Only One Place of Redress: African Americans, Labor Regulations, and the Courts from Reconstruction to the New Deal

By David E. Bernstein

(Duke University Press, 2001, 204 pages, $39.95)

Book Review by Ivan G. Osorio

Most Americans have a good opinion of labor laws (when they think of them at all): they are thought to be voluminous and arcane government mandates, the fruit of the New Deal, enforcing fair treatment for low-income workers. Labor laws are considered especially beneficial to ethnic minorities who would otherwise be discriminated against in an open labor market.

Not so, says David E. Bernstein, a law professor at George Mason University. In his new book, Only One Place of Redress, Bernstein looks at the beginnings of modern American labor regulation and raises a question all policymakers should ask: Who benefits? The historical record, he concludes, indicates that most labor regulations have hurt the people they were supposed to help. And they have helped the politically powerful at the expense of those without political influence.

Bernstein centers his discussion on labor law from 1905 to 1937, during what he terms the Lochner era of jurisprudence. It began with a celebrated U.S. Supreme Court decision and ended as the Court began to uphold New Deal legislation that undercut it. During the Lochner era, courts often—though not always—interpreted the Fourteenth Amendment’s guarantee of "equal protection of the laws" as a prohibition on "class" or "special interest" legislation that benefited one group at the expense of another. In the case Lochner v. New York (1905) the Supreme Court struck down as unconstitutional a New York law that prohibited bakers from working over 60 hours a week. The Court ruled that the law was special interest legislation because the hours limitation favored established unionized German bakeries at the expense of nonunion bakeries run by recent Jewish and Italian immigrants willing to work longer hours.

Bernstein emphasizes a point often made by public choice theorists: Well-organized groups can influence legislation to their advantage and to the detriment of unorganized and politically weak groups. Lochner helped strike down the worst laws discriminating against the weak and unorganized, says Bernstein, but during the late nineteenth and early twentieth centuries it did not adequately protect African Americans who lacked political power: "The problem with Lochnerism from African American workers’ perspective was that it was much too timid and ineffectual; courts gave far too much leeway to the regulatory powers of government, allowing interest groups to profit from labor regulations at the expense of African Americans."

Bernstein observes that labor regulations restricted African Americans’ choices in employment. Some laws were backed by all-white labor unions and were so the courts would not strike them down as class legislation. Other labor laws were not directed against African Americans, but they too had a disparate impact that was harmful to them and other struggling ethnic groups.

One class of labor law that tried to limit the geographical mobility of African American workers was so-called "emigrant agent" laws. After the Civil War, labor recruiters—called emigrant agents—roamed throughout the Southern states advertising faraway job opportunities for freed slaves. They helped freemen leave the plantation, lowering what economists call the "information costs" of relocating. Agents also helped migrants by advancing them cash for train ticket costs and retiring their debts to planters.

Emigrant agent laws did not ban labor recruiters outright, but they imposed burdensome requirements intended to make it impossible for them to conduct business. The most common requirement was a licensing fee. To get around the Fourteenth Amendment’s prohibition against special interest legislation, "the planters lobbied for facially neutral legislation that would subdue labor market forces."

The courts tried to protect African American workers and emigrant agents from these laws. In 1880, the Alabama Supreme Court struck down the state’s $250 agent licensing fee as prohibitive— in a ruling that Bernstein calls "one of the first Lochnerian decisions." The Court declared the law "void as an indirect tax upon the citizen’s right of free egress from the State." Unfortunately, most emigrant agent laws did not meet the same fate as Alabama’s. Bernstein observes: "The history of emigrant agent laws provides an excellent example of how Lochnerian jurisprudence, when applied, aided African Americans, while judicial deference to government regulation harmed them."

White persons in organized professions and all-white unions particularly favored licensing laws to restrict African American job competition because they could be justified on the ground of public safety, a legitimate area for regulation under state police powers. Because courts generally upheld these laws, Lochnerian jurisprudence was of little help to African Americans in this regard. Organized interests manipulated the licensing process in two ways: 1) they influenced lawmaking to ensure that the letter of the law worked to their benefit; and 2) they tried to gain control of the licensing board after a law was passed.

