1942: Labor Legislation

With the country engaged in the greatest war of its history, there was little time or occasion for adopting new labor laws or amending the old. Such changes as occurred in the labor laws of the country were the result of decisions of war administrative agencies, such as the rulings of the War Labor Board affecting wages and the closed shop, and of state labor administrations, which suspended or modified state labor laws regulating the work of women and children in order to ease the existing severe shortages of labor.

Pending recommendations for expanding the country's social insurance system were again held in abeyance. It was known that the Social Security Administration and other agencies had submitted to the President voluminous reports on the subject and recommendations for improving and elaborating the system. But presumably it was not considered advisable to push the matter during war-time. The publication in the fall of 1942 of the Beveridge report, embodying plans for a thoroughgoing reorganization and expansion of British social insurance stimulated new interest in the whole question in this country and made it certain that some action in this direction would be taken either before the war ended or early in the post-war years.

1941: Labor Legislation

Aside from legislation affecting labor included in purely war measures, such as the provision of the Selective Service Act empowering the Government to take over defense plants on strike, the year 1941 was free of important additions to the labor law of the country. In many fields, developments in defense and war activities aroused considerable interest in legislation, but action was deferred. Interruptions to munitions production by strikes proved the most fertile source of proposed legislative action. Congress considered and debated a variety of measures dealing with strikes and organized labor. Many of these proposals were concerned with the legality of strikes against defense production and were aimed to postpone or prohibit strikes. Another type was aimed to curb the excesses of organized labor, to ensure the more democratic management of unions, and to devise means which would require unions to expose their finances to public audit. But all such measures, largely because of opposition to them by the President and his advisers, failed of enactment.

As in the year before, much consideration was given to our social security legislation. The prospect of difficult problems of readjustment in the post-war period kept alive proposals to extend the coverage of existing laws and, perhaps, to raise the contributions to the social insurance funds by employers and employees. To ensure closer control over the country's labor supply, the state employment services were all centralized and brought under Federal authority. Many regarded this action as a first step toward federalizing the existing state unemployment insurance administrations, a proposal which was indeed made by high Federal officials.

Another year passed without legislation designed to amend or reform the statutes from which such administrative agencies as the National Labor Relations Board derived their authority. In January the Attorney General's committee on administrative agencies made its report and among the reforms it proposed was the separation of the judicial and prosecutive functions of such agencies. But Congress, having defeated the Walter-Logan Bill in 1940, took no action in this regard in 1941. The National Labor Relations Board, regarded by many critics as the principal offender against accepted judicial processes, made some reforms in its internal management, but it still arrogated to itself unusual powers.

In spite of the great pressure for war production, the hours provisions of the Fair Labor Standards Act remained intact. As the work-week was increased, employees received penalty overtime rates for more and more hours. The Administrator of this Act, meanwhile, extended its provisions to industries and occupations hitherto regarded as intra-state, and in this he was in the main sustained by the courts.

Decisions of the United States Supreme Court continued to uphold the constitutionality of measures of social reform and the acts of administrators charged with enforcing these reform laws. In February the Court affirmed the constitutionality of the Fair Labor Standards (wages and hours) Act. In most of its decisions dealing with the powers of the Labor Relations Board, it continued to allow the Board the widest of latitude in interpreting and applying the Wagner Act. One of the most far-reaching judgments was in the Phelps-Dodge case, where the Court sustained the Board's decision holding it an unfair practice to deny a job to an employee because of union membership, even though he had not before worked for the employer in question. The Court's rulings in cases involving the application of the Sherman Anti-Trust Act to union policies and actions were most favorable to the unions and seemed to render them immune to the terms of this law. See also LABOR ARBITRATION; STRIKES; UNITED STATES: Supreme Court Decisions; WAGES, HOURS AND WORKING CONDITIONS.

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.

1939: Labor Legislation

Federal.

With the passage in 1938 of the Fair Labor Standards Act and the Railroad Unemployment Insurance Act, the period of expansion in Federal labor legislation had for the time being come to an end. No major law of this class was enacted by Congress in 1939. Developments during the year were concerned with the revision of the Social Security Act, problems of administration, and the debate over proposed amendments to the National Labor Relations Act.

Social Security Act Amendments.

