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Contesting the Great Compression: The National Labor Relations Board and Skilled Workers’ Struggle to Control Wage Differentials, 1935–1955

Published online by Cambridge University Press:  05 March 2020

BRYANT ETHERIDGE
BRYANT ETHERIDGE*
Affiliation:
Bridgewater State University
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Abstract:

This article argues that federal labor policy was a factor in causing the Great Compression, the dramatic compression of skill-based wage differentials that occurred in the 1940s, and in bringing it to an end. By giving the National Labor Relations Board the power to determine the appropriate collective-bargaining unit, New Dealers gave industrial unions the means with which to build a more egalitarian wage structure. Unskilled and semiskilled workers seized the opportunity and voted themselves big pay raises. Skilled craftsmen responded by petitioning the NLRB for permission to form their own craft bargaining units, a process known as “craft severance.” As conservatives gained influence in Washington in the 1940s, the board adopted a bargaining-unit policy more favorable to craft unions. By the early 1950s, skilled craftsmen had regained control of their wage demands and thereby helped bring the Great Compression to a halt.

Keywords

Great Compressionwage compressioncollective bargainingNew Deal labor policyNew Deal order
Type
Article
Information
Journal of Policy History , Volume 32 , Issue 2 , April 2020 , pp. 183 - 213
Copyright
© Donald Critchlow and Cambridge University Press 2020

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References

Notes

1. Tin Processing Corporation, 96 NLRB 300 (1951). See the appendix for more information on the NLRB cases from Texas cited herein.

2. “A Sensible N.L.R.B. Policy,” New York Times, 14 July 1952; “Bargaining Unstabilized,” New York Times, 7 May 1953; “Craft vs. Industrial Units,” New York Times, 10 March 1954.

3. Claudia Goldin and Robert Margo, “The Great Compression: The Wage Structure in the United States at Mid-Century,” Quarterly Journal of Economics 107, no. 1 (1992): 1–34.

4. Piketty, Thomas, Capital in the Twenty-First Century (Cambridge, Mass., 2014)CrossRefGoogle ScholarPubMed. Piketty briefly addresses the Great Compression, noting in passing the role of National War Labor Board wage controls. His earlier work on income inequality in the U.S., coauthored with Emmanuel Saez, engaged the issue of wage compression more directly. , Piketty and , Saez, “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics 118, no. 1 (2003): 1–39CrossRefGoogle Scholar.

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6. The role of NWLB wage determinations in the Great Compression awaits a definitive treatment. Labor historians, while devoting considerable attention to the NWLB’s union security policies, have shown less interest in the board's wage controls. The latest institutionalist accounts of the Great Compression produced by economists acknowledge the significance of NWLB wage controls, but they do not attempt to disaggregate them from the effects of collective bargaining. The prevalence of union opposition to the board's wage policies indicates, however, that analyzing the two factors separately would be fruitful. For a suggestive account of the intertwined issues of union hostility to wage controls, the NWLB's evolving policy on union security, and the indeterminacy of union jurisdiction that was exacerbated by the Wagner Act’s free choice provisions and reflected in the craft severance movement, see Willard, Timothy Alan, “Labor and the National War Labor Board, 1942–45: An Experiment in Corporatist Wage Stabilization” (PhD diss., University of Toronto, 1984)Google Scholar.

7. For the most influential articulation of this thesis, see Goldin, Claudia and Katz, Lawrence, The Race Between Education and Technology (Cambridge, Mass., 2008)Google Scholar.

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13. The phrase “radical moment” is from Katznelson, Ira, Fear Itself: The New Deal and the Origins of Our Time (New York, 2013)Google Scholar.

14. The AFL-CIO merger did not resolve the craft severance issue. By 1955, however, a pro-AFL shift in NLRB policy had rendered bargaining-unit designations less effective as a wage-setting tool.

15. MacDonald, Robert M., Collective Bargaining in the Automobile Industry (New Haven, 1963), 195Google Scholar.

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18. Reynolds, Lloyd G., The Structure of Labor Markets: Wages and Labor Mobility in Theory and Practice (New York, 1951), 195Google Scholar. In the 1940s and 1950s, labor economists published extensively on wage compression and the relative importance of industrial unions in causing it. See, for example, Ulman, Lloyd, “Marshall and Friedman on Union Strength,” Review of Economics and Statistics 37, no. 4 (1955): 384–401CrossRefGoogle Scholar. For a corroborating and somewhat more recent account, see Freeman, Richard B., “Unionism and the Dispersion of Wages,” Industrial and Labor Relations Review 34, no. 1 (1980): 3–23CrossRefGoogle Scholar.

