As the contract impasse between the Twin Cities Hospitals (TCH) and the Minnesota Nurses Association (MNA) has heated up, journalists, commentators, and interested bystanders have looked increasingly to history for insights and lessons. The participation of more than 12,000 nurses in the one-day strike of June 10 was widely described as the “largest” nurses’ strike in American history. As the nurses voted on June 18 to authorize a second, open-ended strike, the search for historical references expanded. In revisiting the Minneapolis Teamsters’ strike of 1934 and the Hormel strike of 1985-86, journalist Betsy Sundquist (“Possibility of Nurse Strike Recalls Old Confrontations,” Finance and Commerce, June 18, 2010) invoked the shibboleth of the National Guard in asking whether Governor Pawlenty might order their intervention in a prolonged nurses’ strike. Such speculation might raise the temperature of intimidation several degrees, but it doesn’t help us learn from history in ways useful to resolving the present crisis.
I am an historian of Minnesota labor and a close follower of the TCH-MNA conflict, and I have always argued that it is productive to seek historical precedents and contexts for contemporary labor issues. In the current MNA-TCH labor dispute, I think observers have been misreading history and drawing the wrong comparisons. Rather than focusing on the drama of armed National Guardsmen policing our streets, we would do much better to explore the process through which the Minneapolis Teamsters’ strike was resolved in late August 1934 in order to extract some useful ideas about how to reach a settlement in the current hospitals-nurses conflict.
Governor Floyd B. Olson’s calling out the National Guard in late July 1934 did not end the Teamsters’ strike. The Guard did raid the headquarters of both the union and the Citizens’ Alliance, the employers’ organization which had stood opposed to union recognition, the signing of contracts, and the awarding of wage increases. The Guard even arrested more than one hundred union leaders and activists and held them in tents at the State Fairgrounds, and it allowed more and more non-union trucks to operate in Minneapolis. But the strike continued another three weeks after this imposition of martial law. Why?
While the National Guard could disrupt the union, break up its picket lines, and keep the streets clear for non-union trucks, they could not force striking teamsters back to work. As John L. Lewis, the president of the United Mine Workers’ Union and the founding president of the CIO, put it in 1943, when Franklin D. Roosevelt himself threatened to break a nationwide coal miners’ strike: “You can’t mine coal with bayonets.” And in 1934 neither Minnesota’s governor nor anyone else was about to order guardsmen to load, unload, and drive private trucks. Even though the summer of 1934 saw the economy still deep in depression, with unemployment over 25% and the market for goods well below normal, employers could not recruit enough strikebreakers to restore their operations. Too many workers, including the unemployed, understood that if the Teamsters won, they, too, would benefit.
What did end the strike? This is where the story gets particularly interesting and where history’s relevance to the present is clear.
The Citizens’ Alliance, formed in 1902, had been the core of employer anti-unionism in Minneapolis — and a role model for employers across the country — for more than three decades. The city’s key banks provided the glue that held together this “union against unions,” as historian William Millikan called it. At their head was Northwest Bancorporation (“Banco”), a holding company of 105 banks in 84 communities across eight states. From on high flowed the business community’s marching orders: any employer who signed a contract with a union would be cut off from bank loans. This network seemed invincible until the Great Depression, when the growing dissatisfaction and organization of working people changed the country’s political climate and pried open Banco’s iron grip.
Banks took quite a hit in the Great Depression, from the failures of mortgages and loans to the collapse of the stock market and Wall Street. One of FDR’s first acts as president in the spring of 1933 was to call a “Bank Holiday” to stem depositors’ runs on banks. FDR then created the Federal Deposit Insurance Corporation (FDIC) to provide government protection for deposits and, with Congress’ support, he instituted a new system of federal regulation and oversight over banking. At the heart of this effort was the Reconstruction Finance Corporation (RFC), which loaned money to at-risk banks and underwrote local development projects. In mid-1933, the once all-powerful Northwest Banco had, in desperation, turned to the RFC and borrowed $23 million to stave off its own bankruptcy. Over the next year, the combination of continued depression conditions and three Teamsters’ strikes (February — coal delivery; June — drivers and warehouse workers; July — drivers and warehouse workers again, when the June settlements fell apart) made it impossible for local banks to repay their loans to Northwest Banco or for Northwest Banco to repay its loans to the RFC. In July, as the third Teamsters’ strike was beginning, the Minnesota American Federation of Labor organization passed a resolution calling for a federal investigation of “the financial group in Minneapolis.”
The July Teamsters’ strike (the year’s third) was particularly intransigent. FDR had sent a pair of federal negotiators to move negotiations along, but they made no headway. Under the Citizens’ Alliance’s leadership, employers had reneged on their June promises to the union, and then, faced with a strike, refused to budge on the principle of union recognition. The Teamsters’ Union was better organized than ever with a “Committee of 100” activists based in workplaces, a “Ladies’ Auxiliary” running a strike kitchen and a hospital commissary, and a “Federal Workers’ Section” organizing the unemployed and securing their commitment against strike-breaking. They also introduced a communications innovation with the publication of a daily newspaper, The Organizer, and a new picketing technique, “roving pickets,” who followed scab trucks and challenged them whenever they stopped to load or unload. On July 21, 1934, a terrible confrontation occurred in which two strikers and two sheriffs’ deputies were killed. It was this event — remembered in labor history as “Bloody Friday” — that caused Governor Olson to call out the National Guard.
