Americans in Depression and War
By Irving Bernstein
Unemployment was the overriding fact of life when Franklin D. Roosevelt became President of the United States on March 4, 1933. An anomaly of the time was that the government did not systematically collect statistics on joblessness, actually did not start doing so until 1940. The Bureau of Labor Statistics later estimated that 12,830,000 persons were out of work in 1933, about one-fourth of a civilian labor force of over fifty-one million. March was the record month, with about fifteen and a half million unemployed. There is no doubt that 1933 was the worst year, and March the worst month for joblessness in the history of the United States.
But there was another side to the problem. Following the stock market crash of 1929, the Hoover Administration urged and many industries and unions adopted work-sharing. For example, the United States Steel Corporation in 1929 had 224,980 full-time employees. The number shrank to 211,055 in 1930, to 53,619 in 1931, to 18,938 in 1932, and to zero on April 1, 1933. All who remained on the payroll on this last date were part time, and they were only half as numerous as those on full time in 1929.
Massive unemployment had a profound social and emotional impact upon American workers and their families. The movement of population, historically a response to economic opportunity, changed drastically when opportunity dried up. Immigration from abroad virtually stopped. The long-term shift from farm to city slowed significantly and there was, in fact, some reverse migration. The great population movement of the thirties was transiency the worker adrift in a sea of unemployment. People, especially the young, girls as well as boys, took to the road because they could no longer bear to stay home. In the middle of the decade when the dust blew in the Great Plains, wiping out their farms, whole families of Okies, Arkies, and Mizoos migrated west, especially to California. The migrants often made their way to the junk-pile Hoovervilles with their Prosperity Roads, Hard Times Avenues, and Easy Streets. The destitute often lost their homes or farms because they were unable to make payments on mortgages.
When Roosevelt became President one of his most urgent tasks was to devise a new federal relief policy. Historically, private charity and local government had cared for the indigent. Both soon exhausted their resources, and the states, starting with New York in 1931 when Roosevelt was governor, stepped in. Frances Perkins, his Industrial Commissioner, was charged with the enforcement of labor laws. She was appointed Secretary of Labor after Roosevelt took office, the first time a woman was named to the Cabinet.
Roosevelt signed the Federal Emergency Relief Act on May 12, 1933. The President selected Harry L. Hopkins, who had headed the New York relief program, to run FERA. A gifted administrator, Hopkins quickly put the program into high gear. He gathered a small staff in Washington and brought the state relief organizations into the FERA system. While the agency tried to provide all the necessities, food came first. City dwellers usually got an allowance for fuel, and rent for one month was provided in case of eviction. FERA paid for medicine, some doctor bills, but no hospital costs. Work relief sewing rooms renovated hand-me-down clothing. One of the most significant FERA policies was to grant relief without discrimination. Blacks, especially in the South, who had never before gotten anything from government, suddenly found themselves eligible for federal relief and moved onto the rolls.
During the spring of 1933, Roosevelt launched two programs to revive business and increase employment. The National Recovery Administration, under General Hugh S. Johnson, allowed businessmen to fix prices and allocate production quotas through codes of "fair competition," and without regard to the antitrust laws. The codes also set minimum wages and maximum hours of employment. The Public Works Administration, under Secretary of the Interior Harold L. Ickes, constructed major capital improvements.
Employment effects of both programs were disappointing. An NRA "boomlet" during the summer petered out in September. PWA projects were inherently long term, for example, building the Grand Coulee Dam on the Columbia River and the Triborough Bridge in New York City; and Ickes insisted on careful planning and the avoidance of graft, which caused delay. Roosevelt and Hopkins feared that the jobless would suffer cruelly during the winter of 1933-34, as they had the previous year. Thus, in the fall of 1933, Hopkins urged and the President accepted a proposal for a forced draft work relief program, called the Civil Works Administration. PWA transferred funds to CWA. In effect, FERA turned itself into CWA, and by December 15, Hopkins had four million people at work on secondary roads, schoolhouses, playgrounds, parks, among many other projects. Most were welcomed by the communities that benefited, but some were hastily conceived and condemned as "leaf-raking." Significantly, millions of jobless workers got their families through a tough winter by earning wages for work performed. As CWA tapered off in the spring of 1934, FERA took over but now with a heavier emphasis on work relief.
Roosevelt, intensely interested in conservation, created a special relief program the Civilian Conservation Corps for young men to work in the forests. There were two purposes: to put jobless youth to useful work and to restore the land. The administrative machinery appeared cumbersome, but worked efficiently. The Labor Department recruited the jobless men, who were from families on relief, were unmarried, and were between the ages of sixteen and twenty-five. Army reserve officers managed the camps, and the Forest Service and the National Park Service planned the projects. Since the labor movement at the outset had opposed the program as "militarizing" labor, the President named Robert Fechner, vice president of the Machinists, to head CCC.
Congress passed the Civilian Conservation bill on March 31, 1933. By June, 1,300 camps were in operation. All told, two and a half million young men went through the program. They planted trees; dug reservoirs, fishponds, and diversion ditches; built dams, bridges, and fire towers; fought tree diseases; restored historic battlefields; cleared beaches and campgrounds. They performed numerous other tasks to improve and protect the nation's natural resources while at the same time they reclaimed themselves. Their health improved in the outdoors; boys who had never been out of urban slums in the East visited the national parks in the West; the unskilled were taught trades; and whites and blacks learned to live together. The CCC, to Roosevelt's surprise, proved universally popular.
