Labour in the Era of Capitalist Globalization

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LABOUR IN THE ERA OF CAPITALIST GLOBALIZATION

A HISTORICAL ANALYSIS

Andr Mommen

CEPSMaarssen

2010

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Globalization includes rapid growth in imports, exports, and the share of trade in the world

economy, and even more rapid growth in the international flows of foreign investment aroundthe world. The term is also used to refer to the international convergence of rules,

regulations, and even the social structure and role of government in many countries. This

process is often viewed as a neo-liberal "race-to-the-bottom" in global working standards,

wages, and working conditions. Economic competition, along with Americas tradeliberalization and European Unions (EU) deepening economic integration and geographicalexpansion are challenging the role f he trade unions. New forms of work, company

restructuring, welfare-state reforms and trade liberalization have weakened the systems of

collective bargaining until now prevailing in most developed capitalist countries. A commontrend across the EU, Japan and the USA is towards consolidation and merger of union

organizations. Union density is declining in Japan, the USA and almost all Europeancountries in recent years. Even where union membership losses have been stemmed,

increasing employment levels in many countries have meant that union density has fallen.

The survival of restraints on neo-liberalism in most countries owes much to their

institutionalization after the Second World War and to Europes divided past. The continuingexistence of a distinct ideological dimension associated with social integration, whichembraces commitments to social justice, fairness and class harmony, are present in all trade-union movements. Richard Hyman is right when he calls for greater sensitivity to thecomplexities of trade-union ideological dimensions, and to the pluralistic and contestedcharacter of European trade unionism (Hyman 1996). In the USA, the trade-union movementwas predominantly pragmatic and combined market orientations with social-integrationideologies. In Europe, unions are affiliated to political parties or they have contracted closeties to them, which helps them establishing neo-corporatist forms of interest intermediation.However, these forms of interest intermediation are challenged by economic and socialtransformations engendered by transnational capital and the new economy. Well-paidtechnicians, engineers, and designers became independent contractors. Consultants andother free agents are the flexible workers par excellence, because they are escaping fromany collective agreements. With them emerged millions ofinvoluntary contingent workers,1

most of them parked into precarious small jobs, who are excluded from any pension packagesand other forms of job security. These unorganizable workers are forming an ever-growingworkforce submitted to alternative arrangements. Apart from the regular labour market, alarge permanent workforce of temporary employees, whereby free agents bid for jobs, israpidly growing. Are we returning to the old sweating system of farming out work tocompeting contractors according to the nineteenth-century model? At any rate, labour historyis full of this kind of little boot-traps. For the time being, pre-industrial relics have emerged as

new tools in the hands of the post-industrial managers.

Beyond the Dunlop model

1 In 1997 there were 5,6 million workers with contingent jobs in the USA ((Ross 2000: 79).

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Until the 1970s it was assumed that unionism adopting the Dunlop model2 would expand inall developed capitalist countries and that collective bargaining on an industry-wide basewould become the preferred method of setting wages, hours, and working conditions. This

proved to be the case in the 1950s and 1960s in North America and Western Europe. But theeconomic slump of the 1970s and 1980s gave rise to a neo-liberal reaction, trade liberalization

and deregulation. This meant the end of the so-called Dunlop model (Dunlop 1958) thatprevailed in post-World War II.

In Dunlops model, attention was also turning to other actors and their interactions, andconcluded with an explanation of the rules governing employment relationships that evolvedout of these interactions. According to Dunlop and his school (Kerr, Harbison, Dunlop, andMyers 1960), the logic of industrialization would lead to a convergence toward a common setof formal arrangements as capitalist mechanisms expand to all economic sectors. Therefore,the rise of industrial unionism and industry-wide bargaining has to be considered asinevitable. The merits and shortcomings of the Dunlop model were extensively discussed inlater works on American industrial relations (Kochan, Katz, and McKenzie 1986). In addition,

Marxists (Davis 1980) and institutionalists (Goldfield 1987) argue that the functionalistDunlop model does not pay enough attention to the nature of American capitalism,international competition and the process of capitalist accumulation determining theentrepreneurial and trades-union strategies. Moreover, the rise of industrial unionism and thesubsequent industry-wide bargaining practices should be seen as a response of organizedlabour to monopoly capital and Taylorism hollowing out the very base of craft unionism afterWorld War I, not as the outcome of a modernization process affecting governmental policiesand management strategies.

The Dunlop model was the outcome of a long history of class conflicts, sectoral strugglesand economic changes leading to the formation of a semi-skilled industrial working classconcentrated in large production units. In the history of industrial relations, three broad stagescan be discerned in the transition from craft unionism to industrial unionism and the rise ofcollective bargaining systems:

Task differentiation breaking down the craft into a series of simpler jobs with foremenstill knowing the entire production process and with a wage system based on piecerates;

Increasing capital requirements with the introduction of simple machines for sometasks in big workhouses and putting-out for some tasks still done by hand;

Large factories with power-driven machinery and the end of putting-out practices. Aslong as a retail or custom-order market existed local craftsmen could survive in their

old manner, especially in local a luxury markets and defend the traditions of craftunionism during the first decades of monopoly capitalism (Hirsch 1978: 15-36).

2According to Dunlops system model, analysis of industrial relations should begin by considering the variousenvironmental contexts that affect employment relationships economic forces, technology, and the broad

political legal and social forces that determine the power of labour and management. Dunlop was on the NationalWear Labor Board and consulted with the Office of Economic Stabilization and the Office of War Mobilizationand Reconversion. After the war, Dunlop returned to Harvard. He served as Chairman of the NationalCommission on Productivity (1970-1975) and chairman of the Construction Industry Stabilization Committee

(1971-1973). He was also director of Nixons Cost of Wage Council (1973-194) and Fords Secretary of Labor(1975-1976) until he resigned in a dispute over policy. He served Clinton as chairman of the Commission on theFuture of Worker-Management Relations (1993-1995).

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Dunlops model worked fairly well as long as the environment remained stable. However, hismodel is now outdated. Since then, international pressures on national economies andwage levels have increased. In practically all countries union membership does expandany more. Today, labour power is currently concentrated in the state sector (education,

civil service) and in older and mature industries, especially the older firms in thoseindustries, and the older plants within diversified firms. The growing and dynamic partsof the economy are today unorganized. Especially the 1980s witnessed a significantchange in the system of collective bargaining and industrial relations. As a result of thedisaggregation of the working class (Hyman 1992) denoting a variety of processesunion power is declining now that a post-Fordist organization of production, alsodescribed as flexible specialization (Piore and Sabel 1984) or flexible mass production(Boyer 1986), led to a growing diversification of the composition of the working force.Employers became less interested in nation-wide patterns of industrial relations designedto deal with macroeconomic problems and solutions.

The Dunlop model emerged in the US at the end of World War II, but influenced practicesof collective bargaining in other capitalist countries. Typical for the USA was that there arefew national sectoral employer bodies with any bargaining role. Therefore, bargaining takes

place predominantly at enterprise or local level. Major business organizations such as theNational Association of Manufacturers (NAM) and the US Chamber of Commerce do notdeal with trade unions, though they have some role in developing policy on labour issues.Collective bargaining plays a key role in industrial relations in most European states. In Japanand the USA, collective bargaining is a relatively marginal activity, though it may have awider impact beyond its direct sphere, especially in Japan. Despite differences and a trendtowards decentralization, bargaining in the EU is considerably more centralized than in thetwo competing competitor economies. Nonetheless, centralized systems of collective

bargaining at the intersectoral or sectoral level have been superseded by the growingimportance of company-based accords.The purpose of this article is to address this debate and to answer to the question whetherrecent changes in the world economy are fundamental. Economic liberalization and free tradehave made an important progress since the invention ofReaganomics and Thatcherism.Deregulation and privatization have become twins guiding economic strategies of allgovernments wanting to balance their budgets. These neo-liberal policies have affected thesocial power balance between capital and labour and have fostered anti-labour policies

promoting more labour flexibility, wage cuts and a lean welfare state. Actual labour relations

are reflecting these profound environmental changes now that neo-liberalism has become thepredominant ideology of globalizing capitalist forces re-establishing pre-1914 economic andsocial relations. My thesis is that changes which have occurred since the 1970s reflect deep-seated environmental pressures that have been building up gradually as well as organizationalstrategies that have been evolving quietly for a number of decades. I address this debate in thefollowing manner. First, I describe the growth of unionism from the very beginning as aresponse to industrialism. Second, I analyze union practices as a response to the constraintsdictated by accumulation of capital globalization processes.

