The Second New Deal

The Second New Deal

As the 1935 legislative session began, the US economy was more stable than it had been when Roosevelt took office. However, there had not been any significant economic recovery, and unemployment levels remained near their 1932 peak. Roosevelt and Congress agreed it was time to move beyond the limited federal jobs programs that were created in 1933 and 1934. The short-lived CWA had created the number of jobs needed to spur recovery, but it had been dismantled due to the haphazard nature of the program and escalating costs which expanded well beyond the CWA’s anticipated budget. In contrast, job growth had been slow within the PWA due to the planning required before beginning major construction projects. In addition, the PWA was under the management of the frugal Harold Ickes. Although he used PWA funds efficiently, critics believed Ickes moved too slowly in creating jobs.

In April 1935, Congress approved a massive spending bill that authorized over $4 billion in new projects. Among the programs this bill created was the National Youth Administration. This agency provided part-time work for college students and was designed to both finance student education and delay the entry of young adults into the full-time labor market. Funds were also allocated for the creation of the Rural Electrification Administration, an agency that financed publicly owned electric cooperatives that provided power to most rural communities for the first time. The flagship program of the “big bill,” as Roosevelt called it, was the Works Progress Administration (WPA)A federal jobs program created in 1935 and administered by Harry Hopkins. The WPA spent an estimated $12 billion and employed over 8 million people during its eight years of existence, although usually only about 1.5 million were employed at any given time. The goal of the WPA was to be an employer of last resort for those who otherwise would not have jobs and would presumably find their way onto relief roles. Most WPA workers were engaged in construction projects, although the WPA also employed writers, musicians, artists, and actors through various programs., which together with future allocations would spend $11 billion over the next eight years.

The first priority of the WPA, the president declared, was to transfer an estimated 3.5 million Americans from the relief roles to the payroll of federal works projects. Roosevelt declared that the government “must and shall quit this business of relief.” Offering direct cash payments was “to administer a narcotic,” Roosevelt believed. In contrast to the purpose-driven citizens who spent each day engaged in honest labor, Roosevelt suggested that the dole created “a spiritual and moral disintegration fundamentally destructive to the national fiber.”

The goal of the WPA was to fund only useful projects that provided wages large enough to offer material security but not so large as to draw workers away from employment in the private sector. The WPA employed 3 million people in its first year and over 8 million during its eight years in existence. During that time, the WPA built 600,000 miles of roads and highways and tens of thousands of buildings and bridges as well as many other projects.

The WPA was not without its critics. The decision to pay lower wages limited the number of experienced foremen, while many of the workers feared that completion of their present project might mean unemployment. Eager to not work themselves out of a job, workers dallied; the WPA was lampooned as standing for “We Poke Along” or “We Putter Around” by those who observed WPA crews taking breaks on the side of a road.

Figure 7.15

Eleanor Roosevelt visits a WPA worksite in Des Moines, Iowa, in 1936.

Others argued that WPA contracts and jobs were being used as a political football by the Democratic Party. With the exception of New York and a few other cities with Republican administrations, Democratic politicians were usually the ones that decided what projects were built and by whom. Machine politics often controlled these decisions and sometimes led to brazen abuses. For example, the Democratic mayor of Memphis required WPA workers to make political contributions, while Chicago’s notorious Democratic machine exacted tribute with little more finesse than the notorious crime bosses that influenced Chicago politics. New Jersey received over $400 million in WPA contracts, but workers in the Garden State were expected to contribute 3 percent of their weekly pay to the Democratic Party. In many of these cases, expectations that government workers kick back some of their pay to local political machines were different primarily in that these paychecks were being funded by taxpayers across the nation rather than city or state treasuries.

The WPA also received criticism from some individuals who believed that four smaller WPA programs designed to employ writers, musicians, actors, and artists were not a wise use of federal revenue. Others defended these programs as ensuring the preservation of history and the arts. The Federal Writers Project supported literature and the humanities and commissioned hundreds of historical research projects, as well as a popular series of state and local guidebooks. One of its most ambitious programs sought to document the history of every state and territory. Another noteworthy project was the preservation of history through over 2,000 interviews with individuals who had grown up in slavery. The research for these two projects remains the largest and most significant collection of primary source material on state and local history and the history of slavery.

