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Journal of Policy History 13.3 (2001) 367-390

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The Other New Deal and Labor: The Regulatory State and the Unions, 1933-1940

Daniel Nelson

At the end of Turbulent Years, his classic study of the labor upheavals of the 1930s, Irving Bernstein unexpectedly announces that the American Federation of Labor "gained a decisive and permanent victory." This is a remarkable admission. Bernstein had devoted the bulk of his study to the failures of the AFL and the emergence of a more relevant alternative, the CIO. Like most authors, he associated the turbulence of the 1930s with the rise of industrial unionism, which addressed the apparent deficiencies of the AFL, notably its preoccupation with skilled workers and neglect of large-scale manufacturing. Still, the AFL grew more rapidly. Bernstein tries to explain: the triumph of the AFL "was hidden by the mystique of power [John L] Lewis had imparted to the CIO, by the highly publicized contemporary successes of SWOC . . . and UAW . . . and the deliberate falsification of membership records." 1 While these factors may account for the misleading imagery of the CIO, they do not explain the behavior of millions of workers who opted for AFL organizations. Clearly other forces were at work. 2

Between 1933 and 1940, when war mobilization became a decisive influence, American unions recruited 4.3 million new members, raising union density from less than 12 percent of the nonagricultural labor force to 22 percent, the greatest sustained increase to that date. Union membership in manufacturing tripled, accounting for two million new members. Membership in other sectors more than doubled, accounting for the other 2.3 million members. Union victories in manufacturing were marked by intense conflict and organizational innovation, including the formation of the CIO and the sit-down movement. Union growth in the other [End Page 367] sectors was more subdued. It produced fewer dramatic incidents and public confrontations. Transportation, trade, and services, for example, accounted for less than 20 percent of all strikers and days idled. 3 NLRB elections were infrequent. 4 And while new, younger labor leaders played major roles, there were relatively few new unions. In short, there was one pattern in manufacturing and an entirely different pattern in most other industries. What accounted for these distinctions, which ultimately favored the AFL?

The answer lies in the nature of the organizational stimulus, especially the federal government policies introduced in 1933 and afterward to revive the economy. New Deal legislative and administrative initiatives did not explicitly favor union expansion, but they did emphasize objectives such as price and wage increases and collective bargaining that encouraged union growth. Directly or indirectly, government created a union-friendly environment, as Bernstein and others have long noted. 5 What they have not emphasized was the diverse nature of the stimulus, especially after 1935. Historians have logically equated union growth with policies that addressed labor force issues and collective bargaining, disregarding other, seemingly unrelated measures that in fact had similar effects. Government-sanctioned collective bargaining was a boon to the labor movement but not a prerequisite for union growth. Had Congress not passed the Wagner Act, the number of union members in 1940 might have been lower, but nowhere near as low as it had been in 1930 or 1932. Rather than any single measure, it was the New Deal approach to economic problems that was decisive.

In practice, one set of policies promoted collective bargaining and created organizing opportunities for workers, notably but not exclusively in industries such autos, steel, and tires, where the CIO drew most of its strength. Another set, devoted to the public regulation of business activity, created comparable or superior opportunities in other sectors such as transportation and communications, where well-established AFL unions already operated. When both types of policies are taken into account, the seemingly inexplicable triumph of the AFL becomes instead a natural outgrowth of the interventionist approach of the Roosevelt administration.

Bottom-Up, Top-Down

In a recent essay, Richard Freeman forcefully addressed the traditional story of union growth in the 1930s...


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