Guilds and Unions

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					   The Slave Issue: Why did Europeans settle in the North or West
    and not the South?
   African immigration basically stopped in 1820
   By 1860     99% of Africans in the U.S. were natives
   Higher percentage of Africans were natives than Europeans
   Slavery as an institution ended in the British Empire and the
    Northern United States.
   Prior to Eli Whitney’s cotton gin, cotton production was not
    possible on a large scale in the South. Gradually slavery was
    dying in the South also.
   The growth of cotton led to a significant growth in slave labor.
    Did this impact the pattern of European migration?
   Although Europeans may have had a greater distaste for slave
    labor, the attraction to the North was because jobs in
    manufacturing were more desirable and plentiful.
   No legal rights
       to marriage
       to property
       to children
   increase in population comes only from
    native population after 1808. As noted, the
    vast majority of the African-American
    population was native born
   Why fight the war?       The argument over
    slavery.
   Remember, cotton production was migrating
    to the West. Would slavery be allowed in the
    new Western territories?
   Furthermore, who would compensate the
    South if slavery was declared illegal?
   Note: The North did not have an economic
    interest to end slavery.
   Could slavery be abolished without war?
     Federal government purchasing slaves
      immediately
     Gradual freeing of slaves over time.
   Was integration of society a goal of the
    abolitionists? In general, no.
   Claudia Goldin and Frank Lewis estimate the direct Northern
    cost at $3.4 billion and the direct Southern cost to be $3.3 billion.

   Lost human capital -
     Estimating the economic value of the 600,000 who died
     North - 1.06 billion
     South - .767 billion
   Direct government expenditure:
     North - 2.3 billion
     South - 1 billion
   Physical destruction in the South: 1.5 billion
   $6.7 billion is
     double the total exports of the U.S. from 1850-1860.
     double the national income in 1860
     four times the sum of all government expenditure from 1789-
       1860
   6.7 billion is enough to
     purchase the slaves from all slave owners at 1860 prices and...
     give each slave family 40 acres and a mule and....
     still have $3.5 billion left for reparations.
   In other words, the North could have used their expenditure to
    pay the South to end slavery peacefully.
Guilds and Unions
   Business is initially organized into guilds.
   Guilds have a Master, Journeymen, and
    Apprentices.
   The interest of these threes are connected,
    and in fact early unions admitted Masters
    (who are employers today) into their ranks.
Early Strikes
   1741 strike of New York bakers. Strike was over
    the price of bread set by the municipal authority.
   1806 strike of cordwainers in Philadelphia.
    Journeymen struck against the masters in the
    same guild.
   Prior to the cordwainer strike, the separation of
    labor and capital was not clear.
   Ruling of the court: The strike of journeymen
    represented a criminal conspiracy.
Forming Unions before the Civil War

   Commonwealth vs. Hunt (1842) ruled that unions did not necessarily
    represent a criminal conspiracy.
   The National Trade Union collapsed after the panic of 1837. In other
    words, economic crisis could easily destroy worker solidarity.
   By 1860 only 5,000 workers belonged to unions. The majority of
    white males were either self-employed or employed in small business.
    Large scale operations were not prevalent.
   Initially labor is not regarded as a property right. Mechanic lien laws
    were not adopted until the early 19th century. Such laws recognized
    the property rights of labor.
   An integrated labor market is not possible without adequate
    transportation. Labor markets were not integrated till the later 19th
    century.
Political Rights and Labor
   Prior to 1860, the right to vote was restricted to free, white,
    adult males who also owned property. This is a remnant of
    English law.
   Historically the right to vote (or one’s status as a citizen) was
    tied to the ownership of property. The idea that skill and effort
    can be thought of as property, and hence allow one to fully
    participate in society, gradually takes hold in the 19th century.
   This process begins in Massachusetts and New York in the
    1820s and gradually spread to all states. One should note that
    Western states tended to be more liberal than Eastern states.
   Why would political rights be restricted to land-owners? Or
    why would laborers not be allowed to participate? The answer
    lies in the mobility of labor vs. the mobility of land.
The National Labor Union

