A Brief History: The U.S. Department of Labor

By Judson MacLaury

The organic act establishing the Department of Labor was signed on March 4, 1913, by a reluctant President William Howard Taft, the defeated and departing incumbent, just hours before Woodrow Wilson took office. A Federal Department of Labor was the direct product of a half-century campaign by organized labor for a "Voice in the Cabinet," and an indirect product of the Progressive Movement. In the words of the organic act, the Department's purpose is "to foster, promote and develop the welfare of working people, to improve their working conditions, and to enhance their opportunities for profitable employment."

Initially the Department consisted of the new U.S. Conciliation Service (USCS), which mediated labor disputes, plus four pre-existing bureaus: the Bureau of Labor Statistics (BLS), the Bureau of Immigration, the Bureau of Naturalization and the Children's Bureau. Woodrow Wilson's appointee as Secretary of Labor was Scottish-born Congressman William B. Wilson (1913-1921), a founder and former Secretary-Treasurer of the United Mine Workers of America.

In his first annual report Secretary Wilson enunciated a philosophy, echoed by many Secretaries since, that the Department was created "in the interest of the wage earners", but must be administered in fairness to labor, business and the public at large. Under Wilson's early leadership the Bureaus functioned fairly autonomously and the Department focused most of its remaining resources on the USCS. He also set up a national employment service within the Bureau of Immigration.

With the entry of the U.S. into World War I on April 5, 1917, adequate war production became a national necessity and issues of working conditions and labor peace assumed paramount importance. The Department assumed the major responsibility for implementing the nation's war labor policies, which included recognition of the right of workers to bargain collectively, establishment of machinery to adjust grievances, and an 8-hour workday. The War Labor Administration, headed by Wilson, was placed in charge of most of the government's labor programs. Its principal component was the War Labor Board, which adjudicated labor disputes not resolved by the USCS.

When the war ended, an upsurge in labor-management conflict resulted in an alarming strike wave that threatened to paralyze the rebounding post-war economy. At the same time, a nationwide "Red Scare" led to a series of government raids resulting in the arrests of thousands of "dangerous" aliens. The Justice Department demanded that the Bureau of Immigration deport them all, but the Department insisted on observing strict legal standards and it dismissed most of the charges. Only 556 proven Communists were deported.

After the activism of President Wilson there was a sharp reversal in policy by the Republican Administrations from 1921 to 1933 and the Department reflected their desire for less government. President Warren Harding appointed James J. Davis (1921-1930), who had attained national prominence as a charitable fund raiser. Although Davis was a union member, the Department now followed a neutral course toward organized labor and focused on other areas. Administration of a series of new, restrictive immigration laws and deportation of undesirable aliens became its main function. The Department also expanded the activities of the Children's Bureau and led the unsuccessful fight for a constitutional amendment limiting child labor. The employment service directed seasonal farm workers to areas of labor shortage, establishing a Departmental tradition of aid to migrant farm workers. The Women's Bureau, a wartime agency which had been made a permanent bureau in 1920, promoted the welfare of working women, primarily through information dissemination.

The Department took few positive steps to cope with the Depression under Davis's successor, William N. Doak (1930-1933), an official with the Brotherhood of Railway Trainmen. One of the principal Departmental programs for fighting the Depression was the Davis-Bacon Act of 1931, which fought wage slashing on federal construction projects by requiring that contractors match local rates.

In 1933 President Franklin D. Roosevelt appointed Frances Perkins (1933-1945), the first woman ever to serve in the Cabinet. While FDR was governor of New York, Perkins had served as Commissioner of Labor and had developed plans to alleviate unemployment as the Depression deepened. She survived a politically motivated impeachment attempt over her refusal to deport Communist labor leader Harry Bridges and served until shortly after FDR died in April 1945.

Taking office in the depths of the Depression, Perkins believed that government had a major role to play in achieving a recovery and she had the President's ear. However, her first crisis involved the Bureau of Immigration and Naturalization, whose efforts to deport aliens had become extreme. She disbanded a special corps devoted to deportation and ceased the Bureau's harassment of this group. This sometimes troublesome Bureau was transferred to the Department of Justice in 1940.

Perkins next helped set up the Civilian Conservation Corps (CCC), which sent young, unemployed men from the cities to work on conservation projects in rural areas at a dollar a day. She played a major role in the design of many of the other economic assistance and social programs of the New Deal, but her main contribution was in the enactment of Social Security. She led a campaign to convince the nation that a pension system would be humanitarian and would help prevent future depressions. The Social Security Act passed in 1935.

