The Relevance of the Nlra and Labor Organizations in the Post-Industrial, Global Economy

By Craver, Charles B. | Labor Law Journal, Fall 2006 | Go to article overview

The Relevance of the Nlra and Labor Organizations in the Post-Industrial, Global Economy


Craver, Charles B., Labor Law Journal


When the National Labor Relations Act (NLRA)1 was enacted in 1935, 13.2 percent of nonagricultural labor force participants were members of labor organizations.2 The United States had been transformed from an agrarian to an industrial economy as large manufacturing firms were established to produce automobiles, steel, electrical equipment, and similar commodities. During the mid-1930s, the leadership of the American Federation of Labor (AFL) created the Committee for Industrial Organization that was intended to develop ways to organize these new manufacturing companies and divide the new members among existing AFL craft unions.3 When it became apparent that the skilled, semiskilled, and unskilled workers employed by large production companies could not be easily assigned to traditional craft unions, the Committee for Industrial Organization leaders formed the Congress of Industrial Organizations (CIO) and created new industrial unions including the United Automobile Workers Union, the United Steelworkers Union, the International Electrical Workers Union, and the United Rubber Workers Union.

From 1935 through the mid-1950s, union membership experienced the most rapid expansion in U.S. history, as the union density rate increased from 13.2 percent to 34.7 percent.4 Competition between AFL and CIO unions-and the unparalleled success of the newly created industrial unions-generated significant membership growth. As labor organizations enhanced their economic power, Congress amended the NLRA in 1947(5) and in 1959(6) to prohibit union unfair labor practices and to limit secondary activity by organized labor.

In the mid-1950s, the AFL and the CIO united into a single labor federation, and AFL-CIO unions agreed not to compete with one another to represent the same workers. Although union membership continued to grow, it did not expand as rapidly as the nonagricultural labor force. As a result, by 1970, the union density rate had fallen to 27.3 percent.7 Throughout the late 1970s, the U.S. experienced high inflation, fueled by the formation of OPEC and rapidly rising oil prices. Cost-of-living adjustment clauses contained in many collective bargaining agreements caused labor costs in unionized manufacturing industries to increase substantially compared to costs associated with unorganized workers not covered by such contractual provisions. As businesses sought to reduce labor costs, northern manufacturing jobs were moved to sunbelt states. Labor-intensive work was often relocated to Maquiladoro plants in Northern Mexico.8 Electrical manufacturing and clothing production was relocated to low wage Asian countries. Businesses that continued to produce goods in the U.S. demanded wage and benefit reductions from labor unions that would enable them to compete with facilities operated in lower wage areas of the world.

A transformation in the American economy took place characterized by a shift away from a manufacturing-based economy to a white-collar, service, and retail-based economy. By 1990, only 16.1 percent of nonagricultural labor force participants were union members.9 These new businesses were highly competitive, and they worked hard to discourage their employees from joining labor organizations. Private sector union membership began to decline substantially. By the end of 2005, only 7.8 percent of private sector, nonagricultural workers were members of labor organizations.10 If this trend continues, private sector labor unions will become almost entirely irrelevant in coming years.

Over the past ten to fifteen years, the American economy has changed radically. Not only have we witnessed the transformation from an industrial to a white-collar, service, and retail economy, we have also seen a shift away from long-term, stable employment relations to shorter-term employment arrangements.11 Companies do not hesitate to lay off large numbers of workers as necessary, and many firms use independent contractors and "permatemps" retained from external employment agencies. …

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The Relevance of the Nlra and Labor Organizations in the Post-Industrial, Global Economy
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