Prolegomena of trade unionism

Lets start from the beginning when labour strategies and industrial relations were unknownconcepts. The main problem for the entrepreneur was the creation of work discipline in his

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shop. In order to prevent workers from walking out employers locked the gates of theirfactories. Absenteeism was a much more difficult phenomenon to deal with. Workers would

be absent on traditional holidays, on blue Mondays and on days when potatoes had to be dug.3

There was little that employers could do about this kind of absenteeism. Methods of indirectemployment in combination with outsourcing of tasks offered a solution to the delicate

problem of disciplining workers. Parents brought their children to the factory or the mines astheir own assistants. Kinship links provided an avenue to employment in the industrial townsand mining areas. This family-based employment scheme was characterized forms ofsubcontracting already known in capitalist agriculture. This family-based employment was

broken up by a series of technical and legal changes making these forms of subcontractingless attractive to the employers. The introduction of automatic mules and the power-loomweaving in combination with limitations to working hours of children opened the door tomore outsiders and broke the kinship system to pieces. From this moment on workers becamewage earners subjected to an individual labour contract and workhouse discipline.

As industry expanded throughout the nineteenth and twentieth century the cleavage between

workers and capital sharpened. Task breakdown and mechanization rendered craftsmensskills obsolete, lessened their control over their work, and changed the content of their jobs,

but industrialization also altered the character of the work force itself and its organization. Itwas not until the industrial expansion of the mid-nineteenth century that organized labourcame into its own as an economic and political force to be reckoned with. In most countriesnational trade unions of skilled workers were founded in the middle of the nineteenth century.Their success depended on their ability to organize skilled workers in the same branches ofactivities or trades in order to resist to wage cuts and unemployment. At the same time thefailure of wages to keep pace with prices, the growth of mechanization that threatened the

jobs of skilled craftsmen in certain industries, and the influx of immigrants willing to acceptlower pay and poorer working conditions combined to create a demand for a coalition ofworkers with the same skill belonging to the same trade. As industrialism made progress,these skilled workers were confronted with an army of unskilled workers carrying out theirodd jobs as best they could. As more were needed for work as semi-skilled machineoperatives the same situation was repeated in jobs the technique of which was initially a littlemore difficult. In skilled trades formal apprenticeship came to be less used mainly because theincreased mobility of labour and the expansion of employment made it impossible to procurethe practice of a particular craft as a privilege confined to those who had undergone sacrificesof serving on apprenticeship. At the end of the nineteenth century it was estimated that Britishtrade unions which effectively restricted their trade to men who had been apprentices had only90,000 members, and shipbuilding was the only large industry where apprenticeship was still

common.

Two fundamental options struggled in the nineteenth and early twentieth century forpredominance in the trade-union movement. One view was represented by the trade unions,which drew the great bulk of their members from the skilled craftsmen; the other positionadvocated bringing all skilled and unskilled - workers into one big union. For sure, mostunion leaders were by no matters revolutionaries. Many union leaders preached cooperation

between labour and capital, because they interpreted labours goals simply and pragmatically:better wages, shorter working hours and improvement of working conditions. Though some

3 Many workers had a dual life over the cycle of the year as industrial and agricultural workers. In summer when

the coal trade was slack miners transformed themselves in harvesters. Many agricultural workers could pick upenough of the miners skills to be eventually a perfect strikebreaker or competitor in the labour market(Hammond and Hammond 1978a, 1978b, 1979).

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cherished utopian or anarchist ideas, the spontaneous ideology of the working-class leaderswas impregnated bypragmatism and democratism. As defensive organizations of skilledworkers the unions had survived throughout the depression of the 1880s. Though they wereworried by pressures coming from below as well as from above, they were prepared to fightwith tenacity their skills. The skilled workers feared the men from the dishonourable trades

and therefore they campaigned against piecework, overtime and the laxity of apprenticeshipregulations. More serious to the artisan elite was the threat from new machinery. Especiallythe quickening rise of the semi-skilled operative offered a direct challenge to the craft controlof the labour market through zealously maintained apprenticeship restrictions. All craftstended to succumb to inexorable division-of-labour pressures, which led to the creation of anew generation of sweated labour, as in the notorious, immigrant-based cheap clothingindustry already was the case after the introduction of the sewing machine.

A fundamental long-term shift in economic power away from craft towards the skilled workerwas taking place especially in the new metal industries and construction works. Ironworking,engineering and shipbuilding were all specialized occupations attracting skilled workers

tramping in search of varied, often seasonal employment. Manufacturers introducing newmethods and machinery to increase the volume of production hired also cheaper and moretractable labour to keep their selling prices lower. The versatile artisan found himself havingto specialize in order not to disappear altogether with the inflow of unskilled workers. Theworking classes provided three possible sources of cheap labour: women, children, andimmigrants. In the pre-industrial workshop teenage apprentices and women had become asource of increased exploitation. As apprenticeship declined with the progress ofmechanization and social legislation forbade womens labour in mines and in some tradesadult male immigrants offered new opportunities to the employers.

The workers were gradually forced to protect themselves by nation-wide combinations asgreater power passed to the owners of capital. Craft unionism still nurtured a narrow,sectional mentality, but its eroding position had made the skilled artisan sensitive of hischanged position. Already by 1860 the British labour aristocracy was concerned withmaintaining status within a vertical craft structure. Skilled cotton operatives had federated intothe Weavers First Amalgamation (1858). Though these workers did not accept the freemarket as such, they accepted the existing liberal organization of society. They still attemptedto enforce a strict apprenticeship system as long as they could survive in a fragmented,subcontracting economy which persuaded people to believe that they might one day rise tomastership. This explains why John Bright, the self-proclaimed terror of the squires andhimself an industrialist could trust on a considerable working-lass following, while Karl

Marxs International Workingmens Association made only a slight impact in Britain(Robbins 1979).

The assumption that working men as working men rather than as lumberjacks or odd fellowsor Methodists had a common interest which required organization and representation wasrather new in the first half of the nineteenth century. For most working people the crucialexperience of industrialization was the change in the nature and intensity of exploitation. Inthe view of E.P. Thompson the industrialization process brought apart from intensifiedexploitation, greater insecurity, and increasing misery also an intensification of politicaloppression (Thompson 1968: 207-232). Manufacturers coalesced with landowners in order tokeep control over their employees. The Hammonds (1978a, 1978b, 1979) said that in effect

the state abdicated in favour of the employers so far as labour policy was concerned:Workmen were to obey their master as they would obey the State, and the State was to

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enforce the masters commands as it would its own. (Hammond and Hammond 1978b: 80).However, the workers were not entirely at the mercy of their masters. Illegal unionism seemsto have kept a potent force in certain trades.

Workers were able to believe that the governments anti-protectionist policies were to blame

rather than the driving down of prices by intense internal competition. The conclusion wasthat both masters and workers should unite to defend their common sectional interests (Foster1977: 122-124). However, the major force pushing to the growth ofnational unions camefrom expanding national and international trade. Railways and steamships had disturbingeffects by reducing the ability of imposing output and price-controlling mechanisms onsociety. Natural barriers to the expansion of markets were destroyed when railways andsteamships brought in their wake a flood of new producers. Many remnants of local self-containment broke down and most economic activities were directly exposed to the unifyinginfluence of national or global market conditions (Ashworth 1960: 246).

By 1870, most unions were themselves in a process of transformation when the steel industry

started its expansion after 1870. Increased demand of steel in the era of railroad constructionand shipbuilding did much contribute to transition from iron to steel production and to anincreased demand of coking coal. Huge amounts of capital provided by banks and the stockmarket were invested in large steel mills and coal mines which had to provide the downstreamindustries with ever-larger amounts of steel and coking coal. As a consequence, liberalcapitalism now became in need of better regulations to create market equilibriums, whiletrade unions started campaigning for labour legislation.

