Historical Amnesia: The Humphrey-Hawkins Act, Full Employment and Employment as a Right*

Abstract

Economist William A. Darity has proposed a federal job guarantee with decent wages for all job seekers, an idea with deep,
but largely forgotten, roots in US history.The article briefly explores some New Deal job-creation efforts and President Franklin
Roosevelt’s proposal for an Economic Bill of Rights. It then focuses on two major attempts to secure full employment through
legislation. The Full Employment Bill of 1945 was defeated; the compromise, the Employment Act of 1946 did not have full employment
as its goal. After years of struggle, a much-weakened Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978 passed,
but then was violated and virtually ignored. Full employment shifts power from capital to labor, so major opposition can be
expected from efforts to obtain it. Proponents need more power and a strong movement, including at the grassroots level, pushing
for jobs for all--not just jobs for me or my group. Publicizing the benefits of past job programs and reintroducing the idea
of a decent-paying job as a right are suggested, as well as making decent jobs for all the center of economic policy. This
requires a fundamental break with neoliberalism and reallocating political power away from big business and Wall Street toward
middle and working-class people and the working- and non-working poor.

KeywordsFull employment–Jobs proposals–The Humphrey- Hawkins act–New Deal job creation–The employment act of 1946–Employment as a right–CETA

Full text

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The Review of Black Political
Economy
ISSN 0034-6446
Rev Black Polit Econ
DOI 10.1007/s12114-011-9121-3
Historical Amnesia: The Humphrey-
Hawkins Act, Full Employment and
Employment as a Right*
Helen Lachs Ginsburg

1 23
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Historical Amnesia: The Humphrey-Hawkins Act, Full
Employment and Employment as a Right*
Helen Lachs Ginsburg
#Springer Science+Business Media, LLC 2011
Abstract Economist William A. Darity has proposed a federal job guarantee with
decent wages for all job seekers, an idea with deep, but largely forgotten, roots in US
history.The article briefly explores some New Deal job-creation efforts and President
Franklin Roosevelt’s proposal for an Economic Bill of Rights. It then focuses on two
major attempts to secure full employment through legislation. The Full Employment
Bill of 1945 was defeated; the compromise, the Employment Act of 1946 did not have
full employment as its goal. After years of struggle, a much-weakened Humphrey-
Hawkins Full Employment and Balanced Growth Act of 1978 passed, but then was
violated and virtually ignored. Full employment shifts power from capital to labor, so
major opposition can be expected from efforts to obtain it. Proponents need more power
and a strong movement, including at the grassroots level, pushing for jobs for all–not
just jobs for me or my group. Publicizing the benefits of past job programs and
reintroducing the idea of a decent-paying job as a right are suggested, as well as making
decent jobs for all the center of economic policy. This requires a fundamental break with
neoliberalism and reallocating political power away from big business and Wall Street
toward middle and working-class people and the working- and non-working poor.
Keywords Full employment .Jobs proposals .The Humphrey- Hawkins act .New
Deal job creation .The employment act of 1946 .Employment as a right .CETA
Rev Black Polit Econ
DOI 10.1007/s12114-011-9121-3
*
This is a substantial expansion and revision of a presentation at the October 1, 20l0 Howard University
Economics Department Conference on Jobs and the Future of the US Economy: Possibilities and Limits,
Parts of it draw from my book: Full Employment and Public Policy: the United States and Sweden (1983).
My thanks to Professor Haydar Kurban and graduate students at Howard University and to Professors
Gertrude S. Goldberg of Adelphi University and Frank Stricker of California State University-Dominguez
Hills for various forms of invaluable support.
I want to thank the organizers of this conference for bringing us together on a critical issue. Hopefully, the
conference is just the beginning of a continuing dialogue among people striving to put the need for jobs
and how to create them on center stage.
H. L. Ginsburg (*)
Economics Department, Brooklyn College–City University, Brooklyn, NY 11210, USA
e-mail: helenginsburg@yahoo.com
Author's personal copy

Introduction
Though Wall Street was rescued by the federal government from a crisis that it
helped to create, economist William Darity (2010) has noted that “it is stunning how
cautious the response has been to the nation’s greatest economic crisis since the
Great Depression of the 1930s.”The crisis is a disaster for tens of millions of
American workers and their families. In January 2011, official unemployment averaged
9.0%–representing 13.9 million persons. However, persons working part time who
would like full-time employment, as well as persons who want jobs but have not looked
for work in the past 4 weeks, are not included by the Bureau of Labor Statistics in the
official figures. Including them, as the National Jobs for All Coalition (NJFAC) does
monthly on its website (NJFAC), brings the figure to 18.0%–28.7 million people.
While all groups have seen sharp rises in unemployment, there are wide disparities.
For white workers the jobless rate was 8.0%–but for African Americans it was a
depression level of 15.7% and for black 16–to–19 year olds it was an astronomical
45.4%. In addition, in 2009 (the latest year available) 16.3 million people were
working year-round full time, yet earned less than the inadequate official poverty level
for a family of four (NJFAC).
