BY GERTRUDE SCHAFFNER GOLDBERG
Taught to think of depressions as things of the past, Americans were shocked by the financial crash of 2008. How enduring or deep would the effects of this largely unexpected meltdown be? Would it, like the 1929 crash, lead to something close to an economic collapse? Would this crisis generate mass protest and an opportunity to address some of the very economic and social ills that had caused it?
In the wake of the financial crisis, unemployment reached mass proportions, and serious unemployment persists today. High rates of official unemployment (8% or more) lasted much longer than at any other time since World War II. At the peak of this Great Recession, in the last months of 2009, nearly 31 million people—almost double the number (16.3 million) just prior to the crash—were jobless or forced to work part-time despite wanting full-time work. An estimated 18 million of those who had full-time, year-round jobs were still poor, earning less than the paltry official poverty level for a family of four ($23,850 in 2014). Now, more than six years after the crash, the number of jobless or involuntary part-time workers is still 22 million, over a third higher than the pre-crisis figure. By 2011, four million families had lost their homes to foreclosure, and by the time the economic damage is done, foreclosures may total as many as 13 million. Yet there has been no mass movement of the unemployed or dispossessed.
The unemployed and suffering masses were not silent during the Great Depression. In the 1930s, economic crisis gave rise to important social movements that contributed to significant social reform. One reason why our political economy remains frozen in its pre-crisis mode is that movements of comparable size and strength have not arisen since the Great Recession. Unemployed workers and organized labor formed powerful movements in the 1930s, but their contemporary counterparts have either failed to organize or continued to lose ground since the Great Recession. Such organizing may seem less urgent during this crisis than during the prolonged crisis of the 1930s. Yet, given the aftermath of the recession and existing economic and environmental problems, the need was sufficient to have led to more sustained social protest than actually occurred. The urgency of reform persists, and a mass mobilization that could rescue our political economy from plutocracy remains possible.
Unemployed Workers: Yesterday and Today
What are the key differences that explain why the unemployed mobilized during the 1930s, but not during the present crisis? One is the rate of unemployment and the rapidity with which it rose. Related to this is a great difference in the availability of relief to meet the needs of unemployed workers and their families.
(1) Level of unemployment and rate of increase. After the 1929 crash, unemployment shot up rapidly. The rise was more than three-fold, from an estimated official rate of 3.2% in 1929 to 9.7% in 1930. Moreover, unemployment continued to rise, reaching a high-water mark of almost 25% by the time Franklin D. Roosevelt became president in 1933. Further, the rate did not drop below 14% until 1941, when the build-up for World War II had begun to rescue the economy.
Jobless workers were proportionately much less numerous following the 2008 crash. Whereas the unemployment rate tripled in the year following the 1929 stock market crash, it rose from 4.6% in 2007 to 5.8% in 2008, only reaching 10.0%—or slightly more than double the rate in 2007—by the end of 2009, the peak time of Great Recession unemployment. Since then, this official unemployment rate has dropped to just under 6% in 2014.
Although unemployment was less widespread than during the Great Depression, its size and toll were arguably great enough to have generated more protest. The official unemployment rate—including only those who do no work at all for pay and who are actively looking for a job—is a serious undercount of true unemployment and underemployment. Counting, in addition to the officially unemployed, those forced to work part-time and those who want a job but aren’t looking (some of whom have become discouraged and stopped looking) more than doubles the total. In 2014, with official unemployment falling below 6%, the labor force participation rate (LFPR)—that is, the percentage of people 16 and older who are working or actively seeking work—was the lowest since 1978. If the LFPR were at its pre-recession level, the unemployment rate in October 2014 would have been 9.1% instead of 5.8%! The working poor in 2013, the latest year for which data are available, represented an even higher proportion of the full-time, year-round workforce than at the height of the Recession. And the Department of Labor recently estimated that there are several million workers eligible for the statutory minimum wage in their states or the federal minimum wage (only $15,080 if they work 40 hours a week, every week of the year) who are not being paid what these laws require.
