Coronavirus: a return to normal is not good enough

We shouldn’t be satisfied with a return to normalcy. We need a “new normal.”

We are now in a recession, one triggered by government ordered closures of businesses producing nonessential goods and services, an action taken to limit the spread of the coronavirus. In response, Congress has approved three stimulus measures which legislators hope will keep the economy afloat until the virus is contained and companies can resume business as usual.

Many people, rightly criticizing the size, speed, and aims of these measures, have called for a new, improved stimulus package.  But what is getting far less attention, and may be the most important thing to criticize, is the notion that we should view a return to normalcy as our desired goal.  The fact is we also need a new economy.

The old normal only benefited a few

The media, even those critical of the Trump administration, all too often showcase economic experts who, while acknowledging the severity of the current crisis, reassure us that economic activity will return to normal before too long.  But since our economy increasingly worked to benefit a small minority, that is no cause for celebration.

Rarely mentioned is the fact that our economy was heading into a recession before the coronavirus hit. Or that living and working conditions for the majority of Americans were declining even during the past years of expansion. Or that the share of workers in low-wage jobs was growing over the last fifteen years.  Or that Americans are facing a retirement crisis.  Or that life expectancy fell from 2014 to 2017 because of the rise in mortality among young and middle-aged adults of all racial groups due to drug overdoses, suicides, and alcoholism.  If existing patterns of ownership and production remain largely unchanged, we face a future of ever greater instability, inequality, and poverty.

The economic crisis

The failings of our current system are only accentuated by the crisis. Many analysts are predicting an unprecedented one-quarter decline in GDP of 8 percent to 10 percent in the second quarter of this year.   The overall yearly decline may well be in the 5-7 percent range, the steepest annual drop in growth since 1946.

The unemployment rate is soaring and may reach 20 percent before the year is out.  A recent national survey found that 52 percent of workers under the age of 45 have already lost their job, been placed on leave, or had their hours cut because of the pandemic-caused downturn.

As a consequence, many people are finding it difficult to pay rent.  Survey results show that only 69 percent of renters paid their rent during the first week of April compared with over 80 percent during the first week of March.  And this includes renters who made partial payments.  Homeowners are not in much better shape.

Our unemployment insurance system has long been deficient: benefits are inadequate, last for only short period of time, and eligibility restrictions leave many workers uncovered. As of year-end 2019, the average unemployment insurance check was only $378 a week, the average duration of benefits was less than 15 weeks, and fewer than one-third of those unemployed were drawing benefits.

Now, the system is overwhelmed by people seeking to file new claims, leaving millions unable to even start their application process.  Although recent federal legislation allows states to expand their unemployment insurance eligibility and benefits, a very large share of those losing their jobs will find this part of our safety net not up to its assigned job.

A better crafted stimulus is needed

In response to the crisis, policy-makers have struggled to approve three so-called stimulus measures, the March 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act being the largest and most recent.  Unfortunately, these efforts have been disappointing.  For example, most of the provisions in the CARES Act include set termination dates untied to economic or health conditions. Approved spending amounts for individuals are also insufficient, despite the fact that Treasury Secretary Mnuchin believes the $1200 provided to most Americans as part of the CARES Act will be enough to tide them over for 10 weeks.

Also problematic is that not all CARE funds are directed to where they are most needed.  For example, no money was allocated to help states maintain their existing Medicaid program eligibility and benefit standards or expand health care coverage to uninsured immigrants and those who lose their job-based insurance.  And no money was allocated to state and local governments to help them maintain existing services in the face of declining tax revenues. Perhaps not surprisingly, the largest share of CARES approved spending is earmarked for corporate rescues without any requirement that the funds be used for saving jobs or wages.  In sum, we need another, better stimulus measure if we hope to minimize the social costs of our current crisis.

Creating a new normal

Even a better stimulus measure leaves our economy largely unchanged.  Yet, ironically, our perilous situation has encouraged countless expressions of social trust and solidarity that reveal ways to move forward to a more humane, egalitarian, and sustainable economy.  This starts with the growing recognition by many Americans that social solidarity, not competitive individualism, should shape our policies. People have demonstrated strong support for free and universal access to health care during this crisis, and we can build on that to push for an expansive Medicare for All health care system.  People also have shown great solidarity with the increasingly organized struggles of mail carriers, health care workers, bus drivers, grocery shoppers, cashiers, and warehouse workers to keep themselves safe while they brave the virus for our benefit.  We can build on that solidarity to push for new labor laws that strengthen the ability of all workers to form strong, democratic unions.

There is also growing support for putting social well-being before the pursuit of profit.  Many people have welcomed government action mandating that private corporations convert their production to meet social needs, such as the production of ventilators and masks.  We can build on this development to encourage the establishment of publicly owned and operated industries to ensure the timely and affordable production of critical goods like pharmaceuticals and health care equipment. And many people are coming to appreciate the importance of planning for future crises.  This appreciation can be deepened to encourage support for the needed transformation of our economy to minimize the negative consequences of the growing climate crisis.

We should not discount our ability to shape the future we want.

The Green New Deal and the State: Lessons from World War II—Part II

There is growing interest in a Green New Deal, but far too little discussion among supporters about the challenging nature of the required economic transformation, the necessary role of public planning and ownership in shaping it, or the strategies necessary to institutionalize a strong worker-community voice in the process and final outcome. In this two-part series I draw on the experience of World War II, when the state was forced to direct a rapid transformation from civilian to military production, to help encourage and concretize that discussion.

In Part I, I first discussed the need for a rapid Green New Deal-inspired transformation and the value of studying the U.S. experience during World War II to help us achieve it. Then, I examined the evolution, challenges, and central role of state planning in the wartime conversion to alert us to the kind of state agencies and capacities we will need to develop. Finally, I highlighted two problematic aspects of the wartime conversion and postwar reconversion which we must guard against: the ability of corporations to strengthen their dominance and the marginalization of working people from any decision-making role in conversion planning.

Here in Part II, I discuss the efforts of labor activists to democratize the process of transformation during the war period in order to sharpen our thinking about how best to organize a labor-community movement for a Green New Deal.  During this period, many labor activists struggled against powerful political forces to open up space for new forms of economic planning with institutionalized worker-community involvement.  The organizing and movement building efforts of District 8 leaders of the United Electrical, Radio & Machine Workers of America (UE), as described by Rosemary Feuer in her book Radical Unionism in the Midwest, 1900-1950, stand out in this regard.  Although their success was limited, there is much that we can learn from their efforts.

Organizing for a worker-community planned conversion process

District 8 covered Missouri, Iowa, Kansas, Arkansas, southern Indiana and southern and western Illinois, and UE contracts in that area were heavily weighted towards small and medium sized firms producing mechanical and electrical products.  As the government began its war time economic conversion in 1941, its policy of suppressing civilian goods and rewarding big corporations with defense contracts hit the firms that employed UE members hard.

The UE response was to build a labor and community-based effort to gain control over the conversion process. In Evansville, Indiana, the UE organized a community campaign titled “Prevent Evansville from Becoming a Ghost Town.”  As Feurer explains,

District 8’s tentative proposal called upon union and civic and business leaders to request the establishment of a federal program that would “be administered through joint and bona fide union-management-government cooperation” at the local level. It would ensure that before reductions in the production of consumer goods were instituted, government must give enough primary war contracts and subcontracts to “take up the slack” of unemployment caused in cities such as Evansville. It also proposed that laid-off workers would get “first claim on jobs with other companies in the community,” while excessive overtime would be eliminated until unemployment was reduced.

District 8 organizers pressed Evansville’s mayor to gather community, labor, and business representatives from all over the Midwest to discuss how to manage the conversion to save jobs.  They organized mass petition drives and won endorsements for their campaign from many community groups and small businesses.  Persuaded, Evansville’s mayor contacted some 500 mayors from cities with populations under 250,000 in eleven midwestern states, requesting that they send delegations of “city officials, labor leaders, managers of industry and other civic leaders” to a gathering in Chicago.  Some 1500 delegates attended the September meeting.

The conference endorsed the UE’s call for a significant role for labor in conversion planning, specifically “equal participation of management and labor in determining a proper and adequate retraining program and allocation of primary and sub-contracts. . . [And that] all possible steps be taken to avoid serious dislocations in non-defense industries.”  A committee of seven, with two labor representatives, was chosen to draw up a more concrete program of action.

One result was that Evansville and Newton, Iowa (another city with a strong UE presence) were named “Priority Unemployment Plan” areas, and allowed to conduct “an experiment for community-based solving of unemployment and dislocations caused by war priorities.”  The plan restricted new plant construction if existing production capacity was considered sufficient, encouraged industry-wide and geographical-based pooling of production facilities to boost efficiency and stabilize employment, required companies to provide training to help workers upgrade their skills, and supported industry-wide studies to determine how to best adapt existing facilities for military production.

William Sentner, the head of District 8, called for labor to take a leading role in organizing community gatherings in other regions and creating regional planning councils. Unfortunately, CIO leaders did little to support the idea. Moreover, once the war started, unemployment stopped being a serious problem and the federal government took direct control over the conversion process.

Organizing for a worker-community planned reconversion process

As the war began to wind down, District 8 leaders once again took up the issue of conversion, this time conversion back to a peacetime economy.  In 1943, they got the mayor of St. Louis to create a community planning committee, with strong labor participation, to discuss future economic possibilities for the city.  In 1944, they organized a series of union conferences with elected worker representatives from each factory department in plants under UE contract throughout the district, along with selected guests, to discuss reconversion and postwar employment issues.

At these conferences District 8 leaders emphasized the importance of continued government planning to guarantee full employment, but also stressed that the new jobs should be interesting and fulfilling and the workweek should be reduced to 30 hours to allow more time for study, recreation, and family life.  They also discussed the importance of other goals: an expansion of workers’ rights in production; labor-management collaboration to develop and produce new products responsive to new needs; support for women who wanted to continue working, in part by the provision of nurseries; and the need to end employment discrimination against African Americans.

While these conferences were taking place, the Missouri River flooded, covering many thousands of acres of farmland with dirt and sand, and leaving thousands of people homeless.  The US Army Corps of Engineers rushed to take advantage of the situation, proposing a major dredging operation to deepen the lower Missouri River channel, an effort strongly supported by big shipping interests.  It became known as the Pick Plan. Not long after, the Bureau of Reclamation proposed a competing plan that involved building a series of dams and reservoirs in the upper river valley, a plan strongly supported by big agricultural interests. It became known as the Sloan Plan.

While lower river and upper river business interests battled, a grassroots movement grew across the region opposing both plans, seeing them, each in their own way, as highly destructive.  For example, building the dams and reservoirs would destroy the environment and require the flooding of hundreds of thousands of acres, much of it owned by small farmers, and leave tens of thousands of families without homes.

Influenced by the growing public anger, newspapers in St. Louis began calling for the creation of a new public authority, a Missouri Valley Authority (MVA), to implement a unified plan for flood control and development that was responsive to popular needs.  Their interest in an MVA reflected the popularity of the Tennessee Valley Authority (TVA), an agency created in 1933 and tasked with providing cheap electricity to homes and businesses and addressing many of the region’s other development challenges, such as flooding, land erosion, and population out-migration.  In fact, during the 1930s, several bills were submitted to Congress to establish other river-based regional authorities.  Roosevelt endorsed seven of them, but they all died in committee as the Congress grew more conservative and war planning took center stage in Washington DC.

District 8, building on its desire to promote postwar regional public planning, eagerly took up the idea of an MVA.  It issued a pamphlet titled “One River, One Plan” that laid out its vision for the agency.  As a public agency, it was to be responsive to a broad community steering committee; have the authority to engage in economic and environmental planning for the region; and, like the TVA, directly employ unionized workers to carry out much of its work.  Its primary tasks would be the electrification of rural areas and flood control through soil and water conservation projects and reforestation.  The pamphlet estimated that five hundred thousand jobs could be created within five years as a result of these activities and the greater demand for goods and services flowing from electrification and the revitalization of small farms and their communities.

District 8 used its pamphlet to launch a community-based grassroots campaign for its MVA, which received strong support from many unions, environmentalists, and farm groups.  And, in August 1944, Senator James Murray from Montana submitted legislation to establish an MVA, written largely with the help of District 8 representatives.  A similar bill was submitted in the House.  Both versions called for a two-year planning period with the final plan to be voted on by Congress.

District 8 began planning for a bigger campaign to win Congressional approval.  However, their efforts were dealt a major blow when rival supporters of the Pick and Sloan plans settled their differences and coalesced around a compromise plan.  Congress quickly approved the Pick-Sloan Flood Control Act late December 1944 but, giving MVA supporters some hope that they could still prevail, Senator Murray succeeded in removing the act’s anti-MVA provisions.

District 8 leaders persuaded their national union to assign staff to help them establish a St. Louis committee, a nine-state committee, and a national committee to support the MVA. The St. Louis committee was formed in January 1945 with a diverse community-based steering committee.  Its strong outreach effort was remarkably successful, even winning support from the St. Louis Chamber of Commerce.  Feurer provides a good picture of the breadth and success of the effort:

By early 1945, other city-based committees were organizing in the nine-state region. A new national CIO committee for an MVA laid plans for “reaching every CIO member in the nine-state region on the importance of regionally administered MVA.  In addition, other state CIO federations pledged to organize for an MVA and to disseminate material on the MVA through local unions to individual members.  Further the seeds planted in 1944 among AFL unions were beginning to develop into a real coalition.  In Kansas City, the AFL was “circulating all the building trades unions in the nine states for support” to establish a nine-state buildings trades MVA committee. Both the AFL and CIO held valley wide conferences on the MVA to promote and organize for it.

Murray submitted a new bill in February 1945, which included new measures on soil conversation and the protection of wild game, water conservation, and forest renewal. It also gave the MVA responsibility for the “disposal of war and defense factories to encourage industrial and business expansion.”

But the political tide had turned.  The economy was in expansion, the Democratic Party was moving rightward, and powerful forces were promoting a growing fear of communism.  Murray’s new bill was shunted to a hostile committee and big business mounted an unrelenting and successful campaign to kill it, arguing that the MVA would establish an undemocratic “super-government,” was a step toward “state socialism,” and was now unnecessary given passage of the Pick-Sloan Flood Control Act.

