Discussion: (0 comments)
There are no comments available.
A public policy blog from AEI
Full Employment, Guideposts and Economic Stability
Expert analysis from AEI's Economics Policy scholars
Three possible Democratic hopefuls — Bernie Sanders, Cory Booker, and Kristen Gillibrand — have recently proposed job guarantee or full employment policies. The idea is quickly becoming a centerpiece of Democrats’ 2020 strategy. AEI scholars, including most recently AEI economist Michael Strain, have long been skeptical, arguing there are better ways to help the unemployed.
One of the first to address the issue of guaranteed federal government jobs was Henry Hazlitt. An accomplished economic journalist, Hazlitt was a member of the American Enterprise Association’s (AEI’s predecessor) advisory board in the 1940s. He served while being the chief editorial writer for The New York Times, where he wrote a signed weekly column about finance and economics and many unsigned editorials. He had an impressive literary background, and prior to his association with AEA, H. L. Mencken chose Hazlitt as his successor to be editor of the American Mercury. Hazlitt also edited The Freeman, a precursor of sorts to National Review, and his book “Economics in One Lesson” (1946) is still considered a classic, with more than a million copies in print in at least 10 different languages.
In an October 1945 pamphlet in the AEA’s National Economic Problems series, Hazlitt examined the provision of the Full Employment bill of 1945 (it later became the Employment Act of 1946) that people “have the right to useful, remunerative, regular and full-time employment, and that it was the policy of the US to assure the existence at all times of sufficient employment opportunities to enable all American who have finished their school . . . to exercise this right.” While there was substantial agreement about trying to keep unemployment low, there was concern that guaranteed jobs legislation could doom private enterprise. Hazlitt dissected the bill’s myriad problems and its vague and unworkable language, writing that it might as well have been called “The Wealth and Happiness for All Bill.” AEI’s beloved economist Herbert Stein wrote about the debate in his masterpiece The Fiscal Revolution in America and economist Murray Weidenbaum, long associated with AEI, wrote a history of the Employment Act of 1946 in a 1996 edition of Presidential Studies Quarterly.
In 1966, in the third of AEI’s televised Rational Debates, distinguished economists Arthur Burns of Columbia University (and later AEI) debated MIT professor and future Nobel laureate Paul Samuelson on the meaning of full employment. In introducing the debate, UVA professor G. Warren Nutter, who coordinated the debate series for AEI, noted that the two men “confirmed the suspicions of many that even so complicated a topic . . . can be treated lucidly . . . without slighting any of the fundamentals involved.”
More recently, Stein wrote about the next major iteration of a guaranteed jobs bill, the Humphrey Hawkins Full Employment Act, which Jimmy Carter signed into law in 1978. The law says that if government doesn’t meet certain goals, then it should create a “reservoir of public employment.” Like Hazlitt, Stein questioned its foundations in his AEI Economist newsletter from March 1978. This week Michael Strain wrote about the new Democratic guaranteed jobs proposals, noting that it was hard to overestimate the “silliness” of these proposals. Strain argues instead that the right approach is to start with policies that will enable workers to be more successful such as expanding the Earned Income Tax Credit.
A footnote: The 1946 act also created the White House Council of Economic Advisers, chaired today by former AEI scholar Kevin Hassett, and earlier by seven other AEI scholars or adjuncts.
To learn more about AEI’s Archive Project and to read recent blogs by Karlyn Bowman and Joseph Kosten, click here.
There are no comments available.
1789 Massachusetts Avenue, NW, Washington, DC 20036
© 2018 American Enterprise Institute