Full Employment!  Really?

President Carter signing the Humphrey–Hawkins Full Employment and Balanced Growth Act of 1978

New Orleans        In the breathless and world shaking tone common to television and radio broadcasts, economists were trying to parse the numbers in the federal report on jobs and wages for February.  Growth was almost nonexistent at 20,000 new hires, and there was a lot of “he-say, she saying” back and forth on that.  On the other hand, wages were up over 3% compared to February 2018, leading some to hope against hope that workers might finally be getting a share of the robust economy, although that is doubtful.  Others chortled that with statistical unemployment dropping to 3.8%, the US was actually approaching “full employment.”  Interesting, but is that really true?

Not to be negative, but it is worth recalling that statistical unemployment masks a huge number of the unemployed as the formulas are jiggled from administration to administration in the Bureau of Labor Statistics.  So-called “discouraged job-seekers” are a good example since that category is likely a disguise for applicants continuing to roll in for nonexistent jobs in rural areas and some job markets.  Gig workers were also over-counted by many miles for a long time, so it is unclear to me how they fit in this number.  Young, minority, and other workers are also rarely employed fully.

Searching back in distant memory there was a huge fight over full employment and job creation called the Humphrey-Hawkins bill, popularly named after Minnesota Senator Hubert Humphrey and California Congressional Representative, Gus Hawkins.  It is often called the Full Employment act.  The technical name is Full Employment and Balanced Growth Act.  It was more than a fight, it was also a victory, winning passage in 1978, during the recession at that time, and signed into law by President Jimmy Carter.

The most interesting and important part of the mandate is that the Act instructs the Federal Reserve to manage monetary policy with a central objective of creating full employment.  Not surprisingly, conservative Republican forces on a regular basis try to repeal any notion of full employment in order to push the priorities as nothing more than inflation or maybe improved trade balances.

If you think we’ve hit full employment though, think again.  By the definitions of the Act within five years or 1983 “unemployment rates should be not more than 3% for persons aged 20 or over and not more than 4% for persons aged 16 or over, and inflation rates should not be over 4%.”  We’re nowhere close to that figure and have never been whether in 1983 or 2017 after forty year under a full employment policy.

Importantly, the Act mandates that if the private sector cannot achieve these goals, then it is the federal government’s responsibility to create “a reservoir of public employment” to make them real. Now, that’s more than a great idea.  That’s the law.

It’s time to enforce the full employment law fully, not pretend we’re already experiencing it when we all know people who are more fully unemployed, than employed.


Education Stuck in Class

Galveston, Texas, natives Melissa O’Neal, from left, Bianca Gonzalez and Angelica Gonzales took part in a college-prep program for low-income students, but found that school wasn’t a ticket to upward mobility. Michael Stravato New York Times News Service

Dauphine Island    “Life happens,” was a quote from one of the three young women from south Texas who believed so completely that education would change their lives, and perhaps more significantly, redirect their fate and future from the path of their parents to a brighter new world of opportunity.  The Times story was unfair to these three young women though.  “Life” actually happens to everyone.   Decisions are made.  Paths are taken or abandoned.  Choices abound at the crossroads.

Reading the story it became clear that any chance of education changing their lives in the radical way that they hoped it might when they were naïve young girls was only true in the margins or perhaps by even more random luck, because class had already created most of the limits and boundaries.  One faced the long shot odds of $40,000 in debt to Emory University in Atlanta because the university somewhat arbitrarily closed off her application without giving her financial assistance and got the money by almost implicitly agreeing to marry the high school boyfriend and work for his furniture store later.  Even with some college all three were all working hourly shifts in the service industry back in Texas five years later.  One was still trying and close to getting a degree in a local college, but I honestly would challenge anyone reading this piece to smugly argue that graduating or not graduating in her case is going to radically change her prospects.

There can’t be a crueler lie now in America than the notion that simply getting a college degree from any of the thousands of schools out there somehow put the young graduate on the path to a great job and a wonderful future.  She’s still going to be in South Texas, and that’s not a bad place to be, but the jobs are what are available there:  agriculture and its service, service in general, warehousing and distribution, and so forth.

To move out of “class” is not $40,000 but over $200,000 and more if one stumbles from South Texas or any lower income urban neighborhood into something approaching the Ivy League and its “gold card” of greater opportunity.  And, frankly, in this economy that’s no guarantee as well.  I listen and watch at the challenges faced by the young men and women who were my daughter’s classmates at Hampshire College in Amherst, Massachusetts, which was an excellent institution that provided her a spectacular education.  I don’t mind writing the check every month for what is left on that debt, but I guarantee none of them jumped on the fast train out of Hampshire.  ACORN International has a brilliant volunteer that has done research for us whose mother I met speaking at Williams and who graduated from Hampshire a couple of years after my daughter.  She has gone through internships, interviews, and more to try and find a place to work and make a contribution.  My son with a degree from Rochester Institute of Technology:  same story, different verse.  Frankly, compared to the odds faced by these young women in Texas, both of them had it easy and have emerged smelling like roses.

Was it only last year or the year before when all of these colleges and universities used to talk about need based scholarships and special recruiting efforts to diversify their enrollment based on a fairer chance for lower income, working class students?  What happened to that?  Yes, I know:  life happened to them!  Now all we hear about is that they are raising their tuitions and struggling in the economy, blah, blah, blah.  The first hint of news I heard in this direction was some kind of sweetheart, side deal that some high priced school make recently with KIPP, the charter school operator.  That kind of deal might assuage the conscience of some well paid admissions officer somewhere, but that’s nothing but a sweetheart deal and a slap in the face at public schools and the places where education could be a key out of the class jail.

We’re damned if we do and damned if we don’t when it comes to our sorry education systems.  The competition in a small job market means that too many want a college degree for $8, $9, and $10 per hour jobs, so some degree, any degree, is a bump over minimum wage, but $20,000 a year is not a break out of the rigidity of American society’s increasingly rigid class structure.  The sooner we stop pretending that we are solving any problems with either our higher education or “lower” education system, and start really talking about this and other scalable tools to break down class barriers all around us, the better. We’re going to lose more than a generation though by continuing to look backwards and not facing the reality of the mess we have today.