Magazine article Regulation

The Striking Success of the National Labor Relations Act: The NLRA Has Brought Labor Peace and Improved Workers' Negotiating Power, Which May Explain Why Union Membership Is Declining

Magazine article Regulation

The Striking Success of the National Labor Relations Act: The NLRA Has Brought Labor Peace and Improved Workers' Negotiating Power, Which May Explain Why Union Membership Is Declining

Article excerpt

In the United States today, less than 10 percent of private sector employment is unionized. After peaking at 35 percent in the early 1950s, union membership has been in decline for the last 59 years. The decline represents one of the most important institutional shifts in the U.S. economy. Reflecting the decline, a common theme among academic legal commentators is that the law governing unionization and collective bargaining, the National Labor Relations Act (NLRA), has been a terrible failure. I believe the opposite is true: the NLRA has been largely successful and in one key area it has been exceedingly successful. Moreover, its presumed failure--declining union enrollment--is due largely to its overall success.

In this article, I will describe this success. I will first outline the goals of the Wagner Act (the NLRA's progenitor legislation), and then explain how the NLRA achieved those goals. I will conclude by explaining why it's not surprising that those successes would result in declining union membership.


The first of the Wagner Act goals was, and is, industrial peace. The preamble of the Act states that the "denial by some employers of the right of employees to organize" and bargain collectively had led "to strikes and other forms of industrial strife or unrest." On one level, that goal means reducing the number of strikes or the economic effects of strikes. But that barely scratches the surface of that goal. Industrial strife in the late 19th and early 20th centuries went far deeper, raising the question of whether the employees would agree to work within a capitalist system.

Prior to 1932, there was no federal legal right to strike, even peacefully, and many strikes were illegal under state law or the federal common law. Employers often required that workers agree not to join a union or be involved in union activities during the term of their employment, and the federal courts held such agreements binding. Concerted activity by employees was not protected. If workers went out on strike and did not return to work when served with a state court-ordered injunction, the striking workers were in contempt of court. When confronted by police or Pinkerton guards, strikes would often turn violent. The next move in many strikes was for the governor to call out the National Guard to restore order.

In the Great Railroad Strike of 1877, federal troops were deployed in major cities in six states, including Baltimore, Pittsburgh, Chicago, and St. Louis. Striking workers often resisted, resulting in considerable violence and many deaths. Certainly one could understand President Rutherford Hayes' concern that a revolution against the government itself might be in the making. Hence, when I use the term "industrial peace" to describe what Congress was seeking, my focus is--and Congress's focus was--on the unrest that led to riots and the eventual use of police or military force to restore order.

Equality of bargaining power / The second goal was, and is, to redress "inequality of bargaining power." In the words of the Act, "[t]he inequality of bargaining power ... substantially burdens and affects the flow of commerce, and tends to aggravate recurrent business depressions, by depressing wage rates and the purchasing power of wage earners in industry and by preventing the stabilization of competitive wage rates and working conditions within and between industries." Whereas the goal of industrial peace is easily stated, the same is not true of the equality of bargaining power.

The second goal is complex because it has both procedural and substantive elements. On the procedural element, the legislation's author, Sen. Robert F. Wagner (D-N.Y.), said that the goal was satisfied if workers were represented by unions. I will adopt Senator Wagner's interpretation by equating the procedural element with workers' achievement of collective bargaining status. …

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