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Macroeconomic Policy and a Living Wage pp 27–65Cite as

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Background of the Employment Act I: A Living Wage

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Abstract

The first three decades of the twentieth century saw the USA transformed into a mature economy. Manufacturing became the dominant industry of the nation and a large number of low-skilled workers were being employed in factories often run by giant corporations. This combination of low-skilled workers employed in factories that were not easy to monitor created what was known as “the labor problem.” This chapter will investigate the solutions to this “labor problem” that were formulated by the political economy of a living wage. Proponents of a living wage for workers focused on the improvement of wages as going a long way to solve the labor problem by treating workers fairly. Higher wages and steady work would make workers healthier and happier in their jobs, especially if they were to improve their lot in life by joining unions to engage the giant corporations in collective bargaining. Proponents of the political economy of a living wage hoped their program would be adopted voluntarily but were willing to seek the help of government if they failed to secure volunteers among business leaders.

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Notes

  1. 1.

    A portion of the material in this chapter is derived from Stabile, 2016, Chap. 2.

  2. 2.

    Moss, 1996, pp. 1–4.

  3. 3.

    Rothbard, 2017, pp. 5198 and 5256.

  4. 4.

    Kaufman and Barry, 2014, p. 1206; Figart, Mutari and Power, 2002, pp. 39–40.

  5. 5.

    Stabile, 2008, pp. 2–3 and 112–113.

  6. 6.

    Glickman, 1997, pp. 3, 62, and 131.

  7. 7.

    Gompers, 2015.

  8. 8.

    Dubofsky and Dulles, 2010, p. 181. See also Dickman, 1987, p. 17

  9. 9.

    Glickman, 1997, p. 131.

  10. 10.

    Rothbard, 2017, pp. 617–684.

  11. 11.

    Kolko, 1963.

  12. 12.

    Rothbard, 2017, p. 5183; Dickman, 1987, p. 155.

  13. 13.

    Ely, 1893, p. 101.

  14. 14.

    Ely, 1893, p. 38.

  15. 15.

    Ely, 1893, p. 222.

  16. 16.

    Ely, 1893, p. 69.

  17. 17.

    Ely, 1893, p. 77.

  18. 18.

    Ely, 1893, p. 85. This material on Ely is adapted from Stabile, 2016, pp. 19–20.

  19. 19.

    Rothbard, 2017, p. 6345.

  20. 20.

    Dickman, 1987, p. 155.

  21. 21.

    Ryan, 1906.

  22. 22.

    For a study of all the influences on Ryan, see Stabile, 2016, pp. 26–27.

  23. 23.

    Ryan, 1906, p. 43.

  24. 24.

    Ryan, 1906, p. 72.

  25. 25.

    Ryan, 1906, pp. 132–136.

  26. 26.

    Ryan, 1906, p. 261.

  27. 27.

    Slichter, 1934, p. iii.

  28. 28.

    Roosevelt, 1933c.

  29. 29.

    Stabile, 2016, pp. 28–30.

  30. 30.

    Rothbard, 2017, pp. 7605–7642.

  31. 31.

    Akerlof and Yellin, 1996.

  32. 32.

    Lauck, 1929, p. 247.

  33. 33.

    Rosen, 2005, p. 1982.

  34. 34.

    Kaufman, 2006, p. 296; Rutherford, 2011, pp. 162–165.

  35. 35.

    Commons, 1934, pp. 758–759. For an earlier version of Commons’ ideas, see Stabile, 2008, pp. 82–87.

  36. 36.

    Dickman, 1987, pp. 8–16, 79–126 and 158–159.

  37. 37.

    Commons, 1919, pp. 112–116.

  38. 38.

    Commons et al., 1921, pp. vi.

  39. 39.

    Commons et al., 1921, pp. 13–25.

  40. 40.

    Commons et al., 1921, p. 263.

  41. 41.

    Commons et al., 1921, p. 271.

  42. 42.

    Lichtenstein, 2002, p. 6.

  43. 43.

    Stabile, 1984, pp. 51–56 and 100–107.

  44. 44.

    Hacker and Pierson, 2016, p. 2174.

  45. 45.

    Rothbard, 2017, pp. 6880–7202.

  46. 46.

    Rothbard, 2017, p. 5468.

  47. 47.

    Gregg, 1919, pp. 42–44. See also Dickman, 1987, p. 242.

  48. 48.

    Rothbard, 2017, p. 7214.

  49. 49.

    Wilson, 1919. See also Stabile, 2016, pp. 54–64.

  50. 50.

    Stabile, 1986, pp. 819–827.

  51. 51.

    Hoover, 1922, p. 49.

  52. 52.

    Rosen, 2005, p. 121.

  53. 53.

    Rothbard, 2017, pp. 9926–9930; Rosen, 2005, pp. 1577–1578.

  54. 54.

    Stein, 1994, p. 29; see also pp. 32 and 37.

  55. 55.

    Rothbard, 2017, pp. 9936–9941.

  56. 56.

    Hansen, 1964 [1951], pp. 510 and 520.

  57. 57.

    American Federationist, 1919, p. 130

  58. 58.

