May 13, 2008

An Eye-Witness Report

Social Security and Other Pro-Worker Laws
Were Enacted During the Great Depression

(Third of a 4-Part Series)

By Harry Kelber

One of the worst aspects of the Great Depression was the plight of old workers. Since there was no federal pension they could turn to in their old age, they had to keep working until they were too feeble and sickly even to report to their job. The alternative was to become a burden on their family, rely on charity or end up in a “poor house.”

The prevailing view, fostered by the conservatives in Congress and the business community, was that workers should have saved enough money during their working years to take care of their old age. The government didn’t owe them a lifetime pension, and besides, it hadn’t the money to pay for it. Old people, if they were penniless, could rely on bread lines, soup kitchens and public lodgings (“flop houses”) which could sustain them.

From 1929, when the AFL endorsed old-age pensions, the issue grew in political importance and saw the emergence of crackpot pension schemes that attracted considerable public attention. During 1933-34, Dr. Francis Townsend, a retired physician, proposed paying every person over sixty-five a monthly pension of $200, which had to be spent in 30 days. At the same time, Huey Long, governor of Louisiana, announced his “share the wealth” program, which would guarantee every citizen an annual income of $5,000.

We Won Social Security

The Social Security Act, which became law in August 1935, covered both the unemployed and the aged. It required employers and employees to pay a one percent payroll tax that would rise to three percent by 1948. However, the law exempted agricultural and shipping industries, as well as government, charity cultural, educational and domestic workers and enterprises with fewer than eight employees. This exclusion limited unemployment coverage to less than 22 million workers, fewer than half the number of gainfully employed.

Under Social Security, when a worker reached sixty-five, he would be entitled an annuity, the amount depending on the length of time he had worked and the size of his earnings. It was to be no less than $10 or more than $85 a month.

We Won Unemployment Insurance

Unemployed workers who wanted to gain the benefits of the Act, had to follow specific procedures. They had to report to a public employment office or other designated agency to record their condition. If during the next four weeks, the government agency failed to find them an acceptable job, they became eligible for unemployment compensation, amounting to one-half of their pay for 12 weeks.

Demanding positive reforms from Congress, more than a million and a half workers in various industries went on strike in 1934. There was a general strike in San Francisco, supported by 130,000 longshoremen, teamsters and workers from other trades. In Minneapolis, a strike of teamsters immobilized the city, with nothing moving except some milk, coal and ice trucks. Throughout the South, about 400,000 textile workers had stopped work to win some basic demands. There were strikes across the country at steel mills, coal mines, railroads and other worksites.

The Roosevelt administration and key members of Congress were alarmed; something had to be done to quell these strikes before they turned even more destructive. AFL President William Green told a congressional committee that only passage of Senator Wagner’s bill (which gave workers the right to join unions and bargain collectively) could prevent a labor explosion.

We Won Worker Rights

The Wagner Act, known formally as the National Labor Relations Act (NLRA) became law in July, 1935. It provided for the establishment of a new National Labor Relations Board of three experts to supervise and enforce the principle that the employees had the “right to self-organization, to join, form or assist labor organizations to bargain collectively through representatives of their own choosing, and to engage in concerted for the purpose of collective bargaining or other mutual aid and protection.”

Many well-known corporations did not take kindly to the passage of the NLRA. According to the La Follette Civil Liberties Committee, they accumulated arsenals of “industrial munitions,” weapons like machine guns, rifles, revolvers and tear gas that could be used by hired security guards in industrial disputes.

Investigation revealed that, between 1933 and 1937, industry had hired 3,781 such agents to join and spy on 93 unions. There was some evidence that a labor spy or stool pigeon could be found in every one of labor’s 41,000 locals—at a cost to industry of some $80 million annually.

We Won a Minimum Wage, Maximum Hours Law

Another major piece of New Deal legislation, the Fair Labor Standards Act, became a federal law in June 1938. It provided for the establishment of a minimum wage of 25 cents an hour, which would gradually be increased over seven years until it reached 40 cents an hour. It also established a 44-hour week, which would be reduced in three years to a 40-hour workweek.

Employees who worked more than the maximum were entitled to time and a half pay for overtime. The Act also banned the labor of children under sixteen in most occupations and under eighteen in hazardous industries.

Almost immediately, the wages of 300,000 workers who were receiving less than 25 cents an hour were raised, and the hours of some 1,300,000 workers who had been working more than 44 hours was shortened.

* * * * *

It is ironic that during the greatest economic depression our country has ever endured, labor was able to win the most important pro-worker legislation in its history. And let’s remember that it was “Big Government” that enabled the American people to stage their extraordinary comeback.

Final Article: “Winning with the CIO” will be posted May 16, 2008.

Visit our web site at