their shared political and economic interests. It consists of the trade union or labour union movement, as well as political parties of labour. It can be considered an instance of class conflict.
The Fast Food Accountability and Standards (FAST) Recovery Act is a Californian law which brings multiple reforms to the state's fast food industry. The bill's provisions aim to allow workers and California state to hold fast-food chains responsible for issues like wage theft and overtime pay, and establish a council which itself shall be responsible for establishing minimum standards for fast food workers. The regulations will apply to any chain in California that has at least 100 stores nationwide that share a common brand. The bill has since been passed by both the Assembly and State Senate, and was signed by Governor Gavin Newsom on September 5, 2022.