The 1950s also witnessed an easing of the labor conflict of the two previous decades. The passage of the Taft-Hartley Act in 1947 (discussed in the previous chapter) had reduced labor militancy. In 1955, the AFL and CIO merged to form a single organization representing 35 percent of all nonagricultural workers. In leading industries, labor and management hammered out what has been called a new “social contract.” Unions signed long-term agreements that left decisions regarding capital investment, plant location, and output in management’s hands, and they agreed to try to prevent unauthorized “wildcat” strikes. Employers stopped trying to eliminate existing unions and granted wage increases and fringe benefits such as private pension plans, health insurance, and automatic adjustments to pay to reflect rises in the cost of living.
Unionized workers shared fully in 1950s prosperity. Although the social contract did not apply to the majority of workers, who did not belong to unions, it did bring benefits to those who labored in nonunion jobs. For example, trade unions in the 1950s and 1960s were able to use their political power to win a steady increase in the minimum wage, which was earned mostly by nonunion workers at the bottom of the employment pyramid. But these “spillover effects” were limited. The majority of workers did not enjoy anything close to the wages, benefits, and job security of unionized workers in such industries as automobiles and steel.
An advertisement for a government film explaining to children how to survive a nuclear attack by hiding under their desks. Thousands of schools instituted these “duck and cover” drills. They were meant to reduce Americans’ fear of nuclear war.
Indeed, nonunion employers continued to fight vehemently against labor organization, and groups like the National Association of Manufacturers still viewed unions as an unacceptable infringement on the power of employers. Some firms continued to shift jobs to the less-unionized suburbs and South. By the end of the 1950s, the social contract was weakening. In 1959, the steel industry sought to tighten work rules and limit wage increases in an attempt to boost profits battered by a recession that hit two years earlier. The plan sparked a strike of 500,000 steelworkers, which successfully beat back the proposed changes.