Professor Darity (2010) laments “the failure to undertake or even to consider
more daring and imaginative policies [than the stimulus of 2009] to produce a
healthy and equitable economy.”And he proposes a “powerful transformative
policy,”“a federal job guarantee that would insure that all persons willing to work
would be able to obtain work”(see also, e.g., Harvey 1989 and 2000; Wray 1998).
Darity (2010) also shows its economic feasibility, at a minimum annual salary of
$20,000 (a mean of $40,000) plus $10,000 in benefits, to provide jobs for all of
those currently jobless. He spells out the extensive advantages that would accrue
both to the unemployed, to workers and to society, including addressing the nation’s
vast unmet physical and human infrastructure needs, security for workers, improved
health, elimination of working poverty and a chance for former prisoners to become
useful members of society. Professor Darity’s idea and variants of it have deep roots
(Nixon 1973) and some of these roots are part of 20th century US history.
In this article I briefly explore some New Deal job creation efforts and President
Franklin Roosevelt’s Economic Bill of Rights. The main focus is on two major
attempts to secure full employment and the right to a job through legislation. In the
1940s, the ill-fated Full Employment Bill of 1945, failed to pass; the Employment
Act of 1946, passed, but did not have full employment as its goal. The second major
attempt, in the 1970s, led to passage of the weak Humphrey-Hawkins Full
Employment Act of 1978, which has been virtually ignored.
In the article, I draw partly from my experience as a participant observer. In the
1970s, I was an academic economist and active participant in the struggle to attain
strong full employment legislation in the United States. During that period, I wrote,
consulted with many groups (mostly faith-based) provided testimony to Congress,
and spoke extensively throughout the country on unemployment and the need for a
federal government commitment to full employment. I am a co-founder and
currently serve on the executive committee of the National Jobs for All Coalition
(NJFAC), an organization that educates and advocates for a government policy of
living-wage jobs for all who want to work.
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Background
The Great Depression of the 1930s and World War II set in motion a major attempt to
establish full employment and “the right to a job”as federal government responsibilities.
The Great Depression and the New Deal
The Great Depression, a traumatic event, was a turning point in US history. When
Democratic President Franklin D. Roosevelt was swept into the White House in
1933, unemployment was 25%–up from 3% in 1929. Hopelessness and desperate
poverty were rampant. But his predecessor, Republican President Herbert Hoover,
had effused optimism and the view that “recovery was just around the corner,”even
as unemployment rose precipitously under his watch [(Hession and Sardy 1969)
p630]. The New Deal mostly–but not completely–broke with the prevailing
orthodox neoclassical economic doctrine that saw capitalism as self-regulating and
thus denied the possibility of involuntary unemployment or minimized its extent,
except as a temporary phenomenon caused by wages that are too high. Traditional
economics declared that the cure is lower wages; residual unemployment is deemed
voluntary, thus putting the onus for unemployment on the individual, not the society.
Typical policy prescriptions were belt-tightening--that is, cutting wages and
government expenditures—and laissez faire.
It is well known that the noted British economist (Keynes 1936) challenged that
theory, found no built-in mechanism in capitalism to overcome high unemployment
and advocated large-scale government expenditures to stimulate sagging private-
sector demand.
1
However, pragmatism more than theory influenced New Deal
policies, which often, but not always, resembled those advocated by Keynes
[(Bernstein 1985) Ch.4, (Leuchtenburg 1963) p243–250].
Spurred by myriad social movements, the New Deal stressed, among other things,
large scale public investment and direct government job creation. The New Deal used
indirect efforts to create private-sector employment through major publicly-financed
projects, especially the Public Works Administration. The PWA built much of the
nation’s infrastructure in the 1930s, including, among many examples, the Lincoln
Tunnel and Triborough Bridge in New York, Oregon’s coastal highway, the Port of
Brownsville, Texas, the overseas highway between the mainland and Key West, Florida
and the majority of the era’s new schools, courthouses, city halls and sewage plants.
The New Deal alsostressed directjob-creation programs for the unemployed with the
government as the employer. Best known are the Civilian Conservation Corps (CCC)
and the Works Progress Administration (WPA). The CCC [(Bernstein 1985)p155–160]
was a conservation-oriented program that mostly served unemployed young men.
Among its many accomplishments, CCC workers planted 2 billion trees, thinned 4
million acres of trees–some of them on burned-over landscapes–stocked streams with
nearly a billion fish and left a legacy of land, water, forest preservation and recreation
for future Americans, including ourselves. The WPA, perhaps the best remembered
1
Karl Marx, writing in the 19th century, believed that unemployment was an inherent part of capitalism
that helped to keep down wages–and that unemployment could only be ended with capitalism’s downfall.
So Keynes was also implicitly challenging Marx’s view.
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and most controversial of the direct job-creation programs, was established in 1935,
when President Roosevelt proposed a program to provide work for every able-bodied
jobless person. It peaked at 3.3 million workers, but never managed to give jobs to
more than 31% of the unemployed (Ginsburg 1983).
