Part of the aversion toward embracing WPA-style programs today is the false idea that they did little to reduce unemployment, which some claim was only “solved” by the war. Most statistical studies understate the effect of the New Deal job creation measures because they don’t show how much of the decline in official employment was attributable to the multiplier effect of spending on direct job creation. Additionally, the “work relief” category does not include employment on public works funded by the Public Works Administration (PWA), nor the multiplier effect of PWA spending. The figures tell the story indirectly, however, in the path official unemployment followed — steeply declining in periods when work relief spending was high and either declining more slowly or increasing in periods when work relief spending was cut back...
A more effective way to restart the economic process on solid ground is to deal with the underlying cause of the problem: We have a credit-based economy, rather than an incomes-based economy... A good place to start recovery efforts, therefore, would be to change this method of economic growth by fostering more, not fewer WPA-type programs.
In my view, a universal Job Guarantee program would be the best way forward and truest to the spirit of the WPA. The jobs would pay basic wages and benefits with a goal to provide a living wage. The program would take all comers — anyone ready and willing to work, regardless of education, training, or experience. We could adapt the jobs to the workers. As the late Hyman Minsky put it, we could “take the workers as they are”, work them up to their ability, and then enhance their skills through on- the-job-training. Additionally, the guaranteed public service job would be a counter- cyclical influence, automatically increasing government employment and spending as jobs were lost in the private sector, and decreasing government jobs and spending as the private sector expanded. Such a program would remain a permanent feature of our economy, acting as a buffer stock to put a floor under unemployment, while maintaining price stability whereby government offers a fixed wage which does not “outbid” the private sector, but simply creates a stabilizing floor and thereby prevents deflation.
Bill: Here is one site which says that 2011 US welfare spending will be $430B. I have not tracked down more reliable figures or decomposed this. Still, sound-bite analysis would suggest that a Job Guarantee Program could be substantially funded by current welfare payments which are high, after all, because of current high unemployment.
Now, getting this done in the face of Ryans, Bachmanns, Gingriches, etc (not to mention, unfortunately, Obamas), is a vastly different discussion.
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