19. The National Labor Board, created by the National Industrial Recovery Act of 1933, often used majority rule and administrative discretion to determine bargaining-unit composition during its two-year existence, rather than relying on mediation or presuming the appropriateness of craft unions’ jurisdictional claims. Gordon, Colin, New Deals: Business, Labor, and Politics in America, 1920–1935 (New York, 1994), 209Google Scholar; Tomlins, State and the Unions, 115.

20. Tomlins, State and the Unions, 227.

21. Gross, James, The Reshaping of the National Labor Relations Board: National Labor Policy in Transition, 1937–1947 (Albany, NY, 1981), 232Google Scholar.

22. On the relationship between the CIO and the NLRB in the 1930s, see Zieger, Robert, The CIO, 1935–1955 (Chapel Hill, 1997), 63–64Google Scholar, 82; Gross, Robert A., The Making of the National Labor Relations Board: A Study in Economics, Politics, and the Law, Volume I (1933–1937), (Albany, NY, 1981)Google Scholar, 243–54.

23. Quoted in Gross, Reshaping of the NLRB, 233, 46–47.

24. Dunlop, John, Wage Determination Under Trade Unions (New York, 1944), 57Google Scholar.

25. Globe Machine, 3 NLRB 294 (1937).

26. Quoted in Gross, Reshaping of the NLRB, 46. See also Millis, Harry A. and Brown, Emily Clark, From the Wagner Act to Taft-Hartley: A Study in National Labor Policy and Labor Relations (Chicago, 1950), 141Google Scholar.

27. American Can Company, 13 NLRB 1252 (1939).

28. The American Can ruling in 1939 was only one of a number of reasons why the AFL declined to support the FLSA, but it was a crucial consideration. Gross, Reshaping of the NLRB, 47.

29. Gross, Reshaping of the NLRB, 4.

30. Katznelson, Fear Itself, 274. Gall, Gilbert, “The CIO and the Democratic Alliance: The Case of the Smith Committee and the NLRB,” Labor Studies Journal 14, no. 2 (1989): 3–27Google Scholar.

31. Gross, Making of the NLRB, 249.

32. Gross, Reshaping of the NLRB, 167–71, 188–90, 197–98, 204, 207. On bills to limit the board’s discretion regarding bargaining units, see Millis and Brown, From the Wagner Act to Taft-Hartley, 335, 348–53.

33. Quoted in Tomlins, State and the Unions, 221–22.

34. Krislov, Joseph, “Administrative Approaches to Craft Severance,” Labor Law Journal 5, no. 4 (1954)Google Scholar: 231–40. The three cases were: Bendix Aviation Corporation, 39 NLRB 81 (1942); Bethlehem Steel Corporation, 39 NLRB 1330 (1942); and Goodyear Aircraft Corporation, 45 NLRB 369 (1942). For more postwar scholarly literature on craft severance, see Abodeely, John E., “NLRB Craft Severance Policies: Preeminence of the Bargaining History Factor After Mallinckrodt,” Boston College Law Review 11, no. 3 (1970Google Scholar): 411–33; G. B. H., “Craft Severance: The Doctrine of American Potash,” Virginia Law Review 46, no. 4 (1960): 756–74; Joseph Krislov, “Craft Units in Industrial Plants,” Personnel (1955): 353–60. Lahne, Herbert J., “The Welder’s Search for Craft Recognition,” Industrial and Labor Relations Review 11, no. 4 (1958)CrossRefGoogle Scholar: 591–607; Weber, Arnold, “The Craft-Industrial Issue Revisited: A Study of Union Government,” Industrial and Labor Relations Review 16, no. 3 (1963): 381–404CrossRefGoogle Scholar.

35. Tomlins, State and the Unions, 220.

36. Millis and Brown, From the Wagner Act to Taft-Hartley, 144. The key decisions in this era included Phelps Dodge Corp., 60 NLRB 1431 (1945); and International Minerals and Chemical Corp., 71 NLRB 878 (1946).

37. NLRB v. Hearst Publications, 32 U.S. 111 (1944); Packard Motor Car Co. v. NLRB, 330 U.S. 485 (1947).

38. Millis and Brown, From the Wagner Act to Taft-Hartley, 146.

39. Rathbun, Benjamin Jr., “The Taft-Hartley Act and Craft Unit Bargaining,” Yale Law Journal 59, no. 6 (1950): 1025CrossRefGoogle Scholar.

40. In the National Tube case from 1948, the board explained in detail its construal of section 9 (b) (2). National Tube, 76 NLRB 1199 (1948).

41. Winfrey, “Appropriate Bargaining Unit Decisions,” 177.

42. Millis and Brown, From the Wagner Act to Taft-Hartley, 143–44. See also Goldberg, Arthur J., AFL-CIO: Labor United (New York, 1956), 76–77Google Scholar.

