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What most Americans also don’t remember is that Labor Day was supposed to celebrate unions, not to be a cookout or an all-day beer festival. Cleveland was trying to establish what he thought was a compromise between radical leftists and good old Americans by choosing the first Monday in September rather than following the European custom of making May 1 the left’s great holiday.
And finally, what most Americans no longer remember, except in a negative sense, is unions themselves. Union membership is now about 6.9 percent of the non-government workforce--the lowest rate in more than a century--and the number of union members employed by state and local governments is for the first time higher than those employed by private industry.
The labor movement in the United States really got going shortly after the Civil War. Initially it was led by Samuel Gompers, a cigar maker, who became president of the American Federation of Labor (AFL), a conglomerate consisting mainly of craft unions, i.e. unions representing only members of a given trade. Late in the 1930s industrial unions--unions organized by companies rather than individual trades--became more prominent and joined the Congress of Industrial Organizations (CIO). Although for years there was general warfare between these two groups, in 1955 they merged into the AFL-CIO.
What seems amazing now is that during the period of the Depression in the 1930s, union membership rose substantially and many unions were successful in protecting their members from wage cuts, and even managed wage and benefit increases. Not incidentally, the effect of the success of these unions was to increase wages and benefits for many non-union workers. Since companies often feared unionization, they tried to persuade their employees to not join a union by making their wages and benefits directly compatible with those obtained by the unions. Accordingly, it does seem odd that in the present recession unions have often been held to be part of the problem and their popularity has declined substantially.
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http://uppersaucon.patch.com/articles/what-most-americans-dont-remember-about-labor-day-2