Chapter 4: Post-war Era and Korean War
When FDR died in office in April 1945, he was replaced by Vice President Harry S. Truman, an ardent but obscure New Dealer from Missouri. Right after the Japanese surrender ending World War II, Truman announced a 21-point domestic "Fair Deal" program building on the New Deal. The Fair Deal included a number of benefits for working people and retirees. Carrying the program forward at the Department of Labor was Secretary Lewis B. Schwellenbach, replacing Frances Perkins who resigned to head the Civil Service Commission. Schwellenbach, a former U.S. Senator and federal judge from Washington state, was known as a committed New Dealer and strong supporter of workers' rights. He was considered one of Truman's most promising appointees. Little did the new Secretary know how difficult and short would be his term, or how tragically it would end.
Noble but abstract goals for workers and the country quickly foundered in the harsh realities of readjustment after World War II. As happened after the "Great War", wartime agencies and controls on the economy were done away with as rapidly as possible, at a pace matched only by the demobilization of the armed forces. The prospect of millions of job-hungry veterans seeking employment before conversion to peacetime production was in full swing raised fears of massive unemployment. As was the case after World War I, however, such fears proved unfounded. Most veterans found jobs shortly after discharge.
Instead, the real labor problem of the time was a massive if peaceful wave of strikes. Unions sought to make what they considered well-deserved gains after enduring wage freezes imposed during the war. Workers were also prodded by the sharp inflation, fueled by pent-up consumer demand, that followed the lifting of wartime price restrictions. Strike followed upon strike in such important sectors as railroads, coal, steel, autos and oil.
The strike wave mobilized widespread anti-union sentiment which soon made itself felt in the federal government. Overriding a veto by President Truman, Congress passed the Taft-Hartley Act which placed a number of restrictions on labor unions. These included banning the "closed shop" (under which workers had to join the union to be hired) and allowing the President to order temporary "cooling off" periods for strikes deemed to imperil the nation's safety. Beyond Taft-Hartley, the Congress ordered severe budget cuts in the Department of Labor, which once again many mistakenly saw as a hot-bed of pro-union sentiment.
One of the hardest-hit offices was the Bureau of Labor Statistics. This historical core of the Department, established in 1884, had quietly but effectively carried on its statistical work for over 60 years. Then after the war the Bureau suffered a draconian 40 percent reduction in its staff. In the midst of the cuts, a new Commissioner, Ewan Clague, was appointed. Under his two decades of leadership the Bureau recovered to full effectiveness and added new programs to meet new statistical needs.
In addition to the disruptive cuts, there was a profusion of shufflings of agencies in and out of the Department, continuing a trend which had started during the war. The U. S. Employment Service, which had been redesignated the Bureau of Employment Security (BES) and the Apprentice-Training Service were transferred in from the War Manpower Commission. The Children's Bureau was permanently removed in 1946. The child labor function was later transferred to the Wage and Hour Division. As a result of the Taft-Hartley Act, the U.S. Conciliation Service was separated from the Department in 1947 and became the independent Federal Mediation and Conciliation Service. The only "line bureaus" that continued unchanged through this period of organizational turmoil were the Bureau of Labor Statistics, the Labor Standards Division, the Women's Bureau, and the Wage and Hour and Public Contracts Divisions.
The programs of the core group of bureaus were adapted to post-war needs and were augmented by new programs, particularly in international labor and veterans' rights. In recognition of the increased importance of foreign labor affairs in the post-war world, in 1947 Secretary Schwellenbach established an Office of International Labor Affairs to facilitate the international exchange of labor information between the U.S. government and foreign countries. The Bureau of Veterans Reemployment Rights was transferred to the Department in 1947. Its function, which by then had largely been fulfilled, was to help veterans and certain others to regain their previous jobs. The Employment Act of 1946 created a Council of Economic Advisers to the President but did not create any new programs at the Department. However, the law gave added urgency to the Department's existing employment efforts.
While the Department was enduring the cuts of a hostile Congress, Secretary Schwellenbach, not in the best of health to start with, suffered a serious physical decline. He had left Washington, DC several years earlier because of an illness aggravated by the local climate. Now, after returning at the President's bidding to become Secretary of Labor, Schwellenbach succumbed to a back malady, aggravated by disappointment over setbacks to the Department. He died in office in June 1948.
At that point the Truman Administration seemed certain to be defeated in the fall elections and few qualified candidates were available to preside over a reduced Department of Labor in an interim government. Finally, after several candidates turned the post down, Truman, with an eye to the elections, offered it to Maurice J. Tobin, then governor of Massachusetts. Tobin was an effective campaigner who was popular with labor and who could be counted on to deliver his state and possibly others to the Truman camp. After several days of understandable hesitation, Tobin finally accepted and took office in August 1948.
In a reversal of the pattern of Secretary Schwellenbach's incumbency, Tobin came in with low expectations and at a dark hour for his Administration and served long enough to see a marked upturn in the fortunes of the Department. Truman fooled everyone and won reelection. Truman's party also carried both houses of Congress, putting him in a good position to achieve some of his Fair Deal goals. Truman immediately sought repeal of the Taft-Hartley Act. He failed in this, but succeeded in raising the minimum wage to 75 cents per hour and raised benefits and extended coverage under Social Security.
At the same time, the Labor Department saw something of a rebirth. Earlier budget cuts were restored, so that by the time Tobin left office in 1952 appropriations had doubled over 1948 and the staff had grown by 50 percent. In 1949 a special commission headed by Herbert Hoover made recommendations on ways to improve governmental efficiency. Following their lead, Tobin determined to consolidate as much as possible the widely dispersed labor functions of the Federal government. He achieved some success in this. The BES, as indicated, was brought back to the Department and to it was added the Unemployment Insurance system, formerly under the Social Security Administration. Also, a congressionally authorized reorganization plan gave the Secretary, for the first time, direct authority over the presidentially appointed heads of the bureaus of the Department, adding greatly to administrative efficiency.
With the outbreak of the Korean War in 1950, a strengthened Department of Labor played a vital role in mobilizing manpower for defense production. Acting under a presidential order making the Secretary of Labor responsible for the wartime labor supply, Tobin created a Defense Manpower Administration to supervise and coordinate manpower activities of the Department. The Department's responsibilities ran the gamut of labor problems, from assuring an adequate supply of workers and seeing that skill levels were adequate, to promoting safety and health standards and minimizing losses due to work stoppages. The defense manpower problem faded away when hostilities in Korea ceased, but by the end of the Truman Administration in 1953 the program had dealt with important concerns such as the need for greater educational and skill levels and the need for better use of the capacities of women, older workers and minorities. These concerns endured and grew and eventually demanded answers from the Federal government.