The Indicator from Planet Money - Jobs, Labor And The 1936 GM Strike

The brutal unemployment situation in the US today is making a lot of people think again about labor unions. Which had their first major victory after a 1936 strike.

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Hey mon is Cardiff. This is the indicator from Planet Money. So this morning be July jobs report was released by the Bureau of Labor Statistics and therefore showed that last month the economy recovered about 1.8 million jobs. Plus the unemployment rate fell from 11.1% to 10.2% better than if the economy were not getting jobs and way better than if it were losing jobs. But what is worrying about the July jobs report? Is it the pace at which the labor market is improving his actually started to slow down. It is slow down from the months of May and June when the unemployment rate was falling faster and this slowdown is happening, even though the unemployment rate right now is still higher than it was at its worst point after the last big recession of more than a decade ago and labor market still has 13 million fewer jobs now than it did before the pandemic started.

The long way to go where did more coverage of the labor market on Monday? But today we are doing something a little different. We are starting a series that we're going to run every Friday through the end of the summer in which we re are one of our favorite episodes in the past. And because today's jobs Friday the episode we chose is a story about how a union action change the relationship between American workers and the companies that employed them. It is back in 1937 General Motors sign the very first contract with United Auto Workers Union. It was the culmination of weeks of drama. GM did not want its Workforce to unionize co-worker staged a sit-in strike inside the GM factory production ground to a halt for 44 days. They provided there on entertainment slept in and 8in why the work stoppage cost GM 1 million dollars a day.

Even turned off the heat in the factory. And remember this is winter in Michigan at one point a riot broke out and this standoff was just captivating the world. What observers described as the most crucial battle in American labor history involving nearly a hundred thousand men as practically shut down the entire American Motor industry from Michigan by the strike started. We bring you these actual pictures of a riot in progress. What happens when I try to strike us goes crazy when does faction becomes the older of the day?

In the end though GM CEO signed a contract with the United Auto Workers Union never be the same Chrysler and Ford followed suit signing Union agreements of their own. This is the indicator from Planet Money. I'm Stacey Vanek Smith, and I'm Carlos Garcia today on the show with this major Union victory meant for workers what it meant for the Auto industry and why unions overtime kind of lost their Mojo after 6 long weeks of idleness its home today and back to work tomorrow.

This summer Planet Money goes back to school to learn all the economic Concepts. We might have forgotten like tariffs China and the US are fighting over tariffs. But how do those pesky taxes work on the next episode of Planet Money summer school Will Show You by considering a Santa Claus suit summer school every Wednesday on planet money from NPR.

That moment when the Auto industry shook hands with the Union us business was forever changed Milestone Harley shaiken is a labor Economist at Berkeley that modest contract one page was Labor's Magna Carta in the decades after that contract was signed the UAW bargain for things like pensions and health care benefits and paid vacation and famously High salaries. That's according to Gary burtless and Economist with the Brookings institution US Auto Workers were among the princes of industrial labor in the United States have received very high wages. Very good friends benefits. The economy people had more purchasing power US economy group companies got wealthier more of them unionized unions were riding high and everybody wanted to be a union worker unions and their Industries.

Union spread across the country and by the mid-1950s more than a third of all us workers were in the union that is today's indicator more than 1/3 and then the oil crisis to send it. It was the early 1970s gas prices spiked and suddenly everybody wanted a small fuel-efficient car us automakers were not so good with the small fuel-efficient cars and foreign competitors like Volkswagen and Toyota started to get a foothold in the US market a market that the big three us automakers had just totally owned before then lost a lot of sales lost a lot of profitability and without those huge profits for GM and Chrysler just could not afford to pay such outside wages to their workers Americans were actually buying a lot of foreign cars and those foreign cars cost less partially because they weren't dealing with the high salaries and benefits that the big three were dealing with the good deals that you

Negotiated when times were good started to drag on us automakers manufacturers and their unions could not turn on a dime. They couldn't change the arrangements. You know what exactly they were left Nimble in responding to the demands of the market this happen for a couple of reasons first companies across the u.s. Watched this thing unfold in the auto sector and they thought we don't want to deal with that. They started fighting unionization like never before sometimes intimidating workers are firing workers who tried to unionize even though that was not legal and also why being hard against unions pushing through legislation to weaken them companies in all kinds of industries were also seeing more competition from overseas just like the automaker's had experienced and companies were starting to equate unions with an inability to compete until they fought unions much much harder using much straw.

Longer methods someone say coercive methods.

Started to back away from unions and from trying to organize employees in the companies. They worked for this happened. Both because companies could be so vicious to workers who try to unionize and also because in some cases unions were seen as cumbersome to workers with these sort of onuris regulations that would drag a company down becoming more profitable in at the same time. We have a business is like Sears who's operating model is proven to be less successful and it happens that in a lot of the shrinking Industries unions have been very important and businesses have been much more Fierce and resisting unionization than their counterparts were in the 1950s and 60s when it was very plain that unions and very successful unions in many growing industries were not an impediment to companies being very successful and expanding but nowadays,

I think in many workers minds and in many business men's Minds as the notion that you would be both unionized and growing and flourishing seem to be incompatible time after the oil crisis the way people and Company saw unions had just shifted today says Gary there are more retired members of the United Auto Workers and working members last year union membership to its lowest level since that contract was signed between the UAW and GM in the 30s according to the labor department just over 10% of us workers are unionized and a batch card if we should probably say that you and I are both in the union full disclosure. Phil a lot of workers in NPR are in sag-aftra and Q the old timey audio

This episode of the indicator originally aired in February of 2019. It was produced by dharius Raffi on in edited by Patty Hearst indicator is a production of NPR.
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