A number of New Deal programs directly involved the Department of Labor. The Wagner-Peyser Act of 1933 revitalized the existing U.S. Employment Service (USES) and established a nation-wide system of employment offices. The USES also provided placement and recruitment for the unemployed and later helped administer Unemployment Insurance (UI) under the Social Security Act. The Walsh-Healey Public Contracts Act of 1936 required that firms manufacturing goods for the government establish an 8-hour day and assure that the work would be done under safe and healthful conditions. It also authorized the Secretary to set minimum wages based on locally prevailing rates.

This Act prepared the way for a much broader labor standards bill, which Perkins had long supported, setting minimum wages and maximum work hours for most industrial workers. Both the American Federation of Labor and the National Association of Manufacturers opposed it, but after a prolonged legislative battle the Fair Labor Standards Act (FLSA) became law in 1938. Administered by the Department of Labor, the Act set a minimum wage of 25 cents per hour and a maximum workweek of 40 hours (to be phased in by 1940) for most workers in manufacturing. The 40-hour week has not changed since 1938, but the wage level has been raised numerous times and the coverage has broadened to include most salaried workers.

One of Perkins' favorite activities was helping state governments. In July 1933 she began a series of conferences on state labor legislation that continued annually for more that 20 years. She also created the Bureau of Labor Standards in 1934 as a service agency and informational clearinghouse for state governments and other agencies to improve conditions of work.

The Department played only a limited role in the World War II war production effort, focusing on maintaining labor standards. The Bureau of Labor Statistics served as the research arm for the Office of Price Administration, the War Labor Board and the Armed Forces. The USCS worked with the War Labor Board.

When Harry S. Truman succeeded FDR in April 1945, Perkins resigned voluntarily. Truman then appointed Lewis B. Schwellenbach (1945-1948), a federal judge and former U.S. Senator, to carry the "Fair Deal" program forward at the Department of Labor. Noble goals for workers quickly foundered on high inflation and, as was the case after World War I, a massive wave of strikes. Reaction to the strikes led to the anti-union Taft-Hartley Act of 1947 (despite strong opposition by Schwellenbach). As a result, the USCS was reconstituted outside the Department as the Federal Mediation and Conciliation Service (FMCS). Congress also ordered severe budget cuts in the Department, which many saw as a hot-bed of unionism. The hardest-hit agency was the BLS, which suffered a draconian 40 percent reduction in its staff. A reshuffling of agencies in and out of the Department added to the disruptions. Responding to Cold War needs, the Department established an Office of International Labor Affairs.

When Schwellenbach died in office in June 1948 he was succeeded by Maurice J. Tobin (1948-1953), popular governor of the state of Massachusetts. With Tobin's help Truman won reelection, and the Department saw a rebirth in which the cuts of 1947 and 1948 were largely restored. Tobin transferred several dispersed labor functions into the Department, including the USES, which had been removed in 1939, and the UI system. Congress also gave the Secretary direct authority over the traditionally independent bureau heads. During the Korean War the strengthened Department played a major role in mobilizing for defense production. In the process it began to deal with the need to raise the educational levels of workers and make better use of the capacities of women, older workers and minorities.

In 1953 President Eisenhower appointed Martin P. Durkin, a Democrat and president of the plumbers and steamfitters union. The unions took Durkin's appointment as a sign that the new Administration was open to change in the hated Taft-Hartley Act. Durkin drew up amendments to the Act but when Eisenhower refused to support them Durkin resigned in protest in September 1953. The main legacy of his brief tenure was in the improvement of the Department's administrative efficiency. He clarified and strengthened the role of the Secretary, assigned each bureau to one Assistant Secretary to promote better cooperation, and established the principle that the Secretary normally takes the lead in government labor policymaking.

Eisenhower replaced Durkin with James P. Mitchell (1953-1961), vice-president in charge of labor relations and operations at a New York department store. Mitchell served during a period of high prosperity and low unemployment. He continued Durkin's quest for organizational improvement, establishing himself as the Administration's representative for all federal agencies concerned with labor and reducing the overlapping of functions. Internally, he concentrated on coordinating the work of the bureaus and, to promote greater continuity of policy, he appointed civil servants as deputies to top political staff.