Figure 7.16

William Gropper's "Construction of a Dam" (1939). One of more than 100,000 pieces of public art that were sponsored by the WPA.

The Federal Music Project provided over 200,000 performances and created archives of uniquely American music from Native American reservations to the hills of Appalachia. The Federal Theater project sponsored performances in major cities and created traveling troupes that brought musicals, comedies, and dramas to millions throughout rural America. Perhaps the most famous of the four, the Federal Art Project, commissioned over 100,000 paintings, murals, and sculptures. It also administered an outreach program that funded community art centers and subsidized art classes in public schools. Among its most memorable creations were hundreds of posters promoting various WPA programs that soon became the public face of the entire agency.

Eleanor Roosevelt and others within the president’s circle of advisers supported these projects because they were concerned that the Depression had eliminated many of the jobs once available to artists and musicians. If left entirely to the dictates of the free market during a prolonged depression, the defenders of the WPA programs believed, an entire generation of writers, researchers, artists, actors, and musicians would be lost. They argued that the long-term consequences of such an occurrence would be catastrophic because there would be no one to teach the next generation of artists and musicians once the economy recovered.

Roosevelt also backed the Social Security ActA federal law creating old-age pensions for certain retired workers and their dependents that was financed through taxes paid by employers and employees. The act also provided matching federal grants for states to create unemployment insurance, a system of financial compensation for injured workers, and direct financial aid for impoverished families with children. in August 1935; the act created a government insurance program for the elderly, the temporarily unemployed, and the permanently disabled. Payments were set to begin in 1940 and were financed by a special fund that drew money from a modest tax paid by employers and workers. Initial benefits were also modest. The Roosevelt administration did not intend for Social Security payments to be the primary source of retirement income; rather, the program was designed to provide a guaranteed minimum level of security and the foundation of an individual’s retirement fund.

Later generations would increase the benefit from the initial average of $20 per month in ways that indicated a different interpretation of the program. The result of these increases and the growing number of retirees in comparison to workers has created challenges in modern times, yet Social Security remains the most popular welfare program initiated during the New Deal. However, because the plan withdrew money from workers and employers for several years before making payments to beneficiaries, Social Security did not stimulate economic recovery until the first payments were made. In addition, Social Security did not cover domestic or agricultural workers, which left many women and minority families without protection.

A third major provision of the Second New Deal of 1935 was the National Labor Relations Act, more commonly known as the Wagner ActThe common name given to the National Labor Relations Act due to its sponsorship by New York senator Robert Wagner. The law protected the right of workers to create unions and bargain collectively with employers. The law also created the National Labor Relations Board to enforce its provisions.. The NRA had included provisions that guaranteed the right of workers to join unions that would collectively negotiate wages and other terms of employment with their employer. Most employers disregarded these provisions, and the NRA itself had been declared unconstitutional for unrelated reasons. In response, the Wagner Act reinstated the principle of government support for workers who sought to bargain collectively. The law prohibited discrimination against union members and required employers to recognize the legitimacy of a union if the majority of their workers were members. The act also prohibited employers from firing workers after a strike and other common actions that had been used to intimidate workers and union members in the past. Equally important, the Wagner Act created the National Labor Relations Board (NLRB) to arbitrate disagreements between unions and employers.

Some labor leaders feared the Wagner Act was still too ambiguous in some regards and, the NLRB lacked the power to do more than facilitate arbitration between employers and union representatives. “All the bill proposes to do is escort [labor leaders] to the door of their employer and say ‘here they are, the legal representatives of your employees,’” explained Massachusetts senator David Walsh. Ironically, Walsh’s somewhat tongue-in-cheek remark would later be cited by attorneys representing business interests who sought to limit the collective-bargaining provisions of the Wagner Act. In the next two decades, however, the law bolstered both unions and the Democratic Party. Partially due to the popularity of the Wagner Act among union members, the Democrats would enjoy the support of organized labor for the next half century.

