The beginning of 1932 marked a terrible time for the American people. This was the time of the Great Depression which, at the time, seemed to worsen with the passing of each year. This was a time when unemployment peaked and private, charitable organizations were overwhelmed by the crisis. Americans, with nowhere to turn, needed someone or something to help them face off against their hunger, loss of property, and their dying hope. However, things were looking better when on July 1, 1932, Franklin D. Roosevelt, the newly assigned democratic presidential nominee, gave one of the most promising and influential speeches in American history. “I pledge to you, I pledge myself, to a new deal for the American people”, he concluded. Many seized the prospect of this ‘New Deal’, resulting in Roosevelt beating Hoover by a landslide during the elections. In his first days of office, Roosevelt kicked off his presidency with swift and immediate government action. The bills passed could be grouped into categories about relief, recovery, and reform. This never before seen action by the government was so instrumental to economic success during the time period that it became known as the ‘First New Deal’. The many goals of the First New Deal which included stabilizing banks, regulation of businesses, lower the unemployment rate, and many more.
In the beginning of his First Hundred Days, Roosevelt wanted to fix the broken banking system. He started by closing all of the American banks while working on pushing for the Emergency Bank Act through the government. To ensure trust in the American people, Roosevelt explained the New Deal legislation and encouraged confidence in federal banks through his Fireside Chats. Roosevelt asked the American people to deposit their savings into the banks. These chats consisted of Roosevelt talking informally and even personally to the American people. When the banks soon reopened on stricter guidelines, Americans deposited their money and the act was successful. Not long afterwards, Congress passed the Glass Steagall Act, which gave federal deposit insurance. This, among other acts, allowed for the economy to stabilize.
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Also, for the rest of his First Hundred Days, Roosevelt instituted many programs in order to address the problems of the Great Depression. This included the Agricultural Adjustment Administration (AAA). The act increased the price of agricultural goods by giving cash incentives, so farmers could voluntarily limit their production of agricultural goods. In turn, this lowered supply thereby increasing prices. Additionally, the National Industry Recovery Act (NIRA) was instrumental in regulating businesses. The NIRA stopped antitrust laws and made for businesses to establish their own ‘codes’. These ‘codes’ would regulate their production, control prices, and many others. In exchange, businesses would have to give decent wages, put a stop to child labor, ang give their workers freedom to unionize.
Although government action caused GDP to climb, there was still a very high unemployment rate. The unemployment number did go down from its high, however, but the unemployment numbers were still huge. To address this, the Civil Works Administration (CWA) was created to put unemployed people on projects that were created by the government. Additionally, the Public Works Administration (PWA) was created by the government in order to provide aid to projects including bridges, schoolhouses, libraries, etc. Also, the Federal Emergency Relief Act (FERA) was used by Roosevelt by his authorization to give 500 million in direct grants. The money went to the states, so they could create relief agencies in order to provide resources to the vast amount of unemployed people.
In his First 100 Days, Franklin D. Roosevelt quickly pushed several bills forwards which were made to stabilize banks, provide relief to citizens, create jobs, and help businesses. Roosevelt’s First New Deal created policies that stopped the economic downturn. The total number of American workers largely increased, banks were no longer in complete turmoil, farmers were given positive incentives, and the American people were given hope.
After his first term, Roosevelt ran for and won his second term easily. This time, however, Roosevelt was facing a lot of criticism with conservatives angered about the excess amount of government action and liberals who were angered by the lack of work done in order to help the unemployed as well as those who were simply suffering all around at the hands of the Great Depression. Additionally, much to Roosevelt’s anger, the Supreme Court did not agree to key parts of the First New Deal. In his Second New Deal, Roosevelt instituted many policies that forever changed the American people.
As previously mentioned, there was a lot of criticism over Roosevelt’s First New Deal. Some felt that he did not do enough while others felt that he did too much. Dr. Francis E Townsend felt that more needed to be done to help the elderly. The Townsend Plan suggested that every citizen that was over the age of sixty would get two hundred dollars a month. Father Charles Coughlin believed that Roosevelt had not done enough to address defense of labor and reform for the monetary system. In his ‘End Poverty in California’ program, Upton Sinclair proposed the idea of a progressive income tax and compensation for the elderly. He also proposed that states should take farms and factories that had not paid their property taxes. After which the state would offer jobs for the unemployed to work on those factories and farms.
In response to the rapid criticism, Roosevelt realized that the arguments of the critics were reasonable and well founded. He decided to release yet another wave of government action that would later be called the ‘Second New Deal’. Before the reelection, Roosevelt asked all the congressional leaders to come to the White House. There, he had with him a list of specific government actions that he wanted done before the summer. The legislation passed would greatly change America for years to come.
