Wagner-Peyser Act

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Wagner-Peyser Act

United States 1933


The Wagner-Peyser Act of 1933 declared that its purpose was "To provide for the establishment of a national employment system and for cooperation with the States in the promotion of such system, and for other purposes established a nationwide system of public employment offices." The key function of the act was to provide (1) federal matching funds for the operation of state employment offices, (2) federal supervision of operations, (3) state administration of services, and (4) employment services to veterans. It was amended in 1998 as part of the Workforce Investment Act, P.L. 105-220, which required that public employment services be provided as a component of the "One-Stop" delivery system of the states. Its state-related funds were used to provide three different methods of labor exchange services to job seekers and employers: self-service, facilitated self-help service, and staff-assisted service.


  • 1918: Influenza, carried to the furthest corners by returning soldiers, spreads throughout the globe. Over the next two years, it will kill nearly 20 million people—more than the war itself.
  • 1922: Publication of James Joyce's novel Ulysses and T. S. Eliot's poem The Waste Land—works that will transform literature and inaugurate the era of modernism.
  • 1928: Discovery of penicillin by Alexander Fleming.
  • 1930: Discovery of Pluto.
  • 1933: Hitler becomes German chancellor, and the Nazi dictatorship begins. A month later, the Reichstag building burns, a symbol of the new regime's contempt for democracy. (Though a Dutch communist is punished for the crime, the perpetrators were almost certainly Nazis.) During this year, virtually all aspects of the coming horror are manifested: destruction of Jewish-owned shops and bans on Jewish merchants; elimination of political opposition (including the outlawing of trade unions); opening of the first concentration camps (and the sentencing of the first Jews to them); book-burning; and the establishment of the first racial purity laws.
  • 1933: Germany and Japan withdraw from the League of Nations.
  • 1933: Newly inaugurated U.S. president Franklin D. Roosevelt launches the first phase of his New Deal to put depression-era America back to work.
  • 1933: Twenty-First Amendment repeals Prohibition.
  • 1933: Even as Stalin's manmade famine rages in the Ukraine, the new administration of President Roosevelt formally recognizes the USSR.
  • 1936: The election of a leftist Popular Front government in Spain in February precipitates an uprising by rightists under the leadership of Francisco Franco. Over the next three years, war will rage between the Loyalists and Franco's Nationalists. The Spanish Civil War will prove to be a lightning rod for the world's tensions, with the Nazis and fascists supporting the Nationalists, and the Soviets the Loyalists.
  • 1938: The U.S. Fair Labor Standards Act establishes a minimum wage.
  • 1943: Worn down by two Russian winters, the Germans begin to fall back. In January, the siege of Leningrad (which at more than 800 days is the longest in modern history) is broken, and a month later, the German 6th Army surrenders at Stalingrad.

Event and Its Context

It took the United States government about 150 years and several aborted attempts to establish a permanent federal employment service for American citizens. The first state regulation of private employment agencies occurred in 1848. A year later Wisconsin and Minnesota required licensing of private employment agencies, and soon other states enacted similar licensing laws. The state of Ohio established the first state employment agency in 1890. The entry of the federal government into employment offices occurred in 1907 when the Bureau of Immigration and Naturalization opened employment offices to aid people in obtaining jobs.

The World War I Era

The first real advancement toward the eventual establishment of a federal employment service for all American citizens occurred in 1914 in response to conditions surrounding World War I. War in Europe drastically reduced the number of immigrants arriving in the United States. As a result, the Federal Bureau of Immigration became an employment service for the growing number of unemployed workers in the United States. As the country became directly involved in World War I, the federal government needed a coordinated system to match people with war-related jobs.

Beginning around 1917, to deal with the masses of people needing jobs, along with unskilled workers beginning to immigrate to metropolitan areas, the U.S. Congress organized the Vocational Education Program. This action was a turning point in federal employment assistance because prior to this legislation the federal government felt that worker education, training, and any such related help was the responsibility of the states. At the same time, however, the states felt that such responsibility was in the hands of local communities. Consequently, little in the way of government-sponsored action was accomplished prior to passage of this legislation.

In January 1918 the United States Employment Service (USES) was established as a unit in the Department of Labor. In its first year of operation, more than 10 million job seekers made applications for jobs, and the USES referred about 6 million people to jobs. By the time World War I ended in 1918, decreasing funds and considerable opposition to its functions ended its brief existence (at least for the time being).

