For the first time ever, the U.S. Congress has a Full Employment Caucus. At a January 29 news conference, Representative John Conyers, Jr., Ranking Member of the Committee on the Judiciary, announced that 17 members of the House of Representatives have decided to work together as a caucus to secure the human right to living-wage employment. An initial focus of the caucus is HR 1000, the Humphrey-Hawkins Full Employment and Training Act, which was introduced earlier this year by Conyers and already has 57 co-sponsors. The Machinists Union filmed the event, indicating the possibility of increased labor involvement on the issue.
The bill establishes a trust fund financed by a small tax on Wall Street trading that will distribute funds to States, local governments, and Indian tribes to hire public-service workers to meet pressing social and environmental needs.
In a January 30 conference call with the community-based Jobs for All Campaign, ten activists from various parts of the country talked with Jenny Perrino, Conyers staff person on the issue, about building toward a “Full Employment Action Day” on Capitol Hill in late May or early June. A planning committee meeting for that event is projected for late March.
On February 5 in Washington, DC, Conyers will be discussing HR 1000 at a public forum on “Employment: A Human Right.” Also speaking will be Representative Frederica S. Wilson, a co-sponsor, and a panel of economists: Dean Baker, Co-Director and Co-Founder of Center for Economic and Policy Research; John Cavanagh, Director of the Institute for Policy Studies; Phil Harvey, Professor of Law and Economics at Rutgers University; Thea Lee, Deputy Chief of Staff at AFL-CIO; and Larry Mishel, President of Economic Policy Institute.
Hopefully, the economists at that forum will articulate clear support for true full employment, rather than one or another arbitrary unemployment rate. Unfortunately, the term “full employment” has become ambiguous. Many economists use the term to refer to an unemployment rate that is supposedly not so low as to cause excessive inflation, which they call the nonaccelerating inflation rate of unemployment, or NAIRU. They disagree about what that specific rate is supposed to be and recent consensus predictions have been wrong. But many of them accept that there is such a rate, though it may well be a myth. Regardless, even if true full employment generated inflationary pressures, given the political will, we could deal with it without creating unemployment and poverty to do so.
HR 1000 articulates what had been, until recently, the common sense definition of “full employment.” We will have full employment when everyone who is able and willing to work can find a job. In the following letter that I sent to the panelists on February 1, I ask them to help clarify this ambiguity and fully support HR 1000 and its definition of full employment.
Dear Dean Baker, John Cavanagh, Philip Harvey, Thea Lee, and Larry Mishel:
As economists with considerable standing in progressive communities, at the February 5 forum on “Employment: A Human Right” you will be in a position to offer valuable support for true full employment, in contrast to one NAIRU or another. When more economists affirm an unambiguous definition of full employment, it will strengthen grassroots efforts to use HR 1000 as an organizing tool.
You can provide this support by affirmatively answering two questions:
• Do you support the human right to a living-wage job opportunity?
• Do you believe that if we have the political will, we can handle any inflationary pressures that result from securing the human right to a living-wage job opportunity?
Those principles, it seems to me, underlie HR 1000. According to Conyers’ website, the bill “aims to provide a job to any American that seeks work.” The bill itself seems to affirm a clear definition of full employment with language such as:
• The right to full opportunities for useful paid employment at fair rates of compensation of all individuals able, willing, and seeking to work.
• Achieving a national goal of jobs for all at living wages.
• Even at the top of the business cycle, when national unemployment rates drop to the 4 percent to 5 percent range, job vacancy surveys show that the economy does not provide enough jobs to employ everyone who wants to work.
• The right to useful work at living wages for all persons seeking employment.
But as you know, “full employment” has become an ambiguous phrase. Many economists use the term to refer to a NAIRU. They disagree about what that specific rate is supposed to be and recent consensus predictions have been wrong. But most of them seem to accept that there is such a rate, though it may well be a myth.
Referring to traditional measures to stimulate the private economy, in an email to me Dean Baker said, “There will be a limit as to how far you can go with just macroeconomic policy. At that point there will still be people without jobs. It will require other policies to get those people employed.” In Getting Back to Full Employment, Baker and his co-author, Jared Bernstein, argue that the government should act as an “employer of last resort” when “labor markets fail to create the quantity of jobs necessary to employ American labor resources.” HR 1000 fulfills that responsibility.
Concerning inflation, the bill states, “Direct job creation to close the economy’s job gap … provides a means of creating additional jobs without adding significantly to inflationary pressures,” as can be the case with deficit spending.
In emails to me, Phil Harvey elaborated on this point:
First, unlike a macroeconomic stimulus, a direct job creation program can limit its job creation effect to those places where job shortages still exist and for the benefit of those individuals who lack work because of the unavailability of suitable employment in the regular labor market.
Second, unlike the jobs created by a macroeconomic stimulus, workers employed in a direct job creation program can remain available for private sector employment when and if they are needed, thereby accomplishing the wage and price stabilizing function that unemployment performs without requiring anyone to be unemployed.
Third, while a macroeconomic stimulus creates jobs by increasing aggregate demand, thereby exerting upward pressure on prices, a direct job creation program can be funded without increasing aggregate demand at the top of the business cycle (as the countercyclical trust fund financing of Unemployment Insurance benefits demonstrates)….
Jobs funded by HR 1000 would have to be temporary … by making workers employed with program funds subject to the same kind of recall requirements that limit the continued receipt of Unemployment Insurance benefits…. [HR 1000] would protect program employees from having to accept private or regular public sector jobs less favorable than their program job.
So, in today’s economy with intense global competition, the conventional concerns about inflation strike me as unjustified, especially since HR 1000 includes a number of provisions to guard against excessive inflation. Regardless, even if true full employment generated inflationary pressures, given the political will we could deal with that issue – without creating unemployment and poverty to do so.
Clearly, achieving full employment is possible in this country. We did it during World War Two because we made a commitment to do it. We can do it again.
A standard justification for accepting less than full living-wage employment is that young and relatively unskilled workers don’t deserve a living wage. Therefore, the argument goes, they must work hard, gain experience, and improve their skills so they can boost their income. Thus, poverty-level wages are supposed to serve as a motivational tool for self-advancement and enhanced productivity. But workers employed at a living wage are still motivated to improve their position. And declaring that some people don’t deserve a living wage is a moral outrage and opens the door to evermore people working at poverty-level wages. A living wage is a fundamental human right that all workers deserve. We must consistently fight for that principle.
As George Lakoff has argued persuasively, we need to couch our policy proposals within a moral framework that resonates deeply with our audience. And most Americans agree: the federal government should see to it that everyone who wants to work can find a living wage job.
Achieving true full employment would have enormous beneficial effects throughout our society. So hopefully at the Feb. 5 forum you will offer clear, strong support for the human right to living-wage employment.
Wade Lee Hudson