Convicts and Comrades: Coerced Labor’s Impact on Early Labor Unions

What role did the use of convict labor play in the establishment of early labor unions? This paper introduces a model where certain firms employ convict labor, reproducing the empirical patterns observed in the data. Workers face reduced wages and migrate to other firms, while firms see heightened profits, exacerbating income inequality. In response, workers organize, form unions, and initiate strikes. The calibrated model highlights the role of unions in narrowing income disparities. Empirically, I use an instrumental variable approach to demonstrate that, at the turn of the 20th century, convict labor significantly boosted union growth, strikes, and membership. This influence has persisted as regions with a history of heavy dependence on convict labor continue to display higher rates of union membership in the present day. These findings provide the first evidence of the role of coerced labor in the formation and persistence of labor unions.