The Day Ronald Reagan Disarmed the American Labor Movement

On this day in economic and business history...

The modern labor community has its own method of dating history. There's "Before Reagan," which covers much of the history of labor rights in the 20th century, and then there's "After Reagan," which begins on Aug. 5, 1981, when President Ronald Reagan broke the strike of the Professional Air Traffic Controllers Organization, or PATCO.

The PATCO strike was, more than any other event of the last half-century, a turning point in the relationship between labor and government, as well as the relationship between labor and business interests. It set the tone for the Reagan presidency and set the stage for a shift in power from labor to capital. Let's examine what happened so we can better understand its effect on the American economy.

The story of the PATCO-Reagan showdown began during the 1980 presidential campaign, when Republican candidate Reagan courted PATCO's endorsement. A letter from Reagan to PATCO president Robert Poli promised cooperation and support, should he be elected:

I have been briefed by members of my staff as to the deplorable state of our nation's air traffic control system. They have told me that too few people working unreasonable hours with obsolete equipment has placed the nation's air travelers in unwarranted danger. In an area so clearly related to public policy the Carter administration has failed to act responsibly.

You can rest assured that if I am elected president, I will take whatever steps are necessary to provide our air traffic controllers with the most modern equipment available and to adjust staff levels and work days so that they are commensurate with achieving a maximum degree of public safety. ...

I pledge to you that my administration will work very closely with you to bring about a spirit of cooperation between the president and the air traffic controllers. Such harmony can and must exist if we are to restore the people's confidence in their government.

The administration of President Jimmy Carter had not helped the controllers as they had hoped, and a deteriorated relationship with the Federal Aviation Administration (headed by Carter appointees) led PATCO to endorse Reagan toward the end of the 1980 campaign. It was one of only four AFL-CIO unions to do so.

Shortly after Reagan's inauguration in 1981, PATCO began to negotiate a new contract with a fresh, Reagan-appointed head of the FAA. Their demands were quite optimistic, to say the least: Controllers wanted a four-day, 32-hour work week and a $10,000 annual pay raise -- equal to nearly $26,000 today, or roughly half of the current median U.S. annual household wage. This $770 million package was countered with a $40 million FAA offer -- far less than might content the controllers. At the same time that PATCO was starting its contract negotiations, the Reagan Department of Justice was working with the FAA to compile what a District Court Judge would later decry as a "hit list" -- a list of PATCO members to arrest and prosecute should a strike occur.

The two sides were clearly angling for a strike, which finally took place on Aug. 3 when 13,000 controllers did not report to work. PATCO's leaders hoped the strike might also win the union freedom from its designation as a civil-service (government) union -- a status that legally restricted it from striking. Reagan immediately denounced the strike as illegal and a "peril to national safety," demanding that the controllers return to work through the authority he held under the Taft-Hartley Act. If they did not, Reagan promised to fire them all.

Some 1,300 striking controllers returned to work, and the FAA implemented a contingency plan that involved supervisory personnel and military controllers. Soon, most flights were back on schedule, and PATCO's position was severely weakened. Reagan carried out his threat two days later, on Aug. 5, and more than 11,000 striking controllers were fired. Not only did Reagan terminate their employment, but he also banned them from federal service for life. PATCO was decertified as a representative union that October, and although some of the strikers were allowed to reapply for jobs several years later, it was not until 1993 that President Bill Clinton lifted the lifetime ban on the entire group.

The impact of Reagan's destruction of PATCO was far-reaching. Joseph McCartin, writing for The New York Times three decades later, noted Reagan's near-term gains and the long-term effect of the strike's failure:

By firing those who refused to heed his warning, and breaking their union, Reagan took a considerable risk. Even his closest advisors worried that a major air disaster might result from the wholesale replacement of striking controllers. Air travel was significantly curtailed, and it took several years and billions of dollars (much more than PATCO had demanded) to return the system to its pre-strike levels.

But the risk paid off for Reagan in the short run. He showed federal workers and Soviet leaders alike how tough he could be. Although there were 39 illegal work stoppages against the federal government between 1962 and 1981, no significant federal job actions followed Reagan's firing of the PATCO strikers. His forceful handling of the walkout, meanwhile, impressed the Soviets, strengthening his hand in the talks he later pursued with Mikhail Gorbachev. ...

By 2010, the number of workers participating in walkouts was less than 2% of what it had been when Reagan led the actors' strike in 1952. Lacking the leverage that strikes once provided, unions have been unable to pressure employers to increase wages as productivity rises. Inequality has ballooned to a level not seen since Reagan's boyhood in the 1920s.

