The era of Franklin D. Roosevelt transformed the power of workers to achieve a better life. The New Deal facilitated the mass organization of the industrial working class into militant unions and also relied on the state through measures such as the Fair Labor Standards Act and Social Security. But though the New Deal of the 1930s is often remembered as the zenith of progressivism, in many ways World War II marked the high point of this collaboration. Ironically, the war's strengthened military-industrial complex also proved its undoing.
Deficit spending required by war mobilization rapidly produced full employment. The nation's gross national product soared from $91 billion in 1939 to $166 billion in 1945. The military and civilian sectors together saw the creation of 17 million new jobs, mainly high-wage positions in new industries powered by new plants, equipment, and technologies. It was the egalitarian nature and consequences of that growth, however, that was most striking. Progressive-minded public officials and representatives of the labor movement honeycombed newly created agencies charged with manpower mobilization and labor relations, price stabilization, and conversion to military production.
The National War Labor Board (NWLB), for example, consisted of equal numbers of representatives of labor, business, and the public. Because labor exercised substantial political muscle and because the public members of the board wanted to insure continuous production, the board usually supported unionization. In return for a "no strike" pledge from the labor movement for the duration of the war, the board established a principle of "maintenance of membership." Essentially this meant that the millions of new workers flooding into war industries would almost automatically become union members. It also encouraged new organizing efforts both in war industries and at firms producing civilian goods. Membership in trade unions grew from 9 million to 15 million by the end of the 1940s.
Organizers openly circulated membership cards on the factory floor during working hours and unions won nine out of 10 National Labor Relations Board elections. When Sewell Avery, the right-wing head of Montgomery Ward, refused to comply with NWLB rulings, he was hauled out of his office by uniformed soldiers. Rulings by the National Labor Relations Board, backed by Attorney General Francis Biddle, consistently found that corporations engaging in unfair labor practices were not eligible for government contracts.
Spectacular union growth was decisive in eliminating the gross inequalities characteristic of the old order. Under the NWLB regime, regional wage differentials narrowed considerably, particularly in the South. Vacation pay and sick leave became commonplace. Grievance procedures and seniority rules mandated by the NWLB extended the rule of law to an industrial terrain once governed by the whims of management. Two million women joined the labor movement. In a landmark ruling against General Motors in 1942, the NWLB mandated equal pay for equal work. At least for some African Americans and white women, that principle became a reality.
All of this tended to compress the income hierarchy by raising up those at the bottom, making the decade of the 1940s the most economically egalitarian of the 20th century. The Fair Employment Practices Commission (created by FDR to ward off a threatened March on Washington in 1941 led by A. Phillip Randolph to demand war jobs for African Americans) outlawed discrimination in defense-industry hiring. Outside political pressure, plus the government's enhanced leverage as a dispenser of military contracts, meant that open racism would no longer be tolerated.
So when Gerald Tuttle, head of the Vultee Corporation who announced that "it is not the policy of this company to employ people not of the Caucasian race," or executives of North American Aviation, a major maker of warplanes, let it be known that the company's new plant in Fairfield, Kansas, would not employ Negroes, the government insisted that they change their policies or lose war production contracts. Both plants were opened to blacks.
At the beginning of the 1940s, black income was 40 percent of white income; by the end of the decade it was 60 percent. In highly unionized, industrial states like Michigan, it reached an astounding 90 percent. When white transit workers in Philadelphia wildcatted to prevent the promotion of eight blacks to the position of motormen, the local branch of the War Manpower Commission (another agency with considerable labor-movement presence) deployed 8,000 federal troops to end the walkout and enforce the law. Women, African Americans, and other minority workers would suffer from serious inequalities for decades to come, but these wartime accomplishments were real.
The War Production Board (WPB), meanwhile, possessed broad powers to direct the flow of capital investment, allocate war contracts, spur regional economic development, and subsidize technological innovation. Pressured to refuse contracts to firms who were in violation of the nation's labor laws (and these included some of the biggest corporations like Ford, Bethlehem Steel, and International Shoe), the WPB often waffled but finally ordered the War Department to award a $10 million contract to Chrysler rather than Ford even though Ford's bid was lower. It insisted, although sometimes without following through, that its contractors comply with the Walsh-Healey Act, which mandated that private companies receiving government work meet prevailing regional standards regarding wages, hours, and working conditions.
To assure a steady supply of labor in the shipbuilding and construction industries, the WPB helped negotiate stabilization agreements between the relevant unions and industry representatives covering wages, hours, grievance procedures, work rules, overtime, limits on production, and premium pay. The shipbuilding agreement was policed by members of the Congress of Industrial Organizations (CIO), the American Federation of Labor, corporate delegates from the main shipyards, and representatives from the Navy and U.S. Maritime Commission. When the Federal Shipbuilding and Drydock Company in Kearny, New Jersey, refused to comply, the Navy seized the shipyard and imposed "maintenance of membership" and the other provisions of the stabilization concord.