Drawing lessons

A careful study of District 8’s efforts, especially its campaign for an MVA, can help us think more creatively and effectively about how to build a labor-community coalition in support of a Green New Deal.  In terms of policy, there are many reasons to consider following District 8 in advocating for regionally based public entities empowered to plan and direct economic activity as a way to begin the national process of transformation.  For example, many of the consequences of climate change are experienced differently depending on region, which makes it far more effective to plan regional responses.  And many of the energy and natural resources that need to be managed during a period of transformation are shared by neighboring states.  Moreover, state governments, unions, and community groups are more likely to have established relations with their regional counterparts, making conversation and coordination easier to achieve.  Also, regionally organized action would make it much harder for corporations to use inter-state competition to weaken initiatives.

Jonathan Kissam, UE’s Communication Director and editor of the UE News, advocates just such an approach:

UE District 8’s Missouri Valley Authority proposal could easily be revived and modernized, and combined with elements of the British proposal for a National Climate Service. A network of regional Just Transition Authorities, publicly owned and accountable to communities and workers, could be set up to address the specific carbon-reduction and employment needs of different regions of the country.

The political lessons are perhaps the most important.  District 8’s success in building significant labor-community alliances around innovative plans for war conversion and then peacetime reconversion highlights the pivotal role unions can, or perhaps must, play in a progressive transformation process.  Underpinning this success was District 8’s commitment to sustained internal organizing and engagement with community partners.  Union members embraced the campaigns because they could see how a planned transformation of regional economic activity was the only way to secure meaningful improvements in workplace conditions, and such a transformation could only be won in alliance with the broader community.  And community allies, and eventually even political leaders, were drawn to the campaigns because they recognized that joining with organized labor gave them the best chance to win structural changes that also benefited them.

We face enormous challenges in attempting to build a similar kind of working class-anchored movement for a Green New Deal-inspired economic transformation.  Among them: weakened unions; popular distrust of the effectiveness of public planning and production; and weak ties between labor, environmental, and other community groups.  Overcoming these challenges will require our own sustained conversations and organizing to strengthen the capacities of, and connections between, our organizations and to develop a shared and grounded vision of a Green New Deal, one that can unite and empower the broader movement for change we so desperately need.

Climate Change, The Green New Deal, and the Struggle for Climate Justice

Most calls for a Green New Deal correctly emphasize that it must include a meaningful commitment to climate justice.  That is because climate change—for reasons of racism and capitalist profit-making—disproportionately punishes frontline communities, especially communities of color and low-income.

A 2020 published study on redlining (“the historical practice of refusing home loans or insurance to whole neighborhoods based on a racially motivated perception of safety for investment”) and urban heat islands helps to shed light on the process.  The authors of the study, Jeremy S. Hoffman, Vivek Shandas, and Nicholas Pendleton, examined temperature patterns in 108 US urban areas and found that 94 percent of them displayed “consistent city-scale patterns of elevated land surface temperatures in formerly redlined areas relative to their non-redlined neighbors by as much as 7 degrees Celsius (or 13 degrees Fahrenheit).”

As one of the authors explained in an interview:

“We found that those urban neighborhoods that were denied municipal services and support for home ownership during the mid-20th century now contain the hottest areas in almost every one of the 108 cities we studied,” Shandas said. “Our concern is that this systemic pattern suggests a woefully negligent planning system that hyper-privileged richer and whiter communities. As climate change brings hotter, more frequent and longer heat waves, the same historically underserved neighborhoods — often where lower-income households and communities of color still live — will, as a result, face the greatest impact.”

Urban heat islands

Climate scientists have long been aware of the existence of urban heat islands, localized areas of excessive land surface heat.  The urban heat island effect can cause temperatures to vary by as much as 10 degrees C within a single urban area.  As heat extremes become more common, and last longer, the number of associated illnesses and even deaths can be expected to rise.  Already, as Hoffman, Shandas, and Pendleton note,

extreme heat is the leading cause of summertime morbidity and has specific impacts on those communities with pre-existing health conditions (e.g., chronic obstructive pulmonary disease, asthma, cardiovascular disease, etc.), limited access to resources, and the elderly. Excess heat limits the human body’s ability to regulate its internal temperature, which can result in increased cases of heat cramps, heat exhaustion, and heatstroke and may exacerbate other nervous system, respiratory, cardiovascular, genitourinary, and diabetes-related conditions.

Studies have identified some clear causes for urban heat extremes—one is the density of impervious surface area; the greater the density, the hotter the land surface temperature.  The other is the tree canopy; the greater the canopy, the cooler the land surface temperature.  And as the three authors observe, “emerging research suggests that many of the hottest urban areas also tend to be inhabited by resource-limited residents and communities of color, underscoring the emerging lens of environmental justice as it relates to urban climate change and adaptation.” What their study helps us understand is that the process by which communities of color and poor came to live in areas with more impervious surface area and fewer green spaces was to a large degree the “result of racism and market forces.”

Racism and redlining

Racism in housing has a long history.  Kale Williams, writing in the Oregonian newspaper, highlights the Portland, Oregon history:

Exclusionary covenants, legal clauses written into property deeds, prohibited people of certain races, specifically African Americans and people of Asian descent, from purchasing homes. In 1919, the Portland Realty Board adopted a rule declaring it unethical to sell a home in a white neighborhood to an African American or Chinese person. The rules stayed in place until 1956.

In 1924, Portland voters approved the city’s first zoning policies. More than a dozen upscale neighborhoods were zoned for single-family homes. The policy, pushed by homeowners under the guise of protecting their property values, kept apartment buildings and multi-family homes, housing options more attainable for low-income residents, in less-desirable areas.

Portland was no isolated case; racism shaped national housing policy as well.  In 1933, Congress, as part of the New Deal, passed the Home Owners’ Loan Act, which established the Home Owners’ Loan Corporation (HOLC).  The purpose of the HOLC was to help homeowners refinance mortgages currently in default to prevent foreclosure and, of course, reduce stress on the financial system. It did that by issuing bonds, using the funds to purchase housing loans from lenders, and then refinancing the original mortgages, offering homeowners easier terms.

Between 1935 and 1940, the HOLC drew residential “security” maps for 239 cities across the United States.  These maps were made to access the long-term value of real estate now owned by the Federal Government and the health of the banking industry. They were based on input from local appraisers and neighborhood surveys, and neighborhood demographics.

As Hoffman, Shandas, and Pendleton describe, the HOLC:

created color-coded residential maps of 239 individual US cities with populations over 40,000. HOLC maps distinguished neighborhoods that were considered “best” and “hazardous” for real estate investments (largely based on racial makeup), the latter of which was outlined in red, leading to the term “redlining.” These “Residential Security” maps reflect one of four categories ranging from “Best” (A, outlined in green), “Still Desirable” (B, outlined in blue), “Definitely Declining” (C, outlined in yellow), to “Hazardous” (D, outlined in red).

This identification of problem neighborhoods with the racial makeup of the neighborhood was no accident.  And because the maps were widely distributed to other government bodies and private financial institutions, they served to guide private mortgage lending as well as government urban planning in the years that followed.  Areas outlined in red were almost always majority African-American.  And as a consequence of the rating system, those who lived in them had more difficulty getting home loans or upgrading their existing homes. Redlined neighborhoods were also targeted as prime locations for development of multi-unit buildings, industrial use, and freeway construction.

As expected, a 2019 paper by three researchers with the Chicago Federal Reserve Bank found:

a significant and persistent causal effect of the HOLC maps on the racial composition and housing development of urban neighborhoods. These patterns are consistent with the hypothesis that the maps led to reduced credit access and higher borrowing costs which, in turn, contributed to disinvestment in poor urban American neighborhoods with long-run repercussions.

What Hoffman, Shandas, and Pendleton establish in their paper is that this racially influenced mapping has also had real climate consequences.  Urban heat islands are not just randomly distributed through an urban area—they are more often than not located in redlined areas.  And those extra degrees of heat have real health and financial consequences. As Hoffman explains, the impact on residents of those heat islands is serious and wide-ranging:

“They are not only experiencing hotter heat waves with their associated health risks but also potentially suffering from higher energy bills, limited access to green spaces that alleviate stress and limited economic mobility at the same time,” Hoffman said. “Our study is just the first step in identifying a roadmap toward equitable climate resilience by addressing these systemic patterns in our cities.”

Redlining and climate change

Hoffman, Shandas, and Pendleton condensed the 239 HOLC maps into a database of 108 US cities.  They excluded cities that were not mapped with all four HOLC security rating categories and in some cases had to remove overlapping security rating boundaries, or merge them because they were drawn in different years.  The map below shows the location of the 108 cities.

They then used land surface temperature (LST) maps generated in summer months between 2014 and 2017 to estimate land surface temperatures in all four color-coded neighborhoods in each of these 108 cities to determine whether there was a relationship between LST and neighborhood rating in each city.

They found that present-day temperatures were noticeably higher in D-rated areas relative to A-rated areas in approximately 94 percent of the 108 cities.  The results are illustrated below. Figure a shows the LST difference between ranked neighborhoods for the country as a whole.  The four other figures do the same for each designated region of the country.

Portland, Oregon and Denver, Colorado had the greatest D to A temperature differences, with their D-rated areas some 7 degrees Celsius warmer than their A-rated areas (or some 13 degrees warmer in Fahrenheit).  For the nation as a whole, D-rated areas are now on average 2.6 degrees Celsius warmer than A-rated areas. Thus, as the authors note, “current maps of intra-urban heat echo the legacy of past planning policies.”   Moreover,

indicators of and/or higher intra-urban LSTs have been shown to correlate with higher summertime energy use, and excess mortality and morbidity. The fact that residents living in formerly redlined areas may face higher financial burdens due to higher energy and more frequent health bills further exacerbates the long-term and historical inequities of present and future climate change.

As this study so clearly shows, we are not all in the same boat when it comes to climate change; racial and class dimensions matter.  The poor and people of color are disproportionately suffering the most from global warming largely because of the way racism and profit-making combined to shape urbanization in the United States.  But this is only one example.  A transformative Green New Deal must bring to light the ways in which this dynamic has shaped countless other processes and embrace and support the struggles of frontline communities, economic and climate.

When it comes to pay, US business leaders are world champs

US CEOs not only draw the highest salaries (including bonuses and equity awards, etc.), but they are king of the hill when it comes to lording it over their employees, as illustrated by the high ratio of CEO to worker earnings.

And this record-breaking performance is no one-off.  The share of net wealth held by the top 0.1 percent has been steadily climbing and now rivals that of the bottom 90 percent.

Who cares that wages stagnate, life expectancy falls, economic insecurity grows, social services are gutted in favor of militarism, and climate-generated crises multiply?  Not those at the top, who are doing just fine.

Another sign of the deepening social crisis: The decline in US life expectancy

US life expectancy is on the decline, falling from 2014 to 2017—the first years of decline in life expectancy in over twenty years.  And according to Steven H. Woolf and Heidi Schoomaker, authors of the recently published “Life Expectancy and Mortality Rates in the United States, 1959-2017” in the Journal of the American Medical Association, “A major contributor has been an increase in mortality from specific causes (e.g., drug overdoses, suicides, organ system diseases) among young and middle-aged adults of all racial groups, with an onset as early as the 1990s and with the largest relative increases occurring in the Ohio Valley and New England.”

Declining life expectancy

In 1960, the US had the highest life expectancy of any country in the world.  By 2017 US life expectancy significantly trailed that of other comparable countries, as illustrated below.

In 1980, the difference between average life expectancy in the US and that of comparable countries was not large–73.7 years versus 74.5 years.  However, as we can see in the next figure, the gap steadily grew over the following years.  The US gained 4.9 years in average life expectancy from 1980 to 2017; comparable countries gained 7.8 years on average.

As researchers for the Kaiser Family Foundation point out, “The U.S. and most comparable countries experienced a slight decline in life expectancy in 2015. By 2016, life expectancy for these comparable countries rebounded to pre-2015 numbers, but in the US, such a bounce back did not occur.”  After averaging 78.9 years in 2014, averaged life expectancy in the US fell to 78.7 years in both 2015 and 2016, and then dropped again in 2017 to 78.6 years. These declines mark the first decreases in US life expectancy in more than 20 years.

Moreover, this growing gap and outright decline in average life expectancy holds for both US males and females, as we see from the following figure.

The growing social crisis

Woolf and Schoomaker drew upon 50 years’ worth of data from the US Mortality Database and the US Centers for Disease Control and Prevention’s WONDER database in an attempt to explain why US life expectancy has not kept pace with that of other wealthy countries and is now falling.  Their primary finding, as noted above, is that US life expectancy is being dragged down by “an increase in mortality from specific causes (eg, drug overdoses, suicides, organ system diseases) among young and middle-aged adults of all racial groups.”

More specifically, while over the period 1999-2017, infant mortality, mortality rates among children and early adolescents (1-14 years of age), and age-adjusted mortality rates among adults 65-84 all declined, individuals aged 25-64 “experienced retrogression” beginning in 2010, as we can see in the following figures taken from their article.  Between 2010 and 2017, these midlife adults experienced a 6 percent total increase in mortality rate. This increase overwhelmed gains experienced by the other age cohorts, dragging down overall US average life expectancy.

Woolf and Schoomaker concluded that there were multiple causes for this rise in mortality rates among individuals 25-64.  However, they highlighted drug overdose, alcohol abuse and suicide as among the most important.  This age cohort experienced a nearly four-fold increase in fatal drug overdoses between 1999 and 2017.  Their suicide rates went up nearly 40 percent over the same period. The rate of alcohol-related disease deaths soared by almost 160 percent for those 25-34 years.

In an interview with BusinessInsider, Woolf wrestled with why the country is experiencing such a dramatic rise in mortality rates among young and middle aged adults. “It’s a quandary of why this is happening when we spend so much on healthcare,” Woolf said, adding: “But my betting money is on the economy.”

That seems like a pretty safe answer.  It also raises the question: how do we help working people understand the increasingly toxic nature of the workings of the US economy and build the ties of solidarity necessary to advance the struggle for system transformation.

The Harsh Reality of Job Growth in America

The current US economic expansion, which began a little over a decade ago, is now the longest in US history.  But while commentators celebrate the slow but steady growth in economic activity, and the wealthy toast continuing strong corporate profits, lowered taxes, and record highs in the stock market, things are not so bright for the majority of workers, despite record low levels of unemployment.