Time rates the Reagan-PATCO showdown as the third-most notable federal standoff in American history, also noting that major strikes dwindled from more than 300 a year before PATCO to just 30 per year (and still falling) two decades later.

When Reagan led the Screen Actors Guild walkout in 1952, roughly a third of the entire American workforce belonged to a labor union. Today, about 12% of the workforce is unionized. Corporate profits are at an all-time postwar high as a percentage of GDP, and wages as a percentage of GDP have fallen to an all-time low. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) began what would be the longest and strongest secular bull market in its history a year after Reagan broke PATCO, producing real gains of nearly 700% from 1982 to 2000, even though real corporate earnings only doubled during the same period. These market gains -- which took place at a time when millions of Americans were becoming stock market participants -- helped the nation overlook a growing divide between labor and capital that only became widely apparent following the 2007 financial crisis.

These broad, secular economic trends can't be blamed solely on the PATCO breakup, as there are always multiple forces at work in the world. However, in some rare cases, a single event can steer many of those forces toward the same destination.

What macro trend was Warren Buffett referring to when he said, "This is the tapeworm that's eating at American competitiveness"? Find out in our free report: "What's Really Eating at America's Competitiveness." You'll also discover an idea to profit as companies work to eradicate this efficiency-sucking problem. Just click here for free, immediate access.


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  • Report this Comment On August 05, 2013, at 12:01 PM, ElliotJStamler wrote:

    I think it inaccurate to state that Ronald Reagan's justifiable action caused the spine to be broken by organized labor. Pres. Coolidge once said simply and correctly that there is no right by gov't employees to strike against the public at any time for any reason. That is still both the law and common sense. If you want to work for the gov't and especially in vital public safety you give up your right to strike-if that's unpalatable, don't work for the gov't. I didn't vote for Ronald Reagan but he was 100% right. Unions are on the ropes for many reasons and most of them are the unions' leaders town fault-I write this as a businessman who has at times in the distant past been a member and officer of a trade union.

  • Report this Comment On August 05, 2013, at 12:15 PM, Ishinomaki wrote:

    What a ridiculous premise! You can thank unions and more specifically, greedy union leadership for the demise of the labor movement. I suppose it's Reagan's fault that Detroit is in the mess it's in as well? Oh wait, no....that would be Bush's fault! And no, I'm not a republican....and certainly not a democrat either.

  • Report this Comment On August 05, 2013, at 12:32 PM, johnnypelos wrote:

    This story is laughable

    Reagan did not destroy Detroit nor did he destroy Hostess. By breaking the Union Strike, Reagan advanced the Labor Movement, well the legitimate Labor Movement. The movement that says you can work wherever you want without paying extortion money. Democrats collectively destroyed Detroit and Hostess and Labor Movement by extorting money from workers to fill thier pockets. This will continue until we rid this country of the vermin that are Unions

  • Report this Comment On August 05, 2013, at 12:34 PM, Chiara2 wrote:

    DNC propaganda!

  • Report this Comment On August 05, 2013, at 12:36 PM, bobthegoodone wrote:

    Ronald Reagan started the downhill spiral this country is currently in and may never recover from

  • Report this Comment On August 05, 2013, at 12:47 PM, fingerlakes54 wrote:

    If this situation had been handled similar to 'The Railway Labor Act" this whole situation could have been avoided.

  • Report this Comment On August 05, 2013, at 12:59 PM, AllenElliott wrote:

    This is liberal propaganda

  • Report this Comment On August 05, 2013, at 1:09 PM, borninkenyafools wrote:

    Just how stupid do you have to be to believe this premise. Really to believe this means you've lost all critical thinking skills .

  • Report this Comment On August 05, 2013, at 1:17 PM, Sandcrab54 wrote:

    I work for a government organization with a non-strike contract. I would fully expect a strike to result in a firing. CONTRACT! What does that mean. At the time, I had friends that were ATC's. I felt sorry for them, but knew the right thing was done. One thing that isn't mentioned very much. The government allowed the strikers to join or rejoin the military as AC's. After that their record was expunged.

  • Report this Comment On August 05, 2013, at 1:21 PM, Stevegarry22 wrote:

    President Regan successfully broke the back of labor unions, their demands in everything from the auto industry to Federal and Sate governments were outrageous. back in the 1970's and 80's you had high school drop outs making engineers wages,as we do today, for doing nothing. Have you ever been to a Detroit auto plant, like the government, they have 25 people to do one persons job, and they all stand around griping about anything and everything, while doing nothing.

