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This Day in Labor History: August 14, 1935

[ 19 ] August 14, 2013 |

On August 14, 1935, President Franklin Delano Roosevelt signed the Social Security Act, bringing the modern welfare state to the American people and providing the nation’s poor long-desired old age insurance.

FDR signing the Social Security Act.

The nation’s elderly had long lived with the potential of late-life poverty. The nation’s lack of a welfare state doomed the poor to rely on their families for survival, an impossibility for many. During the nation’s frequent economic downturns, this problem was worse. The continued decline in quality of life for the elderly during the Great Depression helped spur a more organized movement for old-age insurance. Many advocates fell in behind Francis Townsend. A California doctor, Townsend believed that if you put more money in the hands of the elderly, they would reinvigorate the economy with their spending. The Townsend plan proposed a sizable pension of $200 a month to any American over the age of 60 and was based upon the federal investment in pensions for Civil War soldiers, the first welfare program in American history. Townsend favored a sales tax rather than an income tax (proposed by Huey Long in his own old-age pension program) to pay for it. People would have to spend every cent of the $200 each month and quit working in order to receive it, which Townsend said would open jobs for the young and spur the economy through spending. By 1935, 28 states had passed old-age pensions of their own, although many of these provided no more than a dollar day, required a state residency of ten years, and limited eligibility to those over the age of 70.

Francis Townsend.

Within Roosevelt’s Cabinet, no one advocated more for old-age insurance than Secretary of Labor Frances Perkins. Organized labor had opposed Perkins’ appointment as Secretary of Labor for three reasons: she was the first Secretary of Labor that did not come from the labor movement, she was a woman, and she was a reformer rather than a unionist. The American Federation of Labor did not trust the federal government to run any kind of social welfare program. Believing both that the government was always the tool of capital and that welfare would undermine the independence of the American worker, the AFL under William Green would oppose much of the New Deal, even if its rank and file loved FDR. Perkins had long advocated for old-age insurance. Roosevelt initially opposed any long-term program, seeking instead a quick fix for the elderly through emergency relief. But by 1934, he had come around to Perkins’ view on the necessity of a permanent program. FDR named Perkins the head of the Committee on Economic Security, combining politicians and academics, to create what would become Social Security.

At the same time the CES met, Townsend’s plan became famous. 25 million Americans signed petitions in support of the plan and 1200 clubs formed, mostly by the elderly, to promote it. Policymakers were not amused. Perkins called it “a very large gift….much larger than the income which they enjoyed during their younger and working years” while others said the high sales taxes to fund it would hurt businesses. In addition, policymakers feared a federal plan. Even FDR told Perkins that he preferred the states having a great deal of control because “Just think what it would be like to have the power in the federal government if Huey Long should become President.”

The final plan did preserve state old-age welfare programs but put the majority of power within the federal government. Roosevelt insisted that the program be entirely self-supporting, not wanting a huge initial outlay to create massive debts for future generations. This meant much higher payroll tax rates, up to 6% of taxable payroll by 1949.

Today, we think of Social Security as something that is almost untouchable; despite Republican attempts to privatize the program, people really like it the way it is. That doesn’t mean it wasn’t controversial in 1935. Roosevelt was so popular among the people that Democrats steamrolled the Republicans in the 1934 midterm elections. The giant congressional majorities that followed is how the bill passed. Much of Congress disliked the bill, particularly the increased federal presence. Most of it offered little short-term political value. Only FDR’s overwhelming popularity prevented more open opposition. Still, on March 20, 1935, the Times ran a story titled, “Hopes Are Fading for the Social Security Bill” that predicted the only piece of the bill that would get through would be some assistance for the indigent over 65 years old. No one really knew what would happen to the bill once it reached the House floor. Some thought the Townsendites would overwhelm it and make it politically infeasible. Others believed right-wingers would demand lower tax rates and thus not fund it.

FDR used every trick in his book to push the bill through, making voting for it a matter of personal political loyalty to the most popular president in 20th century America at the peak of his powers. And the bill did pass overwhelming, by a 372-33 margin. Still, that took a lot of compromising from Roosevelt, who accepted a scaled back bill that only covered about 60% of workers, excluding federal employees, professionals like doctors and attorneys, domestic workers, agricultural workers, and the self-employed. The CES had strongly fought for including domestics and farmworkers and giving these up was the last compromise FDR made. Even then, the Senate nearly made the bill voluntary instead of compulsory after passing an amendment by Champ Clark that would have allowed for plans with more liberal provisions to opt out. The Clark Amendment got dumped in reconciliation. Finally, Roosevelt signed the Social Security Act until 1935.

