During the period of the Golden Age in the USA, several social structures of accumulation (SSA) were used to improve the economic situation within the country and contribute to the stable economic growth during 1945-1973. The capital-labor accord is one of the main structures which were used to regulate the relations between employers and employees with references to increasing the wages along with stimulating productivity.
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In spite of the fact the period of the Golden Age in the USA ended with the definite economic stagnation in the country, the system of the capital-labor accord was rather effective to overcome the problem of unemployment and workers’ dissatisfaction after World War II and resolve the capital-labor conflict typical for the capitalistic society.
The period of 1945-1973 is known in the US history as the period of the Golden Age because of a kind of the economic prosperity resulted in the economic stability and low rates of inflation. The economic growth during the mentioned time frames was presented in the form of high employment and as the increase of the public’s welfare rates.
According to Reuss, “from the late 1940s to the early 1970s, the U.S. economy grew at an average annual rate of nearly 4%. The annual unemployment rate only exceeded 6% twice in the 25 years between 1949 and 1973” (Reuss 25).
To understand the correlation between the economic growth, decreasing levels of unemployment and regulating the capital-labor conflict, it is important to pay attention to the concept of the capital-labor accord used during 1945-1973. The labor accord can be explained as the definite agreement between the organizations, firms, industries and labor force which is organized in the labor unions to protect its interests (Rajan).
The basic principles of the labor accord are the dependence on the job control and job management provided by the employers, the accentuation of the role of unions in regulating the economic relations and the workers’ rights, the stabilization of the question of collective bargaining, and the effective correlation between the labor peace and economic stability along with increasing profits.
The purpose of the organization of unions in the late 1930s was to protect the rights of employees in the economically unstable environment. The initiative was supported by the government, and the era of the capital-labor accord started. It was necessary to create the system which could be discussed as beneficial for the employers and employees.
It is possible to note that the capital-labor accord depended on the intention of the employers “to recognize unions and bargain collectively, and the unions’ acceptance of management control over the production process in exchange for wage increases tied to productivity growth, health and retirement benefits, and job security” (Reuss 26).
The large employers reacted to the organization of unions positively because it was a chance to regulate the relations with the workers according to the conditions advantageous for the both sides. The capital-labor conflict was caused by the employers’ activities in relation to the extraction of the workers’ efforts and results of their work (Rajan).
It was important to concentrate on the possible profits and advantageous income distribution. However, this situation could not be discussed as satisfactory for the employees. That is why, workers relied on organizing unions as the effective means to protect their interests. The accentuation of the possibilities of the labor accord as the regulative means was the result of the economic and social processes in the USA during the 1930s.
Thus, the monopolistic firms within the influential and developed industries saw the definite benefits in supporting the idea of developing the labor unions. However, there were a lot of restrictions to join the labor union, and these restrictions reflected the companies’ strategies. It was impossible not to control the process of joining the union in order to regulate the economic situation in the country (Rajan).
As a result, the labor accord became the method of the labor control and management. That is why, Reuss concentrates on the discussion of the idea of a limited capital-labor accord as the characteristic feature of the Golden Age because “these arrangements excluded the majority of U.S. workers, who were not employed by large companies in the ‘core’ industries (auto, steel, trucking, etc.)” (Reuss 26).
Nevertheless, it is important to pay attention to the fact that the emphasis on the labor accord within the main industries stimulated the general growth of the economy, and those workers who did not belong to the unions also experienced the positive results of increasing the wages.
Thus, MacEwan and Miller state that those workers who were not in unions were “indirect beneficiaries of the unions’ strength, as wages and working conditions generally were improved because of both unions’ gains in the workplace and their political successes” (MacEwan and Miller How We Got Here 38). The economic agreement between the monopolistic firms and labor unions was advantageous for all the participants and contributed to bolstering the productivity.
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The high employment during the period of the Golden Age is associated with the general economic stability. The development of the industries was based on providing the definite unemployment insurance to guarantee the social peace and stability as well as the intensive work and profitability (MacEwan and Miller What Ails the US Economy?).
It is possible to speak about the definite economic chain. The recognition of the unions by the large employers resulted in increasing the workers’ productivity along with increasing their wages, and the growth of productivity and intensive work resulted in the economic growth when the new workplaces were created, and many industries demanded the labor force (Fishback).
According to Reuss, “government macroeconomic stabilization policies, the welfare state, and large powerful unions in the core industries, however, were part of an institutional framework that fostered capitalist profitability and economic growth” (Reuss 26). Thus, the resolution of the problem of unemployment was directly connected with implementing the idea of the labor accord.
The high level of employment as a result of the economic growth and high wages are often based on increasing the prices to preserve the balance from the point of the firms’ interests. However, the capital-labor accord as the social structure of accumulation helped prevent the development of the tendency to increase the wages along with increasing the prices and contributing to the development of inflation.
The system of the capital-labor accord with the accents on the organization of unions was oriented to regulating the economic conflict between the employers and employees. MacEwan and Miller stress that unions essentially “abandoned efforts … to alter the organization of the economy. In exchange for their acceptance and a general increase of wages along with productivity advances, unions ceded to management control” (MacEwan and Miller How We Got Here 38).
Nevertheless, the advantages of this regulated capitalism could not guarantee the economic stability within the United States of America during a long period of time. The period of the Golden Age resulted in the economic stagnation and in the slowdown of the workers’ productivity because the system of the labor accord had a lot of inner contradictions which could not be regulated and resolved according to the idea of the correlation between creating the unions, providing high wages and high productivity.
The capital-labor accord system which was actively used during the Golden Age in the USA (1945-1973) can be discussed as the effective measure to regulate the relations between the employers and workers basing on the organization of the labor unions and beneficial distribution of profits and wages.
As a result, the labor accord as the social structure of accumulation is the effective method to stabilize and control the labor-management relations within the organization or industry. Although many workers could not join the labor unions because of the numerous restrictions, the results of the labor accord were available for all the workers because the tendency influenced the general economic situation and affected the unemployment problem.
Moreover, the wages increased within the all the main industries, and the fact contributed to improving the people’s welfare. Thus, according to the labor accord system, the labor peace and high productivity of workers were exchanged for the expansion of the labor possibilities and higher wages provided by the employers. This situation satisfied the public till the period of the economic stagnation began along with inflation and decreasing demands for the labor force.
Fishback, Price. Government and the American Economy: A New History. Chicago: University of Chicago Press, 2007. Print.
MacEwan, Arthur, and John Miller. “How We Got Here”. Economic Collapse, Economic Change: Getting to the Roots of the Crisis. Ed. Arthur MacEwan and John Miller. USA: M.E. Sharpe, 2011. 33-63. Print.
“What Ails the US Economy?” Economic Collapse, Economic Change: Getting to the Roots of the Crisis. Ed. Arthur MacEwan and John Miller. USA: M.E. Sharpe, 2011. 3-18. Print.
Rajan, Raghuram. Fault Lines. USA: Princeton University Press, 2011. Print.
Reuss, Alejandro. “That ’70s Crisis”. The Economic Crisis Reader. Ed. Gerald Friedman, Fred Moseley, and Chris Sturr. USA: Dollars & Sense, 2009. 24-33. Print.