THE NEW YORK FOREIGN PRESS CENTER, NEW YORK CITY, NEW YORK.
MODERATOR: Okay, hello. I’m Katie Reedy, today’s moderator. Welcome to the Foreign Press Centers’ video conference briefing on understanding the history of labor in the United States. Please keep your microphone muted until you are called on to ask a question. If you have technical problems during the briefing, you can use the chat feature and we will try to assist you. As a reminder of today’s ground rules, this briefing is on the record.
I’d like to introduce our briefer, Professor Joshua Freeman. He is a distinguished professor at the Graduate Center of Queens College of the City University of New York. He previously taught at Columbia University and the College at Old Westbury SUNY. He has written extensively about the history of labor, modern America, and New York City. His books include “Behemoth: A History of the Factory and the Making of the Modern World,” “Working-Class New York: Life and Labor Since World War II,” “American Empire: The Rise of a Global Power, the Democratic Revolution at Home,” “In Transit: The Transport Workers Union in New York City, 1933-1966.”
This press briefing is an opportunity to better understand the history of labor in the United States and to ask any questions you may have on this topic. As a reminder, our briefer’s opinions are his own and do not represent those of the U.S. Government. Professor Freeman will provide opening remarks and then we will open this briefing to questions and answers.
Professor Freeman, please go ahead.
MR FREEMAN: Thanks a lot. I want to thank the Foreign Press Center for inviting me and for the journalists for joining in. It’s always a pleasure to have journalists who want to know about history, so I’m going to try to give a concise history of labor in the United States, end with a few remarks about where things are today, and then leave plenty of time for questions.
The U.S. labor movement is almost as old as the United States itself. An association of shoemakers in Philadelphia in 1792, not long after the Revolution, founded what’s generally considered the first union to be established in the country. And over the next century unions grew in size and power very episodically. They would expand in prosperous times, shrink in economic downturns. As in many parts of the world, originally union members were overwhelmingly skilled craftspeople. These were men, they were white, and they organized according to their particular craft – barrel makers, carpenters, bakers, or whatever.
But by the middle of the 19th century you began to get a kind of an expansion to other types of workers. Miners, railroad workers, factory workers, unskilled laborers now all begin to join unions in relatively modest numbers. The growth of industrial capitalism and the emergence of national corporations after the American Civil War, first in the railroad industry and then in other industries, led to some really titanic clashes between workers and employers. I think one reason for this was that many workers saw the development of these kinds of unprecedented concentrations of wealth as threatening not just their employment situation but the very nature of American democracy.
And you saw this kind of explosion in 1877, when – this was an economic downturn period. The railroad lines, which were the biggest corporations in the country, cut wages over and over again, and the result was the first national strike in U.S. history, which resulted in scores of death. And I have a photo I want to show you, if I could get it up here, that gives you some sense of the intensity of I guess what you’d call class conflict in the United States. This is the roundhouse of the Pennsylvania Railroad in Pittsburgh. To put down the strike the governor sent in the state militia, which proceeded to kill 20 strikers, and in retaliation they burned down what was one of the largest railway complexes in the world.
Less than 10 years later, 1885, 1886, another huge wave of strikes, this time primarily in an unsuccessful effort to achieve the eight-hour day. Workers typically worked 50, 60, 70 hours during that period of time. 1893, economic depression, yet another wave of strikes.
And one notable characteristic of these 19th century strikes was the high level of violence between workers and employers and workers and the police. Between 1875 and 1910, state militias – which is what today we would call the National Guard – was called out nearly 500 times to deal with labor unrest. And it’s interesting, prior to the 1960s, when the National Guard and even the regular army was repeatedly mobilized to deal with race-related urban disorders, the main reason that military force was used domestically in the United States was to deal with labor strife.
Well, as you get this rising level of kind of conflict and militancy, there are efforts to create national labor organizations that would bring together local and craft-based groups. The Knights of Labor – let me see if I could put up another illustration that’s got a bit of a chronology here – the Knights of Labor was the most successful 19th century labor group. It was a kind of odd mixture of a kind of labor union and a reform organization. It wanted to get rid of the emerging industrial capitalist system with – replace it with some sort of cooperative system. It was briefly very successful, but then by the end of the 19th century really fell apart.