Employment in the low-wage, autocratic Southern textile industry dropped precipitously as workers streamed northward into the defense plants. But the demand for military and civilian fabric was insatiable. Consequently, a WPB report concluded that the Southern industry's "wage structure must be brought back into line with wage trends in industry generally." Soon thereafter the WPB ordered an increase in Southern textile wages and fringe benefits.
Diversification of supply was also a goal of the WPB. The Smaller War Plants Corporation within the WPB made heroic efforts to direct government contracts to medium-sized and smaller manufacturers and offered subsidies to make that feasible. Manned by New Dealers, the idea was to resist the trend to industrial concentration and oligopoly. It was also a way to equalize the country's industrial geography, to encourage the industrialization of declining regions like the Appalachian highlands, the Ozarks, the Great Lakes "cut over" region, and the old cotton South. But this, along with other progressive objectives would wither and die.
Other agencies connected to the war effort also helped improve the lot of workers. The Office of Price Administration, in charge of price control, protected the day-to-day living standards of millions of working-class families. Led by labor-friendly administrator Chester Bowles, the OPA fought price gouging during a period of severe shortages of civilian goods. Its fight against inflation included dozens of specific orders to cap the prices of everyday commodities. Five hundred CIO members sat on OPA advisory boards, and thousands of volunteers, mainly urban housewives, helped the OPA enforce its regulations, checking on local prices and the quality of goods; their enemies in the business community labeled these women "the kitchen Gestapo." Instances of war profiteering and price gouging were exposed by congressional committees, in particular a Senate investigation presided over by then-Sen. Harry Truman.
Though war invariably produces labor shortages and often raises wages, the use of government's wartime emergency powers to broadly improve the lives of American workers did not just happen as a byproduct of war. It required deliberate, and often contested, policy -- the fruit of the Roosevelt coalition.
From the outset, however, the wartime labor-progressive coalition was bitterly and successfully confronted by corporate America -- by what Dwight Eisenhower would later call the military-industrial complex. For a brief moment the WPB was run by two co-directors who embodied the nation's delicate political equilibrium: William Knudsen, the head of General Motors, and Sidney Hillman, a founder of the CIO, the nation's social-democratic-minded and most militant labor federation. But Hillman's ouster early in 1942 was an ominous sign of a shift in the balance of power.
Increasingly the war-mobilization apparatus came to be dominated by big business in league with the defense establishment. The military, itself run by "dollar a year" refugees from Wall Street, preferred to rely on the major corporations to fulfill its needs for munitions and equipment. The top 100 companies received 70 percent of all military contracts. War contracts were heavily subsidized, cost-plus arrangements that assured profits ranging from 233 percent to 350 percent greater than those prevailing during the period from 1937 to 1940. They even allowed corporate purchase of government-funded new plants and equipment at 10 percent of cost. Big business found ways around the excess-profits tax, while wage increases were sharply curtailed by the NWLB.
As demands for full production increased, the War Production Board too often turned a blind eye to labor-law violators in issuing its contracts. Labor-management committees, initially created to address housing, health, and safety matters, soon enough concerned themselves mainly with speeding up production, a kind of patriotic sweating. Daring proposals by labor leaders like Walter Reuther of the United Auto Workers and Phillip Murray, head of the CIO, to establish tripartite councils of labor, management, and public officials to plan the conversion of civilian to war production (and later the re-conversion of war plants to peacetime uses) were briefly debated and then ignored.
Military Keynesianism increased wages and union power but ultimately became a monumental public-works project on behalf of corporate America, shifting the power balance against labor. A conservative Republican resurgence in the 1942 elections killed off the New Deal's left-leaning National Resources Planning Board and its program for a postwar regime of enlarged Social Security including national health insurance. The Republican revival inspired anti-union legislation to limit the political as well as the economic leverage of the labor movement. Business members of the NWLB grew more aggressive about blocking the extension of unionization to the newer retail and service sectors of the economy and into the South. The political and social consequences of that defeat haunt us today.
In sum, war enormously enlarged the capacities of the state; it also made the state fiercely contested terrain. A liberal-labor coalition accomplished a great deal in using this government apparatus to impose a more equitable distribution of the national wealth and more democratic protocols to govern the work lives of millions of citizens. But by war's end, it succumbed to the power of the military-industrial complex. And because the labor movement had grown accustomed to relying on the state's assistance, it demobilized a once active rank and file, eventually leaving it disarmed to face a less labor-friendly future.
Yet the wartime use of government contracting to insist on decent standards for workers shows what is possible when a political coalition is mobilized to take back democratic governance from control by a corporate elite. And that should not require a war.
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