43. “Ratcheting” was another term used to describe the same phenomenon. Krislov, “Craft Units in Industrial Plants,” 354. In addition to management concerns regarding wage increases, the expiration of every bargaining unit’s contract created an opportunity for workers to strike without violating their contract; thus more contracts increased the frequency with which management had to contend with work stoppages.

44. Krislov, Joseph, “Raiding Among the ‘Legitimate’ Unions,” Industrial and Labor Relations Review 8, no. 1 (1954): 19–29Google Scholar.

45. On strategic position, see John Womack Jr., “Working Power over Production: Labor History, Industrial Work, Economics, Sociology, and Strategic Position,” at http://www.helsinki.fi/iehc2006/papers2/Womack.pdf (accessed 16 August 2017).

46. National Tube, 76 NLRB 1199 (1948). National Tube was one of a small number of cases where the board did acknowledge the effects of craft severance on wage differentials. The order in the case noted that “any change in the unit governing the bargaining relations between the Employer and its employees would be detrimental to the basic wage rate structure underlying the Employer’s present operations.” For other instances where the board explicitly referenced the possible impact of craft severance on wage differentials, see Armstrong Tire and Rubber Co., 104 NLRB 892 (1953); General Motors Corp., Buick Division, 79 NLRB 376 (1948); Owens-Corning Fiberglass Corp., 79 NLRB 594 (1948); Pacific Coast Association of Pulp and Paper Manufacturers, 94 NLRB 477 (1951); The Winter Weiss Company, 80 NLRB 159 (1948).

47. General Electric (Lynn), 58 NLRB 57 (1944).

48. In addition to the cases cited below, see also General Tire and Rubber Co. 66 NLRB 453 (1946); Smiths Bluff Refinery of the Pure Oil Co., 77 NLRB 51 (1948); Gulf Oil Corp., 108 NLRB 162 (1954).

49. Hughes Tool Co., 77 NLRB 1193 (1948).

50. Sheffield Steel Corp. of Texas, 43 NLRB 956 (1942).

51. Sinclair Rubber Inc., 96 NLRB 220 (1951).

52. Winfrey, “Appropriate Bargaining Unit Decisions,” 32, 34, 56, 112, 123–24 and 287.

53. Quoted in Krislov, “Craft Units in Industrial Plants,” 355. However, as Krislov and other researchers found, the CIO official was either being deceitful or deluding himself regarding who initiated the craft severance process. Typically craftsmen approached AFL organizers, not the other way around.

54. Ozanne, Robert, “A Century of Occupational Differentials in Manufacturing,” Review of Economics and Statistics 44, no. 3 (1962)Google Scholar: 297–98.

55. Firestone Tire and Rubber Co. (Port Neches), 57 NLRB 868 (1944).

56. Firestone Tire and Rubber Co., 76 NLRB 226 (1948). Phillips Oil Company, 94 N.L.R.B. 1438. AFL unions were strong proponents of allowing bargaining units comprised of one person. The board, however, ruled that was not “collective” bargaining.

57. Correspondence and meeting minutes, Box 5, Tri-Cities Labor and Trades Council Records, University of Texas at Arlington Special Collections.

58. Sinclair Rubber Inc., 57 NLRB 800 (1944).

59. Table 77, Part 43, Texas, Volume II, 1950 Census of Population. The figures for craftsmen include self-employed tradesmen, so almost certainly the proportion of whites was even higher than 95 percent in settings where employer and union discrimination held sway. The three sectors were fabricated metal industries, chemicals and allied products, and other nondurable goods. The statistics are an aggregate of three standard metropolitan areas: Beaumont–Port Arthur, Galveston, and Houston. It is important to note that the contingent of workers identified as white in the 1950 census included Latinos, so the proportion of unskilled laborers who were Anglo was lower than the 45 percent identified as white.

60. Stein, Judith, “The Ins and Outs of the CIO,” International Labor and Working-Class History 44 (1993): 57CrossRefGoogle Scholar.

61. Margo, Robert A., “Explaining Black-White Wage Convergence, 1940–1950,” Industrial and Labor Relations Review 48, no. 3 (1995)Google Scholar: 470–81.

62. In the 1950s and 1960s, that changed as craftsmen in southeast Texas began to use craft severance as a mechanism to resist racial equality. Marshall, Ray, “Some Factors Influencing the Upgrading of Negroes in the Southern Petroleum Refining Industry,” Social Forces 42, no. 2 (1963): 189CrossRefGoogle Scholar.

63. Paper, Allied-Industrial, Chemical and Energy Workers International Union Collection, Houston Metropolitan Research Center.