Even a partial listing of WPA activities shows its scope and the variety of imaginative
and useful projects–though the lion’s share was in construction, which worked against
job creation for women. WPA workers not only built or reconstructed 617,000 miles of
roads, 124,000 bridges and viaducts, 120,000 public buildings and thousands of parks,
playgrounds and athletic fields; they drained malarial swamps, organized nursery
schools, and taught illiterate adults to read and write. WPA actors set up theaters
throughout the land; WPA artists produced murals, sculptures and paintings, some of
which still adorn our public buildings. The WPA helped to sustain the talents of writers
like Saul Bellow, Studs Terkel and Richard Wright–as well as the dignity of millions of
other people who otherwise would have been forced to remain idle.
New Deal programs literally changed the face of the nation and paved the way for future
prosperity. They showed that the government could act swiftly to create large-scale
productive employment. Nonetheless, as Mangum (1969) notes, the WPA was often
charged by its opponents as mere “leaf-raking.”These were not perfect programs. WPA
jobs, for instance, generally paid more than welfare but less than prevailing wages and
were of limited duration. And there were various forms of discrimination against women–
and against blacks, most of whom lived in the South. The distinguished black historian
John Hope Franklin, trying to sum up one part of the WPA experience states, “under the
WPA there was such a variation in policy from place to place as to make impossible any
general statement with regard to the treatment of Negroes”[(Franklin 1969) p538].
2
Continually attacked by conservatives and business as too large, New Deal
expenditures were actually too small to end the Depression. (Had equally massive
expenditures been made on domestic programs, it would not have taken a World War to
end the Depression.) Unemployment was still 10% in 1941
3
when the US entered World
War II, but it fell rapidly to 2%, hitting an all-time low of 1.2% in 1944, effectively
ending the Great Depression and ushering in several years of wartime full employment.
Wartime full employment
With a huge expansion of the armed forces plus millions of civilian war jobs to fill, severe
labor shortages developed and people whose labor had previously been rejected or who had
been out of the labor force became valuable workers. Among them were women, older and
younger workers, disabled persons and blacks. Discrimination did not melt away, but given
the tight labor market plus the threat by black labor leader A. Phillip Randolph of a protest
March on Washington against employment discrimination, President Roosevelt issued an
executive order that enabled black workers to make some breakthroughs in industry, though
mostly as manual workers (Bernstein 1985;Franklin1969; Marshall 1969; Randolph
1964). Low unemployment during World War II, according to James K. Galbraith [1998,
2
For more information and discussion of the forms and extent of discrimination, see [(Bernstein 1985 p156–
157, 286–289; Franklin 1969 p 534–560; Rose 2009)].
3
Official unemployment statistics for the Depression era count people working on job-creation programs
as unemployed. Unemployment rates would appear smaller if they had been counted as employed.
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p16], “brought [wage] inequality down …more than it had previously risen through the
Great Depression .... [it] created all at once, the middle-class wage structure of the
American mid-century.”
But a few years of full employment could not erase a pervasive fear of a return of the
depression after the war. And there was a also a strong feeling, especially in labor and
liberal circles, that a nation that was capable of providing jobs for all during wartime could
and should be able to do the same during peacetime. Thus, in 1944, while the war still
raged, full employment and jobs for all emerged as a national issue.
Roosevelt’s Economic Bill of Rights
President Roosevelt (1944) in his January 1944 State of Union Message, proposed “a
Second Bill of Rights under which a new basis of security and prosperity can be
established for all–regardless of station, race or creed.”Unlike the original Bill of
Rights, these were economic rights. First on list was “the right for all…to useful and
remunerative jobs.”Roosevelt’s humanistic vision of employment as an economic right
(along with, among others, the right to earn enough to provide adequate food, clothing
and recreation, and the right to adequate housing, medical care, economic security and a
good education) contrasts with a different and narrower concept of full employment
presently embraced by many economists and others, which focuses solely on an
unemployment rate or even, as explained later, on an inflation rate (Ginsburg 1991).
This broader human rights tradition is expressed, for example, not only in Roosevelt’s
Economic Bill of Rights but also in the United Nations Charter, Article 23 of the Universal
Declaration of Human Rights, and by the British economist, Sir William Beveridge (1945),
whose influential book, Full Employment in a Free Society, clearly defined full
employment in terms of human beings who are out of work and meant always having
more vacant jobs than jobseekers [p18]. According to Beveridge, the message society
sends to a worker unable to find a job is that you are useless. So, even if adequate income
is provided from unemployment insurance, it is a “personal catastrophe”[p23]. This
humanistic concept of full employment stresses the benefits of full employment: that
greater utilization of human and other resources means rising living standards and–with
some exceptions–for example women in some earlier conceptions based on the traditional
homemaker role–no individual or group is left out (Ginsburg 1991; Goldberg 2000).
In the 1944 presidential election, full employment emerged as the major issue. Not only
did the Democratic Party platform promise to “guarantee full employment.”But Thomas
Dewey, the Republican presidential nominee, embraced support for full employment and
even emphasized the government’s obligation to intervene in the economy to provide
sufficient jobs, when necessary, to give “every man and woman a chance to earn a decent
living”(Bailey 1950).