The Wagner Act provided federal support for unions and the concept of workers’ right to bargain collectively. As a result, union membership expanded rapidly. In some fields, the number of strikes and other protests also increased. United Mine Workers leader John L. LewisPerhaps the most influential and controversial labor leader in US history, Lewis led the United Mine Workers and helped create the Congress of Industrial Organizations. Lewis proved extremely effective at winning higher wages for miners, but drew the ire of most Americans for his willingness to call labor strikes during World War II. demonstrated the new spirit of labor militancy by challenging the AFL and its reluctance to organize the unskilled or semiskilled workers. Although these laborers constituted a majority of the US workforce, they were not members of craft unions and therefore not likely to be represented by any of the various unions belonging to the AFL. Lewis believed that because the nature of labor had changed, mechanization was challenging the importance of the craft unions. As a result, he believed that no laborer would be protected as long as only skilled workers were organized. In response, Lewis organized a federation of unions that sought to represent all workers within a particular sector, such as mining or steel production.

Lewis and other labor leaders created the Congress of Industrial Organizations (CIO)A federation of unions representing primarily unskilled and semiskilled laborers that was created in 1935. United Mine Workers leader John L. Lewis led these unions out of the American Federation of Labor in 1938, although the two labor federations would merge during the 1950s., which soon emerged as a rival federation of the AFL. Many unions that were part of this new federation were also much more aggressive in their tactics. For example, the United Auto Workers launched a sit-down strike in which they occupied several General Motors factories. Unlike previous strikes of this nature, federal and state governments did not send military forces to crush the strike, and GM was soon forced to negotiate with UAW leaders. Similar activism led to a union contract providing higher pay and benefits for employees of US Steel.

Figure 7.18

Although the number of strikes declined during the first years of the Depression, unions were strengthened by the Wagner Act. Workers pictured in this 1937 photo are participating in a sit-down strike in a Chevrolet plant in Flint, Michigan.

With workers throughout various industries belonging to the CIO, union leaders attempted to force other steel plants in Chicago to accept a similar contract for their workers. Members of various unions within the CIO who were not workers at the steel plants in question joined with their fellow steelworkers in a mass demonstration. Tensions were high, and several Chicago police fired upon the unarmed crowd, killing ten and severely injuring thirty. Labor leaders referred to the May 30, 1937, tragedy as the Memorial Day Massacre, while most media accounts presented the crowd as lawless and sympathetic to Communism. The two opposing perspectives reflected unresolved views about the limits of police authority and worker solidarity.

The New Deal was not only popular with union workers. In fact, it proved so popular with various other groups that the American two-party system would be fundamentally transformed during the 1930s. The New Deal CoalitionA term referring to the tendency of union workers, Southern whites, Northern blacks, Catholics, liberals, and Jews to support the Democratic Party in the wake of the New Deal. referred to the combined electoral strength Democrats enjoyed among various groups until divisions regarding the civil rights movement led white Southerners to embrace the Republican Party. Between the 1930s and the 1960s, however, white Southerners who had traditionally voted for the Democratic Party and rallied behind job-producing projects such as the WPA and TVA were even more likely to produce reliable Democratic majorities.

Northern workers were equally loyal to the Democrats due to the Wagner Act and subsequent support for prolabor legislation. Northern African Americans increasingly switched their support from the Republican Party of Reconstruction to the Democratic Party of the New Deal, which provided federal jobs that officially offered equal wages regardless of race. Working-class women’s leaders also backed the Democrats due to their tentative support for equality in the labor market and the inclusion of women in leadership positions. Jews and Catholics likewise voted Democratic for many of the same reasons. Finally, liberals and the intelligentsia tended to support the New Deal Coalition due to the Democratic Party’s tendency to be more supportive of programs that bolstered federal spending for education and the welfare state. The New Deal Coalition did not eliminate divisions of race, ethnicity, religion, region, or social class. As a result, these tensions regularly threatened to split the Democratic Party. However, for the next thirty years, the nation experienced unprecedented material prosperity and Democratic leaders generally avoided any controversial positions that might divide their supporters.