Plumbing, for instance, is an occupation from which African Americans and other minorities were excluded for many years. Even though most plumbers’ unions already barred African Americans from union membership, the unions used licensing boards to further restrict competition. In some states, examining boards required a union apprenticeship just to take the licensing exam. Licensing requirements could include a high school diploma or "a highly subjective personal interview." Worst of all: "If those tactics did not work, examining boards were not above doctoring test scores."

The effect of licensing laws on African American workers extended well past World War II. For example, Bernstein notes that in 1953, only three of 3,200 licensed plumbers in Maryland were black, and that as late as 1972 there was only one licensed African American plumber in Montgomery County, Alabama.

Railroad Labor Regulations

Railroads were the most powerful industrial force in America at the dawn of the twentieth century, and the unions representing railroad workers excluded African Americans. So did the unions for boilermakers, machinists, and blacksmiths—all unions representing large numbers of railroad employees. These unions lobbied for laws that were supposed to protect their safety and the safety of passengers. But mainly they protected their white members’ jobs. "Full crew" laws mandated the size March 2002 and composition of every train crew. They set up detailed job classifications that distorted employees’ true functions—to the detriment of African American workers. For instance, to comply with the law railroads classified African Americans as porters even though they worked as brakemen. This put them in a lower wage category than their white counterparts.

The courts tried to offer protection. In 1908, the Supreme Court in Adair v. United States struck down a union-backed 1898 law banning federal courts from enforcing "yellow dog" contracts, in which an individual worker agrees not to join a All-white unions favored licensing laws to restrict African American job competition because they could be justified on the ground of public safety. union. The ruling aided African Americans because it overturned the law’s attempt to assist the all-white railroad unions that wanted to monopolize the railroad labor market. However, in 1930 the Supreme Court upheld the 1926 Railway Labor Act (RLA), which gave railroad unions monopoly representation privileges over railway workers.

The 1934 RLA amendments further strengthened unions’ monopoly power. They banned yellow dog contracts (which meant Adair was now a dead letter) as well as company-financed unions, which often accepted African Americans. The amendments also created a National Mediation Board (NMB) to oversee railway worker representation elections and a National Railroad Adjustment Board (NRAB) to settle contract disputes. The NMB prevented African Americans from forming their own unions, since alternative representation was illegal under the RLA. The NRAB also only recognized Labor Watch majority, i.e. white, unions as authorized employee representatives.

The 1931 Davis-Bacon Act gave unions the power to dictate wages by requiring federal contractors to pay the "prevailing wage" in their geographical area as determined by the Secretary of Labor. This was usually equivalent to the union wage. Northern construction unions backed prevailing wage legislation because they feared black workers newly arrived from the South would depress wages. Barred from union membership, black workers were willing to work for less to compete with unionized white workers.

In 1927 U.S. Rep. Robert Bacon introduced the bill that became Davis-Bacon after his white constituents in Long Island, New York, complained about an Alabama contractor who brought Southern blacks to work on the construction of a Veteran’s Bureau hospital. New York’s existing prevailing wage law did not cover workers on federal projects. The bill eventually passed Congress and President Hoover signed it into law on March 3, 1931.

Davis-Bacon caused massive African American unemployment by eliminating an important incentive for hiring African American laborers: cost. "The only recourse African Americans had in a labor market dominated by exclusionary unions that demanded above-market wages was their willingness to work for less money than the unionists," says Bernstein. By mandating uniform wages, Davis-Bacon "prohibited African Americans from exercising that advantage."

Bernstein argues that New Deal labor legislation "damaged African American workers more generally" than did Davis-Bacon or the Railway Labor Act. He focuses on three laws: The National Industrial Recovery Act (NRA), the Fair Labor Standards Act (FLSA), and the National Labor Relations Act or Wagner Act (NLRA). Their effect "was to cartelize the labor market to the disadvantage of African Americans." The Supreme Court opened the door to a new era of government activism when it affirmed the constitutionality of these laws—but it did not improve the employment opportunities of African Americans.

