As modern capitalistic production caused the growth of a distinct
wage-earning class and brought about a sharp separation between
employers and laborers, and as the latter were thrown upon their own 69
resources under the prevailing theories of free competition and free
contract, it was inevitable that they should organize to secure their
interests as a class. The growth of labor organizations has been
greatest in those countries where the laborer has been forced to
depend mostly upon his own efforts for protection and improvement,
namely, in England and the United States. On the continent of Europe,
on the other hand, where the individual has been accustomed to look to
the government for the redress of industrial grievances, there has
been a much less vigorous and spontaneous development of such
organizations. They are a product of the nineteenth century and had
their origin in modern machine production.
The growth of labor organizations in the United States has proceeded
hand in hand with the industrial development of this country, and has
been especially rapid since the Civil War. Two distinct types of trade
unions may be noted--the local and the national (or international)
unions. The former, which comprises members who live and work in the
same locality, is the primary unit, and dates back to the beginning of
the century. Each local union, even when subordinate to a national
organization, is a self-governing unit, and is absolutely democratic.
Its relation to the national body has been well compared to that of
one of our states to the United States. The first national union was
not formed until 1850, but now these far surpass the locals in
importance. Their government is representative, as they are made up of
local unions. The great majority of the national trade unions are
bound together in the powerful federal organization, the American
Federation of Labor. The membership of this body numbers considerably
over 1,000,000, while the railroad unions, which are not connected
with it, claim about 125,000 more. Probably not far from 1,500,000
persons in the United States belong to labor organizations, which is
about 10 per cent of the total working population or about 15 per 70
cent of those engaged in trade and transportation, manufacturing and
mechanical pursuits. While this does not seem a very large proportion
and is not as large as the membership of British trade unions, yet it
must be remembered that they constitute on the whole the elite of the
labor world and exercise an authority and power out of proportion to
their numbers. Many other workmen, who do not themselves belong to the
unions, follow their lead and are directly affected by their actions.
Historically the two most important national organizations in this
country have been the Knights of Labor and the American Federation of
Labor, and they represent such different principles that it will be
worth while to describe them. The Knights of Labor was organized in
1869 as a local union of seven garment cutters and had a meteoric
career, counting a membership of 730,000 in 1886, the year of its
greatest strength. It was a national amalgamation of mixed local
assemblies composed of workers of all trades who lived in the same
locality. It held the theory that the interests of all members of the
laboring class are identical and must be cared for at the same time,
if possible, by political action, by co-operation, and by education.
In 1886, however, it entered upon a series of disastrous strikes;
later it came into conflict with trade unions which had not joined its
ranks and were opposed to its policies; and finally it became
entangled in politics. As it lost in influence and strength its place
was taken by the American Federation of Labor, which was its very
opposite in organization and government. This latter body is a
“confederation of trade and labor unions,” each trade being organized
separately into local unions which are given great autonomy, these
unions alone being represented in the national body. Only matters of
general interest come before it, all local trade matters being left to
the local unions. In 1903 it claimed a membership of 1,745,000.
More important than the history of labor organizations is a knowledge 71
of their objects and methods. The primary purpose is of course to
control the conditions of labor and to substitute the principle of
collective bargaining for individual contract. As one of the most
effective ways to secure this result they aim at a more or less
complete monopoly of the labor market. This they may do by bringing
all workers in a trade within the union or by preventing non-union men
from working. The first of these is called the inclusive method,[15]
and if successful makes the union the sole seller of the kind of labor
controlled by its members. It is a monopoly of the laborers against
the employers and is sought to be enforced by inducing men to join the
union either by persuasion or coercion, the latter finding expression
in the strikes against the employment of non-union men and the
insistence upon the “closed shop.” The other form of monopoly consists
in the exclusion of new members from the trade and in a control of
employment; this is a monopoly of a small group against their
fellow-workmen. It is enforced by regulating the entrance to the
trade, making it difficult or expensive, or by limiting the number of
apprentices. Sometimes, as in the Chicago Building Trades in 1900,
they have united with their employers by means of “exclusive
agreements” to raise wages and prices of the finished products at the
same time, and thus jointly to mulct the public. Such efforts to
monopolize the labor market have their counterparts in the
organization of capital, as we have seen. In practice such a labor
monopoly has sometimes been used to improve and elevate conditions,
just as sometimes a capitalistic monopoly has reduced prices below the
competitive point. In general, however, we must condemn monopoly on
principle in the competitive field and insist that freedom and
opportunity be given to all on as equal terms as possible. Of the two 72
forms of trade union monopoly, the former alone, which endeavors to
make it all comprehensive and to enforce generally union conditions,
can be economically justified.