Social Security proved immediately popular, even if AFL leaders grumbled. Despite the fact that union members loved Social Security, it was only the emergence of the CIO and the success the rival federation had in wrapping itself in progressive New Deal policy that moved AFL leaders to accept that Social Security might not destroy voluntarism. By 1938, the AFL joined the CIO in promoting expanded benefits. Republicans tried to make repealing it an issue in the 1936 elections. That didn’t work out so well for them. The plan was not implemented until the Supreme Court decided its constitutionality in Helvering v. Davis in 1937. Social Security meant something very real for the nation’s elderly. For instance, Roy Acuff had a hit off of his song about Social Security, “Old Age Pension Check:”

I relied on Edward Berkowitz, America’s Welfare State: From Roosevelt to Reagan and Dewitt, Beland and Berkowitz, Social Security: A Documentary History to write this post. Check those books out.

This is the 72nd post in this series. Other posts are archived here.

Tompall Glaser, RIP

[ 13 ] August 13, 2013 |

Another country legend is gone. It’s amazing how many iconic country songs Glaser was involved with in one way or another. “Streets of Baltimore.” “El Paso.” “Gentle on My Mind.” “Ring of Fire.” “Lovin’ Her Was Easier.”

Enforceable Standards

[ 8 ] August 13, 2013 |

I endorse all of Robert Kuttner’s essay on the need for enforceable standards in the garment industry as the only way disasters like the Rana Plaza collapse in Bangladesh can be prevented. Kuttner rightly points out that there are precedents for creating these standards:

NAFTA was approved by Congress in 1993, over the fierce objection of the unions and with about two-thirds of House Democrats voting no. Clinton got it through mainly with the support of Republicans. When Clinton came back for new authority in 1997 to negotiate more trade deals, the House rejected his request. So the administration began discussions with the unions to see what kind of labor provisions might win their support. The administration was particularly eager to make a trade agreement with Cambodia, which was just emerging from the Killing Fields years under the Khmer Rouge and desperately needed access to U.S. consumer markets. In those years, textile and apparel imports were allocated according to a national quota system, known as the Multi-Fiber Arrangement. In yearlong discussions with Clinton officials, leaders of the apparel and textile union UNITE proposed a novel approach. As part of the trade deal, the Cambodian government would enforce workers’ rights to organize and join unions. If Cambodia kept its word, it would benefit from a significant increase in its import quotas. “The administration didn’t exactly take our version,” recalls Mark Levinson, one of the union’s architects of the plan. “We proposed more power for unions and workers in Cambodia. They accepted the broad idea of trading a quota increase for labor rights but brought in the ILO to oversee it.”

Thus did the U.S.–Cambodia free-trade deal come to include the world’s only enforceable labor rights as part of a trade agreement. Under the U.S.–Cambodia Bilateral Textile Agreement, signed in January 1999, Cambodia received a bonus export quota to the U.S. if its labor practices were found to be in compliance. Thanks to the agreement, Cambodia’s clothing exports increased from $26 million in 1995 to $1.9 billion in 2004, representing 80 percent of its industrial exports. Wages increased, and unions not only gained a foothold in the apparel industry but also were able to negotiate contracts with major hotels such as Raffles. But under another trade pact, the entire multi-fiber quota system was gradually phased out over a ten-year period ending in 2004, and fashion brands were now able to look for the cheapest producer worldwide. Freed from quota constraints, China quickly became the world’s largest exporter of clothing, other nations cut costs to match China’s price, and the United States gave up its leverage to reward Cambodia for respecting labor rights.

By 2004, Cambodia’s factory owners were repressing trade unions, hauling union leaders into court and holding them financially responsible for losses due to strikes. Government, fearing a loss of Cambodia’s global market share and no longer having any reward for enforcing workers’ rights, was siding with the industry. The popular leader of Cambodia’s largest union, Chea Vichea, was assassinated. Between 2001 and 2011, wages in Cambodia’s garment industry fell 17 percent. The ILO’s monitoring program continues, but cooperation with it has evaporated. Factories have shifted more workers to short-term employment contracts. Trade union members are routinely fired. Illegal overtime has increased, as has child labor. This deterioration has intensified even though the purchasers of garments made in Cambodia are international brands such as Nike, Disney, and H&M, all of which have corporate codes of conduct.