But the strike continued.
When President Roosevelt went to the Mayo Clinic for a check-up on August 8, Governor Olson met with him to discuss a new strategy to end the strike. At the same time, a committee from the Minnesota AFL met with FDR’s chief aide, Lewis Howe, for a similar discussion. No one really knows for sure what transpired in these conversations, but the next day, Jesse Jones, the executive director of the Reconstruction Finance Corporation, contacted the directors of Northwest Banco and warned them that if they and the Citizens’ Alliance continued to threaten financial punishment to employers who settled with the Teamsters’ Union, the RFC would call their loans due immediately, forcing them into bankruptcy. Within a week, dozens of employers had agreed to recognize the results of government-supervised union elections, most of which would be won by the union. More than 10,000 drivers, helpers, and warehouse workers gained union recognition, contracts, grievance procedures, seniority protections, and wage increases. Because of the pressure applied from many sides, the 36-day strike finally ended.
Here is the lesson of the Teamsters’ strike to the current impasse between MNA and the TCH: grassroots pressure can bring more financial resources to the bargaining table.
There is a tremendous amount of money in the healthcare industry. The hospitals argue that they do not have the money to pay for the union’s proposed changes, which include a negotiated patient/staffing ratio, limits on management’s authority to command nurse “floating,” the protection of nurses’ current pension system, and annual wage increases. MNA has responded that, although the hospitals are legally non-profit, TCH-affiliated hospitals collectively netted a surplus of more than $700 million over their operating costs in 2009. MNA has also pointed to the sumptuous salaries of hospital CEOs (typically over $1 million) as another indication that the hospitals are hardly strapped for cash. Moreover, much of the industry’s resources are siphoned off and re-allocated, before the TCH representatives bring their checkbooks to the bargaining table. Corporations which own the hospitals’ properties, real estate investment trusts, banks which loan the hospitals money for expansion and new technologies, insurance companies, health maintenance organizations, laboratory testing companies, and pharmaceutical companies, all of which depend on the smooth functioning of hospitals, are enormously profitable. Nationally, healthcare companies earned a profit of $200 billion in 2009. Lab testing companies earned $50 billion, while Big Pharma netted another $50 billion. Healthcare real estate investment trusts earned a 24% profit rate. Executive salaries are another bellwether of the industry’s flush resources. Stephen Hemsley, CEO of United Health Group, earned $101.96 million last year alone. The salaries, stock options, and bonuses raked in by Hemsley’s predecessor, William McGuire, are still referred to regularly in media coverage of healthcare executive compensation run amok. In the last decade, the CEO of Target Corporation has been the only non-health industry CEO to top Minnesota’s CEO compensation charts. There is plenty of money in the healthcare industry.
While unions have not won many contract battles in the last decade, the few successes do have an important feature in common: they brought the corporate entities with deep pockets to the table. In Florida, the Coalition of Immokalee Workers, a farm workers’ union, has won a series of wage increases for tomato pickers by pressuring highly visible fast food firms such as Taco Bell, McDonald’s, and Burger King to increase the prices they pay to farmers for tomatoes, enabling the farmers to pay higher wages to the field workers. These food giants did not offer higher tomato prices out of the goodness of their corporate hearts, but because they felt the pressures of boycotts, pickets, and creative advertizing which led consumers to associate their multiple brand names with exploitation and poverty. In the Twin Cities, Service Employees International Union Local 26 has pressured downtown building owners to agree to pay more to contract cleaners so that the buildings’ janitors and window washers could make better wages and benefits and enjoy greater economic security. When unions have been able to bring corporate and financial interests out of the shadows and into the sunlight of responsibility and accountability, they have been able to get more resources reallocated at the bargaining table.
As in the case of the 1934 Teamsters’ strike, grassroots pressure brings these larger players and additional resources into the settlement of labor conflicts. History shows that strikers’ families and neighbors participated. Creative communications strategies disseminated strikers’ stories to the wider community. Potential strikebreakers understood their stake in the conflict. Members of other unions contributed resources and solidarity. And citizens and voters brought pressure to bear on political as well as financial leaders. We — the public, the families of nurses and other healthcare workers, members of unions, unemployed men and women — would do well to heed this history and apply pressure collectively and creatively to bring more resources to the table to fund the MNA’s proposals for long-term patient — our — welfare.
Peter Rachleff is Professor of History at Macalester College. See, also, Peter Rachleff, “Minnesota Nurses Association Provides Rx for Union Revival” (MRZine, 14 June 2010).