   The National Labor Union first met in 1866. Its main objective
    was the establishment of the 8 hour work day for government
    workers. This was signed into law by Andrew Johnson in 1868.
   With such political success, the NLU turned to the issue of
    “Greenbackism.” The idea was to monetize the debt. In effect,
    increase the supply of money to pay the debt created by the
    Civil War. Such a plan would lower interest rates (due to an
    increase in the money supply) and make it easier for labor
    cooperative to acquire needed capital. This movement failed.
   The political focus of the NLU continued. The NLU formed the
    National Labor and Reform Party, who in 1872 was soundly
    defeated in national elections. Political losses spelled the death
    of the union.
Noble Order of the Knights of Labor
   Organized in 1869 by Uriah Stephens
   Went public in 1878, after nine years as a secret
    organization.
   After winning some strikes, especially a railroad
    strike against Jay Gould, the Knights fell apart in
    1886 after a series of violent and unsuccessful
    strikes.
   The problem for the Knights was a lack of focus.
    Rather than focus on issues directly impacting
    workers, the Knights called for the end of
    capitalism and the reformation of society.
The American Federation of Labor
   The AFL was a craft union. Craft unions were
    locally rooted, concerned mainly with the
    improvement of union members position, even if
    this meant that workers outside the union did not
    benefit.
   The AFL was founded by Samuel Gompers,
    whose tactics included restricting membership to
    craft workers, accumulate large strike funds, and
    practice “voluntarism.”
AFL and Voluntarism
   “The AFL had long utilized the method of "voluntarism",
    which former AFL President Samuel Gompers had
    described as "rewarding our friends and punishing our
    enemies" (Donahue 1992, pp. 12). Rather than
    supporting either of the major political parties, the AFL
    had supported individual politicians from both parties.
    This was considered a wise course of action given the
    large number of "one-party states". Since many of the
    regulations regarding unions were centered at the state
    level, avoidance of party affiliation enhanced the AFL's
    efforts (Donahue 1992, pp. 12-13).”
The AFL and CIO
   The AFL dominated labor for 50 years. In 1935
    the Congress of Industrial Organization (CIO)
    was founded. The CIO was a collection of
    industrial unions (rather than craft unions).
   Although the CIO was focused on social issues,
    for example trade liberalization, in 1955 it
    merged with the AFL and the focus on labor
    issues and non-aligned political activity became
    the dominant theme.
Craft Unions
   Craft Unions - Workers who share a common
    skill.
   The American Federation of Labor (AFL) is a
    collection of craft unions. Craft unions were
    locally rooted, concerned mainly with the
    improvement of union members position, even if
    this meant that workers outside the union did not
    benefit.
   Craft unions increase wages by limiting access to
    the unions and to the required skills.
Industrial Unions
   Industrial Unions - Workers employed in a
    common industry
   The Council of Industrial Organization (CIO) is a
    collection of industrial unions. Industrial unions
    tend to be organized over a wide geographic area.
    Furthermore, success is only achieved if the union
    is inclusive. All workers must participate in the
    union for the union to bargain successfully.
   Industrial unions, via strikes, negotiate for higher
    wages.
The CIO and Trade Liberalization
   From the CIO in 1943, specifically the director of
    research J. Raymond Walsh....
   " '...almost unanimous consensus of informed opinion for
    over a century... had held that obstacles to trade were
    invariable costly to a nation. Unfettered trade enabled
    every nation to realize the highest standard of living;
    specialization in producing things with the greatest
    efficiency induced maximum productiveness. Nothing
    less than national defense considerations could justify, in
    the CIO view, 'artificial obstacles' in the way of free
    international trade." (from the U.S. Congress (1943) as
    reprinted (Donahue 1992, p. 9)
More from the CIO
   "Without 'free trade'... at least half of the American
    people would be doomed to a life of poverty. The nation
    would be consumed by crime, civil disorders, race riots,
    violence, forcing an end to all civil and individual
    liberties. America's roads would be clogged with masses
    of wandering, homeless people, threatening the existence
    of the family as an institution and giving rise to a
    generation of juvenile delinquents. Sickness and disease
    would plague the population. Demagogues would
    harangue the people and mislead and confuse them. The
    crisis would convulse the nation, threatening private
    property and democratic political institutions alike"
    (Donahue 1992, p. 23).
Sherman Anti-Trust Act and Labor Unions
   Section I of the Sherman Act: Every contract,
    combination in the form of trust or otherwise, or
    conspiracy in restraint of trade or commerce... is hereby
    declared to be illegal.”
   Problem: A union calling a strike is a restraint of trade
    (be definition). Initially the Supreme Court argued that
    labor unions violated the Sherman Act.
   In 1914 the Clayton Act was passed. Section 6 of this act
    declared that labor “is not a commodity or article of
    commerce” and that labor unions should not be
    considered as “illegal combinations or conspiracies in
    restraint of trade.”
More on the Sherman Act
   Problem with applying the Sherman Act to labor:
   Business can avoid the Sherman Act because
    competition can be restricted via price leadership,
    mergers, high entry costs, etc. All of these actions
    are not necessarily violations of the Sherman Act.
   Labor cannot avoid market competition without
    a union, since there are no scale economies, entry
    and exit is perfectly free.
   The Wagner Act (1935) was need to legitimize the
    actions of labor unions.
The Wagner Act
   The Wagner Act (National Labor Relations Act) was
    passed in 1935. Under its terms
       labor had the right to organize.
       labor could elect by secret ballot its own bargaining agents.
       labor could bargain collectively.
       employers could not interfere with the process by punishing
        union members.
       the National Labor Relations Board was established and given
        authority to judge and arbitrate outcomes.
   Note:     Only when politicians had an incentive to
    support labor did government’s attitude towards labor
    change.
The Rise of the Tertiary Sector
   Tertiary Sector - Service sector (teachers, civil
    servants, health care, etc..)
   Primary Sector - Agriculture, mining, fishing, etc
   Secondary Sector - Manufacturing
   Why does the tertiary sector increase?
       Technological change reduces the number of workers
        required in the primary and secondary sector.
       Rapid increase in educational attainment produces a
        labor force ill-suited for the jobs available in the
        primary and secondary sector.
Tertiary Sector and Unions
   How does this impact unions in the United
    States?
   As employment in manufacturing declines
    (in relative terms), membership in unions
    follows.
   Unions have sought to expand to the
    tertiary sector, especially for public
    services.

				
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posted:8/31/2012
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