Topic 6.

Labor in the Gilded Age

We have been brought to the ragged edge of anarchy,
Richard Olney, U.S, Attorney General on the
Pullman Strike, July 4, 1894

Learning Objective: Explain the socioeconomic continuities and

changes associated with the growth of industrial capitalism from 1865
to 1898,

The expression Gilded Age, first used by Mark Twain in 1873 as the title of
a book, referred to the superficial glitter of the new wealth so prominently
displayed in the late 19th century. The characterization of the period from 1865
to 1898 as the Gilded Age has proved a useful label for an era in which the
“captains of industry” controlled large corporations, created great fortunes, and
dominated politics. At the same time, the problems faced by workers, farmers,
and burgeoning cities festered under the surface of the new wealth.

Challenges for Wage Earners

The growth of industry was based on hard physical labor in mines and factories.
However, for the people doing these jobs, life was hard.
Wages By 1900, two-thirds of all employed Americans worked for wages,
usually at jobs that required them to labor ten hours a day, six days a week.
Wages were determined by the laws of supply and demand. Because there was
usually a large supply of immigrants competing for factory jobs, wages were
barely above the level needed for bare subsistence. Low wages were justified by
David Ricardo (1772-1823), whose famous “iron law of wages” argued that
taising wages would only increase the working population, and the availability
of more workers would in turn cause wages to fall, thus creating a cycle of
misery and starvation.
Real wages (income adjusted for inflation or deflation) rose steadily in the
late 19th century, but even so most wage earners could not support a
family
decently on one income. Therefore, working-class families depended on the
income of women and children. In 1870, about 12 percent of children were
employed outside the home. By 1900, that number ‘had increased to about
20 percent. In 1890, 11 million of the 12.5 million families in the United States
averaged less than $380 a year in income.

TOPIC 6.7 LABORINTHEGILDEDAGE 383

 Labor Discontent Before the Industrial Revolution, workers laboreg
in small workplaces that valued an artisan’s skills. People often felt a sense
of accomplishment in creating a product from start to finish. Factory wor,
was radically different. Industrial workers were often assigned just one step in
the manufacturing of a product, performing semiskilled tasks monotonously,
Both immigrants from abroad and migrants from rural America had to learp
to work under the tyranny of the clock. In many industries, such as railroads
and mining, working conditions were dangerous. Many workers were exposed
to chemicals and pollutants that only later were discovered to cause chronic
illness and early death.
Industrial workers rebelled against intolerable working conditions by
missing work or quitting. They changed jobs on the average of every three
years. About 20 percent of those who worked in factories eventually dropped
out of the industrial workplace rather than continuing. This was a far higher
percentage than those who protested by joining labor unions.

The Struggles of Organized Labor

The late 19th century witnessed the most deadly—and frequent—labor
conflicts in the nation’s history. Many feared the country was heading toward
open warfare between capital and labor.

Industrial Warfare
With a surplus of low-cost labor, management held most of the power in its
struggles with organized labor. Strikers could easily be replaced by bringing in
strikebreakers, or scabs—unemployed persons desperate for jobs. Employers
used several tactics for defeating unions:
e Lockout: the act of closing a factory to break a labor movement before it
could get organized
« Blacklist: a toster of the names of pro-union workers that employers
circulated so that these people could not find work
e Yellow-dog contract: a contract that included as a condition of
employment that workers could not join a union
¢ Private guards and state militia: forces used by employers to put down
strikes
Court injunction: judicial action used by an employer to prevent or end
a strike
Moreover, management fostered public fear of unions as anarchistic and
un-American. Before 1900, management won most of its battles with organized
labor because, if violence developed, employers could almost always count on
the support of the federal and state governments.
Tactics by Labor Workers were divided on the best methods for defending
themselves against management. Some union leaders advocated political

384 UNITED STATES HISTORY: AP’ EDITION

 action. Others favored direct confrontation: strikes, picketing, boycotts, and
slowdowns to achieve union recognition and collective bargaining, the ability
of workers to negotiate as a group with an employer over wages and working
conditions. .
Great Railroad Strike of 1877 One of the worst outbreaks of labor
violence in the century erupted in 1877. During an economic depression, the
railroad companies cut wages in order to reduce costs. A strike on the Baltimore
and Ohio Railroad quickly spread across 11 states and shut down two-thirds
of the country’s rail lines. Railroad workers were joined by 500,000 workers
from other industries in an escalating strike that quickly became national in
scale. For the first time since the 1830s, a president (Rutherford B. Hayes) used
federal troops to end a labor dispute. The strike and the violence finally ended,
but not before more thar 100 people had been killed. After the strike, some
employers addressed the workers’ grievances by improving wages and working
conditions, while others took a harder line by busting workers’ organizations.

