23-4 Legacy of the New Deal

“Those
suffering

hardship from

no fault of

their own have
a right to call

upon the

government

for aid.”

- Franklin Roosevelt, 1938

Social Security

◼ Social Security Act of 1935

provided aid to retired people
and others in need

▪ Guaranteeing a pension to

retired people paid for by the
new law imposing a payroll tax

◼ Employers had to match the

tax taken out of their
employees check

◼ Others benefiting – disabled,

unemployed, or children who
lost their fathers

Lasting Labor Reforms

◼ Government reforms and a new

labor organization helped unions
grow more powerful – able to use
collective bargaining

◼ Fair Labor Standards Act

▪ Set minimum wage at 25

cents/hr

▪ Maximum work week at 44 hrs

▪ Time-and-a-half & overtime

work

▪ Put an end to child labor

Lasting Labor Reforms, cont.

◼ Congress of Industrial Organization

Union (CIO)

▪ Opened union membership to women and

African Americans

◼ CIO helped with the

United Auto Workers strike
– having a sit-down strike
to win higher wages and
shorter hours

▪ Won, but Supreme Court later

ruled sit-down strikes illegal

How do labor
unions have an

effect on the

economy?

Scorecard on the New Deal

◼ Critics of the New Deal

argued that it made the
government too
powerful

▪ Complained that FDR

relied on deficit spending

▪ Complained that full

economic recovery did not
start until 1941 when
America started producing
goods for WWII

Scorecard on the New Deal, cont.

◼ Supporters claimed the

New Deal restored faith
in the government

▪ Employed millions

▪ Ended banking crisis

▪ Reformed stock market

▪ Saved poor families from

losing their homes

▪ Improved working

conditions