The fact is, despite the long expansion, the share of workers in low-wage jobs remains substantial. To make matters worse, the share of low-quality jobs in total employment seems likely to keep growing. And, although US workers are not unique in facing hard times, the downward press on worker well-being in the US has been more punishing than in many other advanced capitalist countries, leaving the average US worker absolutely poorer than the average worker in several of them.

The low wage reality

According to a recent Bookings report by Martha Ross and Nicole Bateman, titled Meet the Low-wage Workforce,

Low-wage workers comprise a substantial share of the workforce.  More than 53 million people, or 44 percent of all workers ages 18 to 64 in the United States, earn low hourly wages. More than half (56 percent) are in their prime working years of 25-50, and this age group is also the most likely to be raising children (43 percent).

Ross and Bateman draw upon the Census Bureau’s 2012-2016 American Community Survey 5-year Public Use Microdata Sample to identify low-wage workers.  Although their work does not incorporate the small increase in wages between 2017-2019, they are confident that doing so would not significantly change their findings.

Their workforce definition started with all civilian, non-institutionalized individuals, 18 to 64 years of age, who worked at some point in the previous year (during the survey period) and remained in the labor force (either employed or unemployed).  They then removed graduate and professional students and traditional high school and college students, as well as those who reported being self-employed or earning self-employment income and those who worked without pay in a family business or farm.  This left them with a total of 122 million workers.

Their definition of a low-wage worker started with the “often-employed threshold” of two-thirds the median hourly wage of a full-time/full year worker, with one major modification. They used the male wage because they wanted to establish a threshold that was not affected by gender inequality.  They identified anyone earning a lower hourly wage as a low-wage worker.

The average national threshold across their five years of data, in 2016 real dollars, was $16.03.  They then adjusted this value, using the Bureau of Economic Analysis’s Regional Price Parities, to take into account variations in the cost of living in individual metropolitan areas.  The adjusted thresholds ranged from $12.54 in Beckley, West Virginia to $20.02 in San Jose, California.  Using these thresholds, the authors found that 44 percent of the workforce, some 53 million workers, were low-wage workers.

These low-wage workers were a racially diverse group.  Fifty-two percent were white, 25 percent Latinx, 15 percent Black, and 5 percent Asian American. Both Latinx and Black workers were over-represented relative to their share of the total workforce.

Strikingly, 57 percent of low-wage workers worked full time year-round.  And half of all low-wage workers “are primary earners or contribute substantially to family living expenses. Twenty-six percent of low-wage workers are the sole earners in their families, with median family earnings of $20,400.”

Finally, as the authors also note, the economic mobility of low wage workers appears quite limited. They cite one study that “found that, within a 12-month period, 70 percent of low-wage workers stayed in the same job, 6 percent switched to a different low-wage job, and just 5 percent found a better job.”

The growing share of low-wage jobs

The downward movement in a new monthly index, the job quality index (JQI), makes clear that economic growth alone will not solve the problem of too many workers employed in low-wage work.  The index measures the ratio of high-quality jobs (those that pay more than the average weekly income) to low quality jobs (those that pay less than the average weekly income).  The index steadily declined over the past three decades, during periods of expansion as well as recession, from a ratio of 94.9 in 1990 to a ratio of 79.0 as of July 2019 (as illustrated below).

The process of creating the index and its usefulness is described in a recent paper authored by Daniel Alpert, Jeffrey Ferry, Robert C. Hockett, Amir Khaleghi.  The index itself is maintained by a group of researchers from Cornell University Law School, the Coalition for a Prosperous America, the University of Missouri-Kansas City, and the Global Institute for Sustainable Prosperity.  As the authors note, the most prominent factor underlying the three decade fall in the ratio is the “relative devaluation” of US labor.

The index tracks private sector jobs provided by third party employers, which excludes self-employed workers, and, for now, covers only production and nonsupervisory (P&NS) positions, which account for approximately 82 percent of total private sector jobs in the country.

The index draws on the BLS’s Current Employment Statistics which provides average weekly hours, average hourly wages, and total employment for 180 distinct job categories organized in industry groups.  As the authors explain:

JQI itself is a fairly simple measure. The index divides all categories of jobs in the US into high and low quality by calculating the mean weekly income (hourly wages multiplied by hours worked) of all P&NS jobs and then calculates the number of P&NS jobs that are above or below that mean. An index reading of 100 would indicate an even distribution, as between high- and low-quality jobs. Readings below 100 indicate a greater concentration in lower quality (those below the mean) positions, and a reading above 100 would greater concentration in high quality (above the mean) positions.

Recognizing that some groups are quite large and include a wide range of jobs hovering around the mean, the JQI is further adjusted by disaggregating those particular groups into subgroups. The average income of each of those subgroups is then compared with the mean weekly income derived from the entire sample to determine whether the positions should be classified as high or low quality jobs.

As noted above, the JQI fell from 94.9 in 1990 to 79.0 as of July 2019.  As for the significance of this decline:

The decline confirms sustained and steadily mounting dependence of the U.S. employment situation on private P&NS jobs that are below the mean level of weekly wages. . . .

Notably, movements in the JQI are not particularly correlated with recession; it is important to note that the first big decline occurred during the expansion of the late 1990s. The index was steady during the 2001 recession, and its second big decline occurred during and after the Great Recession. There is admittedly some cyclical patterning evidenced in the JQI output, but this is overwhelmed by a larger secular phenomenon.

Losing ground

Not only are US workers facing a labor market increasingly oriented towards low-wage employment, the resulting downward pressure on wages appears to be proceeding at a more rapid pace in the US than in other countries.  As a consequence, a majority of US workers are now poorer, in real terms, than many of their counterparts in other countries.

For example, in a study comparing income inequality in France and the US, the economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman found that the average pre-tax national income of adults in the bottom 50 percent of the income distribution is now greater in France than in the United States.  “While the bottom 50 percent of incomes were 11 percent lower in France than in the US in 1980, they are now 16 percent higher.”  Moreover,

The bottom 50 percent of income earners makes more in France than in the US even though average income per adult is still 35 percent lower in France than in the US (partly due to differences in standard working hours in the two countries). Since the welfare state is more generous in France, the gap between the bottom 50 percent of income earners in France and the US would be even greater after taxes and transfers.

A recent study by the Center for the Study of Living Standards finds that growing numbers of US workers are also falling behind their Canadian counterparts.  More specifically, “the study compares incomes in every percentile of the income distribution, and finds that up through the 56th percentile Canadians are better off than their U.S. counterparts.”

The study’s author, Simon Lapointe, in words that echo the comments of Piketty, Saez, and Zucman, adds:

Our income estimates may actually underestimate the economic well-being of Canadians relative to Americans. Indeed, Canadians usually receive more in-kind benefits from their governments, including notably in health care. Had these benefits been included in the estimates, the median augmented household income in Canada would likely surpass the American median by a greater margin. While these benefits also come with higher taxes, the progressivity of the income tax system is such that the median household is most likely a net beneficiary.

The takeaway

There are many reasons for those at the top of the US income distribution to celebrate the performance of the US economy and tout the superiority of current US economic and political institutions and policies.  Unfortunately, there is a strong connection between the continuing gains for those at the top and the steadily deteriorating employment conditions experienced by growing numbers of workers.  Hopefully, this economic reality will become far better understood, leading to a more widespread recognition of the need for collective action to transform the US economy in ways that are responsive to majority interests.

A Wealth Tax: Because That’s Where The Money Is

The bank robber Willie Sutton, when asked by a reporter why he robbed banks, is reputed to have answered, “Because that’s where the money is.”  Which brings us to a wealth tax.

Transforming our economy is going to be expensive.  And a tax on the wealth of the super wealthy is one way to capture a sizeable amount of money, which is why both Bernie Sanders and Elizabeth Warren include the tax in their respective programs.  The economists Gabriel Zucman and Emmanuel Saez estimate that Sanders’s proposed wealth tax would raise $4.35 trillion over the next decade, while Warren’s would raise $2.75 trillion.

Where the money is  

The concentration of wealth has steadily increased since the mid-1990s, as illustrated in the following Bloomberg News chart.

A recent Federal Reserve Bank study highlights the fact that the top 10 percent and even more so the top 1 percent of households have been especially successful in increasing their equity ownership in US public and private companies.  For example,

in 1989, the richest 10 percent of households held 80 percent of corporate equity and 78 percent of equity in noncorporate business. Since 1989, the top 10 percent’s share of corporate equity has increased, on net, from 80 percent to 87 percent, and their share of noncorporate business equity has increased, on net, from 78 percent to 86 percent. Furthermore, most of these increases in business equity holdings have been realized by the top 1 percent, whose corporate equity shares increased from 39 percent to 50 percent and noncorporate equity shares increased from 42 percent to 53 percent since 1989.

It is worth emphasizing that last point: the top 1 percent of households now control more than half of the equity in US businesses, public and private.

The figure below shows total wealth holdings for all US families as of the second quarter, 2019.  The top 1 percent now own almost as much wealth as all the families in the 50th to 90th percentiles combined.

A comparison with the size and distribution of wealth in 2006, shown below, illustrates the rapid gains made by those at the top.

In 2006, the total wealth held by families in the 50th to 90th percentiles was slightly greater than that held by families in the 90th to 99th percentiles and significantly larger than those in the top 1 percent.  But not anymore.  And sadly, families in the bottom half of the distribution, whose wealth is predominately in real estate, have fallen further behind everyone else.

Time for a wealth tax

Recognizing this reality, and the fact that this concentration of wealth was aided by a steady decline in top individual, corporate, and estate tax rates, both Sanders and Warren want to tax the super wealthy to generate funds to help pay for their key programs, especially Medicare for All.  And, as an added bonus, to begin weakening the enormous political power of those top families.

Sanders would create an annual tax that would apply to married couple households with a net worth above $32 million — about 180,000 households in total, or roughly the top 0.1 percent.  The tax would start at 1 percent on net worth above $32 million, with increasing marginal tax rates–a 2 percent tax on net worth between $50 to $250 million, a 3 percent tax from $250 to $500 million, a 4 percent tax from $500 million to $1 billion, a 5 percent tax from $1 to $2.5 billion, a 6 percent tax from $2.5 to $5 billion, a 7 percent tax from $5 to $10 billion, and an 8 percent tax on wealth over $10 billion. For single filers, the brackets would be halved, with the tax starting at $16 million.

Warren’s wealth tax would apply to households with a net worth above $50 million — an estimated 70,000 households. The tax would start at 2 percent on net worth between $50 million to $1 billion, rising to 3 percent on net worth above $1 billion.  Her proposed tax brackets would be the same for married and single filers.

Zucman and Saez have calculated how some of the richest Americans would have fared if these wealth taxes had been in place starting in 1982.  For example, Jeff Bezos, the founder of Amazon, is currently worth some $160 billion.  Under the Sanders plan his wealth would have been reduced to $43 billion.  Under the Warren plan, it would be $87 billion.

As a New York Times article sums up:

Over all, the economists found, the cumulative wealth of the top 15 richest Americans in 2018 — amounting to $943 billion, using estimates from Forbes — would have been $434 billion under the Warren plan and $196 billion under the Sanders plan.

Despite the fact that the super wealthy will still have unbelievable fortunes even if forced to pay a wealth tax, almost all of them are strongly opposed to the tax and determined to discredit it.

Challenges ahead

Polling done early in the year found strong support for a wealth tax.  As Matthew Yglesias explains:

Americans are . . . positively enthusiastic about Sen. Elizabeth Warren’s proposal to institute a wealth tax on large fortunes, according to a new poll from Morning Consult.  Their survey finds that . . . the wealth tax scores a crushing 60-21 victory that includes majority support from Republicans.

Of course, this kind of support was registered before the start of any serious media effort to raise doubts about its effectiveness.  Recently, a number of wealthy business people and conservative economists have begun to make the case that a wealth tax is a radical measure that will harm the economy.  Some point to the fact that many countries that once used the tax have now abandoned it.  Twelve OECD countries had a wealth tax in 1990, now only three do (Norway, Switzerland, and Spain).  France, Germany, and Sweden are among the majority that no longer use it.

However, as Zucman and Saez explain, this fact does not mean that a wealth tax would not work in the US.  For example, in some countries it was the election of conservative governments philosophically opposed to such taxes that led to their elimination.  More substantively, they highlight four problem areas that tended to undermine the effectiveness of and support for national wealth taxes in Europe and why these should not be a major problem for the US.

First, European countries have their own separate tax laws and member states do not tax their nationals living abroad.  Thus, a wealthy person living in a country with a wealth tax could easily move to a nearby country without a wealth tax and escape paying it.  And many have.  But, as the economists note,

The situation in the United States is different. You can’t shirk your tax responsibilities by moving, because US citizens are responsible to the Internal Revenue Service no matter where they live. The only way to escape the IRS is to renounce citizenship, an extreme move that in both Warren’s and Sanders’s plans would trigger a large exit tax of 40 percent on net worth.

Second, European governments tolerated a high level of tax evasion. Until last year, they did not require banks in Switzerland or other tax havens to share information about deposits with national tax authorities.  This made it easy for the wealthy to hide their assets. The US is in a better situation to avoid this outcome.  The Foreign Account Tax Compliance Act, signed in 2010, requires foreign financial institutions to send detailed information to the Internal Revenue Service about the accounts of U.S. citizens each year, or face sanctions. Almost all foreign banks have agreed to cooperate.

Third, European wealth taxes had many exemptions and deductions.  In contrast, there are none in the proposed plans by Warren and Sanders.  Zucman and Saez highlight the French program that was in place from 1988 to 2017 as a prime example:

Paintings? Exempt. Businesses owned by their managers? Exempt. Main homes? Wealthy French received a 30 percent deduction on those. Shares in small or medium-size enterprises got a 75 percent exemption. The list of tax breaks for the wealthy grew year after year.

Fourth, European wealth taxes fell on a considerably larger share of the population than would the proposed plans by Warren or Sanders. In Europe, “wealth taxes tended to start around $1 million, meaning they hit about 2 percent of the population, compared with about 0.1 percent for the proposed U.S. plans.”  This broader reach of the European wealth taxes helped to generate popular pressure to weaken them, leading to their eventual removal.  The more limited reach of the proposed US plans should help to blunt that development in the US.

