Labor unions have always played a difficult role in the United States. While some view them as key to protecting employees from employer abuse, others view them as unnecessary overreaches into the workplace. Labor union membership has steadily fallen since the 1980s, with a majority of Americans reporting this decline is a negative.[1] Debate over the role of unions has reemerged as concerns over corporate practices have made the news in the past few years. This contrast can be particularly tricky to reconcile in the context of the United States with its economic adherence to free market principles.

This paper explores the emergence of unions and their development throughout U.S. history, analyzing their role in order to better understand both the current division in opinions on unions as well as how they have shaped our modern economy. This paper will start with an exploration of how unions originated through one of their first fights. Next, the role and impact of government in relation to unions will be discussed. Lastly, the paper will explain a theory for why labor unions have persisted in the U.S. capitalist system.

Clamor for Reform: The Rise of Unions

Labor unions in the United States started to gain popular recognition during the mid to late 1800s. A combination of an influx of factory work, which involved hundreds of workers in one building, and the rapid concentration of corporate power led to extensive abuses against workers. This gave workers both the motivation and means to organize as, unlike the cottage industries before, workers saw each other regularly at work in the same building. Beyond this, workers had to be near their place of work, which made planning outside of work easier. This reliance on living close to a factory or other jobsite also gave unions one of their first targets for reform: company towns.

Company Towns – The Pullman Strike

One of the most egregious examples of exploitation in the 1800s were company towns. These, as the name implies, were towns built by corporations to house their workers and provide for their daily needs. In theory, company towns were meant to benefit both workers and their employers by providing housing and other support and some like the ones established by Hershey included extensive amenities for workers. Unfortunately, many were closer to prisons or labor camps where workers were unable to leave because of a lack of transport, were kept within the area by guards and fences, or remained trapped by debt.[2] These towns often gave no voting power to the resident workers and some paid workers in “scrip” which was payment only usable at company owned stores.[3] These towns would become some of the key targets of union activism as seen with the Pullman Strikes.

Pullman Palace Car Company was a luxury train car manufacturer and its owner George M. Pullman created the company town of Pullman for his workers. The town was better than others with some amenities but was still plagued by inconsistencies in housing conditions and high rents. The Pullman residents eventually requested a reduction in rent rates after their wages were slashed repeatedly. The company refused and proceeded to fire several of the leading petitioners.[4] In response, on May 10, 1884, the workers left the factory to strike. The strike, which amassed 150,000 strikers, was ultimately put down by federal troops sent by President Grover Cleveland.[5] Despite the strong resistance of employers and the federal government, a national commission investigating the strike noted that Pullman’s practices were partly to blame and stated that his policies in relation to the town were “unamerican.”[6]

Company Towns – The Fall and Potential Resurgence

Critically, the concept of the company town did not actually die as a result of strikes or legislation, but from general improvements to the economy. The 1920 economic boom gave workers greater capacity to buy outside of company towns and the slew of New Deal programs coming from the Great Depression in the 1930s provided stronger safety nets to workers.[7] Though labor agitation and debate about the acceptability of company towns were common at the time, the U.S. didn’t institute regulations around this topic. These debates about company towns and other labor conditions reveal that American’s have long viewed practices like company towns, which are considered unacceptable in countries where unions hold greater sway, in an unfavorable light. However, the U.S. has been reluctant to address such practices with regulation.

Company towns continue to be a dichotomy between the discomfort of many Americans (including the federal government) with corporate overreach and the ongoing lack of consensus on fully embracing labor reforms. Company towns may feel like a distant concept, but today many view companies like Amazon and Google –which offer housing, amenities, and transportation– as the return of company towns.[8] Amazon’s first labor union, formed in 2022 over a variety of issues including wages and workplace conditions, reflects both a potential resurgence in unions and raises similar concerns to company towns.[9] Congress has appeared sympathetic to the union as seen by the introduction and passage in the House of Representatives of the Protecting the Right to Organize Act (PRO-Act).[10] However, this bill narrowly passed the House of Representatives with a vote of 225-206 and is considered “dead in the water” in the Senate.[11]

The Impact of Unions

Many of the modern workplace conditions and concepts stem from union activism. Although labor unions’ actions may not directly result in creating law, they act as a major catalyst for systematic change, galvanizing others to action. One example of union activism resulting in a later policy change is the modern 8-hour workday.

The 8-Hour Workday

In 1866, the newly formed National Labor Union (NLU) made the first national call for an 8-hour workday. The NLU, an amalgamation of trade-based union groups, highlighted shortening grueling 12 to 16 hour shifts[12] into an 8-hour workday as one of their key demands.[13] The NLU’s requests were cut short by the Panic of 1873.[14] The hard financial times made it difficult for those scraping by to risk agitating their already fragile work positions. Additionally, the NLU’s combination of many different trades with varied and often opposing goals, resulted in some internal conflict.[15]

Despite the NLU’s dissolution, their proposed 8-hour workday continued to be part of the labor movement and was endorsed by the progressive party of Theodore Roosevelt in the early 1900s.[16] In 1916, the Adamson Act created an 8-hour workday for railroad workers and opened the door for wider endorsement of the practice.[17]Later, the Supreme Court upheld the constitutionality of the Adamson Act, further enshrining the legitimacy of the reform.[18]

The 8-hour workday has become a hallmark of our modern capitalist society. Though no federal law mandated an 8-hour workday, the Fair Labor Standards Act set a maximum 40-hour workweek (indirectly endorsing an 8-hour workday) for a broad range of professions.[19] Further, states have independently applied an 8-hour workday into their laws, going beyond by requiring breaks for employees, particularly for meals.[20] Despite continued support for the 8-hour workday, one may wonder how a capitalist society could embrace the reforms of labor unions which could be viewed as interferences in a free market. This question can be explained, at least in part, by observing how Americans in the 1800s viewed their own labor.