“The establishment of a standard rate of wages may perhaps be said to
be the primary object of trade union policy. Without the standard rate
the trade union, such as it is, could have no existence.”[16] The
purpose of the union is to substitute collective bargaining for
individual agreements and thereby to improve the condition of its
members. But if a single bargain is to determine the pay of a large
number of men, there must be a common standard. In every employment on
a large scale the men are necessarily grouped together and their pay
is determined by a common rule. This is true even in non-union shops.
It is generally assumed that the standard rate of labor organizations
means a uniform wage for each member, but this is not the case; it
means rather a uniform rate of pay to all for the same performance. In
the case of piece work, it could manifestly not mean anything else;
but a large number of labor leaders object to piece work. They insist
that a standard wage means a minimum wage, and that by the
establishment of such a minimum the whole standard of efficiency and
the plane of competition are raised, as the employers cannot then
afford to hire any but competent workmen. The question immediately
presents itself as to what is to become of the older or partially
disabled men, who are no longer able to earn the standard or minimum
wage? In England they are practically guaranteed a subsistence by the
union; in this country the union not infrequently exempts them from
the provisions as to the standard wage. When the rule is enforced
there is certainly a real hardship for these men. But from the
employers there comes the more serious complaint that the effect of 73
the standard wage is to reduce to a dead level the efficient and the
inefficient; that it is a maximum wage and that the efficient and
industrious are prevented from earning more than a fixed amount. There
is undoubtedly a great deal of truth in this charge; the man who
hastens the pace is said to be taking “blood money,” and sometimes a
maximum wage is set which the members are forbidden to exceed. On the
other hand, it may fairly be said that while the union regulation of
wages does tend to produce greater uniformity, the union rate is
usually higher than the competitive rate would be, that is, wages are
leveled up, not down; and finally, that territorial variations make
the local rate conform to local conditions.
A reduction in the hours of labor has been even more strenuously urged
by progressive labor leaders in the United States than an increase in
wages. “Organize and control your trade and shorten your hours,” is
their contention, “and wages will take care of themselves.” Their
arguments in favor of a general shortening of the working day are
twofold. In the first place, owing to the intensity and strain of work
under modern machine methods, the worker cannot work efficiently more
than eight or nine hours a day. The work is too exacting and the
strain on the attention too great; it is a noticeable fact that most
of the accidents in industrial establishments occur in the last hour
or two of the working day. Not only that, but the laborer is entitled
to his share of industrial progress in the form of more leisure,
giving him time for a better family and social life, affording
opportunity for intellectual improvement, and permitting the
development of more rational and higher wants. With the improvement in
the condition of the laboring classes, will go the elevation of
society as a whole.
The second argument in favor of shorter hours put forward by the trade
unionist, is economic rather than social. He argues that a “reduction 74
of hours will diminish the supply of labor in the market, and so will
raise its price. It will make room for the unemployed, and so will
remove the depressing influence of their competition.” There is
involved in this contention the familiar lump-of-labor argument of the
trade unionist: there is just so much work to be done, and if some men
do each a little less there will be more for others. By shortening the
hours of labor of everybody employment will be made more general, and
the work will be better distributed. Now the economists in general
have supported the trade unions in their demands for a shorter working
day, but they have done so because they believed that the product of
industry would not thereby be diminished. They have seen that when the
hours of labor were reduced the laborer was less rapidly worn out
physically, that he could work more rapidly for a short time, and that
his increased leisure and pay, if rationally used, made him a more
intelligent and efficient worker. In other words, a reduction in the
hours of labor from 15 a day to 12, to 10, and even in some cases to
8, was not attended by a parallel reduction in the output, but the
latter remained about the same. This is the great economic
justification of the shorter working day, and as long as this can go
on without materially affecting the product of industry it must be
approved. If, however, the latter is decreased there will be less to
divide and then the relative disadvantages of a smaller dividend must
be weighed against the advantages of increased leisure. Of course the
point to which the number of hours can be reduced without lessening
the product can only be determined by experiment, and will differ in
different trades, but it is inevitable that until this point is
reached the pressure of the trade unions for shorter working days--or
for more holidays or half-holidays--will not be successfully resisted.
