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Published by EH.NET (April 2001)

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.

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 a large 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 conservative

courts 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.