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, aimed at stimulating economic recovery during the Great Depression. It sought to promote industrial growth, improve labor conditions, and raise consumer purchasing power through the establishment of codes of fair competition for industries, which included regulations on pricing, production, and wages.

5 Must Know Facts For Your Next Test

1. The NIRA was enacted as part of President Franklin D. Roosevelt's New Deal program to combat the severe economic downturn during the Great Depression.
2. The act established a framework for creating industry-specific codes that set standards for wages, hours of work, and prices to stabilize economic competition.
3. The National Recovery Administration (NRA), established under the NIRA, was responsible for promoting adherence to these codes and facilitating cooperation among businesses.
4. While the NIRA aimed to revive the economy, it faced criticism for its complexity and was ultimately declared unconstitutional by the Supreme Court in 1935.
5. The NIRA's emphasis on workers' rights through Section 7(a) laid the groundwork for future labor legislation, including the Wagner Act.

Review Questions

• How did the National Industrial Recovery Act aim to address economic issues during the Great Depression?
  • The National Industrial Recovery Act aimed to address economic issues during the Great Depression by establishing codes of fair competition that regulated prices, wages, and working conditions across various industries. This approach sought to stimulate economic recovery by encouraging industrial growth and improving labor conditions, ultimately leading to increased consumer purchasing power. By addressing these interconnected issues, the NIRA attempted to create a more stable economic environment that could help lift the nation out of the economic crisis.
• Evaluate the effectiveness of the National Industrial Recovery Act in achieving its goals within American industries.
  • The effectiveness of the National Industrial Recovery Act in achieving its goals varied across different sectors. While some industries benefited from organized standards that helped stabilize prices and wages, others faced challenges with compliance and complexity in code implementation. The NRA worked to enforce these codes but struggled with widespread cooperation from businesses. Ultimately, while NIRA made strides in improving labor rights and promoting fair competition, it was hindered by legal challenges and operational difficulties that limited its overall impact on economic recovery.
• Assess the long-term implications of the National Industrial Recovery Act on labor rights and industrial relations in America.
  • The long-term implications of the National Industrial Recovery Act on labor rights and industrial relations in America were significant. Although it was declared unconstitutional in 1935, its introduction of Section 7(a) laid a foundation for stronger labor protections that would be further developed in subsequent legislation like the Wagner Act. This evolution marked a shift toward greater recognition of workers' rights and collective bargaining as essential components of American industrial relations. As a result, the NIRA influenced future labor policies and contributed to shaping a more organized labor movement that empowered workers across various sectors.

Related terms

NRA: The National Recovery Administration (NRA) was created under the NIRA to oversee the implementation of industrial codes and enforce fair competition practices among businesses.

Section 7(a): Section 7(a) of the NIRA guaranteed workers the right to unionize and engage in collective bargaining, significantly advancing labor rights during this period.

Wagner Act: Formally known as the National Labor Relations Act of 1935, it built upon the principles established by the NIRA by providing stronger protections for workers' rights to organize and bargain collectively.