The Ghost of Full Employment

After nearly two years of bad economic news, which topped off three decades of economic insecurity, perhaps it's understandable that we've grown indifferent to labor-market pains. We shrug at long-term double-digit unemployment. We greet the news of record-breaking poverty with a national yawn. We've come to believe that unconscionable levels of inequality are something natural to the social order.

The government's direct response to the jobs and poverty crisis has been simple indifference. Wedded to the idea that propping up the market will naturally lead to job growth, officials have responded with "solutions" drawn only from the narrow menu of economic fundamentalism -- tax cuts and stimulus. Now that gross domestic product is positive, the unemployment problem is mostly considered "structural" -- a skills mismatch -- and thus beyond our capacity to solve.

Yet not that long ago, in the midst of another long-term economic meltdown, politicians dared to think beyond the idea that growth alone would solve all problems. National leaders, including mainstream politicians in both parties, went so far as to propose a federally mandated and legally enforceable right to a job for every American.

That's right -- the federal guarantee of a job.

Their premise? That people's livelihoods are too important to be left to market mechanisms. As Jimmy Carter's secretary of labor, Ray Marshall, used to say, when the invisible hand goes to work in the labor market, it's all thumbs.

In 1974, when the United States faced another period of double-digit unemployment and global economic crisis, stalwart liberal Sen. Hubert Humphrey and Rep. Augustus Hawkins, an African American from Los Angeles, teamed up to advance a seductive idea: national planning that wouldn't simply promote growth, support Wall Street, or prop up consumption but ensure a job for every person.

Back then, post-World War II economic growth had lost its magic, seeming no longer capable of generating jobs in the stagflation years of the 1970s. So Humphrey and Hawkins looked to revive Franklin Roosevelt's famous Economic Bill of Rights, the core of which was, as FDR explained in 1944, "the right to a useful and remunerative job in the industries or shops or farms or mines of the nation." The aggressive Keynesianism of the Humphrey-Hawkins Act was simple in concept: Federal policy should promote full employment (defined variously as unemployment rates of only 3 percent or 4 percent), and if that failed, government would then be triggered as the employer of last resort.

Most important, supporters believed, a shared economic lot would bring people together, overriding the divisive cultural battles over Vietnam, civil rights, and affirmative action. As Humphrey argued, full employment offered "common denominators -- mutual needs, mutual wants, common hopes, the same fears" -- needed to bring Americans back together in a shared economic agenda. In the parlance of the civil-rights movement, full employment went beyond a seat at the lunch counter -- it offered everyone the ability to buy the hamburger.

Economic-planning advocates felt that our very ability to govern ourselves was at stake. "If the greatest free nation in the history of mankind has to get down on its knees in fear of something as abstract and as arbitrary as these so-called free-market forces," Humphrey explained to Congress in 1976, "well then, we're through. We might just as well haul down the flag, lock up the Capitol, go home, and admit that we don't have the courage or the imagination to govern ourselves."

To contemporary ears, the idea of a federally guaranteed job sounds like crazy talk, but the astonishing historical fact is that the Humphrey-Hawkins Act had the legitimacy to be passed and signed into law. Many of its mechanisms were cumbersome and complex, however, and a combination of fears of inflation and the lack of a history of federal planning raised big concerns despite the lobbying of labor and the civil-rights groups. Between its introduction in 1974 and the final vote in 1978, Carter and his advisers twisted and then eviscerated the Humphrey-Hawkins Act to give the Democratic base a symbolic "win" with little effect on economic planning. The national press rightfully called this latter-day incarnation "a cruel hoax" that held out "the hope -- but not the reality -- of a job." Then the administration lurched right before losing to someone who was a lot better at governing from the right wing -- Ronald Reagan.

Today, as a similar economic malaise haunts the land, we don't need the particular policies of full employment, but we sure need that spirit and imagination. Despite its failure to deliver much of anything, the Humphrey-Hawkins Act serves as a striking example of national leaders thinking boldly about the collective economic well-being of the citizenry. As Paul Krugman put it earlier this week in his New York Times column, "Our unemployment crisis could be cured very quickly if we had the intellectual clarity and political will to act."

The current economic debate has grown sterile and inbred, locked in the type of scenario Humphrey feared -- one in which we sit powerless in the face of massive economic problems. Nary a word is uttered today of alternative visions for how we might organize ourselves economically or what the government should be besides a prop to the largest and most powerful voices in the private sector. President Barack Obama's failure is not on specific policy grounds; it is in his more significant inability to help the nation reimagine a constructive role for the state. Rather than serving as protector, the government has merely proved itself a benefactor of the most wealthy and powerful, those who have already gobbled up most of the increase in wealth and income since the 1970s.

The boldness of the Humphrey-Hawkins Act remains a forgotten artifact of a bygone political era, buried deep in the ideological layers of the post-Reagan world. Perhaps it's time to dig it up and ask ourselves if we are in fact through, as Humphrey dreaded, and whether we actually have the courage and imagination to govern ourselves.