The Ill-fated Full Employment Bill of 1945
4
In reality, however, conflicting interests and philosophies that persisted throughout the
New Deal had not vanished. By 1945, political sentiment for full employment had
4
Much of what follows on the Full Employment Bill of 1945 and the Employment Act of 1946 relies
heavily on the comprehensive legislative history of the Employment Act of 1946 by Bailey (1950).
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entered the legislative arena. The Full Employment Bill of 1945 (S. 320 1950), as
originally introduced by Senators Robert Wagner (D-NY) and James A. Murray (D-
MT) in January 1945, seven months before the end of World War II, had a clear
unambiguous goal. It called for a “national policy and programs for assuring full
employment:”
All Americans able to work and seeking work have the right to useful,
remunerative, regular and full-time employment. And it is the policy of the
United States to assure the existence at all times of sufficient employment
opportunities to enable all Americans…to freely exercise this right [(S. 320
1950) p 243–248].
The Wagner-Murray bill spelled out the federal government’s role in assuring full
employment. The President was to transmit an annual National Production and
Employment Budget to the Congress. This would include estimates of the size of the
labor force, total national production needed to provide jobs for the labor force, and the
total production without special measures by the federal government. But if anticipated
production was insufficient, the federal government was to encourage sufficient additional
nonfederal investment and expenditures to stimulate creation of private-sector jobs; and, if
necessary, federal expenditures were to close the remaining gap to assure full employment.
It was an attempt to achieve full employment in the broad sense of jobs for all by using
Keynesian techniques.
The Full Employment bill had the support of a broad group of labor, faith-based, civil
rights, liberal, social welfare and other organizations. It was vehemently opposed by the
National Association of Manufacturers, the American Farm Federation (representing
large farmers who feared losing cheap labor), and the Chamber of Commerce.
The bill passed overwhelmingly in the more liberal Senate by 71–10 in September
1945, one month after the War had ended, only to be defeated in the more
conservative House at the end of 1945. Conditions had changed. The expected
postwar depression had failed to materialize; anti-labor feelings were fueled by
postwar strikes; and conservative groups, especially big business, intensified their
campaign against the bill. Some extreme conservatives who opposed the bill argued
that we need depressions or a floating pool of the unemployed, but as Stephen Kemp
Bailey points out, for obvious reasons, these were not widely publicized. Mostly, the
public and Congress were told that the bill was totalitarian and un-American,
destructive of free enterprise and its underlying economic theories were dangerous
and impractical. While moderately conservative groups were willing to accept it with
amendments, “the most powerful voices on the right wanted the bill destroyed or
severely emasculated”(Bailey 1950).
The Employment Act of 1946
The Employment Act of 1946 (PL 304 1946) differs markedly from the Full
Employment Bill of 1945. The 1946 Act was introduced by Rep. William Whittington
(D-MS) and conservative Senator Robert A. Taft (R-OH). (Taft is also remembered for
the anti-labor Taft-Hartley Act of 1947, passed only over the veto of President Harry
Truman.) The 1946 Act explicitly rejected the goal of full employment and the federal
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government’s obligation to intervene in the economy to guarantee jobs for all. Instead
there is an obligation:
to create conditions under which there will be afforded useful employment
opportunities for those able, willing and seeking work, and to promote
maximum employment, production and purchasing power.
The vaguer goal of “maximum employment”was substituted for full employment and
the government’s commitment was limited to “all practical means consistent with the needs
and obligations of national policy.”Thus, employment was no longer the unambiguous
priority. Nor did “impractical”means of attaining goals have to be used, thus leaving open
the door to flexible interpretations–for example, that attaining the employment goal would
be inconsistent with the goal of stable prices. Other changes were consistent with these.
There was no National Production and Employment Budget or clearly stated pledge to use
federal resources to assure full employment if the private sector did not do so; but it did
require an annual economic report of the president and establishing a Council of Economic
Advisers and the Joint Economic Committee of Congress, which remain with us.
In the context of the time, the difference between “full employment”and “maximum
employment was not merely semantic and insignificant. According to the Conference
Report of the Congress, these represented important philosophical differences about the
employment objective and extent and role of government’s involvement in the economy:
The House substitute declared that…the function of Government is to promote
and not assure or guarantee employment....the term “full employment”is
rejected, and the term maximum employment is the objective…the words or
terms “full,”“guarantee,”“assure,”“investment”, and “expenditures,”do not
occur. The goal is maximum or high levels of employment. The emphasis on
expenditures and disbursements is omitted [Cited in 11 p16–17].
The Employment Act of 1946 was landmark legislation. But its goal was not to
guarantee employment or bring full employment in the sense of a job for everyone
who wants to work. Rather, its objective was to prevent mass unemployment.
The post world war II era
The post-war era did not see a return of the Great Depression or mass
unemployment, but unemployment never returned to the lows of the World War II
years. There were recurrent recessions and chronic unemployment persisted, even in
good times, and it was easier to ignore than mass unemployment. Although most of
the jobless were always whites, blacks were harder hit. Official black unemployment
was generally double that of whites (Ginsburg 1975).
