[lbo-talk] Damon Silvers: The signal theory of labor law

Michael Pollak mpollak at panix.com
Wed Dec 3 20:56:11 PST 2008


[Excerpted from his David Feller Memorial Labor Law Lecture. Pictures at the original]

http://www.iir.berkeley.edu/events/spring08/feller/

To grasp what needs to be changed, it is necessary to review the thirty

years of policy that got the United States to where we are. But in the

area of labor market regulation, we really need to go back further, to

give the background of a time when we had a high wage national labor

market policy. Between the passage of Section 7 of the National

Recovery Act in 1933 and the passage of the Taft-Hartley Act in 1948,

it was pretty clearly the policy of the United States government to

foster unionization in the private sector. This policy found its

clearest expression in the preamble to the National Labor Relations

Act, but its most powerful political expression in the actions taken by

the War Labor Board. Here is the War Labor Board in action. This man

was the CEO of Montgomery Ward, the Wal-Mart of its day.

Army Seizes Montgomery Ward President

Avery Sewell on April 27, 1944

If you saw this picture in your newspaper, as most American employers

did in 1944, it didn't take much legal analysis to understand that

there could be serious consequences to opposing workers' right to

organize.

The passage of the Taft-Hartley Act, and what Professor Karl Klare of

Northeastern University Law School some years ago labeled the judicial

de-radicalization of the NLRA, moved the posture of the federal labor

laws more in the direction of preserving the status quo and away from

the active encouragement of the growth of private sector unions. But it

was a status quo that centered on collective bargaining. The growth of

labor arbitration, in substantial part as a result of David Feller's

work, of national collective bargaining in industries like auto

manufacturing, steel, coal, and trucking, of structured employee

benefit plans, all were aspects of the institutionalization of

collective bargaining at the heart of the structure of the American

labor market.

Productivity and Wages-the Big Disconnect

[productivity_wages_graph.gif]

And here you can see the results. During the postwar era, America's

workers were able through collective bargaining, to capture most of the

productivity gains in the American economy. This was the period of the

dramatic growth in the real income of most Americans, and the reduction

in inequality to levels that at the time were thought to be indicative

of a modern economy that had put the economic royalist and inequality

of the robber baron age forever behind us.

Then, in the 1980's, the United States began to set the course that led

to the present economic crisis. This was the period when both the

Reagan administration and the business community began to seriously

attack the institutions that drove the high wage postwar economy.

In labor market policy, this was not a gradual development. In 1980,

something fundamentally changed. You can see it here on the graph of

real wages and productivity. They were decoupled. The mechanism for

their decoupling was a fascinating development in labor law. You can

search Lexis and Westlaw and you won't find it. It was neither a

statute, nor a regulation or a case. It was instead an executive order

that on its face applied to the very narrow circumstances of a strike

by air traffic controllers. In the first days of his administration,

President Ronald Reagan responded to a strike by air traffic

controllers by ordering the firing of the striking controllers and

their replacement by "replacement workers."

[nyt.png]

DISMISSED AIR CONTROLLERS WON'T BE REHIRED; Labor vs. Management

By this act, Reagan sent a signal to private sector employers, a signal

comparable in power to that sent forty years earlier by the War Labor

Board. The message was--the federal government fires strikers and hires

replacement workers; you can too. By doing so, the right of employers

to hire permanent replacement workers, a right that had been recognized

in theory by the NLRB in the 1950's, but never acted on, became a

living part of American labor law. Employers used permanent

replacements to break strikes across the industrial landscape in

campaigns like International Paper, Hormel, Caterpillar, Continental

and Eastern Airlines.

<end excerpt>

Michael



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