The political economy of a living wage

THE POLITICAL ECONOMY OF A LIVING WAGE Progressives, the New Deal, and Social Justice Pa lg ve St ud ie s in Am er ic an Ec on om ic Hi st or y Donald R Stabile Palgrave Studies in American Economic History Series Editor Barbara Alexander Babson College Babson Park, Massachusetts, USA Since the social upheavals of the 1960s and 1970s and the free-market resurgence of the 1980s, American society has been enmeshed in a continuing process of profound change Economic change has been oriented around the regulation of business, the information and telecommunication revolutions, and widening roles played by women and minority groups Authors in the innovation area will assess how America arrived at its current position of technological dominance that is nonetheless under pressure from institutions that arguably are not well-configured for the future Regulatory and legal historians will evaluate the reasons for concurrent regulatory breakdown and overreach in industries ranging from finance and health care to energy and land use Finally, researchers working at the intersection of society and economic history will explore continuing struggles around issues of gender, ethnicity, and family structure, and the distribution of income, wealth, and political power The series will address topics of interest to scholars, undergraduate and graduate students, and general readers drawn to the interplay of economics and cultural issues Series contributors will be economics and business historians, or economists working with historians More information about this series at http://www.springer.com/series/14650 Donald Stabile The Political Economy of a Living Wage Progressives, the New Deal, and Social Justice Donald Stabile St Mary’s College of Maryland, St Mary’s City, Maryland, USA Palgrave Studies in American Economic History ISBN 978-3-319-32472-2 ISBN 978-3-319-32473-9 DOI 10.1007/978-3-319-32473-9 (eBook) Library of Congress Control Number: 2016945665 © The Editor(s) (if applicable) and the Author(s) 2016 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG Switzerland ACKNOWLEDGEMENTS While a scholarly book such as this one is usually the result of individual effort, it also depends on the assistance of a community devoted to scholarship and research An author does not create the product of his research individually, but relies on others to help in carrying out a project I would like to acknowledge several types of help that I have received on this book First, I want to thank several resources that made the research for this book easier than it otherwise might have been The staff of the Franklin D. Roosevelt Library in Hyde Park, NY, was very helpful in setting me up as a researcher during a brief research trip The supervisory archivist of the library, Bob Clark, kindly answered many questions for me by e-mail both before and after that trip Shane MacDonald of the archival staff at the American Catholic History Research Center and University Archives at The Catholic University of America in Washington, DC, was equally helpful in my research in the John A. Ryan Papers Julie Day at the Willard Wirtz Library of the US Department of Labor organized my search of union publications very effectively While this type of archival research was helpful, even more valuable is the vast quantity of scholarly resources now available through the Internet Although these are all acknowledged by way of being cited in the bibliography, I especially want to thank Gerhard Peters and John T. Woolley of The American Presidency Project for creating a website of presidential papers that allowed me to locate references to a living wage in President Roosevelt’s speeches and other forms of communication The Social Security Administration’s website on the history of the Social Security Act contributed greatly to my writing of Chapter v vi ACKNOWLEDGEMENTS Second, several individuals helped me at various stages of the production of this book Bruce Kaufman supplied me with many useful suggestions regarding areas of coverage that I should add to the book, recommended readings to round out my knowledge of the issues related to the Progressive Era and the New Deal and generally provided encouragement that kept me going on the project My good friend and colleague, Andy Kozak, read and commented on several of the chapters I had written before he began his fight against the cancer that ended his life, way too soon Otherwise, this book would have been a collaboration with Andy and he would have appreciated John Ryan’s approach with much greater acumen than I have Another good friend, MaryAnn Liberatore, helped me get a large amount of research done at the Roosevelt Library by tackling the microfilmed archives while I looked through boxes