New report calls for full employment

Freddie Allen | 12/16/2013, 8:17 a.m. | Updated on 12/16/2013, 11:31 a.m.
Fifty years ago, civil rights leaders dove headfirst into the on-going debate over American economic policy by placing the fight ...

Senior economic advisers in the administration favored policies that focused on full employment to spur economic growth and production. That was particularly needed in the Black community where the 1963 unemployment rate was 10.9 percent, compared to 5 percent for Whites.

As the EPI report noted, A. Philip Randolph opened the march on August 28, 1963, with these words:

“We are the advanced guard of a massive, moral revolution for jobs and freedom. This revolution reverberates throughout the land touching every city, every town, every village where Black men are segregated, oppressed and exploited. But this civil rights revolution is not confined to the Negro, nor is it confined to civil rights, for our White allies know that they cannot be free while we are not. And we know that we have no future in a society in which 6 million Black and White people are unemployed and millions more live in poverty.”

Following the 1963 march, the Civil Rights Act of 1964 not only outlawed discrimination in housing, education and voting, it also advanced a “new economic script” and banned discrimination in the workplace.

“Prior to the passage of the act, newspapers openly advertised positions by race, clearly identifying jobs where blacks need not apply,” the report stated.

The median income for Black men increased from $16,052 in 1963 to $21,064 in 1968. The poverty rate for Black children fell from 65.6 percent in 1965 to 39.6 percent in 1969.

According to the EPI report, the median income for Black men reached its zenith in 1973 at $23,135 (in 2011 dollars), slightly higher at $23,475 almost 40 years later.

The report blames the oil embargo by OPEC and the Iranian oil crisis for contributing to rising inflation and unemployment rates during the 1970s, which caused lawmakers to abandon policies that promoted full employment in favor of policies that sought to restrict inflation and control prices.

“And, the war against inflation became a war against workers’ demands for higher wages, as well,” the report stated. “The federal minimum wage, which has to be continually increased by law just to keep its real purchasing power from being eroded by inflation, remained unchanged from 1981 to 1990, at $3.35 an hour.”

From President Reagan’s open hostility towards unions to President Clinton’s move to strip Aid to Families with Dependent Children from the Social Security Act and turn much of the spending decisions for the programs over to the states, the EPI report found that fiscal policies “tilted toward profits, interest, and high-end compensation” and increasingly forced American workers to bear more of the risks during economic downturns and less of the rewards when the economy recovered.

The report suggested that another shift towards full-employment principles is critical to stabilize the labor force and address income disparities. The recommendations included an “automatic response” in the form of a stimulus package triggered by a three-month downturn in national payroll employment. The automated stabilizer could immediately boost the economy without having to endure the slow-moving machinations of the federal government for approval.

The report also outlined a youth jobs program for 16- to 24-year-olds including full-time jobs for young people, 21-24 years old, who were not enrolled in school. This program would have a dramatic impact on Black youth (16-19 years old) who bear an unemployment rate of 36 percent compared to White youth with a jobless rate of 19.4 percent, according to the latest jobs report by the Labor Department.

The report recommended fixes for social safety net programs with the federal government assisting cash-strapped states with the associated costs and a financial transaction tax imposed on the financial sector.

As the Black community continues to suffer through depression-era levels of unemployment and poverty, the speeches from the 1963 March on Washington for Jobs and Freedom that highlighted the need for full-employment economic policies still ring true today.

During his 1963 March on Washington for Jobs and Freedom speech, Randolph said: “It falls to us to demand new forms of social planning, to create full employment, and to put automation at the service of human needs, not at the service of profits – for we are the worst victims of unemployment.”