Throughout the industrial heartland, the labor upsurge altered the balance of economic power and propelled to the forefront of politics labor’s goal of a fairer, freer, more equal America. Unlike the AFL, traditionally hostile to government intervention in labor-management relations, the CIO put forward an ambitious program for federal action to shield Americans from economic and social insecurity, including public housing, universal health care, and unemployment and old age insurance.

Building on the idea, so prominent in the 1920s, that the key to prosperity lay in an American standard of living based on mass consumption, CIO leaders explained the Depression as the result of an imbalance of wealth and income. The role of unions, in cooperation with the government, they argued, was to “create a consumer’s demand” by raising wages and redistributing wealth. Only in this way could society absorb the products that rolled off modern assembly lines. The pathbreaking 1937 agreement between the UAW and General Motors spoke of a “rate of pay commensurate with an American standard of living.” By mid-decade, many New Dealers accepted the “underconsumptionist” explanation of the Depression, which saw lack of sufficient consumer demand as its underlying cause. They concluded that the government must act to raise dramatically wage earners’ share of the national income.

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