Labor is one of the three primary factors of production, next to capital and land. However, different from the other two, labor deals with the work of humans rather than money or the property it can rent or buy. Being part of labor requires thus that one is paid for one’s labor services.
The provision of labor was seen by the French sociologist Emile Durkheim (1858-1917) as part of the identification of a worker with society or part of the struggle of the personality with society. The laborer as the member of a class—the working class—is also a recurring theme in sociology. Two classical expositions come from the political philosopher Karl Marx (1818-1883), who offers a historical analysis of class struggle, and the sociologist Max Weber (1864—1920), who uses class more as a classification of stratification. The reward of wages in the context of labor, especially its share of the entire production process encompassing all factors of production, also mirrors the importance and power of the class within society.
ANCIENT LABOR TO INDUSTRIALIZATION
Ancient labor markets, especially in ancient Greece and Rome, were based on agriculture and manufacturing. Both relied heavily on slave labor, which provided both skilled and unskilled labor.
In medieval times, the common agricultural laborer, or peasant, produced for self-sufficiency, and there was little exchange economy. Labor was dependent on the aristocrats, who were the landowners. The feudal landlords granted protection and the right to use the land in exchange for taxes that included labor services, which is commonly called bondage. This hierarchy from lord to serf was common from higher to lower aristocracy and from aristocrats to peasants. Extortion of both goods and labor services were enforced not only by the aristocracy’s ownership of the land, but also by their executive and judicial power.
Manufacturing, which was usually strong in the free cities (i.e., those not under the rule of an aristocrat), was in the hands of guilds whose members organized themselves to protect their interests. Workers had to learn a craft by going through the apprenticeship as journeyman, and they depended on their guild master both financially and also professionally as the guild masters decided upon elevation to the master level. While labor was in this sense not free, moving to the free cities to become a craftsman allowed one to free oneself from aristocratic rule.
Factory work forms the core process of industrialization, moving away from small-scale production at home and toward large-scale, specialized production. This specialization process is described with the example of the pin factory by the Scottish economist Adam Smith (1723-1790): [I]n the way in which this business is now carried on, not only the whole work is a peculiar trade, but it is divided into a number of branches, of which the greater part are likewise peculiar trades. One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on, is a peculiar business, to whiten the pins is another; it is even a trade by itself to put them into the paper; and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactures, are all performed by distinct hands. (Smith 1776, p. 15)
While Smith understood the importance of specialization, in his time the impact of machines was probably still underestimated. Mechanization using the steam engine in the eighteenth century led to a higher productivity of factory work, which is commonly seen as the breakthrough in the process of industrialization.
Smith did provide the intellectual underpinning of the capitalist model in which the pursuit of self-interest under free competition leads to higher wealth for society. His influential work was even used in English courts to prohibit union activities, as the unionization of labor was seen as a hindrance to free competition.
Together, mechanization and specialization led to a certain alienation of the laborer toward the production process. Labor became, next to capital, a true factor of modern production. During the period of industrialization, peasant workers moved away from agricultural work and toward that of unskilled labor in the newly established manufacturing plants. These laborers were no longer dependent on landowners but became wage workers, forming the working class. The process of industrialization was a long one. Exploitation of the workers was the norm rather than the exception as sufficient labor arrived from the ranks of agricultural workers. Edward P. Thompson, in "The Moral Economy of the English Crowd in the Eighteenth Century" (1971), writes of the formative years from 1780 to 1832 in England. He describes in detail the life and the movements of the English working class of that time. It was through the struggle of the workers that the notion of a working class evolved, which was necessary to develop labor organization.
It took about a century for wage labor to become the norm in the nineteenth century as increasingly more workers were employed, replacing work on the land with work in the newly established factories. The movement from larger workshops to mechanized industries took two centuries, from the late eighteenth century into the early twentieth century. Industrialization commenced in England and was started in continental Europe several decades later, starting with Flanders, France, and later in Germany, Switzerland, and some southern European countries.
