the ranks on bureaucratic rule and increasingly sided with management in the restoration of workplace authority and company competitive priorities. It was a conflict that eventually exhausted both sides and left the leadership unable to mobilize the ranks to resist the employers’ offensive their unions now faced.16 As the momentum of the upsurge wore down, capital moved in with what one union leader called, with unintended irony, “one-sided class war.” And all too one-sided it was, for beginning in 1979, much of the US union leadership, with a sometimes resistant membership following, began a rapid retreat as it simply surrendered in the face of employer attacks, recession, and restructuring.
It was the United Auto Workers (UAW), long considered one of the country’s most effective unions, that led the retreat in November 1979 when its leader, Doug Fraser, of “one-sided class war” fame, agreed to major concessions at the Chrysler Corporation, even before the US Congress passed a Chrysler “bailout” that required concessions from the unions. From that time on, one union after another agreed to wage cuts and freezes as well as changes in working conditions, almost always without a fight. This essentially political choice would lay the basis for further retreat.17
The surrender of 1979 led to a dramatic collapse in almost every major form of trade union activity across the US economy. This collapse began even before the 1980–82 recession took hold, and well before Ronald Reagan fired fifteen thousand air-traffic controllers when their union, PATCO, struck in August 1981. Between 1979 and 1983, union membership in the private sector fell by 26 percent. Although largely due to the recession, this loss revealed that concessions alone could not stop employment reductions.18 New organizing, which might have helped stem the continued loss of members, declined by more than half as organizing efforts were abandoned. From 1979 to 1981, the total number of strikes dropped by almost half, while the number of strikes involving more than a thousand workers had fallen by two-thirds by 1984. Negotiated annual wage increases in major collective bargaining agreements in manufacturing dropped from 6.1 percent in 1981 to 1.5 percent in 1984, falling far behind inflation even as the annual rate of increase in the Consumer Price Index fell by more than half.19 Concessions, however, were not only about wages. A third of all concessionary agreements reached in 1982 involved changes in work rules designed to increase productivity. By 1983 changes in work organization had been conceded in auto, steel, meatpacking, tires, petroleum refining, and air and rail transport.20
The virtual collapse of union activity and resistance was at least one reason the rate of surplus value rose by over 9 percent between 1979 and 1983 alone, by far the biggest increase for any five-year period in the entire postwar era. This represented a real increase in the mass of surplus value of $520 billion over a brief period. The growth in the rate and mass of surplus value would continue throughout the 1980s, bringing an increase in real surplus value of $1.2 trillion from 1982 through 1989, a 70 percent increase. Meanwhile, fixed capital assets grew by a more modest 48 percent, allowing an increased rate of profit.21 Concessions on wages and benefits could explain some of such a significant shift in income, but major changes in both the structure of industry and the organization of work were also required to sustain the period of growth initiated in 1982.
Industry Restructures
The failure to unionize the US South after World War II opened the door to the creation of a competitive, low-wage region for American industry. Basic industry in the United States began its journey away from the highly unionized Northeast and Midwest into the largely rural South at the close of the war. Between 1947 and 1972, value added in manufacturing grew by nearly four times in the South compared to just under twice in the country as a whole. Between 1972 and 1989 this Southern growth rate slowed to 60 percent, but nevertheless remained over twice that for the nation as a whole.22 The shift to the low-wage, nonunion South played a significant role in depressing the value of labor power in the 1980s and beyond. The regional wage differentials made further moves from highly unionized states, particularly in the Midwest, well worthwhile. In 1979, the hourly wage differential between the South as a whole and the Northeast and Midwest was about 10 percent. For those states that saw a large part of the shift before and after 1979, the wage gap in that year was 15 to 16 percent between Georgia, North Carolina, and Tennessee, major gainers, on the one hand, and Michigan and Illinois, significant losers, on the other. By 2000, the percentage of payroll employment in manufacturing in North and South Carolina, Arkansas, and Mississippi surpassed that of Michigan, Illinois, and all of the states of the upper Midwest and the Northeast. In that year, union density was 3.5 percent in South Carolina, 3.2 percent in North Carolina, 6.2 percent in Mississippi, and 7.5 percent in Arkansas, compared to 21.5 percent in Michigan and 18 percent in Illinois.23
Industry-wide bargaining in the form of wage and benefit patterns or master contracts had been organized labor’s major means of reducing labor market competition and increasing worker incomes since the end of World War II. Tempted by wage differentials and pushed by growing competition at home and abroad, firms began to break away from existing industry agreements or wage/benefit patterns in order to strike their own deals or escape unionization altogether and improve their own position in the increasingly competitive world economy. As productivity and profitability necessarily differ between firms in the same industry at any given moment, the desire to break away from the imposed labor costs of pattern bargaining in a period where competition is increasing is almost irresistible. This is particularly true where new firms with higher productivity levels or lower labor costs enter the industry, as was the case in auto, meatpacking, and trucking, or where international competition intervenes, as in textiles, garments, and textiles, which will be examined below. Such trends contributed to the decentralization of collective bargaining in those industries that had established some form of industry-level bargaining. The number of union contracts to be negotiated and administered rose from 120,000 in the 1960s, when union density was about 30 percent, to 180,000 in 2006, with density down to 12 percent, less than 8 percent in the private sector.24
In the 1980s, systems of “pattern” and “master” agreement bargaining that had held wages up since the late 1940s broke down in most key industries, including automobiles, meatpacking, steel, coal mining, and road haulage. Beginning in the late 1970s and accelerating in the 1980s, the automobile industry moved south, led primarily by Japanese and European firms.25 As the Big Three and their suppliers consolidated, outsourced, and shrank, UAW membership plunged from a high of 1.5 million in 1970, when a majority of members were auto, aerospace, or agricultural implement workers, to 355,000 in 2010, with only about half the members from its traditional core industries.26
Unions in meatpacking faced a similar fate as new, aggressive firms like IBP and ConAgra entered the industry in the 1970s and shifted its center from the East and Midwest to the South and the West. By the mid-1980s the meatpacking union’s pattern settlement had shattered, and in real terms average union wages fell from $10.65 an hour in 1979 to $6.68 in 1990.27 Coal miners similarly saw more and more employers abandon their national agreement with the Bituminous Coal Operators Association after 1981.28
In three major industries, deregulation, a neoliberal innovation of the late 1970s, aided restructuring and the fragmentation of collective bargaining. The first industry to experience deregulation was air transportation. Here the system of pattern bargaining at the major airlines was rapidly dismantled. Between 1978, when airline deregulation was passed by Congress, and 1988, only a little more than half of the new collective agreements covering the unionized workforce saw any wage increase. More than a quarter of settlements included a wage freeze or cut, while one in five introduced a two-tier wage system. As a result, average real wages of airline mechanics fell by about 40 percent from 1979 to 1989, while flight attendants lost almost half their monthly income in the same period.29
In road haulage, following deregulation in 1980, the Teamsters’ National Master Freight Agreement, which had covered 277,000 workers in 1979, saw this drop to 160,000 by 1985 and Teamster earnings fall by 11 percent in real terms from 1979 to 1983. Deregulation had opened the industry to new competition, particularly from Southern-based giants such as Overnite and J. B. Hunt.30 Telecommunications workers also fell victim to the new neoliberal atmosphere when their employer, the American Telephone and Telegraph,
