Industrialization & Labor Unions

1. Industrialization &Labor Unions Chapter 24

2. Industrialization • The United States continued to grow and expand rapidly and was becoming one of the leading industrial powers. • Industrialization was happening due to a wealth of natural resources, government support of business, and a growing population that provided both labor, and a market for products.

3. Advancements in Industry • Bessemer Process - This was a process created by Henry Bessemer to create steel from iron. This created a metal that was lighter, more flexible, and rust resistant. • By injecting air into iron, it would remove the element carbon, which would produce steel that could be used in production of goods. • Uses: Railroad tracks, barbed wire, farm machines.

4. Advancements in Industry • In 1876, Thomas Alva Edison established the world’s first research laboratory, where he perfected the light bulb, which he patented in 1880. • He worked on a system for producing and distributing electrical power in a safe and affordable manner. • Allowed manufacturers to locate and run their factories wherever and whenever they wanted.

5. Other Significant Inventions • 1867 – Christopher Sholes – Typewriter • 1876 – Alexander Graham Bell and Thomas Watson – Telephone • These two inventions helped create more jobs for women.

6. Railroads • As manufacturing grew, so did the railroad industry. • Made transportation more reliable, and westward expansion easier for businesses and people. • The government made huge land grants and loans to railroad companies.

7. Transcontinental Railroad • May 1969, two railroads, the Central Pacific and Union Pacific, finally met in Promontory, Utah. • This was the first transcontinental railroad, that reached across the west. • Railroad tracks were 6x’s what they were during the Civil War!!!

8. Railroads for Travel • As cities and land became linked via railroad, people began using them for personal travel more often. • In 1880, George Pullman built a factory for manufacturing sleeper cars for long trips. • He created a town near his factory where his workers lived, and provided for their basic needs in hopes of controlling a stable workforce. • This eventually led to a strike when he cut their pay, but refused to lower their rent.

9. Big Business & Labor • As industry grew, so did businesses, and wealthy, large business owners began competing for control of markets, setting new standards for labor and competition.

10. Andrew Carnegie • Rose to fortune while working for and buying stock in the Pennsylvania Railroad. • Entered into the steel business in 1873, and by 1899 the Carnegie Steel Company manufactured more steel than all of the factories in Great Britain.

11. Carnegie’s Business Strategies • Wanted to control as much of the steel industry as he could using two methods: • Vertical Integration: Bought out his suppliers to control all of the raw materials and transportation systems needed for his company. Ex: I own a shoe company, so I buy companies that make rubber, shoe laces, cardboard for the shoebox, etc. • Horizontal Integration – Bought out any company that produced a similar product to limit competition. Ex: I own a shoe company, so I buy Nike, Adidas, etc so there is no competition.

12. Social Darwinism • Charles Darwin wrote “On the Origin of Species” in 1859, where he discussed that some individuals of a species flourish and pass their traits along to the next generation while others do not. • “Natural selection” weeds out less-suited individuals, thus “survival of the fittest” • Applied to businesses as well. Those that were well run with a strong workforce would emerge successful over those that were not.

13. John D. Rockefeller • Many business owners pursued horizontal integration and began buying out stock in companies to control competition. • John D. Rockefeller’s Standard Oil Company joined with competing companies in trust agreements, and smaller companies would gain a portion of profits earned. • Rockefeller used this to gain control of the oil industry.

14. “Robber Barons”? • In 1870, Rockefeller produced 2-3% of the nations crude oil. By 1880, they controlled 90%. • Paid his employees low wages and sold his oil at lower prices to beat out the competition. Once he controlled the market, he put prices far above the original levels. People began calling him and others who followed this practice “robber barons”. • They were however, also philanthropists, giving away millions of dollars to help Americans. • Carnegie donated 90% of his wealth and wrote a book called the Gospel of Wealth where he said it was the responsibility of the rich to distribute their surplus to those in need.

15. Sherman Antitrust Act • The government was worried that expanding corporations would limit competition. • In 1890, the Sherman Antitrust Act made it illegal to form a trust that interfered with trade between states or other countries. • Was extremely hard to enforce, and most cases were thrown out.

16. Labor Unions Emerge • Workers, both skilled and unskilled, began banding together to fight back against low wages, and unsafe working conditions that were occurring in factories. • Some factories had laborers working 7 days a week, 12 hour days, with no vacation, sick leave, or pay for injuries suffered on the job. • In 1882, 675 laborers were killed each week!!! • 20% of boys, and 10% of girls under age 15 held full-time jobs.

17. Labor Unions cont… • Many early labor unions would not allow entrance by African Americans, so they would be forced to start their own unions. • Small labor unions eventually led to the emergence of two major types of labor unions.

18. Craft Unionism • Skilled Workers • Samuel Gompers led a Cigar Makers’ union to join with other skilled unions to create the American Federation of Labor (AFL) in 1886. • Focused on “collective bargaining” , or negotiations between representatives and management to agree on wages, hours, and working conditions.

19. Industrial Unionism • The idea that labor unions should be open to both skilled AND unskilled workers. • Eugene V. Debs began the American Railway Union (ARU) allowing unskilled and skilled workers to join. • Began striking until negotiations with management led to higher wages.

20. Strikes • Strike of 1877 – Baltimore & Ohio Railroad (B&O) struck against 2 wage cuts in 2 months. Strike spread to other railroad lines. 50,000 miles of railroad traffic stopped for a week! • Federal troops sent by Pres. Rutherford stepped in to end the strike, because it was impeding interstate commerce.

21. Strikes Cont… • Haymarket Affair – May 1886, people gathered in Haymarket Square in Chicago to protest police violence after a striker was killed in a strike. • Police arrived, and someone threw a bomb causing police to fire on the workers. • Several people were charged with starting a riot and caused people to start turning against the labor movement.

22. Strikes • Homestead Strike – Strike against one of Carnegie’s steel companies. • Workers struck after an annoucement that wages would be cut. • Wanted to hire scabs, or people who would work in place of the strikers, which led to violence.

23. Strikes Cont… • Pullman Company Strike – Laid of many employees and cut wages following the panic of 1893. A strike took place when wages were not raised and rent wasn’t cut by spring 1894. • People began boycotting Pullman trains. • Strike turned violent and federal troops were sent in. Eugene Debs was jailed, and the strikers were fired and blacklisted.