- Bill Barclay, CPEG and Ventura DSA
The first two posts in this series described two proposals for attacking the overarching problem inequality by directly taxing wealth, one during and after the lifetime of the wealth holder. The first, Warren's proposal for a wealth tax, is new in U.S. political discourse and the other, Sanders' reform of the Estate Tax, draws on a longer history of assaults against obscene inequality. This post discusses a proposal, the "Jobs for All Act," (Act) that also has a long history as part of countering inequality through restructuring the market for labor but the proposed Act is new in its scope.[i] I'll begin by outlining the history of efforts to create a full employment economy in the U.S., then sketch the major features of the Act and finally discuss the class dynamics of the Act.[ii]
I. The Right to Work: Seeking Full Employment the "Jobs for All Act" (HR 1000)
At the 2017 convention, DSA passed - by an overwhelming margin - a resolution in support of legislation that would guarantee a well paid job for anyone "willing and able to work." This was the language of the "Humphrey-Hawkins 21st Century Full Employment and Training Act" that that we in CPEG, as part of the National Jobs for All Coalition,[iii]had worked on during the Great Recession with Rep. John Conyers' (at that time the only DSA member in Congress) staff. It is also close to FDR's call, in his 1944 State of the Union, that Congress establish "the right to a useful and remunerative job in the industries or shops or farms or mines of the Nation."
Since FDR spoke, there have been several efforts to assure jobs for anyone willing and able to work. The most important were the Employment Act of 1946 and the Humphrey-Hawkins Full Employment Act of 1978. A major component of both Acts was direct job creation by the federal government.[iv]
Neither Act, nor the policies of the Federal Reserve, have created anything close to full employment, at least in the usual English language meaning of the term. What has happened is the political redefinition, led by too many economists, of full employment as 4% unemployment - and only counting those people actively seeking a job. How much difference does the definition make? In January 2019 the official unemployment rate was 4%, or 6.5 million people. However, there were another 5.1 million people working part time who wanted a full time job but couldn't find one and 5.3 million people who wanted to work but were not actively seeking a job in the four weeks prior to the unemployment census so not included in the "unemployed." These numbers total to 16.9 million people or 10% of the U.S. labor force.[v]
II: The "Jobs for All Act" (HR 1000)
HR 1000, to be introduced by Rep. Frederica Wilson (D-FL), is designed to create a true full employment economy. Actual full employment would probably mean that the total unemployed at any point in time would be 1 - 2% of the labor force, not 10%.[i]
The mission of the Act is summarized in the following sentences:
"Congress has also declared and established as a national goal the fulfillment of the right to full opportunities for useful paid employment at fair rates of compensation of all individuals able, willing, and seeking to work." Accomplishing this goal will require “direct job creation by the Federal Government."
The key features of the Act are as follows:
(1) The establishment of a National Full Employment Trust Fund. The Fund is charged with funding the employment of workers obtaining jobs under the provisions of the Act.
(2) Revenues for the Fund will come primarily through a financial transaction tax (FTT). The FTT will be levied on stocks, debt instruments, derivatives, and changes in ownership for trust accounts.[ii] If the FTT revenue is insufficient to fund the jobs created, the Fund may borrow from the Federal Reserve.
(3) Jobs are created through Employment Opportunity Grants (EOG). EOGs may be obtained by a wide range of public and non-profit entities but not by for-profits businesses.
(4) Priorities for job creation include affordable housing, renovating public facilities such as parks and schools, human services such as child and elder care, environmental initiatives, and the arts.
(5) Wages for workers employed by under the Act will be comparable to those for other public sectoror outsourced public sector workers doing equivalent of similar work. Thus the Act is not providing employment at a minimum wage but much closer to a living wage.
(6) Finally, employment under the Act cannot not be used to displace workers already doing these jobs.
