LABOUR IN THE ERA OF CAPITALIST GLOBALIZATION A HISTORICAL ANALYSIS
CEPS Maarssen 2010
Globalization includes rapid growth in imports, exports, and the share of trade in the world economy, and even more rapid growth in the international flows of foreign investment around the world. The term is also used to refer to the international convergence of rules, regulations, and even the social structure and role of government in many countries. This process is often viewed as a neo-liberal "race-to-the-bottom" in global working standards, wages, and working conditions. Economic competition, along with America’s trade liberalization and European Union’s (EU) deepening economic integration and geographical expansion are challenging the role f he trade unions. New forms of work, company restructuring, welfare-state reforms and trade liberalization have weakened the systems of collective bargaining until now prevailing in most developed capitalist countries. A common trend across the EU, Japan and the USA is towards consolidation and merger of union organizations. Union density is declining in Japan, the USA and almost all European countries in recent years. Even where union membership losses have been stemmed, increasing employment levels in many countries have meant that union density has fallen. The survival of restraints on neo-liberalism in most countries owes much to their institutionalization after the Second World War and to Europe’s divided past. The continuing existence of a distinct ideological dimension associated with social integration, which embraces commitments to social justice, fairness and class harmony, are present in all tradeunion movements. Richard Hyman is right when he calls for greater sensitivity to the complexities of trade-union ideological dimensions, and to the pluralistic and contested character of European trade unionism (Hyman 1996). In the USA, the trade-union movement was predominantly pragmatic and combined market orientations with social-integration ideologies. In Europe, unions are affiliated to political parties or they have contracted close ties to them, which helps them establishing neo-corporatist forms of interest intermediation. However, these forms of interest intermediation are challenged by economic and social transformations engendered by transnational capital and the ‘new economy’. Well-paid technicians, engineers, and designers became independent contractors. ‘Consultants’ and other ‘free agents’ are the ‘flexible workers’ par excellence, because they are escaping from any collective agreements. With them emerged millions of involuntary contingent workers,1 most of them parked into precarious small jobs, who are excluded from any pension packages and other forms of job security. These unorganizable workers are forming an ever-growing workforce submitted to ‘alternative arrangements’. Apart from the regular labour market, a large permanent workforce of temporary employees, whereby free agents bid for jobs, is rapidly growing. Are we returning to the old ‘sweating’ system of farming out work to competing contractors according to the nineteenth-century model? At any rate, labour history is full of this kind of little boot-traps. For the time being, pre-industrial relics have emerged as new tools in the hands of the post-industrial managers. Beyond the ‘Dunlop model’
In 1997 there were 5,6 million workers with contingent jobs in the USA ((Ross 2000: 79).
Until the 1970s it was assumed that unionism adopting the ‘Dunlop model2’ would expand in all developed capitalist countries and that collective bargaining on an industry-wide base would become the preferred method of setting wages, hours, and working conditions. This proved to be the case in the 1950s and 1960s in North America and Western Europe. But the economic slump of the 1970s and 1980s gave rise to a neo-liberal reaction, trade liberalization and deregulation. This meant the end of the so-called ‘Dunlop model’ (Dunlop 1958) that prevailed in post-World War II. In Dunlop’s model, attention was also turning to other actors and their interactions, and concluded with an explanation of the rules governing employment relationships that evolved out of these interactions. According to Dunlop and his school (Kerr, Harbison, Dunlop, and Myers 1960), the logic of industrialization would lead to a convergence toward a common set of formal arrangements as capitalist mechanisms expand to all economic sectors. Therefore, the rise of industrial unionism and industry-wide bargaining has to be considered as inevitable. The merits and shortcomings of the Dunlop model were extensively discussed in later works on American industrial relations (Kochan, Katz, and McKenzie 1986). In addition, Marxists (Davis 1980) and institutionalists (Goldfield 1987) argue that the functionalist Dunlop model does not pay enough attention to the nature of American capitalism, international competition and the process of capitalist accumulation determining the entrepreneurial and trades-union strategies. Moreover, the rise of industrial unionism and the subsequent industry-wide bargaining practices should be seen as a response of organized labour to monopoly capital and Taylorism hollowing out the very base of craft unionism after World War I, not as the outcome of a modernization process affecting governmental policies and management strategies. The ‘Dunlop model’ was the outcome of a long history of class conflicts, sectoral struggles and economic changes leading to the formation of a semi-skilled industrial working class concentrated in large production units. In the history of industrial relations, three broad stages can be discerned in the transition from craft unionism to industrial unionism and the rise of collective bargaining systems: • Task differentiation breaking down the craft into a series of simpler jobs with foremen still knowing the entire production process and with a wage system based on piece rates; • Increasing capital requirements with the introduction of simple machines for some tasks in big workhouses and putting-out for some tasks still done by hand; • Large factories with power-driven machinery and the end of putting-out practices. As long as a retail or custom-order market existed local craftsmen could survive in their old manner, especially in local a luxury markets and defend the traditions of craft unionism during the first decades of monopoly capitalism (Hirsch 1978: 15-36).
According to Dunlop’s system model, analysis of industrial relations should begin by considering the various environmental contexts that affect employment relationships economic forces, technology, and the broad political legal and social forces that determine the power of labour and management. Dunlop was on the National Wear Labor Board and consulted with the Office of Economic Stabilization and the Office of War Mobilization and Reconversion. After the war, Dunlop returned to Harvard. He served as Chairman of the National Commission on Productivity (1970-1975) and chairman of the Construction Industry Stabilization Committee (1971-1973). He was also director of Nixon’s Cost of Wage Council (1973-194) and Ford’s Secretary of Labor (1975-1976) until he resigned in a dispute over policy. He served Clinton as chairman of the Commission on the Future of Worker-Management Relations (1993-1995).
Dunlop’s model worked fairly well as long as the environment remained stable. However, his model is now outdated. Since then, international pressures on national economies and wage levels have increased. In practically all countries union membership does expand any more. Today, labour power is currently concentrated in the state sector (education, civil service) and in older and mature industries, especially the older firms in those industries, and the older plants within diversified firms. The growing and dynamic parts of the economy are today unorganized. Especially the 1980s witnessed a significant change in the system of collective bargaining and industrial relations. As a result of the “disaggregation of the working class” (Hyman 1992) denoting a variety of processes union power is declining now that a post-Fordist organization of production, also described as ‘flexible specialization’ (Piore and Sabel 1984) or ‘flexible mass production’ (Boyer 1986), led to a growing diversification of the composition of the working force. Employers became less interested in nation-wide patterns of industrial relations designed to deal with macroeconomic problems and solutions. The ‘Dunlop model’ emerged in the US at the end of World War II, but influenced practices of collective bargaining in other capitalist countries. Typical for the USA was that there are few national sectoral employer bodies with any bargaining role. Therefore, bargaining takes place predominantly at enterprise or local level. Major business organizations such as the National Association of Manufacturers (NAM) and the US Chamber of Commerce do not deal with trade unions, though they have some role in developing policy on labour issues. Collective bargaining plays a key role in industrial relations in most European states. In Japan and the USA, collective bargaining is a relatively marginal activity, though it may have a wider impact beyond its direct sphere, especially in Japan. Despite differences and a trend towards decentralization, bargaining in the EU is considerably more centralized than in the two competing competitor economies. Nonetheless, centralized systems of collective bargaining at the intersectoral or sectoral level have been superseded by the growing importance of company-based accords. The purpose of this article is to address this debate and to answer to the question whether recent changes in the world economy are fundamental. Economic liberalization and free trade have made an important progress since the invention of Reaganomics and Thatcherism. Deregulation and privatization have become twins guiding economic strategies of all governments wanting to balance their budgets. These neo-liberal policies have affected the social power balance between capital and labour and have fostered anti-labour policies promoting more labour flexibility, wage cuts and a lean welfare state. Actual labour relations are reflecting these profound environmental changes now that neo-liberalism has become the predominant ideology of globalizing capitalist forces re-establishing pre-1914 economic and social relations. My thesis is that changes which have occurred since the 1970s reflect deepseated environmental pressures that have been building up gradually as well as organizational strategies that have been evolving quietly for a number of decades. I address this debate in the following manner. First, I describe the growth of unionism from the very beginning as a response to industrialism. Second, I analyze union practices as a response to the constraints dictated by accumulation of capital globalization processes. Prolegomena of trade unionism Let’s start from the beginning when labour strategies and industrial relations were unknown concepts. The main problem for the entrepreneur was the creation of work discipline in his
