BIG BUSINESS AND LABOR

p. 241-249
OBJECTIVES
Identify management and business strategies that
contributed to the success of business tycoons
such as Andrew Carnegie
Explain Social Darwinism and its effects on
society
Summarize the emergence and growth of unions
Explain the violent reactions of industry and
government to union strikes
CARNEGIES INNOVATION
New Business Strategies
Always looking for ways to
make better products cheaper
New machinery & technology
Accounting/shipping
Offered stock in company to
employee
CARNEGIES INNOVATION
Vertical Integration
Control as much of the
industry as possible
Horizontal Integration
Control as many similar
producers as possible
A
A
A
B
B
B
C
C
C
A
B
E
A
C
F
A
D
G
SOCIAL DARWINISM
Principles of Social Darwinism
Social Darwinism
Uses natural selection of
weeding out less-suited
individuals unable to adapt
A New Definition of Success
Success came from Gods favor
If you are poor you must be
lazy
OR
Inferior and deserve what you
get
FEWER CONTROL MORE
Growth and Consolidation
Mergers
cant beat them, join them
Buy outs
Monopoly
Holding Company
Only buys stocks in companies
Does not actually make produce anything
J.P. Morgan
U.S. Steel
Trusts
Manages the stocks of many companies
John D. Rockefeller
Standard Oil
FEWER CONTROL MORE
Rockefeller and the Robber Barons
In less than 10 years (1870) Standard oil went from 2-3% to 90% of the industry
Huge profits and low wages
Charged less than competitors could
afford
Then, raised prices sky high
FEWER CONTROL MORE
Sherman Antitrust Act
Made illegal to form a trust that interfered
with free trade between states or other
countries
Was hard to enforce
What was a trust?
Companies would break up into
individual companies under pressure
7 of 8 cases through out of by the Supreme
Court
LABOR UNION EMERGE
Cooperate powers were consolidating, workers needed to keep pace to protect themselves
Longer hours and danger
Steel mills
7 hour work day
Seamstress
12 hour days, 6 days a week
Did not receive
Vacation
Sick leave
Unemployment benefits
Workers compensation
1882
675 worker killed a day
246,375 per year
LABOR UNION EMERGE
Early Labor Organization
Labor Unions
Date back to 1700s
Small, local, skilled workers
National Labor Union 1886
Lobby for and receive 8 hour
work days for government
workers
Knights of Labor
Open to all workers
UNION MOVEMENTS DIVERGE
Craft Unionism
Skilled workers from one or more
trades
American Federation of Labor
Used strikes as major tactic
Won higher wages and longer weekends
Industrial Unionism
Skilled and unskilled
workers
American Railway Union
Unskilled
Skilled
Firemen
engineers
$17.50/hr
54.5 /wk
1890
$24.00/hr
49/wk
1915
UNION MOVEMENTS DIVERGE
Socialism and the IWW
Industrial Worker of the
World
AKA Wobblies
Miners
Lumberjacks
Cannery
Dock workers
Welcomed all workers
Strikes Turn Violent
The Great Strike of 1877
Baltimore and Ohio
Railroad
Struck to protest their 2
nd
pay
cut in 2 months
Strike spread, over 50,000
miles of track shut down for a
week
Federal Troops are called
in to break the strike
May, 1886
3,000 people gather to protest police brutality
Bomb thrown at police
3 speakers, 5 radicals arrested for
inciting a riot
All convicted, 4 hung, 1 commits suicide in
prison
Public opinion turns on labor
movement
Haymarket Affair
Strikes Turn Violent
The Homestead Strike
Carnegie Steel Company 1892
Plant hires the Pickerton Detective Agency
to protect scabs
Battle ensues
3 detectives, 9 workers killed
National Guard
It would take 45 years before steel workers
mobilize again
Strikes Turn Violent
The Pullman Company Strike
Panic of
1893
Pullman
lays off
~
2
/
3
of its
employees
Cuts pay
by 25-50%
Keeps
company
housing
the same
Federal
Troops
called in
Organizer
jailed
Many fired
and
blacklisted
Strikes Turn Violent
Management and Government Pressure Unions
Unions begin to be
feared by management
Sherman Antitrust Act
All was needed was to say a
strike hurt interstate trade,
and state/federal government
would issue an injunction