LABOR UNIONS
The Labor Movement (Origins)

Colonial America - Civil War: Trade &
Craft Unions developed as workers strived
for better conditions. Overall public
sentiment was anti-union. Leaders viewed
as troublemakers.
Knights of Labor est. 1869
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Demanded end of
child and convict
labor.
Equal pay for women
and the hiring of
African-Americans
Wanted cooperative
ownerships of coal
mines
Changes in Attitudes toward Labor

The Great Depression
saw the public
change their mind
towards unions. They
were now perceived
as positive and
necessary to protect
the American Worker
Pro-Union Legislation

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Norris-LaGuardia Act – prohibited courts from
ending peaceful union demonstrations
NLRA – established the right to collective
bargaining
Fair Labor Standards Act – established
minimum wage, overtime pay, prohibited child
labor under 16 and safer conditions for those
under 18
Anti-Union Attitude Returns

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World War II sees
attitude change again
towards Organized
Labor
Taft-Hartley (1947)
limits union activity
Right-to-Work laws
AFL-CIO
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Union History over the
20th century was
dominated by the AFLCIO
American Federation of
Labor merges with
Congress of Industrial
Organizations (1955)
11 million members
(2010)
Union Arrangements
Closed Shops – employer hires only
union members (Made illegal by Taft/ Hartley 1947)
 Union Shops – Must join union upon
hiring and remain an member throughout
 Modified Union Shop – Not forced to join,
but those who do, must remain members
 Agency Shop – Must pay union dues
although not forced to actually join.

Collective Bargaining

Representatives from both the Union and
Management come together to discuss
grievances (problems) and look for ways
to compromise so that normal operations
can resume.
Methods of Bargaining
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Mediation – Neutral party makes
recommendations and suggest compromise.
Arbitration – Negotiations also managed by 3rd
party, in this case however, all decisions of the
arbitrator or final.
Fact-Finding – Neutral 3rd party again collects
facts relevant to the grievance and reports to
both sides with recommendations
Additional Methods of Bargaining
Injunction or Seizure – Attorneys on
behalf of either side can ask a court to
force management and or the union to
resume operations.
 Presidential Intervention – If a situation
requires, Presidents may also force action
as well. (Reagan & Clinton both)
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Categories of Labor
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Unskilled Labor – Lowest wage earners, limited
or no formal training
Semiskilled - Workers w/ enough training to
operate machinery
Skilled – Workers able to operate complex
equipment
Professional – Highest level of education and
managerial ability
Wage Determination
Determined by three different factors
 Supply & Demand in the Market
 Collective Bargaining Process
 “Signaling” Theory
 Traditional Theory of Wage Determination
 Equilibrium Wage Rate – Supply =
Demand

Other Factors of Wages

Theory of Negotiated Wages – Labor
unions collectively bargain for wages

Signaling Theory – Employers look for
certain signals such as licenses or
certificates to determine wages
Regional Wage Differences

Wages will differ depending on what part
of the country a worker lives. Labor
mobility, cost of living, and attractiveness
of location all impact the difference.
Decline of Unions
Unions have in some ways been victims of
their own success. The high wages they
have helped achieve have caused the
companies they work for to be much less
profitable.
 The Automobile Industry

Labor Unions in Politics
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Organized Labor typically supports and
endorses Democratic Party candidates.
2011 is no different as Republican
controlled state legislatures battle unions
over budget cuts.
Notable Labor Union Figures
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James Hoffa
President of the
Teamsters
Disappeared in 1975
Was making loans to
the mob from
Teamster pension
fund
Hoffa’s Grave?