Turning now from theory to fact, we find that there has been a great 75
improvement in the condition of labor in this respect. At the
beginning of the nineteenth century the almost universal working day
was, as McMaster tells us, from sun to sun. As factories grew up the
habits of agricultural labor were carried over into industrial
occupations, and working days of 16 and 18 hours were not uncommon. In
1903 the average length of the working day in the United States was
9.6 hours. This great reform may fairly be credited to the efforts of
organized labor itself, for without their insistence and struggles it
is unlikely that it would have been voluntarily granted by employers.
The limitation of output results almost necessarily from the
above-mentioned practices of the unions: reduction of hours,
prohibition of piece work, and the standardization of wages all tend
to restrict the output of the individual worker. But some of the
unions have gone further and have directly limited the amount that
could be produced during a given period by the laborer. This has been
particularly true of British unions and is the subject of common
complaint by English employers and writers, but illustrations may
easily be found in the United States. Thus in Chicago in 1900 “the
lathers limited a day’s work to twenty-five bundles of lath, for which
they received $3; they had formerly done thirty-five bundles for a
daily wage of $1.75. Plasterers were limited to thirty square yards a
day; the steam fitters were permitted to lay only ninety feet of steam
pipe per day; but the plumbers had the most objectionable rules and
restricted materially the amount of work that could be done in a
day.”[17] These rules were defended by the unions on the ground that
they were necessary in order to secure careful work and to prevent the
“rusher” for setting the pace for a fair day’s work. The practice 76
has not been uncommon, especially in the sweated trades, for an
unscrupulous employer to pay a few particularly able workmen to put
extra speed into their work and so set a pace that the other workmen
would be compelled to maintain. This was especially objected to by the
unions in the case of team work. They claimed that when all the
workmen had come up to the new standard, particularly in piece work,
the wages were reduced so that even by working at the higher rate of
speed, they could only make a fair wage. One of the rules of the
Chicago carpenters’ union provided that “any member guilty of
excessive work or rushing on any job shall be reported and shall be
subject to a fine of $5.” Whatever the excuse it is clear that such
limitations cannot be economically justified. Not only does such
dawdling undermine the industrial efficiency of the worker, but it is
unfair to the employer. If the latter bargains for the union rate of
wages and the normal working day, he is entitled to a full return of
the laborer’s best efforts. Otherwise there is no fairness in
collective bargaining. “So far as labor leaders are concerned,” said
Mr. John Burns, the English trade unionist, “we are all strongly
opposed to the restriction of production; we are all in favor of
better and more conscientious work.”
Laboring men have never been quite able to divest themselves of their
old antipathy to labor-saving machinery. They generally regard the
introduction of a new machine as a displacer of men, a creator of
unemployment, a depresser of wages. Some unions have successfully
resisted the introduction of machinery into their trades, as the stone
cutters in Chicago,[18] but in general they have recognized the
impossibility of this attitude. In general they now demand that when
machinery is introduced it shall be operated by union men and their
wages shall be fixed so as to give the workers a share of the 77
increased production.
The policies and methods of the trade unions thus far discussed are
those of a militant nature, but the fraternal objects of these
associations, though less conspicuous, are none the less important.
