Does a Strong Economy Lead to More Strikes? The Historical Evidence is Sketchy at Best

I was struck in the post from last week on strikes in 2023 how many people in comments asserted that a strong economy leads to more strikes. This evidently is taken as almost a given by many economists.

The problem with this assertion is that there is no historical evidence for it. Can you find years with a strong economy and a lot of strikes? Of course you can. But you can also find a lot of years with a weak economy and lots of strikes. And you can find whole decades of a strong economy and very few strikes.

Before I started writing this, I talked to an economist colleague of mine who is a well-known labor economist with decades of publications. I asked him about this assertion. He rolled his eyes at it. He said, and I quote, “My own take is that these things are too specific to historical context to bear much generalization.” This is exactly right. The truth of the matter is that labor’s position is really dependent upon external politics. As I argued in A History of America in Ten Strikes, the most critical issue in the success of strikes or other labor actions in American labor history has been whether unions can neutralize the government-business alliance that has dominated the nation’s history. That is the most important reason why labor succeeded in the New Deal (more or less) and continued to see at least stability up to the Reagan administration. Reagan did a hard reset of allying government with business and labor has never really recovered, not even in the present, when you do have a historically small uptick of strikes in recent years.

This point alone demonstrates the absurdity of the argument that a better economy leads to more strikes. But to follow the data through time, you can see it too, if you know your history. While data for the late nineteenth century is not very good and such statistics were not even kept in the early 20th century, you can see strikes go up both in the Panic of 1893. The economy was mostly recovered from the brief Panic of 1883 by 1886, yes, but it’s not like it was great. There’s the gigantic strike year of 1919. An argument that this happened because of a strong economy does not really show an understanding of the historical circumstances around it, nor does it explain the drop in strikes during the 20s, when the economy was mostly “good,” by the way economists talk about these things.

Then of course there is the Great Depression. The two biggest strikes years in the Depression are 1934, after FDR signed the National Industrial Recovery Act, which had Section 7(a) that unions interpreted for workers as their president telling them to form unions, and in 1937, when FDR pulled back the New Deal rug from under workers and the economy tanked again. Even the giant strike wave of 1946 happened in the context of policymakers, workers, unions, and employers all being really scared that the Great Depression was going to return after the war. Of course that didn’t happen, but you can’t understand 1946 by looking at a number of strikes and a number of the economy. You need the historical context, including the anger of workers at delayed wage gains through World War II and a power grab by everyone at the war’s conclusion.

There was a comment in the post the other day that stated that since 1934 was a stronger year economically than the 1931-33 years, it demonstrates the truth of the thesis. Um, no it doesn’t. Again, this was about the NIRA. If you went to the auto towns like Toledo or the rathole southern textile towns or the docks of San Francisco, this was not an economy where people felt hope that things were getting better all of a sudden, with one giant exception, which was the president of the United States.

The context is key in the 1950s and 1960s as well. I suspect this is what the people who argue for this point fall back upon. Is it possible that workers were more willing to strike because the overall economy was good in those years? Well, I suppose so. But the historical evidence isn’t super strong on that point either. In a lot of these big CIO union dominated industrial towns, work was already disappearing due to automation and thus greater productivity from the workers. This is what Jack Metzgar showed in his great book Striking Steel to push back on the claim that unions were trying to featherbed in the 59 steel strike. And as Gabriel Winant showed in his 2021 book The Next Shift: The Fall of Industry and the Rise of Health Care in Rust Belt America, even in the peak of the American economy, there were a lot of workers living on the edge in areas such as Pittsburgh and if anything happened to their jobs, there weren’t really good jobs to replace them. If U.S. Steel decided to close a factory and reopen elsewhere, no one was coming back in to employ them with any kind of equal job, which eventually led to an aging population and the rise of the city as a health care center. But the biggest reason why you have a lot of strikes in these years is that you have a lot of unions plus a government that had to respect union power and thus could not bust their unions. Again, it is entirely possible that the strength of the economy was a piece of the story, but it’s not THE STORY.

Then you have the strike wave of the late 70s, when the economy was extremely shaky, followed by the utter collapse of strikes beginning in 1984. I really want those pushing this hypothesis as truth to explain both sides of this equation. I hardly need to explain what was happening with the economy in the Carter years. Then Reagan came along and crushed the air traffic controllers in 1981, giving employers the green light to do the same with their unions, which is what led to a brief uptick in strikes in 82 and 83 as unions fell for the trick and struck to defend their gains, usually getting destroyed. Then strikes plummeted because unions were scared that a strike would give the employer the chance to bust the unions entirely. They have never recovered. Meanwhile, in most of the years between 1981 and 2008, the economy was considered “good,” again by the standards of how this is usually talked about. So why were there so few strikes in the 90s if the strength of the economy is supposed to explain this?

So is what is passing for a strike wave today (again, very small compared to pre-Reagan America) because the economy is “good?” Maybe? It could be a part of it. But when President Biden goes on TV and says that you have the right to form a union if you want, that helps a lot. The revival of the left since 2008 helps a lot too. Strikes beget strikes. Did teachers in West Virginia go on strike in 2018 because the economy was good in a state where they were making $35,000 a year to teach in dilapidated schools? Um, no.

I am happy to discuss any year you want in comments. Given that I literally wrote the book on strikes, I will be bringing receipts. Do so yourself.

So I guess I have a couple of questions. First, why did this nonsensical hypothesis become conventional wisdom when the historical evidence does not back it up? Second, why do people listen to economists over historians when discussing the past? Third, why do economists and so many other social scientists want to reduce human behavior to an equation or a statistic or a reduction analysis when such things do not explain human behavior? Fourth, why do so many people believe that NUMBERS answer questions about human behavior and turn them into a fetish? Fifth, why do people make such broad based assertions about the economy, as several commenters did in that original post, without any historical evidence behind them and then claim that I am wrong because I am letting my dislike of economists get in the way? I obviously don’t dislike economists. Again, I ran this all by a prestigious economist before writing the post. But I do dislike large segments of the field and this entire issue really sums up why.

The answer to these questions is that…..wait for it…..human behavior, including the economy and whether people go on strike is tremendously complicated and cannot be reduced to a truism or an equation. Everything is historically contingent.

This all reminds me of so many social science presentations I’ve sat through from colleagues in those departments who assert something completely laughable to historians, then the historians point out all the ways they are wrong, and then they don’t care because the facts we give them and the books disproving their assertions we suggest they read don’t fit their model.

In any case, if you are going to argue that a better economy leads to more strikes, then bring the historical evidence to defend it. Because I just don’t see it.