National Industrial Recovery Act

Definition

The National Industrial Recovery Act (NIRA) was a key piece of legislation enacted in 1933 as part of the New Deal, aiming to stimulate economic recovery during the Great Depression by promoting industrial growth and improving labor conditions. This act established a framework for businesses to set fair prices and wages, encouraged collective bargaining, and sought to eliminate unfair competition. NIRA was essential in expanding federal social programs and reshaping the relationship between government, industry, and labor.

5 Must Know Facts For Your Next Test

1. The NIRA aimed to stabilize prices, raise wages, and reduce unemployment during the economic turmoil of the Great Depression.
2. It allowed industries to create 'codes of fair competition,' which were agreements on pricing, production levels, and labor standards.
3. The act marked a significant expansion of federal authority over private industry, setting a precedent for future government intervention in the economy.
4. The NIRA also aimed to provide a safety net for workers by encouraging collective bargaining through labor unions.
5. Although the Supreme Court declared the NIRA unconstitutional in 1935, its principles laid the groundwork for later labor legislation.

Review Questions

• How did the National Industrial Recovery Act aim to promote economic recovery during the Great Depression?
  • The National Industrial Recovery Act aimed to promote economic recovery by establishing a framework for industries to collaborate on setting fair prices and wages while reducing unemployment through public works initiatives. By encouraging businesses to adhere to codes of fair competition and providing support for labor rights, it sought to stabilize the economy during a period of extreme hardship. The act represented a shift toward greater federal involvement in economic affairs as part of the New Deal.
• In what ways did the National Industrial Recovery Act influence labor relations in the United States?
  • The National Industrial Recovery Act significantly influenced labor relations by promoting collective bargaining rights and encouraging union organization. It recognized workers' rights to join unions and negotiate with employers, which set a precedent for future labor legislation. Although parts of the act were later deemed unconstitutional, it laid the groundwork for stronger protections for workers that would be solidified in subsequent laws like the National Labor Relations Act.
• Evaluate the long-term impacts of the National Industrial Recovery Act on federal social programs and economic policy in the United States.
  • The National Industrial Recovery Act had lasting impacts on federal social programs and economic policy by establishing principles of government intervention in the economy and promoting labor rights. Although it was ruled unconstitutional, its ideas influenced later legislation that expanded social protections for workers. The NIRA's focus on collective bargaining paved the way for a more organized labor movement and fostered an environment where government played a crucial role in regulating industry and ensuring fair practices. This legacy continues to shape American economic policy today.

Related terms

Public Works Administration: A program created by the NIRA that funded large-scale public works projects to create jobs and improve infrastructure.

National Labor Relations Act: A 1935 law that protected the rights of workers to organize and engage in collective bargaining, building on the labor protections initiated by NIRA.

Fair Labor Standards Act: A 1938 law that established minimum wage, overtime pay eligibility, recordkeeping, and youth employment standards, further expanding labor rights initiated by NIRA.