shop. In order to prevent workers from walking out employers locked the gates of their factories. Absenteeism was a much more difficult phenomenon to deal with. Workers would be absent on traditional holidays, on blue Mondays and on days when potatoes had to be dug.3 There was little that employers could do about this kind of absenteeism. Methods of indirect employment in combination with outsourcing of tasks offered a solution to the delicate problem of disciplining workers. Parents brought their children to the factory or the mines as their own assistants. Kinship links provided an avenue to employment in the industrial towns and mining areas. This family-based employment scheme was characterized forms of subcontracting already known in capitalist agriculture. This family-based employment was broken up by a series of technical and legal changes making these forms of subcontracting less attractive to the employers. The introduction of automatic mules and the power-loom weaving in combination with limitations to working hours of children opened the door to more outsiders and broke the kinship system to pieces. From this moment on workers became wage earners subjected to an individual labour contract and workhouse discipline. As industry expanded throughout the nineteenth and twentieth century the cleavage between workers and capital sharpened. Task breakdown and mechanization rendered craftsmen’s skills obsolete, lessened their control over their work, and changed the content of their jobs, but industrialization also altered the character of the work force itself and its organization. It was not until the industrial expansion of the mid-nineteenth century that organized labour came into its own as an economic and political force to be reckoned with. In most countries national trade unions of skilled workers were founded in the middle of the nineteenth century. Their success depended on their ability to organize skilled workers in the same branches of activities or trades in order to resist to wage cuts and unemployment. At the same time the failure of wages to keep pace with prices, the growth of mechanization that threatened the jobs of skilled craftsmen in certain industries, and the influx of immigrants willing to accept lower pay and poorer working conditions combined to create a demand for a coalition of workers with the same skill belonging to the same trade. As industrialism made progress, these skilled workers were confronted with an army of unskilled workers carrying out their odd jobs as best they could. As more were needed for work as semi-skilled machine operatives the same situation was repeated in jobs the technique of which was initially a little more difficult. In skilled trades formal apprenticeship came to be less used mainly because the increased mobility of labour and the expansion of employment made it impossible to procure the practice of a particular craft as a privilege confined to those who had undergone sacrifices of serving on apprenticeship. At the end of the nineteenth century it was estimated that British trade unions which effectively restricted their trade to men who had been apprentices had only 90,000 members, and shipbuilding was the only large industry where apprenticeship was still common. Two fundamental options struggled in the nineteenth and early twentieth century for predominance in the trade-union movement. One view was represented by the trade unions, which drew the great bulk of their members from the skilled craftsmen; the other position advocated bringing all – skilled and unskilled - workers into one big union. For sure, most union leaders were by no matters revolutionaries. Many union leaders preached cooperation between labour and capital, because they interpreted labour’s goals simply and pragmatically: better wages, shorter working hours and improvement of working conditions. Though some
Many workers had a dual life over the cycle of the year as industrial and agricultural workers. In summer when the coal trade was slack miners transformed themselves in harvesters. Many agricultural workers could pick up enough of the miners’ skills to be eventually a perfect strikebreaker or competitor in the labour market (Hammond and Hammond 1978a, 1978b, 1979).
cherished utopian or anarchist ideas, the spontaneous ideology of the working-class leaders was impregnated by pragmatism and democratism. As defensive organizations of skilled workers the unions had survived throughout the depression of the 1880s. Though they were worried by pressures coming from below as well as from above, they were prepared to fight with tenacity their skills. The skilled workers feared the men from the ‘dishonourable’ trades and therefore they campaigned against piecework, overtime and the laxity of apprenticeship regulations. More serious to the artisan elite was the threat from new machinery. Especially the quickening rise of the semi-skilled operative offered a direct challenge to the craft control of the labour market through zealously maintained apprenticeship restrictions. All crafts tended to succumb to inexorable division-of-labour pressures, which led to the creation of a new generation of sweated labour, as in the notorious, immigrant-based cheap clothing industry already was the case after the introduction of the sewing machine. A fundamental long-term shift in economic power away from craft towards the skilled worker was taking place especially in the new metal industries and construction works. Ironworking, engineering and shipbuilding were all specialized occupations attracting skilled workers tramping in search of varied, often seasonal employment. Manufacturers introducing new methods and machinery to increase the volume of production hired also cheaper and more tractable labour to keep their selling prices lower. The versatile artisan found himself having to specialize in order not to disappear altogether with the inflow of unskilled workers. The working classes provided three possible sources of cheap labour: women, children, and immigrants. In the pre-industrial workshop teenage apprentices and women had become a source of increased exploitation. As apprenticeship declined with the progress of mechanization and social legislation forbade women’s labour in mines and in some trades adult male immigrants offered new opportunities to the employers. The workers were gradually forced to protect themselves by nation-wide combinations as greater power passed to the owners of capital. Craft unionism still nurtured a narrow, sectional mentality, but its eroding position had made the skilled artisan sensitive of his changed position. Already by 1860 the British labour aristocracy was concerned with maintaining status within a vertical craft structure. Skilled cotton operatives had federated into the Weavers’ First Amalgamation (1858). Though these workers did not accept the free market as such, they accepted the existing liberal organization of society. They still attempted to enforce a strict apprenticeship system as long as they could survive in a fragmented, subcontracting economy which persuaded people to believe that they might one day rise to mastership. This explains why John Bright, the self-proclaimed ‘terror of the squires’ and himself an industrialist could trust on a considerable working-lass following, while Karl Marx’s International Workingmen’s Association made only a slight impact in Britain (Robbins 1979). The assumption that working men as working men rather than as lumberjacks or odd fellows or Methodists had a common interest which required organization and representation was rather new in the first half of the nineteenth century. For most working people the crucial experience of industrialization was the change in the nature and intensity of exploitation. In the view of E.P. Thompson the industrialization process brought apart from intensified exploitation, greater insecurity, and increasing misery also an intensification of political oppression (Thompson 1968: 207-232). Manufacturers coalesced with landowners in order to keep control over their employees. The Hammonds (1978a, 1978b, 1979) said that in effect the state abdicated in favour of the employers so far as labour policy was concerned: “Workmen were to obey their master as they would obey the State, and the State was to
enforce the master’s commands as it would its own.” (Hammond and Hammond 1978b: 80). However, the workers were not entirely at the mercy of their masters. Illegal unionism seems to have kept a potent force in certain trades. Workers were able to believe that the government’s anti-protectionist policies were to blame rather than the driving down of prices by intense internal competition. The conclusion was that both masters and workers should unite to defend their common sectional interests (Foster 1977: 122-124). However, the major force pushing to the growth of national unions came from expanding national and international trade. Railways and steamships had disturbing effects by reducing the ability of imposing output and price-controlling mechanisms on society. Natural barriers to the expansion of markets were destroyed when railways and steamships brought in their wake a flood of new producers. Many remnants of local selfcontainment broke down and most economic activities were directly exposed to the unifying influence of national or global market conditions (Ashworth 1960: 246). By 1870, most unions were themselves in a process of transformation when the steel industry started its expansion after 1870. Increased demand of steel in the era of railroad construction and shipbuilding did much contribute to transition from iron to steel production and to an increased demand of coking coal. Huge amounts of capital provided by banks and the stock market were invested in large steel mills and coal mines which had to provide the downstream industries with ever-larger amounts of steel and coking coal. As a consequence, liberal capitalism now became in need of better regulations to create market equilibriums, while trade unions started campaigning for labour legislation. The appearance of national and international cartels in especially the steel industry and international trade-union federations had its origins in this period that is also known as the age of classical imperialism. Tariff protection to preserve the domestic market for native producers rose high on the parliamentary agenda. They should enable domestic producers to enter into agreements to maintain prices at profitable levels and to avoid disastrous price swings. In France, cotton and coal industries protected by a tariff wall could cartelize the domestic market (Kuisel 1984:60). Charging high prices to domestic customers could subsidize the dumping of surpluses abroad at less than the costs of production. Cartels offered, in contrast to the United States and the United Kingdom, a substitute form of capital concentration (Freedeman 1993: 107-128). In the United States high tariffs combined with the Sherman Act4 (1890) were favouring industrial mergers. In the United Kingdom the exporting industry was advantaged by imperial preferences but was confronted with fast-rising tariffs elsewhere.5 In Germany, France or Belgium state interference and/or strong unions could enforce better working conditions upon employers in these highly cartelized and tariffprotected industrial sectors. With the growth of collective bargaining in this period, there was a tendency towards greater uniformity of wage-rates in the skilled trades and some levelingup in the worst-paid areas.