And the organization that proved more enduring was the American Federation of Labor. And a lot of the traits of the American Federation of Labor really still characterize American unionism, so let me say a few things about it. AFL unions tended to be very contract-oriented. They saw their main goal as signing legally binding agreements with particular employers that sort of set the terms and conditions of employment, and they developed kind of bureaucracies to enforce these kinds of contracts. So these became led by full-time labor leaders, kind of labor leadership became a kind of career if you want to think of it that way.
Also the AFL was quite an exclusionary organization. The Knights of Labor were very inclusionary; about 10 percent of their members were African American. The AFL – many of its components banned Black members, and female member – workers were kind of largely ignored. AFL unions tended to be very pragmatic politically. They avoided sweeping reform programs. In the electoral realm, they concentrated on, to use the phrase of the day, we reward our friends and punish our enemies.
The United States, unlike most industrial countries, never developed an independent labor party. American unions have operated through alliances with the major parties, and of course in recent years this has primarily meant alliances with the Democratic Party. So this is the kind of model of American unionism that develops by the end of the 19th century. It had a lot of critics, mostly from the left, and the same kind of wave of radicalism that you saw in Europe in the early 20th century hit the United States.
The greatest strike wave in U.S. history took place in 1919. One out of every five workers in the entire country went on strike. One of the interesting things about this that I think no one thought about until recently is this actually overlapped with the worse pandemic in U.S. history, the influenza epidemic of 1918, 1919. There’s no research about the relationship of these two things, but it doesn’t seem as if the epidemic caused strikes, but it didn’t inhibit political action either. And sort of I was thinking about this because it’s kind of similar I think to the situation we’ve seen recently with the anti-racist demonstrations since the killing of George Floyd.
About 10 percent of non-agricultural workers belonged to a union in the beginning of the 20th century. That number plunged after the stock market crash in 1929 as mass unemployment developed. But the Depression turned out to be actually the greatest moment of labor advance in U.S. history and it had sort of two aspects to it. One was a big wave of union organizing. And at the forefront of this was a new union organization which was called the Congress of Industrial Organizations. That was founded in 1935. And it started as a group within the AFL, but it broke off.
The AFL was still concentrating on skilled workers organized by craft. The CIO said forget it if you want to organization the giant companies that dominate the economy – Ford, GM, U.S. Steel, Goodyear. These are all non-union. And it says the old methods will never organize, then we have to organize everybody – skilled, unskilled, white, black – who work in a given workplace into the same union. And within a decade, they pretty much succeeded in doing that. They organized the entire steel and rubber and automobile, electrical equipment manufacturing industries.
If you want to think in contemporary terms, it’s as if suddenly someone succeeded in unionizing Walmart, Amazon, FedEx, McDonald’s, Burger King, IBM, and Home Depot. And I didn’t pull those names out of a hat, those are all among the 10 largest employers of the United States. They’re all non-union. It’s as if suddenly they all became union. And with this gigantic increase in union membership from 3 million to 15 million in 1945 – so that right after World War II you see the peak of U.S. union membership with about 35 percent of workers belonging to unions.
The other thing you see in the same period is changes in labor law. In 1935, Congress passes the National Labor Relations Act or what was called the Wagner Act, after Senator Robert Wagner, its sponsor. And this for the first time says that American workers have a right, a federal right to belong to a union, to engage in collective activity, to go on strike without reprisal. And it required employers – if the majority of workers indicated they wanted to have a union, it required employers, like it or not, to recognize the union and engage in collective bargaining and establish a system of what was called exclusive representation. The union that indicated it had majority support represented every worker, including those that joined it and those that didn’t. And any contract it signed covered every worker in the workplace. So this is a different system than you see in let’s say France or Italy, where you might have multiple unions in the same workplace. All this is still the case today.
The other thing you saw in the same time period was the Social Security Act, which created our still-existing system of old age pensions and unemployment insurance. And then three years later in 1938, the Fair Labor Standards Act, which established a minimum wage, 40-hour week, and the idea of overtime – you have to pay people extra if they work more than the designated work week.
