Full Employment and How to Get It

[Frank Stricker]

Full Employment and How to Get It                             By Frank Stricker

The President speaks: “Jobs, jobs, jobs, we’re gonna give you so many new jobs you will be sick of it.”

Bob Right, Faux-Freedom Caucus member, thinks:  “Great! And he’ll make sure that the government doesn’t start job programs like the WPA and CCC that we had in the 1930s. And thank god he won’t be deincentivizing rich people by taking back the trillions of dollars they grabbed in the last forty years. Just the opposite. More tax cuts for the 1%. That’s freedom.”                                                                                                                   

            Really, Bob?

            The chart below is a slice of wage and job history covering 65 years. It shows how bad things have often been without good-job programs. Wage growth has been mostly terrible since the 1960s, and job growth has been on-again-off-again since 1980. After the 1960s, we had just one period when both wage and job growth were strong. You might conclude, as I do, that deliberate policies had something to do with this bad record.

 

Report Card on Growth in Real Wages and Total Jobs, Five-Year Periods, 1950-2015^[1]                                                                                    

                                  Wages          Jobs                 

1950-1955	A+	A
1955-1960	A	B
1960-1965	B+	A
1965-1970	C	A+
1970-1975	F	B+
1975-1980	FF	A+
1980-1985	FF	D
1985-1990	FF	A
1990-1995	FF	D
1995-2000	C-	A
2000-2005	F	F
2005-2010	F	FF
2010-2015	D	B

 

 

 

 

 

 

Total five-year growth in wages and jobs graded thusly: 10% or more = A, 8%-9% = B, 7% = C, 6% = D, under 6% = F, decline =FF.

 

 

 

The Great Recession was a catastrophe for millions of people in the United States and many other countries, but it did add force to movements organizing for income equality and higher wages. Occupy Wall Street put economic inequality on the front page. Fast-food workers, many with union support, organized and demonstrated. Some states and cities raised their minimum wages, sometimes to levels that had once seemed unattainable. But there’s been no increase in the federal minimum wage and no new permanent job programs, unless you consider Obamacare a job program. The Democrats  missed an opportunity to fix lousy job markets. Too little courage, too much faith in business markets.

During the recession everyone talked about unemployment, but as the economy improved and the official unemployment rate fell, less was said about the need for job creation. Mr. Trump talks about saving jobs in the mines and factories and adding millions of infrastructure jobs, but he presents no realistic plans for any of this. He argues that big tax cuts--handouts to rich people and big businesses--will create a lot of jobs. Did the Bush cuts of 2001 and 2003 deliver more jobs? Check the chart.

We are not close to full employment, despite what the experts say. The real unemployment rate is more than twice the official rate. And we have not had sustained wage increases for a long time. Real hourly pay for the average employee is about where it was in 1973. The deck is stacked against employees in many ways and one way is that there are 20 million people who want a job or want to move from part-time to full-time work. So there’s a labor surplus that saps employee bargaining power.

If the American people really want more and better jobs--and not just political theatre-- they need to push Congress to double the minimum wage right away and get behind government programs that directly create good jobs. One general job program has been introduced into the House by Representative John Conyers and it is also a project of the National Jobs for All Coalition. It’s  HR 1000, The Humphrey-Hawkins 21^st Century Full Employment and Training Act, which establishes a trust fund to create 6 million new jobs. [2] Progressives should also push to create a Department of Public Infrastructure. America’s infrastructure got another D+ this year from the engineers.

We can have high-wage full employment. Here’s what it might look like in ten years if we start fixing things now.

What Real Full Employment Could Look Like in 2027

1. The federal government guarantees a job for everyone who wants and needs one. That is a way to be sure that we have full employment. At real full employment, the official unemployment rate stays at or below 2%.

2. Securing a new job takes only a month or two--half as long as in 2016. There are real labor shortages and employers routinely raise wages to attract workers.

3. The economy adds 300,000 jobs per month instead of 200,000, as in 2016.  That’s a million more per year and 10 million more in ten years. Sound impossible? There’s a lot of give in the size of the labor force. In January of 2017, there were 7.6 million officially unemployed, 5.8 million part-timers wanting full-time work, and 5.7 million job-wanters who had not recently searched for a job.

4. The federal minimum wage has been lifted every year until it is $20 an hour. Because of fuller employment and high demand for workers, most employers have to pay more. The average working-class wage, which was $22 in 2017, is $35. Even after inflation, the purchasing power of that wage is up 30%.

5. The national unemployment rate of 2% holds true across the land. Thanks in part to the National Full Employment Trust Fund, which is funded by a tiny tax on stock and bond transactions, more jobs go to high-unemployment areas. Extreme jobless rates for African-Americans in Chicago and poor whites in West Virginia are becoming a thing of the past.

6. Full-employment America includes a dense network of social services to facilitate work, including universal, affordable child care and federal training programs linked to real jobs. Affirmative action is enforced and minorities, poor people, and residents of hollowed-out communities are getting decent jobs. Federal policy and government-supported citizen-groups help ex-prisoners find work. Employers are required to accommodate people with disabilities, and because there are labor shortages, they are more willing to comply.

7. The history of recent decades shows that the private sector thrives on low wages and a labor surplus. That is why real full employment requires federal programs to directly create jobs. So the federal presence has spread. There are thousands of new public- and private- sector projects funded and supervised by the federal government. They range from new parks and better bridges to more and better Head Start schools and more green energy businesses. Some projects are overseen by existing government departments. Many are funded and supervised by the Department of Labor under the National Full Employment Trust Fund or managed by the Department of Public Infrastructure.

8. Employee involvement and opportunities for advancement are increasing. As compensation improves, there is more discussion about reducing the standard forty-hour week.[3]      

            Does all this sound utopian?  It may, but is there anything more utopian than believing that deregulation and more tax cuts to the rich will bring full employment and better wages? 

How has that worked out in the last few decades? Check the chart.       

    Frank Stricker is emeritus professor of history and interdisciplinary studies at California State University, Dominguez Hills. He is on the board of NJFAC, and author of the How America Lost the War on Poverty (2007).                         

 

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[1]. Data for job totals in the chart come from Current Employment Statistics (CES), at BLS.gov, measured January to January. Thus for 2010-2015, totals are from January, 2010 to January 2015. Real wages are from the annual Economic Reports of the President, including the one for 2016, Table B-15, p. 418, and BLS Economic News Releases, Table A-2, Current and real (constant 1982-1984 dollars) earnings for production and nonsupervisory employees on private nonfarm payrolls, seasonally adjusted.

2. The National Full Employment Trust Fund is the financial arm of HR 1000. The bill is co-sponsored by several dozen representatives. It is also known as The Jobs for All Act.

 

3. Thanks for suggestions about the meaning of full employment to many people including James Devine, Helen Ginsburg, William Darity, Jr., Darrick Hamilton, Philip Harvey, Trudy Goldberg, June Zaccone, and Scott Myers-Lipton. Harvey’s Securing the Right to Employment: Social Welfare Policy and the Unemployed in the United States (Princeton: Princeton University Press, 1989), helped a lot as did Russell A. Nixon, “The Historical Development of the Conception and Implementation of Full Employment as Economic Policy,” in Alan Gartner, Russell A. Nixon, and Frank Riessman, eds., Public Service Employment: An Analysis of Its History, Problems and Prospects (New York: Praeger Publishers, 1973), 9-27.