Labor Day Parade, May 1, 1911, NYC
This Labor Day should remind all of us of how much ground Americans have lost in the workplace since the end of the New Deal. One significant reason for the increasing economic inequality among Americans is directly related to the demise of a viable labor movement in the United States.
Throughout the nineteenth century, given their
preoccupation with property rights and the sanctity of contracts (which is a
legacy of John Locke's politics) , most state courts treated labor unions and
strikes as illegal conspiracies in restraint of trade. Slowly, the tide began
to turn. As the effects of the Great Depression became pronounced, industrial
unionism, organized under the auspices of the Congress of Industrial
Organizations (CIO), emerged.
With the enactment of the National
Labor Relations Act in 1935, the right of all workers "to organize and
bargain collectively through representatives of their own choosing" was
pronounced for the first time to be national public policy. Other New Deal
legislation included the Walsh-Healey Government Contracts Act, which required
the payment of prevailing wages on government contracts in excess of $10,000;
the Railroad Retirement Act; and the Fair Labor Standards Act of 1938 which
provided for the first time, with certain exceptions, a nationwide minimum wage
floor and maximum workweek of 40 hours per week within three years of its
enactment date.
Since the 1940s, however,
the American labor movement has been forced into retreat. After the death of
Franklin Roosevelt and the election of a Republican Congress in 1946, the
right-wing in the United States became resurgent. The first great success of
New Deal critics was achieved with the enactment of the Taft-Hartley Act in
1947, which was passed over President Truman's veto. The effect of this
legislation was to outlaw "closed shops" and to permit individual
states to allow "open shops" - i.e. shops in which elected unions
could not require all of the employees to belong to the unions, irrespective of
whether the non-union employees also received and enjoyed the benefits of
collective bargaining.
As a result of that legislation,
corporations began an inevitable migration to the South where welcoming state
legislatures hastily enacted "right-to-work" laws. The migration of
these manufacturing companies away from the unionized urban centers of the
Midwest and North left hundreds of mill towns impoverished and desolate, and
the union movement was effectively eviscerated.
It did not take long for the owners
of corporations to discover that, once they had escaped from the threat of
unionization, they could escape almost all government regulation by moving their
business and manufacturing operations out of the United States to Third World
countries. In an article that appeared in the Nation magazine,["Mill Hill Populism: Meet The New Face of
Populism in Post-NAFTA North Carolina," May 12, 2008] , Bob Moser noted
that "North Carolina, first in the South for its share of jobs in
manufacturing, long benefited from out-sourcing. Decades ago Northern
manufacturers shifted jobs to low-wage, Southern states with severe
restrictions on organized labor. Now the 'old economy' parts of all these
states were reeling from post-NAFTA version of out-sourcing. Since 1993, North
Carolina has bled more than 200,000 manufacturing jobs...The pace of closures
isn't slacking, either. Last year, 10% of the state's textile jobs were lost...."
Even among the few unionized workers
still employed in manufacturing, a two-tier pay system has been imposed by management to which unions
were forced to acquiesce because of downward economic pressures: younger
workers now make substantially less per hour than more senior employees who
perform the same work. The effect of this two-tier system denies younger
workers upward mobility and divides workers based solely upon dates of hire:
"The changing job market is undercutting entry-level wages for those who
do not go to college. 'In the 1960s and 1970s, you saw high school graduates
getting good jobs at Ford and AT&T, jobs that in inflation-adjusted terms
were paying $20 or $25 in today's wages," said Sheldon Danziger, a
professor of public policy at the University of Michigan. "Nowadays most
kids with just high school degrees will work in service-sector jobs for $10 or
less..."
Perhaps as worrisome are the
long-term trends which suggest that, absent substantive structural reform,
unemployment will remain even more intractable long after the economic meltdown
which began in 2008 and now continues unabated. Between 1975 and 2005,
entry-level wages for male high school graduates who did not graduate from
college declined 19% after adjustment for inflation while the incomes of their
female counterparts fell 9%. Lastly, men who were in their thirties in 2004 are
reported to have had a median income of 12% less, after adjusting for
inflation, than did their fathers' generation when the latter were in their
thirties.
