year’s Master Steel Agreement negotiations. By 1986,
less than 33 percent of major union contracts still
had cost-of-living adjustments (COLAs, which are in-
dexed to inflation), compared with 60 percent in
- Annual raises were replaced by bonuses that
were not included in a worker’s base pay. “Two-
tiered” systems were established in which new hires
received significantly lower pay and benefits. Unions
also relinquished some paid holidays and personal
days, acceded to cuts in medical and retirement
plans, and agreed to work out changes that gave
employers more control. Nationally, average wages
declined. By 1990, unions no longer set the wage
standards in any major industry, as they had done for
decades in auto, steel, rubber, mining, and transpor-
tation.
The nation’s dramatic shift from a manufactur-
ing to a service economy compounded the problem.
Between 1979 and 1989, the number of manufactur-
ing jobs declined from 21 million to 19.4 million,
while the number of service-sector jobs (in fast-food
restaurants, retail and discount stores, hotels, nurs-
ing homes, and offices) mushroomed from 32 mil-
lion to 45 million. These new jobs tended to be
poorly paid, insecure, devoid of benefits, and non-
unionized.Strike Breaking and Replacement Workers Em-
ployers seized upon an obscure loophole in a 1938
Supreme Court decision, in the case ofNational La-
bor Relations Board v. Mackay Radio, that allowed them
to continue operations by “permanently replacing”
rather than firing striking workers. Between 1985
and 1989, employers hired permanent replacement
workers in nearly 20 percent of strikes. In theory, a
striking worker lost only his or her particular job; the
employer was legally obligated to offer such an em-
ployee the first new position that opened. However,
in an era of downsizing, few striking workers were re-
called. Before 1981, theMackay Radiodecision was
little known and rarely used. However, it quickly be-
came the bane of the labor movement, as a growing
number of major corporations began using it.
Replacement workers were recruited during
strikes at Maytag and Greyhound Lines in 1983;
Phelps Dodge and Continental Airlines in 1984;1002 Unions The Eighties in America
Garment workers in Scranton, Pennsylvania, march with picket signs in 1984.(AP/Wide World Photos)