One thing to note: These laws were not universal. They only covered people who could be considered involved in interstate commerce in some way or another. They explicitly excluded farm workers, domestic workers, and public employees. And to this day, for example, public employees are not covered by federal labor law, and in many states they are not allowed to join unions and collective bargaining is illegal.
But all in all, this was a tremendous advance, and the post-war quarter century was a kind of golden era for American workers because you had an expanding economy and a high level of unionization, which meant wages went up and new benefits became common, pensions to supplement Social Security, health insurance, vacations. This was a time when economic or particularly income inequality was at a historic low. And year after year, workers could – and their families, they saw life getting better. Things that were previously almost unimaginable – owning a car, owning a home, taking a vacation, sending children to college, retiring when you were still able to do things – these became kind of commonplace.
So this is, I think, kind of a golden age. When people say “make America great again,” I think in a lot of people’s heads this is the moment they’re thinking about.
If you looked really carefully, there were already signs that labor’s advance had stalled. 1947, Congress modifies the Wagner Act with something called the Taft-Hartley Act that diminishes the rights of unions. It’s a kind of shift in favor of employers in terms of the rules and regulations. And I could go into the details, but I won’t do it now. But the net effect of it is to make it harder for unions to organize and to create a two-tiered system where some states could opt out of some of the rules, which happened in the South, making them more attractive to employers who wanted to minimize union presence.
So kind of labor advances pretty much stopped by the late ‘50s, early ‘60s. The big exception were public employees. Prior to the 1960s, very few public employees belonged to unions. But then came a two-decade wave of organizing that brought millions of teachers and policemen and firemen and parks workers and so forth into the labor movement. Many of these workers were female or non-white. And this organizing success in part was a result of a spillover, I think, from the civil rights movement and then the women’s movement, which were contemporaneous with it.
So all in all, mid ‘30s to mid ‘70s, a period of big advance. And then a 40-year decline begins. In 1970, 27 percent of all nonagricultural workers belonged to a union; by 1983 that was down to 20 percent. By last year, 2019, it was down to just 10 percent. I’m going to throw up a picture here which I hope will give you an image of this. As you can you see from this chart – I hope – most of the decline is in the private sector. So that the public sector, later to be organized, ends up being much more heavily organized, and by recent years you actually have about the same number of private and public workers in the union movement. In the private sector, what they call union density, the percentage of workers who belong to a union, is only 6 percent – in other words, lower than it was in, let’s say, 1900. Okay.
Now, why did this decline happen? That’s a complicated question. A couple factors I’ve mentioned. One is a much tougher anti-union stand by business starting during the very deep recession of the late 1970s and early 1980s. Another is the decline in industries that were traditionally strongly union – manufacturing and mining in particular – while the growing industries were particularly in the service sector, which have lower unionization rates. Similar inequality in regional patterns. Unions had been strongest in the Midwest and Northeast, but since the 1980s the greatest growth in the United States in terms of jobs and population is in the South and Southwest, areas traditionally weak in unions.
Today, you have 23 percent of workers in New York state belonging to a union. That’s the highest number in the country. In the Carolinas – North Carolina, South Carolina – it’s 2 percent. So tenfold difference in different parts of the country.
In very recent years, there have been some signs of revival of the labor movement, but not primarily taking the form of growing union membership, but kind of alternative strategies, alternative organizations. I think probably the most impressive is what’s called the Fight for 15. This was a campaign launched by some fast-food workers in New York in 19 – excuse me, in 2012, who were seeking better pay, better conditions. They demanded a $15-an-hour minimum wage, which at the time seemed like totally off the chart, because the federal minimum wage at the time and now is $7.25. What’s amazing is that within a few years in seven different states, the states passed minimum wages of $15 or more. Some cities have done this. So there’s been a tremendous increase.
Now, this actually was a union that was kind of lurking behind this, SEIU. It provided political and financial support. It hoped this would convert into bigger union membership. That didn’t happen. So you got improved wages but not increased union membership.