Thus, according to the U.S Department of Labor [Union Member Summary, January 22, 2010], as of 2010, only 12.3 per cent of employed wage and salary workers were union members. Not surprisingly, many of the same non-union employees did not seem to understand that their ability to influence working conditions and wages, as solitary individuals who lacked comparable bargaining power with managers and owners of business, was virtually nil. Apparently, however, the myth of the autonomous, self-made individual who can receive recognition, remuneration and advancement solely by dint of one's own hard work continues to resonate in the workplace to the present, notwithstanding all of the evidence to the contrary.
The effect of this continuing economic trend has been to show, once again, that the practice of liberal individualism produces results quite different from its theory: In an world of unrestrained competition, only the few, the wealthier, the more powerful, the more resourceful, the better educated, the more mobile, will be able to maximize their opportunities; everyone else gets left behind.
With the demise of the labor movement, the American workplace continues to be governed by the nineteenth century doctrine of employment-at-will, which further circumscribes the ability of most Americans to protect their livelihoods or to improve their conditions of work. Forty-nine states--with the exception of Montana (which has abolished at-will employment by statute)--subscribe to that legal concept. The doctrine of at-will employment is a legal fiction which was created by state courts in the United States during the Gilded Age. This legal doctrine repudiated the long-standing presumption set down by Blackstone that any indefinite employment contract was for one year.
The earliest reported case in Massachusetts which endorsed the concept of at-will employment is Harper v. Hassard., 113 Mass. 187 (1873). That case, incredibly, involved a written agreement, not an oral contract, between the employer, John G. Hassard, et al., and the employee, Thomas J. Harper. The written agreement provided, in pertinent part that, "It is agreed between said parities...the said Harper agrees with the said Hassard and Fosters that he will, during the term of not exceeding three years from the date of this agreement, render and give his exclusive time, services, skill, and energy to them in the manufacture of oil and water colors, and also instruct them during the said term the art of manufacturing or making colors..."
The court, in an era when Social Darwinism was the operative strain of classical liberal ideology, did what jurists oftentimes do when their "conventional wisdom" is confronted by ugly and unsettling facts--they opted to dissemble. As an exercise in unabashed judicial activism, the Massachusetts Supreme Judicial Court reversed a lower court decision and held that "There is no express agreement of the defendants to employ the plaintiff for three years..." and that "...the defendants had the right to elect to terminate their agreement with the plaintiff at any time by reasonable notice; and none of the judges have any doubt..." This act of judicial intervention in favor of a manufacturer and against an employee reversed three hundred years of settled Anglo-American common law, which held that the employment relationship was contractual; it also transformed the relationship between employers and employees into purchasers and sellers of a mere commodity - labor.
The legal fiction of at-will employment essentially posits an equality of bargaining power between individual employers and employees: Each is free to accept or reject employment, resign or be fired without cause or restriction. However, since employers in "union-free" environments are legally permitted to unilaterally impose, almost without restriction, whatever conditions of work they require as to hours, compensation, and often restrictions on re-employment after discharge in the form of non-competition agreements, the relationship is again one of inequality in which the employees are burdened and the employers benefited. In response to this conundrum, Locke's political philosophy can provide no guidance or remedy whatsoever, since his politics envision nothing beyond solitary actors whose property must be protected as well as their rights of acquisition.
Labor laws that are rigged in favor of the employers and the legal fiction of at-will employment need to be at the top of any agenda to reclaim the Promise of America. Since corporations and employers are not required to any show any loyalty to their employees, employees need to demand that our labor laws and our tax policies protect the rights of workers and the middle class, and place obstacles in the way of corporations, particularly multi- national corporations, from doing further damage to the American economy.