(2) Availability of Relief. The high rate of unemployment and its rapid rise during the early years of the Depression were related to the utter paucity of relief for the unemployed or protection against the loss of their livelihoods. Why? With some form of compensation, unemployed workers and their families continue to buy goods and services, their consumption keeps the economy from shrinking or collapsing, and that slows the increase of unemployment. Prior to the Depression, unemployment insurance existed in some European countries but hadn’t crossed the Atlantic. There was no aid for the unemployed at the state level until 1931, when New York, under then-Governor Franklin D. Roosevelt, became the first state to open its limited coffers for “temporary, emergency relief.” Local public relief was meager, if available at all, and private charity was even more limited.
How Big a Deal Was the Unemployed Movement?
Some observers downplay the influence of the unemployed movement during the New Deal. However, it mobilized considerable support for the Workers’ Unemployment Bill, also known as the Lundeen Bill, named for Rep. Ernest Lundeen (Farmer-Labor Party-Minn.). Economist Paul Douglas (later Senator from Illinois) considered the Lundeen Bill “the most thoroughgoing and adequate proposal … for taking care of the unemployed.” The New York Times quoted House Speaker Joseph W. Byrnes describing the “mountainous piles of letters with which Congress is being deluged” by supporters of the Lundeen Bill and the Townsend plan, the latter a proposal for generous, universal pensions for the elderly. It was Douglas’ view that pressure from the left had “enabled the administration forces to say to the indifferent and conservatives that unless they accepted the moderate program put forth by the administration, they might later be forced to accept the radical and far-reaching provisions of the Lundeen bill.” Another major focus of the unemployed movement during the Depression was protecting the rights of employees in the New Deal work programs, including organizing actions against cutbacks.
Conditions for unemployed workers are quite different in the 21st century. When the Great Recession struck, social welfare programs created during the New Deal were on hand to reduce mass suffering. The rolls of the Supplemental Nutritional Assistance Program (SNAP, or “food stamps”) increased by 14.3 million. In July 2010, food stamps helped 42 million people stave off hunger. In contrast to the early Depression years, Unemployment Insurance (UI)—its rolls increasing nearly five-fold between 2007 and 2010—helped keep 3.3 million Americans out of poverty in 2009. The length of time that a worker can collect benefits during normal times, usually 26 weeks, was increased by an extended-benefits program (enacted by Congress in 1970 for periods of high unemployment) and by the Emergency Unemployment Compensation Program (EUC) of 2008. Along with other fiscal stimuli, social welfare programs prevented the deep downward spiral of diminishing consumption, rising unemployment, and collapsing production of the early Depression years when, according to New Deal relief administrator Harry Hopkins, “the working people of this country suffered untold misery.” These are important reasons why its 21st-century counterpart remained a recession—a Great Recession, but much lower on the Richter scale of economic cataclysm than the Great Depression.
Despite the availability of these social programs during the Great Recession, many needs remained unmet. Although UI benefits expanded greatly, many of the unemployed went without compensation. At most, 50% of those officially unemployed received benefits. Since states typically pay half of a worker’s former salary or less, income loss, even for those covered by UI, was severe. Millions of those receiving extended benefits have lost benefits since December 2013.
While extended UI benefits kept income flowing to many of the long-term unemployed, government job creation is a more beneficial policy—for the unemployed and for the nation. It can increase dignity, reduce isolation, maintain the habit of work, and provide an opportunity to learn new skills—as it did during the famous work programs of the New Deal. With tremendous unmet needs in the country’s physical and social infrastructure and the imperative of greening an economy currently steering headlong into climate crisis, advocacy for the unemployed should include an updated model of New Deal work programs—job-creation programs that pay living wages and do not, in contrast to the Depression-era, discriminate against women and minorities.
