Authors: Mark Paul, William Darity, Jr., and Darrick Hamilton
Abstract: Full employment has been part of the policy discourse in the United States since the early twentieth century. One of the most notable proponents of true full employment—defined as an economy in which any person who seeks a job can secure one—was President Franklin D. Roosevelt; his vision of “economic security” for all is a touchstone for full-employment advocates. For Roosevelt, direct hiring programs such as the Works Progress Administration (WPA) and the Civilian Conservation Corps (CCC) were great successes during the Great Depression. While they provided much-needed—albeit temporary—relief during the economic catastrophe, their size and transient nature were insufficient to achieve the long-term impact on employment that Roosevelt, and the full-employment supporters that came before and after him, sought. Today, economists and policymakers, including the governors of the Federal Reserve System, tend to associate “full employment” with a four-to-six percent unemployment rate, using the standard measure of unemployment. This measure of unemployment counts workers who do not have a job, have actively looked for work in the previous four weeks, and are currently available for work; it does not count the millions who have stopped actively seeking employment, or those inadequately employed in temporary, seasonal, or other precarious employment situations. The four-to-six percent unemployment rate referred to above is based on a conception defined by economists as the non-accelerating inflation rate of unemployment (NAIRU). It is noteworthy that this “target” has changed throughout time. Moreover, an economy with these unemployment rates needlessly condemns millions of U.S. workers to unemployment and underemployment, often resulting in severe economic hardship for those left behind by decisionmakers’ policy choices.
Key Findings
- A job guarantee would fundamentally transform the current labor market in the United States.
- Our current conception of full employment is inadequate; we discuss a bold policy in this paper to bring the United States to a permanent, more accurate indicator of full employment—by which we mean that everyone who seeks a job can find one at non-poverty wages.
- Beyond providing full employment, the job guarantee could be a turning point for American workers. Workers are faced with stagnating real wages and a continued erosion of labor’s share of income.
- The job guarantee could significantly alter the current power dynamics between labor and capital—particularly for low wage workers and traditionally marginalized groups.