    Outlaw ALL government unions NOW!!!!!!

  • Report this Comment On August 05, 2013, at 1:22 PM, Sandcrab54 wrote:

    Bobthegoodone??? Reagan had NOTHING to do with the present financial mess. Liberal giveaway programs and catering to union greed are the direct cause of this mess and are in the laps of Democrat sycophants.

  • Report this Comment On August 05, 2013, at 1:29 PM, JimBoJeff wrote:

    I, jeff Castillo, was never sure what to make of this SKILLED labor Confederation "halt-of-work". one, of the things, is that I never heard of a professionaly-empowered-complement-concerned-articulate going "off employ cycle". as I was, used to unionization, it typically involved (blue-collar) non-skilled "ditry-grease-bucket" laborer's, as it necessitates them causing for-working-conditions, including work place safety, seniority-ranking, and allowances-for-sick-days, among other things - not silpleton minded wages alone. and as such, this was the first time, I, heard of somebody with internalized skills, negiotable-learned-talent, and abstract- abilitic cogencie, being in disconcord

  • Report this Comment On August 05, 2013, at 1:42 PM, WhyAndHow wrote:

    Interesting and factual read on history. Helps explain why our current median hourly rate adjusted for inflation and productivity is only 50% of what it was 40 years ago.

    As for other comments... left, right, they are both wrong. Its time for people to start being honest again.

  • Report this Comment On August 05, 2013, at 1:49 PM, kkrimmer wrote:

    Reagan's S&L meltdown (lack of oversight, again) cost taxpayers $160 billion which today would be close to $400 billion. Who ended up with all that money?

    What about relativity? Republicans did not seem to think that Ronald Reagan’s $2 trillion addition to the national debt from 1981 through 1988 was very much, or another $1 trillion added to the debt by George H.W. Bush from 1989 through 1992 mattered. Even George W. Bush’s addition to the debt of about $5 trillion from 2001 through 2008 did not get many, if any, Republican complaints.

    One can only conclude that for some reason, unknown to science and mathematics, Republican trillions are somehow relatively smaller than Democratic trillions. Any Republican who can explain this phenomenon should get a Nobel Prize.

  • Report this Comment On August 05, 2013, at 1:50 PM, kkrimmer wrote:

    The Reagan Myth I

    A CNN/Opinion poll last month gave him the 3rd highest approval rating among presidents of the past 50 years, behind John Kennedy and Bill Clinton. But Reagan's average approval rating during the eight years that he was in office was nothing spectacular - 52.8 percent. That places the 40th president not just behind Kennedy, Clinton and Dwight Eisenhower, but also Lyndon Johnson and George H.W. Bush

    Reagan's boldest move as president was his 1981 tax cut, a sweeping measure that slashed the marginal rate on the wealthiest Americans from 70 percent to 50 percent. The legislation also included smaller cuts in lower tax brackets, as well as big breaks for corporations and the oil industry. But the following year, as the economy was mired in recession and the federal deficit was spiraling out of control, even groups such as the Business Roundtable lobbied Reagan to raise taxes. And he did: The Tax Equity and Fiscal Responsibility Act of 1982 was, at the time, the largest peacetime tax increase in U.S. history.

    Though Reagan expanded the U.S. military and launched new weapons programs, his real contributions to the end of the Cold War were his willingness to negotiate arms reductions with Soviet leader Mikhail Gorbachev and his encouragement of Gorbachev as a domestic reformer. Indeed, a USA Today poll taken four days after the fall of the Berlin Wall found that 43 percent of Americans credited Gorbachev, while only 14 percent cited Reagan.

    Cont....

  • Report this Comment On August 05, 2013, at 1:50 PM, kkrimmer wrote:

    Reagan Myth Cont.

    Reagan famously declared at his 1981 inauguration that "in the present crisis, government is not the solution to our problem; government is the problem." This rhetorical flourish didn't stop the 40th president from increasing the federal government's size by every possible measure during his eight years in office.

    Federal spending grew by an average of 2.5 percent a year, adjusted for inflation, while Reagan was president. The national debt exploded, increasing from about $700 billion to nearly $3 trillion. Many experts believe that Reagan's massive deficits not only worsened the recession of the early 1990s but doomed his successor, George H.W. Bush, to a one-term presidency by forcing him to abandon his "no new taxes" pledge.