The appearance of national and international cartels in especially the steel industry andinternational trade-union federations had its origins in this period that is also known as the ageof classical imperialism. Tariff protection to preserve the domestic market for native

producers rose high on the parliamentary agenda. They should enable domestic producers toenter into agreements to maintain prices at profitable levels and to avoid disastrous priceswings. In France, cotton and coal industries protected by a tariff wall could cartelize thedomestic market (Kuisel 1984:60). Charging high prices to domestic customers couldsubsidize the dumping of surpluses abroad at less than the costs of production. Cartelsoffered, in contrast to the United States and the United Kingdom, a substitute form of capitalconcentration (Freedeman 1993: 107-128). In the United States high tariffs combined with theSherman Act4 (1890) were favouring industrial mergers. In the United Kingdom the exportingindustry was advantaged by imperial preferences but was confronted with fast-rising tariffselsewhere.5In Germany, France or Belgium state interference and/or strong unions could

enforce better working conditions upon employers in these highly cartelized and tariff-protected industrial sectors. With the growth of collective bargaining in this period, there wasa tendency towards greater uniformity of wage-rates in the skilled trades and some leveling-up in the worst-paid areas.

4 Small businessmen, farmers, and workers felt an increasing disadvantage to the new large corporationsemerging after the Civil War. This discontent found its political expression in the 1880s. The Sherman Acts key

provisions were directed toward actual monopoly and conspiracies or agreements designed to secure monopolypower, but they did not target concentration of capital (Einhorn and Smith 1968: 29-35).5 In 1902 the Board of Trade calculated that the import duty on British goods exported to the United States

amounted to 73 per cent of their value. France imposed an average duty of 34 per cent, and Germany of 25 percent. Australia and South Africa were at the low level of an average 6 per cent duty, New Zealand at 9 per centand Canada at only 16 per cent (Cole and Postgate 1971: 447-448).

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In Britain, the Trade Union Congress (TUC) acquired a growing influence after its inceptionin 1869, but it had no real coordinating power in industrial matters. Significant was thetendency for trade unions in the same or closely related occupations to form nationalfederations. Such developments, together with attempts by large unions or federations indifferent industries to coordinate their politics, as the miners, the railwaymen and the transport

workers undertook to do when they formed their triple alliance6

in 1913, foreshadowed amuch more complete departure from individualistic competition. Other union delegatesthought that labour should be directly represented in politics. Support for the eight-hour day(a normal working day) received widespread appeal as a slogan that seemed possible ofachievement within a relatively short span of time, and consequently all labour organizationsincluded an eight-hour plank in their platforms. The most important stimulus for wageregulation came from the Royal Commission on Trade Unions, which propagated a new formof conciliation. There followed a campaign in the coal and iron districts for the formation ofBoards and Conciliation. There were a number of reasons for promoting conciliation.Arbitration presupposed closer cooperation and industrial co-partnership and strongerunionization of both workers and employers. They would gradually form national associations

able to arrange wages and prices through arbitration in order to prevent violent price and wagecutting. Arbitration was meant to interfere with the market, an idea that soon was formalizedin the sliding scale. The logic of union policy was to even out wage costs in all coal districtsand to use strike power only against wage and price cutting employers. The same argumentwas used when pressing for a shorter working day.

However, the power of preventing wages from falling unreasonably and disastrously low, wasin the hands of strong unions assisting strikes and lockouts. In Britain, the decision to createsuch a strong miners union and to agitate about hours at work and wages was taken in theaftermath of unsuccessful strikes in 1867 that had left Lancashire colliers unionism in ruins.The existing national union, the MNA offered no alternative and had transformed itself intoan inter-county union only for the purpose of promoting social legislation in combination withsubsidized coal prizes.7 Responsibility for the conduct of strikes remained with the districtsand the support of one of one district for another was a purely voluntary matter. At the otherhand, the unions were tempted by projects aiming at regulating labour supply (emigration,apprenticeship, and other forms of craft control) or the market for coal. If over-productionwas the problem then the coal industry were to restrict its output, thereby forcing up the priceof coal and, in turn, wages.8That the miners wanted to restrict output was against the liberalcredo: it was nothing less than a blueprint for a coalition of producers against consumers.

The sliding scale

International competition and expanding markets obliged entrepreneurs to adjust their costs.In most industries wages constituted an important cost. They could be compressed by severalmeans (wage cuts, lay-offs, longer working days or weeks). By 1841 a British ironmasterlinked the wages of his puddlers to the selling price of iron bars. Later on, thesesliding scales

became standard practice for skilled workers in the American and British iron and steel

6 The miners, railwaymen, and transportmen were less united than their opponents believed. Their strategy had tobe attuned to each unions needs and to economic circumstances, such as the level of real wages andunemployment (Middlemas 1979: 154).7 A community of interest in price control was contained in the address of the MNA to the owners of the Durham

and Northumberland mines in 1864 (Fisher and Smethurst 1978).8 Its was agreed that by restricting output there would be a shortage of coal on the markets, and this would have atendency to keep up the selling price, and thus wages would be kept up.

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industry, and common in coalmining. In both countries four struggles representing momentsin a broader process of inter-class and intra-class conflict emerged as a result of

The competition over control of the domestic markets;

The struggle between industrial capital and the landing interests;

Competition over control of domestic markets for coal and steel; The assertion of capital over labour to wrest control away from craft workers

culminating in mass strikes (Santoro 2003: 11-31);

Liberaleconomic regimes without third party9 reducing the frequency of strikes.

Sliding scales were adopted in British coalmining to transfer risk from mine-owners toworkers. The sliding scales had nowhere been pressed more hardly than in British coal-mining, where the MNA, or what was left of it,10 were pretty steady in their support of thesliding scales and opposed even a legal eight-hour day (which might have worsened theconditions of the most influential section, the hewers). In the metals industry sliding scales

were gradually extended to unskilled occupations (Hanes 2003). After the First World Warcoal miners unions abandoned the sliding scale as a part of a process by which the burden ofthe risk induced by shifts in the demand function for the output was shifted from employees tothe employers by favouring schemes linking wages to operating profits. In coking and ironmining sliding scales were still used throughout the 1920s. Manufacturers and textile unionsnever could reach an agreement on sliding scales. In the United States, the iron and steelindustry adopted sliding scales for the remuneration of skilled workers in many a plant. Afterthe formation of the U.S. Steel Corporation sliding scales disappeared. In the coal industrysliding scales unions had started enforcing sliding scales upon the pit owners by 1869 in theanthracite mines of Pennsylvania and later on in several silver and copper mines too.

The idea that wages were dependent on the varying price of the commodity produced, whichwas very different from the notion of a minimum standard wage autonomous of supply-and-demand considerations, was deeply rooted into the working classes of the coal fields. Slidingscales required conciliation and arbitration procedures the union leaders could use in order to

pacify labour relations. Already in March 1869 the Board of Arbitration and Conciliation forthe Manufactured Iron Trade of the North of England was instituted. In Durham and SouthStaffordshire, miners and pit owners also could agree on the idea of wage regulation by

sliding scalesproviding for the adjustment of wages in a definite relation to changes in themarket price of coal. Payment of wages at the pit was accomplished by time-rates and price-lists that outlined specific piece-rates taking account of the variations in the type of coal wonand conditions of work.

The miners in Northumberland and, to a lesser extent, Durham shared with the cotton-spinners and shipbuilders a certain conjunction with their employers, derived from theirleading role in maintaining the nations export. These union leaders relied heavily on friendly

benefits to create disciplined control from the center. In 1872, they established with the pitowners a Joint Committee to arbitrate and to settle all questions relating to matters of wages,

practices of working, or any other subject which may arise from time to time at anyparticular colliery (Garside 1971: 22). This Joint Committee acted as an important socialpeace-keeping body at pit level. Other districts adopted the sliding scale too. The adoption of

9 Like in France where the state could help enforcing labour agreements (Gillet 1973: 332-334).10 Or what left of it, was now controlled by the Durham and Northumberland Societies, whose leaders were trueto the Liberal Party.

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sliding-scale procedures in the coalfields culminated in the slump of 1874-1880 in growingdissatisfaction with the device.

The sliding scale embodied the opinions of the new liberal school who now, at this time,dominated the miners movement. The idea of a minimum wage was alien to the pit owners

viewpoint: the risks of capital were to be borne by workers in terms of lower wages. In SouthWales, for the first four years of the working of the sliding scale, the miners suffered first a7.5 per cent reduction, and later a 10 per cent reduction. This led to considerabledissatisfaction among the workmen, whose wages were determined by the sliding scale. The

principle of the sliding scale continued down to 1903. Its termination was decided by theSouth Wales Miners Federation (Edwards 1926: 76-107). The Yorkshire, Lancashire andCheshire miners terminated their local sliding-scale agreements too.

