Second New Deal

Second New Deal: Definition

The New Deal aimed to revitalize the economy through economic, banking, and labor reform, but it did not have the effect President Roosevelt had hoped for. There was still widespread suffering as unemployment, poverty, and homelessness continued to affect the public.

The Second New Deal was the second wave of programs and reforms started by President Franklin Delano Roosevelt in 1935 and built upon the foundation of the first New Deal, which began in 1933. The New Deal and the Second New Deal centered their efforts on the Three R's of relief, recovery, and reform.

However, after the first phase of the New Deal had concentrated on banking reforms and getting the economy back on track, President Roosevelt decided to refocus his sights on social and labor reform. In general, the Second New Deal programs aimed to reform labor systems and assist those working in farming or industry rather than helping banks or larger organizations.

Second New Deal Programs

The programs of the Second New Deal focused on providing relief to the American people through jobs and economic assistance and primarily aimed to help the people that the Depression had hit the hardest: the working class. Providing employment, financial safety nets, and safeguarding workers' rights became some of President Roosevelt's top concerns.

Fig 1. An example of a mural funded by the Works Progress Association.²

Works Progress Administration (WPA)

The goal of the WPA, created in April 1935, was to lower the unemployment rate by creating jobs through public works programs. Workers hired for the WPA completed projects that would benefit the public, such as schools, parks, and highways. Many of the projects completed by the WPA are still standing today.

However, the WPA did not only focus on infrastructure and construction. People with varying skill sets found work under the WPA - writers and artists were given a job in writing plays and poems, writing murals, or putting on theater productions. Historians were hired to support historic preservation and conduct research. Women were also given jobs in schools and sewing rooms.

Fig 2. A woman works in a New York City sewing shop supported by the WPA.

The National Youth Administration (NYA) was essential to the WPA. The NYA provided opportunities for the younger generation by providing them with part-time jobs that would allow them to finish their schooling and then complete further education at college or obtain a job after graduation.

Resettlement Administration (RA):

The RA was established in April 1935 to assist farmers, sharecroppers, and tenants. They provided loans to assist with growing crops and housing for migrant workers, providing direct financial aid to struggling farmers who needed emergency loans to help pay off debts that had ballooned with the Great Depression.

The RA is also considered a continuation of the programs that FDR began during the first years of the New Deal that had tried to help farmers live off the land that was under extreme stress because of the overplanting that led to the Dust Bowl. The RA also had the authority to address environmental issues affecting farmers, such as erosion, flooding, and pollution.

The RA also resettled farmers and the poor living in rural areas to land better for growing crops and created government-sponsored homes and communities. These communities were heavily criticized as promoting socialist ideals and caused the head of the RA to leave in 1936. This brought an end to the programs until it was succeeded by the Farm Security Administration (FSA) in 1937.

Fig 3. A photo of the Bayou Bourbeau farm in Louisiana was created with the help of the Farm Security Association.

Second New Deal Legislation

In addition to programs, FDR also tackled the issue of the Great Depression through legislation. The legislative action was through Acts passed by Congress and tax reform.

Revenue Act of 1935

Sometimes referred to as the "Wealth Tax Act," the Revenue Act of 1935 introduced a sweeping tax reform that significantly increased the income taxes of the wealthy and lowered income taxes for the poor. The Act also bumped up estate taxes and established taxes for corporations. This second Revenue Act raised taxes on wealthy Americans and would not be the last.

Social Security Act (SSA):

The Social Security Act (SSA) created a "safety net" for older Americans who had reached retirement age. This was a way to ensure the older generation's economic security in their retirement and open up jobs and opportunities for the younger generation. The SSA also guaranteed monetary assistance to workers who had lost their jobs and became unemployed, mothers with dependent children, and citizens who were disabled. The SSA is still active today and is considered an essential pillar of the American social welfare system.

National Labor Relations Act:

The National Labor Relations Act (NLRA), sometimes referred to as the Wagner Act since New York Senator Robert Wagner proposed it, was passed in July 1935. It was primarily passed to replace the previous labor reform law called the National Industrial Recovery Act (NRA), which had been declared unconstitutional by the Supreme Court.

The NLRA created the National Labor Relations Board to monitor private businesses and stop them from treating their workers poorly. The act also protected people working for private companies who wished to unionize, engage in collective bargaining, or go on strike.

Second New Deal Purpose

The purpose of the Second New Deal was the same as the first New Deal: to ensure that the American people had their needs met and worked and to create a system that would discourage another disastrous economic depression. The programs and legislation passed between 1935 and 1936 provided direct relief to the American people through jobs, loans, and financial assistance.

Second New Deal vs. The first New Deal

The New Deal and the Second New Deal centered around the three R's; the actions of the first New Deal focused on getting the economy back on track. Both waves of the New Deal gave the government much more power than they previously had in the lives of the American people.

However, the primary focus of the first New Deal centered around the urgent matter of rescuing the banking system and economy after the disastrous market crash of 1929. The Second New Deal focused heavily on social reform and creating a safety net for American families.