Because the National Industrial Recovery Act would encourage businessmen to join collectively in their self-interest, the American Federation of Labor insisted and the key legislator, Senator Robert F. Wagner of New York, and Roosevelt agreed that similar support should extend to workers. Thus, Section 7(a) of the statute required that every code of fair competition must contain the following conditions:
- That employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection;
- That no employee and no one seeking employment shall be required as a condition of employment to join any company union or to refrain from joining, organizing, or assisting a labor organization of his own choosing.
This general language appeared to provide legal protection of workers' rights to form and join free trade unions while denying employers the right to impose company unions or employee representation plans as they were then known upon the workers.
The labor movement had been weak in the twenties, and the suffering of the Great Depression had given workers a deep sense of grievance. Section 7(a) was the spark that kindled a smoldering militancy.
John L. Lewis, president of the United Mine Workers of America, the largest of the industrial unions, recognized the opportunity to advance labor's cause. His aspiration was to unionize the unorganized mass production industries steel, automobiles, rubber, nonferrous metals, shipbuilding, electrical equipment, among others industries which the craft union dominated AFL had largely ignored. But first Lewis must rebuild the UMW base in coal. The union had lost the heart of the old Central Competitive Field, western Pennsylvania and Ohio, in the late twenties, had never organized the great Southern Appalachian Field, and had contested with rival unions in Illinois and West Virginia. Lewis launched a massive organizing drive in June, 1933. The miners responded immediately and almost unanimously.
A new structure of bargaining, the Appalachian Agreement, was signed with the operators of the commercial mines on September 21, 1933. It established the UMW virtually overnight as the biggest and strongest of American labor unions. The unfinished task was to make agreements with the steel corporations for their "captive" mines, that is, coal operations they owned. These companies, which strongly opposed unions and feared that Lewis would use the captive mines to organize the steel mills, declined to bargain, imposed company unions, and for a while refused to allow representation elections. This led to a strike and presidential intervention. Elections were then held at several of the captive mines, which the UMW won. Lewis thereby drove a wedge into the antiunion wall of the steel industry.
While not so dramatically as the miners, other older unions also made significant gains. Strikes in 1933 by Sidney Hillman's Amalgamated Clothing Workers brought in 50,000 new members as well as forcing higher wages and shorter hours in the men's clothing industry. Similar campaigns by David Dubinsky's International Ladies' Garment Workers' Union enjoyed even greater success in many women's garment markets. Significantly, the UMW, the ACW, and the ILGWU, essentially industrial unions, agreed that the great task before the American labor movement was the unionization of the mass production industries.
Section 7(a) spurred organization in these basic industries and sparked the formation of unions in new areas. Editorial employees on newspapers, for example, established the American Newspaper Guild, conducted strikes, and won contracts with many publishers. Motion picture actors created Screen Actors Guild. Agricultural workers engaged in major strikes, especially in California where communists were in control, but few led to permanent unions.
Thus, the combination of labor's new militancy and the refusal of many employers, especially the big corporations, to engage in collective bargaining caused a great increase in strikes in the summer of 1933, particularly over the issue of recognition. Although the statute did not provide for it, Roosevelt on August 5, established an informal National Labor Board to handle 7(a) disputes. The Board consisted of three prominent industrialists, three leading trade unionists, and Senator Wagner as chairman. Since NLB could not compel compliance with its decisions, it depended upon persuasion.
NLB's notable achievement was the "Reading Formula," which became a cornerstone of national labor policy. It was implemented after the Full-Fashioned Hosiery Workers launched an organizing drive in the stocking mills around Reading, Pennsylvania. The employers refused recognition, and 10,000 workers walked out. On August 10, 1933, the Board mediated a strike settlement which provided for NLB to conduct secret-ballot elections to determine representatives. The employers agreed to bargain with the union if it won majorities. Elections were held, the union was selected at most mills, and written agreements were negotiated. Here the representation election served as a substitute for the strike over recognition.
The Reading Formula proved useful in a number of other situations, particularly the captive mines. But several large firms, notably the Weirton Steel and Budd Manufacturing companies, refused to permit elections and successfully challenged the shaky authority of the Board in the courts. The issue came to a head in the spring of 1934. The automobile industry, which had resisted the nascent auto unions and formed company unions, persuaded Roosevelt to establish a special Automobile Labor Board which recognized company unions and placed the principle of proportional representation (each organization speaking only for its own members) over exclusive representation (the union receiving a majority negotiating for all the workers). NLB virtually collapsed.
Senator Wagner, persuaded that Section 7(a) and the NLB experience should be incorporated into a new permanent law with a board responsible for its administration, introduced such a bill into Congress in the spring of 1934. Industry opposed the measure vigorously. This division and rising conflict over unionization in the steel industry led Roosevelt to defer action on Wagner's bill; instead, he won from Congress a general authorization for the President to establish boards to deal with labor disputes. By executive orders he then created several industry boards, starting with steel, along with a successor to NLB called the National Labor Relations Board. At the same time, the railway unions persuaded Congress to amend the Railway Labor Act of 1926 to establish a system in transportation much like that Wagner had proposed.