For good reason, the historic 1963 March on Washington was officially named
the March on Washington for Jobs and Freedom. Further, as Mathew Forstater notes,
“the theme of job creation runs through Dr. King’s writing (Forstater 2002) and Dr.
King reiterated over and over again that …“government [should] become an
employer of last resort.”“We need an economic bill of rights. This would guarantee
a job to all people who want to work”[cited in (Forstater 2002) p 48].
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During this era, full employment came to be defined as an unemployment rate–often
4 to 5%-higher than the 2 to 3% used in the early postwar era. Later, in 1977, Herbert
Stein, who had earlier been head of President Richard Nixon’s Council of Economic
Advisers, called 7% unemployment—the rate at the time—“full employment”and some
economists today think 6% unemployment is “full employment.”
In the second half of the 1960s–all Vietnam War years–unemployment dipped
somewhat below 4% for the first time since the Korean War years. From 1966 to 1969 it
averaged 3.7% and many thought that full employment had arrived. However, a 1966
Labor Department special survey of slums and ghettos cast doubt on the usefulness of
official unemployment figures in those places. Massive disparities were found between the
national unemployment rates and unemployment and underemployment in such areas (U.
S. Department of Labor 1967). During an era of supposedly full employment, there were
also widespread urban riots throughout the United States. A high-level commission,
appointed by President Lyndon Johnson and headed by Governor Otto Kerner of Illinois
to investigate why the civil disorders happened, concluded that depression-levels of
unemployment, underemployment and poverty wages in the nation’s ghettos were major
causes. It called for the creation of two millionmorejobsin3years,anactionthatwas
not taken (U. S. National AdvisoryCommissiononCivilDisorders1968).
During the post-war era, in many circles the definition of full employment shifted from
people to prices, as did public policy. Shortly before the Kerner Commission released its
findings, conservative free-market advocate Milton Friedman (1969) gave the presidential
address to the American Economic Association. At the time of Friedman’stalk,theso-
called trade-off theory was in vogue. It posited an inverse relationship between
unemployment and inflation [(Ginsburg 1975)part2,11p22–29]. (The trade-off theory
was used extensively by opponents of the Humphrey-Hawkins Act (Schantz and
Schmidt 1980)) Friedman went even further. He contended that there is a “natural”rate
of unemployment consistent with a constant rate of inflation–and warned that attempts
to achieve unemployment rates that are too low–that is, below the “natural”rate—not
only were fruitless but would lead to accelerating inflation. The Non-Accelerating
Inflation Rate of Unemployment–the NAIRU—became a standard economic concept
and soon full employment was often used to mean an unemployment rate below which
it was thought inflation would accelerate. But that did not happen when unemployment
in the late 1990s and 2000 dipped below the rate many economists had considered the
NAIRU (Bernstein and Baker 2003).
The Comprehensive Employment and Training Act of 1973
Job creation programs were not a hallmark of the postwar years. In the 1960s, the focus
was on education and training programs but in 1971 a small job-creation program was
signed into law. In 1973, the Comprehensive Employment and Training Act
consolidated and decentralized most programs. The largest jobs program (including
training components) since the 1930s, CETA used states and local communities, not
federal administrators, as prime sponsors.
CETA originally served mostly the chronically unemployed and the poor. But with the
onset of a very deep recession in the mid-1970s--with unemployment higher than any time
since the 1930s—the very poor were competing with jobless “regular”workers in an
economy that didn’t provide enough jobs for either. In 1978, CETA was reauthorized by
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Congress so that it was largely for the poor, which added to its political woes. Labor
economists Ray Marshall (Secretary of Labor at the time) and Vernon Briggs [(1989) p597]
note that “given limited resources, it made sense to target the most needy, but from a
political standpoint the change meant that CETA had little to offer the vast number of
unemployed who had had incomes above the poverty level,”and it was perceived of as a
program just for the poor. CETA was first cut by the Carter administration, and then
eliminated completely by the Reagan administration in the midst of a deep recession with
double-digit unemployment.
CETA had problems but its workers performed many useful jobs, e.g., in social
services, food coops, weatherization¸ senior care, conservation, and as teachers’aides
(Marshall and Briggs 1989;Rose2009). It was unfairly maligned with some of the same
charges as the 1930s programs, e. g., “make-work”as well as new ones–often the result
of conflicting goals set by Congress (Bullock 1981;Ginsburg1985;Rose2009).
Obstacles notwithstanding, Bullock (1981), in his study, concludes that CETA’soverall
accomplishments were very positive and Marshall (1984) shows that despite the
conventional wisdom, the overwhelming evidence supported the view that CETA was a
good investment for society. CETA peaked in 1978, with roughly 750,000 workers. At
the time 6 million people were officially unemployed. CETA was not designed to be a
full employment program to provide decent work for anyone who wants it. Nor has any
other program. Still, the dream of jobs for all did emerge again in the 1970s, as the
struggle for the Humphrey-Hawkins Act shows.
The Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978
Despite the persistence of unemployment in the postwar years, full employment did not
emerge again as a major public policy issue until the mid 1970s, in a struggle that led to
passage of the Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978,
(PL 523 1978) which is still a US law.
In June 1974, an early version of this legislation, the Equal Opportunity and Full
Employment Act of 1974 (H.R. 15476 1974), was introduced into Congress by the
principal author, Rep. Augustus Hawkins (D-CA), co-sponsored by Henry Reuss (D-WI).
Shortly thereafter, liberal Senator Hubert Humphrey (D-MN), who had been Vice
President under Lyndon Johnson, introduced an identical bill in the Senate. Hawkins, an
influential member of the Congressional Black Caucus (and one of its founders), who
died in 2007 at age 100, had played a major role in drafting the Civil Rights Act of 1964,
especially Title VII. Deeply committed to equality for all people and to a broad
interpretation of full employment as a human right, Hawkins did not see the bill as
simply an anti-recession measure or another jobs program. Indeed, the economy was not
in recession when the legislation was in its formative stage, but he represented the Watts
ghetto of Los Angeles, a district haunted by endemic poverty and depression levels of
joblessness even in so-called “good times.”
Hawkins, however, strongly believed that full employment would not simply benefit
the ghettos. The whole society would gain. In his view, full employment had a double
goal: to provide jobs for all and, by utilizing the labor of the jobless, to fulfill unmet
social and human needs. It was not a panacea; it would not alone solve every problem;
but it was an important key to reducing poverty, inequality, discrimination, and crime,
and to improving living standards and the quality of life of all people.
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Significantly, Robert Browne, founder of the Review of Black Political Economy
and the Black Economic Research Center, was one of Hawkins’advisers on the bill
and helped to shape the early version, which Anderson [(2008) p95] has called “the
boldest employment policy initiative ever introduced in the Congress.”The goal of
the first version was a job for everyone who wanted to work and was able to work–
including persons not in the labor force as it is traditionally measured. So all meant
just that: women, older and younger people, physically and mentally handicapped
people, members of racial, ethnic, national or religious minorities, veterans, ex-drug
addicts, and former prisoners. The strategy was to create most jobs through federal
economic policies geared toward increasing the overall demand for labor. An
integral back up component of the policy required the government to create an
adequate number of jobs for everyone still out of work. Federally funded reservoirs
of public and private projects to meet community needs were to be developed in all
labor markets and Job Guarantee Offices were to refer jobseekers to suitable private
or public employment, or, if need be, to temporary employment in a Standby Job
Corps. Anybody who applied for work at a Job Office, including handicapped
persons, was to be considered “prima face ‘willing and able’to work”[(H.R. 15476
1974), Sec 5(g), p13].
The core of the bill–the most controversial part that differentiated it even from the
ill-fated Full Employment Bill of 1945–was the inclusion of a legal, enforceable
right to employment. Someone who felt unfairly deprived of his or her job rights was
entitled to an administrative appeal and, if necessary, could go to court and sue the
government. Interestingly, no target unemployment rate was specified because the
goal was simply to have enough jobs for everyone who wanted to work, including,
as previously mentioned, those not customarily counted as part of the labor force.
Full implementation was to take five years.
Support for the original version of the law, the Equal Opportunity and Full
Employment Bill, as Anderson [(2008) p95] points out, was “underwhelming.”But
in March 1975, only 9 months after its introduction, the official rate of
unemployment rose rapidly–from 5.2% to 8.7%–and was still climbing. That
prompted the introduction of a new version, (H. R. 50 1975) meant to acknowledge
the immediate crisis as well the chronic crisis. The new version set an
unemployment rate target of 3%, to be attained within 18 months, as well as other
measures which did not alter the philosophy or final goal of real full employment
with a job guarantee.
Consciousness about full employment was starting to increase and two groups to
work for full employment were formed: The National Committee for Full
Employment and its legislative arm, the Full Employment Action Council, both
initially co-chaired by Coretta Scott King, widow of Dr. Martin Luther King, Jr., and
labor leader Murray Finley, head of the Amalgamated Clothing and Textile Workers
Union.
A very large group of leaders was brought together from groups with a direct
stake in full employment or a belief that it was a major societal need. They
represented faith-based, women’s, civil rights, ethnic, native American, labor and
liberal groups, seniors, and others. However, the bill itself lacked support from the
AFL-CIO, and without it, it could go nowhere in Congress. The AFL-CIO strongly
opposed the legal enforceable right to a job as impractical and unnecessary, a charge
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denied by the legal department of the United Auto Workers, which supported the bill
and was not part of the AFL-CIO at the time. UAW lawyers claimed that without the
private right to sue, which exists in many federal and state programs–for example
unemployment benefits–the right would not be enforceable.
Why the opposition from organized labor? Speculation about other possible
reasons heard by the author at the time, included a fear of flooding the labor market
with job seekers; not having a high priority because unemployment didn’t affect
union members directly; and the racism of some unions, particularly in the building
trades, where minorities were pushing for affirmative action.
