I argued in my last column that the new political power that unions gained with passage of the Wagner Act gave them the confidence to push for higher wages from employers. This chart lays out the timing. The Wagner Act passed in the summer of 1935, giving unions in the industrial sector coequal status with management for the first time. Unions and voters both recognized that this would increase the value of unionizing tremendously, and millions of workers joined unions after the act's passage.
John L. Lewis and his Congress of Industrial Organizations saved their hardest punches until after President Franklin D. Roosevelt won his 1936 reelection campaign. With FDR safely in the White House, the unions increased work stoppages (strikes and other actions), employers recognized the unions' growing power and wages began rising significantly. The Supreme Court's affirmation, in April 1937, that the National Labor Relations Act was constitutional made it clear that union pressure was the new reality for companies.
Their pay levels reflected that.
(Amity Shlaes, the author of this blog post, is a Bloomberg View columnist. The opinions expressed are her own. Ilan Kolet, who created this chart, is a data editor for Bloomberg News.)
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