Inflation and Labor Unrest Summary

  • Last updated on November 10, 2022

On the heels of the Great Depression and in the face of wartime limits on wages, labor turned to mass disruption and strikes to alleviate the poverty of the working class.

Summary of Event

In examining the crisis in U.S. labor relations that followed World War II, one is confronted not by a single dramatic event but by a series of interrelated industrial struggles. Between 1945 and 1948, concerns about the postwar economy and labor reorganization swelled into a nationwide wave of strikes that influenced all levels of employment. The strikes occurred in the political vacuum created by divisions within the U.S. workforce, the shift in industrial production from a wartime to a peacetime economy, United States;postwar economy and the legacy of wartime governmental intervention into labor activities. Labor;unrest Inflation Strikes [kw]Inflation and Labor Unrest (Apr. 8, 1943-June 23, 1947) [kw]Labor Unrest, Inflation and (Apr. 8, 1943-June 23, 1947) [kw]Unrest, Inflation and Labor (Apr. 8, 1943-June 23, 1947) Labor;unrest Inflation Strikes [g]North America;Apr. 8, 1943-June 23, 1947: Inflation and Labor Unrest[00790] [g]United States;Apr. 8, 1943-June 23, 1947: Inflation and Labor Unrest[00790] [c]Business and labor;Apr. 8, 1943-June 23, 1947: Inflation and Labor Unrest[00790] [c]Economics;Apr. 8, 1943-June 23, 1947: Inflation and Labor Unrest[00790] Green, William Lewis, John L. Murray, Philip Reuther, Walter P. Thomas, Rolland J. Truman, Harry S. [p]Truman, Harry S.;and organized labor[organized labor]

During the war, government intervention into industrial relations had been deemed necessary to ensure uninterrupted production of war materials. Beginning in 1940, under the slogan National Unity, the government enforced a policy of uneasy collaboration between unions and employers. William Green of the American Federation of Labor American Federation of Labor (AFL) and Philip Murray of the Congress of Industrial Organizations Congress of Industrial Organizations (CIO) pledged that for the duration of the war, there would be no work stoppages or walkouts, which had characterized the prewar era during the rise of the CIO. Furthermore, they voluntarily renounced many of their administrative decision-making powers to a War Labor Board War Labor Board, U.S. .

Composed of four members each from labor, management, and the public, the board’s primary duties were to regulate wages and settle disputes between labor and management. In such disagreements, the board not only was the final arbiter but also set limits on what the disagreeing parties could negotiate voluntarily. Thus, in July, 1942, the War Labor Board implemented the Little Steel formula Little Steel formula , which set a relatively severe restriction on the wages of employees of national steel industries. On April 8, 1943, President Franklin D. Roosevelt Roosevelt, Franklin D. [p]Roosevelt, Franklin D.;World War II domestic policy issued an order to freeze wage increases to a percentage equal to the estimated rise in the cost of living since January 1, 1941: 15 percent. Employees who had already received 10 percent in increases could bargain for only 5 percent more. Eventually applied to the entire industrial sector, the ultimate effect of the Little Steel formula was that wartime abundance of overtime work was prevented from raising actual levels of take-home pay in basic industries.

Despite these governmental efforts to create economic stability, commodity prices rose 33 percent. Inflation rates were severe enough to provoke strikes during the war, against the “no-strike” pledges of most wartime industrial union leaders. In 1943, almost five thousand unauthorized work stoppages occurred, affecting more than two million laborers. During the same year, John L. Lewis, president of the United Mine Workers United Mine Workers , urged his followers to strike, despite recriminations from the government and from some fellow unionists. In the end, Lewis’s miners won “portal to portal” pay—a formula whereby the War Labor Board circumvented its own wage freeze by granting Lewis’s people pay for the time it took them to arrive at their workstations.

That such a major walkout could take place given the harsh wartime restrictions made many labor analysts predict chaos after the war ended—and many of their concerns were realized. The dissolution of the War Labor Board following the United States’ victory over Japan in 1945 brought on a massive wave of strikes. With the end of national price controls, the already high inflation rate soared to unprecedented heights, yet employee wages, held by the Little Steel formula, showed little growth. To overcome the gap between prices and wages, unions attempted to negotiate wage increases. When negotiations failed, strikes were called.

Beginning in 1946, the United Auto Workers United Auto Workers requested a 30 percent increase in wage rates without a price increase at General Motors General Motors . In response, the company offered a 10 percent cost-of-living increase and would not allow union discussion of industry price rates. In April, United Auto Workers president Rolland J. Thomas and lead negotiator Walter P. Reuther were urging union members toward a settlement that could be reached without a work stoppage, but by early September some auto plants around Detroit were already on strike, and the national union decided to call for a strike vote. When General Motors failed to respond to a union offer to have all issues settled by arbitration if the company would open its books for public examination, 225,000 workers walked out on November 21, led by newly elected president Reuther.

