"The labor problem" is the economics term widely used toward the turn of the 20th century with various applications."the labor problem." Roberts, Harold Selig. 1994. Roberts' Dictionary of Industrial Relations. p. 406. It has been defined in many ways, such as "the problem of improving the conditions of employment of the wage-earning classes."Adams, Thomas Sewall. 1908. Labor Problems: A Text Book. p. 3
The labor problem encompasses the difficulties faced by wage-earners and employers who began to cut wages for various reasons including increased technology, desire for lower costs or to stay in business. The wage-earning classes responded with strikes, by unionizing and by committing acts of outright violence. It was a nationwide problem that spanned nearly all industries and helped contribute to modern business conditions still seen today. Possible causes include the failure to account for the negative externality of reproduction in the face of finite natural resources which results in over-supply of labor and falling living standards for wage-laborers, depersonalization by machines and poor working conditions.
Time frame
Since the problem was within unions and not between unions and employers, the Labor Problem had not yet become an issue. Many also attribute the end of the problem to the end of the 1920s. This has some merit but is also open to interpretation. Reforms began to pass to correct many of the problems but reforms continued to pass well into the 1930s, 1940s and 1950s. The civil rights movement took over in the United States, which brought about even further legislation. Many attribute the end of the labor problem to the late 1920s because it marks a significant drop in strikes and violence and an increase in passed legislation aimed at correcting the labor issues.
Causes
This depersonalization of the production process meant that people essentially became expendable. People were not eliminated but there was a significant job loss. This led to lower wages in the long run because fixed costs decreased (with increased technology) so employers saw fit to cut wage expenses for this now partially expendable labor force. Although the problem spanned many industries, they were not all concerned with the same problems. For example, the steel industry was mainly concerned with being phased out due to technological advances while other industries, namely textiles, had problems with child labor and working conditions. The variety of problems and concerns led to legislation being passed, which covered different areas and led to greater reform.
Notable events
Another example is the Pullman Strike in 1894, where almost 4,000 workers who were members of the American Railway Union (ARU) went on a strike without permission of the union to protest wage cuts by the Pullman Company."Pullman Strike." Wikipedia: The Free Encyclopedia. Wikimedia Foundation, Inc. 27 Dec. 2013. Web. 28 Dec. 2013. One extreme example occurred when train engineers and laborer stopped a train before it reached the station in New York City, stranding men, women and children alike in the heat.Field 1893, pp. 61-68
Effects
While some pieces of legislation like the aforementioned Wagner Act and Fair Labor Standards Act were not passed until the 1930s, their roots trace back to this Labor Problem at the turn of the century when demand for reform was growing in popularity. Many aspects of modern business like an established 40-hour work week, overtime pay, collective bargaining and safer working conditions among numerous other reforms can all trace their roots back to this time period and the legislation passed to correct it.
See also
Notes
External links
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