We can certainly expect a fierce debate over the viability and effectiveness of a wealth tax as the campaign season continues, especially if Sanders or Warren becomes the Democratic Party nominee for president.  We should be prepared to advocate for the tax as one important way to ensure adequate funding of needed programs.  But we should also take advantage of the debate to shine the brightest light possible on the growing and already obscene concentration of wealth in the US and even more importantly on the underlying and destructive logic of the capitalist accumulation process that generates it.

What the New Deal can teach us about winning a Green New Deal: Part V—summing up the New Deal experience

Growing awareness of our ever-worsening climate crisis has boosted the popularity of movements calling for a Green New Deal.  At present, the Green New Deal is a big tent idea, grounded to some extent by its identification with the original New Deal and emphasis on the need for strong state action to initiate social-system change on a massive scale.  Challenges abound for Green New Deal activists.  Among the many, how to:

  • create supportive working relationships between the different movements currently pushing for a Green New Deal
  • develop a sharper, shared vision of the aims of a Green New Deal
  • increase popular support for those aims as well as participation in those movements
  • build sufficient political power to force a change in state policy along lines favorable to the Green New Deal
  • ensure that the resulting trajectory of change strengthens the broader struggle to achieve a socially just and ecologically sustainable political-economy

While there are great differences between the crises and political movements and possibilities of the 1930s and now, there are also important lessons that can be learned from the efforts of activists to build mass movements for social transformation during the Great Depression.  My aim in this series, including in this fifth and last post, is to illuminate the challenges faced and choices made by these activists in order to draw out some of the relevant lessons.

In previous posts I argued that the despite the severity of the Great Depression, it took sustained, left-led, mass organizing and actions to force the federal government to accept responsibility for improving economic conditions.  Unfortunately, First New Deal relief and job creation policies were inadequate, far from what the growing movement of unemployed demanded or was needed to meet majority needs.  However, continued mass activity by the unemployed, those on relief, and those employed eventually forced the Roosevelt administration to undertake a Second New Deal, which included its widely praised programs for public works (WPA), social security (Social Security Act), and union rights (National Labor Relations Act).

These Second New Deal programs were unprecedented and did improve conditions for working people.  But, as I argue in this final post, both the WPA and the Social Security Act again fell short of the transformative changes demanded by activists.  And while the NLRA did offer workers important legal protections that made it safer for them to unionize their workplaces, its effect was to encourage a top-down system of labor-management relations that suppressed rank and file activism and class consciousness. Thus, despite their pathbreaking nature, these programs were far from revolutionary.  Rather they were designed to ameliorate the suffering caused by capitalism’s crisis without threatening capitalist control over economic activity.

Tragically, changes in the political and economic environment, as well as strategic choices made by the left in response to those changes led to the weakening of popular movements, leaving them unable to push the Roosevelt administration into yet a Third New Deal.  As a result, the upsurge of the 1930s failed to advance the socialist-inspired transformation that motivated many of its participants. In the end, it proved only able to force the state to adopt policies that reformed the workings of the system, a not inconsiderable achievement, but one that still left working people vulnerable to the vicissitudes of capitalism.  Hopefully, a careful study of the New Deal experience will help Green New Deal activists build movements able to avoid the trap of limited reform while fighting for the massive, interconnected, and empowering social-system change we so desperately need.

The Second New Deal

It is easy to understand why supporters of a Green New Deal look to the New Deal as a touchstone.  Growing numbers of people have come to the conclusion that our problems are too big to be solved by individual or local efforts alone, and that once again innovative and transformative state-led actions will be needed to solve them.  Quite simply, the New Deal experience inspires people to believe in the possibility of a Green New Deal.

When people talk about the innovative and transformative policies of the New Deal they normally mean the core policies of the Second New Deal: the WPA, the Social Security Act, and the National Labor Relations Act.  As innovative as these policies were, they were, as discussed in Part IV, largely forced on the Roosevelt Administration by left-led mass movements.  And, as we see next, they were, by design, meant to blunt more radical demands for change.  In short, they were important reforms, but no more than reforms, and as such offered only partial solutions to the problems of the time.  Sadly, workers today continue to suffer from their limitations.

Works Progress Administration

One of the most important Second New Deal programs was the Works Progress Administration (WPA). Established in May 1935, it employed millions of unemployed to carry out public projects such as construction of public buildings and roads.  Federal Project Number One, a much smaller program that also operated under the WPA umbrella, employed musicians, artists, writers, actors and directors in large arts, drama, media, and literacy projects. These included the Federal Writers’ Project, the Federal Theatre Project, the Federal Music Project, and the Federal Art Project.

Roosevelt’s decision to replace the Federal Emergency Relief Administration (FERA) with the WPA was a clear sign that he recognized that his First New Deal employment and relief programs — FERA and the Civil Works Administration (CWA) — had done little to satisfy fast growing left-led unemployed movements that were demanding a federal jobs program under which unemployed workers would be directly put to work, at union wages, producing a wide range of needed goods and services.

FERA had provided loans and grants to states which then offered relief work to those that qualified for relief.  As discussed in Part III, the program required workers to submit to demeaning financial investigations, often paid those chosen for relief with coupons that could only be redeemed for select food items, made no attempt to match worker skills with jobs, and often employed those on relief in make-work tasks.  While FERA marked the first direct federal support for relief and enabled states to greatly expand their relief rolls, it also required states to provide matching funds to receive FERA money.  Limited state resources meant that relief covered only about one-third of those unemployed.

CWA was a far more popular program, most importantly because it involved direct federal employment, had no relief requirement, paid relatively well, and sought to match workers’ skills with jobs.  However, it was, by design, a short-term program that lasted only 6 months, with most employment creation ending after 4 months.

The WPA was a federal program that operated its own projects in cooperation with state and local governments, which were required to cover some 10 to 30 percent of their costs.  In some cases, the WPA took over ongoing FERA state and local relief programs.  But, despite its impressive accomplishments, it also fell short of movement demands.

Although the WPA combined elements of both FERA and the CWA, it was far more like the former than the latter. For example, in contrast to the CWA, participation in WPA projects required a state means test.  Thus, unemployment alone was not enough to qualify a person for the program.  Moreover, as under FERA, participants were subject to demeaning monitoring of their spending habits and living conditions.

Again. unlike the CWA, little effort was made to match workers’ skills with jobs.  Workers were divided into two broad categories of skilled and unskilled.  The unskilled were assigned construction jobs even if they had no construction experience.  The skilled were assigned a variety of writing or teaching jobs regardless of whether they had experience in those areas.  The program did pay market wages.  However, limits were put on maximum allowable hours of weekly employment in addition to an overall limit on total earnings.

WPA employment opportunities were also limited.  Its average monthly employment was approximately 3 million workers.  The CWA, at its peak, employed over 4 million a month.  The WPA, like FERA, employed only about one-third of the unemployed.  Moreover, because of unstable program financing, even those employed by the WPA would sometimes suffer layoffs.

The unemployed movement wanted a permanent federal employment program that would guarantee full employment.  And they wanted that program to employ people to produce needed goods and services as a direct counter to private production.  This was far from the vision of the Roosevelt administration.  As Harry Hopkins, chief administrator of the WPA, explained:

Policy from the first was not to compete with private business. Hence we could neither work on private property, set up a rival merchandising system, nor form a work outlet through manufacturing, even though manufacturing had contributed to relief rolls hundreds of thousands of workers accustomed to operating machines and to doing nothing else for a living.

Operating under these limits, the WPA had little choice but to focus its efforts on the construction of public buildings and roads.  Post offices accounted for close to half of the more than 3000 public buildings constructed.

Moreover, despite its limitations, the unemployed had to fight to sustain the program.  Congress decided to provide funds for the program one year at a time.  Sometimes allocations fell short of planned spending, resulting in layoffs.   Other times, militant demonstrations by an alliance of unemployed groups forced Congress into making supplemental appropriations.

The number of public works projects and WPA participants began a steady decline in 1939.  The next year the Roosevelt administration decided to reorient program activity to projects of direct use to the military, including construction of base housing and military airfields as well as expansion of naval yards. The WPA was quietly terminated in 1943, with unemployment problems seemingly solved thanks to the demands of wartime production.  Sadly, the unemployed never developed the political weight or broader social movement needed to push the government into embracing a more expansive and ongoing program of national planning and public production.

The Social Security Act

The Social Security Act is widely considered to be the New Deal’s crown jewel.  According to his Secretary of Labor, “[President Roosevelt] always regarded the Social Security Act as the cornerstone of his administration . . . and . . . took greater satisfaction from it than from anything else he achieved on the domestic front.”

Roosevelt appointed a Committee on Economic Security in July 1934 with the charge to develop a social security bill that he could present to Congress in January 1935 that would include provisions for both unemployment insurance and old-age security.  An administration approved bill was in fact introduced in January and Roosevelt called for quick Congressional action.  The bill was revised in April by a House committee and given a new name, “The Social Security Act.”  After additional revisions the Social Security Act was approved by overwhelming majorities in both Houses of Congress, and the legislation was signed by the President on August 14, 1935.

The Social Security Act was a complex piece of legislation.  It included what we now call Social Security, a federal old-age benefit program; a program of unemployment benefits administered by the states, and a program of federal grants to states to fund benefits for the needy elderly and aid to dependent children.  It was a cautious beginning, as explained by Edwin E. Witte, the Executive Director and Secretary of the President’s Committee on Economic Security:

Because we were in the midst of a deep depression, the Administration and Congress were very anxious to avoid placing too great burdens on business and also to avoid adding to Government deficits. It was these considerations that resulted in the low beginning social security tax rates and the step-plan of the introduction of both old-age and unemployment insurance and also in the establishment of completely self-financed social insurance programs, without Government contributions–to this day a distinctive feature of social insurance in this country.

Before examining the way Roosevelt’s concerns for the well-being of business placed limits on the timeliness, coverage, and support provided by these programs, it is important to recognize that, as with the WPA, Roosevelt’s commitment to social security was a response to the efforts of the Communist Party (CP), which authored a far more progressive bill, one that would have significantly shifted the balance of class power towards workers.

The CP began pushing its Workers Unemployment Insurance Bill in the summer of 1930, and it, as well as the Unemployment Councils, worked hard to promote it over the following years.  On March 4, 1933, the day of Roosevelt’s inauguration, they organized demonstrations stressing the need for action on unemployment insurance.

Undeterred by Roosevelt’s lack of action, the CP authored a bill–the Workers Unemployment and Social Insurance Bill–that was introduced in Congress in February 1934 by Representative Ernest Lundeen of the Farmer-Labor Party.  In broad brush, as Chris Wright summarizes, the bill:

provided for unemployment insurance for workers and farmers (regardless of age, sex, or race) that was to be equal to average local wages but no less than $10 per week plus $3 for each dependent; people compelled to work part-time (because of inability to find full-time jobs) were to receive the difference between their earnings and the average local full-time wages; commissions directly elected by members of workers’ and farmers’ organizations were to administer the system; social insurance would be given to the sick and elderly, and maternity benefits would be paid eight weeks before and eight weeks after birth; and the system would be financed by unappropriated funds in the Treasury and by taxes on inheritances, gifts, and individual and corporate incomes above $5,000 a year. Later iterations of the bill went into greater detail on how the system would be financed and managed.

Not surprisingly, the bill enjoyed strong support among workers, employed and unemployed.  Thanks to the efforts of unemployed and union activists it was soon endorsed by 5 international unions, 35 central labor bodies, and more than 3000 local unions.  Rank and file worker committees also formed across the country to pressure members of Congress to pass it.

When Congress refused to act on the bill, Lundeen reintroduced it in January 1935. Because of public pressure, the bill became the first unemployment insurance plan in US history to be recommended by a congressional committee, in this case the House Labor Committee.  It was voted down in the full House of Representatives, 204 to 52.

Roosevelt strongly opposed the Lundeen bill and it was to provide a counter that he established his Committee on Economic Security in July 1934 and pressed Congress to approve the resulting Social Security Act as quickly as possible.  Roosevelt’s Social Security Act fell far short of what the Workers Unemployment and Social Insurance Bill offered, and it was strongly opposed by movement activists and organizations of the unemployed.

The part of the bill that established what we now call Social Security suffered from five main weaknesses.  First, it was to be self-financing because of administration fears of deficit spending, a decision which placed downward pressure on benefit levels.  Second, it was to be financed by contributions from both workers and employers.  Thus, workers had to shoulder half the costs of the program.

Third, the system was not universal.  The act covered only workers in commerce and industry, about half the jobs in the economy.  Among those left out were farm and domestic workers.

Fourth, the act provided for monthly retirement benefits payable only to the primary worker in a family when they retired at age 65 or older. Moreover, the amount received depended on the value of wages earned in covered employment starting in 1937.

Finally, the act mandated that monthly benefit payments would not begin until 1942.  A 1939 amendment did allow benefit payments to begin in 1940 and added child, spouse, and survivor benefits to the authorized retirement benefits.

In sum, this was a program that offered too little, too late, and to too few people.  And while improvements were made over the years, the current system pales in comparison to the kind of security and humane retirement workers would have enjoyed if the workers’ movement had been powerful enough to secure passage of its preferred bill.

The unemployment system established as part of the Social Security Act was also structured in ways unfavorable to workers compared with the proposed benefits of the Workers Unemployment and Social Insurance Bill.  Rather than set up a comprehensive national system of unemployment compensation, as workers desired, the act established a federal-state cooperative system that gave states wide latitude in determining standards.

More specifically, the act levied a uniform national pay-roll tax of 1 percent in 1936, 2 percent in 1937, and 3 percent in 1938, on covered employers, defined as those employers with eight or more employees for at least twenty weeks, not including government employers and employers in agriculture.  Only workers employed by a covered employer could receive benefits.

Covered employers were given a federal credit on up to 90 percent of the tax if they paid their credit amount into a certified state unemployment compensation fund.  The act left it to the states to decide whether to enact their own plans, and if so, to determine eligibility conditions, the waiting period to receive benefits, benefit amounts, minimum and maximum benefit levels, duration of benefits, disqualifications, and other administrative matters. It was not until 1937 that programs were established in every state as well as the then-territories of Alaska and Hawaii.  And it was not until 1938 that most began paying benefits.

