FDR's Second New Deal and Its Impact

FDR's Second New Deal Plans

  • Criticism Addressed: FDR worked to address criticisms from various groups, including Dr. Townsend’s old-age pension plan and issues raised by the National Union of Social Justice concerning labor unions.
  • Focus on Agriculture: The Resettlement Administration (RA) aimed to assist struggling farmers, particularly in the Southern U.S., which was identified as a critical area of economic concern.

The Resettlement Administration (RA)

  • Objectives and Intentions:

    • Aimed to resettle farmers in dire economic conditions, especially in the Deep South, and retrain them for skilled labor.
    • Focus on helping black tenant farmers escape the cycle of sharecropping and poverty.

  • Economic Situation:

    • In the South, 42% of the population lived below the poverty line, with 1,700,000 households earning less than $500 per year.
    • Tenant farmers often earned less than unskilled laborers despite long working hours.

  • Implementation Challenges:

    • Tenant farmers resisted being retrained into skilled professions like carpentry or plumbing, often preferring to continue farming.
    • Employers preferred hiring experienced workers over newly trained individuals, limiting job prospects for RA graduates.
    • Public skepticism towards government resettlement policies, with fears of being moved haphazardly.

  • Success and Failure:

    • Resettled 4,500 families and recultivated 9,000 acres, but this was a small fraction compared to the total households in poverty.
    • The RA was dismantled in 1937 due to poor performance and limited impact on poverty alleviation.

Economic Downturn and Recovery Efforts

  • Recession of 1937:

    • As the economy slumped, unemployment rose again, prompting questions on how to respond.
    • Options included cutting back on federal spending or increasing it to create jobs.

  • FDR's Approach:

    • Opted for increased federal spending, leading to a $4 billion public works program, which temporarily staved off recession while the depression continued.

Fair Labor Standards Act of 1938

  • Purpose:

    • Introduced minimum wage standards of 40¢ per hour and established a maximum workweek of 40 hours.
    • Expanded labor protections, prohibiting child labor and unsafe working conditions for minors.

  • Implementation:

    • Included provisions for overtime pay exceeding 40 hours, paying 60¢ per hour.
    • The Act faced resistance, particularly from Southern industries fearing wage increases would harm competitiveness.

Legislative Challenges and Political Fallout

  • FDR's Expansive Powers:
    • A proposed bill in 1938 sought to grant FDR sweeping reorganization powers, leading to criticism and fears of overreach.
    • Resulted in a loss of seats for Democrats in Congress, straining the New Deal's trajectory.

Legacy of FDR's New Deal

  • Government's Expanded Role:

    • Established social safety nets like unemployment insurance and social security, aimed to prevent crises.
    • Enhanced federal responsibility for citizens' well-being helped lay the groundwork for future welfare programs.

  • Enduring Impact:

    • Set standards for labor conditions and public welfare, with lasting effects on banking and unemployment protections.
    • Critics labeled this approach as the creation of a "welfare state", debating the balance between government support and personal responsibility.

  • Long-Term Economic Recovery:

    • The U.S. economy did not fully recover from the Great Depression until WWII, underscoring the limitations of New Deal initiatives despite their presidential vision.