This is not the only example of the American government getting involved successfully to prevent a race to the bottom. So frequently, defenders of capitalism say that there’s nothing governments can do short of old-school protectionism to prevent the exploitation of workers overseas, but this is patently untrue. The Cambodia example is one. Early 20th century laws that improved the lives of sailors around the world is another. A third is banning products made by slave labor (or from endangered species for that matter, which is also applicable here). In fact, the U.S. government can do a great deal. It just chooses not to.

State Change

[ 64 ] August 13, 2013 |

The Chihuahuan Desert in New Mexico (and presumably Chihuahua as well, but the Mexican side of the drought is completely ignored by most environmental journalists) is undergoing what ecologists call “state change,” where the grasslands are declining into a permanent scrub desert that radically transforms the ecosystem. This has resulted from a combination of climate change and overgrazing. The overgrazing create enormous ecological degradation, but that could be restored at least to some extent under the old ecological conditions. Now, it seems highly unlikely.

The future of human habitation in the American southwest is quite unclear with a non-zero possibility that cities from Denver to Las Vegas to Phoenix to El Paso could be more or less abandoned over the next century because the environment (specifically water supplies) simply won’t be able to carry this many people in those places. This would be catastrophic to the economy, although perhaps not more so than the near certainty that Miami is doomed and probably New Orleans as well.

The Decline of the Oregon Republican Party

[ 51 ] August 13, 2013 |

When I was a kid, the Oregon Republican Party was a real and legitimate enterprise. It elected senators that remained in office for a very long time (Mark Hatfield, Bob Packwood, before that Wayne Morse even if he eventually switched parties). It elected governors like Vic Atiyeh and Tom McCall. It could win the state legislature.

Then the state changed and the state Republican Party changed. As the state moved away from the timber industry and toward a urban focus, the Republicans decided to emulate their brethren in Idaho and Alabama and take up ever crazier positions (in truth, Idaho used to be a fairly bipartisan and moderate state as well, electing politicians like Frank Church, but at least the party and the state populace moved in the same direction). Now it can’t win anything. In a massive Republican landslide year like 2010, the best it can do is run a former TrailBlazer who doesn’t believe in anything except that he doesn’t like paying taxes and still lose the governorship.

Now the Oregon Republican Party has named a new chairman that really sums up its nuttiness. He’s Art Robinson, who has been the sacrificial lamb to run against Peter DeFazio for Congress a couple of times and is a true nutjob who among other things thinks that nuclear waste is safe and that public schools should be abolished.

So as you can see, the Oregon Republican Party is on its way back to statewide relevance.

A Little Treason in Defense of Slavery for Your Sunday

[ 81 ] August 11, 2013 |

Just in case you get into any causes of the Civil War discussion during Sunday barbecue with the in-laws or something. Here’s E.S. Dargan’s speech at the Alabama secession convention:

I feel impelled, Mr. President, to vote for this Ordinance by an overruling necessity. Years ago I was convinced that the Southern States would be compelled either to separate from the North, by dissolving the Federal Government, or they would be compelled to abolish the institution of African Slavery. This, in my judgment, was the only alternative; and I foresaw that the South would be compelled, at some day, to make her selection. The day is now come, and Alabama must make her selection, either to secede from the Union, and assume the position of a sovereign, independent State, or she must submit to a system of policy on the part of the Federal Government that, in a short time, will compel her to abolish African Slavery.

Mr. President, if pecuniary loss alone were involved in the abolition of slavery, I should hesitate long before I would give the vote I now intend to give. If the destruction of slavery entailed on us poverty alone, I could bear it, for I have seen poverty and felt its sting. But poverty, Mr. President, would be one of the least of the evils that would befall us from the abolition of African slavery. There are now in the slaveholding States over four millions of slaves; dissolve the relation of master and slave, and what, I ask, would become of that race? To remove them from amongst us is impossible. History gives us no account of the exodus of such a number of persons. We neither have a place to which to remove them, nor the means of such removal. They therefore must remain with us; and if the relation of master and slave be dissolved, and our slaves turned loose amongst us without restraint, they would either be destroyed by our own hands– the hands to which they look, and look with confidence, for protection– or we ourselves would become demoralized and degraded. The former result would take place, and we ourselves would become the executioners of our own slaves. To this extent would the policy of our Northern enemies drive us; and thus would we not only be reduced to poverty, but what is still worse, we should be driven to crime, to the commission of sin; and we must, therefore, this day elect between the Government formed by our fathers (the whole spirit of which has been perverted), and POVERTY AND CRIME! This being the alternative, I cannot hesitate for a moment what my duty is. I must separate from the Government of my fathers, the one under which I have lived, and under which I wished to die. But I must do my duty to my country and my fellow beings; and humanity, in my judgment, demands that Alabama should separate herself from the Government of the United States.