In the early years, most states required eligible workers to wait 2 to 4 weeks before drawing benefits, which were commonly set at half recent earnings (subject to weekly maximums) for a period ranging from 12 to 16 weeks. Ten state laws called for employee contributions as well as employer contributions.

Just like with social security, over the following years the program was expanded in a number of positive ways, including by expanding coverage and benefits.  However, the unemployment program established by the Social Security Act fell far short of the universal, progressively funded social safety net that workers were demanding.

The National Labor Relations Act

In the spring of 1934, Senator Robert Wagner introduced a bill to establish a new labor relations board that, unlike the one established by the First New Deal’s National Industrial Recovery Act (NIRA), would have enforcement authority.  Few in Congress supported the bill; President Roosevelt also opposed it.

Wagner reintroduced a revised version of his bill a year later and to a dramatically different outcome.  In May 1935 it received unanimous support in the Senate Labor Committee, followed by strong support in both the Senate and House.  As reported by the editors of Who Built America?, President Roosevelt remained opposed to the bill up until the very end:

“It ought to be on the record,” his labor secretary noted, that the bill was “not a part of the President’s program.  It did not particularly appeal to him when it was described to him.”  But when the US Supreme Court struck down the NIRA in May and Wagner’s National Labor Relations bill was passed by one house of Congress, FDR finally endorsed the bill.

In broad brush, the National Labor Relations Act established a set of laws and regulations designed to guarantee the right of private sector workers to peacefully organize into trade unions of their choosing and engage in collective bargaining and actions such as strikes.  The act also created the National Labor Relations Board to organize and oversee the process by which workers decide on whether to join a union as well as determine whether collective bargaining agreements are being fairly bargained and enforced.

The turnaround in support for the NLRA owes much to the growing militancy of workers, and the threat that this militancy posed to the established order.  Section 7a of the NIRA had promised workers that they would “have the right to organize and bargain collectively through representatives of their own choosing . . . free from the interference, restraint, or coercion of employers.”  Unfortunately, with no mechanism to ensure that workers would be able to exercise this right, after a short period of successful union organizing, companies began violently repressing genuine union activity. By 1935, growing numbers of workers were calling the National Recovery Administration (NRA), which had been established to oversee the NIRA, the National Run Around.

However, it was not the corporate campaign of violence directed against workers that was the catalyst for the change in government policy.  Rather it was the explosion of powerful left-led worker victories in three major labor struggles in early 1934.  The first was in Toledo, Ohio, where American Workers’ Party sponsored unemployed organizations joined with striking auto workers seeking to unionize a major auto parts manufacturer.  The workers battled special deputies and National Guard troops for weeks, maintaining an effective strike.  Fearful of the possibility of an even larger strike, the Roosevelt administration finally sent federal mediators to Toledo, forcing the company to recognize the union and agree to significant wage increases.

At almost the same time, an even bigger struggle began in Minneapolis. A Trotskyist-led Teamster local, fighting to unionize a number of trucking and warehouse companies, effectively shut down commercial transport in the city.  Days of violence followed as police and special deputies tried to break the strike.  Faced with a growing threat of a general strike, federal mediators again were forced to intervene, and again forced the employers to recognize the union.

A general strike did take place in San Francisco.  Led by Communist and other radical rank and file activists, San Francisco longshoremen rejected a secretly negotiated deal between the national leadership of the International Longshoremen’s Association and the waterfront employers.  Their strike was quickly joined by dockworkers in every other West Coast port as well as many sailors and waterfront truckers.

Police attempts to break the San Francisco strike led to a full-scale battle and the death of two strikers by police on what became known as Bloody Thursday.  In response, the labor movement declared a general strike.  Some 150,000 workers went out, essentially bringing San Francisco, Oakland, Berkeley and other nearby municipalities, to a halt.  Again, federal intervention was required to bring the strike to a halt, with a victory for the workers.

These struggles, all with important left leadership, showed a dramatic growth in worker militancy, solidarity, and radicalism that sent shock waves throughout the corporate community as well as the government.  And it was to head off the further radicalization of the labor movement that the Congress and Roosevelt agreed to support the NLRA and its mechanisms to regularize the unionization process.  In the words of Steve Fraser:

The Wagner Act helped institutionalize a form of industrial democracy that steered clear of any frontal assault on the underlying political economy. It legitimated collective bargaining, imposed responsibilities on both management and trade union officialdom, and worked to establish peace on the shop floor.

Union leaders were to police their members, instilling a disciplined commitment to the terms of the contract. Control of life on the shop-floor remained with management. Militants who thought otherwise were soon enough reigned in. The much-maligned (not without cause) trade union bureaucracy was, after all, the fruit of a mass movement, an institution, created where there had been nothing, the slowly solidified residue of fiery desires.

For a few years, it appeared that worker militancy, a willingness to directly challenge corporate rights with no concern for issues of legality, would continue despite the NLRB’s existence.  For example, in early 1936 rubber workers in Akron, Ohio disregarded both union leadership and a court injunction to surround the eleven-mile perimeter of a Goodyear plant with pickets.  They shut down the plant in protest over recent wage cuts and layoffs of activists and rejected federal attempts at mediation.  When word came that the sheriff might come with armed deputies to open the plat, the strikers armed themselves.  Finally, after four weeks, Goodyear settled, agreeing to reinstate the fired workers, reduce the workweek, and recognize the authority of union shop committees.

Not long after, inspired by the rubber workers, auto workers began staging walk-outs and strikes at several different Chrysler and GM plants over firings and unionization.  The biggest action came at the end of 1936 with the Flint sit-down strike.  The workers held the plant for 44 days, during which time they fought off attempts by armed police to evict them and ignored injunctions issued by the courts demanding that they leave.  In the end GM agreed to recognize the UAW as the exclusive bargaining representative for all GM workers.

The number of strikes grew dramatically from 2,014 in 1935 to 4,740 in 1937, with workers increasingly winning unionization not through the machinery of the NLRA, but through direct action.  For example, the number of sit-down strikes lasting more than a day grew from 48 in 1936 to some 500 in 1937.

Unfortunately, this upward trajectory of militant, class conscious activity would not be sustained.  The reasons are complex.  One part of the explanation concerns the evolving political orientation of the CP.  Responding to the new strategic orientation of the Communist International, which stressed the importance of building coalitions with all progressive and liberal forces to check the rise of fascism, the CP began pursuing an anti-fascist popular front policy that included support for Roosevelt’s 1936 re-election and the New Deal more generally.

This new orientation also translated into an increasingly conservative line regarding labor activism.  Party activists were encouraged not only to support the new CIO union leadership but also to oppose militant organizing tactics.  As Frances Fox Piven and Richard A. Cloward describe:

The Communists, by now well into their Popular Front phase and some of them into the union bureaucracy as well, endorsed the call for union discipline. Wyndham Mortimer issued a statement early in 1937 saying: “Sit-down strikes should be resorted to only when absolutely necessary.” And the Flint Auto Worker, edited by Communist Henry Kraus, editorialized that “the problem is not to foster strikes and labor trouble. The union can only grow on the basis of established procedure and collective bargaining.”

At the same time, corporate leaders were taking direct aim at the new labor reforms.  One of their first big victories was a 1938 Supreme Court ruling that said companies had the right to hire permanent replacement workers when workers went on strike.  The following year it ruled sit-down strikes illegal, even if undertaken in response to an illegal corporate action.

States also joined in.  In 1939, as Piven and Cloward report:

state legislatures began to pass laws prohibiting some kinds of strikes and secondary boycotts, limiting picketing, outlawing the closed shop, requiring the registration of unions, limiting the amount of dues unions could charge, and providing stiff jail terms for violations of the new offenses. By 1947 almost all of the states had passed legislation imposing at least some of these limitations.

Finally, corporate leaders also launched an anti-Communist attack against union activists, especially those in leadership positions in the newly created unions of the CIO.  Their efforts were amplified by House Un-American Activities Committee hearings which began in 1938.  The 1947 Taft–Hartley Act codified all these developments, outlawing wildcat strikes, solidarity or political strikes, secondary boycotts, secondary and mass picketing, and closed shops, as well as requiring union officers to sign non-communist affidavits as a condition for their union to secure NLRA rights.

In sum, as left and union leadership began to rely ever more heavily on the NLRA to win gains for workers, corporate and political elites began aggressively narrowing the acceptable boundaries of legal action.  As a consequence, although there would still be periods of worker militancy, the frequency of rank and file-led actions, open rebellion against the law, and moments of cross-union and class solidarity became increasingly rare.  Thus, the NLRB succeeded, as its supporters hoped, in creating a more stable system of labor relations that was consistent with and supportive of the needs of capitalist production.

The Movement’s Decline

The workers movement of the 1930s was a mass movement that, thanks to left leadership, encouraged class solidarity and support for a program of radical social change.  The movement was, as described in this and past posts, powerful enough to force the Roosevelt administration into adopting successively more progressive programs that, although flawed, did improve working and living conditions for many.

However, even as its different political tendencies began to unify, creating a national organization of the unemployed, the movement began to suffer a loss of militancy and vision that left it unable to further influence political developments.  As a consequence, the reforms of the Second New Deal came to define the limits of change.

In 1934 the Communist Party organized Unemployed Councils tightened their organizational form, finally adopting a written constitution.  In early 1935, Socialist Party organized unemployed organizations and a number of Musteite organized Unemployed Leagues joined together to create a national organization of the unemployed, the Workers Alliance.  The following year, the Workers Alliance reached agreement with the Unemployed Councils and several other small unemployed organizations to form a new, larger national organization of the unemployed, the Workers Alliance of America (WAA). This unity was possible in large part because of the CP’s newly adopted popular front policy which led it to seek alliances with other political tendencies and groups that were seen as anti-fascist.  This included the Socialist Party and Muste’s Conference for Progressive Labor Action and their associated movements of unemployed.

The Workers Alliance of America, critical of the WPA, continued to fight for the unemployed and those on relief.  For example, when the Roosevelt administration announced planned cuts in WPA employment for 1937, the organization organized a number of sit-ins and demonstrations at city relief offices throughout the country.  The President, under pressure from big city mayors, rescinded the cuts.

However, defending an existing program is not the same as winning a new, improved one.  And this the movement could not do for several reasons.  One is that the rank and file base of the unemployed movement was shrinking because of the growth in the economy and the expansion in relief opportunities.  Another is that many of the movement’s most experienced activists were now employed as organizers in the growing trade union movement.

A third reason is that changes in the relief system undermined the movement’s ability to mobilize the unemployed and win gains through collective action.  The system had become professionalized, with relief officials in city after city establishing rules about the size of delegations that would be allowed in offices and the number of times each week that delegations could seek meetings with officials. Moreover, relief office workers were instructed not to meet clients if they were accompanied by a delegation or grant relief if a delegation was present in the office.

This left local unemployed organizers in the position of either accepting the new ground rules to ensure that their members received relief or continuing their mass activity hoping that their old strategy would be more effective in winning gains.   Increasingly, members advocated for the former, leaving organizers with no choice.  In fact, as a sign of the growing sophistication of the New Deal relief effort, a number of relief offices actually offered jobs to local activists with the unemployed movement with the promise that they could help make the system work more efficiently and effectively for those seeking relief.  In many cases, those offers were accepted.

Perhaps the most important reason for the movement’s growing political weakness was the Communist Party’s decision to pursue an alliance with the Roosevelt administration as part of its anti-fascist popular front policy.  This led the party to organize support for Roosevelt’s 1936 election and his New Deal policies, and to deemphasize oppositional and militant mass actions in support of social transformation in favor of more established political activity such as petition drives and lobbying for improvements in existing programs. In fact, hoping to win Roosevelt’s good will, the CP often organized rallies designed to show worker support for the WPA and other New Deal programs.  Roosevelt was actually invited to give the main speech at the WAA’s second annual convention.  When he turned down the invitation the honor was given to the WPA’s Director of Labor Relations. In 1938, WAA locals even campaigned for pro-New Deal candidates.

Increasingly the WAA became integrated into the New Deal.  As Piven and Cloward point out:

The [WAA became] recognized as the official bargaining agent for WPA workers, and alliance leaders now corresponded frequently with WPA administrators, communicating a host of complaints, and discussing innumerable procedural questions regarding WPA administrative regulations. Some of the complaints were major, having to do with pay cuts and arbitrary layoffs. Much of the correspondence, however, had to do with minute questions of procedure, and especially with the question of whether WPA workers were being allowed to make up the time lost while attending alliance meetings. Alliance leaders also wrote regularly to the president, reviewing the economic situation for him, deploring cuts in WPA, and calling for an expansion of the program.

The WAA continued to make demands on the administration, drafting their own bills calling for greater public spending and employment at union wages, advocating for their own far more sweeping social insurance program, and calling for the establishment of a national planning agency to oversee a permanent public works program.  But the movement no longer threatened Roosevelt, and its demands were largely ignored.  The WAA dissolved itself in 1941.

The labor movement, riding the growth in the economy, soon replaced the unemployed movement as the most powerful social force for change.  However, for reasons noted above, it also underwent its own moderation despite the efforts of rank and file activists.  For example, CIO leaders established Labor’s Non-Partisan League in 1936 to support President Roosevelt’s reelection and his New Deal program. World War II; the post-war vicious anti-communist attacks on all critics of capitalism, especially in the labor movement; and the strength of the post-war economic expansion finally buried the promise of a radical transformation.  There would be no transformative Third New Deal.

Lessons

The New Deal experience holds a number of important lessons for those advocating a Green New Deal.  First, the existence or even recognition of a crisis cannot be counted on to motivate a change in government policy if that change threatens the status quo.  It took years of mass organizing to force the federal government to acknowledge its responsibility to respond to the devastating social consequences of the Great Depression.  The challenge will be even greater today since, as opposed to the 1930s, the capitalist class continues to enjoy lucrative opportunities for profit-making.

Second, a broad-base mass movement that threatens the stability of the system can force a significant change in government policy.  The driving force for change in the 1930s was the movement of unemployed, and its early power came from the Communist Party’s ability to establish a network of local Unemployed Councils that provided unemployed workers with the opportunity to better understand the cause of their hard times, build class solidarity through collective actions in defense of local needs, and become part of broader campaigns for public policies on the national level that were directly responsive to their local concerns.

