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Description
The goal of full employment once occupied a central position on the agenda of progressives, including those in the governments of the United States and Western Europe. For example, "the right to a useful and remunerative job" was the first item in Franklin Roosevelt's Economic Bill of Rights (1944/1950). The "right to work" was also recognized as a human right in the Universal Declaration of Human Rights (United Nations 1948; Harvey 1989; 2002). It was widely accepted at the time that this goal translated into an achievable and sustainable unemployment rate of 2 to 3 percent (Beveridge 1945, 21,127-128; Clark 1949, 14).
In many countries in Western Europe, this goal was largely achieved. For a number of decades after World War II, unemployment was below 3 percent--often substantially. This was not the case in the United States. Although the achievement of full employment was a prominent goal of the Democratic Party throughout this period, rates below 4 percent were achieved only in the immediate post-war years and during the Korean and Vietnam wars. An example of the rise and fall of full employment as a progressive policy goal is its status in Democratic Party platforms--from a central position to complete disappearance in recent decades (Harvey 2007; Mucciaroni 1990; Weir 1992). (1)
The stagflation of the 1970s weakened the faith of policy makers both in the achievability of full employment and in Keynesian demand management, the strategy on which progressives had relied since the 1940s (Harvey 2007; Mucciaroni 1990; Weir 1992). Moreover, since unemployment affects both the level of social need and the availability of resources to meet it (Ginsburg 2000; Goldberg 2000; 2002), the viability of the welfare state was also called into question. The emergence of inflation as a primary concern of public policy brought a shift in focus from full employment to price stability and a tendency to redefine full employment itself. Rather than a job for all, it came to mean an unemployment rate believed to be consistent with price stability. This was invariably higher than the rate earlier associated with full employment. Variously tagged by conservative and mainstream economists as "the natural rate of unemployment" and/or the "nonaccelerating inflation rate of unemployment" (NAIRU), this policy goal was used interchangeably with "full employment" and dominated the economic policy debate (Ginsburg 1983; 1991).
Mass unemployment at various levels is now a fact of life in a number of Western European countries that had earlier attained extremely low rates of unemployment. Although the United States achieved rates of 4.2 percent in 1999 and 4.0 percent in 2000, since then unemployment has been higher. Indeed, there is reason to believe that full employment in its original meaning is no longer a policy goal and that it has been redefined. For example, Janet L. Yellen, President and CEO of the Federal Reserve Bank of San Francisco, recently expressed a widely-shared view when, with unemployment at 4.7 percent, she said that "the economy is now operating in the vicinity of 'full employment'" (2006, 2).
Are progressives also less committed to full employment and inclined to redefine it? Have the likely advocates of full employment changed their attitudes? Do they still consider full employment desirable or... |
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