David E. Bernstein, Only One Place of Redress: African Americans, Labor Regulations and the Courts from Reconstruction to the New Deal. Durham, NC and London: Duke University Press, 2001. xiii + 189 pp. $39.95 (cloth), ISBN 0-8223-2583-7.
Reviewed for EH.NET by Richard K. Vedder, Department of Economics, Ohio University.
Published by EH.NET, April 2001.
The conventional view is that American workers were greatly helped by Progressive labor legislation that evolved in the late nineteenth and early twentieth centuries, but that conservative courts blocked implementation of those laws designed to protect helpless workers from the greedy acts of insensitive capitalists. Bernstein, a law professor at George Mason University, thinks that this traditional view is backwards, at least with respect to African American workers. Much of the so-called progressive legislation was highly discriminatory and harmful to African Americans, and the "reactionary" court decisions actually helped reduce the damages to their quality of life imposed by these regulations. The book is a series of case studies that amplify this thesis.
Bernstein is not the first person to argue that governmental labor laws and regulations can have unintended or adverse consequences. For decades, for example, economists in the law and economics tradition have written about the adverse effects of occupational licensing, and Harold Demsetz, for one, argued as early as 1965 that New Deal labor reforms, far from being black America's salvation, were a setback in its efforts to climb the economic ladder. Yet Bernstein combines in one engaging volume alarge amount of evidence supporting the revisionist perspective.
To Bernstein, the key Supreme Court decision supporting a "liberty of contract" position was the 1905 case of Lochner vs. New York. In Lochner, a majority ruled that New York state hours legislation in the bakery industry (limiting work to 60 hours per week) violated the constitutional right of individuals to freely enter into contracts. The Lochner majority was a precarious one, and, while influential, the principles in that case were only inconsistently applied in the next thirty-two years until the Supreme Court in 1937 completely abandoned Lochner. Nonetheless, in Bernstein's view, the relief that conservativecourts provided African Americans under Lochner mitigated the harsh anti-black dimensions of much 1900-era labor legislation. In the course of this slim (117 pages of text) volume, Bernstein largely convinces this writer.
Bernstein uses four types of governmental intervention in labor markets to make the point with respect to the pre-New Deal era: emigrant agent laws, licensing laws, railroad labor regulations, and prevailing-wage laws. He then provides a short but devastatingly critical assessment of the impact of New Deal labor laws on African American labor.
A few specifics. After the Civil War, newly freed slaves were often eager to "demonstrate their freedom" by migrating to areas, such as the Mississippi Delta, where job opportunities were more remunerative. Information and transportation costs were high, however, so emigrant labor agents arose to provide services to African Americans: they arranged employment (typically in agriculture) in new areas, lent them transportation money, and so forth. They facilitated economically productive migration. Yet southern states responded to the pleas of politically influential white planters who feared the loss of a low-cost labor force, by passing laws that attempted to tax emigrant agents out of existence. The success of this legislation varied, but these laws were for a time thwarted by courts which followed Lochnerian legal reasoning, in many cases even before Lochner.
While the emigrant agent laws prevailed in the South, occupational licensing was used to restrict the entry of blacks throughout the country, particularly in the construction industry. By imposing literacy or other relatively irrelevant requirements for licenses to become, say, a plumber, craft unions were able to restrict the entry of competent, low-wage workers into their occupations, a disproportionate number of whom were African Americans. This permitted union members to receive wages above those that would exist in an unhampered labor market. Throughout the book, labor unions are the biggest villains, trying to restrict black entry -- in part to reduce competition, and in part for racist reasons.
While the book eschews the tables, graphs and statistical estimations dear to the heart of economists and cliometricians, it provides enough evidence to show that moves by special interests to use government's coercive powers to restrict black participation in various moderately skilled occupations were often devastatingly effective. Over 20 percent of America's barbers and hairdressers were African American in 1890, but that proportion declined due to rigid licensing laws administered by whites interested in reducing black competition. Thus African American membership in the leading barbers' union fell by more than three-fourths in the quarter century after 1903, and a few unions had overt provisions prohibiting blacks from membership.
Railroads were an industry where blacks were well represented at the dawn of the twentieth century. Efforts to use various legislative strategies to reduce African American participation largely failed before the 1920s, but government came to the rescue of the largely white leadership of the railroad brotherhood, most importantly after the passage of the Railway Labor Act of 1926, and its 1934 amendments. The outlawing of "yellow dog" contracts, typically heralded as a sign of progressive protection of workers wanting to organize, had the impact of largely wiping blacks out of certain railroad occupations, because non-union African Americans were largely replaced in thinly disguised racist contracts negotiated with the now dominant railroad unions. In large parts of the South, in the early twentieth century most railroad fireman were black; by 1960, only seven percent were.
The story of the Davis-Bacon Act and associated legislation has been told before (including by this author), but Bernstein recounts it competently and adds some new details, showing more clearly than ever the racist origins of that still extant legislation. Similarly, Bernstein shows that New Deal legislation had particularly strong adverse circumstances on African Americans; the unemployment effects of the Fair Labor Standards Act were particularly great in the South, for example. The Wagner Act gave discriminatory unions more power to discriminate and restrict the entry of blacks.
This is a good book. Some economists might ask for more explicit and lengthy demonstration of how economic theory can be used to bolster the main thesis. Many would call for some econometric demonstration that assertions arising from anecdotal evidence or from simple descriptive statistics hold under more sophisticated statistical scrutiny. For example, it is possible from Census data for 1930 and 1940 to examine changing occupational data by race, occupation and location. Did the unemployment rate of blacks rise relative to that of whites more in the South, as implied by Bernstein, than in other areas less impacted by minimum wage laws? Using data back to 1890, were occupational losses from 1890 to, say, 1930 greater in a statistical sense in highly licensed occupations relative to those with freer entry?
Therefore, this is not the last word on the subject. But it is a very important addition to the literature. Bernstein, using the traditional narrative approach of legal scholars along with a little economic theory, has demonstrated, convincingly to this author, that the coercive power of the state was used to hurt blacks, and that the color-blind market approach envisioned in Lochner would have provided superior job opportunities for African Americans.
Richard Vedder, Distinguished Professor of Economics at Ohio University, is co-author, with Lowell Gallaway, of Out of Work: Unemployment and Government in Twentieth-Century America (1993), and is currently doing historical research into U.S. immigration.
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Posted: 18 April 2001