You’ve seen this similarly in the growth of what are called worker centers. These are nonprofits that serve primarily low-wage immigrant workers, many undocumented. They’ve been pretty successful in winning some advances, but it has not converted into more union members. Again, another thing like this, a lot of online worker advocate organizations, some in the tech industry, these have grown up, they’ve had some success, but not in terms of union membership.
So what we’re seeing is with – not significant union gains, but we are seeing questions of labor and labor rights and the treatment of workers as being more central to U.S. political discussion, I think, in the last few years than for quite a while.
And I’ll just end by pointing out that we’ve certainly seen this in the current pandemic, in the issue of so-called essential workers, the warehouse workers, the meat-packing workers, the delivery workers, who frankly are generally ignored by the public. But they have now received a lot of attention and their conditions have been highlighted, and companies like Amazon have found themselves facing rather unusual levels of public criticism and worker protest because of what is seen as a failure to adequately protect the health of their workers. Does this mark the beginning of some long-term shift, or is this just a very short-term, temporary COVID-related development? I don’t know. It’s very hard to say. I think when we come out of this, the world’s going to look different in a lot of ways. Whether it looks different in terms of labor relations remains to be seen.
So I think I’ll stop there, and happy to answer any questions that you folks have.
MODERATOR: Thank you so much, Professor. Let’s first hear from those participating via the Zoom app, and then I don’t think actually we have anyone who has called in. So yeah, so for those of you who have joined, please click the “Raise Hand” button. I already see a hand up; that’s great. At the bottom of your screen you should be able to choose that option and I will call on you. And please, as a courtesy, please do provide your full name and outlet.
Okay, so Pearl. I believe we have a question from Pearl Matibe.
QUESTION: Thank you very much, Katherine. I appreciate this platform. Again, my name is Pearl; I’m with the Mail and Guardian, South Africa. Thank you very much, Professor Freeman. And more importantly, I always appreciate data and data visualization, so I really appreciate you sharing the slides that you put up today.
You brought up a question in terms of the fact that labor is becoming an important issue, particularly the – in the face of COVID-19. But it also, prior to COVID-19, was a key element in the 2020 U.S. election. Especially when Senator Sanders was running, the issue of unions was key, I believe, maybe in Texas or Arizona. I can’t remember which state. How do you see that playing out? It’s – I find it interesting that you pinpointed certain sectors. In my mind, I thought union activity was not prevalent in the hospitality sector. Can you speak a little bit about where you see unions being impacted in this current election? Thank you.
MR FREEMAN: Yeah, that’s a really complicated question because the American working class is so diverse, and union membership is so diverse. So, for example, you point to the hospitality industry, which has been a success story for unions in an era when their traditional strong areas, let’s say our construction and manufacturing, have been – and particularly manufacturing – have been shrinking. Well, hospitality workers are heavily non-white in this country, heavily female, and their union is quite progressive. I think the spectrum in the hospitality union goes from Hillary Clinton on the right to Bernie Sanders on the left, and I think they will be a very important pro-Biden element if they can be mobilized to vote in large numbers. And there are many other unionized areas like that.
Donald Trump, obviously, with a great deal of publicity, did win a fair number of white male working class votes, particularly in some key areas like the Midwest. I think that factor perhaps has been overemphasized, but it’s certainly a real factor when you have such close elections in certain key states. Where those workers will end up will be very important, and I don’t think any of us really know. I mean, Trump is pretty good at the symbolic level, but he hasn’t really delivered a lot of the things he promised. So will there be a disillusionment in that group? It remains to be seen.
So I think, look, Americans without more than a high school education who work in relatively low-paid jobs are the majority of all people in the country, and most of them don’t belong to unions but a fair number of them do, and they will be critical. But I would get paid a lot more money if I could tell you how I thought it would be playing out.
QUESTION: Thank you very much, Professor Freeman. I do have a follow-up question, but maybe after the other journalists have asked, if indeed there is any time, I’ll ask a follow-up question. Thank you.
MODERATOR: Thank you. All right. Do we have any other – anyone else who’d like to raise their hand to ask a question? Pearl, do you want to just go ahead? That’s – that’d be great and we can give folks time to collect. Yes.
