Apr 16, 2009
Unemployment and excessive inequality are capitalism’s principal faults, according to John Maynard Keynes. These faults have become glaringly obvious in the past thirty years, when the gap between the lowest paid workers and the highest has increased tenfold or more.¹ The employment crisis is more than evident to the 5.1 million who have become unemployed during the current downturn toward depression, joining millions of others who are working part time against their will or have given up looking for work altogether. Some estimate the true unemployment rate at more than 15 percent.² Our voice, raised perhaps monotonously often in favor of the establishment of an immediate and significant federal jobs program, on a par with the Works Progress Administration or the Civilian Conservation Corps, has now been joined by the Levy Economics Institute of Bard College, in a report entitled The Social and Economic Importance of Full Employment, by L. Randall Wray.

The popular view holds that in a capitalist economy, a hefty contingent of the unemployed keep down the pressure for wage increases by those who are working, since there are plenty of others ready and willing to take their jobs. In addition, too-low unemployment, because it forces employers to pay higher wages to attract the best workers from a shrinking pool, is inflationary. The popular view is not only an immoral view but, according to the Levy Institute, an incorrect one as well. The Institute argues for the government taking on the role of employer of last resort (ELR), hiring “any workers not needed in the private sector or by existing government operations.”

The report goes on to refute the arguments against a federal ELR program, and offers suggestions for useful types of work, including the sort that Roosevelt provided in the 30s.

If unemployement continues to rise at anything like the rate we have seen in the last six months, we will approach Great Depression levels of actual unemployment (25 percent or more) before the end of the year. The time is now to institute a federal ELR program. It is not only morally imperative for a civilized nation to guarantee employment to anyone willing and able to work, it may be our last hope to avoid massive civil unrest and a prolonged worldwide depression.
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¹ Income inequality in the United States, from Wikipedia, accessed Apr 11, 2009.
² Shocking truth: The real unemployment rate is is much higher, by Steve Crist, from the Burlington (VT) Examiner, Apr 7, 2009, accessed Apr 22, 2009.
tags: Employment