A Strike Where Both Sides Won


On this day in economic and financial history...

On Dec. 14, 1960, a group of 20 developed nations agreed to the Convention for the Organization for Economic Cooperation and Development, creating the OECD out of the foundation of an earlier multinational group dedicated to rebuilding a postwar Europe. The OECD was formed to further the economic well-being of its member nations, most of which are firmly at the upper end of the economic-development scale today.

The OECD today counts 34 nations among its members and has been responsible for the collection and dissemination of a great deal of economic data, much of which eventually finds its way into analysis conducted by economists and financial commentators around the world. The OECD also hosts the OECD Development Centre, which contributes analysis and policy recommendations regarding emerging economies; the G7's Financial Action Task Force on Money Laundering; and the International Energy Agency, which was formed after the 1973 oil crisis to respond to oil supply disruptions and to provide valuable information on the global energy market.

The original OECD signatories have, by and large, seen real per-capita GDP rise significantly since the agreement was signed. Here is a small sample of growth from 1960 to 2010:


1960 Per-Capita GDP

2010 Per-Capita GDP

Annualized Change

United States








United Kingdom




















Source: World Bank, via Google Public Data. Figures in constant year-2000 USD. *German GDP data begins in 1970; 40-year change used.

The growth of the Dow Jones Industrial Average far outpaced the GDP gains made by either the United States or any of the other member nations. Despite suffering 10 distinct bear markets in the five decades following the Convention's acceptance, the Dow grew at an annualized rate of 6%, handily trouncing the 4.1% annualized return it had posted in its five previous decades.

An unpopular peace dividend
The Dow suffered an unpleasant 4.3% decline on Dec. 14, 1916, the wildest swing of any Dec. 14 in its history. News of a potential peace agreement in Europe sent bears rampaging through Wall Street to maul any stock connected to the war effort, causing the worst market decline since the Panic of 1907. Steel, oil, mining, and alcohol stocks all cratered.

Investors need not have panicked. The war ground on for another two brutal years, changing the course of modern history in the process. However, the value of the war to American investors proved overstated. The Dow went on to lose 12% more of its value between this Dec. 14 freak-out and the armistice of 1918.

Get back to work
Thousands of Boeing employees returned to work on Dec. 14, 1995, a day after winning significant concessions from one of the most successful strikes of the past several decades. The 69-day strike had kept 33,000 members of the International Association of Machinists and Aerospace Workers out of Boeing's plants and gained them an immediate bonus of 10% of annual wages (an average of $4,200 per employee) and an average 14% increase in hourly pay from 1997 to 1999.

The success of the strike was especially notable in light of the complete failure of the UAW's 18-month strike against Caterpillar , which had wrapped up the previous week with no concessions from the company. The machinists' union even managed to extract a concession in which Boeing promised to retrain and continue to employ any worker whose job was outsourced. This was seen as particularly important in light of Boeing's dramatic workforce reductions, which cut its staff from 145,331 employees in 1989 to 105,235 at the time the strike ended.

In 2010, 15 years after the strike ended, Boeing's workforce had grown to 160,537 employees, including part-time and contingent workers. The company's annual profit margin more than doubled over this timeframe from 2.3% in 1995 to 5.1% in 2010.

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The article A Strike Where Both Sides Won originally appeared on Fool.com.

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