Job creation legislation, including bills for full employment, an Infrastructure Bank, and a revival of the Civilian Conservation Corps, has been introduced in the House of Representatives in the last few years. Unfortunately, this did not happen until unemployment was falling, although still high, and public concern fading—and in a Congress very unlikely to enact such measures.
(3) Presence of ideologically committed organizers. Poor people typically lack resources for organized protest. This weakness can be overcome—and was overcome in the early years of the Depression—with an infusion of external resources.
Members of the Communist Party were the first to organize the unemployed and were the most active. Communist Party organizers were particularly adept at helping jobless workers to overcome the tendency toward self-blame and to understand their “private” troubles as public grievances. In time, other radical groups provided these resources: the Workers’ Committees organized by members of the Socialist Party and other groups of socialists, and the Unemployed Leagues led by the left-wing minister, educator, and activist A. J. Muste. Eventually, elites at various levels of government lent their support. The National Conference of Mayors was established in 1932 with the express purpose of lobbying for federal relief and, immediately after its founding, a delegation of big-city mayors was dispatched to Washington for that purpose.
Within months of the stock market crash, demonstrations by the unemployed occurred in almost every important industrial center, some involving violent clashes with the police. Although the Communist press probably exaggerated in claiming that “millions” demonstrated on March 6, 1930—only a few months after the crash—large numbers did take part, many at the instigation of the local Unemployed Councils (UC). “Bleeding heads,” wrote New Deal historian Irving Bernstein, “converted unemployment from a little-noticed to a page-one problem in every important city in the United States.”
Before the New Deal, the major gains of the unemployed movement were raising public consciousness of the extent and devastation of unemployment, gaining the alliance of local elites, stopping evictions, and increasing relief levels. While historians debate the size and impact of the movement, most would agree that the insurgency of the organized unemployed influenced Roosevelt’s unprecedented decision very soon after taking office to provide direct federal relief to the needy.
Although the unemployed, underemployed, and working poor during the Great Recession and its aftermath were—and remain—numerous and needy, external resources that could spur organizing have not been available. Parties of the left are nearly non-existent. Organizations like the Coalition for Human Needs, the National Employment Labor Project, and the Center for Effective Government advocate for the maintenance of benefits like Food Stamps and Unemployment Insurance, and the National Jobs for All Coalition (NJFAC) promotes job creation and has helped to craft pending legislation such as the 21st Century Humphrey-Hawkins Full Employment and Training Act (H.R. 1000). (Full disclosure: The author is the chair of NJFAC.) However, these organizations lack the resources and the mission for building a movement of the unemployed.
An obvious candidate for providing organizational resources to the unemployed is the labor movement. “The strength at the bargaining table,” goes the adage, “is related to the length of the line [of job-seekers] outside.” Yet labor, while supporting extended benefits for unemployed workers, has not been a proponent of full employment or government job creation. During the 1970s push for a full-employment bill, the AFL-CIO strongly opposed a legally enforced right to a job in an original version of what became the Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978. Economist Helen Ginsburg suggests that, for the Federation, “full employment was not a high priority because the AFL-CIO’s main concerns were with matters more directly affecting their members, most of whom were employed.” The discussion of the labor movement that follows offers some more insight into the Federation’s neglect of job creation.
The Labor Movement: Gains in the Thirties, Stagnation Today
On the eve of the Great Depression, the proportion of workers belonging to labor unions (or “union density”) was about equal to the proportion in 2008. Whereas the labor movement tripled its membership in the 1930s, there were 1.5 million fewer union members in 2013 than in 2008. What accounts for the great difference between the Depression era and today?
(1) Labor and the New Deal. Referring to the substantial growth of the labor movement during the New Deal, economist Richard McIntyre observes that “a radical movement can make real social change when government is even only mildly supportive.” President Roosevelt and Labor Secretary Frances Perkins were not strong advocates of collective bargaining, reportedly believing government could do more for workers than unions could. Yet the New Deal provided moderate, sometimes reluctant, support that contributed to the stunning growth of the labor movement in the 1930s.