If I am wrong in this responsible act, I hope my God may forgive me; for I am not actuated, as I think, from any motive save that of justice and philanthropy!

Justice and philanthropy indeed.

Worker Centers

[ 11 ] August 11, 2013 |

Stephen Greenhouse has an outstanding article on worker centers, particularly the Texas-based Workers Defense Project, that provide union-like groups to some of the poorest workers in the United States, especially undocumented immigrants. Worker centers have provided a lot of inspiration in the last few years to labor activists since they can do a lot of good without the difficulties of negotiating U.S. labor law and extremely difficult unionization campaigns. The long-term viability of this type of organizing is unknown. As Greenhouse points out, the worker centers are heavily reliant upon grants and providers can be fickle. The AFL-CIO and the large internationals should increase their funding of these centers, but in the end, they need to see some kind of return on their dollar in order to make this viable. In any case, these are people creating real victories and empowerment for working people in an impossible anti-union climate and in our most difficult to organize states. They deserve our attention and support.

It’s also worth noting that Texas does not require workers’ compensation for construction workers. When Rick Perry talks about Texas’ “business-friendly climate,” the dictionary definition of that term is a dead worker.

…..Also, these worker centers are starting to freak out Republicans.

Where is Fukushima? Where is West? Where is Bangladesh?

[ 77 ] August 11, 2013 |

Pierce makes an excellent point about how our 24-hour news cycle eliminates extraordinarily important stories that deserve long-term coverage. This reality is a huge boon to business and the corrupt, who can rest assured that if stories about their malfeasance do come out, they will disappear soon.

Hey, is there another royal birth on the horizon?

Nation’s Least Friendly Schools to LGBT Students

[ 91 ] August 11, 2013 |

Schools are listed here with no comment provided.

The list of most LGBT unfriendly schools is largely a repeat of last year with 16 returning schools and four replacements (in bold):

Grove City College, (Grove City, Pa.)
Hampden-Sydney College (Hampden-Sydney, Va.)
College of the Ozarks (Point Lookout, Mo.)
Wheaton College (Wheaton, Ill.)
University of Notre Dame (Notre Dame, Ind.)
Brigham Young University (Provo, Utah)
Wake Forest University (Winston-Salem, N.C.)
Calvin College (Grand Rapids, Mich.)
University of Rhode Island (Kingston, R.I.)
University of Dallas (Irving, Texas)
Texas A&M University (College Station, Texas)
Baylor University (Waco, Texas)
Trinity College (Hartford, Conn.)
Auburn University (Auburn, Ala.)
Colgate University (Hamilton, N.Y.)
Wofford College (Spartanburg, S.C.)
Hillsdale College (Hillsdale, Mich.)
Catholic University of America (Washington, D.C.)
Pepperdine University (Malibu, Calif.)
University of Wyoming (Laramie, Wyo.)

Charter Schools Do Better On Standardized Tests: One of Rheeism’s Many Lies

[ 58 ] August 10, 2013 |

Gary Rubinstein does some number crunching from New York school test report that showed declining scores and what he finds exposes more Rheeism lies:

In the Stephanie Simon report she mentions that KIPP Star and Democracy Prep hadn’t done so well with their proficiency rate, but she doesn’t mention how far they had dropped. Out of over 500 schools, which includes about 35 charter schools, of the one hundred largest drops, 22 were charter schools.

The most stunning example is the famed Harlem Village Academy which had 100% passing in 2012, but only 21% passing in 2013 for a 79% drop (you can see that sad dot all the way at the right of the scatter plot). Democracy Prep Harlem Charter, run and staffed by many TFAers, dropped 84% in 2012 to 13% in 2013. KIPP Amp dropped from 79% in 2012 to just 9% in 2013. The Equity Project (TEP) which pays $125,000 for the best teachers had finally gotten some test scores they can brag about with 76% in 2012, but that has now sunk to just 20% in 2013. The Bronx Charter School Of Excellence, which recently received money from a $4.5 million grant to help public schools emulate what they do, dropped from 96% in 2012 to 33% in 2013. So these are the schools that are the red ‘outliers’ hovering near the bottom right of the scatter plot. In general, the average charter school went down by 51 percentage points compared to 34 percentage points for the average public school. The most plausible explanation for charters dropping so much more than public schools is that their test prep methods were not sufficient for the more difficult tests. In other words “you’re busted.”