First Federal Bill

Although no longer functioning, the war-related work of the USES highlighted the need for a permanent and effective national employment service. In 1919 a group of state and federal employment officers, labor leaders, and other influential people recommended the establishment of a comprehensive public employment service based on cooperation between the various state governments and the federal government. Consequently, Congress passed the Kenyon-Nolan bill, but it failed to become law.

During the postwar depression of 1920, the government enacted the Vocational Rehabilitation Act to assist returning veterans and others in finding employment. Although somewhat limited in scope during this time, this measure marked the beginning of the federal involvement in employment assistance. A conference on unemployment convened in 1921 at the urging of Secretary of Commerce Herbert Hoover to discuss the need for an active national employment service to replace the defunct, temporary wartime USES. Little was actually accomplished at this meeting; in fact, little was accomplished during the next 10 year in the areas of unemployment and federal employment services (largely due to a subsequent 1920s economic expansion and the high level of employment that resulted).

The dire economic events that occurred in 1929 changed the perception of employment services. When the U.S. stock market crashed in October of that year and triggered the Great Depression, there was an immediate need for a federal employment service. With unemployment impacting one-fourth of the country's workforce—more than 12 million people—the need for employment assistance was greater than was possible on the local and state levels. The Wagner Act of 1931 contained provisions for a cooperative federal-state employment service very much similar to that contained in the Kenyon-Nolan bill of 1918. The bill passed both the House of Representatives and the Senate, but because it was perceived as competing with rather than helping other community services, it was later vetoed.

The Wagner-Peyser Act

In 1933 the federal government implemented a number of programs to assist people with employment. Unfortunately, some of them were later found to be unconstitutional, and most were only temporary in nature. However, one signaled a new direction for permanent employment assistance. The enactment of the Wagner-Peyser Act, which was approved by President Franklin D. Roosevelt on 6 June 1933, established a national employment service in the United States. The law authorized the federal government to cooperate with the states in establishing and maintaining public employment services. Its functions were to develop a national system of public employment offices, furnish information on employment opportunities, and maintain a system for dealing with labor among the states. The act reestablished the USES as a division of the Department of Labor.

Under the Wagner-Peyser Act, each state received funds that were allocated for the planning and administration of a labor program that could deal effectively with the needs of both employers and job seekers. The act appropriated $1.5 million for its first fiscal year with approximately $1.1 million reserved for subsidies to state offices that were affiliated with the federal service and that conformed to standards laid down by the federal service. The appropriation for the second fiscal year (ending 30 June 1935) was $3.7 million, of which about $165,000 was expended for services in the District of Columbia; $200,000 was granted for Veterans' Placement Service; and the bulk of the monies, $3 million, was reserved for the states.

President Roosevelt appointed Frances Perkins on 4 March 1933, as U.S. secretary of labor. Perkins made recommendations to Congress, suggesting such measures as a permanent unemployment service, a mediation service, unemployment insurance, low cost housing, worker safety, old-age insurance, higher wages, an end to child labor, and the right of workers to organize. Perkins was instrumental in the passage and later in the application of the Wagner-Peyser Act.

Although unemployment insurance was not directly a part of the Wagner-Peyser Act of 1933 and the federal/state employment service that resulted, it is worth noting as an important follow-up to the act in terms of worker security. The need for unemployment insurance had been evident for a long time. Massachusetts had introduced the concept in 1916, and over 180 legislative proposals for unemployment compensation had followed in 28 states over the following 18 years. Only the state of Wisconsin, however, actually adopted such a program. The federal Social Security Act of 1935 also established the unemployment insurance program, which provided for the first time a defense against the effects of unemployment by assisting the individual and the local community.

The Wagner-Peyser Act required that all federal and state positions for public service be filled based on merit. For this reason, the USES prepared a manual, Specifications for Positions in State Employment Services, to establish national uniform requirements for like positions in the various states and to equalize salaries in each type of work position throughout the country. A national advisory council was appointed to help the USES determine and elucidate its policies, maintain neutrality between employers and labor, and place efficiency ahead of political considerations. Similar state and local advisory councils were established on an as-needed basis.