Small businessmen, farmers, and workers felt an increasing disadvantage to the new large corporations emerging after the Civil War. This discontent found its political expression in the 1880s. The Sherman Act’s key provisions were directed toward actual monopoly and conspiracies or agreements designed to secure monopoly power, but they did not target concentration of capital (Einhorn and Smith 1968: 29-35). 5 In 1902 the Board of Trade calculated that the import duty on British goods exported to the United States amounted to 73 per cent of their value. France imposed an average duty of 34 per cent, and Germany of 25 per cent. Australia and South Africa were at the low level of an average 6 per cent duty, New Zealand at 9 per cent and Canada at only 16 per cent (Cole and Postgate 1971: 447-448).
In Britain, the Trade Union Congress (TUC) acquired a growing influence after its inception in 1869, but it had no real coordinating power in industrial matters. Significant was the tendency for trade unions in the same or closely related occupations to form national federations. Such developments, together with attempts by large unions or federations in different industries to coordinate their politics, as the miners, the railwaymen and the transport workers undertook to do when they formed their ‘triple alliance’6 in 1913, foreshadowed a much more complete departure from individualistic competition. Other union delegates thought that labour should be directly represented in politics. Support for the eight-hour day (‘a normal working day’) received widespread appeal as a slogan that seemed possible of achievement within a relatively short span of time, and consequently all labour organizations included an eight-hour plank in their platforms. The most important stimulus for wage regulation came from the Royal Commission on Trade Unions, which propagated a new form of conciliation. There followed a campaign in the coal and iron districts for the formation of Boards and Conciliation. There were a number of reasons for promoting conciliation. Arbitration presupposed closer cooperation and industrial co-partnership and stronger unionization of both workers and employers. They would gradually form national associations able to arrange wages and prices through arbitration in order to prevent violent price and wage cutting. Arbitration was meant to interfere with the market, an idea that soon was formalized in the ‘sliding scale’. The logic of union policy was to even out wage costs in all coal districts and to use strike power only against wage and price cutting employers. The same argument was used when pressing for a shorter working day. However, the power of preventing wages from falling unreasonably and disastrously low, was in the hands of strong unions assisting strikes and lockouts. In Britain, the decision to create such a strong miners’ union and to agitate about hours at work and wages was taken in the aftermath of unsuccessful strikes in 1867 that had left Lancashire collier’s unionism in ruins. The existing national union, the MNA offered no alternative and had transformed itself into an inter-county union only for the purpose of promoting social legislation in combination with subsidized coal prizes.7 Responsibility for the conduct of strikes remained with the districts and the support of one of one district for another was a purely voluntary matter. At the other hand, the unions were tempted by projects aiming at regulating labour supply (emigration, apprenticeship, and other forms of craft control) or the market for coal. If over-production was the problem then the coal industry were to restrict its output, thereby forcing up the price of coal and, in turn, wages.8 That the miners wanted to restrict output was against the liberal credo: it was nothing less than a blueprint for a coalition of producers against consumers. The sliding scale International competition and expanding markets obliged entrepreneurs to adjust their costs. In most industries wages constituted an important cost. They could be compressed by several means (wage cuts, lay-offs, longer working days or weeks). By 1841 a British ironmaster linked the wages of his puddlers to the selling price of iron bars. Later on, these sliding scales became standard practice for skilled workers in the American and British iron and steel
The miners, railwaymen, and transportmen were less united than their opponents believed. Their strategy had to be attuned to each union’s needs and to economic circumstances, such as the level of real wages and unemployment (Middlemas 1979: 154). 7 A community of interest in price control was contained in the address of the MNA to the owners of the Durham and Northumberland mines in 1864 (Fisher and Smethurst 1978). 8 Its was agreed that by restricting output there would be a shortage of coal on the markets, and this would have a tendency to keep up the selling price, and thus wages would be kept up.
industry, and common in coalmining. In both countries four struggles representing moments in a broader process of inter-class and intra-class conflict emerged as a result of • • • • • The competition over control of the domestic markets; The struggle between industrial capital and the landing interests; Competition over control of domestic markets for coal and steel; The assertion of capital over labour to wrest control away from craft workers culminating in mass strikes (Santoro 2003: 11-31); Liberal economic regimes without “third party”9 reducing the frequency of strikes.
Sliding scales were adopted in British coalmining to transfer risk from mine-owners to workers. The sliding scales had nowhere been pressed more hardly than in British coalmining, where the MNA, or what was left of it,10 were pretty steady in their support of the sliding scales and opposed even a legal eight-hour day (which might have worsened the conditions of the most influential section, the hewers). In the metals industry sliding scales were gradually extended to unskilled occupations (Hanes 2003). After the First World War coal miners’ unions abandoned the sliding scale as a part of a process by which the burden of the risk induced by shifts in the demand function for the output was shifted from employees to the employers by favouring schemes linking wages to operating profits. In coking and iron mining sliding scales were still used throughout the 1920s. Manufacturers and textile unions never could reach an agreement on sliding scales. In the United States, the iron and steel industry adopted sliding scales for the remuneration of skilled workers in many a plant. After the formation of the U.S. Steel Corporation sliding scales disappeared. In the coal industry sliding scales unions had started enforcing sliding scales upon the pit owners by 1869 in the anthracite mines of Pennsylvania and later on in several silver and copper mines too. The idea that wages were dependent on the varying price of the commodity produced, which was very different from the notion of a minimum standard wage autonomous of supply-anddemand considerations, was deeply rooted into the working classes of the coal fields. Sliding scales required conciliation and arbitration procedures the union leaders could use in order to pacify labour relations. Already in March 1869 the Board of Arbitration and Conciliation for the Manufactured Iron Trade of the North of England was instituted. In Durham and South Staffordshire, miners and pit owners also could agree on the idea of wage regulation by sliding scales providing for the adjustment of wages in a definite relation to changes in the market price of coal. Payment of wages at the pit was accomplished by time-rates and pricelists that outlined specific piece-rates taking account of the variations in the type of coal won and conditions of work. The miners in Northumberland and, to a lesser extent, Durham shared with the cottonspinners and shipbuilders a certain conjunction with their employers, derived from their leading role in maintaining the nation’s export. These union leaders relied heavily on friendly benefits to create disciplined control from the center. In 1872, they established with the pit owners a Joint Committee to arbitrate and to settle all questions relating to matters of wages, practices of working, “or any other subject which may arise from time to time at any particular colliery” (Garside 1971: 22). This Joint Committee acted as an important social peace-keeping body at pit level. Other districts adopted the sliding scale too. The adoption of
Like in France where the state could help enforcing labour agreements (Gillet 1973: 332-334). Or what left of it, was now controlled by the Durham and Northumberland Societies, whose leaders were true to the Liberal Party.