The impetus to unionization in the 1930s was almost accidental. In pursuit of industrial peace to facilitate recovery, the New Deal offered concessions to both business and labor in its National Recovery Act of 1933 (NRA). Section 7(a) of the NRA, which gave collective bargaining rights to labor, was nonetheless “the spark that rekindled the spirit of unionism within American labor,” according to historian Irving Bernstein. Labor leaders, some of whom had lobbied for Section 7(a), responded by launching vigorous organizing drives. United Mine Workers President John L. Lewis compared 7(a) to the Emancipation Proclamation and committed the union’s entire treasury to an organizing drive. An important element in labor’s rise were outstanding leaders like Lewis and Sidney Hillman of the Amalgamated Clothing Workers, unionists who advocated organizing millions of workers in the mass production industries rather than confining the movement to elitist, skilled-craft unions. These leaders went on to found the Congress of Industrial Organizations (CIO), which was committed to industrial unionism in mass production industries and to egalitarian principles more generally, including racially integrated unions. An additional, important ingredient in labor’s rise was a rank and file that sometimes organized themselves and, on occasion, without their leaders’ assent, initiated radical tactics.
Section 7(a) encountered fierce business resistance. Senator Robert Wagner (D-N.Y.), who headed a National Labor Board to oversee the implementation of 7(a), became convinced that enforceable rules were necessary. Consequently, he introduced the National Labor Relations Act (NLRA), or Wagner Act, which would not only grant the right to collective bargaining but establish administrative machinery with quasi-judicial powers to implement it. Roosevelt and Perkins reluctantly supported the NLRA for reasons that are not entirely clear to historians. Perkins, in fact, later wrote, “All the credit for it belongs to Wagner.”
The Flint Sit-Down Strike: Workers, Unions, Employers, and the State
When rank-and-file workers at the General Motors plant in Flint, Mich., engaged in a sit-down strike (starting in late December 1936) without the authorization of CIO President John L. Lewis, he nonetheless supported them to the hilt. In a critical showdown, President Roosevelt and Secretary of Labor Perkins refrained from condemning the sit-downs. Instead, they supported the efforts of Michigan’s governor, Frank Murphy, to achieve a peaceful settlement and to delay the enforcement of a court order to end the strike. The result was a momentous victory for the labor movement: recognition of the United Auto Workers by General Motors, then the largest corporation in the world. According to labor historian James Green, it was “the most important single strike confrontation of the century.” Following on its heels was another great victory for labor—union recognition for workers at the United States Steel Corporation.
In a press conference in which newspaper editors asked FDR why he had not spoken out against the illegal sit-downs, he explained his stance: “I believed … that the country, including labor, would learn the lesson of their own volition without having it forced upon them by marching troops.” FDR may also have been reciprocating for labor’s vigorous support of his 1936 campaign for the presidency. Nonetheless, FDR’s response to the Flint showdown was consistent with his view that “mere suppression” is not an adequate response to protest.
Roosevelt ceased moderate support for the labor movement after the major breakthroughs at General Motors and U.S. Steel. Sensing the growing unpopularity of radical tactics, he famously denounced efforts to unionize the rest of the steel industry: “The majority of the people are saying just one thing, a plague on both your houses.”
Employers resisted the Wagner Act, too, claiming that it would be declared unconstitutional. Militant labor groups, in turn, took the law into their own hands, using confrontational tactics such as the “sit-down strike”—occupying the plant instead of picketing outside (see box). Though it would be short-lived, moderate support from government gave labor a window of opportunity, making possible enormous gains, such as the unionization of the largest auto and steel companies. The Supreme Court upheld the constitutionality of the Wagner Act, thus making collective bargaining legal, but declared the sit-down strike illegal. As historian Green wrote, “The courts allowed unions to engage in collective bargaining over a limited range of issues, but prohibited them from using the kind of militant, direct action that had built the CIO.”
