BIG BUSINESS VS. UNIONS

The Rise of Big Business

1900: Big Businesses dominate economy Large factory complexes and distribution

centers Corporations: organization owned by

many, but treated as single person by law

Economies of Scale: cost decreases as products are made quickly in large quantities Big Business=high fixed cost, low operating

cost Small businesses find it hard to compete,

falling prices help consumers, corps. form “pools” to control prices

Consolidating Industry

Andrew Carnegie and Steel Vertical Integration (Page 102)

John D. Rockefeller & Standard Oil Monopoly Trust Holding Companies

J.P. Morgan Investment Banking Buys Carnegie Steel and others, forms U.S.

Steel

Working Conditions

Poor working conditions: repetitive tasks, dangerous work environment, unhealthy conditions, machines not meant for safety

1860-1890: wages rise 50% 1900: 22 cent/hour average pay

Deflation: rise in the value of money Companies cut wages, prices continue to fall

Workers unhappy about conditions, wage cuts, high wages for executives—want to organize

Rise of Organized Labor

Two types of workers: Craft workers: skilled workers, higher wages Common laborers: unskilled, low paid

Craft workers form unions Business leaders oppose unions, but

forced to negotiate for needed labor Industrial Unions: especially disliked Business leaders “lockout” union members

Force used to break up strikes

Union Force

Great Railroad Strikes Knights of Labor

Favor boycotts and arbitration More strikes, government injunction American Federation of Labor (AFL)

Closed shops 1900: Women = 18% of workforce

Women paid less than men Women’s Trade Union League