National Industrial Recovery Act

National Industrial Recovery Act of 1933

Before we can look at the National Industrial Recovery Act (NIRA), let's take a few steps back. In 1929, the Stock Market crashed, which caused the Great Depression. There are more factors at play here, but the important takeaway is that The Great Depression began in 1929. Franklin Delano Roosevelt became President in 1933 with ambitious goals to end the depression.

Roosevelt wasted no time and almost immediately acted. The president passed many acts in his first hundred days in office, including the National Recovery Act of 1933.

Fig 1: Franklin Delano Roosevelt was the President during the New Deal era. The National Industrial Recovery Act was passed within his first year as President!

National Industrial Recovery Act: Purpose

In 1933, many theories were about the cause of the Great Depression. The Roosevelt Administration, like everyone else, was unsure of what exactly caused the depression, so they didn't have a definite solution for the issue. The administration appointed experts to write out the NIRA. The act was to accomplish what its title said, help American industries recover.

Just like there were many theories about the cause of the depression, there were many alternative solutions. Some believed the federal government needed to withdraw further from the economy, but the Roosevelt Administration disagreed. NIRA was supposed to regulate industries, raise wages, standardize the workweek, and protect the right to unionize.

Fig 2: NIRA Blue Eagle. The phrase "We Do Our Part" targeted the American patriotic spirit.

Roosevelt used an executive order to establish a department to oversee NIRA called the National Recovery Administration. Hugh S. Johnson was responsible for the administration. To make the NRA more popular, the Roosevelt Administration launched a campaign to popularize the act. Flyers praised it, while businesses that followed NIRA were encouraged to display a blue eagle. The blue eagle represented NRA.

National Industrial Recovery Act: Definition

Titles are different sections of an act, and NIRA had three. The graph below shows a brief breakdown of each title. The section below will go into more detail about the different sections of NIRA!

Title I

Title 1 of NIRA was about industrial regulation. People in business were required to create fair codes that would apply to the entire industry. These codes allowed American industries to self-regulate.

Unionization was a protected right under section 7A of Title I. Union status couldn't affect an employee's or future employment status. An employer couldn't fire employees if they joined unions or refused to join corporate unions. Employers were unable to pay employees less than minimum wage. Lastly, employees could only work 30 hours a week.

Title II and Title III

Title II of NIRA designated 3.3 billion dollars to public works projects. This created the Public Works Administration (PWA) headed by Secretary of the Interior Harold L. Ickes. This program awarded funds to different states. The states then hired private contractors to fulfill public work projects. The PWA built schools, homes, bridges, and more!

Title III made minor adjustments to existing acts like the Emergency Relief Act and the Construction Act of 1932.

National Industrial Recovery Act: Impact

NIRA started incredibly popular. People were excited to unionize and have a minimum wage. Mismanagement made enthusiasm around the NIRA fade. The National Industrial Recovery Act had unforeseen consequences. The people in business in charge of creating the codes wanted incentives. They wanted guarantees that their companies would benefit from self-regulation. In the end, these codes caused prices to rise while production decreased.

Employers overlooked laws that protected unions or simply found workarounds. Unions found little to no success when they tried to fight for their rights. The National Industrial Recovery Act was unpopular among Conservatives and Liberals because it didn't meet either's expectations.

In 1935, the Supreme Court ruled that the National Industrial Recovery Act was unconstitutional in Schechter Poultry Corp. Versus the United States. The act was two years old and had two more hours before its renewal. The Roosevelt Administration didn't believe the show had enough time to develop fully, but the Supreme Court disagreed.

National Industrial Recovery Act: Significance

The National Industrial Recovery Act wasn't a complete failure. One of its most significant accomplishments, outside the other labor laws it created, was the illegalization of child labor in the textile industry. The textile industry was generally hazardous, but even more so for children. Small kids could reach areas that adults couldn't. They would send a child inside the broken machine to repair it. Many children lost fingers, hands, and other body parts. In the worst-case scenario, they lost their lives.

Fig 4: Copy of the opening page of the National Industrial Recovery Act

The National Industrial Recovery Act enacted labor laws that protected workers. While it wasn't perfect, it was a good start. The Public Work Administration continued after NIRA was voted unconstitutional. It continued to provide construction work that benefitted the nation, state, community, and individual.