The Striking Success of the National Labor Relations Act

Research Handbook on the Economics of Labor and Employment Law (Cynthia L. Estlund & Michael L. Wachter, eds.), 2012

U of Penn, Inst for Law & Econ Research Paper No. 13-30

39 Pages Posted: 17 Oct 2013 Last revised: 7 Nov 2013

See all articles by Michael L. Wachter

Michael L. Wachter

University of Pennsylvania Law School - Institute for Law and Economics

Date Written: 2012

Abstract

Although often viewed as a dismal failure, the National Labor Relations Act (NLRA) has been remarkably successful. While the decline in private sector unionization since the 1950s is typically viewed as a symbol of this failure, the NLRA has achieved its most important goal: industrial peace.

Before the NLRA and the 1947 Taft-Hartley Amendments, our industrial relations system gave rise to frequent and violent strikes that threatened the nation’s stability. For example, in the late 1870s, the Great Railroad Strike spread throughout a number of major cities. In Pittsburg alone, strikes claimed 24 lives, nearly 80 buildings, and over 2,000 railroad cars. State militias could not contain the violence, and President Hayes dispatched federal troops to six states. Even in the midst of World War II, continuing disputes led Presidents Roosevelt and Truman to seize over one-third of the top 100 U.S. corporations. Today’s strikes look much different.

In addition to industrial peace, the NLRA aimed to secure equal bargaining power and industrial democracy through greater union membership. This Article compares how these objectives have fared under four legal, political, and economic regimes established by reforms since the New Deal: the National Industrial Relations Act, the original NLRA, the NLRA modified by the Taft-Hartley Amendments, and the contemporary patchwork of employment laws.

This Article argues that the NLRA’s key accomplishment has not been recognized -- by giving workers the right to organize, the Act turned a violent, strike-prone nonunion sector into a vibrant one. The post-Taft-Hartley NLRA gave employers a choice: they could act opportunistically and see their workers unionize or they could treat their employees fairly and make unionization less attractive. By and large, employers have chosen the latter. Thus, the NLRA has achieved industrial peace and improved conditions for workers, but in a way that its drafters did not expect.

Keywords: Labor law, violent strikes, industrial peace, War Labor Board, seizure of corporations, decline in strike activity, National Industrial Recovery Act, NLRA, National Labor Relations Act, Wagner Act, Taft-Hartley Act, the competitive advantage of the non-union sector

JEL Classification: J5, J51, J58, K31, N42

Suggested Citation

Wachter, Michael L., The Striking Success of the National Labor Relations Act (2012). Research Handbook on the Economics of Labor and Employment Law (Cynthia L. Estlund & Michael L. Wachter, eds.), 2012; U of Penn, Inst for Law & Econ Research Paper No. 13-30. Available at SSRN: https://ssrn.com/abstract=2341157

Michael L. Wachter (Contact Author)

University of Pennsylvania Law School - Institute for Law and Economics ( email )

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Philadelphia, PA 19104
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