By August of 1934, 19 of the 48 states and the District of Columbia, as well as the U.S. territories of Hawaii and Alaska (along with a total of 167 local offices) were associated with the USES in the service of unemployment compensation and public employment services. Each state received federal subsidies after it signed a formal, written agreement that bound the state to compliance with federal regulations and standards, including selection and training of personnel, supervision of salaries, standardized record systems, and premises used for offices.

The charter of the USES strengthened and improved in efficiency throughout the years as employment services integrated with unemployment compensation. Although the procedures and purposes of employment service and unemployment compensation are not identical, each presents a distinct step in one extended process.

Since the 1960s Congress has passed several acts that have expanded the scope of services offered by the USES, including the Area Redevelopment Act (1961), the Manpower Development and Training Act (1962), the Vocational and Educational Act (1963), the Economic Opportunity Act (1964), the Job Training Partnership Act (1982), and the Economic Dislocation and Worker Adjustment Assistance Act (1988). Since 1979 the USES also has provided employers with tax credits for hiring disadvantaged workers.

The USES in Modern Times

According to a February 1995 report by the Government Accounting Office, there were at least 163 federal employment and training programs in existence at the time. Fourteen federal departments administered these programs. The USES maintained over 1,700 local public employment offices in the states and territories, which provided about 3.2 million workers with jobs annually. Although the names of these offices varied, with the use of such titles as Employment Services, Employment Security Commission, Job Service, One-Stop Center, or Workforce Development Center, the mission of each was identical: to assist job seekers in finding jobs, to assist employers in locating qualified workers, and to provide job training and related services.

The United States Public Employment Service evolved throughout the latter half of the twentieth century into a series of public services as the U.S. Congress created new programs to serve specific target audiences and to address changing labor market conditions. At the beginning of the twenty-first century, the U.S. Employment Service represented a solid foundation for a vast, publicly supported workforce development system.

Key Players

Perkins, Frances (1882-1965): Perkins was born in Boston, Massachusetts, and graduated from Mount Holyoke College in 1902. She received her master's degree in sociology from Columbia University in 1910. In 1910 she became leader of the New York Consumer's League and lobbied for better working conditions and shorter hours of work. President Franklin D. Roosevelt appointed Perkins as secretary of labor in 1933. She held the position for 12 years, longer than any other secretary of labor. Perkins was the first woman to hold a cabinet position in the United States. As secretary of labor she played a critical role in New Deal legislation. Her most important contribution is generally considered her work as chairwoman of the President's Committee on Economic Security. In this position she was involved in all the preliminary work that eventually resulted in the Social Security Act of 1935.

Peyser, Theodore Albert (1873-1937): Peyser was born in Charleston, West Virginia. He worked at various occupations in the West Virginia area before moving to Cincinnati, Ohio, in 1893 to become a traveling salesman. Peyser moved to New York City in 1900 and worked in the life insurance business. He was elected as a Democratic representative from the state of New York to the 73rd, 74th, and 75th Congresses and served from 4 March 1933 until his death in 1937.

Wagner, Robert Ferdinand (1877-1953): Wagner graduated from the New York City College in 1898 and the New York Law School in 1900. He was a Democratic state legislator from New York in 1904 and was elected to the New York State senate in 1908. Wagner took a particular interest in industrial working conditions and developed sympathy for the emerging trade union movement. In 1919 Wagner became a justice of the New York Supreme Court, holding this position until 1926, at which time he was elected to the United States Senate. During his first term, Wagner failed in his attempts to persuade Congress to pass legislation to help trade unions and the unemployed. President Franklin D. Roosevelt appointed Wagner in 1933 as the first chairman of the National Recovery Administration, and he eventually became an important figure in the Roosevelt administration. He was instrumental in drafting such legislation as the National Industrial Recovery Act, the Federal Emergency Relief Administration, and the Social Security Act. Wagner sponsored the National Labor Relations Act (or the Wagner Act), which in 1935 established the federal government as the regulator and ultimate arbitrator in labor disputes. It is widely regarded as the single most important piece of labor legislation enacted in the United States in the twentieth century. The intent of the Wagner Act was to eliminate interference by employers when workers attempt to organize into a union.

See also: Perkins Becomes Secretary of Labor; Stock Market Crash.



Commons, John R. "United States Employment Service" and"The Wagner-Peyser Act." In Historical Dictionary of the New Deal: From Inauguration to Preparation for War, edited by James S. Olson. Westport, CT: Greenwood Press, 1985.


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—William Arthur Atkins