The auto strikers were soon joined by workers throughout industry. On January 15, 1946, 174,000 electrical workers struck General Electric. The next day, 93,000 meat packers struck. On January 21, 750,000 steelworkers struck U.S. Steel. At the height of these and 250 lesser disputes, 1.6 million workers were on strike. On April 1, 340,000 of Lewis’s coal miners struck again, causing a nationwide brownout. A May 23 railroad strike by engineers and trainmen over work-rule changes brought an almost complete shutdown of the nation’s commerce.

The strike wave, however, was not limited entirely to industrial workers. Strikes were widespread among teachers and municipal workers, and there were more strikes in transportation, communication, and public utilities than in any previous year. In short, the first six months of 1946 marked the most concentrated period of labor-management strife in U.S. history, with 2.97 million workers involved in strikes—and by the end of the year, that figure had risen to 4.6 million.

Spurring the strikers was the idea of counter-power over such management decisions as the speed of work, numbers of workers per task, what foremen were acceptable, and how the work was organized. The real uniting factor for the unions, however, was the long-standing push for higher wages. In 1947, the government moved to contain the strike movement. In the auto dispute, President Harry S. Truman appointed a fact-finding board and appealed to the strikers to return to work pending its decision; similar boards were created for numerous other industries. In most cases, however, the findings of the strike boards were insufficient to satisfy union demands. Where fact-finding boards were unable to set limits on the strike wave, the government turned to direct seizure of industries, still authorized under wartime powers.

Overall, unions made little effort to combat the government’s attack. Except for Lewis’s United Mine Workers, fined $3.5 million for insubordination, all returned to work when the government seized their industries. After June 23, 1947, they had less choice in the matter: The Taft-Hartley Act Taft-Hartley Act (1947)[Taft Hartley Act] Labor-Management Relations Act (1947)[Labor Management Relations Act] , passed on that date, contained provisions that restricted labor unions from organizing aggressively or conducting militant activities. In most cases, unions accepted the conclusions of the government’s fact-finding boards, although by 1947 this often meant a decline in wages to below wartime levels. Indeed, by March of that year, auto and steel workers’ salaries were 25 percent less than two years before.


The final settlement of the strike wave granted wage increases of only 17 percent, not enough to keep up with lost income from cutbacks in overtime. Contract language regarding control over the workplace strengthened management at the expense of the workers, and wage increases with no bar against price hikes meant that unions’ gains came at the expense of the consumer.

The labor unrest was finally quelled by the conservative political response to the strikes of 1943 and 1946, combined with the emerging conservatism of the Cold War as embodied in the Taft-Hartley Act. To enforce its restrictions, that act included strict anticommunist oaths for union officers. Elimination of domestic communists from the trade union movement was seen not only as a way to prevent another massive strike wave but also as an essential ingredient of the larger anticommunist crusade typified by Senator Joseph McCarthy and his counterparts on the House Committee on Un-American Activities (HUAC). Labor;unrest Inflation Strikes

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Barnard, John. Walter Reuther and the Rise of the Auto Workers. Boston: Little, Brown, 1983. A complete biography of the celebrated union organizer; discusses his view of the place of labor in the U.S. economy.
  • citation-type="booksimple"

    xlink:type="simple">Brecher, Jeremy. Strike! San Francisco: Straight Arrow Books, 1972. Narrates and analyzes rank-and-file labor struggles; discusses the major strikes of U.S. workers between 1877 and 1970, including the 1946 strike wave. Index.
  • citation-type="booksimple"

    xlink:type="simple">DeCaux, Len. Labor Radical: From the Wobblies to the CIO. Boston: Beacon Press, 1970. A “personal history” that spans the period from 1910 to the 1960’s. As a participant in the labor movement, DeCaux provides a unique perspective on the 1940’s strike wave. Index.
  • citation-type="booksimple"

    xlink:type="simple">Lens, Sidney. The Crisis of American Labor. New York: Sagamore Press, 1959. A political and social analysis of post-World War II labor unrest. Focuses on key labor leaders, including John L. Lewis and Walter Reuther. Index.
  • citation-type="booksimple"

    xlink:type="simple">Lingeman, Richard R. Don’t You Know There’s a War On? The American Home Front, 1941-1945. Updated ed. New York: Nation Books, 2003. Details all aspects of the American domestic experience during World War II, from Japanese internment to rationing.
  • citation-type="booksimple"

    xlink:type="simple">Lipsitz, George. Class and Culture in Cold War America. South Hadley, Mass.: J. F. Bergin, 1981. Analyzes the effects of the collective actions and aspirations of workers after World War II on the United States’ economic, political, and social identity. Contains a chapter chronicling the strike wave of 1946. Bibliography, index.
  • citation-type="booksimple"

    xlink:type="simple">Zieger, Robert. John L. Lewis: Labor Leader. Boston: Twayne, 1988. Describes in detail Lewis’s rise through the ranks of the United Mine Workers; compares Lewis’s goals for the labor movement with those of Walter Reuther. Index.

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Employment Act

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Categories: History