Spearhead of the miners actions promoted by the MNA11 consisted of promoting a legaleight-hour day and nationalization of the coal sector (Arnot 1979: 105-108).12 During thedepression of the 1880s and 1990s nationalization of the pits soon would become the miners

central demand brought up at conferences or put forward to an annual meeting of the TradesUnion Congress. In November 1893 a parliamentary Bill to nationalize mines and mineralswas brought in by a group of Labour MPs. The Government were to create a MiningDepartment which would pay such wages as would ensure a comfortable existence and duringthe continuance of incapacity, the result of sickness or of an accident sustained while at work,the worker should receive his full weekly wages and free medical attendance. After twentyyears of debates no practical progress was made into the direction of nationalization.However, turbulent economic and social changes occurred after 1900 with several greatstrikes and the definitive decay of the lasting craft unions. Strikes paved the way for sociallegislation. The minimum wage strike of over a million miners in March and April 1912 gavea strong impetus to the Coal Mines (Minimum Wage Act, 1912) Act and to a parliamentaryBill (1913) on nationalization of all mines.

High war profits were invoked by the miners of South Wales in 1915 to launch a strike for aminimum wage. Government control of coal-mining in 1916 took this sector out of thedangerous arena of the free labour market in a period the shop stewards movement13

competed with the TUC for the mandate of popular defense. The miners pleaded for a newmethod of wage regulation and during the negotiations they stressed the necessity ofeliminating the injustices of regulating wages almost solely in relation to the movements inthe price of coal. More direct control on selling prices including the costs of production and

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The Miners National Association (MNA) was established in 1863 and contained the miners associations ofDurham, Northumberland, South Staffordshire the Sliding Scale Associations of the South Wales coalfield. In1869 the Amalgamated Association of Miners (AAM) was founded during a meeting of delegates fromLancashire. The AAM was a collection of small unions in places which had not previously organized. The MNAwas governed by moderates whose primary concern was bargaining and arbitration. By 1902 only the Durhamand Northumberland were still members of the MNA. As its influence decreased, that of the Miners Federation(MFGB) increased by a rapid expansion in the coal industry (Fisher and Smethurst 1978: 114-155). In 1908

Northumberland and Durham joined the MFGB. Total membership increased to almost 600,000.12 Because of local reasons the opposition to the eight-hour day remained strong in the northeastern coalfields.The miners in Durham feared that there would be an insufficient number of boys available to work an equalnumber of shifts with the hewers and that an increase in the number of shifts would entail greater domestic andsocial problems.13 This anarcho-syndicalist movement combined a popular championship of working-class grievances with

demands for workers participation, a negotiated peace and socialism. The movement attempted, with somesuccess, to break down traditional divisions between craftsmen and the less skilled workers, and to transmute theideas of craft control into ideas of workers control (Hinton 1973).

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productivity increases was demanded in order to know real costs and what wages the industrywas in a position to pay. In January 1919, the MFGB annual conference agreed to demandhigher wages, a six-hour working day and nationalization14 with joint control andadministration by the workers and the State (Saville 1988: 41-47).

During the First World War the Miners Federation of Great Britain (MFGB) uniting alldistrict unions sought to establish new conciliation procedures throughout the districts aimedat providing wage advances more in line with the prevailing economic conditions and atimposing a degree of coordination amongst the districts. Though coal was of strategicimportance for the world economy and there were over a million miners in Britain, social andeconomic conditions had changed. Substitution of other forms of power for coal and thegrowth of the fuel economy had a disastrous impact on the coal-mining industry. Neverthroughout the inter-war period did the industry ever again equal the record level of outputand coal exports in 1913. Before the war, the mining industry seldom experienced any seriouslong-term unemployment. At first, only particular coalfields, dependent upon the export trade,were seriously affected when Germany started paying reparations in coal deliveries. Already

in 1921, over-stocked markets and falling commodity prices put great pressure on the BritishCabinet to decontrol the mines, leaving owners and miners unprepared to match the high costof modernization. The triple alliance of railwaymen, miners and transport workers brokedown: joint action was impossible without joint control (Middlemas 1979: 156-157).

By 1925 the Baldwin Government started subsidizing the mine-owners, which provided atemporary revival to the coal business.15 Meanwhile, coal owners had resorted to thetraditional palliatives of attempting to reduce wages and increase working hours. In exportingdistricts particularly susceptible to the ramifications of the trade cycle, the necessity to remaincompetitive incited pit owners during the post-war period of depression to make relativelymore frequent and severe attacks upon wages and hours than those made in districts

producing predominantly for the home market. In addition, basic industries, themselvesimportant coal consumers and similarly depressed after 1921, added to the plight of the coalindustry. This illustrates the relative weak position of the miners unions in the inter-war

period. This explains why nationalization of the coal industry soon would represent the mostacceptable way of improving the working conditions of the miners and provide the means ofreducing costs without necessarily resorting to alterations in wages and hours based upon thecompetitive needs of the coal districts. The demand for a national system of wage regulation,

politically less demanding than nationalization, represented a similar, but limited, ideal. In1947 nationalization was decided by the Labour Government, which allowed concentration ofcoal production on low-cost pits in expanding coalfields.16

Craft unionism versus industrial unionism

In the United States, the National Labor Union (founded in 1866) advocated harmonybetween capital and labour, but also defended rights for blacks and women and pleaded forbetter housing.17 But most union leaders found that the needs of their members could not be

14 A Royal Commission established in 1919 could not agree on state ownership of the coal mines. Billsintroduced in 1919 and, in similar terms in 1923 and 1924 to nationalize the mines, were easily defeated.15 In March 1926, there were employed in and about the mines 1,111,900 men, and in April 1927 1,280,687. ByJuly there were 258,203 miners registered as unemployed (Hannington 1979: 154-155).16 Cheap coal can only be obtained by efficient organization of the coal industry, while at the same time the

miners must enjoy conditions that make mining a career as attractive as any in the country. (Lawther, 1944: 11).17 In 1871, the National Labor Union transformed itself into the National Labor Reform Party. In other countries,

political demands never were absent from the union agenda. In Britain, the National Miners Association (MNA)

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subordinated to utopianism offering nothing tangible in the immediate future. When reformand political elements captured the leadership most union leaders left the National LaborUnion (Grob 1961: 11-33). The National Labor Union did not survive the economic downturnof 1873. Its role was taken over by the in 1869 founded Knights of Labor. From the outset,the Knights advocated the abolition of the wage system and labour owning and operating

mines, factories and railroads. They also promoted the concept of an all-inclusiveorganization that was divided geographically by districts with membership open to almostanyone who worked. This organizational concept, which sharply contrasted with thehorizontal organization of the trade unions, also reflected utopian ideas about the futureorganization of society. The Knights thought that strikes betrayed the principle ofcooperation. Therefore they opposed the trade-union leaders who viewed strikes as almost theonly effective weapons against recalcitrant employers.

Many factors contributed to the Knights initial success. A fair part of the Knights popularityamong workers was derived from their support of the successful Southwest Railroadsshopmens strike of 1885. For the first time in American history a large company negotiated a

collective agreement with a national labour organization (Commons and Perlman1970: 72-102). By 1886, the Knights boasted a membership of over 700,00018 in 5,500 local assembliesagainst 250,000 for the unions. Contemporaries like Edward Aveling and Eleanor Marx(1891: 139; 144) qualified the Knights as a huge heterogeneous organization and as thefirst spontaneous and indigenous outgrowth of the American working class as it becameconscious of itself. However, some conditions augured well for he success of the movement.To begin with, the ruralelement had always been numerically strong in the Knights. After1886 these elements even gained proportionally in strength and provided a strong impetus fora farmer-labour coalition. Secondly, the leaders of the Knights were wedded to the concept ofa fluid society lacking in class distinctions, and they thought in terms of a community ofinterests between farmers and workers. Thirdly, growing occupation with and reform inspiredthe Knights to gravitate to the farmers as a possible ally. Finally, there was the fact thatPopulism and labour reformism had emerged from the same American traditions: both wereequal-rights and anti-monopoly movements and from the monetary schemes in vogue after1840. Circumstances appeared propitious for a farmer-labour coalition as mechanization ofagriculture forced the farmer into a difficult position. Caught between decreasing farm prices,an ever-increasing surplus, and relatively high costs of transportation, the farmers werelooking for urban allies for union on a programme of mutual relief.