While 1933 had seen a dramatic growth of unions and many serious strikes, 1934 witnessed an eruption. There were 1,856 stoppages that year, by far the largest number since World War I. Many were accompanied by violence, and four constituted social upheavals in the affected communities. A walkout of auto parts workers at the Electric Auto-Lite Company's plants in Toledo, Ohio, disrupted that city and, in the face of the threat of a general strike, led to the institution of collective bargaining. A series of massive strikes of truck drivers led by Trotskyites in Minneapolis brought on class warfare and forced the recognition of the union. A similar upheaval that started on the docks in San Francisco was the prelude to both a general strike in the Bay Area and to a coastwide maritime shutdown. The result was recognition of the longshore union, led by radical Harry Bridges, and the establishment of collective bargaining. The largest of these strikes took place during the fall of 1934 when 376,000 textile workers in hundreds of mills in New England and the South walked out.
The great strikes of 1934 confirmed Senator Wagner in his conviction that the nation needed a new labor policy. The National Labor Relations Board, which worked out a "common law" of policy in its cases, but confronted the same problem of noncompliance by die-hard employers that had destroyed NLB, agreed. Wagner's staff and the NLRB revised the bill and on February 21, 1935, the senator introduced the proposed National Labor Relations Act. Again, there was a sharp conflict over the measure between labor and management; but this time Roosevelt, who did not support it strongly, did not intervene to put it aside. Congress passed the bill with large majorities, and on July 5, the President signed the Wagner Act.
The theory of the statute was that there was an "inequality of bargaining power between employees who do not possess full freedom of association ... and employers who are organized in the corporate or other forms of ownership association..." Congress sought to redress this imbalance by protecting the right of workers to organize and by encouraging collective bargaining. The new, permanent, three-member National Labor Relations Board would achieve these objectives in two ways. The first was by designating employee representatives for the purpose of collective bargaining. Here the Board would determine the appropriate unit, that is, the specific employees who would be eligible to vote in a representation election and the precise jobs in the plant that would later be covered by a collective bargaining agreement. It would then conduct a secret-ballot election, and, if a majority within the unit voted for a union, the Board would certify that it was "the exclusive representative of all the employees" in the unit.
The other function of the Board was to prevent employers from engaging in five designated "unfair labor practices." The first, following the language of Section 7(a), was to restrain employees from self-organization and concerted activities in forming, joining, or assisting labor unions for the purpose of collective bargaining. The second prohibition on employer activity was to dominate a labor organization, in effect, outlawing the company union. The third was to discriminate among employees by such practices as hiring, firing, and paying special wage rates in order to encourage or discourage membership in a labor organization. The main purpose was to bar the employer from discharging a worker who had joined the union. The fourth was to prohibit an employer from firing a worker who filed charges with or testified before the NLRB. Finally, it became an unfair practice for an employer "to refuse to bargain collectively" with the certified representative elected by a majority of employees. There were no unfair practices for labor unions.
The Wagner Act afforded an unprecedented opportunity to the American labor movement. Corporations hostile to unions were determined that the law should not be enforced. Their basic strategy was to challenge the constitutionality of the statute. A group of lawyers under the auspices of the American Liberty League opined that the Wagner Act was invalid, thereby encouraging noncompliance. Employers tied up the NLRB with injunction suits for almost two years. On April 12, 1937, however, the Supreme Court upheld the constitutionality of the statute by a five to four vote in five related cases, the most notable involving the Jones & Laughlin Steel Corporation.
Ironically, at this moment of victory, the labor movement split on the issue of craft vs. industrial unionism. That question had been papered over with an ambiguous compromise at the AFL's San Francisco convention in 1934. By the next year the pressure for the chartering of new industrial unions in the mass production industries had increased significantly but was frustrated on every side by craft control of the Federation and its Executive Council, particularly by unions in the building and metal trades.
At the Federation's Atlantic City convention in October, 1935, John L. Lewis and his followers, recognizing they were in the minority, decided to force the industrial union issue. After bitter debate over a resolution to charter new industrial unions, which the craft unionists defeated, the Lewis group got thirty-eight percent of the vote, more than expected. Near the close of the convention, "Big Bill" Hutcheson, president of the Carpenters and the most powerful of the craft unionists, interrupted a speech by a Rubber Workers delegate to demand a point of order. Lewis called this "small potatoes." Hutcheson called Lewis "a bastard." The miner caught the carpenter on the jaw with a swift jab and sent him sprawling. Lewis adjusted his necktie, relit his cigar, and sauntered off. Hutcheson won the point of order, but Lewis and industrial unionism got the headlines.
At a breakfast meeting the day after the convention Lewis called together a group of industrial unionists to lay the groundwork for a new organization, the Committee for Industrial Organization (CIO). Lewis became chairman. Charles P. Howard was named secretary. President of one of the purest craft organizations in the Federation, the Typographical Union, Howard believed industrial unionism was the only way to organize the mass industries. John Brophy, a miner, became director.
While CIO would launch organizing drives, it stressed at the outset that they would be in "affiliation" with the AFL, thus avoiding dual unionism. But Lewis and Green soon denounced each other publicly, and fratricide became the condition of the labor movement. In August, 1936, the Executive Council suspended the ten affiliated unions that composed the CIO. In November the Tampa convention, with the industrial unionists absent, expelled them from the Federation. In 1938 the CIO proclaimed itself a dual trade union federation and changed its name to the Congress of Industrial Organizations.
Both the CIO and the AFL moved vigorously into organizing the unorganized, but the former made the dramatic gains. For Lewis, steel was the prime target. His first task was to capture the old Amalgamated Association of Iron, Steel and Tin Workers, not for its strength but for its industrial union charter. Granted many years before by the AFL, the charter would lend legitimacy to the drive. This was accomplished on June 4, 1936, when the Amalgamated joined CIO and merged into the newly formed Steel Workers Organizing Committee whose chairman was Philip Murray, vice-president of the Miners.