Attempts to Organize National Unions

Before the 1860s, unions had been organized as local associations in one city
or region, They were usually craft unions, ones focused on one type of work,
National Labor Union The first attempt to organize all workers in all
states—skilled and unskilled, agricultural and industrial—was the National
Labor Union. Founded in 1866, it had some 640,000 members by 1868.
Besides championing the goals of higher wages and the eight-hour day, it also
had a broad social program: equal rights for women and African Americans,
monetary reform, and worker cooperatives. Its chief victory was winning the
eight-hour day for federal government workers. It lost support, however, after
a depression began in 1873 and after the unsuccessful strikes of 1877.
Knights of Labor A second national labor union, the Knights of Labor,
began in 1869 asa secret society in order to avoid detection by employers. Under
the leadership of Terence V. Powderly, the union went public in 1881, opening
its membership to all workers, including African Americans and women.
Powderly advocated a variety of reforms: (1) forming worker cooperatives “to
make each man his own employer? (2) abolishing child labor, (3) abolishing
trusts and monopolies, and (4) settling labor disputes by arbitration rather
than strikes, Because the Knights were loosely organized, however, Powderly
could not control local units that decided to strike.
The Knights of Labor grew rapidly, attaining a peak membership of 730,000
Workers in 1886. However, it also declined rapidly after the violence of the
Haymarket riot in Chicago in 1886 turned public opinion against the union.
Haymarket Bombing Chicago, with about 80,000 Knights in 1886, was
the site of the first May. Day labor movement. Also living in Chicago were
about 200 anarchists who advocated the violent overthrow of all government.
In response to the May Day movement calling for a general strike to achieve
an eight-hour day, labor violence broke out at Chicago’s McCormick Harvester

TOPIC 6,7 LABORINTHE GILDED AGE 385

plant. On May 4, workers held a public meeting in Haymarket Square, ang
as police attempted to break up the meeting, someone threw a bomb, which
killed seven police officers. The bomb thrower was never found. Even so, eight
anarchist leaders were tried for the crime, and seven were sentenced to death,
Horrified by the bomb incident, many Americans concluded that the union
movement was radical and violent. The Knights of Labor, as the most visible
union at the time, lost popularity and membership.
American Federation of Labor Unlike the reform-minded Knights of
Labor, the American Federation of Labor (AFL) concentrated on “bread-and-
butter unonism,” attaining narrower economic goals. Founded in 1886 as an
association of 25 craft unions of skilled workers, and led by Samuel Gompers
until 1924, the AF of L focused on just higher wages and improved working
conditions. Gompers directed his local unions to walk out until the employer
agreed to negotiate a new contract through collective bargaining. By 1901,
the AF of L was by far the nation’s largest labor organization, with 1 million
members. Even this union, however, would not achieve major successes until
the early decades of the 20th century.

Strikes and Strikebreaking in the 1890s

Two massive strikes in the last decade of the 19th century demonstrated both
the growing discontent of labor and the continued power of management to
prevail in industrial disputes,
Homestead Strike Henry Clay Frick, the manager of Andrew Carnegie's
Homestead Steel plant near Pittsburgh, precipitated a strike in 1892 by
cutting wages by nearly 20 percent. Frick used the weapons of the lockout,
private guards, and strikebreakers to defeat the steelworkers’ walkout after five
months. Sixteen people, mostly steelworkers, died in the conflict. The failure of
the Homestead strike set back the union movement in the steel industry until
the New Deal in the 1930s.
Pullman Strike Even more alarming to conservatives was a strike started
by workers living in George Pullman’s company town near Chicago. The
Pullman Palace Car Company manufactured widely used railroad sleeping
cars. In 1894, Pullman announced a general cut in'wages and fired the leaders
of the workers’ delegation who came to bargain with him. The workers
at Pullman laid down their tools and appealed for help from the American
Railroad Union. The ARU’s leader, Eugene V. Debs, directed railroad workers
not to handle any trains with Pullman cars. The union’s boycott tied up rail
transportation across the country.
Railroad owners supported Pullman by linking Pullman cars to mail trains.
They then appealed to President Grover Cleveland, persuading him to use the
army to keep the mail trains running. A federal court issued an injunction
forbidding interference with the operation of the mail and ordering railroad
workers to abandon the boycott and the strike. For failing to respond to this
injunction, Debs and other union leaders were arrested and jailed. The jailing