By 1887 the Knights had lost their hold upon the large cities with their conscious workersand immigrant population. They soon would become an organization predominantly of

country people, small merchants, mechanics, and farmers. In many states members of theOrder drew up with farmers a common platform and in 1891 they contributed to the formationof the Peoples Party (Grob 1961: 37; 90-98). However, the strength of this party was situatedin the rural areas of the West, not in the industrialized counties where the working-classvoters had abandoned Populism. The fact that the interests of farmers and workers were notidentical contributed to the failure to forge an effective alliance between the two. Because ofthis alliance the Knights no longer represented the aspirations of the American worker andthey soon would disappear from the political and social scene.

(1863) took up questions which demanded legislation.18 Edward Aveling and Eleanor Marx estimated that membership was 300,000 to 500,000 in 1886 and that otherestimations its number reached at least one million (Aveling and Marx 1891: 136).

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Initially, strikes occurred during periods of retrenchment and drastic reorganizations afterwaves of capital concentration. This was especially the case in the railway sector wherediscipline had become stricter and acquired a military character throughout the longnineteenth century. However, many industrial workers were employed for part of their time in

commerce and transport. Outworkers did most of the fetching and carrying of their rawmaterials and finished goods. Small producers were still involved in commercial activities orthey owned a shop. As outwork declined and economic activities became more specializedand large-scaled, the proportion of industrial employees whose full industrial time was givento industrial production must have increased. The greater part of this change was probablyaccomplished by about 1900 when electric power became available at an ever-larger scale andthe chemical industry could break through. These changes known in America as themanagerial revolution influenced management methods of large numbers of firms in asimilar way. But in Europe its influence was insignificant before 1914. In 1907, a Britishobserver could write that the rule of the thumb was dead in the workshop and that the day waswith the engineer and the chemist (Ashworth 1960: 102).

Scientific management was a declaration of war on craft unionism and on the skilledworker. Frederick W. Taylor, who drew his experience from his work for the Bethlehem SteelCompany (Braverman 1974: 102-106), wanted the managers to assume the burden ofgathering together all of the traditional knowledge which in the past has been possessed by theworkmen and then of classifying, tabulating, and reducing this knowledge to rules, laws, andformulae which are immensely helpful to the workmen in doing their daily work (Taylor1919: 36). Taylor s idea was that conception should be separated from execution and his

purpose4 was to cheapen the worker by decreasing his training and enlarging his output(Braverman 1974: 118).

The increasing consolidation of employees in some industries and activities and the greaterimpact of management on the organization of work in the large factories and mines appearedto be leaving purely industrial action by workers less chance of success, and the increase ofadverse legal decisions in trade union cases also implied the inadequacy of such action.Moreover, a growing number of workers was becoming articulate, though they never had thechance to improve their position much through trade union of friendly society activities. Itwas in such circumstances that substantial minorities of trade-union militants and socialistswere able to revolutionize the trade unions. In the US and Britain different socialist sects triedto take over the trade-union movement or to conduct its activities into the direction of politics.These militants were able in 1899 to induce the TUC to call in a conference of interest bodies

which created the Labour Representation Committee (the beginning of the Labour Party) andmarked the decline of socialist sectarianism.

In the US, the in 1886 constituted American Federation of Labor (A.F. of L.) soon assumedthe role of unofficial advocate of labour after the decay of the Knights of Labor. Contrary tothe general impression, its leaders were not, on principle, either in favour of or opposed toindustrial organization, or to the organization of the unskilled. The majority of its affiliateswere craft unions, but some, especially in coal mining and brewing, were already industrial intheir arrangement. The Federation leaders believed that eventually all workers would findtheir way into a union, and would solve their own problems. This made them opposegovernment intervention in economic and social affairs. They wanted to concentrate their

efforts and resources upon organizing on the economic front, and limit their political activity,which brought them in conflict with the Socialists. The A.F. of L. refused to adopt the

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principle of independent political action and declared in 1895 that political debates shouldhave no place in the convention of the Federation (Taft 1957: 71-75). One has argued that theabsence of feudalism in America, the greater class mobility, higher standards of living, theexistence of the right of the franchise, as well as the greater social democracy, were serioushandicaps to the spread of Socialist ideas. Observers had to conclude that the American

worker failed to respond to the appeal of a class struggle doctrine and a classless society.Against these negative elements, one must recognize the intransigence of the Americanindustrialist when facing the unions and the industrialists absolute domination over the termsof employment without any intrusion or recognition of the union.

The years between 1909 and 1913 marked the end of socialist sectarianism, but also coincidedwith the last major outbursts of syndicalism. The outbreak of violent mass strikes and theentry of new strata of unskilled workers into the class struggle went hand in hand with theformation of industrial cartels and monopolies. In the US, the rebellion of immigrant steelworkers in Pennsylvania (Brody 1960) and sweated garment workers (New York) in 1909, thesupposedly unorganizable immigrant workers were supported by the Industrial Workers of

the World (IWW). Simultaneously, the A.F. of L. had to fight bitter, rearguard battles againstthe degradation of their crafts by dilution, Taylorism, and speed-up. Instead of the A.F. of L.motto of a fair days wage for a fair days work, the IWW inscribed on its banner thesocialist watchword abolition of the wage system (Lorwin 1933: 86). The IWWconcentrated all energies on building the One Big Union, but this syndicalism proved to beonly temporary (Renshaw1999). Though IWWs syndicalism created the first industrialunions, this form of syndicalism did not reach the already organized workers in the traditionalcrafts and industries, but only the instable groups of workers in metal and coal mining(Wyman 1979: 235-255; Corbin 1981: 240-241; Brown 1979: 149) and agriculture, or thedock and river workers, i.e. relatively unskilled seasonable and migratory workers (De Caux1978). By 1917, the IWW had reached its peak with about 30,000 lumberjacks, 40,000 metalminers, 24,000 agricultural workers, 15,000 building-trade workers, and about 10,000 in otheroccupations (Bimba 1927: 258).

The sources of labour stability had broken down in World War I. Restoration meant a totalreconstruction of the prewar labour situation in the USA. The central problem was to start anew free-flow supply of unskilled labour. The movement of Slavic peasants into the industrywas stopped when the Johnson Act went into effect in 1921. Obviously, Congress was moreconcerned with safeguarding American racial parity than with the needs of industry.However, Southern Negroes had constituted the chief source during the war, and theirnumbers continued to mount afterward (Drake and Cayton 1962: 88-89). These migrants were

commonly considered inferior workmen, but careful selection made it possible to cull anefficient force from the mass available on the Chicago labour market. Thousands ofimmigrant workers arrived from Mexico (Daniel 1981). The importation of Mexicans becamewidespread in agriculture and in the steel industry where many unskilled workers could findan employ. Permanent Mexican communities were taking root in the industrial andagricultural areas and many advanced into the semi-skilled ranks. A similar process wasoccurring among the Negroes. Meanwhile, the Eastern Europeans were occupying the lesser

positions once held by the English speaking workforce.

Notwithstanding a continuous inflow of cheap, unskilled labour, mechanization would cause afast decline of IWW union membership in all trades. An inflow of unskilled operators created

new opportunities for an industrial unionism based on occupation instead of crafts wheretransforming industries started reorganizing their factories on the base of Fordist or Taylorist

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principles of work organization. As a consequence, craft unions had to open up theirmembership to semi-skilled workers now predominant in most industrial activities.

In many aspects, World War I had marked the watershed between old and new unionism inmost developed countries. Unions in Western Europe saw the number of their adherents

increase explosively as the system of collective bargaining was introduced and favoured bygovernments in which social democrats participated. All workers employed by one industrywere organized in the same union and where unions of different ideological backgroundexisted, they co-operated when dealing with entrepreneurial organizations. In the US, the A.F.of L. remained a federation of craft unions, but also comprised several industrial unions - suchas the United Mine Workers of America (UMWA) - showing much more militancy than theaverage craft unions (UMWA1976). Yet, labour leaders seemed to face an insoluble dilemma.Without mass organization, labour lacked effective political influence; without theguardianship of a benevolent government, unions could not defeat recalcitrant employers.During the New Deal, more so than ever before, the federal government acted as societysarbiter. Because of the growth of membership, unions started playing an important role in

national politics. The UMWA led by John L. Lewis realized that labours fate wasinextricably linked with its political and social influence. He offered his fellow barons of tradeunionism another chance to build a powerful mass working-class movement. According to hisadmirers, he provided them with the shock troops of militant American labour and committedthe Unions resources to building of the unions of automobile workers, steel workers, rubberworkers and other new industrial unions (UMWA 1976; Dubovsky and Van Tine 1977: 203-217). In the US, unions influence was based on the resources they could mobilize toinfluence the working-class vote. But they did not present themselves as politicalorganizations representing the interests of labour as a class. Obviously, the American unionsaccepted the existing social and political order (Davis 1980). This contrasted sharply with thesituation in Europe where the unions belonged to socialist movements and where they helpedforming socialist parties.