In 1937 the Supreme Court overturned Lochner in West Coast Hotel Co. v. Parrish. By a 5-4 majority the Court held that minimum wage laws do not violate liberty of contract. The majority in Parrish argued that when a government fails to mandate a minimum wage it provides a "subsidy" to "unconscionable employers" who let their employees rely instead on public welfare to subsist. In short, the Court gave government the power to set a minimum wage rate because of the possibility that one of the parties involved may use public assistance.

Lochner had a last hurrah on May 27, 1935, when the Supreme Court overturned the National Industrial Recovery Act (NRA) in the case Schechter Poultry Corp. v. United States. Bernstein considers this a positive development: "Of all the New Deal programs, the NRA was the most harmful to African American workers. Had the Supreme Court not declared it unconstitutional in 1935, the NRA might have consigned African Americans to permanent second-class legal and economic status." The NRA gave unions monopoly representation power and required wages to be determined by "joint labor-business panels," in which exclusionary unions represented labor. But the NRA’s wage provisions did not cover agricultural and domestic labor where African American labor predominated. Wages in those fields remained stagnant, while the artificially high wages of NRA-covered industries forced a general increase in prices.

Even in industries covered by the NRA, occupations with large representations of African Americans were classified below white-dominated jobs requiring similar or fewer skills. And when the NRA did lift African American wages to artificially high levels that proved unsustainable, employers would respond by replacing labor with mechanization. The Court wisely struck down the NRA, but its "two most harmful parts" resurfaced in the National Labor Relations Act (NLRA), or Wagner Act, and the Fair Labor Standards Act (FLSA). Like the NRA, the NLRA gave unions monopoly bargaining power at a time when a majority of unions excluded blacks or relegated them to segregated Jim Crow locals. The NLRA banned company unions, which tended to treat African Americans better than white-dominated trade unions. It also made it more difficult for employers to retain strikebreakers after a strike ended. Many African American workers, excluded from union membership, worked as strikebreakers to find jobs in union-dominated trades.

The Supreme Court upheld the NLRA in 1937. It held that the Act did not interfere with the employer’s conduct of business, but protected "the worker’s right to organize for the purpose of securing the redress of grievances and to promote agreements with employers." Bernstein notes: "This statement is disingenuous, because the right to organize was never in question, only the power of the government to encourage and even require organization." The NRA’s minimum wage provisions resurfaced in 1938 as the Fair Labor Standards Act (FLSA). Its most harmful feature was its inflexible uniformity. Unlike Davis-Bacon, which permitted regional wage differentials, the FLSA imposed a Labor Watch national minimum wage without regard to differences in labor productivity or the cost of living. The FLSA produced unemployment because it priced low-skill low-wage jobs out of the market. Job loss was greater in the South, where wages and living costs were lower than in the rest of the country, and where African Americans made up a greater share of the population.

Bernstein concludes that, "New Deal legislation contributed to a significant, persistent increase in African American unemployment," a trend that continued for decades. By 1954, the ratio of black unemployment to white was two to one, "and has remained that way." Bernstein counters the commonly held view that African Americans were better off under federal regulation than state regulation: "New Deal laws that hurt African Americans regulated areas—wages, agricultural production, collective bargaining—that southern state governments generally left alone." Rather than dispute the role of state vs. federal regulations, "the historical choice with regard to particular New Deal regulatory issues was often between federal government regulation and unregulated labor markets." Regulation, Bernstein shows, usually benefited those with most access to political power. "Because of their lack of political influence," during this period, "African Americans were better off with free labor markets than with federal regulation."

Conclusion

Only One Place of Redress will interest labor attorneys, constitutional scholars, and general readers interested in the history of labor law and American social history during the post-Reconstruction/ pre-New Deal era. Only 117 pages long (not including references), its economy of language is at times frustrating. This reviewer wanted more detail on Lochner and other cited decisions. But Bernstein’s volume is a well-focused work of legal, economic, and regulatory history—and a convincing indictment of the negative effects of misguided public policy.

Ivan G. Osorio is editor of Labor Watch. This review is republished from the March 2002 of Labor Watch.