This chapter argues that although nineteenth-century labor markets were unencumbered by regulatory legislation, there existed frictions and rents in the labor market; moreover, labor market institutions other than legislation played an active role in determining labor market outcomes. The chapter provides evidence of frictions and firm-specific rents in nineteenth-century urban American labor markets: when firms experienced positive output price shocks, their employees earned wage premia relative to other employees with similar skills in the same labor market. The existence of rents in the labor contract suggests a role for bargaining and conflict between employees and employers. Workers in the late nineteenth century went on strike to increase wages. This chapter presents data on the frequency of strikes in the nineteenth century and suggestive evidence of an association between strikes and wages; finally, it documents the rise of judicial labor injunctions aimed at suppressing strikes
