Big Business and the Labor Movement

1. Big Business and the Labor Movement

2. “Big Business” • Very large, powerful corporations began to emerge in the late 1800s in an era known as the Gilded Age. • This is occurring at a time when the gap between rich and poor is widening. • Some people argued that the government needed to regulate businesses and their business practices.

3. A corporation is an organization owned by many people but treated by law as though it was a single person. Stockholders, the people who own the corporation, own shares of ownership called stock. Issuing stock allows a corporation to raise large sums of money but spreads out the financial risk. From the sale of stock, corporations could invest in new technologies to increase their efficiency. By making goods quicker and cheaper, these corporations achieved economies of scale.

4. Big corporations had an advantage over small manufacturing companies. Big corporations could produce more cheaply, and they could continue to operate even in poor economic times by cutting prices to increase sales. Many small businesses with high operating costs were forced out of business.

5. Two New Models of Big Business • Two methods were used by corporate entrepreneurs to maximize market share and eliminate competition: Vertical Integration and Horizontal Integration

6. Vertical IntegrationHorizontal Integration • A process by which all aspects of a given product’s creation are combined into one company. • What advantages does this give to the company? • Incorporating competing businesses into your company. This can be done through hostile takeovers, corporate mergers, etc. • Increases market share, decreases competition

8. The Labor Movement • Responses to Industrial Challenges

9. The Trees, by Rush • Read the lyrics to the song while you listen. • When finished, review the discussion questions.

10. The Trees, by Rush There is unrest in the forest There is trouble with the trees For the maples want more sunlight And the oaks ignore their pleas The trouble with the maples (and they’re quite convinced they’re right) They say the oaks are just too lofty And they grab up all the light But the oaks can’t help their feelings If they like the way they’re made And they wonder why the maples Can’t be happy in their shade? There is trouble in the forest And the creatures all have fled As the maples scream `oppression!` And the oaks, just shake their heads So the maples formed a union And demanded equal rights the oaks are just too greedy We will make them give us light Now there’s no more oak oppression For they passed a noble law And the trees are all kept equal By hatchet, Axe, And saw ...

11. The Trees, by Rush Questions for Discussion: 1. What might the trees represent in general? What about the oaks and maples in particular? 2. What argument do the oaks use to justify their position? What about the maples? 3. How are they made equal?

13. Working in the United States, late 1800s Workers in industrial America faced monotonous work, dangerous working conditions, and an uneven division of income between the wealthy and the working class. Between 1865 and 1897, the United States experienced deflation, or a rise in the value of money. Relations between workers and employers were made more difficult by deflation. Deflation caused prices to fall and increased the buying power of workers’ wages. Companies cut workers’ wages but prices fell even faster, so that wages were really still going up in buying power. Workers were angry, however, because they were being paid less for the same amount of work.

15. Tactics Used to Discourage Labor Unions • Blacklists • Strike Breakers (scabs) • Lockouts • Injunctions

16. Negative Public Perception & the Labor Movement • The public identified the movement with immigrants, socialists, and radicals. • Haymarket Square Bombing gave movement a black eye. • American wages were highest in the industrial world.

17. Haymarket Square Bombing

18. Early Labor Unions • National Labor Union (1866) • Noble and Holy Order of the Knights of Labor (1878) • American Federation of Labor (1881)

19. Knights of Labor • First nationwide industrial union • Allowed skilled & unskilled workers, blacks, women • Called for 8-hour workday, health and safety codes • Supported boycotts at first, later on strikes • Utilized arbitration to settle disputes • Declined rapidly after Haymarket Square bombing in 1886 • Part of its failure was in its scope- too broad

20. American Federation of Labor • Founded by Samuel Gompers • Trade union, as opposed to an industrial union (skilled craftsmen only) • “plain and simple” goals - stay out of politics • Three goals: have companies recognize unions and agree to collective bargaining, closed shops, 8- hour workday • By 1900, largest union in the country - 500,000 members

21. Labor Summary • Slow but steady progress was made from 1860-1900 in the area of labor unions. • Many obstacles stood in the way of the growth of the movement. • 8-hour workday, 40-hour workweek, better health and safety codes would eventually be long-term successes. • By 1900, less than 18% of the workforce in the U.S. was unionized. • During the Progressive Era efforts would be made to unionize women and end child labor. • Labor Day, established in 1894, marks the achievements of the American labor force.