Union membership continued to increase into the 1950s, despite the limits imposed by the Supreme Court and Congress, including red- baiting, beginning in the late thirties, by the Congressional House Un-American Activities Committee (HUAC). The AFL joined the attack against the CIO, and the CIO, in time, purged some of its most progressive leaders, many of them unionists who thought in terms of the interests of the working class as a whole rather than solely of union members or a particular occupation or industry. The loss of this progressive leadership may account for the fact that the AFL-CIO opposed the enforceable right to employment in the 1970s. Nor has it mounted a campaign for government job creation during the Great Recession.
(2) The Labor Movement in the Great Recession. Like Section 7(a), the Employee Free Choice Act (EFCA), before Congress in 2009, could have rekindled the labor movement. The goal of EFCA was to make it easier for employees to join unions and harder for employers to prevent it. The labor movement considered the Act critical to a reversal of the deep decline in union density since the 1950s. One prominent management-side labor lawyer held that labor could only gain ground if such legislation were passed. During the 2008 campaign, Barack Obama said he would sign EFCA if he became president.
When a Democratic White House and congressional leadership made passage appear likely, business responded with fierce lobbying against EFCA. This opportunity to recapture some of labor’s power was bypassed, owing to a combination of White House refusal to move on it before passage of health care reform and reservations of moderate Democrats over EFCA’s controversial card check provision: instead of requiring a vote by secret ballot, union recognition would be achieved as soon as the majority of workers signed cards in favor of union membership. However, in the interest of enacting EFCA, labor seemed willing to forgo the card check. With loss of Democratic control of the House, EFCA was doomed. Thus, the state was not even “moderately supportive.” Moreover, the national crackdown of Occupy Wall Street coordinated by the federal Department of Homeland Security raises doubt over the extent to which an increasingly plutocratic state would desist from suppression of militant unionists or radical social protest.
Since the Great Depression, labor has consistently been a big contributor to the Democratic Party. Yet it has little to show for this support. As economist McIntyre points out, “For fifty years, even when the Democrats have controlled the presidency and both houses of Congress, organized labor has been unable to win any federal legislation that would spur union growth or increase what little political and economic leverage it still has.” The Democratic Party is not a working-class party comparable to the social democratic parties in Europe that were closely allied with labor and partners in the establishment of the progressive welfare states that flourished in the second half of the last century. Sweden, for 60 years, was a full-employment social democracy.
Labor continued to be a big supporter of the Democratic Party during the Great Recession. After the critical loss of EFCA despite Democratic control of Congress, labor nonetheless went all out for the Democrats in the mid-term election of 2010. No doubt it did so with the expectation that if Democrats retained control of Congress, it would have a second shot at EFCA. Prior to the 2010 election, AFL-CIO President Richard Trumka sent 28.6 million pieces of mail to union members urging them to vote and providing a slate of endorsed candidates. In addition, 100,000 volunteers went door-to-door to promote endorsed candidates to 13 million union members in 32 states. In the 2012 election cycle, the labor movement as a whole—the AFL-CIO, its individual member unions, and other unions not in the 56-member Federation—contributed over $141 million to campaigns and committees, 90% of which went to Democrats.
Requisites for Reform
The conditions that led to a movement of unemployed workers and to large gains in union density following the stock market crash of 1929 were either altogether lacking or much weaker in the aftermath of the recent economic crisis. In the 1930s, mass unemployment plagued the nation and was largely uncompensated or unrelieved. Need is a necessary condition for a movement of economically distressed people, but it is not sufficient. Despite mass suffering, it took the organizational resources of the Communist Party and other organizations on the left to forge an unemployed workers’ movement worthy of the name.