Responsible American unionism

With the growth of the trade-union movement, employers began to understand that aresponsible trade-union movement could act as a stabilizing element. Centralized or industry-wide collective bargaining tends to reduce strikes and to protect employers and society againstmass-labour unrest (Hyman 1977; Coates and Topham 1974: 51-55). This idea was, however,slow to convince employers and governments as long as the numerous craft unions did notamalgamate and federate or transformed themselves into industrial unions. However, craft

unionism was still long living because individual employers preferred bargaining with craftunions defending sectional interests. This explains why in the US, the A.F. of L. remained afederation of craft unions. In Britain the unions, strengthened by amalgamation andfederation, and inflated by vast membership, were still fighting their own battles since thecreation of the General Council in 1921. The issue of whether or not the TUC should organizeassistance for affiliated unions had been subject to constant debate (Lovell and Roberts 1968:49-94).

In the 1920s, craft unionism, however, was a phenomenon of the industrial past. Craft unionswere absorbed by industrial unions or they had to merge in order to widen their field of actionor to enhance their appeal to semi-skilled workers. Business or yellow unions had no chance

to compete with the independent unions stressing the interest of labour in opposition tocapital. Collective bargaining promoted by these independent unions slowly superseded the

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practice of individual labour contracts as industrial firms were employing thousands of semi-skilled workers. This was the case in the new industrial sectors such as the motorcar industryand the sector of electric home-appliances, where Taylorist forms of work organizationalready had reached a high degree of perfection and demanded also at the national level aspecific type of labour management. In the US, this framework would be provided by the

New Deal legislation. In Europe, most countries already had experienced just after World WarI with nation-wide collective labour agreements and social legislation.

In the US, the passage of the National Labor Relations Act (NLRA) in 1935 and various otherpieces of New Deal labour legislation designed to protect worker rights represented a shift inthe prevailing view of the employment relationship and how to regulate it. Prior to the 1930s,the role of government policy was protecting the workings of the free labour market and toguarantee the freedom of contracting. New Deal legislation endorsed collective bargaining asa part of a broader economic and social reform. The choice of collective bargaining as the

preferred institutional mechanism reflected not so much the creation of a new idea, but thelegitimation of a process that had made some progress in some industries in prior years. The

NLRA incorporated many of the principles and policies embodied in previous advisorycommittees ad industrial commissions (the National War Labor Board of World War I and the

National Labor Board established in 1933 under the National Industrial Recovery Act). TheNLRA was expected to give employees the freedom to choose whether or not they wanted tobe unionized. Election procedures and institutionalized collective bargaining therefore were toreplace conflict and violence so typical for American labour relations. Corporatism, whichhad become a common feature in several European countries establishing new forms of labourrelations, was not even discussed in the US.

Keynesian macroeconomic theory also helped provide acceptance for the New Deal industrialrelations system. Union policies that increased wages through collective bargaining werecompatible with this strategy as long as markets continued to operate and productivitycontinued to increase. The best example of this tendency is offered by the American motorcarindustry and that has been characterized by very rapid growth in its early years and byconcentration in the hands of a few producers (General Motors - GM, Ford, and Chrysler).Therefore, the United Automobile Workers (UAW) led by the legendary Walter Reuther(Barnard 1983) could operate as a major driving force in the American labour relations sincethe late 1930s when the UAW started pioneering institutionalized industry-wide bargaining.Before this, union influence was minimal. These changes came suddenly and violently. From1935, the car industry was singled out by the new Congress of Industrial Organization (CIO)as area of potential recruitment for industrial unionism (Zieger 1995). The success of the sit-

down strikes at GMs plants at the end of 1936 marked a turning point. Although full-scaleindustrial bargaining was introduced in the coal-mining industry in the 1930s, the UAWextended the concept of collective bargaining well beyond the traditional boundaries of

business unionism. Chrysler was organized very soon after GM. Ford managed to resist until1941. President Roosevelt and legal provisions had encouraged unionization, but specificmanagerial practices19 had provided the impetus to labour unrest among the unskilledworkers. The link with the then-triumphant Fordism has to be stressed, because the UAW metthe needs of the unskilled mass workers when negotiating production standards (line speedsand labour loading) and taking them through the grievance procedure. Application of theseniority rule established job security and abolished the arbitrary authority of the foreman.

19 Irregular employment, limited job security, re-engaging at the flat rate men who had been laid off work athigher rates shortly before, speed-up practices, widespread employment rackets based partly on the considerableresponsibility and discretion given to foremen and the firms espionage systems.

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After World War II, the divide between A.F. of L. and CIO20 was healed when the so-calledDunlop model of collective bargaining spread over all sectors and American trade-unionofficials deployed activities sponsored by the State Department and the CIA (Romero 1993;Busch 1983; Windmuller 1954). This New Deal model of industrial relations developed in the

postwar economic environment of growth and market expansion, was encouraged bygovernment policies and prevailing union and business values. This model included the use of

pattern bargaining and wage formulas to set wages. Union bargaining power was strengthenedby their substantial organization of a number of the nations core industries. Economic growthand the collective bargaining process gave stability to contract negotiations and led toimportant wage increases combined with fringe benefits. In the motorcar industry, the UAWconsolidating its initial success became for a time the largest union with 90 per cent of theeligible workers in the car industry unionized (Turner, Clack, and Robert 1967: 293-306). TheUAW-GM 1950 five-year contract (also called the Treaty of Detroit) became an example forother industrial sectors, including rubber, steel, farm construction equipment, trucking and thefood and retail sector.21 Union power, however, gradually declined in the 1970s and 1980s.

Intensified competition from either international or domestic nonunion competitors inducedmajor modifications in traditional bargaining approaches. In addition, the anti-union stance ofthe Reagan administration gave a green light to union busting and helped reducing theabsolute number of unionized workers for the first time since the 1930 (Goldfield 1987: 3-25). Deregulation in industries such as airlines, trucking, and communication opened the doorto new entrants and produced abrupt increase in cost competition. Furthermore, the deepmacroeconomic recession of the early 1980s exacerbated the economic pressure for wagescuts.

As these competitive pressures increased, unions were confronted with large-scale layoffs andplant closings. Employment in the Fordist motorcar industry dropped from a December 1978peak of 800,800 to 487,700 in January 1983. As a result of increased competition on the USmotorcar market unions had to face a significant decline in their bargaining power. As labourand management in union firms searched for a response to intensified competition, they oftenmodified collective bargaining by introducing new subjects into the negotiations. In manycases this entailed making changes at either the workplace or strategic levels of industrialrelations practice. Labour gained quid pro quos in exchange for concessions in pay or workrules. A number of firms improved job security. A guaranteed income stream programme wascreated in the 1982 agreement at Ford and GM to compensate high-seniority auto workers

permanently laid off because of plant closings and other reasons.22 But new work structuresgeared toward greater flexibility. Firms pushed for fewer classifications and more firm-

specific training. As labour and management struggled to respond to environmental pressures,they made significant changes in the bargaining process as well. These changes announcingthe end of the Dunlop model included

A decentralization of bargaining structures;

20 The refusal of the A.F. of L. to accept industrial organizations was long since settled. The CIO industrialunions were permanently established. Several A.F. of L. affiliates, such as the teamsters, machinists, and ladiesgarments workers, were primarily industrial in nature. During the war both federations had cooperated ongovernment advisory bodies (Taft 1959: 473-486). By 1954 the decision was taken to merge both federationsinto the AFL-CIO.21 This system established industry-wide patterns of wage, benefits, and working conditions, unaffected bycompetitive conditions in other separate industries and sectors, and lasted until the 1980s.

22 Airlines and trucking were highly affected by liberalization policies and increased competitive pressures.Therefore, American Airlines introduced lifetime job guarantees and lowered the pay of new hires during 1983negotiations.