I just don’t see how the ‘reformers’ can reconcile these statistics with their statement that these lower scores are a good thing since we are now being honest about where we stand. The low scores in general do not decisively prove anything. The cutoff scores for passing were an arbitrary choice by some politicians in Albany. But the evidence that charters are certainly not working the miracles they claim is very clear from this data.

Ouch. It’s all about the data for education reformers, right? Well the data suggests that the promises reformers tell about charter schools aren’t coming true.

Hackneyed Anti-Union Historical References

[ 123 ] August 10, 2013 |

Dylan Matthews responded on Twitter to my brief criticism of his column on Thursday , leading to a good debate that eventually included Mike Konczal, Jamelle Bouie, David Roberts, Ned Resnikoff, and other smart people. Matthews admitted that he could see a scenario where there was no minimum wage at all, which I disagree with strongly. He claims to be for reducing inequality (which I believe does support) but shows no understanding about the importance of giving workers dignity and power to control their own lives. When I challenged Matthews’ claim that AEI economists had the interest of working-class people in mind (and I do not believe they do care about working-class people. Otherwise they wouldn’t be working for the American Enterprise Institute) by saying that if these were such good ideas, maybe actual working-class organizations like labor unions would support them, Matthews responded unfortunately, tweeting:

This is the anti-union equivalent of saying that we can’t take Democrats seriously on civil rights today because Robert Byrd was a Klan member in 1946. Who cares what George Meany’s foreign policy was in 1972? What on earth does that have to do with anything in 2013? But you hear this all the time. Meany’s support of Vietnam and hatred of McGovern remains a bog-standard anti-union argument from center-left people who are not comfortable with unions. At least mentioning Teamsters corruption and Jimmy Hoffa is so past its sell-by date that it’s not respectable to trot that one out anymore. But outside of saying that maybe we shouldn’t care all that much what AFL-CIO executives think about foreign policy, I can’t see what AFL leadership’s position on Cold War foreign policy 41 years after it happened matters one iota to the present and I certainly can’t understand what possible relevance it has to any economic debate today. Not only was that decision extremely controversial within the AFL-CIO, leading to many internationals openly bucking Meany, but the American labor movement also had a lot of other priorities in the 1960s and 1970s that are well worth taking seriously. Maybe Matthews could have mentioned union support for the Humphrey-Hawkins bill of 1978 that could have guaranteed full employment. Or the Occupational Safety and Health Act. Or increases in the minimum wage. Oh right, he doesn’t really support that one.

As regards Nixon’s health plan, while it might sound good compared what came after, it was hardly considered some great progressive bill in 1974. Unions believed it could be better. Ted Kennedy did not support it either. Nixon wanted to end Medicaid and replace it with significant employee contributions to health plans that did not exist in 1974. The plan as a whole was not terrible, but taking Nixon seriously as a progressive president domestically only makes sense if we complete ignore both the congressional and social movement context of the period. On all progressive domestic programs, Nixon signed what he had to and weakened legislation when he could in order to mitigate opposition to what he really cared about–fighting communists and cracking down on hippies. Nixon was moved very little by actually providing quality health care to average Americans, although his plan, if enacted, might have created real improvements. With hindsight, labor maybe should have supported it, but that was far from clear at the time.

I told Matthews that he needed to read less conservative economists and more labor history. The more I think about it, the more I believe he to delve much deeper into twentieth century American history. I don’t mean that in a condescending way. In general, we should all read more history, but for an important writer to not have the contextual historical background to make arguments that pull from the past to discuss legislation or ideas in the present is a problem. In any case, it’d be nice if liberal-centrist columnists who don’t much value unions at least updated their arguments to include some events that took place after I was born nearly 40 years ago.

America’s First Sex Manual, 1766

[ 69 ] August 9, 2013 |

Very interesting.

And thus those nobler parts we see
For such the parts of generation be:
And they who carefully survey will find
Each part is fitted for the use design’d:
The purest blood we find if well we heed
Is in the testicles turn’d into seed:
Which by most proper channels is transmitted
Into the place by nature for it fitted:
With highest sense of pleasure to excite
In amorous combatants the more delight.
For in this work nature doth design
Profit and pleasure in one act to join.