sliding-scale procedures in the coalfields culminated in the slump of 1874-1880 in growing dissatisfaction with the device. The sliding scale embodied the opinions of the new liberal school who now, at this time, dominated the miners’ movement. The idea of a minimum wage was alien to the pit owners’ viewpoint: the risks of capital were to be borne by workers in terms of lower wages. In South Wales, for the first four years of the working of the sliding scale, the miners suffered first a 7.5 per cent reduction, and later a 10 per cent reduction. This led to considerable dissatisfaction among the workmen, whose wages were determined by the sliding scale. The principle of the sliding scale continued down to 1903. Its termination was decided by the South Wales Miners’ Federation (Edwards 1926: 76-107). The Yorkshire, Lancashire and Cheshire miners terminated their local sliding-scale agreements too. Spearhead of the miners’ actions promoted by the MNA11 consisted of promoting a legal eight-hour day and nationalization of the coal sector (Arnot 1979: 105-108).12 During the depression of the 1880s and 1990s nationalization of the pits soon would become the miners’ central demand brought up at conferences or put forward to an annual meeting of the Trades Union Congress. In November 1893 a parliamentary Bill to nationalize mines and minerals was brought in by a group of Labour MPs. The Government were to create a Mining Department which would pay such wages as would ensure a comfortable existence and during the continuance of incapacity, the result of sickness or of an accident sustained while at work, the worker should receive his full weekly wages and free medical attendance. After twenty years of debates no practical progress was made into the direction of nationalization. However, turbulent economic and social changes occurred after 1900 with several great strikes and the definitive decay of the lasting craft unions. Strikes paved the way for social legislation. The minimum wage strike of over a million miners in March and April 1912 gave a strong impetus to the Coal Mines (Minimum Wage Act, 1912) Act and to a parliamentary Bill (1913) on nationalization of all mines. High war profits were invoked by the miners of South Wales in 1915 to launch a strike for a minimum wage. Government control of coal-mining in 1916 took this sector out of the dangerous arena of the ‘free’ labour market in a period the shop stewards’ movement13 competed with the TUC for the mandate of popular defense. The miners pleaded for a new method of wage regulation and during the negotiations they stressed the necessity of eliminating the injustices of regulating wages almost solely in relation to the movements in the price of coal. More direct control on selling prices including the costs of production and
The Miners’ National Association (MNA) was established in 1863 and contained the miners associations of Durham, Northumberland, South Staffordshire the Sliding Scale Associations of the South Wales coalfield. In 1869 the Amalgamated Association of Miners (AAM) was founded during a meeting of delegates from Lancashire. The AAM was a collection of small unions in places which had not previously organized. The MNA was governed by moderates whose primary concern was bargaining and arbitration. By 1902 only the Durham and Northumberland were still members of the MNA. As its influence decreased, that of the Miners’ Federation (MFGB) increased by a rapid expansion in the coal industry (Fisher and Smethurst 1978: 114-155). In 1908 Northumberland and Durham joined the MFGB. Total membership increased to almost 600,000. 12 Because of local reasons the opposition to the eight-hour day remained strong in the northeastern coalfields. The miners in Durham feared that there would be an insufficient number of boys available to work an equal number of shifts with the hewers and that an increase in the number of shifts would entail greater domestic and social problems. 13 This anarcho-syndicalist movement combined a popular championship of working-class grievances with demands for workers’ participation, a negotiated peace and socialism. The movement attempted, with some success, to break down traditional divisions between craftsmen and the less skilled workers, and to transmute the ideas of craft control into ideas of workers’ control (Hinton 1973).
productivity increases was demanded in order to know real costs and what wages the industry was in a position to pay. In January 1919, the MFGB annual conference agreed to demand higher wages, a six-hour working day and nationalization14 with joint control and administration by the workers and the State (Saville 1988: 41-47). During the First World War the Miners’ Federation of Great Britain (MFGB) uniting all district unions sought to establish new conciliation procedures throughout the districts aimed at providing wage advances more in line with the prevailing economic conditions and at imposing a degree of coordination amongst the districts. Though coal was of strategic importance for the world economy and there were over a million miners in Britain, social and economic conditions had changed. Substitution of other forms of power for coal and the growth of the fuel economy had a disastrous impact on the coal-mining industry. Never throughout the inter-war period did the industry ever again equal the record level of output and coal exports in 1913. Before the war, the mining industry seldom experienced any serious long-term unemployment. At first, only particular coalfields, dependent upon the export trade, were seriously affected when Germany started paying reparations in coal deliveries. Already in 1921, over-stocked markets and falling commodity prices put great pressure on the British Cabinet to decontrol the mines, leaving owners and miners unprepared to match the high cost of modernization. The ‘triple alliance’ of railwaymen, miners and transport workers broke down: joint action was impossible without joint control (Middlemas 1979: 156-157). By 1925 the Baldwin Government started subsidizing the mine-owners, which provided a temporary revival to the coal business.15 Meanwhile, coal owners had resorted to the traditional palliatives of attempting to reduce wages and increase working hours. In exporting districts particularly susceptible to the ramifications of the trade cycle, the necessity to remain competitive incited pit owners during the post-war period of depression to make relatively more frequent and severe attacks upon wages and hours than those made in districts producing predominantly for the home market. In addition, basic industries, themselves important coal consumers and similarly depressed after 1921, added to the plight of the coal industry. This illustrates the relative weak position of the miners’ unions in the inter-war period. This explains why nationalization of the coal industry soon would represent the most acceptable way of improving the working conditions of the miners and provide the means of reducing costs without necessarily resorting to alterations in wages and hours based upon the competitive needs of the coal districts. The demand for a national system of wage regulation, politically less demanding than nationalization, represented a similar, but limited, ideal. In 1947 nationalization was decided by the Labour Government, which allowed concentration of coal production on low-cost pits in expanding coalfields.16 Craft unionism versus industrial unionism In the United States, the National Labor Union (founded in 1866) advocated harmony between capital and labour, but also defended rights for blacks and women and pleaded for better housing.17 But most union leaders found that the needs of their members could not be
A Royal Commission established in 1919 could not agree on state ownership of the coal mines. Bills introduced in 1919 and, in similar terms in 1923 and 1924 to nationalize the mines, were easily defeated. 15 In March 1926, there were employed in and about the mines 1,111,900 men, and in April 1927 1,280,687. By July there were 258,203 miners registered as unemployed (Hannington 1979: 154-155). 16 “Cheap coal can only be obtained by efficient organization of the coal industry, while at the same time the miners must enjoy conditions that make mining a career as attractive as any in the country.” (Lawther, 1944: 11). 17 In 1871, the National Labor Union transformed itself into the National Labor Reform Party. In other countries, political demands never were absent from the union agenda. In Britain, the National Miners’ Association (MNA)
subordinated to utopianism offering nothing tangible in the immediate future. When reform and political elements captured the leadership most union leaders left the National Labor Union (Grob 1961: 11-33). The National Labor Union did not survive the economic downturn of 1873. Its role was taken over by the in 1869 founded Knights of Labor. From the outset, the Knights advocated the abolition of the wage system and labour owning and operating mines, factories and railroads. They also promoted the concept of an all-inclusive organization that was divided geographically by districts with membership open to almost anyone who worked. This organizational concept, which sharply contrasted with the horizontal organization of the trade unions, also reflected utopian ideas about the future organization of society. The Knights thought that strikes betrayed the principle of cooperation. Therefore they opposed the trade-union leaders who viewed strikes as almost the only effective weapons against recalcitrant employers. Many factors contributed to the Knights’ initial success. A fair part of the Knights’ popularity among workers was derived from their support of the successful Southwest Railroads shopmen’s strike of 1885. For the first time in American history a large company negotiated a collective agreement with a national labour organization (Commons and Perlman1970: 72102). By 1886, the Knights boasted a membership of over 700,00018 in 5,500 local assemblies against 250,000 for the unions. Contemporaries like Edward Aveling and Eleanor Marx (1891: 139; 144) qualified the Knights as a “huge heterogeneous organization” and as “the first spontaneous and indigenous outgrowth of the American working class as it became conscious of itself”. However, some conditions augured well for he success of the movement. To begin with, the rural element had always been numerically strong in the Knights. After 1886 these elements even gained proportionally in strength and provided a strong impetus for a farmer-labour coalition. Secondly, the leaders of the Knights were wedded to the concept of a fluid society lacking in class distinctions, and they thought in terms of a community of interests between farmers and workers. Thirdly, growing occupation with and reform inspired the Knights to gravitate to the farmers as a possible ally. Finally, there was the fact that Populism and labour reformism had emerged from the same American traditions: both were equal-rights and anti-monopoly movements and from the monetary schemes in vogue after 1840. Circumstances appeared propitious for a farmer-labour coalition as mechanization of agriculture forced the farmer into a difficult position. Caught between decreasing farm prices, an ever-increasing surplus, and relatively high costs of transportation, the farmers were looking for urban allies for union on a programme of mutual relief. By 1887 the Knights had lost their hold upon the large cities with their “conscious” workers and immigrant population. They soon would become an organization predominantly of country people, small merchants, mechanics, and farmers. In many states members of the Order drew up with farmers a common platform and in 1891 they contributed to the formation of the People’s Party (Grob 1961: 37; 90-98). However, the strength of this party was situated in the rural areas of the West, not in the industrialized counties where the working-class voters had abandoned Populism. The fact that the interests of farmers and workers were not identical contributed to the failure to forge an effective alliance between the two. Because of this alliance the Knights no longer represented the aspirations of the American worker and they soon would disappear from the political and social scene.
(1863) took up questions which demanded legislation. 18 Edward Aveling and Eleanor Marx estimated that membership was 300,000 to 500,000 in 1886 and that other estimations its number reached at least one million (Aveling and Marx 1891: 136).
