Corporate Giants Attack National Labor Relations Act

By Gerry Scoppuotello

Recently Amazon, Starbucks and Trader Joe’s have filed legal challenges to the constitutionality of  the National Labor Relations Act (NLRA), which was enacted in 1935 and whose constitutionality was upheld in 1938 by the U.S. Supreme Court. With profits of nearly $40 billion in 2022, why are these companies launching this assault on workers now? If they are successful, how will workers and unions respond?

The  NLRA protections which still exist are often ineffective due to the expensive anti-union campaigns that corporations can afford to deploy against workers. Until recently unions have won  barely half of the elections for which they have filed representation petitions. Would workers be stronger without the National Labor Relations and Act and its National Labor Relations Board (as some think) and, if it is so weak, why do billionaire capitalists want  to kill it off?

Rank and File Revolt and the Supreme Court

At the onset of the Great Depression (1929) workers had no labor laws to protect organizing efforts and they had to resort to violent strikes to survive and earn a living for themselves and their families. By 1930 the collapse of capitalist production in the U.S. caused massive unemployment and suffering. Operators of the all important coal industry ruthlessly cut wages due to cutthroat competition in the coal fields of Pennsylvania, Illinois and the South in order to maintain profits. The 1933 National Industrial Recovery Act (NIRA) and its federal agency promised temporary relief by enacting mandatory codes of production and wages to end the death spiral of uncontrolled capitalist competition, overproduction and underconsumption.

As a concession to labor, the NRA added section 7(a) which guaranteed workers the right to collective bargaining. Section 7(a) had no enforcement powers and its enactment was due  almost solely to the powers of negotiation and manipulation of John L. Lewis, President  of the United Mineworkers who fought for its inclusion and then sent his organizers into the field declaring to  mineworkers: “The President Wants You to Join the Union!.” Lewis then either orchestrated strikes in the coalfields or was powerless to stop them when launched by angry miners. He used the power of the workers to withhold their labor, as it were, as a threat to mine owners (and President Roosevelt) to force them  to agree to the the Lewis NIRA labor code which called for a minimum wage of $5 a day (previously $1.50/day) and maximum 40 hrs/week.

Wages paid in scrip and the requirement that miners live in company owned housing were both prohibited. These were  demands that the UMWA was too weak to negotiate in collective bargaining.  The mine owners agreed to these codes because the relaxed antitrust laws allowing inter-capitalist wage-setting (taking wages out of competition between firms) while at the same time reining in the dangerous overproduction of coal which led to lower prices and then lower wages. and eventually lower profits.

Many workers in industries other than coal were unhappy with the codes because their unions still had no enforceable legal right to bargain collectively and because some codes set wage rates that were too low, especially in the South where African American workers described the NRA  as the “Negro Removal Act.” The one exception to this was made in the coal industry, again by John L. Lewis who successfully fought the low southern wage scale during labor-industry bargaining for the southern coal industry codes. According to Lewis biographer, Melvyn Dubosky:

….(defending) the rights of southern  workers for  decent existence, Lewis shattered the operators’ case for a low southern cost of living, especially for Black miners who comprised half or more of their labor force. Black miners lived more poorly than their white brothers and tolerated a lower standard of living Lewis proved, not because their needs and standards were more primitive, but because they had no choice. Racism not only depressed Black wage levels but it also compelled Black workers to pay more than whites for identical housing

The United Mineworkers Union membership swelled to 500,000 almost overnight between 1933 and 1934 from a low of just under 80,000.

The Supreme Court found the NIRA unconstitutional in 1935 citing the “non delegation” article of the constitution, claiming that the Executive Branch of government had usurped the powers granted in the Commerce Clause of the constitution in Schechter Poultry vs the United States (Mr. Schechter wanted to pay his chicken pluckers below the minimum wage set by the NIRA code.) The Supreme Court struck down the NRA on constitutional grounds. This left workers again with no legal right to organize. As a consequence, by 1934 massive general strikes broke out in San Francisco, Toledo, Minneapolis and, the greatest of all, the Textile Strike of 400,000 workers from Maine to South Carolina in the summer of 1934 These strikes all happened within months of each other and involved close to two million workers. It took U.S. Army machine guns to finally suppress the textile strike.

Faced with near unprecedented mass worker revolt the government again intervened and Congress passed  the 1935  Wagner Act providing for the National Labor Relations  Board which could strike down five different unlawful employer activities. At the same time the Board-supervised union elections.  Again the lords of capital struck back and in 1937, the Jones and Laughlin Steel company, under siege by the Congress of Industrial Organizations’ (CIO) Steel Workers Organizing Committee, petitioned the Supreme Court, claiming the Wagner Act to be unconstitutional because it did not allow workers to make their own individual labor contracts with owners. This time the Supreme Court upheld the law’s constitutionality, but barely, ruling 5-4 in favor of the lower court.