Murray established headquarters in Pittsburgh and recruited an able staff. SWOC's strategy was threefold: work with the ethnic groups that composed the industry's labor force; exploit the federal government, particularly the Senate's La Follette Committee, which was exposing antiunion practices; and, most important, capture the restive company unions from within. This last was especially effective in the mills of United States Steel, the largest corporation in the industry. By the end of 1936 "Big Steel's" chairman Myron C. Taylor, concluding that Murray had won over the company unions, entered into secret negotiations with Lewis that led to the signing of a collective bargaining agreement on March 2, 1937.
In the wake of this sensational victory, SWOC swept up many smaller firms. By April it claimed a membership of 280,000. Murray now turned his attention to Jones & Laughlin, the fourth firm in the industry, which had challenged the constitutionality of the Wagner Act in the Supreme Court and lost. SWOC shut down J & L for two days in May. An NLRB election followed, which the union won handily, and an agreement was signed.
The other so-called "Little Steel" companies--Bethlehem, Republic, Youngstown, National, and Inland--proved much tougher. Their executives were bitterly antiunion. Led by Tom Girdler of Republic, and excepting only the officers of Inland, they were committed to the use of violence. When orders for steel fell off in May, 1937, a prelude to recession, they welcomed a walkout as a test of strength they expected to win. Late that month Girdler forced Murray into a strike for which SWOC was not yet ready. It gradually spread to most of the other companies which continued to operate, and there was much violence. In the "Memorial Day Massacre" at Republic's South Chicago mill, Chicago police killed ten people and wounded many others.
This defeat for SWOC was the turning point in the strike. By the end of June the union had gained only limited recognition at Inland and Youngstown mills in Indiana. This caused Lewis to become extremely annoyed with Roosevelt because the President refused to support SWOC in the Little Steel strike.
The United Automobile Workers (UAW) emerged as a major union at the same time, but under markedly different conditions. Several small auto unions that had popped up in the NRA period and made limited gains in calling strikes and negotiating contracts amalgamated into the UAW in April, 1936, under the presidency of Homer Martin, a former Baptist preacher. In July the union, firmly committed to industrial organization, affiliated with CIO. Its main task was to organize the Big Three of the industry-General Motors, Ford, and Chrysler. The UAW began with GM, by far the largest with 110 plants in fourteen states and eighteen foreign countries.
During the latter part of 1936 the UAW pushed organization throughout the GM system, especially in Flint, Michigan. At this time the sit-down strike emerged as an effective organizing weapon. There was a rash of sit-downs by new unions between 1936 and 1938, notably the Goodyear strike in Akron in 1936. The UAW adopted the technique enthusiastically and forced the largest manufacturing corporation in the world to stop production. What some consider the greatest strike of a turbulent decade was on.
The sit-down continued in Flint for six weeks. Michigan governor Frank Murphy called in the National Guard, not to evict the strikers but to keep the peace. He then moved to mediation, involving Lewis and GM's top officials along with Secretary of Labor Frances Perkins and the President. On February 11, 1937, Murphy got an agreement. The UAW evacuated the plants; in return the union gained recognition. The UAW was now established in GM.
This great victory was followed by agreements at Hudson, Packard, and Studebaker, along with many parts manufacturers. On April 6, Chrysler signed a contract with the union. The UAW now launched a drive to organize Ford. Henry Ford was utterly opposed to collective bargaining, and his Service Department, headed by Harry Bennett, was a violence squad. Two UAW organizers, Walter Reuther and Richard Frankensteen, were beaten unmercifully at the "Battle of the Overpass" outside the River Rouge plant on May 26, 1937. The union deferred the Ford campaign.
A number of smaller CIO unions made notable gains. The National Maritime Union, with important communist influence, organized the sailors on the East and Gulf coasts after a series of violent strikes. In 1937 Harry Bridges took his West Coast longshoremen out of the AFL International Longshoremen's Association and formed the International Longshoremen's and Warehousemen's Union with a CIO charter. The United Rubber Workers, founded in 1935, effectively organized Firestone, Goodrich, U.S. Rubber and Goodyear. The United Electrical, Radio and Machine Workers, also with a significant communist group of leaders, won agreements at General Electric, Westinghouse, RCA, and a host of smaller firms. GE, unusual for very large corporations, agreed to NLRB elections rather than risk strikes. Sidney Hillman's Amalgamated Clothing Workers formed a Textile Workers' Organizing Committee in 1937 which was only marginally successful in the widely dispersed industry.
The AFL responded vigorously to the CIO challenge. Ironically, craft unions which had fought Lewis over industrial unionism now organized on an industrial basis. While the Federation affiliates enjoyed no great conquests like U.S. Steel and GM, they gathered support in a very large number of smaller plants. The Teamsters, for example, had 441,000 members in 1939, substantially more than SWOC or the UAW and only slightly fewer than the UMW.
The result of the contest between AFL and CIO was a dramatic increase in overall union membership. According to the Bureau of Labor Statistics, American unions (excluding Canadian members) hit the low point of 2,689,000 members in 1932. In 1935, the time of the AFL-CIO split, the total had grown to 3,584,000. By 1939 membership exceeded eight million.
