American Labor and the Great Depression (Genre: Online Article) 1 Welcome to the next section of our online series on the history of workers rights in the United States. Here, we take a look at a defining event, the Great Depression. We ll examine the events of the Great Depression, along with the governmental and judicial responses to those events, and see how those responses contributed to the rules and regulations overseeing workers rights in the United States. History and Background 2 What was the world like when the Great Depression took place? What happened during the corresponding era? The Great Depression struck at the end of the 1920s, a decade of cultural dynamism and economic growth. It followed American achievements at home and abroad the victory of the Allies (including the United States, Great Britain, France, and Russia) in World War I (1918), and the guarantee of women s right to vote, assured by the passage of the Nineteenth Amendment (1920). These events helped ensure that the beginning of the decade known as the Roaring Twenties would be characterized by general fiscal strength and a sense of social prosperity. Unfortunately, by the end of the decade, with the positive after-effects of World War I receding, economies around the world became increasingly shaky. 3 Most people agree that the Great Depression began on Tuesday, October 29, 1929, known as Black Tuesday, a day that marked a calamitous drop in the stock market and led to the worst economic disaster Americans had experienced. People went from rich to bankrupt in a single day. And that was just the beginning. As 1930 rolled around, the American economy grew worse and worse. Staggering numbers of Unit 3 1
American workers lost their jobs. By 1932, the number of jobless peaked at almost 25 percent of the workforce. As a result, other seemingly guaranteed elements of American life began to quickly slip away. People could no longer take gainful employment, a place to live, or food on the table for granted. 4 Although the Great Depression s negative ramifications could be seen and felt in all aspects of life, its effects on American labor were especially profound ultimately, in a positive way. To demonstrate why, this article will examine how this disastrous event gave rise to reforms in the American workplace. Click Great Depression Facts and Figures to get to more information about the Great Depression on this site. First Years of the Great Depression: 1929 1933 5 The first year of the Great Depression was also the first year of Herbert Hoover s short-lived presidency. During Hoover s single term in the White House, American workers benefited from the passage of a few important acts specifically related to unionization of laborers and workers rights. Workers needed these laws so they could group together and protect their rights as workers. For example, in 1932, Hoover passed the Norris-LaGuardia Act, which stated, the individual unorganized worker is commonly helpless to exercise actual liberty of contract and to protect his freedom of labor (Section 2, Norris- LaGuardia Act). A year later, shortly after his inauguration in 1933, President Franklin D. Roosevelt passed the Emergency Banking Relief Act. By doing so the government was trying to support the banking systems, which were suffering tremendously in the severe economy. 6 Overall, however, Hoover was not able to fix the economic and other problems stemming from the Great Depression. At the next presidential election, Franklin D. Roosevelt took over, taking office in 1933. Roosevelt would be president through the remainder of the Great Depression and beyond. Click The American Presidents to get to more information about Hoover and Roosevelt and the challenges of their terms on this Web site. Roosevelt and the New Deal: 1933 1935 7 Roosevelt remains America s longest-serving president. He rose to power in large part because of his promises to help the United States overcome the Great Depression. These promises were encased in a set of policies generally referred to as the New Deal. With the New Deal, Roosevelt espoused his faith that the 2 Unit 3
United States could not only see its way through the Great Depression, but emerge a stronger country. Roosevelt promised that the New Deal policies and actions would pull the economy together and help jobless Americans rejoin the workforce. 8 Two landmark pieces of legislation from the New Deal era the National Industrial Recovery Act of 1933 and the Wagner Act of 1935 shared common ground, both of them serving to further regulate the processes of collective bargaining. Collective bargaining is a significant means by which unionized employees negotiate with employers. Both acts are worth examining on an individual basis. 9 The purposes of the National Industrial Recovery Act were primarily [t]o encourage national industrial recovery, to foster fair competition, and to provide for the construction of certain useful public works (National Industrial Recovery Act). 