National Industrial Recovery Act

Definition

The National Industrial Recovery Act (NIRA) was a key piece of legislation enacted in 1933 as part of President Franklin D. Roosevelt's New Deal, aimed at stimulating economic recovery during the Great Depression. It sought to promote industrial growth and improve labor conditions by establishing codes of fair competition, thereby regulating industries and encouraging collective bargaining for workers. The act represented a significant shift in government involvement in the economy, with lasting effects on manufacturing practices and labor relations.

5 Must Know Facts For Your Next Test

1. The National Industrial Recovery Act was signed into law on June 16, 1933, and was one of the cornerstones of Roosevelt's New Deal policies.
2. NIRA established various industry codes that set minimum wages, maximum working hours, and standards for working conditions in an effort to boost consumer spending.
3. The act also aimed to reduce destructive competition by encouraging businesses to cooperate in setting prices and output levels.
4. The Supreme Court declared the NIRA unconstitutional in 1935, which led to its eventual repeal but influenced future labor relations laws.
5. Despite its short life, the NIRA laid the groundwork for future federal regulations on labor standards and industrial practices.

Review Questions

• How did the National Industrial Recovery Act impact labor relations in the United States during its implementation?
  • The National Industrial Recovery Act had a significant impact on labor relations by recognizing workers' rights to organize and engage in collective bargaining through Section 7(a). This provision encouraged union formation and strengthened workers' voices in negotiations with employers. As a result, it marked a transformative moment for labor rights, contributing to increased union membership and collective action among workers during a time of economic hardship.
• Discuss the key components of the NIRA that aimed to stabilize the economy and promote fair competition among industries.
  • The NIRA included key components such as the establishment of industry codes that regulated pricing, production levels, minimum wages, and maximum hours. By promoting fair competition, these codes aimed to eliminate practices like price undercutting that were detrimental to economic stability. The act also encouraged cooperation among businesses rather than competition, aiming to create a more stable economic environment during the Great Depression.
• Evaluate the long-term implications of the National Industrial Recovery Act on American manufacturing innovations and labor policies.
  • Although the National Industrial Recovery Act was ultimately declared unconstitutional, it had lasting implications for American manufacturing innovations and labor policies. The establishment of industry codes prompted manufacturers to adopt new practices that prioritized efficiency and worker welfare. Furthermore, the NIRA's emphasis on collective bargaining set a precedent for future labor legislation, influencing subsequent reforms that shaped modern labor relations and workplace standards in America.

Related terms

Public Works Administration: A New Deal agency created by the NIRA that aimed to stimulate the economy through large-scale public works projects, providing jobs and improving infrastructure.

Section 7(a): A provision of the NIRA that guaranteed workers the right to organize and engage in collective bargaining, marking a major advance in labor rights.

National Recovery Administration: The agency established to oversee the implementation of the NIRA, tasked with creating and enforcing industry codes to promote fair competition and labor rights.