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1932 › Franklin D. Roosevelt (Democratic) › Distribution of national income and purchasing power
A more equitable distribution of national income — higher reward to labor, lower to speculative capital
pledge_forwarddirectional_stancecandidate_directevidence A Economy & Fiscal PolicyLabor & Employment⚡ The Great Depression similar solutions · similar reasoning
Solution
Reorient policy from the producer to the consumer; ensure all willing to work receive at least the necessities of life; raise the average reward for a day's work and reduce the reward to capital, especially speculative capital. No mechanism specified.
Rationale
The basic trouble "was not an insufficiency of capital. It was an insufficient distribution of buying power coupled with an oversufficient speculation in production"; wages did not rise proportionately to returns to capital; an economy with surplus productive capacity cannot endure without broader purchasing power.
Statements (3)
Do what we may have to do to inject life into our ailing economic order, we cannot make it endure for long unless we can bring about a wiser, more equitable distribution of the national income.
In such a system, the reward for a day's work will have to be greater, on the average, than it has been, and the reward to capital, especially capital which is speculative, will have to be less.
There is one final objective of my policy which is more vital and more basic than all else. I seek to restore the purchasing power of the American people. The return of that purchasing power, and only that, will put America back to work.
Follow-through
partialcontested among sources
NRA codes raised minimum wages and cut hours; the Wagner Act (1935) armed unions; Social Security (1935) created a floor; the 1935 'wealth tax' was the first explicit redistributive measure — and Congress gutted it. The regressive payroll tax and continued mass unemployment limited the shift; income concentration fell substantially only with wartime taxation.
Mechanisms
| Date | Type | Name | Effect | Consistent? | Source |
|---|---|---|---|---|---|
| 1933-06-16 | statute | National Industrial Recovery Act wage and hour codes | My FIRST request is that the Congress provide for the machinery necessary for a great cooperative movement throughout all industry in order to obtain wide reemployment, to shorten the working week, to pay a decent wage for the shorter week and to prevent unfair competition and disastrous overproduction. | yes | Message to Congress Recommending Enactment of the National Industrial Recovery Act. |
| 1935-07-05 | statute | National Labor Relations Act | Federal protection of collective bargaining. | yes | Statement on Signing the National Labor Relations Act. |
| 1935-08-30 | statute | Revenue Act of 1935 ('wealth tax') | Higher surtaxes on top incomes; substantially diluted in Congress. | partly | Franklin D. Roosevelt: Domestic Affairs | Miller Center |
Obstruction
congress Conservative Democrats diluted the 1935 revenue bill. source
Assessments
The 1935 tax scheme was watered down and Social Security's payroll deductions muted purchasing power.
Roosevelt proposed a tax scheme in 1935 that would have greatly increased the tax bills of wealthy Americans and corporations. Conservatives in Congress, however, watered down the proposal considerably.
Other positions on this issue
- Share Our Wealth: cap fortunes, guarantee every family a homestead and income — Huey P. Long, 1936 specific_pledge
1932-fdr-equitable-income-distribution · created by claude-fable-5-1 · review: unreviewed