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An increased emphasis on contingent compensation criteria;

A changing pattern of strike activity.Decentralization reversed the trend toward centralized and pattern bargaining that hademerged in the post-World War II period as a result of the extensive union coverage in FordistIndustries. First of all, economic pressures created the decentralization of longstanding formal

and informal bargaining structures in a number of industries and created an erosion of theinter-company pattern of bargaining in rubber, motorcar, and meatpacking industries. Withintrucking, the influence of the National Master Freight Agreement declined as regional andcompany modifications gained importance. In addition, deviations form the nationalagreements emerged in 1982, when the steel industry established different bargaining goalsfor such distressed industries as basic steel and such healthy industries as nonferrous metals orcontainers. This caused a weakening of the inter-industry (intra-union) pattern bargaining socharacteristic for the United Steelworkers negotiations. In 1985, an end was put to the steelindustrys thirty-year old tradition of coordinated bargaining.23

Secondly, a new form of decentralization emerged from national-level to company- or plant-

level bargaining in the rubber, steel, and motorcar industries, where plant-level modificationsin work rules were frequently introduced as part of the efforts to lower costs and keep

business in-house. Plants agreements in the automotive industry introduced pay systems andtransfer rights that differed from prevailing industry practices.

Thirdly, intensified pressures in the 1970s and 1980s forced decentralization as part of aprocess whereby wage and work-rule concessions were introduced in response to increasedcompetition and an associated erosion of union coverage. Trucking illustrates both tendencies.Contracts had been set before and immediately after World War II at the company level. Inthe 1950s, however, Jimmy Hoffa was able to induce regional agreements. In 1964, a

National Master Freight Agreement set common increases in wages and fringe benefits and anumber of work rules for truckers. Although regional agreements still supplemented the termsof the national agreement. In the 1970s, the number of independent drivers increasedsignificantly. Unionized carriers started cutting prizes and wages while abandoning thenational agreement. The Motor Carrier Act of 1980 and the decision of the InterstateCommerce Commission to allow free entry and rate competition in industry increased

pressure on wages and obliged the Teamsters Union to abandon centralized bargaining(Galenson 1997).

Militant European unionism

In most European countries, the 1960s and 1970s were characterized by growing working-class militancy, which in some cases broke out of the regular institutionalized forms ofcollective bargaining. Attacks on union leadership were commonplace in all Europeancountries where growing working-class militancy was striving for workers control at thefactory level and participation at the sectoral level.24 At stake was the unions ability toaccommodate workers demands by forcing them into the normal procedures of interestintermediation. This strained relationship stemmed both from changes in the composition ofthe working class and in workers demands, and from the problems facing trade unions asorganizations. However, most European unions benefited from this wave of radicalism, asmost employers and governments found themselves compelled to grant them recognition.

23 Other industries, such as printing, underwent a similar erosion of pattern bargaining.24 In Germany, Mitbestimmung(Co-determination) was established in the 1960s. (On the debate on workerscontrol, see Hunnius, Garson, and Case 1973.)

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Hence, this greater labour strength disturbing the normal patterns of industrial bargainingwould become an issue politicians and entrepreneurs had to include into their strategies and

policy frameworks.

Industrial conflicts at the micro-level of the firm were connected to wide-ranging

reorganizations of production and the expansion or consolidation of Fordism. Work rhythmswere stepped up and jobs fragmented so that workers lost their occupational identities or theiropportunities to pursue careers. At the macro-level, however, economic growth permitted thedraft of Keynesian welfare schemes favouring massive migration from the rural areas in andoutside Europe to the cities. A situation of quasi-full employment gave workers a relative jobsecurity and therefore increased bargaining power. New generations of unskilled workers hadaccess to the labour market in a period the unions were confronted with growing workersdemands. New long-term union goals had to be formulated in such a climate of growing classconflicts, factory occupations and street violence. Trade union weakness meant that manynew grievances could not be dealt with by institutional means and that maoist militantsoriginating from the universities could establish their influence in several Fordist factories in

Italy and France and organize there the protest of the mass workers.

In the 1970s, labour organizations slowly increased their influence as collective mobilizationwas progressively institutionalized and collective bargaining patterns could be re-established.In countries with strong unions, governments and employers regarded the participation oftrade unions in the macro-economic management as a second-best solution. As far asworkers could be reintegrated into their union strategy employers could avoid labour conflictsinside of their factories. In the literature on these topics, most authors describe this

phenomenon as the century of neo-corporatism. The central issue, however, was not therelationship between unions and workers, but between labour and the state. The problem washow the working-class movement could articulate its newly acquired strength in the politicalarena and in the political institutions of capitalism (Panitch 1977). In most Europeancountries, union policies focused on incomes and full-employment policies (The London CSEGroup 1980; Panitch 1976). Neo-corporatist trends in several European countries promisedlong-term stability, but coincided with instability in Italy or the United Kingdom, where the

political system frustrated social concertation. By the mid-1980s, however, in virtually alladvanced capitalist countries concertation was no longer the major focus of the labourmovement. Changes toward a post-Fordist organization of production as a response toincreased competition on the domestic markets, led to a growing diversification of the labourforce. Managers became more interested in increasing flexibility and industrial relationsunderwent a shift from the macro-economic level to the shop-floor level.

Economic adjustment could be obtained by increased management control at the companylevel, which went at the expense of decisions made at the macro-level. Radical changes in the

productive system occurred in some industries as a result of increased competition affectingthe organization of production in individual countries. This required the building of a newrelationship between unions and management. Market and political (neo-liberal policies)trends can be singled out as the driving forces behind deregulation policies weakening thetrade unions and their allied political forces. Changes in labour markets, technology, and theorganization of production, and its consequences on the ability of labour movements torepresent workers interests adequately explain why the inherited institutional arrangementsor the industrial relations systems are not functioning anymore or have revealed their

weaknesses.

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The industrial restructuring of the 1980s and 1990s occurred in a period of growing massunemployment and required an adjustment to the changed international economic situation.The crisis of the large corporations which was paralleled by an impressive growth of smallsubcontracting firms and an even more impressive growth of the informal economy, wouldundermine the bargaining power of the large industrial unions whose leaders had to trust in

periods of large-scale conflicts and bankruptcies on governmental aid and compromises(Hanck 1991) in order to alleviate the social costs of these massive shakeouts. This wasnotably the case in the coal and steel industry, where modernization and innovation wasaccompanied by contraction (Mny and Vincent 1987). The same can be said of theexpanding tertiary sector with its growing number ofa-typical(i.e. unorganizable) skilledworkers in the new economy. The need for a continuous reorganization of production and theimportance of product quality and flexibility for international competition transformed thetrade-union movement into a social peacekeeping organization assisting managers andgovernments.

The European Single Market signified the advent of a less regulated economy, in which the

stronger unions are enjoying a greater protection, while the weaker unions are forced into aprocess of leveling down. Convergence will lead to the emergence of cooperative andpragmatic labour relations and the growth of business unionism. A soft version of the Germanmodel, rather than an outright neo-liberal policy, is already taking on the role of the second-

best solution for all actors involved at the macro-national levels. TheLisbon Agenda theEuropean Union agreed on in 2000 provides us with a catalogue of new demands unions andentrepreneurs have to deal with. For entrepreneurs and unions aggregate labour costs will nolonger be the sole focal issue of negotiation now that various aspects of the use andreproduction of the labour force (organization of working time, internal mobility and career,incentives, vocational training) are become even more crucial in order to make the Europeaneconomy more competitive than the American economy. Meanwhile, employers areresponding to the globalization challenges by adopting their own personnel policies and bytransferring their production units to low-cost countries in the capitalist periphery.

NAFTAs impact on American labour

The US has experienced steadily growing global trade deficits for nearly three decades, andthese deficits have accelerated rapidly since North American Free Trade Agreement(NAFTA) took effect on January 1, 1994. Although gross US exports to its NAFTA partnershave increased dramatically - with real growth of 147 percent to Mexico and 66 percent toCanada - these increases have been overshadowed by the larger growth in imports, which

have gone up by 248 percent from Mexico and 79 percent from Canada. As a result, theUS$16.6 billion US net export deficit with these countries in 1993 increased by 378 percent toUS$62.8 billion by 2000 (all figures in inflation-adjusted 1992 dollars). The NAFTAeliminated 766,030 actual and potential US jobs between 1994 and 2000 because of the rapidgrowth in the net US export deficit with Mexico and Canada. As a result, NAFTA has led to

job losses in all 50 states and the District of Columbia. The loss of these real and potentialjobs is just the most visible tip of NAFTA's impact on the US economy. In fact, NAFTA hasalso contributed to rising income inequality, suppressed real wages for production workers,weakened collective bargaining powers and ability to organize unions, and reduced fringe

benefits.

NAFTA's impact in the US, however, often has been obscured by the boom and bust cyclethat has driven domestic consumption, investment, and speculation in the mid- and late 1990s.