10 The Wagner Act is also referred to as the National Labor Relations Act. It too had several purposes, including: To diminish the causes of labor disputes burdening or obstructing interstate and foreign commerce, [and] to create a National Labor Relations Board (National Labor Relations Act). This act contributed greatly to the labor union movement. Significantly, it made legally possible the existence of a workplace with only unionized employees. Moreover, through the foundation of the National Labor Relations Board, or the NLRB, it enabled a regulating body to keep the work of labor unions, employees, and employers alike, lawful, and fair. Life-Changing Laws: 1935 1938 11 During his tenure, President Roosevelt approached economic improvement from several angles. Primarily, he focused on stabilizing American finance. In addition, he increased the number of available jobs. Ultimately, he went so far as to found government programs, like the Works Progress Administration, or WPA, to oversee these processes. 12 Roosevelt continued to enact and develop many important, wideranging pieces of legislation, including two acts related in particular to workers rights. The changes of these acts would reverberate throughout American society. They are still felt today. 13 One of Roosevelt s most important changes to American labor legislation came through the Social Security Act, or SSA. The government developed this act in 1935 in order to provide for the general welfare by establishing a system of Federal old-age benefits [ and] unemployment compensation laws (Social Security Act). It had other Unit 3 3
considerations, too. With this legislation, the government became responsible for providing money to individuals who had spent time in the workforce, but no longer could work. Their inability to work was usually because of age, disability, or joblessness. 14 In other words, the government provided certain funds to workers who had retired (similar to the pension system). It also regulated insurance funding for workers. Specifically, workers who either had become injured on the job or who had lost their job were insured. All these provisions, however, relied upon the idea of Americans contributing portions of their salaries to the government through taxes. This tax money would then be returned to them through Social Security. This act, slightly revised, still applies to Americans today. 15 The Social Security Act accomplished a great deal in terms of comfort and security for those no longer in the workforce. Yet it did not address conditions within the workplace. Instead, Roosevelt s government generated another act in 1938 to meet these needs for the first time. 16 The Fair Labor Standards Act of 1938 set up requirements about how people could reasonably be expected to work in terms of hours, payment, and age-appropriateness. The act regulated the number of hours people could legally be required to work in a week. The government set this limit at forty hours, and established a policy of compensation for those working overtime. The Fair Labor Standards Act also established a national minimum wage, or salary. Finally, this act made the important distinction between adult and child workers, explaining that children could not be laborers except according to strict, additional regulation. 17 By the end of 1938, Roosevelt s administration had successfully implemented its New Deal policies. These policies enforced legal, financial, and job-creation changes. They bettered the lives of millions of American citizens. End of the Great Depression 18 Historians do not agree on a definitive end point of the Great Depression. Some consider the era over in 1939, others sometime later in the following decade. Certainly, improving the economy took much longer than witnessing its collapse. Yet the economic horrors of the Great Depression would soon be eclipsed by horrors of a different kind. 19 In the years leading up to 1938, slowly but surely, the difficulties caused by the Great Depression were ameliorated. Americans integrated themselves back into the workforce. 4 Unit 3
Soon, it became time to reengage with the rest of the world. 20 Between 1929 and 1939, Roosevelt led the United States back to financial security. Simultaneously, the dangerous dictator Adolf Hitler was coming to power in Germany. His armies were encroaching on other European countries. In 1939, World War II began. Just as with other wars, World War II created jobs in the countries involved in the battle, such as Great Britain. It also created jobs for other countries supporting the war effort, such as the United States. Throughout World War II, the American economy strengthened, most dramatically after Roosevelt directed American soldiers to officially join the fight in 1941. 21 Before the end of World War II, strong labor laws were in place in the United States. Many of those working in America could expect to benefit from unionization, and even more workers could expect to benefit from federal legislation designed to protect them in the workplace and after they retired from that workplace. 22 A teenager entering the American workforce in 1945 would encounter a far different environment from that of a worker twenty years earlier. This new worker could expect to work forty hours a week, make at least a minimum wage, receive overtime payments and insurance benefits, and collect Social Security after retirement. All of these reforms enabled the achievement of the American Dream. Unit 3 5