    Reagan's contributions to the culture wars of the 1980s were largely rhetorical and symbolic. Although he published a book in 1983 about his staunch opposition to abortion overlooking the fact that he had legalized abortion in California as governor in the late 1960s.

  • Report this Comment On August 05, 2013, at 1:52 PM, PaulPhoenix wrote:

    Govt. Unions should be illegal.

    Vital, taxpayer funded services should not be allowed to be held up because of greed. If you do not want to

    make what amounts to a guaranteed salary until you retire, then please do not take the job.

    Govt. unions are dying and rightly so.

  • Report this Comment On August 05, 2013, at 1:58 PM, CathalMac wrote:

    Bottom line is, as a Federal Government dept. they are not allowed to strike end of story. There Union took the worst approach possible. They could have slowed down the air traffic by following the letter of the law, that way everyone would have been sick of it and looking for a settlement. Instead they challenged the President. Bad Idea, especially that President!

  • Report this Comment On August 05, 2013, at 1:59 PM, TMFBiggles wrote:

    @ PaulPhoenix -

    Actually, that is not true at all. Per BLS:

    "Public-sector workers had a union membership rate (35.9 percent) more than five times higher than that of private-sector workers (6.6 percent)."

    http://www.bls.gov/news.release/union2.nr0.htm

    - Alex

  • Report this Comment On August 05, 2013, at 2:12 PM, 2smartforlibs wrote:

    What you left wing media lap dogs forgot to mention was Reagan couldn't have done what he did if you don't give credit to Jimmy "Teeth" Carter. Check his executive orders.

  • Report this Comment On August 05, 2013, at 2:39 PM, bobthegoodone wrote:

    The impetus for NAFTA actually began with President Ronald Reagan, who campaigned on a North American common market , then we had his Amnesty , he caused more damage to America than any other President in history

  • Report this Comment On August 05, 2013, at 2:39 PM, oldpapajerry wrote:

    Ronald Regan was the last president to enforce the all the laws of the nation, not just the ones "he" liked.

    Did the Times forget it was illegal under federal law for the ATC members to strike??

    Did it matter that by striking they risked the lives of thousands and would have costs the country untold billions in lost revenue and productivity?

    Nope....

    The Obama Times just spews out the Union line as usual.

    OPj

  • Report this Comment On August 05, 2013, at 2:56 PM, bobthegoodone wrote:

    Those who forget history to make their beliefs sound right are doomed to repeat it

  • Report this Comment On August 05, 2013, at 3:09 PM, michaelbinCA wrote:

    Howdy Doodie only did what he was told to do and say what THEIR script said. CA did well in the 1980's. DoD, et al.

  • Report this Comment On August 05, 2013, at 3:11 PM, SLTom992 wrote:

    NO public service employees ought to be able to strike. Period! For instance, presently in the San Francisco bay area the Bay Area Rapid Transit workers are about to strike despite the fact that they are the highest paid public transit workers in the world. Although they all voted for Obama they don't want to have to split the insurance increases with the public. They are claiming that the "surplus" that BART has should be used as pay increases instead of used for track improvements and new train cars to replace the 40 year old cars presently being used. Almost a quarter of the workers in the bay area use this transit service and they intend to shut down a major portion of the business to force a 23% raise over the next three years. And when management offers less than that they refer to it as "Union Breaking"! Screw them.

  • Report this Comment On August 05, 2013, at 3:20 PM, michaelbinCA wrote:

    Cause and Effect? How many Vietnam Vets came back from SE ASIA and elsewhere during the Ford years, then Carter's? (about 59,000 didn't come back - DoD lackey body bag and coffin makers did well). The American Communists would not hire these so-called killers of the Commie's brothers and sisters. So, Carter's Era people had to make work programs which cost money (money doesn't grow on trees) Reagan had to BAIL OUT the S & L's big time, stole from HUD to start crap in Middle East to allow the DoD contractors in his Pinko state of CA to enter the picture, making room for those WHO COULD HAVE GONE TO Israel to wipe their butts with the draft cards. And on it goes. Tylenol murders in 1982, Challenger blown up by who knows whom. All group oriented. Reagan conveniently forgets and retires to his beloved Bel Air, CA.