It is likely that activists for a Green New Deal will have to engage in a similar process of movement building if they hope to force a meaningful government response to our current crises.  Despite the fact that we face a number of interrelated social, economic, and ecological crises, activists must still find ways to weave together different local organizations engaged in collective actions in defense of their local needs into a nation-wide political force able to project a vision of responsive system change as well as define and fight for associated policies.

Third, government responses to political pressure can be expected to fall far short of movement demands for transformative change.  The Roosevelt administration’s First New Deal programs fell far short of what working people demanded and needed.  It took sustained organizing to win a Second New Deal, which while better, was still inadequate.  It the movement for a Green New Deal succeeds in forcing government action, it is safe to assume that, much as in the 1930s, the policies implemented will be partial and inadequate.  Thus, movement activists have to prepare participants for a long, and ongoing campaign of mobilization, organizational development, and pressure.

Fourth, because of the importance of government policy and the natural attraction of wanting to exert personal influence on it, movement activists must remain vigilant against becoming too tied to the government bureaucracy, thereby losing their political independence and weakening the movement’s capacity to continue pushing for further changes in state policy.  WAA leaders understandably wanted to influence New Deal policy, but their growing embrace of the Roosevelt administration, pursued for broader political objectives as well, ended up weakening the movement’s organizational strengthen and effectiveness and perhaps even more importantly, vision of a more egalitarian and democratic society. Green New Deal activists can be expected to face the same kind of pressures if a progressive government comes to power and begins to initiate its own reform program and movements must be alert to the danger.

Fifth, and finally, movements have to be careful not to become too policy oriented. The New Deal included a number of different programs each designed to address different problems.  This created a natural tendency for the different organizations that comprised the broader social movement to narrow their own focus and concentrate on finding ways to respond to the policy shortcomings that most affected their members.  Thus, while the unemployed, those on relief, and those fighting for unionization initially shared a sense of common struggle, over time, in large measure because of their success in winning reforms, they became separate movements, each with their own separate concerns. As a consequence, the overall power, unity, and commitment of the broader social movement for massive societal change was weakened.

This is a challenge that the movement for a Green New Deal can expect to face if it is successful enough to force meaningful government reforms, especially given the multiplicity of the challenges the country faces. The only way to minimize this challenge is to ensure that movement organizing, from the very beginning, encourages participants to see the need for the broader transformative change inspired by the notion of a Green New Deal, and to draw from their struggle an ever more concrete understanding of how that change can be advanced and how real improvement in their lives depends on its achievement.

What the New Deal can teach us about winning a Green New Deal: Part IV—Keeping the pressure on the state

Advocates for a Green New Deal, pointing to ever-worsening and interrelated environmental, economic, and social problems, seek adoption of a complex and multifaceted state-directed program of economic transformation.  Many point to the original New Deal–highlighting the federal government’s acceptance of responsibility for fighting the depression and introduction of new initiatives to stabilize markets, expand relief, create jobs producing public goods and services, and establish a system of social security–to make it easier for people to envision and support another transformative state effort to solve a major societal crisis.

While the New Deal experience might well inspire people to believe in the possibility of a Green New Deal, the way that experience is commonly presented may well encourage Green New Deal supporters to miss what is most important to learn from it and thus weaken our chances for advancing a meaningful and responsive Green New Deal.  Often the New Deal experience is described as a set of interconnected government policies that were implemented over a short period of time by a progressive government determined to end an economic crisis.  This emphasis on government policy encourages current activists to focus on developing policies appropriate to our contemporary crisis and on electing progressive leaders to implement them.

In reality, as discussed in Part I, Part II, and Part III of this series, despite the enormous negative social consequences of the Great Depression, it took sustained organizing, led by a movement of the unemployed, to transform the national political environment and force the federal government to accept responsibility for improving economic conditions.  Even then, the policies of the Roosevelt administration’s First New Deal were most concerned with stabilizing business conditions under terms more favorable to business than workers.  Its relief and job creation policies were minimal and far from what the movement demanded or was needed to meet majority needs.

As I argue in this post, it took continued mass organizing to force the Roosevelt administration to implement, two years later, its Second New Deal, which included its now widely praised programs for public works, social security, and union rights.  However, as important and unprecedented as these programs were, they again, as we will see in the next post, fell short of what working people were demanding at the time.

Thus, the most important take-away from this history is that winning a meaningful Green New Deal will require more than well-constructed policy demands and the election of a progressive president.  It will require building a left-led mass movement that prepares people for a long struggle to overcome expected state and corporate resistance to the needed transformative changes.  And a careful study of the New Deal experience can alert to the many challenges and strategic choices we are likely to confront in our movement building efforts as well as the many policy twists and turns we are likely to face as the federal government and corporate sector respond to our demands for a Green New Deal.

The failings of the First New Deal

The First New Deal, as important and innovative as it was, offered no meaningful solution to the crisis faced by working people.  The economy had hit bottom in early 1933 and was beginning to recover.  But although national income grew by one-quarter between 1933 and 1934, it was still only a little more than half of what it had been in 1929.  Some ten million workers remained without jobs and almost twenty million people remained at least partially dependent on relief.

As discussed in Part III, Roosevelt’s First New Deal relief and job programs, were, by design, inadequate to address the ongoing social crisis.  For example, the Federal Emergency Relief Administration (FERA) did provide the first direct federal financing of state relief.  But because the program required matching state funds, many states either refused to apply for FERA grants or kept their requests small. Moreover, because state governments were determined to minimize their own financial obligations and not undermine private business activity, those that did receive relief were subject to demeaning investigations into their personal finances and relief payments were kept small and often limited to coupons exchangeable only for food items on an approved list.

The Civil Works Administration (CWA), created under FERA’s umbrella, was a far more attractive program.  Most importantly, participation was not limited to those on relief. And the program offered meaningful, federally organized, work for pay.  However, with millions of workers seeking to participate in the program, Roosevelt, determined to keep the federal budget deficit small, refused to fund it beyond six months.

Many workers were also critical of one of the First New Deal’s most important efforts to promote economic recovery: the National Industrial Recovery Act (NIRA).  The NIRA suspended anti-trust laws and encouraged companies to engage in self-regulation through industry organized wage and price controls, and the establishment of production quotas and restrictions on market entry.  Workers saw this act as rewarding the same business leaders that were responsible for the Great Depression.

To appease trade union leaders, Section 7a of the NIRA included the statement that “employees shall have the right to organize and bargain collectively through representatives of their own choosing . . . free from the interference, restraint, or coercion of employers.”  Unfortunately, no mechanism was included to ensure that workers would be able to exercise this right, and after a short period of successful union organizing, companies began violently repressing genuine union activity.

Another key First New Deal initiative, The Agricultural Adjustment Act, was also unpopular.  It sought to strengthen the agricultural sector by paying farmers to take land out of production, thus lowering the supply of agricultural goods and boosting their price. However, most of the land that was taken out of production had been used by poor African American sharecroppers and tenant farmers.  Thus, the policy ended up rewarding the bigger farmers and punishing the poorest.

In short, the programs of the First New Deal, coming almost four years after the start of the Great Depression, fell far short of what workers needed and wanted.  And, they did little to slow the on-going mass organizing.

The unemployed movement continues

As described in Part II, the Communist Party (CP) was fast off the mark in organizing the unemployed.  As early as August 1929, two months before the stock market crash, it had begun work on the creation of a nationwide organization of Unemployed Councils (UCs).  The UCs grew fast, uniting and mobilizing the unemployed, who engaged in locally organized fights for relief and against evictions in many parts of the country.  The CP and the UCs also organized several national mobilizations in support of federal unemployment insurance and emergency relief assistance as well as a 7-hour workday and an end to discrimination against African American and foreign-born workers.

The Socialist Party (SP) and the Muste-led Conference of Progressive Labor Action (CPLA) each had their own organizations concerned with the unemployed.  But they were few in number and initially not engaged in the kind of direct organizing of the unemployed and direct action practiced by the UCs.  SP organizations concentrated on educating the population about the causes of unemployment and the need for national action to combat it.  While CPLA organizations did include the unemployed, they were mostly focused on promoting self-help activities for survival.  However, beginning in 1933, both the SP and CPLA began to change their approach, and their respective organizations began to operate much like the CP’s Unemployed Councils.

The SP sponsored Chicago Workers Committee on Unemployment began the turn towards direct organizing of the unemployed and a commitment to direct action.  By 1933 it had 67 locals in Chicago as well as some in other nearby cities.  Committees in other states, primarily in the Midwest, soon followed Chicago’s example.  And in November 1933, these more activist committees came together to found a new, Midwest-centered organization, the Unemployed Workers League of America.

The SP’s New York organizations of unemployed were also growing in number.  Several came together in 1933 to form the Workers Unemployed League, which later merged with other organizations in the state to become the Workers Unemployed Union.  This group eventually merged with groups in other East Coast states to form the Eastern Federation of the Unemployed and Emergency Workers.  Socialist Party-led unemployed organizations held multi-state demonstrations in their areas of strength in March 1933 and November 1934 to demand new and more expansive programs of federal relief and job creation.

The Musteites began their own turn to more militant unemployed organizing in early 1933.  By July 1933 their Unemployed Leagues (ULs) claimed 100,000 members in Ohio, 40,000 in Pennsylvania, and 10,000 more in West Virginia, New Jersey, and North Carolina.  That same month, their ULs formed a national organization to coordinate their work, the National Unemployed League.

The CPLA dissolved itself in December 1933, as activists established a new, more radical organization, the American Workers Party (AWP).  Reflecting this change, delegates to the National Unemployed League’s second national convention in 1934 formally rejected the organization’s past reliance on self-help activities and private relief and declared their opposition to capitalism.

The ULs, like the UCs, engaged in mass sit-ins at relief offices to overturn negative decisions by relief officials.  One sit-in in Pittsburgh lasted 59 days.  They also organized mass resistance to court ordered evictions, blocking sheriffs when possible or returning furniture to an evictees home if it had been removed.   ULs in several cities also engaged in direct appropriate of food from government warehouses in line with their slogan, “Give Us Relief, Or We’ll Take It.”  The AWP, like its processor, had a strong presence in the Midwest, but was never able to extend its influence or build networks of Uls outside that region.

Not only did the programs of the First New Deal not slow unemployed organizing, the unemployed movement began increasingly taking on a unified national character as unemployed activists from the three different political tendencies gradually began working together, often against the mandates of their leaders. The extent and militance of unemployed activism made it difficult for governments–local, state, and national–to rest easy.  For one thing, it highlighted a growing radicalization of the population, as more and more people demonstrated their willingness to openly challenge the legitimacy of the police, the court system, and state institutions.

Relief worker organizing

The First New Deal greatly expanded the number of people on relief, and the CP quickly began organizing relief workers in 1934, followed shortly by the SP and CPLA.  The CP sponsored Relief Workers Leagues (RWLs) targeted those receiving FERA relief funds or employed by the CWA. In addition to organizing grievance committees to fight discrimination, especially against African American, single, and foreign-born workers, the RLWs fought for timely payment of relief wages, higher pay for relief work with cost of living adjustments, free transportation to work sites and free medical care, and a moratorium on electric and gas charges for those on relief.

They also sent delegations to Washington D.C. to protest wage discrimination or low wages and organized in support of the CP’s call for a national Unemployment Insurance Bill.  Local RWL members also joined with the unemployed in marches on state capitals and on picket lines outside welfare offices to demand more employment opportunities and more money for relief.  League members were especially aggressive in protesting against the termination of the CWA.

Nels Anderson, director of Labor Relations for the Works Progress Administration (WPA), provides a good feeling for the work of RWL members:

They parade; they protest; they make demands; they write millions of letters to officials. . . . They are irreconcilable . . . they never stop asking.  They state their demands in every conceivable way.  They crowd through the doors of every relief station and every WPA office.  They surround social workers on the street.

Although not as large or as developed as the unemployment movement, the organization and activities of relief worker organizations were not easy to ignore and made it difficult for the Roosevelt administration to tout the success of its First New Deal initiatives.

Organizing for a national Unemployment Insurance Bill

The CP also continued to organize for a national Unemployment Insurance Bill.  The CP and the UCs had declared National Unemployment Insurance Day on Feb 4, 1932 with activities in many cities.  It was also the major demand of the second national Hunger March in late 1932.  On March 4, 1933, the day of Roosevelt’s inauguration, they organized demonstrations stressing the need for action on unemployment insurance.

Undeterred by Roosevelt’s lack of action, the CP authored a bill that was introduced in Congress in February 1934 by Representative Ernest Lundeen of the Farmer-Labor Party.  Not surprisingly, the Workers Unemployment and Social Insurance Bill was strongly supported by the UCs as well SP and Musteite organizations of unemployed.  And as a result of the efforts of activists from these and other organizations it was soon formally endorsed by 5 international unions, 35 central labor bodies, and more than 3000 local unions.  Rank and file worker committees also formed across the country to pressure members of Congress to pass it.

In broad brush, the bill proposed social insurance for all the jobless, the sick, and the elderly without discrimination, at the expense of the wealthy.  More specifically, as Chris Wright summarizes, the bill:

provided for unemployment insurance for workers and farmers (regardless of age, sex, or race) that was to be equal to average local wages but no less than $10 per week plus $3 for each dependent; people compelled to work part-time (because of inability to find full-time jobs) were to receive the difference between their earnings and the average local full-time wages; commissions directly elected by members of workers’ and farmers’ organizations were to administer the system; social insurance would be given to the sick and elderly, and maternity benefits would be paid eight weeks before and eight weeks after birth; and the system would be financed by unappropriated funds in the Treasury and by taxes on inheritances, gifts, and individual and corporate incomes above $5,000 a year. Later iterations of the bill went into greater detail on how the system would be financed and managed.

When Congress refused to act on the bill, Lundeen reintroduced it in January 1935. Because of public pressure, the bill became the first unemployment insurance plan in US history to be recommended by a congressional committee, in this case the House Labor Committee.  It was voted down in the full House of Representatives, 204 to 52.