Initially, strikes occurred during periods of retrenchment and drastic reorganizations after waves of capital concentration. This was especially the case in the railway sector where discipline had become stricter and acquired a military character throughout the long nineteenth century. However, many industrial workers were employed for part of their time in commerce and transport. Outworkers did most of the fetching and carrying of their raw materials and finished goods. Small producers were still involved in commercial activities or they owned a shop. As outwork declined and economic activities became more specialized and large-scaled, the proportion of industrial employees whose full industrial time was given to industrial production must have increased. The greater part of this change was probably accomplished by about 1900 when electric power became available at an ever-larger scale and the chemical industry could break through. These changes known in America as the ‘managerial revolution’ influenced management methods of large numbers of firms in a similar way. But in Europe its influence was insignificant before 1914. In 1907, a British observer could write that the rule of the thumb was dead in the workshop and that the day was with the engineer and the chemist (Ashworth 1960: 102). ‘Scientific management’ was a declaration of war on craft unionism and on the skilled worker. Frederick W. Taylor, who drew his experience from his work for the Bethlehem Steel Company (Braverman 1974: 102-106), wanted the managers to assume “the burden of gathering together all of the traditional knowledge which in the past has been possessed by the workmen and then of classifying, tabulating, and reducing this knowledge to rules, laws, and formulae which are immensely helpful to the workmen in doing their daily work” (Taylor 1919: 36). Taylor ‘s idea was that conception should be separated from execution and his purpose4 was to cheapen the worker by decreasing his training and enlarging his output (Braverman 1974: 118). The increasing consolidation of employees in some industries and activities and the greater impact of management on the organization of work in the large factories and mines appeared to be leaving purely industrial action by workers less chance of success, and the increase of adverse legal decisions in trade union cases also implied the inadequacy of such action. Moreover, a growing number of workers was becoming articulate, though they never had the chance to improve their position much through trade union of friendly society activities. It was in such circumstances that substantial minorities of trade-union militants and socialists were able to revolutionize the trade unions. In the US and Britain different socialist sects tried to take over the trade-union movement or to conduct its activities into the direction of politics. These militants were able in 1899 to induce the TUC to call in a conference of interest bodies which created the Labour Representation Committee (the beginning of the Labour Party) and marked the decline of socialist sectarianism. In the US, the in 1886 constituted American Federation of Labor (A.F. of L.) soon assumed the role of unofficial advocate of labour after the decay of the Knights of Labor. Contrary to the general impression, its leaders were not, on principle, either in favour of or opposed to industrial organization, or to the organization of the unskilled. The majority of its affiliates were craft unions, but some, especially in coal mining and brewing, were already industrial in their arrangement. The Federation leaders believed that eventually all workers would find their way into a union, and would solve their own problems. This made them oppose government intervention in economic and social affairs. They wanted to concentrate their efforts and resources upon organizing on the economic front, and limit their political activity, which brought them in conflict with the Socialists. The A.F. of L. refused to adopt the
principle of independent political action and declared in 1895 that political debates should have no place in the convention of the Federation (Taft 1957: 71-75). One has argued that the absence of feudalism in America, the greater class mobility, higher standards of living, the existence of the right of the franchise, as well as the greater social democracy, were serious handicaps to the spread of Socialist ideas. Observers had to conclude that the American worker failed to respond to the appeal of a class struggle doctrine and a classless society. Against these negative elements, one must recognize the intransigence of the American industrialist when facing the unions and the industrialists’ absolute domination over the terms of employment without any intrusion or recognition of the union. The years between 1909 and 1913 marked the end of socialist sectarianism, but also coincided with the last major outbursts of syndicalism. The outbreak of violent mass strikes and the entry of new strata of unskilled workers into the class struggle went hand in hand with the formation of industrial cartels and monopolies. In the US, the rebellion of immigrant steel workers in Pennsylvania (Brody 1960) and sweated garment workers (New York) in 1909, the supposedly unorganizable immigrant workers were supported by the Industrial Workers of the World (IWW). Simultaneously, the A.F. of L. had to fight bitter, rearguard battles against the degradation of their crafts by dilution, ‘Taylorism’, and speed-up. Instead of the A.F. of L. motto of a “fair day’s wage for a fair day’s work”, the IWW inscribed on its banner the socialist watchword “abolition of the wage system” (Lorwin 1933: 86). The IWW concentrated all energies on building the One Big Union, but this syndicalism proved to be only temporary (Renshaw1999). Though IWW’s syndicalism created the first industrial unions, this form of syndicalism did not reach the already organized workers in the traditional crafts and industries, but only the instable groups of workers in metal and coal mining (Wyman 1979: 235-255; Corbin 1981: 240-241; Brown 1979: 149) and agriculture, or the dock and river workers, i.e. relatively unskilled seasonable and migratory workers (De Caux 1978). By 1917, the IWW had reached its peak with about 30,000 lumberjacks, 40,000 metal miners, 24,000 agricultural workers, 15,000 building-trade workers, and about 10,000 in other occupations (Bimba 1927: 258). The sources of labour stability had broken down in World War I. Restoration meant a total reconstruction of the prewar labour situation in the USA. The central problem was to start a new free-flow supply of unskilled labour. The movement of Slavic peasants into the industry was stopped when the Johnson Act went into effect in 1921. Obviously, Congress was more concerned with safeguarding American “racial” parity than with the needs of industry. However, Southern Negroes had constituted the chief source during the war, and their numbers continued to mount afterward (Drake and Cayton 1962: 88-89). These migrants were commonly considered inferior workmen, but careful selection made it possible to cull an efficient force from the mass available on the Chicago labour market. Thousands of immigrant workers arrived from Mexico (Daniel 1981). The importation of Mexicans became widespread in agriculture and in the steel industry where many unskilled workers could find an employ. Permanent Mexican communities were taking root in the industrial and agricultural areas and many advanced into the semi-skilled ranks. A similar process was occurring among the Negroes. Meanwhile, the Eastern Europeans were occupying the lesser positions once held by the English speaking workforce. Notwithstanding a continuous inflow of cheap, unskilled labour, mechanization would cause a fast decline of IWW union membership in all trades. An inflow of unskilled operators created new opportunities for an industrial unionism based on occupation instead of crafts where transforming industries started reorganizing their factories on the base of Fordist or Taylorist
principles of work organization. As a consequence, craft unions had to open up their membership to semi-skilled workers now predominant in most industrial activities. In many aspects, World War I had marked the watershed between old and new unionism in most developed countries. Unions in Western Europe saw the number of their adherents increase explosively as the system of collective bargaining was introduced and favoured by governments in which social democrats participated. All workers employed by one industry were organized in the same union and where unions of different ideological background existed, they co-operated when dealing with entrepreneurial organizations. In the US, the A.F. of L. remained a federation of craft unions, but also comprised several industrial unions - such as the United Mine Workers of America (UMWA) - showing much more militancy than the average craft unions (UMWA1976). Yet, labour leaders seemed to face an insoluble dilemma. Without mass organization, labour lacked effective political influence; without the guardianship of a benevolent government, unions could not defeat recalcitrant employers. During the New Deal, more so than ever before, the federal government acted as society’s arbiter. Because of the growth of membership, unions started playing an important role in national politics. The UMWA led by John L. Lewis realized that labour’s fate was inextricably linked with its political and social influence. He offered his fellow barons of trade unionism another chance to build a powerful mass working-class movement. According to his admirers, he provided them with the shock troops of militant American labour and committed the Union’s resources to building of the unions of automobile workers, steel workers, rubber workers and other new industrial unions (UMWA 1976; Dubovsky and Van Tine 1977: 203217). In the US, unions’ influence was based on the resources they could mobilize to influence the working-class vote. But they did not present themselves as political organizations representing the interests of labour as a class. Obviously, the American unions accepted the existing social and political order (Davis 1980). This contrasted sharply with the situation in Europe where the unions belonged to socialist movements and where they helped forming socialist parties. “Responsible” American unionism With the growth of the trade-union movement, employers began to understand that a responsible trade-union movement could act as a stabilizing element. Centralized or industrywide collective bargaining tends to reduce strikes and to protect employers and society against mass-labour unrest (Hyman 1977; Coates and Topham 1974: 51-55). This idea was, however, slow to convince employers and governments as long as the numerous craft unions did not amalgamate and federate or transformed themselves into industrial unions. However, craft unionism was still long living because individual employers preferred bargaining with craft unions defending sectional interests. This explains why in the US, the A.F. of L. remained a federation of craft unions. In Britain the unions, strengthened by amalgamation and federation, and inflated by vast membership, were still fighting their own battles since the creation of the General Council in 1921. The issue of whether or not the TUC should organize assistance for affiliated unions had been subject to constant debate (Lovell and Roberts 1968: 49-94). In the 1920s, craft unionism, however, was a phenomenon of the industrial past. Craft unions were absorbed by industrial unions or they had to merge in order to widen their field of action or to enhance their appeal to semi-skilled workers. Business or ‘yellow’ unions had no chance to compete with the independent unions stressing the interest of labour in opposition to capital. Collective bargaining promoted by these independent unions slowly superseded the