However, rising unemployment–even among union members–did put pressure on
AFL-CIO leadership. Eventually the bill was redrafted and given a new title: The
Full Employment and Balanced Growth Act (H.R. 50 1976), which was heavily
influenced by Senator Humphrey and the AFL-CIO, which gave it its endorsement
and promised all-out support. As its new name implies, the emphasis on equal
opportunity was gone and the bill incorporated some features of an earlier planning
bill sponsored by Humphrey and Senator Jacob Javits (R-NY). More comprehensive
in its methods, it was far more modest in its goals, including limiting the size of the
job reservoirs. And, most significantly, it entirely eliminated the right to sue for a job
and thus dropped the job guarantee.
The basics of this version of the bill became part of the Democratic Party platform
in 1976. However, Senator Humphrey, a leading candidate in the presidential
primary, withdrew because of failing health. Other leading primary candidates were
early supporters of the bill, but not Jimmy Carter. Eventually, he reluctantly
endorsed the bill’s goals but not the bill. Only after winning the primary did he
finally endorse the bill itself–one that had been rewritten and weakened to meet his
objections.
From 1976 until its passage in 1978, absent a strong counter pressure in the
country calling for a stronger bill, Humphrey-Hawkins’full employment orientation
was successively weakened. Unemployment, too, declined and that weakened
support. In a decade characterized by “stagflation,”– inflation as well as
unemployment—inflation became a larger issue. Influential business groups, not
surprisingly, opposed the bill; but some liberals deemphasized unemployment and
creating employment and shifted their emphasis to fighting inflation. Indeed, Charles
Schultze, head of President Carter’s Council of Economic Advisers argued that
inflation took precedence over job creation and that specific targets for unemploy-
ment and creation of public-sector jobs were a threat to price stability and should be
removed from the bill [(Goldberg and Collins 2001) p161]. Some supporters
wondered whether this reflected an anti-poor bias and a desire to keep low wages
low [(Ginsburg 1983) p71]. And, among many, the bill came to be seen as a “black
issue”.
According to Harvey L. Schantz and Richard H. Schmidt (1980), the strategy of
opponents to alter the bill through adding specific goals was partly successful, since
there was great difficulty in maintaining full employment as the purpose of the bill.
The Humphrey Hawkins Full Employment and Balanced Growth Act of 1978
(PL 523 1978) was signed into law by President Jimmy Carter on October 27, 1978.
A complicated law, its stated purpose is “to translate into practical reality the right of
all Americans who are able, willing and seeking to work to full opportunity for
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useful paid employment at fair rates of compensation.”There are multiple goals:
“full employment, production and real income, balanced growth, adequate
productivity growth, proper attention to national priorities, and reasonable price
stability.”
However, there are only two numerical goals: unemployment, which was
supposed to be reduced to 4% within 5 years–by 1983. It is not widely recognized
that this was clearly stated as an interim not a final goal–which is to further reduce
unemployment until full employment–which is nowhere defined in the law–is
reached. Thus, it implicitly rejected the idea that 4% unemployment is full
employment. Also, an ultimate employment goal is the removal of disparities
between unemployment rates of certain groups such as youth, minorities, and
women and the overall rate. (In that era, women’s unemployment rates exceeded
those of men.)
The other numerical target was inflation, which was to be reduced to 3% by 1983
and to 0% by 1988. But the supporters of the act succeeded in retaining the priority
of reducing unemployment, since “policies and programs for reducing the rate of
inflation, shall be designed so as not to impede achievements of the goals and
timetables for reducing unemployment.”The law contains many other features–some
that would be useful in attaining full employment with decent wages. But it lacked
teeth and thus was virtually violated and then ignored almost immediately.
5
It was obvious, right from the start, that economic policies were not going to be
redirected towards meeting even the modest 4% interim unemployment rate goal.
Inflation was President Carter’s main concern when he sent his Economic Report to
Congress in January 1979. Though unemployment was 5.8%, goals of 6.2% were
projected for 1979 and 1980! Under the law, the Congress–Democratic at the time–
had the right to challenge the President–by setting different goals. But it did not.
Representative Hawkins charged the President and the Congress with violating the
act, to no avail. In 1983, five years after its passage, during the presidency of Ronald
Reagan, unemployment averaged 9.6% and during most of the 1980s, unemploy-
ment was higher than when the act was passed in 1978. It took two decades after the
law’s passage to briefly attain 4% unemployment and then not by design.
Implementation of the mandate to reach an interim goal of 4% and then reduce it
further, and to make the fight against unemployment a national priority, had
vanished and remains nowhere in sight.
Concluding thoughts
The focus of the Jobs Conference held at Howard University on October 1, 2010
was mostly on the present jobs crisis. But we do not start from a historical vacuum.
Looking at the past should give us some insights into the present and the future.
However, not all of the past has been positive.
5
Under the Humphrey-Hawkins Act, the Federal Reserve System must explain to Congress semiannually
how it is gearing its policies to further the goals of full employment and reasonable price stability. The
Chairman of the “Fed”is currently questioned twice a year at Congressional hearings.