Roosevelt strongly opposed the Workers Unemployment and Social Insurance Bill, and so moved quickly to pressure Congress to write a social security bill he could support.  He created the President’s Committee on Economic Security in July 1934, which established the principles that formed the basis of the Social Security Act that was eventually signed into law as part of the Second New Deal.

Trade union organizing

As the economy continued to recover, and the unemployed were increasingly able to find jobs or gain relief, left groups began shifting their attention towards organizing the employed.  As one UL organizer who later became an organizer for the CIO explained, the goal was not a permanent organization of the unemployed. “We wanted the day to come when unemployed organizations would be done away with and there would only be organizations of employed workers.”

A number of unions, hoping to build on worker anger over employment conditions and the NIRA’s Section 7a, which many workers were encouraged to believe meant that the President supported unionization, launched lighting fast organizing drives.  And with good success.  The United Mine Workers was one.  For example, it took the union only one day after the NIRA became law to sign up some 80 percent of Ohio miners.  And it was able to press its advantage, aided by a series of wildcat strikes, to win gains for its members. The Amalgamated Clothing Workers and the International Ladies’ Garment Workers’ Union also grew quickly, with each winning significant employer concessions following a series of short strikes.

The following year saw an explosion of trade union organizing, including three major successful union struggles.  The first was in Toledo Ohio, which at the time was a major center for automobile parts manufacturing.  Organizing began in the summer 1933 at several parts plants.  In February 1934 some 4000 workers went out on strike.  It appeared that the strike would be settled quickly when one of the largest companies, Electric Auto-Lite, decided to oppose any deal.  The other companies quickly followed Electric Auto-Lite’s lead and the strike resumed.  With Electric Auto-Lite hiring scabs and maintaining production, it appeared the strike was lost.  Then, in May, the local UL, the unemployed organization of the American Workers’ Party, intervened.

It organized a mass picket line around Electric Auto-Lite, even though the courts had issued an injunction against third party picketing.  The local sheriff and special deputies arrested several picketers, beating one badly. In response, the UL and the union organized a bigger blockade of some 10,000 workers, trapping the strikebreakers inside the factory.

The “Battle of Toledo” was on.  In an effort to break the blockade, the sheriff and deputies used tear gas, water hoses, and guns.  The workers responded by stoning the plant and burning cars that were in the company parking lot.  The National Guard was called out and in the fighting that followed two picketers were killed.  Unable to break the strike, the plant was forced to close.  After two weeks of Federal mediation, the company and the union reached an agreement: the company recognized the union, boosted its minimum wage, and hiked average wages by 5 percent.

At almost the same time as the struggle began in Toledo, another major union battle started in Minneapolis.  In February 1934, the Trotskyist-led Teamster Local 574 organized a short successful strike, winning contracts with most of the city’s coal delivery companies.  The victory brought in many new members, both truckers and those who worked in warehouses.  In May, when employers refused to bargain with the union, some 5000 walked off their jobs. The union, well prepared for the strike, effectively shut down commercial transport in the city, allowing only approved farmers to deliver food directly to grocers.

The Citizen’s Alliance, composed of the city’s leading business people, tried to break the strike.  Police and special deputies trapped and beat several of the strikers.  The union responded with its own ambush.  The fighting continued over two days. A number of deputies and strikers were badly hurt, some from beatings and some from gunshots; two strikers died.  But the strike held. The National Guard was called in an attempt to restore order, and while they brought a halt to the fighting, their presence didn’t end the strike.

Other unions, especially in the building trades, began striking in solidarity with the Teamsters, and the threat of a general strike was growing.  After several weeks, with federal authorities applying pressure, the employers finally settled, signing a contract with the union.

A general strike did take place in San Francisco.  Passage of the NIRA had, much like in the coal industry, spurred a massive increase in union membership in West Coast locals of the International Longshoremen’s Association (ILA).  Led by left-wing activists, these locals began, in March 1934, organizing for a coastwide strike to win a shorter workweek, higher pay, union recognition, and a union-run hiring hall.  The threatened strike was soon called off by the top East Coast-based leadership of the ILA, following a request from Roosevelt.  They then secretly negotiated a new agreement with the employers that met none of the workers demands.

The San Francisco longshoremen rejected the deal and struck on May 9.  They were quickly joined by dockworkers in every other West Coast port as well as many sailors and waterfront truckers.  All totaled some 40,000 maritime workers stopped working.

Battles between the police and strikers who resisted the employers use of strikebreakers led to injuries in several ports and the death of one striker. Roosevelt tried again to end the strike, but without success.  On July 3, employers decided to use the police to break the picket line in San Francisco, and succeeded in getting a few trucks through.  They tried again on July 5, leading to a full-scale battle between the police and the strikers.  Two strikers were shot and killed on what became known as Bloody Thursday.

On the following day San Francisco longshoreman called for a general strike.  Teamster locals in both San Francisco and Oakland quickly voted to strike, despite the opposition of their leaders. On July 14, after a number of other unions had voted for a general strike, the San Francisco Labor Council endorsed the action. Some 150,000 workers went out, essentially bringing the city, as well as Oakland, Berkeley and other nearby municipalities, to a halt.  Police tried to break the strike by arresting strike leaders, but the workers held firm.  General Hugh S. Johnson, head of the National Recovery Administration, denounced the strike as a “bloody insurrection” and “a menace to the government.”

After three days, city union leadership, fearful of the growing radicalization of the strikers and worried about escalating threats from employers, called off the strike.  Local ILA unions were forced to accept federal arbitration, but in October, the arbitrator gave the workers most of what they had demanded.

These struggles showed a growth in worker militancy and radicalism that sent shock waves throughout the corporate community as well as the government. As Steve Fraser explains:

General strikes are rare and inherently political. While they last, the mechanisms and authority of the strike supplant or co-exist with those of the “legitimate” municipal government. . . . Barring actual revolution, power ultimately devolves back to where it came from. But the act of calling and conducting a general strike is a grave one. It may have no revolutionary aspirations, yet it opens the door to the unknown. That these two strikes [in Minneapolis and San Francisco] happened in the same year — 1934 — is a barometer of just how far down the road of anti-capitalism the working-class movement had traveled.

Corporate leaders, as the editors of the American Social History Project describe, did not just roll over in the face of this growing activism:

After the employers’ initial shock over Section 7a had worn off, executives in steel, auto, rubber, and a host of other industries followed a two-pronged strategy to forestall unionization: they established or revived company unions to channel workers discontent in nonthreatening directions, and the vigorously resisted organizing drives.

Textile employers were among the more ruthless in their response.  The largest strike in 1934 began in September when 376,000 textile workers from Maine to Alabama walked off their jobs. The employers hired spies, fired union activists, and had workers evicted from their company housing.  With the support of a number of governors, they also made use of the National Guard to break strikes.  Many strikers were injured in the violence that followed, some fatally.  The employers rejected a Roosevelt attempt at mediation and after three weeks, the union leadership ended the strike, having suffered a major defeat.

While a few unions were able to take advantage of the NIRA, most were not.  In fact, by early 1935, five hundred AFL local unions had been disbanded. Section 7a’s statement promising workers the right to organize freely turned out to be largely meaningless.  It was supposed to be enforced by a tripartite National Labor Board, but the board was given no real enforcement power, and it often refused to intervene in unionization struggles.  A number of industries, such as auto, were not even covered by it.  By 1935, growing numbers of workers were calling the National Recovery Administration (NRA), which had been established by the President to oversee the NIRA, the National Run Around.

Mounting pressure for a Second New Deal

With his First New Deal, Roosevelt demonstrated a willingness to experiment, but within established limits.  For example, he remained determined to limit federal budget deficits and minimize federal responsibility for relief and job creation.  Thus, his early initiatives failed to calm the political waters.

Economic improvements, while real, were not sufficient to satisfy working people.  Unemployment remained too high, relief programs remained too limited and punitive, and possibilities for improving wages and work conditions remained daunting for most of those with paid employment.  Consequently, left-led movements continued to successfully mobilize, educate, and radicalize growing numbers of workers around demands increasingly threatening to the status quo.

Also noteworthy as an indicator of the tenor of the times was Upton Sinclair’s 1934 run for governor of California.  His popular End Poverty in California movement advocated production for use and not for profit.  Among other things, it called for the state to purchase unused land and factories for use by the unemployed, allowing them to barter what they produced, as well as pensions for the poor and those over sixty years old, all to be financed by higher taxes on the wealthy and corporations.

More right-wing political movements were also gaining in popularity, feeding off of popular disenchantment with government policy.  For example, Senator Huey Long from Louisiana criticized Roosevelt for creating huge bureaucracies and supporting monopolization.  In 1934 he launched his Share Our Wealth Plan, which called for a system of taxes on the wealthy to finance guaranteed payments of between three to five thousand dollars per household and pensions for everyone over sixty.  He also advocated a thirty-hour work week and an eleven-month work-year.  His Share Our Wealth Clubs enjoyed a membership of some seven or eight million people, mostly in the South but also in the Midwest and mid-Atlantic states as well.

Frances Townsend, a retired doctor from California, had his own proposal.  His Townsend Plan called for giving every person over 60 who was not working $200 a month on the promise that they would spend it all during the month.  It also called for abolishing all other forms of Federal relief and was to be financed by a regressive national sales tax.  Within two years of the publication of his plan, over 3000 Townsend Plan Clubs, with some 2.2 million members, were organized all over the country and began pressuring Congress to pass it.

Despite political differences, all these movements–at least initially in the case of the movements promoted by Long and Townsend–tended to encourage a critical view of private ownership and wealth inequality and most business leaders blamed Roosevelt, and his First New Deal policies, for this development.  They were especially worried about the possibility of greater government regulation of their activities.  In 1934, a number of top business leaders resigned from Roosevelt’s Business Advisory Council and began exploring ways to defeat him in the presidential election of 1936.

In sum, by 1935 Roosevelt was well aware that he needed to act, and act decisively to reestablish his authority and popularity.  In some ways his decision to launch a more worker-friendly Second New Deal spoke to his limited choices.  Most business leaders had now made clear their opposition not only to his administration but to any new major federal initiatives as well.  In fact, in May 1935, the Supreme Court ruled the National Industrial Recovery Act unconstitutional.  It did the same with the Agricultural Adjustment Act in January 1936.

A do-nothing policy was unlikely to win back business support or strengthen Roosevelt’s political standing given the economy’s weak on-going economic expansion.  Thus, as Steve Fraser comments:

The Roosevelt administration needed new allies. To get them it would have to pay closer attention to the social upheavals erupting around the country. The center of gravity was shifting, and the New Deal would have to shift with it or risk isolation.

Roosevelt’s response was the Second New Deal.  His political acumen is well illustrated by the fact that the three signature achievements of the Second New Deal—the Works Progress Administration, the National Labor Relations Act, and the Social Security Act–not only responded to the demands of the mass movements organized by left political forces, but did so in a way that allowed him to take back the initiative from the left.

The Works Progress Administration, created in May 1935, provided meaningful work for millions of jobless workers, satisfying the demands of many of those in the unemployed and relief workers movements.  Moreover, unlike the earlier short-lived CWA that focused on public construction work, the Works Progress Administration also included a Federal Arts Project, a Federal Theater Project, a Federal Writers’ Project, and a Federal Music Project.

The National Labor Relations Act, passed in July 1935, created a framework for protecting the rights of private sector workers to organize into unions of their choosing, engage in collective bargaining, and take collective actions such as strikes.  Many trade unionists celebrated this act, believing that it would secure their rights to organize.  The Social Security Act passed in August 1935 established a system of old-age benefits for workers, benefits for victims of industrial accidents, unemployment insurance, and aid for dependent mothers and children, the blind, and the physically handicapped.  This was a direct response to the demands of the broad workers’ movement for a federally organized system of social protection.

However, as we will see in the next post, while the Second New Deal represented a major step forward for working people, each of these signature initiatives, as designed, fell short of what progressive movements demanded.  Unfortunately, changing political and economic conditions greatly weakened the left over the following years, leaving it unable to sustain its organizing and its pressure on the state.  As a consequence, not only was there no meaningful Third New Deal, the reforms of the Second New Deal have either ended (direct public employment), greatly weakened (labor protections), or come under attack (social security).

Lessons

The New Deal was not a program conceived and implemented at a moment in time by a government committed to transformative policies in defense of popular needs.  Rather, it encompassed two very different New Deals, with the Second far more progressive than the First.  Moreover, the Second New Deal did not emerge as a natural evolution of the First New Deal.  Rather as shown above, it was a largely a response to continued popular pressure from movements with strong left leadership.

This history holds an important lesson for those advocating for a Green New Deal.  It is unlikely that popular movements can win and secure full implementation of their demands for a Green New Deal at one historical moment.  Rather, if we succeed, it will take time.  However, as the history of the New Deal shows, the process of change is not likely to be advanced by advocating for modest demands in the belief that these can be easily won and that governments will be predisposed to extend and deepen the required interventions over time.  Rather, we need to build awareness that our political leaders will most likely respond to our efforts with reforms designed to blunt or contain our demands for change. Thus, it is necessary to put forward the most progressive demands that can win popular support at the time while preparing movement participants for the fact that the struggle to win meaningful transformative policies will be long and complex.

Another lesson from the New Deal experience is that movement building itself must also be a dynamic process, responding and transforming in response to political and economic developments.  It was the movement of unemployed that spearheaded the political pressures leading to the First New Deal.  First New Deal policies and the economic recovery then changed the organizing terrain, leading to new organizing of relief workers and trade unions.

At the same time, there were strong threads tying these movements together. One of the most important was that experiences in one, say the unemployed movement, provided an educational experience that helped create organizers able to spur the work of the newer movements, for example that of relief workers.  And because of all these movements owed much to the work of left political groups, there was a common vision that also tied them together and encouraged each to support the struggles of the other and join in support of even bigger demands, such as for a new system of social insurance.

Advocates of a Green New Deal need to pay careful attention to this organizing experience. Given the Green New Deal’s multidimensional concerns, achieving it will likely require organizing in many different arenas which may well require, at least at an early stage, organizing a number of different movements, each with their own separate concerns.  The challenge will be finding ways to ensure coordination, productive interactions and interconnections, and an emerging unified vision around big transformative demands.