QUESTION: Yes, thank you very much, Katherine. So Professor Freeman, my follow-up question is: You mentioned the fact that for government employees, for example, it’s illegal for them to belong to a union, and yet we see the – I guess this bargaining has helped other people in other sectors. And yet we’ve also seen in recent years where the government has actually shut down, and so government employees cannot bargain, cannot be —
MR FREEMAN: No, the —
QUESTION: — part of that bargaining process. Who is – who is bargaining on their behalf? And I just want to raise another element to my question there. In many —
MR FREEMAN: Well, let me – Pearl, Pearl, let me – let me clarify because I obviously was not clear, and so let me explain this and then I’ll take the rest of it.
MR FREEMAN: There’s no federal regulation or federal rights for public employees, which means that every state is different. So in some states it is illegal to have collective bargaining for public employees. For example, in the state of Virginia it’s – let’s say that some local school board, public school system, it wants to bargain with the union and sign a contract. It is not legally allowed to do that. Then there are other states, for example like New York, that do allow bargaining and there’s lots of unionization in New York state, but strikes are illegal. Okay? Then there are states like Pennsylvania where public sector bargaining is legal and public employee strikes are legal. So there’s a huge range. This issue has gotten a fair amount of attention in the last couple of weeks because among the workers who in some places are unionized are police, but in other places they can’t engage in collective bargaining. So it’s really kind of a mishmash. So I hope that’s a little clearer than my initial presentation.
QUESTION: It is, but so I just wanted to add the second portion of my – what I wanted to try and clarify my understanding, is for example, at the end of 2019, government employees in the District of Columbia, for example, in order for them to get a raise, an increase, a certain percentage to their earnings, they weren’t part of the ones who were bargaining or negotiating. I think the recommendations – I think came one recommendation from the White House with a certain percentage increase, and another recommendation came from Congress with a certain percentage increase. So are they waiting on them to decide whether or not they get an increase and how much, so they’re not playing a part? And where do you see the – (laughter) – I see you smiling.
MR FREEMAN: Well, I mean —
QUESTION: And where do you – where do you see —
MR FREEMAN: You just —
QUESTION: I’m trying to see: What can other countries learn from this process?
MR FREEMAN: Yeah. You picked such an odd example, because the District of Columbia is the only local area, the only city which is directly controlled by the federal government. So there Congress can overrule the local elected government and actually do anything it wants, because it’s not a state. It’s directly – it has a special status. So that’s a very unusual circumstance and it becomes a football – a partisan football – in fact, it’s about to happen all over again because there’s a – the Democrats are going to pass a bill in the House to propose making it a state, and then the Republicans are going to turn it down. So it’s an unusual case.
I think if you’re looking at other countries, in a way, the United States is a kind of natural experiment, because you don’t have one system; you have 50 systems and different states, and you could look and see which one do you think works better. A lot of states who do allow collective bargaining don’t want to have strikes, make strikes illegal, and use arbitration systems to determine wages for public employees. Sometimes they have to go that route; sometimes they can choose to go that route.
So there’s a whole variety. Whether this makes sense as opposed to having a national system, I don’t know. But this really has to do – this is getting into the weeds of the constitutional basis for labor law. Why can the federal government regulate things like wages or union rights? Well, it’s because Congress – the Constitution gives Congress and the federal government the right to regulate interstate commerce. So if there’s not interstate commerce, then it falls to the individual state. So that’s why we have this crazy hodgepodge, and it’s led to a very decentralized and fragmented labor movement in the United States in the public sector compared to most other countries.
MODERATOR: Thank you. Pearl, did you have a follow-up on that or are you all set?
QUESTION: Let me think.
MR FREEMAN: I think there’s a hand raised.
QUESTION: I think – I mean, I certainly appreciate Professor Freeman’s explanations. I think they’re very, very helpful. You had one slide that you put up, but I noticed that the slide only ends at 2013, so I was taking a look at that graphic where you were emphasizing —
MR FREEMAN: Yeah.
QUESTION: — the decline, I believe, in the private sector.
MR FREEMAN: Yeah, yeah.
QUESTION: Do you have another – other information? Perhaps I can reach out to you via e-mail that’ll show us —
MR FREEMAN: You can if you —
QUESTION: — the more recent data?
