By Mary Jansen

THE LATE 30S IMPACT ON LABOR

UNIONS

What Are Labor Unions?Labor Unions: an organization of workers formed to protect the rights and

interests of its members---an organization of workers formed for the purpose of advancing its members' interests in respect to wages, benefits,

and working conditions.

• In the early 1930s, the future of labor unions seemed dim.

• Pro-union stance of the Roosevelt administration & congress enacted legislature form the early New Deal.

• Wagner Act of 1935.

A History of Labor Unions

1866:National Labor Union founded

Colored national Labor Union

formed

Federation of Organized Trades and Labor Unions

formed

1866 1881 1886 1929 1938

1869 1885 1926 1935 1940

First labor Union strike

American Federation of

Labor founded

Discrimination against union

members forbidden

Great Depression

begins

National Labor Relations Act and

Social Security Act passed

Fair Labor Standards Act establishes first

minimum wage

John L. Lewis resigns

-President of the UMWA from 1920-1960. -Giant among American leaders in the first half of the 20th C.-Advised presidents and challenged corporate leaders.

-Nearly four million workers joined labor organizations and wages were raised by over a billion dollars during his first year. -Helped create some of the nation's leading labor unions including the CIO

"I have pleaded your case from the pulpit and from the public platform--not in the quavering tones of a feeble

mendicant asking alms, but in the thundering voice of the captain of a mighty host, demanding the rights to which free

men are entitled.” -John L. Lewis

1880-1969: -Born in Lucas, Iowa, on Feb.12 -1907 married Myrta Edith Bell

-Died at his home in Alexandria, Va.

John L. Lewis

Eugene Debs

-Born November 5, 1855, Terre Haute, Indiana-Died October 20, 1926, Elmhurst, Illinois

-1875: helped organize a local lodge of the Brotherhood of Locomotive Firemen-1893: President of the new American Railway Union-His union won national prominence after a successful strike for higher wages against the Great Northern Railway-May –November 1895: In

jail for his role in the Chicago Pullman Palace Car Company Strike.-1897: Converted to socialism and led the establishment of the Socialist Party of America (1900, 1904, 1908, 1912, 1920)

-Won support through his personal warmth, integrity, and sincerity. -Extremely effective as a public speaker. One of his best speeches, “You Railroad Men,” was given in 1906.

Primary SourceYou Railroad Men! -1906

In this address, Debs is trying to get the men of the railroad union to support him in his political campaigns.

“The president was really addressing his own brethren.”

“President Roosevelt among other things, said: “I would be false to your interests if I failed. to do justice to the capitalist as much as to the wage-

worker.””

“I believe it can be said with truth, that I personally know, more railroad employees, and

maybe claimed as my personal friends.”

Primary SourceYou Railroad Men!

Origin:“You Railroad Men”

speech given by Eugen V. Debs in

1906.

Debs, a former Railroad union leader, is trying to

gain the support of railroad workers in his political campaigns.

Purpose:

Value:This speech shows Debs views on politics and unions. Even

though he is no longer a part of the railroad unions, he still feels that union workers deserve the

best. Also, he puts down President Roosevelt showing his

socialist political viewpoint.

Limitation:This speech was given solely for railroad workers. The examples Debs uses to gain their support would only be relative for men

working in railroad unions. Also, because Debs is trying to gain

support, he may not be sharing his complete opinions. He is most likely only sharing the opinions that will gain him the support he wants.

Committee for Industrial Organization:Origins

Samuel

Gompers established the

American Federation of Labor (AFL) in

1886.

Gompers’ death in 1924 brought about difficulties in

the AFL.

In 1935, John L. Lewis (an AFL

member) formed the Committee for Industrial Organization

(CIO).

The CIO was

originally part of the

AFL.

In 1937, the AFL expelled all members of the CIO.

The CIO became an umbrella

organization for other

unions.

The Committee

for Industrial Organization

later became the Congress of Industrial

Organizations.

Committee For Industrial Organization:ContinuedThe CIO quickly

attracted thousands of

workers due to strikes in other

Unions.

In 1937, steel company workers

went on strike because of low

wages and to try to convince their employers to join

the CIO

This strike was not as

successful because the

Steel Companies did not recognize Unions until

1941.In 1955,the AFL and CIO

reunited together as

the AFL-CIO. The AFL-CIO was the largest

union in the United States.