practice of individual labour contracts as industrial firms were employing thousands of semiskilled workers. This was the case in the new industrial sectors such as the motorcar industry and the sector of electric home-appliances, where Taylorist forms of work organization already had reached a high degree of perfection and demanded also at the national level a specific type of labour management. In the US, this framework would be provided by the New Deal legislation. In Europe, most countries already had experienced just after World War I with nation-wide collective labour agreements and social legislation. In the US, the passage of the National Labor Relations Act (NLRA) in 1935 and various other pieces of New Deal labour legislation designed to protect worker rights represented a shift in the prevailing view of the employment relationship and how to regulate it. Prior to the 1930s, the role of government policy was protecting the workings of the free labour market and to guarantee the freedom of contracting. New Deal legislation endorsed collective bargaining as a part of a broader economic and social reform. The choice of collective bargaining as the preferred institutional mechanism reflected not so much the creation of a new idea, but the legitimation of a process that had made some progress in some industries in prior years. The NLRA incorporated many of the principles and policies embodied in previous advisory committees ad industrial commissions (the National War Labor Board of World War I and the National Labor Board established in 1933 under the National Industrial Recovery Act). The NLRA was expected to give employees the freedom to choose whether or not they wanted to be unionized. Election procedures and institutionalized collective bargaining therefore were to replace conflict and violence so typical for American labour relations. Corporatism, which had become a common feature in several European countries establishing new forms of labour relations, was not even discussed in the US. Keynesian macroeconomic theory also helped provide acceptance for the New Deal industrial relations system. Union policies that increased wages through collective bargaining were compatible with this strategy as long as markets continued to operate and productivity continued to increase. The best example of this tendency is offered by the American motorcar industry and that has been characterized by very rapid growth in its early years and by concentration in the hands of a few producers (General Motors - GM, Ford, and Chrysler). Therefore, the United Automobile Workers (UAW) led by the legendary Walter Reuther (Barnard 1983) could operate as a major driving force in the American labour relations since the late 1930s when the UAW started pioneering institutionalized industry-wide bargaining. Before this, union influence was minimal. These changes came suddenly and violently. From 1935, the car industry was singled out by the new Congress of Industrial Organization (CIO) as area of potential recruitment for industrial unionism (Zieger 1995). The success of the sitdown strikes at GM’s plants at the end of 1936 marked a turning point. Although full-scale industrial bargaining was introduced in the coal-mining industry in the 1930s, the UAW extended the concept of collective bargaining well beyond the traditional boundaries of business unionism. Chrysler was organized very soon after GM. Ford managed to resist until 1941. President Roosevelt and legal provisions had encouraged unionization, but specific managerial practices19 had provided the impetus to labour unrest among the unskilled workers. The link with the then-triumphant Fordism has to be stressed, because the UAW met the needs of the unskilled ‘mass workers’ when negotiating production standards (line speeds and labour loading) and taking them through the grievance procedure. Application of the ‘seniority rule’ established job security and abolished the arbitrary authority of the foreman.
Irregular employment, limited job security, re-engaging at the flat rate men who had been laid off work at higher rates shortly before, speed-up practices, widespread employment rackets based partly on the considerable responsibility and discretion given to foremen and the firms’ espionage systems.
After World War II, the divide between A.F. of L. and CIO20 was healed when the so-called ‘Dunlop model’ of collective bargaining spread over all sectors and American trade-union officials deployed activities sponsored by the State Department and the CIA (Romero 1993; Busch 1983; Windmuller 1954). This New Deal model of industrial relations developed in the postwar economic environment of growth and market expansion, was encouraged by government policies and prevailing union and business values. This model included the use of pattern bargaining and wage formulas to set wages. Union bargaining power was strengthened by their substantial organization of a number of the nation’s core industries. Economic growth and the collective bargaining process gave stability to contract negotiations and led to important wage increases combined with fringe benefits. In the motorcar industry, the UAW consolidating its initial success became for a time the largest union with 90 per cent of the eligible workers in the car industry unionized (Turner, Clack, and Robert 1967: 293-306). The UAW-GM 1950 five-year contract (also called the ‘Treaty of Detroit’) became an example for other industrial sectors, including rubber, steel, farm construction equipment, trucking and the food and retail sector.21 Union power, however, gradually declined in the 1970s and 1980s. Intensified competition from either international or domestic nonunion competitors induced major modifications in traditional bargaining approaches. In addition, the anti-union stance of the Reagan administration gave a green light to union busting and helped reducing the absolute number of unionized workers for the first time since the 1930 (Goldfield 1987: 325). Deregulation in industries such as airlines, trucking, and communication opened the door to new entrants and produced abrupt increase in cost competition. Furthermore, the deep macroeconomic recession of the early 1980s exacerbated the economic pressure for wages cuts. As these competitive pressures increased, unions were confronted with large-scale layoffs and plant closings. Employment in the Fordist motorcar industry dropped from a December 1978 peak of 800,800 to 487,700 in January 1983. As a result of increased competition on the US motorcar market unions had to face a significant decline in their bargaining power. As labour and management in union firms searched for a response to intensified competition, they often modified collective bargaining by introducing new subjects into the negotiations. In many cases this entailed making changes at either the workplace or strategic levels of industrial relations practice. Labour gained quid pro quos in exchange for concessions in pay or work rules. A number of firms improved job security. A guaranteed income stream programme was created in the 1982 agreement at Ford and GM to compensate high-seniority auto workers permanently laid off because of plant closings and other reasons.22 But new work structures geared toward greater flexibility. Firms pushed for fewer classifications and more firmspecific training. As labour and management struggled to respond to environmental pressures, they made significant changes in the bargaining process as well. These changes announcing the end of the ‘Dunlop model’ included • A decentralization of bargaining structures;
The refusal of the A.F. of L. to accept industrial organizations was long since settled. The CIO industrial unions were permanently established. Several A.F. of L. affiliates, such as the teamsters, machinists, and ladies’ garments workers, were primarily industrial in nature. During the war both federations had cooperated on government advisory bodies (Taft 1959: 473-486). By 1954 the decision was taken to merge both federations into the AFL-CIO. 21 This system established industry-wide patterns of wage, benefits, and working conditions, unaffected by competitive conditions in other separate industries and sectors, and lasted until the 1980s. 22 Airlines and trucking were highly affected by liberalization policies and increased competitive pressures. Therefore, American Airlines introduced lifetime job guarantees and lowered the pay of new hires during 1983 negotiations.
• An increased emphasis on contingent compensation criteria; • A changing pattern of strike activity. Decentralization reversed the trend toward centralized and pattern bargaining that had emerged in the post-World War II period as a result of the extensive union coverage in Fordist Industries. First of all, economic pressures created the decentralization of longstanding formal and informal bargaining structures in a number of industries and created an erosion of the inter-company pattern of bargaining in rubber, motorcar, and meatpacking industries. Within trucking, the influence of the National Master Freight Agreement declined as regional and company modifications gained importance. In addition, deviations form the national agreements emerged in 1982, when the steel industry established different bargaining goals for such distressed industries as basic steel and such healthy industries as nonferrous metals or containers. This caused a weakening of the inter-industry (intra-union) pattern bargaining so characteristic for the United Steelworkers negotiations. In 1985, an end was put to the steel industry’s thirty-year old tradition of coordinated bargaining.23 Secondly, a new form of decentralization emerged from national-level to company- or plantlevel bargaining in the rubber, steel, and motorcar industries, where plant-level modifications in work rules were frequently introduced as part of the efforts to lower costs and keep business in-house. Plants agreements in the automotive industry introduced pay systems and transfer rights that differed from prevailing industry practices. Thirdly, intensified pressures in the 1970s and 1980s forced decentralization as part of a process whereby wage and work-rule concessions were introduced in response to increased competition and an associated erosion of union coverage. Trucking illustrates both tendencies. Contracts had been set before and immediately after World War II at the company level. In the 1950s, however, Jimmy Hoffa was able to induce regional agreements. In 1964, a National Master Freight Agreement set common increases in wages and fringe benefits and a number of work rules for truckers. Although regional agreements still supplemented the terms of the national agreement. In the 1970s, the number of independent drivers increased significantly. Unionized carriers started cutting prizes and wages while abandoning the national agreement. The Motor Carrier Act of 1980 and the decision of the Interstate Commerce Commission to allow free entry and rate competition in industry increased pressure on wages and obliged the Teamsters Union to abandon centralized bargaining (Galenson 1997). Militant European unionism In most European countries, the 1960s and 1970s were characterized by growing workingclass militancy, which in some cases broke out of the regular institutionalized forms of collective bargaining. Attacks on union leadership were commonplace in all European countries where growing working-class militancy was striving for ‘workers’ control’ at the factory level and participation at the sectoral level.24 At stake was the unions’ ability to accommodate workers’ demands by forcing them into the normal procedures of interest intermediation. This strained relationship stemmed both from changes in the composition of the working class and in workers’ demands, and from the problems facing trade unions as organizations. However, most European unions benefited from this wave of radicalism, as most employers and governments found themselves compelled to grant them recognition.