During the recent, severe recession, unemployment was less widespread than during the Depression, and people’s needs were better met, owing partly to the expansion of programs born during the New Deal, like Unemployment Insurance and Food Stamps. On the other hand, unemployment, underemployment, and the related problem of stagnating wages continue to cause enormous distress. Recently, Federal Reserve Chair Janet Yellen decried the nation’s growing inequality of income and wealth and asked whether “this trend is compatible … with the high value Americans have traditionally placed on equality of opportunity.” Moreover, the threat to the environment posed by climate change has become increasingly dire in recent years, and its mitigation is severely hindered by the claims of deniers and the fossil-fuel industry that addressing the threat to the planet will increase unemployment.
In short, there are a number of serious economic problems that could give rise to a set of related, movement-generating demands—were the necessary organizational resources forthcoming. A movement demanding a living minimum wage, wider and more adequate coverage by short-term unemployment insurance, and job-creation as an antidote to long-term unemployment would be a powerful means of rebuilding organized labor, reducing economic inequality, and removing employment barriers to the mitigation of climate change. Moreover, some jobs created by government could contribute to climate change mitigation, such as retrofitting buildings throughout the country, building solar panels and windmills, and making the infrastructure more efficient. Achievement of these goals could lead to a real full-employment policy, stronger collective bargaining rights, and a reorientation of the economy towards environmental sustainability. The missing ingredient—so important during the early thirties, even with the mass suffering of the time—is ideologically committed organizational resources.
With mainstream churches no longer in a position to provide the vital support that they lent to civil rights and welfare rights struggles, hope rests with the labor movement. But does labor have the resources and the ideological commitment to reform? As Service Employees International Union (SEIU) official David Rolf has observed, “Organized labor, even in its current weakened state, remains one of the few progressive institutions with independent resources. American labor unions hold a combined $34 billion in assets, boast an organized and disproportionately progressive membership, and wield significant political power in left-leaning areas.” Some of those resources need to be shifted from a Democratic Party that fails to reciprocate labor’s support to building a movement that could put pressure on the Democrats in the way that the Civil Rights Movement did. Recall that, as a Democratic senator from Texas, Lyndon Johnson held back civil rights, but under pressure as President, that son of the South used his political power and acumen to expand civil rights.
Is the labor movement likely to use its resources on behalf of a progressive, multi-faceted social movement? Labor journalist Greg Heires writes that “unions need to change their internal structure and cultures to allow for a dramatic shift of their resources into more aggressive organizing.” No doubt labor’s structure and culture are partly the product of attacks on labor and the purging of its progressive leadership. Perhaps the very decline of the labor movement—and the defeat of EFCA, which might have reversed that decline—will rekindle the movement. AFL-CIO President Richard Trumka, suggesting how labor can respond, has said, “We are going to open our arms to people who want to join our movement. … Instead of saying to our community partners and the civil rights movement or the Latino movement, ‘That’s your issue and this is my issue,’ they’re going to be our issues, and we’re going to work together.” Whether the structure and culture of the AFL-CIO will permit such an outreach is unclear.
There are some hopeful signs in the labor movement. SEIU has spent more than $10 million to underwrite the movement of fast-food workers because, according to New York Times labor correspondent Steven Greenhouse, it sees this as “a powerful lever to raise pay for low-wage workers nationwide.” National Nurses United vigorously promotes the financial transaction tax, which would provide billions of additional dollars for schools, housing, hospitals, local communities, and medicines (see Doug Orr, “The Big Casino,” D&S, May/June 2014). Organized labor played an important role in the recent People’s Climate March in New York. Divisions between labor and the environmental movement over the problem of jobs are beginning to break down. In his blog post, “The Greening of the Labor Movement,” Heires reports that 70 unions helped organize the march, which brought 400,000 people to the streets of New York in September.
As long as unemployment remains high, however, our ability to cope with climate change and other environmental problems will be compromised. A full-employment policy that features government creation of living-wage green jobs—that either directly contribute to a more sustainable economy or meet human needs for education, elder care, and child care with minimal strain on the environment—is a policy that could unite the advocates of economic and environmental justice. Needs abound; there is no dearth of policy solutions. Potential organizational resources exist. The question is whether they can be deployed in the service of a broad social movement to serve economic and environmental justice.