p. 241-249 Big Business and Labor

Objectives Identify management and business strategies that contributed to the success of business tycoons such as Andrew Carnegie Explain Social Darwinism and its effects on society Summarize the emergence and growth of unions Explain the violent reactions of industry and government to union strikes

Carnegie’s Innovation New Business Strategies Always looking for ways to make better products cheaper New machinery & technology Accounting/shipping Offered stock in company to employee

Carnegie’s Innovation Vertical Integration Horizontal Integration Control as much of the industry as possible Control as many similar producers as possible A B C A B E A C F A D G

Social Darwinism Social Darwinism Principles of Social Darwinism A New Definition of Success Social Darwinism Uses “natural selection” of weeding out less-suited individuals unable to adapt Success came from God’s favor If you are poor you must be lazy OR Inferior and deserve what you get

Fewer Control More Growth and Consolidation Trusts Mergers “can’t beat them, join them” Buy outs Monopoly Holding Company Only buys stocks in companies Does not actually make produce anything J.P. Morgan U.S. Steel Trusts Manages the stocks of many companies John D. Rockefeller Standard Oil

Fewer Control More Rockefeller and the “Robber Barons” In less than 10 years (1870) Standard oil went from 2-3% to 90% of the industry Huge profits and low wages Charged less than competitors could afford Then, raised prices sky high

Fewer Control More Sherman Antitrust Act Was hard to enforce Made illegal to form a trust that interfered with free trade between states or other countries Was hard to enforce What was a trust? Companies would break up into individual companies under pressure 7 of 8 cases through out of by the Supreme Court

Labor Union Emerge 1882 675 worker killed a day 246,375 per year Cooperate powers were consolidating, workers needed to keep pace to protect themselves Longer hours and danger Steel mills 7 hour work day Seamstress 12 hour days, 6 days a week Did not receive Vacation Sick leave Unemployment benefits Workers compensation 1882 675 worker killed a day 246,375 per year

Labor Union Emerge Labor Unions National Labor Union – 1886 Early Labor Organization Labor Unions Date back to 1700s Small, local, skilled workers National Labor Union – 1886 Lobby for and receive 8 hour work days for government workers Knights of Labor Open to all workers

Union Movements Diverge Craft Unionism Industrial Unionism Skilled workers from one or more trades American Federation of Labor Used strikes as major tactic Won higher wages and longer weekends Skilled and unskilled workers American Railway Union Unskilled Skilled Firemen engineers $17.50/hr 54.5 /wk 1890 $24.00/hr 49/wk 1915

Union Movements Diverge Socialism and the IWW Industrial Worker of the World AKA Wobblies Miners Lumberjacks Cannery Dock workers Welcomed all workers

Baltimore and Ohio Railroad Strikes Turn Violent The Great Strike of 1877 Haymarket Affair Baltimore and Ohio Railroad Struck to protest their 2nd pay cut in 2 months Strike spread, over 50,000 miles of track shut down for a week Federal Troops are called in to break the strike May, 1886 3,000 people gather to protest police brutality Bomb thrown at police 3 speakers, 5 radicals arrested for inciting a riot All convicted, 4 hung, 1 commits suicide in prison Public opinion turns on labor movement

Strikes Turn Violent The Homestead Strike Carnegie Steel Company – 1892 Plant hires the Pickerton Detective Agency to protect scabs Battle ensues 3 detectives, 9 workers killed National Guard It would take 45 years before steel workers mobilize again

Strikes Turn Violent The Pullman Company Strike Panic of 1893 Pullman lays off ~2/3 of its employees Cuts pay by 25-50% Keeps company housing the same Federal Troops called in Organizer jailed Many fired and blacklisted The Pullman Company Strike

Unions begin to be feared by management Strikes Turn Violent Management and Government Pressure Unions Unions begin to be feared by management Sherman Antitrust Act All was needed was to say a strike hurt interstate trade, and state/federal government would issue an injunction