1938: Labor Legislation

Federal.

The Fair Labor Standards Act, approved by the President, June 25, 1938, and the Railroad Unemployment Insurance Act, approved the same date, were the most important pieces of Federal legislation adopted in the last year. They continued to add to the great body of Federal legislation for the regulation of working conditions, the development of which began with the entrance into office of this administration in 1933.

Fair Labor Standards Act.

The Labor Standards Act was the first national minimum-wage and maximum-hour law of broad scope ever enacted in this country. Its passage reflects the progressive liberalization of the powers of the Federal Government, granted by recent decisions of the United States Supreme Court; the change in the membership of the Court; and the strong tendency toward centralization in the public regulation of economic and social conditions.

In the declaration of policy of the Act, Congress declared that 'the existence, in industries engaged in commerce or in the production of goods for commerce, of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers' causes such labor conditions 'to spread among the several states,' 'constitutes an unfair method of competition,' 'leads to labor disputes burdening and obstructing commerce,' and 'interferes with the orderly and fair marketing of goods in commerce.'

The provisions of the Act fixed minimum wages of 25 cents an hour the first year, 30 cents the next 6 years, and 40 cents after the expiration of 7 years. Maximum hours of work per week were set in the Act at 44 the first year, 42 the second, and 40 in the third and thereafter. In addition, the Law provides for the creation of industry committees, composed of an equal number of employer, employee, and public representatives. The function of these committees is to study conditions in the industries for which they are set up and to recommend to the Administrator of the Act the highest minimum wage an industry can pay, compatible with its prosperity and the prospects for employment. When such a committee reports its recommendations, the Administrator is empowered to put them into effect provided he finds that they are made in accordance with the law and are supported by the necessary evidence. Before the end of 1938, several industry committees had been set up in various parts of the clothing and textile industries.

In addition to the provisions regarding wages and hours, the Act revived Federal control over child labor by providing that 'no producer, manufacturer, or dealer shall ship or deliver for shipment in commerce any goods produced in an establishment situated in the United States in or about which . . . any oppressive child labor has been employed.' Oppressive child labor is defined as the employment of children under 16 years of age in any occupation, or the employment of persons between the ages of sixteen and eighteen years in occupations found to be particularly hazardous.

Administration of the Act is lodged in an Administrator, who became director of the new Wage and Hour Division of the United States Department of Labor. Elmer F. Andrews formerly Industrial Commissioner of the State of New York, was appointed the first Administrator. Employers who violate the Act are, upon conviction, subject to a fine of $10,000, or to imprisonment for not more than six months, or both. They are also liable to the employees affected 'in the amount of their unpaid minimum wages, or their unpaid overtime compensation . . . and in an additional equal amount as liquidated damages.'

Unemployment Insurance Act.

The Railroad Unemployment Insurance Act extended to railroad employees a plan of compulsory unemployment insurance similar in its broad outlines and purposes to the system of unemployment insurance provided for employees in other industries by the Social Security Act of 1935. The railroad system of unemployment insurance was made independent of the Social Security Board and was placed under the jurisdiction of the Railroad Retirement Board, the agency created to administer the old-age pension law for railroad employees. The plan is financed by a tax on employers amounting to 3 per cent of the wages of employees earning not in excess of $300 per month. The provisions of the Act apply to employees of carriers engaged in interstate commerce. Benefit payments begin after June 30, 1939, and are paid for each day of unemployment in excess of 7 during any half month. Maximum benefits in a year may not exceed 80 times the daily rate, the highest of which is $3. In its general administrative features, the Act is substantially similar to most compulsory unemployment insurance laws.

Federal Maritime Labor Board.

The only other important Federal legislation affecting conditions of labor was the amendment to the Merchant Marine Act of 1936, creating a Federal Maritime Labor Board. Approved June 23, 1938, in response to the desire for more peaceful labor relations in the maritime industry, this amendment established a labor board, whose prime function it is to furnish facilities of mediation and voluntary arbitration to employers and employees in that industry.

State Labor Legislation.

In the states the progress of the past few years was continued. Minimum wage laws were enacted in Kentucky and Louisiana, making altogether 25 states and the District of Columbia and Puerto Rico with such legislation on their statute books. With the passage of old-age pension laws by Virginia and Puerto Rico, in 1938, all states and Alaska, Hawaii, and Puerto Rico now have this type of law. A constitutional amendment authorizing the enactment of a workmen's compensation law in Arkansas paves the way for the adoption of such a measure. When the Arkansas legislature acts, Mississippi will remain the only American state without provision for compulsory insurance against industrial accidents. It is clear from this summary survey of state labor legislation that state governments are rapidly enacting a formidable series of laws for the regulation of local working conditions.

Amendments and Provisions Still under Discussion.

Much of the discussion of labor legislation during 1938 was concerned with amendments to the existing Social Security and National Labor Relations Acts. A commission appointed by the President canvassed the practicability of enacting legislation to provide medical care for the low-income groups of our population. Because, also, of the continuing heavy burdens of expenditures for the relief of the unemployed and the headway made by the Townsendites and other groups advocating liberal pension payments to the aged, the administration has been studying the policy of extending the provisions of the Social Security Act to groups, such as farm labor, domestic servants, and the like, not now covered by the law, and liberalizing the scales of unemployment benefit and of old-age pensions and insurance.

Proposed amendments to the Labor Relations Act have been sponsored mainly by employers and the A.F. of L. They became one of the several crucial issues in the political campaigns of November 1938. In the main, the purpose of the amendments most likely to be seriously considered are aimed at revising the Board's procedure, limiting its power to determine the bargaining unit, and making it obligatory upon the Board to receive certain types of complaints from employers.

International Labor Office.

The Federal Government continued during the year its close ties with the International Labor Office in Geneva. These were strengthened by the election of John Winant, former Governor of New Hampshire, as Director of that Office. American representatives at the Office were active participants in its many conferences and investigations. The United States Senate also ratified five maritime labor treaties, the first I.L.O. conventions to be ratified by this country.