Cwa: A Candid Appraisal
ON November 9, 1933, the Civil Works Administration was created by order of the President for the purpose of ‘increasing employment quickly.’ The sum of $400,000,000 was taken from the Public Works fund and turned over to the Federal Relief Administration with the expectation that four million unemployed men and women would be put to work at once.
A few days after announcement of the new plan, the governors, mayors, and relief administrators of all the states met at Washington to hear the glad tidings. Many important details had not yet been worked out when this semipublic conference was called, but the representatives of the several states were told to go home and get started with all haste — detailed instructions would come later.
So far as speed was concerned, there was little cause for disappointment. The public, which had become impatient and even bitter with the delays of other activities of the Recovery Programme, was astonished at the quick execution of the CWA. To see hordes of men all over the country working with pick and shovel a week after a new plan was first announced was unprecedented in the annals of governmental conduct.
For the first few weeks everybody was happy. Those who wanted jobs got them or hoped to get them within a few days, merchants reported an increase of 30 to 40 per cent in sales, civic-minded persons saw unsightly spots cleaned up or painted, social workers were gratified to have their relief rolls diminished. The fact that it came at the Christmas season added to its glorification and enthusiastic reception. Anything but a repetition of that gloomiest of all Christmases of 1932, when public morale had reached its lowest depths! Those in high authority were so elated with the early results that they were incited to proclaim that perhaps the CWA was the American plan for unemployment relief in preference to the English ‘dole’ system.
Soon after Christmas adverse rumblings started, growing in number and seriousness each day. Graft, political favoritism, false expense accounts, dishonesty and collusion in purchasing materials, piled up at such a rate as to make the Federal Administrator frankly admit that he was ‘tremendously disconcerted’ and appeal to the Attorney-General and the War Department for assistance in cleaning up.
Also it became evident that the cost was much more than originally planned. Average weekly wages were higher than the estimated $12 per man per week (owing to the unexpectedly large proportion of skilled and white-collar workers) and local communities were not financing as much of the material and tool expenses as had been planned. Whereas the federal government had been spending $40,000,000 per month for direct and work relief, CWA alone was now costing the federal government $200,000,000 per month.
Quick action was necessary. On January 15, weekly hours were reduced, a few weeks later wage rates, then quotas; finally came complete demobilization on the first of April.
In a short two months the bubble started to burst,1 not because of criticism of political opponents (although this soon developed), but because of the inherent weaknesses and fallacies of the programme itself. To understand what these were, one must cite some of the basic provisions of the CWA and indicate how they differed from other forms of unemployment relief.
Method of Financing
As is well known, unemployment relief was entirely financed from local taxes and private contributions during the first two years of the depression. From the time of the first federal loan through the R.F.C. in the summer of 1932, relief throughout the country has, in theory at least, been a tripartite contribution of local, state, and federal
governments.2 In the administration of these funds the local and state governments, as well as the federal, had a stake. More or less definite procedures, fixed by law or custom, were in operation with respect to the purchasing of materials, establishment of workrelief projects, and their administration. Local taxpayers, whose money was being used, could be counted upon to see that dishonesty and political favoritism were not too flagrant.
There were no such automatic deterrents, however, with CWA projects financed entirely by a beneficent government thousands of miles away. Everyone wanted a chance at the grab bag — big and little merchants who had equipment and tools to sell, town officers who wanted lanes improved to their front doors, public officials or aspirants for public office who expected to procure votes via job giving. By its very nature the CWA was antithetic to federal government, which implies mutual responsibility as well as mutual benefits from participating units of government.
Selection of Men
Of the three million families on public relief prior to CWA, probably one million had members working for aid they received. The term ‘work relief’ had been officially interpreted to be ‘wages or other compensation paid for work where the recipient and the amounts paid are both determined on the basis of the actual existing need. Wages in return for such work may be paid in cash or in kind.’ Work relief implied that persons were employed on a basis of actual existing need and were privileged to earn only enough to pay for their minimum needs. While the rate of pay might vary according to type of work, hours were so adjusted that the weekly income was just enough to cover minimum budgets.
The Civil Works Administration frankly referred to itself as an employment programme as well as a relief programme. One half of those employed came from relief rolls; for the other half the door was thrown wide open to all unemployed regardless of financial stress or immediate need. This brought on a wild scramble of some ten million unemployed for two million jobs. These two million not taken from relief rolls were theoretically to be chosen on the basis of qualification. With the average of five persons for every job, it was not surprising that the successful candidate frequently had to have ‘pull’ as well as ability.
Wage Rates and Hours
In the spring of 1933, wage rates for common labor in private as well as public employment had dropped as low as 15 cents and 18 cents per hour. During the summer, NRA codes had brought these rates up to 30 cents and 40 cents per hour. The minimum CWA rates were 40 cents in Southern states, 45 cents in the Middle states, and 50 cents in Northern states. Wages for skilled labor were $1.00, $1.10, and $1.20, respectively. It will be seen that both the common and the skilled labor rates were higher than code rates for similar work in private industry.