Despite organized labor's gains, the specter of in security remained for the worker and his family. To compensate for loss of employment, other industrial nations had developed social insurance programs, but the United States had lagged behind. The only significant public program consisted of a group of uneven state workmen's compensation laws dealing with job related illness and disease.
The Great Depression energized the impulse for social insurance. The two key movements were for unemployment insurance and old-age pensions. Wisconsin pioneered in enacting an unemployment insurance law in 1932. The need for pensions prompted the Townsend Plan, which emerged in 1933 and quickly won large public support. Under this nostrum, the government would pay everyone sixty years old or over $200 a month on the condition that the pension was spent within a month.
Roosevelt and Miss Perkins had long been committed to social insurance. In 1934 the President concluded that the time was ripe to develop a comprehensive federal program. He created the Committee on Economic Security with Miss Perkins as chairwoman. CES delivered the security bill to the White House in January, 1935, and the President immediately asked Congress to pass it. Both houses acted favorably after considerable revision, and on August 14, 1935, Roosevelt signed what had now come to be called the Social Security Act.
The statute contained a basket of programs, though there were several significant exclusions. The first of the new plans was a federal-state system of unemployment insurance. The role of the federal government was limited essentially to collecting and disbursing funds and to setting standards for the states, while the latter would determine most of the substantive features of the program. Many classes of employees were excluded from coverage--farm workers, domestic servants, public employees, employees of nonprofit organizations, among others. For firms with eight or more employees covered by social security, the government would impose a tax, starting at one percent of payroll in 1936 and rising to three percent in 1938. If the states enacted unemployment compensation laws, which all soon did, their employers would receive credit for ninety percent of the tax used to finance the state's program.
The Social Security Act established two programs for the aged, one for immediate needs, the other, a long-term pension system. The former, called old-age assistance, was a federal-state relief program in which the federal government would match a state contribution of no more than fifteen dollars a month. More important in the long run was the federal program of old-age social insurance. Under it, the worker would be taxed during his productive years thereby earning a pension for the time when he was no longer able to work. His employer would be taxed as a cost of production. The amount of the pension would be determined by the resources of the system. The law also created several welfare programs for especially needy groups beyond the aged. One was for families headed by women; the other was assistance to the blind.
There were two important exclusions from the Social Security Act. While most of the people who worked on the draft bill, including Roosevelt, favored the creation of a health insurance system, opposition of the American Medical Association made it politically impossible. The other exclusion was a general relief program. Although Hopkins urged a permanent welfare provision along with creation of a new department of welfare with Cabinet status, Roosevelt preferred to treat this problem separately on the theory that mass unemployment was temporary.
The emergency unemployment relief law was due to expire in 1935. Roosevelt and Hopkins agreed that it should be replaced with a new program that would stress work relief over direct relief. In 1935 the President established the Works Progress Administration for this purpose under Hopkins. By early 1936 over three million persons were at work in WPA programs, encompassing public buildings, schools, roads, parks, arts, theater, among others.
On taking office in 1933, Roosevelt and Miss Perkins were convinced of the need for federal standards legislation. The NRA codes provided for minimum wages and maximum hours, but the National Industrial Recovery Act was held unconstitutional in 1935. The cause seemed even more hopeless the next year when the Court voided the New York minimum wage law for women and children.
But in 1937 the judicial prospect brightened. The President proposed a reorganization of the Supreme Court which, while defeated, led to more liberal decisions, notably in the cases upholding the constitutionality of the Wagner Act. The Administration then proposed the Fair Labor Standards bill. It suffered a tortured legislative history with bitter opposition from the South, which sought to lure northern industry with low wages, long hours, and child labor. But in 1938, after significant concessions on standards and especially on coverage, Congress acted favorably and the President signed the Fair Labor Standards Act.
The statute established a minimum wage for a restricted number of covered industries in interstate commerce of twenty-five cents an hour in 1939, thirty cents in 1940, and forty cents in 1945. It also fixed the norm of the forty-hour week, again gradually. It became forty-four hours in 1939, forty-two hours in 1940, and forty hours thereafter. There was no prohibition on longer hours. Rather, the employer would have to pay at least time and a half for hours worked in excess of the weekly maximum. The law also prohibited the employment of children under sixteen years of age in most industries and under eighteen years in hazardous trades.
Unemployment remained high during the New Deal era. By 1935 a fifth of the labor force was still out of work. The only significant recovery occurred between 1935, and 1937. In the latter year, in fact, industrial production exceeded the level reached in 1929. But because of the growth of the labor force and increased productivity, there were still 7,700,000 persons unemployed. That number increased in the recession of 1937-38, exceeding ten million; 1939 yielded only a modest improvement. There were now almost nine and a half million persons out of work, over seventeen percent of the civilian labor force. While the New Deal policies broke the downward slide, they did not solve the current problem.
The outbreak of war in Europe in 1939 transformed the position of American labor. The mass unemployment of the thirties swiftly melted away as the nation turned to arming and supplying Britain and the Soviet Union along with building up its own military capability. By the time of Pearl Harbor there were shortages of skilled labor. The nation reached substantial full employment in 1942.
The rise in employment spurred a significant increase in union organization. It is probable that the labor movement added close to two million members between 1939 and 1941. By the latter year somewhere between one-fifth and one-fourth of nonagricultural employment was covered by union contract, the highest percentage in history to that time.