of paper documents Finally, I wish to thank the staff at Palgrave Macmillan for their help and encouragement in publishing this book Their anonymous reviewer made many helpful suggestions that enabled me to see the connection between a living wage and the rise of consumerism in USA, which led me to recognize that the connection was ultimately severed when the Progressives focused heavily on consumerism As is always the case, none of the persons mentioned above are responsible for the use I made of their help and any flaws or errors contained in the book are mine alone CONTENTS 2 The Political Economy of a Living Wage A Living Wage and the Issues It Raises A Living Wage in the History of Political Economy The Progressive Era: John A. Ryan and the Right to a Living Wage Ryan and Social Justice Ryan’s New Deal Connections The Roosevelt Program of Economic Security Roosevelt and Social Justice The Rest of This Book 24 32 34 35 38 42 A Living Wage from World War I Through the Onset of the Great Depression Ryan Revises His Ideas World War I, National Planning, and a Living Wage The Period of Reconstruction Unions Favor the Living Wage Policy of the NWLB The Economy of the 1920s Herbert Hoover and the New Economy Economic Analysis of a Living Wage John Maurice Clark, Overhead Costs, and a Living Wage Two Business Leaders on a Living Wage Stuart Chase Finds Waste in the Economy Foster and Catchings Worry About Consumption 49 50 54 57 61 64 65 66 69 73 75 78 vii viii CONTENTS Paul H. Douglas and the Family Wage Jett Lauck Supports a Living Wage as a  New Industrial Revolution Hoover and the Great Depression Foster and Catchings and the Need for Consumption Unions Continue to Favor a Living Wage Economists Discuss the Depression The Swope Plan and a Living Wage Barbara Nachtrieb Armstrong and a Living Wage Policy Conclusion 80 82 83 85 86 87 88 90 92 Planning a Living Wage: The National Industrial Recovery Act The National Industrial Recovery Act Roosevelt, the NIRA, and a Living Wage The NRA and a Living Wage Roosevelt and a Living Wage Clark, Planning, and the NIRA Unions Favor the NIRA Father Charles Coughlin and Social Justice Douglas, the NIRA, and Minimum Wages Rexford Tugwell Downplays a Living Wage Ryan Speaks Up for the NRA A Brookings Study Criticizes a Living Wage Mordecai Ezekiel Promises $2500 a Year Charles Roos Looks at Wages under the NRA Conclusion 99 100 101 106 108 110 112 116 118 119 122 125 128 130 131 A Useful and Remunerative Job: The National Labor Relations Act The AFL Favors the NLRA Robert Wagner Explains the NLRA Congress, the NLRA, and a Living Wage Emil Rieve and Labor’s Demands from Government The Details of the NLRA Frances Perkins and a National Labor Policy William Green and Organized Labor’s Goals 139 140 141 142 144 145 147 148 CONTENTS ix Paul Douglas and Unions Collective Bargaining and a Living Wage Business Criticizes the NLRA Conclusion 150 151 152 156 Social Security: Protection from Poverty in Old Age and Unemployment Armstrong, Social Insurance, and a Living Wage The Townsend Plan The Nation’s Business Examines Unemployment Insurance Roosevelt Promises Social Security The AFL and the SSA Lewisohn Analyzes Unemployment Insurance Wagner Proposes Social Security Congress, Social Security, and a Living Wage The Details of the SSA Perkins on the Benefits of Security Douglas Explains Social Security A Business Perspective on Social Security The Committee on Economic Security Edwin Witte Defends Social Security Criticisms of Social Security The Nation Examines Social Security The New Republic on Social Security Abraham Epstein and the Failure of Social Insurance William Withers and the Social Security Compromise Carl Shoup on Clark’s Approach Conclusion 161 162 164 166 167 169 170 172 173 176 178 179 180 181 183 184 185 186 187 190 192 193 The Right to Earn Enough: The Fair Labor Standards Act Economic, Political, and Legal Problems of Minimum Wage Legislation Herbert J. Weber Proposes a Rising Minimum Wage Armstrong and the Minimum Wage as a Living Wage Perkins and the Need for a Minimum Wage Law The US Supreme Court Approves Minimum Wage Laws Douglas Reexamines a Living Wage 201 202 204 206 208 209 211 ... Wage: The National Industrial Recovery Act The National Industrial Recovery Act Roosevelt, the NIRA, and a Living Wage The NRA and a Living Wage Roosevelt and a Living Wage Clark, Planning, and the NIRA... Mutari, and Marilyn Power discuss the NIRA in their book, Living Wages, Equal Wages, but not mention Roosevelt’s inclusion of a living THE POLITICAL ECONOMY OF A LIVING WAGE wage as a goal of the. .. ECONOMY OF A LIVING WAGE 17 Moreover, the growth of capital had another impact on the subsistence wage that Marx found in his analysis of machinery Machines had a great advantage of reducing the