Federal Law Requires Job Creation
America’s workers would not be subjected to low wage jobs if they were assured of employment at non-poverty wages. Maintenance of full employment with available jobs offering livable wages would accomplish that goal. To get from here to there would require the United States to comply with the terms of an existing law, the Full Employment and Balanced Growth Act of 1978.
Known popularly as the Humphrey-Hawkins Act after the names of the bill’s major Congressional sponsors, the late Senator Hubert Humphrey and the late Representative Augustus Hawkins, the law mandated that federal policies be directed at attaining a 4 percent overall unemployment rate and a 3 percent adult unemployment rate by 1983 on the path toward the target of a zero percent unemployment rate by 1988. The conventional way to achieve that objective – which never has been met – is old-fashioned Keynesian pump priming or the application of stimulus expenditures.
Keynesian spending measures are an indirect approach to job creation, requiring the private sector to respond by growing the volume of jobs. But a less remarked provision of the Humphrey-Hawkins Act mandates that if the private sector response does not yield full employment, the public sector will provide the missing jobs. The law charges the public sector with the responsibility of direct job creation.
Alan Aja, Daniel Bustillo, Darrick Hamilton and I argue in detail in the current issue of Social Research that this is best accomplished by the adoption of a federal job guarantee. In short, we have proposed the formation of a National Investment Employment Corps similar to the Works Progress Administration and the Civilian Conservation Corps developed in response to the unemployment crisis of the Great Depression.
The employment corps could address a host of national human and physical infrastructure needs including the building and restoration of roads, highways, dams, museums, parks, the postal service, child care centers, health clinics and schools. It could serve as a pilot site for the implementation of innovative green technologies that would enhance our environmental health. And the jobs could offer decent pay and benefits.
We propose that the minimum salary for jobs in the employment corps would be $23,000 and provide a benefits package that would include the health insurance options offered to all federal employees. We estimate that the average cost per job directly created by the employment corps would be $50,000 including salary, benefits, training, and equipment and materials – a far cry from the 2009 stimulus effort.
The public sector would function as an employer of last resort, and the public sector jobs would provide a permanent alternative to jobs with deprivation wages. America’s workers no longer would have to take poorly paid jobs with negligible benefits. And 25 years after the original target date the nation could achieve the Humphrey-Hawkins Act’s mandate of a zero percent rate of unemployment.