Learning Objective V: Discuss social and labor legislation and show how it reflects the new value of society--that business has rights as it always has, but it also now has responsibilities to society.
MANAGEMENT AND GOVERNMENT PRESSURE UNIONS
The more powerful the unions became, the more employers
came to fear them. Management refused to recognize unions
as representatives of the workers. Many employers forbade
union meetings, fired union members, and forced new
employees to sign “yellow-dog contracts,” swearing that they
would not join a union.
Finally, industrial leaders, with the help of the courts,
turned the Sherman Antitrust Act against labor. All a company
had to do was say that a strike, picket line, or boycott
would hurt interstate trade, and the state or federal government
would issue an injunction against the labor action. Legal
limitations made it more and more difficult for unions to be
effective. Despite these pressures, workers—especially those in
skilled jobs—continued to view unions as a powerful tool. By
1904, the AFL had about 1,700,000 members in its affiliated
unions; by the eve of World War I, AFL membership would
climb to over 2 million.
Until the 1930's, American social and labor legislation lagged almost a generation behind that of the more progressive European states like Denmark and Germany. Before the New Deal of the 1930's, labor and social legislation lay for the most part in the domain of the individual states such as Massachusetts, New York, and Oregon. Throughout the 19th century, few authorities contested the right of government to protect society and individuals against anything that threatened the general welfare. However, it was generally felt that the role of government protection was the responsibility of the states, and not the federal government.
But when the more progressive states passed social and labor legislation, the collective impact of these laws was not very impressive. Powerful vested interests such as manufacturers and landlords threw their weight against any kind of social legislation; and since such laws ran counter to the American traditions of individualism and laissez-faire, they often succeeded in either defeating them or making them ineffective. The enemies of state social legislation discovered the 14th Amendment to the Constitution as an effective weapon.
The philosophy which developed here was that if the worker accepted the job , he must also accept the risk of the job. The employer was not responsible for accidents which happened to the employee because of his own negligence or that of a fellow worker. If one lost a hand or an arm, it was tough! Most European nations had workman's compensation by the tum of the century, but the U.S. lagged behind again.
It was not until 1917 when the Supreme Court upheld New York State's Compensation Act that the majority of states could develop their own worker's compensation program. Within a few years, all states, except some southern states, had worker's compensation.
Finally, another area which needed attention was unemployment and retirement. America's early industries provided nothing for workers who had outlived their usefulness. These workers were supposed to fend for themselves or live on the charity of their children.
Again European nations took the lead by providing unemployment and old-age pension programs, even before the tum of the century.
It was not until the Social Security Act of 1935 (New Deal legislation) that our nation took appropriate action.
The overall trend before the New Deal was that business took in the profits and left the social problems which developed as a result of its practices to society to handle and pay for. As a result of the new social legislation, society made business responsible for some of the problems it helped to create. A new value emerged: business had rights AND responsibilities.