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Between 1994 (when NAFTA was implemented) and 2000, total employment rose rapidly inthe US, causing overall unemployment to fall to record low levels. Unemployment, however,

began to rise early in 2001, especially in the manufacturing sector. If, as expected, US tradedeficits continue to rise with Mexico and Canada while job creation slows, then the job lossessuffered by US workers will be much larger and more apparent than if US NAFTA trade were

balanced or in surplus. However, NAFTA supporters have remained silent on the impacts ofrapid import growth on domestic production. The growth in US trade and trade deficits has

put downward pressure on the wages of "unskilled" (i.e., non-college-educated) workers inthe US, especially those with no more than a high school degree. This group represents 72.7

percent of the total US workforce and includes most middle- and low-wage workers. TheseUS workers bear the brunt of the costs and pressures of globalization (Mishel et al. 2001: 157,172-79). NAFTA has also contributed to growing income inequality and to the decliningwages of US production workers, who make up about 70 percent of the workforce. NAFTA,however, is but one contributor to a larger globalization process that has led to growingstructural trade deficits and has shaped the US economy and society over the last few decades.Rapid growth in US trade and foreign investment, as a share of US gross domestic product,

has played a large role in the growth of inequality in income distribution in the last 20 years.NAFTA has continued and accelerated international economic integration, and thuscontributed to the growing tradeoffs this integration requires. Because the United States tendsto import goods that make intensive use of less-skilled and less-educated workers in

production, it is not surprising to find that the increasing openness of the US economy to tradehas reduced the wages of less-skilled workers relative to other workers in the United States(Bakvis 2004).

Globalization has reduced the wages of "unskilled" workers for at least three reasons. First,the steady growth in US trade deficits over the past two decades has eliminated millions ofmanufacturing jobs and job opportunities in this country. Most displaced workers find jobs inother sectors where wages are much lower, which in turn leads to loweraverage wages for allUS workers. Recent surveys have shown that, even when displaced workers are able to findnew jobs in the US, they face a reduction in wages, with earnings declining by an average ofover 13 percent (Mishel et al. 2001: 24). These displaced workers' new jobs are likely to be inthe service industry, the source of 99 percent of net new jobs created in the United Statessince 1989, and a sector in which average compensation is only 77 percent of themanufacturing sector's average (Mishel et al. 2001: 169). This competition also extends toexport sectors, where pressures to cut product prices are often intense. Increased importcompetition and capital mobility resulting from globalization increased the "threat effects" in

bargaining between employers and workers, further contributing to stagnant and falling wages

in the USA (Bronfenbrenner 1997a). Employers' credible threats to relocate plants, tooutsource portions of their operations, and to purchase intermediate goods and servicesdirectly from foreign producers have a substantial impact on trade-union bargaining

positions.25

NAFTA's supporters promised that the accord would lead to the creation of more and betterjobs in all three countries. In reality, the opposite has occurred. Job creation in Mexico hasbeen sluggish, the jobs that have been created are of a precarious nature, and it is still difficultfor many workers to form unions to defend their interests. Between mid-1993 and mid-1996,2,421,055 new jobs were created in Mexico, while the working-age population increased by5,037,735 persons. Officially, the number of absolutely unemployed people those who did not

25 A unique study of union organizing drives in 1993-95 found that over 50 percent of all employers made threatsto close all or part of their plants during organizing drives (Bronfenbrenner 1997b).

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work even one hour a week - in that period grew from 819,132 persons in 1993 to 1,354,710in 1996. It is difficult to separate the unemployment generated by NAFTA from that resultingfrom other causes, but it must be taken into account that, in Mexico, NAFTA is theculmination and legal formalization of an economic policy that began in 1983. At the veryleast, it is clear that NAFTA does not improve the current economic model's capacity to

generate employment. It is important to analyse the manufacturing sector, since it isresponsible for 83.65 percent of Mexico's exports and is considered the "engine" of growth inthe government's strategies. In terms of job creation, however, the sector is not only incapableof generating new jobs, but it has experienced an absolute decrease in employment. Duringthe NAFTA period (1993-1996), manufacturing GDP grew 9.9 percent. However, a decline of9.9 percent in employment was recorded in the sector. Also, despite a 12.62 percent increasein productivity, average real wages have decreased 21.9 percent since NAFTA wasimplemented (RMAC 2005).The contrast between promises and reality could not be more dramatic. The manufacturingsector is one of the most dynamic sectors, but it employs fewer people; productivity increases

but the average real wage falls even more than that of workers in other sectors. In fact, the

average manufacturing wage has become even more "competitive" in order to attractinvestment and promote exports. In 1993, the average wage of a manufacturing worker in theUnited States was five times higher than the wages of his or her Mexican counterpart. In1996, this disparity increased to 8.75 to 1. During the NAFTA era, the average manufacturingwage in Mexico, measured in U.S. dollars, has decreased 60 percent. Persistent and trade-distorting violations of minimum-wage laws can be grounds for complaint under NAFTA'slabour side agreement. Nevertheless, in Mexico, more and more employers are paying lessthan the legal minimum wage. In 1996, 19.53 percent of workers earned less than theminimum wage. A basic consumption "basket" costs more than the equivalent of twominimum wages. The assessment wage used by the Mexican Social Security Institute (whichincludes the value of some benefits) during the first three years of NAFTA fell by 23.11

percent. The minimum wage contracted 10.81 percent during that period, but that is theculmination of a continuous decline starting in 1976. Since that year, the minimum wage haslost almost 73.72 percent of its purchasing power. The Labour Side Agreement permitscomplaints on child labour cases to the extent that they violate national laws. Child labour iscompletely prohibited in Mexico. There are estimates, however, that 10 million childrenwork. TheInstituto Nacional Indigenista (INI, National Institute for Aboriginals) asserts that,in such agricultural areas as San Quintin in Baja California, and Culiacn in Sinaloa, asizeable number of workers (more than 20 percent) are indigenous people under the legal ageto work who are forced into that situation by the miserable conditions in which their familieslive. The Mexican government and corporations have not kept the promises made during the

NAFTA debate to improve the condition of workers. Employment is falling in themaquiladoras. Mexican government data have confirmed that employment in themaquiladora zones, which the report implies are the showcases of NAFTA's success, hasdeclined from 1.3 million in 2000 to 1.0 million in 2003.

NAFTA has served as an efficient mechanism for reducing employment levels and wages inCanada and the United States. While labour laws have not changed, labour relations have

been modified through a process of "modernization" of collective bargaining contracts. Mostexport companies, for example, work with official unions linked to the government and havechanged their workers' labour conditions.26The principles that these companies continue to

promote in current salary or contractual negotiations include improvements in production

26 There are examples in various sectors and among a variety of Mexican and foreign firms. These includeRoche-Syntex, of Swiss origin, and such automotive companies as Ford, General Motors and Chrysler.

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1980, radical policy changes marked the end of all labour-friendly arrangements and thebeginning of profound economic restructurings. However, there is also evidence that thedecline in union membership is beginning to slow up. Many unions are stepping up theirefforts to recruit in new industries and jobs and more people are turning to trade unions

because they want the protection they can provide.

References

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Aveling, Edward, and Eleanor Marx (1891) The Working-Class Movement in America, London: SwanSonnenschein.

Bakvis, Peter (2004) Distorted World Bank report on NAFTA and labor,Economic Justice News, January,7(1).

Barnard, John (1983) Walter Reuther and the Rise of the Auto Workers, Boston: Little, Brown and Company.

Bimba, Anthony (1927) The History of the American Working Class, New York: International Publishers.

Boyer, Robert (ed.) ( 1986)La flexibilit du travail en Europe, Paris: La Dcouverte.

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Brissenden, Paul F. (1971) The Launching of the Industrial Workers of the World, New York: Haskell HousePublishers.

Brody, David (1960) Steelworkers in America. The Nonunion Era, Cambridge, Mass.: Harvard University Press.

Bronfenbrenner, Kate (1997a) The effects of plant closings and the threat of plant closings on worker rights toorganize. Supplement toPlant Closings andWorkers' Rights: A Report to the Council of Ministers by theSecretariat of the Commission for Labor Cooperation, Lanham, Md.: Bernan Press.

Bronfenbrenner, Kate (1997b) We'll close! Plant closings, plant-closing threats, union organizing, andNAFTA, Multinational Monitor, 18(3): 8-13.

Brown, Ronald C. (1979)Hard-Rock Miners. The

Labour in the Era of Capitalist Globalization

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