Legal test of the constitutional authority Congress to impose wage and price controls

Question

In 1971, using authority delegated to him by Congress, President Nixon imposed wage and price controls to try to get inflation under control. This was known as the Nixon Shock.

There was a district court case, Amalgamated Meat Cutters v. Connally, on the constitutionality of the measures, but the only legal issue that seems to have been addressed in this case seems to have been whether or not Congress could legally delegate this power to the president.

Regardless of the delegation issue, was there any test at the time of, or had it already been established, whether Congress even had the constitutional power in the first place to do this, if it had chosen to do it without delegating it? It seems pretty far out for the legislature to claim the power to invalidate an employment contract and force the employee to be paid less.

Was this underlying issue argued at all in Amalgamated Meat Cutters? What would be the constitutional basis for this power? The interstate commerce clause? In that case, would the wage and price controls not apply to a purely local business?

Is this related to the question of the constitutionality of minimum wage laws?

Answer 1

Congress imposed price controls on various agricultural and manufactured goods under several of the "New Deal" anti-depression measures, particularly the National Recovery Act, or NRA. There were constitutional challenges to these, and the were upheld under the Commerce power. I'd need to do some research to find the exact cases.

(Update: Relevant cases include Wickard v. Filburn, 317 U.S. 111 (1942 (Federal productioin quotas for wheat, even if consumed on the same farm where it is grown), Nebbia v. New York, 291 U.S. 502 (1934) (Regulation of price of milk by NY state), Olsen v. Nebraska, 313 U.S. 236 (1941) (state regulation of commissions charged by private employment agencies), Bowles v. Willingham, 321 U.S. 503 (1944) (wartime Federal rent control), and United States v. Carolene Products Company, 304 U.S. 144 (1938) (Federal regulation of interstate milk shipment) See also the Hepburn Act of 1906 (Federal power given to the ICC to control railroad prices), this law review article on price control cases, and this article on Price Controls from the Legal information institute)

Cases imposing minimum wage laws, both by Congress and by the States, were also challenged and upheld. Those are one from of wage control. I think that West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937) was the key case on that issue. By the 1970s this was probably regarded as settled, and so was not raised in the challenge to the laws of that date.