Labor’s Large Share of the National Income

Rather than allow the natural forces of economic recovery take its course, Franklin Roosevelt’s administration experimented with government stimulus and prolonged the depression. FDR would end the depression by provoking both the Germans and Japanese into war, something he could not accomplish in peace. The communist-infiltrated Congress of Industrial Organizations (CIO) funneled labor money and votes to FDR’s reelection bids, and expected labor-friendly treatment in return.

Bernhard Thuersam

Labor’s Large Share of the National Income:

“The New Deal did not and apparently could not, solve the basic [economic] recovery problem. Some of its works seemed to actually retard revival. Roosevelt himself and the majority of his adherents saw nothing radical or revolutionary – in the pejorative sense – about the New Deal, arguing indeed that it promoted individual enterprise and free competition precisely because it favored small business over big business, the average citizen against monopoly, collective bargaining against concentrated managerial power. Beyond any question, government intervention strengthened labor’s hand.

Business, on the other hand, noted a new arrogance of labor, sit-in strikes and law-breaking tactics. Moreover, the quasi-judicial National Labor Relations Board appeared to overstep its professional impartiality in assuring C.I.O. unions an opportunity to redress old grievances by swinging to the other extreme. Even in the shadows of the war economy, radical C.I.O. leaders created the impression that labor’s exclusive goal was a large share in the national income, not a due share in a larger national income.

Hutcheson warned against such developments. “Business leaders called on the leaders of the C.I.O. to act….[the C.I.O.] had opened its ranks to Communists and other crackpot labor theorists. “They had swarmed in and were spreading their radical views,” wrote the Brotherhood’s official Journal, The Carpenter, “Business gave up….”

Roosevelt’s “pump-priming” as a method for [economic] revival finally ended in July, 1939. At that time, the Works Projects Administration (WPA) took care of 3,325,000 people. Roosevelt launched his new $3,000,000,000 Bill of indirect or “lending-spending” project. Apparently, expecting by speed and adroitness to reach his goal “through a broken field of dangers,” he counted on support from liberals because the program would ensure another army of men against idleness, and from the balance of power conservatives, because it excluded a prevailing union wage.

On July 31, under the influence of Senator Byrd, Roosevelt’s program moved swiftly to its doom. With [this defeat] and other current developments, it greatly reduced his prestige. But throughout history, wars or threats of war have kept many a chief magistrate and executive in power. Within a month after Roosevelt’s defeat in Congress, Hitler and Stalin overran Poland, and Europe was plunged into war. Roosevelt’s dimmed star came back again into the ascendant.

(Portrait of an American Labor Leader, William L. Hutcheson, Maxwell C. Raddock, American Institute of Social Science, 1955, pp. 232-234)

Labor’s Large Share of the National Income