III. Michael Kalecki, the Power of the "Sack" – and NonReformist Reforms
There is much to be enthusiastic about in HR 1000 – and I believe that DSA chapters should seek to have their congressional representative sign on as a co-sponsor of the bill. The proposed jobs are not minimum wage jobs; the requirement that pay be equal to public sector employees doing equivalent work would provide people employed under the with a living wage.[iii] This salary level may disappoint someone working in Silicon Valley or Wall Street who is laid off and is hired under the terms of the Act, but they will not starve. Because the proposal includes a funding source, the MMT controversy does not impact the program. Further, the choice to fund by way of an FTT will inevitably reign the role of the financial sector, another positive outcome. And, finally, the focus on work that grows the “social wage” addresses the need to rebuild our public infrastructure as well as expanding the care work sector. In all of these respects HR 1000 is true to CPEG’s original vision.[iv]
What about the politics of the proposal? In 1943 Michael Kalecki[v]wrote an article titled “The Political Aspects of Full Employment.[vi] In this article, Kalecki asked whether full employment was possible in a capitalist political economy. He argued that, from a narrow economic perspective the answer was yes; but he went on to suggest that a program of true full employment, such as HR 1000, would face significant political resistance because it is a challenge to class power. A full employment program would undercut the power to hire and fire that is a prerogative of capital. To be clear, a program such as HR 1000 does not destroy that power; after all, as noted above, many higher paying jobs would be largely unaffected. But it would sharply curtail the exercise of class power in the lower and middle levels of the income and job hierarchy. Near the end of Kalecki’s article he writes:
If capitalism can adjust itself to full employment, a fundamental reform will have been incorporated in it. If not, it will show itself an outmoded system which must be scrapped.
Kalecki and other left critics of full employment are certainly correct in arguing that capital will resist such a program. But does that doom it – or is that precisely why we should fight for it? Yes, a true full employment program such as outlined in HR 1000 will pose a challenge to class power. And it is sometimes argued that, if we can get full employment passed, we should just go for broke and institute socialism. But that ignores the process by which change, even revolutionary change, is likely to happen in the U.S. (and other wealthy capitalist political economies).
Consider the following. When queried, a majority of people in the U.S. agree with the statement that the government should assure that everyone willing and able to work can get a job.[vii] That does not mean, however that these citizens are ready to abolish capitalism tomorrow.
It seems to me that the question posed by Kalecki is exactly the way to approach the issue. If, faced by the implementation of a full employment program that draws upon the support of a majority of the population, capital opts for an economic or political strike, the numbers who are willing to say, it’s an outmoded system and must be scrapped would likely skyrocket. After all, full employment is a program with majority support and that speaks to everyday needs. Then, rather than retreat, many, perhaps most, may be willing to go further. That’s what makes HR 1000 a non-reformist reform and one that should be embraced by all progressives and certainly all socialists.
[i]There will always be some people unemployed due to job changes, etc. Thus the 1 - 2% number.
[ii]The proposed FTT exempts purchases and sales of mutual fund shares. This may be a significant reduction in potential revenue and could possibly lead to various schemes to game the FTT levy.
[iii]Of course public sector employees are, on average, paid less than private sector workers with equivalent education and experience.
[iv]CPEG’s original paper is here: https://docs.wixstatic.com/ugd/30e282_2bde05cbdf6245fcad4ae0c4bd1b84c9.pdf
[v]Kalecki was one of the most brilliant economists of the 20thcentury, serving as an advisor to various governments including Cuba and is native Poland.
[vi]https://delong.typepad.com/kalecki43.pdf; Joan Robinson raised similar concerns in her post-WWII pamphlet “The Problem of Full Employment; https://cpb-us-e1.wpmucdn.com/blogs.roosevelt.edu/dist/f/76/files/2012/12/Robinson-on-the-Problem-of-Full-Employment.pdf
[vii]Among other sources: https://www.thenation.com/article/why-democrats-should-embrace-a-federal-jobs-guarantee/