Science, Tech, Math › Social Sciences History of the American Labor Movement Share Flipboard Email Print Buyenlarge/Getty Images Social Sciences Economics U.S. Economy Employment Supply & Demand Psychology Sociology Archaeology Environment Ergonomics Maritime By Mike Moffatt Professor of Business, Economics, and Public Policy Ph.D., Business Administration, Richard Ivey School of Business M.A., Economics, University of Rochester B.A., Economics and Political Science, University of Western Ontario our editorial process Mike Moffatt Updated January 27, 2020 The American labor force has changed profoundly during the nation's evolution from an agrarian society into a modern industrial state. The United States remained a largely agricultural nation until late in the 19th century. Unskilled workers fared poorly in the early U.S. economy, receiving as little as half the pay of skilled craftsmen, artisans, and mechanics. About 40 percent of workers in cities were low-wage laborers and seamstresses in clothing factories, often living in dismal circumstances. With the rise of factories, children, women, and poor immigrants were commonly employed to run machines. Rise and Fall of Labor Unions The late 19th century and the 20th century brought substantial industrial growth. Many Americans left farms and small towns to work in factories, which were organized for mass production and characterized by steep hierarchy, a reliance on relatively unskilled labor, and low wages. In this environment, labor unions gradually developed clout. One such union was the Industrial Workers of the World, founded in 1905. Eventually, they won substantial improvements in working conditions. They also changed American politics; often aligned with the Democratic Party, unions represented a key constituency for much of the social legislation enacted from the time of President Franklin D. Roosevelt's New Deal in the 1930s through the Kennedy and Johnson administrations of the 1960s. Organized labor continues to be an important political and economic force today, but its influence has waned markedly. Manufacturing has declined in relative importance, and the service sector has grown. More and more workers hold white-collar office jobs rather than unskilled, blue-collar factory jobs. Newer industries, meanwhile, have sought highly skilled workers who can adapt to continuous changes produced by computers and other new technologies. A growing emphasis on customization and a need to change products frequently in response to market demands has prompted some employers to reduce hierarchy and to rely instead on self-directed, interdisciplinary teams of workers. Organized labor, rooted in industries such as steel and heavy machinery, has had trouble responding to these changes. Unions prospered in the years immediately following World War II, but in later years, as the number of workers employed in the traditional manufacturing industries has declined, union membership has dropped. Employers, facing mounting challenges from low-wage, foreign competitors, have begun seeking greater flexibility in their employment policies, making more use of temporary and part-time employees and putting less emphasis on pay and benefit plans designed to cultivate long-term relationships with employees. They also have fought union organizing campaigns and strikes more aggressively. Politicians, once reluctant to buck union power, have passed legislation that cut further into the unions' base. Meanwhile, many younger, skilled workers have come to see unions as anachronisms that restrict their independence. Only in sectors that essentially function as monopolies—such as government and public schools—have unions continued to make gains. Despite the diminished power of unions, skilled workers in successful industries have benefited from many of the recent changes in the workplace. But unskilled workers in more traditional industries often have encountered difficulties. The 1980s and 1990s saw a growing gap in the wages paid to skilled and unskilled workers. While American workers at the end of the 1990s thus could look back on a decade of growing prosperity born of strong economic growth and low unemployment, many felt uncertain about what the future would bring. This article is adapted from the book "Outline of the U.S. Economy" by Conte and Karr and has been adapted with permission from the U.S. Department of State.