That was 88 years ago and today, Amazon and  Morgan Lewis, the most powerful union busting law firm in the U.S. is now going not just after minimum wage Amazon workers in Alabama and New York, but all workers rights. Amazon still doesn’t recognize the JFK8 union victory two years ago and, as part of its pleadings before the Labor Board in that litigation, it has unleashed Morgan Lewis to argue that the Board itself acted unconstitutionally when it sought injunctions in federal court against the company to stop firing its unionizing employees.

The question might well not be, will the reactionary Supreme Court dismantle “Labor’s Magna Carta,” but when. For, although it took the Court a number of years to slowly undermine a womans’ right to choose before it completely overturned her rights in 2023, signs of a quick anti-worker decision lie ahead. In oral arguments on January 17 the Court launched  its first volley against workers’ rights when it agreed to hear two  cases that would cripple  the regulatory powers of federal agencies such as the National Labor Relations Board.  These cases—Loper Bright Enterprises, Inc. v. Raimondo and Relentless, Inc. v. Department of Commerce—seek to limit or entirely overturn the 40 year old “Chevron doctrine” which upheld such powers. Two federal courts in these cases have upheld long standing regulatory powers of the government, the underlying critical issue in the Amazon case. Yet on appeal the Supreme Court has taken up these cases – not a good sign. Striking down these two court cases would be a first step in challenging the constitutionality of the National Labor Relations Act. The Supreme Court could simply have stayed these rulings by not taking the appeals, leaving the NLRA intact. When the Supreme Court heard oral arguments on January 17, only the three  liberal justices spoke in favor of these regulatory legal precedents.  Oral arguments can be heard  at https://www.oyez.org/cases/2023/22-451

What threats to its profits is Amazon afraid of?

There might well be several. First, the rate of increase of the labor force (those willing and able to work) shrinks approaching zero. Scarcity of labor, holding the demand for labor intact, strengthens labor all other things being equal. By 2032, its ten year average yearly increase will barely be .4%, according to the  Federal Bureau of Labor Statistics.

Second, the real unemployment rate in January 2024 was 8.0%, not the rosy 3.7 % trumpeted in the media. The U-6 unemployment rate at 8.0% is defined as: Total Unemployed, Plus All Persons Marginally Attached to the Labor Force, Plus Total Employed Part Time for Economic Reasons, as a Percent of the Civilian Labor Force. The U-6 rate is considered by many economists to be the most revealing measure of the true state of the nation’s employment situation (investopedia).

Third, unions and worker power are surging. In 2022 unions won an astonishing 83% of NLRB elections. According to Bloomberg Law:

Unions’ 662 total union wins—up from 653 in 2022—represent the highest first-half win total for labor organizers since 2005. Meanwhile, the number of management wins at the NLRB fell from 194 in first-half 2022 to 165 in first-half 2023. These upward and downward forces have propelled unions to an 80% win rate in NLRB representation elections—the first time ever that such a milestone has been reached at the midyear point.

Finally, Marx was right! It is now widely held that the tendency of the rate of profit to fall (TRPF) is accurate.  According to this theory, over time the rate of profit (say per year)  has a tendency to fall because profit can only be derived by withholding from workers the full value of that which we produce by our labor power. The remainder is kept by the capitalist as profit. Since, also over time, the capitalist reduces the amount of labor in the production of goods (replacing it by technology and more capital) the rate of profit (not the amount of profit) must therefore shrink.

If history is any guide, worker mass struggle can intervene and change material conditions and sometimes lead to revolution such as in 1917 Russia. Whether this struggle will be waged by organized labor, which currently represents only 10 % of the labor force, or other organized formations of labor is unclear. Starting 1905 in Petrograd, Russia, hundreds of workers councils (soviets) each with hundreds of participants provided the organizational vehicle out of which emerged the Bolshevik party which gained majority support of workers, peasants and the army, eventually taking state power.

Provocations by the corporate/banking bosses and the reactionaries on the Supreme Court may well be the spark that ignites the vast potential of the hundreds of millions of unorganized workers in the United States. Should the court remove the safety valve of organizing constrained by the NLRA and NLRB, it is entirely conceivable that a massive wave of organizing and strike activity could sweep across the U.S. dwarfing the legendary uprisings of the Great Depression.