  • Report this Comment On August 05, 2013, at 3:44 PM, mileswrich wrote:

    I am a Democrat today. I left the Republican Party in 1992 after the Clarence Thomas nomination and other GHW Bush policies. But Reagan did not destroy the labor movement with the PATCO strike. I realize the PATCO strike is seen as a turning point, but the PATCO members could not legally strike. By walking off their jobs, they basically quit. Reagan had no choice. I agreed with what he told them during the campaign. They were over worked and underpaid, but as government employees, they did not have the right to strike. In Wisconsin, Governor Walker took away their right to collectively bargain. Reagan did no such thing.

  • Report this Comment On August 05, 2013, at 3:45 PM, bryannh1962 wrote:

    Unions destroyed unions, simply put. Greed and arrogance caused the formation of unions to try to help working stiffs gain some dignity and make more than the pittance they were getting from robber barons of the late 19th and early 20th century. Greed and arrogance is responsible for the corresponding decline of said unions today.

  • Report this Comment On August 05, 2013, at 4:33 PM, achance15 wrote:

    a federal employee signs an agreement they will not strike and they did. I guess all that favored the strikers stopped flying at that time to support them. Imagine how many accidents would have taken place with replacement controllers.

  • Report this Comment On August 05, 2013, at 4:49 PM, riotquake wrote:

    Shame on the tyrannical republican government, If govenment workers' rights are not

    defended, no workers' rights will be defended. We're right back to the pre-depression era.

    Capitolisim is Cannibalism.

  • Report this Comment On August 05, 2013, at 5:18 PM, andiconda wrote:

    I cannot stand the conservative agenda, feed the rich starve everyone else. NEVER AGAIN

  • Report this Comment On August 05, 2013, at 5:34 PM, Paulson545 wrote:

    Coal miners union leaders and union power plant union leaders force their members to vote for democrats. Now with obama's war on coal and on coal fired power plants thousands of them are out of work because of obama's war on coal.

  • Report this Comment On August 05, 2013, at 6:01 PM, wtire wrote:

    WHAT...no way folks!

  • Report this Comment On August 05, 2013, at 6:16 PM, IronJaw5 wrote:

    The Air Controllers were federal employees and had no right to strike. Federal workers who strike are subject to immediate termination. I spent 25 years with the U.S. Border Patrol (retired at the end of 2011). If our union went on strike that would be a violation of their federal employment.

    Reagan actually did give them a chance to come back to work and avoid termination - and many did. But based upon the rules of the game, all should have been canned for the violation.

  • Report this Comment On August 05, 2013, at 6:26 PM, buddmann1 wrote:

    Bravo President Reagan

  • Report this Comment On August 05, 2013, at 6:34 PM, robertkeiser wrote:

    I was working in the control tower at LAX at the time, All the supervisors had to go to work, the planes didn't stop. I could not believe the people they hired to replace them, a bunch kids with no experience. what a big surprise now they all make over 100,000 a year. I wonder how things would be now if Regan didn't act. The real mistake Unions had and have is poor leadership. just think if they could present themselves like the Banksters who are holding the government hostage now!!

  • Report this Comment On August 05, 2013, at 6:41 PM, kittlesforme wrote:

    Anybody notice this guys name? Alex "Planes", writing an article about the air controller strike! LOL

    Sorry, bud, but your name obviously doesn't help with this article. Your deductions and reasoning is pure crapola..............

  • Report this Comment On August 05, 2013, at 7:21 PM, dregstudios wrote:

    His effigy should be burned in the street for selling out the Middle Class to Big Business. Reagan has a legacy so distorted by the Conservative idolization of him that we may never have a clear picture of the real man behind the television set beyond the elaborate myth now concocted around him. Did he really rid the world of commie scum? Did destroy or save our economy? http://dregstudiosart.blogspot.com/2011/02/happy-100th-gippe...

  • Report this Comment On August 05, 2013, at 8:41 PM, agsb2 wrote:

    It looks to me President O is doing a pretty got job destroying full time work.

  • Report this Comment On August 05, 2013, at 8:52 PM, OldJim51 wrote:

    Mr. Planes, Regan didn't destroy ATC jobs, he dismantled the union. ATC are in a non-strike position, just like police and firemen. The PATCO union tried to show its power and ignored all court orders to remain on the job. It took a while but some returned to work and others were replaced. Unions are labor icons that can not be feared any longer. The job market today needs skilled workers that respect the job they have and ambition for improvement. Companies will come and go but marketable skills will always be in demand. That's were the economy needs t be placed.

