Labor and the Limits of Prosperity

Labor and the Limits of Prosperity

The labor movement’s postwar gains were quickly neutralized within the climate of the Red Scare. The conservative orientation of the federal government throughout the three Republican administrations of the 1920s likewise created an environment that was hostile toward organized labor. Employers rallied around a strategy they branded the American PlanThe name coined by antiunion industrialists who pledged to never negotiate with union leaders. The American Plan sought to create the image that the “open shop” was synonymous with freedom and other American values, while the “closed shop” forced workers to join unions. Critics argued that this was simply a devious method of spinning antiunion activities that harmed workers., a series of ideas and tactics that sought to challenge the legitimacy of unions and outlaw provisions that required workers to join unions.

As the name indicates, the American Plan sought to portray any provision requiring a worker to join a union as contrary to “American” principles, such as freedom of choice. Some manufacturers even placed American flags on products that had been made by nonunion labor in hopes of branding organized labor as something that was foreign to the ideals and values of the nation. Central to this tactic were attempts to casually equate unions with Socialism. Because both organized labor and Socialist parties were growing in popularity throughout Europe, supporters of the American Plan simply had to create the impression that these two trends were intrinsically connected.

Businesses lobbied government officials to outlaw collective bargaining throughout the 1920s. They based their argument on the idea that individual workers should be completely free to contract independently rather than be bound by a single contract negotiated on their behalf. Labor leaders contended that the intent of the American Plan was simply to reduce the collective power of unions. They argued that employers were disingenuous in claiming that they were motivated by a desire to liberate workers from union contracts. Reminding the public of the violence used against workers who tried to start unions in the past, union leaders sarcastically asked what had suddenly made modern corporations so very concerned with the freedoms of their workers.

Labor leaders also sought to explain the difference between collective bargaining and the collective ownership of Socialism. However, without the access to the media and the financial resources enjoyed by many industrialists, labor leaders found themselves on the outside and on the defensive. The conservative political climate that followed in the wake of the Red Scare and the continued notion that unionization was a gateway to Socialism plagued the labor movement throughout the 1920s. Despite the growth of industry and creation of millions of new jobs, union membership declined from 5 million to below 3.5 million by the late 1920s.

The overall percentage of workers who were members of unions also declined from 18 percent to 10 percent in the 1920s. Part of the reason for organized labor’s trouble was the slight decrease in the percentage of workers employed in blue-collar jobs due to technology and automation. The emergence of the modern corporation created tens of thousands of new jobs in clerical fields, but these usually remained impervious to organization. Despite the decline in percentages and overall numbers of union workers, labor strikes remained the most potent weapon in the arsenal of labor activism. One of the largest and most radical strikes occurred in a location that had been least welcoming to unions in the past—the South. Northern textile mills had moved to the South in previous decades for precisely this reason. During the 1920s, some of these southern mills were paying workers less than $10 per week at a time when the national average wage for such work exceeded $20. In addition, southern textile mills in the 1920s were the first to experiment with the “stretch-out”—a technique where employers simply fired a large number of workers and required those who remained to make up the slack by working faster. The stretch-out and low pay led to strikes in Tennessee, the Carolinas, and even in a handful of textile mills in the Deep South.

A biracial union backed by the Communist Party emerged in Gastonia, North Carolina, in the late 1920s. This new Southern radicalism threatened to build and maintain worker solidarity across the racial divide by focusing on social class rather than race. In 1929, the union led its white and black workers to the picket lines in protest of wages that failed to provide even the basic necessities of life. Area mills recognized the potential threat of class consciousness in a region where black and white workers had been played against one another for generations. With the support of competing mills, management brought in replacement workers and sought to divide the white and black strikers.

The specter of Communism and “racial amalgamation” led to increased tensions throughout Gastonia until a gun battle left the chief of police and at least one union supporter dead. Seven workers were given extended prison sentences for their possible roles in the death of the police chief. There was barely any investigation into the death of the black union supporter. Shortly thereafter, a female strike leader was shot and killed by mill guards. Together with increased police harassment of the unions and their leaders, populist appeals to racism, and the replacement of striking workers, interracial union activism was only a temporary feature in the South during the 1920s.

Contrary to the Communist propaganda that spread throughout the textile mills, business owners did not always personify the caricature of the greedy Capitalist. In fact, many industrialists tested new ideas from a common belief that humane treatment of workers would lead to increased productivity. “Welfare Capitalism” became the new buzzword in the emerging business colleges and throughout Wall Street. Some business leaders hoped to forestall labor militancy by offering certain perquisites such as profit sharing, pensions, and paid vacations. These kinds of benefits would still be rare for at least another generation, yet more employers than ever before provided limited funding for workers’ recreation and social clubs. In each case, the goal was to reduce turnover and labor activism. However, some employers convinced themselves that they were beloved by their workers who completely trusted their well-being to the care of their benevolent employer.

Figure 6.8

Supporters of the Gastonia, North Carolina, strike called on all mill workers to stand together in solidarity behind fellow workers that had been charged with murder. However, those workers who supported the strike were evicted from their homes, which were owned by the mill. Together with economic pressure and armed guards who shot and killed a female strike leader, the 1929 strike was broken.

Workers took advantage of these services but remained suspicious of welfare Capitalism, largely due to repeated failure of management to live up to its own lofty rhetoric. Some of these employer-sponsored organizations were designed to replace unions or eliminate working men’s fraternal organizations. Employers continued to intentionally mix and then separate workers of various ethnicities and regional identities in hopes of keeping them divided and suspicious of one another. With the exception of nonwhite workers who continued to experience discrimination, efforts to exploit Old World animosities became less effective as the twentieth century progressed. For example, descendants of Irish and English immigrants were less likely to view one another as natural enemies than their parents had been. New immigrants from regions such as Northern and Southern Italy found that when they arrived in America, they were simply considered “Italians.” Because they faced the same discrimination and prejudice, immigrants put aside their regional rivalries and began to see themselves as Italian-Americans rather than Romans, Neapolitans, Venetians, or Sicilians. Over time, US factories would encourage assimilation and the creation of a common “white” identity among immigrants and old-stock Americans alike.

Other companies experimented with procedures for soliciting workers’ concerns in ways that were similar to unions, but they did not charge membership fees. These groups had little power beyond what management allowed but often secured modest reforms or one-time bonuses. Management often used these “company unions” to discredit actual unions by agreeing to negotiate only with the representatives of the company union. For example, if the steelworker’s union pressed for a pay raise, the company might grant a one-time bonus to forestall a possible strike. Just to make sure the union did not receive credit for the increase, the company would announce the bonus through the representatives of the company-controlled union. As a result, they hoped workers would perceive the company union as more effective than the independent union that deducted fees from their paychecks.

The decline of labor activism during the 1920s was the result of two leading factors: the conservative political climate of the decade and the general prosperity that led to low unemployment and slightly higher wages. Conservative legislatures continued to vote down anti–child labor laws, and the Supreme Court reversed a handful of provisions that would have limited the number of children in the workforce. Farm and business lobbies became so powerful during the 1920s that a proposed Constitutional amendment banning child labor was approved by only six state legislatures. Unions lobbied on behalf of the amendment but were overwhelmed by the resources of industry. In addition, unemployment dropped to below 5 percent during the mid-1920s, which eliminated some of the financial threat that children’s labor posed to working men and women. Similar to periods of low unemployment in the past, however, workers could expect their jobs to be eliminated if the economy began to slow.