As before, black workers constituted the most disadvantaged group in the American labor force. A large number of unions, particularly craft organizations affiliated with the AFL, denied them membership. They were, in the words of the old saying, "the last to be hired and the first to be fired." When a black man was lucky enough to get a job, he often found himself behind a broom.
During the New Deal period millions of jobless black workers became important beneficiaries of the federal policy of nondiscrimination. Both FERA and WPA provided relief without regard to race, creed, color, or national origin. But eligibility for relief did not meet the fundamental problem--a job. Rising employment in the defense period offered the prospect of dealing with this basic issue if historic discrimination could be overcome.
A. Philip Randolph, who was both an important black trade unionist as president of the Brotherhood of Sleeping Car Porters and a leading civil rights spokesman for the black community, saw the opportunity. In early 1941 jobs were opening up in defense plants, but they were not being offered to blacks. Randolph recognized that it would take government intervention to attack discrimination, and that Roosevelt would have to be forced to act by a dramatic gesture. He conceived of a Negro March on Washington.
The March was scheduled for July 1, 1941. In May the President became convinced that Randolph had strong backing and that the demonstration would be of great size. Through Eleanor Roosevelt and Mayor Fiorello H. LaGuardia of New York, the President sought to persuade Randolph to cancel the March. He refused. Invited to the White House, Randolph told Roosevelt that the price for calling off the demonstration was an executive order dealing with discrimination in defense plants.
On June 25, 1941, the President issued Executive Order No. 8802, which barred discrimination in employment in defense industries and created the Committee on Fair Employment Practices to investigate complaints and to correct valid grievances.
Nondiscrimination got another boost with the rise of the CIO. The UMW had long accepted black miners on an equal footing with white. The new industrial unions, like SWOC and the UAW, adopted the same policy and black workers in these industries eagerly joined the unions.
Both SWOC and the UAW had left unfinished campaigns in 1937 that they now carried to substantial completion. The steel union filed unfair practice charges against the Little Steel companies, which NLRB and the courts upheld. Republic Steel was ordered to reinstate over 7,000 strikers with back pay. In early 1941 SWOC launched a massive organization campaign, selecting Bethlehem as the prime target. This led to NLRB elections in the big mills at Lackawanna, New York; Johnstown, Pennsylvania; and Sparrows Point, Maryland. All were won by large majorities. The victories broke the back of opposition at Republic, Youngstown Sheet & Tube, and Inland. By November, 1941, the NLRB had certified SWOC as bargaining agent for the employees of all four corporations.
The unfinished task of the UAW was to organize the Ford Motor Company. Following the stinging defeat he administered to the union in the Battle of the Overpass in 1937, Harry Bennett through his Service Department maintained an antiunion reign of terror in the factories. Henry Ford himself publicly denounced the UAW declaring: "Labor union organizations are the worst thing that ever struck the earth." The union, fettered by the recession and torn by internal factionalism, filed a series of unfair practice charges with the NLRB. The company, in an appeal to the courts, won one case in which Ford's statements were protected as freedom of speech under the First Amendment. The other cases were an uninterrupted series of UAW victories.
The union launched a major drive with CIO help in the fall of 1940. It gained a large membership and on April 2, 1941, the workers struck the River Rouge. Governor Murray D. Van Wagoner of Michigan mediated a settlement in which the strikers returned to work in return for Ford's consent to NLRB elections. The AFL made a belated entrance. In the voting on May 21, the UAW won overwhelmingly at the Rouge.
The election results--only 2.6 percent of the Rouge workers voted for no union--shocked Henry Ford. Further, the NLRB was about to open bearings that would expose Service Department violence and racketeering. Ford ordered Bennett to get a quick agreement with the UAW. The results were extraordinary. Wages became the highest in the industry. Layoffs and rehires would be based strictly on seniority. The Service Department was disbanded. The UAW won the union shop and the checkoff. Ford cars would carry the union label.
It was during this period that Franklin D. Roosevelt and John L. Lewis locked horns. In January, 1940, Lewis told Roosevelt that he would support him for a third term "if the vice-presidential candidate should happen to be John L. Lewis." Roosevelt thought the proposition ridiculous. That October, Lewis in a famous radio speech denounced the President and called upon labor to vote for Wendell Willkie, the Republican contender. If Roosevelt won, Lewis would consider the result "a vote of no-confidence" and would resign as president of the CIO. Labor rejected Lewis and voted overwhelmingly to reelect Roosevelt for a third term.
At the CIO convention in November, Lewis tried to go back on his promise, but Sidney Hillman skillfully forced him out. Phillip Murray became the president of the CIO. Lewis, wounded and bitter, went home to the UMW.
The strike problem became a critical issue during the defense period. There were a number of reasons--rising employment, growing inflation, residual resistance by management to unionization, the inexperience of new bargainers on both sides of the table, and the exploitation of unrest by communist leaders within the CIO unions they controlled. While the number of work stoppages and workdays lost did not increase significantly in 1940, several strikes directly affected defense production. Antiunion spokesmen in industry and Congress denounced the walkouts as "treason" and demanded antistrike legislation.
In 1941 the situation worsened. A communist-led UAW local shut down Allis-Chalmers in Milwaukee, stopping the production of machinery essential for naval vessels. Even more serious, communists called out the UAW local, at North American Aviation in Inglewood, California. In all, the year saw more than 4,000 work stoppages, with 2,360,000 workers involved.