  • Report this Comment On August 05, 2013, at 8:56 PM, elfraed wrote:

    And, just to rub salt in the wounds, an airport which serves Washington, D.C. was renamed Ronald Reagan Washington National Airport, and a statue of him was placed there. Maggie Thatcher was made in a similar mold but had the British government done the same for her, the statue would not have lasted a day. Even if the British government has no more respect for their people, than ours has for us, they do have a sense of propriety.

  • Report this Comment On August 05, 2013, at 9:01 PM, elfraed wrote:

    And, it was not President Reagan alone. The Courts decided to fine the union for every day they were on strike, and soon the union was bankrupt. Afterward, Republicans and Democrats decided to rename an airport for him and place his statue there. Pure, unmitigated gall.

  • Report this Comment On August 05, 2013, at 9:08 PM, wdavidfields wrote:

    I swear right wing phonies sniff out these stories and opinions and do everything in their power to snuff them out. Don't listen to the sick right, who has been destroying this nation since the 1970's. It's time for a new rhetoric. My solution: outlaw the Republican and Tea Parties, jail the leadership and marginalize it's members and supporters. That will solve much of our nation's problems and then we can try to rebuild this nation that the Republicans and Tea Party have worked so hard to destroy.

  • Report this Comment On August 05, 2013, at 9:23 PM, MLevin12 wrote:

    FACT #1 IT WAS ILLEGAL FOR THE AIR TRAFFIC CONTROLLERS UNION AKA PATCO TO STRIKE . Reagan gave them the opportunity to return to their jobs they refused and they got what they had coming to them . Fact #2 Reagan cut taxes and revenues soared to the federal government , we won the cold war ! Good paying jobs , unemployment was 10% then 5% under Reagan , Please don't rewrite history those who lived thru the Carter mess with high inflation and 20% interest would take Reagan over carter or Obama ....you libtards really hate the fact Reagan was more popular and more successful than Oduma

  • Report this Comment On August 05, 2013, at 9:46 PM, DList1 wrote:

    Nonsense. The labor movement lost when it sold it's soul to the Democrat party and let American hating, anti-working class radical Leftist take over the movement. I worked under a union for 10 years and the most I seen them do was get Bill Clinton elected. Bill the friend of corporate america and NAFTA.

  • Report this Comment On August 05, 2013, at 10:22 PM, DeeDee2013 wrote:

    What rot!!! The first nail in the union coffin almost 40 years ago was actually the influx of high-quality, affordable cars from Japan. Japanese passenger car exports rose from about 100,000 in 1965 to almost 2 million in 1975, and soared thereafter to make them the world's leading car producer for quite some time. Remember the well-known quip saying, "don't buy a car made on a Monday or a Friday?" Our workmanship was shoddy.

    The Japanese revolutionized the auto and manufacturing industry, largely because McArthur brought a quality guy named W. Edwards Deming to Japan after WWll. Deming had helped Boeing manage to manufacture loads of quality aircraft during WWll with a bunch of new workers (mainly women) because of his Six Sigma quality approach. Why Boeing let him go is hard to imagine. He was at the forefront of creating manufacturing process cells run by teams in lieu of the old assembly line process. The Japanese dealt the first major blow to American unions because of their focus on quality and their pride in their work and products that finally drove American companies to emulate their 70,000+ mile warranties.

    The second nail in the coffin was probably technology, such as robotics and other high-tech processes. American unions stayed in the "there must be a fireman on every train"-type mode long past the time when they should have been negotiating for more education and training.

    The third nail was Walmart, who led the American drive to off-shoring because their customer base was not rich, but wanted all the consumption the wealthier had - many TVs, phones, etc. Once other companies saw what Walmart had been able to do driving costs down at their suppliers, they followed suit within about 10 years. GE and many other companies soon copied Walmart's model.

  • Report this Comment On August 06, 2013, at 2:46 AM, joebatch wrote:

    Let me see if I have this correct. First reagan promised to work with the air traffic controllers union to make sure that such a critical job which affected millions of people flying every day would be safe as possible ie.safe working conditions and safe equipment to do their jobs safely. Then he turned around stabbed them in the back and fired them. I was 20 at the time and not paying a lot of attention to politics at the time but I remember thinking to my self, this will not end well in the long run. Look where it lead to today. And this man is considered a 'hero' by whom? Why? Unions are not the scary boogie man. If were not for the unions that started in the 19th and early 20th century we would not have 40 hr weeks,overtime pay, fair pay,the end of child labor etc.But all of that is old school now isn't it? Let's go back to the good ole pre union days. They worked so well for us working people in the past didn't they?