Other industries, such as printing, underwent a similar erosion of pattern bargaining. In Germany, Mitbestimmung (Co-determination) was established in the 1960s. (On the debate on workers’ control, see Hunnius, Garson, and Case 1973.)
Hence, this greater labour strength disturbing the normal patterns of industrial bargaining would become an issue politicians and entrepreneurs had to include into their strategies and policy frameworks. Industrial conflicts at the micro-level of the firm were connected to wide-ranging reorganizations of production and the expansion or consolidation of Fordism. Work rhythms were stepped up and jobs fragmented so that workers lost their occupational identities or their opportunities to pursue careers. At the macro-level, however, economic growth permitted the draft of Keynesian welfare schemes favouring massive migration from the rural areas in and outside Europe to the cities. A situation of quasi-full employment gave workers a relative job security and therefore increased bargaining power. New generations of unskilled workers had access to the labour market in a period the unions were confronted with growing workers’ demands. New long-term union goals had to be formulated in such a climate of growing class conflicts, factory occupations and street violence. Trade union weakness meant that many new grievances could not be dealt with by institutional means and that ‘maoist’ militants originating from the universities could establish their influence in several ‘Fordist’ factories in Italy and France and organize there the protest of the ‘mass workers’. In the 1970s, labour organizations slowly increased their influence as collective mobilization was progressively institutionalized and collective bargaining patterns could be re-established. In countries with strong unions, governments and employers regarded the participation of trade unions in the macro-economic management as a ‘second-best’ solution. As far as workers could be reintegrated into their union strategy employers could avoid labour conflicts inside of their factories. In the literature on these topics, most authors describe this phenomenon as the ‘century of neo-corporatism’. The central issue, however, was not the relationship between unions and workers, but between labour and the state. The problem was how the working-class movement could articulate its newly acquired strength in the political arena and in the political institutions of capitalism (Panitch 1977). In most European countries, union policies focused on incomes and full-employment policies (The London CSE Group 1980; Panitch 1976). Neo-corporatist trends in several European countries promised long-term stability, but coincided with instability in Italy or the United Kingdom, where the political system frustrated social concertation. By the mid-1980s, however, in virtually all advanced capitalist countries concertation was no longer the major focus of the labour movement. Changes toward a ‘post-Fordist’ organization of production as a response to increased competition on the domestic markets, led to a growing diversification of the labour force. Managers became more interested in increasing flexibility and industrial relations underwent a shift from the macro-economic level to the shop-floor level. Economic adjustment could be obtained by increased management control at the company level, which went at the expense of decisions made at the macro-level. Radical changes in the productive system occurred in some industries as a result of increased competition affecting the organization of production in individual countries. This required the building of a new relationship between unions and management. Market and political (neo-liberal policies) trends can be singled out as the driving forces behind deregulation policies weakening the trade unions and their allied political forces. Changes in labour markets, technology, and the organization of production, and its consequences on the ability of labour movements to represent workers’ interests adequately explain why the inherited institutional arrangements or the industrial relations systems are not functioning anymore or have revealed their weaknesses.
The industrial restructuring of the 1980s and 1990s occurred in a period of growing mass unemployment and required an adjustment to the changed international economic situation. The crisis of the large corporations which was paralleled by an impressive growth of small subcontracting firms and an even more impressive growth of the informal economy, would undermine the bargaining power of the large industrial unions whose leaders had to trust in periods of large-scale conflicts and bankruptcies on governmental aid and compromises (Hancké 1991) in order to alleviate the social costs of these massive shakeouts. This was notably the case in the coal and steel industry, where modernization and innovation was accompanied by contraction (Mény and Vincent 1987). The same can be said of the expanding tertiary sector with its growing number of a-typical (i.e. unorganizable) skilled workers in the new economy. The need for a continuous reorganization of production and the importance of product quality and flexibility for international competition transformed the trade-union movement into a social peacekeeping organization assisting managers and governments. The European Single Market signified the advent of a less regulated economy, in which the stronger unions are enjoying a greater protection, while the weaker unions are forced into a process of leveling down. Convergence will lead to the emergence of cooperative and pragmatic labour relations and the growth of business unionism. A soft version of the German model, rather than an outright neo-liberal policy, is already taking on the role of the secondbest solution for all actors involved at the macro-national levels. The Lisbon Agenda the European Union agreed on in 2000 provides us with a catalogue of new demands unions and entrepreneurs have to deal with. For entrepreneurs and unions aggregate labour costs will no longer be the sole focal issue of negotiation now that various aspects of the use and reproduction of the labour force (organization of working time, internal mobility and career, incentives, vocational training) are become even more crucial in order to make the European economy more competitive than the American economy. Meanwhile, employers are responding to the globalization challenges by adopting their own personnel policies and by transferring their production units to low-cost countries in the capitalist periphery. NAFTA’s impact on American labour The US has experienced steadily growing global trade deficits for nearly three decades, and these deficits have accelerated rapidly since North American Free Trade Agreement (NAFTA) took effect on January 1, 1994. Although gross US exports to its NAFTA partners have increased dramatically - with real growth of 147 percent to Mexico and 66 percent to Canada - these increases have been overshadowed by the larger growth in imports, which have gone up by 248 percent from Mexico and 79 percent from Canada. As a result, the US$16.6 billion US net export deficit with these countries in 1993 increased by 378 percent to US$62.8 billion by 2000 (all figures in inflation-adjusted 1992 dollars). The NAFTA eliminated 766,030 actual and potential US jobs between 1994 and 2000 because of the rapid growth in the net US export deficit with Mexico and Canada. As a result, NAFTA has led to job losses in all 50 states and the District of Columbia. The loss of these real and potential jobs is just the most visible tip of NAFTA's impact on the US economy. In fact, NAFTA has also contributed to rising income inequality, suppressed real wages for production workers, weakened collective bargaining powers and ability to organize unions, and reduced fringe benefits. NAFTA's impact in the US, however, often has been obscured by the boom and bust cycle that has driven domestic consumption, investment, and speculation in the mid- and late 1990s.