On March 19, 1941, the President by executive order established the National Defense Mediation Board. It was a tripartite agency with three public, four industry, and four labor members (two each from the AFL and the CIO). NDMB's function was to settle labor disputes in defense industries. Its methods were mediation, voluntary arbitration, and, if they failed, fact-finding with recommendations which might be made public.
In the ten months of its life the Board received a total of 118 disputes. In most cases, strikes were in progress when the agency entered the dispute; in a number of others, stoppages soon took place. NDMB policy was to persuade the union to call off the strike in return for a promise of a hearing and of wage retroactivity to the date of expiration of the contract or of the time of return to work. This was successful in the majority of cases. If, however, one of the parties refused to accept the recommendation, the Board forwarded the matter to the White House.
NDMB's greatest case involved the captive mines. At stake was the output of the basic steel industry, essential to the entire defense program. Lewis had won the union shop in the commercial mines in 1939. Two years later he demanded the same provision from the twelve major steel corporations for their coal mines. Only Jones & Laughlin agreed. The UMW called out 50,000 miners at the others on September 15, 1941. Secretary of Labor Frances Perkins immediately certified the dispute to the Board. Lewis agreed to send the men back to work for thirty days while the NDMB engaged in fruitless mediation.
Roosevelt appealed to the miners' patriotism not to strike again, which enraged Lewis. He called a second strike on October 27. On the condition of submission of the union shop issue to the Board, he then agreed to send the men back into the pits on November 3, for fifteen days. On November 10, the Board by a vote of nine to two came out against the union shop, only CIO members Murray and Tom Kennedy of the UMW voting for it. These men resigned and NDMB collapsed. Roosevelt himself now entered the negotiations, but with equally dismal results.
Lewis called a third strike on November 17. The next day the President got both sides to agree to binding arbitration before a board consisting of Lewis, Benjamin Fairless of U.S. Steel, and Dr. John R. Steelman, the director of the U.S. Conciliation Service. Lewis, certain that Steelman would vote for the union shop, ordered the miners back to work. The award was as Lewis expected, but hardly anyone noticed. It came down on December 7, 1941, the day Japanese aircraft attacked Pearl Harbor.
President Roosevelt convened a labor-management conference at the White House on December 17. It consisted of the twelve top labor leaders (six from the AFL and six from the CIO) and an equal number of prominent employers. William H. Davis and Senator Elbert D. Thomas of Utah, chairman of the Senate Committee on Education and Labor, were the moderators. The conference reached unanimous agreement on two basic policies. The first prohibited strikes and lockouts for the duration of the war. The second provided that labor disputes would be submitted to a government board for resolution. Taken together, these principles insured compulsory arbitration and guaranteed uninterrupted production. Conflict developed over union security. The employers insisted that the board should be denied jurisdiction over this issue; labor demanded the right to consider the question. Roosevelt cut the knot on December 23, announcing that he accepted the two endorsed principles. Asserting that the agency would have authority over "all disputes," he sustained the labor position on union security.
On January 12, 1942, the President issued an executive order creating the tripartite National War Labor Board of twelve members, four each from labor, industry, and the public. Davis became chairman; Professor George W. Taylor of the University of Pennsylvania, vice-chairman. Most of its dispute procedures were like those of the Defense Mediation Board, but it would also issue "directive orders," that is, final decisions. NWLB inherited the NDMB's unfinished cases. The NWLB's jurisdiction extended to disputes that "might interrupt work which contributes to the effective prosecution of the war." In the exigencies of wartime this became, in effect, virtually the entire economy. The agency's authority stemmed from the President's powers as commander-in-chief. Despite the urging of some, including Lewis, that it begin with a statement of principles, the Board chose to hammer out policies on a case-by-case basis.
In a series of decisions in the first half of 1942, NWLB evolved a standard maintenance-of-membership compromise. The employee was free to join or to decline membership in the union. If he enrolled, he was obligated to maintain his membership as a condition of employment for the life of the contract.
Far more important was the shaping of wartime wage policy, notably in the Little Steel decision of July 16, 1942. SWOC had won bargaining rights at Bethlehem, Republic, Youngstown, and Inland before Pearl Harbor, but the parties had failed to negotiate their first contracts largely because of a disagreement over wages. The union asked for an increase of twelve and a half cents an hour, or a dollar a day, justified basically by the rise in the cost of living. The corporations argued that it was inflationary, particularly with a basic material like steel, where the higher cost would be passed along to many consuming industries.
In the Little Steel case the majority on the wage issue consisted of the NWLB's public and industry members, with the labor group in dissent. Taylor wrote the opinion, which became the core of wartime wage policy. His theory was the maintenance of prewar real wages. This would both protect the worker's income against the erosion of rising prices and at the same time prevent him from exploiting the tight wartime labor market by increasing his real wages. Between January 1, 1941, when the inflation began, and May 1, 1942, living costs had risen fifteen percent. Since steelworkers had already gotten 11.8 percent in wage increases, they were now entitled to the added 3.2 percent. Taylor proposed an additional 2.3 percent because the case had been certified to the Board before the President's anti-inflation message and because the cost of living had advanced more in steel towns than the national average. Thus, Little Steel employees received a five-and-a-half percent increase--forty-four cents a day. More important, the national standard, subject to certain adjustments, became a fifteen percent rise in hourly wage rates from the base date of January 1, 1941. The Little Steel decision was an incomplete wage stabilization policy because, under NWLB's authority, it applied only to dispute cases in that sector of the economy covered by collective bargaining. Many employers, both nonunion and union, were starting to grant substantial wage increases voluntarily in order to hold or pirate labor on the assumption that the government would bear the added cost. At the urging of the President, therefore, Congress passed the Economic Stabilization Act to maintain prices, wages, and salaries at their levels of September 15, 1942. On October 3, Roosevelt issued an executive order granting NWLB authority over virtually all wages and many salaries under $5,000; the Commissioner of Internal Revenue received control over higher salaries.
