National Industrial Recovery Act (NIRA)

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The Great Depression led to new directions in federal labor policy. In an effort to recover economically from The Great Depression, President Franklin Roosevelt approved the 1933 National Industrial Recovery Act (NIRA). It was created to stimulate the economy and increase the spending power of the worker. This act was divided into three titles: Title I promoted centralized economic planning by instituting codes of fair competition for industry; Title II provided $3.3 billion for public works projects; and Title III contained minor amendments to the Emergency Relief and Construction Act of 1932. Under Title I, Section 7(a), for the first time in our history, a national policy favored collective bargaining and gave an employees the option to join unions not solely on the pretense of …show more content…
(Peters & Woolley). After the enactment of this act, union membership drastically increased. Due to the rapid increase of union member, the National Recovery Administration (NRA) was established to oversee the drafting and the implementation of fair competition codes. The NRA established and implemented a multitude of codes, which become confusing to business. There were so many codes that business would frequently confuse them or the codes were conflicting with other, which resulted in businesses paying different wages to their employees. The NRA was well received by unions and business, until the mass confusion with the codes began; their popularity began to dwindle fast. Due to the lack of popularity and several lawsuits, the U.S. Supreme Court declared the NIRA unconstitutional in May 1935. The Court held that the act impermissibly delegated legislative power to the NRA and that the application of the act to commerce within the state exceeded the powers granted to the federal government by the Commerce Clause. (The Commerce Clause gives Congress the power to regulate commerce between states, but not within an individual state). (Peters