Land of Promise: An Economic History of the United States by Michael Lind

Author:Michael Lind [Lind, Michael]
Language: eng
Format: azw3
Publisher: HarperCollins
Published: 2012-04-17T00:00:00+00:00

FROM THE WRECKAGE OF THE NIRA

While many historians have distinguished a second New Deal from the first New Deal, this ignores the continuity between the NIRA and subsequent programs. Much of the New Deal’s lasting legacy consisted of pieces of the shattered NIRA, which were pried from the wreckage and re-created as separate programs. A number of the industry-wide code authorities of the NIRA, for example, were re-created in the form of commissions that oversaw regulated industries, from bituminous coal and oil to aviation and trucking. These will be discussed in chapter 13.

The collapse of the NIRA led the Roosevelt administration to seek the goals of union recognition, minimum wages, and social insurance directly, by means of government regulation and provision, rather than indirectly, by means of trade-association agreements. The Wagner Act of 1935, a free-standing equivalent of section 7(a) of the NIRA, gave unions the right to engage in collective bargaining. The Fair Labor Standards Act (FLSA) of 1938 created a national minimum wage and instituted the eight-hour day. Conservative Democrats in the South exempted the occupations in which most black Americans worked, such as agricultural work and domestic work, but they were gradually added later in successive revisions of the act.

The Wagner Act and the statutory minimum wage created by the FLSA in 1938 were poor substitutes for a more flexible and adaptable system that might have evolved over time in the United States, if the NIRA had survived. In Britain, Germany, and other European countries, statutory minimum wages for a long time were limited to a few sweatshop industries, like those supervised by Churchill’s trade boards. France was one of a few European democracies to adopt a national minimum wage from an early period, for the same reason that the United States did—the proportion of workers who belong to unions has always been much lower in France than in Central and Northern Europe.66

The weakness of unions in the United States is often blamed on the Taft-Hartley Act of 1947, which weakened the Wagner Act, or the failure to organize the American South, or hostile attitudes toward unions by courts and government agencies, beginning with the presidency of Ronald Reagan and his Republican successors. But in every other modern democracy where substantial portions of the private sector workforce are unionized, NIRA-style employers associations, called “peak associations,” bargain at the national or regional level with labor representatives. Most of the democratic countries with such tripartite government-business-labor sectoral wage-setting systems have seen their productivity increase at roughly the US rate over the last half century. There is, however, one difference—thanks in large part to higher levels of unionization, the distribution of income in those countries is far less unequal and there is greater upward economic and social mobility than in the United States.

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