The Little Steel formula became the Board's basic wage policy. If a wage increase would cause a price increase, it could be put into effect only if approved by the Director of Economic Stabilization, former Supreme Court justice James F. Byrnes. The result of this order was both to broaden the Board's jurisdiction and to circumscribe its powers. From that time forward, organized labor conducted a massive campaign to exploit, out-flank, and shatter the wage stabilization program. Very low wages moved up to the Fair Labor Standards Act minimum. Women began to receive equal pay with men.
A very wide range of "inequalities" was discovered until the "hold-the-line" order of April 8, 1943, stripped the Board of authority to grant approval for this reason. Individual workers received merit increases and promotions; and many industrial workers won fringe benefits such as paid holidays, paid vacations, and shift differentials for the first time.
In the latter part of 1943 the AFL and CIO joined to attack the Bureau of Labor Statistics' Cost-of-Living Index, the yardstick under Little Steel. Labor claimed that BLS, because it failed to account for wartime price conditions, grossly understated the rise in living costs. Between January, 1941, and December 1943, the index rose 23.4 percent. The AFL and CIO contended that costs had actually increased 43.5 percent. A technical committee under the chairmanship of economist Wesley C. Mitchell estimated that BLS had understated the price advance by from three to five percentage points. But this led to no change in Little Steel because the Board was powerless to alter the formula and neither the stabilization director nor the President would do so.
Several strong unions launched direct assaults upon the Little Steel policy. The nonoperating railway organizations, which had sought twenty cents, received eight cents from an emergency board and saw it cut to four cents under the formula by the stabilization director. They ordered a strike on December 30, 1943, and the operating unions joined in the call. Roosevelt directed the Army to takeover the railroads.
Lewis presented the prime challenge to the wage stabilization program in the spring of 1943. Though the UMW's bituminous agreements had expired and the miners had exhausted their Little Steel entitlement, Lewis demanded an increase of two dollars a day and portal-to-portal pay--that is, compensation for nonproductive travel time from the mine entrance to the working face and return. Lewis refused to appear at a War Labor Board hearing, and the miners began to strike. The President seized the mines and named Interior Secretary Harold Ickes as administrator. NWLB then denied the wage increase and referred the portal-to-portal issue to the parties. When no agreement was reached on June 11, the miners resumed the strike, this time against the government. There was great public outrage against Lewis, and Congress moved to pass the punitive Smith-Connally War Labor Disputes bill, which restricted the right to strike. On June 18, the Board ordered him to sign the contract. Lewis called it a "yellow-dog" and refused. On June 23, Roosevelt said he would ask Congress for authority to draft striking miners into the Army.
In late October the miners again walked out, and the President again seized the mines. Ickes then worked out a settlement with Lewis, and the men returned to work on November 3, 1943. In fact, the miners won an increase of a dollar and a half a day. But it was taken as fringe benefits in a combination of portal-to-portal pay and a shorter lunch period rather than as a direct wage increase. Thus, NWLB could approve the settlement technically under the Little Steel formula.
Until the latter part of 1942, manpower needs were met by tapping the depression reservoir of the unemployed. From that time forward there was a shortage of labor which became progressively more severe.
These labor needs were met in two ways--by raising the number of persons in the labor force (mainly by hiring women, teen-agers, and retirees) and by increasing the hours of work. War plants shifted from a forty-hour to a forty-eight-hour workweek; in 1943, labor shortage areas also adopted the forty-eight-hour week. Under the Fair Labor Standards Act the workers received time and a half pay for hours over forty. This made the enforcement of the War Labor Board's Little Steel policy workable. That is, weekly earnings might rise significantly despite the restraint the formula imposed on hourly rates.
In April, 1942, the President established the War Manpower Commission under Paul V. McNutt, the former governor of Indiana, to allocate available labor in the face of the wartime shortage. In the spring of 1943 McNutt issued a sweeping order intended to "freeze" about twenty-seven million essential workers in their jobs, which angered the AFL and the CIO. The military and many others urged national service legislation, or a "labor draft." The labor movement violently opposed the idea. Roosevelt concurred until January, 1944, when, worn out by the 1943 coal strikes, he endorsed national service as part of a package that would also have imposed heavy burdens on industry. The House adopted a labor draft bill in 1945, but the collapse of Germany made the issue moot.
The wartime labor shortage significantly improved the economic status of two groups which had suffered historic discrimination--women and blacks. The number of females employed soared as "men's" jobs, particularly in the blue-collar categories, opened up; the War Labor Board's policy of equal pay for equal work eliminated wage differentials based on sex. Blacks also made progress, though overcoming discrimination proved difficult. There was a vicious race riot in Detroit in 1943. The FEPC, despite this formidable opposition, succeeded in opening a large number of jobs in war industries and government to black workers.
The sharp increase in employment during the war caused a dramatic growth in union membership. By 1945 more than fourteen million American workers were enrolled. Equally significant, the union proportion of nonagricultural employment reached an all-time high of 35.8 percent. By the end of the war the trade-union movement was big and had established firm collective bargaining bases in most of the important industries of the United States.