The FLSA was amended in 1955 to broaden coverage and raise the minimum wage from 75 cents to $1 per hour. In 1958 Congress authorized the Department to enforce safety and health standards to protect workers in longshoring and harbor work. The problem of assuring an adequate supply of trained workers became a major concern. A Departmental policy group developed projections on skills which would be needed 20 years later. The Department also examined the employment problems of women, minorities and the handicapped. Mitchell headed a Commission that investigated and publicized the problems of migrant farm workers. The Department also provided better protections from unscrupulous employers under its Bracero program, which imported seasonal Mexican farm workers.

New laws on misconduct by unions and employers led to new responsibilities for the Department. Under the Welfare and Pension Plans Disclosure Act it collected and made available information on companies' pension and benefits plans. The Landrum-Griffin Act of 1959 required filing of reports on union funds with the Department of Labor, banned Communists from holding union office, and toughened restrictions on secondary boycotts by unions.

In 1961 President Kennedy brought into government an able throng anxious to implement his "New Frontier." His first appointee as Secretary of Labor was Arthur J. Goldberg (1961-1962), special counsel to the American Federation of Labor - Congress of Industrial Organizations. Known as the "Davey Crockett of the New Frontier," Goldberg became involved in a wide range of social and cultural issues. He regularly acted to settle or prevent strikes, particularly in the aerospace and transportation industries. He even settled a strike against the New York Metropolitan Opera. Strongly conscious of the rights of blacks and other minorities, he abolished segregation in the Department.

The Department developed a major role in dealing with the emerging problems of automation and unemployment. Under the Area Redevelopment Act of 1961 it provided training and assistance in regions of serious unemployment. In 1962 the broader Manpower Development and Training Act gave the Department responsibility for identifying labor shortages, training the unemployed and sponsoring manpower research. Amendments to the FLSA in 1961 raised the minimum wage to $1.25 an hour and further broadened the scope of the law.

When Goldberg left the Department to become a Supreme Court Justice, he was succeeded by Under Secretary W. Willard Wirtz (1962-1969), a former labor lawyer and law professor active in Democratic politics. Wirtz generally left labor disputes to the FMCS and focused on training and equal opportunity programs. The Department soon developed a wide range of programs to meet the social and economic goals of the President Lyndon Johnson's "Great Society" and "War on Poverty" and it established the Manpower Administration to coordinate these programs. One of the most important was the Neighborhood Youth Corps, which helped 1.5 million poor, unemployed youths work and earn income while completing high school. It was administered by local sponsors and provided public service jobs. Other programs included: Special Impact for people in very poor neighborhoods; New Careers, providing training in health, education and public safety; and the Work Incentive Program, to move able-bodied persons off welfare and into jobs.

Through the passage of the Civil Rights Act of 1964 the independent Equal Employment Opportunity Commission was established to enforce non-discrimination in the nation's workplaces. The next year Executive Order 11246 created the Office of Federal Contract Compliance Programs (OFCCP) in the Department of Labor to eliminate discrimination by government contractors. In the hope of opening more jobs for American farmworkers, the Bracero program was terminated. Efforts by the Department to secure passage of a job safety and health law were unsuccessful but they laid the foundations for future legislative action.

During the Nixon and Ford Administrations a succession of five Secretaries carried out policies of restructuring parts of the Great Society and decentralizing federal labor programs. George P. Shultz (1969-1970), an academic economist with special expertise in labor issues, was President Nixon's first appointee. Shultz set the general course which the Department followed until January 1977 and also helped formulate the Administration's economic policies. He went to other posts in the Administration and was succeeded by his Under Secretary, James D. Hodgson (1970-1973), former vice president for industrial relations with Lockheed Aircraft Corporation. Hodgson departed involuntarily after Nixon's reelection and was succeeded by Peter J. Brennan (1973-1975), a unionist from the New York City building trades who had supported Nixon's Vietnam War policies. Brennan was replaced by President Ford with John T. Dunlop (1975-1976), an academic labor economist and longtime government advisor. He served less than a year, resigning when President Ford vetoed a labor bill whose passage Dunlop had supported. Ford's second appointee was Willie J. Usery (1976-1977), another unionist then serving as Director of the FMCS.

The Department's main goal now became to strengthen and rationalize the massive employment and training effort. In 1969 the Manpower Administration was restructured and the Comprehensive Employment and Training Act (CETA) of 1973 established a targeted form of revenue-sharing to transfer funds and decision-making for training activities closer to local officials. The Emergency Employment Act of 1971 provided 170,000 temporary public service jobs. In 1969 the Job Corps, which provided training for needy youths, was shifted from the Office of Economic Opportunity to the Department.