LABOR ORGANIZATION
Labor organization commenced in Europe in the eighteenth century, first within an urban setting or within factories, solely to perform the social functions of exchange and insurance against illness. National organization arose in Europe in the late nineteenth century. It was the skilled worker, at a level between owner and unskilled labor, who participated in the organization of labor in unions. Labor organization was not at first a reaction to hardship. In fact, the living standards of workers, unionized or not, were steadily rising throughout Europe from 1850 to 1900.
The history of unions in the United States started in the nineteenth century. In the turbulent decades from 1870 to 1890 the groundwork for organized labor was laid. The National Labor Union (NLU), founded in 1866, was the first federation of unions, followed by the Knights of Labor in 1869. The latter disintegrated after the Haymarket Riot on May 1, 1886, in Chicago in which unions unsuccessfully demanded the eight-hour working day.
The American Federation of Labor (AFL), founded in 1886, organized mainly skilled workers, while the more radical Industrial Workers of the World (IWW), founded in 1905, provided a federation for unskilled labor. The membership in the IWW declined with the Palmer Raids (1918-1921), named for Alexander Mitchell Palmer, the U.S. attorney general after World War I who led the government attack on the radical left during the "Red Scare" period.
Unions in the United States did not become a political factor in those years. This has been attributed to several reasons: The U.S. political system was fragmented between states and the federal level, and it discouraged worker movements. Furthermore, employers’ associations reacted very strongly against the labor organizations. Janet Currie and Joseph Ferrie argue in the Journal of Economic History (2000) that despite some legislative changes in favor of the laborer, unions refrained from a national political influence and instead sought to negotiate on a company level.
This changed after the Great Depression and especially under the New Deal programs of President Franklin D. Roosevelt. The labor movement was strengthened, and the government found its role in brokering agreements between businesses and labor unions. The government’s aims were to provide some assistance to poor and unemployed workers and to establish the rights of labor unions, which culminated in the Wagner Act.
During the 1930s, the Congress of Industrial Organizations (CIO) organized industrial workers who were part of the emerging large-scale corporations. This represented a movement from crafts-based unionism toward industry unions. The CIO argued that crafts-based unionism was no longer suitable to many industries in which several crafts were undertaken, thus artificially dividing the unionized workers within a firm. One union organized within the CIO was the United Auto Workers (UAW). The CIO split off from the AFL to form its own entity in 1938. After World War II (1939-1945), as most differences were settled, the two combined into the AFL-CIO, under which most unions are aligned.
NEW MODES OF PRODUCTION, LABOR SAVINGS, AND GLOBALIZATION
The 1960s marked the beginning of steady decline in union membership. After the economically strong years following World War II, workers faced increasingly more plant shutdowns. During the 1970s the fear of mechanization and the displacement of men by machines was a recurring theme. In the 1980s cheaper foreign labor began replacing domestic labor. This was most explicit within the automobile industry, in which European and especially Japanese manufacturers provided fierce competition against the American car manufacturers. Under this pressure, union power eroded over time. The fear of globalization was amplified during the negotiations about the North American Free Trade Agreement, which opened up the markets of Mexico, Canada, and the United States in 1994. The opponents feared U.S. workplaces being moved to Mexico, with cheaper labor and lower working standards. In consecutive years, intensifying trade and the outsourcing of labor-intensive industries, especially to Asian countries, weakened the union even more.
This increasing globalization was anticipated in Robert Reich’s book The Work of Nations (1991). His main theme is that the division of workers into skilled and unskilled occupations is extended to a threefold partition into routine producers, in-person service providers (services that have to be provided person to person), and knowledge workers. The last type is rather broad as it includes some people who are usually not considered part of labor, such as entrepreneurs. It is this last type of worker for whom Reich foresees the best prospects, while the routine producers in particular will be replaced either by foreign competition or machines. The in-person service workers are somewhat protected from foreign competition as they require the physical availability of labor.