Labor organizations generally; have insurance and benefit features, by
which sick, injured, or unemployed members are assisted. This is
particularly true of the English organizations, which developed these
features before the rise of the militant new unionism. They often
possess large funds and have been rendered thereby more conservative
and responsible. The educative effect of trade unionism among the
members is marked; some of them possess libraries and all of them
promote discussion and thought upon economic problems, while the
administration of their affairs often gives valuable training. The
older unions did much to encourage co-operation among their members,
but today the tendency is to limit their activities to the essential
one for which they are organized, namely, collective bargaining.
Intelligent unionists realize that they can secure the various objects
for which they strive only by substituting collective bargaining for
contracts between employers and individual laborers. Where this plan
is accepted by employers, representatives of the two sides agree upon
wage scales, usually for a year; during this period the chief task of
union officials is to see that the agreement is lived up to, and if
possible to add to their membership and strengthen the union. In the
United States relatively few trades have adopted this method as a
general practice, the employers still being able to dictate wages and
conditions of employment in most of them, while the unions are still
struggling for recognition, if not for existence. Employers insist, in
refusing to make collective bargains with the unions, that, as they
run all the risks, they must be permitted to manage their business as
they see fit and without interference from the business agent of the 78
union. In reply the unions insist that hours, wages, and conditions of
employment are as much their business as that of the employer. The
latter also urges that the trade unions as at present organized are
too irresponsible and before they ask for collective bargaining should
be incorporated, so that they could be sued for breach of contract if
guilty of such. As yet, however, the unions have preferred their
present position of irresponsibility and immunity and have almost
invariably refused to be incorporated.
“In the minds of a large section of the public,” writes President
Hadley,[19] “labor unions are chiefly associated with strikes. It is
believed by many who ought to know better, that such organizations
exist for the purpose of striking, and that if the organizations were
suppressed, industrial peace would be secured. The first of these
ideas is a distorted one; the second is wholly unfounded.” Strikes
are, however, a necessary concomitant of collective bargaining. If the
representatives of a union cannot come to terms with an employer, they
may compel their members to refuse to sell their commodity, labor;
such a concerted refusal to work is a strike. The “right to quit work”
has been regarded as a sacred one by trade unionists, but it involves
social consequences of great importance. For the workingman, it means
loss of wages and demoralizing idleness; to the employer, idle
capital, loss of profits, and depreciation of plant; and to the
consuming public, inconvenience and annoyance together with curtailed
production. Quite aside from all acts of violence and lawlessness, by
which they are too often accompanied, there is involved an enormous
money waste. According to a report of the Department of Labor, losses
from strikes and lockouts in the United States from 1881 to 1900
amounted to $449,342,000 or an average loss per establishment involved
of about $3,500.
The public is awakening to the realization that it suffers the 79
greatest injury as the innocent third party to every industrial
dispute, and is insisting that the industrial peace be kept or more
reasonable methods of settling differences be found than a strike or
lockout. Such a method is found in conciliation and arbitration. In
the older and more strongly organized unions strikes are infrequent
and methods of joint discussion and agreement are increasingly
resorted to. Boards of conciliation are often provided for, which
endeavor by means of conference and concession to prevent a dispute
from arising; they succeed best where both employers and employes are
organized. Should the dispute come to a head, however, provision is
usually made for its reference to a board of arbitration, which may be
selected by the disputants themselves or may be created by the state;
in the latter case the acceptance of the award may be voluntary or
compulsory. In the United States most of the successful boards have
been those selected by the parties to the dispute; the state boards
have usually the power only of investigating the causes of the
trouble, but this in itself has proved of considerable value in more
than one instance, notably in the case of the Anthracite Coal
Commission. Compulsory arbitration is being given a thorough trial in
Australasia and seems to be meeting with success there. In this
country, however, the trade unions are strongly opposed to compulsory
or enforced governmental arbitration. Writing of Great Britain, Mr.
and Mrs. Webb assert that the principle of arbitration, having been
found inconsistent with collective bargaining, is fast going out of
favor. It would seem from the experience of both England and the
United States that the chief virtue in these methods lies in the habit
of joint conference and conciliation between the representatives of
labor and capital.