The Social Security Act Amendments were signed by the President on Aug. 10. The most important revision was made in the part of the Act dealing with Old Age Insurance. The amendments advanced and liberalized the old-age benefits and reduced the taxes of both employers and employees. The amended law provided that the payment of monthly benefits shall begin Jan. 1, 1940, two years earlier than originally scheduled. The rate of benefits for those retiring in the early years are increased and monthly benefits are provided for the aged wives and dependent children of annuitants and to the survivors of insured wage-earners. The coverage of the old-age insurance system is extended to seamen on American vessels, employees of banks building and loan associations, and similar organizations. Wage taxes of one per cent each, payable by workers and employers, are maintained at that rate for the next three years instead of being raised to 1½ per cent, as originally provided. The combined effect of reducing contributions and raising benefits has been to meet the criticism directed against the accumulation of a huge old-age insurance reserve.

The changes made in other parts of the Act were not so considerable. Some slight extension of the coverage of the unemployment compensation laws was made and an estimated saving to employers of about $65,000,000 a year was effected by a change in the law which exempted from the pay-roll tax that part of an employee's wage or salary in excess of $3,000 a year. Benefits under the public assistance programs were generally liberalized, and in the case of grants to the states for the aid of the indigent aged and blind, the Federal Government raised its matching grant from maximum of $15 to $20 a month.

Unemployment Compensation.

See UNEMPLOYMENT INSURANCE; UNITED STATES: Relief and Security.

Administration of Fair Labor Standards Act

In June 1939, the Fair Labor Standards Administration completed the first year of its existence. The first Administrator of the Act, Elmer F. Andrews, resigned before the close of the year and was replaced by Colonel Philip Fleming. Although the minimum wage rates and maximum hours, fixed by the law, were widely adopted there was evidence of frequent violation and accumulation of complaints in the offices of the Administration. The statutory minimum wage of 25 cents an hour, which prevailed in the first year, was raised on Oct. 24 to 30 cents an hour and the maximum hours per week were reduced from 44 to 42. It is estimated that some 650,000 employees will be affected directly by the advance in the minimum wage and that some 2,400,000 workers, now employed at more than 42 hours, will be affected by the new hour provisions. In an increasing number of industries, including by the end of 1939 the cotton, hosiery, wool textile, apparel, hat, millinery, shoe and knit-goods industries, industry committees, as provided by the law, have recommended minimum rates of wages ranging from 32.5 to 40 cents an hour. (See WAGES, HOURS AND WORKING CONDITIONS.)

Pressure for Revision of Wagner Act.

The piece of Federal labor legislation which has been most widely discussed and considered is the National Labor Relations (Wagner) Act and there are signs that this statute will be shortly amended. Suggested amendments touch this law at many points. The A. F. of L. has been anxious to limit the power of an administrative board to fix the bargaining unit. In common with employers and other critics of the present situation, the Federation has deplored existing administrative procedures which confuse the judicial and executive functions of the Board and has advocated some method of separating these functions. Limitations on the employer's right to a free expression of opinion and to frank discussion with his employees have been another source of dissatisfaction. The employers particularly have been urging revisions in the law which would bar unfair practices by labor as well as by employers and management. The Administration in Washington has so far consistently and effectively opposed any tampering with the Wagner Act. But the pressure for revision has recently grown much stronger. When amendments are made, they will in one form or another deal with these issues.

State Labor Legislation.

In the states, the most important legislation of the year was the labor relations laws enacted in Wisconsin, Pennsylvania, Minnesota and Michigan. These laws reflected a strong reaction against the wave of strikes and violence in 1937, widespread local dissatisfaction with the Wagner Act and the Labor Relations Board, and changes in state Administrations. While the provisions of these laws are not identical, they have in common the curbs they impose upon certain union practices and the prohibition of unfair practices by both labor and employers. The Wisconsin Act, for example, excludes employees who have been found guilty of an unfair labor practice from voting in representation elections. The check-off of union dues, unless authorized in writing, is defined as an unfair practice of employers. Coercion and intimidation, mass picketing, secondary boycotts, violation of a collective bargaining agreement, picketing or boycotting unless a strike is called, and taking unauthorized possession of the property of an employer are defined as unfair practices of employees. Labor representatives, moreover, are required to keep a record of financial transactions and make reports to members. Both the Wisconsin and Pennsylvania acts drastically modify the anti-injunction law by permitting the issuance of injunctions in many types of labor disputes.

The enactment of a workmen's compensation law in Arkansas, authorized by an amendment to the State Constitution adopted the year before, completes, with the exception of Mississippi, the roster of American States which provide compulsory insurance against industrial accidents. (See also CHILD LABOR.)

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.