Opposition immediately developed on the part of farmers who felt that they should still be able to hire farm labor at rates which had prevailed the previous summer, and on the part of industrial employers who criticized the inconsistency of allowing one department of government to pay higher rates than another department had established for them.
The thirty-hour week was shorter than that prescribed by industrial codes during the same period. Unlike the former work-relief provisions, hours had no relation to family needs; the single man was given as much work as the man with ten children.
It is little wonder that the CWA as originally put into operation could not long continue; it was bound to collapse of its own weight. Yet the end of no experiment in the Recovery Programme will bring more general disappointment and alarm than the elimination of CWA has brought. The hopes and expectations of millions were suddenly aroused and then as quickly shattered. Its spectacular beginning, blazoned in headlines for several weeks, had brought about such spontaneous enthusiasm and lift in spirit as the nation had not experienced in years. It was a sad disillusionment to learn that such a munificent programme must close.
Thoughtful students of the unemployment problem knew that a prolonged continuation of a programme like the CWA was impossible. As a temporary measure to get money into circulation during the Christmas holidays, it had real merit. As a harbinger of a new kind of unemployment relief, it was deleterious in arousing false expectations. European countries, which have had much longer experience with the unemployment problem than we, have learned that it is impractical and impossible to combine employment programmes with relief programmes.
No government has ever been able to provide enough public jobs for those thrown out of private industry during a severe depression. Unemployment insurance is the only means of taking care of all or even a major portion of the unemployed during periods of prolonged distress. For this a nest egg has to be built up during years of prosperity and added to even in times of depression by contributions from employers, taxpayers, and perhaps from those who still are employed. Public works are a partial relief and are especially effective at the beginning of a depression or in a short-lived depression. (It must be borne in mind that public works, consisting mostly of work let through private contracts, constitute an entirely different sort of programme than the CWA.)
If, then, a government cannot support a prolonged work programme for all unemployed, it is only fair to the taxpayers and to the potential beneficiaries that what work is provided shall be given to those in greatest need. While it is desirable that eligibility requirements should be above the pauper level now necessary to get food orders from relief agencies (the level of eligibility would depend entirely on how much money the government was willing to spend), yet relative needs should be the basis of selection for employment on any work-relief plan. This basic principle the CWA ignored, and the nemesis came in the form of political favoritism, selling of jobs for a fee, and the usurping of jobs by those who did not deserve them.
The second lesson learned through the CWA experience is that relief is not the proper channel through which to raise the wage standard. It is most certainly the responsibility of public officials to see that no public relief programme tends to lower wage levels, as undoubtedly had occurred during the earlier years of the depression. But the public, more particularly the farmer and the employer groups, resist a taxsupported relief programme which pays higher than the prevailing wages. A work-relief programme should pay the going rate of wages; any improvement in wage standards must come about through other channels.
Undoubtedly the saddest feature revealed in the CWA debacle was the careless and inefficient spending of public funds— in some cases amounting to actual dishonesty and graft. The Federal Relief Administration gives as an excuse the speed with which such a large programme was put over. Haste in organization, however, is only part of the answer. We have become used to federal aid of one kind or another, such as in the building of roads, in vocational education, and more recently for unemployment relief. In these cases it has been the federal government sharing with the local governments. The CWA, financed entirely from federal funds, was a direct departure from this traditional federal-aid policy, and it set up no counterchecks to offset the protections which are automatically in operation when all benefiting parties are helping to pay the cost. It is so very easy to be generous with someone else’s money!
The CWA was an interesting experiment, albeit a costly one. If we were shocked and disappointed at the rapacity of so many local officials, we were reassured and encouraged at the eager willingness to work demonstrated by the millions of unemployed. If we were somewhat alarmed that the Federal Relief Administration should promulgate such a mammoth programme in such haste as not to take into due consideration many important factors, we are happy in the knowledge that it is willing to experiment and is not satisfied with the mere feeding of hungry people. More than anything else, the CWA has convinced us that, if we are to pull through this crisis without permanently destroying the morale and ambition of millions of our citizens, we must find some other form of relief than the handing out of grocery orders.
- The writer has purposely ignored the technical fact that the CWA was planned from the beginning to be a temporary measure. While first announcements did proclaim that the programme was to end on February 15, there is no doubt that it was hoped and intended by those in charge that it could be carried on so long as federal relief was necessary. In fact it was enthusiastically proclaimed by some in high authority that it might entirely replace direct relief so far as the federal government was concerned. With all sections of the country clamoring for continuance, it is certain that Congress would have been glad to coöperate if the first two months’ experience had proved that the programme was feasible. — AUTHOR↩
- With the exception of several Southern states where federal funds paid practically the entire relief bill. — AUTHOR↩