While the traditional struggle between the capitalist class (the providers of capital) and the labor class seems outdated, Stanley Aronowitz argues in How Class Works (2003) that labor still struggles over institutional arrangements such as working hours, overtime pay, and working conditions. These social movements are in essence class struggles over the division of power between capital and labor. In the United States capital is still the decisive element, argues Aronowitz, as the workers did not unite the aims of the different groups (immigrants versus native, black versus white, male versus female), but Aronowitz argues labor should still strive to unite as a force in order to strongly support its common goals.
U.S. FEDERAL LABOR LAW
Labor law reflects the struggle and achievement of labor in a nation. In the United States, the following legal developments show the evolution of current laws. While not intended to forbid the labor unions, the Sherman Antitrust Act of 1890 was used for many years to hinder union work. Its unspecific nature prohibiting "combinations in restraint of trade" allowed its use against combined, unionized demands from workers. The Clayton Antitrust Act, Section 6 (1914), remedies this shortcoming as it explicitly exempts labor unions. The National Labor Relations Act, or the Wagner Act (1935), allowed union representation and established the National Labor Relations Board. It allowed for collective bargaining and strikes to enforce demands. However, the Wagner Act does not encompass all workers; agricultural workers, for example, are excluded.
The Fair Labor Standards Act (1938) enacts minimum wages and overtime pay, and it abolishes oppressive child labor. While it originally included many exemptions, over time several of those have been eliminated so the act covers all blue-collar workers while excluding supervisory functions.
During World War II, the Fair Employment Act (1941) was introduced, prohibiting racial discrimination. Initially it was intended only for the national defense industry, but it was later extended to encompass all labor relations and to prohibit many forms of discrimination in the workplace.
The Taft-Hartley Act (1947), or Labor-Management Relations Act, and the Labor Management Reporting and Disclosure Act (1959) amended the National Labor Relations Act to restrict union power. The acts prohibit unfair labor practices by unions, which were previously only prohibited for employers. Unions were no longer allowed to influence the employers in their allocation of work to different plants. Secondary boycotts—for example, the refusal to handle the goods of non-unionized companies—were also prohibited. Closed-shop agree-ments—that only union labor could be hired by employers—were also outlawed.
LABOR INSTITUTIONS
The International Labor Organization (ILO) was created in 1919. There were several reasons for the establishment of such an organization. Its primary concern, a humanitarian one, was for the welfare of the worker. Numerous workers in many different countries had to work under exploitative circumstances, threatening their life, health, and family life. A second purpose was to integrate the growing working class into the political process and thereby to avoid social unrest or revolutions that could impede international peace. This aim is also found in the constitution of the ILO, as peace can only be achieved along with social justice. An economic motivation for the establishment of the ILO was concern over the cost of upholding humanitarian working standards. It was generally agreed that international standards for working conditions would avoid a race to the bottom—that is, a competition among nations over low labor costs, to the detriment of the workers. The organization of the ILO is tripartite. Each member country has two representatives of the government, one of the employers’ associations, and one of the labor unions.
In 1926 the ILO introduced a supervisory system to control the implementation and enforcement of its standards. This was an important step toward a more functional organization that went beyond discussing pressing issues. The United States, which was involved in several aspects of the founding and establishment of the ILO, became a member in 1934. One of the main steps forward was the Declaration of Philadelphia, adopted in 1944, which introduced freedom of association for workers. In 1969, the ILO was awarded the Nobel Peace Prize.
The U.S. Department of Labor is the governmental organization responsible for labor in relation to occupational safety, wage and hour standards, unemployment insurance benefits, reemployment services, and labor statistics. On the national level, the Bureau of Labor Statistics is the principal organization within the United States to provide statistical information and research for the government. While it is part of the Department of Labor, it serves as an independent statistical agency and provides labor market statistics as well as occupational forecasts. Other countries have organizations that have similar goals, albeit often less extensive ones.