    Rothbard, 2017, p. 9952.

  59. 59.

    Dickman, 1987, pp. 14 and 84–91.

  60. 60.

    Foster and Catchings, 1924, 1925 and 1928. See also Stabile, 2016, pp. 78–80.

  61. 61.

    Foster and Catchings, 1925, p. 246.

  62. 62.

    Laidler, 1999, p. 207n, also makes this connection.

  63. 63.

    Kaufman, 2012, p. 509.

  64. 64.

    Dickman, 1987.

  65. 65.

    The material in this section is based on Stabile, 2016, pp. 69–75.

  66. 66.

    National Consumers League, 1919, p. 4.

  67. 67.

    Filene, 1923, p. 411.

  68. 68.

    Clark, 1923, p. 16.

  69. 69.

    Clark, 1926, p. 451–453.

  70. 70.

    Clark, 1923, pp. 37 and 42.

  71. 71.

    Kaufman, 2008, p. 216.

  72. 72.

    Eichengreen, 2018, p. 64.

  73. 73.

    Rosen, 2005, p. 178.

  74. 74.

    For a previous discussion of this material, see Stabile, 2016, pp. 90–91, 162–164 and 187.

  75. 75.

    Armstrong, 1932.

  76. 76.

    Armstrong, 1932, p. xiii.

  77. 77.

    Armstrong, 1932, p. xvi.

  78. 78.

    Armstrong, 1932, p. 437.

  79. 79.

    Armstrong, 1932, p. 462.

  80. 80.

    Armstrong, 1932, pp. 465–537.

  81. 81.

    Rosen, 2005, p. 3087.

  82. 82.

    Armstrong, 1932, p. 548.

  83. 83.

    Roosevelt, 1933a, pp. 131–141.

  84. 84.

    Stabile, 2016, pp. 61–64.

  85. 85.

    Roosevelt, 1933b.

  86. 86.

    For a concise history of the NIRA, see Rosen, 2005, pp. 1846–2335. See also Stabile, 2016, pp. 99–139, for a discussion for the living wage aspects on the NIRA.

  87. 87.

    Stabile, 2016, pp. 54–57.

  88. 88.

    Stabile, 2016, pp. 54–64.

  89. 89.

    Roosevelt, 1933c.

  90. 90.

    Roosevelt, 1933b.

  91. 91.

    Mitchell, 1947, pp. 240–241.

  92. 92.

    Nordlund, 1997, p. 8; Dickman, 1987, 259–260.

  93. 93.

    Roosevelt, 1933d.

  94. 94.

    Rosen, 2005, pp. 2096–2098.

  95. 95.

    Ryan, 1945, p. 298.

  96. 96.

    The material in the next section is derived from Stabile and Kozak, 2012, pp. 236–253.

  97. 97.

    Keynes, 1933.

  98. 98.

    Keynes, 1933.

  99. 99.

    Keynes, 1933.

  100. 100.

    Backhouse and Bateman, 2011, p. 28, overlook this fiscal stimulus component of the NIRA.

  101. 101.

    Rosen, 2005, p. 753.

  102. 102.

    Keynes, 1933.

  103. 103.

    Lekachman, 1966, p. 123.

  104. 104.

    Slichter, 1934, p. 33.

  105. 105.

    Slichter, 1934, pp. 29–30.

  106. 106.

    Dickman, 1987, pp. 165–166.

  107. 107.

    Clark, 1934, pp. 20–21; Slichter, 1934, pp. 115–116. For a summary of the problems of the NIRA and NRA, see Rosen, 2005, pp. 2200–2235.

  108. 108.

    Stabile, 2016, pp. 140–144 and 215–221.

  109. 109.

    Wolman [1934] 1970, p. 95.

  110. 110.

    Stein, 1994, p. 60.

  111. 111.

    Stabile, 2016, pp. 139–225.

  112. 112.

    Stein, 1994, pp. 53–55.

  113. 113.

    Townsend, 1933.

  114. 114.

    Stabile, 2016, pp. 172–179.

  115. 115.

    Keynes, 1938.

  116. 116.

    Keynes, 1938.

  117. 117.

    Rosen, 2005, pp. 3355–3385, 3405, and 3511. On the basis of his work, Currie transferred to the White House as an economic adviser to Roosevelt, where his career as an agent of influence for the USSR (West, 2013, pp. 70, 117, 142 and 151–152) eclipsed his early work on fiscal policy.

  118. 118.

    Backhouse and Bateman, 2011, p. 29.

  119. 119.

    For a discussion of the history of the development of the concept of automatic stabilizers, see Keiser, 1956, pp. 422–441.

  120. 120.

    Wagner, 1935, p. 294

  121. 121.

    Gordon, 2016, pp. 9734–9736 and 10395; Goldin and Margo, 1991, pp. 1–2.

  122. 122.

    Lawlor, 2006, p. 83; Rosen, 2005, pp. 746 and 1610.

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    Donald R. Stabile

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Stabile, D.R. (2018). Background of the Employment Act I: A Living Wage. In: Macroeconomic Policy and a Living Wage. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-01998-3_2

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