Brief History of Labor

Labor Problem (1900s):

• Undesirable outcomes that stem from inequitable and contentious/oppressive/exploitative employment relationship
  • Work weeks of 54-57 hours common (long hours)
    • Iron/steel industry 40% of laborers did more than 72 hours/week, 20% 84+hrs
  • 50% working class families below $800 annually (low wages)
    • Had to rent rooms/sew garmets/use child labor
  • Fire at shirtwaist factory in 1911 – killed 146 workers (unsafe)
    • Industrial accidents = 25k deaths, 25k permanent disability, 2M temporally disabled
  • Many companies only hire 1 day at a time (insecurity)
    • Foreman exercised absolute control – fire for any reason, discriminate
• Problems:
  • Economic: People deserve better lives than this
    • Need to afford decent housing, clothing food
    • Have to reflect democratic society
  • Business: are workers motivated? Loyal? Productive?
    • 1913 Ford has TO rate of 10% — avg was 370%
      • Ford offered $5/day
    • Such low wages, consumers couldn’t afford / purchasing power
      • Ford workers couldn’t afford Ford until $5 wage
    • Strikes cost $$$

Mainstream Economics School

• Economic activity of self-interested agents who interact in competitive markets
  • Efficiency, equity, voice achieved through competitive markets
  • Competition results in optimal allocation & pricing of resources
  • **Issue is economic failures are preventing markets from working properly
    • Best solution: competition! Other employers
• Labor unions seen as monopoly on labor
  • Interfere with invisible hand of free-market competition
  • Seen as protecting lazy workers

Human Resource Management School

• Labor problems stem from poor management
  • Common view is foreman drove workers til they broke down; drive for max production, then discard them
  • Solution: Better management
• Independent unions seen as adversarial; anti-cooperation
  • “Companies get the union they deserve”
  • Unions like a fever; symptom of bad management

Industrial Relations School

• Labor problem believed to stem from unequal bargaining power between corporations and individual workers
  • Persistent unemployment, company towns dominated by one employer, lack of savings; huge monopolies — have undue influence on market = workers have vastly inferior bargaining power
  • Solution: increase workers’ bargaining power by forming independent labor unions and pursuing collective bargaining

Critical Industrial Relations School

• Capitalist institutions do not simply exist but are created by society
  • Dominant groups design/control institutions to serve their interests
• Construct HR to serve their interests
• Solution: significant restructuring of the nature of capitalism; replace with socialism