What the New Deal can teach us about winning a Green New Deal: Part III—the First New Deal

In Part I and Part II of this series on lessons to be learned from the New Deal I argued that despite the severity of the Great Depression, sustained organizing was required to transform the national political environment and force the federal government to accept direct responsibility for financing relief and job creation programs. In this post, I begin an examination of the evolution and aims of New Deal programs in order to highlight the complex and conflictual nature of a state-directed reform process.

The New Deal is often talked about as if it were a set of interconnected programs that were introduced at one moment in time to reinvigorate national economic activity and ameliorate the hardships faced by working people.  Advocates for a Green New Deal, which calls for a new state-led “national, social, industrial, and economic mobilization” to confront our multiple interlocking problems, tend to reinforce this view of the New Deal.  It is easy to understand why: state action is desperately needed, and pointing to a time in history when it appears that the state rose to the occasion, developing and implementing the programs necessary to solve a crisis, makes it easier for people to envision and support another major effort.

Unfortunately, this view misrepresents the experience of the New Deal.  And, to the extent it influences our approach to shaping and winning a Green New Deal, it weakens our ability to successfully organize and promote the kind of state action we want.

The New Deal actually encompasses two different periods; the First New Deal was begun in 1933, the Second New Deal in 1935.  In both periods, the programs designed to respond to working class concerns fell far short of popular demands.  In fact, it was continued mass organizing, spearheaded by an increasingly unified unemployed movement and an invigorated trade union movement, that pushed the Roosevelt administration to initiate its Second New Deal, which included new and significantly more progressive initiatives.

Unfortunately, as those social movements lost energy and vision in the years that followed, pressure on the state for further change largely abated, leaving the final reforms won compromised and vulnerable to future attack.   The lesson from this history for those advocating for a Green New Deal is clear: winning a Green New Deal requires, in addition to carefully constructed policy demands, an approach to movement building that prepares people for a long struggle to overcome expected state efforts to resist the needed transformative changes.

The First New Deal

Roosevelt’s initial policies were largely consistent with those of the previous Hoover administration.  Like Hoover, he sought to stabilize the banking system and balance the budget.  On his first day in office Roosevelt declared a national bank “holiday,” dismissing Congressional sentiment for bank nationalization.  He then rushed through a new law, the Emergency Banking Act, which gave the Comptroller of the Currency, the Secretary of the Treasury, and the Federal Reserve new powers to ensure that reopened banks would remain financially secure.

On his sixth day in office, he requested that Congress cut $500 million from the $3.6 billion federal budget, eliminate government agencies, reduce the salaries of civilian and military federal workers, and slash veterans’ benefits by 50 percent.  Congressional resistance led to spending cuts of “only” $243 million.

Roosevelt remained committed, against the advice of many of his most trusted advisers, to balanced budget policies for most of the decade.  While his administration did boost government spending to nearly double the levels of the Hoover administration, it also collected sufficient taxes to keep deficits low.  It wasn’t until 1938 that Roosevelt proposed a Keynesian-style deficit spending plan.

At the same time, facing escalating demands for action from the unemployed as well as many elected city leaders, Roosevelt also knew that the status quo was politically untenable.  And, in an effort to halt the deepening depression and growing militancy of working people, he pursued a dizzying array of initiatives, most within his first 100 days in office.  The great majority were aimed at stabilizing or reforming markets, which Roosevelt believed was the best way to restore business confidence, investment, and growth.  This emphasis is clear from the following list of some of his most important initiatives.

  • The Agricultural Adjustment Act (May 1933). The act sought to boost the prices of agricultural goods. The government bought livestock and paid subsidies to farmers in exchange for reduced planting. It also created the Agricultural Adjustment Administration to manage the payment of subsidies.
  • The Securities Act of 1933 (May 1933). The act sought to restore confidence in the stock market by requiring that securities issuers disclose all information necessary for investors to be able to make informed investment decisions.
  • The Home Owners’ Loan Act of 1933 (June 1933). The act sought to stabilize the finance industry and housing industry by providing mortgage assistance to homeowners. It created the Home Owners Loan Corporation which was authorized to issue bonds and loans to help homeowners in financial difficulties pay their mortgages, back taxes, and insurance.
  • The Banking Act of 1933 (June 1933). The act separated commercial and investment banking and created the Federal Deposit Insurance Corporation to insure bank deposits, curb bank runs, and reduce bank failures.
  • Farm Credit Act (June 1933). The act established the Farm Credit System as a group of cooperative lending institutions to provide low cost loans to farmers.
  • National Industrial Recovery Act (June 1933). Title I of the act suspended anti-trust laws and required companies to write industrywide codes of fair competition that included wage and price fixing, the establishment of production quotas, and restrictions on market entry.  It also gave workers the right to organize unions, although without legal protection.  Title I also created the National Recovery Administration to encourage business compliance.  The Supreme Court ruled the suspension of anti-trust laws unconstitutional in 1935.  Title II, which established the Federal Emergency Administration of Public Works or Public Works Administration, is discussed below.

Roosevelt also pursued several initiatives in response to working class demands for jobs and a humane system of relief.  These include:

  • The Emergency Conservation Work Act (March 1933). The act created the Civilian Conservation Corps which employed jobless young men to work in the nation’s forests and parks, planting trees, reducing erosion, and fighting fires.
  • The Federal Emergency Relief Act of 1933 (May 1933). The act created the Federal Emergency Relief Administration to provide work and cash relief for the unemployed.
  • The Federal Emergency Administration of Public Works or Public Works Administration (June 1933). Established under Title II of the National Industrial Recovery Act, the Public Works Administration was a federally funded public works program that financed private construction of major public projects such as dams, bridges, hospitals, and schools.
  • The Civil Works Administration (November 1933).  Established by executive order, the Civil Works Administration was a short-lived jobs program that employed jobless workers at mostly manual-labor construction jobs.

This is without doubt an impressive record of accomplishments, and it doesn’t include other noteworthy actions, such as the establishment of the Tennessee Valley Authority, the ending of prohibition, and the removal of the US from the gold standard.  Yet, when looked at from the point of view of working people, this First New Deal was sadly lacking.

Roosevelt’s pursuit of market reform rather than deficit spending meant a slow recovery from the depths of the recession.  In fact, John Maynard Keynes wrote Roosevelt a public letter in December 1933, pointing out that the Roosevelt administration appeared more concerned with reform than recovery or, to be charitable, was confusing the former with the latter.  Primary attention, he argued, should be on recovery, and that required greater government spending financed by loans to increase national purchasing power.

Roosevelt also refused to address one of the unemployed movement’s major policy demands: the establishment of a federal unemployment insurance fund financed by taxes on the wealthy.  Finally, as we see next, even the New Deal’s early job creation and relief initiatives were deliberately designed in ways that limited their ability to meaningfully address their targeted social concerns.

First New Deal employment and relief programs

The Roosevelt administration’s first direct response to the country’s massive unemployment was the Civilian Conservation Corps (CCC).  Its enrollees, as Roosevelt explained, were to be “used in complex work, not interfering with normal employment and confining itself to forestry, the prevention of soil erosion, flood control, and similar projects.”  The project was important for establishing a new level of federal responsibility, as employer of last resort, for boosting employment.  Over its nine-year lifespan, its participants built thousands of miles of hiking trails, planted millions of trees, and fought hundreds of forest fires.

However, the program was far from meeting the needs of the tens of million jobless and their dependents.  Participation in the program was limited to unmarried male citizens, 18 to 25 years of age, whose families were on local relief, and who were able to pass a physical exam.  By law, maximum enrollment in the program was limited to 300,000.

Moreover, although the CCC provided its participants with shelter, clothing, and food, the wages it paid, $30 a month ($25 of which had to be sent home to their families), were low.  And, while white and black were supposed to be housed together in the CCC camps where participants lived under Army supervision, many of the camps were segregated, with whites given preference for the best jobs.

Two months later, the Roosevelt administration launched the Federal Emergency Relief Administration (FERA), the first program of direct federal financing of relief.  Under the Hoover administration, the federal government had restricted its support of state relief efforts to the offer of loans.  Because of the precariousness of their own financial situation, many states were unable to take on new debt, and were thus left with no choice but to curtail their relief efforts.

FERA, in contrast, offered grants as well as loans, providing approximately $3 billion in grants over its 2 ½ year lifespan. The grants allowed state and local governments to employ people who were on relief rolls to work on a variety of public projects in agriculture, the arts, construction and education.  FERA grants supported the employment of over 20 million people, or about 16 percent of the total population of the United States.

However, the program suffered from a number of shortcomings.  FERA provided funds to the states on a matching basis, with states required to contribute three dollars for every federal dollar.  This restriction meant that a number of states, struggling with budget shortfalls, either refused to apply for FERA grants or kept their requests small.

Also problematic was the program’s requirement that participants be on state relief rolls.  This meant that only one person in a family was eligible for FERA work.  And the amount of pay or relief was determined by a social worker’s evaluation of the extent of the family’s financial need.  Many states had extremely low standards of necessity, resulting in either low wages or inadequate relief payments which could sometimes be limited to coupons exchangeable only for food items on an approved list.

Finally, FERA was not directly involved in the administration and oversight of the projects it funded. This meant that compensation for work and working conditions differed across states.  It also meant that in many states, white males were given preferential treatment.

A month later, the Public Works Administration (PWA) was created as part of the National Industrial Recovery Act.  The PWA was a federal public works program that financed private construction of major long-term public projects such as dams, bridges, hospitals, and schools.  Administrators at PWA headquarters planned the projects and then gave funds to appropriate federal agencies to enable them to help state and local governments finance the work. The PWA played no role in hiring or production; private construction companies carried out the work, hiring workers on the open market.

The program lasted for six years, spent $6 billion, and helped finance a number of important infrastructure projects.  It also gave federal administrators valuable public policy planning experience, which was put to good use during World War II.  However, as was the case with FERA, PWA projects required matching contributions from state and local governments, and given their financial constraints, the program never spent as much money as was budgeted.

These programs paint a picture of a serious but limited effort on the part of the Roosevelt administration to help workers weather the crisis.  In particular, the requirement that states match federal contributions to receive FERA and PWA funds greatly limited their reach.  And, the participant restrictions attached to both the CCC and FERA meant that program benefits were far from adequate.  Moreover, because all of these were new programs, it often took time for administrators to get funds flowing, projects developed, participants chosen, and benefits distributed.  Thus, despite a flurry of activity, millions of workers and their families remained in desperate conditions with winter approaching.

Pressed to do more, the Roosevelt administration launched its final First New Deal jobs program in November 1933, the Civil Works Administration (CWA), under the umbrella of FERA.  It was designed to be a short-term program, and it lasted only 6 months, with most employment creation ending after 4 months.  The jobs created were primarily low-skilled construction jobs, improving or constructing roads, schools, parks, airports, and bridges. The CWA gave jobs to some 4 million people.

This was a dramatically different program from those discussed above.  Most importantly, employment was not limited to those on relief, greatly enlarging the number of unemployed who could participate.  At the end of Hoover’s term in office, only one unemployed person out of four was on a relief roll.  It also meant that participants would not be subject to the relief system’s humiliating means tests or have their wages tied to their family’s “estimated budgetary deficit.”  Also significant was the fact that although many of the jobs were inherited from current relief projects, CWA administrators made a real effort to employ their workers in new projects designed to be of value to the community.

For all of these reasons, jobless workers flocked to the program, seeking an opportunity to do, in the words of the time, “real work for a real wage.”   As Harry Hopkins, the program’s chief administrator, summed up in a talk shortly after the program’s termination:

When we started Civil Works we said we were going to put four million men to work.  How many do you suppose applied for those four million jobs? About ten million. Now I don’t say there were ten million people out of work, but ten million people walked up to a window and stood in line, many of them all night, asking for a job that paid them somewhere between seven and eighteen dollars a week.

In point of fact, there were some fifteen million people unemployed.  And as the demand for CWA jobs became clear, Roosevelt moved to end the program.   As Jeff Singleton describes:

In early January Hopkins told Roosevelt that CWA would run out of funds sooner than expected.  According to one account, Roosevelt “blew up” and demanded that Hopkins begin phasing out the program immediately.  On January 18 Hopkins ordered weekly wages cut (through a reduction in hours worked) and hinted that the program would be terminated at the beginning of March.  The cutback, coming at a time when the program had just reached its promised quota, generated a storm of protest and a movement in Congress to continue CWA through the spring of 1934.  These pressures helped the New Deal secure a new emergency relief appropriation of $950 million, but the CWA was phased out in March and April.

Lessons

The First New Deal did represent an important change in the economic role of the federal government.  In particular, the Roosevelt administration broke new ground in acknowledging federal responsibility for job creation and relief.  Yet, the record of the First New Deal also makes clear that the Roosevelt administration was reluctant to embrace the transformative role that many now attribute to it.

As Keynes pointed out, Roosevelt’s primary concern in the first years of his administration was achieving market stability through market reform, not a larger financial stake in the economy to speed recovery.  In fact, in some cases, his initiatives gave private corporations even greater control over market activity.

The Roosevelt administration response to worker demands for jobs and a more humane system of welfare was also far from transformative.  Determined to place limits on federal spending, its major initiatives required substantial participation from struggling state governments.  They also did little to challenge the punitive and inadequate relief systems operated by state governments.  The one exception was the CWA, which mandated wage-paying federally directed employment.  And that was the one program, despite its popularity, that was quickly terminated.

Of course, there was a Second New Deal, which included a number of important and more progressive initiatives, including the Works Progress Administration, the Social Security Act, and the National Labor Relations Act.  However, as I will discuss in the next post in this series, this Second New Deal was largely undertaken in response to the growing strength of the unemployed movement and workplace labor militancy.   And as we shall see, even these initiatives fell short of what many working people demanded.

One lesson to be learned from this history for those advocating a Green New Deal is that major policy transformations do not come ready made, or emerge fully developed.  Even during a period of exceptional crisis, the Roosevelt administration was hesitant to pursue truly radical experiments.  And the evolution of its policy owed far more to political pressure than the maturation of its administrative capacities or a new found determination to experiment.

If we hope to win a Green New Deal we will have to build a movement that is not only powerful enough to push the federal government to take on new responsibilities with new capacities, but also has the political maturity required to appreciate the contested nature of state policy and the vision necessary to sustain its forward march.