MR FREEMAN: Yeah, you’re more – you’re welcome to. I’ll just add a piece of data, and then I’m happy to send my e-mail right now. It’s jfreeman, as my name, and it’s @gc.cuny.edu. Feel free. I could put it in the chat. The one piece I would add is that since that chart ended, in terms of absolute numbers, there are actually now more publicly employed workers who belong to a union than privately employed, and that is unprecedented in the past U.S. history. This is a new situation.
QUESTION: Thank you very, very much. Thank you.
MODERATOR: Thank you. All right, so we have a question from the chat. This is from Takashi Ebuchi from the Asahi Shimbun from Japan.
And their question is: “Thanks for the informative talk. Some say we now need a new-New Deal to deal with the fierce economic crisis. What should be done in terms of labor policy? Do you think Biden can be the FDR of the 21st century?”
MR FREEMAN: Well, I think American labor law is pretty much broken. I think the rules that were established in the mid-1930s, that’s a long time ago at this point, and they no longer correspond to the way work is organized. We have so much subcontracting, gig work, shorter-term employment stints. We also have much fiercer employer resistance so that if they do polls, the majority of all workers said they would like to be in a union, yet only about 10 percent actually are able to achieve that. So I do think we need – I would say we do need a new New Deal, and it does need a revision of labor law to more effectively achieve the aim of the original 1930s legislation, which is to give workers a voice in employment, to bring some component of democracy into the workplace.
How – there are lots of proposals. There was just a big study up at Harvard University at the Kennedy School of a proposal for a revision, and there are other things like this. So there’s a lot of talk about this, and I’m sure people around Biden are very well aware of these issues. Can Biden be the next FDR? I don’t know. But I would say the only reason why FDR could be FDR was because there were massive popular movements dealing with issues like housing, unemployment, labor relations, that were pressing the whole political establishment to be much more proactive. So if Biden is going to be able to achieve big-scale change, it – here, I think Bernie Sanders was right when he said it has to be a movement, it can’t be a person. And I don’t know. We’ve seen a lot of – a very unprecedented level of activity in the last couple weeks, but it’s been around a very specific set of issues.
MODERATOR: Thank you. All right, we have a hand up from Alex from Turan News Agency, and I will turn it over to him.
QUESTION: Thank you, Katherine. And Josh, this is Alex Raufoglu from Turan News Agency of Azerbaijan. Wonderful presentation, thank you for doing this. You mentioned influenza, and you spoke a little bit about the behavior of American labor during that time early last century.
Two questions popped up in my mind. One is: Can American labor rebound and once again act strongly right now, so given current circumstances that we are in? And many of us are focused on the response of the governments to a pandemic and obviously its economic impact. But the private sector must lead as well, right, not just in the recovery phase but also in crisis response, given its capacity for rapid adaptation and innovation, understanding of consumer behavior, flexibility, just name it.
So my question is: How can the public and private sector collaborate most effectively in restarting financial flows, delivering essential health, and other services to vulnerable, and restoring livelihoods? Thank you very much.
MR FREEMAN: Yeah, that’s a big question or a couple questions, and I’m just a historian, but let me look back first. It’s interesting, American labor has made some of its greatest advances in periods of crisis or great national stress, and particularly during the two world wars, because there was some sense in these moments that the country’s security, its victory depended not just on the soldier in the field but on the industrial worker. These were the great industrial wars, and unless you could turn out the planes and the tanks, you could never win. So there was a kind of strategic and moral rise in the standing of workers, particularly industrial workers, which translated into greater union strength, political strength, ultimately greater wages and benefits.
I think we sort of saw something a little bit like that in the past few months with the essential workers. A lot of companies felt the need to raise their wages by $2 – this became a kind of new norm – to recognize the risks, but also, frankly, the kind of high profile of these workers who they often treated pretty lousily till the pandemic hit. So there is an opportunity for workers, I think, whose conditions have now been exposed to the public – a sympathetic public, I think, to the grocer, to the deliveryman, to the person who they have been depending on.