In 1970 the movement for a job safety and health law was successful, and the next year the Department established the Occupational Safety and Health Administration (OSHA) to enforce rules, or oversee state-run programs, to protect against hazards in most of the nation's workplaces. Controversy soon dogged OSHA as inspectors were criticized for being "nitpickers." The costs of compliance with rules provoked opposition from manufacturers and attempts to accommodate them caused consternation among the unions.

Promotion of equal job opportunity became an ever more important activity of the Department. In the largely white construction industry the Department promoted voluntary minority- hiring agreements between unions and contractors. Later these "Philadelphia Plans" set numerical minority hiring goals for contractors in a number of cities. The OFCCP coordinated these and other equal opportunity efforts and helped to improve their management.

The Employee Retirement Income Security Act (ERISA) of 1974 gave the Department a major role in protecting and improving the nation's private retirement systems. The Congress raised the minimum wage in stages to $2.30 an hour by January 1976 and coverage was initially extended to 1.5 million domestic workers. UI coverage was expanded to cover an additional 5 million persons and extended benefits were authorized during periods of high unemployment.

The Department continued to avoid involvement in most labor-management disputes. However, in 1970 it successfully mediated an illegal strike by postal workers after federal troops were called up. It also focused on labor-management relations in the turbulent construction industry. In 1971 a Construction Industry Stabilization Committee within the Department began to oversee construction contract settlements, resulting in a moderating trend in annual wage increases.

In January 1977 Jimmy Carter succeeded Gerald Ford. His primary domestic goal was to stimulate the economy and create jobs for the unemployed. He selected Ray Marshall (1977-1981), a labor economist at the University of Texas specializing in unemployment and minority group issues. Marshall helped develop an economic stimulus program that included 725,000 public service under CETA and an expanded Job Corps. CETA was reauthorized in 1978 with sharper targeting of assistance to the most disadvantaged persons and a new Private Sector Initiatives Program to help private firms provide job training for the needy. The Youth Employment and Demonstration Projects Act of 1977 set up programs to assist young people. The Targeted Jobs Tax Credit gave employers tax credits for hiring disadvantaged people. The Humphrey-Hawkins Act of 1978 called on the federal government to simultaneously reduce unemployment and eliminate inflation.

OSHA was under intense attack by 1977 and Marshall quickly instituted a "common sense priorities" program to focus on serious dangers, simplify safety and health regulations, and help small businesses reduce occupational hazards. Enforcement became much stricter, safety standards were simplified, and tough health standards were issued for benzene, cotton dust, lead and other hazards. In addition, OSHA issued an innovative generic cancer policy which regulated a whole class of cancer-causing substances at once. In 1978 OSHA was joined by a sister agency, the Mine Safety and Health Administration, consisting largely of functions transferred from the Interior Department.

Amendments to the FLSA raised the minimum wage from $2.30 to $3.35 an hour by January 1, 1981, and farm workers were covered for the first time. To strengthen enforcement of equal employment programs, federal contract compliance functions were centralized under OFCCP. After the U.S. withdrew from the International Labour Organization for foreign policy reasons in 1977, the Department helped lay the groundwork for a return to the organization in 1980. To strengthen the Department's capacity to analyze complex issues, its economic research functions were consolidated under the Office of the Assistant Secretary for Policy Evaluation and Review.

In January 1981 Ronald Reagan took office as President with a domestic agenda for economic recovery that emphasized reduced government spending and relief for business from burdensome government rules. To carry out these programs at the Department Reagan appointed Raymond J. Donovan (1981-1985). Donovan was vice president of a construction company in his home state of New Jersey and had been active in Reagan's presidential campaign.

One of Donovan's primary goals was regulatory relief, and OSHA was the lead agency in this effort. It immediately froze rules proposed during the Carter Administration and sought to weaken existing standards to make them less costly for business. However, because of the complexity of rule-making procedures, existing rules proved difficult to change. OSHA adopted a less punitive approach to enforcement and encouraged voluntary compliance. MSHA, OFCCP, and the other regulatory agencies followed similar deregulatory policies.

Discretionary spending was slashed by 60 percent and departmental employment fell by 21 percent. CETA programs were cut from $8 billion per year to $3.7 billion, largely through elimination of public service employment jobs. Replacing CETA in 1983 was the Job Training and Partnership Act (JTPA), which shifted significant decision-making and oversight from the federal level to the states while continuing to allow local officials to shape their own programs, subject to approval by special private industry councils.