The percentage of union workers

declined beginning in the 1950s.

In 1983, only twenty

percent of American workers

belonged to a union

“Keynesian Economics”

Temporary way to boost economy

through the government

Lowered taxes so people

spend more

Government spends more (new deal-

bridges and roads-labor

unions)

What it did: The Theory:Aggregat

ed Demand

total spending in the economy

answered the question of how

to generate growth despite rising wages

A Zero-Sum

GameIf one side gains,

the other side loses

if profits rose, wages must be kept down or

lowered.

“Keynesian Economics:” How did it Impact Recovery?

Keynesian Economics improved the economy through the First and Second New Deal.

Government thought they needed to slow things down and tried to reverse Keynesian Economics.

Interest rates were raised in 1936 but it was done too quickly. This lead to the recession of 1937-38.

The Slow Economic Recovery of 193719

33The USA economy began to recover in the second quarter 19

34-3

5The recovery was stalled

1935

-37By late

1935, a vigorous recovery was underway but ended when a new recession occurred in 1937

Recovery

In the early 1930s

American industries

were controlled by the NRA and AAA.

The government was not pleased

with workers not

joining labor

unions.

The supreme court ruled

the NRA unconstitutional in 1935

and the AAA in 1936.

However, by 1937,

labor unions were

recognized at many

large firms.

No longer under the control of

these organizations

, industry production expanded

and recovery began in

1935.

Labor cost increase

was contradicte

d by a monetary

policy.

Many workers

declined to join labor

unions because of

the recovery.

The Slow Economic Recovery of 1937

By June of 1937, this

slow recovery was over

and a new recession occurred.

Reasons

The Slow Economic Recovery of 1937Why Slow?

Disputed

Roosevelt's new deal caused

business leaders to question

whether their private

property rights and its income stream would be protected

they grew less willing to invest in

assets

Roosevelt had to use antitrust

laws to get businesses

to cooperate

This increased regulation

which reduced

businesses’ ability to act independentl

y

the majority of the

public was unsure of

this regime.

“Regime uncertaint

y”

The New Recession of 1937-38

• 33% declineIndustrial Production

• 35% declineWages

• 13% declineNational Income

Unemployment

• Rose 5% (40 million lost jobs)

What Happened Fall 1937 to Summer 1938?

The New Recession of 1937-38How did we get out of it?

“Roosevelt

Recession”

FDR asked Congress in April of 1938 to

support a substantial increase in federal

spending and lending (Keynesian Economics)

Congress supported

FDR’s request and the

recovery was soon underway

again

Why did this Recession Occur?During the slow economic recovery of 1937, The

government tried to reverse Keynesian Economics and two contradicting issues forced the country

back into a recession.Increase of Real labor Costs• labor unions became recognized at

large firms• New social Security taxes in 1936

and 1937• tax on undistributed corporate

profits *these three policies came together and costs jumped without increase in demand and firms had to reduce production and lay off workers.

Monetary Policy• Banks, in fear of bank runs, began

to hold large excess reserves.• if lending of these reserves

continued, massive inflation would occur

• to stop this from happening, officials and the Federal Reserve System doubled reserve requirements and whipped out excess reserves.

• Banks began to restore the lost reserves by reducing loans causing the stock of money to lower.

Wagner-Steagall Housing Act1937: The Wagner-Steagall Housing Act established the

United States Housing Administration responsible for making publicly subsidized housing.

For each new public housing unit created, a unit of substandard quality

must be removed.

Decisions were left to local authorities

Set very low maximum income requirements for public housing

residents.

Federal government provided funds

Ownership and operation of housing was the responsibility of local

authority.

• -ensured that the quality of housing would increase, but not the quantity.

• -Let communities decide weather they wanted public housing or not

• -Kept communities segregated• -Intended to alleviate fears that

public housing would compete with the private market

• -Led to high concentrations of poverty within public housing projects

Fair Labor Standards ActEstablish

ed:

Minimum wage

Overtime pay

Record keepingyouth

employment standards

affecting full-time and part-time workers in

the private sector and in

Federal, State, and local

governments

Did not Require:

vacation, holiday,

severance, or sick pay

meal or rest periods,

holidays off, or vacations

premium pay for weekend or holiday work

pay raises or fringe

benefitsa discharge notice, reason for

discharge, or immediate payment of final wages to terminated

employees

1938:

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