During the Second New Deal, Roosevelt sought to create even more bank reform in order to help the American people. The Banking Act was one of the most influential acts on the change of banking laws ever in American history. Before, regional reserve banks were largely in control of the regulations in the Federal Reserve. However, under the Banking Act, there would be a new system in which a board of governors would regulate the regional banks. Their job would be to control discount rates, selection of board members, reserve requirements, as well as many other duties. Due to the fact that the government would be burrowing billions of dollars so it could fund various programs, the board kept interest rates low in the beginning.
Also, Roosevelt had to address the problems of unemployment as well. Thus, the Emergency Appropriation Relief Act allowed for the government to spend 4.8 billion dollars in expenses. Around a third of this went to the Works Progress Administration formerly known as the CWA. The program itself created jobs and relief to more than eight million citizens. In addition, the program provided money for the building multiple roads, schools, hospitals, etc. The WPA was responsible for the Federal One Project, a project that employed artists with many jobs. The WPA was also responsible for the National Youth Administration (NYA). This gave jobs that were work-study to around half a million college students as well as four million high school students.
To address the criticisms pointed out by Townsend and Coughlin, Roosevelt created the Social Security Act. This act was created in order to help both the elderly and the young. The act was also intended to provide help to the unemployed and disabled. The act gave money to people who were retired over the age of sixty-five. There was an unemployment program that gave money to the unemployed using taxes on employers, and programs for those who were disabled as well. Roosevelt took his critics’ ideas to make as components in some of these acts.
Sadly, the NIRA was gone when the Supreme Court struck it down due to regulatory implications of the act, so Roosevelt set to work on a new act to help workers in its stead. The Wagner Act was created so that the workers had the right to unionize, provided a way that laborers could address federal grievances, and many others. Though the law had to face the Supreme Court, it was eventually passed with the help of John Lewis, who wanted the government to give protection for industrial workers to unionize. The Wagner Act created permanent workers’ rights as well as the fact that it gave workers protection from their bosses.
Roosevelt won the next election against his republican opponent by a landslide. As a result, Roosevelt believed that he had the strongest public support at the time. Thus, he decided to propose the Supreme Court Packing Plan. The plan consisted of the idea that one justice was to be added for every justice over the age of seventy who would not step down. Ultimately, the act was unsuccessful, but it did succeed in making the Supreme Court justices intimidated. From that point on, the Supreme Court kept the Wagner Act and the Social Security Act.
Although Roosevelt’s Second New Deal was very successful, there was still a huge economic deficit. Roosevelt held fiscal beliefs which means that he felt that the deficit was bad. He understood what would happen when the government spent so much, but he also realized the state that the American people were in. However, Roosevelt believed that the economy would be able to get back on its feet by the end of 1936 so much so that he could put a close to government spending. However, the economy soon went into a recession amidst a depression. Two million Americans lost their jobs, causing the unemployment rate to go up by five percent. Roosevelt, recognizing that the country was in trouble, asked the government in 1938 for more spending on relief. This caused the government to give 33 billion dollars to the PWA and WPA programs.
In the summer of 1938, Roosevelt signed the Fair Labor Standards Act, giving the American people minimum wage. The act also established a maximum for hours allowed to be worked a week as well preventing any child under the age of sixteen from working. This very important act of legislation was very important as it would be a major help to citizens for the rest of American history.
The New Deal as a whole was seen as a huge increase in government power. The government took responsibility for the Great Depression. Many people considered the New Deal a very big success in American history. With his First and Second New Deal, Roosevelt created better working conditions, a minimum wage, stabilized banks, and many others. In doing so, Roosevelt stopped the economic decrease while helping the vast amount of Americans that needed help during the Great Depression.
The New Deal was a set of domestic policies that increased the role of the government during the Great Depression. The idea was derived from Franklin Roosevelt’s speech when he accepted his nomination for president. The New Deal had a very great range of goals. Its goals can be categorized into three parts: relief, recovery, and reform.
Relief was considered by many to be the immediate action taken by Roosevelt to stop the economic decrease. For example, the Federal Emergency Relief Act allowed the government to give cash to those who needed it most. Another example is the Civil Works Administration, an organization responsible for giving jobs to the unemployed and the construction of many roads and bridges as well as other projects. These examples are just a few of the many steps taken by Roosevelt and the government to halt the Great Depression.
Recovery meant Roosevelt creating programs in order to increase consumer demand. For example, the Agricultural Administration Act taxed food processors and gave the money back to farmers as a positive incentive for not selling as much. This decrease in supply increased prices of agricultural goods. Also, the Works Progress Administration was responsible for giving out jobs while building schools and other public works projects. More people became employed which was good for the economy. As a result, these programs increased consumer demand which would cause economic growth.
