National Industrial Recovery Act (NIRA)

Definition

The National Industrial Recovery Act (NIRA) was a landmark piece of legislation enacted in 1933 as part of President Franklin D. Roosevelt's New Deal aimed at addressing the economic challenges of the Great Depression. It sought to stimulate industrial growth, improve labor conditions, and promote fair competition through the establishment of codes of fair practices for industries. The NIRA played a crucial role in fostering cooperation between businesses and labor while seeking to revitalize the economy during a period of significant hardship.

5 Must Know Facts For Your Next Test

1. The National Industrial Recovery Act was signed into law on June 16, 1933, as part of a response to the severe economic downturn during the Great Depression.
2. The act created the National Recovery Administration (NRA), which was responsible for overseeing the implementation of industry codes that promoted fair wages, hours, and practices.
3. NIRA's Section 7(a) was significant in strengthening labor unions and collective bargaining rights, which led to increased union membership during the 1930s.
4. The Supreme Court declared the NIRA unconstitutional in 1935, stating that it gave too much power to the federal government over local businesses.
5. Despite its eventual downfall, the NIRA laid the groundwork for future labor rights legislation and set a precedent for government intervention in the economy.

Review Questions

• How did the National Industrial Recovery Act aim to address the economic issues faced during the Great Depression?
  • The National Industrial Recovery Act aimed to combat the economic challenges of the Great Depression by stimulating industrial growth and improving labor conditions. By establishing codes of fair practices, the NIRA sought to promote cooperation between businesses and labor unions, thereby increasing employment and consumer spending. The act was designed to restore confidence in the economy and foster recovery through regulation and support for workers' rights.
• Evaluate the impact of Section 7(a) of the National Industrial Recovery Act on labor relations in the United States.
  • Section 7(a) of the National Industrial Recovery Act had a profound impact on labor relations by guaranteeing workers' rights to organize and engage in collective bargaining. This provision strengthened labor unions and facilitated their growth during the 1930s, leading to improved working conditions and wages for many workers. However, this newfound support for labor was met with resistance from some business owners, creating tensions that would shape labor relations for years to come.
• Analyze the significance of the Supreme Court's decision on the National Industrial Recovery Act in relation to government intervention in the economy.
  • The Supreme Court's decision to declare the National Industrial Recovery Act unconstitutional in 1935 was significant as it marked a turning point in the balance between federal power and state authority. The ruling highlighted concerns about overreach by the federal government in regulating local businesses and set a precedent for limiting government intervention in economic affairs. This decision also reflected broader debates about capitalism and regulation during a time when many were questioning how best to recover from the Great Depression and ensure economic stability.

Related terms

New Deal:

A series of programs and policies implemented by Franklin D. Roosevelt aimed at recovering from the Great Depression, focusing on relief for the unemployed, economic recovery, and financial reform.

Public Works Administration (PWA):

A New Deal agency created by the NIRA that funded large-scale public works projects, such as bridges, dams, and schools, to create jobs and stimulate economic growth.

Section 7(a): A key provision of the NIRA that guaranteed workers the right to organize and bargain collectively, providing legal support for labor unions.