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Is there anything we can learn from the failure of the efforts in the 1940s and a
similar scenario three decades later? An obvious lesson is the need for more power
and a strong movement pushing for jobs for all, including at the grassroots level. In
the case of Humphrey-Hawkins, with which I am personally familiar, most of the
focus was in Washington and involved leadership of groups. There were some
attempts at grassroots organizational efforts, mostly spurred by the National Council
of Churches [(Ginsburg 1983) p77]. But these efforts were far too microscopic in
size to counter the opposition. Full employment–and even low unemployment–
shifts power from capital to workers, so, we can anticipate major opposition–at least
until there is a major political and economic shift.
In the 1940s, interest in the original legislation waned when the immediate threat
of a postwar Great Depression abated, and in the 1970s, declining unemployment
seemed to have a similar impact. Accordingly what is needed is a strong sense of
solidarity and long-run as well as short-run goals. This means a continued
recognition of the need for decent jobs for all–not just a job for me or for my group.
Not everything in the past has been dismal. But much of the positive side is
forgotten or unknown to many Americans, especially awareness that, when
pressured by social movements, the government can act, and can create useful jobs
that meet social needs. There have been constant ideological campaigns to discredit
and reduce the role of government and major political efforts to slash government
budgets except for military expenditures. But the United States has a rich tradition of
government job creation programs, such as the WPA, and their accomplishments
should be widely publicized. (Students, for example, can research what the WPA did
in their city or state. Mine were astonished and impressed to learn that some parts of
Brooklyn College were built by the WPA.) Past programs (in the 1930s and 1970s)
were not perfect–but we can learn from their strengths and avoid their weaknesses.
The idea–if we get the power–is not to replicate but to refashion decent-paying jobs
with a broad range of skill-levels and occupations for the needs of the early 21st
century (Rose 2009; Harvey 2011).
History also tells us that recognition of the government’s role in job creation was
once so widespread that even a Republican presidential candidate emphasized its
need to intervene in the economy to provide sufficient jobs for all; and that the right
to a decent-paying job is not crazy talk (Cowie 2010) but was proposed by Franklin
Roosevelt and embraced by the Rev. Martin Luther King, Jr. and Augustus Hawkins,
among others. The right to a job–and other economic rights–is a visionary concept
and can be empowering. It can help counter the American ethos of individualism
that has been pushed to the extreme in recent decades. It can help us forge links with
others, such as universal health care and housing rights advocates.
It can also be used to counter the tendency of even some progressive economists
to define full employment as 4% unemployment. Compared to right now, that level
would be like Nirvana, and all efforts should be made to reduce unemployment as
quickly as possible. If the recent past is a guide, getting to 4% unemployment would
counter the deteriorating working conditions and wage stagnation of employed
workers and mean a lot less unemployment–even among those at the bottom of the
labor market (Bernstein and Baker 2003). However, is it adequate to set our goal as
getting back to the “good old days?”Even in 2000, the last time we had 4%
unemployment, the jobless rate was 7.6% among blacks and 24.5% among black
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teens; 5.7 million were officially unemployed and millions more were uncounted
hidden unemployed. What about their right to a job? That’s a question Augustus
Hawkins had in mind in his original bill. He should be honored for his vision–
perhaps a conference on his ideas could help to ignite interest in them. The
Humphrey-Hawkins Act is still the nation’s policy dictum on full employment
(Anderson 2008), and it actually says we don’t stop at 4%. Living wage jobs as a
right may seem unrealistic but so once did the right of all children to go to school,
the right of women to vote and the abolition of slavery.
Decent jobs for all needs to be made the centerpiece of economic policy. In addition
to Darity’s proposal, in recent years, some others have suggested various paths to large-
scale job creation. Some proposals are similar to Darity’s—others are complementary.
Some were proposed even before the onset of the Great Recession because there has
been a chronic problem as well as the immediate crisis–and the deficit in human and
physical infrastructure is not a new one. These proposals (e.g., Baiman et al. 2009;Bell
et al. 2007; Ginsburg and Goldberg 2008; Pollin 2010;Harvey 2011) would help get
us on the road to real full employment. But that’s not the direction we’re going in
now. The road to real full employment is not paved with tax breaks for billionaires,
nor with austerity budgets. Nor is it paved with the unfettered rights of capital and
the trampled rights of workers, nor with cutting back on the public sector, nor with
the other negative trends filling today’s landscape.
Economist (Pollin 2011) points out that making full employment the centerpiece
of economic policy requires a fundamental break with neoliberalism and “an epoch-
defining reallocation of political power away from the interests of big business and
Wall Street and toward the middle class, working people and the poor.”He
recognizes the need for a financial regulatory regime to channel private funding
towards productive, employment-generating activities and much more but highlights
two fundamental points. “Full employment remains a moral imperative for creating a
decent society,”and its achievement is a matter of political will. “Is there the
political will…to fight for something as basic as the right to a decent job,”he asks,
“as we struggle our way out of the Great Recession?
We must strive to make that answer, “yes.”The task will not be easy but it must
be done.
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