386 — UNITED STATES HISTORY: AP’ EDITION

of Debs and others effectively ended the strike. In the case of In re Debs (1895),
the Supreme Court approved the use of court injunctions against strikes, which
gave employers a very powerful legal weapon to break unions.
After serving a six-month jail sentence, Debs concluded that more radical
solutions were needed to cure labor’s problems. He turned to socialism and the
American Socialist Party, which he helped to found in 1900.

Conditions in 1900
By 1900, only 3 percent of American workers belonged to unions. Management
held the upper hand in labor disputes, with government generally taking its
side, However, people were beginning to recognize the need for a better balance
between the demands of employers and employees to avoid the numerous
strikes and violence that characterized the late 19th century.
During the Gilded Age, industrial growth was concentrated in the Northeast
and Midwest regions, the parts of the country with the largest populations,
the most capital, and the best transportation. As industries grew, these regions
developed more cities and attracted more immigrants from overseas and
migrants from rural areas.

REFLECT ON THE LEARNING OBJECTIVE

1. Explain three changes for workers during the period associated with the
growth of industrial capitalism from 1865 to 1898.

KEY TERMS BY THEME

Organized Labor (WXT) craft unions Samuel Gompers

“iron law of wages” National Labor Union Homestead strike
wage earners Knights of Labor Pullman strike
collective bargaining Haymarket bombing Eugene V, Debs
railroad strike of 1877 American Federation of
Labor (AFL)

MULTIPLE-CHOICE QUESTIONS

Questions 1-3 refer to the following excerpt.

“You evidently have observed the growth of corporate wealth and influence.
You recognize that wealth, in order to become more highly productive,
is concentrated into fewer hands, and controlled by representatives and
directors, and yet you sing the old siren song that the workingman should
depend entirely upon his own ‘individual effort’

The school of laissez-faire, of which you seem to be a pronounced

advocate, has produced great men in advocating the theory of each for
himself and his Satanic majesty taking the hindermost, but the most

TOPIC 6,7 LABOR INTHE GILDED AGE 387

 pronounced advocates of your school of thought in economics have, when
practically put to the test, been compelled to admit that combination
and organizations of the toiling masses are essential both to prevent the
deterioration and to secure an improvement in the condition of the wage
earners.
Samuel Gompers, Letter to Judge Peter Grosscup,
“Labor in Industrial Society,’ 1894
1. This excerpt was written to most directly support which of the following?
(A) Formation of trusts
(B) The right to organize and bargain collectively
(C) The antitrust movement
| (D) Employee ownership of business
2. Which of the following best explains why Gompers thought that
“organizations of the toiling masses are essential both to prevent the
deterioration and to secure an improvement in the condition of the wage
earners”?
(A) The school of laissez-faire economics
(B) The rise of the captains of industry
(C) The concentration of corporate wealth and power
(D) The belief in individualism and self-reliance
3. The ideas expressed in this excerpt are most closely allied with
(A) the theory of wages by David Ricardo
(B) the practice of horizontal integration
(C) the establishment of Pullman’s company town for workers
(D) the rise of the American Federation of Labor
SHORT-ANSWER QUESTION
Use complete sentences; an outline or bulleted list alone is not acceptable.
1. Answer (a), (b), and (c).
(a) Briefly explain ONE specific example of the impact of a labor
organization during the period from 1865 to 1900.
(b) Briefly explain ONE specific example of a tactic used by employers
to defeat the organization of labor unions.
(c) Briefly explain ONE specific example of the role of government ina
labor conflict during the period from 1865 to 1900.
388 UNITED STATES HISTORY: AP" EDITION