Big Business Strikes Back
After the success of the National Labor Relations Act and the growth of collectivization, big business got their footing, fought back, and won some major victories that would nearly erase unions in America.
By Lisa Wright
Our previous post in this series explored the rise of American unions in the early 20th century. With the passage of the National Labor Relations Act (NLRA) in 1935, things were looking up for American workers. As union membership grew, so did the living standard of America’s middle class—a trend that lasted for 30 to 40 years.
But anti-union forces weren’t backing down without a fight.
Back before the NLRA, union-busting efforts were violent and aggressive, sometimes escalating to opening fire on strikers. After the NLRA banned hostile anti-union activities, union-busters tried a different tactic: harnessing the power of the federal government.
The ironic thing is, efforts to destroy unions goes against the will of the American people. Since the passage of the NLRA, nationwide approval for unions has never dipped below 48%, topping out at 75% in the early 50s, and is over 70% today. So, while union support was at its high, powerful business interests, including industry leaders, certain state legislators, and occasionally even the federal government was doing everything it could do degrade unions’ power and reverse public opinion.
Devastating “Right-to-Work” Laws Are Born
After WWII ended, unemployment was at incredible lows between 1 and 3%. Americans were back to work, and with the NLRA protecting union workers’ rights, that meant there were more strikes, too. In retaliation, a largely anti-union Congress passed the Labor Management Relations Act (also known as the Taft-Hartley Act), in 1947. President Truman unsuccessfully attempted to veto the Act, calling it a “dangerous intrusion to free speech.”
The Act included:
• Prohibition of closed shops (these required employees to become a union member and pay dues as a condition of employment)
• Requirement of 80 days' notice for strikes
• Introduction of “Right-to-Work" laws
"Right to work” might sound like a good thing—but it's not. In fact, Martin Luther King, Jr., called the phrase “a false slogan” put in place to remove workers’ rights. By making union membership optional and bestowing any union-won benefit on all workers, Right-to-Work weakens unions financially, degrades workplace safety, and reduces employee wages and benefits.
Right-to-Work has had a catastrophic effect on membership rate. After RTW was introduced, U.S. union membership took a continuous dive until reaching a record low in 2023 to 6%.
According to the AFL-CIO, 24% of jobs in Right-to-Work states offer a low wage, compared to only 14.5% in states without RTW. Workers’ pay drops an average of 3% when Right-to-Work laws are passed. After Michigan recently repealed its own RTW laws, 27 states still have RTW in place.
In 1981, President Ronald Reagan fired striking air traffic controllers who were seeking protections from long stressful shifts without breaks. It broke their Patco union, and set American labor on a course toward dwindling unionization.
Reagan’s Betrayal
Hollywood actor Ronald Reagan served as president of the Screen Actors Guild (SAG) from 1947 to 1952 and again from 1959 to 1960. His work helped SAG actors secure great benefits like residual payments, health insurance, and a pension plan.
Fast forward to 1981. Reagan is now President of the United States, but has flip-flopped on unions and no longer supports them.
In August, he was faced with a union crisis. The Professional Air Traffic Controllers Organization (PATCO)—a union that endorsed Reagan’s candidacy—went on strike to protest unfair wages and long working hours.
In a bold move, thousands of controllers walked off the job. No air traffic controllers, no flights, right? President Reagan ordered them back to work in 48 hours or he’d fire them all. The union didn’t blink, and while they struck, Reagan’s people scrambled to replace them. From retired controllers to recent air traffic program graduates, thousands broke the strike.
Reagan’s plan worked. On the first day, airlines were able to offer 50% of their regularly-scheduled flights. That increased to 75% on the second day. Reagan’s 48-hour deadline passed, and he fired all 11,345 unionized professionals.
Reagan’s victory became a “how-to” guide for employers to smash union protections. Companies manipulated strikes as an opportunity to save money by replacing union workers with cheaper non-union labor. With an enhanced anti-union tool chest, businesses started crushing unions and regaining the upper hand, resulting in union membership falling precipitously.
Despite recent labor wins, the past reveals a sobering lesson for workers seeking protections within unions: the opposition is powerful and connected, and they have an effective tool kit to keep workers down.
Income Inequality Grows
Attacks against unions were hurting Americans -. As union membership sank, millions of workers missed out on fair pay and benefits. Income inequality grew, which meant our poorest demographics were hit the hardest.
One commonly used metric to measure income inequality is the 90/10 ratio. This ratio, which compares top household incomes with bottom ones, has risen since the late 1970s.
In 1980, the nation’s 90/10 ratio was 9.1, meaning top households made 9 times more than the bottom. That number rose steadily for the next 40+ years—revealing a growing divide between our nation’s richest and poorest. The ratio topped out at 13.53 in 2021, before dropping back to 12.63 in 2022.
Slow But Steady Progress Rebuilds
Although it’s nothing like the Wild West of the early 20th century, employers are still attacking unions today. The Economic Policy Institute estimates that “union-avoidance” efforts are a $400 million-dollar a year business, though reporting loopholes hide a far larger number.
But workers are pushing past the pushback. There's a renewed passion to organize, including unionizing non-traditional industries. Employees at Amazon, Starbucks, Trader Joe’s, Google Fiber, Barnes & Noble, and many others are successfully organizing across the country.
Hopefully, as these efforts grow we’ll see membership rates go up, income inequality go down, and once again see the rise of a pro-union America.
Lisa Wright is a journalist and author of several books.
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