Reform meant creating programs to ensure that another crisis like the Great Depression didn’t happen again as well as insure the American people against financial disasters. For example, the Social Security Administration was responsible for making sure that the older men and women in America had the financial capability to keep living. Also, the Securities and Exchange Commission was created to monitor the stock market and make sure that there was no insider trading. These actions by the government, as well as several others, were created to try to make sure that another financial disaster would not happen again.
The Fair Labor Standards Act introduced great change for the American people. The Fair Labor Standards Act created a minimum wage requirement, forty cents per hour at the time. It also made a maximum work week of forty hours and stopped those under the age of sixteen from working. The challenge that the policy was made to address the fact that American workers were getting unfairly paid by their employers. Also, the American people were getting paid little to nothing while working completely unfair hours. Additionally, there were many children under the age of sixteen working long hours and getting little pay as well to support their families. This law prevented them from working as well as provided wages and better working hours for the people.
The Fair Labor Standards Act was an example of reform. Reform was the act of trying to make sure the Great Depression and other financial disasters would never happen again. The Fair Labor Standards Act introduced a minimum wage requirement which put money into the hands of the people. With the extra cash, the people were able to stimulate economic growth. This would, in theory, provide less of a risk for economic deterioration because people would spend more and still have that minimum wage to fall back on in case of an emergency. Because the people were getting a direct fair amount of money into their pocket, it prevented people with jobs from entering into extreme property. In turn, this would increase the standard of living. The fact that people had money would encourage them to spend more and would therefore cause economic growth. Thus, the Fair Labor Standards Act was created in order to establish fair wage in an effort to see that the country would not see another Great Depression.
Lasting for about ten years, the Great Depression was one of the worst economic breakdowns in the industrialized world. Minorities, specifically African Americans, Hispanics, and Native Americans had it the worst. These people were often the last hired and the first people that employers looked for to fire. These minorities were already put in jobs that paid less, and the Great Depression just made that even worse. As a result, minorities had little financial stability to fall back on in the first place when the Great Depression began. A lot of these minorities fell into terrible debt and had very low wages. The Fair Labor Standards Act increased the minimum wage for all people, including these groups. Minorities now had higher wages which gave them a bigger financial cushion to fall back on. Also, although it was not specifically targeted towards women, the Fair Labor Standards Act increased the wage enough so that women could earn a living. Arguably, the act actually helped women more than it helped men considering that it helped women who are particularly head of the household or living by themselves. Thus, the Fair Labor Standards Act gave minorities and women a greater financial cushion to all back on.
Before the Fair Labor Standards Act was introduced, both adults and children worked for long hours day after day just to survive. In the Great Depression, not only did workers get laid off, but several laborers experienced wage cuts. These workers, including the children, would work long hours in horrible conditions for very little and unfair pay. When the government passed the Fair Labor Standards Act, it was an immediate success. Children under the age of sixteen would no longer have to work in factories, and there was just pay for everyone. Also, there was a maximum hour work week required as well. In doing so, the act raised wages for hundreds of thousands of people and prevented children between the ages of ten and fifteen from working. In terms of medium-term change, the Act would continue to prevent children from working and create better working conditions for the people due to the financial support that the minimum wage gave.
In terms of long-term, the Fair Labor Standards Act continued to help American citizens beyond the 1930s. The conceptual idea of the act has not been changed, but small details of it have. For example, in 2020, the Fair Labor Standards Act is still being used to dictate minimum wage which varies state by state. However, children are still largely not allowed to work, and harmful child labor is prohibited. Hours that are over the typical forty-hour work week are still considered overtime. Ultimately, the Federal Labor Standards Act established the ideal labor conditions that we know today. The values that it holds are still very importantly regarded and used even after several decades.
Works Cited
- Dana Cochran et al., “The Great Depression”, Matthew Downs, ed., in The American Yawp, eds. Joseph Locke and Ben Wright (Stanford, CA: Stanford University Press, 2018).
- Huizar, Laura. “A Baseline for Economic Freedom: 80 Years of Fair Labor Standards”. National Employment Law Project, 24 Oct. 2018, www.nelp.org/blog/80-years-of-fair-labor-standards/
- Dunleavy, Brian. “Did New Deal Programs Help End the Great Depression?” History.com, A&E Television Networks, 13 Aug. 2018. www.history.com/news/new-deal-effects-great-depression
- The Editors of Encyclopedia Britannica. “Fair Labor Standards Act”. Encyclopedia Britannica, Encyclopedia Britannica, Inc., 21 Mar. 2018, www.britannica.com/event/Fair-Labor-Standards-Act.
- Cole, Peter. “Minimum Wage and More: The Law That Changed American Labor”. Time, Time, 24 June 2016, time.com/4376857/flsa-history/.
- Leuchtenburg, William E. “Franklin D. Roosevelt: The American Franchise”. Miller Center, 24 July 2018, millercenter.org/president/fdroosevelt/the-american-franchise.
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