Whether this will be capitalized on in a way that goes beyond just the COVID epidemic, I don’t know. It’s just interesting. Right now, for example, major corporations have sort of divided on what to do with this high pay, the – not high, but $2 extra. Amazon has canceled it already. Target announced, I think just today, that they’re making it permanent. So behind the scenes, I think this is very much in play right now.
In terms of moving forward, economic recovery, absolutely you’re going to need both public and private involvement. Right now, we have that, but it’s mostly in terms of the federal role that’s sort of giving money, lending power, credit into the private sector. It’s not providing a whole lot of direction in terms of investment priorities and so forth. It’s – and it’s leaving that kind of to the individual private companies. I wonder, going forward, if we’re going to need a more – a different balance, let’s put it that way, between public and private, with more of a component of planning, which is something that you did see in the New Deal era. A lot of Americans don’t like that, but a lot of Americans – also other Americans think that that is important.
So I think that will be very much kind of a tension, and I think no matter who wins the presidential election, I think that issue is going to be lurking there.
QUESTION: Thanks so much.
MODERATOR: Thank you. It looks like Pearl’s hand is up again or was – maybe that was from before. Pearl, do you have another question?
QUESTION: Yes. I’ll make this my last question for you.
MODERATOR: No problem.
QUESTION: Thank you very much, Katherine. I’ll make this my last question for you, Professor Freeman. Right around now, the United States Government is exploring how to have more resilient engagement with Africa. Part of that is engaging U.S. businesses with Africa. So already they are – have had these decades and decades of knowledge in terms of how they work with – their relationships with their workforce.
If you were to think of perhaps three things as takeaways, as lessons from history – lessons from the history of labor – that you think had long-term gain in terms of being drivers of – for workers, what would those be? What key – what three key drivers were lessons from history?
MR FREEMAN: Well, I think I would go back to that mid-’30s moment, and it’s interesting. What was the thinking behind creating these new rights and these new structures? And I think it was multiple. One was a kind of democratization instinct that said why should workers have rights everyplace except where they spend most of their day, which is the workplace, where you have no rights of speech or – so forth.
But there were other instincts too. One was to channelize high-level disruption. I mean, I showed you that picture of the burnt-down train yard. For people like Robert Wagner who wrote that bill, they all want that. So they want to create institutional frameworks for what they see as inevitable: conflict between employers and employees. So it’s not you’re going to eliminate that, but you’re going to find institutional means to regulate that.
And then there’s a third piece, which I think is very relevant to not just Africa, but to China and a lot of the world, which is there is a kind of Keynesian assumption behind a lot of the American labor law, although no one in the United States realizes that. If you read the preamble to the bill, the idea is not just to give rights, but it also says look, the problem the United States has is not that we can’t make lots of stuff in 1935; it’s that we have overcapacity. There’s not enough demand. We have empty factories, factories that aren’t working, farms that are making too much food. How do we solve this problem? We have to increase consumer demand. How do we do that? Give power to workers to succeed in raising their own wages. And this will create a kind of virtuous circle where higher wages will stimulate the economy, which will increase output and productivity, which could then support higher wages and so forth and so on.
So this is a different model than, for example, China used until recently, which was so much based on infrastructure investment as stimulating demand, which – not necessarily saying there’s anything wrong with that, but I think even a lot of Chinese policymakers now realize that you need to increase consumer demand. So labor relations and unionism actually can be a macroeconomic tool to stimulate demand.
America’s been going the opposite direction over the last 20 or 30 years and the ability to buy things for a lot of Americans has gone down, and I think that is one of the reasons why we’ve had pretty chronic economic problems in the 21st century. What I’m saying, not everyone would agree for sure, but I think if you asked me for a takeaway for another region, these are parts of American history I would look at.
QUESTION: Thank you very much. Thank you very much.
MODERATOR: Thank you. All right. Do we have any final questions?
MODERATOR: Okay. Well, with that, I want to thank Professor Freeman for his time and for giving this presentation today. As I mentioned, it was on the record, and so we will have a transcript that we will be able to post on our website, and hopefully we can refer those with questions about this topic to that transcript for many years to come.
So thank you again to everyone.
MR FREEMAN: Thanks.