  • Report this Comment On August 06, 2013, at 4:27 AM, Elshinare wrote:

    Ok so I'm confused. It seems like everyone thinks that unions put unskilled workers to work alone on jobs paying them really high wages...If you do some research, real research not just google things and state what you read as fact, you will find out that Unions start people off as an apprentice, who makes minimum wage or a little more not much more, their union dues pay for medical dental and vision insurance, as well as training. MOST Unions won't allow an apprentice to work alone until they can prove their skills. Then after usually 2 years of schooling AND working on the job, an apprentice can take their test to be a journey man from which they must have so many work hours under their belt before they can take the Journey man Test. Saying the Unions ruined wages is false, they base wages on experience, and time in the job, as well as your level. I have a stepbrother who is a Master Electrician, back in the 80's when he became a journeyman he was making 18-24 dollars an hour...my best friend is a Journeyman Electrician, non-union, and he is making less than 16 dollars an hour. Saying Unions are a liberal organization is wrong, unions got betrayed by republicans multiple times, therefore why should/would they trust the RNC? People are harsh on Obama because of what he's done, or not done, but at the same time presidents who are really just a CEO and figure head have less power now than they did prior to Bush Jr. and Clinton. But if we don't like it we do have a chance to change everything, stop voting in multi term politicians and elect a fresh new crowd who MIGHT be able to agree on something and get things going right.

  • Report this Comment On August 06, 2013, at 5:10 AM, sonoftherepublic wrote:

    Planes and kimmer are imbeciles - Reagan was not the union problem - unions were the problem - then as now and this is especially true in anything concerning government !

    Yes wholesale ass wipe pablum puking lib tards are alive and well on the fool - what does this have to with seeking alpha ??

    Historical revisionist are a bane just like the unions - get rid of them

  • Report this Comment On August 06, 2013, at 6:44 AM, devoish wrote:

    "Shortly after Reagan's inauguration in 1981, PATCO began to negotiate a new contract with a fresh, Reagan-appointed head of the FAA. Their demands were quite optimistic, to say the least: Controllers wanted a four-day, 32-hour work week and a $10,000 annual pay raise -- equal to nearly $26,000 today, or roughly half of the current median U.S. wage. This $770 million package was countered with a $40 million FAA offer -- far less than might content the controllers. At the same time that PATCO was starting its contract negotiations, the Reagan Department of Justice was working with the FAA to compile what a District Court Judge would later decry as a "hit list" -- a list of PATCO members to arrest and prosecute should a strike occur" Alex Planes

    Good morning Alex,

    You wrote that $26,000 is the equivalent of 1/2 of todays median annual wage.

    The US median annual wage for an individual today is 26,000. The median household wage is $50,000 or so.

    You also wrote that the ATC demanded a package worth $770,000,000 to divide among 13,000 controllers which comes to almost $60,000 each.

    Would you mind paddling your fact checker or editor?

    Mean (not median) average wage in 1981 was about $10,000, would you mind re-writing this paragraph with accurate numbers, comparing it in its own time - minimum wage raised from $2.30 to $3.35

    Best wishes,

    Steven

  • Report this Comment On August 06, 2013, at 8:46 AM, WPON1963 wrote:

    Unions theoretically are a good idea. Unfortunately, they were corrupted at the top, not unlike our federal government. However, the decline of unions mirrors the decline of manufacturing in the USA. The premise of this article is flawed. Sorry.

  • Report this Comment On August 06, 2013, at 10:49 AM, TMFBiggles wrote:

    @ devoish -

    You're right as far as the median wage/median household wage goes, so I've put in for a fix there. Mean wages are generally used less often because they can be skewed by extreme outliers.

    As far as the size of the package, that's what was mentioned by several sources. I'm sure it included other requests that weren't part of the pay increase, just as the typical salaried employee's total package of benefits includes health insurance, time off, and the like. It's possible that this total included demands for better equipment as well, but that's just speculation on my part.

    Here's the source of that figure: http://www.politico.com/news/stories/0808/12292.html

    - Alex

  • Report this Comment On August 07, 2013, at 7:40 AM, devoish wrote:

    I think a better "fix" would have been to compare what PATCO was asking for to an individuals mean wage today, not an individual and his partner which is what household income is,

    As far as the $770,000,000 pricetag goes, I'll stand corrected on raising that question, without including "other requests" that did not exist.

