1940: Labor Legislation

No new major legislation relating to labor was enacted during 1940. Since most of the labor laws, adopted under the New Deal, were not much more than five years old, the country was just about ready to review the experience with this legislation. Public and official interest was, therefore, in the main concerned with improving the administration of the existing laws, discussing proposed amendments, and weighing the effects of decisions by the courts on the meaning and consequences of the various labor statutes.

Proposed Amendments to Social Security Act.

Probably the most widely accepted of our labor laws is the Social Security Act. This Act was, in several of its provisions, liberalized through amendments adopted in 1939, and it was inevitable that the Act would in time be further amended to secure the benefits of old age and unemployment insurance to groups not now covered in the law. Amendments to this effect were introduced by Senator Robert F. Wagner in the first session of the 76th Congress. His amended bill extends the coverage under the old age and survivors insurance system to some 10,000,000 additional persons, including 4,000,000 agricultural workers, 2,500,000 domestic servants, 750,000 employees of nonprofit institutions, and 1,500,000 employees of states, counties, and municipalities not now covered by pension plans. The bill also extends coverage under the unemployment insurance system to some 5,000,000 additional workers, including those employed in establishments having fewer than eight employees. No action was taken on this bill during 1940 but it stands a good chance of adoption in the near future.

Operation of the Fair Labor Standards Act.

The Fair Labor Standards Act (Wage and Hour Law), which had been in effect since October 1938 under Colonel Philip Fleming as Administrator, showed evidences of considerable improvement in administration and enforcement. A number of industry committees, provided for by the law, recommended minimum rates higher than the general statutory minimum of 30 cents an hour and they were put into effect. In October the 40-hour week became effective. The paramount issue raised by this law was the effect of the limitation of hours on defense production, some observers contending that the requirement of penalty overtime payments for hours worked in excess of 40 a week or 8 a day needlessly restricted output. But the administration refused to sacrifice the labor standards secured by this Act and denied that it reduced the nation's output. While, therefore, many private, as well as Government, plants worked from 48 to 60 hours a week, they were permitted to do so by paying the time-and-a-half rate for all hours above 40.

Opposition to the Wagner Act.

From the time of its passage in 1935, the National Labor Relations (Wagner) Act has been the most contentious of our national labor laws. The law and the method of its administration have been held responsible for fomenting labor trouble, abusing the employer, favoring the C.I.O. against the A. F. of L., and failing to curb unfair practices of organized labor. All efforts to amend the law or to change the administrative policy, however, ended in failure. In July 1939 the House of Representatives adopted a resolution authorizing an investigation of the Labor Relations Board and the Wagner Act. An investigating committee under the chairmanship of Congressman Howard W. Smith of Virginia began a sweeping investigation of the policies and acts of the Board. The majority report of this committee, issued Dec. 28, 1940, proved to be a complete indictment of the administration of the Act and a criticism of many of its basic provisions. The majority report also urged drastic amendments. But administration opposition blocked them. Mr. J. Warren Madden, however, was not reappointed as Chairman of the Board, but was succeeded by Professor H. A. Millis of the University of Chicago.

Defeat of the Walter-Logan Bill.

The Walter-Logan bill, a measure aimed to curb the powers of the many administrative agencies, including the Labor Relations Board, set up since 1933, met the same fate. Meanwhile, however, the Attorney-General's Committee on Administrative Agencies had, under the chairmanship of Dean Acheson, devoted several years to an exhaustive study of the whole problem of the proper functions of such agencies, the scope of their judicial and enforcement duties, and their relations to the courts. Mr. Acheson's report was eagerly awaited in the hope that it would afford a sober and fair appraisal of the problem and suggest appropriate legislative remedies.

Position of the Supreme Court.

The United States Supreme Court continued, as in the last few years, to uphold decisions and findings of the administrative boards and to give these agencies wide latitude in defining and applying their powers. The consequences of the recent trend in the Court's decisions and theory of constitutional law have been to expose practically all labor issues to Federal control under the power to regulate interstate commerce, to afford administrative agencies a free hand in interpreting the laws under which they operate, and to impose upon Congress the duty of scrutinizing the legislation it adopts much more closely than appears to have been the case with several of our recent Federal statutes. See also articles on CONGRESS OF INDUSTRIAL ORGANIZATIONS; STRIKES; TRADE UNIONS; WAGES, HOURS AND WORKING CONDITIONS.