Donovan was replaced by William E. Brock (1985-1987), the U.S. Trade Representative and a former Senator. Brock's initial goal was to improve the Department's efficiency and he instituted a "Secretary's Management System" to track and assure timely meeting of the Department's goals. The Department began to focus on both long and short-term employment and training policies. It initiated a "Work Force in the Year 2000" project to help make plans to meet future skilled labor needs. It also cooperated with the broadcast industry in Project Literacy U.S.

OSHA and MSHA shifted emphasis from reducing compliance costs for business to providing more effective protection for workers. MSHA undertook an accident reduction program in small coal mines. To accelerate the process of setting protective standards, OSHA explored mediated rule-making, under which the interested parties would seek a consensus on the best regulation. Generic standard-setting, suspended by Secretary Donovan, was resurrected.

A task force under ERISA developed proposals to assure that pension plans would have enough funds to pay promised retirement benefits. The Department helped develop proposals to reform government welfare programs at the state and community levels and to help working mothers and displaced homeworkers in the work force.

After Brock departed to join Senator Robert Dole's presidential campaign, Reagan selected Ann Dore McLaughlin (1987-1989), who had served as Assistant Secretary of the Treasury and Under Secretary of the Interior. During her brief tenure, McLaughlin sought to reconcile demands of work and family life largely through non-governmental means, establishing a Commission on Workforce Quality and Labor Market Efficiency. The Department helped shape an amendment to ERISA which required employers to eliminate underfunding of pension plans and it set up a program to help displaced workers.

Newly elected President George Bush appointed Elizabeth Hanford Dole (1989-1990). Dole had held several high government positions and was the wife of Senate Republican Leader Robert Dole. While Dole resigned in 1990, she set the main policies which guided the Department until the end of the Bush Administration. She was succeeded by Lynn Morley Martin (1991-1993). Martin was a former school teacher who had gone into electoral politics, serving ten years in the U.S. House of Representatives.

The Department followed a more activist approach to workforce issues than it had during the Reagan Administration. OFCCP undertook a "Glass Ceiling" initiative to reduce barriers to advancement by women and minorities within corporations. OSHA and MSHA issued final standards on air quality and other hazards and assessed record penalties for violations of safety and health regulations. Dole helped broker a settlement of the protracted Pittston coal mine strike in southwest Virginia. A Secretary's Commission on Achieving Necessary Skills was appointed which prepared national competency guidelines to improve the education and skills of American workers and JTPA amendments were enacted to target training resources toward the neediest. The first raise in the minimum wage in over a decade was enacted, accompanied by a special sub-minimum youth training wage, long opposed by Democrats.

In January 1993 Robert B. Reich was appointed by President Bill Clinton, who was elected on a platform of "Putting People First" and reinvigorating the economy. A teacher of government at Harvard, an author, and a radio and television commentator, Reich had previously served in the Justice Department and the Federal Trade Commission.

Under his leadership, the Labor Department focused on building up the skills of American workers. The School-to-Work Opportunities Act, enacted in 1994, was designed to ease the transition from secondary education to employment for the 75 percent who do not graduate from college. Goals 2000 established a national system of skill standards to certify that workers had the skills that employers needed. States were given funds to establish one-stop career centers, linking unemployment insurance, job counseling, and access to job training.

As chairman of the Pension Benefits Guaranty Corporation, Reich oversaw the enactment of the Retirement Protection Act, aimed at assuring that millions of workers in underfunded pension plans would receive adequate retirement benefits. He emphasized protection of workers by waging active campaigns against sweatshops, unsafe worksites, and fraudulent purveyors of health insurance. The Department collected tens of millions of dollars in back pay for victims of job discrimination. The Department administered the Family and Medical Leave Act of 1993, which provided workers with up to 12 weeks of unpaid leave to care for a new child or ill family member. While these efforts went forward, the Department's operations were streamlined and its staff was reduced by more than 1,000 employees. From its reluctant birth in 1913 as primarily an immigration agency with limited data collection, labor relations and social welfare duties, the Department has evolved into one of the principal regulatory and human resources development Departments of the Federal Government.

Mr. MacLaury's article was originally published in A Historical Guide to the U.S. Government, Oxford University Press, 1998. It has been slightly revised and appears here with the publisher's permission.