    17500 PATCO members times 1.25 new hires to staff a four day work week, 22,000 x 10,000 raise is 220,000,000 plus the base pay of 4500 new hires and ($20,000/year?) and it closes in on $770 mil price tag fast.

    http://nvdatabase.swarthmore.edu/content/american-air-traffi...

    But as someone who sees todays kids struggle in low wage jobs against high college debt, Mcdonalds telling their employees they need a second job to make ends meet and CEO's rewarding themselves and their boardrooms and hedge funds and politicians with stock buybacks instead of rewarding their employees with raises. I expect employee strikes will be returning to the news.

    I think 99% of Americans know they would be better off with a four day work week and better pay and pension benefits they could ask for then, than they are today with the freedom to lose everything in a criminally run stock market and financial industry.

    Best wishes,

    Steven

  • Report this Comment On August 07, 2013, at 8:57 PM, MKantzler wrote:

    The level of vitriol in much of this discussion is as obnoxiously political and partisan as the House hearings on the Affordable Care Act, and like those hearings, it does little to clarify or add to the story, which is basically correct. Scholars and historians agree that the confrontation between President Reagan and PATCO was one of the most impacting factors to change the capitalist-labor equation since the late 19th century. The most noteworthy, in-depth and objective examination of that confrontation, and its effects, was published by Joseph A. McCartin (Oxford Press), in his book, “Collision Course,” which points to missteps and miscalculations on both sides which, like most aircraft accidents, combined with many other factors to bring about the inevitable failure that cost not only the controllers their careers and their union its existence, but also extracted much from the aviation industry, the traveling and flying public, and the government—a great cost endured by all to achieve not so much the pre-eminence of government, but rather to shift the balance of socio-economic power and leverage in the workplace and in the international dialogue.

    Spoken in the shortest breath, the outcome of the Reagan-PATCO standoff, like the failed congressional-term confrontations between party extremes in politics, and capitalism vs. labor and democracy, was the consequence of a lack of balance—setting loose the unrelenting, pivotal momentum of extremes, carrying the interests of all who were directly involved to a point of failure, as measured by any practical gauge, a failed outcome only to be challenged by the detached, ideological morae of the corporatist torch bearers.

    On the sides of the contenders, PATCO most lacked balance in the weight of its demands against what could be conceded by a conservative, Republican administration in those economic times. There were also failures on both sides to recognize the nature of the opposing arguments, and to have planned for a mechanism to step back from across the brink, in PATCO’s case, propelled there by what the government Office of Personnel Management later concurred was an authoritarian, abusive and inflexible Federal Aviation Administration (FAA) management, so removed from the acumen of workplace ethic that the new controllers created another union only several years after PATCO was decertified. The Reagan administration failed to see that, aside from the “illegal” concessions it did offer, significant proposals to rein in the FAA, not more money than was offered, would have been enough to prevent the strike. It failed to see, and PATCO failed to make it seen by the administration and the public that controllers, many of whom were veterans, were not striking against their government, but were lashing out in reaction at their management: the FAA. A contract with provisions to balance that runaway administrative power with worker rights and job-related interests, such as shared equipment and procedural decision-making (journeyman controllers are the expert system and traffic managers, not supervisors), would have been an answer to prevent failure, as well as increase safety and productivity while ultimately cutting the massive waste in new-systems development and procurement, which has remained an FAA failure ever since, buried under billions of dollars.

    These same objectives, of employee participation in the decisions that affect the workplace, also have provided benefits in many of the largest industries in the private sector, which is why unions are the only structure which can provide a needed balance against unfettered corporatism, which history has shown must be bent to achieve a balance of profit and efficiency; and efficiency is the product of cooperation and satisfaction on both sides, a balance that thwarts failure.

    What many so-called Republicans today (I doubt Lincoln or Eisenhower would recognize them as such) fail to understand is that these corporate-union balances are also necessary in a democracy. When you have a diverse ethnic, racial, and religious population, which is the American demographic, and a supposedly “democratic” government, policies which lie beyond the bounds of compromise, balance, or tolerance cannot succeed unless democracy is supplanted, or portions of the population are minimized or brutalized—the “robber barons” factory ethos. One of the PATCO controllers’ greatest hopes was to purge what remained of that ethos from the federal sector which, as it turns out, was another consequence of the strike, and today’s controllers are enjoying the beneficial experience of that success.

    Malcolm Kantzler

    One of the “Hit List” PATCO leaders

  • Report this Comment On August 07, 2013, at 9:27 PM, devoish wrote:

    Malcolm Kantzler,

    Thank you very much for posting,

    Steven

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