In July 1933, FDR carried out the Nationwide Industrial Restoration Act by ordering corporations to chop weekly hours from 48 to 40, whereas holding nominal wages unchanged. This successfully boosted nominal hourly wages by roughly 20%, virtually in a single day. The inventory market crashed on the announcement.
Between March and July of 1933, industrial manufacturing had soared by 57% beneath the affect of FDR’s greenback devaluation program. After July 1933, industrial manufacturing began declining as a result of excessive wage prices imposed by the NIRA. When this system was repealed in Might 1935, industrial manufacturing was truly decrease than in July 1933. Instantly after the NIRA was repealed, industrial manufacturing started rising extraordinarily quickly. You don’t get extra clearcut coverage experiments.
However many California legislators appear unaware of the NIRA’s historical past. Alex Tabarrok directed me to this WSJ article:
A invoice transferring via the Legislature would shorten California’s regular workweek to 32 hours from 40 for corporations with greater than 500 staff. Staff who put in additional than 32 hours in per week must be paid time-and-a-half. And get this: Employers can be prohibited from lowering staff’ present pay charge, so they might be paid the identical for working 20% much less.
That’s similar to the failed NIRA coverage of 1933.
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