Between 1994 (when NAFTA was implemented) and 2000, total employment rose rapidly in the US, causing overall unemployment to fall to record low levels. Unemployment, however, began to rise early in 2001, especially in the manufacturing sector. If, as expected, US trade deficits continue to rise with Mexico and Canada while job creation slows, then the job losses suffered by US workers will be much larger and more apparent than if US NAFTA trade were balanced or in surplus. However, NAFTA supporters have remained silent on the impacts of rapid import growth on domestic production. The growth in US trade and trade deficits has put downward pressure on the wages of "unskilled" (i.e., non-college-educated) workers in the US, especially those with no more than a high school degree. This group represents 72.7 percent of the total US workforce and includes most middle- and low-wage workers. These US workers bear the brunt of the costs and pressures of globalization (Mishel et al. 2001: 157, 172-79). NAFTA has also contributed to growing income inequality and to the declining wages of US production workers, who make up about 70 percent of the workforce. NAFTA, however, is but one contributor to a larger globalization process that has led to growing structural trade deficits and has shaped the US economy and society over the last few decades. Rapid growth in US trade and foreign investment, as a share of US gross domestic product, has played a large role in the growth of inequality in income distribution in the last 20 years. NAFTA has continued and accelerated international economic integration, and thus contributed to the growing tradeoffs this integration requires. Because the United States tends to import goods that make intensive use of less-skilled and less-educated workers in production, it is not surprising to find that the increasing openness of the US economy to trade has reduced the wages of less-skilled workers relative to other workers in the United States (Bakvis 2004). Globalization has reduced the wages of "unskilled" workers for at least three reasons. First, the steady growth in US trade deficits over the past two decades has eliminated millions of manufacturing jobs and job opportunities in this country. Most displaced workers find jobs in other sectors where wages are much lower, which in turn leads to lower average wages for all US workers. Recent surveys have shown that, even when displaced workers are able to find new jobs in the US, they face a reduction in wages, with earnings declining by an average of over 13 percent (Mishel et al. 2001: 24). These displaced workers' new jobs are likely to be in the service industry, the source of 99 percent of net new jobs created in the United States since 1989, and a sector in which average compensation is only 77 percent of the manufacturing sector's average (Mishel et al. 2001: 169). This competition also extends to export sectors, where pressures to cut product prices are often intense. Increased import competition and capital mobility resulting from globalization increased the "threat effects" in bargaining between employers and workers, further contributing to stagnant and falling wages in the USA (Bronfenbrenner 1997a). Employers' credible threats to relocate plants, to outsource portions of their operations, and to purchase intermediate goods and services directly from foreign producers have a substantial impact on trade-union bargaining positions.25 NAFTA's supporters promised that the accord would lead to the creation of more and better jobs in all three countries. In reality, the opposite has occurred. Job creation in Mexico has been sluggish, the jobs that have been created are of a precarious nature, and it is still difficult for many workers to form unions to defend their interests. Between mid-1993 and mid-1996, 2,421,055 new jobs were created in Mexico, while the working-age population increased by 5,037,735 persons. Officially, the number of absolutely unemployed people those who did not
A unique study of union organizing drives in 1993-95 found that over 50 percent of all employers made threats to close all or part of their plants during organizing drives (Bronfenbrenner 1997b).
work even one hour a week - in that period grew from 819,132 persons in 1993 to 1,354,710 in 1996. It is difficult to separate the unemployment generated by NAFTA from that resulting from other causes, but it must be taken into account that, in Mexico, NAFTA is the culmination and legal formalization of an economic policy that began in 1983. At the very least, it is clear that NAFTA does not improve the current economic model's capacity to generate employment. It is important to analyse the manufacturing sector, since it is responsible for 83.65 percent of Mexico's exports and is considered the "engine" of growth in the government's strategies. In terms of job creation, however, the sector is not only incapable of generating new jobs, but it has experienced an absolute decrease in employment. During the NAFTA period (1993-1996), manufacturing GDP grew 9.9 percent. However, a decline of 9.9 percent in employment was recorded in the sector. Also, despite a 12.62 percent increase in productivity, average real wages have decreased 21.9 percent since NAFTA was implemented (RMAC 2005). The contrast between promises and reality could not be more dramatic. The manufacturing sector is one of the most dynamic sectors, but it employs fewer people; productivity increases but the average real wage falls even more than that of workers in other sectors. In fact, the average manufacturing wage has become even more "competitive" in order to attract investment and promote exports. In 1993, the average wage of a manufacturing worker in the United States was five times higher than the wages of his or her Mexican counterpart. In 1996, this disparity increased to 8.75 to 1. During the NAFTA era, the average manufacturing wage in Mexico, measured in U.S. dollars, has decreased 60 percent. Persistent and tradedistorting violations of minimum-wage laws can be grounds for complaint under NAFTA's labour side agreement. Nevertheless, in Mexico, more and more employers are paying less than the legal minimum wage. In 1996, 19.53 percent of workers earned less than the minimum wage. A basic consumption "basket" costs more than the equivalent of two minimum wages. The assessment wage used by the Mexican Social Security Institute (which includes the value of some benefits) during the first three years of NAFTA fell by 23.11 percent. The minimum wage contracted 10.81 percent during that period, but that is the culmination of a continuous decline starting in 1976. Since that year, the minimum wage has lost almost 73.72 percent of its purchasing power. The Labour Side Agreement permits complaints on child labour cases to the extent that they violate national laws. Child labour is completely prohibited in Mexico. There are estimates, however, that 10 million children work. The Instituto Nacional Indigenista (INI, National Institute for Aboriginals) asserts that, in such agricultural areas as San Quintin in Baja California, and Culiacán in Sinaloa, a sizeable number of workers (more than 20 percent) are indigenous people under the legal age to work who are forced into that situation by the miserable conditions in which their families live. The Mexican government and corporations have not kept the promises made during the NAFTA debate to improve the condition of workers. Employment is falling in the maquiladoras. Mexican government data have confirmed that employment in the maquiladora zones, which the report implies are the showcases of NAFTA's success, has declined from 1.3 million in 2000 to 1.0 million in 2003. NAFTA has served as an efficient mechanism for reducing employment levels and wages in Canada and the United States. While labour laws have not changed, labour relations have been modified through a process of "modernization" of collective bargaining contracts. Most export companies, for example, work with official unions linked to the government and have changed their workers' labour conditions.26 The principles that these companies continue to promote in current salary or contractual negotiations include improvements in production
There are examples in various sectors and among a variety of Mexican and foreign firms. These include Roche-Syntex, of Swiss origin, and such automotive companies as Ford, General Motors and Chrysler.
levels, quality and competitiveness. The implementation of these principles has brought as a consequence a new conception of labour relations, in which the bilateral relationship between workers and employers is undermined, since employers can deal with "unions" that they have selected. This has also weakened the remaining unions' ability to participate in negotiations on the nature of the new work rules. This commonly occurs through the use of so-called "protection contracts" with official unions. Upon arrival in Mexico, companies receive instructions - often official - to negotiate future labour relations with a particular union, most often unions affiliated with the Confederación de Trabajadores de México (CTM, Confederation of Mexican Workers), which is closely linked to the government and to sign a kind of collective bargain contract, normally with the benefits guaranteed by law. This contract is of a very flexible nature, however, so that when workers start work the contract and union are already in place. If workers wish to affiliate with another union, they will not obtain employment. The chances of changing the union or the contract in the future depend on organization by the workers, who will obviously confront all kinds of pressures, repression and problems, up to the loss of their jobs or even their lives.27 The majority of new automotive companies based in the north of the country have negotiated protection contracts with the CTM. These new plants utilize modern technologies, including computers, robotics and fluid processes, coupled with flexible work contracts. Their practices, in turn, put pressure on older plants in the centre of Mexico, many of which, including Renault, have now closed. In the cases of Ford and Volkswagen, old labour contracts have been eliminated and wages and benefits have been set at the same levels as in the newer plants, along with the same flexible labour conditions. NAFTA has served to ratify these practices (RMAC 2005). Conclusions Globalization is pressing for alternative labour strategies now that ruthless competitive dynamism of capitalism is reasserting itself in the form of free trade and foreign direct investment and ‘lean’ production through job ‘flexibility’ and ‘casualization’ has become the norm. The trade-union movements were not prepared for all this. The spatial relocation of industrial activities to lower income countries and changes in the process of capital accumulation on a world scale from material to financial expansion are not an aberration but a normal development of the accumulation of capital. The worldwide relocation of capital to financial activities and aggressive competition had a devastating effect on segments of the working force and on organized labour in the highly developed capitalist countries where the number of jobs in manufacturing industries fell and the proportion of the workforce employed by small companies grew. This transformation changed the context not just of labour-capital relations, but also of the North-South relations. In this situation, most trade unions are attempted by nationalist or protectionist strategies in order to keep competitors out. Nationalprotectionist reactions have been strong in all countries now that the working-class vote is going to populist protest parties. Uneven capitalist development has engendered unevenly developed trade-union movements and weak or “failed states”. In the “labour-friendly” (Silver and Arrighi 2000: 55) developed world, American hegemony created with the help of its own trade-union leaders a favourable climate for stabile industrial relations (the ‘Dunlop model’) and economic prosperity. In the poor developing world, social conflicts were contained by military or authoritarian regimes. However, as we have seen, uneven development caused social unrest among workers in most countries. Apart from the New Deal period, American capital had no interest in making peace with the trade-union movement at home. With the advent of Thatcher in 1979 and Reagan in
As occurred to the Ford-Cuautitlán automotive workers or the workers at Refrescos Pascual.
1980, radical policy changes marked the end of all labour-friendly arrangements and the beginning of profound economic restructurings. However, there is also evidence that the decline in union membership is beginning to slow up. Many unions are stepping up their efforts to recruit in new industries and jobs and more people are turning to trade unions because they want the protection they can provide. References
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