Reconciling Unions with Capitalism: Free Labor and the Republic

Unions, which serve as a bridge between business and workers’ interests, are politically contentious. Some believe that labor unions innately buy into the capitalist system. They point out that labor unions in the U.S. context only exist within relationships with capitalists.[21] Namely, labor unions are simply privately negotiating with their employers for better conditions and wages rather than rejecting this system outright.[22] In contrast to these views, labor unions are often considered to be a critical element of socialism in contemporary debate. This correlation seems logical given that so many labor unions and movements drew their foundational theory from Karl Marx’s works, The Communist Manifesto and Das Kapital, since Marx viewed unions as critical to overthrowing capitalism, and since many countries that supported Marx’s theories moved towards some form of socialism.

Marx’s description of a capitalist society and its exploitation resonated with many Americans in the late 1800s. Much of what Marx had predicted a corrupt capitalist society would look like was a reality for many U.S. citizens.[23] However, when their frustration was vented, it was not directed at the whole system but rather at the political decisions that allowed for negative conditions in a capitalist system. Americans were moved by Marx’s theories, but many still saw Marxist thoughts on labor as compatible with a free market.

This may speak to a deep-rooted cultural support for democratic capitalism, as American workers believed these issues could be resolved by changing the laws via elected officials or referendums. Thus, rather than revolution, a new movement called “free labor,” emerged, aiming to change capitalism through the American political framework. Unlike Marxism, this movement was not centered around a redistribution of value but rather on protecting workers and providing upward mobility to achieve “productive property.”[24] Again we see a uniquely American view of labor unions, as the concerns were centered around individuals having a fair opportunity to gain ownership within their lifetimes. In the late 1800s, this took shape as aspiration towards home ownership, but the concept of free labor has resurged today in the concept of a “living wage.”

Unlike free labor, a living wage includes more than a way to achieve upward mobility. A living wage enables a person to meet basic needs including food, shelter, and other necessities.[25] The push for a living wage speaks to the same central concerns as free labor:  providing autonomy and a good quality of life to workers. The U.S. interpretation of free labor and living wages both seem to stem from concepts of the American Dream. Though the actual phrase “American Dream” was coined in the 1930s, it is highly likely the idea was an innate motivation for early unions. One of the key ideas of the American Dream, one’s ability to succeed via their own efforts, links closely to both free labor and the desire for a living wage. This idea was common in popular book genres at the time. The author Horatio Alger popularized the “rags to riches” narrative so commonly associated with upward mobility.[26] The fact that his books sold more than 20 million copies helps illustrate the widespread belief U.S. citizens had in the American Dream.

However, some unions like the Knights of Labor held more extreme views. Namely, beyond wanting greater property ownership, they felt the very nature of wage earning was antithetical to republican values. They described wage earning as not only un-republican, but also as unjust dependency.^[27] However, we can see another uniquely capitalist framing in their argument. Their frustration with wages was over working without having ownership in the business. We again see that American support for labor unions tends to stem from desires of ownership and the ideals of the American Dream.

Conclusion

Our history seems to suggest that the place of the union is to help strike the balance between a capitalist system and a republican government. From balancing a company’s offers of housing and medicine with workers’ ability to make independent choices to compromising over how many hours should be dedicated to work vs. personal pursuits, the American experience with unions centers around creating balance. Since the 1800s, unions have remained an important part of our system. Their prominence has fluctuated over time but as the same problems with market power and corporate concentration of the 1800s are rearing their heads again, unions are also resurging. Additionally, the uniquely American cultural view of unions seems to be alive and well, with most labor proponents still intuitively endorsing the American Dream that has inspired generations prior.

 

[1] Majorities of adults see decline of union membership as bad for the U.S. and working people, Ted Van Green (2022).

[2] Company Towns: 1880s to 1935, Virginia Commonwealth University (2017).

[3] Id.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] America’s Company Towns, Then and Now, Michele Lent Hirsch (2015).

[9] Amazon Workers on Staten Island Vote to Unionize in Landmark Win for Labor, Karen Weise & Noam Scheiber (2022).

[10] PRO Act, Don Gonyea (2021).

[11] Id.

[12] Industrial Revolution: Working Conditions, Norwood Secondary College (2022).

[13] Founding of the National Labor Union, Ellen Terrell (2020).

[14] Early National Organizations, US History.org (2022).

[15] Id.

[16] Founding of the National Labor Union, Ellen Terrell (2020).

[17] Id.

[18] Id.

[19] Id.

[20] What Are the Labor Laws for Working an 8 Hours Straight Shift?, Ruth Mayhew (2019).

[21] Why Unions Are Good — But Not Good Enough, Barry Eidlin (2020).

[22] Id.

[23] Ages of American Capitalism, Jonathan Levy (2021).

[24] Id.

[25] What Is a Living Wage?, Julia Kagan (2022).

[26] The Gilded Age, Alan Axelrod (2017).

[27] Id.