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Domestic, Global Economic Shifts Force US Organized Labor to Change

Monday September 6 is Labor Day in the United States, a day set aside to honor American workers and the dignity of labor. The organized labor movement of the late 19th century that spawned the national holiday has waxed and waned over the years.

Many Americans view Labor Day as a welcome end-of-summer three-day weekend to spend at the beach or the barbecue pit.

But the first Labor Day observance was in New York City in 1882. It was intended as a celebration of the strength and spirit of labor and trade. U.S. President Grover Cleveland proposed the first Monday in September be a national holiday, rather than May Day, which had more radical associations, and it became law in 1894.

"It is the only national holiday that we have that commemorates the contributions of a particular segment of society - working people," explained Historian Joshua Freeman of the City University of New York.

Freeman says America's labor force changed dramatically over the years with the rise of steam power and the abolition of slavery.

"The United States had an industrial economy that grew rapidly in the 19th century, especially after our Civil War in the 1860s - steel mills and iron mills and railroads and huge textile mills - some of them employing thousands of workers in a single facility," said Freeman. "And this growth of manufacturing transformed not only the economy, but [also] the whole nation and the communities and the politics and culture of the country."

Freeman says labor had a difficult time organizing those industries. Corporations sensed higher wages and shorter working hours would erode company profits and complicate managing production.

Union labor's golden age begins

Many strikes turned violent as worker frustrations mounted. But historian Joshua Freedman says from the turn of the 20th century through the 1930s, America's organized labor movement grew.

"And, of course, the big breakthroughs came in the 1930s, when the giant companies, the GMs, the Fords, the U.S. Steels were finally unionized after years and years of trying to do so," added Freeman. "And that really made the labor movement central to American society - to its economy, to its politics. And, of course, it tremendously upgraded the standard of living of American workers. They suddenly got weekends off. They started being able to buy homes, to buy cars, [and] to send their kids to college, to take vacations, to retire. These were things that, at the beginning the 20th century, a working person could not do. But by the end of the 20th century, they were almost taken for granted."

Many corporations came to realize prosperous workers stimulate economic growth by creating a consumer class that buys houses, cars and other goods.

Freeman says the three decades following World War II were a "golden age" for U.S. labor unions. He adds that by the early-1950s, a third of American workers were union members.

"[Union members were] still a minority, but they were in key locations of the economy, the templates and power centers - the steel industry, the auto industry, the coal industry, transportation [and] construction," explained Freeman. "So their social weight transcended even their large numbers. That is no longer true today. We are a very different economy and a much weaker labor movement. Today the template for American capitalism is more Wal-Mart than GM or Ford and that is a low wage, non-union approach to running a business."

Unions begin decline

Union membership has declined dramatically since the 1970s. The recession of that decade meant jobs were harder to find, so people were more willing to take lower-wage, non-union jobs. Meanwhile, the growth of international competition forced American companies to cut costs to maintain profits, and they have hired workers abroad at non-union wages and closed U.S. factories. Many firms have merged into international corporations with production facilities in parts of the world where costs are lower.

Changing demographics also played a role. U.S. population growth shifted to the South and Southwest, where union membership has been lower than elsewhere in the country.

Today, labor organizers are recruiting immigrants, much as they did a century ago.

Rutgers University School of Management and Labor Relations political scientist Janice Fine says organized labor has historically vacillated between solidarity and fear that immigrants will work for lower wages and bring down living standards for all Americans. At other times, Fine says organized labor has fostered solidarity among all workers.

"What labor movements have concluded is that low wage immigrant workers have become a real source of vitality in the labor movement throughout the world because they have been keen to organize. Very often, they are in relationship with each other; they have very often migrated with their home communities, and there is a willingness on the part of these workers to take risks to better their situation," noted Fine.

The future of American unions remains unclear. In 2010, the number of public sector union members far surpassed their counterparts in the private sector.

Government unions have come under increasingly sharp criticism by some conservatives who say that big government is largely to blame for the current recession. They say government workers enjoy expensive salaries and benefits that outstrip those enjoyed by the corporate labor force. Janice Fine disagrees.

"It is confusing to me because studies show that public sector wages are not out of whack with public sector wages," added Fine. "And, in fact, white collar public sector workers are paid much less than their private sector counterparts. The idea that somehow we are going to hold teachers and cops and firefighters and blue collar sanitation workers responsible for this much larger problem in the economy just seems really sad."

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